§ 69 — Approval of issues of stock, bonds and other forms of indebtedness; approval of mergers or consolidations

§ 69. Approval of issues of stock, bonds and other forms of\nindebtedness; approval of mergers or consolidations. A gas corporation\nor electric corporation organized or existing, or hereafter\nincorporated, under or by virtue of the laws of the state of New York,\nmay issue stocks, bonds, notes or other evidences of indebtedness\npayable at periods of more than twelve months after the date thereof, or\na receiver of such a corporation, if duly authorized by law, may issue\nreceiver's certificates, when necessary for the acquisition of property,\nincluding the stock or bonds of any other corporation incorporated for,\nor engaged in, the same or a similar business, in this state or any\nother state, or proposing to operate or operating under a franchise from\nthe same or any other municipality, for the construction, completion,\nextension or improvement of its plant or distributing system, or for the\nimprovement or maintenance of its service or for the discharge or lawful\nrefunding of its obligations or for the reimbursement of moneys actually\nexpended from income or from any other moneys in the treasury of the\ncorporation not secured or obtained from the issue of stocks, bonds,\nnotes or other evidences of indebtedness of such corporation, within\nfive years next prior to the filing of an application with the\ncommission for the required authorization, for any of the aforesaid\npurposes except maintenance of service and except replacements in cases\nwhere the applicant shall have kept its accounts and vouchers of such\nexpenditure in such manner as to enable the commission to ascertain the\namount of moneys so expended and the purposes for which such expenditure\nwas made; provided and not otherwise that there shall have been secured\nfrom the commission an order authorizing such issue, and the amount\nthereof, and stating the purposes to which the issue or proceeds thereof\nare to be applied, and that, in the opinion of the commission, the\nmoney, property or labor to be procured or paid for by the issue of such\nstock, bonds, notes or other evidences of indebtedness is or has been\nreasonably required for the purposes specified in the order, and that\nexcept as otherwise permitted in the order in the case of bonds, notes\nand other evidences of indebtedness, such purposes are not in whole or\nin part reasonably chargeable to operating expenses or to income. Stock\nmay be issued to stockholders as a stock dividend provided that there\nshall have been secured from the commission an order authorizing such\nissue and a transfer of surplus to capital in an amount equal to the par\nor stated value of the stock so authorized and stating that a sum equal\nto the amount to be so transferred was expended for the purposes\nenumerated in this section. Stock may be issued to an employee or\ndirector of a gas corporation or electric corporation under a stock\noption plan pursuant to which such corporation grants options to its\nemployees or directors to purchase shares of stock, such options to be\nexercisable for a stated period of time to purchase shares of stock at\nthe market value of the stock at the time of issuance of the option,\nprovided that there shall have been secured from the commission an order\nauthorizing such issue and that the proceeds from the exercise of the\nstock options are needed for one of the purposes enumerated in this\nsection. The issue of stocks, bonds or other evidences of indebtedness,\nwithin the meaning of this section, shall include the sale by any such\ncorporation of any such securities previously issued in compliance with\nthe provisions of this section and subsequently reacquired by such\ncorporation, provided, however, for good cause shown the commission may\nexempt from the restriction hereof, stocks, bonds or other evidences of\nindebtedness. For the purpose of enabling it to determine whether it\nshould issue such an order, the commission shall make such inquiry or\ninvestigation, hold such hearings and examine such witnesses, books,\npapers, documents or contracts as it may deem of importance in enabling\nit to reach a determination. Such corporation shall not without the\nconsent of the commission apply said issue or any proceeds thereof to\nany purpose not specified in such order. Such gas corporation or\nelectric corporation may issue notes, for proper corporate purposes and\nnot in violation of any provision of this or of any other act, payable\nat periods of not more than twelve months without such consent; but no\nsuch notes shall, in whole or in part, directly or indirectly be\nrefunded by any issue of stock or bonds or by any evidences of\nindebtedness running for more than twelve months without the consent of\nthe commission. The commission shall have power to require every such\ncorporation to file with the commission after the issuance of stocks,\nbonds, notes or other evidences of indebtedness issued with or without\nthe approval of the commission as herein provided, a notice of such\ntransaction in such form as the commission may prescribe. Provided,\nhowever, that the commission shall have no power to authorize the\ncapitalization of any franchise to be a corporation nor to authorize the\ncapitalization of any franchise or the right to own, operate or enjoy\nany franchise whatsoever in excess of the amount (exclusive of any tax\nor annual charge) actually paid to the state or to any political\nsubdivision thereof as the consideration for the grant of such franchise\nor right, nor to authorize the issuance of any stocks or other\nsecurities for any purposes other than those enumerated in this section.\nNor shall the capital stock of a corporation formed by the merger or\nconsolidation of two or more other corporations, exceed the sum of the\ncapital stock of the corporations, so consolidated, at the par value\nthereof, or such sum and any additional sum actually paid in cash; nor\nshall any contract for consolidation or lease be capitalized in the\nstock of any corporation whatever; nor shall any corporation hereafter\nissue any bonds against or as a lien upon any contract for consolidation\nor merger.\n A permission or approval by the public service commission of a merger\nor consolidation shall not be deemed to be an approval of the value of\nany property or accounts of any company involved in the merger at the\ntime of the merger, nor shall any such permission or approval be\nconstrued to be a certification by the public service commission that\nthe bonds and/or capital stock of any such merged, merging or\nconsolidating corporations are represented in value by commensurate\nphysical assets of such corporations, nor shall such approval be\nevidence as to the value of any such property or account in subsequent\nrate proceedings or before any court or public body.\n