The Winslow mail., 1925-01-23
CERTIFICATE OF INCORPORATION
OF ]. C. PENNEY COMPANY
CONTINUED from page 81

IContinued from page 81
does not apply to the classified COM
mon stock or stores which have been
in continuous operation for more than
five years subsequent to January LIST,
1925;
f3) 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
active store managers in stores which
do not fall under either of the two
exceptions above set forth in para
graphs (1) and (2) of this Article.
They shall thereupon notify the hold
aers of such classified common stock
in writing that it must forthwith be
converted into the unclassified COM
mon stock of the corporation and the
GLASS A preferred stock. or either. IN
accordance with the method as set
forth in Article XII hereof, and the
classified common stockholder must
deliver such shares of stock to the
corporation for exchange within thir-
dy (30l, days from the mailing of such
notice. If he fails to make such de-
1ivery 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 un-
classified common stock and class A
preferred stock in accordance with
Ghe method set forth in Article XII
hereof.
Provided, however, commencing with
January 1st, 1925, that where a store
mas been in continuous operation for
i've 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 lieu of 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 in
Article XIII hereof.
Classified common stock so convert
ed into class A preferred stock and
unclassified common stock, or either,
may be reissued and 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
mold classified common stock.
The term "store manager" as used
xn this Article shall include such per-
sons as are described and designated
zas such from time to time in the
Eyy-1aws of the corporation.
Article XII
BASIS OF EXCHANGE OF CLASS
MFIED COMMON STOCK FOR CLASS
A PREFERRED STOCK AND UN-
CLASSIFIED COMMON STOCK-The
exchange of classified common stock
for unclassified common stock anC
class A preferred stock, or either
shall be made upon the following
basis:
The classified common stockholdel
exchanging his stock shall receive IL
Teturn-First: That number of shares
of unclassified common stock which
bear the same proportion to the tota
number of shares of unclassified com
mon stock outstanding, as the ne
earnings of the shares of classified
common stock so exchanged, bear tt
the net earnings of the total number
of shares of the unclaSSifed common
stock outstanding; Second: If th'
book value of the shares of unclassi
fled common stock so issued in ex
schange for the said classified common
stock shall be less than the boOl
value of said classified common stool
so exchanged, there shall be ISSUED
and delivered to the stockholder max
ing the exchange, sufficient class I
preferred stock at par, in addition t.
Ihe said unclassified common stock
I'd make the total book value of al