Subject 515-4-1 STOCK AND BOND APPLICATION RULES
| (1) |
All applications for the issuance of
stocks, bonds or notes, or other evidence of debts, payable more than twelve
months after date thereof, by companies subject to these rules shall be by
written petition, verified by the president or other officer of such company,
setting forth the information hereinafter required. Such petition may be duly
assigned for hearing as provided herein except that those petitions submitted
by Electric Membership Corporations, small businesses as defined in O.C.G.A.
(50-13-4.a3), and other small businesses that may, from time to time, finance
through government lending agencies or through government administered or
guaranteed loans shall not require a hearing. |
| (2) |
For applications not requiring a hearing,
all discovery, responses, analysis and recommendations must be completed such
that the application can be acted upon by this Commission in Administrative
Session within 60 days of the original filing. |
All such applications filed by any utility company subject to
these rules, shall set out all the properties of applicant, transmission lines,
central equipment, buildings, generating stations and other structures or
property, giving a general description thereof.
| (1) |
Said petition shall also contain in
addition to full description of its property a sworn statement in detail of the
financial condition of the company, giving the amount and kinds of the capital
stock, bonds, and other obligations outstanding; the consideration on which the
same were issued clearly and fully stated; the rate and amount of dividends
declared thereon, and all other items of outstanding indebtedness; and as to
all, whether and how secured, and if secured by mortgage or pledge, a copy of
the instrument shall be annexed to the petition; and said petition shall also
contain a statement of the amount of any of its stock held by other
corporations, and the names of and the amount held by each; and all facts
needed to show that the capitalization and proposed capitalization of said
company is lawful and legitimate and does not violate either the laws or the
Constitution of this State, or the United States. |
| (2) |
Information Need Not be
Repeated. In case the petitioning corporation or party shall have
already or previously made and filed a report to this Commission showing its
capitalization and financial condition in compliance with the standing order on
that subject, the matter thus already reported need not again be repeated in
the application, but may be made part thereof by appropriate form of reference,
with any new facts or data added to bring the recital down to date. |
Said petition shall contain a statement of the amount and
kind of stock which the corporation desires to issue; and a tabulated statement
of bonds or notes which the corporation desires to issue, the terms and rate of
interest, and whether and how to be secured, and if to be secured by a
mortgage, or pledge, a copy of the same shall be attached.
Said petition shall contain a statement of the use to which
the capital to be secured by the issue of such stock, bonds, or notes is to be
put, with a definite statement of how much is to be used for the acquisition of
property; how much for the construction and equipment of power plants; how much
for car sheds, and the completion, extension, or improvement of its facilities
or properties; how much for the improvement and maintenance of its service; how
much for the discharge or lawful refund of its obligations, or for lawful
corporate purposes.
Said petition shall contain a statement in detail of the
property which is to be acquired, with its value, a detailed description of the
construction, completion, extension, or improvement of its facilities set forth
in such a manner, that an estimate may be made of its cost; a statement of the
character of the improvement of its service proposed, and the reasons why the
service should be maintained from its capital; if it is proposed to discharge
or refund its obligations a statement of the nature and description of its
obligations, including their par value and the amount for which they were
actually sold, and the application of the proceeds arising from such
sale.
Said petition shall contain a statement showing whether any
contracts have been made for the acquisition of such property, or for such
construction, completion, extension, or improvement of its facilities, or for
the disposition of any of its stocks, bonds, or notes which it is proposed to
issue; and if any such contracts have been made, copies thereof must be
attached to the petition, as well as a statement showing how much money or
other thing of value has been received by the corporation under such
contract.
Said petition shall contain a statement showing whether any
of the outstanding stock, or bonds, or notes, as contemplated in the Act of
August 22, 1907, have been issued or used in capitalizing any franchise or any
right to own, operate or enjoy any franchise, or any contract for consolidation
or lease, or for services rendered or to be rendered, or a bonus to any person
or persons natural or artificial, and if so, shall state the amount and
character thereof, and the franchise, right, contract, or lease, service or
bonus, so capitalized.
If the stock is to be issued by a new corporation to be
formed by a merger or consolidation of two or more other corporations, the
petition shall contain a complete description of the properties to be
consolidated, and a complete statement of the financial condition of the
corporation so consolidated of the kind set out in
515-4-1-.03.
Attached to said petition must be a certified copy of the
charter, if granted by the legislature or accurate citations to volume and page
if to be found in the published laws; or a copy of the petition filed with the
Secretary of State, or any court, and a certificate of incorporation issued by
the Secretary of State, or court, if incorporated under a general law; duly
certified copies of all certificates, statements, or records which modify,
change, or extend the purposes or powers of such corporation.
Said petition shall set out in detail all acts done by said
corporation in obedience to the laws of the State, applicable to such desired
issue or increase of capital or issue of bonds, and shall fully and
affirmatively show that all requirements of the laws of Georgia have been fully
complied with.
Said petition shall state fully the method and
instrumentalities proposed for carrying into effect with safety to the
petitioners and the public the purposes stated, and for complying with all
conditions imposed by law or by the Commission, and expressing the readiness of
petitioners to make a report of actings and doings under the same as the
Commission may require.
When a petition is assigned for hearing in accordance with
Rule
515-4-1-.01, the Commission shall
fix a time and place for hearing thereon, and shall give to the applicant not
less than ten days' notice thereof, either personally or by mail; the applicant
shall publish a notice of the application and the time and place of the hearing
in such newspapers and at such times as the Commission shall direct. At the
hearing the applicant shall produce such witnesses and furnish such books,
papers, documents, and contracts as the Commission shall at any time before
final decision on the application require, and must establish to the
satisfaction of the Commission that the proposed issue of stocks, bonds, notes,
or other evidence of indebtedness is for the benefit of the public service, and
is otherwise lawful.
On the conclusion of the hearing, or so soon thereafter as
circumstances permit, the Commission will make up its opinion and frame its
order upon the facts appearing in each instance and the law applicable thereto.
Each application will be kept open and further order may be made from time to
time as may be needful for the security and protection of all concerned, and
for a due compliance with the law and the orders of this Commission. All bonds
and stocks when authorized by the Commission, and the proceeds of the same,
must be used for the purpose or purposes authorized, and for none other, under
pain of the penalties in such case provided by law.
| (1) |
This rule shall apply to all issuances of
securities for which the Commission orders it to apply pursuant to the laws of
Georgia except where:
| (a) |
Such securities are
issued and sold prior to January 1, 1976, or are issued pursuant to
authorization granted prior to the effective date of this rule. |
| (b) |
The gross proceeds to the issuer of the
securities will be less than $2,000,000. |
| (c) |
Such securities consist of evidences of
debt of a maturity of ten years or less, from date of issue to a commercial
bank, insurance company or similar institution not for resale to the public
provided no commission, fee, or remuneration is to be paid in connection
therewith to any third person (except an associated service company charging
only its cost of services) for negotiating the transaction. |
| (d) |
Such securities are to be issued prorata
to existing holders of securities of the applicant pursuant to any preemptive
right or privilege, or in connection with any liquidation or reorganization, or
recapitulation of surplus. |
| (e) |
Such
security is issued in exchange for outstanding securities where no commission
or other remuneration is paid or given directly or indirectly for soliciting
such exchange. |
| (f) |
The Commission,
on application filed pursuant to this rule, finds that compliance with the
competitive bidding requirements of this rule would not be appropriate or
consistent with the public interest. Such findings will not be made where the
issuer has engaged in negotiating for the sale or underwriting of the
securities without having been authorized in writing by the Commission prior to
such negotiation. Nothing in this section shall be deemed to preclude the
Commission from entering any order which would otherwise be
appropriate. |
| (g) |
Such securities
and loans are issued or guaranteed by the United States government or an agency
of the United States government or by a State or local government or
agency. |
| (h) |
The exceptions
contained in this rule shall not be construed as a waiver of the requirements
of Section 93-414 of the 1933 Code of Georgia for Commission approval of
security issues. |
|
| (2) |
Except as provided in this rule, the Commission will not approve, pursuant to
Section 93-414 of the 1933 Code of Georgia, the issuance of stocks, bonds,
notes or other evidence of debt by any company or corporation over which the
authority of the Commission is extended by law unless such securities be issued
pursuant to competitive bidding. Where the Commission grants an application for
authorization and approval to issue and sell securities through competitive
bidding, the applicant shall publicly invite sealed, written proposals for the
purchase or underwriting of such securities at least one week (or such other
period as the Commission may by order fix), prior to entering into any contract
or agreement for the issuance or sale of such securities.
| (a) |
The public invitation shall describe the
type and amount of securities to be bid for, and shall state the date, time and
place for opening of bids. Such invitation or the statement of terms and
conditions relating to bids, shall reserve the right to reject any or all bids
and, among other things, describe the arrangements made for independent counsel
for bidders. No bids shall be invited, or accepted, from any person who, prior
to the submission of bids, has performed any service for compensation in
connection with the issuance and sale of the proposed securities, or who has
received or will receive any fee or compensation in connection with the
issuance and sale of the proposed securities (except as successful bidder), nor
shall any bid be invited or accepted under which officers or directors would
benefit from or share in the proceeds from the securities. Such proposals as
may be received in response to the public invitation shall not be opened at any
time or place other than as specified in the invitation. The duly authorized
representative of any person making any such proposal shall be entitled to be
present at the opening of such proposals and to examine each proposal
submitted. The invitation or the statement of terms and conditions relating to
bids shall refer to the limitation herein prescribed. |
|
| (3) |
After receiving and opening all bids
submitted as provided in paragraph (2) of this rule, the applicant shall within
the period specified in the public invitation for proposals (unless all bids
are rejected), accept that bid which shall be most favorable on the basis of
the specifications set forth in the Commission's order. No bid shall be
accepted from a person who directly or indirectly controls or is controlled by,
or is under the same common control with the applicant without approval by
further order of the Commission. |
| (4) |
Promptly after the opening of the
proposals the applicant shall report to the Commission by telephone or
telegraph the information called for in paragraph (4)(b) hereof and shall file
with the Commission a verified statement in writing, together with five
conformed copies thereof, setting forth:
| (a) |
The action taken to comply with the Commission's order of authorization and
paragraphs (2) and (3) of this rule, including a statement that the method of
complying with the competitive bidding requirements as described in the
application has been carried out. |
| (b) |
A summary of the terms of the proposals
received, including the name of each bidder or representative of a bidding
group, the interest or dividends rate specified (where applicable), the price
to be paid the issuer per share or per $100 principal amount, the cost of money
to the issuer (except in the case of common stock), the name of the successful
bidder, and the successful bidder's initial public offering price with the
resulting yield to the public (except in the case of common stock), accompanied
by a true and correct copy of the proposal accepted. |
|
| (5) |
If the application to issue securities is
deemed to fall within any of the exceptions contained in paragraph (1) of this
rule, and such exception is relied upon as waiving the requirement for
competitive bidding, the application shall specifically refer to such exception
and show that it is applicable. |
| (6) |
If the application to issue securities does not fall within clauses (a), (b),
(c), (d), or (e) of paragraph (1) of this rule the application shall either:
| (a) |
Set forth the proposed method of
complying with the competitive bidding requirements of paragraphs (2), (3), and
(4) of this rule, including summarization of the principal terms of the
proposed invitation as part of the application; or |
| (b) |
Apply for exemption from the competitive
bidding requirements of paragraphs (2), (3), and (4) of this rule upon findings
as referred to in paragraph (1)(f). Such an application may be made only where
the issuer has not, prior to the filing of the application, engaged in any
negotiation for the sale or underwriting of the securities and does not so
engage prior to Commission action on the application for exemption, and the
application so shows, provided that engaging in negotiation may be permitted
where the Commission has given its written authorization in advance. Such
application for exemption may be filed as part of an application for securities
approval, or as a separate application filed at any time prior to the filing of
such an application for securities approval. Such application for exemption
shall show the specific grounds relied on as warranting the finding referred to
in paragraph (1)(f) of this rule. If an application for such exemption is
denied by the Commission after the application for securities approval has been
filed, the requirements of clause (a) of this paragraph shall be complied with
by amendment to the application. |
|
| (7) |
There shall also be set forth in the
application or amendment thereto:
| (a) |
The
name and address of any person receiving or entitled to receive a fee for
services (other than attorneys, accountants, and similar technical services) in
connection with the negotiation for or consummation of the issuance or sale of
securities, or for services in securing underwriters, sellers, or purchasers of
securities, other than fees included in any competitive bid; the amount of each
such fee; and facts showing the necessity of the services and that the fee does
not exceed the customary fee for such services in arms-length transactions and
is reasonable in the light of the cost of rendering the service and any other
relevant factors. |
| (b) |
All facts
showing or tending to show that the issuer or applicant directly or indirectly
controls, or is controlled by, or is under the same common control as, any
person named pursuant to the requirements of (7)(a), or showing or tending to
show the opposite. |
|
| (8) |
The evidence submitted shall include copies of any contract, underwriting, or
other arrangement entered into for the sale or marketing of the securities.
Where a contract or underwriting is not in final form so as to permit filing, a
preliminary draft or a summary containing such identification of the parties
thereto and such principal terms thereof as may be practicable, may be filed,
pending filing of a conformed copy in the form executed. |
| (9) |
An application for approval under this
rule will ordinarily require a minimum of thirty days after it is filed to
allow for public notice, investigation, opportunity for hearing, consideration
by the Commission and issuance of its order. |
| (10) |
The effective date of this rule is
January 1, 1976. |
