Document:

EX-10.2

Exhibit 10.2

FOREST CITY ENTERPRISES, INC.

2005 DEFERRED COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS

(As Amended and Restated Effective January 1, 2005)

Forest City Enterprises, Inc. does hereby amend and completely restate the Forest City
Enterprises, Inc. 2005 Deferred Compensation Plan For Nonemployee Directors on the terms and
conditions hereinafter set forth, effective as of January 1, 2005. The original effective date of
the Plan was January 1, 2005. The purpose of the Plan is to provide funds upon Termination of
Service by death, retirement, Disability or otherwise for nonemployee Directors of Forest City
Enterprises, Inc. or their beneficiaries. It is intended that the Plan will assist in attracting
and retaining qualified individuals to serve as Directors.

ARTICLE I

DEFINITIONS

For the purposes hereof, the following words and phrases shall have the meanings set forth
below, unless their context clearly requires a different meaning:

1. “Account” shall mean the bookkeeping account(s) maintained by the Committee on behalf of
each Participant pursuant to Section 4 of Article II that is credited with Fees which are deferred
by a Participant, and the gains, losses, interest and other earnings on such amounts as determined
in accordance with Section 4 of Article II.

2. “Beneficiary” or “Beneficiaries” shall mean the person or persons, including one or more
trusts, designated by a Participant in accordance with the Plan to receive payment of the remaining
balance of the Participant’s Account in the event of the death of the Participant prior to receipt
of the entire amount credited to the Participant’s Account.

3. “Board” shall mean the Board of Directors of the Company.

4. “Change in Control” shall mean that:

(i) The Company is merged or consolidated or reorganized into or with another
corporation or other legal person, and as a result of such merger, consolidation or
reorganization less than a majority of the combined voting power of the securities of such
corporation or person that are outstanding immediately following the consummation of such
transaction is held in the aggregate by either (a) the holders of Voting Stock (as
hereinafter defined) of the Company immediately prior to such transaction or (b) Permitted
Holders;

(ii) The Company sells or otherwise transfers all or substantially all of its assets to
any other corporation or other legal person, and as a result of such sale or transfer less
than a majority of the combined voting power of the securities of such corporation or person
that are outstanding immediately following the consummation of such sale or transfer is held
in the aggregate by either (a) the holders of Voting Stock (as hereinafter defined) of the
Company immediately prior to such sale or transfer or (b) Permitted Holders;

(iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor
schedule, form or report) thereto, each as promulgated pursuant to the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), disclosing that any person (as the term
“person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) other than a
Permitted Holder has become the beneficial owner (as the term “beneficial owner” is defined
under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of
securities representing 20percent or more of the combined voting power of the
then-outstanding securities entitled to vote generally in the election of the Board (the
“Voting Stock”);

(iv) The Company files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A
(or any successor schedule, form or report or item therein) that a change in control of the
Company has or may have occurred or will or may occur in the future pursuant to any
then-existing contract or transaction, other than with respect to a Permitted Holder; or

(v) If during any period of two consecutive years, individuals who at the beginning of
any such period constitute the Board cease for any reason to constitute at least a majority
of the members thereof, unless the election, or the nomination for election by the Company’s
stockholders, of each member of the Board first elected during such period was approved by a
vote of at least two-thirds of the members of the Board then still in office who were
members of the Board at the beginning of any such period.

Notwithstanding the foregoing provisions of subsection (iii) or (iv) hereof, a “Change in Control”
shall not be deemed to have occurred for purposes of the Plan, either (1) solely because the
Company, a Subsidiary, or any Company-sponsored employee stock ownership plan or other employee
benefit plan of the Company, files or becomes obligated to file a report or a proxy statement under
or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor
schedule, form or report or item therein) under the Exchange Act, disclosing beneficial ownership
by it of shares of Voting Stock, whether in excess of 20percent or otherwise, or because the
Company reports that a change in control of the Company has or may have occurred or will or may
occur in the future by reason of such beneficial ownership or (2) solely because of a change in
control of any Subsidiary. Notwithstanding the foregoing provisions of subsections (i-iv) hereof,
if, prior to any event described in subsections (i-iv) hereof that may be instituted by any person
who is not an officer or director of the Company, or prior to any disclosed proposal that may be
instituted by any person who is not an officer or director of the Company that could lead to any
such event, management proposes any restructuring of the Company that ultimately leads to an event
described in subsections (i-iv) hereof pursuant to such management proposal, then a “Change in
Control” shall not be deemed to have occurred for purposes of the Plan.

4A. “Class A Common Shares” shall mean the Class A Common Shares of the Company, or any
security into which such shares may be changed, as determined by the Committee in its sole
discretion, (i) in the event of a change in outstanding Class A Common Shares or in the capital
structure of the Company by reason of any share dividend, share split, reverse share split,
recapitalization, reorganization, merger, consolidation, combination, exchange or other relevant
change in the capitalization of the Company or (ii) in the event of any change in applicable laws
or any change in circumstances which results in or would result in any substantial dilution or
enlargement of the rights of any Participant in the Plan or which otherwise warrants equitable
adjustment because it interferes with the intended operation of the Plan.

5. “Code” shall mean the Internal Revenue Code of 1986, as amended.

6. “Committee” shall mean the Compensation Committee of the Board or such other Committee as
may be authorized by the Board to administer the Plan.

7. “Company” shall mean Forest City Enterprises, Inc. and its successors, including, without
limitation, the surviving corporation resulting from any merger or consolidation of Forest City
Enterprises, Inc. with any other corporation or corporations.

8. “Deferral Election” shall mean the Election Agreement (or portion thereof) completed by a
Participant and filed with the Committee that indicates the amount of his or her Fees that is or
will be deferred under the Plan for a Year.

9. “Director” shall mean a member of the Board.

10. “Disability” shall have the meaning given to such term in the Company’s Long Term
Disability Plan, as amended from time to time.

11. “Election Agreement” shall mean an agreement in the form that the Committee may designate
from time to time, including, without limitation, the “Election Agreement for 2005” that was filed
by Participants in December 2004 and the “Election Agreement for 2006” filed by Participants in
December 2005.

12. “Eligible Director” shall mean a Director who is not an employee of the Company or any of
its Subsidiaries. An Eligible Director shall continue as such until the earlier of the date he or
she (i) ceases to be a Director or (ii) becomes an employee of the Company or any of its
Subsidiaries.

13. “Election Filing Date” shall mean December 31 of the Year next preceding the first day of
the Year for which Fees would otherwise be earned.

14. “Fee” or “Fees” shall mean the annual retainer payable to a Director for his or her
services as a member of the Board.

15. “Insolvent” shall mean that the Company has become subject to a pending voluntary or
involuntary proceeding under the United States Bankruptcy Code or has become unable to pay its
debts as they mature.

16. “Participant” shall mean any Eligible Director who has at any time made a Deferral
Election in accordance with Section 2 of Article II the Plan and who, in conjunction with his or
her Beneficiary, has not received a complete distribution of the amount credited to his or her
Account.

17. “Payment Election” shall mean the Election Agreement (or portion thereof) completed by a
Participant and filed with the Committee that indicates the time of commencement of payment and
form of payment of the Participant’s Fees that are or will be deferred pursuant to a Deferral
Election under the Plan.

18. “Permitted Holder” shall mean (i) any of Samuel H. Miller, Albert B. Ratner, Charles A.
Ratner, James A. Ratner, Ronald A. Ratner or any spouse of any of the foregoing, and any trusts for
the benefit of any of the foregoing, (ii) RMS, Limited Partnership and any general partner or
limited partner thereof and any person (other than a creditor) that upon the dissolution or winding
up of RMS, Limited Partnership receives a distribution of capital stock of the Company, (iii) any
group (as defined in Section 13(d) of the Exchange Act) of two or more persons or entities that are
specified in the immediately preceding clauses (i) and (ii), and (iv) any successive recombination
of the persons or groups that are specified in the immediately preceding clauses (i), (ii) and
(iii).

19. “Plan” shall mean this deferred compensation plan, which shall be known as the Forest City
Enterprises, Inc. 2005 Deferred Compensation Plan For Nonemployee Directors.

20. “Subsidiary” shall mean any corporation, joint venture, partnership, unincorporated
association or other entity in which the Company has a direct or indirect ownership or other equity
interest and directly or indirectly owns or controls 50percent or more of the total combined voting
or other decision-making power.

21. “Termination of Service” shall mean a separation from service as defined under Section
409A of the Code.

22. “Unforeseeable Emergency” shall mean a severe financial hardship to a Participant or
Beneficiary resulting from (i) an illness or accident of the Participant or Beneficiary or his or
her spouse or dependent (as defined in Section 152(a) of the Code), (ii) loss of the Participant’s
or Beneficiary’s property due to casualty, or (iii) other similar or extraordinary circumstances
arising as a result of events beyond the control of the Participant or Beneficiary.

23. “Year” shall mean each calendar year, commencing on or after January 1, 2005.

ARTICLE II

ELECTION TO DEFER

1. Eligibility and Participation. An Eligible Director may make an annual Deferral
Election with respect to receipt of 50% or 100% of his or her Fee for any Year in accordance with
Section 2 of this Article. An Eligible Director who makes a Deferral Election must also make a
Payment Election with respect to the amount deferred in accordance with Section 5 of this Article.
An Eligible Director’s entitlement to defer shall cease with respect to the Year following the Year
in which he or she ceases to be an Eligible Director.

2. Deferral Elections. Subject to Section 2(iii) of this Article, all Deferral
Elections, once effective, shall be irrevocable, shall be made on an Election Agreement filed with
the Committee and shall comply with the following requirements:

(i) The Deferral Election shall specify the amount of Fees that is to be deferred
within the limits under Section 3 of this Article.

(ii) The Deferral Election shall be made by, and shall be effective as of, the
applicable Election Filing Date. Notwithstanding the foregoing, a Director who first
becomes an Eligible Director during the course of a Year, rather than as of the first day of
such Year, shall make such Deferral Election within thirty (30) days following the date the
Director first becomes an Eligible Director, and such Deferral Election shall be effective
on the date made and shall be effective only with regard to Fees earned following the filing
of the Election Agreement with the Committee.

(iii) In accordance with Question and Answer 20 of Internal Revenue Service Notice
2005-1, on or before December 31, 2005 a Participant may elect to terminate participation in
the Plan or cancel the Deferral Election that he or she made under the Election Agreement
for 2005 with respect to Fees earned during the Year beginning January 1, 2005,
provided that the amounts subject to such termination or cancellation are
includible in the gross income of the Participant in the taxable Year in which the amounts
are earned and vested. In the event of any such termination or cancellation by a
Participant, the amount subject to such termination or cancellation shall be distributed to
the Participant in the Year that it is earned and vested.

3. Amount Deferred. A Participant shall designate on the Election Agreement whether
50% or 100% of his or her Fees earned during the Year are to be deferred.

4. Accounts; Earnings. Fees that a Participant elects to defer shall be treated as if
they were set aside in an Account on the date the Fees would otherwise have been paid to the
Participant.

(i) Such Account will be credited with gains, losses, interest and other earnings based
on investment directions made by the Participant, in accordance with investment deferral
crediting options and procedures established by the Committee, which shall include
procedures for prospective investment directions with respect to Fees that are to be
deferred under the Plan and for the reallocation of Fees (and gains, losses, interest and
other earnings thereon) credited to a Participant’s Account. The Committee specifically
retains the right in its sole discretion to change the investment deferral crediting options
and procedures from time to time. Unless otherwise specified by the Committee, the
investments in which a Participant’s Account may be deemed invested are (a) an interest
bearing obligation specified by the Committee from time to time and (b) Class A Common
Shares. Any dividends deemed payable with respect to Class A Common Shares that are deemed
credited to a Participant’s Account shall be credited to the Participant’s Account and shall
be deemed reinvested in Class A Common Shares.

(ii) By electing to defer any amount pursuant to the Plan, each Participant shall
thereby acknowledge and agree that the Company is not and shall not be required to make any
investment in connection with the Plan, nor is it required to follow the Participant’s
investment directions in any actual investment it may make or acquire in connection with the
Plan. Any amounts credited to a Participant’s Account with respect to which a Participant
does not provide investment direction shall be credited with gains, losses, interest and
other earnings as if such amounts were invested in an investment option to be selected by
the Committee in its sole discretion. Each Participant shall be 100% vested in the entire
amount credited to his or her Account at all times.

5. Initial Payment Elections. Subject to Sections 5(iii), 5(iv), 6, 7, 8, and 9 of
this Article, all Payment Elections shall be irrevocable, shall be made annually on an Election
Agreement filed with the Committee and shall comply with the following requirements:

(i) The Payment Election shall contain the Participant’s elections regarding the time
of the commencement of payment of amounts in his or her Account.

(a) A Participant may elect to commence payment (1) upon the date on which he or she
incurs a Termination of Service for any reason, including, without limitation, by reason of
death, retirement, or Disability, or (2) with the Committee’s written approval at the time
that the Participant files his or her Election Agreement with the Committee, in a specified
year that begins at least two years after the date on which the Deferral Election becomes
effective.

(b) Payments made in accordance with the Participant’s election under Section
5(i)(a)(1) shall be paid or commence to be paid on the date of the Termination of Service
and payments made in accordance with the Participant’s election under Section 5(i)(a)(2)
shall be paid or commence to be paid on June 1 of the specified year.

(c) Notwithstanding the foregoing provisions of this Section 5(i), in the event that a
Participant elects (with the Committee’s approval as described in Section 5(i)(a)(2)) to
commence payments in a specified year, and prior to the date such payment is due to be paid
or commence to be paid (as described in Section 5(i)(b)) he or she incurs a Termination of
Service, payment of the Participant’s Account shall commence, in the form or forms elected
pursuant to Sections 5(ii) and/or 5(iii), on the date of such Termination of Service.

(ii) The Deferral Election shall also contain the Participant’s elections regarding the
form of payment of amounts in his or her Account.

(a) The Participant may elect to receive amounts in his or her Account in one of the
following forms: (1) a single, lump sum payment or (2) a specified number of quarterly
installments over a specified period not exceeding five (5) years. Distributions shall be
made in cash or in Class A Common Shares (with fractional shares paid in cash), or any
combination thereof, as elected by the Participant, provided, however, that
Class A Common Shares shall only be distributable with respect to that portion of a
Participant’s Account that is deemed invested in such shares at the time of the
distribution. In the event that a Participant’s Account (or a portion thereof) was deemed
invested in Class A Common Shares but the Participant elects payment of such Account (or a
portion thereof) in cash, the value of such Account (or a portion thereof) shall be based on
the fair market value of the Class A Common Shares as of the date preceding the date the
cash payment is scheduled to be paid (or commence to be paid) under the Plan.

(b) In the event that all or a portion of a Participant’s Account is payable in
installments the amount of each installment shall be determined as follows:

	 	(1)	 	The value, at the time of the
first installment payment, of the portion of the Participant’s
Account payable in installments shall be divided by the number
of installment payments that will be made during the installment
period;

	 	(2)	 	The amount determined under (1)
shall be paid to the Participant on each payment date through
the end of the calendar year in which the installment payments
begin;

	 	(3)	 	After the end of the calendar
year described in (2), the value at the end of such calendar
year of the portion of the Account payable in installments shall
be divided by the number of installment payments then remaining
in the installment period;

	 	(4)	 	The amount determined under (3)
shall be paid to the Participant on each payment date during the
following calendar year;

	 	(5)	 	The procedures described in (3)
and (4) shall be followed for any following calendar year in
which installment payments will be made;

	 	(6)	 	The portion of the Account
subject to such installment payments that remains unpaid from
time to time shall continue to be credited with gains, losses,
interest and other earnings as provided in Section 4(i) of this
Article; and

	 	(7)	 	The final installment payment
shall include an adjustment for gains, losses, interest and
other earnings pursuant to Section 4(i) of this Article during
the period between the beginning of the calendar year in which
the final installment payment is made and the date of such final
payment.

(iii) The Payment Election shall be made by, and shall be effective as of, the
applicable Election Filing Date. A Participant may not have more than: (A) two Payment
Elections described in Section 5(i)(a)(2) in effect at any one time, (B) three Payment
Elections in total in effect at any one time, and (C) two Payment Elections in effect at any
one time that provide for payments in installments.

(iv) In accordance with Question and Answer 19(c) of Internal Revenue Service Notice
2005-1, a Participant may make a new Payment Election with respect to the time of
commencement of payment and form of payment of the portion of his or her Account
attributable to the amount deferred (including earnings) pursuant to the Deferral Election
that he or she made under the Election Agreement for 2005. Any such new Payment Election
shall specify the time at which the Participant has elected to have such portion of his or
her Account paid under Section 5(i) of this Article and the form of payment under Section
5(ii) of this Article.

(v) The payment of a single, lump-sum amount, or the payment of a specified number of
quarterly installments as designated by the Participant in the Election Agreement, to a
Participant (or his or her Beneficiary) pursuant to this Section 5 shall discharge all
obligations of the Company to such Participant (or his or her Beneficiary) under the Plan.

6. Subsequent Payment Elections. A Participant may make a subsequent Payment Election
to change the time of the commencement of payment(s) of his or her Account, the form of payment of
his or her Account, or both, with respect to an amount previously deferred under a Deferral
Election if all of the following requirements are met:

(i) Such subsequent Payment Election may not take effect until at least twelve (12)
months after the date on which the subsequent Deferral Election is made;

(ii) In the case of a subsequent Payment Election related to a distribution not
described in Section 7 or 9 of this Article, the first payment under such subsequent Payment
Election shall in all cases be deferred for a period of not less than five (5) years from
the date such distribution would otherwise have been made (or, in the case of installment
payments, which are treated as a single payment for purposes of this Section 6, five (5)
years from the date the first installment payment was scheduled to be paid); and

(iii) Any subsequent Payment Election related to a distribution that is to be made at a
specified time or pursuant to a fixed schedule pursuant to Section 5 of this Article must be
made not less than twelve (12) months prior to the date the payment was scheduled to be made
under the prior Payment Election (or, in the case of installment payments, which are treated
as a single payment for purposes of this Section 6, twelve (12) months prior to the date the
first installment payment was scheduled to be paid).

7. Death of a Participant. In the event of the death of a Participant, the remaining
amount of the Participant’s Account shall be paid to the Beneficiary or Beneficiaries designated in
a writing on a form that the Committee may designate from time to time, (the “Beneficiary
Designation”) in accordance with the Participant’s Payment Election, or in accordance with a
special payment election filed by the Participant with the Committee at the same time as the
Participant’s Payment Election under Section 5 or 6 of this Article is filed with the Committee
that is to be operative and override any other payment election under the Participant’s Payment
Election in the event of the death of the Participant. Any special payment election filed by a
Participant subsequent to the filing of his or her initial Payment Election under Section 5 of this
Article must meet such additional requirements as the Committee determines are appropriate to avoid
the inclusion of the amounts subject to such special payment election in the gross income of a
Participant or Beneficiary under Section 409A(a)(1) of the Code, including, without limitation, the
requirements under Section 6 of this Article. A Participant’s Beneficiary Designation may be
changed at any time prior to his or her death by the execution and delivery of a new Beneficiary
Designation. The Beneficiary Designation on file with the Company that bears the latest date at
the time of the Participant’s death shall govern. In the absence of a Beneficiary Designation or
the failure of any Beneficiary to survive the Participant, the amount of the Participant’s Account
shall be paid to the Participant’s estate in accordance with the elections made on the
Participant’s Payment Election. In the event of the death of the Beneficiary or Beneficiaries
after the death of a Participant, the amount of the Participant’s Account shall be paid to the
estate of the last surviving Beneficiary in accordance with the elections made on the Participant’s
Payment Election or special payment election, as applicable.

8. Small Payments. Notwithstanding the foregoing, if at the time of a Participant’s
Termination of Service the Participant’s Account balance does not exceed $10,000, such Account
shall be automatically paid to such Participant in a single, lump-sum payment on the date of such
Termination of Service.

9. Unforeseeable Emergency. Notwithstanding the foregoing, in the event of an
Unforeseeable Emergency and at the request of a Participant or Beneficiary, accelerated payment
shall be made to the Participant or Beneficiary of all or a part of his or her Account. Payments
of amounts as a result of an Unforeseeable Emergency may not exceed the amount necessary to satisfy
such Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result
of the distribution(s), after taking into account the extent to which the hardship is or may be
relieved through reimbursement or compensation by insurance or otherwise by liquidation of the
Participant’s assets (to the extent the liquidation of such assets would not itself cause severe
financial hardship). Amounts payable under this Section 9 of Article II shall only be payable in
cash, and shall not be payable in Class A Common Shares.

ARTICLE III

ADMINISTRATION

The Company, through the Committee, shall be responsible for the general administration of the
Plan and for carrying out the provisions hereof. The Committee shall have all such powers as may
be necessary to carry out the provisions of the Plan, including the power to (i) resolve all
questions relating to eligibility for participation in the Plan and the amount in the Account of
any Participant and all questions pertaining to claims for benefits and procedures for claim
review, (ii) resolve all other questions arising under the Plan, including any factual questions
and questions of construction, and (iii) take such further action as the Company shall deem
advisable in the administration of the Plan. The actions taken and the decisions made by the
Committee hereunder shall be final and binding upon all interested parties. The Committee shall
provide a procedure for handling claims of Participants or their Beneficiaries under the Plan.
Such procedure shall provide adequate written notice within a reasonable period of time with
respect to the denial of any such claim as well as a reasonable opportunity for a full and fair
review by the Committee of any such denial. It is intended that the Plan comply with the
provisions of Section 409A of the Code, as enacted by the American Jobs Creation Act of 2004, so as
to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that
is prior to the taxable year or years in which such amounts would otherwise actually be distributed
or made available to Participants or Beneficiaries. This Plan shall be administered in a manner
that effects such intent.

ARTICLE IV

AMENDMENT AND TERMINATION

The Company reserves the right to amend or terminate the Plan at any time by action of the
Board, except that no such action shall adversely affect any Participant or Beneficiary who has an
Account, or result in any change in the timing or manner of payment of the amount of any Account
(except as otherwise permitted under the Plan), without the consent of the Participant or
Beneficiary (provided, however, that this limitation requiring the consent of
Participants or Beneficiaries to certain actions shall not apply to any amendment or termination
that is deemed necessary by the Company to ensure compliance with Section 409A of the Code).

ARTICLE V

MISCELLANEOUS

1. Non-Alienation of Deferred Compensation. No right or interest under the Plan of
any Participant or Beneficiary shall be (i) assignable or transferable in any manner, (ii) subject
to alienation, anticipation, sale, pledge, encumbrance, attachment, garnishment or other legal
process or (iii) in any manner liable for or subject to the debts or liabilities of the Participant
or Beneficiary. Notwithstanding the foregoing, to the extent permitted by Section 409A of the
Code, the Committee shall honor a judgment, order or decree from a state domestic relations court
which requires the payment of part or all of a Participant’s or Beneficiary’s interest under this
Plan to an “alternate payee” as defined in Section 414(p) of the Code.

2. Interest of Participant. The obligation of the Company under the Plan to make
payment of amounts reflected in an Account merely constitutes the unsecured promise of the Company
to make payments from its general assets and no Participant or Beneficiary shall have any interest
in, or a lien or prior claim upon, any property of the Company. Further, no Participant or
Beneficiary shall have any claim whatsoever against any Subsidiary for amounts reflected in an
Account. Nothing in the Plan shall be construed as guaranteeing that an Eligible Director shall
remain a Director. It is the intention of the Company that the Plan be unfunded for tax purposes.
The Company may create a trust to hold funds to be used in payment of its obligations under the
Plan, and may fund such trust; provided, however, that any funds contained therein
shall remain liable for the claims of the Company’s general creditors. Notwithstanding the above,
upon the earlier to occur of (i) a Change in Control or (ii) a declaration by the Board that a
Change in Control is imminent, the Company shall promptly to the extent it has not previously done
so:

(a) establish an irrevocable trust, substantially in the form of the Rabbi Trust
attached hereto as Exhibit A (the funds of which shall be subject to the claims of
the Company’s general creditors) to hold funds to be used in payment of its obligations
under the Plan; and

(b) transfer to the trustee of such trust, to be added to the principal thereof, an
amount equal to (I) the aggregate amount credited to the Accounts of all of the Participants
and Beneficiaries under the Plan, less (II) the balance, if any, in the trust at such time.

3. Claims of Other Persons. The provisions of the Plan shall in no event be construed
as giving any other person, firm or corporation any legal or equitable right as against the Company
or any Subsidiary or the officers, employees or directors of the Company or any Subsidiary, except
any such rights as are specifically provided for in the Plan or are hereafter created in accordance
with the terms and provisions of the Plan.

4. Severability; Failure to Satisfy Section 409A. The invalidity and unenforceability
of any particular provision of the Plan shall not affect any other provision hereof, and the Plan
shall be construed in all respects as if such invalid or unenforceable provision were omitted. Any
provisions that would cause any amount deferred or payable under the Plan to be includible in the
gross income of any Participant or Beneficiary under Section 409A(a)(1) of the Code shall have no
force and effect unless and until amended to cause such amount to not be so includible (which
amendment may be retroactive to the extent permitted by Section 409A of the Code).

5. Governing Law. The provisions of the Plan shall be governed and construed in
accordance with the laws of the State of Ohio.

6. Headings; Interpretation.

(i) Headings in this Plan are inserted for convenience of reference only and are not to
be considered in the construction of the provisions hereof.

(ii) Any reference in this Plan to Section 409A of the Code will also include any
proposed, temporary or final regulations, or any other guidance, promulgated with respect to
such Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

(iii) For purposes of the Plan, the phrase “permitted by Section 409A of the Code,” or
words or phrases of similar import, shall mean that the event or circumstance that may occur
or exist only if permitted by Section 409A of the Code would not cause an amount deferred or
payable under the Plan to be includible in the gross income of a Participant or Beneficiary
under Section 409A(a)(1) of the Code.

EXECUTED at Cleveland, Ohio on December 13, 2005.

FOREST CITY ENTERPRISES, INC.

By: /s/ THOMAS G. SMITH

Title: Executive Vice President,

Chief Financial Officer and SecretaryEX-10.3

Exhibit 10.3

FOREST CITY ENTERPRISES, INC.

UNFUNDED NONQUALIFIED SUPPLEMENTAL

PENSION PLAN FOR EXECUTIVES

PLAN STATEMENT

(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2005)

1

PREAMBLE

Forest City Enterprises, Inc. does hereby amend and completely restate the Forest City Enterprises,
Inc. Unfunded Nonqualified Supplemental Pension Plan for Executives on the terms and conditions
hereinafter set forth, effective as of January 1, 2005.

This Plan is an unfunded, non qualified supplemental pension arrangement for a select group of
management or highly compensated employees of Forest City Enterprises, Inc. and, except to the
extent preempted by federal law, all rights hereunder shall be governed by and construed in
accordance with the laws of the State of Ohio.

The Plan consists of this Plan Statement, which incorporate the general provisions and guidelines
of the Plan which shall apply equally to all Plan participants, and separate individual Agreements,
the provisions of which will apply solely to the Plan Participant with respect to whom the
Agreement has been entered into.

ARTICLE I

2

Definitions

The following words and phrases as used herein shall have the following meanings unless a different
meaning is plainly required by the context:

	 	1.1	 	“Agreement” shall mean the written agreement between a Participant and the Corporation that
is entered into upon the Participant’s commencement of participation in the Plan and which
specifies (i) the Normal Retirement Benefit to which such Participant shall be entitled under
the Plan and (ii) such other special provisions as are applicable to the Participant. In the
event of any conflict or inconsistency between this Plan Statement and an Agreement, the terms
of the Agreement shall control.

	 	1.2	 	“Beneficiary” shall mean such person or persons as a Participant may from time to time, by
notice to the Corporation on a form made available by the Committee for such purpose,
designate to receive any benefit payable in the event of his death, and means the estate of
the Participant if no valid beneficiary designation is in effect at the time of a
Participant’s death.

	 	1.3	 	“Board” shall mean the Board of Directors of the Corporation.

	 	1.4	 	“Code” shall mean the Internal Revenue Code of 1986, as amended.

	 	1.5	 	“Committee” shall mean the Committee appointed by the Board to administer the plan.

	 	1.6	 	“Compensation” shall mean the basic cash remuneration payable to a Participant which was
attributable to his employment with the Corporation during calendar year, excluding bonuses,
overtime, and incentive pay and annual Corporation contributions to the Corporation’s 401(k)
Plan.

	 	1.7	 	“Corporation” shall mean Forest City Enterprises, Inc.

	 	1.8	 	“Disability” shall mean a mental or physical disability of at least six months duration which
the Committee expects will render the Participant unable to engage in any occupation or
employment for remuneration or profit for the duration of such person’s life.

Any Participant who is so disabled may be required to submit to medical examination at any
time prior to his Normal Retirement Date, but not more often than semi-annually, to
determine whether he is still entitled to benefits under the Plan by reason of such
Disability. Should such a disabled Participant refuse to submit to medical examination, any
Plan benefits shall be discontinued until the withdrawal of such refusal.

	 	1.9	 	“Key Employee” shall mean a key employee as defined in Section 409A of the Code and Section
416(i) of the Code (without regard to paragraph (5) thereof) of the Corporation (or a
controlled group member).

	 	1.10	 	“Moody’s Rate” shall mean the interest rate that is the sum of (i) the average of the Moody’s
A, Aa, and Aaa Bond rates determined as of the quarter next preceding the quarter during which
installment payments commence under Article II of the Plan plus (ii) .50.

	 	1.11	 	“Normal Retirement Benefit” shall mean the amount specified by the Corporation in a
Participant’s Agreement, plus any discretionary increments in such amount as the Corporation
may from time to time provide.

	 	1.12	 	“Normal Retirement Date” shall mean, solely for purposes of this Plan, the first day of the
month next following the later of the date of (i) a Participant’s attainment of age 60 or (ii)
a Participant’s Termination of Employment.

	 	1.13	 	“Participant” shall mean an employee of the Corporation serving in an executive or other
managerial capacity who is selected by the Committee to participate in the Plan, and with whom
the Corporation has entered into an Agreement.

	 	1.14	 	“Plan” shall mean the Forest City Enterprises, Inc. Unfunded Nonqualified Supplemental
Pension Plan for Executives, consisting of this Plan Statement and separate, individual
Agreements with Plan Participants.

	 	1.15	 	“Service” shall mean the aggregate period of a Participant’s employment with the Corporation
since his original date of hire, as determined by the Committee in accordance with uniform
rules, treating persons similarly situated in a similar manner.

	 	1.16	 	“Termination of Employment” shall mean a separation from service as defined under Section
409A of the Code.

	 	1.17	 	The masculine pronoun wherever used shall include the feminine pronoun, and the singular
shall include the plural.

ARTICLE II

Eligibility for Benefits

	 	2.1	 	Vesting

If a Participant’s employment with the Corporation terminates prior to the Participant’s
completion of 10 years of Service, no retirement benefit shall be payable from this Plan.
Subject to Section 2.5, if a Participant’s employment with the Corporation terminates on or
after the Participant’s completion of 10 years of Service, he shall be vested in and
entitled to a percentage of his Normal Retirement Benefit in accordance with the following
schedule:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Vested
	 	 	Years of Service	 	Percentage
	 
	 	10 years but less than 11 years	 	 	50	%
	 
	 	11 years but less than 12 years	 	 	60	%
	 
	 	12 years but less than 13 years	 	 	70	%
	 
	 	13 years but less than 14 years	 	 	80	%
	 
	 	14 years but less than 15 years	 	 	90	%
	 
	 	15 or more years	 	 	100	%
	2.2
	 	Normal Retirement Benefit	 	 	 	 

A Participant who incurs a Termination of Employment with a vested interest in his Normal
Retirement Benefit shall be entitled to a receive such vested amount of his Normal
Retirement Benefit. Payment of the vested Normal Retirement Benefit shall be made in equal
biweekly installments over a period of 120 months, with the first biweekly payment being
made on the Participant’s Normal Retirement Date. The amount of each biweekly installment
payment shall be determined by the Committee so that the installment payments have a present
value (taking into account the amount of a Participant’s vested Normal Retirement Benefit at
the time such payments commence and interest, at the Moody’s Rate, that would be earned on
the amount of such vested Normal Retirement Benefit during the payment period) equivalent to
the value of the Participant’s vested Normal Retirement Benefit at the time such payments
begin. Notwithstanding the foregoing, if the Participant is a Key Employee, payment on
account of Termination of Employment shall commence on the first paydate of the seventh
month following such Termination of Employment (or the date of death, if earlier) and the
total amount of biweekly installment payments to which such Key Employee would otherwise be
entitled during the six-month period following the date of such Termination of Employment
shall also be paid on the first paydate of the seventh month following such Termination of
Employment.

	 	2.3	 	Disability

Notwithstanding Section 2.2, a Participant with a vested interest in his Normal Retirement
Benefit who incurs a Termination of Employment by reason of Disability shall be entitled to
receive such vested amount of his Normal Retirement Benefit. Payment of the vested Normal
Retirement Benefit shall be made in equal biweekly installments over a period of 120 months,
calculated in accordance with the method specified in Section 2.2, with the first biweekly
payment being made on the first paydate of the month following such Termination of
Employment. Notwithstanding the foregoing, if the Participant is a Key Employee, payment
shall commence on the first paydate of the seventh month following such Termination of
Employment (or the date of death, if earlier) and the total amount of biweekly installment
payments to which such Key Employee would otherwise be entitled during the six-month period
following the date of such Termination of Employment shall also be paid on the first paydate
of the seventh month following such Termination of Employment.

	 	2.4	 	Death

Notwithstanding Sections 2.2 and 2.3, in the event of the death of a Participant the
Participant’s remaining vested Normal Retirement Benefit shall be paid to his Beneficiary in
the form of a single, lump sum payment on the first day of the month following the date of
the Participant’s death.

	 	2.5	 	Forfeiture of Benefit

Notwithstanding the foregoing, in the event that the Committee determines that a
Participant’s willful or intentional conduct results in material financial detriment to the
Corporation with a financial gain to the Participant, or the Participant is convicted of a
felony or of a misdemeanor involving fraud, dishonesty or moral turpitude, that Participant
(and his Beneficiary, if any) shall forfeit a portion of any Normal Retirement Benefit
otherwise payable from this Plan. The amount of a Participant’s forfeited Normal Retirement
Benefit shall be equal to the amount of financial detriment incurred by the Corporation as a
result of the Participant’s conduct. This Section 2.5 only applies to benefits accrued
under the Plan on or after January 1, 1999.

	 	2.6	 	Small Payments

Notwithstanding the foregoing, if at the time of a Participant’s Termination of Employment
the Participant has a vested interest in his Normal Retirement Benefit that does not exceed
$10,000, such vested amount of the Normal Retirement Benefit shall be automatically paid to
such Participant in a single, lump sum payment on the date of such Termination of
Employment, provided, however, that if the Participant is a Key Employee,
payment shall occur on the first day of the seventh month following such Termination of
Employment (or, if earlier, the date of death).

ARTICLE III

Administration

	 	3.1	 	Subject to the provisions of the Plan, full power and authority to construe, interpret and
administer the Plan shall be vested in the Committee as from time to time constituted by the
Board.

	 	3.2	 	Decisions and determinations by the Committee shall be final and binding upon all parties,
including the Corporation, shareholders, employees and Participants and their Beneficiaries
and personal representatives. The Committee shall have the authority to interpret the Plan,
to establish and revise rules and regulations relating to the Plan, and to make any other
determinations that it believes necessary or advisable for the administration of the Plan.

	 	3.3	 	No member of the Committee shall be liable for any act done or determination made in good
faith.

	 	3.4	 	It is intended that the Plan comply with the provisions of Section 409A of the Code, so as to
prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that
is prior to the taxable year or years in which such amounts would otherwise actually be
distributed or made available to Participant’s or Beneficiaries. The Plan shall be
administered in a manner that effects such intent.

ARTICLE IV

Funding

	 	4.1	 	Nothing in this Plan shall be interpreted or construed to require the Corporation in any
manner to fund its obligations to Participants hereunder.

	 	4.2	 	In the event that the Corporation shall decide to establish an advance accrual reserve on its
books against the future expense of this Plan, such reserve shall not under any circumstances
be deemed to be an asset of this Plan nor a source of payment of any claims under this Plan
but, at all times, shall remain a part of the general assets of the Corporation, subject to
the claims of the Corporation’s creditors.

	 	4.3	 	A person entitled to a benefit in accordance to the provisions of this Plan shall have a
claim upon the Corporation only to the extent of the biweekly payments thereof, if any, due up
to and including the then current months and shall not have a claim upon the Corporation for
any subsequent biweekly payment unless and until such payment shall become due and payable.

ARTICLE V

Amendment and Termination

The Corporation reserves the right to amend or terminate the Plan at any time by action of
the Compensation Committee of the Board.

EXECUTED at Cleveland, Ohio on December 13, 2005.

FOREST CITY ENTERPRISES, INC.

By: /s/ THOMAS G. SMITH

Title: Executive Vice President,

Chief Financial Officer and Secretary

3

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