Form 8-K Voting results and compensation documents

0000038067-13-000063.txt : 20130617 0000038067-13-000063.hdr.sgml : 20130617 20130617161715 ACCESSION NUMBER: 0000038067-13-000063 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20130613 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Submission of Matters to a Vote of Security Holders ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20130617 DATE AS OF CHANGE: 20130617 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOREST CITY ENTERPRISES INC CENTRAL INDEX KEY: 0000038067 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 340863886 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04372 FILM NUMBER: 13917002 BUSINESS ADDRESS: STREET 1: 1100 TERMINAL TOWER STREET 2: 50 PUBLIC SQ CITY: CLEVELAND STATE: OH ZIP: 44113 BUSINESS PHONE: 216-621-6060 MAIL ADDRESS: STREET 1: 1100 TERMINAL TOWER STREET 2: 50 PUBLIC SQUARE CITY: CLEVLAND STATE: OH ZIP: 44113 8-K 1 form8-kvotingresultsandcom.htm 8-K Form 8-K Voting results and compensation documents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________________

Form 8-K

_____________________________________________________________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): June 13, 2013

_____________________________________________________________

Forest City Enterprises, Inc.

(Exact name of registrant as specified in its charter)

_____________________________________________________________



Ohio (State or other jurisdiction of incorporation or organization)	1-4372 (Commission File Number)	34-0863886 (I.R.S. Employer Identification No.)

Terminal Tower, 50 Public Square Suite 1100, Cleveland, Ohio		44113
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 216-621-6060

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

_____________________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 - Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(e) As noted in item 5.07 below, at the Annual Meeting of Shareholders of Forest City Enterprises, Inc. (the “Company”) held on June 13, 2013 (the “Annual Meeting”), the Company's shareholders approved amendments and restatements of the Executive Short-Term Incentive Plan (“STIP”), Executive Long-Term Incentive Plan (“LTIP”) and 1994 Stock Plan (the “Stock Plan”). Descriptions of the material terms of the STIP, LTIP and Stock Plan are set forth on pages 55 through 66 of the Company's Definitive Proxy Statement on Schedule 14A, which was filed with the Securities and Exchange Commission on April 30, 2013 and are incorporated herein by reference. The descriptions of the STIP, LTIP and Stock Plan are qualified in their entirety by reference to the STIP, LTIP and Plan, which are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively, and incorporated herein by reference.

The Stock Plan was amended and restated to: (i) increase the shares of Class A common stock available for issuance by 5,000,000; (ii) extend the term during which awards may be granted under the Stock Plan through March 13, 2023; (iii) remove the cap on the aggregate number of shares of Class A common stock that can be issued as restricted shares, or in payment of restricted stock units or performance shares; (iv) revise the limit on the aggregate number of shares of Class A common stock that can be issued pursuant to incentive stock options within the meaning of Section 422 of the Internal Revenue Code, as amended (the “Code”); (v) revise the annual per-person limits on certain awards, including awards intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code and (vi) revise the list of management objectives that may be used with respect to certain awards that intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code.

The amended and restated forms of the Company's Restricted Stock Agreement, Performance Shares Agreement, Incentive and Nonqualified Stock Option Agreement, Restricted Shares Agreement for Nonemployee Directors and Nonqualified Stock Option Agreement for Nonemployee Directors are attached hereto as Exhibits 10.4, 10.5, 10.6, 10.7 and 10.8, respectively, and incorporated herein by reference. The forms of the agreements contained no material amendments and were amended and restated to align with the Stock Plan, as approved by the shareholders at the Annual Meeting.

In addition, the Company's Board of Directors amended and restated the Senior Management Short-Term Incentive Plan (the "Senior Management STIP") and Senior Management Long-Term Incentive Plan (the "Senior Management LTIP"). None of the Company's named executive officers participate in Senior Management STIP or the Senior Management LTIP. The Senior Management STIP and Senior Management LTIP are included as Exhibits 10.9 and 10.10 to this Form 8-K and are incorporated herein by reference.

Item 5.07 - Submission of Matters to a Vote of Security Holders

At the Annual Meeting, 155,725,836 shares of Class A common stock representing 155,725,836 votes and 19,988,185 shares of Class B common stock representing 199,881,850 votes were represented in person or by proxy. These shares represented a quorum. The matters presented to shareholders for vote at the Annual Meeting and the voting tabulation for each such matter were as follows:

1: The election of four (4) directors by holders of Class A common stock and the election of nine (9) directors by holders of Class B common stock, each to hold office until the next annual shareholders' meeting and until a successor is elected and qualified.



	For	Withheld	Broker Non-Votes
Class A Nominees
Arthur F. Anton	149,885,904	1,494,538	4,345,394
Scott S. Cowen	147,659,085	3,721,357	4,345,394
Michael P. Esposito, Jr.	144,098,454	7,281,988	4,345,394
Stan Ross	149,736,138	1,644,304	4,345,394



Class B Nominees
Kenneth J. Bacon	194,355,760	277,200	5,248,890
Deborah L. Harmon	194,535,760	97,200	5,248,890
David J. LaRue	194,535,820	97,140	5,248,890
Brian J. Ratner	194,527,820	105,140	5,248,890
Bruce C. Ratner	194,527,820	105,140	5,248,890
Charles A. Ratner	194,527,820	105,140	5,248,890
Deborah Ratner Salzberg	194,527,820	105,140	5,248,890
Ronald A. Ratner	194,527,820	105,140	5,248,890
Louis Stokes	194,517,760	115,200	5,248,890

2: The approval (on an advisory, non-binding basis) of the compensation of the Company's named executive officers.



	For	Against	Abstain	Broker Non-Votes
Combined Class A and Class B	341,361,750	4,583,299	68,353	9,594,284

3: The approval of the amendment and restatement of the Executive Short-Term Incentive Plan.



	For	Against	Abstain	Broker Non-Votes
Combined Class A and Class B	344,153,215	1,765,313	94,874	9,594,284

4: The approval of the amendment and restatement of the Executive Long-Term Incentive Plan.



	For	Against	Abstain	Broker Non-Votes
Combined Class A and Class B	344,157,639	1,750,918	104,845	9,594,284

5: The approval of the amendment and restatement of the 1994 Stock Plan.



	For	Against	Abstain	Broker Non-Votes
Combined Class A and Class B	313,076,158	32,858,825	78,419	9,594,284

6: Ratification of PricewaterhouseCoopers LLP as independent registered public accounting firm for the Company for the eleven months ending December 31, 2013.



	For	Against	Abstain
Combined Class A and Class B	354,834,622	685,491	87,573

Item 9.01 - Financial Statements and Exhibits



Exhibit Number		Description
10.1	—	Forest City Enterprises, Inc. Executive Short-Term Incentive Plan (As Amended and Restated)
10.2	—	Forest City Enterprises, Inc. Executive Long-Term Incentive Plan (As Amended and Restated)
10.3	—	Forest City Enterprises, Inc. 1994 Stock Plan (As Amended and Restated)
10.4	—	Amended and Restated Form of Forest City Enterprises, Inc. Restricted Stock Agreement
10.5	—	Amended and Restated Form of Forest City Enterprises, Inc. Performance Shares Agreement
10.6	—	Amended and Restated Form of Incentive and Nonqualified Stock Option Agreement
10.7	—	Amended and Restated Form of Forest City Enterprises, Inc. Restricted Shares Agreement for Nonemployee Directors
10.8	—	Amended and Restated Form of Forest City Enterprises, Inc. Nonqualified Stock Option Agreement for Nonemployee Directors
10.9	—	Forest City Enterprises, Inc. Senior Management Short-Term Incentive Plan (As Amended and Restated)
10.10	—	Forest City Enterprises, Inc. Senior Management Long-Term Incentive Plan (As Amended and Restated)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



		FOREST CITY ENTERPRISES, INC.

Date:	June 17, 2013	By:	/s/ ROBERT G. O'BRIEN
		Name:	Robert G. O’Brien
		Title:	Executive Vice President and Chief Financial Officer

EXHIBIT INDEX



Exhibit Number		Description
10.1	—	Forest City Enterprises, Inc. Executive Short-Term Incentive Plan (As Amended and Restated)
10.2	—	Forest City Enterprises, Inc. Executive Long-Term Incentive Plan (As Amended and Restated)
10.3	—	Forest City Enterprises, Inc. 1994 Stock Plan (As Amended and Restated)
10.4	—	Amended and Restated Form of Forest City Enterprises, Inc. Restricted Stock Agreement
10.5	—	Amended and Restated Form of Forest City Enterprises, Inc. Performance Shares Agreement
10.6	—	Amended and Restated Form of Incentive and Nonqualified Stock Option Agreement
10.7	—	Amended and Restated Form of Forest City Enterprises, Inc. Restricted Shares Agreement for Nonemployee Directors
10.8	—	Amended and Restated Form of Forest City Enterprises, Inc. Nonqualified Stock Option Agreement for Nonemployee Directors
10.9	—	Forest City Enterprises, Inc. Senior Management Short-Term Incentive Plan (As Amended and Restated)
10.10	—	Forest City Enterprises, Inc. Senior Management Long-Term Incentive Plan (As Amended and Restated)

EX-10.1 2 exhibit101.htm EXHIBIT Exhibit 10.1



		EXHIBIT 10.1

FOREST CITY ENTERPRISES, INC.

EXECUTIVE SHORT-TERM INCENTIVE PLAN

(As Amended and Restated as of March 14, 2013)

PREAMBLE

The Forest City Enterprises, Inc. Executive Short-Term Incentive Plan, as previously amended and restated, is hereby amended and restated in its entirety as set forth below (the “Plan”). The Plan is filed in the Company's proxy statement for the annual meeting held on June 13, 2013. The purpose of the Plan is to advance the interests of the Company and its shareholders and assist the Company in attracting and retaining key employees by providing short-term cash incentives and financial rewards to such key employees that are intended to be deductible to the maximum extent possible as “performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code. This Plan is subject to shareholder approval with respect to amounts that may become payable under the Plan for Awards (defined below) granted after the date of shareholder approval of the Plan at the 2013 annual meeting of shareholders of the Company, and no such Awards shall be granted hereunder if such shareholder approval is not obtained.

ARTICLE I

DEFINITIONS

1.1 Award means an annual cash award of incentive compensation pursuant to the Plan.

1.2 Code means the Internal Revenue Code of 1986, as amended.

1.3 Committee means the Compensation Committee of the Board of Directors of the Company, or their designee consisting of members appointed from time to time by the Board of Directors of the Company, and shall comprise not less than such number of directors as shall be required to permit the Plan to satisfy the requirements of Code Section 162(m). The Committee administering the Plan shall be composed solely of “outside directors” within the meaning of Code Section 162(m).

1.4 Company means Forest City Enterprises, Inc., an Ohio corporation, or its successors.

1.5 Disability means a total and permanent disability that causes a Participant to be eligible to receive long term disability benefits from the Company's Long Term Disability Plan, or any similar plan or program sponsored by a subsidiary or branch of the Company.

1.6 Key Employees means Board-appointed officers of the Company who are designated by the Board as “Section 16 officers” and other key employees of the Company and its subsidiaries.

1.7 Participant means a Key Employee who is selected by the Committee to participate in the Plan.

1.8 Payout Formula means the objective formula established by the Committee for determining Awards for a Performance Period based on the level of achievement of the Performance Objectives for the Performance Period.

1.9 Performance Objectives means the measurable performance objective or objectives established pursuant to the Plan for Participants, which may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or of the subsidiary, division, department, region or function within the Company or subsidiary in which the Participant is employed, and may be made relative to the performance of other companies. The Performance Objectives shall be based on specified levels of or growth in or relative to peer company performance in one or more of the following criteria: assets (e.g., net asset value); capital (e.g., working capital); cash flow (e.g., earnings before depreciation, amortization and deferred taxes (“EBDT”), operating cash flow, total cash flow, cash flow in excess of cost of capital, residual cash flow, cash flow return on investment or funds from operations (“FFO”)); liquidity measures (e.g., available cash and credit, total debt ratio, debt-to-EBDT ratio or net operating income-to-debt ratio); margins (e.g., profits divided by revenues, operating margins, gross margins or material margins divided by revenues); productivity (e.g., productivity improvement); profits (e.g., net income, operating income, earnings before taxes (“EBT”), earnings before interest and taxes (“EBIT”), EBDT, FFO, residual or economic earnings, earnings or EBDT per share - these profitability criteria could be measured subject to GAAP definitions); sales or expenses (e.g., revenue growth, reduction in expenses, sales and administrative costs divided by sales or sales and administrative costs divided by profits); and stock price (e.g., stock price appreciation or total shareholder return). In addition to the returns and ratios mentioned



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above, the performance objectives may be based on any other ratios or returns using the criteria mentioned above, including: economic value added; net asset ratio; debt-to-capital ratio; working capital divided by sales; and profits or cash flow returns on assets, designated assets, invested capital, net capital employed or equity (including return on net assets, return on capital or invested capital, or total return, meaning change in net asset value plus or minus net cash flow). If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Performance Objectives unsuitable, the Committee may in its discretion modify such Performance Objectives or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable, except if such action would result in the loss of the otherwise available exemption under Section 162(m) of the Code. In such case, the Committee shall not make any modification of the Performance Objectives or minimum acceptable level of achievement.

1.10 Performance Period means a period of time established by the Committee, in its sole discretion, within which the Performance Objectives relating to an Award are to be achieved. The Committee may establish different Performance Periods for different Participants, and the Committee may establish concurrent or overlapping Performance Periods.

1.11 Plan means this Forest City Enterprises, Inc. Executive Short-Term Incentive Plan.

1.12 Retirement means termination of employment with the Company or an affiliated company when a Participant is age 65 or older with five or more years of continuous service.

ARTICLE II

ELIGIBILITY AND PARTICIPATION

2.1 Eligibility and Participation. The Committee shall select Key Employees of the Company who are eligible to receive Awards under the Plan, and who shall be Participants in the Plan during any Performance Period in which they may earn an Award. A Key Employee who is a Participant for a given Performance Period is neither guaranteed nor assured of being selected for participation in any subsequent Performance Period.

ARTICLE III

TERMS OF AWARDS

3.1 Awards. Within 90 days after the commencement of each Performance Period or, if earlier, by the expiration of 25% of a Performance Period, the Committee will (a) designate one or more Performance Periods, (b) select the Participants for the Performance Periods, (c) establish the Performance Objectives for each Participant, and the relative weighting of each Performance Objective, and (d) determine the Payout Formula for each Participant. The Performance Objectives, the weighting of the Performance Objectives and the Payout Formulas need not be uniform with respect to any or all Participants. Participants must achieve the Performance Objectives established by the Committee in order to receive an Award under the Plan. However, when establishing the Payout Formula, the Committee may determine, within the time period set forth above, that only the threshold level relating to a Performance Objective must be achieved for Awards to be paid under the Plan. Similarly, the Committee may establish a minimum threshold performance level, a maximum performance level, and one or more intermediate performance levels or ranges, with target award levels or ranges that will correspond to the respective performance levels or ranges included in the Payout Formula. Notwithstanding the foregoing, the maximum aggregate amount payable pursuant to any Awards established for a Participant in any one calendar year will be $2,000,000.

3.2 Discretionary Adjustment. The Committee may not increase the amount payable under the Plan or with respect to an Award pursuant to Section 3.1, but retains the authority to reduce the amount in its sole discretion based on individual performance or any other reason.

3.3 Certification. Following the close of each Performance Period and prior to payment of any amount to any Participant under the Plan, the Committee will certify in writing as to the attainment of the Performance Objectives and the amount of the Award.

3.4 Form of Payment. Each Award under the Plan shall be paid in cash or its equivalent.

3.5 Timing of Payment. Except as otherwise provided pursuant to Section 4.2(a), payment of Awards will be made following the end of the Performance Period and after determination of and certification of the Award, but in no event more than two and one half months after the later of (a) the end of the Performance Period or (b) the end of the calendar year in which the Performance Period ends, unless the Participant has submitted a valid election to defer receipt of the Award in accordance with the terms and conditions of a deferred compensation plan approved by the Committee.



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ARTICLE IV

NEW HIRES, PROMOTIONS AND TERMINATIONS

4.1 New Participants During the Performance Period. Unless otherwise determined by the Committee and subject to Section 5.3 hereof, if an individual is newly hired or promoted during a calendar year into a position eligible for participation in the Plan, he or she shall be eligible for an Award under the Plan for the Performance Period, subject to adjustments under Section 3.2 hereof, and prorated for the portion of the Performance Period following the date of eligibility for the Plan.

4.2 Retirement, Disability or Death. Unless otherwise determined by the Committee, a Participant who terminates employment with the Company during a Performance Period, and after at least one-half of such Performance Period has elapsed, due to Retirement, Disability or death shall be eligible to receive an Award in accordance with this Section 4.2, subject to adjustments under Section 3.2 hereof, and pro-rated for the portion of the Performance Period prior to termination of employment.

(a) Disability or Death. Any pro-rated Award pursuant to this Section 4.2 on account of a Participant's termination of employment due to Disability or death shall be determined based upon the target Award level and shall be paid within sixty (60) days following termination of employment. Awards payable in the event of death shall be paid to the Participant's estate.

(b) Retirement. Any pro-rated Award pursuant to this Section 4.2 on account of a Participant's termination of employment due to Retirement shall be determined based upon actual performance through the end of the applicable Performance Period (subject to adjustments under Section 3.2 hereof) and shall be paid at the same time that Awards are paid to other Participants for such Performance Period in accordance with Section 3.5 hereof.

4.3 Termination of Employment. If a Participant's employment with the Company and its affiliates terminates during a Performance Period under any circumstances other than those set forth in Section 4.2 hereof, then, unless otherwise determined by the Committee, no Award shall be payable to such Participant with respect to such Performance Period.

ARTICLE V

MISCELLANEOUS

5.1 Withholding Taxes. The Company shall have the right to make payment of Awards net of any applicable federal, state and local taxes required to be withheld, or to require the Participant to pay such withholding taxes. If the Participant fails to make such tax payments as required, the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Participant or to take such other action as may be necessary to satisfy such withholding obligations.

5.2 Nontransferability. No Award may be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, including assignment pursuant to a domestic relations order, during the time in which the requirement of continued employment or attainment of performance objectives has not been achieved. Each Award shall be paid during the Participant's lifetime only to the Participant, or, if permissible under applicable law, to the Participant's legal representatives. No Award shall, prior to receipt thereof by the Participant, be in any manner liable for or subject to the debts, contracts, liabilities, or torts of the Participant.

5.3 Administration. The Committee shall administer the Plan, interpret the terms of the Plan, amend and rescind rules relating to the Plan, and determine the rights and obligations of Participants under the Plan. The Committee may delegate any of its authority as it solely determines. In administering the Plan, the Committee may at its option employ compensation consultants, accountants and counsel and other persons to assist or render advice to the Committee, all at the expense of the Company. All decisions of the Committee shall be final and binding upon all parties including the Company, its shareholders, and the Participants. The provisions of this Plan are intended to ensure that all Awards granted hereunder qualify for the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code, and this Plan shall be interpreted and operated consistent with that intention.

5.4 Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Award, such provision will be stricken as to such jurisdiction, and the remainder of the Plan or Award shall remain in full force and effect.



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acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.

5.6 Clawback Policy. Notwithstanding any other provision of the Plan to the contrary, any Award granted hereunder shall be subject to forfeiture or repayment pursuant to the terms of any applicable compensation recovery (or “clawback”) policy maintained by the Company from time to time, as such policy may be amended, including, but not limited to, any amendment adopted to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules or regulations issued by the Securities Exchange Commission or applicable securities exchange.

5.7 Employment at Will. Neither the adoption of the Plan, eligibility of any person to participate, nor payment of an Award to a Participant shall be construed to confer upon any person a right to be continued in the employ of the Company. The Company expressly reserves the right to discharge any Participant whenever in the sole discretion of the Company its interest may so require.

5.8 Amendment or Termination of the Plan. The Board of Directors of the Company reserves the right to amend or terminate the Plan at any time with respect to future Awards to Participants. Amendments to the Plan will require shareholder approval to the extent required to comply with applicable law, including the exemption under Code Section 162(m).

5.9 Non-Exclusivity of the Plan. Neither the adoption of the Plan by the Board of Directors nor the submission of the Plan to shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board of Directors or the Committee to adopt such other incentive arrangements as either may deem desirable, including, without limitation, cash or equity-based compensation arrangements, either tied to performance or otherwise.

5.10 Successors. All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company.



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EX-10.2 3 exhibit102.htm EXHIBIT Exhibit 10.2



		EXHIBIT 10.2

FOREST CITY ENTERPRISES, INC.

EXECUTIVE LONG-TERM INCENTIVE PLAN

(As Amended and Restated as of March 14, 2013)

PREAMBLE

The Forest City Enterprises, Inc. Executive Long-Term Incentive Plan, as previously amended and restated (“Plan”), is hereby amended and restated in its entirety as set forth herein. The purpose of the Plan is to advance the interests of the Company and its shareholders and assist the Company in attracting and retaining key employees by providing long-term cash incentives and financial rewards to such key employees that are intended to be deductible to the maximum extent possible as “performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code. The Plan is subject to shareholder approval with respect to amounts that may become payable under the Plan for Awards (defined below) granted after the date of shareholder approval of the Plan at the 2013 annual meeting of shareholders of the Company, and no such Awards shall be granted hereunder if such shareholder approval is not obtained.

ARTICLE I

DEFINITIONS

1.1 Award means an award of long-term cash incentive compensation pursuant to the Plan.

1.2 Plan means the Forest City Enterprises, Inc. Cash Long-Term Incentive Plan.

1.3 Code means the Internal Revenue Code of 1986, as amended.

1.4 Committee means the Compensation Committee of the Board of Directors of the Company, or their designee consisting of members appointed from time to time by the Board of Directors of the Company, and shall comprise not less than such number of directors as shall be required to permit the Plan to satisfy the requirements of Code Section 162(m). The Committee administering the Plan shall be composed solely of “outside directors” within the meaning of Code Section 162(m).

1.5 Company means Forest City Enterprises, Inc., an Ohio corporation, or its successors.

1.6 Disability means a total and permanent disability that causes a Participant to be eligible to receive long term disability benefits from the Company's Long Term Disability Plan, or any similar plan or program sponsored by a subsidiary or branch of the Company.

1.7 Key Employees means Board-appointed officers of the Company who are designated by the Board as “Section 16 officers” and other key employees of the Company and its subsidiaries.

1.8 Participant means a Key Employee who is selected by the Committee to participate in the Plan.

1.9 Payout Formula means the objective formula established by the Committee for determining Awards for a Performance Period based on the level of achievement of the Performance Objectives for the Performance Period.

1.10 Performance Objectives means the measurable performance objective or objectives established pursuant to the Plan for Participants, which may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or of the subsidiary, division, department, region or function within the Company or subsidiary in which the Participant is employed, and may be made relative to the performance of other companies. The Performance Objectives shall be based on specified levels of or growth in or relative to peer company performance in one or more of the following criteria: assets (e.g., net asset value); capital (e.g., working capital); cash flow (e.g., earnings before depreciation, amortization and deferred taxes (“EBDT”), operating cash flow, total cash flow, cash flow in excess of cost of capital, residual cash flow, cash flow return on investment or funds from operations (“FFO”)); liquidity measures (e.g., available cash and credit, total debt ratio, debt-to-EBDT ratio or net operating income-to-debt ratio); margins (e.g., profits divided by revenues, operating margins, gross margins or material margins divided by revenues); productivity (e.g., productivity improvement); profits (e.g., net income, operating income, earnings before taxes (“EBT”), earnings before interest and taxes (“EBIT”), EBDT, FFO, residual or economic earnings, earnings or EBDT per share - these profitability criteria could be measured subject to GAAP definitions); sales or expenses (e.g.,



	1

revenue growth, reduction in expenses, sales and administrative costs divided by sales or sales and administrative costs divided by profits); and stock price (e.g., stock price appreciation or total shareholder return). In addition to the returns and ratios mentioned above, the performance objectives may be based on any other ratios or returns using the criteria mentioned above, including: economic value added; net asset ratio; debt-to-capital ratio; working capital divided by sales; and profits or cash flow returns on assets, designated assets, invested capital, net capital employed or equity (including return on net assets, return on capital or invested capital, or total return, meaning change in net asset value plus or minus net cash flow). If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Performance Objectives unsuitable, the Committee may in its discretion modify such Performance Objectives or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable, except if such action would result in the loss of the otherwise available exemption under Section 162(m) of the Code. In such case, the Committee shall not make any modification of the Performance Objectives or minimum acceptable level of achievement.

1.11 Performance Period means a period of time established by the Committee, in its sole discretion, within which the Performance Objectives relating to an Award are to be achieved. The Committee may establish different Performance Periods for different Participants, and the Committee may establish concurrent or overlapping Performance Periods.

1.12 Plan means this Forest City Enterprises, Inc. Executive Long-Term Incentive Plan.

1.13 Retirement means termination of employment with the Company or an affiliated company when a Participant is age 65 or older with five or more years of continuous service.

ARTICLE II

ELIGIBILITY AND PARTICIPATION

ARTICLE III

TERMS OF AWARDS

3.4 Form of Payment. Each Award under the Plan shall be paid in cash or its equivalent.



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ARTICLE IV

NEW HIRES, PROMOTIONS AND TERMINATIONS

4.2 Retirement, Disability or Death. Unless otherwise determined by the Committee, a Participant who terminates employment with the Company during a Performance Period and at least one year after the beginning of such Performance Period due to Retirement, Disability or death shall be eligible to receive an Award in accordance with this Section 4.2, subject to adjustments under Section 3.2 hereof, and pro-rated for the portion of the Performance Period prior to termination of employment.

ARTICLE V

MISCELLANEOUS



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such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of the Plan or the Award, such provision will be stricken as to such jurisdiction, and the remainder of the Plan or Award shall remain in full force and effect.

5.5 No Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person. To the extent that any person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.

5.9 Non-Exclusivity of Plan. Neither the adoption of the Plan by the Board of Directors nor the submission of the Plan to shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board of Directors or the Committee to adopt such other incentive arrangements as either may deem desirable, including, without limitation, cash or equity-based compensation arrangements, either tied to performance or otherwise.



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EX-10.3 4 exhibit103.htm EXHIBIT Exhibit 10.3



		EXHIBIT 10.3

FOREST CITY ENTERPRISES, INC.

1994 STOCK PLAN

(As Amended and Restated as of March 14, 2013)

1. PURPOSE

The purpose of the 1994 Stock Plan (As Amended and Restated as of March 14, 2013) shall be to enhance the attraction, retention and motivation of Nonemployee Directors and employees, including officers, executives and other employees who are members of the Company's management team who, in the judgment of the Committee, can contribute materially to the Company's success by awarding these employees and Nonemployee Directors the opportunity to receive Option Rights, Restricted Shares, Restricted Stock Units, Appreciation Rights and Performance Shares. The Plan is also intended to foster within these employees and Nonemployee Directors an identification with ownership and shareholder interests.

2. DEFINITIONS

Unless the context of the applicable section clearly indicates otherwise, the terms below, when used within the Plan, shall have the meaning set forth in this Section 2.


A.	APPRECIATION RIGHT means a right granted pursuant to Section 9 of the Plan, including a Free-standing Appreciation Right and a Tandem Appreciation Right.


B.	BASE PRICE means the price to be used as the basis for determining the Spread upon the exercise of a Free-standing Appreciation Right.


C.	BOARD OF DIRECTORS or BOARD means the Board of Directors of the Company.


D.	CHANGE OF CONTROL means if at any time any of the following events has occurred:

(1)

the Company merges itself, or is merged or consolidated with, another corporation and as a result of such merger or consolidation less than 51% of the voting power of the then-outstanding voting securities of the surviving corporation immediately after such transaction are directly or indirectly beneficially owned in the aggregate by the former shareholders of the Company immediately prior to such transaction;

(2)

all or substantially all the assets accounted for on the Consolidated Balance Sheet of the Company are sold or transferred to one or more corporations or persons, and as a result of such sale or transfer less than 51% of the voting power of the then-outstanding voting securities of such corporation or person immediately after such sale or transfer is directly or indirectly beneficially held in the aggregate by the former shareholders of the Company immediately prior to such transaction or series of transactions;

(3)

a person, within the meaning of Section 3(a)(9) or 13(d)(13) (as in effect on the date of the award) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes the beneficial owner (as defined in Rule 13d-3 of the Securities and Exchange Commission pursuant to the Exchange Act) of (a) 15% or more but less than 35% of the voting power of the then-outstanding voting securities of the Company without prior approval of the Company's Board, or (b) 35% or more of the voting power of the then-outstanding voting securities of the Company; provided, however, that the foregoing does not apply to any such acquisition that is made by (i) any Subsidiary of the Company (ii) any employee benefit plan of the Company or any Subsidiary or (iii) any person or group of which employees of the Company or of any Subsidiary control a greater than 25% interest unless the Board determines that such person or group is making a “hostile acquisition”; or


(4)	a majority of the members of the Board are not Continuing Directors, where a “Continuing Director” is any member of the Board who (x) was a member of the Board on March 14, 2013 or (y) was nominated for election or elected to such Board with the affirmative vote of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election.



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E.	CODE means the Internal Revenue Code of 1986, as amended from time to time.


F.	COMPANY means Forest City Enterprises, Inc.


G.	COMPENSATION COMMITTEE or COMMITTEE means the Compensation Committee of the Board of Directors, as described in Section 3-A of the Plan.


H.	COVERED EMPLOYEE means a Grantee who is, or is determined by the Committee to be likely to become, a “covered employee” within the meaning of Section 162(m) of the Code.


I.	DATE OF GRANT means the date specified by the Committee on which a grant of Option Rights or Stock Appreciation Rights or a grant or sale of Restricted Shares, Restricted Stock Units or Performance Shares shall become effective, which shall not be earlier than the date on which the Committee takes action with respect thereto.


J.	DEFERRAL PERIOD means the period of time during which Restricted Stock Units are subject to deferral limitations under Section 8 of the Plan.


K.	FREE-STANDING APPRECIATION RIGHT means an Appreciation Right granted pursuant to Section 9 of the Plan that is not granted in tandem with an Option Right or similar right.


L.	GRANTEE means an employee of the Company or a Subsidiary or a Nonemployee Director to whom an Option Right, Appreciation Right, or an award of Restricted Shares, Restricted Stock Units or Performance Shares has been granted under the Plan.


M.	INCENTIVE STOCK OPTIONS means Option Rights that are intended to qualify as “Incentive Stock Options” under Section 422 of the Code or any successor provision.

MANAGEMENT OBJECTIVES means the measurable performance objective or objectives established pursuant to the Plan for Grantees who have received grants of Performance Shares or, when so determined by the Committee, received grants of Option Rights, Restricted Shares, Restricted Stock Units or Appreciation Rights pursuant to the Plan. Management Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Grantee or of the Subsidiary, division, department, region or function within the Company or Subsidiary in which the Grantee is employed. The Management Objectives may be made relative to the performance of other companies. The Management Objectives applicable to any Qualified Performance-Based Award to a Covered Employee shall be based on specified levels of or growth in or relative to peer company performance in one or more of the following criteria:


(1)	Assets (e.g., net asset value);


(2)	Capital (e.g., working capital);


(3)	Cash Flow (e.g., EBDT [earnings before depreciation, amortization and deferred taxes], operating cash flow, total cash flow, cash flow in excess of cost of capital, residual cash flow, cash flow return on investment or FFO [funds from operations]);


(4)	Liquidity measures (e.g., available cash and credit, total debt ratio, debt-to-EBDT ratio or net operating income-to-debt ratio);


(5)	Margins (e.g., profits divided by revenues, operating margins, gross margins or material margins divided by revenues);


(6)	Productivity (e.g., productivity improvement);


(7)	Profits (e.g., net income, operating income, EBT [earnings before taxes], EBIT [earnings before interest and taxes], EBDT, FFO, residual or economic earnings, earnings or EBDT per share - these profitability criteria could be measured subject to GAAP definitions);



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(8)	Sales or expenses (e.g., revenue growth, reduction in expenses, sales and administrative costs divided by sales or sales and administrative costs divided by profits); and


(9)	Stock price (e.g., stock price appreciation or total shareholder return).

In addition to the returns and ratios mentioned above, the management objectives may be based on any other ratios or returns using the criteria mentioned above, including: economic value added; net asset ratio; debt-to-capital ratio; working capital divided by sales; and profits or cash flow returns on assets, designated assets, invested capital, net capital employed or equity (including return on net assets, return on capital or invested capital, or total return, meaning change in net asset value plus or minus net cash flow).

If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which we conduct our business, or other events or circumstances render the Management Objectives unsuitable, the Committee may in its discretion modify such Management Objectives or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable, except in the case of a Qualified Performance-Based Award where such action would result in the loss of the otherwise available exemption under Section 162(m) of the Code. In such case, the Committee shall not make any modification of the Management Objectives or minimum acceptable level of achievement.


O.	MARKET VALUE PER SHARE means the fair market value of the Shares as determined by the Committee from time to time.


P.	NONEMPLOYEE DIRECTOR means a member of the Board who is not an employee of the Company or any Subsidiary.


Q.	NONQUALIFIED STOCK OPTIONS means options which do not qualify as Incentive Stock Options within the meaning of Section 422(b) of the Code or any successor provision.


R.	OPTION PRICE means the purchase price payable upon the exercise of an Option Right.


S.	OPTION RIGHT means an option to purchase a Share or Shares upon exercise of an option granted pursuant to Section 6 of the Plan.


T.	PERFORMANCE PERIOD means, in respect of a Performance Share, a period of time established pursuant to Section 10 of the Plan within which the Management Objectives relating to such Performance Share are to be achieved.


U.	PERFORMANCE SHARE means a bookkeeping entry that records the equivalent of one Common Share awarded pursuant to Section 10 of the Plan.


V.	PLAN means the Forest City Enterprises, Inc. 1994 Stock Plan (As Amended and Restated as of March 14, 2013).


W.	QUALIFIED PERFORMANCE-BASED AWARD means any award or portion of an award that is intended to satisfy the requirements for “qualified performance-based compensation” under Section 162(m) of the Code.


X.	RESTRICTED SHARES means Shares granted or sold pursuant to Section 7 of the Plan as to which neither the substantial risk of forfeiture nor the prohibition on transfers referred to in such Section 7 has expired.


Y.	RESTRICTED STOCK UNIT means a bookkeeping entry reflecting an award made pursuant to Section 8 of the Plan of the right to receive Shares or cash at the end of a specified Deferral Period.


Z.	RETIREMENT means termination of employment with the Company or a Subsidiary at age 65 or older and after five or more years of continuous employment with the Company or a Subsidiary. Approved absence or leave from the Company or a Subsidiary shall not be considered an interruption of employment for purposes of the Plan.


AA.	RULE 16b-3 means Rule 16b-3 of the Securities and Exchange Commission (or any successor rule to the same effect), as in effect from time to time.



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BB.	SHARES means shares of the Company's Class A Common Stock, $0.33-l/3 par value.

CC.

SPREAD means, in the case of an Option Right, the excess of the Market Value per Share of the Shares on the date when Option Rights are surrendered in payment of the Option Price of other Option Rights, over the Option Price provided for in the surrendered Option Right, in the case of a Free-standing Appreciation Right, the amount by which the Market Value per Share on the date when any such right is exercised exceeds the Base Price specified in such right or, in the case of a Tandem Appreciation Right, the amount by which the Market Value per Share on the date when any such right is exercised exceeds the Option Price specified in the related Option Right.

DD.

SUBSIDIARY means a corporation, company or other entity (i) more than 50 percent of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than 50 percent of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company except that for purposes of determining whether any person may be a Grantee for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation in which at the time the Company owns or controls, directly or indirectly, more than 50 percent of the total combined voting power represented by all classes of stock issued by such corporation.


EE.	TANDEM APPRECIATION RIGHT means an Appreciation Right granted pursuant to Section 9 of the Plan that is granted in tandem with an Option Right.


FF.	Wherever used herein, unless indicated otherwise, words in the masculine form shall be deemed to refer to females as well as to males.


3.	ADMINISTRATION

A. COMPENSATION COMMITTEE

The Plan shall be administered by the Compensation Committee. The Committee shall be composed of not less than three members of the Board, each of whom shall (i) meet all applicable independence requirements of the New York Stock Exchange, or if the Shares are not traded on the New York Stock Exchange, the principal national securities exchange on which the Shares are traded, (ii) be a “nonemployee director” within the meaning of Rule 16b-3 and (iii) be an “outside director” within the meaning of Section 162(m) of the Code. A majority of the Committee shall constitute a quorum, and the acts of the members of the Committee who are present at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of the Committee in writing, shall be the acts of the Committee.

B. DETERMINATIONS

Within the limits of the provisions of the Plan, the Committee shall have the plenary authority to determine (i) the employees to whom awards hereunder shall be granted, (ii) the number of shares subject to each award under the Plan; provided that, if the award is an incentive stock option, the aggregate fair market value of the shares (as determined at the time the option is granted) which become exercisable in any calendar year for any employee shall not exceed $100,000, (iii) the form (Incentive Stock Options, Nonqualified Stock Options, Restricted Shares, Restricted Stock Units, Appreciation Rights or Performance Shares) and amount of each award granted, (iv) the provisions of each agreement relating to an award under the Plan, and (v) the limitations, restrictions and conditions applicable to any such award. In making such awards the Committee shall take into consideration the performance of each eligible employee and Nonemployee Director. The determinations of the Committee on all matters regarding the Plan shall be final and conclusive.

C. INTERPRETATION

Subject to the provisions of the Plan, the Committee may interpret the Plan, and prescribe, amend and rescind rules and regulations relating to it. The interpretation of any provision of the Plan by the Committee shall be final and conclusive.


4.	ELIGIBILITY



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All awards under the Plan may be granted under the Plan to employees of the Company or any Subsidiary and Nonemployee Directors, as determined by the Committee, based upon the Committee's evaluation of employees' and Nonemployee Directors' duties and their overall performance including current and potential contributions to the Company's success. Generally, the group of eligible employees includes officers, senior executives, directors who are also employees, and any other members of the Company's management team or other employees deemed appropriate by the Committee. All determinations by the Committee as to the identity of persons eligible to be granted awards hereunder shall be conclusive.


5.	SHARE AWARDS UNDER THE PLAN

A. FORM

Awards under the Plan shall be granted in the form of Incentive Stock Options, Nonqualified Stock Options, Restricted Shares, Restricted Stock Units, Appreciation Rights or Performance Shares as herein defined in Section 2.


B.	SHARES SUBJECT TO THE PLAN

(i)

The aggregate number of Shares that may be issued or transferred (a) upon the exercise of Option Rights or Appreciation Rights, (b) as Restricted Shares (and released from all substantial risks of forfeiture), (c) upon the vesting of Restricted Stock Units or (d) in payment of Performance Shares that have been earned under the Plan during the term of the Plan may not exceed 21,750,000, 5,000,000 of which are being added, subject to shareholder approval, by this March 14, 2013 amendment and restatement of the Plan) Shares (plus any Shares relating to awards that expire or are forfeited or cancelled), subject to adjustments described in Section 12-A. Such Shares may be Shares of original issuance or treasury shares or a combination of the foregoing.

(ii)

Shares covered by an award granted under the Plan shall not be counted as used unless and until they are actually issued and delivered to a Grantee. Without limiting the generality of the foregoing, if any portion of the benefit provided by an award granted under the Plan is paid in cash, the Shares that were covered by that award will, to the extent settled in cash, be available for issue or transfer hereunder. Notwithstanding anything to the contrary contained in the foregoing provisions of this Section 5-B: (a) Shares tendered in payment of the Option Price of an Option Right shall not be added to the aggregate plan limit described above; (b) Shares withheld by the Company to satisfy tax withholding obligations shall not be added to the aggregate plan limit described above; (c) Shares that are repurchased by the Company with Option Right proceeds shall not be added to the aggregate plan limit described above; and (d) all Shares covered by an Appreciation Right, to the extent that it is exercised and settled in Shares, shall be considered issued or transferred pursuant to the Plan.


(iii)	Notwithstanding anything in this Section 5-B, or elsewhere in this Plan, to the contrary and subject to adjustment as provided in Section 12-A of this Plan:


(a)	The aggregate number of Shares actually issued or transferred by the Company upon the exercise of Incentive Stock Options will not exceed 21,750,000 Shares.


(b)	No Grantee will be granted Option Rights or Free-standing Appreciation Rights, in the aggregate, for more than 500,000 Shares during any calendar year.


(c)	No Grantee will be granted Qualified Performance-Based Awards of Restricted Shares, Restricted Stock Units or Performance Shares in the aggregate, for more than 500,000 Shares in any calendar year.


(d)	Notwithstanding any other provision of the Plan to the contrary, the aggregate grant date fair value (computed as of the Date of Grant in accordance with applicable financial accounting rules) of all awards granted to any single Nonemployee Director during any single calendar year shall not exceed $250,000.


6.	OPTION RIGHTS



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The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting to eligible employees or Nonemployee Directors of options to purchase Shares. Each such grant may utilize any or all of the authorizations, and shall be subject to all of the requirements, contained in the following provisions:


A.	Each grant shall specify the number of Shares to which it pertains subject to the limitations set forth in Section 5-B of the Plan.


B.	Each grant shall specify an Option Price per Share, which may not be less than the Market Value per Share on the Date of Grant.


C.	Each grant shall specify whether the Option Price shall be payable (i) in cash or by check acceptable to the Company, (ii) by the actual or constructive transfer to the Company of nonforfeitable, unrestricted Shares owned by the Grantee (or other lawful consideration) having a value at the time of exercise equal to the total Option Price, or (iii) by a combination of such methods of payment.


D.	To the extent permitted by law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or broker on a date satisfactory to the Company of some or all of the Shares to which such exercise relates.


E.	Successive grants may be made to the same Grantee whether or not any Option Rights previously granted to such Grantee remain unexercised.

Each grant shall specify the period or periods of continuous service by the Grantee with the Company or any Subsidiary which is necessary before the Option Rights or installments thereof will become exercisable and may provide for the earlier exercise of such Option Rights in the event of Retirement, death or disability, a Change of Control or other similar transaction or event. Unless otherwise determined by the Committee at the Date of Grant, the Option Rights shall immediately become exercisable upon the Retirement of the Grantee and shall remain exercisable until 10 years from the Date of Grant.


G.	Any grant of Option Rights may specify Management Objectives that must be achieved as a condition to the exercise of such Option Rights.

Option Rights grants under the Plan may be (i) options, including, without limitation, Incentive Stock Options, that are intended to qualify under particular provisions of the Code, (ii) Nonqualified Stock Options that are not intended to so qualify, or (iii) combinations of the foregoing. Incentive Stock Options may be granted only to Grantees who, as of the Date of Grant, are officers or other key employees of the Company or any Subsidiary.


I.	No Option Right shall be exercisable more than 10 years from the Date of Grant.


J.	Each grant of Option Rights shall be evidenced by an agreement, which shall contain such terms and provisions, consistent with the Plan, as the Committee may approve.


K.	Notwithstanding any other provision of this Plan, in no event may any Option Right provide for the payment of dividend equivalents.

7. RESTRICTED SHARES

The Committee may also authorize the grant or sale to eligible employees or Nonemployee Directors of Restricted Shares. Each such grant or sale may utilize any or all of the authorizations, and shall be subject to all of the requirements, contained in the following provisions:


A.	Each such grant or sale shall constitute an immediate transfer of the ownership of Shares to the Grantee in consideration of the performance of services, entitling such Grantee to voting, dividend and other ownership rights, but subject to the substantial risk of forfeiture and restrictions on transfer hereinafter referred to.


B.	Each such grant or sale may be made without additional consideration or in consideration of a payment by such Grantee that is less than the Market Value per Share at the Date of Grant.



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Each such grant or sale shall provide that the Restricted Shares covered by such grant or sale shall be subject, except (if the Committee shall so determine) in the event of Retirement, death or disability or a Change of Control or other similar transaction or event, for a period of not less than 3 years to be determined by the Committee at the Date of Grant (which period may lapse on a pro-rated, graded, or cliff basis as determined by the Committee), to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code.

Each such grant or sale shall provide that during the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Shares shall be prohibited or restricted in the manner and to the extent prescribed by the Committee at the Date of Grant (which restrictions may include, without limitation, rights of repurchase or first refusal in the Company or provisions subjecting the Restricted Shares to a continuing substantial risk of forfeiture in the hands of any transferee).

Any grant of Restricted Shares may specify Management Objectives which, if achieved, will result in termination or early termination of the restrictions applicable to such shares and each such grant shall specify in respect of such specified Management Objectives, a minimum acceptable level of achievement and shall set forth a formula for determining the number of Restricted Shares on which restrictions will terminate if performance is at or above the minimum level, but falls short of full achievement of the specified Management Objectives.

Any such grant or sale of Restricted Shares may require that any or all dividends or other distributions paid thereon during the period of such restrictions be automatically deferred and reinvested in additional Restricted Shares, which may be subject to the same restrictions as the underlying award; provided that any dividends with respect to Restricted Shares that vest based on the achievement of Management Objectives shall be accumulated until such award is earned, and the dividends shall not be paid if the Management Objectives are not satisfied.

Each grant or sale of Restricted Shares shall be evidenced by an agreement that shall contain such terms and provisions, consistent with the Plan, as the Committee may approve. Unless otherwise directed by the Committee, all certificates representing Restricted Shares shall be held in custody by the Company until all restrictions thereon shall have lapsed, together with a stock power executed by the Grantee in whose name such certificates are registered, endorsed in blank and covering such Shares.

8. RESTRICTED STOCK UNITS

The Committee may also authorize the granting or sale of Restricted Stock Units to eligible employees or Nonemployee Directors. Each such grant or sale may utilize any or all of the authorizations, and shall be subject to all of the requirements contained in the following provisions:


A.	Each such grant or sale shall constitute the agreement by the Company to deliver Shares or cash to the Grantee in the future in consideration of the performance of services, but subject to the fulfillment of such conditions during the Deferral Period as the Committee may specify.


B.	Each such grant or sale may be made without additional consideration or in consideration of a payment by such Grantee that may be less than the Market Value per Share at the Date of Grant.

Each such grant or sale shall be subject, except (if the Committee shall so determine) in the event of Retirement, death or disability or a Change of Control or other similar transaction or event, to a Deferral Period of not less than 3 years, as determined by the Committee at the Date of Grant. Unless otherwise determined by the Committee at the Date of Grant, the Deferral Period shall immediately lapse upon the Retirement of the Grantee.


D.	During the Deferral Period, the Grantee shall have no right to transfer any rights under his or her award and will have no voting rights.

Any grant of Restricted Stock Units may specify Management Objectives which, if achieved, will result in termination or early termination of the Deferral Period applicable to such Restricted Stock Units and each such grant shall specify in respect of such specified Management Objectives, a minimum acceptable level of achievement and shall set forth a formula for determining the number of Restricted Stock Units payable upon termination of the Deferral Period if performance is at or above the minimum level, but falls short of full achievement of the specified Management Objectives.



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Each grant or sale of Restricted Stock Units will specify the time and manner of payment of the Restricted Stock Units that have been earned. Any grant or sale may specify that the amount payable with respect thereto may be paid by the Company in cash, in Shares or in any combination thereof and may either grant to the Grantee or retain in the Committee the right to elect among those alternatives.


G.	Each grant or sale of Restricted Stock Units shall be evidenced by an agreement containing such terms and provisions, consistent with the Plan, as the Committee may approve.

Each grant or sale of Restricted Stock Units may provide the Grantee with dividend equivalents, on either a current or deferred or contingent basis, and either in cash or in additional Shares, as determined by the Committee in its sole discretion and set forth in the related award agreement; provided that dividend equivalents with respect to Restricted Stock Units that vest based on the achievement of Management Objectives shall be accumulated until such award is earned, and the dividend equivalents shall not be paid if the Management Objectives are not satisfied.

9. APPRECIATION RIGHTS

The Committee may also authorize grants to Grantees of Appreciation Rights. An Appreciation Right shall be a right of the Grantee to receive from the Company an amount, which shall be determined by the Committee and shall be expressed as a percentage (not exceeding 100 percent) of the Spread at the time of the exercise of such right, upon such terms and conditions as the Committee may determine in accordance with the following provisions:


A.	Any grant may specify that the amount payable upon the exercise of an Appreciation Right may be paid by the Company in cash, Shares or any combination thereof and may either grant to the Grantee or reserve to the Committee the right to elect among those alternatives.


B.	Any grant may specify that the amount payable upon the exercise of an Appreciation Right shall not exceed a maximum specified by the Committee on the Date of Grant.


C.	Any grant may specify (i) a waiting period or periods before Appreciation Rights shall become exercisable and (ii) permissible dates or periods on or during which Appreciation Rights shall be exercisable.


D.	Any grant may specify that an Appreciation Right may be exercised only in the event of Retirement, death or disability of the Grantee or a Change of Control of the Company or other similar transaction or event.


E.	Each grant shall be evidenced by an agreement, which shall describe the subject Appreciation Rights, identify any related Option Rights, state that the Appreciation Rights are subject to all of the terms and conditions of this Plan and contain such other terms and provisions as the Committee may determine consistent with this Plan.


F.	Any grant of Appreciation Rights may specify Management Objectives that must be achieved as a condition of the exercise of such rights.


G.	Regarding Tandem Appreciation Rights only: Each grant shall provide that a Tandem Appreciation Right may be exercised only (i) at a time when the related Option Right (or any similar right granted under any other plan of the Company) is also exercisable and the Spread is positive and (ii) by surrender of the related Option Right (or such other right) for cancellation.


H.	Notwithstanding any other provision of this Plan, in no event may any Appreciation Right provide for the payment of dividend equivalents.


I.	Regarding Free-standing Appreciation Rights only:


(i)	Each grant shall specify in respect of each Free-standing Appreciation Right a Base Price per Common Share, which shall be equal to or greater than the Market Value per Share on the Date of Grant.


(ii)	Successive grants may be made to the same Grantee regardless of whether any Free-standing Appreciation Rights previously granted to such Grantee remain unexercised.



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(iii)

Each grant shall specify the period or periods of continuous employment of the Grantee by the Company or any Subsidiary that are necessary before the Free-standing Appreciation Rights or installments thereof shall become exercisable, and any grant may provide for the earlier exercise of such rights in the event of Retirement, death or disability of the Grantee or a change in control of the Company or other similar transaction or event. Unless otherwise determined by the Committee at the Date of Grant, the Free-standing Appreciation Rights shall immediately become exercisable upon the Retirement of the Grantee and shall remain exercisable until 10 years from the Date of Grant.


(iv)	No Free-standing Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant.

10. PERFORMANCE SHARES

The Committee may also authorize the granting of Performance Shares that will become payable to a Grantee upon achievement of specified Management Objectives during the Performance Period. Each such grant may utilize any or all of the authorizations, and shall be subject to all of the requirements, contained in the following provisions:

Each grant will specify the number of Performance Shares to which it pertains, which number may be subject to adjustment to reflect changes in compensation or other factors; provided, however, that no such adjustment will be made in the case of a Qualified Performance-Based Award where such action would result in the loss of the otherwise available exemption of the award under Section 162(m) of the Code.


B.	The Performance Period with respect to each Performance Share will be such period of time (not less than one year), as will be determined by the Committee at the time of grant which may be subject to earlier lapse or other modification in the event of the Retirement, death or disability of a Grantee, or a Change of Control of the Company or other similar transaction or event.

Any grant of Performance Shares will specify Management Objectives which, if achieved, will result in payment or early payment of the award, and each grant may specify in respect of such Management Objectives a minimum acceptable level of achievement and may set forth a formula for determining the number of Performance Shares that will be earned if performance is at or above the minimum or threshold level or levels, or is at or above the target level or levels, but falls short of maximum achievement of the specified Management Objectives. The grant of Performance Shares will specify that, before the Performance Shares will be earned and paid, the Committee must certify that the Management Objectives have been satisfied.


D.	Each grant will specify the time and manner of payment of Performance Shares that have been earned. Each grant will specify that the amount payable with respect thereto may be paid by the Company in cash, in Shares or in any combination thereof and may either grant to the Grantee or retain in the Committee the right to elect among those alternatives.


E.	Any grant of Performance Shares may specify that the amount payable or the number of Shares issued with respect thereto may not exceed maximums specified by the Committee at the Date of Grant.


F.	Each grant of Performance Shares will be evidenced by an agreement and will contain such other terms and provisions, consistent with this Plan, as the Committee may approve.

Each grant Performance Shares may provide the Grantee with dividend equivalents, either in cash or in additional Shares, as determined by the Committee in its sole discretion and set forth in the related award agreement; provided that any such dividend equivalents shall be accumulated until the Performance Shares are earned, and the dividend equivalents shall not be paid if the Management Objectives are not satisfied.

11. DURATION

No awards may be granted under this Plan after March 13, 2023, but all grants made on or prior to such date shall continue in effect thereafter subject to the terms of the Plan.

12. MISCELLANEOUS

A. ADJUSTMENTS IN THE EVENT OF CHANGE IN COMMON STOCK



	9

The Committee shall make or provide for such adjustments in the numbers of Shares covered by outstanding Option Rights, Restricted Shares, Restricted Stock Units, Appreciation Rights or Performance Shares granted hereunder, in the price per share applicable to such Option Rights and Appreciation Rights and in the kind of shares covered thereby, as the Committee, in its sole discretion, exercised in good faith, may determine is equitably required to prevent dilution or enlargement of the rights of Grantees that otherwise would result from (i) any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, or (ii) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (iii) any other corporate transaction or event having an effect similar to any of the foregoing. With respect to each adjustment contemplated by the foregoing sentence, no such adjustment shall be made to the extent that such adjustment would cause an award to violate the provisions of Section 409A of the Code. Moreover, in the event of any such transaction or event, the Committee, in its discretion, may provide in substitution for any or all outstanding awards under the Plan such alternative consideration as it, in good faith, may determine to be equitable in the circumstances and may require in connection therewith the surrender of all awards so replaced in a manner that complies with Section 409A of the Code. The Committee shall also make or provide for such adjustments in the numbers of Shares specified in Section 5-B of the Plan as the Committee in its sole discretion, exercised in good faith, may determine is appropriate to reflect any transaction or event described in this Section 12-A; provided, however, that any such adjustment to the number specified in Section 5-B(iii)(a) will be made only if and to the extent that such adjustment would not cause any Option Right intended to qualify as an Incentive Stock Option to fail to qualify.

B. TRANSFERABILITY

(i)

Except as provided in Section 12-B(iii) below, no Option Right, Restricted Share, Restricted Stock Unit, Appreciation Right or Performance Share granted under the Plan will be transferable by a Grantee other than by will or the laws of descent and distribution. Except as otherwise determined by the Committee, Option Rights and Appreciation Rights will be exercisable during the Grantee's lifetime only by him or her or by his or her guardian or legal representative.

(ii)

The Committee may specify at the Date of Grant that part or all of the Shares that are (a) to be issued or transferred by the Company upon the exercise of Option Rights or Appreciation Rights or upon payment under any grant of Restricted Stock Units or Performance Shares or (b) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 7 of the Plan, will be subject to further restrictions on transfer.

(iii)

The Committee may determine that Option Rights (other than Incentive Stock Options), Restricted Shares, Restricted Stock Units, Performance Shares or Appreciation Rights may be transferable by a Grantee, without payment of consideration therefor by the transferee, only to any one or more members of the Grantee's immediate family; provided, however, that (a) no such transfer shall be effective unless reasonable prior notice thereof is delivered to the Company and such transfer is thereafter effected in accordance with any terms and conditions that shall have been made applicable thereto by the Company or the Board and (b) any such transferee shall be subject to the same terms and conditions hereunder as the Grantee. For the purposes of this Section 12-B, the term “immediate family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Grantee's household (other than a tenant or Grantee), a trust in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Grantee) control the management of assets, and any other entity in which these persons (or the Grantee) own more than fifty percent of the voting interests.


C.	APPLICATION OF PROCEEDS

The proceeds received by the Company from the sale of Shares under the Plan shall be used for general corporate purposes.

D. WITHHOLDING TAXES

Upon the issuance of any Shares or any payment made or benefit realized by a Grantee under the Plan, the Company shall have the right to require the Grantee to remit to the Company an amount payable in cash, money



	10

order, certified check or cashier's check that is sufficient to satisfy all federal, state and local withholding tax requirements prior to the delivery of any certificate(s) for shares of common stock or any payment or benefit.

The Committee, in its sole discretion, may permit or require the Grantee to pay such taxes through the withholding of Shares otherwise deliverable to such Grantee or the delivery to the Company of Shares otherwise acquired by the Grantee. In no event, however, shall the Company accept Shares for payment of taxes in excess of required tax withholding rates, except that, in the discretion of the Committee, a Grantee or such other person may surrender Shares owned by the Grantee to satisfy any tax obligations resulting from any such transaction.

E. RIGHT TO TERMINATE EMPLOYMENT

Nothing in the Plan or any agreement entered into pursuant to the Plan shall confer upon any Grantee the right to continue in the employment of the Company or any Subsidiary or service as a Nonemployee Director or affect any right which the Company has to terminate any Grantee's employment or other service at any time.


F.	GOVERNING LAW

The Plan and all grants and awards and actions taken thereunder shall be construed and its provisions enforced and administered in accordance with the internal substantive laws of Ohio, except to the extent that such laws may be superseded by any federal laws.

G. AWARDS NOT TREATED AS COMPENSATION UNDER BENEFIT PLANS

No awards under the Plan shall be considered as compensation under any employee benefit plan of the Company, except as specifically provided in any such plan or as otherwise determined by the Board of Directors.

H. ELIMINATION OF FRACTIONAL SHARES

If, under any provision of the Plan or formula used to calculate award levels of Option Rights, Restricted Shares, Restricted Stock Units, Appreciation Rights or Performance Shares, the number so computed is not a whole number, such number of shares shall be rounded down to the next whole number.

I. PROHIBITION OF RE-PRICING

Except for adjustments made pursuant to Sections 12-A or 13, neither the Board nor the Committee will, without the further approval of the shareholders of the Company, authorize the amendment of any outstanding Option Right or Appreciation Right to reduce the Option Price or Base Price. No Option Right or Appreciation Right will be cancelled and replaced with an award having a lower Option Price or Base Price, or for another award, or for cash without further approval of the shareholders of the Company, except as provided in Sections 12-A or 13. Furthermore, no Option Right or Appreciation Right will provide for the payment, at the time of exercise, of a cash bonus or grant or sale of another award without further approval of the shareholders of the Company. This Section 12-I is intended to prohibit the re-pricing of “underwater” Option Rights or Appreciation Rights without shareholder approval and will not be construed to prohibit the adjustments provided for in Sections 12-A or 13.

J. CLAWBACK POLICY

Notwithstanding any other provision of the Plan to the contrary, any award granted hereunder shall be subject to forfeiture or repayment pursuant to the terms of any applicable compensation recovery (or “clawback”) policy maintained by the Company from time to time, as such policy may be amended, including, but not limited to, any amendment adopted to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules or regulations issued by the Securities Exchange Commission or applicable securities exchange.

13. CHANGE OF CONTROL

In the event of a Change of Control, the Committee, in its sole discretion, may provide for or take such actions, if any, as it deems necessary or desirable with respect to any award that is outstanding as of the date of the Change of Control. Such actions may include, without limitation: (a) the acceleration of the vesting, settlement and/or exercisability of an award; (b) the payment of a cash amount in exchange for the cancellation of an award; (c) the cancellation of Option



	11

Rights and/or Appreciation Rights without payment therefor if the Market Value per Share on the date of the Change of Control does not exceed the Option Price or Base Price per Share of the applicable awards; and/or (d) the issuance of substitute awards that substantially preserve the value, rights and benefits of any affected awards.

14. COMPLIANCE WITH SECTION 409A OF THE CODE

To the extent applicable, it is intended that this Plan and any grants made hereunder comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Grantees. This Plan and any grants made hereunder shall be administered in a manner consistent with this intent. Any reference in this Plan to Section 409A of the Code will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

Neither a Grantee nor any of a Grantee's creditors or beneficiaries shall have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a Grantee or for a Grantee's benefit under this Plan and grants hereunder may not be reduced by, or offset against, any amount owing by a Grantee to the Company or any of its affiliates.

If, at the time of a Grantee's separation from service (within the meaning of Section 409A of the Code), (i) the Grantee shall be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company shall make a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company shall not pay such amount on the otherwise scheduled payment date but shall instead pay it, without interest, on the first business day of the seventh month after such six-month period.

Notwithstanding any provision of this Plan and grants hereunder to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Plan and grants hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, a Grantee shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Grantee or for a Grantee's account in connection with this Plan and grants hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its affiliates shall have any obligation to indemnify or otherwise hold a Grantee harmless from any or all of such taxes or penalties.

15. EFFECTIVE DATE/APPROVAL BY SHAREHOLDERS


A.	The Plan is amended and restated as provided herein effective as of March 14, 2013, subject to approval of the Plan by the Company's shareholders at the Company's 2013 annual meeting of shareholders to the extent required by applicable law and the rules of the New York Stock Exchange.

Except as otherwise provided herein, all awards granted prior to March 14, 2013, shall be governed by the terms of the Plan in effect prior to such date, and all awards granted during the period beginning on March 14, 2013, and ending prior to approval of the Plan by the Company's shareholders in accordance with Section 15-A shall be subject to the provisions of Section 5-B of the Plan in effect immediately prior to March 14, 2013.

16. AMENDMENT AND TERMINATION OF THE PLAN

The Plan may be amended from time to time or suspended or terminated by the Committee; provided, however, that any amendment that must be approved by the shareholders of the Company in order to comply with applicable law or the rules of the New York Stock Exchange or, if the Shares are not traded on the New York Stock Exchange, the principal national securities exchange upon which the Shares are traded or quoted, shall not be effective unless and until such approval has been obtained. Without limiting the generality of the foregoing, the Committee may amend the Plan to eliminate provisions which are no longer necessary as a result of changes in tax or securities laws or regulations, or in the interpretation thereof.



	12

EX-10.4 5 exhibit104.htm EXHIBIT Exhibit 10.4

EXHIBIT 10.4

FOREST CITY ENTERPRISES, INC.

Restricted Shares Agreement

THIS RESTRICTED SHARES AGREEMENT (this "Agreement") effective as of _____________ is made by and between Forest City Enterprises, Inc., an Ohio corporation (the "Company"), and _________, the Grantee (the "Grantee"). All capitalized terms have the meanings set forth in the Forest City Enterprises, Inc. 1994 Stock Plan (As Amended and Restated as of March 14, 2013) (the "Plan") unless otherwise specifically provided.

WHEREAS, the Board of Directors is of the opinion that the interests of the Company and its shareholders will be advanced by affording present and future executives and key employees an opportunity to secure stock ownership in the Company; and

WHEREAS, the execution of a restricted shares agreement substantially in the form hereof has been authorized by a resolution of the Committee duly adopted on ___________; and

NOW, THEREFORE, pursuant to the Plan, and subject to the terms and conditions thereof and the terms and conditions hereinafter set forth, the Company hereby confirms to the Grantee, effective as of ___________(the "Date of Grant"), the number of Restricted Shares that are shown on the signature page of this Agreement as the Original Award.

1. Definitions. All capitalized terms have the meanings set forth in the Plan unless otherwise specifically provided. As used in this Agreement, the following terms have the following meanings:

"Cause" means gross neglect of duty, dishonesty, conviction of a felony, disloyalty, intoxication, drug addiction, or other similar misconduct adverse to the best interests of the Company.

"Disability" means disability as defined in the Company's Long Term Disability Plan, as amended from time to time.

"Original Award" means the number of Shares indicated as the Original Award on the signature page of this Agreement.

"Subsidiary" has the meaning set forth in the Plan, except that for the purpose of Section 4(b) of this Agreement only, "Subsidiary" shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of such corporations (or a group of corporations that themselves are Subsidiaries) other than the last corporation in the unbroken chain owns stock possessing fifty percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

2. Issuance of Restricted Shares. The Shares will be treated as issued on the Date of Grant as fully paid and nonassessable shares and will be represented by certificates

registered in the name of the Grantee and bearing a legend referring to the restrictions set forth in this Agreement.

3. Restriction on Transfer. The Shares may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by the Grantee, except to the Company, until they have become nonforfeitable in accordance with Section 4 of this Agreement. Any purported transfer, encumbrance or other disposition of the Shares that is in violation of this Section 3 will be null and void, and the other party to any such purported transaction will not obtain any rights to or interest in the Shares.

4. Vesting. (a) The Shares will become nonforfeitable upon the occurrence of the following:

Amount Nonforfeitable Date Nonforfeitable


1/4 of the Original Award	On the second anniversary of the Date of Grant.


1/4 of the Original Award	On the third anniversary of the Date of Grant.


All Forfeitable Shares	Fourth anniversary of the Date of Grant.

(b) Notwithstanding the provisions of Section 4(a) or Section 5, all of the Shares will immediately become nonforfeitable if the Grantee:


(i)	ceases to be employed by the Company or a Subsidiary due to the Grantee’s death or Disability,


(ii)	ceases to be employed by the Company or a Subsidiary due to the Grantee’s Retirement, with the consent of the Committee, or


(iii)	ceases to be employed by the Company or a Subsidiary as the result of a termination by the employer without Cause.

5. Termination of Rights and Forfeiture of Shares. Except for Shares that have become nonforfeitable, all of the Shares will be forfeited if the Grantee ceases to be employed by the Company or a Subsidiary at any time prior to the fourth anniversary of the Date of Grant. In the event of a forfeiture, any certificate(s) representing the Shares will be canceled.

6. Dividend, Voting and Other Rights. Except as otherwise provided in this Agreement, the Grantee will have all of the rights of a shareholder with respect to the Shares, including the right to vote the Shares and receive any dividends that may be paid thereon; provided, however, that any additional Shares or other securities that the Grantee may become entitled to receive pursuant to a stock dividend, stock split, combination of shares, recapitalization, merger, consolidation, separation or reorganization or any other change in the capital structure of the Company will be subject to the same restrictions as the Shares.

7. Retention of Stock Certificate(s) by Company. Any certificates representing Shares will be held in custody by the Company together with a stock power endorsed in blank by the Grantee with respect thereto, until those Shares have become nonforfeitable in accordance with Section 4.

8. Agreement Subject to Plan. This Agreement is subject to the provisions of the Plan and shall be interpreted in accordance therewith. The Grantee hereby acknowledges receipt of a copy of the Plan.

9. Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal, state and other applicable securities laws with respect to the Restricted Shares; provided, however, notwithstanding any other provision of this Agreement, the Company will not be obligated to issue any securities pursuant to this Agreement if the issuance thereof would result in a violation of any such law.

10. Withholding Taxes. To the extent the Company or a Subsidiary is required to withhold any taxes in connection with the vesting of Shares under this Agreement, then the Grantee shall surrender to the Company a number of the Shares granted hereunder with a value equal to the required withholding (based on the fair market value of the Shares on the date of surrender); provided that in no event shall the value of the Shares surrendered exceed the minimum amount of taxes required to be withheld or such other amount that will not result in a negative accounting impact. If the Company or any Subsidiary is required to withhold any taxes other than in connection with the vesting of Shares under this Agreement (including such taxes as may be required to be withheld in connection with the payment of dividends), then the Company or Subsidiary (as applicable) shall have the right in its sole discretion to (a) withhold such required tax withholding from dividends paid under this Agreement, (b) require the Grantee to pay or provide for payment of the required tax withholding, or (c) deduct the required tax withholding from any amount of salary, bonus, incentive compensation or other amounts otherwise payable in cash to the Grantee (other than deferred compensation subject to Section 409A of the Code).

11. Employment Rights. Nothing contained in the Plan or this Agreement shall confer upon the Grantee any right to be continued in the employment of the Company or any Subsidiary, or interfere in any way with the right of the Company, or such Subsidiary, to terminate his or her employment at any time.

12. Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement will not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary and will not affect the amount of any insurance coverage available to any beneficiary under any insurance plan covering employees of the Company or a Subsidiary.

13. Severability. In the event that one or more of the provisions of this Agreement are invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.

14. Governing Law. This Agreement is made under, and will be construed in accordance with, the internal substantive laws of the State of Ohio without regard to conflict of law principles of such state.

15. Restrictive Legends. The Grantee acknowledges that the Shares are subject to the terms of this Agreement and to transfer restrictions imposed by the securities laws, and that the certificates representing the Shares will bear a restrictive legend substantially as follows:

The Shares represented by this certificate were issued pursuant to a Restricted Shares Agreement effective as of ________ between Forest City Enterprises, Inc. and the holder named on the face of this certificate, and are subject to the terms and conditions, including restrictions on transfer, of that Agreement. Any purported transfer, encumbrance or other disposition in violation of that Agreement will be null and void.

16. Entire Agreement. Subject to Section 8, this Agreement represents the entire agreement between the Company and the Grantee with respect to these Restricted Shares and supersedes all prior agreements whether in writing or otherwise.

The undersigned Grantee hereby accepts the award of Restricted Shares granted pursuant to this Agreement, subject to the terms and conditions of the Plan and the terms and conditions set forth herein.

_______________________________________

[Name]

Date: __________________________________

Executed in the name and on behalf of the Company at Cleveland, Ohio as of the ___ day of ____________, _________.

FOREST CITY ENTERPRISES, INC.

By: ________________________________

Name: David J. LaRue

Title: President and Chief Executive Officer



Date of Grant:
Original Award:	Restricted Shares

EX-10.5 6 exhibit105.htm EXHIBIT Exhibit 10.5

EXHIBIT 10.5

FOREST CITY ENTERPRISES, INC.

PERFORMANCE SHARES AGREEMENT

WHEREAS, _________ (the “Grantee”) is an employee of Forest City Enterprises, Inc. (the “Company”) or one of its Subsidiaries; and

WHEREAS, the grant of Performance Shares was authorized by a resolution of the Compensation Committee (the “Committee”) of the Board of Directors of the Company that was duly adopted on __________ (the “Date of Grant”), and the execution of a Performance Shares Agreement substantially in the form hereof (this “Agreement”) to evidence such grant was authorized by a resolution of the Committee that was duly adopted on the Date of Grant; and

WHEREAS, on the Date of Grant the Committee also approved a Statement of Performance Goals (the “Statement of Performance Goals”) setting forth the goals required to be achieved in order for the Grantee to earn some or all of the Performance Shares, up to a maximum of 200% of the Target Performance Shares (as defined below).

NOW THEREFORE, pursuant to the Company’s 1994 Stock Plan (As Amended and Restated as of March 14, 2013) (the “Plan”) and subject to the terms and conditions thereof and the terms and conditions hereinafter set forth, the Company hereby confirms to Grantee, effective as of the Date of Grant, the grant of _________ Performance Shares (the “Target Performance Shares”).

NOW, THEREFORE, the Company and the Grantee hereby agree as follows:

1.Definitions.

All terms used herein with initial capital letters that are defined in the Plan shall have the meanings assigned to them in the Plan, and the following additional terms, when used herein with initial capital letters, shall have the following meanings:

(a) “Disability” means disability as defined under the Company’s Long Term Disability Plan, as amended from time to time.

(b) “Management Objectives” means the relative total shareholder return calibrations established by the Committee for the Grantee for the Performance Period covered by this Agreement as set forth in the Statement of Performance Goals. The total number of Performance Shares to be earned by the Grantee shall be determined using the schedules for relative total shareholder return set forth on the Statement of Performance Goals.

(c) “Performance Period” means the period of three-years and eleven months commencing on February 1, 2013 and ending on December 31, 2016.

2. Earn-Out of Performance Shares.

(a) Grantee shall be entitled to receive payment with respect to the Target Performance Shares:

(i) Subject to Section 3 hereof, only if Grantee remains in the continuous employ of the Company or a Subsidiary during the entire Performance Period;

(ii) On the basis of the Grantee’s Grant Tier without regard to any changes in the Grantee’s position with the Company or a Subsidiary (e.g., a promotion or demotion) during the Performance Period; and

(iii) Based on the actual performance of the Company during the Performance Period measured against the goals relating to the Management Objectives set forth on the Statement of Performance Goals.

(b) In no event shall the Grantee earn (i) more than 200% of the Target Performance Shares or (ii) any Target Performance Shares if the actual results achieved fall below the threshold level with respect to all of the Management Objectives established for the Grantee for the Performance Period.

(c) Any fraction of a Performance Share resulting from the calculations required in connection with this Agreement shall be rounded down to the nearest full Share.

(d) Following the Performance Period, the Committee shall determine in writing whether and to what extent the goals relating to the Management Objectives have been satisfied for the Performance Period and shall determine in writing the number of Performance Shares that shall have become earned hereunder. It is intended that any Performance Shares payable under this Agreement will qualify as “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code (or otherwise be exempt from the application of Section 162(m) of the Code), and this Agreement shall be interpreted and administered in accordance with such intent. In that regard, the Committee may not make any adjustments with respect to the Performance Shares that would result in the loss of the otherwise available exemption of the Performance Shares under Section 162(m)(4)(C) of the Code.

3. Pro Rata Earning of Performance Shares on Retirement, Death or Disability. Notwithstanding Section 2 hereof and subject to the final sentence of this Section 3 and the payment provisions of Section 5 hereof, if the Grantee’s employment with the Company and its Subsidiaries terminates during the Performance Period and at least one year after the beginning of the Performance Period due to the Grantee’s Retirement, death or Disability, the Grantee shall be eligible to receive payment of a portion of the Performance Shares, pro-rated based on the number of whole months that the Grantee was employed by the Company or any Subsidiary during the Performance Period.



	2

(a) Any pro-rated Performance Shares payable pursuant to this Section 3 on account of the Grantee’s termination of employment due to Disability or death shall be determined based upon the Target Performance Shares and shall be paid within sixty (60) days following termination of employment. Awards payable in the event of death shall be paid to the Grantee’s estate.

(b) Any pro-rated Performance Shares payable pursuant to this Section 3 on account of the Grantee’s termination of employment due to Retirement shall be determined based upon actual performance through the end of the Performance Period (as determined by the Committee pursuant to Section 2 hereof) and shall be paid at the time provided in Section 5 hereof.

4. Forfeiture of Award. Except to the extent Grantee has earned the right to receive payment for Performance Shares pursuant to Section 2 or 3 hereof, Grantee’s right to receive payment shall be forfeited automatically and without further notice on the date that Grantee ceases to be an employee of the Company or a Subsidiary prior to the last day of the Performance Period.

5. Payment of Performance Shares. Performance Shares earned as provided in Section 2 or 3 hereof shall be paid to Grantee or his or her executor or administrator, as the case may be, in Shares no more than two and one-half months after the later of (i) the end of the Performance Period or (ii) the end of the calendar year in which the end of the Performance Period occurs.

6. Transferability. Grantee’s right to receive any Performance Shares shall not be transferable nor assignable by Grantee other than by will or by the laws of descent and distribution.

7. Right to Terminate Employment. Nothing contained in this Agreement shall confer upon Grantee any right with respect to continuance of employment by the Company or any Subsidiary, nor limit or affect in any manner the right of the Company or any Subsidiary to terminate the employment or adjust the compensation of Grantee.

8. Taxes and Withholding. To the extent the Company or any Subsidiary is required to withhold any taxes in connection with the delivery of Shares under this Agreement, then the Company or Subsidiary (as applicable) shall retain a number of Shares otherwise deliverable hereunder with a value equal to the required withholding (based on the fair market value of the Shares on the date of delivery); provided that in no event shall the value of the Shares retained exceed the minimum amount of taxes required to be withheld or such other amount that will not result in a negative accounting impact. If the Company or any Subsidiary is required to withhold any taxes other than in connection with the delivery of Shares under this Agreement, then the Company or affiliate (as applicable) shall have the right in its sole discretion to require the Grantee to pay or provide for payment of the required tax withholding, or to deduct the required tax withholding from any amount of salary, bonus, incentive compensation or other amounts otherwise payable in cash to the Grantee (other than deferred compensation subject to Section 409A of the Code).



	3

9. Payment of Dividends. No dividends shall be accrued or earned with respect to any Performance Shares until such Performance Shares are earned and paid to the Grantee as provided in this Agreement.

10. Adjustments. The number and kind of Shares subject to this Agreement shall be subject to adjustment as provided in Section 12-A of the Plan.

11. Compliance with Section 409A of the Code. To the extent applicable, it is intended that this Agreement be exempt from, or comply with, the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Grantee. This Agreement and the Plan shall be administered in a manner consistent with this intent. Reference to Section 409A of the Code is to Section 409A of the Internal Revenue Code of 1986, as amended, and will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

12. Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, that notwithstanding any other provision of this Agreement, no Performance Shares shall be paid if the payment thereof would result in a violation of any such law.

13. Clawback Policy. Notwithstanding any other provision of this Agreement to the contrary, the Grantee may be required to forfeit any or all of the Performance Shares and repay any or all of the Shares acquired hereunder pursuant to the terms of any applicable compensation recovery (or "clawback") policy maintained by the Company or a Subsidiary from time to time, as any such policy may be amended, including, but not limited to, any amendment adopted to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules or regulations issued by the Securities Exchange Commission or applicable securities exchange.

14. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment shall adversely affect the rights of Grantee under this Agreement without Grantee’s consent (provided, however, that the Grantee’s consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code).

15. Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

16. Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan. The Compensation Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with the grant of Performance Shares.



	4

17. Successors and Assigns. Without limiting Section 6 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Grantee, and the successors and assigns of the Company.

18. Governing Law. The interpretation, performance, and enforcement of this Agreement shall be governed by the internal substantive laws of the State of Ohio, without giving effect to the principles of conflict of laws thereof.

19. Notices. Any notice to the Company provided for herein shall be in writing to the Company and any notice to Grantee shall be addressed to Grantee at his or her address on file with the Company. Except as otherwise provided herein, any written notice shall be deemed to be duly given if and when delivered personally or deposited in the United States mail, first class certified or registered mail, postage and fees prepaid, return receipt requested, and addressed as aforesaid. Any party may change the address to which notices are to be given hereunder by written notice to the other party as herein specified (provided that for this purpose any mailed notice shall be deemed given on the third business day following deposit of the same in the United States mail).

The undersigned Grantee hereby accepts the award of Performance Shares granted pursuant to this Agreement, subject to the terms and conditions of the Plan and the terms and conditions set forth herein.

_______________________________________

[Name]

Date: __________________________________

Executed in the name and on behalf of the Company at Cleveland, Ohio as of the ___ day of ___________, _______.

FOREST CITY ENTERPRISES, INC.

By: ____________________________

Name: David J. LaRue

Title: President and Chief Executive Officer



	5

EX-10.6 7 exhibit106.htm EXHIBIT Exhibit 10.6

EXHIBIT 10.6

STOCK OPTION AGREEMENT

THIS AGREEMENT, effective as of __________ by and between FOREST CITY ENTERPRISES, INC., an Ohio corporation of Cleveland, Ohio, (the "Company") and _________, an employee of the Company or a Subsidiary (the "Grantee"). All capitalized terms have the meanings set forth in the Forest City Enterprises, Inc. 1994 Stock Plan (As Amended and Restated as of March 14, 2013) (the "Plan") unless otherwise specifically provided.

WHEREAS, the execution of a Stock Option Agreement substantially in the form hereof has been authorized by a resolution of the Committee duly adopted on ___________; and

NOW THEREFORE, pursuant to the Plan, and subject to the terms and conditions thereof and the terms and conditions hereinafter set forth, the Company hereby confirms to the Grantee, effective as of ___________ (the "Date of Grant"), the grant of Option Rights to purchase an aggregate of _________ Shares. As set forth in the table below, all or a portion of the Option Rights may be intended to constitute an “incentive stock option” within the meaning of Section 422 of the Code (such Option Rights, if any, the "Incentive Stock Option Rights"), and all or a portion of the Option Rights may be intended to constitute a nonqualified stock option (such Option Rights, if any, the "Nonqualified Option Rights"). This Agreement shall be construed in a manner that will enable the Incentive Stock Option Rights, if any, to qualify as such. The Nonqualified Option Rights, if any, shall not be treated as an “incentive stock option” within the meaning of Section 422 of the Code.



Incentive Stock Option Rights:	_______ Shares
Nonqualified Option Rights:	_______ Shares


1.	DEFINITIONS. All capitalized terms have the meanings set forth in the Plan unless otherwise specifically provided. As used in this Agreement, the following term has the following meaning:

"Disability" means disability as defined in the Company's Long Term Disability Plan, as amended from time to time.


2.	OPTION PRICE. The Option Price with respect to the Shares covered by the Option Rights shall be $______ per Share, the Market Value per Share as of the close of business on the Date of Grant.


3.	OPTION PERIOD; VESTING AND TIME OF EXERCISE OF OPTION RIGHTS. (0) The Option Rights shall continue in effect for a period of 10 years from the Date of

Grant, except as such option period may be reduced as hereinafter provided in Section 6 of this Agreement as a result of certain terminations of the employment of the Grantee.


(b)	The Option Rights shall be exercisable cumulatively over the option period only in accordance with the following terms, conditions and provisions:

(i)

Except as otherwise provided in the Plan or this Agreement, the Option Rights shall not be exercisable prior to the second anniversary of the Date of Grant, and upon such day the Option Rights shall automatically become vested and exercisable with respect to 25% of the Option Rights. Thereafter, upon the third anniversary of the Date of Grant, the Grantee may exercise an additional 25% up to 50% of the Option Rights. Upon the fourth anniversary and thereafter until the tenth anniversary of the Date of Grant, the Grantee may exercise an additional 50% up to 100% of the Option Rights. Schedule I, attached hereto, lists the number of Shares as to which the Grantee may exercise the Option Rights upon the second, third and fourth through tenth anniversaries of the ten-year option period.

(ii)

Except as hereinafter provided in Section 6 of this Agreement, no part of the Option Rights may be exercised unless the Grantee is, at the date of such exercise, in the employ of the Company or a Subsidiary, and shall have been continuously so employed since the Date of Grant. Approved absence or leave from the Company, or a Subsidiary, shall not be considered an interruption of employment for the purposes of this Agreement.

METHOD OF EXERCISE. Shares may be purchased pursuant to this Agreement only upon receipt by the Secretary of the Company of notice in writing from the Grantee of his or her intention to purchase, specifying the number of Shares as to which the Grantee desires to exercise the Option Rights, and said notice shall be accompanied by the full amount of the Option Price in the form of: cash, a certified or official bank check, a money order, a cashier's check, or in Shares owned by the Grantee and having a market value at the time of exercise equal to the total Option Price of the Shares subject to such exercise. Such form of written notice is attached hereto. In no event shall the Option Rights be exercisable as to less than 25 Shares at any one time or all of the remaining Shares then subject to the Option Rights, if less than 25.

OPTION RIGHTS CONFER NO RIGHTS AS COMMON SHAREHOLDER. The Grantee shall not be entitled to any privileges of ownership with respect to Shares subject to the Option Rights, unless and until purchased and delivered upon the exercise of the Option Rights, in whole or in part, and the Grantee becomes a shareholder of record with respect to such delivered Shares. The Grantee shall not be considered a shareholder of the Company with respect to any such Shares not so purchased and delivered.


6.	TERMINATION OF OPTION RIGHTS. (0) In the event the employment of the Grantee with the Company or a Subsidiary shall terminate under any circumstance other than

those specified in Section 6(b), (c) or (d) below, all rights to purchase Shares pursuant to the Option Rights (including rights to purchase Shares thereunder which have accrued but which then remain unexercised) shall forthwith cease and terminate.


(b)	In the event of the termination of the Grantee's employment because of Disability, the Option Rights may be exercised by the Grantee, to the extent he or she was entitled to do so on the date of termination, but not later than ten years from the Date of Grant.


(c)	If, with the consent of the Committee, the Grantee's employment shall terminate by reason of Retirement, the Option Rights shall become immediately exercisable by the Grantee on the date of his or her Retirement and shall remain exercisable until ten years from the Date of Grant.

(d)

If the Grantee shall die during his or her employment with the Company or a Subsidiary or during a period of Disability, the Option Rights shall become immediately exercisable if the Grantee was otherwise Retirement eligible and may be exercised by the legal representative of the Grantee, to the extent the Grantee was entitled to exercise the Option Rights at the time of his or her death for a one-year period from the date of death, but not later than ten years from the Date of Grant.


(e)	To the extent that the Option Rights shall not have been exercised within any applicable period specified in Section 6(b), (c) or (d) above, all further rights to purchase Shares pursuant to such Option Rights shall cease and terminate at the expiration of such period.

TRANSFERABILITY. (0) Except as provided in Section 7(b), the Option Rights may not be transferred by the Grantee other than by will or the laws of descent and distribution or pursuant to a domestic relations order. During the Grantee's lifetime, the Option Rights are exercisable only by the Grantee or, in the case of the Grantee's legal incapacity, only by his or her guardian or legal representative, provided, however, that if so determined by the Committee, the Grantee may, in a manner designated by the Committee, designate a beneficiary to exercise the rights of the Grantee under the Option Rights upon the death of the Grantee. Absent such a designation, in a case of death, the Option Rights shall be exercisable by the executor, administrator or legal representative of the deceased Grantee.

(b)

The Nonqualified Option Rights only (if any) may be transferable by the Grantee, without payment of consideration therefor by the transferee, only to any one or more members of the Grantee's immediate family; provided, however, that (i) no such transfer shall be effective unless reasonable prior notice thereof is delivered to the Company and such transfer is thereafter effected in accordance with any terms and conditions that shall have been made applicable thereto by the Committee and (ii) any such transferee shall be subject to the same terms and conditions hereunder as the Grantee. For the purposes of this Section 7, the term "immediate family" means any child, stepchild, grandchild, parent, stepparent,

grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Grantee's household (other than a tenant of the Grantee), a trust in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Grantee) control the management of assets, and any other entity in which these persons (or the Grantee) own more than fifty percent of the voting interests.


(c)	Except as permitted by the above, the Option Rights may not be sold, transferred, assigned, pledged, hypothecated or otherwise disposed of (whether by operation of law or otherwise or be subject to execution, attachment or similar process). Any attempted sale, transfer, assignment, pledge, hypothecation or encumbrance, or other disposition of the Option Rights shall be null and void.


8.	CHANGE IN STOCK CAPITALIZATION. The number and kind of Shares covered by the Option Rights and the price per share applicable to such Option Rights shall be subject to adjustment as provided in Section 12-A of the Plan.


9.	EMPLOYMENT RIGHTS. Nothing contained in the Plan or this Agreement shall confer upon the Grantee any right to be continued in the employment of the Company or any Subsidiary, or interfere in any way with the right of the Company, or such Subsidiary, to terminate his or her employment at any time.

10.

RELATION TO OTHER BENEFITS. Any economic or other benefit to the Grantee under this Agreement will not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary and will not affect the amount of any insurance coverage available to any beneficiary under any insurance plan covering employees of the Company or a Subsidiary.

11.

AMENDMENTS TO PLAN AND AGREEMENT. (0) The Committee may, without further action by the shareholders, from time to time, amend, alter, suspend or terminate the Plan, except as otherwise required by applicable law or the rules of the New York Stock Exchange or, if the Shares are not traded on the New York Stock Exchange, the principal national securities exchange upon which the Shares are traded or quoted.


(b)	This Agreement may not be modified orally. Any amendment to the Plan will be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment will adversely affect the rights of the Grantee with respect to this Option Right without the Grantee's written consent.


12.	DELIVERING OF SHARES. The Grantee shall give notice of his or her intent to exercise Option Rights, and Shares shall be delivered by the Company after full payment of the Option Price in respect of the Shares delivered, subject to the conditions of Section 4 hereof.


13.	CANCELLATION OF OPTION RIGHTS. The Committee may cancel any unexercised Option Rights if the Grantee, and while having rights to purchase hereunder, engages in any employment or activity which in any way directly or indirectly, diverts or attempts to divert from the Company any business whatsoever, and which in the opinion of the Committee is contrary to the best interests of the Company.

14.

CLAWBACK POLICY. Notwithstanding any other provision of this Agreement to the contrary, the Grantee may be required to forfeit any or all of the Option Rights and repay any or all of the Shares acquired hereunder pursuant to the terms of any applicable compensation recovery (or "clawback") policy maintained by the Company or a Subsidiary from time to time, as any such policy may be amended, including, but not limited to, any amendment adopted to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules or regulations issued by the Securities Exchange Commission or applicable securities exchange.


15.	AGREEMENT SUBJECT TO THE PLAN. This Agreement is subject to the provisions of the Plan and shall be interpreted in accordance therewith. The Grantee hereby acknowledges receipt of a copy of the Plan.

16.

COMPLIANCE WITH LAW. The Company shall make reasonable efforts to comply with all applicable federal, state and other applicable securities laws with respect to the Option Rights; provided, however, notwithstanding any other provision of this Agreement, the Company will not be obligated to issue any securities pursuant to this Agreement if the issuance thereof would result in a violation of any such law.


17.	SEVERABILITY. In the event that one or more of the provisions of this Agreement are invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.


18.	GOVERNING LAW. This Agreement shall be governed by the internal substantive laws of the State of Ohio.

19.

WITHHOLDING TAXES. If the Company shall be required to withhold any federal, state, local or foreign tax in connection with the exercise of the Option Rights, the Grantee shall pay the tax or make provisions that are satisfactory to the Company for the payment thereof. The Grantee may elect, pursuant to procedures established by the Company, to satisfy all or any part of any such withholding obligation by surrendering to the Company a portion of the Shares that are issuable to the Grantee upon the exercise of the Option Rights. If such election is made, the Shares so surrendered by the Grantee shall be credited against any such withholding obligation at their Market Value per Share on the date of such surrender. In no event, however, shall the Company accept Shares for payment of taxes in excess of required tax withholding rates.


20.	MANDATORY NOTICE OF DISQUALIFYING DISPOSITION. Without limiting any other provision hereof, the Grantee hereby agrees that if he or she disposes (whether by sale, exchange, gift, or otherwise) of Shares received from the exercise of Incentive Stock

Option Rights (if any) within two years of the Date of Grant or within one year of the exercise of such Incentive Stock Option Rights by the Grantee, the Grantee shall notify the Company of such disposition in writing within 30 days from the date of such disposition. Such written notice shall state the principal terms of such disposition and the type and amount of the consideration received for such Incentive Stock Option Rights by the Grantee in connection therewith.


21.	GENERAL. It is understood that wherever masculine pronouns are used in this Agreement, it is intended to include the feminine pronouns as well as the masculine.


22.	ENTIRE AGREEMENT. Subject to Section 15, this Agreement represents the entire agreement between the Company and the Grantee with respect to these Option Rights and supersedes all prior agreements whether in writing or otherwise.

The undersigned Grantee hereby accepts the award of Option Rights granted pursuant to this Agreement, subject to the terms and conditions of the Plan and the terms and conditions set forth herein.

____________________________________

[Name]

Date: _______________________________

Executed in the name and on behalf of the Company at Cleveland, Ohio as of the ___ day of __________, ______.

FOREST CITY ENTERPRISES, INC.

By: ________________________________

Name: David J. LaRue

Title: President and Chief Executive Officer

EX-10.7 8 exhibit107.htm EXHIBIT Exhibit 10.7

EXHIBIT 10.7

FOREST CITY ENTERPRISES, INC.

Restricted Shares Agreement

WHEREAS, __________ (the "Grantee") is a nonemployee director of Forest City Enterprises, Inc. (the "Company");

WHEREAS, a grant of Restricted Shares to the Grantee, and the execution of a Restricted Shares Agreement in the form hereof (this "Agreement") to evidence such grant, were authorized by unanimous approval of the Compensation Committee (the "Committee") of the Board of Directors (the “Board”) of the Company on ____________ (the "Date of Grant"); and

WHEREAS, the grant of Restricted Shares was made pursuant to and in compliance with the Amended Board of Directors Compensation Policy (effective February 1, 2008), subject to a total grant date fair market value of $__________ for 20___ equity award grants.

NOW, THEREFORE, pursuant to the Company's 1994 Stock Plan (As Amended and Restated as of March 14, 2013) (the "Plan"), and subject to the terms and conditions thereof and the terms and conditions hereinafter set forth, the Company hereby confirms to Grantee, effective as of the Date of Grant, the grant of the number of Restricted Shares that are shown on the signature page of this Agreement as the Original Award.

1. Definitions. All capitalized terms have the meanings set forth in the Plan unless otherwise specifically provided. As used in this Agreement, the following terms have the following meanings:

"Disability" means disability as defined in the Company’s Long Term Disability Plan, as amended from time to time.

"Original Award" means the number of Shares indicated as the Original Award on the signature page of this Agreement.

2. Issuance of Restricted Shares. The Shares will be treated as issued on the Date of Grant as fully paid and nonassessable shares and will be represented by certificates registered in the name of the Grantee and bearing a legend referring to the restrictions set forth in this Agreement.

4. Vesting. (a) The Shares will become nonforfeitable as follows:



Amount Nonforfeitable	Date Nonforfeitable
33 1/3% of the Original Award	On the first anniversary of the Date of Grant.
An additional 33 1/3% of the Original Award	On the second anniversary of the Date of Grant.
An additional 33 1/3% of the Original Award	On the third anniversary of the Date of Grant.

(b) Notwithstanding the provisions of Section 4(a) or Section 5, all of the Shares will immediately become nonforfeitable if the Grantee terminates service as a director of the Company after the Date of Grant due to the Grantee’s death or Disability.

5. Termination of Rights and Forfeiture of Shares. Except for Shares that have become nonforfeitable, all of the Shares will be forfeited if the Grantee ceases to be a director of the Company at any time prior to the third anniversary of the Date of Grant. In the event of a forfeiture, any certificate(s) representing the Shares will be canceled. Except for Shares that have become nonforfeitable, all of the Shares will be forfeited if the Grantee ceases to be a director of the Company for any reason other than provided in Section 4(b) above at any time prior to the third anniversary of the Date of Grant.

8. Agreement Subject to Plan. This Agreement is subject to the provisions of the Plan and shall be interpreted in accordance therewith. The Grantee hereby acknowledges receipt of a copy of the Plan.

9. Compliance with Law. The Company shall make reasonable efforts to comply with all applicable federal, state and other applicable securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company will not be obligated to issue any securities pursuant to this Agreement if the issuance thereof would result in a violation of any such law.



	2

10. Severability. In the event that one or more of the provisions of this Agreement are invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.

11. Governing Law. This Agreement is made under, and will be construed in accordance with, the internal substantive laws of the State of Ohio without regard to conflict of law principles of such state.

12. Restrictive Legends. The Grantee acknowledges that the Shares are subject to the terms of this Agreement, and that the certificates representing the Shares will bear a restrictive legend substantially as follows:

The Shares represented by this certificate were issued pursuant to a Restricted Shares Agreement effective as of __________ between Forest City Enterprises, Inc. and the holder named on the face of this certificate, and are subject to the terms and conditions, including restrictions on transfer, of that Agreement. Any purported transfer, encumbrance or other disposition in violation of that Agreement will be null and void. Copies of that Agreement will be mailed to the Grantee, without charge, within five days after of a written request is received by the Company.

13. Entire Agreement. Subject to Section 8, this Agreement represents the entire agreement between the Company and the Grantee with respect to these Restricted Shares and supercedes all prior agreements whether in writing or otherwise.



	3

____________________________________

[Name]

Date: _______________________________

Executed in the name and on behalf of the Company at Cleveland, Ohio as of the ___ day of __________, ______.

FOREST CITY ENTERPRISES, INC.

By: ________________________________

Name: David J. LaRue

Title: President and Chief Executive Officer

Name of Grantee: ________________________

Date of Grant: ________________________

Original Award: Restricted Shares



	4

EX-10.8 9 exhibit108.htm EXHIBIT Exhibit 10.8

EXHIBIT 10.8

FOREST CITY ENTERPRISES, INC.

Nonqualified Stock Option Agreement

WHEREAS, ______________ (the "Grantee") is a nonemployee director of Forest City Enterprises, Inc. (the "Company");

WHEREAS, a grant of Option Rights to the Grantee, and the execution of a Nonqualified Stock Option Agreement in the form hereof (this "Agreement") to evidence such grant, were authorized by unanimous approval of the Compensation Committee (the "Committee") of the Board of Directors (the “Board”) of the Company on ____________ (the "Date of Grant"); and

WHEREAS, the grant of Option Rights was made pursuant to and in compliance with the Amended Board of Directors Compensation Policy (effective February 1, 2008), subject to a total grant date fair market value of $_____________ for 20____ equity award grants.


1.	DEFINITIONS. All capitalized terms have the meanings set forth in the Plan unless otherwise specifically provided. As used in this Agreement, the following term has the following meaning:

"Disability" means disability as defined in the Company’s Long Term Disability Plan, as amended from time to time.


2.	OPTION PRICE. The Option Price with respect to the Shares covered by the Option Rights shall be $______ per Share, the Market Value per Share as of the close of business on the Date of Grant.


3.	OPTION PERIOD; VESTING AND TIME OF EXERCISE OF OPTION RIGHT. (0) The Option Rights shall continue in effect for a period of 10 years from the Date of Grant, except as such option period may be reduced as hereinafter provided in Section 6 of this Agreement as a result of certain terminations of the Grantee’s service as a director of the Company.


(b)	The Option Rights shall be exercisable cumulatively over the option period only in accordance with the following terms, conditions and provisions:

(i)

Except as otherwise provided in the Plan or this Agreement, the Option Rights shall not be exercisable prior to the first anniversary of the Date of Grant, and upon such day the Option Rights shall automatically become vested and exercisable with respect to 33 1/3% of the Option Rights. Thereafter, upon the second anniversary of the Date of Grant, the Grantee may exercise an additional 33 1/3% up to 66 2/3% of the Option Rights.

Upon the third anniversary and thereafter until the end of the option period, the Grantee may exercise an additional 33 1/3% up to 100% of the Option Rights. To the extent exercisable, Option Rights may be exercised from time to time. Schedule I, attached hereto, lists the number of Shares the Grantee may exercise the Option Rights for upon the first, second and third through tenth anniversaries of the ten-year option period.


(ii)	Except as hereinafter provided in Section 6 of this Agreement, no part of the Option Rights may be exercised unless the Grantee is, at the date of such exercise, a director of the Company and shall have continuously served as a director since the Date of Grant.

METHOD OF EXERCISE. Shares may be purchased pursuant to this Agreement only upon receipt by the Secretary of the Company of notice in writing from Grantee of his or her intention to purchase, specifying the number of Shares as to which the Grantee desires to exercise the Option Rights, and said notice shall be accompanied by the full amount of the Option Price in the form of: cash, a certified or official bank check, a money order, a cashier's check, or in Shares owned by the Grantee and having a market value at the time of exercise equal to the total Option Price of the Shares subject to such exercise. Such form of written notice is attached hereto. In no event shall the Option Rights be exercisable as to less than 25 Shares at any one time or all of the remaining Shares then subject to the Option Rights, if less than 25.


6.	TERMINATION OF OPTION RIGHT. (0) In the event the Grantee terminates service as a director of the Company under any circumstance other than those specified in Section 6(b), (c) or (d) below, all rights to purchase Shares pursuant to the Option Rights (including rights to purchase Shares thereunder which have accrued but which then remain unexercised) shall forthwith cease and terminate.


(b)	If the Grantee’s service as a director of the Company terminates due to the Grantee’s Disability, the Option Rights may be exercised by the Grantee, to the extent the Grantee was entitled to do so on the date of termination, but not later than ten years from the Date of Grant.


(c)	If the Grantee’s service as a director of the Company terminates at or after age 65 with five or more years of service as a director of the Company, the Option Rights shall become immediately exercisable by the Grantee on the date of termination and shall remain exercisable until ten years from the Date of Grant.

(d)

If the Grantee shall die while serving as a director of the Company or during a period of Disability, the Option Rights shall become immediately exercisable if Grantee was age 65 or older and had served as a director of the Company for five or more years, and may be exercised by the legal representative of the Grantee, to the extent the Grantee was entitled to exercise the Option Rights at the time of his or her death, for a one-year period from the date of death, but not later than ten years from the Date of Grant.


(e)	To the extent that the Option Rights shall not have been exercised within any applicable period specified in Sections 6(b), (c) or (d) above, all further rights to purchase Shares pursuant to such Option Rights shall cease and terminate at the expiration of such period.

TRANSFERABILITY. (0) Except as provided in Section 7(b), the Option Rights may not be transferred by the Grantee other than by will or the laws of descent and distribution or pursuant to a domestic relations order. During the Grantee's lifetime, the Option Rights are exercisable only by the Grantee or, in the case of the Grantee’s legal incapacity, only by his guardian or legal representative, provided, however, that if so determined by the Committee, the Grantee may, in a manner designated by the Committee, designate a beneficiary to exercise the rights of the Grantee under the Option Rights upon the death of the Grantee. Absent such a designation, in a case of death, the Option Rights shall be exercisable by the executor, administrator or legal representative of the deceased Grantee.

(b)

The Option Rights may be transferable by the Grantee, without payment of consideration therefore by the transferee, only to any one or more members of the Grantee's immediate family; provided, however, that (i) no such transfer shall be effective unless reasonable prior notice thereof is delivered to the Company and such transfer is thereafter effected in accordance with any terms and conditions that shall have been made applicable thereto by the Committee and (ii) any such transferee shall be subject to the same terms and conditions hereunder as the Grantee. For the purposes of this Section 7, the term "immediate family" means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Grantee's household (other than a tenant of Grantee), a trust in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Grantee) control the management of assets, and any other entity in which these persons (or the Grantee) own more than fifty percent of the voting interests.


(c)	Except as permitted by the above, the Option Rights may not be sold, transferred, assigned, pledged, hypothecated or otherwise disposed of (whether by operation of law or otherwise or be subject to execution, attachment or similar process). Any attempted sale, transfer, assignment, pledge, hypothecation or encumbrance, or other disposition of the Option Rights shall be null and void.


8.	CHANGE IN STOCK CAPITALIZATION. The number and kind of Shares covered by the Option Rights and the price per share applicable to such Option Rights shall be subject to adjustment as provided in Section 12-A of the Plan.


(b)	This Agreement may not be modified orally. Any amendment to the Plan will be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment will adversely affect the rights of the Grantee with respect to this Option Right without the Grantee's written consent.


10.	DELIVERING OF SHARES. The Grantee shall give notice of his intent to exercise Option Rights, and Shares shall be delivered by the Company after full payment of the Option Price in respect of the Shares delivered, subject to the conditions of Section 4 hereof.


11.	CANCELLATION OF OPTION RIGHTS. The Committee may cancel any unexercised Option Rights if the Grantee, while having rights to purchase hereunder, engages in any employment or activity which in any way directly or indirectly, diverts or attempts to divert from the Company any business whatsoever, and which in the opinion of the Committee is contrary to the best interests of the Company.


12.	AGREEMENT SUBJECT TO THE PLAN. This Agreement is subject to the provisions of the Plan and shall be interpreted in accordance therewith. The Grantee hereby acknowledges receipt of a copy of the Plan.


13.	COMPLIANCE WITH LAW. The Company shall make reasonable efforts to comply with all applicable federal, state and other applicable securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company will not be obligated to issue any securities pursuant to this Agreement if the issuance thereof would result in a violation of any such law.


14.	SEVERABILITY. In the event that one or more of the provisions of this Agreement are invalidated for any reason by a court of competent jurisdiction, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.


15.	GOVERNING LAW. This Agreement shall be governed by the internal substantive laws of the State of Ohio.


16.	GENERAL. It is understood that wherever masculine pronouns are used in this Agreement, it is intended to include the feminine pronouns as well as the masculine.


17.	ENTIRE AGREEMENT. Subject to Section 12, this Agreement represents the entire agreement between the Company and the Grantee with respect to these Option Rights and supersedes all prior agreements whether in writing or otherwise.

The undersigned Grantee hereby accepts the award of Option Rights granted pursuant to this Agreement, subject to the terms and conditions of the Plan and the terms and conditions set forth herein.

____________________________________

[Name]

Date: _______________________________

Executed in the name and on behalf of the Company at Cleveland, Ohio as of the ___ day of __________, ______.

FOREST CITY ENTERPRISES, INC.

By: ________________________________

Name: David J. LaRue

Title: President and Chief Executive Officer

EX-10.9 10 exhibit109.htm EXHIBIT Exhibit 10.9

EXHIBIT 10.9

FOREST CITY ENTERPRISES, INC.
SENIOR MANAGEMENT SHORT-TERM INCENTIVE PLAN

1. Purpose. The purpose of this Senior Management Short-Term Incentive Plan (this "Plan") is to align employee and shareholder interests by providing cash incentives to eligible senior or other select management employees of Forest City Enterprises, Inc. (the "Company") for meeting and exceeding corporate, business unit and individual objectives defined each fiscal year.

2. Definitions. The following capitalized words as used in this Plan shall have the following meanings:

a. "Affiliate" means any corporation or other entity (including, but not limited to, partnerships, limited liability companies and joint ventures) controlled by the Company.

b. "Award Opportunity" means a cash award opportunity established under the Plan for a Participant by the Committee pursuant to such terms, conditions, restrictions and/or limitations, if any, as the Committee may establish.

c. "Board" means the Board of Directors of the Company.

d. "CEO" means the Chief Executive Officer of the Company.

e. "Code" means the Internal Revenue Code of 1986, as amended.

f. "Committee" means the Compensation Committee of the Board.

g. "Company" has the meaning given such term in Section 1 of this Plan.

h. "Disability" means a total and permanent disability that causes a Participant to be eligible to receive long term disability benefits from the Company’s Long Term Disability Plan, or any similar plan or program sponsored by an Affiliate or branch of the Company.

i. "Employee" means any person employed by the Company or Affiliate in a senior or other select management capacity, whether such Employee is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan.

j. "EVP-HR" means the Executive Vice President, Human Resources of the Company.

k. "Participant" means, as to any Performance Period, any Employee who is selected by the Committee to be eligible to participate in the Plan for that Performance Period, as provided herein.

l. "Payout Formula" means the formula established by the Committee for determining Award Opportunities for a Performance Period based on the level of achievement of the Performance Objectives for the Performance Period.

m. "Performance Objectives" means the measurable or subjective performance objective or objectives established pursuant to this Plan for Participants who have received Award Opportunities. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or of an Affiliate, division, business unit, department, region or function within the Company or Affiliate in which the Participant is employed and may be based on the following criteria: assets (e.g., net asset value); capital (e.g., working capital); cash flow (e.g., earnings before depreciation, amortization and deferred taxes ("EBDT"), operating cash flow, total cash flow, cash flow in excess of cost of capital, residual cash flow, cash flow return on investment or funds from operations ("FFO")); liquidity measures (e.g., available cash and credit, total debt ratio, debt-to-EBDT ratio or net operating income-to-debt ratio); margins (e.g., profits divided by revenues, operating margins, gross margins or material margins divided by revenues); productivity (e.g., productivity improvement); profits (e.g., net income, operating income, earnings before taxes ("EBT"), earnings before interest and taxes ("EBIT"), EBDT, FFO, residual or economic earnings, earnings or EBDT per share – these profitability criteria could be measured subject to GAAP definitions); sales or expenses (e.g., revenue growth, reduction in expenses, sales and administrative costs divided by sales or sales and administrative costs divided by profits); and stock price (e.g., stock price appreciation or total shareholder return) and/or strategic business criteria related to a Participant's area or areas of responsibility. In addition to the returns and ratios mentioned above, the performance objectives may be based on any other ratios or returns using the criteria mentioned above, including: economic value added; net asset ratio; debt-to-capital ratio; working capital divided by sales; and profits or cash flow returns on assets, designated assets, invested capital, net capital employed or equity (including return on net assets, return on capital or invested capital, or total return, meaning change in net asset value plus or minus net cash flow). The Performance Objectives may be made relative to the performance of other corporations or other entities.

n. "Performance Period" means the Company’s fiscal year or such other period as determined by the Committee in its discretion, within which the Performance Objectives relating to an Award Opportunity are to be achieved. The Committee may establish different Performance Periods for different Participants, and the Committee may establish concurrent or overlapping Performance Periods.

o. "Plan" means this Forest City Enterprises, Inc. Senior Management Short-Term Incentive Plan, as amended from time to time.

p. "Retirement" means termination of employment with the Company or an Affiliate at age 65 or older and after five or more years of continuous employment with the Company or an Affiliate. Approved absence or leave from the Company or an Affiliate shall not be considered an interruption of employment for purposes of the Plan.



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3. Administration. The Committee shall be responsible for administration of the Plan. The Committee, by majority action, is authorized to interpret the Plan, to prescribe, amend, and rescind regulations relating to the Plan, to provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company and its Affiliates, and to make all other determinations necessary or advisable for the administration of the Plan, but only to the extent not contrary to the express provisions of the Plan. Determinations, interpretations, or other actions made or taken by the Committee pursuant to the provisions of the Plan shall be final, binding and conclusive for all purposes and upon all Participants. No member of the Committee shall be liable for any such action or determination made in good faith. The Committee may delegate to the CEO, the EVP-HR or other senior officers or senior managers of the Company, subject to such terms as the Committee shall determine, authority to administer all or any portion of the Plan, or the authority to perform certain functions, including administrative functions. In the event of such delegation, all references to the Committee in this Plan (other than such references in the immediately preceding sentence and in the last sentence of this Section 3) shall be deemed references to such senior officers or senior managers as it relates to those aspects of the Plan that have been delegated. In this regard, the Committee specifically authorizes each senior officer and senior manager to establish the individual Performance Objectives for his or her direct reports who participate in the Plan and determine whether and to what extent the individual Performance Objectives for those direct reports have been achieved. Notwithstanding the foregoing, and to the extent required by the Committee charter or the applicable exchange listing standards, the Committee shall retain exclusive authority to establish Award Opportunities and determine payouts for any Board-appointed officers of the Company who are designated by the Board as "Section 16 officers".

4. Eligibility. The Committee, in its sole discretion, shall determine which Employees will be eligible to participate in the Plan for any given Performance Period. In lieu of expressly selecting eligible Employees for Plan participation, the Committee may establish eligibility criteria providing for participation of all Employees who satisfy such criteria. When making eligibility determinations, the Committee shall consider the recommendations of the CEO and the EVP-HR; provided that the CEO shall make all recommendations with respect to the participation of the EVP-HR. An Employee who is a Participant for a given Performance Period is neither guaranteed nor assured of being selected for participation in any subsequent Performance Period.

5. Award Opportunities

a. After the beginning of each Performance Period, the Committee shall establish the Award Opportunity for each Participant, including the applicable Performance Objectives and Payout Formula. Each Performance Objective will be weighted by the Committee to reflect its relative importance to the Company in the applicable Performance Period. The Payout Formulas, Performance Objectives and weighting of the Performance Objectives need not be uniform with respect to any or all Participants. The Committee shall consider the recommendations of the CEO and the EVP-HR in determining the applicable Payout Formulas, Performance Objectives and weighting of the Performance Objectives; provided that the CEO shall make all recommendations with respect to the EVP-HR. The Committee may also establish Award Opportunities for newly hired or newly promoted



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Employees without compliance with the limitations provided herein, which Award Opportunities may be based on performance during less than the full Performance Period and may be pro-rated at the discretion of the Committee.

b. Participants must achieve the Performance Objectives established by the Committee in order to receive payment of an Award Opportunity under the Plan. However, the Committee may determine that only a threshold level relating to a Performance Objective must be achieved for Award Opportunities to be paid under the Plan. Similarly, the Committee may establish a minimum threshold performance level, a maximum performance level, and one or more intermediate performance levels or ranges, with target award levels or ranges that will correspond to the respective performance levels or ranges included in the Payout Formula.

c. The Committee may in its sole discretion modify the Payout Formulas, Performance Objectives or the related minimum acceptable level of achievement, in whole or in part, as the Committee deems appropriate and equitable (i) to reflect a change in the business, operations, corporate structure or capital structure of the Company or its Affiliates, the manner in which it conducts its business, or other events or circumstances or (ii) in the event that a Participant's responsibilities materially change during a Performance Period or the Participant is transferred to a position that is not designated as eligible to participate in the Plan.

6. Determination of Award Opportunities.

a. Following the end of each Performance Period, the Committee shall determine whether and to what extent the Performance Objectives with respect to each Participant for the applicable Performance Period have been achieved and, if such Performance Objectives have been achieved, to approve actual payment of each Award Opportunity under the Plan pursuant to the applicable Payout Formulas. The Committee shall consider the recommendations of the CEO and the EVP-HR when determining whether the Performance Objectives have been achieved with respect to Participants; provided that the CEO shall make all recommendations with respect to the EVP-HR. The Committee may, in its sole discretion, increase, decrease or eliminate the amount of any Award Opportunity otherwise payable to any Participant to reflect such Participant's individual performance or such other factors as the Committee deems relevant, in recognition of changed or special circumstances, or for any other reason. Except as otherwise provided in Section 6(b) or as otherwise determined by the Committee, in the event a Participant’s employment with the Company and its Affiliates terminates for any reason prior to the last day of the Performance Period, the Participant shall not be entitled to payment of an Award Opportunity with respect to that Performance Period.

b. Unless otherwise determined by the Committee, a Participant who terminates employment with the Company and its Affiliates during a Performance Period, and after at least one-half of such Performance Period has elapsed, due to Retirement, Disability or death shall be eligible to receive payment of an Award Opportunity in accordance with this Section 6(b), subject to adjustments under Section 6(a), and pro-rated for the portion of the Performance Period prior to termination of employment.



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i. Any pro-rated Award Opportunity pursuant to this Section 6(b) on account of a Participant’s termination of employment due to Disability or death shall be determined based upon the target Award Opportunity level and shall be paid within sixty (60) days following termination of employment. An Award Opportunity payable in the event of death shall be paid to the Participant’s estate.

ii. Any pro-rated Award Opportunity pursuant to this Section 6(b) on account of a Participant’s termination of employment due to Retirement shall be determined based upon actual performance through the end of the applicable Performance Period (subject to adjustments under Section 6(a)) and shall be paid at the same time that Award Opportunities are paid to other Participants for such Performance Period in accordance with Section 7 hereof.

7. Payment of Award Opportunities. Except as otherwise provided in Section 6(b)(i) or this Section 7, if earned as set forth in Section 6, an Award Opportunity of a Participant for a particular Performance Period shall be paid in cash after the end of the Performance Period, but, in no event more than two and one half months after the later of (a) the end of the Performance Period or (b) the end of the calendar year in which such Performance Period ends. Notwithstanding the foregoing, a Participant may elect to defer receipt of payment of an Award Opportunity in accordance with the terms and subject to the conditions of the Company's deferred compensation plan.

8. Tax Withholding. The Company and its Affiliates shall have the right to deduct from all payments made to any person under the Plan any federal, state, local, foreign or other taxes which, in the opinion of the Company and its Affiliates are required to be withheld with respect to such payments.

9. No Employment Contract. Nothing contained in this Plan shall confer upon a Participant any right with respect to continuance of employment by the Company and its Affiliates, nor limit or affect in any manner the right of the Company and its Affiliates to terminate the employment or adjust the compensation of a Participant. For purposes of the Plan, the transfer of employment of a Participant between the Company and any one of its Affiliates (or between Affiliates) shall not be deemed a termination of the Participant’s employment.

10. Transferability. No right or benefit under this Plan will be subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge such right or benefit will be void. No such right or benefit will in any manner be liable for or subject to the debts, liabilities, or torts of a Participant.

11. Clawback Policy. Notwithstanding any other provision of the Plan to the contrary, any Award Opportunity granted hereunder shall be subject to forfeiture or repayment pursuant to the terms of any applicable compensation recovery (or "clawback") policy maintained by the Company or Affiliate from time to time, as any such policy may be amended, including, but not limited to, any amendment adopted to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules or regulations issued by the Securities Exchange Commission or applicable securities exchange.



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12. Successors. All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company.

13. Governing Law. The Plan and all Award Opportunities shall be construed in accordance with and governed by the laws of the State of Ohio, but without regard to its conflict of law provisions.

14. Amendment or Termination. The Committee reserves the right, at any time, to amend, suspend or terminate the Plan, in whole or in part, in any manner, and for any reason, and without the consent of any Participant, Employee or other person. A proper amendment of this Plan automatically shall effect a corresponding amendment to all Participants' rights hereunder without further action or notice. A proper termination of this Plan automatically shall effect a termination of all Participants' rights hereunder without further action or notice.

15. Participation by Employees of Affiliates. Any Affiliate may, by action of its board of directors or equivalent governing body and with the consent of the Committee, adopt the Plan; provided that the Committee may waive the requirement that such board of directors or equivalent governing body effect such adoption. By its adoption of or participation in the Plan, the adopting Affiliate shall be deemed to appoint the Company its exclusive agent to exercise on its behalf all of the power and authority conferred by the Plan upon the Company and accept the delegation to the Committee of all the power and authority conferred upon it by the Plan. The authority of the Company to act as such agent shall continue until the Plan is terminated as to the participating Affiliate. An Award Opportunity of a Participant employed by a participating Affiliate shall be paid in accordance with the Plan solely by that Affiliate, unless the Committee otherwise determines that the Company shall be responsible for payment. Each Award Opportunity that may become payable under the Plan shall be paid solely from the general assets of the Company or the Affiliate responsible for payment thereof. Nothing in this Plan shall be construed to create a trust or to establish or evidence any Participant's claim of any right to payment of an Award Opportunity other than as an unsecured general creditor with respect to any payment to which he or she may be entitled.

[END OF DOCUMENT]



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EX-10.10 11 exhibit1010.htm EXHIBIT Exhibit 10.10

EXHIBIT 10.10

FOREST CITY ENTERPRISES, INC.
SENIOR MANAGEMENT LONG-TERM INCENTIVE PLAN

1. Purpose. The purpose of this Senior Management Long-Term Incentive Plan (this "Plan") is to align employee and shareholder interests by providing cash incentives to eligible senior or other select management employees of Forest City Enterprises, Inc. (the "Company") for meeting and exceeding corporate and business unit objectives defined each performance period.

2. Definitions. The following capitalized words as used in this Plan shall have the following meanings:

a. "Affiliate" means any corporation or other entity (including, but not limited to, partnerships, limited liability companies and joint ventures) controlled by the Company.

c. "Board" means the Board of Directors of the Company.

d. "CEO" means the Chief Executive Officer of the Company.

e. "Code" means the Internal Revenue Code of 1986, as amended.

f. "Committee" means the Compensation Committee of the Board.

g. "Company" has the meaning given such term in Section 1 of this Plan.

j. "EVP-HR" means the Executive Vice President, Human Resources of the Company.

k. "Participant" means, as to any Performance Period, any Employee who is selected by the Committee to be eligible to participate in the Plan for that Performance Period, as provided herein.

m. "Performance Objectives" means the measurable or subjective performance objective or objectives established pursuant to this Plan for Participants who have received Award Opportunities. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of an Affiliate, division, business unit, department, region or function within the Company or Affiliate in which the Participant is employed and may be based on the following criteria: assets (e.g., net asset value); capital (e.g., working capital); cash flow (e.g., earnings before depreciation, amortization and deferred taxes ("EBDT"), operating cash flow, total cash flow, cash flow in excess of cost of capital, residual cash flow, cash flow return on investment or funds from operations ("FFO"); liquidity measures (e.g., available cash and credit, total debt ratio, debt-to-EBDT ratio or net operating income-to-debt ratio); margins (e.g., profits divided by revenues, operating margins, gross margins or material margins divided by revenues); productivity (e.g., productivity improvement); profits (e.g., net income, operating income, earnings before taxes ("EBT"), earnings before interest and taxes ("EBIT"), EBDT, FFO, residual or economic earnings, earnings or EBDT per share – these profitability criteria could be measured subject to GAAP definitions); sales or expenses (e.g., revenue growth, reduction in expenses, sales and administrative costs divided by sales or sales and administrative costs divided by profits); and stock price (e.g., stock price appreciation or total shareholder return). In addition to the returns and ratios mentioned above, the performance objectives may be based on any other ratios or returns using the criteria mentioned above, including: economic value added; net asset ratio; debt-to-capital ratio; working capital divided by sales; and profits or cash flow returns on assets, designated assets, invested capital, net capital employed or equity (including return on net assets, return on capital or invested capital, or total return, meaning change in net asset value plus or minus net cash flow). The Performance Objectives may be made relative to the performance of other corporations or other entities.

n. "Performance Period" means a period of four consecutive fiscal years of the Company, or such other period as determined by the Committee in its discretion, within which the Performance Objectives relating to an Award Opportunity are to be achieved. The Committee may establish different Performance Periods for different Participants, and the Committee may establish concurrent or overlapping Performance Periods.

o. "Plan" means this Forest City Enterprises, Inc. Senior Management Long-Term Incentive Plan, as amended from time to time.

p. "Retirement" means termination of employment with the Company or an Affiliate at age 65 or older and after five or more years of continuous employment with the



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Company or an Affiliate. Approved absence or leave from the Company or an Affiliate shall not be considered an interruption of employment for purposes of the Plan.

3. Administration. The Committee shall be responsible for administration of the Plan. The Committee, by majority action, is authorized to interpret the Plan, to prescribe, amend, and rescind regulations relating to the Plan, to provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company and its Affiliates, and to make all other determinations necessary or advisable for the administration of the Plan, but only to the extent not contrary to the express provisions of the Plan. Determinations, interpretations, or other actions made or taken by the Committee pursuant to the provisions of the Plan shall be final, binding and conclusive for all purposes and upon all Participants. No member of the Committee shall be liable for any such action or determination made in good faith. The Committee may delegate to the CEO, the EVP-HR or other senior officers or senior managers of the Company, subject to such terms as the Committee shall determine, authority to administer all or any portion of the Plan, or the authority to perform certain functions, including administrative functions. In the event of such delegation, all references to the Committee in this Plan (other than such references in the immediately preceding sentence and in the last sentence of this Section 3) shall be deemed references to such senior officers or senior managers as it relates to those aspects of the Plan that have been delegated. Notwithstanding the foregoing, and to the extent required by the Committee charter or the applicable exchange listing standards, the Committee shall retain exclusive authority to establish Award Opportunities and determine payouts for any Board-appointed officers of the Company who are designated by the Board as "Section 16 officers".

5. Award Opportunities



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Committee may also establish Award Opportunities for newly hired or newly promoted Employees without compliance with the limitations provided herein, which Award Opportunities may be based on performance during less than the full Performance Period and may be pro-rated at the discretion of the Committee.

6. Determination of Award Opportunities.

b. Unless otherwise determined by the Committee, a Participant who terminates employment with the Company and its Affiliates during a Performance Period and at least one year after the beginning of such Performance Period due to Retirement, Disability or death shall be eligible to receive payment of an Award Opportunity in accordance with this Section 6(b), subject to adjustments under Section 6(a), and pro-rated for the portion of the Performance Period prior to termination of employment.



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12. Successors. All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or



	5

indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company.

13. Governing Law. The Plan and all Award Opportunities shall be construed in accordance with and governed by the laws of the State of Ohio, but without regard to its conflict of law provisions.

[END OF DOCUMENT]



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