<PAGE>
As filed with the Securities and Exchange Commission on September 30, 1999.
Registration No. 333-_____
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)
Maryland 52-1833074
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
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
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.[_]
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.[X]
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.[_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Aggregate Price Per Unit (1) Aggregate Offering Price Registration Fee
------------------- ---------- ---------------------------- ------------------------ ----------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par 2,319,421 $15.66 $36,322,133 $10,098
value per share (2)
- ------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par 4,183,817 $15.66 $65,518,574 $18,214
value per share (3)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL 6,503,238 $15.66 $101,840,707 $28,312
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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 September 23, 1999 on the New York Stock Exchange.
(2) Represents number of outstanding shares of Saul Centers, Inc. common stock
held by B.F. Saul Real Estate Investment Trust, Dearborn Corporation and
Avenel Executive Park Phase II, Inc., the selling shareholders.
(3) Issuable upon conversion of outstanding units issued by Saul Holdings
Limited Partnership held by the selling shareholders. Pursuant to the
partnership agreement for Saul Holdings Limited Partnership, each unit is
convertible into one share of Saul Centers, Inc. common stock.
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
<PAGE>
Subject to Completion, Dated September 30, 1999
PROSPECTUS
SAUL CENTERS, INC.
8401 Connecticut Avenue
Chevy Chase, Maryland 20815
(301) 986-6207
6,503,238 Shares of Common Stock
$.01 Par Value Per Share
This prospectus relates to the 6,503,238 shares of our common stock that
may be offered for sale or otherwise transferred from time to time by B.F. Saul
Real Estate Investment Trust, Dearborn Corporation and Avenel Executive Park
Phase II, Inc., known as the Selling Shareholders, or their pledgees. We will
not receive any proceeds from the sale of these shares by the Selling
Shareholders or their pledgees.
Our common stock is traded on the New York Stock Exchange under the symbol
"BFS." On [September 13], 1999, the last reported sale price of our common
stock was $[15.53] per share.
Investing in our common stock involves certain risks. Carefully consider
the Risk Factors beginning on page 3 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 information in this prospectus is not complete, and may be changed. This
prospectus is included in the registration statement that was filed by Saul
Centers, Inc. with the Securities and Exchange Commission. The Selling
Shareholders cannot sell their shares until that registration statement becomes
effective. This prospectus is not an offer to sell the shares or the
solicitation of an offer to buy the shares in any state where the offer or sale
is not permitted.
The date of this prospectus is _________ __, 1999.
<PAGE>
PROSPECTUS SUMMARY
As used in this prospectus, the terms "Company," "we," "us" and "our" refer
to Saul Centers, Inc.
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, including Saul Holdings Limited Partnership. Our primary business is
the ownership, operation, management, leasing, acquisition, development and
financing of community and neighborhood shopping centers and other commercial
properties, primarily in the Mid-Atlantic region. As of December 31, 1998,
these properties included 29 operating shopping centers, three primarily office
properties and an industrial/warehouse property. 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 our taxable period ended
December 31, 1993, and we intend to continue operating so as to qualify as a
REIT.
The Offering
The Selling Shareholders have pledged a substantial amount of their shares
of Company common stock and their units issued by Saul Holdings Limited
Partnership (which are convertible into shares of Company common stock) to
secure financing obtained by the Selling Shareholders. The pledgees have
requested that the Selling Shareholders have this registration statement filed
in order to increase the liquidity of their collateral in the event that the
Selling Shareholders were to default and the pledgees were to sell their
collateral.
Common Stock Offered (1)...................... 6,503,238 shares
Common Stock Outstanding
Before the Offering........................ 13,131,152 shares
Common Stock Outstanding
After the Offering (2)..................... 17,314,969 shares
Plan of Distribution.......................... The shares of common stock
covered by this prospectus
are being registered to
provide liquidity to
pledgees of shares and units
held by B.F. Saul Real
Estate Investment Trust,
Dearborn Corporation and
Avenel Executive Park Phase
II, Inc. See "Plan of
Distribution."
New York Stock Exchange Symbol................ BFS
-2-
<PAGE>
(1) Includes shares of common stock currently held by the Selling Shareholders
and shares of common stock issuable to the Selling Shareholders upon
conversion of units issued by Saul Holdings Limited Partnership.
(2) Calculated assuming that all outstanding units issued by Saul Holdings
Limited Partnership to the Selling Shareholders are converted into shares
of the Company's common stock. Pursuant to the partnership agreement for
Saul Holdings Limited Partnership, each unit is convertible into one share
of the Company's common stock.
RISK FACTORS
This prospectus and information incorporated by reference contain forward-
looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended, or the Exchange Act. Our actual results could
differ materially from those anticipated in these forward-looking statements,
including those discussed in "Risk Factors" or incorporated by reference into
this prospectus.
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. Only one retail tenant, Giant Food, at 7.1%,
accounted for more than 1.7% of the Company's 1998 total revenues. No office
tenant other than the United States General Service Administration ("GSA"), at
10.4%, accounted for more than 1.8% of 1998 total revenues. 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 and may adversely affect
our operating cash flow and our ability to make distributions to
-3-
<PAGE>
shareholders. 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 shareholders.
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
shareholders 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 in limited material new property
development activity during the last five years, although we have engaged in
extensive renovation and redevelopment 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
shareholders 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 updates of the environmental assessments
describe the procedures performed and present the
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<PAGE>
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 shareholders 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 shareholders.
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 affect our operating cash flow and our ability to make expected
distributions to shareholders, and in an increased risk of default on our
obligations.
-5-
<PAGE>
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 shareholders.
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 (other than
Chevy Chase Bank, F.S.B.) (known as the Exclusivity Agreement and Right of First
Refusal) generally requires 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.
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.
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
-6-
<PAGE>
commercial real estate activities. Three of our executive 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, future reductions of the level of our debt, or
future releases 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 received constructive
distributions. Depending on the overall level of debt and other factors, these
distributions could be in excess of The Saul Organization's bases in their
Operating Partnership interests, in which case such excess constructive
distributions would taxable. 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 shareholders. 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 Saul Holdings Limited
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 shareholders.
Influence of Officers, Directors and Significant Shareholders
Our officers 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 shareholders 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 shareholders.
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:
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 shareholders.
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<PAGE>
Staggered Board. Our Board of Directors has three classes of directors.
The terms of these classes will expire in 2000, 2001and 2002, respectively.
Directors for each class will be chosen for three-year terms upon the expiration
of the current class' term, beginning in 2000. The staggered terms for
directors may adversely affect the shareholders' ability to change control of
the Company, even if a change in control were in the interest of some, or a
majority, of shareholders.
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 shareholders.
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
shareholders.
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 shareholders 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
shareholders.
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. 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
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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 our 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 shareholders. We cannot, however, change our policy of
seeking to maintain our qualification as a REIT without the approval of
shareholders. Accordingly, shareholders will have no control over changes in
our policies other than our policy of maintaining our qualification as a REIT.
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares of our common
stock by the Selling Shareholders listed below.
SELLING SHAREHOLDERS
<TABLE>
<CAPTION>
Shares Percentage Number of Percentage
Beneficially Beneficial Shares Offered Beneficial
Owned Before Ownership Before by Selling Ownership After
Name Offering (1) Offering (1) Shareholder (1) Offering (1)
- ---- ------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
B.F. Saul Real Estate 3,137,555 17.1% 3,137,555 0%
Investment Trust and
affiliated entities
Dearborn Corporation 3,183,200 17.4% 3,183,200 0%
Avenel Executive Park 182,483 1.0% 182,483 0%
Phase II, Inc.
</TABLE>
(1) Calculated assuming that all outstanding units issued by Saul Holdings
Limited Partnership are converted into shares of the Company's common
stock. Pursuant to the partnership agreement for Saul Holdings Limited
Partnership, each unit is convertible into one share of the Company's
common stock.
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<PAGE>
PLAN OF DISTRIBUTION
The Company is registering the shares on behalf of the Selling Shareholders
to provide liquidity to pledgees of units and shares held by the Selling
Shareholders.
The shares covered by this prospectus may be offered and sold by the
Selling Shareholders, or by purchasers, transferees, donees, pledgees or other
successors in interest (all such persons shall be deemed "Selling Shareholders"
for purposes of this Section), directly or through brokers, dealers, agents or
underwriters who may receive compensation in the form of discounts, commissions
or similar selling expenses paid by a Selling Shareholder or by a purchaser of
the shares on whose behalf such broker-dealer or underwriter may act as agent.
Sales and transfers of the shares may be effected from time to time in one or
more transactions, in private or public transactions, on the New York Stock
Exchange, in the over-the-counter market, in negotiated transactions or
otherwise, at a fixed price or prices that may be changed, at market prices
prevailing at the time of sale, at negotiated prices, without consideration or
by any other legally available means. Any or all of the shares may be sold from
time to time by means of (a) a block trade, in which a broker or dealer attempts
to sell the shares as agent but may position and resell a portion of the shares
as principal to facilitate the transaction; (b) purchases by a broker, dealer or
underwriter as principal and the subsequent sale by such broker, dealer or
underwriter for its account pursuant to this prospectus; (c) ordinary brokerage
transactions (which may include long or short sales) and transactions in which
the broker solicits purchasers; (d) the writing (sale) of put or call options on
the shares; (e) the pledging of the shares as collateral to secure loans, credit
or other financing arrangements and, upon any subsequent foreclosure, the
disposition of the shares by the lender thereunder, directly or through brokers,
dealers, agents or underwriters; and (f) any other legally available means.
To the extent required with respect to a particular offer or sale of the
shares, a prospectus supplement or a post-effective amendment will be filed
pursuant to the Securities Act, and will accompany this prospectus, to disclose
(a) the number of shares to be sold, (b) the purchase price, (c) the name of any
broker, dealer, agent or underwriter effecting the sale or transfer and the
amount of any applicable discounts, commissions or similar selling expenses, (d)
that a Selling Shareholder that is a pledgee intends to sell, directly or
through brokers, dealers, agents or underwriters, more than 500 shares, and (e)
any other relevant information.
The Selling Shareholders may transfer the shares by means of gifts,
donations and contributions. This prospectus may be used by the recipients of
such gifts, donations and contributions to offer and sell the shares received by
them, directly or through brokers, dealers or agents and in private or public
transactions; however, if sales pursuant to this prospectus by any such
recipient could exceed 500 shares, then a prospectus supplement would need to be
filed pursuant to Section 424(b)(3) of the Securities Act to identify the
recipient as a Selling Shareholder and disclose any other relevant information.
Such prospectus supplement would be required to be delivered, together with this
prospectus, to any purchaser of such shares.
In connection with distributions of the shares or otherwise, the Selling
Shareholders may enter into hedging transactions with brokers, dealers or other
financial institutions. In connection with such transactions, brokers, dealers
or other financial institutions may engage in short sales of the Company's
common stock in the course of hedging the positions they assume with Selling
-10-
<PAGE>
Shareholders. To the extent permitted by applicable law, the Selling
Shareholders also may sell the shares short and redeliver the shares to close
out such short positions.
The Selling Shareholders and any broker-dealers who participate in the
distribution of the shares may be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act and any discounts, commissions or similar
selling expenses they receive and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. In addition, the Selling Shareholders have the right
to sell the shares covered by this prospectus through underwriters. As a
result, the Company has informed the Selling Shareholders that Regulation M,
promulgated under the Exchange Act, may apply to sales by the Selling
Shareholders in the market. The Company and the Selling Shareholders will agree
to indemnify any broker, dealer, agent or underwriter that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act. The aggregate net
proceeds to the Selling Shareholders from the sale of the shares will be the
purchase price of such shares less any discounts, concessions or commissions.
The Selling Shareholders are acting independently of the Company in making
decisions with respect to the timing, price, manner and size of each sale. No
broker, dealer, agent or underwriter has been engaged by the Company in
connection with the distribution of the shares; however, if the shares are
distributed they may be distributed through brokers, dealers, agents or
underwriters. There is no assurance, therefore, that the Selling Shareholders
will sell any or all of the shares. In connection with the offer and sale of
the shares, the Company has agreed to make available to the Selling Shareholders
copies of this prospectus and any applicable prospectus supplement and has
informed the Selling Shareholders of the need to deliver copies of this
prospectus and any applicable prospectus supplement to purchasers at or prior to
the time of any sale of the shares offered hereby.
The shares covered by this prospectus may qualify for sale pursuant to
Section 4(1) of the Securities Act or Rule 144 promulgated thereunder, and may
be sold pursuant to such provisions rather than pursuant to this prospectus.
The Company will not receive any proceeds from the sale of shares covered
by this prospectus and has agreed to pay all of the expenses incident to the
registration of these shares, other than discounts and selling concessions or
commissions, if any, and fees and expenses of counsel for the Selling
Shareholders, if any.
The Company and the Selling Shareholders have agreed to customary
indemnification obligations with respect to the sale of common stock by use of
this prospectus.
-11-
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
The Company is subject to the informational requirements of the Exchange
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 Company's
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 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 Commission allows us to "incorporate by reference" information that has
been filed with it, which means that we can disclose important information to
you by referring you to the other information we have filed with the Commission.
The information that we incorporate by reference is considered to be part of
this prospectus, and related information that we file with the Commission will
automatically update and supersede information we have included in this
prospectus. We also incorporate by reference any future filings we make with
the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
until the Selling Shareholders sell all of their shares or until the
registration rights of the Selling Shareholders expire. This prospectus is part
of a registration statement that we have filed with the Commission (Registration
No. 333-_____). The following documents are specifically incorporated by
reference in this prospectus:
1. The Company's Annual Report on form 10-K for the fiscal year ended
December 31, 1998.
2. The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31 and June 30, 1999.
3. The description of the Company's 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 as
incorporated by reference in the Company's
-12-
<PAGE>
Registration Statement on Form 8-A filed pursuant to the Exchange Act,
including any amendments or reports filed to update the description.
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
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Shaw Pittman,
Washington, D.C.
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, 1998 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.
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 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.
-13-
<PAGE>
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 OF CONTENTS
Page
----
Prospectus Summary 2
Risk Factors 3
Use of Proceeds 9
Selling Shareholders 9
Plan of Distribution 10
Where You Can Find More Information 12
Incorporation of Certain Documents by Reference 12
Legal Matters 13
Experts 13
Indemnification 13
Saul Centers, Inc.
6,503,238 Shares
Common Stock
PROSPECTUS
_________,1999
________________
<PAGE>
PART II
Information Not Required In Prospectus
Item 14. Other Expenses of Issuance and Distribution.
-------------------------------------------
Registration Fee $ 28,312
Fees and Expenses of Transfer Agent and Registrar 1,300 *
Legal Fees 4,500 *
Printing and Engraving 3,200 *
2,688 *
Miscellaneous -------
Total $ 40,000 *
-------
___________________
* 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 (filed herewith).
23.a Consent of Arthur Andersen LLP (filed herewith).
23.b Consent of Shaw Pittman (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 30th day of
September, 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 September 23, 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 September 23, 1999
----------------------
B. Francis Saul II Chief Executive Officer
(Principal Executive Officer)
/s/ Philip D. Caraci President and Director September 23, 1999
--------------------
Philip D. Caraci
/s/ Gilbert M. Grosvenor Director September 23, 1999
------------------------
Gilbert M. Grosvenor
/s/ Philip C. Jackson, Jr.
-------------------------- Director September 23, 1999
Philip C. Jackson, Jr.
/s/ Gen. Paul X Kelley Director September 23, 1999
----------------------
General Paul X. Kelley
USMC (Ret.)
Director ___________ ___, 1999
-------------------------
Charles R. Longsworth
/s/ Patrick F. Noonan Director September 23, 1999
---------------------
Patrick F. Noonan
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C> <C>
/s/ B. Francis Saul III Director September 23, 1999
-----------------------
B. Francis Saul III
/s/ Mark Sullivan III Director September 23, 1999
---------------------
Mark Sullivan III
/s/ James W. Symington Director September 20, 1999
----------------------
James W. Symington
/s/ John R. Whitmore
-------------------- Director September 23, 1999
John R. Whitmore
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
5 Opinion of Shaw Pittman (including consent) with respect to
legality
23.a Consent of Arthur Andersen LLP
23.b Consent of Shaw Pittman (included in its opinion filed as Exhibit
5 hereto)
24 Power of Attorney (included in signature page)
<PAGE>
EXHIBIT 5
[SP LETTERHEAD]
September 30, 1999
Saul Centers, Inc.
8401 Connecticut Avenue
Chevy Chase, MD 20815
Re: Form S-3 Registration Statement
Ladies and Gentlemen:
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, on behalf of
certain shareholders of the Company (the "Selling Shareholders"), 2,319,421
shares of the Company's common stock, par value $ 0.01 per share (the "Common
Stock"), currently held by the Selling Shareholders (the "Shares) and 4,183,817
shares of Common Stock issuable to the Selling Shareholders upon conversion of
units issued by Saul Holdings Limited Partnership (the "Conversion Shares").
In such capacity, we have reviewed the charter and by-laws of the Company,
the Registration Statement and the corporate action taken by the Company that
provides for the issuance of the shares of Common Stock which are the subject of
the Registration Statement.
Based upon the foregoing, we are of the opinion that:
1. The Shares to be offered by the Selling Shareholders pursuant to the
Registration Statement have been duly authorized and validly issued,
and are fully paid and non-assessable.
2. The Conversion Shares to be offered by the Selling Shareholders
pursuant to the Registration Statement have been duly authorized and,
upon conversion of the units issued by Saul Holdings Limited
Partnership into shares of Common Stock, will be validly issued, fully
paid and non-assessable.
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/ Shaw Pittman
SHAW PITTMAN
<PAGE>
Exhibit 23.a
ARTHUR ANDERSEN LLP
Independent Public Accountants Report
To the Board of Directors of
Saul Centers, Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 8, 1999
included in Saul Centers, Inc. Form 10-K for the year ended December 31, 1998
and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Washington, DC
September 27, 1999
