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                                                                  Exhibit 10.21



                               SECOND AMENDMENT TO
                         1997 PERFORMANCE EQUITY PLAN OF
                                  LEXFORD, INC.


         WHEREAS, Lexford, Inc., predecessor by merger to Lexford Residential
Trust, a Maryland real estate investment trust ("Lexford"), established the 1997
Performance Equity Plan (the "Plan") effective as of May 14, 1997;

         WHEREAS, Section 16 of the Plan provides that the Plan may be amended
by the Lexford Board of Directors; and

         WHEREAS, the Special Committee of the Board has instituted the 1998
Non-Employee Trustee Retirement Program (as hereinafter defined);

         NOW, THEREFORE, the Plan is amended as set forth below effective as of
April 16, 1998.

1.       The name of the Plan shall be changed to:
         "1997 Performance Equity Plan of Lexford Residential Trust".

2.       Section 2.3 shall be changed to read as follows: "Board" means the
         Board of Trustees of Lexford Residential Trust.

3.       Section 2.8 shall be changed to read as follows: "Company" means
         Lexford Residential Trust.

4.       Section 2.9 shall be changed to read as follows: "Company Shares" means
         common shares of beneficial interest, par value $.01 per share, of the
         Company.

5.       The following Section 2.18A is hereby added to the Plan:

         2.18A "Permanent Disability" means (i) ninety (90) consecutive days, or
         (ii) one hundred eighty days cumulatively in any twelve (12) month
         period, during which Participant is unable to engage in his customary
         occupational or business activities due to sickness or injury.

6.       Section 2.19 shall be changed to read as follows: 

         "Plan" means the 1997 Performance Equity Plan of Lexford 
         Residential Trust.

7.       Section 2.20 shall be changed to read as follows:

         "Rabbi Trust" means the Lexford Residential Trust Executive Deferred
         Compensation Rabbi Trust.


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8.       The following Section 2.27 is hereby added to the Plan:

         2.27 "1998 Non-Employee Trustee Retirement Program" means that certain
         Non-Employee Trustee Retirement Program instituted by the Special
         Independent Committee of the Board, which Committee, in turn, was
         established by the resolution adopted by the full Board at its meeting
         held on March 26, 1998.

9.       Section 6.3(b)(ii) of the Plan is amended to read as follows:

         (ii)     if the Participant is a non-employee trustee and ceases to be
                  a trustee, the Shares shall forfeit as provided in the
                  Participant's Restricted Stock Award Agreement; unless the
                  Participant resigns as a trustee pursuant to, and in
                  accordance with the terms of, the 1998 Non-Employee Trustee
                  Retirement Program as described in Section 8(d), in which
                  event the Participant Shares shall be fully vested upon the
                  acceptance of his resignation from the Board; and

10.      Section 6.4 of the Plan is amended by adding the following paragraph
         (c) at the end of such Section:

         (c) Notwithstanding anything herein to the contrary, a non-employee
         trustee who resigns as a trustee and participates in the 1998
         Non-Employee Trustee Retirement Program will become fully vested as of
         April 15, 1998 in all of his non-vested Shares (being 11,000 Shares not
         theretofore vested at such date) originally awarded under this Plan.

11.      Section 8 of the Plan is amended to read as follows: 

         8. Deferral of Shares into Rabbi Trust.

         (a) Within ten (10) days of the approval of this Plan by the
         shareholders of the Company and prior to the issuance of any Shares
         under the Plan, each Participant may make a written election to defer
         the Shares that would otherwise be transferred to him or her upon the
         vesting of such Shares pursuant to Section 6 and/or Section 7 of the
         Plan. Such election shall be binding upon such Participant with respect
         to all Shares he or she would be entitled to receive upon attainment of
         the Performance Goals as described in Sections 6 and 7 except that any
         election to receive Shares is subject to the provisions of Section 9.
         If the Participant elects to defer receipt of Shares, such Shares will
         be contributed to the Rabbi Trust and held for his or her benefit
         (subject to forfeiture under Section 6.3(b)) under the terms of the
         Rabbi Trust until the latest of: (i) the Participant's termination of
         employment with the Company, (ii) the cessation of the Participant's
         non-employee trusteeship, or (iii) if the Participant has elected to
         defer receipt of such Shares in accordance with the terms of the 1998
         Non-Employee Trustee Retirement Program as described in paragraph (d)
         below and as specified in such deferral election and the 1998
         Non-Employee Trustee Retirement Program.

         (b) A Participant may make a written election to defer receipt of any
         or all dividends paid with respect to any Shares subject to a deferral
         election as described in this Section 8 until the time at which the
         Shares in respect of which such dividends are 



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         payable become taxable to the individual. In order to become effective
         with respect to any dividend payable, such election must be made at
         least ten (10) days prior to the date that such dividend is declared by
         the Board. A written election to defer receipt of dividends made
         pursuant to this Section 8(b) shall remain in effect and shall apply to
         any and all dividends declared from and after the date of such election
         unless and until a Participant shall determine to modify, suspend,
         revoke or amend such prior election and make a subsequent written
         election which shall apply prospectively to any and all dividends
         declared more than nine (9) days following the date of such subsequent
         written election. A Participant may not amend, modify, suspend, revoke
         or otherwise alter a prior written election made under this Section
         8(b) more than once per calendar year. Any Participant written election
         in effect from time to time under this Section 8(b) shall conform in
         all respects to any and all other written elections made with respect
         to dividends payable on Company Shares which are held for the benefit
         of such Participant in the Rabbi Trust, but not otherwise issued
         pursuant to the terms of this Plan. A Participant may elect to defer a
         percentage of any dividends payable in respect of vested Shares held in
         the Rabbi Trust for his or her benefit, and to receive the remainder,
         provided that any such election shall be made in increments of ten
         percent (10%).

         (c) To the extent that a Participant does not elect to defer any
         portion of cash dividends payable with respect to any Shares, such
         dividends shall be paid to the Participant when such Shares vest under
         the terms of this Plan or, if previously vested, when such cash
         dividends are paid with respect to such Shares. Prior to the time the
         Participant vests in Shares, cash dividends payable with respect to
         such Shares shall be automatically deferred into the Rabbi Trust,
         invested under the terms thereof and, to the extent not forfeited under
         the terms of this Plan, distributed in accordance with the foregoing.
         At such time as any Shares shall become vested under this Plan,
         dividends paid prior to the date of vesting and accumulated in the
         Rabbi Trust, together with any earnings thereon, shall thereupon be
         paid to the Participant in accordance with the terms of the
         Participant's written election made pursuant to Section 8(b) above, as
         then in effect. For example: in the event that the Participant shall
         have a total of $1,000 in dividends and earnings thereon accumulated
         with respect to non-vested Shares issued under this Plan which shall
         become vested and the Participant shall have a written election in
         effect pursuant to the provisions in Section 8(b) hereof which shall
         specify payment on a current basis to the Participant of forty percent
         (40%) of all dividends paid in respect of vested Shares, then, as soon
         as practicable following the date of vesting, the Company will cause
         the Participant to receive payment in the amount of $400 in accumulated
         dividends together with earnings thereon as a result of the vesting of
         Shares which had previously been non-vested.

         (d) A Participant who resigns as a non-employee trustee and who
         participates in the 1998 Non-Employee Trustee Retirement Program may
         make an irrevocable election, prior to the effective date of his
         resignation, to continue to defer the receipt of all or a portion of
         his Shares awarded under this Plan for a maximum period of five (5)
         years from the effective date of his resignation. Payment will be made
         to such Participant at the end of such deferral period in the form of a
         lump sum or annual installments. Dividends declared and paid on account
         of Shares held in the Rabbi Trust for the benefit of retiring
         non-employee trustee Participants who participate in the 1998
         Non-Employee Trustee 



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         Retirement Program will be paid to such Participants in accordance with
         the terms of the Participants' affirmative written dividend deferral
         elections made in accordance with the provisions of Section 8 (c). In
         the absence of such an election made under Section 8 (c), then
         dividends declared and paid on account of Shares held in the Rabbi
         Trust for the benefit of retiring non-employee trustee Participants who
         participate in the 1998 Non-Employee Trustee Retirement Program will be
         paid to such Participants at such time as the deferred Company Shares
         are distributed to the Participant pursuant to the terms of his
         irrevocable election made in accordance with the provisions of this
         Section 8(d). For example, if the Participant elects to defer receipt
         of his Shares hereunder for a period of five (5) years, distributable
         in five equal annual installments, but does not make an affirmative
         written dividend deferral election in accordance with the provisions of
         Section 8 (c) then distribution of the Shares shall be made to the
         Participant in five proportionate annual installments and dividends
         which may have accumulated on such Shares, together with earnings
         thereon, will be paid to the Participant at the time of each such
         installment in accordance with the following distribution schedule:

         Anniversary    Amount of
          of Election   Distribution
         ------------   ------------
         1              20% of accumulated dividends and earnings

         2              25% of accumulated dividends and earnings

         3              33 1/3% of accumulated dividends and earnings

         4              50% of accumulated dividends and earnings

         5              remaining balance of accumulated dividends and earnings

         Notwithstanding any of the foregoing provisions of this Section 8(d),
         in the event of the Participant's death or Permanent Disability the
         Participants or his legal representative, as the case may be, shall
         become entitled to distribution of all of the Shares issued to the
         Participant hereunder, together with all dividends accumulated as well
         as earnings thereon in one lump sum distribution and payment.





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