Document:

FCE-10Q EX 10.2   3.31.2015

Exhibit 10.2

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) (as amended by the First Amendment to the 1994 Stock Plan, dated December 17, 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.

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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
	First anniversary of the Date of Grant. 

 
		
	1/4 of the Original Award
	Second anniversary of the Date of Grant.

		
	All Forfeitable Shares
	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: 

		
	(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 third 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.

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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 

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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

4FCE-10Q EX10.3    3.31.2015

Exhibit 10.3

 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) (as amended by the First Amendment to the 1994 Stock Plan, dated December 17, 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) “Cause” shall have the meaning assigned to such term in the Grantee’s employment agreement with the Company or a Subsidiary, or if there is no such employment agreement that defines such term, “Cause” means the Grantee’s 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. 
(b) “Disability” means disability as defined under the Company’s Long Term Disability Plan, as amended from time to time. 
(c) “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.
(d) “Performance Period” means the period of three years commencing on January 1, 2015 and ending on December 31, 2017. 

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 Death, Disability, Retirement or Involuntary Termination Without Cause. Notwithstanding Section 2 hereof: 
(a) 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 death or Disability, the Grantee shall become vested and 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. Any pro-rated Performance Shares payable pursuant to this Section 3(a) shall be determined based upon the Target Performance Shares and shall be paid to the Grantee (or to the Grantee’s estate in the event of death) within sixty (60) days following termination of employment. 
(b) If the Grantee’s employment with the Company and its Subsidiaries terminates during the Performance Period and either (i) at least one year after the beginning of the Performance Period due to the Grantee’s Retirement, or (ii) at least eighteen months after the beginning of the Performance Period due to the termination of the Grantee’s employment by the Company or a Subsidiary without Cause (and not due to death or Disability), the Grantee shall become vested and 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. Any pro-rated Performance 

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Shares payable pursuant to this Section 3(b) 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. Except as otherwise provided pursuant to Section 3(a), 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 within two and one-half months after the end of the Performance Period. 
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 statutory minimum amount of taxes required to be withheld or such other amount that will not result in a negative accounting impact to the Company or a Subsidiary. 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). 
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. 

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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. 
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). 

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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: 
Title: 

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