In 2004, the Company established a stock incentive plan (the "Options Plan"), as amended. Under the Options Plan, options were granted at an exercise price not less than the market value of the common stock on the date of grant and expire ten years from the date of grant. Officer options vest ratably over four years following the grant and are charged to expense using the straight-line method over the vesting period. Director options vest immediately and are charged to expense as of the date of grant. The Options Plan was replaced with the Incentive Plan (as defined below) in May 2024.

The Company uses the fair value method to value and account for stock options. The fair value of options granted is determined at the time of the grant using the Black-Scholes model, a widely used method for valuing share-based employee compensation, and the following assumptions: (1) Expected Volatility determined using the most recent trading history of the Company's common stock (month-end closing prices) corresponding to the average expected term of the options; (2) Average Expected Term of the options based on prior exercise history, scheduled vesting and the expiration date; (3) Expected Dividend

Yield determined by management after considering the Company's current and historic dividend yield, the Company's yield in relation to other retail REITs and the Company's market yield at the grant date; and (4) a Risk-free Interest Rate based upon the market yields of US Treasury obligations with maturities corresponding to the average expected term of the options at the grant date. The Company amortizes the value of options granted ratably over the vesting period and includes the amounts as compensation expense in general and administrative expenses.

Stock option expense totaling $0.1 million for each of the three months ended June 30, 2026 and 2025, and $0.2 million and $0.3 million for the six months ended June 30, 2026 and 2025, respectively, is included in general and administrative expense in the Consolidated Statements of Operations. As of June 30, 2026, the estimated future expense related to unvested stock options was approximately $0.2 million.


	Number of Shares	Weighted Average Exercise Price per share		Aggregate Intrinsic Value
Outstanding options at January 1	1,095,500	$	48.35	$	—
Options granted	—	—		—
Options exercised	(8,750)	33.79		17,176
Options expired/forfeited	(116,875)	56.37		—
Outstanding options at June 30	969,875	47.51		625,950
Exercisable options at June 30	917,500	48.10		482,400

The intrinsic value of stock options outstanding or exercisable measures the price difference between the options' exercise price and the closing share price quoted by the New York Stock Exchange as of the date of measurement. During the three and six months ended June 30, 2026, 8,750 options were exercised. No options were exercised during the three and six months ended June 30, 2025. At June 30, 2026, the final trading day of the 2026 second quarter, the closing share price of $37.39 was lower than the exercise price of 0.8 million outstanding options granted from 2017 through 2022. The weighted average remaining contractual life of the Company's outstanding and exercisable options is 4.2 years and 4.1 years, respectively.

On May 17, 2024, following shareholder approval, the Company established the Saul Centers, Inc. 2024 Stock Incentive Plan (the "Incentive Plan"), under which various equity incentives may be granted. Grants are split between time-vested and performance-based depending on to whom they are granted. Grants of time-vested restricted stock awards granted to officers will vest on an annual basis over five years. The performance-based restricted stock awards granted to officers will vest on the fifth anniversary of the award's grant date. The performance measurement for the performance-based awards is the Company's annual actual funds from operations compared to the annual funds from operations target established by the Board. Performance-based awards are earned on a sliding scale from 50% to 150% of the number of shares granted as the Company's actual funds from operations scales from 90% to 110% of the Board's established target, with a minimum result of 90% of the target required for the award to vest, in accordance with the Incentive Plan. Grants of time-vested restricted stock awards granted to non-employee directors vest on an annual basis over three years.

The Company uses the fair value method to value and account for restricted stock grants. The fair value of granted restricted stock is determined at the time of the grant using a discounted cash flow analysis, and the following assumptions: (1) Expected Dividend Yield determined by management after considering the Company's current and historic dividend yield, the Company's yield in relation to other retail REITs and the Company's market yield at the grant date; (2) the closing price of the Company's common stock on the date of the grant; (3) estimated forfeitures; and (4) a present value discount rate equal to the Expected Dividend Yield. The Company amortizes the value of granted restricted stock ratably over the vesting period and includes the amounts as compensation expense in general and administrative expenses. For accounting purposes, (a) time-vested restricted stock awards are treated as having been granted on the date the Board authorizes the grant and (b) performance-based restricted stock awards are treated as having been granted on the date the Board establishes the performance target.

Dividends on restricted stock awards will accrue commencing on the grant date and will be paid when the underlying shares vest. Restricted stock awards are measured at fair value, adjusted for estimated forfeitures and estimated or actual results of the Company compared to the Board-established targets. The cost of restricted stock compensation is charged to expense ratably from the grant date through the vesting date and will be adjusted periodically for changes in forfeiture estimates and, for performance-based awards, the impact of revised expectations of the Company's results compared to the Board-established targets.

Restricted stock compensation expense totaled $0.5 million and $0.3 million for the three months ended June 30, 2026 and 2025, respectively, and $0.9 million and $0.5 million, for the six months ended June 30, 2026 and 2025, respectively, which is included in general and administrative expense in the Consolidated Statements of Operations. As of June 30, 2026, the estimated future expense related to unvested restricted stock awards was approximately $7.4 million.


	Number of Shares	Weighted Average Grant-Date Fair Value Per Share
Unvested restricted stock outstanding at January 1	206,181	$	32.12
Restricted stock granted	87,400	32.42
Restricted stock vested	(32,938)	35.06
Change in restricted stock awards based on performance	—
Restricted stock forfeited	—	—
Unvested restricted stock outstanding at June 30	260,643	31.85
Authorized future restricted stock grants	106,700

The Company recognized stock compensation expense, inclusive of both stock options and restricted stock, totaling approximately $0.6 million and $0.4 million for the three months ended June 30, 2026 and 2025, respectively, and approximately $1.1 million and $0.8 million, for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, estimated future total stock-based compensation expense related to unvested awards that are granted for accounting purposes under both plans is approximately $7.6 million. On a weighted average basis, this expense is expected to be recognized over the next 3.6 years.

Pursuant to the Incentive Plan, the Compensation Committee established a Deferred Compensation Plan for Directors for the benefit of the Company's directors and their beneficiaries. Annually, directors are given the ability to make an election to defer all or part of their fees and have the option to have their fees paid in cash, in shares of common stock or in a combination of cash and shares of common stock upon separation from the Board. If a director elects to have his/her fees paid in stock, fees earned during a calendar quarter are aggregated and divided by the closing market price of the Company's common stock on the last trading day of the quarter to determine the number of shares to be credited to the director. The Company credited directors' deferred fee accounts with 4,888 and 6,166 shares for the six months ended June 30, 2026 and 2025, respectively, and issued 3,691 and 9,189 shares, respectively. As of June 30, 2026 and December 31, 2025, the directors' deferred fee accounts comprise 101,689 and 100,492 shares, respectively.