Exhibit 10.44
FOREST CITY ENTERPRISES, INC.
DEFERRED COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS
Forest City Enterprises, Inc. hereby establishes, effective as of January
1, 1999, the Forest City Enterprises, Inc. Deferred Compensation Plan For
Nonemployee Directors on the terms and conditions hereinafter set forth. 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 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 interest 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 20 percent 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 20 percent 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.
5. "Committee" shall mean the Compensation Committee of the Board or such
other Committee as may be authorized by the Board to administer the Plan.
6. "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.
7. "Director" shall mean a member of the Board.
8. "Disability" shall have the meaning given to such term in the Company's
Long Term Disability Plan, as amended from time to time.
9. "Election Agreement" shall mean an agreement in substantially the form
attached hereto as Exhibit A, as such form shall be modified from time to time
by the Committee.
10. "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.
11. "Fee" or "Fees" shall mean any compensation payable in cash to a
Director for his or her services as a member of the Board or any committee
thereof.
12. "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.
13. "Participant" shall mean any Eligible Director who has at any time
elected to defer the receipt of Fees in accordance with 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.
14. "Permitted Holder" shall mean (i) any of Samuel H. Miller, Albert B.
Ratner, Charles A. Ratner, James A. Ratner, Ronald A. Ratner, Nathan Shafran 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).
15. "Plan" shall mean this deferred compensation plan, which shall be known
as the Forest City Enterprises, Inc. Deferred Compensation Plan For Nonemployee
Directors.
16. "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 50 percent or more of the total combined voting or other
decision-making power.
17. "Year" shall mean a calendar year.
ARTICLE II
ELECTION TO DEFER
1. Eligibility_and_Participation. An Eligible Director may elect to defer
receipt of 50% or 100% of his or her Fee for any Year in accordance with Section
2 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. Election to Defer. An Eligible Director who desires to defer all or part
of his or her Fee pursuant to the Plan must defer 50% or 100% of such Fee
pursuant to the Plan and must complete and deliver an Election Agreement to the
Committee before the first day of the Year for which such compensation would
otherwise be paid. An Eligible Director who timely delivers an executed Election
Agreement to the Committee shall be a Participant. An Election Agreement that is
timely delivered to the Committee shall be effective for the succeeding Year
and, except as otherwise specified by an Eligible Director in his or her
Election Agreement, shall continue to be effective from Year to Year until
revoked or modified by written notice to the Committee or until terminated
automatically upon either the termination of the Plan, the Company becoming
Insolvent or the Participant ceasing to be a Director. In order to be effective
to revoke or modify an election relating to Fees otherwise payable in any
particular Year, a revocation or modification must be delivered prior to the
beginning of the first Year of service for which such compensation is payable.
Notwithstanding the above, in the event that a Director first becomes an
Eligible Director during the course of a Year, rather than as of the first day
of a Year, the Eligible Director's Election Agreement must be filed no later
than thirty (30) days following the date the Director first becomes an Eligible
Director, and such Election Agreement shall be effective only with regard to
Fees earned following the filing of the Election Agreement with the Committee.
3.Amount Deferred; Period of Deferral. A Participant shall designate on
the Election Agreement whether 50% or 100% of his or her Fee is to be deferred.
Unless the Committee permits deferral until a later date, the applicable
percentage of Fees shall be deferred until the date the Participant ceases to be
a Director by death, retirement, Disability or otherwise.
4. Accounts. 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. Such Account will be credited with interest at such
rate and in such manner as is determined from time to time by the Committee.
5. Payment of Account. The amount of a Participant's Account shall be paid
as provided in this Section 5.
(i) The amount of a Participant's Account attributable to deferral of
Fees shall be paid to the Participant in a lump sum or in a number of
approximately equal annual installments (not in excess of fifteen (15)
installments) as designated by the Participant in the Election Agreement.
The lump sum payment or the first annual installment, as the case may be,
shall be made as soon as practicable following the end of the period of
deferral as specified in Section 3 of this Article. In the event that the
Account is paid in installments, the amount of such Account remaining
unpaid shall continue to bear interest, as provided in Section 4 of this
Article.
(ii) Notwithstanding the payment terms designated by a Participant on
the Election Agreement, but subject to the approval of the Committee as
described below in this Section, a Participant may elect to change the form
of payment of his or her Account to a form of payment otherwise permitted
under Section 5(i) of this Article II; provided such election shall be in
writing on a form provided by the Committee, and provided further that any
election made less than one year prior to the date the Participant ceases
to be a Director by death, retirement, Disability or otherwise shall not be
valid, and in such case, payment shall be made in accordance with the
Participant's original Election Agreement. Any such election may be changed
or revoked by the Participant at any time and from time to time by the
filing of a later written election with the Committee provided that any
election made less than one year prior to the date the Participant ceases
to be a Director by death, retirement, Disability or otherwise shall not be
valid, and in such case, payment shall be made in accordance with the
latest valid election of the Participant. The payment of a lump sum amount,
or the payment of a number of approximately equal annual installments, not
in excess of fifteen (15) payments, as designated by the Participant in the
Election Agreement, to a Participant (or his or her Beneficiary) pursuant
to this Section shall discharge all obligations of the Company to such
Participant (or his or her Beneficiary) under the Plan.
6. 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 substantially in the form attached
hereto as Exhibit B (the "Beneficiary Designation") in accordance with the
Participant's latest valid election, or in accordance with a special payment
election filed by the Participant with the Committee that is to be operative and
override any other payment election filed by the Participant in the event of the
death of the Participant. 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 a lump sum amount within 90 days after the
appointment of an executor or administrator. In the event of the death of the
Beneficiary or Beneficiaries after the death of a Participant, any amount
remaining in the Account shall be paid in a lump sum to the estate of the last
surviving Beneficiary within 90 days after the appointment of an executor or
administrator.
7. Small Payments. Notwithstanding the foregoing, if installment payments
elected by a Participant would result in a payment of less than $500, the entire
amount of the Participant's Account may at the discretion of the Committee be
paid in a lump sum in accordance with Section 5 of this Article.
8. Acceleration.
(i) Notwithstanding the above, in the event of an unforeseeable
emergency, as defined in section 1.457-2(h)(4) and (5) of the Income Tax
Regulations, that is caused by an event beyond the control of the
Participant or Beneficiary and that would result in severe financial
hardship to the individual if acceleration were not permitted, the
Committee may in its sole discretion accelerate the payment to the
Participant or Beneficiary of the amount of his or her Account, but only up
to the amount necessary to meet the emergency.
(ii) Notwithstanding any other provision of the Plan, the Participant,
or his or her Beneficiary in the event of his or her death, shall be
permitted, at any time, to make an election to receive, payable as soon as
practicable after such election is received by the Committee, the remaining
amount of the Account in the form of a single lump sum, if (and only if)
the Account is reduced by 10%, which 10% amount shall thereupon irrevocably
be forfeited.
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.
ARTICLE IV
AMENDMENT AND TERMINATION
The Company reserves the right to amend or terminate the Plan at any time
by action of the Board; The Company reserves the right to amend or terminate the
Plan at any time by action of the Board; provided, however, 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.
ARTICLE V
MISCELLANEOUS
1. Non-alienation of Deferred Compensation. Except as permitted by the
Plan, no right or interest under the Plan of any Participant or Beneficiary
shall, without the written consent of the Company, 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.
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 (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. 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.
5. Governing Law. The provisions of the Plan shall be governed and
construed in accordance with the laws of the State of Ohio.
EXECUTED at Cleveland, Ohio on December 29, 1998.
FOREST CITY ENTERPRISES, INC.
By: THOMAS T. KMIECIK
Title: Assistant Teasurer
EXHIBIT A
FOREST CITY ENTERPRISES, INC.
DEFERRED COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS
ELECTION AGREEMENT
I,_________ , hereby elect to participate in the Forest City Enterprises,
Inc. Deferred Compensation Plan For Nonemployee Directors (the "Plan") with
respect to Fees which I otherwise would be entitled to receive beginning on or
after January 1, 1999. I hereby elect to defer payment of the Fees which I
otherwise would be entitled to receive as follows:
1. Deferral of Fees Otherwise Payable During 1999. Percentage of Fees, if
any, otherwise payable during 1999 (check one):
____ defer 50% ___ defer 100%
2. Form of Distributions. Please make payment of the above specified
deferrals, together with all accrued interest reflected in my Account, as
follows (check one):
a. ___ Pay in a lump sum
b. ___ Pay in ___ (not more than 15) approximately equal annual
installments
3. Special Death Election. If I die before I receive the entire amount
credited to my Account, without regard to any other election I have made on this
Election Agreement, please defer payment or make payment of the first annual
installment to my Beneficiary as follows (check one and complete blank if
necessary):
a. ___ Defer until ____ year(s) (not more than 2) after my death and pay to
my Beneficiary in a lump sum or in ____ (not more than 15)
approximately equal annual installments (check one and complete
blank if necessary)
b. ___ Defer until my death and pay to my Beneficiary in a lump sum or
in ____ (not more than 15) approximatelyequal annual installments
(check one and complete blank if necessary)
I acknowledge that I have reviewed the Plan and understand that my
participation will be subject to the terms and conditions contained in the Plan.
I understand that this Election Agreement must be returned to the Committee no
later than December 31, 1998 to be effective. Capitalized terms used, but not
otherwise defined, in this Election Agreement shall have the respective meanings
assigned to them in the Plan.
I understand that (i) this Election Agreement shall continue to be
effective for all payments of Fees which would otherwise be paid to me after
1999 and (ii) I may not revoke or modify this Election Agreement with respect to
the deferral of Fees otherwise payable during 1999, although I may elect to
terminate the future deferral of Fees as of the first day of any later Year by
delivering written notice to the Committee prior to the first day of such Year.
I also understand that I may change the form of payment of my Account to a form
of payment otherwise permitted under the Plan, provided that if I make an
election to change my form of payment less than one year prior to the date I
cease to be a Director by death, retirement, Disability or otherwise, such
election will not be effective and, in such case, payment shall be made in
accordance with my latest valid election.
I acknowledge that I have been advised to consult with my own financial,
tax, estate planning and legal advisors before making this election to defer in
order to determine the tax effects and other implications of my participation in
the Plan.
Dated this___day of______, 1998.
_____________________________ _________________________________
(Signature) (Print or type name)
Exhibit B
FOREST CITY ENTERPRISES, INC.
DEFERRED COMPENSATION PLAN FOR NONEMPLOYEE DIRECTORS
BENEFICIARY DESIGNATIONS
In accordance with the terms and conditions of the Forest City Enterprises,
Inc. Deferred Compensation Plan For Executives (the "Plan"), I hereby designate
the person(s) indicated below as my beneficiary(ies) to receive the amounts
payable under said Plan.
Name ___________________________ Name ____________________________
Portion of Account ________% Portion of Account _________%
Address _________________________ Address _________________________
_________________________________ _________________________________
_________________________________ _________________________________
Social Sec. No. of Social Sec. No. of
Beneficiary _____________________ Beneficiary _____________________
Relationship ____________________ Relationship ___________________
Date of Birth ___________________ Date of Birth __________________
In the event that the above-named beneficiary(ies) predecease(s) me, I
hereby designate the following person as beneficiary(ies);
Name ___________________________ Name ____________________________
Portion of Account ________% Portion of Account _________%
Address _________________________ Address _________________________
_________________________________ _________________________________
_________________________________ _________________________________
Social Sec. No. of Social Sec. No. of
Beneficiary _____________________ Beneficiary _____________________
Relationship ____________________ Relationship ___________________
Date of Birth ___________________ Date of Birth __________________
I hereby expressly revoke all prior designations of beneficiary(ies),
reserve the right to change the beneficiary(ies) herein designated and agree
that the rights of said beneficiary(ies) shall be subject to the terms of the
Plan. In the event that there is no beneficiary living at the time of my death,
I understand that the amounts payable under the Plan will be paid to my estate.
_______________ _____________________ ______________________________
Date (Signature) (Print or type name)