Employment Agreement, by and between David J. LaRue and Forest City Employer, LLC, effective as of January 1, 2016, as amended and restated

Employment Agreement

Employment

Position and Duties

Compensation and Benefits

Base Salary. During the Term, the Company will pay you an annualized base salary (“Annual Base Salary”) at a rate of not less than $775,000, payable in regular installments in accordance with the Company’s customary payroll practices. During the Term, the Annual Base Salary shall be reviewed by the Compensation Committee of Forest City (the “Compensation Committee”), and adjusted, based upon your performance and the Forest City Group’s performance and competitive with industry standards.

Bonus. For each fiscal year during the Term, you will participate in the Company’s Short-Term Incentive Plan (the “STIP”) and the Long-Term Incentive Plan (the “LTIP”) under terms and conditions established by the Board or the Compensation Committee from time to time.

Vacation and Benefits. During the Term, you will participate in the Company’s paid time-off program and other Company benefits consistent with applicable policies for the executive officers of Forest City, including but not limited to benefits substantially comparable to those provided to you by Forest City Enterprises, Inc. immediately prior to the Effective Date.

Termination of Employment

Death and Disability. Your employment will terminate automatically upon the date of your death. If the Company determines in good faith that your Disability (as defined below) has occurred during the Term, it may give to you written notice of its intention to terminate your employment; provided that such notice is provided no later than 180 days following your first day of Disability. In such event, your employment will terminate effective on the 30th day after receipt of such notice by you (the “Disability Effective Date”), provided that, within the 30 days after such receipt, you shall not have returned to full-time performance of your duties. For purposes of this Agreement, “Disability” shall mean the inability of you to perform the essential duties of the position held by you by reason of any medically determined physical or mental impairment that lasts for 150 consecutive days in any one-year period, all as determined by an independent licensed physician mutually acceptable to the Company and you or your legal representative.

Cause. Your employment with the Company may be terminated with or without Cause. For purposes of this Agreement, “Cause” shall mean: (i) your conviction, a guilty plea or plea of nolo contendere by you for (x) any crime involving dishonesty with respect to the Forest City Group, or (y) any felony; or (ii) a material breach by you of the Code of Legal and Ethical Conduct or other written Forest City Group policies, your obligations under this Agreement, or any laws material to the conduct of the Forest City Group’s business. The cessation of your employment will not be deemed to be for Cause unless and until (A) there shall have been delivered to you a copy of a resolution duly adopted by majority vote of the Compensation Committee (after reasonable notice is provided to you that specifically identifies the manner and sets forth the specific acts of which the Compensation Committee believes that you may be guilty of the conduct described in subparagraph (i) through and including (ii), and you are given an opportunity, together with counsel, to be heard before the Compensation Committee), finding that, in the good faith opinion of the majority of the Compensation Committee, you are guilty of the conduct described in subparagraph (i) through and including (ii) above, and (B) you shall fail to cure such conduct (if curable) within a reasonable time period established by the Compensation Committee of not less than thirty (30) calendar days after your receipt of such notice.

Good Reason. Your employment with the Company may be terminated by you with or without Good Reason. For purposes of this Agreement, “Good Reason” shall mean any of the following without your consent: (i) a material reduction of your duties or responsibilities set forth in Section 2, including any change in your officer status; (ii) a material reduction of your Annual Base Salary, STIP target opportunity, LTIP target opportunity or total direct compensation opportunity (provided that for purposes of this clause (ii) a material reduction shall be any reduction of greater than 10% occurring during the Term); (iii) a material change in geographic location at which you must perform services under this Agreement from the Company’s offices at which you were principally employed (the Company has determined that a relocation of more than fifty (50) miles would constitute such a material change); or (iv) a material breach by the Company or Forest City of this Agreement. A termination of your employment by you shall not be deemed to be for Good Reason unless (x) you give notice to the Company of the existence of the event or condition constituting Good Reason within 90 days after you have knowledge that such event or condition initially occurs or exists, (y) the Company fails to cure such event or condition within 30 days after receiving such written notice (or, if earlier, the last day of the Term), and (z) your Date of Termination (as defined below) occurs not later than 150 days after such event or condition initially occurs or exists (or, if earlier, the last day of the Term).

Notice of Termination. Any termination by the Company for Cause, or by you for Good Reason, shall be communicated by a written notice to the other party which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances

Date of Termination. “Date of Termination” means (i) if your employment is terminated by the Company for Cause, or by you for Good Reason, the date of receipt of the notice of termination or any later date specified within 30 days of such notice, as the case may be, (ii) if your employment is terminated by the Company other than for Cause or Disability, or if you voluntarily resign without Good Reason, the date on which the terminating party notifies the other party that such termination shall be effective, provided that on a voluntary resignation without Good Reason, the Company may, in its sole discretion, make such termination effective on any date it elects in writing, between the date of the notice and the proposed date of termination specified in the notice, (iii) if your employment is terminated by reason of death, the date of your death, (iv) if your employment is terminated by the Company due to Disability, the Disability Effective Date, or (v) if your employment is terminated at the end of the Term.

Severance Payments

Disability; Other than for Cause or Good Reason. If, during the Term, the Company terminates your employment for Disability or other than for Cause, or if you terminate your employment for Good Reason:

The Company shall pay to you the sum of: (A) the portion of your Annual Base Salary earned through the Date of Termination, to the extent not previously paid; (B) the amount of any incentive compensation under the STIP or LTIP that has been earned by you for a completed fiscal year or other measuring period preceding the Date of Termination, but has not yet been paid to you; and (C) any accrued paid time-off, to the extent not previously paid (the sum is referred to as the “Accrued Benefits”). Unless subject to a valid deferral election made pursuant to the terms of the Company’s deferred compensation plan, the Accrued Benefits described in clauses (A) and (C) shall be paid in a single lump sum within 30 days after the Date of Termination and the Accrued Benefits described in Clause (B) shall be paid in a single lump sum within 30 days after the Date of Termination (but in no event later than two and one half months following the end of the fiscal year or other measuring period preceding the Date of Termination).

The Company shall pay or provide to you the severance benefits described in this Section 5(a)(ii) if and only if you sign and do not revoke a release of claims agreement in the form attached as Exhibit A, with such changes as the Company may determine to be required or reasonably advisable in order to make the release enforceable and otherwise compliant with applicable law (the “Release”), and the Release becomes effective and irrevocable no later than the 60th day following your Date of Termination (the “Release Deadline”). If these conditions are not satisfied, then you will forfeit any right to severance payments under this Section 5(a)(ii). To become effective and irrevocable, the Release must be executed by you and any revocation periods (as required by statute, regulation, or otherwise) must have expired without you having revoked the Release. The severance benefits under this Section 5(a)(ii) are as follows:

Two times the sum of (I) your Annual Base Salary, (II) the average of the annual incentives payable to you under the STIP for the last three full fiscal years prior to the Date of Termination, (III) an amount equal to 12 monthly long-term care premiums, based on the level of coverage in effect for you immediately prior to the Date of Termination, and (IV) an amount equal to your annual health care subsidy payment as in effect immediately prior to the Date of Termination. The Company shall pay this amount within 10 days after the date that the Release becomes effective and irrevocable; provided, however, that if the Release Deadline could occur in the calendar year immediately following your Date of Termination, then the amount shall be paid within 10 days after the date of the Release Deadline (even if the Release has become effective and irrevocable in accordance with its terms prior to that date).

The annual incentive that would have been payable to you under the STIP for the fiscal year during which the Date of Termination occurs, determined as if you had remained employed for the entire year (and any additional period of time necessary to be eligible to receive the annual incentive for the year), based on actual performance during the entire fiscal year and without regard to any discretionary adjustments that have the effect of reducing the amount of the annual incentive (other than discretionary adjustments applicable to all senior executives who did not terminate employment), pro-rated based on the number of days in Forest City’s fiscal year through (and including) your Date of Termination. The pro-rated annual incentive shall be payable in a single lump sum at the same time that payments are made to other participants in the STIP for that fiscal year (pursuant to the terms of the STIP but in no event later than two and one-half months after the fiscal year during which the Date of Termination occurs), or as otherwise may be provided in a valid deferral election made pursuant to the terms of the Company’s deferred compensation plan.

If and only if the Date of Termination occurs in the second half of a performance period under the LTIP, the cash LTIP and performance shares that would have been payable to you for that particular performance period (and only that performance period), determined as if you had remained employed for the entire performance period (and any additional period of time necessary to be eligible to receive payment for the performance period), based on actual performance during the entire performance period and without regard to any discretionary adjustments that have the effect of reducing the amount of payment (other than discretionary adjustments applicable to all senior executives who did not terminate employment), pro-rated based on the number of days in the performance period through (and including) your Date of Termination. The cash LTIP and performance shares earned, if any, shall be payable in a single lump sum at the same time that payments are made to other participants in the LTIP for that performance period (pursuant to the terms of the LTIP but in no event later than two and one-half months after the performance period during which the Date of Termination occurs), or as otherwise may be provided in a valid deferral election made pursuant to the terms of the Company’s deferred compensation plan.

All outstanding and unvested Forest City restricted shares, restricted share units and stock options that are subject to a vesting schedule based solely on continued service (and specifically excluding any awards with respect to which the number of shares earned depends upon performance) shall become immediately vested and exercisable. In addition, all outstanding and vested Forest City stock options (including those that vest pursuant to the operation of the immediately preceding sentence) will remain exercisable for the full duration of their term.

To the extent not previously paid or provided in Section 5(a)(i) above, the Company shall pay or provide, or cause to be paid or provided, to you any other amounts or benefits required to be paid or provided or which you are eligible to receive under any plan, program, policy or practice or contract or agreement of the Forest City Group, including any benefits to which you are entitled under Part 6 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended, and the Company’s unfunded nonqualified supplemental retirement plan (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”), in accordance with the terms and normal procedures of each such plan, program, policy or practice or contract or agreement, based on accrued and vested benefits through the Date of Termination.

Death; Cause; Other than for Good Reason; Expiration of Term. If your employment is terminated for Cause, or if you voluntarily terminate your employment without Good Reason or you die, or upon expiration of the Term due to either party’s election not to renew the then-current term, this Agreement shall terminate without further obligations to you other than the obligation to pay to you your Accrued Benefits through the Date of Termination and the Other Benefits, in each case to the extent not previously paid or provided.

Full Settlement. Except as otherwise provided in Section 8 of this Agreement, or in the applicable compensation recovery policy maintained by Forest City from time to time, as the same may be amended to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules or regulations issued by the Securities and Exchange Commission or applicable securities exchange, the Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Forest City Group may have against you or others. In no event shall you be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to you under any of the provisions of this Agreement and such amounts shall not be reduced whether or not you obtain other employment. If you receive payments under Section 5(a)(ii) of this Agreement, then you shall not be entitled to any other severance pay or benefits under any severance plan, program or policy of the Forest City Group, unless otherwise authorized by the Compensation Committee, in its discretion.

Confidential Information

Non-Solicitation; Non-Competition; Non-Disparagement

You agree that during the period commencing on the date of this Agreement and ending two years after the Date of Termination (the “Protection Period”), and provided that the Company has not materially breached its obligations under Section 5 hereof, you will not in any manner, directly or indirectly, through any person, firm or corporation, alone or as a member of a partnership or limited liability company or as an officer, director, shareholder, investor or employee of or in any other corporation or enterprise or otherwise, in the United States, (i) have any direct or indirect equity or other ownership interest in, or provide any financial or other assistance (whether as a lender, investor or otherwise) to, any Competitive Business (as defined below); (ii) perform services as a director, officer, manager, employee, member, consultant, representative, agent or otherwise for any Competitive Business; or (iii) otherwise engage in any Competitive Business, including, without limitation, by diverting or attempting to divert from the Forest City Group any business whatsoever by influencing or attempting to influence, or soliciting or attempting to solicit any of the customers of the Forest City Group (or any potential customers with whom the Forest City Group had business contact during the one-year period ending on the Date of Termination). For purposes of this Section 7, the term “Competitive Business” shall mean any person or entity (including any joint venture, partnership, firm, corporation, or limited liability company) that conducts a real estate business that is competitive with the commercial office, retail rental, and/or multifamily residential portfolios owned or managed by any member of the Forest City Group as of the Date of Termination (or any significant business that is being actively pursued as of the Date of Termination by any member of the Forest City Group).

You agree that during the Protection Period, and provided that the Company has not materially breached its obligations under Section 5 hereof, you will not in any manner, directly or indirectly, through any person, firm or corporation, alone or as a member of a partnership or limited liability company or as an officer, director, shareholder, investor or employee of or in any other corporation or enterprise or otherwise, induce or attempt to induce any employee of any member of the Forest City Group, but only with respect to employees with whom you had direct contact while employed by the Company pursuant to this Agreement, as well as those with whom you had direct contact while employed by Forest City Enterprises, Inc. or any of its subsidiaries or affiliates or any predecessor thereof at prior to the date of this Agreement, to quit or abandon their employ.

You agree to refrain, both during and after the Term, from publishing or providing any oral or written statements about the Forest City Group, or any of such member’s officers, directors, managers, employees, agents or representatives that are disparaging, slanderous, libelous or defamatory, or that disclose private or Confidential Information about their business affairs, or that constitute an intrusion into their private lives, or that give rise to unreasonable publicity about their private lives, or that place them in a false light before the public, or that constitute a misappropriation of their name or likeness.

Likewise, the Forest City Group shall not publish or provide any oral or written statements about you or your family that are disparaging, slanderous, libelous or defamatory, or that disclose private or confidential information about your business or personal affairs, or that constitute an intrusion into your private life, or that give rise to unreasonable publicity about your private life, or that place you or your family in a false light before the public or that constitute a misappropriation of your name or likeness.

Nothing in this Section 7 shall prohibit you from being: (i) a shareholder in a mutual fund or a diversified investment company or (ii) an owner of not more than 5% of the outstanding equity securities of any class of a corporation or other entity which is publicly traded, provided that you have no active participation in the business of such corporation or other entity.

You agree and acknowledge that the promises and obligations made by the Company in this Agreement (specifically including, but not limited to, the payments and benefits provided for under Section 5(a)(ii) hereof) constitute sufficient consideration for the covenants contained in this Section 7. You also agree and acknowledge that the covenants contained in this Section 7: (i) are reasonable in period, scope and area, and (ii) are necessary to protect legitimate proprietary and business interests of the Forest City Group. If, at the time of enforcement of this Section 7, a court of competent jurisdiction holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope or area permitted by law.

Your obligations set forth in this Section 7 shall remain in full force and effect for the entire period provided herein notwithstanding the termination of your employment under this Agreement for any reason; provided that your obligations under Section 7(a) shall cease if the Company terminates your employment for Cause or you terminate your employment for Good Reason.

Enforcement

Survival

Notices

Successors and Assigns; Forest City Group

Amendment and Waiver

Miscellaneous

Section 409A Compliance

Section 409A of the Internal Revenue Code (“Section 409A”) imposes payment restrictions on “separation pay” (i.e., payments owed to you upon termination of employment). Failure to comply with these restrictions could result in negative tax consequences to you, including immediate taxation, interest and a 20%

All amounts that would otherwise be paid or provided during the first six months following the date of termination shall instead be accumulated through and paid or provided (together with interest on any delayed payment at the applicable federal rate under the Internal Revenue Code), on the first business day following the six-month anniversary of your termination of employment.

Any expense eligible for reimbursement must be incurred, or any entitlement to a benefit must be used, during the Term (or the applicable expense reimbursement or benefit continuation period provided in this Agreement). The amount of the reimbursable expense or benefit to which you are entitled during a calendar year will not affect the amount to be provided in any other calendar year, and your right to receive the reimbursement or benefit is not subject to liquidation or exchange for another benefit. Provided the requisite documentation is submitted, the Company will reimburse the eligible expenses on or before the last day of the calendar year following the calendar year in which the expense was incurred.

For purposes of this Agreement, “termination of employment” or words or phrases to that effect shall mean a “separation from service” within the meaning of Section 409A.

Dispute Resolution

In the event any claim, dispute or controversy arises in connection with this Agreement or the interpretation or enforcement of any provision of this Agreement and the claim, dispute or controversy is not resolved within 30 days through informal, good faith negotiations between the parties, the claim, dispute or controversy shall be referred to non-binding mediation. It is agreed that any mediation shall be conducted in Cleveland, Ohio, or some other location upon mutual consent of the parties involved, at a time and place convenient to the mediator and the parties involved.

The parties shall, in good faith, select a mediator who is mutually agreeable to both sides. Each party shall bear his or its own costs and attorneys’ fees associated with the mediation and shall share equally the responsibility for paying the mediator’s fee.

Should any claim, dispute, or controversy remain in existence between the parties after the completion of the two-step resolution process set forth above, either party may pursue its remedies for such breach in a court of competent jurisdiction in Cleveland, Ohio.

Severability

Entire Agreement

FOREST CITY EMPLOYER, LLC

By Forest City Rental Properties, LLC, the sole manager

By Forest City Enterprises, L.P., the sole manager

By Forest City Realty Trust, Inc., its general partner

/s/ Ketan Patel

By: Ketan K. Patel

/s/ David J. LaRue

/s/ Ketan Patel