The Coconino sun., 1925-01-16

/ in accordance with the provisions 0
the bylaws upon thirty 500 days
written notice.
In the event that said unclassifie,
common stock is purchased by th
lcorporation, it may either be retirec
tnf reissued and resold as provided il
Article XVI hereof.
These provisions shall be bindins
upon the successors, heirs, administra
tors, executors or assigns of the
holders of unclassified common steel
of this corporation.
Article XI
LIMITATION ON OWNERSHIP
OF CLASSIFIED COMMON STOCK
CONVERSION OF CLASSIFIED
COMMON STOCK INTO CLASS A
PREFERRED AND UNCLASSTFIET
COMMON STOCK:
Classified common stock shall bt
issued to such store managers as the
Board of Directors. may designate, lr
order to preserve the benefits of the
original J. G. Penney plan fer indi-
vidual responsibility in the manage.
ment 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
stock of this corporation except under
the following circumstances:
"a 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 Dec2m-
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
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;
(3) 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-
eeptions above set forth in para
graphs (1) and (2) of this Article.
They shall thereupen notify the hold
ers of such classified common stock
N writing that it must forthwith be
into the unclassified com
non stock Of the corporation and the
class A preferred stock, or either, II,
accordance with the method as set
forth in Article XII hereof, and the
leliver such shares of stock to the
corporation for exchange within thirty
,30) 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)
# Article VII, or may treat his stock
Is 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
tore has been in continuous operation
or five complete calendar years and
is rate of net earnings upon its store
apital has not equalled one-half the
ate of net earnings upon the aggre
rate common stock, classified and un-
lassified, outstanding in any complete
alendar year during said five years
,eriod, the Board of Directors at their
'ption may, in lieu of demanding the
Exchange of the stock, discontinue the
,peration of said store and purchase
ii the classified common stock issued
herefor in the manner provided in
Article XIII hereof.
Classified common stock so convert
d into class A preferred stock and
common stock, or either,
nay be reissued and resold at such
lines and upon such terms, and for
uch consideration as the Board of
Directors may see fit, to any person
ntitled under this Article to own and
lold classified common stock.
The term "store manager" as used
h this Article shall include such per-
ons as are described and designated
IS such from time to time in the by
avs of the corporation.
Article XII
BASIS OF EXCHANGE OF
CLASSIFIED COMMON STOCK
FOR CLASS A PREFERRED STOCK
AND UNCLASSIFIED COMMON
,TOCK:
The exchange of classified common
took for unclassified common stock
nd class A preferred stock, or either,
hall be made upon the following
asis:
The classified common stockholder
his stock shall receive in
eturn-First: That number Of shares
f unclassified common stock which
ear the same proportion to the total
lumber of shares of unclassified COM
non stock outstanding, as the net
arnings of the shares o. classified
ommon stock so exchanged, bear to
he net earnings of the total number
f shares of the unclassified common
took outstanding; Second: If theI
ook value of the shares of unciassi-
led common stock so issued in ex-