[DIRECTOR]   Exhibit 10.66

FOREST CITY ENTERPRISES, INC.
Nonqualified Stock Option Agreement
     WHEREAS, [GRANTEE NAME] (the “Grantee”) is a nonemployee director of Forest
City Enterprises, Inc. (the “Company”);
     WHEREAS, a grant of Option Rights to the Grantee was authorized by a
resolution of the Compensation Committee (the “Committee”) of the Board of
Directors (the “Board”) of the Company that was duly adopted on
                                         (the “Date of Grant”), and the
execution of a Nonqualified Stock Option Agreement in the form hereof (this
“Agreement”) to evidence such grant was authorized by a resolution of the
Committee that was duly adopted on                                         ; and
     WHEREAS, the grant of Option Rights was made pursuant to and in compliance
with the Amended Board of Directors Compensation Policy approved by the Board
with effect from February 1, 2008.
     NOW, THEREFORE, pursuant to the Company’s 1994 Stock Plan (As Amended and
Restated as of June 19, 2008) (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 Option Rights to purchase            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 RIGHT. (a) 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.

4.   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
that have been owned by the Grantee for at least six months prior to the date of
exercise 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.

 

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    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.   5.   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 RIGHT. (a) 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 terminates service as a director of the Company 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 terminates
service as a director of the Company 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.

7.   TRANSFERABILITY. (a) 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 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 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.

 

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8.   CHANGE IN STOCK CAPITALIZATION. The Committee shall make or provide for
such adjustments in the numbers of Shares covered by the Option Rights, in the
price per share applicable to such Option 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 the Grantee 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. Moreover, in the event of any such
transaction or event, the Committee, in its discretion, may provide in
substitution for the Option Rights 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 the Option Rights so replaced. The Company
shall give the Grantee written notice of any change described in this Section 8.

9.   AMENDMENTS TO PLAN AND AGREEMENT. (a) 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.

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.   NOTICES. Any notice to be given hereunder by the Grantee shall be sent by
certified or registered mail addressed to the Company for the attention of the
Chairman of the Board, or the President, at its principal office, Terminal
Tower, 50 Public Square, Suite 1100, Cleveland, Ohio 44113-2267, and any notice
by the Company to the Grantee shall be sent by certified or registered mail
addressed to the Grantee at                                          . Either
party may, by notice given to the other in accordance with the provisions of
this Section, change the address to which subsequent notices shall be sent.

13.   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.

14.   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.

15.   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.

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

17.   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.

18.   ENTIRE AGREEMENT. Subject to Section 13, this Agreement represents the
entire agreement between the Company and the Grantee with respect to these
Option Rights and supercedes all prior agreements whether in writing or
otherwise.

 

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     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.

                        [Grantee Name] 

    Date:        

     Executed in the name and on behalf of the Company at Cleveland, Ohio as of
the            day of                                         , 2008.

            FOREST CITY ENTERPRISES, INC.
      By:           Name:           Title:      

 

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Exercise of Stock Option
Forest City Enterprises, Inc.
Terminal Tower
50 Public Square, Suite 1100
Cleveland, Ohio 44113-2267
Ladies and Gentlemen:
     The undersigned Grantee hereby exercises the Nonqualified Option Right
granted to him/her pursuant to the Nonqualified Stock Option Agreement effective
as of            between Forest City Enterprises, Inc. and the Grantee with
respect to                      Shares covered by said Option Rights, and:

(a)   tenders herewith $                     in payment of the Option Price
thereof by delivery of                                         . The name and
registered address on such certificate should be:

     
(form of payment)
   
 
   
 
   
 
   
 
   
 
   
 
   

or

(b)   to the extent permitted by law, elects to make a cashless exercise in
accordance with Section 6D of the Plan. A copy of this Notice and stock
certificates representing the Shares should be delivered to:

                                                                       
                                                       .
The Grantee’s social security number is:
                                                            

                  Grantee   

Dated: