-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OP/icmHQ8Yf1LtK55nOfXCh+MzhG8qp7H5Avv++djLtZDi49CEVsVl9K+cJPJSUn 0gbXqNbx3uaADKjFfqBu5g== 0000950152-00-003345.txt : 20000501 0000950152-00-003345.hdr.sgml : 20000501 ACCESSION NUMBER: 0000950152-00-003345 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000607 FILED AS OF DATE: 20000428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOREST CITY ENTERPRISES INC CENTRAL INDEX KEY: 0000038067 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 340863886 STATE OF INCORPORATION: OH FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-04372 FILM NUMBER: 613287 BUSINESS ADDRESS: STREET 1: 1100 TERMINAL TOWER STREET 2: 50 PUBLIC SQ CITY: CLEVELAND STATE: OH ZIP: 44113 BUSINESS PHONE: 216-621-6060 MAIL ADDRESS: STREET 1: 1100 TERMINAL TOWER STREET 2: 50 PUBLIC SQUARE CITY: CLEVLAND STATE: OH ZIP: 44113 DEF 14A 1 FOREST CITY ENTERPRISES, INC. DEF 14A 1 ================================================================================ SCHEDULE 14A (RULE 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
FOREST CITY ENTERPRISES, INC. (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) XXXXXXXXXXXXXXXX (NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: ....... (2) Aggregate number of securities to which transaction applies: .......... (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ............ (4) Proposed maximum aggregate value of transaction: ...................... (5) Total fee paid: ....................................................... [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ............................................... (2) Form, Schedule or Registration Statement No.: ......................... (3) Filing Party: ......................................................... (4) Date Filed: ........................................................... ================================================================================ 2 FOREST CITY ENTERPRISES, INC. NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 7, 2000 NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of Forest City Enterprises, Inc. will be held in the 6th floor Ballroom of the Ritz-Carlton Hotel, Tower City Center, 1515 West Third Street, Cleveland, Ohio 44113, on Wednesday, June 7, 2000 at 9:00 a.m., local time, for the purpose of considering and acting upon: (1) The election of thirteen (13) directors, each to hold office until the next annual shareholders' meeting and until a successor shall be elected and qualified. Four (4) directors will be elected by holders of Class A Common Stock and nine (9) by holders of Class B Common Stock. (2) The ratification of PricewaterhouseCoopers LLP as independent auditors for the Company for the fiscal year ending January 31, 2001. (3) Such other business as may properly come before the meeting or any adjournment thereof. Shareholders of record at the close of business on April 17, 2000 will be entitled to notice of and to vote at such annual meeting or any adjournment thereof. BY ORDER OF THE BOARD OF DIRECTORS Thomas G. Smith, Secretary Cleveland, Ohio April 28, 2000 IMPORTANT: IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING. WHETHER OR NOT YOU INTEND TO BE PRESENT, PLEASE MARK, DATE AND SIGN THE APPROPRIATE ENCLOSED PROXY OR PROXIES AND SEND THEM BY RETURN MAIL IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. 3 FOREST CITY ENTERPRISES, INC. PROXY STATEMENT SOLICITATION AND REVOCATION OF PROXIES The enclosed Proxy or Proxies relating to shares of Class A Common Stock and Class B Common Stock are solicited on behalf of the Board of Directors of Forest City Enterprises, Inc. (the "Company") for use at the annual meeting of shareholders to be held on Wednesday, June 7, 2000 at 9:00 a.m., local time, in the 6th floor Ballroom of the Ritz -Carlton Hotel, Tower City Center, 1515 West Third Street, Cleveland, Ohio 44113. This Proxy Statement and related form of proxy are being first sent to shareholders on or about April 28, 2000. A shareholder giving a Proxy may revoke the same by notifying the Secretary of the Company in writing or at the annual meeting, without affecting any vote previously taken. OUTSTANDING SHARES AND VOTING RIGHTS As of April 17, 2000, the record date fixed for the determination of shareholders entitled to vote at the annual meeting, there were outstanding 19,372,406 shares of Class A Common Stock, par value $.33 1/3 per share, and 10,659,096 shares of Class B Common Stock, par value $.33 1/3 per share, of the Company (collectively "Common Stock"). At the annual meeting, the holders of Class A Common Stock will be entitled as a class to elect four (4) directors, and will be entitled to one vote per share for this purpose. Michael P. Esposito, Jr., Joan K. Shafran, Stan Ross and Louis Stokes have been nominated for election to serve as these directors. At the annual meeting, the holders of Class B Common Stock will be entitled as a class to elect nine (9) directors and will be entitled to one vote per share for this purpose. Albert B. Ratner, Samuel H. Miller, Charles A. Ratner, James A. Ratner, Jerry V. Jarrett, Ronald A. Ratner, Scott S. Cowen, Brian J. Ratner and Deborah Ratner Salzberg have been nominated for election to serve as these directors. Except for the election of directors, the holders of Class A Common Stock and Class B Common Stock will vote together on all other matters presented at the meeting and will be entitled to one (1) vote per share of Class A Common Stock and ten (10) votes per share of Class B Common Stock held of record. If notice in writing is given by any shareholder to the President, a Vice President or the Secretary of the Company not less than forty-eight hours before the time fixed for the holding of the meeting that such shareholder desires cumulative voting with respect to the election of directors by a class of shareholders to which the holder belongs, and if an announcement of the giving of such notice is made upon the convening of the meeting by the Chairman or Secretary or by or on behalf of the shareholder giving such notice, each holder of shares of that class shall have the right to accumulate such voting power as the holder possesses at such election with respect to shares of that class. Each holder of shares of Class A Common Stock or Class B Common Stock, as the case may be, shall have as many votes as equal the number of shares of that class of Common Stock owned by that holder multiplied by the number of directors to be elected by the holders of that class of Common Stock. These votes may be distributed among the total number of directors to be elected by the holders of that class of common stock or distributed among any lesser number, in such proportion as the holder may desire. Under Ohio law and the Company's Articles of Incorporation, broker non-votes and abstaining votes will be counted for purposes of determining whether a quorum is present at the annual meeting, but will not be counted in favor of or against any nominee for election to the Board of Directors of the Company. Abstentions will be counted as cast with respect to a proposal and have the same effect as votes against the ratification of PricewaterhouseCoopers LLP as the Company's independent auditors for the fiscal year ending January 31, 2001. Broker non-votes will not be counted as cast for any proposal. 1 4 ELECTION OF DIRECTORS It is intended that proxies will be voted for the election of the nominees named in the table below as directors of the Company unless authority is withheld. Each is to serve until the next annual shareholders' meeting and until their successor is elected and qualified. In the event any one or more of such nominees unexpectedly becomes unavailable for election, proxies will be voted in accordance with the best judgment of the proxy holder. All nominees are presently directors of the Company. At March 1, 2000, the Ratner, Miller and Shafran Families, which include members of the Company's current Board of Directors and certain executive officers ("Family Interests"), owned 74.6% of the Class B Common Stock. RMS, Limited Partnership ("RMSLP"), which owned 74.3% of the Class B Common Stock outstanding as of the record date, is a limited partnership, comprised of the Family Interests, with eight individual general partner positions, currently consisting of: Samuel H. Miller, Co-Chairman of the Board of Directors and Treasurer of the Company; Charles A. Ratner, President and Chief Executive Officer of the Company and Director; Ronald A. Ratner, Executive Vice President of the Company and Director; Brian J. Ratner, Senior Vice President- East Coast Development of the Company and Director; Deborah Ratner Salzberg, Vice President -Forest City Residential Group, Inc., a subsidiary of the Company, and Director; Joan K. Shafran, Director; Joseph Shafran; and one position that is currently vacant. Joan K. Shafran is the sister of Joseph Shafran. Charles A. Ratner, James A. Ratner and Ronald A. Ratner are brothers. Albert B. Ratner is the father of Brian J. Ratner and Deborah Ratner Salzberg and is first cousin to Charles A. Ratner, James A. Ratner, Ronald A. Ratner, Joan K. Shafran and Joseph Shafran. Samuel H. Miller was married to Ruth Ratner Miller (now deceased), a sister of Albert B. Ratner. The vacant general partnership position relates to shares controlled by the children of Ruth Ratner Miller. Under the partnership agreement of RMSLP ("Agreement"), the voting power of the general partners representing a family branch is determined by dividing the interest of the family branch they represent by the aggregate interests of all family branches. The voting power of the general partner or general partners representing a family branch may not be divided or apportioned but must be voted together as a whole. If the general partners representing a family branch are unable to agree on how to vote that branch, the total voting power of the other general partners is computed without reference to the voting power otherwise available to that family branch. Accordingly, the voting power of the Ruth Miller Family Branch will be excluded until its vacant general partner position is filled. General partners holding 60% of the total voting power (excluding the voting power of a family branch, if any, unable to agree on how to vote on a particular matter) of RMSLP determine how to vote the Class B Common Stock of Forest City Enterprises, Inc. held by RMSLP. At March 1, 2000, members of the Family Interests collectively owned 32.5% of the Class A Common Stock. The following table includes the shares of Class B Common Stock held by RMSLP at March 1, 2000, under the Agreement voted by the general partners of RMSLP, who under Rule 13d-3 of the Securities Exchange Act of 1934, are deemed to be the beneficial owners of those shares of Class B Common Stock: 2 5
Percent of Shares of Class B RMSLP's Name of Common Stock Holdings of Class B Family Branch General Partners Held through RMSLP Common Stock* - ---------------------------------------------------------------------------------------------------------- Max Ratner Charles A. Ratner 3,215,370 40.6% Ronald A. Ratner Albert Ratner Brian J. Ratner 1,764,505 22.3% Deborah Ratner Salzberg Samuel H. Miller Samuel H. Miller 607,202 7.7% Shafran Joan K. Shafran 1,601,936 20.2% Joseph Shafran Ruth Miller (Presently vacant) 729,917 9.2% ----------- --------- Total 7,918,930 100.0% =========== =========
* Represents total voting power for the Family Branch. The Ruth Miller Family Branch currently does not have voting power as its general partner position is vacant. Accordingly, the current voting power within RMSLP is as follows: Max Ratner Family Branch, 44.7%; Albert Ratner Family Branch, 24.5%; Samuel H. Miller Family Branch, 8.5%; and Shafran Family Branch, 22.3%. The following table sets forth the beneficial ownership of shares of Class A Common Stock and Class B Common Stock as of March 1, 2000 of each director, nominee, other named executive officer and all directors and executive officers as a group. Except as otherwise noted, each person has had the principal occupation shown for at least the last five years.
Number of Shares of Common Stock Beneficially Owned ------------------------------------------------------------------------- Combined Class Class A A and B Percent Class B Occupation Director Common Percent Common of Common Percent Name and Age Since Stock (h,j) of Class (h) Stock (i,j) Class (i) Stock of Class - ---------------------------------------------------------------------------------------------------------------------------------- NOMINEES (a) Michael P. Co-Chairman, Inter- 1995 23,656 (1) 0.12% 23,656 0.12% - - Esposito, Jr. Atlantic Capital Partners (investment banking); Chairman of XL Capital Ltd. (f/k/a Exel Limited) (insurance); Retired Executive Vice President - Chief Control Compliance and Administrative Officer, The Chase Manhattan Bank, N.A. (banking). Age 60. (c,d,e) (a) Joan K. Executive Managing 1997 211,958 (2) 1.09% 8,135,388 29.80% 7,923,430 (3) 74.33% Shafran Partner, The Berimore Co. (2)(3) (investments); Principal and President of the Board, Do While Studio (art and technology nonprofit). Age 52.
3 6
Number of Shares of Common Stock Beneficially Owned ------------------------------------------------------------------------------------ Combined Class Class A A and B Percent Class B Occupation Director Common Percent Common of Common Percent Name and Age Since Stock(h,j) of Class(h) Stock(i,j) Class(i) Stock of Class - ----------------------------------------------------------------------------------------------------------------------------------- (a) Louis Attorney, Squire, Sanders, 1999 233 0.00% 233 0.00% - - Stokes & Dempsey (law); Retired Member of The United States Congress. Age 75. (d,e) (a) Stan Ross Retired Vice Chairman/Special 1999 - - - - - - Consultant of Ernst & Young LLP (accounting & consulting); Chairman of the Board of USC Lusk Center for Real Estate (education). Age 64. (d) (b) Albert B. Co-Chairman of the 1960 719,751 (4) 3.72% 722,807 3.73% 3,056 (5) 0.03% Ratner Board of Directors of the (4)(5) Company since June 1995, Vice Chairman of the Board of the Company from June 1993 to June 1995, Chief Executive Officer prior to July 1995 and President prior to July 1993. Director of American Greetings Corporation (greeting cards) and RPM, Inc. (lubricants). Age 72. (f) (b) Samuel H. Co-Chairman of the 1960 1,021,104 (6) 5.27% 8,940,034 32.76% 7,918,930 (7) 74.29% Miller Board of Directors (6)(7) of the Company since June 1995, Chairman of the Board of the Company from June 1993 to June 1995 and Vice Chairman of the Board, Chief Operating Officer of the Company prior to June 1993, Treasurer of the Company since December 1992. Age 78. (f)
4 7
Number of Shares of Common Stock Beneficially Owned ----------------------------------------------------------------------------------------- Combined Class Class A A and B Percent Class B Occupation Director Common Percent Common of Common Percent Name and Age Since Stock (h,j) of Class (h) Stock (i,j) Class (i) Stock of Class - ----------------------------------------------------------------------------------------------------------------------------------- (b) Charles A. President of the Company 1972 1,785,360 (8) 9.21% 9,704,290 35.53% 7,918,930 (9) 74.29% Ratner since June 1993, Chief (8)(9) Executive Officer of the Company since June 1995, Chief Operating Officer from June 1993 to June 1995 and Executive Vice President prior to June 1993. Director of Cole National Corporation (retail) and Cole National Group Inc. (retail). Age 58. (f) (b) James A. Executive Vice President 1984 2,061,135 (10) 10.63% 2,061,135 10.63% -(11) - Ratner of the Company and (10)(11) President of Forest City Rental Properties Corporation, a subsidiary of the Company. Age 55.(f) (b) Jerry V. Retired Chairman 1984 4,500 (12) 0.02% 4,500 0.02% - - Jarrett and Chief Executive Officer of Ameritrust Corporation (banking); Age 68. (c,d,e) (b) Ronald A. Executive Vice President 1985 867,675 (13) 4.48% 8,786,605 32.18% 7,918,930 (14) 74.29% Ratner of the Company and (13)(14) President of Forest City Residential Group, Inc., a subsidiary of the Company. Age 53. (f) (b) Scott S. President, Tulane University 1989 5,600 (15) 0.03% 5,600 0.03% - - Cowen (education) since July 1998; Dean and Professor of Weatherhead School of Management, Case Western Reserve University (education) prior to July 1998. Director of Fabricenters of America (specialty retailing), Newell Rubbermaid Corporation (consumer products) and American Greetings Corporation (greeting cards). Age 53. (c,d,e)
5 8
Number of Shares of Common Stock Beneficially Owned ---------------------------------------------------------------------------------------- Combined Class Class A A and B Percent Class B Occupation Director Common Percent Common of Common Percent Name and Age Since Stock (h,j) of Class (h) Stock (i,j) Class (i) Stock of Class - ---------------------------------------------------------------------------------------------------------------------------------- (b) Brian J. Senior Vice President - East 1993 150,264 (16) 0.78% 8,069,194 29.56% 7,918,930 (17) 74.29% Ratner Coast Development of the (16)(17) Company since January 1997, Vice President-Urban Entertainment from June 1995 to December 1996, Vice President of the Company from May 1994 to June 1995 and an officer of various subsidiaries. Age 42. (f) (b) Deborah Officer of various 1995 88,332(18) 0.46% 8,007,262 29.34% 7,918,930 (19) 74.29% Ratner subsidiaries of the (18)(19) Salzberg Company. Age 46. (f) OTHER NAMED EXECUTIVE OFFICER Thomas G. Senior Vice 7,361(20) 0.04% 7,871 0.04% 510 0.00% Smith President, Chief Financial Officer and Secretary of the Company. Director of Cleveland Region Advisory Board, First Merit Bank (banking). Age 59. (f,g) ALL DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS AS A GROUP (19 in number) 5,074,355(21) 26.07% 13,001,942 47.47% 7,927,587 (22) 74.37% (21)(22)
6 9 (1) Includes 3,500 shares that were issuable upon the exercise of stock options vested at March 1, 2000 and within 60 days thereafter. (2) Includes 69,118 shares of Class A Common Stock held in a partnership in which Joan K. Shafran has shared power of voting and disposition. Ms. Shafran has beneficial ownership of 140,590 shares held in a trust for which she is trustee and has shared power of voting and disposition. (3) Includes 4,500 shares of Class B Common Stock held in a partnership in which Joan K. Shafran has shared power of voting and disposition. Ms. Shafran's beneficial ownership of the remaining 7,918,930 shares of Class B Common Stock reflects her status as a general partner of RMSLP. See discussion of RMSLP above. (4) Albert B. Ratner has beneficial ownership of 371,787 shares of Class A Common Stock held in trusts for which he is trustee and has shared power of voting and disposition and 180,602 shares for which he has sole power of voting and disposition. Mr. Ratner has beneficial ownership of 66,988 shares held in trusts for which he is trust advisor and has shared power of voting and disposition with the trustees. (5) Does not reflect the following shares that Albert B. Ratner disclaims beneficial ownership of: 1,514,472 shares of Class B Common Stock held by trusts for which he is trustee and 133,967 shares held by trusts for which he is trust advisor, of which 610,499 shares are held in the Albert Ratner Family Branch of RMSLP, 790,998 shares are held in the Max Ratner Family Branch of RMSLP and 246,942 shares are held in the Ruth Miller Family Branch of RMSLP. See discussion of RMSLP above. (6) Samuel H. Miller has beneficial ownership of 464,376 shares of Class A Common Stock held in trusts for which he is trustee and has shared power of voting and disposition and 550,202 shares for which he has sole power of voting and disposition. (7) Samuel H. Miller's beneficial ownership of these shares of Class B Common Stock reflects his status as a general partner of RMSLP. See discussion of RMSLP above. (8) Charles A. Ratner has beneficial ownership of 1,286,115 shares of Class A Common Stock held in trusts for which he is trustee and has shared power of voting and disposition. Mr. Ratner has beneficial ownership of 129,914 shares held in trusts for which he is trust advisor and has shared power of voting and disposition with the trustees. Includes 21,600 shares that were issuable upon the exercise of stock options vested at March 1, 2000 and within 60 days thereafter. (9) Charles A. Ratner's beneficial ownership of these shares of Class B Common Stock reflects his status as a general partner of RMSLP. See discussion of RMSLP above. (10) James A. Ratner has beneficial ownership of 1,405,938 shares of Class A Common Stock held in trusts for which he is trustee and has shared power of voting and disposition and 138,532 shares for which he has sole power of voting and disposition. Mr. Ratner has beneficial ownership of 23,624 shares held in trusts for which he is trust advisor and has shared power of voting and disposition with the trustees. Includes 13,500 shares that were issuable upon the exercise of stock options vested at March 1, 2000 and within 60 days thereafter. 7 10 (11) Does not reflect the following shares that James A. Ratner disclaims beneficial ownership of: 2,011,031 shares of Class B Common Stock held by trusts for which he is trustee and 134,132 shares held by trusts for which he is trust advisor, of which 1,282,695 shares are held in the Max Ratner Family Branch of RMSLP, 483,897 shares are held in the Albert Ratner Family Branch of RMSLP and 378,571 shares are held in the Ruth Miller Family Branch of RMSLP. See discussion of RMSLP above. (12) Includes 3,500 shares that were issuable upon the exercise of stock options vested at March 1, 2000 and within 60 days thereafter. (13) Ronald A. Ratner has beneficial ownership of 223,902 shares of Class A Common Stock held in trusts for which he is trustee and has shared power of voting and disposition and 137,720 shares for which he has sole power of voting and disposition. Includes 13,500 shares that were issuable upon the exercise of stock options vested at March 1, 2000 and within 60 days thereafter. (14) Ronald A. Ratner's beneficial ownership of these shares of Class B Common Stock reflects his status as a general partner of RMSLP. See discussion of RMSLP above. (15) Includes 3,500 shares that were issuable upon the exercise of stock options vested at March 1, 2000 and within 60 days thereafter. (16) Brian J. Ratner has beneficial ownership of 19,360 shares of Class A Common Stock held in trusts for which he is trustee and has shared power of voting and disposition. Mr. Ratner claims beneficial ownership of 15,600 shares held as custodian for his daughter and as to which he has sole power of voting and disposition. Includes 8,100 shares that were issuable upon the exercise of stock options vested at March 1, 2000 and within 60 days thereafter. (17) Brian J. Ratner's beneficial ownership of these shares of Class B Common Stock reflects his status as a general partner of RMSLP. See discussion of RMSLP above. (18) Deborah Ratner Salzberg has beneficial ownership of 65,560 shares of Class A Common Stock held in trusts for which she is trustee and has shared power of voting and disposition. Includes 3,600 shares that were issuable upon the exercise of stock options vested at March 1, 2000 and within 60 days thereafter. (19) Deborah Ratner Salzberg's beneficial ownership of these shares of Class B Common Stock reflects her status as a general partner of RMSLP. See discussion of RMSLP above. (20) Includes 7,350 shares that were issuable upon the exercise of stock options vested at March 1, 2000 and within 60 days thereafter. (21) These shares of Class A Common Stock represent all the shares in which beneficial ownership is claimed by these persons. Shares for which beneficial ownership have been claimed by more than one person have been counted only once in this category. Includes 92,550 shares that were issuable upon the exercise of stock options vested at March 1, 2000 and within 60 days thereafter. 8 11 (22) These shares of Class B Common Stock represent all the shares in which beneficial ownership is claimed by these persons. Included in this total are 7,918,930 shares of Class B Common Stock that are held by RMSLP. Shares for which beneficial ownership have been claimed by more than one person have been counted only once in this category. (a) Nominated for election by holders of Class A Common Stock. (b) Nominated for election by holders of Class B Common Stock. (c) Member of the Audit Committee. (d) Member of the Compensation Committee. (e) Member of the Nominating and Corporate Governance Committee. (f) Officer and/or director of various subsidiaries of the Company. (g) This officer is not a director. (h) Does not reflect potential conversion of Class B Common Stock to Class A Common Stock. (i) Reflects potential conversion of all Class B Common Stock held by the nominee or officer listed to Class A Common Stock. Shares of Class B Common Stock are convertible pursuant to their terms into shares of Class A Common Stock at any time on a 1 for 1 basis. (j) This column includes, if any, Class A stock options that were exercisable on March 1, 2000 or will be exercisable within 60 days after such date. The Company has been advised that the shares owned by RMSLP and shares owned by other Ratner, Miller and Shafran families will be voted for the approval of the election of the directors nominated. If such shares are voted for approval, then such vote will be sufficient to elect the nominees voted on by the Class B shareholders. 9 12 DIRECTOR COMPENSATION Each non-employee director of the Company receives an annual retainer of $25,000. They also receive a fee of $500 for attending any board committee meeting and an additional $500 for serving as chairman for any board committee meeting. During fiscal 1999, Messrs. Cowen, Esposito and Jarrett received $3,000, $4,500 and $4,500, respectively, for attending or serving as chairman for board committee meetings. In addition, Messrs. Esposito, Jarrett and Stokes, and Ms. Joan K. Shafran received $5,000, $9,000, $4,000 and $3,000, respectively, for attending other meetings in their capacity as a director of the Company. Directors who are also employees of the Company receive no additional compensation for service as directors. PRINCIPAL SECURITY HOLDERS The following table sets forth the security ownership as of March 1, 2000 of all other persons who beneficially own 5% or more of the Company's common stock.
Number of Shares of Common Stock Beneficially Owned --------------------------------------------------------------------------------------- Combined Class Class A A and B Class B Common Percent Common Percent Common Percent Name and Address Stock (a) of Class (a) Stock (b) of Class (b) Stock of Class - ---------------------------------------------------------------------------------------------------------------------------------- Private Capital Management, Inc. and 2,165,053(1)(5) 11.18% 2,523,993(1)(5) 12.79% 358,940(1)(5) 3.37% Bruce S. Sherman 3003 Tamiami Trail North Naples, FL 33940 Southeast Asset Management, Inc. and 1,864,050(2)(5) 9.62% 2,066,028(2)(5) 10.55% 201,978(2)(5) 1.89% Longleaf Partners Realty Fund 6410 Poplar Ave., Suite 900 Memphis, TN 38119 Wallace R. Weitz & Company 1,021,900(3)(5) 5.28% 1,021,900(3)(5) 5.28% -(5) - 1125 South 103 Street Suite 600 Omaha, NE 68124 EQSF Advisers, Inc. and 986,277(4)(5) 5.09% 1,010,477(4)(5) 5.21% 24,200(4)(5) 0.23% M.J. Whitman Advisers, Inc. 767 Third Avenue New York, NY 10017 Joseph Shafran 233,459(6) 1.21% 8,156,889(6) 29.88% 7,923,430(6) 74.33% Paran Management Company 13212 Shaker Boulevard, Suite 100 Cleveland, OH 44120 Ratner, Miller & Shafran Family 6,306,313(7) 32.45% 14,258,149(7) 52.07% 7,951,836(7) 74.60% Interests Terminal Tower 50 Public Square Suite 1600 Cleveland, OH 44113
10 13 (1) Private Capital Management, Inc. (PCM), a Florida corporation, is an investment advisor registered under Section 203 of the Investment Advisers Act of 1940. PCM is deemed to be the beneficial owner of the securities in the table above because of its shared power to dispose or to direct the disposition of these securities; PCM disclaims any power to vote or to direct the voting of these securities. Bruce S. Sherman, as Chairman of PCM, exercises shared dispositive power with respect to shares held by PCM on behalf of its clients and may also be deemed to be the beneficial owner of the 2,165,053 shares of Class A Common Stock beneficially owned by PCM. PCM has shared power to dispose or to direct the disposition of 2,155,053 shares of Class A Common Stock and Mr. Sherman has sole power to vote or to direct the vote and to dispose or to direct the disposition of 10,000 shares of Class A Common Stock. Mr. Michael J. Seaman, an employee of PCM or its affiliates, owns 8,100 shares of Class A Common Stock not included in the table above. Mr. Seaman disclaims any beneficial ownership in any of the securities beneficially owned by either PCM or Mr. Sherman. (2) Southeastern Asset Management, Inc. (SAM), a Tennessee corporation, is an investment advisor registered under Section 203 of the Investment Advisers Act of 1940. Longleaf Partners Realty Fund (LPRF) is a series of Longleaf Partners Fund Trust, a Massachusetts business trust. SAM may be the beneficial owner of the securities included in the table above because of its advisory relationship with the persons owning the securities. SAM has sole voting and dispositive power over 53,378 shares of Class B Common Stock, and shared voting and dispositive power with LPRF over 1,864,050 shares of Class A Common Stock and 148,600 shares of Class B Common Stock. SAM and LPRF disclaim beneficial ownership in 641,900 shares of Class A Common Stock and 3,900 shares of Class B Common Stock held in an account over which they have no voting or dispositive powers. Mr. O. Mason Hawkins, a U.S. citizen and Chairman of the Board and Chief Executive Officer of SAM, may be deemed to be a controlling person of SAM as a result of his official position with or ownership of SAM's voting securities. The existence of such control is expressly disclaimed. Mr. Hawkins does not own, directly or indirectly, any securities included in the table above. (3) Wallace R. Weitz & Company (WWC), a Nebraska corporation, is an investment advisor registered under Section 203 of the Investment Advisers Act of 1940. WWC has reported to the Company that it is the beneficial owner of securities included in the table above because of its advisory relationship with persons owning the securities. (4) Martin J. Whitman is the Chairman, President and Chief Executive Officer of EQSF Advisors, Inc. (EQSF) and the Chairman and Chief Executive Officer of M.J. Whitman Advisers, Inc. (MJWA). EQSF has sole power of voting and disposition for 612,200 shares of Class A Common Stock and MJWA has sole power of voting and disposition for 374,077 shares of Class A Common Stock. Mr. Whitman disclaims beneficial ownership of all such shares. (5) The number of shares of capital stock beneficially owned represent shares beneficially owned at December 31, 1999 as disclosed in Forms 13F and/or 13G filed by the Principal Security Holder named in the table. (6) Joseph Shafran is the brother of Joan K. Shafran. Included in the Class A Common Stock are 69,118 shares held in a partnership in which Joseph Shafran has shared power of voting and disposition. Mr. Shafran has beneficial ownership of 164,341 shares of Class A Common Stock held in trusts for which he is trustee and has shared power of voting and disposition. Included in the Class B Common Stock are 4,500 shares held in a partnership in which Joseph Shafran has shared power of voting and disposition. Joseph Shafran's beneficial ownership of the remaining 7,918,930 shares of Class B Common Stock reflects his status as a general partner of RMSLP. See discussion of RMSLP under "Election of Directors." 11 14 (7) The Ratner, Miller and Shafran families have an ownership interest in the Company as reflected in the table above. These securities are beneficially owned by members of these families either individually or through a series of trusts and custodianships. Of the shares of Class B Common Stock listed above, RMSLP owns 7,918,930 shares which represents 74.29% of the Class B Common Stock outstanding at March 1, 2000. Certain members of the Ratner, Miller and Shafran families have been nominated for election to serve on the Board of Directors of the Company. (See information regarding nominees and directors previously disclosed for further information regarding the beneficial ownership of the Company's Common Stock by these individuals). (a) Does not reflect potential conversion of Class B Common Stock to Class A Common Stock. (b) Reflects potential conversion of all Class B Common Stock held by the principal security holder listed to Class A Common Stock. Shares of Class B Common Stock are convertible into shares of Class A Common Stock at anytime on a 1 for 1 basis. COMMITTEES OF THE BOARD OF DIRECTORS During the last fiscal year, the Company's Board of Directors held four regular meetings. The Audit Committee is composed of three non-employee directors: Messrs. Michael P. Esposito, Jr. (Chairman), Scott S. Cowen and Jerry V. Jarrett. The Audit Committee recommends the firm of independent accountants to be appointed by the Board of Directors, reviews the fee structure and the scope of the annual audit, reviews the results of the annual audit, reviews reports of significant audits performed by the Company's internal auditors, reviews the adequacy of internal controls and consults with independent accountants and financial management on accounting issues, including significant changes in accounting practices. Three Audit Committee meetings were held during 1999. The Compensation Committee is comprised of five non-employee directors: Messrs. Jerry V. Jarrett (Chairman), Scott S. Cowen, Michael P. Esposito, Jr., Louis Stokes and Stan Ross. The Compensation Committee reviews the compensation arrangements for senior management. Three Compensation Committee meetings were held during 1999. The Nominating and Corporate Governance Committee is comprised of four non-employee directors: Messrs. Scott S. Cowen (Chairman), Michael P. Esposito, Jr., Jerry V. Jarrett and Louis Stokes. The Nominating and Corporate Governance Committee proposes Board of Director nominees and advises the Board on all matters concerning corporate governance, to the extent these matters are not the responsibility of other committees, assessing the Board's performance and making recommendations to the Board on the functions and duties of the committees of the Board, general Board practices and the Company's relations with its stockholders. The Nominating and Corporate Governance Committee did not meet during 1999. Each director attended at least 75% of the meetings of the Board and those committees on which the director served. 12 15 COMPENSATION COMMITTEE INTERLOCKS AND INSIDE PARTICIPATION The Compensation Committee of the Board of Directors consists entirely of nonemployee Directors. No member of the Compensation Committee is a current or former officer or employee of the Company or any of its subsidiaries. COMPENSATION COMMITTEE REPORT The Compensation Committee Report shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates the information by reference and shall not otherwise be deemed filed under such Acts. The primary role of the Compensation Committee is to develop and implement compensation policies that are consistent with and integrally linked to the accomplishments of the Company's strategic objectives. The Company believes that shareholder value is best maximized through the increase in Earnings Before Depreciation, Amortization and Deferred Taxes, as discussed in the Management's Discussion and Analysis section of the Company's Annual Report, and the increase in the value of its real estate portfolio over time. The Company adheres to certain principles in developing its compensation policies. Total compensation should be competitive with other companies in the real estate industry of similar size. Incentive compensation should be linked both to each individual's performance and the performance of the Company as a whole. Compensation opportunities should be structured to attract and retain those individuals that can help achieve the Company's strategic objectives and thus maximize shareholder value. The Compensation Committee reviews and approves the development and formulation of all policies under which each form of compensation is paid or awarded to the Company's "key" officers as defined by the Committee. The salaries of the Chief Executive Officer and the five other most highly compensated officers are proposed by the Chief Executive Officer to the Committee for approval. The Committee then reviews and approves the compensation of the Chief Executive Officer and the five other most highly compensated executive officers. The Compensation Committee also reviews the salaries and incentives for each member of the Ratner, Miller and Shafran families identified as executive officers. The Compensation Committee utilizes nationally recognized outside experts as consultants to assist it in the performance of its duties. These consultants are asked to analyze officers salaries and compare those paid by Forest City Enterprises with comparable corporations in the real estate field. In addition, the consultants are asked to provide the committee with guidance on ranges in annual salary and incentive compensation so officers of Forest City Enterprises would be compensated on a competitive basis. The committee meets with these consultants as required and expects to continue to use their services in the future. The Company entered into an agreement with Charles A. Ratner, President and Chief Executive Officer, effective February 1, 1997. The Agreement provides for an annual salary of $400,000. The contract was initially for a one year term but is renewable annually. In reviewing the Chief Executive Officer's compensation, the Compensation Committee feels one of the most important indicators of performance on his part is his ability to understand and react to changing conditions affecting our industry and to adjust strategic directions and tactical plans to be responsive. Improving shareholder value and development of management succession plans also rank high on the list of performance indicators. Jerry V. Jarrett, Chairman Scott S. Cowen Michael P. Esposito, Jr. Louis Stokes Stan Ross 13 16 EXECUTIVE COMPENSATION The following table sets forth the compensation awarded to, earned by, or paid to the Company's chief executive officer and the five other most highly compensated executive officers.
Summary Compensation Table -------------------------- Long Term Compensation Awards ------ Annual Compensation Securities --------------------- Underlying All Other Name and Principal Position Year Salary($) Bonus($) Options(#) Compensation($) - ----------------------------------------------------------------------------------------------------------------------- Charles A. Ratner, 1999 $ 399,987 $ 250,000 28,800 $114,134 President and Chief 1998 399,986 200,000 28,800 114,408 Executive Officer 1997 398,543 - - 125,562 Albert B. Ratner, Co-Chairman 1999 474,352 - - 111,019 of the Board of Directors 1998 449,986 - - 126,330 1997 449,679 - - 143,466 Samuel H. Miller, Co-Chairman 1999 428,987 - - 11,853 of the Board of Directors 1998 399,985 - - 12,128 and Treasurer 1997 399,986 - - 12,128 Thomas G. Smith, 1999 318,756 212,000 14,400 51,693 Senior Vice President, 1998 319,794 155,000 14,400 51,900 Chief Financial Officer 1997 309,800 140,000 - 51,900 and Secretary James A. Ratner 1999 324,986 203,125 18,000 8,693 Executive Vice President 1998 324,986 162,500 18,000 8,576 1997 323,543 - - 8,554 Ronald A. Ratner 1999 324,986 203,125 18,000 8,415 Executive Vice President 1998 324,986 162,500 18,000 8,576 1997 323,543 - - 8,554
Amounts reported as "All Other Compensation" in 1999 include (i) accrual of annual benefits to each named executive officer's vested balance in the Company's deferred compensation plan as follows: Charles A. Ratner, $10,000; Albert B. Ratner, $10,000; Samuel H. Miller, $10,000; James A. Ratner, $7,000; and Ronald A. Ratner, $7,000; (ii) accrual of an amount for Thomas G. Smith under a deferred compensation plan, $50,000; (iii) cost of group term life insurance as follows: Charles A. Ratner, $693; Albert B. Ratner, $853; Samuel H. Miller, $853; Thomas G. Smith, $693; James A. Ratner, $693 and Ronald A. Ratner, $415; (iv) the Company's matching contribution to the 40l(k) plan as follows: Charles A. Ratner, $1,000; Albert B. Ratner, $1,000; Samuel H. Miller, $1,000; Thomas G. Smith, $1,000; James A. Ratner, $1,000; and Ronald A. Ratner, $1,000; and (v) the dollar 14 17 value of the benefit to the named executive officer of the interest-free use of the Company paid premiums, excluding the term insurance portion which is paid by the named executive officer, from the current year to the projected date the premiums will be refunded to the Company for split-dollar life insurance as follows: Charles A. Ratner, $102,441; and Albert B. Ratner, $99,166. The Company entered into employment agreements with Albert B. Ratner and Samuel H. Miller, Co-Chairmen of the Board of Directors effective January 1, 1999 which provide for an annual salary of $475,000 and $425,000, respectively. The agreements are renewable annually. Although no formal bonus plan exists, an annual bonus may be awarded, determined on a discretionary basis. The Company entered into employment agreements with James A. Ratner and Ronald A. Ratner effective February 1, 1997, providing for annual salaries of $325,000 each. These agreements are renewable annually. The employment agreements for Albert Ratner, Samuel Miller, Charles Ratner, James Ratner and Ronald Ratner provide that upon the death of such officer, his beneficiary will receive an annual death benefit for five years equal to the salary paid for the last calendar year prior to the death. The same death benefit is provided to Thomas Smith through an agreement dated May 31, 1999. OPTION GRANTS IN LAST FISCAL YEAR --------------------------------- The following table sets forth information regarding stock options granted during fiscal 1999 to the executive officers named in the Summary Compensation Table.
INDIVIDUAL GRANTS - ----------------------------------------------------------------------------------------------------------------------- Number of % of Total Grant Date Securities Options Value Underlying Granted to Exercise ----- Options Employees or Base Grant Date Granted in Fiscal Price Expiration Present (#) (1) Year ($/Sh) Date Value $ (2) - ----------------------------------------------------------------------------------------------------------------------- Charles A. Ratner 28,800 7.6% $22.375 4/7/09 $ 324,268 Albert B. Ratner - - - - - Samuel H. Miller - - - - - Thomas G. Smith 14,400 3.8% $22.375 4/7/09 $162,134 Ronald A. Ratner 18,000 4.8% $22.375 4/7/09 $202,667 James A. Ratner 18,000 4.8% $22.375 4/7/09 $202,667
(1) On April 7, 1999, fixed stock options to purchase Class A Common Stock were granted under the 1994 Stock Option Plan ("Plan"). The options have a term of 10 years and vest as follows: 25% after two years, 50% after three years and 100% after four years from date of grant. The exercise price is equal to the fair market value on the date of grant. Fair market value is defined as the price per share at the close of business on the trading date immediately preceding the date the stock option grant is awarded. Under the Plan, the awards may be incentive stock options or non-qualified stock options. All the options granted in the above table were non-qualified stock options, except for Thomas G. Smith, who was granted 4,469 incentive stock options and 9,931 non-qualified stock options. 15 18 (2) The options were valued at $11.26 each using the Black-Scholes option-pricing model using the following assumptions: expected volatility of 36.8%, based on closing prices of Class A Common Stock for 74 months prior to grant; risk-free rate of return of 5.2%; dividend yield of .6%, based on return of U.S. Government notes and bonds; expected life of 8.7 years and turnover of 2%. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES --------------------------------- The following Table shows stock options exercised during fiscal 1999 by the executive officers named in the Summary Compensation Table and the value of unexercised stock options to purchase Class A Common Stock held at January 31, 2000.
Number of Securities Value of Underlying Unexercised Unexercised In-the-Money Options at Options at Shares FY-End (#) FY-End ($) Acquired on Value Exercisable/ Exercisable/ Name Exercise (#) Realized ($) Unexercisable Unexercisable - --------------------------------------------------------------------------------------------------------------------------- Charles A. Ratner - - 14,400/72,000 $168,300/$274,500 Albert B. Ratner - - - - Samuel H. Miller - - - - Thomas G. Smith - - 3,750/35,700 $41,016/$128,569 James A. Ratner - - 9,000/45,000 $98,438/$164,813 Ronald A. Ratner - - 9,000/45,000 $98,438/$164,813
The last closing price of the Company's Class A Common Stock for the fiscal year ended January 31, 2000 was $26.06 per share. 16 19 The following graph shows a comparison of five-year cumulative total return of Forest City Enterprises, Inc. Class A Common Stock (FCEA), Forest City Enterprises, Inc. Class B Common Stock (FCEB), Standard & Poor's 500 Stock Index (S&P 500) and the Dow Jones Real Estate Investment Index. The cumulative total return is based on a $100 investment on January 31, 1995 and the subsequent change in market prices of the securities at each respective fiscal year end. It also assumes that dividends were reinvested quarterly.
PERFORMANCE GRAPH [Graph Inserted here] Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 FCEA $100 $111 $206 $270 $257 $266 FCEB $100 $107 $199 $264 $250 $302 S&P 500 $100 $139 $175 $222 $295 $325 Dow Jones Real Estate Investment Index $100 $123 $167 $195 $152 $145
TRANSACTIONS WITH AFFILIATED PERSONS The Company paid approximately $256,000 as total compensation during 1999 to RMS Investment Corp. (RMSIC), a company engaged in property management and leasing, controlled by the four children of Charles A. Ratner (the President, Chief Executive Officer and a Director of the Company), the two children of James Ratner (an Executive Vice President and a Director of the Company), the two children of Ronald Ratner (an Executive Vice President and a Director of the Company), Deborah Ratner Salzberg (Vice President - Forest City Residential Group, Inc. and a Director of the Company), Brian J. Ratner (Senior Vice President - East Coast Development and a Director of the Company), the four children of Ruth Miller (deceased sister of Albert Ratner) and Samuel H. Miller (a Co-Chairman of the Company's Board of Directors), Samuel H. Miller as Trustee, and Fannye Shafran as Trustee. RMSIC manages and provides leasing services to two of the Company's Cleveland-area specialty retail shopping centers, Golden Gate (362,000 square feet) and Midtown (258,000 square feet). The rate of compensation for such services is 4% of all tenant rentals, plus a lease fee of 2% to 3%. Management believes these fees are comparable to that which other management companies would charge. 17 20 Under the Company's current policy, no director, officer or employee, including members of the Ratner, Miller or Shafran families, is allowed to invest in a competing real estate opportunity without first obtaining approval of the Company's Conflict of Interest Committee. However, the Company currently does not have non-compete agreements with any of its directors, officers and employees and, upon leaving the Company, any director, officer or employee could compete with the Company. An exception to the Company's conflict-of-interest policy permits those of the principal shareholders who are officers or employees of the Company to own, alone or in conjuction with others, certain commercial, industrial and residential properties which may be developed, expanded, operated and sold independently of the business of the Company. The ownership of these properties by these principal shareholders makes it possible that conflicts of interest may arise between them and the Company. Although no such conflicts are anticipated, areas of possible conflict may be in the development or expansion of properties which may compete with the Company or the solicitation of tenants for the use of such properties. The Company was informed by these principal shareholders in 1960 that, except for these properties, they would in the future engage in all business activities of the type conducted by the Company only through and on behalf of the Company as long as they were employed by the Company. This would not preclude them from making personal investments in real estate on which buildings and improvements have been completed prior to such investments. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING/COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires the Company's officers, directors and persons who are beneficial owners of more than ten percent of a registered class of the Company's equity securities ("Reporting Persons") to file reports of ownership and changes in ownership with the Securities and Exchange Commission and the New York Stock Exchange. Reporting Persons are required by regulations of the Securities and Exchange Commission to furnish the Company's Corporate Secretary with copies of all Section 16(a) forms they file. Based solely on its review of the copies of Section 16(a) forms received by it, or written representations from Reporting Persons that no Forms 5 were required for those persons, the Company believes that during 1999 all filing requirements applicable to Reporting Persons were complied. 18 21 RATIFICATION OF INDEPENDENT AUDITORS The Board of Directors recommends the ratification of PricewaterhouseCoopers LLP, Certified Public Accountants, by the shareholders at the annual meeting as the Company's independent auditors for the fiscal year ending January 31, 2001. PricewaterhouseCoopers LLP has indicated that a representative of PricewaterhouseCoopers LLP will attend the annual meeting to respond to appropriate questions from shareholders. Their representative will also have the opportunity to make a statement at the meeting. The affirmative vote of the holders of a majority of the combined voting power of the outstanding shares of Class A Common Stock and Class B Common Stock of the Company present or represented at the meeting is required for the ratification of PricewaterhouseCoopers LLP as the Company's independent auditors for the year ended January 31, 2001. The Company has been advised that the shares held by the Ratner, Miller and Shafran families and partnerships will be voted in favor of the proposal. If such shares are voted for approval, then such vote will be sufficient to approve such proposal. SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING Any shareholder proposals intended to be presented at the Company's 2001 annual meeting of shareholders must be received by the Company at the address below on or before January 2, 2001 for inclusion in the Company's proxy statement and form of proxy relating to the 2001 annual meeting of shareholders. OTHER BUSINESS It is not anticipated that matters other than those described in this Proxy Statement will be brought before the meeting for action, but if any other matters properly come before the meeting of which the Company did not receive notice prior to March 16, 2000, or that applicable laws otherwise permit proxies to vote on a discretionary basis, it is intended that votes thereon will be cast pursuant to said proxies in accordance with the best judgment of the proxy holders. Upon the receipt of a written request from any stockholder entitled to vote at the forthcoming annual meeting, the Company will mail, at no charge to the stockholder, a copy of the Company's annual report on Form 10-K including the financial statements and schedules and excluding exhibits required to be filed with the Securities and Exchange Commission pursuant to Rule 13a-1 under the Securities Exchange Act of 1934, as amended, for the Company's most recent fiscal year. Requests from beneficial owners of the Company's Common Stock must set forth a good faith representation that, as of the record date for the annual meeting, the person making the request was the beneficial owner of securities entitled to vote at such meeting. 19 22 Written requests for such report should be directed to : Thomas T. Kmiecik Assistant Treasurer Forest City Enterprises, Inc. Terminal Tower 50 Public Square Suite 1100 Cleveland, Ohio 44113 tom_kmiecik@fceinc.com COST AND METHOD OF PROXY SOLICITATION The cost of solicitation will be paid by the Company. In addition to solicitation by mail, arrangements may be made with brokers and other custodians, nominees and fiduciaries to send proxies and proxy material to their principals and the Company may reimburse them for their expense in so doing. Officers and other regular employees of the Company may, if necessary, request the return of proxies by telephone, telegram or in person. By order of the Board of Directors. /s/Thomas G. Smith, Secretary Cleveland, Ohio April 28, 2000 20 23 DETACH HERE - -------------------------------------------------------------------------------- PROXY FOREST CITY ENTERPRISES, INC. CLASS A PROXY PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY FOR THE ANNUAL MEETING OF SHAREHOLDERS The undersigned hereby appoints ALBERT B. RATNER and SAMUEL H. MILLER, and each of them, with full power of substitution, as proxies for the undersigned to attend the annual meeting of shareholders of Forest City Enterprises, Inc. to be held in the 6th Floor Ballroom of the Ritz-Carlton Hotel, Tower City Center, 1515 West Third Street, Cleveland, Ohio 44113, on June 7, 2000 at 9:00 a.m., eastern daylight saving time, and at any adjournment thereof, to vote and act with respect to all shares of Class A Common Stock of the Company which the undersigned would be entitled to vote, with all the power the undersigned would possess if present in person, as follows: (1) The election of four (4) directors, each to hold office until the next annual shareholders' meeting and until his or her successor shall be elected and qualified. Nominees: Michael P. Esposito, Jr., Stan Ross, Joan K. Shafran, Louis Stokes (2) The ratification of PricewaterhouseCoopers LLP as independent auditors for the Company for the fiscal year ending January 31, 2001. (3) In their discretion, to vote upon such other business as may properly come before the meeting. PLEASE SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE REVERSE SIDE. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR INSTRUCTIONS, OR, IF YOU GIVE NO INSTRUCTIONS, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2. (CONTINUED AND TO BE SIGNED ON REVERSE SIDE.) 24 DETACH HERE - -------------------------------------------------------------------------------- (Continued from the other side) THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, AND 2. (1) The election of four (4) directors, each to hold office until the next annual shareholders' meeting and until his or her successor shall be elected and qualified. -- Nominees: Michael P. Esposito, Jr., Joan K. Shafran, Louis Stokes, Stan Ross [ ] FOR, except vote withheld from the following nominee(s): [ ] WITHHELD - -------------------------------------------------------------------------------- (2) The ratification of PricewaterhouseCoopers LLP as independent auditors for the Company for the fiscal year ending January 31, 2001. [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ] CHANGE OF ADDRESS (BELOW) DATED: ______________________ , 2000 ------------------------------------ ------------------------------------ SIGNATURE(S) NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. 25 DETACH HERE - -------------------------------------------------------------------------------- PROXY FOREST CITY ENTERPRISES, INC. CLASS B PROXY PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY FOR THE ANNUAL MEETING OF SHAREHOLDERS The undersigned hereby appoints ALBERT B. RATNER and SAMUEL H. MILLER, and each of them, with full power of substitution, as proxies for the undersigned to attend the annual meeting of shareholders of Forest City Enterprises, Inc. to be held in the 6th Floor Ballroom of the Ritz-Carlton Hotel, Tower City Center, 1515 West Third Street, Cleveland, Ohio 44113 on June 7, 2000 at 9:00 a.m., eastern daylight saving time, and at any adjournment thereof, to vote and act with respect to all shares of Class B Common Stock of the Company which the undersigned would be entitled to vote, with all the power the undersigned would possess if present in person, as follows: (1) The election of nine (9) directors, each to hold office until the next annual shareholders' meeting and until his successor shall be elected and qualified. Nominees: Albert B. Ratner, Samuel H. Miller, Charles A. Ratner, James A. Ratner, Jerry V. Jarrett, Ronald A. Ratner, Scott S. Cowen, Brian J. Ratner, Deborah Ratner Salzberg (2) The ratification of PricewaterhouseCoopers LLP as independent auditors for the Company for the fiscal year ending January 31, 2001. (3) In their discretion, to vote upon such other business as may properly come before the meeting. PLEASE SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE REVERSE SIDE. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR INSTRUCTIONS, OR, IF YOU GIVE NO INSTRUCTIONS, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2. (CONTINUED AND TO BE SIGNED ON REVERSE SIDE.) 26 DETACH HERE - -------------------------------------------------------------------------------- (Continued from the other side) THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, AND 2. (1) The election of nine (9) directors, each to hold office until the next annual shareholders' meeting and until his successor shall be elected and qualified. -- Nominees: Albert B. Ratner, Samuel H. Miller, Charles A. Ratner, James A. Ratner, Jerry V. Jarrett, Ronald A. Ratner, Scott S. Cowen, Brian J. Ratner, Deborah Ratner Salzberg [ ] FOR, except vote withheld from the following nominee(s): [ ] WITHHELD - -------------------------------------------------------------------------------- (2) The ratification of PricewaterhouseCoopers LLP as independent auditors for the Company for the fiscal year ending January 31, 2001. [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ] CHANGE OF ADDRESS (BELOW) DATED: ______________________ , 2000 ------------------------------------ ------------------------------------ SIGNATURE(S) NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. -----END PRIVACY-ENHANCED MESSAGE-----