Forestar Group Inc. — Director's Dealing 2010

Feb 24, 2010

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: Forestar Group Inc. (FOR)
CIK: 0001406587
Period of Report: 2010-02-23

Reporting Person: Smith Flavious J. Jr. (Executive Vice President)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2010-02-23	Common Stock	M	3569	$9.29	Acquired	53955	Direct
2010-02-23	Common Stock	D	3569	$18.10	Disposed	50386	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2010-02-23	Stock Appreciation Right	$9.29	M	3569	Disposed	2019-02-10	Common Stock (3569)	Direct

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Option (right to buy)	$17.80	2020-02-09	Common Stock (12806)	12806	Direct
Stock Appreciation Right	$17.80	2020-02-09	Common Stock (15033)	15033	Direct
Restricted Share Units	$		Common Stock (6055)	6055	Direct
Restricted Share Units	$		Common Stock (7584)	7584	Direct

Footnotes

F1: In accordance with the Rights Agreement adopted by the Company on December 11, 2007, Preferred Stock Purchase Rights are deemed to be attached to the shares of Common Stock.

F2: Vesting schedule for Options granted 02/9/2010 - Exercise price is $17.80: Options Exercisable 02/9/2011 - 3,201; Options Exercisable 02/9/2012 - 3,202; Options Exercisable 02/9/2013 - 3,201; and Options Exercisable 02/9/2014 - 3,202.

F3: Vesting schedule for Stock Appreciation Rights (SARs) granted 02/10/2009 - Exercise price is $9.29: SARs Exercisable 02/10/2010 - 3,569; SARs Exercisable 02/10/2011 - 3,569; SARs Exercisable 02/10/2012 - 3,569; and SARs Exercisable 02/10/2013 - 3,570. SARs will be settled for cash.

F4: Vesting schedule for Stock Appreciation Rights (SARs) granted 02/9/2010 - Exercise price is $17.80: SARs Exercisable 02/9/2011 - 3,758; SARs Exercisable 02/9/2012 - 3,758; SARs Exercisable 02/9/2013 - 3,758; and SARs Exercisable 02/9/2014 - 3,759. SARs will be settled for cash.

F5: Restricted share units granted on 2/10/2009 will vest effective 2/10/2012. Restricted share units will be settled for cash based on the fair market value on the vesting date subject to a 1% ROA performance criteria.

F6: Restricted share units granted on 2/9/2010 will vest effective 2/9/2013. Restricted share units will be settled for cash based on the fair market value on vesting date subject to a 1% ROA performance criteria.