FORESTAR GROUP INC. (NYSE:FOR) Files An 8-K Entry into a Material Definitive Agreement

conduct its business in the ordinary course consistent with
past practice during the period between the execution of the
Merger Agreement and the closing of the Merger, and (ii)the
Companys agreement to not solicit proposals relating to
alternative transactions to the Merger or engage in discussions
or negotiations with respect thereto, subject to certain
exceptions. Each of the Company, D.R. Horton and Merger Sub
have agreed to various mutual covenants and agreements,
including, among others, (x)each partys agreement to use
reasonable best efforts to take all actions necessary to
consummate and make effective the Merger as promptly as
practicable, and (y)each partys agreement to give prompt notice
to the other of the occurrence, or failure to occur, of any
event, which occurrence or failure to occur is reasonably
likely to cause failures of certain representations and
warranties to be true and correct or to cause material failure
to satisfy a covenant, condition, or agreement to be complied
with under the Merger Agreement.

The Merger Agreement contains specified termination rights for
the Company and D.R. Horton, including a mutual termination
right in the event that the Merger is not consummated by
January25, 2018. The Company must pay D.R. Horton a $20,000,000
termination fee if D.R. Horton terminates the Merger Agreement
following a change of recommendation, or failure to reaffirm
the recommendation, of the Merger by the Companys board of
directors (the Board), or if the Company terminates the Merger
Agreement to enter into a definitive agreement with a third
party with respect to a superior proposal, as set forth in, and
subject to the conditions of, the Merger Agreement. Under
certain additional circumstances described in the Merger
Agreement, the Company must also pay D.R. Horton a $20,000,000
termination fee if the Merger Agreement is terminated in
certain specified circumstances while an alternative
acquisition proposal to the Merger has been publicly made or
communicated to the Board and not withdrawn and, within twelve
months following such termination, the Company enters into a
definitive agreement with respect to a business combination
transaction of the type described in the relevant provisions of
the Merger Agreement, or such a transaction is consummated. The
Merger Agreement further provides that, upon termination of the
Merger Agreement (i)in the event the Companys stockholders do
not approve the Merger, or (ii)by D.R. Horton in certain
circumstances involving a material breach by the Company of any
of its representations, warranties or covenants under the
Merger Agreement, the Company will be required to pay to D.R.
Horton up to $4,000,000 for expenses incurred by D.R. Horton
(with such payment credited to any termination fee subsequently
paid by the Company).

The foregoing description of the Merger Agreement and the
transactions contemplated thereby does not purport to be
complete and is qualified in its entirety by reference to the
Merger Agreement, a copy of which is attached hereto as
Exhibit2.1 and is incorporated herein by reference. It is not
intended to provide any factual information about the Company,
D.R. Horton or their respective subsidiaries and affiliates.
The Merger Agreement contains representations and warranties by
each of the parties to the Merger Agreement, which were made
only for purposes of that agreement and as of specified dates.
The representations, warranties and covenants in the Merger
Agreement were made solely for the benefit of the parties to
the Merger Agreement; are subject to limitations agreed upon by
the contracting parties, including being qualified by
confidential disclosure schedules; may have been made for the
purposes of allocating contractual risk between the parties to
the Merger Agreement instead of establishing these matters as
facts; and are subject to standards of materiality applicable
to the contracting parties that may differ from those
applicable to investors. Investors should not rely on the
representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or
condition of the Company, D.R. Horton or any of their
respective subsidiaries or affiliates. Moreover, information
concerning the subject matter of the representations,
warranties and covenants may change after the date of the
Merger Agreement, which subsequent information may or may not
be fully reflected in the Companys public disclosures.

Stockholders Agreement

In connection with to the Merger Agreement, the Company and
D.R. Horton entered into a Stockholders Agreement, dated as of
June29, 2017 (the Stockholders Agreement), the terms of which
shall become effective as of the Effective Time. Under the
terms of the Stockholders Agreement, as of immediately
following the Effective Time, and during the Lock-Up Period (as
defined below), the Board shall have five directors, comprised
of four individuals designated by D.R. Horton (which shall
include the Executive Chairman of the Company and at least two
independent directors) and one individual from the current
Board designated by mutual agreement of the Company and D.R.
Horton prior to the Effective Time, with D.R. Hortons agreement
not to be unreasonably withheld (the Legacy Director) or his
replacement. Thereafter, at all times when D.R. Horton and its
affiliates

beneficially own 20% or more of the voting securities of the
Company, the Board shall have five directors unless otherwise
agreed in writing between the Company (as approved by a
majority of the independent directors) and D.R. Horton, and
D.R. Horton will have the right to designate a number of
directors equal to the percentage of the voting securities of
the Company beneficially owned by D.R. Horton and its
affiliates multiplied by the total number of directors that the
Company would have if there were no vacancies, rounded up to
the nearest whole number (and in any event not less than one).
The Company and D.R. Horton have also each agreed to use their
reasonable best efforts to cause at least three of the
directors to be considered to be considered independent under
the rulesof the SEC and under applicable listing standards.

In addition, at all times when D.R. Horton and its affiliates
beneficially own 20% or more of the voting securities of the
Company, no committee of the Board shall have more than three
members unless otherwise agreed in writing between the Company
(as approved by a majority of the independent directors) and
D.R. Horton, and each committee of the Board shall include in
its membership (i)a number of D.R. Horton designees equal to
the percentage of the voting securities of the Company
beneficially owned by D.R Horton and its affiliates multiplied
by the total number of members that such committee would have
if there were no vacancies on such committee, rounded up to the
nearest whole number (and in any event not less than one) and
(ii)at least one member not designated by D.R. Horton. In
addition, at all times when D.R. Horton and its affiliates
beneficially own 20% or more of the voting securities of the
Company, the Board shall maintain a Nominating and Governance
Committee, and the Legacy Director shall be a member of the
Nominating and Governance committee for so long as the Legacy
Director serves on the Board. During the Lock-Up Period, the
Nominating and Governance Committee shall have three members,
including the Legacy Director (as long as the Legacy Director
is then on the Board) and at least one additional independent
director.

The Company has also agreed to establish and maintain an
investment committee (which will not be considered a committee
of the Board) (the Investment Committee), the members of which
shall be officers or employees of the Company who are
(A)experienced professionals in the land acquisition and
development business or (B)the chief executive officer, the
chief financial officer, the general counsel or the president
of community development (or any person serving in an
equivalent role). The Executive Chairman of the Company shall
be a member of the Investment Committee at all times. The other
members of the Investment Committee will be appointed by the
Nominating and Governance Committee. The Investment Committee
will be vested with sole responsibility over investment
decisions of the Company involving capital expenditures of
$20,000,000 or less (each, an Investment Committee Approval
Transaction). All decisions of the Investment Committee will
require the approval of a majority of the members of the
Investment Committee. Any investment decision that does not
involve an Investment Committee Approval Transaction will be
subject to approval by the Board.

For so long as D.R. Horton and its affiliates beneficially own
35% or more of the voting securities of the Company, the
Company and its subsidiaries may not take any of the following
actions without the prior written consent of D.R. Horton:
(i)declare or make any extraordinary or in-kind dividend other
than a dividend on a pro rata basis; (ii)issue any new class of
equity or voting securities; (iii)issue equity or equity-linked
securities or voting securities (A)in the case of securities
issued as employee compensation, constituting 1% or more of the
then outstanding shares of Company Common Stock in any calendar
year or (B)in any case, constituting 10% or more of the
then-outstanding number of shares of Company Common Stock;
(iv)incur indebtedness above certain levels; (v)select,
terminate or remove certain key officers or change their
compensation arrangements; (vi)make or approve any fundamental
change in the Companys business of developing residential and
mixed-use real estate; (vii)acquire assets or enter into
mergers or similar acquisitions involving capital expenditures
in excess of $20,000,000; (viii)effect or approve any voluntary
liquidation, dissolution or winding-up or certain events of
bankruptcy or insolvency; (ix)enter into any strategic alliance
or commercial agreement of a nature similar to the Master
Supply Agreement (as defined below) with a person other than
D.R. Horton; or (x)effect any election of a settlement of the
Companys 3.75% Convertible Senior Notes due 2020 in connection
with an election to convert the notes by a holder thereof.

In addition, at all times when D.R. Horton and its affiliates
beneficially own 35% or more of the voting securities of the
Company, the Company and its subsidiaries may not take any of
the following actions without approval of a majority of the
independent directors who are not also affiliated with D.R.
Horton: (i)enter into, amend, modify, terminate or approve any
transaction between the Company or any of its subsidiaries, on
one hand,

and D.R. Horton or any of its affiliates, on the other hand, or
enter into any waiver, consent or election thereunder (other
than an Investment Committee Approval Transaction); (ii)amend,
modify or terminate, or enter into any waiver, consent or
election under, the Stockholders Agreement or enter into any
merger or business combination with D.R. Horton or any of its
affiliates; (iii)enter into any merger, business combination or
similar transaction in which D.R Horton receives consideration
for its Company Common Stock of greater value or in a different
form than other Company stockholders; or (iv)settle any claim
between the Company and D.R Horton (other than an Investment
Committee Approval Transaction).

For so long as D.R. Horton and its affiliates beneficially own
20% or more of the voting securities of the Company, the
Company may not amend its or its subsidiaries organizational
documents in any manner that could adversely affect the rights
of D.R. Horton under the Stockholders Agreement. In addition,
Forestar may not amend its or its subsidiaries organizational
documents in any manner that could adversely affect the rights
or of the other Company stockholders under the Stockholders
Agreement.

D.R. Horton has agreed to certain lock-up and standstill
provisions for a period of 15 months following the Effective
Time (the Lock-Up Period). During the Lock-Up Period, D.R.
Horton generally may not (subject to customary exceptions)
transfer shares of Company Common Stock, other than transfers
of up to one-third of the aggregate amount of shares of Company
Common Stock beneficially held by D.R. Horton and its
subsidiaries as of immediately following the Effective Time in
an offering that is not registered under the Securities Act of
1933, as amended, to transferees agreeing to be bound by the
lock-up provisions in the Stockholders Agreement. In addition,
during the Lock-Up Period, D.R. Horton and its affiliates
generally may not (subject to customary exceptions) participate
in any transactions that would result in D.R. Horton and its
affiliates beneficially owning more than 80% of the voting
power of the Company Common Stock, provided that D.R. Horton is
permitted, under certain conditions, to make private proposals
to the non-D.R. Horton affiliated directors on the Board. Any
proposal by D.R. Horton to acquire all of the shares of Company
Common Stock must be (i)subject to review, evaluation and prior
written approval of a majority of the independent directors,
and (ii)submitted for approval to the Companys stockholders,
with a nonwaivable condition that a majority of the voting
power of the non-D.R. Horton stockholders approve the
transaction.

Except in certain cases, D.R. Horton has a pre-emptive right
(but not the obligation) to participate in any issuance of
equity or other securities of the Company by purchasing up to
D.R. Hortons and its subsidiaries pro rata portion of such
equity or securities at the price and otherwise upon the same
terms and conditions as offered to other investors.

The Stockholders Agreement provides for customary registration
rights with respect to Company Common Stock held by D.R.
Horton, its affiliates and their permitted transferees. to such
registration rights, the Company has agreed to file, prior to
expiration of the Lock-Up Period, and to use its reasonable
best efforts to make and keep effective, a shelf registration
statement permitting the resale of Company Common Stock by D.R.
Horton, it affiliates and their permitted transferees. In
addition, after expiration of the Lock-Up Period, D.R. Horton
has the right, subject to certain limitations, to require the
Company to register D.R. Hortons Company Common Stock for
resale. D.R. Horton also has piggyback registration rights in
connection with offerings of Company Common Stock by the
Company or other stockholders. The Stockholders Agreement also
provides that D.R. Horton and its affiliates will not be
prohibited from engaging in business opportunities
independently of the Company unless the opportunity is offered
to an individual who is both an affiliate of D.R. Horton and an
officer or director of the Company and the offer is made in
writing to the individual in his or her capacity as an officer
or director of the Company.

The Stockholders Agreement shall terminate upon termination of
the Merger Agreement or on the first day that D.R. Horton and
its affiliates beneficially own less than 15% of the voting
securities of the Company, provided that the provisions of the
Stockholders Agreement relating to D.R. Hortons registration
rights, the waiver of business opportunities and certain
customary provisions will survive the termination of the
Stockholders Agreement after the Effective Time.

The foregoing summary of the Stockholders Agreement and the
transactions contemplated thereby does not purport to be
complete and is subject to, and qualified in its entirety by,
the full text of the Stockholders

Agreement, which is filed as Exhibit10.1 to this Form8-K and is
incorporated herein by reference.

Master Supply Agreement

In connection with the Merger Agreement, the Company and D.R.
Horton entered into a Master Supply Agreement, dated as of
June29, 2017 (the Master Supply Agreement). The terms of the
Master Supply Agreement become effective as of the closing of
the Merger, and unless earlier terminated, continue until the
earlier of (a)the date that D.R. Horton and its affiliates
beneficially own less than 15% of the voting securities of the
Company and (b)June29, 2037.

Under the Master Supply Agreement, the Company will present to
D.R. Horton all lot development opportunities (subject to
certain exceptions) that the Company desires to acquire and
develop that have been approved or conditionally approved by
the Investment Committee (a Forestar Sourced Opportunity); and
D.R. Horton shall have the right, but not the obligation, to
present the Company with lot development opportunities that
D.R. Horton desires to acquire for development (if presented to
the Company, a D.R. Horton Sourced Opportunity).

The following opportunities are excluded from Forestar Sourced
Opportunities: (a)any opportunities, developments or ventures
owned, under contract, the subject of a letter of intent or
otherwise being pursued, by the Company, as of the Effective
Time, or (b)any opportunities presented to the Company by a
third-party builder.

The Company and D.R. Horton will collaborate regarding all
Forestar Sourced Opportunities and all D.R. Horton Sourced
Opportunities, after considering current and future market
conditions and dynamics. If the parties agree to pursue a
Forestar Sourced Opportunity or a D.R. Horton Sourced
Opportunity, such agreement will be evidenced by a mutually
agreed upon written development plan prepared at the direction
of the Investment Committee (a Development Plan), addressing,
among other things, the number, size, layout and projected
price of lots, phasing, timing, amenities and entitlements, and
are referred to as either a Forestar Sourced Development or a
D.R. Horton Sourced Development, as the case may be.

D.R. Horton or its affiliates will have (a)a right of first
offer (ROFO) to buy up to 50% of the lots in the first phase
(and in any subsequent phase in which D.R. Horton purchased at
least 25% of the lots in the previous phase) in each Forestar
Sourced Development; and (b)the right to purchase up to 50% of
the lots in each D.R. Horton Sourced Development, at the then
current fair market price and terms per lot, as mutually agreed
to by the Company and D.R. Horton. All lots in a Forestar
Sourced Development in which a D.R. Horton affiliate
participates as a buyer will be equitably allocated among D.R.
Horton and any other builders in each phase taking into
consideration the location, size and other attributes
associated with the lots. The agreement evidencing the ROFO for
the lots in the Forestar Sourced Development (the ROFO
Agreement), and the purchase and sale agreement for the lots in
the D.R. Horton Sourced Development (the PSA), will be
negotiated, finalized and executed as a part of the Development
Plan, and in all events the Development Plan will be finalized,
and the ROFO Agreement will be negotiated, finalized and
executed, prior to the expiration of the feasibility period in
any contract to acquire a Forestar Sourced Development. D.R.
Horton will assign to the Company on an as-is, where-is basis
the contract to acquire a D.R. Horton Sourced Development after
the finalization of the Development Plan and PSA for such D.R.
Horton Sourced Development.

The Company, at its sole cost and expense, will perform and
direct, through its employees, agents and contractors, all
functions relative to diligence, entitlement, financing,
planning, design and construction of all on-site and off-site
improvements required for any development.

In addition to termination for breach or mutual agreement of
the parties, the Company may terminate the Master Supply
Agreement at any time that D.R. Horton and its affiliates
beneficially own less than 25% of the voting securities of the
Company.

The foregoing summary of the Master Supply Agreement and the
transactions contemplated thereby does not purport to be
complete and is subject to, and qualified in its entirety by,
the full text of the Master Supply

Agreement, which is filed as Exhibit10.2 to this Form8-K and is
incorporated herein by reference.

Item 1.02. Termination of Material Definitive
Agreement.

On June29, 2017, the Company sent notice to Terra Forma Merger
Parent, L.P., a Delaware limited partnership (Terra Firma
Merger Parent) that, to the Agreement and Plan of Merger (as
amended, the Terra Firma Merger Agreement), dated as of
April13, 2017, by and among Terra Firma Merger Parent, Terra
Firma Merger Sub, L.P., a Delaware limited partnership and a
wholly owned subsidiary of Terra Firma Merger Parent, and the
Company, the Company terminated the Terra Firma Merger
Agreement in order to enter into the Merger Agreement. In
connection with the termination of the Terra Firma Merger
Agreement, the Company paid Terra Firma Merger Parent a
termination fee of $20,000,000.

Item 3.03. Material Modifications to Rights of Security
Holders.

Second Amendment to the Tax Benefits Preservation
Plan

In connection with the Merger Agreement and the transactions
contemplated thereby, the Company and Computershare Trust
Company, N.A. (the Rights Agent), have entered into Amendment
No.2 to Tax Benefits Preservation Plan, dated as of June29,
2017 (the Plan Amendment), with respect to the Tax Benefits
Preservation Plan, dated as of January5, 2017 (as amended from
time to time, the Plan) to provide that (i)none of D.R. Horton,
Merger Sub or any of their Affiliates or Associates (as such
terms are defined in the Plan), individually or collectively,
shall be an Acquiring Person (as defined in the Plan) under the
Plan solely by reason of the public announcement or disclosure,
approval, adoption, execution or delivery of the Merger
Agreement, the consummation of the Merger or the consummation
of any of the other transactions contemplated by the Merger
Agreement (each an Exempt Event), (ii)neither a Stock
Acquisition Date nor a Distribution Date (each term as defined
in the Plan) shall occur solely as a result of an Exempt Event,
(iii)none of D.R. Horton, Merger Sub, or any of their
Affiliates or Associates, individually or collectively, shall
be deemed the Beneficial Owner of or shall be deemed to have
beneficial ownership of or to beneficially own (as such terms
are defined in the Plan) any shares of the Company Common Stock
solely as a result of an Exempt Event, and (iv)the definition
of Expiration Date has been amended to mean the earliest of
(1)the Final Expiration Date (as defined in the Plan), (2)the
time at which the Rights (as defined in the Plan) are redeemed
or exchanged as provided in Section23 and Section24 of the
Plan, (3)the time at which the Board determines that the Plan
is no longer necessary or desirable for the preservation of Tax
Benefits (as defined in the Plan), (4)the close of business on
the first day of a taxable year of the Company to which the
Board determines that no Tax Benefits, once realized, as
applicable, may be carried forward, and (5)immediately prior to
the effective time of the Merger (but only if the Merger does
occur).

The foregoing description of the Plan Amendment does not
purport to be complete and is subject to, and qualified in its
entirety by, the full text of the Plan Amendment, a copy of
which is attached hereto as Exhibit4.1 and is incorporated
herein by reference.

Item 5.02. Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.

As previously disclosed, on April13, 2017, the Company entered
into a Separation Agreement and Release (the Separation
Agreement) with David M. Grimm, the Companys former Chief
Administrative Officer, Executive Vice President, General
Counsel and Secretary, to which, among other items, Mr.Grimms
employment with the Company terminated effective April14, 2017
and Mr.Grimm agreed to provide certain post-termination
consulting services to the Company on an as-needed basis during
the 90-day period following his termination (i.e., through
July12, 2017) or if earlier, through consummation of the
transactions contemplated by the Terra Firma Merger Agreement
or any other change in control of the Company effected to a
transaction agreement executed not later than July12, 2017,
which would include consummation of the Merger involving D.R.
Horton (the Consulting Period) in consideration for a monthly
consulting fee of $25,000 (pro-rated as applicable for any
partial month of service). On June29, 2017, the Company and
Mr.Grimm agreed to modify the Separation Agreement to provide
that the Consulting Period will be extended beyond July12, 2017
to the date of consummation of the Merger involving D.R. Horton
or any earlier date selected by the Company or Mr.Grimm and

that, during such extended Consulting Period, the Company will
pay Mr.Grimm $500 per hour of service rendered.

Item 8.01. Other Events.

On June29, 2017, the Company issued a press release announcing
the termination of the Terra Firma Merger Agreement and the
entry into the Merger Agreement. The full text of the press
release is attached hereto as Exhibit99.1 and is incorporated
herein by reference.

On June29, 2017, the Company and D.R. Horton issued a joint
press release announcing the entry into the Merger Agreement.
The full text of the press release is attached hereto as
Exhibit99.2 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Forward-Looking Statements

Portions of this document may constitute forward-looking
statements as defined by the Private Securities Litigation
Reform Act of 1995. Although D.R. Horton and Forestar believe
any such statements are based on reasonable assumptions, there
is no assurance that actual outcomes will not be materially
different. All forward-looking statements are based upon
information available to D.R. Horton and Forestar on the date
of this document. Neither D.R. Horton nor Forestar undertake
any obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future
events or otherwise. Some forward-looking statements discuss
D.R. Hortons and Forestars plans, strategies and intentions.
They use words such as expects, may, will, believes, should,
would, could, approximately, anticipates, estimates, targets,
intends, likely, projects, positioned, strategy, future, and
plans. In addition, these words may use the positive or
negative or other variations of those terms. Forward-looking
statements in this document include, but are not limited to,
statements regarding the expected effects on D.R. Horton and
Forestar of the proposed Merger, and Master Supply Agreement,
the anticipated timing and benefits of the Merger and related
transactions, including future financial and operating results,
and D.R. Hortons and Forestars plans, objectives, expectations
and intentions. Forward-looking statements also include all
other statements in this document that are not historical
facts. Factors that may cause the actual results to be
materially different from the future results expressed by the
forward-looking statements include, but are not limited to:
Forestars ability to obtain requisite approval from its
stockholders, D.R. Hortons and Forestars ability to satisfy the
conditions to closing of the proposed Merger; other risks
related to the completion of the proposed Merger and actions
related thereto; there may be a material adverse change of
Forestar or the business of Forestar may suffer as a result of
uncertainty surrounding the transaction; the transaction may
involve unexpected costs, liabilities or delays; legal
proceedings may be initiated related to the transaction;
changes in federal or state laws or regulation may occur; the
cyclical nature of the homebuilding industry and changes in
economic, real estate and other conditions; constriction of the
credit markets, which could limit D.R. Hortons and Forestars
ability to access capital and increase their respective costs
of capital; reductions in the availability of mortgage
financing provided by government agencies, changes in
government financing programs, a decrease in D.R. Hortons
ability to sell mortgage loans on attractive terms or an
increase in mortgage interest rates; the risks associated with
Forestars and D.R. Hortons land and lot inventory; home
warranty and

construction defect claims; the effects of a health and safety
incident; the effects of negative publicity; supply shortages
and other risks of acquiring land, building materials and
skilled labor; the impact of an inflationary, deflationary or
higher interest rate environment; reductions in the
availability of performance bonds; increases in the costs of
owning a home; the effects of governmental regulations and
environmental matters on our homebuilding operations; the
effects of governmental regulations on our financial services
operations; our significant debt and our ability to comply with
related debt covenants, restrictions and limitations;
competitive conditions within the homebuilding and financial
services industries; D.R. Hortons and Forestars ability to
execute our growth strategies, acquisitions or investments
successfully; the effects of the loss of key personnel; and
information technology failures and data security breaches.
Additional information about issues that could lead to material
changes in performance is contained in D.R. Hortons and
Forestars respective annual reports on Form10-K and their
respective most recent quarterly reports on Form10-Q, all of
which are filed with the Securities and Exchange Commission
(the SEC). There can be no assurance that the merger will be
completed, or if it is completed, that it will close within the
anticipated time period or that the expected benefits of the
merger will be realized.

Additional Information

In connection with the completion of D.R. Hortons proposed
transaction with Forestar, Forestar will file a registration
statement with the SEC on FormS-4 that will include a proxy
statement/prospectus to be distributed to Forestar
stockholders. Forestar will mail the proxy statement/prospectus
and a proxy card to each stockholder entitled to vote at the
special meeting relating to the proposed Merger. SECURITY
HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT/PROSPECTUS WHEN
IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. The registration statement, proxy
statement/prospectus and other relevant documents will be
available at no cost at the SECs website at http://www.sec.gov.
Investors may also obtain Forestars SEC filings in connection
with the transaction, free of charge, from Forestars Web site
(www.forestargroup.com) under the link Investor Relations and
then under the link Financial and SEC Reporting and then under
the tab SEC Filings, or by directing a request to Forestar,
Charles D. Jehl, Chief Financial Officer.

D.R. Horton, Forestar and their respective directors and
certain of their executive officers may be deemed to be
participants in any solicitation in connection with the
proposed Merger. Information regarding D.R. Hortons directors
and executive officers is available in D.R. Hortons proxy
statement for the 2017 Annual Meeting of Stockholders, filed
with the SEC on December9, 2016. Information regarding
Forestars directors and executive officers is available in
Forestars proxy statement for the 2017 Annual Meeting of
Stockholders, filed with the SEC on March28, 2017. These
documents can be obtained free of charge from the sources
indicated above. Other information regarding D.R. Horton and
Forestar participants in any proxy solicitation in connection
with the proposed transaction and a description of their direct
and indirect interests, by security holdings or otherwise, will
be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC.

This document shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there
be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any
such jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of
Section10 of the U.S. Securities Act of 1933, as amended.