Exhibit 10.22
SEVERANCE AGREEMENT
          THIS SEVERANCE AGREEMENT (this “Agreement”) is made effective as of
October 12, 2009 (the “Effective Date”), by and between Forestar Group Inc., a
Delaware corporation (the “Company”), and Phillip J. Weber (the “Executive”).
          In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Executive, intending to be legally bound,
hereby agree as follows:
          1. Term of Agreement. The term of this Agreement (the “Term”) shall
commence on the Effective Date and shall continue in effect until the earlier of
(i) the third anniversary of the Effective Date or (ii) the occurrence of a
Change in Control as such term is defined in that certain Change in Control
Severance Agreement by and between the Company and the Executive dated as of
even date herewith, as it may be amended from time to time (such agreement, the
“CIC Agreement” and such a Change in Control, a “Change in Control”).
          2. Company’s Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company, the Company agrees, under the conditions
described herein, to pay or provide to the Executive the payments and benefits
described herein. This Agreement shall not be construed as creating an express
or implied contract of employment or to limit the ability of the Company or its
affiliates to terminate the employment of the Executive at any time for any
reason and, except as otherwise agreed in writing between the Executive and the
Company, the Executive shall not have any right to be retained in the employ of
the Company or its affiliates.
          3. The Executive’s Covenants. Subject to the Executive’s right to
terminate his employment for Good Reason as described below, the Executive
agrees that he will remain in the employ of the Company until the earliest of
the third anniversary of the Effective Date, a Change in Control or the
termination by the Company of the Executive’s employment for any reason.
          4. Entitlement to Benefits.
          (a) Subject to the provisions in the remainder of this Section 4, if
(but only if) the Company terminates the Executive’s employment without Cause or
the Executive resigns for Good Reason (as such terms are defined below), in
either case during the Term:
          (i) The Company will pay to the Executive a lump sum cash payment
equal to the sum of (i) his then-current annual base salary and (ii) his target
annual bonus pursuant to any annual bonus or incentive plan maintained by the
Company in respect of the fiscal year in which such termination occurs (the
“Severance Payment”).

 

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          (ii) For the one-year period immediately following the date of such
termination and in satisfaction of the Company’s COBRA obligations in respect of
such period, the Company shall arrange to provide the Executive and his
dependents life, accidental death and dismemberment, medical and dental benefits
substantially similar to those provided to the Executive and his dependents
immediately prior to the date of termination or, if more favorable to the
Executive, those provided to the Executive and his dependents immediately prior
to the first occurrence of an event or circumstance constituting Good Reason, at
no greater cost to the Executive than the cost to the Executive immediately
prior to such date or occurrence, provided that such health and welfare benefits
shall be provided through an arrangement that satisfies the requirements of
Sections 105 and 106 of the Code. To the extent that health and welfare benefits
of the same type are received by or made available to the Executive during the
one-year period following the Executive’s date of termination (which such
benefits received by or made available to the Executive shall be reported by the
Executive to the Company’s insurance provider or other appropriate party in
accordance with any applicable coordination of benefits provisions), the
benefits otherwise receivable by the Executive pursuant to this Section 4(a)(ii)
shall be made secondary to such benefits, provided that the Company shall
reimburse the Executive for the excess, if any, of the cost of such benefits to
the Executive over such cost immediately prior to the date of termination or, if
more favorable to the Executive, the first occurrence of an event or
circumstance constituting Good Reason.
          (iii) The Executive shall be credited with an additional year of
service for purposes of determining the extent to which he is vested in any then
otherwise unvested or restricted equity or equity-based incentive compensation
awards to the extent they are subject to service-based vesting conditions
(including in satisfaction of any service-based vesting component of awards that
are also subject to performance-based vesting conditions, provided that any such
performance-based vesting conditions shall remain in effect in accordance with
their terms).
          (iv) The Company shall reimburse the Executive in accordance with its
standard practices for expenses incurred for outplacement services suitable to
the Executive’s position for a period of one (1) year following the date of such
termination (or, if earlier, until the first acceptance by the Executive of an
offer of employment) in an amount not exceeding ten percent (10%) of the sum of
the Executive’s annual base rate of salary as in effect immediately prior to the
date of termination (or, if more favorable to the Executive, the Executive’s
annual base rate of salary as in effect immediately prior to the first
occurrence of an event or circumstance constituting Good Reason).
          (b) In no event shall the Executive be entitled to payments or
benefits under this Agreement if he becomes entitled to any payments or benefits
under the Change in Control Agreement, including by reason of a termination of
employment before a Change in Control under the circumstances described in the
second sentence of Section 6.1 of the CIC Agreement

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          (c) The Executive’s entitlement to the payments and benefits described
in the foregoing provisions of this Section 4 shall be conditioned in their
entirety upon the Executive timely executing and not revoking a release of
claims against the Company and its agents and affiliates in a form reasonably
satisfactory to the Company. The Company shall provide such form of release to
the Executive not later than five (5) days after the termination of his
employment with the Company. Provided the Executive has timely executed and not
revoked such release of claims and subject to Section 13 hereof, the Severance
Payment shall be paid to the Executive on the date that is sixty (60) days after
his termination of employment.
          5. Notice of Termination. Any purported termination of the Executive’s
employment (other than by reason of death) shall be communicated by notice from
one party hereto to the other in accordance with Section 8 hereof, which notice
in the case of a termination by the Company for Cause or by the Executive for
Good Reason shall specifically identify the circumstances constituting Cause or
Good Reason, as the case may be. Subject to the Company’s right to cure any
circumstances otherwise constituting Good Reason as set forth in Section 12(b)
hereof, the Executive’s termination of employment for Good Reason shall become
effective on the sixth (6th) day after such notice is given.
          6. No Mitigation. The Company agrees that, if the Executive’s
employment with the Company terminates during the Term, the Executive is not
required to seek other employment or to attempt in any way to reduce any amounts
payable to the Executive by the Company pursuant to Section 4 hereof. Further,
the amount of any payment or benefit provided for in this Agreement (other than
Section 4(a)(ii) hereof) shall not be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise.
          7. Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors, legal
representatives and permitted assigns, provided that the obligations of the
Executive are personal and may be performed only by him.
          8. Notices. All notices or other communications under this Agreement
shall be in writing and shall be deemed to have been duly given (a) when
delivered personally or by local courier, (b) upon confirmation of receipt when
such notice or other communication is sent by facsimile, or (c) one day after
timely delivery to an overnight delivery courier addressed as follows:
     To the Company:
6300 Bee Cave Road
Building Two, Suite 500
Austin, TX 78746
Facsimile: (512) 433-5203
Attention: General Counsel

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     To the Executive:
          At the address of the Executive as maintained from time to time on the
payroll system of the Company
Any party hereto may, by notice to the other, change its address for receipt of
notices hereunder.
          9. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and a duly authorized representative of
the Company. No waiver by either party hereto at any time of any breach by the
other party hereto of, or of any lack of compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. This Agreement supersedes any other agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof which have been made by the Executive or the Company. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Texas without regard to its principles
of conflicts of law. Any payments provided for hereunder shall be paid net of
any applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed. The obligations of the
Company and the Executive under this Agreement which by their nature may require
either partial or total performance after the expiration of the Term shall
survive such expiration.
          10. Validity and Construction. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect. The captions of this Agreement are not part of the provisions hereof and
shall have no force or effect.
          11. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
          12. Definitions. For purposes of this Agreement, the following terms
shall have the meanings indicated below:
          (a) “Cause” for termination by the Company of the Executive’s
employment shall mean (i) the willful and continued failure by the Executive to
substantially perform the Executive’s duties with the Company (other than any
such failure resulting from the Executive’s incapacity due to physical or mental
illness or any such actual or anticipated failure after the issuance of a notice
of termination for Good Reason by the Executive pursuant to Section 5 hereof)
after a written demand for substantial performance is delivered to the Executive
by the Company, which demand specifically identifies the manner in which the
Board of Directors of the Company believes that the Executive has not
substantially performed the Executive’s duties, or (ii) the willful engaging by
the Executive in conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise.

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          (b) “Good Reason” for termination by the Executive of the Executive’s
employment shall mean the occurrence (without the Executive’s express written
consent) of (i) a material reduction in the Executive’s authority, duties or
responsibilities, which for purposes of this Agreement shall include only the
assignment to the Executive of any duties substantially inconsistent with the
Executive’s status as a senior executive officer of the Company, or (ii) a
material reduction in the Executive’s annual base salary, provided that the
Executive may not assert Good Reason in respect of any act or failure to act
otherwise constituting Good Reason under this Section 12(b) unless asserted in a
notice of termination pursuant to Section 5 hereof given within ninety (90) days
following the date of the first occurrence otherwise constituting Good Reason,
and provided further that the Company shall not have cured such reduction (in
authority, duties or responsibilities or of base salary, as the case may be)
within five (5) days following notice from the Executive of his termination for
Good Reason.
          13. General 409A Compliance. To the extent applicable, it is intended
that the Agreement comply with the provisions of Section 409A of the Internal
Revenue Code of 1986, as amended (“Section 409A”). This Agreement shall be
administered and interpreted in a manner consistent with this intent, and any
provision that would cause this Agreement to fail to satisfy Section 409A shall
have no force and effect until amended to comply therewith (which amendment may
be retroactive to the extent permitted by Section 409A). Notwithstanding
anything contained herein to the contrary, to the extent required in order to
avoid accelerated taxation and/or tax penalties under Section 409A, the
Executive shall not be considered to have terminated employment with the Company
for purposes of this Agreement, and no payments shall be due to the Executive
under this Agreement which are payable upon the Executive’s termination of
employment, until the Executive would be considered to have incurred a
“separation from service” from the Company within the meaning of Section 409A.
To the extent required in order to avoid accelerated taxation and/or tax
penalties under Section 409A, amounts that would otherwise be payable and
benefits that would otherwise be provided pursuant to this Agreement during the
six (6)-month period immediately following the Executive’s termination of
employment shall instead be paid on the first (1st) business day after the date
that is six (6) months following the Executive’s termination of employment (or
upon the Executive’s death, if earlier). In addition, for purposes of this
Agreement, each amount to be paid or benefit to be provided to the Executive
pursuant to this Agreement shall be construed as a separate identified payment
for purposes of Section 409A. With respect to expenses eligible for
reimbursement under the terms of this Agreement, (a) the amount of such expenses
eligible for reimbursement in any taxable year shall not affect the expenses
eligible for reimbursement in another taxable year and (b) any reimbursements of
such expenses shall be made no later than the end of the calendar year following
the calendar year in which the related expenses were incurred, except, in each
case, to the extent that the right to reimbursement does not provide for a
“deferral of compensation” within the meaning of Section 409A.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

            FORESTAR GROUP INC.
      /s/ James M. DeCosmo       James M. DeCosmo      President and Chief
Executive Officer              /s/ Phillip J. Weber       PHILLIP J. WEBER