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Exhibit 10.6
FOREST CITY
ENTERPRISES, INC.
PERFORMANCE SHARES
AGREEMENT
WHEREAS , [GRANTEE NAME] (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 June 18, 2008 (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 175% of the Target
Performance Shares (as defined below); and
WHEREAS , the Grantee has been assigned to Tier
for purposes of this grant
(the “Grant Tier” ) as set forth in the
Statement of Performance Goals.
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, but subject to Shareholder Approval (as defined below), 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 threshold, target and maximum “Corporate EBDT per
Share,” “Corporate Total Return,” and
“Business Unit Total Return” goals established by the
Committee for the Grantee for the Performance Period covered by
this Agreement as set forth in the Statement of Performance Goals.
Each Management Objective applicable to the Grantee shall be
evaluated separately, with the total number of Performance Shares
to be earned by the Grantee to be determined using the schedules
for the Corporate EBDT per Share goal and the applicable Total
Return goals set forth on the Statement of Performance Goals.
(c) “ Performance Period ” means the
period of three-years and nine months commencing on May 1,
2008 and ending on January 31, 2012.
(d) “ Shareholder Approval ” means
the approval of the Plan by the requisite vote of the holders of
the Shares.
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 and/or the Grantee’s
business unit 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 175%
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 whether and to what extent the goals relating to the
Management Objectives have been satisfied for the Performance
Period and shall determine the number of Performance Shares that
shall have become earned hereunder.
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, Grantee shall be entitled to
receive payment of a prorated portion of the Performance Shares
earned during the Performance Period (based on actual performance
during the Performance Period measured against the goals relating
to the Management Objectives as set forth in the Statement of
Performance Goals) if the Grantee ceases to be an employee of the
Company or any Subsidiary prior to the last day of the Performance
Period due to the Grantee’s Retirement, death or Disability
prior to the end of the Performance Period, but after May 1,
2009. Subject to the final sentence of this Section 3, such
payment shall be made after the end of the Performance Period based
on the number of whole months that Grantee was employed by the
Company or any Subsidiary during the Performance Period.
Notwithstanding the foregoing, the C
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