Form SC 13D Forestar Group Inc. Filed by: SPRINGOWL ASSOCIATES LLC

SECURITIES AND EXCHANGE COMMISSION	�
Washington, D.C. 20549	�
�	�
SCHEDULE 13D
�
Under the Securities Exchange Act of 1934
(Amendment No. )*
�
Forestar Group Inc.
(Name of Issuer)
�
Common Stock, par value $1.00 per share
(Title of Class of Securities)
�
346233109
(CUSIP Number)
�
Andrew Wallach SpringOwl Associates LLC 1370 Avenue of the Americas 28th Floor New York, NY 10019 (212) 445-7800 � Daniele Beasley Cove Street Capital, LLC 2101 East El Segundo Boulevard Suite 302 El Segundo, CA 90245 (424) 221-5897 � with a copy to: David E. Rosewater Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 (212) 756-2000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
�
November 6, 2014
(Date of Event Which Requires Filing of This Statement)
�

�

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. [ ]

�

(Page 1 of 13 Pages)

______________________________

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

�

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

�

�

1	NAME OF REPORTING PERSON SpringOwl Associates LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) �
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		�
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 344,224 shares of Common Stock
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 344,224 shares of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 344,224 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			�
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.0%
14	TYPE OF REPORTING PERSON OO; IA
�	�	�	�	�

�

�

1	NAME OF REPORTING PERSON Daniel Silvers
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) �
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		�
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 4,700 shares of Common Stock
	8	SHARED VOTING POWER 700 shares of Common Stock (see Item 5)
	9	SOLE DISPOSITIVE POWER 4,700 shares of Common Stock
	10	SHARED DISPOSITIVE POWER 700 shares of Common Stock (see Item 5)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 5,400 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			�
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.0%
14	TYPE OF REPORTING PERSON IN
�	�	�	�	�

�

�

1	NAME OF REPORTING PERSON Andrew Nelson
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) �
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		�
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 3,000 shares of Common Stock
	8	SHARED VOTING POWER 0
	9	SOLE DISPOSITIVE POWER 3,000 shares of Common Stock
	10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 3,000 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			�
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.0%
14	TYPE OF REPORTING PERSON IN
�	�	�	�	�

�

�

1	NAME OF REPORTING PERSON Laura Conover
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) �
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		�
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 250 shares of Common Stock
	8	SHARED VOTING POWER 0
	9	SOLE DISPOSITIVE POWER 250 shares of Common Stock
	10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 250 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			�
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.0%
14	TYPE OF REPORTING PERSON IN
�	�	�	�	�

�

�

1	NAME OF REPORTING PERSON Barry Konig
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) �
3	SEC USE ONLY
4	SOURCE OF FUNDS PF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		�
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 1,200 shares of Common Stock
	8	SHARED VOTING POWER 150 shares of Common Stock (see Item 5)
	9	SOLE DISPOSITIVE POWER 1,200 shares of Common Stock
	10	SHARED DISPOSITIVE POWER 150 shares of Common Stock (see Item 5)
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 1,350 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			�
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.0%
14	TYPE OF REPORTING PERSON IN
�	�	�	�	�

�

1	NAME OF REPORTING PERSON Cove Street Capital, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) x (b) �
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		�
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 1,799,244 shares of Common Stock
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 1,799,244 shares of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 1,799,244 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			�
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.1%
14	TYPE OF REPORTING PERSON OO; IA
�	�	�	�	�

�

�

Item 1.	SECURITY AND ISSUER
�	�
�	This statement on Schedule 13D (this "Schedule 13D") relates to the common stock, par value $1.00 per share ("Common Stock"), of Forestar Group Inc., a Delaware corporation (the "Issuer").��The address of the Issuer's principal executive office is 6300 Bee Cave Road, Building Two, Suite 500, Austin, Texas 78746.
�	�
Item 2.	IDENTITY AND BACKGROUND
�	�
�	(a) This Schedule 13D is being filed by and on behalf of (i) SpringOwl Associates LLC, a Delaware limited liability company ("SOA"), (ii) Daniel Silvers ("Mr. Silvers"), (iii) Andrew Nelson ("Mr. Nelson"), (iv) Laura Conover ("Ms. Conover"), (v) Barry Konig ("Mr. Konig") and (vi) Cove Street Capital, LLC, a Delaware limited liability company ("CSC"). SOA, Ms. Conover, Messrs. Silvers, Nelson and Konig, and CSC are herein sometimes referred to each as a "Reporting Person" and collectively as "Reporting Persons". � Jason Ader, Andrew Wallach and Mr. Konig (collectively, the "SOA IC Members") are the members of the Investment Committee of SOA, which controls voting and investment decisions with respect to securities held by funds and accounts for which SOA serves as the investment advisor. Jeffrey Bronchick and Daniele Beasley (collectively, the "CSC Members") are the sole members of CSC. � (b) The principal business address of SOA is 1370 Avenue of the Americas, 28th Floor, New York, NY 10019. The principal business address of each of Mr. Silvers, Mr. Nelson, Ms. Conover, and the SOA IC Members is c/o SpringOwl Associates LLC, 1370 Avenue of the Americas, 28th Floor, New York, NY 10019. The principal business address of CSC is 2101 East El Segundo Boulevard, Suite 302, El Segundo, CA 90245. The principal business address of each of the CSC Members is c/o Cove Street Capital, LLC, 2101 East El Segundo Boulevard, Suite 302, El Segundo, CA 90245. � (c) The principal business of SOA and CSC is providing investment advisory and investment management services. The principal occupation of Mr. Silvers is serving as President of SOA. The principal occupation of Mr. Nelson is serving as the Chief Financial Officer of SOA. The principal occupation of Ms. Conover is serving as the Chief Operating Officer and Chief Compliance Officer of SOA. The principal occupation of Mr. Konig is serving as a Director of SOA. � (d) During the last five years, none of the Reporting Persons nor, to the best of their knowledge, any of the SOA IC Members or CSC Members, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). � (e) During the last five years, none of the Reporting Persons nor, to the best of their knowledge, any of the SOA IC Members or CSC Members, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceedings was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
�	�
�	(f) Each of Mr. Silvers, Mr. Nelson, Ms. Conover, the SOA IC Members and the CSC Members is a citizen of the United States.
�	�
Item 3.	SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
�	�
�	The Reporting Persons used approximately $41 million (including brokerage commissions) in the aggregate to purchase the shares of Common Stock reported in this Schedule 13D.
�	�
�	The source of the funds used to acquire the Common Stock reported herein as beneficially owned by (i) SOA is the working capital of the funds and accounts managed by SOA; (ii) Mr. Silvers is the personal funds of Mr. Silvers; (iii) Mr. Nelson is the personal funds of Mr. Nelson; (iv) Ms. Conover is the personal funds of Ms. Conover; (v) Mr. Konig is the personal funds of Mr. Konig and (vi) CSC is the funds of CSC's clients, as a result of CSC causing its clients to acquire such Common Stock, including pursuant to CSC's discretionary authority to manage the assets of such clients. None of the shares of Common Stock reported herein were purchased with funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, trading or voting the securities.
�	�

�

Item 4.

PURPOSE OF TRANSACTION

�

�

The Reporting Persons initially acquired the Common Stock to which this Schedule 13D relates for investment purposes in the ordinary course of business. The Reporting Persons acquired the Common Stock because they believed that the Common Stock reported herein, when purchased, represented an attractive investment opportunity. � The Reporting Persons (other than SOA) and SpringOwl Asset Management LLC, a Delaware limited liability company and the sole member of SOA ("SOAM"), initially formed a group (the "Group") on November 6, 2014 and on November 13, 2014 entered into a Group Agreement (the "Group Agreement"), regarding certain conduct of the Group. The Group Agreement includes, but is not limited to, an agreement by the parties to (i) consult with each other with respect to all purchases and sales of Common Stock, (ii) to the extent the Group determines to do so, jointly deliver an advance notice of the Group's intention to nominate individuals for election as directors at the Issuer's 2015 annual meeting of stockholders in accordance with the Issuer's bylaws, and take any actions in furtherance thereof, and (iii) require the approval of each member of the Group of any filing with the Securities and Exchange Commission (the "SEC"), press release, white paper, stockholder communication or other public communication. Any party to the Group Agreement may terminate its obligations thereunder immediately upon written notice to all other parties. The description of the Group Agreement in this Schedule 13D is qualified in its entirety by reference to the full text of the Group Agreement, which is attached hereto as Exhibit 1 and is incorporated by reference herein. � In addition, the Reporting Persons and their representatives may have, from time to time, engaged in, and expect to continue to engage in, discussions with members of management and the board of directors of the Issuer (the "Board"), other current or prospective shareholders, industry analysts, existing or potential strategic partners or competitors, investment and financing professionals, sources of credit and other third parties regarding a variety of matters relating to the Issuer, which may include, among other things, the Issuers business, management, capital structure and allocation, corporate governance, Board composition and strategic alternatives and direction, and may take other steps seeking to bring about changes to increase shareholder value as well as pursue other plans or proposals that relate to or could result in any of the matters set forth in clauses (a)-(j) of Item 4 of Schedule 13D. � On October 10, 2014, representatives of SOA met with James DeCosmo, President and Chief Executive Officer of the Issuer ("Mr. DeCosmo"), Chris Nines, Chief Financial Officer of the Issuer, and Anna Torma, Senior Vice President, Corporate Affairs, to give a presentation expressing SOA's concerns related to the Issuer's performance and recommending that the Issuer immediately pursue the following actions to maximize shareholder value: (i) review strategic alternatives available to the Issuer with respect to its oil and gas business; (ii) evaluate and refine the Issuer's capital allocation strategy; and (iii) initiate certain changes to the Issuer's governance structure and Board composition. Additionally, SOA requested the opportunity to present its analysis to the Board at the Board's next regularly scheduled meeting.

�

�	On October 15, 2014, representatives of SOA held a conference call with Kenneth Jastrow, II, Chairman of the Board ("Mr. Jastrow"), during which they reiterated SOA's concerns and recommendations presented at the October 10, 2014 meeting. Later that day, SOA sent a letter to Mr. Jastrow and Mr. DeCosmo summarizing the points raised during the October 15, 2014 call with Mr. Jastrow and urging the Board to consider the initiatives suggested by SOA. In both the October 15, 2014 conference call and letter, SOA reiterated its request to make a presentation to the Board.
�	�
�	On October 24, 2014, representatives of SOA held another conference call with Mr. Jastrow to confirm his receipt of the October 15, 2014 letter and subsequent distribution of such letter to the entire Board, as well as to reiterate SOA's recommendations made during prior communications. Later that day, SOA sent a follow-up letter to Mr. Jastrow and Mr. DeCosmo reiterating the concerns and recommendations expressed in prior communications
�	�
�	Since February 2014, representatives of CSC have held meetings and conference calls with, and have corresponded with, the Issuer's management and the Board regarding similar concerns and recommendations for the Issuer.
�	�

�

�

�	�
�	The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors, including, without limitation, the outcome of any discussions referenced above, the Issuer's financial position, results and strategic direction, actions taken by the Issuer's management and the Board, price levels of the Common Stock, other investment opportunities available to the Reporting Persons, conditions in the securities market and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate, including, without limitation, exchanging information with the Issuer pursuant to appropriate confidentiality or similar agreements; proposing changes in the Issuer's operations, governance or capitalization; acquiring additional Common Stock and/or other equity, debt, notes, instruments or other securities of the Issuer (collectively, "Securities") or disposing of some or all of the Securities beneficially owned by them, in public market or privately negotiated transactions; entering into financial instruments or other agreements that increase or decrease the Reporting Persons' economic exposure with respect to their investment in the Issuer and/or otherwise changing their intention with respect to any and all matters referred to in Item 4 of Schedule 13D.
�	�
Item 5.	INTEREST IN SECURITIES OF THE ISSUER
�	�
�	(a)  (b) � The aggregate number of shares of Common Stock to which this Schedule 13D relates is 2,153,468 shares of Common Stock, constituting approximately 6.2% of the outstanding Common Stock. All percentages set forth herein are based upon a total of 34,958,270 shares of Common Stock outstanding as of November 3, 2014, as reported in the Issuer's Quarterly Report on Form 10-Q for the period ended September 30, 2014, filed with the SEC on November 6, 2014. � SOA has the power to vote and direct the disposition of the 344,224 shares of Common Stock held by the funds and accounts for which it acts as investment advisor. Mr. Silvers has the power to vote and direct the disposition of (i) 4,500 shares of Common Stock directly beneficially owned by Mr. Silvers; (ii) 700 shares of Common Stock held in a joint account with his wife; (iii) 100 shares of Common Stock held in an account for the benefit of his daughter; and (iv) 100 shares of Common Stock held in an account for the benefit of his son. Mr. Nelson has the power to vote and direct the disposition of the 3,000 shares of Common Stock directly beneficially owned by him. Laura Conover has the power to vote and direct the disposition of the 250 shares of Common Stock directly beneficially owned by her. Mr. Konig has the power to vote and direct the disposition of (x) the 1,200 shares of Common Stock directly beneficially owned by him and (y) 150 shares of Common Stock held in an account for the benefit of his wife. CSC has the power to vote and direct the disposition of the 1,799,244 shares of Common Stock held by the accounts for which it acts as investment advisor. � The Reporting Persons may be deemed to have formed a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. Collectively, the group (and each member thereof) may be deemed to have beneficial ownership of a combined 2,153,468 shares of Common Stock, constituting approximately 6.2% of the Issuer's outstanding shares of Common Stock. Each Reporting Person disclaims beneficial ownership of any shares of Common Stock beneficially owned by any other Reporting Person. � (c) Information concerning transactions in the Common Stock effected by the Reporting Persons during the past sixty days is set forth in Schedule I hereto and is incorporated herein by reference.

�

�	(d) As described in this Item 5, certain shares of Common Stock beneficially owned by Mr. Silvers are held in a joint account with his wife and accounts for the benefit of his children and certain shares of Common Stock beneficially owned by Mr. Konig are held in an account for the benefit of his wife. Other than as described herein, no person (other than the Reporting Persons) is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock reported herein.
�	�
�	(e) Not applicable.

�

�

�

�	�
Item 6.	CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
�	�
�	The Reporting Persons are parties to a Group Agreement, as defined and described in Item 4 above. A copy of the Group Agreement is attached as Exhibit 1 to this Schedule 13D and is incorporated by reference herein. � In addition, the Reporting Persons are parties to an agreement with respect to the joint filing of this Schedule 13D and any amendments thereto. A copy of such agreement is attached hereto as Exhibit 2 and is incorporated by reference herein. � Except as set forth herein, there are no contracts, understandings or relationships among the Reporting Persons or between the Reporting Persons and any other person with respect to the Common Stock.
�	�
Item 7.	MATERIAL TO BE FILED AS EXHIBITS
�	�
Exhibit	Description �
1	Group Agreement, dated November 13, 2014, by and among SOAM, Mr. Silvers, Mr. Nelson, Ms. Conover, Mr. Konig and CSC.
2	Agreement as to Joint Filing of Schedule 13D, dated November 14, 2014, by and among the Reporting Persons.

�

�

SIGNATURES

After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: November 14, 2014

�

�	�	SPRINGOWL associates LLC �		�
�	�	By: SpringOwl Asset Management LLC		�
�	�	�		�
�	�	By:	/s/ Andrew Wallach	�
�	�	�	Name: Andrew Wallach	�
�	�	�	Title: Managing Member	�
�	�	�		�
�	�	�		�
�	�	By:	/s/ Daniel Silvers	�
�	�	�	Daniel Silvers	�
�	�	�		�
�	�	�		�
�	�	By:	/s/ Andrew Nelson	�
�	�	�	Andrew Nelson	�
�	�	�		�
�	�	�		�
�	�	By:	/s/ Laura Conover	�
�	�	�	Laura Conover	�
�	�	�		�
�	�	�		�
�	�	By:	/s/ Barry Konig	�
�	�	�	Barry Konig	�
�	�	� cove street capital, llc �		�
�	�	/s/ Daniele Beasley		�
�	�	Name: Daniele Beasley		�
�	�	Title: Chief Compliance Officer; Member		�

�

�

Schedule I

TRANSACTIONS IN COMMON STOCK BY THE REPORTING PERSONS

�

The following tables set forth all transactions in the Common Stock effected by each of the Reporting Persons in the past sixty days. All such transactions were effected in the open market through a broker and all prices per share include commissions.

�

Ms. Conover

�

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
9/19/2014	150	18.26
9/19/2014	100	18.25

�

Mr. Nelson

�

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
9/19/2014	100	18.35
9/19/2014	100	18.34
9/19/2014	300	18.33
9/19/2014	100	18.26
9/19/2014	100	18.25
9/19/2014	400	18.24
9/19/2014	200	18.30
9/19/2014	200	18.29
9/19/2014	200	18.28
10/6/2014	100	17.05
10/6/2014	900	17.06
10/6/2014	300	17.07

�

Mr. Konig

�

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
9/19/2014	1,200	18.28
9/19/2014	150	18.33

�

CSC

�

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
9/24/2014	(425)	17.93
10/6/2014	47,729	17.04
10/7/2014	21,206	17.05
10/8/2014	3,875	17.00
10/9/2014	26,794	17.28
10/15/2014	4,840	15.82
10/24/2014	(1,110)	17.08
10/27/2014	4,500	17.05
11/10/2014	25,000	17.25
11/11/2014	(500)	17.37
11/12/2014	50,000	17.51

�

EXHIBIT 1

�

�

GROUP AGREEMENT

This GROUP AGREEMENT is made as of November 13, 2014 (the "Agreement"), by and between (i) SpringOwl Asset Management LLC ("SpringOwl"), Daniel Silvers (“Mr. Silvers”), Andrew Nelson (“Mr. Nelson”), Laura Conover (“Ms. Conover”) and Barry Konig (“Mr. Konig” and together with Mr. Silvers, Mr. Nelson and Ms. Conover (collectively with SpringOwl, the “SpringOwl Parties”) and (ii) Cove Street Capital, LLC ("Cove Street" and together with the SpringOwl Parties, the "Group" and individually, a "Group Member").

WHEREAS, the Group Members or entities managed by the Group Members, as applicable, are direct and/or beneficial stockholders of common stock of Forestar Group Inc., a Delaware corporation (the "Company"); and

WHEREAS, the Group wishes to enter into this Agreement pertaining to their investments in, and activities related to, the Company and its Securities (as defined below), including but not limited to potential nominations of individuals for election as directors at the Company's 2015 annual meeting of stockholders (the "2015 Annual Meeting") and the potential solicitation of proxies in connection therewith (the "Proxy Solicitation").

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:

1.����������������� SpringOwl represents to Cove Street that, as of the date hereof, the SpringOwl Parties or their respective affiliates are the beneficial owners of 354,224 shares of common stock of the Company, par value $1.00 per share (the “Common Stock”), within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") or as a result of any economic interest in such Common Stock by virtue of swaps, synthetics and other derivative securities or instruments, the value of which is solely and directly related to Common Stock (such instruments, together with Common Stock, hereinafter referred to as “Securities”) and Cove Street represents to SpringOwl that, as of the date hereof, it is the beneficial owner of 1,799,244 shares of Common Stock within the meaning of Rule 13d-3 under the Exchange Act or as a result of interests in other Securities held in accounts over which Cove Street exercises investment and voting discretion. The following table sets forth the schedule of the Securities described in this Section 1 for each of SpringOwl and Cove Street, and neither party beneficially owns or controls any other Securities except as set forth below:

Ownership (as of 11/6/14)	Quantity of Securities
Accounts managed by SpringOwl	344,224
Accounts not managed by SpringOwl (but where certain officers are the beneficial owners)	10,000
Accounts managed by Cove Street	1,799,244

�

2.����������������� To the extent that they so determine, the Group Members shall mutually agree to deliver an advance notice of the Group's intention to nominate individuals for election as directors at the 2015 Annual Meeting in accordance with the bylaws of the Company (a "Nomination Notice"). Following any submission of the Nomination Notice, the Group Members shall mutually agree on further actions to be taken with respect to the Proxy Solicitation, including but not limited to the filing of a proxy statement in connection therewith pursuant to Section 14 of the Exchange Act.

3.����������������� No Group Member or any of their respective affiliates shall acquire Securities of the Company if, as a result, the Group would be deemed to have beneficial ownership of 10% or more of any class of the outstanding equity of the Company without the prior written consent of each of SpringOwl and Cove Street.

4.����������������� Each Group Member agrees to generally consult with each of (i) SpringOwl and (ii) Cove Street, as applicable, regarding all purchases and sales of Securities of the Company by them or their affiliates. Subject to the terms of this Agreement, including, but not limited to Section 3 herein, nothing shall restrict any party’s right to purchase or sell Securities, as it deems appropriate, in its sole discretion; provided that all such purchases or sales are made in compliance with all applicable securities laws. Subject to the terms of this Agreement, each Group Member retains sole discretion over acquisitions and dispositions of, and voting authority over, the Securities that such Group Member holds or beneficially owns. Each Group Member shall advise the other Group Members in writing by 4:30 P.M. Eastern Time on the date that its ownership of Securities, including any purchases or sales thereof, changes. Notwithstanding anything to the contrary herein, no Group Member shall: (i) sell or otherwise dispose of any Securities of the Company without the prior consultation with each of (x) SpringOwl and (y) Cove Street, as applicable and if the Group Member receives any bids that would enable the Group Member to sell, the Group Member will make this bid available to all Group Members to participate in such sale on a pro rata basis, as determined by each such party’s portion of the aggregate Securities owned by such parties and their affiliated funds and discretionary accounts immediately prior to such acquisition, or (ii) acquire any Securities of the Company without providing each of (x) SpringOwl and (y) Cove Street, as applicable, an opportunity to participate in such acquisition on a pro rata basis, as determined by each such party’s portion of the aggregate Securities owned by such parties and their affiliated funds and discretionary accounts immediately prior to such acquisition.

5.����������������� Either SpringOwl, on behalf of all of the SpringOwl Parties, on the one hand, or Cove Street, on the other hand, may terminate this Agreement and its obligations hereunder, and thereby terminate the group formed hereby, immediately upon written notice to the other. This Agreement will automatically terminate on the date that is the earliest of (i) 30 days after the date that no Group Member owns any Securities of the Company, (ii) the termination of any Proxy Solicitation or (iii) the completion of the 2015 Annual Meeting, including any adjournment thereof. Upon termination pursuant to this section, all obligations provided for in this Agreement shall terminate, except for the obligations provided for in Section 6 and the indemnification obligations in Section 7 of this Agreement.

6.����������������� Each of SpringOwl and Cove Street agree to pay their pro rata portion of all expenses (as determined by each of SpringOwl and Cove Street’s respective portion of the aggregate Securities beneficially owned by each of SpringOwl and Cove Street at the time an expense is incurred), including legal and financial advisory expenses incurred by the Group with respect to any actions taken by the Group or any Group Member pursuant to this Agreement, including any Proxy Solicitation, subject to certain adjustments or limitations, as more fully described in Exhibit A hereto.

7.����������������� Each Group Member agrees that any filing with the Securities and Exchange Commission (including without limitation any filing required by Section 13(d), Section 14 or Section 16 of the Exchange Act), press release, white paper, stockholder communication or other public communication proposed to be made or issued by the Group or any of the Group Members in connection with the Group's activities shall be made or issued with the mutual agreement of the Group Members. Each Group Member agrees that any Schedule 13D (including any amendment thereto) under the Exchange Act with respect to the Company ("Schedule 13D") shall be filed jointly by the Group Members. Each of the Group Members agrees that it shall be responsible for the completeness and accuracy of the information concerning it contained in any filing pursuant to Section 13(d), Section 14 or Section 16 of the Exchange Act or any filing pursuant to the Hart-Scott-Rodino Act Antitrust

Improvements Act of 1976 and each of SpringOwl, on behalf of the SpringOwl Parties, and Cove Street hereby agrees to indemnify Cove Street and the SpringOwl Parties, respectively, and their respective affiliates from and against any losses, damages, costs, expenses (including any reasonable and documented attorneys' fees), fines, penalties, disbursements and amounts paid in settlement arising out of any failure with respect to the completeness or accuracy of such information; provided, however, that neither SpringOwl nor Cove Street shall enter into any settlement agreement without the prior written consent of the other unless such settlement includes (i) no admission of liability or guilt by such other party and (ii) an unconditional release of such other party or parties, as applicable, from any and all liability or obligation in respect of such claim. The Group Members shall not be responsible for the completeness and accuracy of the information concerning any other Group Member contained in such filings, except to the extent that it knows or has reason to believe that such information is inaccurate, in which case, no indemnification for such Group Member will be available with respect to such inaccuracy. The right of indemnification provided for in this Section 7 shall continue after the termination of the Agreement, but only for events that occurred prior to such termination and subsequent to the date hereof.

8.����������������� The relationship of the parties hereto shall be limited to carrying on the activities of the Group in accordance with the terms of this Agreement. Such relationship shall be construed and deemed to be for the sole and limited purpose of carrying on such activities as described herein. Nothing herein shall be construed to authorize any party to act as an agent for any other party or to create a joint venture or partnership.

9.����������������� This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute but one and the same instrument, which may be sufficiently evidenced by one counterpart.

10.������������� This Agreement shall be interpreted in accordance with and governed by the laws of the State of New York. If any provision of this Agreement would be invalid under applicable law, then such provision shall be deemed modified to the extent necessary to render it valid while most nearly preserving its original intent. In the event of any dispute among the parties hereto arising out of the provisions of this Agreement or their investment in the Company, the parties hereto consent and submit to the exclusive jurisdiction of the Federal and State Courts in the State of New York.

11.������������� Except as otherwise set forth in this Agreement, this Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted successors and assigns, and nothing herein, express or implied, is intended to or shall confer upon any other person or entity, any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. No party hereto may assign any of its rights or obligations under this Agreement to any other person without the prior written consent of the other parties hereto.

12.������������� Each Group Member acknowledges that Schulte Roth & Zabel LLP ("SRZ") shall act as legal counsel for the Group in connection with the Proxy Solicitation, and each of SpringOwl and Cove Street hereby waives any conflicts in connection with such representation. Each Group Member further agrees that, if any dispute should arise between the Group Members and SRZ actively represents all Group Members at the time of such dispute, then SRZ shall withdraw from representing Cove Street and Cove Street shall waive any conflict with SRZ's continued representation of SpringOwl.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the date first written above.

�

�	�	SpringOwl Asset Management, LLC		�
�	�	�		�
�	�	By:	/s/ Andrew Wallach	�
�	�	Name: Andrew Wallach		�
�	�	Title: Managing Member		�
�	�	�		�
�	�	/s/ Daniel Silvers		�
�	�	Daniel Silvers		�
�	�	�		�
�	�	/s/ Andrew Nelson		�
�	�	Andrew Nelson		�
�	�	�		�
�	�	/s/ Laura Conover		�
�	�	Laura Conover		�
�	�	�		�
�	�	/s/ Barry Konig		�
�	�	Barry Konig		�
�	�	�		�
�	�	�		�
�	�	�		�
�	�	Cove Street Capital, LLC �		�
�	�	By:	/s/ Jeff Bronchick	�
�	�	Name: Jeff Bronchick		�
�	�	Title: Managing Member		�

�

�

EXHIBIT 2

JOINT FILING AGREEMENT
PURSUANT TO RULE 13d-1(k)

The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate.

Date: November 14, 2014

�	�	SPRINGOWL associates LLC �		�
�	�	By: SpringOwl Asset Management LLC		�
�	�	�		�
�	�	By:	/s/ Andrew Wallach	�
�	�	�	Name: Andrew Wallach	�
�	�	�	Title: Managing Member	�
�	�	�		�
�	�	�		�
�	�	By:	/s/ Daniel Silvers	�
�	�	�	Daniel Silvers	�
�	�	�		�
�	�	�		�
�	�	By:	/s/ Andrew Nelson	�
�	�	�	Andrew Nelson	�
�	�	�		�
�	�	�		�
�	�	By:	/s/ Laura Conover	�
�	�	�	Laura Conover	�
�	�	�		�
�	�	�		�
�	�	By:	/s/ Barry Konig	�
�	�	�	Barry Konig	�
�	�	� � cove street capital, llc �		�
�	�	/s/ Daniele Beasley		�
�	�	Name: Daniele Beasley		�
�	�	Title: Chief Compliance Officer; Member		�

�

�

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Marriott Vacations Worldwide (VAC) ticks higher on new activist investor
• Forestar Reports Fiscal 2024 Second Quarter Results
• SmallRig has unveiled a line of innovative products, co-designed with professional creators at 2024 NAB Show