AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 3, 1997
FILE NO. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CORNERSTONE REALTY INCOME TRUST, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN GOVERNING INSTRUMENTS)
Virginia 54-1589139
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
306 East Main Street, Richmond, Virginia 23219
(804) 643-1761
(Address, including zip code and telephone number,
including area code, of registrant's principal executive offices)
Glade M. Knight
306 East Main Street
Richmond, Virginia 23219
(804) 643-1761
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Leslie A. Grandis
McGuire, Woods, Battle & Boothe, L.L.P.
One James Center
Richmond, Virginia 23219
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [x]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of each Proposed Proposed
class of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered registered per unit (1) offering price fee
<S> <C> <C> <C> <C>
Common Shares, no
par value........... 2,700,000 shares $ 11.00 $29,700,000 $9,000
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) of the Securities Act of 1933, as amended.
<PAGE>
PROSPECTUS
CORNERSTONE REALTY INCOME TRUST, INC.
DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN FOR COMMON SHARES
The Dividend Reinvestment and Share Purchase Plan (the "Plan") of Cornerstone
Realty Income Trust, Inc. (the "Company") provides holders of record of the
Company's common shares, no par value (the "Shares"), with a convenient and
economical way to acquire additional Shares without payment of any brokerage
commission or service charge.
The Plan provides that all or a portion of the cash dividends on Shares
registered in the participants' names and on Shares held for them in the Plan
are automatically reinvested in full and fractional Shares. Shareholders who
have their Shares registered in "street name" or in the name of a broker, bank
or other nominee may also participate in the Plan to the extent that their
broker, bank or other nominee has procedures in place that will allow them to do
so. Participants may also purchase additional Shares by making voluntary cash
payments, which are invested quarterly. Voluntary cash payments may not be less
than $50 nor more than $15,000 in any period between quarterly investment dates.
Until such time as the Shares are traded, Shares will be purchased under the
Plan at a price specified by the Company. For this purpose, "traded" means
listed on a securities exchange or quoted on an electronic quotation system
(such as NASDAQ) and actively and regularly traded thereon, in the judgment of
the Company. At the date of this Prospectus, the Shares are not traded and the
purchase price under the Plan has been set at $11.00 per Share. Once the Shares
are traded, the price of Shares purchased with reinvested dividends will be 95%,
and the price of Shares purchased with voluntary cash payments will be 97%, of
the "Index Price." If the Shares are listed on the New York Stock Exchange, the
"Index Price" will be the higher of (i) the average price of Shares, as
published in "The Wall Street Journal" report of New York Stock
Exchange--Composite Transactions, for the period of ten trading days ending on
the day preceding the day of purchase (but not greater than 105% of clause (ii)
hereof) and (ii) the average price of Shares on the New York Stock Exchange on
the day preceding the day of purchase. If the Shares are listed on an exchange
other than the New York Stock Exchange, the "Index Price" will be the higher of
(i) the average price of shares on such exchange for the period of ten trading
days ending on the day preceding the day of purchase (but not greater than 105%
of clause (ii) hereof) and (ii) the average price of Shares on the exchange on
the day preceding the day of purchase. If the Shares are traded other than on a
securities exchange, the "Index Price" will be the higher of (i) the average of
the mean of the closing representative bid and asked prices for the Shares as
reported by the market quotation reporting system of such market for the period
of ten trading days ending on the day preceding the day of purchase (but not
greater than 105% of clause (ii) hereof) and (ii) the average of the closing
representative bid and asked prices therefor as reported by the market quotation
reporting system of such market on the day preceding the day of purchase.
A Shareholder of record may participate in the Plan by completing an
Authorization Card and returning it to First Union National Bank of North
Carolina, Two First Union Center, Charlotte, North Carolina, 28288-1154,
Attention: Shareholder Services Group, Dividend Reinvestment Area. A Shareholder
whose Shares are held by a broker, bank or other nominee should consult with
such nominee if the Shareholder desires to participate in the Plan. Shareholders
who currently participate in the Company's "Additional Share Option" need take
no further action to continue participation in the Plan. Shareholders who are
participants in the Plan may terminate their participation at any time.
Shareholders who are not participants in the Company's Additional Share Option
or the Plan and who do not want to become participants need do nothing and will
continue to receive their cash dividends, if and when declared, as usual.
This Prospectus relates to the authorized but unissued Shares registered for
purchase under the Plan. It should be retained for future reference.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such an offer or solicitation in such
jurisdiction. No person has been authorized to give any information or to make
any representations other than those contained in this Prospectus in connection
with the offering made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that information herein
is correct as of any time subsequent to the date hereof.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
The date of this Prospectus is January 3, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
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AVAILABLE INFORMATION............................... 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..... 1
THE COMPANY......................................... 2
THE PLAN............................................ 2
Purpose............................................ 2
Advantages......................................... 2
Eligibility........................................ 3
Administration..................................... 3
Participation...................................... 4
Costs.............................................. 5
Purchases and Voluntary Cash Payments.............. 5
Reports............................................ 7
Dividends.......................................... 7
Certificates for Shares............................ 7
Sales of Shares.................................... 8
Withdrawal from the Plan........................... 8
Other Information.................................. 9
USE OF PROCEEDS..................................... 11
DESCRIPTION OF COMMON SHARES........................ 11
PLAN OF DISTRIBUTION................................ 12
INDEMNIFICATION OF DIRECTORS AND OFFICERS .......... 12
EXPERTS............................................. 13
LEGAL MATTERS....................................... 13
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AVAILABLE INFORMATION
Cornerstone Realty Income Trust, Inc., with principal executive offices at
306 East Main Street, Richmond, Virginia 23219, telephone number (804) 643-1761,
is subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following regional offices of
the Commission: Seven World Trade Center, Suite 1300, New York, New York, 10048;
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can also be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The Company files reports, proxy statements and other
information with the Commission electronically. The Commission maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
The address of the Web site is: http://www.sec.gov.
The Company has filed with the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended, with respect to the
securities offered hereby. This Prospectus does not contain all the information
set forth in the Registration Statement, certain items of which are contained in
schedules or exhibits to the Registration Statement as permitted by the rules
and regulations of the Commission. For further information, reference is hereby
made to the Registration Statement, including the schedules and exhibits filed
as a part thereof, which may be obtained from the Commission upon payment of the
fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31, 1995
(including Amendments No. 1 and No. 2 thereto on Form 10-K/A), the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30,
1996 and September 30, 1996, the Company's Current Reports on Form 8-K dated
January 31, 1996 (including Amendment No. 1 thereto on Form 8-K/A), April 30,
1996 (including Amendment No. 1 thereto on Form 8-K/A), June 26, 1996 (including
Amendment No. 1 thereto on Form 8-K/A), and September 26, 1996 (including
Amendment No. 1 thereto on Form 8-K/A), and the Company's Registration Statement
on Form 8-A under the Exchange Act, each of which has been filed by the Company
with the Commission, are incorporated herein by reference.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering described herein shall be deemed to
be incorporated by reference into this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
Information relating to the Company contained in this Prospectus summarizes,
is based upon, or refers to, information and financial statements contained in
one or more of the documents incorporated by reference herein; accordingly, such
information contained herein is qualified in its entirety by reference to such
documents and should be read in conjunction therewith.
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THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF
ANY DOCUMENT INCORPORATED BY REFERENCE IN THIS PROSPECTUS, OTHER THAN EXHIBITS
TO ANY SUCH DOCUMENT UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO THE INFORMATION IN THIS PROSPECTUS. REQUESTS FOR SUCH DOCUMENTS
SHOULD BE DIRECTED TO CORNERSTONE REALTY INCOME TRUST, INC., 306 EAST MAIN
STREET, RICHMOND, VIRGINIA 23219, ATTENTION: INVESTOR RELATIONS (TELEPHONE
NUMBER (804) 643-1761).
THE COMPANY
The Company is a Virginia corporation which has elected to be treated for
federal income tax purposes, and intends to qualify on a continuing basis, as a
real estate investment trust ("REIT") under the Internal Revenue Code (the
"Code"). The Company is an owner and operator of residential apartment
communities, and is self-administered and self-managed.
THE PLAN
The Dividend Reinvestment and Share Purchase Plan for record holders of the
Company's Shares is set forth, defined and explained in the following questions
and answers.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to provide Shareholders of record ("Participant"
or "you") with a convenient and economical way of investing cash dividends in
additional Shares and making voluntary cash investments in Shares, in each case
without payment of any brokerage commission or service charge. Because such
additional Shares will be purchased directly from the Company, the Company will
receive additional funds to make real estate acquisitions, make improvements to
Company properties, repay indebtedness, and use for working capital and other
general corporate purposes.
ADVANTAGES
2. WHAT ARE THE ADVANTAGES OF THE PLAN?
AUTOMATIC REINVESTMENT. Participants may have cash dividends on all or a
portion of their Shares automatically reinvested in additional whole and
fractional Shares. Dividends on such additional Shares will be reinvested
automatically in additional Shares.
VOLUNTARY CASH INVESTMENT IN SHARES. Participants may purchase additional
Shares by making voluntary cash payments of not less than $50 nor more than
$15,000 (per Participant or beneficial owner on whose behalf a Participant is
acting) in any period between quarterly investment dates.
DISCOUNT. Once Shares are traded, Shares are purchased through the Plan at a
5% discount with respect to dividend reinvestments and 3% with respect to
voluntary cash payments from current market prices, which enables Participants
to share the cost savings the Company expects to realize from the sale of Shares
pursuant to the Plan.
NO BROKERAGE FEES. There are no brokerage fees, commissions or service
charges on Shares purchased through the Plan, either with reinvested dividends
or with voluntary payments.
STATEMENTS. Regular statements of account will be mailed to Participants
after each investment to provide simplified record-keeping.
In evaluating the potential advantages of the Plan, prospective Participants
should also consider possible disadvantages of the Plan. A Participant must make
an investment decision to participate in the Plan and thereby to purchase Shares
prior to the date the purchase price is determined. See Question 13. A
Participant may not terminate participation with respect to a given Investment
Date after the dividend record date with respect to the reinvestment of
dividends or after the 72 hour period preceding the
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Investment Date with respect to voluntary cash payments. See Question 21. The
market price of the Shares may fluctuate between the time an investment decision
to participate in the Plan is made and the time at which Shares are purchased.
In addition, no interest will be paid on voluntary cash payments received by the
Administrator pending reinvestment under the Plan. Finally, Participants must be
aware of the income tax consequences of participation in the Plan (summarized
under Question 27), including the rule that a Participant will be treated for
federal income tax purposes as having received on each dividend payment date a
distribution equal to the fair market value of the Shares purchased plus any
cash actually distributed.
ELIGIBILITY
3. WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
All Shareholders of record are eligible to participate in the Plan. If your
Shares are registered in a name other than your own (e.g., in the name of a
broker, bank or nominee) and you want to participate, you must either make
appropriate arrangements for your broker, bank or nominee to become a
Participant or you must become a Shareholder of record by having a part or all
of your Shares transferred to your own name. To have Shares of which you are the
beneficial owner re-registered in your name, you must make appropriate
arrangements with your broker, bank or nominee.
Beneficial owners participating through a nominee should consult with the
nominee (e.g., the broker or bank) regarding how to participate and whether any
fees will be charged to participate. The Company reserves the right to refuse to
permit a nominee to participate in the Plan if the terms of such participation
would in the Company's judgment result in excessive burden or cost to the
Company. Any nominee participating in the Plan on behalf of beneficial owners
must participate on behalf of such beneficial owners in compliance with all
relevant provisions of the Plan.
The Plan is intended for the benefit of Shareholders of the Company and not
for individuals or investors who engage in transactions which may cause
aberrations in the price or trading volume of Shares. In order to make voluntary
cash investments, a Participant must remain a holder of record from the last day
of the month prior to the Investment Date through the Investment Date. From time
to time, financial intermediaries may seek to engage in positioning transactions
in order to benefit from the discount from the market price of the Shares
acquired under the Plan. Such transactions could cause fluctuations in the
trading volume of the Shares. The Company reserves the right to modify, suspend
or terminate participation in the Plan by otherwise eligible persons in order to
eliminate practices which are not consistent with the purpose of the Plan.
In addition to the foregoing, the Company may refuse participation in the
Plan to Shareholders residing in states where Shares offered pursuant to the
Plan are neither registered under applicable securities laws or exempt from
registration.
ADMINISTRATION
4. WHO ADMINISTERS THE PLAN FOR THE PARTICIPANTS?
First Union National Bank of North Carolina ("Administrator"), which also
serves as the Company's transfer agent, registrar and dividend disbursing agent,
acts as Administrator for the Plan and the Participants. Beneficial owners who
are not record owners will participate through their broker, bank or other
nominee, and such broker, bank or other nominee will deal with the
Administrator.
3
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PARTICIPATION
5. HOW DOES A SHAREHOLDER PARTICIPATE IN THE PLAN?
All Shareholders currently participating in the Company's "Additional Share
Option" will be automatically enrolled in the Plan unless the Shareholder
provides a written withdrawal request to the Adminstrator or, as applicable, his
broker, bank or other nominee by January 13, 1997. Otherwise a Shareholder of
record may join the Plan by completing an Authorization Card in the form
included in this Prospectus and returning it to the Administrator. The address
of the Administrator is:
First Union National Bank of North Carolina
Two First Union Center
Charlotte, North Carolina 28288-1154
Attention : Shareholder Services Group
Dividend Reinvestment Area
Telephone: 800-829-8432
A Shareholder who is not a Shareholder of record and who owns Shares through
a broker, bank or other nominee should contact the broker, bank or other nominee
regarding how to participate. For any such beneficial owner to participate, the
broker, bank or other nominee will have to become a "Participant" on behalf of
the beneficial owners it represents by submitting an Authorization Card to the
Administrator.
6. WHEN MAY A SHAREHOLDER JOIN THE PLAN?
Shareholders may join the Plan at any time. If the Authorization Card is
received by the Administrator on or before the record date for the payment of
the next dividend, reinvestment will begin with that dividend. If the
Authorization Card is received in the period between any dividend record date
and payment date, that dividend will be paid in cash and the Shareholder's
initial dividend reinvestment will begin with the next dividend.
Voluntary cash payments may be made when joining the Plan.
7. WHAT DOES THE AUTHORIZATION CARD PROVIDE?
The Authorization Card provides for the purchase of additional Shares through
the following investment options:
1. Full Dividend Reinvestment directs the investment of all of your cash
dividends on all of the Shares then or subsequently registered in your name, and
also permits you to make voluntary cash payments for the purchase of additional
Shares in accordance with the Plan.
2. Partial Dividend Reinvestment directs the investment of the cash dividends
on that number of Shares registered in your name which are designated in the
appropriate space on the Authorization Card, and also permits you to make
voluntary cash payments for the purchase of additional Shares in accordance with
the Plan.
You may select either of the above investment options. To initially elect to
participate in the Plan, a Shareholder must direct the Administrator to reinvest
dividends on at least one (1) Share held of record by the Shareholder. A
Shareholder may not elect to make only voluntary cash payments under the Plan.
8. HOW MAY A PARTICIPANT CHANGE OPTIONS UNDER THE PLAN?
As a Participant, you may change investment options or modify the number of
Shares designated under the Partial Dividend Reinvestment option at any time by
completing a new Authorization Card and returning it to the Administrator at the
address set forth on the Authorization Card. Beneficial owners of Shares who are
not Shareholders of record should consult with their broker, bank or other
nominee regarding procedures for changing options under the Plan.
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COSTS
9. WHAT COSTS DO PARTICIPANTS PAY FOR THEIR PURCHASES OF SHARES UNDER THE PLAN?
None. There are no brokerage fees on purchases. All costs of administration
of the Plan are paid by the Company, except that Participants may incur certain
costs in connection with their withdrawal from the Plan if they direct the
Administrator to sell their Shares. In addition, beneficial owners of Shares
participating through a broker, bank or nominee should consult their broker,
bank or other nominee to determine if there is any charge for participating in
that manner.
PURCHASES AND VOLUNTARY CASH PAYMENTS
10. WHAT IS THE SOURCE OF THE SHARES PURCHASED UNDER THE PLAN?
Shares purchased under the Plan come from the legally authorized but unissued
Shares of the Company. Shares will not be purchased in the open market.
11. WHEN WILL DIVIDENDS AND VOLUNTARY CASH PAYMENTS BE INVESTED IN SHARES?
The dates of investment of dividends ("Investment Dates") will be the
dividend payment dates. If the exchange or market on which the Shares are
principally traded is not open for trading on such date, the Investment Date
will be the next day that such exchange or market is open for trading. Dividend
payment dates normally occur on or around the 20th day of January, April, July
and October of each year. In any month in which a cash dividend on Shares is
paid, voluntary cash payments will also be invested as of the Investment Date.
12. HOW MANY SHARES WILL BE PURCHASED WITH A PARTICIPANT'S DIVIDENDS AND
VOLUNTARY CASH PAYMENTS?
The number of full and fractional Shares purchased with a Participant's
dividends and voluntary cash payments will be determined by dividing the
aggregate amount of dividends and voluntary cash payments, if any, by the
applicable purchase price of Shares.
13. WHAT WILL BE THE PRICE FOR SHARES PURCHASED UNDER THE PLAN?
Until such time as the Shares are traded, Shares will be purchased under the
Plan at a price specified by the Company. For this purpose, "traded" means
listed on a securities exchange or quoted on an electronic quotation system
(such as NASDAQ) and actively and regularly traded thereon, in the judgment of
the Company. At the date of this Prospectus, the Shares are not traded and the
purchase price under the Plan has been set at $11.00 per Share. Once the Shares
are traded, the price of Shares purchased with reinvested cash dividends will be
95%, and the price of Shares purchased with voluntary cash payments will be the
97%, of the "Index Price." If the Shares are listed on the New York Stock
Exchange, the "Index Price" will be the higher of (i) the average of the daily
closing sales prices for the Company's Common Shares (as published in "The Wall
Street Journal" report of New York Stock Exchange--Composite Transactions) for
the period of ten trading days preceding the applicable Investment Date (but not
greater than 105% of clause (ii) hereof) (the "Pricing Period") and (ii) the
average of the high and low sale prices of the Company's Shares on the New York
Stock Exchange on the day preceding the Investment Date. If the Shares are
listed on an exchange other than the New York Stock Exchange, the "Index Price"
will be the higher of (i) the average of the daily closing sales prices of
Shares on such exchange for the period of ten trading days ending on the day
preceding the applicable Investment Date (but not greater than 105% of clause
(ii) hereof) and (ii) the average of the high and low sale prices of Shares on
the exchange on the day preceding the Investment Date. If the Shares are traded
other than on a securities exchange, the "Index Price" will be the higher of (i)
the average of the mean of the closing representative bid and asked prices for
the Shares as reported by the market quotation reporting system of such market
for the period of ten trading days ending on the day preceding the Investment
Date (but not greater than 105% of cause (ii) hereof) and (ii) the average of
the closing representative bid and asked prices therefor as reported by the
market quotation reporting system of such market on the day preceding the
Investment Date.
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Investment of voluntary cash payments may be subject to the additional
requirement that the investment price must exceed the Threshold Price if a
Threshold Price has been established. The investment price may be higher for
voluntary cash investments if a Threshold Price has been established. See
Question 16.
Subject to the foregoing parameters, the Index Price, the Threshold Price and
the price for Shares to be purchased pursuant to the Plan will be calculated by
the Company and provided in writing by the Company to the Administrator. Any
determination of such prices made by the Company are binding on the
Administrator and the Participants in the absence of bad faith.
14. HOW DOES A PARTICIPANT MAKE VOLUNTARY CASH PAYMENTS?
Shareholders enrolling in the Plan may make an initial voluntary cash payment
by mailing a check or money order with an executed Authorization Card to the
Administrator. After an Authorization Card has been received by the
Administrator, voluntary cash payments may be made by mailing a check or money
order together with a properly executed copy of the form for such purpose which
will accompany the account statement sent to Participants. All checks and money
orders must be payable to "First Union National Bank of North Carolina." Do not
send cash. Voluntary cash payments must be received not later than five business
days before the Investment Date, and checks must clear prior to such Investment
Date, for a voluntary cash payment to be invested on such Investment Date.
Voluntary cash investments received fewer than five business days before an
Investment Date will be held, without interest, until the next Investment Date,
Any voluntary cash payments not yet invested will be refunded on written request
received by the Administrator not later than 72 hours before the next Investment
Date.
As an alternative to mailing a check or money order with each voluntary cash
payment, a Participant may make arrangements with the Administrator for
automatic drafts or withdrawals from a Participant's checking, savings or other
account. If a Participant provides the Administrator written notice of any
change in such automatic draft or automatic withdrawal authorization at least
ten days before any record date, such change will be given effect as of the next
dividend payment date. If such notice is given to the Administrator after such
ten-day period, the change will not be given effect until the second succeeding
dividend payment date.
Shares purchased with voluntary cash payments will be held by the
Administrator and credited to your account under the Plan. Thereafter, dividends
on such Shares will automatically be fully reinvested in additional Shares
unless such Shares are withdrawn from the Plan by written notice to the
Administrator which must be received before the applicable dividend record date.
A Shareholder who is not a Shareholder of record and who owns Shares through
a broker, bank or other nominee should contact the broker, bank or other nominee
regarding how to make voluntary cash payments. The broker, bank or other nominee
will submit voluntary cash payments to the Administrator on behalf of the
beneficial owner.
15. ARE THERE ANY LIMITATIONS ON VOLUNTARY CASH PAYMENTS?
Yes. A Participant, or a beneficial owner on whose behalf a Participant is
acting, may make voluntary cash payments during the period between each
quarterly Investment Date of not less than $50 nor more than $15,000 (the
"Maximum Investment"). If a Participant, or a beneficial owner on whose behalf a
Participant is acting, holds more than one Plan account or Shares under the same
social security or tax identification number, voluntary cash payments from that
Participant or beneficial owner will generally be aggregated and subject to the
Maximum Investment. The Company will not consider or grant any request for
waiver of the Maximum Investment. A Participant, or a beneficial owner on whose
behalf a Participant is acting, may not use voluntary cash payments to purchase
a number of Shares exceeding that number of Shares owned by the Participant or
beneficial owner on the record date. The Company may, in its sole discretion,
grant waivers of this limitation upon voluntary cash payments.
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16. WHAT ARE THE THRESHOLD PRICE PROVISIONS?
Prior to 5:00 p.m. on the last business day preceding each Pricing Period,
the Company reserves the right to establish a minimum price for the investment
of voluntary cash payments (the "Threshold Price") on the Investment Date,
subject to the following provisions:
The Threshold Price will be established in the Company's sole discretion
after a review of current market conditions and other factors.
A Participant may determine whether a Threshold Price has been established
and its amount by telephoning the Administrator.
If the average of the high and low sales prices (or the mean of the closing
representative bid and asked prices) of the Company's Shares on the New
York Stock Exchange or other exchange or market on a trading day during the
Pricing Period (a "Daily Investment Price") is less than the Threshold
Price, such Daily Investment Price will be EXCLUDED from the Pricing Period
for the purpose of calculating the Index Price for voluntary cash payments.
If the Threshold Price is greater than EACH Daily Investment Price during a
Pricing Period for a particular Investment Date voluntary cash payments
will not be reinvested and voluntary cash payments will be returned to the
Participants as promptly as practicable following the Investment Date,
without interest.
If a Threshold Price is established the Investment Price for voluntary cash
payments may be higher than the investment price for dividends reinvested
in additional Shares.
REPORTS
17. WHAT REPORTS WILL PARTICIPANTS RECEIVE?
Following each purchase of Shares for a Participant under the Plan, the
Administrator will mail to the Participant a statement of account showing the
amounts invested, the number of Shares purchased, and the purchase price. These
statements should be retained for income tax purposes. During the year
Participants will receive copies of the same materials sent to all Company
Shareholders, including the Company's quarterly and annual reports, proxy
statements and other information concerning annual Shareholder meetings. In
general, a Shareholder who is not a Shareholder of record and who owns Shares
through a broker, bank or nominee will receive statements and information
concerning the Plan only from the broker, bank or nominee, although the Company
may also elect to send various Shareholder communications to underlying
beneficial owners.
In addition to the foregoing, the Company's Bylaws require that each
Participant be provided at least annually with a description of all material
information regarding distributions to Shareholders and the effect of
reinvesting such distributions, including the tax consequences thereof.
DIVIDENDS
18. WILL PARTICIPANTS BE PAID DIVIDENDS PAID ON SHARES HELD IN THEIR ACCOUNTS
UNDER THE PLAN?
Yes. Dividends will be paid on all full and fractional Shares held in a
Plan account. Dividends will automatically be reinvested in additional Shares
and added to Participants' accounts.
CERTIFICATES FOR SHARES
19. DO PARTICIPANTS RECEIVE CERTIFICATES FOR SHARES PURCHASED UNDER THE PLAN?
No. All Shares of the Company, including full and fractional Shares issued
under the Plan, will be issued in uncertificated or "book entry" form. This
feature permits ownership of fractional Shares, protects against loss, theft or
destruction of stock certificates, and reduces the costs of the Plan.
7
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Also, as noted above in Question 3, the Administrator will hold Shares in the
names of the registered holders. In the case of a Shareholder holding his or her
shares in the name of a broker, bank or nominee, this means that the
Administrator will hold the Shares in the name of such broker, bank or nominee
unless the Shareholder elects to become a Shareholder of record by having a part
or all of the Shares transferred to the Shareholder's own name.
SALES OF SHARES
20. HOW MAY PARTICIPANTS SELL SHARES THROUGH THE PLAN?
Participants may instruct the Administrator to sell some or all of their
Shares held in the Plan by notifying the Administrator in writing or by using
the form included with account statements. Beneficial owners holding their
Shares through a broker, bank or other nominee should consult the broker, bank
or other nominee regarding procedures for selling such Shares. Participants and
beneficial owners should note that instructions to sell Shares will be acted on
only when the Company's Shares have become traded (e.g., listed on a stock
exchange).
The Administrator will sell Shares through a registered broker dealer, which
may be First Union Brokerage Services, which is an affiliate of the
Administrator, as soon as practicable after receipt of a proper written request.
Shares to be sold may be commingled with those of other Participants requesting
sale of their Shares, and the proceeds to each Participant will be based on the
average price for all Shares sold during the day of sale. Participants should
understand that the price of the Shares may go down as well as up between the
date a request to sell is received and the date the sale is executed. The Plan
does not offer the ability for Participants to specify either the dates or the
prices at which Shares are to be sold through the Administrator.
If a request to sell Shares is received on or after the record date, and
before the payment date, for a dividend, any cash dividend paid on such Shares
will be reinvested. The request to sell Shares will then be processed as soon as
practicable after the dividend is reinvested and the additional Shares are
credited to the Participant's account.
There is no charge for selling Shares through the Administrator except for
the Participant's pro rata share of brokerage commissions.
WITHDRAWAL FROM THE PLAN
21. WHEN AND HOW MAY A PARTICIPANT WITHDRAW FROM THE PLAN?
A Participant may withdraw from the Plan at any time by written request to
First Union National Bank of North Carolina, Two First Union Center, Charlotte,
North Carolina 28288-1154, Attention: Shareholder Services Group, Dividend
Reinvestment Area. If the withdrawal request is received on or after the record
date for determining the Shareholders entitled to receive the next dividend,
that dividend will be reinvested in Shares for the Participant's account on the
dividend payment date, and the request for withdrawal will be processed promptly
thereafter. Any voluntary cash payments sent to the Administrator prior to a
withdrawal request will also be invested in Shares on the next Investment Date
unless the Participant requests in writing the return of the payments at least
72 hours before the Investment Date.
Beneficial owners holding their Shares through a broker, bank or other
nominee should consult the broker, bank or other nominee regarding procedures
for withdrawal.
22. WHAT HAPPENS AFTER A PARTICIPANT WITHDRAWS FROM THE PLAN?
When a Participant withdraws from the Plan, unless the Participant requests
the Administrator to sell all its Shares in the Plan, the Participant will
receive all dividends in cash unless and until the Participant rejoins the Plan.
Upon withdrawal from the Plan, you may request the Administrator to sell all
of your Shares in the Plan account. In that case, the sale will be made as
promptly as possible after processing the withdrawal request, and the
Administrator will pay you the proceeds of the sale, less any applicable
brokerage
8
<PAGE>
commission or charge. If the withdrawal request is received on or after the
record date for determining the Shareholders entitled to receive the next
dividend, the processing of the withdrawal request, and hence the sale, will be
delayed until after the dividend payment date.
23. WHEN MAY A SHAREHOLDER REJOIN THE PLAN?
Generally, a Shareholder of record may again become a Participant at any
time.
OTHER INFORMATION
24. WHAT HAPPENS WHEN A PARTICIPANT SELLS OR TRANSFERS SOME OR ALL OF HIS OR HER
SHARES IN THE PLAN?
There is no effect on the Shares remaining in the Plan.
If you dispose of all or a portion of your Shares, the Administrator will
continue to reinvest dividends on Shares credited to your Plan account in
additional Shares unless and until a written request to withdraw such Shares
from your Plan account is received by the Administrator, and any voluntary cash
payments will continue to be invested under the Plan in additional Shares.
If you dispose of a portion of your Shares and you have directed the
Administrator to reinvest dividends on some of your Shares (i.e., Partial
Dividend Reinvestment), you should provide new written instructions to the
Administrator on how to handle your account. If the Administrator does not
receive new instructions, it may, in its discretion, pay cash dividends to you
on all of your remaining Shares.
25. WHAT HAPPENS IF THE COMPANY ISSUES A STOCK DIVIDEND, DECLARES A STOCK SPLIT,
OR HAS A RIGHTS OFFERING?
Any stock dividends or split Shares distributed by the Company on Shares held
in the Plan will be credited to your Plan account.
26. HOW WILL A PARTICIPANT'S PLAN SHARES BE VOTED AT ANNUAL OR SPECIAL MEETINGS
OF SHAREHOLDERS?
You will receive a proxy to vote the number of Shares (including fractional
shares) held in your Plan account. If no instructions are indicated on a
properly signed and returned proxy card, your Shares in the Plan account will be
voted in accordance with the recommendations of the Company's management. If the
proxy card is not returned or is returned unsigned, your Shares will not be
voted. Shares held by you outside of the Plan may be voted by proxy or in person
at the meeting.
27. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN?
Distributions by REITs are treated as dividends to the extent a REIT has
earnings and profits for federal income tax purposes. To the extent that the
amount distributed by a REIT exceeds the current and accumulated earnings and
profits of the REIT, the distribution will first be treated as a return of
capital to the Shareholder to the extent of basis, with any excess taxable as
gain realized from the sale of shares.
Amounts automatically reinvested in additional whole and fractional Shares
are taxable to the Participant or beneficial owner notwithstanding that such
amounts are reinvested in stock. A Participant or beneficial owner will be
treated for federal income tax purposes as having received on each dividend
payment date a taxable distribution equal to the fair market value on such
dividend payment date of the Shares acquired thereby plus any cash actually
distributed.
A Participant or beneficial owner who purchases Shares at a discount with
voluntary cash payments will be treated for federal income tax purposes as
having received on each dividend payment date a taxable distribution equal to
the excess of (a) the fair market value on such dividend payment date of the
Shares purchased over (b) the voluntary cash payment.
9
<PAGE>
The initial tax basis of whole or fractional Shares acquired through dividend
reinvestment or purchased at a discount through voluntary cash payments under
the Plan will equal the fair market value on such dividend payment date of the
Shares acquired or purchased. A Participant or beneficial owner will generally
recognize capital gain or loss on the sale of the Shares equal to the difference
between the amount realized and the Participant's or beneficial owner's tax
basis in such Shares. The holding period for Shares credited to a Participant's
or beneficial owner's Plan or nominee account pursuant to the dividend
reinvestment aspect of the Plan will begin on the day following the date on
which the Shares were purchased for the Participant's or beneficial owner's
account. The holding period for Shares purchased by voluntary cash payments will
begin on the day following the date of purchase.
In the case of Shareholders of record whose dividends are subject to United
States federal income tax withholding or backup withholding, the Administrator
will reinvest dividends less the amount of tax required to be withheld.
The sales of Shares through the Plan will be reported to the Internal Revenue
Service and to Participants on Form 1099B.
THE FOREGOING DISCUSSION BRIEFLY SUMMARIZES THE PRINCIPAL FEDERAL INCOME TAX
CONSEQUENCES, UNDER CURRENT LAW, OF PARTICIPATION IN THE PLAN AND IS PROVIDED
FOR GENERAL INFORMATION PURPOSES ONLY. IT DOES NOT ADDRESS ALL POTENTIALLY
RELEVANT FEDERAL INCOME TAX MATTERS, INCLUDING CONSEQUENCES PECULIAR TO PERSONS
SUBJECT TO SPECIAL PROVISIONS OF FEDERAL INCOME TAX LAW. THE ABOVE DISCUSSION IS
BASED ON VARIOUS RULINGS OF THE INTERNAL REVENUE SERVICE REGARDING SEVERAL TYPES
OF DIVIDEND REINVESTMENT PLANS. NO RULING, HOWEVER, HAS BEEN ISSUED OR REQUESTED
REGARDING THE PLAN. PARTICIPANTS IN THE PLAN AND PARTICIPATING BENEFICIAL OWNERS
ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS WITH RESPECT TO FEDERAL, STATE,
LOCAL AND OTHER TAX LAWS APPLICABLE TO THEIR SPECIFIC SITUATIONS. IN ADDITION,
THE TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN BY RETIREMENT PLANS DIFFER
FROM THOSE OUTLINED HEREIN FOR INDIVIDUALS. SINCE THE LAWS AND REGULATIONS
REGARDING THE FEDERAL INCOME TAX CONSEQUENCES OF RETIREMENT PLAN PARTICIPATION
ARE COMPLEX AND SUBJECT TO CHANGE, A RETIREMENT PLAN CONSIDERING SUCH
PARTICIPATION SHOULD CONSULT WITH ITS OWN RETIREMENT PLAN TRUSTEES, CUSTODIANS
OR TAX ADVISORS FOR SPECIFIC INFORMATION.
28. MAY THE PLAN BE CHANGED OR DISCONTINUED?
While the Company hopes to continue the Plan indefinitely, the Company
reserves the right to suspend or terminate the Plan at any time. It also
reserves the right to make modifications to the Plan. Participants will be
informed of any such suspension, termination or modification.
29. WHAT IS THE RESPONSIBILITY OF THE ADMINISTRATOR AND THE COMPANY UNDER THE
PLAN?
The Administrator receives the Participants' dividends and voluntary
payments, invests such receipts in additional Shares, maintains records of each
Participant's account, holds, or arranges for the holding, in a nominee name of
all Shares purchased for Participants, and advises Participants as to all
transactions in and the status of their accounts.
Neither the Company nor the Administrator nor its nominees shall have any
liability for any act done in good faith or for any good faith omission to act
in connection with the Plan, including without limitation, any claim or
liability arising out of failure to terminate a Participant's account upon his
death prior to receipt of written notice of death, nor shall they have any
duties, responsibilities or liabilities except such as are expressly set forth
in the Plan.
30. WHO BEARS THE RISK OF MARKET PRICE FLUCTUATIONS IN THE COMPANY'S SHARES?
Your investment in Shares held in a Plan account is no different than an
investment in directly held Shares in this regard. You bear the risk of loss and
the benefits of gain from market price changes for all of your Shares.
Neither the Company nor the Administrator can guarantee that Shares purchased
under the Plan will, at any particular time, be worth more or less than their
purchase price.
10
<PAGE>
USE OF PROCEEDS
The Company proposes to use the proceeds from the sale of Shares pursuant to
the Plan, when and as received, to continue the Company's real estate
acquisitions, to make improvements to Company properties, to repay indebtedness,
and to use for working capital and other general corporate purposes. The Company
has no basis for estimating precisely either the number of Shares that
ultimately may be sold pursuant to the Plan, or the prices at which such Shares
will be sold.
DESCRIPTION OF COMMON SHARES
The summary of certain terms and provisions of the Shares contained in this
Prospectus does not purport to be complete and is subject, and qualified in its
entirety by reference, to the terms and provisions of the Company's Articles and
Bylaws, as amended, copies of which are filed as exhibits to the Registration
Statement.
The Company has 50,000,000 Common Shares, no par value, authorized and
28,441,509 Shares were issued and outstanding as of December 31, 1996. Each
Share is fully paid and nonassessable upon payment therefor and issuance. The
Company has no preferred shares.
Dividend Rights. The holders of Shares are entitled to receive such
dividends as are declared by the Company's Board of Directors.
Voting Rights. The Common Shares have the sole voting power to elect
directors. Each Share is entitled to one vote on all matters submitted to a vote
of Shareholders, including the election of directors. There is no cumulative
voting. The Board of Directors is divided into three classes, as nearly equal in
size as possible. The terms of one class of directors expire each year.
Liquidation Rights. Upon any dissolution, liquidation or winding up of the
Company, the holders of Shares are entitled to receive pro rata all of the
Company's assets and funds remaining after payment of, or provision for,
creditors.
Preemptive Rights. Holders of Shares have no preemptive right to purchase
or subscribe for any shares of capital stock of the Company.
Repurchase of Shares and Restrictions on Transfer. In order that the Company
may meet certain requirements under the Internal Revenue Code of 1986, as
amended (the "Code"), applicable to real estate investment trusts ("REITs"), the
Company's Bylaws prohibit any person from acquiring or holding, directly or
indirectly, ownership of a number of Shares in excess of 9.8% of all the
outstanding Shares. Shares owned by a person in excess of such amounts are
referred to in the Bylaws and herein as "Excess Shares." For this purpose the
term "ownership" is defined in accordance with the constructive ownership
provisions of Section 544 of the Code (as modified by Section 856(h) of the
Code). Accordingly, Shares owned or deemed to be owned by a person who
individually owns less than 9.8% of the Shares outstanding nevertheless may be
Excess Shares.
Holders of Excess Shares are not entitled to voting rights, dividends or
distributions with respect to the Excess Shares. If, after the purported
transfer or other event resulting in an exchange of Common Shares for Excess
Shares and before discovery by the Company of such exchange, dividends or
distributions are paid with respect to Common Shares that were exchanged for
Excess Shares, then such dividends or distributions are to be repaid to the
Company upon demand.
The Bylaws also provide that in the event any person acquires Excess Shares,
such Excess Shares may be redeemed by the Company, at the discretion of the
Board of Directors. Except as set forth below, the redemption price for redeemed
Excess Shares shall be the lesser of (i) the price paid for the Excess Shares
(or if no notice of such purchase price is given, at a price to be determined by
the Board of Directors, in its sole discretion, but no lower than the lowest
market price for the Common Shares during the year prior to the date the Company
exercises its purchase option) and (ii) the fair market value of such Excess
Shares, which shall be the fair market value of the Shares as determined in good
faith by the Board of Directors or, if the Shares are listed on a national
securities exchange, the closing price (average of closing bid and asked prices
if the Shares are quoted on the NASDAQ National
11
<PAGE>
Market System) on the last business day prior to the redemption date. To redeem
Excess Shares, the Board of Directors must give a notice of redemption to the
holder of such Excess Shares not less than one week prior to the date fixed by
the Board of Directors for redemption. The holder may sell such Excess Shares
before the date fixed for redemption. If he does not, the redemption price for
such Excess Shares shall be paid on the redemption date fixed by the Board of
Directors and included in such notice.
Under the Bylaws any acquisition of Shares of the Company that would result
in the disqualification of the Company as a REIT under the Code is void to the
fullest extent permitted by law, and the Board of Directors is authorized to
refuse to transfer Shares to a person if, as a result of the acquisition, that
person would own Excess Shares.
The ownership limitations described above may have the effect of precluding
changes in control of the Company, or preventing a transaction in which some or
all Shareholders might receive a premium for sale of a large or control block of
Shares.
Transfer Agent and Registrar. The transfer agent and registrar for the
common shares is First Union National Bank of North Carolina, Charlotte, North
Carolina.
PLAN OF DISTRIBUTION
The Shares sold under the Plan are being distributed directly by the Company
rather than through an underwriter, broker or dealer. There will be no brokerage
commissions or other fees charged to Participants in connection with purchases
of Shares made directly from the Company under the Plan. Upon withdrawal by a
Participant from the Plan by the sale of Shares held under the Plan, the
Participant will receive the proceeds of such sale less any related brokerage
commissions and any applicable transfer taxes.
The Shares may not be available under the Plan in all states. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, any
Shares or other securities in any state or any other jurisdiction to any person
to whom it is unlawful to make such offer in such jurisdiction.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Virginia law and the Articles of Incorporation of the Company provide that
the directors and officers of the Company shall have no liability to the Company
or its Shareholders in certain actions by or in the right of the Company unless
such officer or director has engaged in willful misconduct or a knowing
violation of the criminal law or of any federal or state securities laws.
Generally, claimants must look solely to the Company's property for satisfaction
of claims arising in connection with the affairs of the Company. The Articles of
Incorporation provide that the Company shall indemnify any present or former
director or officer against any expense or liability in an action brought
against such person if the directors (excluding the indemnified party) determine
in good faith that the director or officer was acting 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, and that the liability was not the result of misconduct, bad
faith, negligence, reckless disregard of duties or violation of the criminal
law. Indemnification is not allowed for any liability imposed by judgment, and
costs associated therewith, including attorneys' fees, arising from or out of a
violation of federal or state securities laws associated with the public
offering of the Common Shares unless (i) there has been a successful
adjudication on the merits of each count involving alleged securities law
violations as to the particular indemnitee, or (ii) such claims have been
dismissed with prejudice on the merits by a court of competent jurisdiction as
to the particular indemnitee, or (iii) a court of competent jurisdiction
approves a settlement of the claims against a particular indemnitee. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling the Company pursuant to
the foregoing provisions, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
12
<PAGE>
EXPERTS
The financial statements and schedule of Cornerstone Realty Income Trust,
Inc. appearing in Cornerstone Realty Income Trust, Inc.'s Annual Report (Form
10-K) at December 31, 1995 and December 31, 1994, and for the two years then
ended have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such financial statements and schedule are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The statements of operations, shareholders' equity and cash flows of
Cornerstone Realty Income Trust, Inc. for the year ended December 31, 1993 and
the historical summary of operating revenue and expenses of Ashley Park
Apartments for the year ended December 31, 1995 have been incorporated by
reference herein and in the Registration Statement in reliance upon the reports
of KPMG Peat Marwick LLP, independent auditors, also incorporated herein by
reference, and upon the authority of said firm as experts in accounting and
auditing.
Certain Statements of Income and Direct Operating Expenses of Properties,
incorporated by reference herein, have been incorporated herein in reliance on
the reports of L. P. Martin & Company, P.C., and Dixon, Odum & Co., L.L.P.,
independent certified public accountants, also incorporated by reference herein,
and upon the authority of said firms as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters with respect to the legality of the Shares offered
hereby will be passed upon by McGuire, Woods, Battle & Boothe, L.L.P., Richmond,
Virginia, as counsel to the Company. McGuire, Woods, Battle & Boothe, L.L.P.
also acts as counsel to Glade M. Knight, the company's Chief Executive Officer,
and certain of his Affiliates. Leslie A. Grandis, a partner in McGuire, Woods,
Battle & Boothe, L.L.P., is a Director of the Company.
13
<PAGE>
CORNERSTONE REALTY INCOME TRUST, INC.
DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN
AUTHORIZATION CARD
TO FIRST UNION NATIONAL BANK OF NORTH CAROLINA ("Administrator"):
I hereby appoint you as my Administrator, subject to the Terms and Conditions of
the Dividend Reinvestment and Share Purchase Plan of Cornerstone Realty Income
Trust, Inc. ("Company"), set forth in the accompanying Prospectus, and authorize
you, to the extent indicated, to apply all cash dividends payable to me on
Company Shares and all my voluntary cash investments to purchase full Shares and
fractional Shares of the Company.
This appointment relates only to the Shares held by me of record in the account
listed below and all full Shares and fractional Shares acquired under the Plan.
I understand that I may terminate my participation at any time by notifying you
in writing. If the undersigned is a nominee participating in the Dividend
Reinvestment and Share Purchase Plan on behalf of underlying beneficial owners,
the undersigned agrees to participate on behalf of such beneficial owners in
compliance with all relevant provisions of the Plan.
I wish to participate in the Dividend Reinvestment and Share Purchase Plan on
the following basis (select one).
[ ] FULL DIVIDEND REINVESTMENT. I want to reinvest dividends on all Shares
now or hereafter registered in my name or held for me in the Plan by the
Administrator. I may also make voluntary cash payments.
[ ] PARTIAL DIVIDEND REINVESTMENT. I want to reinvest dividends on only
_____ Shares registered in my name. I understand that dividends on all Shares
held for me in the Plan by the Administrator will be reinvested. I may also make
voluntary cash payments.
My initial voluntary cash investment in the following amount is enclosed:
$______________ (minimum $50, maximum $15,000 per quarter per Participant or
beneficial owner on whose behalf a Participant acts). Check or money order
should be made payable to "First Union National bank of North Carolina"
Please Print or Type:
[_______________________] SOCIAL SECURITY NUMBER OR TAXPAYER ID NUMBER
[___________________________________________] NAME(S) OF PARTICIPANT(S)
(AS IT APPEARS ON YOUR DIVIDEND
CHECK.)
- - ----------------------- ----------------------------------------------
STREET ADDRESS SIGNATURE(S) OF PLAN PARTICIPANT(S)
- - ----------------------- ----------------------------------------------
CITY STATE ZIP TITLE IF SIGNING IN A REPRESENTATIVE CAPACITY
COUNTRY ________________ DATE _________________________________________
( ) ________________ DAYTIME PHONE NUMBER
MAIL TO: FIRST UNION NATIONAL BANK OF NORTH CAROLINA, TWO FIRST UNION
CENTER, CHARLOTTE, NORTH CAROLINA 28288-1154, Attn: Shareholder Services Group,
Dividend Reinvestment Area
<PAGE>
II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are estimates of the expenses to be incurred in connection with
the issuance and distribution of the securities to be registered:
SEC registration fee................... 9,000
Printing and engraving fees............ 30,000
Legal fees and expenses ............... 20,000
Accounting fees and expenses........... 10,000
Blue Sky fees and expenses ............ 2,000
Miscellaneous.......................... 10,000
---------
TOTAL.................................. $81,000
=========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has obtained, and pays the cost of, directors' and officers'
liability insurance coverage in the amount of $2 million (subject to a retention
or "deductible" of $250,000). Directors' and officers' insurance insures (i) the
directors and officers of the Registrant from any claim arising out of an
alleged wrongful act by the directors and officers of the Registrant in their
respective capacities as directors and officers of the Registrant, and (ii) the
Registrant to the extent that the Registrant has indemnified the directors and
officers for such loss.
The Virginia Stock Corporation Act (the "Virginia Act") permits, and the
Registrant's Articles of Incorporation require, indemnification of the
Registrant's directors and officers in a variety of circumstances, which may
include liabilities under the Securities Act of 1933. Under Section 13.1-697 of
the Virginia Act, a Virginia corporation generally is authorized to indemnify
its directors in civil or criminal actions if they acted in good faith and
believed their conduct to be in the best interests of the corporation and, in
the case of criminal actions, had no reasonable cause to believe that the
conduct was unlawful. The Registrant's Articles of Incorporation require
indemnification of officers and directors with respect to any action if the
directors (other than the indemnified party) determine in good faith that the
indemnified party's course of conduct was undertaken in good faith within what
the indemnified party reasonably believed to be the scope of his authority and
for a purpose he reasonably believed to be in the best interests of the
Registrant or its Shareholders, except in the case of misconduct, bad faith,
negligence, reckless disregard of duties or violation of the criminal law. In
addition, the Registrant may carry insurance on behalf of directors, officers,
employees or agents that may cover liabilities under the Securities Act of 1933.
The Registrant's Articles of Incorporation, as permitted by the Virginia Act,
eliminate the damages that may be assessed against a director or officer of the
Registrant in a Shareholder or derivative proceeding. This limit on liability
will not apply in the event of willful misconduct or a knowing violation of the
criminal law or of federal or state securities laws.
II-1
<PAGE>
ITEM 16. EXHIBITS.
The following exhibits are filed herewith, except as stated.
4.1 Amended and Restated Articles of Incorporation of Cornerstone Realty
Income Trust, Inc., as amended (Incorporated by reference to Exhibit
3.1 included in the Registrant's Report on Form 10-Q for the Quarter
ended June 30, 1995; File No. 0-23954).
4.2 Bylaws of Cornerstone Realty Income Trust, Inc. (Amended through
April 26, 1995)(Incorporated by reference to Exhibit 3.2 included in
the Registrant's Report on Form 10-Q for the Quarter ended June 30,
1995; File No. 0-23954).
5 Opinion of McGuire, Woods, Battle & Boothe, L.L.P. as to the
legality of the securities being registered.
23.1 Consent of McGuire, Woods, Battle & Boothe, L.L.P. (included in
Exhibit 5).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of L.P. Martin & Company, P.C.
23.5 Consent of Dixon, Odom & Co., L.L.P.
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 Martin Zuckerbrod.
24.4 Power of Attorney of Harry S. Taubenfeld.
24.5 Power of Attorney of Penelope W. Kyle.
24.6 Power of Attorney of Glenn W. Bunting.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(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;
(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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective 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 (i) and (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 Securities Exchange
Act of 1934 that are incorporated by reference in this registration statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, 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.
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) 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.
(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to officers, directors and controlling persons of
the registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 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 officer, director 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 of whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 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 January 3,
1997.
CORNERSTONE REALTY INCOME TRUST, INC.
By: /s/ Stanley J. Olander, Jr., Chief Financial Officer
----------------------------------------------------
Stanley J. Olander, Jr., Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/*
- - ------------------------ Director and Chief
Glade M. Knight Executive Officer January 3, 1997
/s/*
- - ------------------------ Director, Chief Financial
Stanley J. Olander, Jr Officer and Secretary January 3, 1997
/s/*
- - ------------------------
Martin Zuckerbrod Director January 3, 1997
/s/*
- - ------------------------
Harry S. Taubenfeld Director January 3, 1997
- - ------------------------
Leslie A. Grandis Director January 3, 1997
/s/*
- - ------------------------
Glenn W. Bunting Director January 3, 1997
/s/*
- - -----------------------
Penelope W. Kyle Director January 3, 1997
*By: /s/ Stanley J. Olander, Jr.
- - --------------------------------
Stanley J. Olander, Jr., January 3, 1997
Attorney-in-Fact for
the above-named persons
II-4
<PAGE>
EXHIBIT INDEX
(EXCEPT AS STATED, THE FOLLOWING EXHIBITS ARE FILED HEREWITH)
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NUMBER
- - ------ ----------- -----------
4.1 Amended and Restated Articles of Incorporation of
Cornerstone Realty Income Trust, Inc., as amended
(Incorporated by reference to Exhibit 3.1 included in the
Registrant's Report on Form 10-Q for the Quarter ended June
30, 1995; File No. 0-23954).
4.2 Bylaws of Cornerstone Realty Income Trust, Inc. (Amended
through April 26, 1995)(Incorporated by reference to
Exhibit 3.2 included in the Registrant's Report on Form
10-Q for the Quarter ended June 30, 1995; File No.
0-23954).
5 Opinion of McGuire, Woods, Battle & Boothe, L.L.P. as to
the legality of the securities being registered.
23.1 Consent of McGuire, Woods, Battle & Boothe, L.L.P.
(included in Exhibit 5).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of L.P. Martin & Company, P.C.
23.5 Consent of Dixon, Odom & Co., L.L.P.
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 Martin Zuckerbrod.
24.4 Power of Attorney of Harry S. Taubenfeld.
24.5 Power of Attorney of Penelope W. Kyle.
24.6 Power of Attorney of Glenn W. Bunting.
EXHIBIT 5
Board of Directors
Cornerstone Realty Income Trust, Inc.
306 East Main Street
Richmond, Virginia 23219
Dear Sirs:
We have acted as counsel to Cornerstone Realty Income Trust, Inc. (the
"Company"), a Virginia corporation, in connection with the preparation of the
registration statement on Form S-3 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 2,700,000 Common Shares of the Company under the
Company's Dividend Reinvestment and Share Purchase Plan. 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 Amended and Restated 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 (the
"Prospectus"). 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 reference to our firm under the caption "Legal
Matters" in the Registration Statement and 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, L.L.P.
January 3, 1997
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Experts" in the
Registration Statement (Form S-3 No. 333-00000) and related Prospectus of
Cornerstone Realty Income Trust, Inc. for the registration of 2,700,000 shares
of its common stock and to the incorporation by reference therein of our report
dated February 6, 1996, except for Note 9, as to which the date is February 22,
1996, with respect to the financial statements and schedule of Cornerstone
Realty Income Trust, Inc. included in its Annual Report (Form 10-K) for the year
ended December 31, 1995, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Richmond, Virginia
December 30, 1996
Consent of Independent Auditors
-------------------------------
Exhibit 23.3
The Board of Directors
Cornerstone Realty Income Trust, Inc.:
We consent to the use of our reports incorporated herein by reference relating
to the statements of operations, shareholders' equity and cash flows of
Cornerstone Realty Income Trust,Inc. for the year ended December 31, 1993 and
the historical summary of operating revenue and expenses of Ashley Park
Apartments for the year ended December 31, 1995 and to the reference to our firm
under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Richmond, Virginia
December 30, 1996
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
Board of Directors
Cornerstone Realty Income Trust, Inc.
Richmond, Virginia
We consent to the use of the following reports prepared by us to be
incorporated into a Registration Statement on Form S-3 to be filed with the
Securities and Exchange Commission by Cornerstone Realty Income Trust, Inc., and
to the references to our firm under the heading "Experts" in the Prospectus
included in such Registration Statement:
(1) Our report dated March 9, 1996 with respect to the statement of
income and direct operating expenses exclusive of items not comparable to
the proposed future operations of the property The Meadows Apartments for
the year ended December 31, 1995, (2) our report dated April 24, 1996 with
respect to the statement of income and direct operating expenses exclusive
of items not comparable to the proposed future operations of the property
Scarlett Oaks Apartments for the twelve month period ended January 31,
1996, (3) our report dated June 4, 1996 with respect to the statement of
income and direct operating expenses exclusive of items not comparable to
the proposed future operations of the property Colonial Ridge Apartments
for the twelve month period ended December 31, 1995, (4) our report dated
July 18, 1996 with respect to the statements of income and direct operating
expenses exclusive of items not comparable to the proposed future
operations of the property Westfield Club Apartments for the twelve month
periods ended December 31, 1995, 1994 and 1993, (5) our report dated July
19, 1996 with respect to the statement of income and direct operating
expenses exclusive of items not comparable to the proposed future
operations of the property Beacon Hill Apartments for the twelve month
period ended April 30, 1996, (6) our report dated August 9, 1996 with
respect to the statement of income and direct operating expenses exclusive
of items not comparable to the proposed future operations of the property
Meadow Creek Apartments for the twelve month period ended April 30, 1996,
(7) our reports dated June 21, 1996 with respect to the statements of
income and direct operating expenses exclusive of items not comparable to
the proposed future operations of the property Lexington Tower Apartments
for the three month period ended March 31, 1996 and for the year ended
December 31, 1995, (8) our report dated August 14, 1996 with respect to the
statement of income and direct operating expenses exclusive of items not
comparable to the proposed future operations of the property Paces Glen
Apartments for the twelve month period ended June 30, 1996, (9) our report
dated August 23, 1996 with respect to the statement of income and direct
operating expenses exclusive of items not comparable to the proposed future
operations of the property Doctors Park Apartments for the twelve month
period ended June 30, 1996, (10) our report dated October 23, 1996 with
respect to the statement of income and direct operating expenses exclusive
of items not comparable to the proposed future operations of the property
Oak Park Apartments for the twelve month period ended June 30, 1996, (11)
our report dated October 17, 1996 with respect to the statement of income
and direct operating expenses exclusive of items not comparable to the
proposed future operations of the property Hampton Glen Apartments for the
twelve month period ended July 31, 1996, (12) our report dated October 24,
1996 with respect to the statement of income and direct operating expenses
exclusive of items not comparable to the proposed future operations of the
property Sterling Chase Apartments for the twelve month period ended August
31, 1996, and (13) our report dated December 10, 1996 with respect to the
statement of income and direct operating expenses exclusive of items not
comparable to the proposed future operations of the property Parkside at
Woodlake Apartments for the twelve month period ended September 30, 1996.
/s/ L. P. Martin & Company, P.C.
Richmond, Virginia
December 30, 1996
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
Board of Directors
Cornerstone Realty Income Trust, Inc.
Richmond, Virginia
We consent to the use of the following reports prepared by us to be
incorporated into a Registration Statement on Form S-3 to be filed with the
Securities and Exchange Commission by Cornerstone Realty Income Trust, Inc., and
to the references to our firm under the heading "Experts" in the Prospectus
included in such Registration Statement:
(1) our report dated May 21, 1996 with respect to the statement of
income and direct operating expenses exclusive of items not comparable to
the proposed future operations of the property Longmeadow Apartments for
the year ended December 31, 1995,
(2) our report dated June 20, 1996 with respect to the statement of
income and direct operating expenses exclusive of items not comparable to
the proposed future operations of the property Lakewood Apartments for the
year ended December 31, 1995, and
(3) our report dated June 20, 1996 with respect to the statement of
income and direct operating expenses exclusive of items not comparable to
the proposed future operations of the property Willow Creek Apartments for
the year ended December 31, 1995.
Dixon, Odom & Co., L.L.P.
High Point, North Carolina
December 30, 1996
EXHIBIT 24.1
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Glade M. Knight and Stanley
J. Olander, Jr., each acting singly, 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 up to $30 million of
the common shares of Cornerstone Realty Income Trust, Inc. (the "Company") under
the Company's Dividend Reinvestment and Share Purchase Plan, 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 this 23rd day of December, 1996.
/s/ Glade M. Knight
--------------------
Glade M. Knight, Director
of the Company
EXHIBIT 24.2
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Glade M. Knight and Stanley
J. Olander, Jr., each acting singly, 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 up to $30 million of
the common shares of Cornerstone Realty Income Trust, Inc. (the "Company") under
the Company's Dividend Reinvestment and Share Purchase Plan, 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
this 23rd day of December, 1996.
/s/ Stanley J. Olander
-----------------------
Stanley J. Olander, Director
of the Company
EXHIBIT 24.3
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Glade M. Knight and Stanley
J. Olander, Jr., each acting singly, 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 up to $30 million of
the common shares of Cornerstone Realty Income Trust, Inc. (the "Company") under
the Company's Dividend Reinvestment and Share Purchase Plan, 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
this 23rd day of December, 1996.
/s/ Martin Zuckerbrod
-----------------------
Martin Zuckerbrod, Director of
the Company
EXHIBIT 24.4
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Glade M. Knight and Stanley
J. Olander, Jr., each acting singly, 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 up to $30 million of
the common shares of Cornerstone Realty Income Trust, Inc. (the "Company") under
the Company's Dividend Reinvestment and Share Purchase Plan, 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
this 23rd day of December, 1996.
/s/ Harry S. Taubenfeld
-------------------------
Harry S. Taubenfeld, Director
of the Company
EXHIBIT 24.5
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Glade M. Knight and Stanley
J. Olander, Jr., each acting singly, 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 up to $30 million of
the common shares of Cornerstone Realty Income Trust, Inc. (the "Company") under
the Company's Dividend Reinvestment and Share Purchase Plan, 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
this 23rd day of December, 1996.
/s/ Penelope W. Kyle
---------------------------
Penelope W. Kyle, Director
of the Company
EXHIBIT 24.6
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Glade M. Knight and Stanley
J. Olander, Jr., each acting singly, 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 up to $30 million of
the common shares of Cornerstone Realty Income Trust, Inc. (the "Company") under
the Company's Dividend Reinvestment and Share Purchase Plan, 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
this 23rd day of December, 1996.
/s/ Glenn W. Bunting
------------------------
Glenn W. Bunting, Jr., Director
of the Company
