As filed with the Securities and Exchange Commission on September 29, 1998
Registration No. 333-_______________
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
APPLE RESIDENTIAL INCOME TRUST, INC.
(Exact name of registrant as specified in its charter)
Virginia 54-1816010
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
306 East Main Street, Richmond, Virginia 23219
(Address of principal executive offices) (Zip Code)
APPLE RESIDENTIAL INCOME TRUST, INC.
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
(Full title of the plan)
<TABLE>
<S> <C> <C>
Glade M. Knight Copy to: Martin B. Richards, Esq.
306 East Main Street McGuire, Woods, Battle & Boothe LLP
Richmond, Virginia 23219 One James Center
Telephone: (804) 643-1761 Richmond, Virginia 23219
(Name, address and telephone number, including Telephone: (804) 775-1029
area code, of agent for service)
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
Title of Proposed Maximum Proposed Maximum
Securities to Amount to be Offering Aggregate Amount of
be Registered Registered Price Per Share (1) Offering Price (1) Registration Fee
========================================================================================================================
<S> <C> <C> <C> <C>
Common
Shares 915,000 shares $10 $9,150,000 $2,699.25
========================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee and
based, pursuant to Rule 457(a) under the Securities Act of 1933, on the most
recent price at which shares were sold to the public.
<PAGE>
PROSPECTUS
APPLE RESIDENTIAL INCOME TRUST, INC.
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
----------------
This document provides information about the 1996 Non-Employee
Directors Stock Option Plan of Apple Residential Income Trust, Inc. (the
"Company"), pursuant to which up to 915,000 shares of the Company's common
stock, no par value (the "Common Stock"), may be issued to eligible directors of
the Company.
----------------
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS
COVERING SECURITIES THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
-----------------
No person is authorized to give any information or make any
representation in connection with the offer contained in this Prospectus, other
than those contained herein. Any information or representation not contained
herein must not be relied upon as having been so authorized. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, the
securities covered by this Prospectus in any State or other jurisdiction in
which, or to any person to whom, it is unlawful to make such an offer or
solicitation. Neither the delivery of this Prospectus nor any sales or
solicitations hereunder shall under any circumstances create any implication
that there has been no change in the affairs of the Company since the date
hereof.
The date of this Prospectus is September 29, 1998.
<PAGE>
TABLE OF CONTENTS
PAGE
----
GENERAL INFORMATION................................................3
SHARES AVAILABLE FOR ISSUANCE......................................3
ELIGIBILITY........................................................3
TERMS OF AWARDS....................................................3
FEDERAL INCOME TAX CONSEQUENCES....................................4
For Participants..........................................4
For the Company...........................................5
RESTRICTIONS ON RESALE.............................................5
ADDITIONAL INFORMATION.............................................5
2
<PAGE>
GENERAL INFORMATION
The Board of Directors (the "Board") of the Company has adopted the
1996 Non-Employee Directors Stock Option Plan (the "Plan"), which became
effective on October 17, 1996.
The Plan is intended to promote long-term shareholder value and to
provide non-employee members of the Board with an incentive to continue as
directors of the Company. The Plan will terminate on October 17, 2006 unless
earlier terminated upon the adoption of a resolution by the Board. The Plan is
administered by the Board. The Board may suspend or discontinue the Plan or
revise or amend the Plan in any manner, except that without approval of the
shareholders of the Company, no revision or amendment may increase the number of
shares subject to the Plan or materially increase the benefits accruing to
participants under the Plan.
The Plan is not subject to any provisions of the Employee Retirement
Income Security Act of 1974 nor is it qualified under Section 401(a) of the
Internal Revenue Code (the "Tax Code").
Statements contained in this Prospectus as to the provisions of the
Plan are intended to be general in nature and may not in every instance be
complete. Reference is made to the written Plan, a copy of which will be
provided, without charge, upon written or oral request to the Company's Chief
Financial Officer. (See "Additional Information.") The statements in this
Prospectus are qualified in all respects by reference to the written Plan.
SHARES AVAILABLE FOR ISSUANCE
A total of up to 915,000 shares of Common Stock is reserved for
issuance under the Plan. Shares allocable to options under the Plan that expire
or otherwise terminate unexercised may again be subjected to an award under the
Plan. In the event of a stock dividend, stock split or combination of shares,
recapitalization, merger or other similar change, appropriate adjustments will
be made in the number and kind of shares issuable under the Plan, the number and
kind of shares to be issued under outstanding stock option awards, the exercise
price and other relevant provisions.
ELIGIBILITY
The Plan defines "Eligible Directors," eligible to receive option
awards under the Plan, as including all directors who are not otherwise
employees of the Company or any of its subsidiaries and who were not employees
thereof for a period of at least one year before the date of grant (as defined
in the Plan). Options have been and will be awarded automatically to the
Eligible Directors under the Plan as follows: (i) as of the Initial Closing,
each Eligible Director automatically received an option to purchase 5,500 shares
of Common Stock plus 0.0125% of the number of shares of Common Stock in excess
of a minimum offering sold by such initial closing; (ii) as of each June 1
during the years 1997 through 2001 (inclusive), each Eligible Director shall
automatically receive an option to purchase 0.02% of the total number of shares
of Common Stock issued and outstanding on that date; and (iii) as of the
election as a director of any new person who qualifies as an Eligible Director,
such Eligible Director shall automatically receive an option to purchase 5,000
shares of Common Stock.
TERMS OF AWARDS
No option issued under the Plan may be exercised earlier than six
months after the date of grant, and no option issued under the Plan may be
exercised after the first to occur of (i) 10 years from the date of grant, (ii)
three years following the optionee's ceasing to be a director of the Company
(other than by death), or (iii) one year following the optionee's death.
3
<PAGE>
The participant does not pay any monetary consideration for the
granting of the options. The Plan provides that the exercise price of shares
covered by an option shall be the fair market value of such shares on the date
of grant. The exercise price of an option may be paid in cash or by delivery to
the Company of shares of Common Stock (valued at fair market value on the date
of exercise) in the amount necessary to pay the exercise price. At the time of
exercise, the Company has the right to retain shares of the Common Stock
otherwise remittable to the optionee under the option to cover the Company's
income tax withholding obligations, subject to the optionee's right to make
other arrangements satisfactory to the Company for the payment of all applicable
withholding taxes. No fees, commissions or other charges are incurred upon
exercise of an option.
Options are not transferable except by will or by the laws of descent
and distribution and generally are exercisable during the lifetime of the
optionee only by such optionee. The Plan contains no provision that permits
participants to withdraw from the Plan and terminate their interests therein,
and it prohibits participants from assigning, pledging, or hypothecating their
options or their interests therein.
If the Company is party to a consolidation or a merger in which the
Company is not the surviving corporation, a transaction that results in the
acquisition of substantially all of the Company's outstanding stock by a single
person or entity, or a sale or transfer of substantially all of the Company's
assets, the Board may take such actions as it deems appropriate with respect to
outstanding options.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the Federal income tax consequences to
the Company and participants under the Plan. It is general and does not purport
to be complete. There may also be applicable state and local taxes. In addition,
in some cases it may be important to consider the effect, if any, of gift,
estate and inheritance taxes.
NO REPRESENTATION RESPECTING THE TAX TREATMENT OF ANY OPTION AWARD HAS
BEEN MADE TO A PLAN PARTICIPANT. PLAN PARTICIPANTS ARE URGED TO CONSULT THEIR
COUNSEL, ACCOUNTANTS, OR OTHER TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF
OPTIONS GRANTED TO THEM IN RELATION TO THEIR OWN PARTICULAR TAX SITUATION.
FOR PARTICIPANTS
NONSTATUTORY STOCK OPTIONS. All options granted under the Plan shall be
nonstatutory in nature and shall not be entitled to special tax treatment under
Tax Code Section 422. Under present Federal income tax law and existing and
temporary regulations subject to change at any time:
(1) Generally, no taxable income will be realized by a
participant upon the grant of nonstatutory stock options under the
Plans.
(2) Upon the exercise of nonstatutory stock options, a
participant will incur ordinary income in the year of exercise to the
extent that the fair market value of the Common Stock on the date of
exercise exceeds the option price.
EXERCISE OF AN OPTION WITH COMMON STOCK. A participant may pay any or
all of the purchase price on the exercise of a stock option by the delivery of
Common Stock. Usually when a participant delivers shares of Common Stock in
satisfaction of all, or any part, of the purchase price, no taxable gain is
recognized on any appreciation in value of the previously held Common Stock. In
other words, even though the delivered shares are valued at their fair market
value for purposes of paying all or part of the option price, the participant is
generally not taxed on the difference between the fair market value and the tax
basis of the shares.
4
<PAGE>
TAX BASIS OF COMMON STOCK RECEIVED UPON EXERCISE. Ordinary income
recognized upon receipt of Common Stock under the Plan will increase the
participant's tax basis for the purpose of determining gain or loss on the
subsequent sale or exchange of the Common Stock. Special rules apply to
determine the basis of shares of Common Stock received upon the exercise of a
stock option by the delivery of shares of previously owned Common Stock.
FOR THE COMPANY
The Company usually will be entitled to a business expense deduction at
the time and in the amount that the participant recognizes ordinary income in
connection with an option award. With respect to nonstatutory options, this
usually occurs upon exercise of the options.
RESTRICTIONS ON RESALE
The Plan contains no restrictions on the resale of Common Stock
received upon exercise of a stock option. However, the securities laws impose
certain limitations on sales by persons who are affiliates of the Company, as
defined in Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"). An affiliate may resell such Common Stock only pursuant to an
effective registration statement under the Securities Act or an exemption from
such registration, such as the exemption provided by Rule 144 under the
Securities Act. The Company has no obligation to register for resale any shares
of Common Stock acquired by participants and this Prospectus is not available to
a participant for re-offers or resales.
In addition, under Section 16(b) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), a director must pay to the Company any
profit made from a purchase and sale, or a sale and purchase, of Common Stock
within a six-month period. Transactions subject to Section 16(b) may include the
receipt, vesting and exercise of stock options, the delivery or retention of
Common Stock to pay the exercise price or to satisfy tax withholding obligations
and the resale of Common Stock received upon exercise. Transactions between the
director and the Company, in which no third parties are involved, may be
eligible for exemption pursuant to Rule 16b-3 under the Exchange Act.
Participants who have questions regarding the applicability of Section 16 are
encouraged to contact the Company's Chief Financial Officer.
PLAN PARTICIPANTS ARE URGED TO CONSULT WITH THEIR BROKERS, FINANCIAL
ADVISERS, AND SECURITIES COUNSEL TO DETERMINE THEIR PARTICULAR STATUS UNDER THE
SECURITIES LAWS BEFORE EFFECTING ANY RESALES OF THE COMPANY'S COMMON STOCK
RECEIVED PURSUANT TO THE PLAN.
ADDITIONAL INFORMATION
The Company hereby incorporates by reference the following documents
filed or to be filed with the Securities and Exchange Commission (the
"Commission");
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997;
(b) all other reports filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act since December 31,
1997, including the Company's Quarterly Reports on Form 10-Q
filed May 14, 1998 and August 14, 1998, and the Company's
Reports of Current Events on Form 8-K or 8-K/A filed on
January 30, 1998, February 18, 1998, February 23, 1998, April
15, 1998, April 17, 1998, April 22, 1998, May 13, 1998, May
22, 1998, June 10, 1998, July 7, 1998, July 16, 1998, August
3, 1998 and August 4, 1998;
(c) the Company's Registration Statement on Form 8-A under the
Exchange Act filed on April 3, 1998 with the Commission; and
5
<PAGE>
(d) from the date of filing such documents, all documents
subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all
securities offered have been sold or which de-registers all
such securities then remaining unsold.
Upon oral or written request, the Company will provide to a
participant, without charge, copies of (i) any and all of the information that
has been incorporated by reference in this document, (ii) the Company's most
recent annual report to shareholders, and (iii) if the participant is not
otherwise receiving such material, all reports, proxy statements and other
communications distributed by the Company to its shareholders generally. Such
requests should be directed to the Company's Chief Financial Officer at the
Company's business address: 306 East Main Street, Richmond, Virginia, 23219,
telephone number (804) 643-1761.
Participants may contact the Company's Chief Financial Officer at the
address and telephone number listed above to obtain additional information about
the Plan and its administrators.
The Company may distribute from time to time to participants reports
showing the status of their grants under the Plans.
6
<PAGE>
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Apple Residential Income Trust, Inc. (the "Company") hereby
incorporates by reference into this Registration Statement the following
documents which have been filed with the Securities and Exchange Commission (the
"Commission"):
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) all other reports filed with the Commission pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since December 31, 1997, including the Company's Quarterly Reports on
Form 10-Q filed May 14, 1998 and August 14, 1998, and the Company's Reports of
Current Events on Form 8-K or 8-K/A filed on January 30, 1998, February 18,
1998, February 23, 1998, April 15, 1998, April 17, 1998, April 22, 1998, May 13,
1998, May 22, 1998, June 10, 1998, July 7, 1998, July 16, 1998, August 3, 1998
and August 4, 1998, and
(c) the description of the Company's Common Shares appearing in its
Registration Statement on Form 8-A filed with the Commission on April 3, 1998
(No. 0-23983)
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which de-registers all such securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be part hereof from the respective dates of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 10 of the Virginia Stock Corporation Act (the "Act") allows, in
general, for indemnification, in certain circumstances, by a corporation of any
person threatened with or made a party to any action, suit or proceeding by
reason of the fact that he or she is, or was, a director, officer, employee or
agent of such corporation. Indemnification is also authorized with respect to a
criminal act or proceeding where the person had no reasonable cause to believe
that his or her conduct was unlawful. Article 9 of the Act provides limitations
on damages payable by officers and directors, except in cases of willful
misconduct or knowing violation of criminal law or any federal or state
securities laws.
Article VI of the Company's Articles of Incorporation (the "Articles")
provides that in every instance in which the Act, and any amendments thereto,
permits the limitation or elimination of liability of directors or officers of a
corporation to the corporation or its shareholders, the directors and officers
of the Company shall not be liable to the Company or its shareholders.
The Articles provide for mandatory indemnification of any individual
who is, was or is threatened to be made a party to a proceeding (including a
proceeding by or in the right of the Company or by or on behalf of its
shareholders) because such individual is or was a director or officer of the
Company or of any legal entity controlled by the Company or because such
individual is or was a fiduciary of any employee benefit plan established at the
II-1
<PAGE>
direction of the Company, against all liabilities and reasonable expenses
incurred on account of the proceeding, provided that the directors of the
Company (excluding the indemnified party) determine in good faith that the
director's or officer's course of conduct which caused the loss or liability was
undertaken in good faith within what he reasonably believed to be the scope of
his authority and for a purpose which he reasonably believed to be in the best
interests of the Company or its shareholders, except such liabilities and
expenses as are incurred because of such individual's willful misconduct, bad
faith, negligence, reckless disregard of duties or violation of the criminal
law.
The Company maintains a standard policy of officers' and directors'
liability insurance. The Company is authorized to purchase and maintain
insurance against any liability it may have under the indemnification provisions
of the Articles or to protect any of the persons named above against any
liability arising from their service to the Company or any other legal entity at
the request of the Company, regardless of the Company's power to indemnify
against such liability.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
Exhibit
Number Description
- ------ -----------
4.1 Articles of Incorporation of Apple Residential Income Trust, Inc.
(Incorporated by reference to Exhibits 3.1, 3.3 and 3.4 included in the
Registrant's Registration Statement on Form S-11; File No. 333-10635).
4.2 Amended and Restated Bylaws of Apple Residential Income Trust, Inc.
(Incorporated by reference to Exhibit 3.5 included in the Registrant's
Registration Statement on Form S-11; File No. 333-10635).
5 Opinion of McGuire, Woods, Battle & Boothe LLP as to the legality of the
securities being registered.
23.1 Consent of McGuire, Woods, Battle & Boothe LLP (included as part of
Exhibit 5).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of L.P. Martin & Company, P.C.
24.1 Power of Attorney of Glade M. Knight.
24.2 Power of Attorney of Stanley J. Olander, Jr.
24.3 Power of Attorney of Lisa B. Kern.
24.4 Power of Attorney of Penelope W. Kyle.
24.5 Power of Attorney of Bruce H. Matson.
99 Apple Residential Income Trust, Inc. 1996 Non-Employee Directors Stock
Option Plan.
ITEM 9. UNDERTAKINGS
II-2
<PAGE>
The undersigned registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, on September 29,
1998.
APPLE RESIDENTIAL INCOME TRUST, INC.
By: /s/ Glade M. Knight
---------------------------------------------
Glade M. Knight, Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
<TABLE>
<CAPTION>
Signature Capacities Date
--------- ---------- ----
<S> <C> <C>
/s/Glade M. Knight Director, President, and September 29, 1998
- --------------------------------- Chief Executive Officer
Glade M. Knight
/s/ * Vice President, September 29, 1998
- ---------------------------------------- Secretary and Chief
Stanley J. Olander, Jr. Financial Officer
/s/* Director September 29, 1998
- ----------------------------------------
Lisa B. Kern
/s/* Director September 29, 1998
- ----------------------------------------
Penelope W. Kyle
Director September 29, 1998
- ----------------------------------------
Bruce H. Matson
*By: /s/ Glade M. Knight
--------------------------------
Glade M. Knight,
Attorney-in-Fact for the above-named persons
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page
- ------ ----------- -------------
<S> <C>
4.1 Articles of Incorporation of Apple Residential Income Trust,
Inc. (Incorporated by reference to Exhibits 3.1, 3.3 and 3.4
included in the Registrant's Registration Statement on Form
S-11; File No. 333-10635.
4.2 Amended and Restated Bylaws of Apple Residential Income Trust,
Inc. (Incorporated by reference to Exhibit 3.5 included in the
Registrant's Registration Statement on Form S-11; File No.
333-10635).
5 Opinion of McGuire, Woods, Battle & Boothe LLP as to the
legality of the securities being registered.
23.1 Consent of McGuire, Woods, Battle & Boothe LLP (included as
part of Exhibit 5).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of L.P. Martin & Company, P.C.
24.1 Power of Attorney of Glade M. Knight.
24.2 Power of Attorney of Stanley J. Olander, Jr.
24.3 Power of Attorney of Lisa B. Kern.
24.4 Power of Attorney of Penelope W. Kyle.
24.5 Power of Attorney of Bruce H. Matson.
99 Apple Residential Income Trust, Inc. 1996 Non-Employee
Directors Stock Option Plan.
</TABLE>
II-5
EXHIBIT 5
September 29, 1998
Board of Directors
Apple Residential Income Trust, Inc.
306 East Main Street
Richmond, Virginia 23219
Dear Sirs:
We have acted as counsel to Apple Residential Income Trust, Inc. (the
"Company"), a Virginia corporation, in connection with the preparation of the
registration statement on Form S-8 pertaining to the Apple Residential Income
Trust, Inc. 1996 Non-Employee Directors Stock Option Plan to which this opinion
is an exhibit (the "Registration Statement"), which is being filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), for the registration under the Act of the Common Shares of the
Company described in such Registration Statement. Terms not otherwise defined
herein shall have the meanings assigned to them in the Registration Statement.
We have reviewed originals or copies of (i) the Articles of
Incorporation, as amended, Bylaws and other corporate documents of the Company,
(ii) certain resolutions of the Board of Directors of the Company, and (iii) the
Registration Statement and the prospectus included therein. In addition, we have
reviewed such other documents and have made such legal and factual inquiries as
we have deemed necessary or advisable for purposes of rendering the opinions set
forth below.
Based upon and subject to the foregoing we are of the opinion that:
1. The Company is duly organized and validly existing under the laws of
the Commonwealth of Virginia; and
2. The Common Shares registered under the Registration Statement have
been duly authorized and, when issued and paid for as described in the
Registration Statement, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we are in
the category of persons whose consent is required by Section 7 of the Act, or
the rules and regulations promulgated thereunder by the Securities and Exchange
Commission.
Very truly yours,
/s/ McGuire, Woods, Battle & Boothe LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333- 00000) pertaining to the 1996 Non-Employee Directors Stock Option
Plan of Apple Residential Income Trust, Inc. of our report dated February 13,
1998, with respect to the consolidated financial statements and schedule of
Apple Residential Income Trust, Inc. included in its Annual Report (Form 10-K)
for the year ended December 31, 1997, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Richmond, Virginia
September 28, 1998
EXHIBIT 23.3
L.P. MARTIN & COMPANY, P.C.
4132 INNSLAKE DRIVE
GLEN ALLEN, VIRGINIA 23060
PHONE: 804-346-2626
FAX: 804-346-9311
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Apple Residential Income Trust, Inc.
Richmond, Virginia
We hereby consent to the incorporation by reference of the following
reports prepared by us in two Registration Statements on Form S-8 of Apple
Residential Income Trust, Inc. filed with the Securities and Exchange Commission
by Apple Residential Income Trust, Inc., and in the Prospectus (including
supplements thereto) included therein and to the references to us under
"Experts" therein:
(1) Our report dated December 16, 1997 with respect to the statement of
income and direct operating expenses exclusive of items not comparable to the
proposed future operations of the property Copper Crossing Apartments for the
twelve-month period ended October 31, 1997, (2) our report dated March 25, 1998
with respect to the statement of income and direct operating expenses exclusive
of items not comparable to the proposed future operations of the property Main
Park Apartments for the twelve-month period ended December 31, 1997, (3) our
report dated April 6, 1998 with respect to the statement of income and direct
operating expenses exclusive of items not comparable to the proposed future
operations of the property Timberglen Apartments for the twelve-month period
ended December 31, 1997, (4) our report dated April 14, 1998 with respect to the
statement of income and direct operating expenses exclusive of items not
comparable to the proposed future operations of the property Copper Ridge
Apartments for the twelve-month period ended February 28, 1998, (5) our report
dated May 14, 1998 with respect to the statement of income and direct operating
expenses exclusive of items not comparable to the proposed future operations of
the property Bitter Creek Apartments for the twelve-month period ended March 31,
1998, (6) our report dated July 16, 1998 with respect to the statement of income
and direct operating expenses exclusive of items not comparable to the proposed
future operations of the property Summer Tree Apartments for the twelve-month
period ended May 31, 1998, (7) our report dated July 17, 1998 with respect to
the statement of income and direct operating expenses exclusive of items not
comparable to the proposed future operations of the property Park Village
Apartments for the twelve-month period ended May 31, 1998, (8) our report dated
July 21, 1998 with respect to the statement of income and direct operating
expenses exclusive of items not comparable to the proposed future operations of
the property Cottonwood Crossing Apartments for the twelve-month period ended
May 31, 1998, (9) our report dated May 14, 1998 with respect to the statement of
income and direct operating expenses exclusive of items not comparable to the
proposed future operations of the property Pace's Point Apartments for the
twelve-month period ended March 31, 1998, (10) our report dated May 14, 1998
with respect to the statement of income and direct operating expenses exclusive
of items not comparable to the proposed future operations of the property Pepper
Square Apartments for the twelve-month period ended March 31, 1998, (11) our
report dated May 14, 1998 with respect to the statement of income and direct
operating expenses exclusive of items not comparable to the proposed future
operations of the property Emerald Oaks Apartments for the twelve-month period
ended March 31, 1998, (12) our report dated May 14, 1998 with respect to the
statement of income and direct operating expenses exclusive of items not
comparable to the proposed future operations of the property Hayden's Crossing
Apartments for the twelve-month period ended March 31, 1998, (13) our report
dated May 14, 1998 with respect to the statement of income and direct operating
expenses exclusive of items not comparable to the proposed future operations of
the property Newport Apartments for the twelve-month period ended March 31,
1998, and (14) our report dated July 15, 1998 with respect to the statement of
income and direct operating expenses exclusive of items not comparable to the
proposed future operations of the property Estrada Oaks Apartments for the
twelve-month period ended June 30, 1998.
Richmond, Virginia
September 29, 1998 /s/ L. P. Martin & Co., P.C.
EXHIBIT 24.1
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Stanley J. Olander, Jr.
his attorney-in-fact, to execute on his behalf, individually and in each
capacity stated below, and to file, any documents referred to below relating to
the registration of all of the common shares of Apple Residential Income Trust,
Inc. (the "Company") issuable under or pursuant to the Company's 1996
Non-Employee Directors Stock Option Plan and options granted thereunder, such
documents being: a Registration Statement to be filed with the Securities and
Exchange Commission; such statements with, or applications to, the regulatory
authorities of any state in the United States as may be necessary to permit such
shares to be offered and sold in such states; and any and all amendments to any
of the foregoing, with all exhibits and documents required to be filed in
connection therewith. The undersigned further grants unto said attorney full
power and authority to perform each and every act necessary to be done in order
to accomplish the foregoing registrations as fully as he himself might do.
IN WITNESS WHEREOF, the undersigned has signed this power of attorney
as of the 29th day of September, 1998.
/s/ Glade M. Knight
------------------------------------------
Glade M. Knight, Director, President and
Chief Executive Officer of the Company
EXHIBIT 24.2
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Glade M. Knight his
attorney-in-fact to execute on his behalf, individually and in each capacity
stated below, and to file, any documents referred to below relating to the
registration of all of the common shares of Apple Residential Income Trust, Inc.
(the "Company") issuable under or pursuant to the Company's 1996 Non-Employee
Directors Stock Option Plan and options granted thereunder, such documents
being: a Registration Statement to be filed with the Securities and Exchange
Commission; such statements with, or applications to, the regulatory authorities
of any state in the United States as may be necessary to permit such shares to
be offered and sold in such states; and any and all amendments to any of the
foregoing, with all exhibits and documents required to be filed in connection
therewith. The undersigned further grants unto said attorney full power and
authority to perform each and every act necessary to be done in order to
accomplish the foregoing registrations as fully as he himself might do.
IN WITNESS WHEREOF, the undersigned has signed this power of attorney
as of the 29th day of September, 1998.
/s/ Stanley J. Olander, Jr.
-------------------------------------------------
Stanley J. Olander, Jr., Chief Financial Officer
of the Company
EXHIBIT 24.3
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints each of Glade M. Knight
and Stanley J. Olander, Jr., either of whom may act as her attorney-in-fact, to
execute on her behalf, individually and in each capacity stated below, and to
file, any documents referred to below relating to the registration of all of the
common shares of Apple Residential Income Trust, Inc. (the "Company") issuable
under or pursuant to the Company's 1996 Non-Employee Directors Stock Option Plan
and options granted thereunder, such documents being: a Registration Statement
to be filed with the Securities and Exchange Commission; such statements with,
or applications to, the regulatory authorities of any state in the United States
as may be necessary to permit such shares to be offered and sold in such states;
and any and all amendments to any of the foregoing, with all exhibits and
documents required to be filed in connection therewith. The undersigned further
grants unto said attorneys and each of them full power and authority to perform
each and every act necessary to be done in order to accomplish the foregoing
registrations as fully as she herself might do.
IN WITNESS WHEREOF, the undersigned has signed this power of attorney
as of the 28th day of September, 1998.
/s/ Lisa B. Kern
--------------------------------------
Lisa B. Kern, Director
of the Company
EXHIBIT 24.4
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints each of Glade M. Knight
and Stanley J. Olander, Jr., either of whom may act as her attorney-in-fact, to
execute on her behalf, individually and in each capacity stated below, and to
file, any documents referred to below relating to the registration of all of the
common shares of Apple Residential Income Trust, Inc. (the "Company") issuable
under or pursuant to the Company's 1996 Non-Employee Directors Stock Option Plan
and options granted thereunder, such documents being: a Registration Statement
to be filed with the Securities and Exchange Commission; such statements with,
or applications to, the regulatory authorities of any state in the United States
as may be necessary to permit such shares to be offered and sold in such states;
and any and all amendments to any of the foregoing, with all exhibits and
documents required to be filed in connection therewith. The undersigned further
grants unto said attorneys and each of them full power and authority to perform
each and every act necessary to be done in order to accomplish the foregoing
registrations as fully as she herself might do.
IN WITNESS WHEREOF, the undersigned has signed this power of attorney
as of the 28th day of September, 1998.
/s/ Penelope W. Kyle
--------------------------------
Penelope W. Kyle, Director
of the Company
EXHIBIT 24.5
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints each of Glade M. Knight
and Stanley J. Olander, Jr., either of whom may act as his attorney-in-fact, to
execute on his behalf, individually and in each capacity stated below, and to
file, any documents referred to below relating to the registration of all of the
common shares of Apple Residential Income Trust, Inc. (the "Company") issuable
under or pursuant to the Company's 1996 Non-Employee Directors Stock Option Plan
and options granted thereunder, such documents being: a Registration Statement
to be filed with the Securities and Exchange Commission; such statements with,
or applications to, the regulatory authorities of any state in the United States
as may be necessary to permit such shares to be offered and sold in such states;
and any and all amendments to any of the foregoing, with all exhibits and
documents required to be filed in connection therewith. The undersigned further
grants unto said attorneys and each of them full power and authority to perform
each and every act necessary to be done in order to accomplish the foregoing
registrations as fully as he himself might do.
IN WITNESS WHEREOF, the undersigned has signed this power of attorney
as of the ___ day of __________, 1998.
--------------------------------
Bruce H. Matson, Director
of the Company
EXHIBIT 99
APPLE RESIDENTIAL INCOME TRUST, INC.
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
Effective October 17, 1996
<PAGE>
APPLE RESIDENTIAL INCOME TRUST, INC.
1996 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
1. PURPOSE. The purpose of this Apple Residential Income Trust, Inc.
1996 Non-Employee Directors Stock Option Plan (the "Plan") is to encourage
ownership in Apple Residential Income Trust, Inc. (the "Company") by
non-employee members of the Board, in order to promote long-term stockholder
value and to provide non-employee members of the Board with an incentive to
continue as directors of the Company.
2. DEFINITIONS. As used in the Plan, the following terms have the
meanings indicated:
(a) "Act" means the Securities Exchange Act of 1934, as amended.
(b) "Board" means the board of directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Company" means Apple Residential Income Trust, Inc., a
Virginia corporation.
(e) "Company Stock" means common stock, no par value, of the
Company. If the par value of the Company Stock is changed, or in the
event of a change in the capital structure of the Company (as provided
in Section 12), the shares resulting from such a change shall be
deemed to be Company Stock within the meaning of the Plan.
(f) "Date of Grant" means the date as of which an Eligible
Director is automatically awarded an Option pursuant to Section 7.
2
<PAGE>
(g) "Disability" or "Disabled" means a physical or mental
condition that prevents the director from performing his customary
duties with the Company. The Board shall determine whether a
Disability exists on the basis of competent medical evidence, and such
determination shall be conclusive.
(h) "Eligible Director" means a director described in Section 4.
(i) "Employer" means the Company, Apple Residential Advisors,
Inc., Apple Residential Management Group, Inc., and Apple Realty
Group, Inc.
(j) "Fair Market Value" means, on any given date, (i) if the
Company Stock is traded on an exchange, the closing registered sales
prices of the Company Stock on such day on the exchange on which it
generally has the greatest trading volume, (ii) if the Company Stock
is traded on the over-the-counter market, the average between the
closing bid and asked prices on such day as reported by NASDAQ, or
(iii) if the Company Stock is not traded on any exchange or
over-the-counter market, the fair market value shall be determined by
the Board using any reasonable method in good faith.
(k) "Initial Closing" means the first closing of the Offering that
will occur after the Minimum Offering is achieved.
(l) "Insider" means a person subject to Section 16(b) of the Act.
(m) "Minimum Offering" means the sale of the initial 15,000,000 in
shares of Company Stock pursuant to the Offering.
(n) "Offering" means, collectively, (1) the sale of up to
$250,000,000 in shares of Company Stock to the public and the
registration of such shares with the Securities and Exchange
Commission
3
<PAGE>
as authorized by resolutions of the Board dated August 22, 1996 (the
"Initial Offering"), and (2) the sale of any additional shares of
Company Stock to the public and the registration of such shares with
the Securities and Exchange Commission, as authorized by resolutions
of the Board from time to time, which sales occur before the
expiration of five years from November 1, 1996 (the "Additional
Offerings").
(o) "Option" means a right to acquire Company Stock granted under
the Plan, at a price determined in accordance with the Plan.
3. ADMINISTRATION. The Plan shall be administered by the Board.
Options shall be granted as described in Section 7. However, the Board shall
have all powers vested in it by the terms of the Plan, including, without
limitation, the authority (within the limitations described herein) to prescribe
the form of the agreement embodying the grant of Options, to construe the Plan,
to determine all questions arising under the Plan, and to adopt and amend rules
and regulations for the administration of the Plan as it may deem desirable. Any
decision of the Board in the administration of the Plan, as described herein,
shall be final and conclusive. The Board may act only by a majority of its
members in office, except that members thereof may authorize any one or more of
their number or any officer of the Company to execute and deliver documents on
behalf of the Board. No member of the Board shall be liable for anything done or
omitted to be done by him or any other member of the Board in connection with
the Plan, except for his own willful misconduct or as expressly provided by
statute.
4. PARTICIPATION IN THE PLAN. Each director of the Company who is not
otherwise an employee of the Employer or any subsidiary of the Company and was
4
<PAGE>
not an employee of the Employer or subsidiary for a period of at least one year
before the Date of Grant shall be eligible to participate in the Plan.
5. STOCK SUBJECT TO THE PLAN. Subject to Section 12 of the Plan, there
shall be reserved for issuance under the Plan an aggregate of 45,000 shares of
Company Stock plus 1.8% of the total number of shares of Company Stock sold in
the Offering in excess of the Minimum Offering, which shall be authorized, but
unissued shares. Shares allocable to Options or portions thereof granted under
the Plan that expire or otherwise terminate unexercised may again be subjected
to an Option under the Plan.
6. NON-STATUTORY STOCK OPTIONS. All options granted under the Plan
shall be non-statutory in nature and shall not be entitled to special tax
treatment under Code section 422.
7. AWARD, TERMS, CONDITIONS AND FORM OF OPTIONS. Each Option shall be
evidenced by a written agreement in such form as the Board shall from time to
time approve, which agreement shall comply with and be subject to the following
terms and conditions:
(a) Automatic Award of Option.
(i) As of the Initial Closing, each Eligible Director shall
automatically receive an Option to purchase 5,500 shares of
Company Stock plus 0.0125% of the number of shares of Company
Stock in excess of the Minimum Offering sold by the Initial
Closing.
(ii) As of each June 1 during the years 1997 through 2001
(inclusive), each Eligible Director shall automatically receive an
Option to purchase 0.02% of the total number of shares of Company
Stock issued and outstanding on that date.
5
<PAGE>
(iii) As of the election as a director of any new person who
qualifies as an Eligible Director, such Eligible Director shall
automatically receive an Option to purchase 5,000 shares of
Company Stock.
(iv) If at any time under the Plan there are not sufficient
shares available to fully permit the automatic Option grants
described in this paragraph, the Option grants shall be reduced
pro rata (to zero if necessary) so as not to exceed the number of
shares available.
(b) Option Exercise Price. The Option exercise price shall be the Fair
Market Value of the shares of Company Stock subject to the Option on the Date of
Grant.
(c) Options Not Transferable. An Option shall not be transferable by
the optionee otherwise than by will, or by the laws of descent and distribution,
and shall be exercised during the lifetime of the optionee only by him. An
Option transferred by will or by the laws of descent and distribution may be
exercised by the optionee's personal representative within one year of the date
of the optionee's death to the extent the optionee could have exercised the
Option on the date of his death. No Option or interest therein may be
transferred, assigned, pledged or hypothecated by the optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.
(d) Exercise of Options. In no event shall an Option be exercisable
earlier than six months from the later of the Date of Grant or the date of
approval of the Plan by stockholders of the Company. Furthermore, no Option may
be exercised:
6
<PAGE>
(i) unless at such time the optionee is a director of the
Company, except that he may exercise the Option within three years
of the date he ceases to be a director of the Company if he ceased
to be a director more than six months after the Date of Grant of
the Option;
(ii) after the expiration of ten years from the Date of Grant;
and
(iii) except by written notice to the Company at its principal
office, stating the number of shares the optionee has elected to
purchase, accompanied by payment in cash and/or by delivery to the
Company of shares of Company Stock (valued at Fair Market Value on
the date of exercise) in the amount of the full Option exercise
price for the shares of Company Stock being acquired thereunder.
8. WITHHOLDING. If the Company is required by law to withhold federal
or state income taxes when an Option is exercised, the Company shall have the
right to retain or sell without notice shares of Company Stock having a Fair
Market Value sufficient on such date or dates as may be determined by the Board
(but not more than five business days prior to the date on which such shares
would otherwise have been delivered) to cover the amount of any federal or state
income tax required to be withheld or otherwise deducted and paid with respect
to such payment and the exercise of the Option, remitting any balance to the
optionee; provided, however, that the optionee shall have the right to make
other arrangements satisfactory to the Company or to provide the Company with
the funds to enable it to pay such tax. Notwithstanding the foregoing, the
Company shall not sell shares of Company Stock if the Optionee
7
<PAGE>
is an Insider and such sale will cause the Optionee to incur a liability under
Section 16(b) of the Exchange Act.
9. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The Board shall have
the power to modify, extend or renew outstanding Options and to authorize the
grant of new Options in substitution therefor, provided that any such action may
not enhance the rights of the optionee without stockholder approval or have the
effect of altering, enhancing or impairing any rights or obligations of any
person under any Option previously granted without the consent of the optionee.
10. TERMINATION. The Plan shall terminate upon the earlier of:
(e) the adoption of a resolution of the Board terminating the
Plan; or
(f) October 17, 2006.
No termination of the Plan shall without his consent materially and adversely
affect any of the rights or obligations of any person under any Option
previously granted under the Plan.
11. LIMITATION OF RIGHTS.
(g) No Right to Continue as a Director. Neither the Plan nor the
granting of an Option nor any other action taken pursuant to the Plan shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain any person as a director for any period of time.
(h) No Stockholders Rights Under Options. An optionee shall have
no rights as a stockholder with respect to shares covered by his Option until
the date of exercise of the Option, and, except as provided in Section
8
<PAGE>
12, no adjustment will be made for dividends or other rights for which the
record date is prior to the date of such exercise.
12. CHANGES IN CAPITAL STRUCTURE.
(i) In the event of a stock dividend, stock split or combination
of shares, recapitalization or merger in which the Company is the surviving
corporation or other change in the Company's capital stock (including, but not
limited to, the creation or issuance to shareholders generally of rights,
options or warrants for the purchase of common stock or preferred stock of the
Company), the number and kind of shares of stock or securities of the Company to
be subject to the Plan and to Options then outstanding or to be granted
thereunder, the maximum number of shares or securities which may be delivered
under the Plan, the exercise price and other relevant provisions shall be
appropriately adjusted by the Board, whose determination shall be binding on all
persons. If the adjustment would produce fractional shares with respect to any
unexercised Option, the Board may adjust appropriately the number of shares
covered by the Option so as to eliminate the fractional shares.
(j) If the Company is a party to a consolidation or a merger in
which the Company is not the surviving corporation, a transaction that results
in the acquisition of substantially all of the Company's outstanding stock by a
single person or entity, or a sale or transfer of substantially all of the
Company's assets, the Board may take such actions with respect to outstanding
Options as the Board deems appropriate.
(k) Notwithstanding anything in the Plan to the contrary, the
Board may take the foregoing actions without the consent of any optionee and the
Board's determination shall be conclusive and binding on all persons for all
purposes.
9
<PAGE>
13. AMENDMENT OF THE PLAN. The Board (except as provided below) may
suspend or discontinue the Plan or revise or amend the Plan in any respect;
provided, however, that without approval of the stockholders of the Company no
revision or amendment shall increase the number of shares subject to the Plan
(except as provided in Section 12) or materially increase the benefits accruing
to participants under the Plan. The Plan shall not be amended more than once
every six months other than an amendment required to comply with changes in the
Internal Revenue Code or the Employee Retirement Income Security Act of 1974 or
regulations thereunder. Notwithstanding the foregoing, the Board may
unilaterally amend the Plan and the terms of Options granted hereunder to ensure
compliance with Rule 16b-3 of the Securities and Exchange Commission promulgated
under the Securities Exchange Act of 1934, as amended.
14. NOTICE. All notices and other communications required or permitted
to be given under this Plan shall be in writing and shall be deemed to have been
duly given if delivered personally or mailed first class, postage prepaid, as
follows: (a) if the Company - at its principal business address to the attention
of the President; (b) if to any participant - at the last address of the
participant know to the sender at the time the notice or other communication is
sent.
15. GOVERNING LAW. The terms of this Plan shall be governed by the laws
of the Commonwealth of Virginia.
10
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Plan to be executed
this 17th day of October, 1996.
APPLE RESIDENTIAL INCOME
TRUST, INC.
By /s/ Glade M. Knight
-------------------------------
Glade M. Knight,
Chairman of the Board
11
