The Winslow mail., 1925-01-30
CERTIFICATE OF INCORPORATION
OF J. C. PENNEY COMPANY
CONTINUED from page y


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 a 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 Q) 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 unclassifed 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 stockholder must
deliver such shares Of stock to the
corporation for exchange within thir
ty (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)
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
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 its
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
unclassifed 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
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
bylaws of the corporation.
Article XII
BASIS OF EXCHANGE OF CLASS
IFIED COMMON STOCK FOR CLASS
A PREFERRED STOCK AND UN-
CLASSIFIED 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 unclassifled COM
mon stock outstanding, as the net
earnings of the shares of classified
common stock so exchanged, bear to
the net earnings of the total number
of shares of the unclassified common
stock outstanding; Second: If the
book value of the shares of unclassi
fed common stock so issued in ex-
change for the said classified common
stock shall be less than the book.
value of said classified common stock
so exchanged, there shall be issued
and delivered to the stockholder max
ing the exchange, sufficient class A
preferred stock at par, in addition to
the said unclassifed common stock,
to make the total book value of all
stock issued in exchange for said COM
mon stock equal to the book value
of the classified common stock so ex-
changed
Provided, however, that no fraction
al shares shall be issued and that the
corporation shall pay in cash in lieu
of any fractional share the book value
thereof.
The status of the classified common
stock and Of the unclassifed common
stock in effecting said exchange shall
be as of the last day of the calendar
year upon the net earnings of which
such exchange is predicated.
Article XIII.
DISCONTINUANCE OF ANY STORE
ID The Board of Directors may
at any time, if it deems it to be for
the best interests of the corporation,
discontinue any store; thereupon it
may in its discretion, (A) transfer
The assets of said store to a new
store about to be opened and insuch
event the classified common stock
holders of the discontinued store shall
surrender their certificates of stock
in the class of stock issued for said
discontinued store, duly endorsed in
blank, and shall receive in exchange
therefor certificates of the same par
value of the class of stock issued for
the opening, maintenance and opera
tion Of the new store; or (B) may
cause the assets of said store to be
sold at the best prices obtainable at
such times and places, In such man
ner and upon such notice as it shall
deem best and shall pay and dis
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