82 - Approval of issues of stock, bonds and other forms of indebtedness.

§ 82. Approval   of   issues  of  stock,  bonds  and  other  forms  of  indebtedness. A steam corporation organized or  existing,  or  hereafter  incorporated,  under  or by virtue of the laws of the state of New York,  may issue stock, bonds, notes or other evidences of indebtedness payable  at periods of more than twelve months  after  the  date  thereof,  or  a  receiver  of  such  a  corporation, if duly authorized by law, may issue  receiver's certificates, when necessary for the acquisition of property,  the construction, completion, extension or improvement of its  plant  or  distributing  system,  or  for  the  improvement  or  maintenance of its  service or for the discharge or lawful refunding of its  obligations  or  for  the  reimbursement  of moneys actually expended from income or from  any other moneys in the treasury  of  the  corporation  not  secured  or  obtained  from  the  issue  of stock, bonds, notes or other evidences of  indebtedness of such corporation, within ten years  next  prior  to  the  filing   of   an  application  with  the  commission  for  the  required  authorization, for any of the aforesaid purposes except  maintenance  of  service  and except replacements in cases where the applicant shall have  kept its accounts and vouchers of such expenditure in such manner as  to  enable  the commission to ascertain the amount of moneys so expended and  the purposes for which such  expenditure  was  made;  provided  and  not  otherwise  that  there  shall  have  been secured from the commission an  order authorizing such issue, and the amount thereof,  and  stating  the  purposes  to  which the issue or proceeds thereof are to be applied, and  that, in the opinion of the commission, the money, property or labor  to  be  procured  or  paid  for  by the issue of such stock, bonds, notes or  other evidences of indebtedness is or has been reasonably  required  for  the  purposes  specified  in  the  order,  and  that except as otherwise  permitted in the order in the case of bonds, notes and  other  evidences  of  indebtedness,  such  purposes are not in whole or in part reasonably  chargeable to operating expenses or to income. Stock may  be  issued  to  stockholders  as  a  stock  dividend provided that there shall have been  secured from the commission  an  order  authorizing  such  issue  and  a  transfer  of  surplus to capital in an amount equal to the par or stated  value of the stock so authorized and stating that a  sum  equal  to  the  amount  to be so transferred was expended for the purposes enumerated in  this section. Stock may be issued to an employee or director of a  steam  corporation under a stock option plan pursuant to which such corporation  grants  options  to  its  employees  or  directors to purchase shares of  stock, such options to be exercisable for a stated  period  of  time  to  purchase shares of stock at the market value of the stock at the time of  issuance of the option, provided that there shall have been secured from  the  commission  an  order  authorizing such issue and that the proceeds  from the exercise of the  stock  options  are  needed  for  one  of  the  purposes enumerated in this section. The issue of stocks, bonds or other  evidences  of  indebtedness,  within  the meaning of this section, shall  include the  sale  by  any  such  corporation  of  any  such  securities  previously  issued in compliance with the provisions of this section and  subsequently reacquired by such corporation, provided, however, for good  cause shown the  commission  may  exempt  from  the  restriction  hereof  stocks,  bonds  or  other  evidences of indebtedness. For the purpose of  enabling it to determine whether it should  issue  such  an  order,  the  commission  shall make such inquiry or investigation, hold such hearings  and examine such witnesses, books, papers, documents or contracts as  it  may  deem  of  importance  in enabling it to reach a determination. Such  corporation shall not without the consent of the commission  apply  said  issue  or  any  proceeds  thereof  to  any purpose not specified in such  order. Such steam corporation may  issue  notes,  for  proper  corporate  purposes  and  not in violation of any provision of this or of any otheract, payable at periods of not more  than  twelve  months  without  such  consent;  but  no  such  notes  shall,  in whole or in part, directly or  indirectly be refunded by  any  issue  of  stock  or  bonds  or  by  any  evidences  of  indebtedness  running for more than twelve months without  the consent of the commission.   The  commission  shall  have  power  to  require  every  such  corporation  to file with the commission after the  issuance of stocks, bonds, notes  or  other  evidences  of  indebtedness  issued  with  or  without  the  approval  of  the  commission  as herein  provided, a notice of such transaction in such form  as  the  commission  may  prescribe.  Provided,  however,  that  the commission shall have no  power  to  authorize  the  capitalization  of  any  franchise  to  be  a  corporation  nor to authorize the capitalization of any franchise or the  right to own, operate or enjoy any franchise whatsoever in excess of the  amount, exclusive of any tax or annual  charge,  actually  paid  to  the  state  or  to any political subdivision thereof as the consideration for  the grant of such franchise or right, nor to authorize the  issuance  of  any  stocks  or  other  securities  for  any  purposes  other than those  enumerated in this section. Nor shall the capital stock of a corporation  formed by the merger or consolidation of two or more corporations exceed  the sum of the capital stock of the corporations,  so  consolidated,  at  the  par  value thereof, or such sum or any additional sum actually paid  in  cash;  nor  shall  any  contract  for  consolidation  or  lease   be  capitalized  in  the  stock  of  any corporation whatever; nor shall any  corporation hereafter issue any bonds against or  as  a  lien  upon  any  contract for consolidation or merger.