ITEM 1. BUSINESS
Cornerstone Realty Income Trust, Inc. (together with its subsidiaries, the "Company") is a Virginia corporation and was incorporated in August 1989. Initial capitalization occurred on August 18, 1992. Operations of rental property commenced on June 1, 1993. The business of the Company is to acquire and operate existing residential apartment communities located in the southern United States. As of December 31, 2000, the Company owned 72 apartment communities, which comprised a total of 18,076 apartment units. The Company's apartment communities are located in Georgia, North Carolina, South Carolina, Texas and Virginia. The Company's properties are described in Item 2
ITEM 2. PROPERTIES
As of December 31, 2000, the Company owned 72 apartment communities, which comprised a total of 18,076 apartment units. Those apartment communities were located in Georgia (5 communities), North Carolina (23 communities), South Carolina (5 communities), Texas (29 communities), and Virginia (10 communities).
The following table sets forth specific information regarding the Company's properties:
(Table continued, next page)
Notes to table of properties:
(1) "Total Investment" includes the purchase price of the property plus real estate commissions, closing costs and improvements capitalized since the date of acquisition, excluding Apple properties. The Apple properties include the allocated purchase price at the time of the merger and improvements capitalized since the merger.
(2) An open item denotes that the Company did not own the property during the period indicated.
(3) Heatherwood Apartments is comprised of Heatherwood (completed in 1980) and Italian Village and Villa Marina Apartments (completed in 1980), acquired in September 1996 and August 1997, respectively, at a cost of $10,205,457 and $7,425,000. They are adjoining properties and are operated as one apartment community.
(4) Trolley Square Apartments is comprised of Trolley Square East Apartments (completed in 1964) and Trolley Square West Apartments (completed in 1965) acquired in June 1996 and December 1996, respectively, at a cost of $6,000,000 and $4,242,575. They are adjacent properties and are operated as one apartment community.
(5) Trophy Chase is comprised of Trophy Chase (completed in 1970) and Hunter's Creek (completed in 1970) acquired in April 1996 and July 1999, respectively, at a cost of $3,710,000 and $8,918,991.
(6) The Meadows is comprised of The Meadows (completed in 1974) and the Enclave (completed in 2000) acquired in January 1996 and March 2000, respectively, at a cost of $6,200,000 and $8,786,000.
(7) Glen Eagles is comprised of Glen Eagles (completed in 1990) and Prestwick (completed in 2000) acquired in October 1995 and September 2000, respectively, at a cost of $7,300,000 and $9,587,653.
(8) Average rent per month reflects December's monthly gross potential less concessions divided by the property's number of units
(9) Economic Occupancy percentage reflects Adjusted Schedule Rent divided by Adjusted Gross Potential where Adjusted Gross Potential consists of Gross Potential net of concessions, model unit costs, and employee unit costs, and Adjusted Schedule Rent consists of Adjusted Gross Potential net of vacancies and bad debt expense.
(10) $73.5 million of secured debt which is secured by 10 properties which are individually noted.
(11) Sold during 2000 (entries in table apply only to undeveloped land retained by the Company).
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
Neither the Company nor any of its apartment properties is presently subject to any material litigation nor, to the Company's knowledge, is any litigation threatened against the Company or any of the properties, other than routine actions arising in the ordinary course of business, some of which are expected to be covered by liability insurance and all of which collectively are not expected to have a material adverse effect on the business or financial condition or results of operations of the Company.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common shares are traded on the New York Stock Exchange ("NYSE"). The common shares were listed on the NYSE under the symbol "TCR" on April 18, 1997. Before
that date, there was no active trading market for the common shares. The following table sets forth the high and low sale prices on the NYSE for the common shares (as reported by the NYSE) and the cash distributions declared and paid for each quarterly period indicated. On March 9, 2001, the last reported sale price on the NYSE was $11.00 per common share.
Distributions of $40,251,087 and $42,050,415 were made to the shareholders during 2000 and 1999, respectively.
The timing and amounts of distributions to shareholders are within the discretion of the Company's board of directors. Future distributions will depend on the Company's results of operations, cash flow from operations, economic conditions and other factors, such as working capital, cash requirements to fund investing and financing activities, capital expenditure requirements, including improvements to and expansions of properties and the acquisition of additional properties, as well as the distribution requirements under federal income tax provisions for qualification as a REIT. The Company's distributions to its shareholders also may be limited by the agreements pertaining to the Company's unsecured lines of credit.
For federal income tax purposes, distributions paid to common shareholders may consist of ordinary income, capital gains distributions, non-taxable return of capital, or a combination thereof. Distributions constitute ordinary income to the extent of the Company's current and accumulated earnings and profits. Distributions which exceed the Company's current and accumulated earnings and profits constitute a return of capital rather than a dividend to the extent of a shareholder's basis in his common shares and reduce the shareholder's basis in the common shares. To the extent that a distribution exceeds both the Company's current and accumulated earnings and profits and the shareholder's basis in his common shares, it is generally treated as gain from the sale or exchange of that shareholder's common shares. The Company notifies shareholders annually as to the taxability of distributions paid during the preceding year. In 2000, approximately 41% of distributions represented a return of capital, 42% ordinary income and 17% represented long-term capital gain.
The Company has a Dividend Reinvestment and Share Purchase Plan under which any record holder of common shares may reinvest cash dividends and may invest additional cash payments of up to $15,000 per quarter in common shares.
On July 23, 1999, in connection with the Apple merger, the Company issued 12,666,019 Series A Convertible Preferred Shares, each of which is convertible into 1.5823 of the Company's common shares, reflecting a conversion price of $15.80 per common share of the Company. The Series A Convertible Preferred Shares are non-voting and have a liquidation preference of $25 per share. After five years, the Series A Convertible Preferred Shares are redeemable at $25 per share plus any accrued dividends, at the option of the Company, in whole or in part, for cash or stock, subject to certain conditions. The Company is imputing dividends calculated as the present value difference between the perpetual preferred stock distribution and the stated distribution rate. The imputed dividend is reflected as additional preferred stock distributions. The Company declared distributions of $2.1842 per share on the Series A Convertible Preferred Stock. The Series A Convertible Preferred Shares are not listed on any exchange.
On March 9, 2001, the Company's common shares were held by 859 shareholders of record.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
For the information called for by this item, see the information in Exhibit 13, 2000 Annual Report, under the caption "Selected Financial Data" on page 14 thereof, which information is hereby incorporated by reference herein.
The selected financial data should be read in conjunction with the financial statements and related notes of the Company included under Item 8 of this Report.
ITEM 7
ITEM 7 / 7A. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS / MARKET RISK DISCLOSURE
For the information called for by this item, see the information in Exhibit 13, 2000 Annual Report, under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 15 through 23 thereof, which information is hereby incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Company and report of independent auditors required to be included in this item are set forth in Item 14 of this report and are hereby incorporated herein by reference.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
For information with respect to the Company's directors and director nominees see the information under "Ownership of Equity Securities" and "Election of Directors" in the Company's Proxy Statement for its 2001 Annual Meeting of Shareholders, which information is hereby incorporated herein by reference. For information with respect to the Company's executive officers see "Executive Officers" in the Company's Proxy Statement for its 2001 Annual Meeting of Shareholders, which information is hereby incorporated herein by reference.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
For information with respect to compensation of the Company's executive officers and directors, see the information under "Compensation of Executive Officers" and "Compensation of Directors" in the Company's Proxy Statement for its 2001 Annual Meeting of Shareholders, which information is hereby incorporated herein by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
See the information under "Ownership of Equity Securities" in the Company's Proxy Statement for its 2001 Annual Meeting of Shareholders, which information is hereby incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For information on certain relationships and related transactions, see the information under "Certain Relationships and Agreements" in the Company's Proxy Statement for its 2001 Annual Meeting of Shareholders, which information is hereby incorporated herein by reference.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed as part of the report
1. Financial Statements --------------------
The following consolidated financial statements of the registrant are hereby included in Item 8 and incorporated herein by reference from Exhibit 13 (2000 Annual Report).
Independent Auditors' Report Ernst & Young LLP
Consolidated Balance Sheets As of December 31, 2000 and 1999
Consolidated Statements of Operations Years ended December 31, 2000, 1999 and 1998
Consolidated Statements of Shareholders' Equity Years ended December 31, 2000, 1999 and 1998
Consolidated Statements of Cash Flows Years ended December 31, 2000, 1999 and 1998
Notes to Consolidated Financial Statements
2. Financial Statement Schedule ----------------------------
Schedule III - Real Estate and Accumulated Depreciation (Included at the end of this Part IV)
All other financial statement schedules have been omitted because they are not applicable or not required or because the required information is included elsewhere in the financial statements or notes thereto.
3. Exhibits --------
Incorporated herein by reference are the exhibits listed under "Exhibit Index" on pages 29 through 40 of this report.
(b) Reports on Form 8-K
During the last quarter of 2000, the Company filed the following Current Reports on Form 8-K:
On December 27, 2000, the registrant filed a Report on Form 8-K dated December 12, 2000. The items reported were items 2 and 7.
SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION (AS OF DECEMBER 31, 2000)
(Schedule continued, next page)
(1) Sold during 2000 (entries in table apply only to undeveloped land retained by the Company). (2) Represents the aggregate cost for Federal Income tax purposes. (3) The reconciliations of the carrying amount of real estate owned and accumulated depreciation is contained in Note 3 of the audited consolidated financial statements.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Cornerstone Realty Income Trust, Inc.
By: /s/ Glade M. Knight ---------------------------------- Glade M. Knight
Chairman of the Board, Chief Executive Officer and President
March 30, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the date indicated.
EXHIBIT INDEX
Exhibit No. Description - --- -----------
2 Agreement and Plan of Merger, dated as of March 30, 1999, by and among the registrant, Apple Residential Income Trust, Inc. and Cornerstone Acquisition Company. (Incorporated by reference to Exhibit 2 to the registrant's Registration Statement on Form S-4; Registration Statement No. 333-78117).
3.1 Amended and Restated Articles of Incorporation of Cornerstone Realty Income Trust, Inc., as amended (Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K dated May 12, 1998; SEC File No. 1-12875).
3.2 Articles of Amendment to the Amended and Restated Articles of Incorporation of Cornerstone Realty Income Trust, Inc. (Incorporated by reference to Exhibit 3.2 to Current Report on Form 8-K dated July 23, 1999; SEC File No. 1-12875).
3.3 Bylaws of Cornerstone Realty Income Trust, Inc. (Amended Through May 25, 2000). (Incorporated by reference to the Exhibit of the same number to Form S-4 Registration Statement, SEC File No. 1-12875, filed on February 21, 2001 by Cornerstone Realty Income Trust, Inc.).
4.1 Promissory Note dated September 27, 1999 in the principal amount of $50,550,000 made payable by Cornerstone Realty Income Trust, Inc. to the order of The Prudential Insurance Company of America (Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.2 Promissory Note dated September 27, 1999 in the principal amount of $22,950,000 made payable by CRIT-NC, LLC to the order of The Prudential Insurance Company of America (Incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.3 Mortgage and Security Agreement dated as of September 27, 1999 from Cornerstone Realty Income Trust, Inc., as borrower, to The Prudential Insurance Company of America, as lender, pertaining to the Hampton Pointe and Westchase properties (Incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.4 Mortgage and Security Agreement dated as of September 27, 1999 from Cornerstone Realty Income Trust, Inc., as borrower, to The Prudential Insurance Company of America, as lender, pertaining to the Arbors at Windsor Lake property (Incorporated by reference to Exhibit 4.4 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.5 Deed of Trust and Security Agreement dated as of September 27, 1999 made by CRIT-NC, LLC, as borrower, for the benefit of The Prudential Insurance Company of America, as lender, pertaining to the Charleston Place and Stone Point properties (Incorporated by reference to Exhibit 4.5 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.6 Deed of Trust and Security Agreement dated as of September 27, 1999 made by CRIT-NC, LLC, as borrower, for the benefit of The Prudential Insurance Company of America, as lender, pertaining to the St. Regis and Remington Place properties (Incorporated by reference to Exhibit 4.6 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.7 Deed To Secure Debt and Security Agreement by Cornerstone Realty Income Trust, Inc., as borrower, to The Prudential Insurance Company of America, as lender, pertaining to the Ashley Run, Stone Brook and Spring Lake properties (Incorporated by reference to Exhibit 4.7 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.8 Assignment of Leases and Rents dated as of September 27, 1999, by Cornerstone Realty Income Trust, Inc. to The Prudential Insurance Company of America (Charleston County, South Carolina) (Incorporated by reference to Exhibit 4.8 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.9 Assignment of Leases and Rents dated as of September 27, 1999, by Cornerstone Realty Income Trust, Inc. to The Prudential Insurance Company of America (Richland County, South Carolina) (Incorporated by reference to Exhibit 4.9 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.10 Assignment of Leases and Rents dated as of September 27, 1999, by CRIT-NC, LLC to The Prudential Insurance Company of America (Mecklenburg County, North Carolina) (Incorporated by reference to Exhibit 4.10 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.11 Assignment of Leases and Rents dated as of September 27, 1999, by Cornerstone Realty Income Trust, Inc. to The Prudential Insurance Company of America (Clayton County, Georgia) (Incorporated by reference to Exhibit 4.11 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.12 Assignment of Leases and Rents dated as of September 27, 1999, by Cornerstone Realty Income Trust, Inc. to The Prudential Insurance Company of America (Gwinnett County, Georgia) (Incorporated by reference to Exhibit 4.12 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.13 Assignment of Leases and Rents dated as of September 27, 1999, by CRIT-NC, LLC to The Prudential Insurance Company of America (Wake County, North
Carolina) (Incorporated by reference to Exhibit 4.13 to Current Report on Form 8-K dated September 29, 1999; SEC File No. 1-12875).
4.14 Promissory Note dated December 12, 2000 in the principal amount of $10,500,000 made payable by CRIT-VA, Inc. to First Union National Bank, with respect to the Mayflower Apartments in Virginia Beach, Virginia. (Incorporated by reference to Exhibit 10.14 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.15 Indemnity and Guaranty Agreement dated as of December 12, 2000 by Cornerstone Realty Income Trust, Inc. as Indemnitor in favor of First Union National Bank as Lender, in connection with a $10,500,000 loan to CRIT-VA, Inc. as Borrower, with respect to the Mayflower Apartments in Virginia Beach, Virginia. (Incorporated by reference to Exhibit 10.15 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.16 Deed of Trust and Security Agreement dated as of December 12, 2000, from CRIT-VA, Inc., as Grantor, to TRSTE, Inc. as Trustee for First Union National Bank, the Beneficiary with respect to the Mayflower Apartments in Virginia Beach, Virginia. (Incorporated by reference to Exhibit 10.16 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.17 Assignment of Warranties and Other Contract Rights dated as of December 12, 2000 from CRIT-VA, Inc. as Borrower to First Union National Bank as Lender with respect to the Mayflower Apartments in Virginia Beach, Virginia. (Incorporated by reference to Exhibit 10.17 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.18 Assignment of Leases and Rents dated as of December 12, 2000 by CRIT-VA, Inc. as Assignor in favor of First Union National Bank as Assignee with respect to the Mayflower Apartments in Virginia Beach, Virginia. (Incorporated by reference to Exhibit 10.18 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.19 Consent and Agreement of Manager dated as of December 12, 2000 by CRIT-VA, Inc. as Borrower in favor of First Union National Bank as Lender with respect to the Mayflower Apartments in Virginia Beach, Virginia. (Incorporated by reference to Exhibit 10.19 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.20 Environmental Indemnity Agreement dated as of December 12, 2000 by CRIT-VA, Inc. and Cornerstone Realty Income Trust, Inc., as Indemnitors, in favor of First Union National Bank, as Lender, with respect to the Mayflower Apartments in Virginia Beach, Virginia. (Incorporated by reference to Exhibit 10.20 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.21 Receipt and Closing Certificate dated December 12, 2000 by CRIT-VA, Inc. as Borrower and Cornerstone Realty Income Trust, Inc. as Guarantor in favor of First Union National Bank, as Lender, with respect to the Mayflower Apartments in Virginia Beach, Virginia. (Incorporated by reference to Exhibit 10.21 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.22 Revolving Credit Note dated December 12, 2000 in the principal amount of $50,000,000 made payable by Cornerstone Realty Income Trust, Inc. and CRIT-NC, LLC to the order of First Union National Bank. (Incorporated by reference to Exhibit 10.22 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.23 Credit Agreement dated as of December 12, 2000 among Cornerstone Realty Income Trust, Inc. and CRIT-NC, LLC as Borrowers and First Union National Bank as Lender and Administrative Agent for all lenders. (Incorporated by reference to Exhibit 10.23 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.24 Schedule setting forth information on 14 substantially identical promissory notes (with respect to Exhibit 4.14) dated December 12, 2000 in various principal amounts made payable to the order of First Union National Bank. (Incorporated by reference to Exhibit 10.24 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.25 Schedule setting forth information on 14 substantially identical Indemnity and Guaranty Agreements (with respect to Exhibit 4.15) dated as of December 12 by Cornerstone Realty Income Trust, Inc. as Indemnitor in favor of First Union National Bank as Lender. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.26 Schedule setting forth information on 14 substantially identical Deeds of Trust (with respect to Exhibit 4.16) dated as of December 12, 2000 with First Union National Bank as Beneficiary. (Incorporated by reference to Exhibit 10.26 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.27 Schedule setting forth information on 14 substantially identical Assignments of Warranties and Other Contract Rights (with respect to Exhibit 4.17) dated as of December 12, 2000 to First Union National Bank as Lender. (Incorporated by reference to Exhibit 10.27 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.28 Schedule setting forth information on 14 substantially identical Assignments of Leases and Rents (with respect to Exhibit 4.18) dated as of December 12, 2000 to First Union National Bank as Assignee. (Incorporated by reference to Exhibit 10.28 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.29 Schedule setting forth information on 14 substantially identical Consents and Agreements of Manager (with respect to Exhibit 4.19) dated as of December 12, 2000 in favor of First Union National Bank. (Incorporated by reference to Exhibit 10.29 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.30 Schedule setting forth information on 14 substantially identical Environmental Indemnity Agreements (with respect to Exhibit 4.20) dated as of December 12, 2000 in favor of First Union National Bank. (Incorporated by reference to Exhibit 10.30 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
4.31 Schedule setting forth information on 14 substantially identical Receipt and Closing Certificates (with respect to Exhibit 4.21) dated December 12, 2000 in favor of First Union National Bank. (Incorporated by reference to Exhibit 10.31 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.1 Amendment and Restatement of Cornerstone Realty Income Trust, Inc. 1992 Incentive Plan. (Exhibit 10.14) (1) This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
10.2 Amendment and Restatement of Cornerstone Realty Income Trust, Inc. 1992 Non-Employee Directors Stock Option Plan. (Exhibit 10.15) (1) This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14 (c) of Form 10-K.
10.3 Agreement for Appointment of Transfer Agent and Registrar between Cornerstone Realty Income Trust, Inc. and First Union National Bank of North Carolina (Incorporated by reference to Exhibit 10.19 to the registrant's Report on Form 10-K for the Year Ended December 31, 1994; SEC File No. 0-23954).
10.4 Agreement and Bill of Transfer and Assignment dated October 1, 1996 between Cornerstone Management Group, Inc. and Cornerstone Realty Income Trust, Inc.(2)
10.5 Agreement and Bill of Transfer and Assignment dated October 1, 1996 between Cornerstone Advisors, Inc. and Cornerstone Realty Income Trust, Inc.(2)
10.6 Agreement and Bill of Transfer and Assignment dated October 1, 1996 between Cornerstone Realty Group, Inc. and Cornerstone Realty Income Trust, Inc. (Acquisition/Disposition Agreement).(2)
10.7 Agreement and Bill of Transfer and Assignment dated October 1, 1996 between Cornerstone Realty Group, Inc. and Cornerstone Realty Income Trust, Inc. (Personal Property). (2)
10.8 Employment Agreement dated September 1, 1996 between Cornerstone Realty Income Trust, Inc. and Glade M. Knight. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14 (c) of Form 10-K. (Incorporated by reference to Exhibit 10.8 to the registrant's Report on Form 10-K for the Year Ended December 31, 1997; SEC File No. 1-12875).
10.9 Employment Agreement dated September 1, 1996 between Cornerstone Realty Income Trust, Inc. and Debra A. Jones. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14 (c) of Form 10-K. (2)
10.10 Employment Agreement dated September 1, 1996 between Cornerstone Realty Income Trust, Inc. and Stanley J. Olander, Jr. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14 (c) of Form 10-K. (2)
10.11 First Amendment to the Cornerstone Realty Income Trust, Inc. 1992 Incentive Plan. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14 (c) of Form 10-K. (Incorporated by reference to Exhibit 10.24 to the registrant's Report on Form 10-K for the Year Ended December 31, 1997; SEC File No. 1-12875).
10.12 First Amendment to the 1992 Incentive Plan Nonstatutory Stock Option Agreement between Cornerstone Realty Income Trust, Inc. and Martin Zuckerbrod. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14 (c) of Form 10-K. (Incorporated by reference to Exhibit 10.25 to the registrant's Report on Form 10-K for the Year Ended December 31, 1997; SEC File No. 1-12875).
10.13 First Amendment to the 1992 Incentive Plan Nonstatutory Stock Option Agreement between Cornerstone Realty Income Trust, Inc. and Harry S. Taubenfeld. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14 (c) of Form 10-K. (Incorporated by reference to Exhibit 10.26 to the registrant's Report on Form 10-K for the Year Ended December 31, 1997; SEC File No. 1-12875).
10.14A First Amendment to the Cornerstone Realty Income Trust, Inc. 1992 Non-Employee Directors Stock Option Plan. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14 (c) of Form 10-K. (Incorporated by reference to Exhibit 10.1 to the
registrant's Current Report on Form 8-K dated May 12, 1998; SEC File No. 1-12875).
10.14B Second Amendment to the Cornerstone Realty Income Trust, Inc. 1992 Non-Employee Directors Stock Option Plan. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to item 14(c) of Form 10-K (FILED HEREWITH)
10.15 Articles of Organization of CRIT-NC, LLC (Incorporated by reference to Exhibit 10.1 included in the registrant's Current Report on Form 8-K dated December 30, 1997; SEC File No. 0-23954.)
10.16 Operating Agreement of CRIT-NC, LLC dated as of December 9, 1997 (Incorporated by reference to Exhibit 10.2 included in the registrant's Current Report on Form 8-K dated December 30, 1997; SEC File No. 0-23954).
10.17 Articles of Incorporation of Apple General, Inc. (Incorporated by reference to Exhibit 10.14 filed in the registration statement on Form S-11 of Apple Residential Income Trust, Inc.; SEC File No. 333-10635).
10.18 Bylaws of Apple General, Inc. (Incorporated by reference to Exhibit 10.15 filed in the registration statement on Form S-11 of Apple Residential Income Trust, Inc.; SEC File No. 333-10635).
10.19 Articles of Incorporation of Apple Limited, Inc. (Incorporated by reference to Exhibit 10.12 filed in the registration statement on Form S-11 of Apple Residential Income Trust, Inc.; SEC File No. 333-10635).
10.20 Bylaws of Apple Limited, Inc. (Incorporated by reference to Exhibit 10.13 filed in the registration statement on Form S-11 of Apple Residential Income Trust, Inc.; SEC File No. 333-10635).
10.21 Certificate of Limited Partnership of Apple REIT Limited Partnership (Incorporated by reference to Exhibit 10.16 filed in the registration statement on Form S-11 of Apple Residential Income Trust, Inc.; SEC File No. 333-10635).
10.22 Limited Partnership Agreement of Apple REIT Limited Partnership (Incorporated by reference to Exhibit 10.17 filed in the registration statement on Form S-11 of Apple Residential Income Trust, Inc.; SEC File No. 333-10635).
10.23 Certificate of Limited Partnership for Apple REIT II Limited Partnership (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983).
10.24 Limited Partnership Agreement for Apple REIT II Limited Partnership (Incorporated by reference to Exhibit 10.6 to Current Report on Form 8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983).
10.25 Certificate of Limited Partnership for Apple REIT III Limited Partnership (Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983).
10.26 Limited Partnership Agreement for Apple REIT III Limited Partnership (Incorporated by reference to Exhibit 10.7 to Current Report on Form 8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983).
10.27 Certificate of Limited Partnership for Apple REIT IV Limited Partnership (Incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983).
10.28 Limited Partnership Agreement for Apple REIT IV Limited Partnership (Incorporated by reference to Exhibit 10.8 to Current Report on Form 8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983).
10.29 Certificate of Limited Partnership for Apple REIT V Limited Partnership (Incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983).
10.30 Limited Partnership Agreement for Apple REIT V Limited Partnership (Incorporated by reference to Exhibit 10.9 to Current Report on Form 8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983).
10.31 Certificate of Limited Partnership for Apple REIT VI Limited Partnership (Incorporated by reference to Exhibit 10.5 to Current Report on Form 8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983)
10.32 Limited Partnership Agreement for Apple REIT VI Limited Partnership (Incorporated by reference to Exhibit 10.10 to Current Report on Form 8-K dated July 9, 1998 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983).
10.33 Certificate of Limited Partnership of Apple REIT VII Limited Partnership (Incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K dated February 1, 1999 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983).
10.34 Limited Partnership Agreement of Apple REIT VII Limited Partnership (Incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K dated February 1, 1999 of Apple Residential Income Trust, Inc.; SEC File No. 0-23983).
10.35 Apple Residential Income Trust, Inc. 1996 Non-Employee Directors Stock Option Plan. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K (Incorporated by reference to Exhibit 99 to the Registration Statement on Form S-8 of Apple Residential Income Trust, Inc., as filed with the Securities and Exchange Commission on September 30, 1998; SEC File No. 333-64703).
10.36 Apple Residential Income Trust, Inc. 1996 Incentive Plan. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K (Incorporated by reference to Exhibit 99 to the Registration Statement on Form S-8 of Apple Residential Income Trust, Inc., as filed with the Securities and Exchange Commission on September 30, 1998; SEC File No. 333-64701).
10.37 Articles of Incorporation of Cornerstone Acquisition Company, as amended by Articles of Amendment thereto. (Incorporated by reference to Exhibit 10.42 to Annual Report on Form 10-K for the year ended December 31, 1999; SEC File No. 1-12875).
10.38 Bylaws of Cornerstone Acquisition Company. (Incorporated by reference to Exhibit 10.43 to Annual Report on Form 10-K for the year ended December 31, 1999; SEC File No. 1-12875).
10.39 Articles of Incorporation of CRIT-SC, Inc. (Incorporated by reference to Exhibit 10.44 to Annual Report on Form 10-K for the year ended December 31, 1999; SEC File No. 1-12875).
10.40 Bylaws of CRIT-SC, Inc. (Incorporated by reference to Exhibit 10.45 to Annual Report on Form 10-K for the year ended December 31, 1999; SEC File No. 1-12875).
10.41 Articles of Organization of CRIT-SC, LLC. (Incorporated by reference to Exhibit 10.46 to Annual Report on Form 10-K for the year ended December 31, 1999; SEC File No. 1-12875).
10.42 Operating Agreement of CRIT-SC, LLC. (Incorporated by reference to Exhibit 10.47 to Annual Report on Form 10-K for the year ended December 31, 1999; SEC File No. 1-12875).
10.43 Certificate of Limited Partnership of CRIT-Cornerstone Limited Partnership. (Incorporated by reference to Exhibit 10.48 to Annual Report on Form 10-K for the year ended December 31, 1999; SEC File No. 1-12875).
10.44 Limited Partnership Agreement of CRIT-Cornerstone Limited Partnership. (Incorporated by reference to Exhibit 10.49 to Annual Report on Form 10-K for the year ended December 31, 1999; SEC File No. 1-12875).
10.45 Stock Option Agreement dated July 23, 1999 between Glade M. Knight and Cornerstone Realty Income Trust, Inc. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K. (Incorporated by reference to Exhibit 10.50 to Annual Report on Form 10-K for the year ended December 31, 1999; SEC File No. 1-12875).
10.46 [Intentionally Omitted]
10.47 [Intentionally Omitted]
10.48 Change in Control Agreement dated as of August 1, 2000 by and between Cornerstone Realty Income Trust, Inc. and Glade M. Knight. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K. (FILED HEREWITH).
10.49 Change in Control Agreement dated as of August 1, 2000 by and between Cornerstone Realty Income Trust, Inc. and S. J. Olander, Jr. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K. (FILED HEREWITH).
10.50 Change in Control Agreement dated as of August 1, 2000 by and between Cornerstone Realty Income Trust, Inc. and Debra A. Jones. This is a management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K. (FILED HEREWITH).
10.51 CRIT-VA, Inc. Articles of Incorporation. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.52 CRIT-VA, Inc. Bylaws. (Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.53 Property Management Agreement dated as of December 12, 2000 between CRIT-VA, Inc. as Owner and Cornerstone Realty Income Trust, Inc. as Manager. (Incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.54 CRIT Special, Inc. Articles of Incorporation. (Incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.55 CRIT Special, Inc. Bylaws. (Incorporated by reference to Exhibit 10.5 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.56 Operating Agreement of CRIT-NC II, LLC. (Incorporated by reference to Exhibit 10.6 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.57 Property Management Agreement dated as of December 12, 2000 between CRIT-NC II, LLC as Owner and Cornerstone Realty Income Trust, Inc. as Manager. (Incorporated by reference to Exhibit 10.7 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.58 CAC Special General, Inc. Articles of Incorporation. (Incorporated by reference to Exhibit 10.8 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.59 CAC Special General, Inc. Bylaws. (Incorporated by reference to Exhibit 10.9 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.60 CAC Special Limited, Inc. Articles of Incorporation. (Incorporated by reference to Exhibit 10.10 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.61 CAC Special Limited, Inc. Bylaws. (Incorporated by reference to Exhibit 10.11 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.62 Limited Partnership Agreement of CAC Limited Partnership. (Incorporated by reference to Exhibit 10.12 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
10.63 Property Management Agreement dated as of December 12, 2000 between CAC Limited Partnership as Owner and Apple General, Inc. as Manager. (Incorporated by reference to Exhibit 10.13 to Current Report on Form 8-K dated December 12, 2000; SEC File No. 1-12875).
13 Portions of the registrant's 2000 Annual Report (with the exception of the information incorporated by reference in Items 6, 7, and 14 of this Form 10-K Report, no other information appearing in the such Annual Report is to be deemed filed as a part of this Form 10-K Report). (FILED HEREWITH).
21 Subsidiaries of Cornerstone Realty Income Trust, Inc. (FILED HEREWITH)
23 Consent of Ernst & Young LLP. (FILED HEREWITH)
99.1 Share Purchase Loan Program of Cornerstone Realty Income Trust, Inc. (Incorporated by reference to Exhibit 99.1 to the Quarterly Report on Form 10-Q for the period ended June 30, 2000; SEC File No. 1-12875).
99.2 Letter of Transmittal related to Exchange Offer. (Incorporated by reference to the Exhibit of the same number to Form S-4/A Registration Statement, SEC File No. 1-12875, filed on March 12, 2001 by Cornerstone Realty Income Trust, Inc.).
99.3 Letter of Instruction to Holders of Convertible Preferred Shares related to Exchange Offer. (Incorporated by reference to the Exhibit of the same number to Form S-4/A Registration Statement, SEC File No. 1-12875, filed on March 12, 2001 by Cornerstone Realty Income Trust, Inc.).
(1) Incorporated herein by reference to the Exhibit referred to in parentheses which was filed as an Exhibit to the registrant's Post-Effective Amendment No. 5 to its Registration Statement on Form S-11 (File No. 33-51296), as filed with the Securities and Exchange Commission on April 28, 1994.
(2) Incorporated herein by reference to the Exhibit of the same number filed as an Exhibit to the registrant's Report on Form 8-K dated September 26, 1996 (File No. 0-23954).
The registrant agrees to furnish the Securities and Exchange Commission on request a copy of any instrument with respect to long-term debt of the registrant or its subsidiaries the total amount of securities authorized under which does not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis.