The Coconino sun., 1925-01-09


the bylaws upon thirty 600 days
( ,vlHtttn notice.
In the event that said unclassified
common stock is purchased by the
corporation, it may either be retired
or reissued and resold as provided in
Article XVI hereof
These provisions shall be binding
upon the successors, heirs, administra-
tors, executors or assigns of the
holders of unclassified common stock
/ of this corporation.
Article XI
LIMITATION ON OWNERSHIP
OF CLASSIFIED COMMON STOCK
CONVERSION OF CLASSIFIED
COMMON STOCK INTO CLASS A
PREFERRED AND UNCLASSIFfED
COMMON STOCK:
Classified common stock shall be
issued to such store managers as the
Board of Directors may designate, in
order to preserve the benefits Of the
original ]. c. Penney plan for indi-
vdual responsibility in the manage
.nent and conduct of stores and the
participation of the active store mana
gers in the profits and in the assump-
tion of losses of the stores with which
they are personally identified and in
which they are financially interested
No one not an active store manager
shall own and hold classified common
stock of this corporation except under
the following circumstances:
ID When the store for which the
classified common. stock was issued
shall have been in continuous opera
tion for less than one full calendar
year (from January 1st to Decem-
Der 31st);
(2) When the store for which the
classified common stock was issued
shall not, in any one calendar year,
have had net earnings equal to at
least one-half the rate of net earnings
for the aggregate common stock,
classified and unclassified, outstand-
ing for the same calendar year, after
the classified common stock has been
issued to or come into the hands of
any person other than an active store
manager, excepting that this provision
does not apply to the classified com
mon stock of stores which have been
in continuous operation for more than
five years subsequent to January 1st,
1925;
t3) As soon after the close of any
calendar year as is practicable the
Board Of Directors of the corporation
shall prepare list Of all classified
common stock held by persons not ac-
tive store managers in stores which do
not fall under either of the two ex-
ceptions above set forth in para
graphs "a and (2) Of this Article.
They shall thereupon notify the hold
ers of such classified common stock
in writing that it must forthwith be
converted into the unclassified com
mon stock of the corporation and the
class A preferred stock, or either, In
accordance with the method as set
forth in Article XII hereof, and the
classified common stakeholder must
deliver such shares Of stock to the
corporation for exchange within thirty
800 days from the mailing of such
notice. If he fails to make such de-
livery the corporation may call his
stock for retirement, in accordance
with the provisions of paragraph (2)
of Article VII, or may treat his stock
as converted into such shares of ur
classified common stock and class A
preferred stock in accordance with the
method set forth in Article XII hereof.
Provided, however, commencing
with January 1st, 1925, that where a
store has been in continuous operation
for five complete calendar years and
it's rate of net earnings upon its store
capital has not equalled one-half the
rate of net earnings upon the aggre-
gate common stock, classified and un-
classified, outstanding in any complete
calendar year during said five years
period, the Board of Directors at their
option may, in lieuaof demanding the
exchange Of the stock, discontinue the
operation of said store and purchase
all the classified common stock issued
therefor in the manner provided III
Article XIII hereof.
Classified common stock so convert
ed into class A preferred stock and
unclassified common stock, or either,
may be reissued land resold at such
times and upon such terms, and for
such consideration as the Board Of
Directors may see fit, to any person
entitled under this Article to own and
hold classified common stock.
The term "store manager" as used
in this Article shall include such per-
sons as are described and designated
as such from time to time in the by
laws Of the corporation.
Article XII
BASIS OF EXCHANGE OF
CLASSIFIED COMMON STOCK
FOR CLASS A PREFERRED STOCK
AND UNCLASSIFIED COMMON
STOCK:
The exchange Of classified common
stock for unclassified common stock
and class A preferred stock, or either,
shall be made upon the following
basis:
The classified common stockholder
exchanging his stock shall receive in
return-First: That number of shares
of unclassified common stock which
bear the same proportion to the total
number of shares of unclassified COM
mon stock outstanding, as the net
earnings of the shares os classified
common stock so exchanged, bear TO
the net earnings of the total number
of shares of the unclassified common
stock outstanding; Second: II the
book value of the shares of unc,assi-
fled common stock so issued in ex-
cbanup for thp said classified COM