§ 69. Approval of issues of stock, bonds and other forms of
indebtedness; approval of mergers or consolidations. A gas corporation
or electric corporation organized or existing, or hereafter
incorporated, under or by virtue of the laws of the state of New York,
may issue stocks, 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,
including the stock or bonds of any other corporation incorporated for,
or engaged in, the same or a similar business, in this state or any
other state, or proposing to operate or operating under a franchise from
the same or any other municipality, for 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 stocks, bonds,
notes or other evidences of indebtedness of such corporation, within
five 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 gas corporation or electric 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 gas corporation or
electric corporation may issue notes, for proper corporate purposes and
not in violation of any provision of this or of any other act, 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 other corporations, exceed the sum of the
capital stock of the corporations, so consolidated, at the par value
thereof, or such sum and 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.

A permission or approval by the public service commission of a merger
or consolidation shall not be deemed to be an approval of the value of
any property or accounts of any company involved in the merger at the
time of the merger, nor shall any such permission or approval be
construed to be a certification by the public service commission that
the bonds and/or capital stock of any such merged, merging or
consolidating corporations are represented in value by commensurate
physical assets of such corporations, nor shall such approval be
evidence as to the value of any such property or account in subsequent
rate proceedings or before any court or public body.