Item 1.01. Entry into a Material Definitive Agreement.
Exchange of Series A Cumulative Perpetual Convertible Preferred Stock for Class
A Common Stock.
On October 16, 2012, Forest City Enterprises, Inc. (the "Company"), entered into
separate, privately negotiated exchange agreements (the "Exchange Agreements")
under which it will exchange $133,723,550 in aggregate amount of liquidation
preference, or 2,674,471 shares, of the Company's outstanding Series A
Cumulative Perpetual Convertible Preferred Stock (the "Preferred Stock"). Under
the Exchange Agreements, holders of the Preferred Stock will receive
approximately 8,844,204 shares of the Company's Class A Common Stock, par value
$0.33-1/3 per share (the "Class A Common Stock"), a cash payment of $13,880,504
for additional exchange consideration, including dividends that would have been
payable on December 15, 2012 and March 15, 2013, and cash in lieu of fractional
shares. The number of shares of Class A Common Stock to be issued in exchange
for the Preferred Stock equals the number of shares into which the Preferred
Stock would currently be convertible. March 9, 2013 is the earliest date upon
which the Company would have had the right to redeem the Preferred Stock. The
Company will issue the Class A Common Stock in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended.
A copy of the basic form of the Exchange Agreement is attached hereto as Exhibit
10.1 and incorporated herein by reference.
A copy of the press release announcing the Company's exchange of its Preferred
Stock for Class A Common Stock is "furnished" as Exhibit 99.1 to this Current
Report on Form 8-K. The information in Exhibit 99.1 shall not be deemed "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934 ("Exchange
Act"), or incorporated by reference in any filing under the Securities Act of
1933, or the Exchange Act.
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