§ 82 — Approval of issues of stock, bonds and other forms of indebtedness

§ 82. Approval of issues of stock, bonds and other forms of\nindebtedness. A steam corporation organized or existing, or hereafter\nincorporated, under or by virtue of the laws of the state of New York,\nmay issue stock, bonds, notes or other evidences of indebtedness payable\nat periods of more than twelve months after the date thereof, or a\nreceiver of such a corporation, if duly authorized by law, may issue\nreceiver's certificates, when necessary for the acquisition of property,\nthe construction, completion, extension or improvement of its plant or\ndistributing system, or for the improvement or maintenance of its\nservice or for the discharge or lawful refunding of its obligations or\nfor the reimbursement of moneys actually expended from income or from\nany other moneys in the treasury of the corporation not secured or\nobtained from the issue of stock, bonds, notes or other evidences of\nindebtedness of such corporation, within ten years next prior to the\nfiling of an application with the commission for the required\nauthorization, for any of the aforesaid purposes except maintenance of\nservice and except replacements in cases where the applicant shall have\nkept its accounts and vouchers of such expenditure in such manner as to\nenable the commission to ascertain the amount of moneys so expended and\nthe purposes for which such expenditure was made; provided and not\notherwise that there shall have been secured from the commission an\norder authorizing such issue, and the amount thereof, and stating the\npurposes to which the issue or proceeds thereof are to be applied, and\nthat, in the opinion of the commission, the money, property or labor to\nbe procured or paid for by the issue of such stock, bonds, notes or\nother evidences of indebtedness is or has been reasonably required for\nthe purposes specified in the order, and that except as otherwise\npermitted in the order in the case of bonds, notes and other evidences\nof indebtedness, such purposes are not in whole or in part reasonably\nchargeable to operating expenses or to income. Stock may be issued to\nstockholders as a stock dividend provided that there shall have been\nsecured from the commission an order authorizing such issue and a\ntransfer of surplus to capital in an amount equal to the par or stated\nvalue of the stock so authorized and stating that a sum equal to the\namount to be so transferred was expended for the purposes enumerated in\nthis section. Stock may be issued to an employee or director of a steam\ncorporation under a stock option plan pursuant to which such corporation\ngrants options to its employees or directors to purchase shares of\nstock, such options to be exercisable for a stated period of time to\npurchase shares of stock at the market value of the stock at the time of\nissuance of the option, provided that there shall have been secured from\nthe commission an order authorizing such issue and that the proceeds\nfrom the exercise of the stock options are needed for one of the\npurposes enumerated in this section. The issue of stocks, bonds or other\nevidences of indebtedness, within the meaning of this section, shall\ninclude the sale by any such corporation of any such securities\npreviously issued in compliance with the provisions of this section and\nsubsequently reacquired by such corporation, provided, however, for good\ncause shown the commission may exempt from the restriction hereof\nstocks, bonds or other evidences of indebtedness. For the purpose of\nenabling it to determine whether it should issue such an order, the\ncommission shall make such inquiry or investigation, hold such hearings\nand examine such witnesses, books, papers, documents or contracts as it\nmay deem of importance in enabling it to reach a determination. Such\ncorporation shall not without the consent of the commission apply said\nissue or any proceeds thereof to any purpose not specified in such\norder. Such steam corporation may issue notes, for proper corporate\npurposes and not in violation of any provision of this or of any other\nact, payable at periods of not more than twelve months without such\nconsent; but no such notes shall, in whole or in part, directly or\nindirectly be refunded by any issue of stock or bonds or by any\nevidences of indebtedness running for more than twelve months without\nthe consent of the commission. The commission shall have power to\nrequire every such corporation to file with the commission after the\nissuance of stocks, bonds, notes or other evidences of indebtedness\nissued with or without the approval of the commission as herein\nprovided, a notice of such transaction in such form as the commission\nmay prescribe. Provided, however, that the commission shall have no\npower to authorize the capitalization of any franchise to be a\ncorporation nor to authorize the capitalization of any franchise or the\nright to own, operate or enjoy any franchise whatsoever in excess of the\namount, exclusive of any tax or annual charge, actually paid to the\nstate or to any political subdivision thereof as the consideration for\nthe grant of such franchise or right, nor to authorize the issuance of\nany stocks or other securities for any purposes other than those\nenumerated in this section. Nor shall the capital stock of a corporation\nformed by the merger or consolidation of two or more corporations exceed\nthe sum of the capital stock of the corporations, so consolidated, at\nthe par value thereof, or such sum or any additional sum actually paid\nin cash; nor shall any contract for consolidation or lease be\ncapitalized in the stock of any corporation whatever; nor shall any\ncorporation hereafter issue any bonds against or as a lien upon any\ncontract for consolidation or merger.\n