FIRST AMENDMENT TO THE FORESTAR REAL ESTATE GROUP INC. DIRECTORS' FEE DEFERRAL PLAN

Exhibit 10.16

FIRST AMENDMENT TO THE
FORESTAR REAL ESTATE GROUP INC.
DIRECTORS’ FEE DEFERRAL PLAN

     This First Amendment (this “ First Amendment ”) to the Forestar Real Estate Group Inc. Directors’ Fee Deferral Plan (as amended, the “ Plan ”) is made by Forestar Group Inc. (f/k/a Forestar Real Estate Group Inc.), a Delaware corporation (the “ Company ”), pursuant to the authorization of the Board of Directors of the Company (the “ Board ”). Capitalized terms used but not defined herein shall have the meanings given to them in the Plan.

      WHEREAS , the Board deems it to be in the Company’s best interest to amend the Plan to provide that the form of payment with respect to Restricted Stock Units will be determined by the Board in its discretion and will be in the form of either shares of Common Stock or cash (or a combination thereof);

      WHEREAS , Section 6.1 of the Plan authorizes the Board to amend the Plan;

      WHEREAS , because Restricted Stock Units and any shares of Common Stock paid with respect to Restricted Stock Units will be issued under the Stock Plan, which has been approved by the stockholders of th