§ 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 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 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.