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As filed with the Securities and Exchange Commission on January 28, 1999.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________________
SAUL CENTERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
Maryland 52-1833074
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
</TABLE>
8401 Connecticut Avenue
Chevy Chase, Maryland 20815
(301) 986-6000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
Henry Ravenel
Saul Centers, Inc.
8401 Connecticut Avenue
Chevy Chase, Maryland 20815
(Name and Address of Agent for Service)
(301) 986-6207
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copies to:
Thomas H. McCormick, Esq.
Shaw Pittman Potts & Trowbridge
2300 N Street, N.W.
Washington, D.C. 20037
Approximate date of commencement of proposed sale to the public: As soon as
possible after the effective date of this registration statement.
If the only securities being registered on this form are to be offered pursuant
to dividend or interest reinvestment plans, check the following box. [X]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Registered Aggregate Price Per Unit Aggregate Offering Price Amount of
to be Registered (1)(3) (2) (2) Registration Fee (3)
- - -------------------- -------------------------- -------------------------- --------------------------- --------------------
- - ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 1,000,000 $15.00 $15,000,000 $4,170.00
par value per share
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</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Saul Centers, Inc. Dividend
Reinvestment and Stock Purchase Plan by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of the
Registrant's outstanding shares of Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c), based on the average of high and low reported
sales price on January 26, 1999 on the New York Stock Exchange.
(3) Does not include 96,907 shares of Common Stock, $.01 par value per share,
previously registered under Registration Statement No. 33-80291. A registration
fee of $ 455.46 was previously paid with respect to such amount.
Pursuant to Rule 429 of the General Rules and Regulations under the
Securities Act of 1933, the Prospectus included herein also relates to
Registration Statement No. 33-80291.
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INTRODUCTORY STATEMENT NOT FORMING PART OF PROSPECTUS
This registration statement relates to the registration of additional
shares of the same class as other securities for which a registration statement
filed on this form relating to the Saul Centers, Inc. Dividend Reinvestment and
Stock Purchase Plan is effective (No. 33-80291). The contents of registration
statement No. 33-80921 are hereby incorporated by reference.
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PROSPECTUS
SAUL CENTERS, INC.
8401 Connecticut Avenue
Chevy Chase, Maryland 20815
(301) 986-6207
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
1,000,000 Shares of Common Stock
$.01 Par Value Per Share
HOW TO ENROLL
. If you are a stockholder of Saul Centers, Inc. or a holder of limited
partnership interests in Saul Holdings Limited Partnership and you wish to
enroll in the Company's Dividend Reinvestment and Stock Purchase Plan, then
you should fill out the enrollment form accompanying this Prospectus.
. For more details, see pages 10 through 12 of this Prospectus.
HIGHLIGHTS OF THE PLAN
. Any holder of record of common stock of the Company (Common Stock), or holder
of limited partnership interests in our operating partnership may elect to
participate in the Plan.
. The Plan provides a simple and convenient method for dividends and partnership
distributions to be automatically invested to purchase shares of Common Stock.
. The purchase price of each share of Common Stock will be 97% of the closing
price of Common Stock on the New York Stock Exchange. (See the response to
question 13 - "What is the price of Common Stock that will be purchased for a
participant?" on page 11).
. You may automatically reinvest all or a portion of your cash dividends or
partnership distributions to purchase shares of Common Stock.
. All cash dividends paid on the whole or fractional shares of Common Stock
obtained under the Plan will be reinvested automatically to purchase shares of
Common Stock.
Please retain this Prospectus for future reference.
Carefully consider the Risk Factors beginning on page 2 of this Prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this Prospectus is January __, 1999.
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THE COMPANY
Saul Centers, Inc., or the Company, is incorporated under the laws of
Maryland and conducts all of its activities through subsidiaries and limited
partnerships of which the Company or one of its subsidiaries is the sole general
partner. Our primary business is the ownership, operation, management, leasing,
acquisition, development and financing of community and neighborhood shopping
centers and, to a limited extent, other commercial properties, primarily in the
Mid-Atlantic region. As of December 31, 1998, these properties included 31
operating shopping centers and three primarily office buildings. For further
information about the operation of these properties and the Company, see our
most recent annual report and quarterly reports, incorporated by reference
elsewhere in this prospectus. We have elected to be taxed as a real estate
investment trust, or a REIT, for federal income tax purposes commencing with its
taxable period ended December 31, 1993, and we intend to continue operating so
as to qualify as a REIT.
RISK FACTORS
General Real Estate Investment Risks
General. Investments in our Company will be subject to the risks incident
to the ownership and operation of commercial real estate. These include the
risks normally associated with changes in general or local market conditions,
competition for tenants, changes in market rental rates, inability to collect
rent due to bankruptcy or insolvency of tenants or otherwise, and the need to
periodically renovate, repair and release space and to pay the related costs.
Lease Expiration and Re-Lease of Space. We will be subject to the risks
that, upon expiration, leases for space in our properties not be renewed, the
space may not be re-leased or the terms of renewal or re-lease (including the
cost of required renovations or concessions to tenants) may be less favorable
than current lease terms. Our operating cash flow would decrease if we were
unable to promptly re-lease all or a substantial portion of this space, if the
rental rates upon such re-lease were significantly lower than expected, or if
reserves for costs of re-leasing prove inadequate.
Dependence on Major Tenants. Giant Food leases 9.8 percent of the
aggregate gross leasable area of our shopping center properties, and, for the
year ended December 31, 1997, accounted for approximately 9.2 percent of the
aggregate base and percentage rent from our shopping center properties
(approximately 6.3 percent of the aggregate annual rental revenues from our
properties as a whole). In addition, for the year ended December 31, 1997, the
General Services Administration ("GSA") accounted for approximately 10.5% of the
aggregate annual rental revenues from our properties, as a whole, primarily from
office properties. The success of our properties depends, to a substantial
degree, upon the success of their anchors and the default or financial distress
of Giant Food, GSA, or any other anchor could cause substantial property
vacancies, which would reduce our operating cash flow until such properties are
re-leased.
Changes in Laws. Costs resulting from changes in real estate taxes
generally may be passed through to tenants and, to such extent, will not affect
us. Increases in income, service or transfer taxes, however, generally are not
passed through to tenants under our portfolio's leases
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and may adversely affect our operating cash flow and our ability to make
distributions to stockholders. Similarly, changes in laws increasing the
potential liability for environmental conditions existing on properties or
increasing the restrictions on discharges or other conditions may result in
significant unanticipated expenditures, which would adversely affect our
operating cash flow and our ability to make distributions to stockholders.
Investments in Mortgages. Although we currently have no plans to invest in
mortgages, we may, in the future, do so. If we were to invest in mortgages, we
would be subject to the risks of such investment, which include the risk that
borrowers may not be able to make debt service or principal payments when due,
that the value of mortgaged property may be less than the amount owed, and that
interest rates payable on the mortgages may be lower than our cost of funds.
Our operating cash flow and our ability to make distributions to our
stockholders could be adversely affected if we invest in mortgages and any of
the above occurs.
Risks of Real Estate Development. We intend to engage in selective property
development. We have engaged limited material new property development activity
during the last five years, although we have engaged in extensive renovation and
redevlopment of many of our shopping centers. Real estate development generally
involves significant risks in addition to those involved in the ownership and
operation of established properties, including the risks that financing may not
be available on favorable terms, that construction may not be completed on
schedule, resulting in increased debt service expense and construction costs,
that long-term financing may not be available on completion of construction, and
that properties may not be leased on profitable terms. Our operating cash flow
and our ability to make distributions to stockholders could be adversely
affected if we engage in real estate development, and if any of the above
occurs.
Possible Liability Relating to Environmental Matters. Under various
federal, state and local laws, ordinances and regulations, an owner or operator
of real property may become liable for the costs of removal or remediation of
certain hazardous or toxic substances on or in such property. Such liability
may be imposed without regard to whether the owner or operator knew of, or was
responsible for, the presence of such hazardous or toxic substances. The costs
of any required remediation or removal of such substances may be substantial and
the owner's liability as to any property is generally not limited under such
laws, ordinances and regulations and could exceed the value of the property
and/or the aggregate assets of the owner. The presence of, or the failure to
properly remediate, such substances, when released, may adversely affect the
owner's ability to sell the affected real estate or to borrow using such real
estate as collateral. We have not been notified by any governmental authority
of any non-compliance, liability or other claim in connection with any of our
portfolio properties and we are not aware of any other environmental condition
with respect to any of our portfolio properties that management believes would
have a material adverse effect on our business, assets or results of operations.
However, management is aware of the presence of minor amounts of asbestos
containing materials at many of our portfolio properties that management
believes generally are in good condition and do not currently constitute a
hazard. The presence of such asbestos containing materials is in compliance
with current law. We do not believe that these conditions involving asbestos
containing materials, in the aggregate, are material. A substantial proportion
of our portfolio properties have been subjected to environmental assessments
within the last five years. The
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updates of the environmental assessments describe the procedures performed and
present the findings and recommendations, if any, resulting therefrom. None of
these environmental assessments or updates has revealed any environmental
liability that our management believes would have a material adverse effect on
our business, assets or results of operations, nor is management aware of any
such liability. No assurance, however, can be given that these reports reveal
all potential environmental liabilities, that no environmental liabilities may
have developed since such environmental assessments were prepared, and that no
prior owner created any material environmental condition not known to us or the
independent consultant preparing such assessments or that future uses or
conditions, including, without limitation, changes in applicable environmental
laws and regulations.
Uninsured Losses. We currently carry comprehensive liability, fire, flood,
extended coverage and rental loss insurance with respect to our portfolio
properties, with policy specification and insured limits customarily carried for
similar properties. There are, however, certain types of losses, as from wars
or earthquakes, that may be either uninsurable or not economically insurable.
Should an uninsured loss occur, we could lose both our capital invested in, and
anticipated profits from, any affected portfolio property.
Taxation of Saul Centers
Failure to Qualify as a REIT. We intend to operate so as to maintain
qualification as a REIT under the Internal Revenue Code, or the Code. A REIT
generally is not subject to federal income tax, provided it makes certain
distributions to its stockholders and meets certain organizational and other
requirements. Although we currently qualify as a REIT under the Code, no
assurance can be given that we will so qualify or that we will continue to
qualify in the future. No assurance can be given that legislation, new
regulations, administrative interpretations or court decisions will not
significantly change the tax laws or their application with respect to
qualification as a REIT or the federal income tax consequences of such
qualification.
If we fail to qualify as a REIT, we will be subject to federal income tax,
including any applicable alternative minimum tax, on our taxable income at
regular corporate rates. In addition, unless entitled to relief under certain
statutory provisions, we will be disqualified from treatment as a REIT for the
four taxable years following the year during which qualification is lost. The
additional tax liability resulting from the failure to so qualify would
significantly reduce funds available for distribution to our stockholders.
Other Tax Liabilities. Even if we qualify as a REIT for federal income tax
purposes, we will be subject to certain federal, state and local taxes.
No Limitation on Debt
We currently have a general policy of limiting our borrowings to 50 percent
of asset value, i.e., the value of our portfolio, as determined by our board of
directors (the Board of Directors) by reference to the aggregate annualized cash
flow from our portfolio. Our organizational documents contain no limitation on
the amount or percentage of indebtedness which we may incur. Therefore, the
Board of Directors could alter or eliminate the current limitation on borrowing
at any time. If our debt capitalization policy were changed, we could become
more highly leveraged, resulting in an increase in debt service that could
adversely
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affect our operating cash flow and our ability to make expected distributions to
stockholders, and in an increased risk of default on our obligations.
We have established our debt capitalization policy relative to asset value,
which is computed by reference to the aggregate annualized cash flow from the
properties in our portfolio rather than relative to book value, a ratio that is
frequently employed. We have used a measure tied to cash flow because we
believe that the book value of our portfolio properties, which is the
depreciated historical cost of the properties, does not accurately reflect our
ability to borrow and to meet debt service requirements. Asset value, however,
is somewhat more variable than book value, and may not at all times reflect the
fair market value of the underlying properties. Although we will consider
factors other than asset value in making decisions regarding the incurrence of
debt (such as the purchase price of properties to be acquired with debt
financing, the estimated market value of properties upon refinancing, and the
ability of particular properties and our ability as a whole to generate cash
flow to cover expected debt service), there can be no assurance that the ratio
of debt to asset value, or to any other measure of asset value, will be
consistent with the expected level of distributions to stockholders.
Possible Conflicts of Interest
Relationship with The Saul Organization. We will acquire, develop, own and
manage shopping center properties and will own and manage other commercial
properties, and, subject to certain exclusivity agreements and rights of first
refusal with the Company, The Saul Organization (comprised of the B.F. Saul Real
Estate Investment Trust, the B.F. Saul Company, Chevy Chase Bank, F.S.B., and
other affiliated entities), will continue to develop, acquire, own and manage
commercial properties and own land suitable for development as, among other
things, shopping centers and other commercial properties. Therefore, conflicts
could develop in the allocation of acquisition and development opportunities
with respect to commercial properties other than shopping centers and with
respect to development sites, as well as potential tenants and other matters,
between us and The Saul Organization. The agreement relating to exclusivity and
the right of first refusal between us and The Saul Organization (known as the
Exclusivity Agreement and Right of First Refusal) generally require The Saul
Organization to conduct its shopping center business exclusively through us and
to grant us a right of first refusal to purchase commercial properties and
development sites that become available to The Saul Organization. The Saul
Organization has granted the right of first refusal to us, acting through our
independent Directors, in order to minimize potential conflicts with respect to
commercial properties and development sites. We and The Saul Organization have
entered into the Exclusivity Agreement in order to eliminate conflicts with
respect to shopping centers. We do not intend to purchase any additional
properties from Chevy Chase Bank, except to the extent that such purchases may
arise pursuant to the Exclusivity Agreement and Right of First Refusal.
In addition, conflicts may arise between us and The Saul Organization in
enforcement of the agreements, including those relating to the transfer of
portfolio properties from The Saul Organization to us and to the transfer of
related management functions, being entered into in connection with the
formation and of the leases between us and Chevy Chase Bank. In order to
minimize these conflicts, matters and actions relating to these agreements and
leases will be considered and approved by the independent Directors.
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Reliance on Senior Executives and Conflicts as to Management Time. Our
success will be largely dependent upon the efforts of a small number of senior
executives, including B. Francis Saul II. The loss of the services of one or
more of these key executives could have a materially adverse effect on the
Company. The Saul Organization will continue to engage in commercial real
estate activities. Three of our officers, one of whom is Mr. Saul, also are
affiliated with The Saul Organization and conflicts may develop as to the
allocation of their management time.
Conflicts Based on Individual Tax Considerations. The tax basis of members
of The Saul Organization in our portfolio properties which were contributed to
certain partnerships in our formation was substantially less than the fair
market value thereof at the time of their contribution. In the event of our
disposition of such properties, a disproportionately large share of the gain for
federal income tax purposes would be allocated to members of The Saul
Organization. In addition, any future reduction of the level of our debt after
the initial reduction, or any release of the guarantees or indemnities with
respect thereto by members of The Saul Organization, would cause members of The
Saul Organization to be considered, for federal income tax purposes, to have
taxable constructive distributions which could be in excess of their bases in
their Operating Partnership interests. Consequently, it is in the interests of
The Saul Organization that we continue to hold the contributed portfolio
properties, that a portion of our debt remain outstanding or be refinanced and
that The Saul Organization guarantees and indemnities remain in place, in order
to defer the taxable gain to members of The Saul Organization. Therefore, The
Saul Organization may seek to cause us to retain the contributed portfolio
properties, and to refrain from reducing our debt or releasing The Saul
Organization guarantees and indemnities, even when such action may be in the
interests of some, or a majority, of our stockholders. In order to minimize
these conflicts, decisions as to sales of the portfolio properties, or any
refinancing, repayment or release of guarantees and indemnities with respect to
our debt, will be made by the independent Directors.
Ability to Block Certain Actions. Under applicable law and the operating
partnership agreement of Saul Holdings Limited Partnership, our operating
partnership, consent of the limited partners is required to permit certain
actions, including the sale of all or substantially all of the Operating
Partnership's assets. Therefore, members of The Saul Organization, through
their status as limited partners in the operating partnership, could prevent the
taking of any such actions, even if they were in the interests of some, or a
majority, of our stockholders.
Influence of Officers, Directors and Significant Stockholders
Our officers of will include B. Francis Saul II and certain other officers
or directors of members of The Saul Organization. Persons associated with The
Saul Organization constitute five of the eleven members of our Board of
Directors. Thus, these stockholders will be in a position to exercise
significant influence over our affairs, which influence might not be consistent
with the interests of some, or a majority, of our stockholders.
Limitations on Acquisition and Change in Control
Our Articles of Incorporation and Bylaws contain a number of provisions,
and our Board of Directors has taken certain actions, that could impede a change
of our control. These provisions include the following:
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Ownership Limit. Our ownership limits may have the effect of precluding
acquisition of control of the Company by a third party without consent of the
Board of Directors, even if a change in control were in the interest of some, or
a majority, of the stockholders.
Staggered Board. Our Board of Directors has three classes of directors.
The terms of the these classes will expire in 1999, 2000 and 2001, respectively.
Directors for each class will be chosen for three-year terms upon the expiration
of the current class' term, beginning in 1999. The staggered terms for
directors may adversely affect the stockholders' ability to change control of
the Company, even if a change in control were in the interest of some, or a
majority, of stockholders.
Preferred Stock. The Articles of Incorporation authorize the Board of
Directors to issue up to 1,000,000 shares of preferred stock and to establish
the preferences and rights of any preferred shares issued. The issuance of
preferred stock could have the effect of delaying or preventing a change of
control of the Company, even if a change in control were in the interest of
some, or a majority, of stockholders.
Statutory Provisions. Under the Maryland General Corporation Law, unless
exempted by action of the board of directors, certain "business combinations"
between a Maryland corporation and a stockholder holding 10 percent or more of
the corporation's voting securities, an Interested Stockholder, are subject to
certain conditions, including approval by a supermajority stockholder vote, and
may not occur for a period of five years after the stockholder becomes an
Interested Stockholder. The Board of Directors has exempted from these
statutory provisions any business combination with a member of The Saul
Organization or any person acting in concert therewith. Therefore, a business
combination with any person or group other than a member of The Saul
Organization or a group including such a member may be impeded or prohibited,
even if such a combination may be in the interest of some, or a majority, of our
stockholders.
The Maryland General Corporation Law also provides that so-called "control
shares" may be voted only upon approval of two-thirds of the outstanding stock
of the corporation excluding the control shares and shares held by affiliates of
the corporation. Under certain circumstances, the corporation also may redeem
the control shares for cash and, in the event that control shares are permitted
to vote, the other stockholders of the corporation are entitled to appraisal
rights. The Board of Directors has exempted from these control share provisions
acquisitions involving The Saul Organization, directors, officers and our
employees and any person approved by the Board of Directors, in its discretion.
Therefore, a control share acquisition by any person not exempted by the Board
of Directors could be impeded, and the attempt of any such transaction could be
discouraged, even if it were in the best interest of some, or a majority, of our
stockholders.
Possible Adverse Consequences of Limits on Ownership of Shares
In order to maintain our qualification as a REIT, not more than 50 percent
in value of our outstanding equity securities may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities). We generally have restricted beneficial and constructive
ownership of more than 5 percent in value of the issued and outstanding equity
securities by any single stockholder with the exception of members of The Saul
Organization.
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The Board of Directors may waive the ownership limit if it is satisfied, based
upon the advice of tax counsel, that ownership in excess of this limit will not
jeopardize our status as a REIT. A purported transfer of shares to a person who,
as a result of the transfer, would violate the ownership limit will be void.
Shares acquired in violation of the ownership limit may be redeemed by us for
the lesser of the price paid or the average closing price of the Common Stock
for the ten trading days preceding redemption.
Changes in Policies
Our major policies, including our policies with respect to acquisitions,
financing, debt capitalization and distributions, have been determined by the
Board of Directors. Although it has no present intention to do so, the Board of
Directors may alter or revise these and other policies from time to time without
a vote of the stockholders. We cannot, however, change our policy of seeking to
maintain our qualification as a REIT without the approval of stockholders.
Accordingly, stockholders will have no control over changes in our policies
other than our policy of maintaining our qualification as a REIT.
DESCRIPTION OF PLAN
The Dividend Reinvestment and Stock Purchase Plan, or the Plan, of the
Company provides holders of record of the Company's Common Stock and the holders
of limited partnership interest in Saul Holdings Limited Partnership (a
Partnership Interest), the Maryland limited partnership of which the Company is
the general partner and through which the Company operates substantially all of
its assets and derives substantially all of its revenue, with a simple and
convenient method of investing in additional shares of Common Stock at a 3%
discount from market price without payment of any brokerage commission, service
charges or other expenses.
Participants in the Plan may have cash dividends on some or all of the
Common Stock owned by them automatically invested in additional shares of Common
Stock, and some or all of the cash distributions received on a Partnership
Interest automatically invested in shares of Common Stock.
Under the Plan, First Chicago Trust Company of New York, or any successor
bank, trust company or other entity as may from time to time be designated by
the Company (the "Agent"), will buy newly issued Common Stock from the Company.
The purchase price of Common Stock will be 97% of the closing price on the New
York Stock Exchange (Consolidated Tape Transactions) for the Common Stock on the
investment date. The investment dates will coincide with the dividend payment
date on the Common Stock (each an "Investment Date"). The Company will receive
the proceeds of the sale of newly issued Common Stock
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The following questions and answers constitute the Plan of the Company.
Purpose and Advantages
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of record of the Company's
Common Stock ("Shareholders") and holders of record of a Partnership Interest
("Limited Partners") with a simple and convenient method of investing in shares
of Common Stock at a 3% discount from market price without payment of any
brokerage commission, service charges or other expenses.
2. How may eligible Shareholders and Limited Partners purchase Common Stock
under the Plan?
Holders of record of Common Stock may have all of the cash dividends on all
or part of their Common Stock automatically reinvested in additional shares of
Common Stock . Holders of record of a Partnership Interest may have all of the
cash distributions on all or part of their Partnership Interest automatically
invested in shares of Common Stock.
3. What are the advantages of the Plan?
Participants in the Plan may reinvest all or a portion of their cash
dividends and partnership distributions in shares of Common Stock at a discount
of 3% from the closing price of the shares on the Investment Date, as more fully
explained in the answer to Question 13. In addition, participants in the Plan
are not required to pay brokerage commissions or other expenses in connection
with the purchase of shares of Common Stock under the Plan. The Plan permits
fractional and whole shares of Common Stock to be purchased with the dividends
and partnership distributions, and dividends on all whole or fractional shares
of Common Stock credited to participants' accounts are automatically reinvested
in additional whole or fractional shares of Common Stock. Participants also
avoid the necessity of safekeeping certificates representing the shares of
Common Stock credited to their accounts, and have increased protection against
loss, theft or destruction of such certificates. Furthermore, underlying
certificates of shares of Common Stock may be deposited for safekeeping as more
fully explained in the answer to Question 18. A regular statement for each
account will provide a participant with a record of each transaction.
Administration
4. Who administers the Plan?
First Chicago Trust Company of New York, as Agent for the participants,
administers the Plan, keeps records, sends statements of account to participants
and performs other duties relating to the Plan. All costs of administering the
Plan are paid by the Company. Common Stock purchased under the Plan is issued
in the name of the Agent or its nominee, as Agent for the participants in the
Plan. As record holder of the Common Stock held in participants' accounts under
the Plan, the Agent will receive dividends on all Common Stock held by it on the
dividend record date, will credit such dividends to the participants' accounts
on the basis of whole and fractional shares of Common Stock held in these
accounts, and will automatically reinvest such dividends in additional Common
Stock. The Agent makes all purchases of Common Stock under the Plan.
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The following address may be used to obtain information about the Plan:
First Chicago Trust Company of New York
Attention: Dividend Reinvestment Department
P.O. Box 2598
Jersey City, New Jersey 07303-2598
If you are already a participant, be sure to include your account number(s)
in any correspondence.
Eligibility
5. Who is Eligible to become a participant?
Any holder of record of Common Stock and any holder of record of a
Partnership Interest is eligible to become a participant in the Plan. If a
beneficial owner has Common Stock registered in a name other than his or her
own, such as that of a broker, bank nominee or trustee, the beneficial owner may
be able to arrange for that entity to participate in the Plan on behalf of the
beneficial owner. Shareholders should consult directly with the entity holding
their Common Stock to determine if they can enroll in the Plan. If not, the
Shareholder should request his or her bank, broker or trustee to transfer some
or all of his or her Common Stock into the beneficial owner's own name in order
to participate in the Plan. Shareholders who are citizens or residents of a
country other than the United States, its territories and possessions, should
make certain that their participation does not violate local laws governing such
things as taxes, currency and exchange controls, stock registration, and foreign
investments.
Participation by Shareholders and Limited Partners
6. How does an eligible Shareholder or Limited Partner become a participant?
A holder of record of either Common Stock or a Partnership Interest, or
both, may elect to become a participant in the Plan at any time. If you wish to
become a participant, all you need to do is complete the enclosed Authorization
Form and mail it to First Chicago Trust Company of New York (see Question 4 for
address). If the Common Stock or a Partnership Interest, as the case may be, is
registered in more than one name (e.g. joint tenants, trustees, etc.), all
registered holders must sign the Authorization Form. Authorization Forms may be
obtained at any time by writing to the Agent.
7. What does the Authorization Form provide?
By signing an Authorization Form, a Shareholder or Limited Partner may
become a participant, and by checking the appropriate boxes on the Authorization
Form the Shareholder or Limited Partner may choose among the following
investment options for that account:
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<PAGE>
For a Shareholder:
-- To reinvest automatically all of the cash dividends on all shares of
Common Stock registered in the participant's name in shares of Common
Stock; or
-- To reinvest automatically all of the cash dividends on some of the
shares of Common Stock registered in the participant's name in shares
of Common Stock.
For a Limited Partner:
-- To invest automatically all of the cash distributions on the
Partnership Interest registered in the participant's name in shares of
Common Stock; or
-- To invest automatically some of the cash distributions on the
Partnership Interest registered in the participant's name in shares of
Common Stock.
A participant may change his or her election by completing and signing a
new Authorization Form and returning it to the Agent. (See Question 4 for the
Agent's address.) Any change of election concerning the reinvestment of
dividends or partnership distributions must be received by the Agent at least
three business days prior to the record date for a dividend payment date (see
Question 8) in order for the change to become effective with that payment. If a
participant selects one or both options in Step # 1 of the Authorization Form
but does not make a corresponding selection in Step # 2 or # 3, as applicable,
the participant will be deemed to have selected to reinvest all cash dividends
on all shares of Common Stock or to invest all cash distributions on a
Partnership Interest, as the case may be, registered in the participant's name
in shares of Common Stock. A participant that holds both Common Stock and a
Partnership Interest may make different elections with respect to each; if,
however, an Authorization Form is returned without any option selected in Steps
# 1, 2, or 3, then no dividends or partnership distributions will be used to
purchase shares of Common Stock.
Regardless of which method of participation is selected, all cash dividends
paid on whole or fractional shares of Common Stock credited to a participant's
Plan account will be reinvested automatically.
8. When may an eligible Shareholder or Limited Partner join the Plan?
The Plan became effective December 8, 1995. The Plan applies to cash
dividends paid and partnership distributions of cash made after December 8,
1995. An eligible Shareholder or Limited Partner may sign and return an
Authorization Form to join the Plan at any time.
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<PAGE>
If the properly completed Authorization Form specifying "Full Dividend
Reinvestment" or "Full Distribution Investment", as the case may be, or "Partial
Dividend Reinvestment" or "Partial Distribution Investment", as the case may be,
is received by the Agent at least three business days prior to the record date
established for a particular distribution, reinvestment will begin with that
payment or distribution. If the Authorization Form is received less than three
business days prior to the record date established for a particular payment,
that dividend or partnership distribution will be paid in cash, and
participation in the Plan for the reinvestment of dividends or investment of
partnership distributions, as the case may be, will not commence until the next
dividend payment. The dividend record date normally precedes the payment of
dividends by approximately two to four weeks.
9. May I reinvest less than the full amount of my dividends or partnership
distributions?
By selecting the "Partial Dividend Reinvestment" or "Partial Distribution
Investment" option, as the case may be, on your Authorization Form, you may
direct the Agent to reinvest the dividends attributable to a lesser number of
shares of Common Stock than the full number of shares you hold, or to invest a
lesser amount of the cash distributions attributable to a Partnership Interest
than the full amount attributable to the Partnership Interest you hold. Cash
distributions will continue to be paid to you on the remaining shares of Common
Stock or on the remaining distribution attributable to your Partnership
Interest, as the case may be.
10. How and when can a participant change the amount of dividends to be
reinvested or partnership distributions to be invested?
A participant may change the dividend reinvestment or partnership
distribution investment option at any time by submitting a newly executed
Authorization Form to the Agent. (See Question 7.) Any change in the number of
shares of Common Stock or the amount of cash distributions in respect of a
Partnership Interest with respect to which the Agent is authorized to reinvest
cash dividends or partnership distributions must be received by the Agent at
least three business days prior to the record date for a dividend payment to
permit the new amount to apply to that payment or distribution.
Purchases
11. What is the source of the Common Stock purchased under the Plan?
Common Stock purchased for a participant's account under the Plan will be
purchased by the Agent from the Company out of its authorized but unissued
shares or treasury shares.
12. When will Common Stock be purchased for participants' accounts?
Purchases from the Company of authorized but unissued Common Stock will be
made on the Investment Date; Shareholders and Limited Partners participating in
the Plan will be deemed to have invested as of the Investment Date.
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<PAGE>
13. What is the price of the Common Stock that will be purchased for a
participant?
The purchase price of the shares of Common Stock purchased from the Company
as of any Investment Date will be 97% of the closing price of Common Stock on
the New York Stock Exchange (Consolidated Tape Transactions) on the Investment
Date. If no trading in the Common Stock occurs on the New York Stock Exchange
on the relevant Investment Date, the purchase price of such Common Stock will be
determined by the Board of Directors of the Company on the basis of such market
quotations as it deems appropriate.
14. How many shares of Common Stock will be purchased for a participant?
The number of shares of Common Stock to be purchased for a participant's
account as of any Investment Date will be equal to the total dollar amount to be
invested for the participant divided by the applicable purchase price, computed
to the fourth decimal place. The total dollar amount to be invested as of any
Investment Date will be the sum of (a) the cash dividends or partnership
distributions on all or a part of the Common Stock or Partnership Interest
registered in the participant's own name, according to the option chosen by the
participant (see Question 7), and (b) the dividends on all Common Stock
(including fractional shares) previously credited to the participant's Plan
account.
The amount to be invested will be reduced by any amount the Company is
required to deduct for federal tax withholding purposes. (See Question 33.)
Reports to Participants
15. What reports are sent to participants in the Plan?
After an investment is made under the Plan for a participant's account,
whether by reinvestment of dividends or by investments of partnership
distributions, the participant will be sent a statement which will provide a
record of the cost of the Common Stock purchased for that account, the number of
shares of Common Stock purchased, the date on which the Common Stock was
credited to the participant's account and the total number of shares of Common
Stock in that account. In addition, each Shareholder will be sent income tax
information for reporting dividends paid.
Stock Certificates
16. Are certificates issued to participants for Common Stock purchased under
the Plan?
Common Stock purchased under the Plan is registered in the name of the
Agent or its nominee as agent for the participants in the Plan.
A certificate for any number of whole shares of Common Stock credited to a
participant's Plan account will be issued to the participant upon written
request to the Agent. Such requests will be handled by the Agent at no charge
to the participant normally within two weeks. Any remaining whole shares of
Common Stock and any fractional shares of Common Stock will continue to be
credited to the participant's account.
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<PAGE>
Common Stock which is purchased for and credited to the account of a
participant under the Plan may not be pledged, sold or otherwise transferred. A
participant who wishes to pledge or transfer such Common Stock must request that
a certificate for such shares of Common Stock first be issued in the
participant's name.
17. What is the effect on a participant's Plan account if a participant
requests a certificate for whole shares of Common Stock held in the
account?
If a participant maintains an account for reinvestment of dividends, all
dividends on the shares of Common Stock for which a certificate is requested
will continue to be reinvested under the Plan until the participant files a new
Authorization Form changing the participant's investment election.
18. May Common Stock held in certificate form be deposited in a participant's
Plan account?
Yes, whether or not the participant has previously authorized reinvestment
of dividends. All dividends on any Common Stock evidenced by certificates
deposited in accordance with the Plan will automatically be reinvested. The
participant should contact the Agent (see Question 4) for the proper procedure
to deposit certificates.
Withdrawal from the Plan
19. May a participant withdraw from the Plan?
Yes, by providing written notice to the Agent to terminate the account.
20. What happens when a participant terminates an account?
If a participant's notice of termination is received by the Agent at least
three business days prior to the record date for the next dividend payment date,
reinvestment of dividends or the investment of partnership distributions, as
the case may be, will cease as of the date notice of termination is received by
the Agent. If the notice of termination is received later than three business
days prior to the record date for a dividend payment date, the termination will
not become effective until after the investment of any dividends or partnership
distributions to be invested as of that dividend payment date. When terminating
an account, the participant may request that a stock certificate be issued for
all whole shares of Common Stock held in the account. As soon as practicable
after notice of termination is received, the Agent will send to the participant
(a) a certificate for all whole shares of Common Stock held in the account and
(b) a check representing any uninvested optional cash payments remaining in the
account and the value of any fractional share of Common Stock held in the
account. After an account is terminated, all dividends for the terminated
account will be paid to the participant unless the participant re-elects to
participate in the Plan.
When terminating an account, the participant may request that all shares of
Common Stock, both full and fractional, certified to the Plan account be sold or
that certain of the Common Stock shares be sold and a certificate be issued for
the remaining Common Stock. The Agent will remit to the participant the
proceeds of any sale. (See Question 22.)
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<PAGE>
21. When may a Shareholder or Limited Partner re-elect to participate in the
Plan?
Generally, a Shareholder of record or a Limited Partner of record may re-
elect to participate at any time. However, the Agent reserves the right to
reject any Authorization Form on the grounds of excessive joining and
withdrawing. Such reservation is intended to minimize unnecessary
administrative expenses and to encourage use of the Plan as a long-term
Shareholder and Limited Partner investment service.
Sale of Common Stock
22. May a participant request that Common Stock held in a Plan account be sold?
Yes, a participant may request that all or any part of the Common Stock
held in a Plan account be sold either when an account is being terminated (see
Question 20) or without terminating the account. However, a fractional share of
Common Stock will not be sold unless all whole shares of Common Stocks held in
the account are sold. If all shares of Common Stock (including any fractional
share) held in a Plan account are sold, the account will automatically be
terminated, and the participant will have to complete and file a new
Authorization Form (see Questions 6 through 8) in order to participate again in
the Plan.
Within seven days after receipt of a participant's written request to sell
Common Stock held in a Plan account, the Agent will place a sell order through a
broker or dealer designated by the Agent. The participant will receive the
proceeds of the same less any brokerage commission, transfer tax or other fees
incurred by the Agent allocable to the sale of such Common Stock.
23. What happens when a participant sells or transfers all the Shares of Common
Stock registered in the participant's name or the entire Partnership
Interest registered in the participant's name?
The individual's participation in the Plan with respect to such holdings is
terminated.
Other Information
24. What happens if the Company issues a stock dividend or declares a stock
split?
In the event of a stock split or a stock dividend payable in Common Stock,
the Agent will receive and credit to the participant's Plan account the
applicable number of whole and/or fractional shares of Common Stock based both
on the number of shares of Common Stock held in the participant's Plan account
and, with respect to shareholders participating in the Plan, the number of
shares of Common Stock registered in the participant's own name as of the record
date for the stock dividend or split.
25. What happens if the Company has a rights offering?
If the Company has a rights offering in which separately tradable and
exercisable rights are issued to registered holders of Common Stock, the rights
attributable to whole shares of Common Stock held in a participant's Plan
account will be transferred to the participant as promptly as practicable after
the rights are issued. Rights attributable to fractional shares of Common Stock
will be reinvested in Common Stock.
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<PAGE>
26. How is a participant's Common Stock voted at shareholder meetings?
Participants will receive proxy materials from the Company for Common Stock
registered in the Agent's name under the Plan in the same manner as Common Stock
registered in a participant's own name, if any. Common Stock credited to a
participant's Plan account may also be voted in person at the meeting.
27. What happens if reinvestment of a participant's distributions would cause
the participant to exceed the ownership limit set forth in the Company's
charter?
The Company's Charter places certain restrictions upon the ownership,
directly or constructively, of the Common Stock, including the limitation of the
beneficial ownership of the Common Stock by any one person (including
attribution) to 5% of the outstanding shares of Common Stock (the "Ownership
Limit"). Any Shareholder or Limited Partner who believes that their
participation in this Plan might cause them to exceed the Ownership Limit should
contact Company counsel before participating in this Plan.
28. What is the responsibility of the Company and the Agent under the Plan?
The Company and the Agent, in administering the Plan, are not liable for
any act done in good faith or for any good faith omission to act, including,
without limitation, any claim of liability (a) arising out of failure to
terminate a participant's account upon such participant's death prior to receipt
by the Agent of notice in writing of such death, (b) with respect to the prices
and times at which Common Stock is purchased or sold for a participant, or (c)
with respect to any fluctuation in market value before or after any purchase or
sale of Common Stock.
All notices from the Agent to a participant will be addressed to the
participant's last known address. Participants should notify the Agent promptly
in writing of any change of address.
The Agent may resign as administrator of the Plan at any time, in which
case the Company will appoint a successor administrator. In addition, the
Company may replace the Agent with a successor administrator at any time.
29. May the Plan be amended, suspended or terminated?
While the Company expects to continue the Plan indefinitely, the Company
may amend, suspend or terminate the Plan at any time, but such action shall have
no retroactive effect that would prejudice the interests of the participants.
To the extent practicable, any such amendment, suspension or termination will be
announced to participants at least 30 days prior to its effective date.
30. What happens if the Plan is terminated?
Each participant will receive (a) a certificate for all whole shares of
Common Stock held in the participant's account and (b) a check representing the
value of any fractional share of Common Stock held in the participant's account
and any uninvested cash dividends or partnership distributions held in the
account.
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<PAGE>
31. Who interprets and regulates the Plan?
The Company is authorized to issue such interpretations, adopt such
regulations and take such action as it may deem reasonably necessary to
effectuate the Plan. Any action to effectuate the Plan taken by the Company or
the Agent in the good faith exercise of their respective judgments will be
binding on participants.
32. What law governs the Plan?
The terms and conditions of the Plan and its operation shall be governed by
the laws of the State of Maryland.
33. What are the federal income tax consequences of participation in the Plan?
Participants should consult their personal tax advisors with specific
reference to their own tax situations and potential changes in the applicable
law as to all federal, state, local, foreign and other tax matters in connection
with the reinvestment of dividends and purchases of Common Stock under the Plan,
the participant's tax basis and holding period for Common Stock acquired under
the Plan and the character, amount and tax treatment of any gain or loss
realized on the disposition of Common Stock. The income tax consequences for
participants who do not reside in the United States may vary from jurisdiction
to jurisdiction. The following is only a brief summary of some of the federal
income tax considerations applicable to the Plan.
A Shareholder participating in the Plan will be treated for federal income
tax purposes as having received a dividend equal to the sum of (a) the fair
market value of any Common Stock purchased under the Plan (including Common
Stock purchased through reinvestment of dividends on shares held in the
shareholder's Plan account), and (b) any cash distributions actually received by
the Shareholder with respect to their Common Stock not included in the Plan.
Participation by a Limited Partner in the Plan should not affect the tax
consequences of the Limited Partner's ownership of its Partnership Interest.
The tax basis of Common Stock purchased under the Plan by shareholders will
be its fair market value on the Investment Date. The tax basis of Common Stock
purchased by Limited Partners through reinvestment of distributions received
with respect to their Partnership Interests will be the price at which such
stock is purchased from the Company. A participant's holding period for Common
Stock purchased under the Plan generally will begin on the date following the
date on which the shares of Common Stock are credited to the participant's
account.
In general, any dividend reinvested under the Plan is not subject to
Federal income tax withholding. The Company or the Agent may be required,
however, to deduct as "backup withholding" thirty-one percent (31%) of all
dividends paid to any Shareholder, regardless of whether such dividends are
reinvested pursuant to the Plan. Similarly, the Agent may be required to deduct
backup withholding from all proceeds from sales of Common Stock held in a Plan
account. A participant is subject to backup withholding if: (a) the
participant has failed properly to furnish the Company and the Agent with his or
her correct tax identification number ("TIN"); (b) the Internal Revenue Service
or a broker notifies the Company or the Agent that the TIN furnished by the
participant is incorrect; (c) the Internal Revenue Service or a broker
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<PAGE>
notifies the Company or the Agent that backup withholding should be commenced
because the participant failed to report properly dividends paid to him or her;
or (d) when required to do so, the participant fails to certify, under penalties
of perjury, that the participant is not subject to backup withholding. Backup
withholding amounts will be withheld from dividends before such dividends are
reinvested under the Plan. Therefore, dividends to be reinvested under the Plan
by participants who are subject to backup withholding will be reduced by the
backup withholding amount.
A participant may recognize a gain or loss upon receipt of a cash payment
for a fractional share of Common Stock credited to a Plan account (see Question
20) or when the Common Stock held in that account is sold at the request of the
participant (see Question 22). A gain or loss may also be recognized upon a
participant's disposition of Common Stock received from the Plan. The amount of
any such gain or loss will be the difference between the amount received for the
whole or fractional shares of Common Stock and the tax basis of the Common
Stock. Generally, any gain or loss recognized on the disposition of Common
Stock acquired under the Plan will be treated for federal income tax purposes as
a capital gain or loss.
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<PAGE>
SAUL CENTERS, INC.
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
AUTHORIZATION FORM
STEP # 1: If you wish to enroll your stock dividend, partnership
--------
distribution, or both in the Plan, you must check one or both of the boxes below
and then proceed to Steps 2 and 3, as appropriate. By checking one or both
boxes, you also consent to the statement in the paragraph below. If you do not
wish to enroll any dividends or distributions in the Plan, do not check either
box and discard this Authorization Form.
[_] Common Stock holders: I hereby enroll in the Plan the dividends on my
shares of Common Stock as designated below in Step # 2.
[_] Partnership Interest holders: I hereby enroll in the Plan the cash
distributions on my Partnership Interest as designated below in Step # 3.
Pursuant to the Dividend Reinvestment and Stock Purchase Plan of Saul
Centers, Inc. (the "Plan"), I hereby authorize Saul Centers, Inc. (the
"Company") to appoint First Chicago Trust Company of New York as my agent to
receive any cash dividends and/or cash partnership distributions that hereafter
become payable to me on the shares of Common Stock and/or the Partnership
Interest as specifically designated below. I further authorize First Chicago
Trust Company of New York to apply such dividends and/or partnership
distributions to the purchase of full shares and fractional interests in shares
of the Company's Common Stock, as set forth below. Capitalized terms not
otherwise defined in this form shall have the same meaning as in the Plan.
STEP # 2: If you have elected to enroll your Common Stock, please select
--------
one of the following boxes:
[_] Full Dividend Reinvestment. I authorize the automatic investment of all
--------------------------
the cash dividends on all the shares of Common Stock registered in my name to
purchase Common Stock.
[_] Partial Dividend Reinvestment. I authorize the automatic investment of
-----------------------------
all the cash dividends on the following shares of Common Stock registered in my
name to purchase Common Stock: Please type or print legibly the Common Stock
identification number(s) found on the upper left hand corner of your stock
certificate for the shares you wish to enroll in the Plan.
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<PAGE>
STEP #3: If you have elected to enroll your Partnership Interest, please
-------
select one of the following boxes:
[_] Full Distribution Investment. I authorize the automatic investment of
----------------------------
all the cash distributions on the Partnership Interest registered in my name to
purchase Common Stock.
[_] Partial Distribution Investment. I authorize the automatic investment
-------------------------------
____% of the cash distributions on the Partnership Interest registered in my
name to purchase Common Stock.
I understand that, if I select one or both of the investment options, all
cash dividends paid on the whole or fractional shares of Common Stock purchased
pursuant to the Plan will be reinvested automatically to purchase additional
Common Stock.
I further understand that the purchases authorized above will be made under
the terms and conditions of the Plan and that I may revoke this authorization at
any time by notifying First Chicago Trust Company of New York, in writing, of my
desire to terminate my participation.
RETURN THIS FORM ONLY IF YOU
WISH TO PARTICIPATE IN THE PLAN
<TABLE>
<S> <C>
_________________________________________ __________________________________
Please Print Name (s) as Shown on Signature (s)
Stock Certificate or on Exhibit A to the
Agreement of Limited Partnership of
Saul Holdings Limited Partnership
____________________________________ __________________________________
Address Signature (s)
____________________________________ ________ _________________________
City State Zip Date Social Security or
Tax Identification Number
</TABLE>
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance therewith,
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Proxy statements, reports and other information concerning
the Company can be inspected and copies obtained, at prescribed rates, from the
Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549, and the Commission's Regional Offices in New York (7 World Trade
Center, Suite 1300, New York, New York 10048) and Chicago (Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661). The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding restraints that file electronically
with the Commission. The address of the Commission's Web site is
http://www.sec.gov. In addition, the Common Stock is listed on the New York
Stock Exchange and similar information concerning the Company can be inspected
and copies obtained at the New York Stock Exchange, 20 Broad Street, New York,
New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 under the Securities Act of 1933, as amended, relating to the securities
offered hereby. This Prospectus does not contain all of the information set
forth in the registration statement and exhibits thereto. The registration
statement and exhibits thereto may be inspected and copies obtained, at
prescribed rates, from the Commission at Room 1204, 450 Fifth Street, N.W.,
Washington, D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed with the Commission pursuant to the 1934
Act, are incorporated by reference in this Prospectus:
1. The Registration Statement on Form S-3 as filed by Saul Centers, Inc. on
December 11, 1995, as amended (Registration Statement No. 33-80291).
2. The Company's Annual Report on form 10-K for the fiscal year ended December
31, 1997.
3. The Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, June 30 and September 30, 1998.
4. The description of the Common Stock, par value $0.01, contained in the
Company's Registration Statement on Form S-11 (Registration No. 33- 4562)
filed pursuant to the Securities Act of 1933 as incorporated by reference in
the Company's Registration Statement on Form 8-A filed pursuant to the 1934
Act, including any amendments or reports filed to update the description.
All documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
1934 Act after the date of this Prospectus and before termination of this
offering are incorporated by reference into this Prospectus from the date of
filing of those documents.
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Anyone receiving a copy of this Prospectus may obtain, without charge, a
copy of any of the documents incorporated by reference, except for the exhibits
to the documents. Mail your request to:
Henry Ravenel
7200 Wisconsin Avenue, # 903
Bethesda, Maryland 20814
or call (301) 986-6207
USE OF PROCEEDS
The Company will receive proceeds from the sale of Common Stock purchased
by the Agent directly from the Company. The proceeds from the sale of Common
Stock offered pursuant to the Plan will be contributed to Saul Holdings Limited
Partnership and used for general partnership purposes. The Company has no basis
for estimating either the number of shares of Common Stock that will be sold
pursuant to the Plan or the prices at which such Common Stock will be sold.
EXPERTS
The consolidated financial statements and related financial statement
schedule included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997 and incorporated by reference in this prospectus have been
audited by Arthur Andersen LLP, independent public accountants as indicated in
their report with respect thereto, and have been incorporated by reference
herein in reliance upon the authority of said firm as experts in giving said
reports.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Shaw, Pittman,
Potts & Trowbridge, Washington, D.C.
INDEMNIFICATION
As permitted by law, directors and officers of the Company are entitled to
indemnification under certain circumstances against liabilities and expenses
incurred in connection with legal proceedings in which they become involved as a
result of serving as such director or officer. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
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<PAGE>
Dividend Reinvestment and Stock Purchase Plan
SAUL CENTERS, INC.
1, 000, 000 Shares
Common Stock
PROSPECTUS
No dealer, salesperson or other individual has been authorized to give any
information or make any representations other than those contained in this
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer by the Company to sell, or a solicitation of an offer
to buy, the securities offered hereby in any jurisdiction where, or to any
person to whom, it is unlawful to make an offer or solicitation. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create an implication that there has not been any change in the
affairs of the Company since the date hereof or that the information contained
herein is correct or complete as of any time subsequent to the date hereof.
__________________
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
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<S> <C>
How to Enroll 1
Highlights of the Plan 1
The Company 2
Risk Factors 2
Description of Plan 8
Available Information 21
Incorporation of Certain
Documents by Reference 21
Use of Proceeds 22
Experts 22
Legal Matters 22
Indemnification 22
</TABLE>
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PART II
Information Not Required In Prospectus
Item 14. Other Expenses of Issuance and Distribution.
-------------------------------------------
<TABLE>
<S> <C>
Registration Fee $ 4,170.00
Fees and expenses of Transfer Agent and Registrar 10,000*
Legal Fees 14,000*
Printing and Engraving 1,000*
Miscellaneous 3,830
-----------------
Total $33,000*
</TABLE>
_____________________
* Estimated
Item 15. Indemnification.
---------------
The Company is incorporated under the laws of the State of Maryland. As
permitted by Maryland law, and as set forth in the Company's Amended and
Restated Bylaws incorporated by reference elsewhere in the Registration
Statement, a director or officer of the Company is entitled to indemnification
by the Company against reasonable expenses, including attorneys' fees, incurred
in connection with a civil or criminal proceeding in which such director or
officer has been involved, or to which he has been, or is threatened to be, made
a party, by reason of being a director or officer. In addition, indemnification
may be provided against judgments, fines and amounts paid in settlement in such
proceedings. In general, however, indemnification is not available where the
director or officer acted in bad faith or personally gained a financial profit
or other advantage to which he was not legally entitled. The directors and
officers of the Company are covered by insurance policies against certain
liabilities which might be incurred by them in such capacities.
II-1
<PAGE>
Item 16. Exhibits.
--------
3.(i) First Amended and Restated Articles of Incorporation of Saul
Centers, Inc. (incorporated herein by reference to Exhibit
3.(a) of the Company's Annual Report on Form 10-K for the year
ended December 31, 1993).
3.(ii) Amended and Restated Bylaws of Saul Centers, Inc. as in effect
at and after August 24, 1993 and as of August 26, 1993
(incorporated herein by reference to Exhibit 3.(b) of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1993).
5 Opinion of Shaw, Pittman, Potts & Trowbridge (filed herewith).
23.a Consent of Arthur Andersen LLP (filed herewith).
23.b Consent of Shaw, Pittman, Potts & Trowbridge (included in its
opinion filed as Exhibit 5 hereto).
24 Power of Attorney (included on the signature page hereto).
Item 17. Undertakings.
------------
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20
percent change in maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement.
II-2
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs 1(i) and 1(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of l934 that are incorporated by reference in the
registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
4. That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each fling of an
employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
5. Insofar as indemnification for arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion
of the Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Chevy Chase, state of Maryland, on this 28/th/ day of
January, 1999.
SAUL CENTERS, INC.,
a Maryland corporation
(Registrant)
By: /s/ B. Francis Saul II
--------------------------
B. Francis Saul II
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following person in the capacity and on the
date indicated:
Signature Title Date
- - ----------------------- ------------------------------- --------------------
/s/ Scott V. Schneider Senior Vice President, Chief January 28, 1999
- - ----------------------- Financial Officer, Treasurer
Scott V. Schneider and Secretary (Principal
Financial Officer)
II-4
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Scott V. Schneider and Philip D. Caraci, and each
of them, his true and lawful attorney-in-fact and agents, with full power of
substitution and resubstitution, for and in his name, place and stead, in any
and all capacities to sign any and all amendments (including post-effective
amendments) to this Registration Statement and any or all other documents in
connection therewith, and to file the same, with all exhibits thereto, with the
Securities and Exchange Commission, granting unto said authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as might or could be
done in person, hereby ratifying and confirming all said attorney-in-fact and
agents or any of them, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- - ---------------------------- ------------------------------- ----------------
<S> <C> <C>
/s/ B. Francis Saul II Chairman of the Board and January 28, 1999
- - ---------------------------- Chief Executive Officer
B. Francis Saul II (Principal Executive Officer)
/s/ Philip D. Caraci President and Director January 25, 1999
- - ----------------------------
Philip D. Caraci
/s/ Gilbert M. Grosvenor Director January 22, 1999
- - ----------------------------
Gilbert M. Grosvenor
Director
- - ----------------------------
Philip C. Jackson, Jr.
/s/ Paul X. Kelley Director January 25, 1999
- - ----------------------------
General Paul X. Kelley
USMC (Ret.)
Director
- - ----------------------------
Charles R. Longsworth
/s/ Patrick F. Noonan Director January 25, 1999
- - ----------------------------
Patrick F. Noonan
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C> <C>
/s/ B. Francis Saul III Director January 25, 1999
- - ---------------------------
B. Francis Saul III
/s/ Mark Sullivan III Director January 21, 1999
- - ---------------------------
Mark Sullivan III
/s/ James W. Symington Director January 21, 1999
- - ---------------------------
James W. Symington
/s/ John R. Whitmore Director January 25, 1999
- - ---------------------------
John R. Whitmore
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- - ------- -----------
<S> <C>
5 Opinion of Shaw Pittman Potts & Trowbridge (including
consent) with respect to legality
23.a Consent of Arthur Andersen LLP
23.b Consent of Shaw Pittman Potts & Trowbridge (included in its
opinion filed as Exhibit 5 hereto)
24 Power of Attorney (included in signature page)
</TABLE>
II-7
<PAGE>
EXHIBIT 5
[SPPT LETTERHEAD]
January 28, 1999
Saul Centers, Inc.
8401 Connecticut Avenue
Chevy Chase, MD 20815
Re: Form S-3 Registration Statement
Dear Sirs:
We have acted as counsel for Saul Centers, Inc., a Maryland corporation
(the "Company"), in connection with a Registration Statement on Form S-3 which
is being filed by the Company under the Securities Act of 1933, as amended (the
"Registration Statement"). The Registration Statement registers 1,000,000
shares of the common stock of the Company, par value $ 0.01 per share (the
"Shares"), issuable pursuant to the Saul Centers, Inc. Dividend Reinvestment and
Stock Purchase Plan (the "Plan").
In such capacity, we have reviewed the charter and by-laws of the Company,
the Registration Statement, the Plan and the corporate action taken by the
Company that provides for the issuance of the Shares.
Based upon the foregoing, we are of the opinion that the Shares issuable
pursuant to the Plan have been duly and validly authorized and, upon issuance
and delivery thereof as contemplated in the Registration Statement and the Plan,
will be validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm and to our opinion in the Prospectus
which is a part of the Registration Statement.
We are, in this opinion, opining only on the law of the State of Maryland
and the federal law of the United States.
Very truly yours,
/s/ SPPT
SHAW, PITTMAN, POTTS & TROWBRIDGE
<PAGE>
Exhibit 23a
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 6, 1998
included in Saul Centers, Inc. Form 10-K for the year ended December 31, 1997
and to all references to our Firm included in this registration statement.
Washington, D.C.
January 28, 1999
