7.04.400 Authority to Issue Stock, Bonds, and Other Forms of Indebtedness

(a) A holder of a Commission-issued CPCN may, when authorized by the Commission, issue stock, bonds, notes or other evidences of indebtedness payable at periods of more than twelve (12) months after the date thereof, or a receiver of such a corporation, if duly authorized by law, may issue receiver's certificates:

(1) When necessary for the acquisition of property, the construction, completion, extension, or improvement of its facilities or the improvement or maintenance of its service within the SRMT jurisdiction, or

(2) For the discharge or lawful refunding of its obligations, or reimbursement of moneys actually expended from the income from any source, within five (5) years next prior to the filing of the application therefor, or for any of such purposes.

(3) Provided, however, that no authority shall be granted authorizing such issue for reimbursement of moneys expended from income for betterments or replacements unless the applicant shall have kept its accounts and vouchers of such expenditures in such manner as to enable the Commission to ascertain the amount of moneys so expended and the purposes for which such expenditures were made.

(b) A holder of a Commission-issued CPCN may issue stock to stockholders as a stock dividend provided that:

(1) The Commission approves the issuance and for a transfer of surplus to capital in an amount equal to the par or stated value of the stock so authorized; and

(2) The applicant has certified in the application for authority that a sum equal to the amount to be so transferred was expended for the purposes enumerated in this section.

(c) A holder of a Commission-issued CPCN may issue stock to an employee or director of a Communications Service Provider through a stock option plan pursuant to which such corporation grants options to its employees or directors to purchase shares of stock provided that:

(1) Such options are 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;

(2) The Commission approves the issuance and for a transfer of surplus to capital in an amount equal to the par or stated value of the stock so authorized; and

(3) The applicant has certified in the application for authority that the proceeds from the exercise of the stock options are needed for one of the purposes enumerated in this section.

(d) 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 that:

(1) For good cause shown, the Commission may exempt from the restriction hereof stocks, bonds, or other evidences of indebtedness;

(2) The application for authority includes the amount of any such issue and the purposes to which it or its proceeds are to be applied certifies that the money, property, or labor procured or to be procured or paid for by such issue or its proceeds has been or is reasonably required for the purposes specified in the application for authority; and

(3) The specified purposes are in no part reasonably chargeable to operating expenses or to income except in the case of bonds, notes, or other evidences of indebtedness as may be specifically identified in the application for authority.

(4) For the purpose of enabling the Commission to determine whether it should authorize such issuance, the Commission shall have the power to make such inquiry or investigation, hold such hearings and examine such witnesses, books, papers, documents, or contracts as it may determine of importance in enabling it to reach a determination.

(e) No such corporation shall, without the consent of the Commission, apply any Commission approved issuance or proceeds therefrom to any purpose not specified in the application for authority.

(f) Communications Providers may issue notes for proper corporate purposes and not in violation of any provision of this chapter or of any other act, payable at periods of not more than twelve (12) months without the consent of the Commission provided that no such note 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 (12) months, without the consent of the Commission.

(g) The Commission may only require a Communications Service Provider to apply for authority to issue stocks, bonds, notes, or other evidence of indebtedness for the acquisition of property, the construction, completion, extension, or improvement of its facilities, or the improvement or maintenance of its service within the jurisdiction of the Saint Regis Mohawk Tribe, or the discharge or refunding of obligations, or reimbursement of moneys actually expended for such purposes.

(h) The Commission shall have power to require every 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 provided in this section, a notice of such transaction in such form as the Commission may prescribe.

(i) The Commission shall have no power to authorize the capitalization of any Franchise Agreement or right to be a corporation, nor to authorize the capitalization of any Franchise Agreement 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 Saint Regis Mohawk Tribe, as the consideration of 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.