---

# SECURITIES AND
EXCHANGE COMMISSION Washington, D.C. 20549

_________________

# FORM 10-K/AAMENDMENT NO. 1

Annual Report Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the
Fiscal Year Ended December 31, 2003

Commission File No. 000-33485

_________________

# SAXON CAPITAL, INC.

Incorporated in Delaware4860 Cox Road 
Suite 300  Glen Allen, Virginia 23060 (804) 967-7400

54-2036076(I.R.S.  Employer Identification No.)

_________________

Securities registered
pursuant to Section 12(b) of the Securities Exchange Act of 1934:

None

Securities registered
pursuant to Section 12(g) of the Securities Exchange Act of 1934:

Common Stock, $0.01 par
value

Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Act).  Yes [ X ]  No [   ]

The
number of shares of common stock of the registrant outstanding as of April 26, 2004 was
28,690,794. The aggregate market value of the voting and non-voting common stock held by
non-affiliates of the registrant as of June 30, 2003 was $375,319,647.

Documents Incorporated
by Reference  None

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EXPLANATORY NOTE

The primary purpose of this Amendment
is to provide information required by Items 10, 11, 12, 13 and 14 of Part III of this report
on Form 10K, which the registrant intended to incorporate by reference from the
registrant's proxy statement for the 2004 Annual Meeting of Shareholders.

---

TABLE OF CONTENTS

|                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Page              
|-------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------
|Part III
Item 10.    
Item 11.    
Item 12.    
Item 13.    
Item 14.    Part IV
Item 15.    
Signatures | Directors and Executive Officers of the Registrant.............................................................................................
Executive Compensation.........................................................................................................................................
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters...
Certain Relationships and Related Transactions................................................................................................
Principal Accountant Fees and Services..............................................................................................................
Exhibits, Financial Statement Schedules, and Reports on Form 8-K...............................................................
..................................................................................................................................................................................... | 2
7
12
15
15
17
18

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# PART III

Item 10.   Directors and
Executive Officers of the Registrant

Board
of Directors and Committees of the Board

Currently,
the board of directors of Saxon Capital consists of six directors, four of whom (Messrs.
Harshfield, Kraemer, Wesselink, and Wageman) are independent directors. The information
set forth below has been furnished by the respective directors.

|Name                                                                                                                   | Age               | Principal Business Experience During Past Five Years
and Certain Other Directorships                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Director
Since           
|---------------------------------------------------------------------------------------------------------------------- | ----------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------
|Richard A. Kraemer  Edward G. HarshfieldMichael L. Sawyer   Dennis G. Stowe     Thomas J. Wageman   David D. Wesselink | 59 66 47 43 69 61 | Mr. Kraemer is Chairman of the Board.  Since 2002,
Mr. Kraemer has been a trustee of the American
Financial Realty Trust.  Since 2001, he has been a
director of The Community Bank.  From 1996 to 1999,
he was Vice Chairman of Republic New York
Corporation, a publicly traded bank holding company.
From 1993 to 1996, he was Chairman and Chief
Executive Officer of Brooklyn Bancorp, the publicly
traded holding company for Crossland Federal Savings
Bank.  Mr. Kraemer has held senior management
positions for most of his thirty-year career.  He
received his undergraduate degree in real estate from
Pace University.
From 1999 until its sale in 2002, Mr. Harshfield was
Chairman of the Board and Chief Executive Officer of
MFN Financial Corporation, a nationwide non-prime
automobile finance company.  From 1993 through 2002,
he was President and Chief Executive Officer and
later Vice Chairman and Director of Cal Fed Bancorp.
Mr. Harshfield currently serves as Chairman and Chief
Executive Officer of Aozora Bank (Tokyo); Director
and Chairman, Compensation Committee for Venture
Technologies, Inc., an on-line insurance brokerage
company, and as a Director of Korea First Bank
(Seoul) and member of the Risk Management and Audit
Committees.  Mr. Harshfield has held senior
management positions in a variety of public and
private companies for most of his forty-year career.
He holds a certificate from the Advanced Management
Program from Harvard Business School and received his
undergraduate degrees from Southeastern University in
Washington, D.C.
Mr. Sawyer has served as Saxon Capital's Chief
Executive Officer since 2001, and as its President
from 1998 until 2001. Before being named President,
Mr. Sawyer had served as a Director and Senior Vice
President of Underwriting since 1995. Before joining
Saxon Capital, Mr. Sawyer served as Vice President
and Director of Conduit Funding for Household
Financial Services. From 1993 until 1994, Mr. Sawyer
was general manager and director of correspondent
lending for Novus Financial Corporation. From 1985
until 1993, Mr. Sawyer held various managerial
positions for Ford Consumer Finance, including
regional underwriting manager and manager of
operations. Mr. Sawyer received his Bachelor's degree
in Liberal Arts from the University of Illinois, and
received his Masters of Business Administration from
the University of California, Irvine.Mr. Stowe has served as Saxon Capital's President and
Chief Operating Officer since 2001.  Prior to being
named to his current position, Mr. Stowe had served
as President and Chief Executive Officer of Saxon
Capital's servicing company since 1994, in addition
to Senior Vice President positions in Saxon Capital's
loan production subsidiaries. Before joining Saxon
Capital in 1994, Mr. Stowe was Vice  President of
Niagara Portfolio Management Corp. (Niagara),
responsible for management and liquidation of Goldome
Credit Corporation (GCC) pursuant to Niagara's
contract with the FDIC, serving as GCC's Senior Vice
President. Mr. Stowe received his Bachelors of
Business Administration in Accounting with honors
from the University of Texas at Arlington.Mr. Wageman has been Managing General Partner of TLT,
Ltd. a financial services consulting business, since
1994.  Since 1996 TLT, Ltd. has been the Trustee of
the LMUSA Creditors Trust. From 1992 to l994, Mr.
Wageman was Chairman of the Board and CEO of Sunbelt
National Mortgage Company, remaining as a consultant
to that company until 1996, following its sale to
First Tennessee National Corporation. He has held
senior management and Board positions in a variety of
public and private companies for most of his
forty-year career.   Mr. Wageman also serves on the
board of directors of Nomas Corp., First Horizon
Asset Securitization, Inc., and Heritage Bancorp Inc.
Mr. Wageman received his bachelor's degree from the
University of Notre Dame and his M.B.A. from the
University of Chicago.
Mr. Wesselink has been Chairman and Chief Executive
Officer of Metris Companies since December 2002.  He
joined Metris as Chief Financial Officer in 1998 and
was named Vice Chairman in 2000. From 1993 to 1998,
he was the Chief Financial Officer of Advanta
Corporation. Prior to Advanta, he spent more than 20
years at Household International and was named HFC's
Chief Financial Officer in 1982 and Senior Vice
President in 1986.  Since 1992, Mr. Wesselink has
also served as a director of CFC International, a
specialty chemical company whose stock is traded on
the Nasdaq National Market. He is also a board member
of the American Financial Services Association
(AFSA), Central College; the National Institute
of Consumer Credit at Marquette University; and a director of
MasterCard Incorporated (U.S. Region Board).  He holds
a bachelor's degree from Central College in Pella,
Iowa, and an M.B.A. from Michigan State University. | 2001
20012001200120012001

---

Executive
Officers

Information
concerning our executive officers was included in Item 1 of our originally filed Form
10-K per General Instruction G(3).

Board
Committees

Executive
Committee. The executive committee has and may exercise all of the powers and authority of
the board of directors in the management of our business and affairs, except where action
of the entire board of directors is required by statute. The executive committee currently
consists of Messrs. Kraemer (Chair), Sawyer, and Wageman. The Executive Committee did not
meet in 2003.

Audit
Committee. The Audit Committee is comprised of four independent directorsMessrs.
Kraemer (Chair), Harshfield, Wesselink, and Wageman. Nasdaq Marketplace Rules and our
Audit Committee charter require that the Audit Committee have at least three members, and
that all members be directors that meet the applicable regulatory standards relating to director independence
status (independent directors). Mr. Wesselink has been designated
as the Audit Committees financial expert. All of the members of our Audit Committee
are independent directors. The Audit Committee operates under a written charter adopted by the
board of directors. The Audit Committees pre-approval policies and procedures
regarding audit and non-audit services are included in its charter. Among other things,
the Audit Committee is responsible for:

- engaging the independent public accountants and approving all fees in advance;
- monitoring the integrity of our financial reporting process and internal control systems regarding finance, accounting and
                   legal compliance;
- monitoring the independence and performance of our independent public accountants and our internal audit function; and
- providing an avenue of communication among the independent public accountants, management,
our internal auditors and the board of directors.

During
2003, the Audit Committee met eleven (11) times.

Compensation
Committee.  The Compensation Committee, among other matters, has responsibility to:

- review the salaries, benefits, and other compensation of our directors, officers, and employees;
- administer equity-based compensation under our 2001 Plan; and
- make recommendations to our board of directors regarding the salaries, benefits and other
compensation of our directors, officers and employees.

The
Compensation Committee is required to have at least two members, all of whom must be
independent directors. The Compensation Committee currently consists of Messrs. Wesselink
(Chair), Harshfield, Kraemer, and Wageman.

During
2003, the Compensation Committee met five (5) times.

Nominating
and Corporate Governance Committee. The Nominating and Corporate Governance Committee is
comprised of four independent directors  Messrs. Wageman (Chair), Harshfield,
Kraemer and Wesselink. The Nominating and Corporate Governance Committee operates under a
written charter adopted by the board of directors which is available on our website at
www.saxoncapitalinc.com. This charter requires, among other things, that this committee have
at least three members, all of whom must be independent directors. Among other
matters, this committee has responsibility to:

- identify, evaluate the qualifications of, and make recommendations to the board concerning
potential candidates for nomination and election to director positions, Committee
positions and Committee Chairs;
- develop and evaluate board and committee member attributes and continuing education; and
- formulate and recommend to the board from time to time such policies that it may consider
to be advisable relating to (1) limitations on boards of director service, employment or
business relationships; (2) qualification, tenure, compensation and retirement of
directors; and (3) ethical standards and our Code of Conduct.

During
2003, the Nominating and Corporate Governance Committee met three (3) times.

Criteria
for Board Nomination. Our corporate governance policies provide that in making nominations for directors, the Nominating and Corporate
Governance Committee shall consider the appropriate balance of experience, skills, and
background advantageous to Saxon Capital and its shareholders, and generally to
seek directors with the following characteristics:

- significant related business experience or equivalent, including extensive senior executive experience, or equivalent;
- satisfaction of all requirements for independent director status;
- understanding of the roles and responsibilities of public company directors;
- ability to relate to Saxon Capital's mission, values, and governance principles;
- personal independence, and willingness to be a strong advocate of independent views and judgment;
- willingness and ability to commit the necessary time;
- ability to work effectively and congenially with other directors, while remaining independent; and
- in good health and capacity for service.

The
Nominating and Corporate Governance Committee seeks to insure that at least a majority of
the directors are independent under the rules of the Nasdaq National Market, and that
members of Saxon Capitals Audit Committee meet the financial literacy requirements
under the rules of the Nasdaq National Market and at least one of them qualifies as an
audit committee financial expert under the rules of the SEC.

Board
Nomination Process

- the Nominating and Corporate Governance Committee recommends persons for the boards consideration;
- the committee seeks recommendations from current members of the board;
- Shareholders may recommend persons for the committees consideration in accordance with the boards
         policies relating to such recommendation;
- all recommended persons will be evaluated by the committee with reference to the nomination criteria
         stated in our corporate governance policies; and
- the committee may engage qualified professional firms to assist in evaluating qualifications.

Shareholder
Recommendation of Director Nominees

Shareholders may recommend persons to be considered for nomination by writing to the Corporate Secretary,
providing the persons name, resume, and qualifications for Board membership with reference to the nomination criteria listed above, which are also stated in our corporate governance policies posted on our website
(www.saxoncapitalinc.com) together with specific instructions for doing so, including the mailing address and
applicable deadline. All recommendations are brought to the attention of the Committee. To date we have not
received any such recommendations.

Section
16(a) Beneficial Ownership Reporting Compliance

The
SEC requires that we disclose any late reports filed by directors, executive officers and
beneficial owners of more than 10% of our common stock pursuant to Section 16(a) of the
Exchange Act during the last fiscal year.

Based
solely on our review of the copies of such forms received or written representations from
reporting persons, we believe that with respect to the fiscal year ended December 31,
2003, all the reporting persons complied with all applicable filing requirements, with the
exception of Bradley D. Adams, Frederick R. Elflein, Jr., Dennis G. Stowe, James V. Smith,
and Jeffrey A. Haar, each of whom failed to timely file one Form 4 for one transaction.
Forms relating to these transactions were subsequently filed.

Code
of Conduct

We
have adopted a code of conduct that applies to all of our directors and employees.  Our code of conduct
is available, free of charge, on our website, along with our Audit Committee Charter, and
our Nominating and Corporate Governance Committee Charter, and our Compensation Committee
Charter.  We will post on our website any amendments to the code of conduct, and any waivers relating to the
code of conduct applicable to any of our directors or executive officers.

---

Item 11.   Executive
Compensation

Executive
Compensation

The
following table sets forth the total components paid or accrued by Saxon Capital during
the last three fiscal years to our Chief Executive Officer and our four most highly
compensated executive officers, who are referred to as named executive officers:

# Summary Compensation
Table

|                         |  | Annual Compensation | Long Term Compensation | 
|------------------------ |  | ------------------- | ---------------------- | 
|
|
|
|Michael L. Sawyer,       |  |                     | 2003                   | 
|Director and Chief       |  |                     | 2002                   | 
|Executive Officer        |  |                     | 2001                   | 
|                         |  |                     |                        | 
|Dennis G. Stowe,         |  |                     | 2003                   | 
|Director, President and  |  |                     | 2002                   | 
|Chief Operating Officer  |  |                     | 2001                   | 
|                         |  |                     |                        | 
|James V. Smith, Vice     |  |                     | 2003                   | 
|President, Wholesale     |  |                     | 2002                   | 
|Division                 |  |                     | 2001                   | 
|                         |  |                     |                        | 
|Jeffrey A. Haar, Vice    |  |                     | 2003                   | 
|President, Correspondent |  |                     | 2002                   | 
|Division                 |  |                     | 2001                   | 
|                         |  |                     |                        | 
|Robert B. Eastep,        |  |                     | 2003                   | 
|Executive Vice President |  |                     | 2002                   | 
|and Chief Financial      |  |                     | 2001                   | 
|Officer                  |  |                    
|                         |  |                     |                        | 

---

| | (1) | Includes the purchase of unused vacation days earned during the year (employees
               are permitted to sell back 5 unused vacation days annually). Amounts for 2003
               for the named executives were as follows: (a) Mr. Sawyer  $0, (b) Mr.
               Stowe  $5,538, (c) Mr. Haar  $0, (d) Mr. Eastep  $4,326, and
               (e) Mr. Smith  0.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | None of the named executive officers received perquisites or benefits that met
               or exceeded the lesser of $50,000 or 10% of his respective salary plus bonus
               payments.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | The aggregate restricted stock units held by the named executive officers and
               the value of such units as of December 31, 2003 are as follows: (a) Mr. Sawyer,
               90,000 restricted stock units valued at $1,555,200; (b) Mr. Stowe, 60,000
               restricted stock units valued at $1,036,800; and (c) Mr. Eastep, 30,000
               restricted stock units valued at $518,400. Each named executive officer is
               entitled to receive dividend equivalents on their respective restricted stock
               units when dividends are otherwise paid.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Long term incentive plan payments distributed from Dominion Resources
               Utility Growth Plan. (5) The amounts listed for 2003 are as follows:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|                  | 401(k) Match | Deferred
Compensation
|----------------- | ------------ | ---------------------
|Michael L. Sawyer |              |                      
|Dennis G. Stowe   |              |                      
|James V. Smith    |              |                      
|Jeffrey A. Haar   |              |                      
|Robert B. Eastep  |              |                      

Option
Grants in Last Fiscal Year

The
following table provides information concerning grants of options to purchase our common
stock representing a contractual right to receive shares of our common stock made during
2003 to our named executive officers.

|Individual Grants
|-----------------
|
|James V. Smith   

---

| | (1) | The
options with a strike price of $12.54 vest 25% over a four-year period
          beginning on March 25, 2003.
| | --- | -----------------------------------------------------------------------------------------------------------------

| | (2) | The
valuation calculations are solely for purposes of compliance with the rules           and
regulations promulgated under the Exchange Act, and are not intended to
          forecast possible future appreciation, if any, of our stock price. The grant
          date present value for the options expiring on March 25, 2013 is derived by
          using the Black-Scholes option-pricing model with the following assumptions:
          option term of 10 years; an annualized risk-free interest rate range of 3.96%;
a           volatility rate of 50%, and a dividend yield of 0%. The approach used in
          developing the assumptions upon which the Black-Scholes valuations were
          calculated is consistent with the requirements of Statement of Financial
          Accounting Standards No. 123, Accounting for Stock-Based
          Compensation. This valuation model was not adjusted for risk of
forfeiture           or the vesting restrictions of the options for the options expiring
on March 25,           2013, which became exercisable pro rata over a four-year period.
This valuation           model does not necessarily represent the fair market value of
individual           options. At the expiration date, the options will have no actual
value unless,           and only to the extent that, the price of the common stock
appreciates from the           grant date to the exercise date.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Aggregated
Option/SAR Exercises in Last Fiscal Year and Fiscal Year End Option/SAR Values

The
following table sets forth information regarding the number of securities underlying
exercisable and unexercisable options, and the value of exercisable and unexercisable
options held by the named executive officers as of December 31, 2003.

|Name                     | Shares Acquired
Upon Exercise(#) | Value Realized($) | Number of Securities
Underlying Unexercised
Options/SARs at FY-End
Exercisable/Unexercisable | Value of Unexercised
In-the-Money Options/SARs
at FY-End($)
Exercisable/
Unexercisable(1)
|------------------------ | -------------------------------- | ----------------- | -------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------
|
|
|Michael L. Sawyer,       |                                  |                   |                                                                                              | 0                                                                                        
|Director and Chief       |                                  |                  
|Executive Officer        |                                  |                  
|Dennis G. Stowe,         |                                  |                   |                                                                                              | 0                                                                                        
|Director, President and  |                                  |                  
|Chief Operating Officer  |                                  |                  
|James V. Smith, Vice     |                                  |                   |                                                                                              | 0                                                                                        
|President                |                                  |                  
|Jeffrey A. Haar, Vice    |                                  |                   |                                                                                              | 0                                                                                        
|President                |                                  |                  
|Robert B. Eastep,        |                                  |                   |                                                                                              | 0                                                                                        
|Executive Vice President |                                  |                  
|and Chief Financial      |                                  |                  
|Officer                  |                                  |                  

---

| | (1) | The amounts set forth represents the difference between the estimated fair
               market value of $20.95 per share as of December 31, 2003 and the exercise price
               of the in-the-money options, multiplied by the applicable number of shares
               underlying such options.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Employment
Agreements

We
have entered into employment agreements with Messrs. Sawyer and Stowe for three-year terms, and
employment agreements with Messrs. Adams and Eastep for one-year terms. All of the employment agreements
automatically renew for successive one-year terms unless previously terminated. The
employment agreements require each of them to devote their best efforts to our interests
and business and prohibit them from disclosing information, competing with us, and
soliciting employees while employed and for specified periods after termination of
employment for any reason other than for cause. Under the terms of these employment
agreements, each of Messrs. Sawyer, Stowe, Adams and Eastep is entitled to an annual base
salary of $325,000, $325,000, $225,000 and $200,000, respectively. Each executives
base salary may be increased by the Compensation Committee. The employment agreements also
provide Messrs. Sawyer, Stowe, and Adams with an annual bonus of up to 100% of base salary
and Mr. Eastep with an annual bonus of up to 100% of base salary, each as determined by
the Compensation Committee based upon their performance and our performance during the
prior fiscal year. We also extend to each executive specified benefits and reimbursement
of expenses.

If
each executive complies with the terms of his employment agreement, and his employment is
terminated, either by us (other than for cause) or voluntarily by the executive for good
reason, then the executive generally is entitled to severance pay in the form of monthly
payments in an amount equal to 1/12th of the sum of (A) the executives annual base
salary plus (B) 100% of the maximum bonus for the fiscal year in which termination occurs,
less deductions required by law payable in accordance with our normal payroll practices,
for twenty-four months (or in the case of Messrs. Adams and Eastep, twelve months)
following such termination. Alternatively, provided that the executive executes and
delivers a general release within fifteen (15) days following such a termination of
employment by us other than for cause or voluntarily by him for good reason, at the
executives sole election the severance pay is payable at the time of such delivery
of the general release and will consist of a lump sum equal to the sum of the amounts
described in clauses (A) and (B) above (or, in the case of Messrs. Sawyer and Stowe, 200%
of such sum) and any stock option not previously vested by the terms of the original grant
vest as of the date of such termination. For purposes of the employment agreements,
good reason includes:

- the material reduction or material adverse modification without the executives prior
written consent of the executives authority or duties (for instance, the substantial
diminution or adverse modification in the executives title, status, overall
position, responsibilities, reporting relationship or general working environment);
- any reduction in the executive's base salary or bonus calculation or any material reduction in employee benefits;
- any requirement to move the executives principal place of employment to a location
that is more than a 50 mile radius from its current location; or
- any material breach of the employment agreement by Saxon Capital that is not cured within
30 days following demand for the cure thereof.

In
the event of death or disability, there is no acceleration of the vesting of these
options. To the extent not inconsistent with the terms of the 2001 Plan, the
executives options vest and become exercisable by the executives estate at the
same times as if the executive had continued to be employed. The executives estate
or heirs are not entitled to any severance pay or employee benefits; except in the event
of death, the executives estate or heirs are entitled to a pro-rated bonus equal to
100% of the executives base salary.

Each
executives employment agreement further provides that upon the consummation of a
change in control (as defined below), the executive is entitled to receive, in the form of
monthly payments, an amount equal to 1/12th of the sum of (A) the executives annual
base salary plus (B) the maximum bonus for the fiscal year in which the consummation of a
change in control occurs, less deductions required by law, payable in accordance with the
normal payroll practices, for twenty-four months (or in the case of Messrs. Adams and
Eastep, twelve months) following consummation of such change in control. We call such
payment the change in control payment. Alternatively, at each executives sole
election, the change in control payment is payable in a lump sum equal to 200% (or in the
case of Messrs. Adams and Eastep, 100 percent) of the sum of the amounts described in
clauses (A) and (B) above. The change in control payment is in addition to, and not in
lieu of, the executives base salary and bonus, if any, payable in accordance with
the terms of the executives employment agreement. In addition, upon the consummation
of a change in control, all of the executives options become immediately and fully
exercisable. Following the consummation of a change in control, the executive is not
entitled to receive severance pay in the event the executives employment is
terminated for any reason. For purposes of the employment agreements, change in
control generally means (1) an acquisition, merger, or consolidation, or (2) the
sale of voting control or all or substantially all of our assets with, by, or to any
person or entity in which our shareholders immediately before the effective date of such
change in control do not own a majority of the outstanding shares of the capital stock of
the surviving entity after such change in control. The terms of our REIT conversion proposal
provide that effective upon the REIT conversion, each executive will waive his
rights to any such payments in connection with the REIT conversion. If the
executives employment is terminated other than for cause at any time following the
public announcement of a prospective change in control, then, notwithstanding such
termination, the executive is entitled to receive the change in control payment based on
the executives base salary in effect on the date of such termination; provided,
however, that such change in control payment is reduced by the total amount of any
severance pay received by him, and thereafter he is not entitled to any further severance
pay. If any payments, distributions, or benefits provided or to be provided to the
executive, whether pursuant to their employment agreement or from other plans or
arrangements maintained by us or any of our subsidiaries are determined to be subject to
the excise tax imposed by Code Section 4999, the executive is entitled to receive a
payment on an after-tax basis equal to the excise tax imposed.

Employment
Agreements with Saxon REIT, Inc.

Saxon
REIT, Inc., (Saxon REIT) will enter into employment agreements with Messrs.
Sawyer, Stowe, Eastep and Adams prior to the REIT conversion. These employment agreements
will become effective only if the REIT conversion occurs and will become effective as of
the date of the REIT conversion.

Compensation
of Directors

Saxon
Capital pays its independent directors an annual cash retainer of $30,000 and an annual
stock retainer of $20,000 (based on the closing price of our common stock on the date of
grant). The chairman of the Audit Committee receives an additional annual cash retainer of
$10,000, and each other committee chairman receives an additional annual cash retainer of
$5,000. Each independent director receives a fee of $3,000 for each board or committee
meeting attended, other than the chairman of the board who receives $6,000 for each board
meeting attended and $3,000 for each committee meeting attended. Upon first being elected
to the Saxon Capitals board of directors, or those independent directors serving as
members of our board as of the date of the REIT conversion, each independent director receives a
one-time grant of 25,000 restricted stock units that vest 25% each year over a four year
period; dividend equivalents are paid to the independent directors with respect to these
units, including unvested units, when dividends are otherwise paid. In 2003, each
independent director was granted 15,000 restricted stock units under the 2001 Plan that
vest 20% each year over a five year period.  Saxon Capital also
reimburses all of its independent directors for reasonable expenses incurred in attending
meetings or for other necessary Saxon Capital business purposes. If the REIT conversion occurs, Saxon REIT will pay its directors the fees described
above.

Compensation
Committee Interlocks and Insider Participation

No
member of our Compensation Committee is or was formerly an officer or employee of Saxon
Capital and its subsidiaries. No interlocking relationships exist between our board of
directors or Compensation Committee and the board of directors or Compensation Committee
of any other company, nor has any interlocking relationships existed in the past.

---

Item 12.    Security
Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The
following table sets forth information relating to our equity compensation plans as of
December 31, 2003:

---

|Plan Category                   | Number of securities to
be issued upon exercise
of outstanding options,
warrants and restricted
stock units | Weighted-average
exercise price of
outstanding options,
warrants and restricted
stock units | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
|------------------------------- | ----------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------
|
|
|Equity compensation plans       |                                                                                                             |                                                                                             |                                                                                                                                            
|approved by security holders(1) |                                                                                                             |                                                                                             |                                                                                                                                            
|Equity compensation plans not   |                                                                                                             |                                                                                             |                                                                                                                                            
|approved by security holders    |                                                                                                             |                                                                                            
|Total                           |                                                                                                             |                                                                                             |                                                                                                                                            
|                                |                                                                                                             |                                                                                             |                                                                                                                                            

---

| | (1) | Includes
858,605 shares reserved for issuance under our Employee Stock Purchase Plan.
| | --- | -------------------------------------------------------------------------------------

Pursuant
to resolutions of the Board of Directors, we entered into Stock Option Agreements dated
August 15, 2001 with Edward G. Harshfield, Richard A. Kraemer and David D. Wesselink
granting options to purchase 250,000 shares, 75,000 shares and 75,000 shares of our
common stock, respectively, at an exercise price of $10.00 per share.  In addition, also
pursuant to a resolution of the Board of Directors, we entered into a Stock Option
Agreement dated November 6, 2001 with Thomas J. Wageman granting an option to purchase
75,000 shares of our common stock at an exercise price of $10.10 per share.  Each of the
grants provides for 25% of the options to vest on each of the 1st, 2nd, 3rd and 4th
anniversary dates of the stock option grant.  All options are exercisable for a period of
10 years following the date of the stock option grant.  As of December 31, 2003, no
non-employee director options have been exercised.

On
September 4, 2003, we granted 180,000 restricted stock units under our 2001 Stock
Incentive Plan to our Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer, and we granted 60,000 restricted stock units to our non-employee
directors.  These restricted stock units were valued at $17.28 per share, with 48,000 of
the awards scheduled to vest each year over the subsequent five years.

In
connection with our private offering in 2001 described above, we granted warrants to
Friedman, Billings, Ramsey & Co., Inc. (FBR) to purchase an aggregate of 1,200,000
shares of our common stock, of which 1,080,000 shares are beneficially owned by FBR, at
an exercise price of $10.00 per share.  The warrants are exercisable for a period of five
years, commencing on July 6, 2001.  As of December 31, 2003, no warrants have been
exercised.

Upon
shareholder approval of the transactions contemplated by the REIT conversion, all
outstanding stock options and restricted stock will become immediately vested.  Saxon
REIT, Inc. will assume any outstanding options or other rights to acquire our common
stock that are not exercised on or before closing of the proposed merger.

The
following table sets forth the total number and percentage of Saxon Capital's shares of
common stock beneficially owned as of March 26, 2004:  (1) each director; (2) our Chief
Executive Officer and each of our other four most highly compensated executive officers;
(3) all executive officers and directors as a group; and (4) beneficial owners of 5% or
more of Saxon Capital's outstanding common stock.  Except as otherwise noted below, the
address of each of the persons in the table is c/o Saxon Capital, Inc., 4860 Cox Road,
Suite 300, Glen Allen, Virginia 23060.

|                                               | Shares Beneficially Owned
|---------------------------------------------- | -------------------------
|
|
|Wasatch Advisors, Inc.(2)                      |                          
|Franklin Mutual Advisers, LLC(3)               |                          
|Friedman, Billings, Ramsey & Co., Inc.(4)      |                          
|Eubel Brady & Suttman Asset Management Inc.(5) |                          
|Wellington Management Company, LLP(6)          |                          
|Dennis G. Stowe                                |                          
|Michael L. Sawyer                              |                          
|Edward G. Harshfield                           |                          
|Richard A. Kraemer                             |                          
|Thomas J. Wageman(7)                           |                          
|Robert B. Eastep                               |                          
|David D. Wesselink                             |                          
|Jeffrey A. Haar                                |                          
|James V. Smith                                 |                          
|All named executive officers and directors     |                          
|as a group (sixteen persons (16))(8)           |                          

---

*Less than 1%.

| | (1) | If a shareholder holds options or other securities that are exercisable or
               otherwise convertible into common stock within 60 days of March 26, 2004, we
               treat the common stock underlying those securities as owned by that shareholder,
               and as outstanding shares when we calculate that shareholders percentage
               ownership of the companys common stock. We do not, however, consider that
               common stock to be outstanding when we calculate the percentage ownership of any
               other shareholder.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Based on Schedule 13G filed on February 18, 2004 by Wasatch Advisors, Inc. with
               the sole power to dispose and vote 3,432,273 shares of our common stock. The
               business address for Wasatch Advisors is 150 Social Hall Avenue, Salt Lake City,
               Utah 84111.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Based on a Schedule 13G filed on February 9, 2004 by Franklin Mutual Advisers,
               LLC with the sole power to dispose and vote 2,690,185 shares of our common
               stock. The business address for Franklin Mutual Advisers, LLC is 51 John F.
               Kenney Parkway, Short Hills, New Jersey 07078.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | FBR directly beneficially owns 1,167,500 shares issuable upon exercise of
               currently exercisable warrants and indirectly beneficially owns 2,084,510 as
               reported on a Schedule 13G filed on February 17, 2004. FBR is also acting as
               financial advisor to Saxon Capital on the REIT conversion for which it is
               receiving an advisory fee of 1% of gross proceeds received from Saxon
               REITs public offering, excluding sales of securities to Saxon
               Capitals officers or directors. The business address of FBR is Potomac
               Tower, 1001 Nineteenth Street North, Arlington, Virginia 22209.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Based on a Schedule 13G filed on February 17, 2004 by Eubel Brady & Suttman
               Asset Management, Inc. with the sole power to dispose and vote 1,891,105 shares
               of our common stock. The business address for Eubel Brady & Suttman Asset
               Management, Inc. is 7777 Washington Village Drive, Suite 210, Dayton, Ohio,
               45459.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Based on a Schedule 13G filed on February 12, 2004 by Wellington Management
               Company, LLP with the shared power to dispose of 1,525,200 shares and vote
               1,064,900 shares of our common stock. The business address for Wellington
               Management Company, LLP is 75 State Street, Boston, Massachusetts 02109.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | Shares are held by TLT, Ltd., 433 Private Road 125, Savoy, Texas 75479. Stock
               options exercisable into common stock are held by Mr. Wageman. TLT, Ltd. is
               controlled by Mr. Wageman.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | Includes only those shares beneficially owned by current executive officers and
               directors.
| | --- | ---------------------------------------------------------------------------------------------------------

---

Item 13. Certain
Relationships and Related Transactions

During
2003, neither Saxon Capital nor any of its subsidiaries engaged in any related party
transactions. Saxon Capital, however, expects that FBR, which owns more than 5% of Saxon
Capitals voting stock, will be the lead underwriter for Saxon REITs public
offering that is currently expected to occur upon the consummation of the transactions contemplated by the
REIT conversion. FBR is
acting as financial advisor to Saxon Capital on the REIT conversion, for which it is
receiving an advisory fee of 1% of gross proceeds received from Saxon REITs public
offering, excluding sales of securities to Saxon Capitals officers or directors.

Mortgage
Loans. During 2003, we originated mortgage loans to our officers and employees. These
mortgage loans were underwritten to our underwriting guidelines. When making loans to our
officers and employees, we waive loan origination fees that otherwise would be paid to us
by the borrower, and reduce the interest rate by 25 basis points from the market rate. At
December 31, 2003, we had $12.0 million of unpaid principal balances related to mortgage
loans originated for our officers and employees. Effective December 1, 2002, we no longer
renew or make new mortgage loans to our executive officers or directors. We have never
made loans to any of our independent directors.

Item 14. Principal
Accountant Fees and Services

The
Audit Committee has appointed Deloitte & Touche LLP to serve as our independent public
auditors for fiscal year 2004. Management has invited representatives of Deloitte &
Touche LLP to be present at the meeting, and expects that they will attend. If present,
these representatives will have the opportunity to make a statement if they desire to do
so, and will be available to respond to appropriate questions from shareholders.

Independent Public
Auditors Fees

For
its 2003 and 2002 services, we paid Deloitte & Touche LLP the following fees:

| | Audit
Fees. The aggregate fees for professional services rendered by Deloitte & Touche LLP
in connection with their audit of our annual consolidated financial statements as well as
reviews of the consolidated financial statements included in our Quarterly Reports on Form
10-Q for the 2003 and 2002 fiscal years were approximately $556,861 and $450,250,
respectively.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Audit-Related
Fees. The aggregate fees for all audit-related services rendered by Deloitte & Touche
LLP in the 2003 and 2002 fiscal years were $107,482 and $139,810, respectively, which
included attestation services rendered by Deloitte & Touche LLP for matters such as
audits of employee benefit plans and agreed-upon procedures as well as consents relating
to SEC registration statements and testing and implementation relating to Sarbanes-Oxley
Section 404 in fiscal year 2003.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Tax
Fees.  There were no tax services rendered by Deloitte & Touche LLP in the 2003 and 2002
fiscal years.
| | ----------------------------------------------------------------------------------------------------------

| | All
Other Fees.  There were no other fees rendered by Deloitte & Touche LLP in the 2003 and
2002 fiscal years.
| | --------------------------------------------------------------------------------------------------------------

The
Audit Committee has considered whether the provision of services by Deloitte & Touche
LLP under the caption All Other Fees above is compatible with maintaining the
independence of Deloitte & Touche LLP.

Pre-Approval Policies and
Procedures

The
Audit Committee pre-approves all audit and permissible non-audit services provided by the
independent public auditors. These services may include audit services, audit-related
services, tax services and other services. All of the services provided by the independent
public auditors described under Independent Public Auditors Fees were
pre-approved by the Audit Committee based on the Audit Committees policy for the
pre-approval of services provided by the independent public auditors.

The
Audit Committees pre-approval policy and procedures include:

- reviewing the performance of the independent public auditors and annually appointing the
independent public auditors or approving any discharge of the independent public auditors
when circumstances warrant;
- approving the annual engagement of the independent public auditors for any and all
services requested to be provided, including audit, audit-related, non-audit services, but
the Audit Committee may also approve particular services on a case-by-case basis;
- prior to the engagement and thereafter as appropriate, reviewing and discussing with the
independent public auditors of all significant relationships they have with Saxon Capital
that could impair the independent public auditors independence, including
consideration of the significance of any non-audit services being provided to Saxon
Capital;
- considering and approving in advance any other audit or non-audit related services,
detailed as to the particular service or category of services, under circumstances (other
than permissible de minimus non-audit related services) proposed to be provided by the
independent public auditors, which responsibility may be delegated to one or more members
of the Audit Committee in the Audit Committees discretion with such member reporting
any decisions to the Audit Committee at the next scheduled meeting;
- requiring management to prepare timely disclosure of any such audit or non-audit related services; and
- reviewing the independent public auditors annual audit plan and discussing the
scope, staffing, locations, reliance upon management and general audit approach.

The
Audit Committee may not delegate to management its responsibilities to pre-approve
services performed by the independent public auditors.

# PART IV

Item 15.  Exhibits,
Financial Statement Schedules and Reports on Form 8-K

(c)              Exhibits.

The
following exhibits are filed herewith:

ExhibitNumber          
                          
                      
  
                                                   Description

|31.1 | Certification
of Chief Executive Officer pursuant to Section 302
|---- | ----------------------------------------------------------------

|31.2 | Certification
of Chief Financial Officer pursuant to Section 302
|---- | ----------------------------------------------------------------

|32.1 | Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section 906
|---- | --------------------------------------------------------------------------------------------

---

# SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant
has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Richmond, Commonwealth of Virginia, on April 29, 2004.

| |  | SAXON CAPITAL, INCBy: /s/ Michael L. Sawyer
Michael L. SawyerChief Executive Officer
| |  | --------------------------------------------------------------------------------------------------

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the dates indicated.

| | Signature | Capacity in Which to Sign | Date
| | ------------------- | -------------------------------------- | --------

| | *
Richard A. Kraemer | Chairman of the Board of Directors | April 29, 2004
| | ------------------------------ | ---------------------------------- | --------------

| | /s/ Michael L. Sawyer
Michael L. Sawyer | Chief Executive Officer and Director  (principal executive officer) | April 29, 2004
| | ------------------------------------------------- | ------------------------------------------------------------------- | --------------

| | *
Dennis G. Stowe | President and Chief Operating Officerand Director | April 29, 2004
| | --------------------------- | ------------------------------------------------- | --------------

| | *
Edward G. Harshfield | Director | April 29, 2004
| | -------------------------------- | -------- | --------------

| | *
Thomas J. Wageman | Director | April 29, 2004
| | ----------------------------- | -------- | --------------

| | *
David D. Wesselink | Director | April 29, 2004
| | ------------------------------ | -------- | --------------

| | *
Robert B. Eastep | Chief Financial Officer (principal financial and accounting officer) | April 29, 2004
| | ---------------------------- | -------------------------------------------------------------------- | --------------

| | * | Pursuant
to the Power of Attorney previously included in the Form 10-K.
| | - | -----------------------------------------------------------------------

| |  | By: /s/ Michael L. Sawyer
Michael L. SawyerAttorney-in Fact
| |  | -------------------------------------------------------------------------

---