exv10w2






Exhibit 10.2









FORESTAR GROUP INC.

RESTRICTED STOCK UNITS AGREEMENT




(Tier I)




          This Agreement is entered into between FORESTAR GROUP INC., a Delaware corporation
(“Forestar”), and Participant, and is an integral and inseparable term of Participant’s service as
an employee, non-employee director, or other service provider of Forestar or an Affiliate. In
consideration of the mutual covenants hereinafter set forth and for other good and valuable
consideration, Forestar and the Participant hereby agree as follows:





	 	1.	 	Grant of Restricted Stock Units. Subject to the restrictions, terms and conditions
of this Agreement (the “RSU Agreement”), the Forestar Group Inc. 2007 Stock Incentive Plan
(as amended, the “Plan”) and the Forestar Standard Terms and Conditions for Restricted Stock
Units (the “Standard Terms and Conditions” ; together with the Plan and the RSU Agreement,
the “Plan Documents”), Forestar hereby awards to the Participant the number of restricted
stock units stated above (the “Restricted Stock Units”).
	 
	 	2.	 	Grant of DERs. Subject to the terms and conditions of the Plan Documents, the
Participant is hereby granted a Dividend Equivalency Right (“DER”) to accompany each
Restricted Stock Unit. Upon payment of a dividend to a holder of Common Stock, Participant
will be entitled to payment of an amount equal to the amount of such per Share dividend
payment, multiplied by the number of RSUs granted pursuant to this RSU Agreement, provided
that the Participant has not experienced a Separation from Service with Forestar and its
Affiliates through the date that such dividend payment was made (the “Dividend Payment
Date”). Payment under each DER shall be made by the later of December 31st of the
year in which the Dividend Payment Date occurred or 2 1/2 months after such Dividend Payment
Date. The form of payment under a DER will be made (at sole discretion of the Committee) in
cash or in a number of shares equal to amount of such payment, divided by the Fair Market
Value of a Share on the Dividend Payment Date, rounded to the nearest Share.
	 
	 	3.	 	Governing Documents. The Restricted Stock Units and DERs awarded hereby are
subject to all the restrictions, terms and provisions of the Plan Documents, which are herein
incorporated by reference, and to the terms of which the Participant hereby agrees.
Capitalized terms used in this RSU Agreement that are not defined herein shall have the
meaning set forth in the Plan Documents.
	 
	 	4.	 	No Stockholder Rights. The Restricted Stock Units will be represented by a book
entry credited in the name of the Participant and are not actual shares of Common Stock. The
Participant will not have the right to vote the Restricted Stock Units or any other rights of
a holder of Common Stock as a result of this grant of Restricted Stock Units. The Participant
acknowledges and agrees that (a) the Participant’s sole rights with respect to dividend
payments are with respect to the payments that arise from the DERs and, (b) the Participant
has no rights under this RSU Agreement or the Plan Documents with respect to the payment of
dividend payments or the adjustment of the Restricted Stock Units to reflect the payment of
cash dividends.
	 
	 	5.	 	General Vesting Requirements. Except as otherwise provided in the Plan Documents
and subject to the conditions of Paragraph 6 hereof, Restricted Stock Units shall vest in
accordance with the Vesting





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	 	 	 	Schedule above as of the occurrence of a Vesting Date (including
the Scheduled Vesting Date as set forth above), provided that the Participant has not
experienced a Separation from Service with
Forestar and its Affiliates through such Vesting Date. Notwithstanding the Vesting
Schedule provided above, upon a Change in Control, all unvested Restricted Stock Units
shall immediately vest. Upon an Participant’s Separation from Service for any reason
prior to a Vesting Date, all Restricted Stock Units that are not vested and payable under
Paragraph 7, and all accompanying DERs, shall be forfeited, and the Participant shall not
thereafter have any rights with respect to the Restricted Stock Units and DERs so
forfeited.
	 
	 	6.	 	Committee Certification of Performance Goals. Except in connection with vesting
upon a Change in Control, in no event shall any Restricted Stock Units vest as of the
scheduled Vesting Date unless the Committee has certified that the Performance Goal set forth
in Exhibit A (if any) hereto has been achieved.
	 
	 	7.	 	Payment of Restricted Stock Units. Subject to the terms and conditions of the Plan
Documents, Forestar will pay to the Participant an amount equal to the Fair Market Value per
Share of Common Stock on the Vesting Date, multiplied by the number of RSUs that vest on such
Vesting Date (the “Payment”). The Payment will be made as soon as practicable after the
Vesting Date, but not later than ninety days after the Vesting Date (or, if earlier, March 15
of the calendar year following the year in which the Vesting Date occurs), provided that if
the Vesting Date occurs upon or after a Change in Control, the Payment shall be made not
later than the fifth business day after the Vesting Date. The form of the Payment will be
made (at sole discretion of the Committee) in cash or in a number of shares equal to amount
of the Payment, divided by the Fair Market Value of a Share on the Vesting Date, rounded to
the nearest Share.
	 
	 	8.	 	Arbitration. The Participant and Forestar agree that this RSU Agreement arises out
of, and is inseparable from, the Participant’s employment or other service with Forestar or
any of its Affiliates. The Participant and Forestar further agree to final and binding
arbitration as the exclusive forum for resolution of any dispute of any nature whatsoever,
whether initiated by the Participant or Forestar, arising out of, related to, or connected
with Participant’s employment or other service with, or termination by, Forestar or any of
its Affiliates. This includes, without limitation, any dispute arising out of the
application, interpretation, enforcement, or claimed breach of this RSU Agreement. The only
exceptions to the scope of this arbitration provision are claims arising under any written
agreement between the Participant and Forestar or its Affiliate that expressly provides that
such claims are not subject to binding arbitration. Arbitration under this provision shall
be conducted under the employment dispute rules and procedures of either the American
Arbitration Association or of JAMS/Endispute, according to the preference of the party
initiating such arbitration. Appeal from, or confirmation of, any arbitration award under
this paragraph may be made to any court of competent jurisdiction under standards applicable
to appeal or confirmation of arbitration awards under the Federal Arbitration Act. This
arbitration provision and related proceedings shall be subject to and governed by the Federal
Arbitration Act. 
	 
	 	9.	 	Section 409A Acknowledgement and Release. Participant understands that payments
under the Plan and this RSU Agreement are potentially subject to Section 409A of the Code
(“409A”) and that if the Plan and this RSU Agreement do not satisfy an exception to 409A or
do not comply with the requirements of 409A and the applicable guidance thereunder, then
Participant may incur adverse tax consequences under 409A. Participant acknowledges and
agrees that (a) Participant is solely responsible for all obligations arising as a result of
the tax consequences associated with payments under this RSU Agreement including, without
limitation, any taxes, interest or penalties associated with 409A, (b) Participant is not
relying upon any written or oral statement or representation by Forestar or any Affiliate
thereof, or any of their respective employees, directors, officers, attorneys or





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	 	 	 	agents
(collectively, the “Company Parties”) regarding the tax effects associated with the execution
of this RSU Agreement and the payment under this RSU Agreement and the Plan, and (c) in
deciding to
enter into this RSU Agreement, Participant is relying on his or her own judgment and the
judgment of the professionals of his or her choice with whom Participant has consulted.
Participant hereby releases, acquits and forever discharges the Company Parties from all
actions, causes of actions, suits, debts, obligations, liabilities, claims, damages,
losses, costs and expenses of any nature whatsoever, known or unknown, on account of,
arising out of, or in any way related to the tax effects associated with the execution of
this RSU Agreement and any payment under the Plan and this RSU Agreement.
	 
	 	10.	 	Miscellaneous. The Committee may from time to time modify or amend this RSU
Agreement in accordance with the provisions of the Plan. This RSU Agreement shall be binding
upon and inure to the benefit of Forestar and its successors and assigns and shall be binding
upon and inure to the benefit of the Participant and his or her legatees, distributees and
personal representatives. This RSU Agreement may be executed by Forestar and the Participant
by means of electronic or digital signatures, which shall have the same force and effect as
manual signatures. Participant agrees that clicking “I Accept” in connection with or
response to any electronic communication or other medium has the effect of affixing the
Participant’s electronic signature to this RSU Agreement. Participant acknowledges and
expressly agrees that the Participant has read the RSU Agreement and the Plan Documents and
agrees to their terms. This RSU Agreement shall be governed by and construed in accord with
federal law, where applicable, and otherwise with the laws of the State of Texas.





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FORESTAR GROUP INC.

STANDARD TERMS AND CONDITIONS

FOR RESTRICTED STOCK UNITS





	1.	 	Certain Definitions: For purposes of this Forestar Group Inc. Terms and Conditions
for Restricted Stock Units (the “Standard Terms and Conditions”), the Forestar Group Inc. 2007
Stock Incentive Plan (as amended, the “Plan”), and the Agreement that evidences the grant of
Restricted Stock Units under the Plan (the “RSU Agreement”) to which this Standard Terms and
Conditions applies, the following terms shall have the meanings set forth below:






	 	a.	 	Change in Control:






	 	i.	 	A change in control shall be deemed to have occurred if the event
set forth in any one of the following paragraphs shall have occurred:






	 	(1)	 	any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of Forestar (not including in the
securities beneficially owned by such Person any securities acquired
directly from Forestar or its Affiliates) representing 20% or more of the
combined voting power of Forestar’s then outstanding securities,
excluding any Person who becomes such a Beneficial Owner in connection
with a transaction described in clauses (a), (b) or (c) of paragraph (3)
below;
	 
	 	(2)	 	within any twenty-four (24) month period, the
following individuals cease for any reason to constitute a majority of
the number of directors then serving on the Board: individuals who, on
the Effective Date, constitute the Board and any new director (other than
a director whose initial assumption of office is in connection with an
actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of Forestar)
whose appointment or election by the Board or nomination for election by
Forestar’s shareholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors on the date hereof or whose appointment, election or nomination
for election was previously so approved or recommended;
	 
	 	(3)	 	there is consummated a merger, consolidation of
Forestar or any direct or indirect subsidiary of Forestar with any other
corporation or any recapitalization of Forestar (for purposes of this
paragraph (III), a “Business Event”) unless, immediately following such
Business Event (a) the directors of Forestar immediately prior to such
Business Event continue to constitute at least a majority of the board of
directors of Forestar, the surviving entity or any parent thereof, (b)
the voting securities of Forestar outstanding immediately prior to such
Business Event continue to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or any
parent thereof), in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit plan of
Forestar or any subsidiary of Forestar, at least 60% of the combined
voting power of the securities of Forestar or such surviving entity or
any parent thereof outstanding immediately after such Business Event, and
(c) in the event of a





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	 	 	 	recapitalization, no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of Forestar or
such surviving entity or any parent
thereof (not including in the securities Beneficially Owned by such
Person any securities acquired directly from Forestar or its
Affiliates) representing 20% or more of the combined voting power of
the then outstanding securities of Forestar or such surviving entity or
any parent thereof (except to the extent such ownership existed prior
to the Business Event);
	 
	 	(4)	 	the shareholders of Forestar approve a plan of
complete liquidation or dissolution of Forestar;
	 
	 	(5)	 	there is consummated an agreement for the sale,
disposition or long-term lease by Forestar of substantially all of
Forestar’s assets, other than (a) such a sale, disposition or lease to an
entity, at least 50% of the combined voting power of the voting
securities of which are owned by shareholders of Forestar in
substantially the same proportions as their ownership of Forestar
immediately prior to such sale or disposition or (b) the distribution
directly to Forestar’s shareholders (in one distribution or a series of
related distributions) of all of the stock of one or more subsidiaries of
Forestar that represent substantially all of Forestar’s assets; or
	 
	 	(6)	 	any other event that the Board, in its sole
discretion, determines to be a Change in Control for purposes of this
Agreement.
	 
	 	 	 	Notwithstanding the foregoing, a “Change in Control” under clauses (1)
through (5) above shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated transactions
immediately following which the record holders of the common stock of
Forestar immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate
ownership in one or more entities which, singly or together,
immediately following such transaction or series of transactions, own
all or substantially all of the assets of Forestar as constituted
immediately prior to such transaction or series of transactions.






	 	ii.	 	For purposes of this definition of “Change in Control”:






	 	(1)	 	“Affiliate” shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the Exchange Act.
	 
	 	(2)	 	“Beneficial Owner” shall have the meaning set forth
in Rule 13d-3 under the Exchange Act.
	 
	 	(3)	 	“Effective Date” means, the Date of Grant of the
applicable Restricted Stock Units.
	 
	 	(4)	 	“Exchange Act” shall mean the Securities Exchange
Act of 1934, as amended from time to time.
	 
	 	(5)	 	“Person” shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof, except that such term shall not include (i) Forestar or
any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of Forestar or any





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	 	 	 	of its
Affiliates, (iii) an underwriter temporarily holding securities pursuant
to an offering of such securities, or (iv) a corporation owned, directly
or indirectly,
by the stockholders of Forestar in substantially the same proportions
as their ownership of stock of Forestar.






	 	b.	 	Dividend Equivalency Rights or DERs: means a right granted in
connection with a Restricted Stock Unit to receive payment on the terms and conditions
set forth in the Plan Documents of an amount equivalent to any dividend paid to a
holder of Common Stock.
	 
	 	c.	 	Forestar: means Forestar Group Inc. and any successor thereto.
	 
	 	d.	 	Plan Documents: means the Plan, the RSU Agreement and the Standard
Terms and Conditions.
	 
	 	e.	 	RSU Agreement: means the written Agreement executed by Forestar and a
Participant evidencing a grant of Restricted Stock Units under the Plan.
	 
	 	f.	 	Separation From Service: means a Participant’s separation from service
(within the meaning of Treasury Regs. § 1.409A-1(h)) with Forestar and its Affiliates
after the Date of Grant of the relevant Restricted Stock Units.
	 
	 	g.	 	Vesting Date: means, with respect to any award of Restricted Stock
Units hereunder, the earliest of (a) such date or dates as the Committee shall specify
in the Restricted Stock Units Agreement evidencing such award of Restricted Stock Units
as the Scheduled Vesting Date(s), (b)  the occurrence of a Change in Control, (c) the
Participant’s death, or (d) the Participant’s becoming disabled (within the meaning of
Section 409A of the Code).






	 	 	Capitalized terms used herein but not defined herein shall have the meaning assigned to such
terms in the Plan.
	 
	2.	 	Restricted Stock Unit Agreement; Acceptance and Execution: The grant of Restricted
Stock Units shall be evidenced by, and subject to the terms and conditions of, a RSU
Agreement. The RSU Agreement shall identify the Participant who has been granted the RSUs,
the Date of Grant, the number of Restricted Stock Units and accompanying DERs (if any) granted
pursuant to an Award, the dates upon which Restricted Stock Units and accompanying DERs (if
any) become vested an are payable. Restricted Stock Units shall be immediately cancelled and
expire if the applicable RSU Agreement is not executed (in such manner as may be specified by
Forestar) by such Participant (or his or her agent or attorney) and delivered to Forestar (in
such manner as may be specified by Forestar) within 60 days after the Date of Grant of the
Restricted Stock Units (unless an extension of such deadline for extenuating circumstances is
approved by a Vice President of Forestar). 
	 
	3.	 	Form of Awards: Restricted Stock Units and accompanying DERs, when issued, will be
represented by a book entry in the name of the Participant. Unless and until a certificate or
certificates representing Shares will have been issued by Forestar to Participant for payment
under a Restricted Stock Unit, Participant will not be or have any of the rights or privileges
of a shareholder of Forestar with respect to Shares issuable upon vesting of this RSU.
	 
	4.	 	Vesting and Time of Payment: Provided that a Participant has not experienced a
Separation from Service with Forestar or an Affiliate through the Vesting Date, the
Participant shall vest and be entitled to payment under a Restricted Stock Unit on the Vesting
Date for such Restricted Stock Unit. The payment under a Restricted Stock Unit shall be made
no later than March 15th of the year following the year in which the Vesting Date
occurs. Notwithstanding the above, payment under a Restricted Stock Unit shall be subject to
paragraph 9 herein.
	 
	5.	 	Payment Amount: Payment under an RSU may be made in cash or in shares, or both, at
the discretion of the Committee or as otherwise set forth in the Agreement. If payment is
made in Shares, a Participant shall be entitled to a Share for each RSU that vests on a given
Vesting Date. If payment in made in cash, the amount of payment under each Restricted Stock
Unit shall be equal to the Fair Market Value per Share of Common Stock on the Vesting Date of
each such Restricted Stock Unit.





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	6.	 	Dividend Equivalency Rights: Upon the payment of a dividend to a holder of Common
Stock, the holder of a DER will either be paid an amount equal to such dividend or be credited
such amount to a bookkeeping account, with such the amount reflected in such account to be
paid upon the vesting and payment of the underlying DER, provided a Participant has not
experienced a Separation from Service with Forestar or an Affiliate through the date such
dividend payment is made to a holder of Common Stock. Upon the Participant’s Separation from
Service with Forestar and its Affiliates or the vesting and payment of the accompanying RSU,
the DER will expire, and Participant shall not longer be entitled to payment under such DER.
	 
	7.	 	Nonalienation of Benefits: Except as required by applicable law, no right or benefit
under the Plan or any Restricted Stock Units Agreement shall be subject to anticipation,
alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or
charge, and any attempt to anticipate, alienate, sell, assign, hypothecate, transfer, pledge,
exchange, transfer, encumber or charge the same shall be void. No right or benefit hereunder
shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of
the person entitled to such benefit. If any Participant shall become bankrupt or attempt to
anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or
charge any right or benefit under the Plan or any Restricted Stock Units Agreement, then such
right or benefit shall, in the discretion of the Committee, cease and terminate, and in such
event, the Committee in its discretion may hold or apply the same or any part thereof for the
benefit of the Participant or his beneficiary, spouse, children or other dependents, or any of
them, in such manner and in such proportion as the Committee may deem proper.
	 
	8.	 	Withholding: Forestar’s obligation to pay Restricted Stock Units in accordance with,
and subject to the terms of, the applicable Restricted Stock Units Agreement, shall be subject
to the satisfaction of applicable federal, state and local tax withholding requirements (if
any). Restricted Stock Unit payments that are withheld to satisfy applicable withholding
taxes shall be determined based on the Fair Market Value of the Common Stock on the date the
withholding tax obligation arises. Only the required statutory minimum tax may be withheld;
excess tax withholding is not allowed.
	 
	9.	 	Section 409A: Notwithstanding any provision to the contrary in an RSU Agreement or
the Plan, if a Participant is a “specified employee” (within the meaning of Section
409A(a)(2)(B) of the Code) and the payment under this RSU otherwise constitutes a deferral of
compensation (within the meaning of Treas. Reg. § 1.409A-1(b)), then to the extent required by
Section 409A(a)(2)(B) of the Code, no payment of Restricted Stock Units shall be made to the
Participant prior to the earlier of (a) the expiration of the six month period measured from
the date of the Participant’s Separation From Service, and (b) the date of the Participant’s
death.
	 
	10.	 	No Right to Continued Employment; No Additional Rights: Nothing contained in the
Plan or in any Restricted Stock Units Agreement shall confer on any Participant any right to
continue in the employ or service of Forestar or any of its Affiliates or interfere in any way
with the right of Forestar or an Affiliate to terminate the employment or service of a
Participant at any time, with or without cause, notwithstanding the Restricted Stock Units
awarded to the Participant may be forfeited. Nothing in the Plan Documents or any Restricted
Stock Units Agreement shall be construed to give any employee, director or consultant of
Forestar or any Affiliate any right to receive an award of Restricted Stock Units or as
evidence of any agreement or understanding, express or implied, that Forestar or any Affiliate
will employ or retain the Participant in any particular position or at any particular rate of
remuneration, or for any particular period of time.
	 
	11.	 	Changes in Stock: In the event of any change in the outstanding stock covered by
Restricted Stock Units by reason of any stock dividend, split-up, spin-off, recapitalization,
reclassification, combination





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	 	 	or exchange of shares, merger, consolidation or liquidation or
the like, the Committee shall provide for a substitution for or adjustment in the number and
class of shares covered by the Restricted Stock Units. The Committee’s determination with
regard to any such substitution or adjustment shall be conclusive.
The Committee may at any time, in its sole discretion, make such amendments to the terms of
Restricted Stock Units Agreements as it deems necessary or appropriate to reflect any
adjustments or substitutions made pursuant to this paragraph.
	 
	12.	 	Exclusion from Pension, Profit-Sharing and Other Benefit Computations: By acceptance
of a Restricted Stock Units award under the Plan, a Participant shall be deemed to have agreed
that any compensation arising out of the award constitutes special incentive compensation that
shall not be taken into account as “salary”, “pay”, “compensation” or “bonus” in determining
the amount of any payment under any pension, retirement or profit-sharing plan of Forestar or
any Affiliate. In addition, each Participant shall be deemed to have agreed that neither the
award, vesting nor payment of Restricted Stock Units shall be taken into account in
determining the amount of any life insurance coverage or short or long-term disability
coverage provided by Forestar or any Affiliate.
	 
	13.	 	Applicability: These Standard Terms and Conditions shall apply to Restricted Stock
Units as to which the Committee designates it as applying, and the Committee may designate it
as applying in whole or in part in its discretion to a Restricted Stock Units award.
	 
	14.	 	Plan Controls: In the event of any conflict between the Plan and the terms of a
Restricted Stock Units Agreement or the Standard Terms and Conditions, the Plan shall govern.





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