The Winslow mail., 1925-01-02
CERTIFICATE OF INCORPORATION
OF J. C. PENNEY COMPANY
Continued from page 3


be fully paid before any dividends
shall be set apart, declared or paid
upon the class A preferred stock, un-
classified common stock, or any clasSl-
fed Common stock; and the first pre-
ferred stock shall be entitled to no
further dividends. The first preferred
stock shall be redeemable in whole
or in part on sixty (60) days notice
by mail at One Hundred Five Dol
lars (S105) per share and an amount
equal to accumulated dividends to the
date of redemption, although not
earned or declared; when any re-
demption is made Of part of the first
preferred stock outstanding, it shall
be in such manner and by such meth
cd as the Board of Directors shall
determine. Upon any sale of all the
assets of the corporation or upon any
Kiquidation of the corporation, in
whole or in part, whether voluntary
or involuntary, except upon the dis
continuance of a branch in accord
ance with the provisions of Articles
XI and XIII, the holders of the first
preferred stock shall be entitled to be
paid one hundred five per cent 1O5q0)
of the par value thereof, and an
amount equal to the accumulated divi
b dendS to the date of payment, al
though not earned or declared, before
any payments are madeto the holders
of any classified common stock, class
A preferred stock, or unclassified COM
mon stock; and the holders of the
first preferred stock shall be entitled
TO no further payment. If the earn
fnr
ter shall be insufficient to pay the
dividends for that quarter on the first
preferred stock, such dividends may
be paid out of earned surplus.
(2) Subject to the provisions of
law and of this paragraph, the first
preferred stock shall be issued at
such prices, and for such considera-
tions, at such times, in such manner,
and in such amounts as the Board OF
Directors shall determine. Two Mil
lion Two Hundred and Twenty Six
thousand Three Hundred Dollars ($2,-
226,3OO) par value of said first pre-
ferred stock may be issued at once;
further issues of first preferred stock
may be made at any time, provided
that the annual net earnings and in
come for the preceding fiscal year,
after reserving an amount sufficient
to pay federal and state income taxes
for such preceding fiscal year, shall
at least equal three times the annual
dividend requirements on the first
preferred stock outstanding and that
proposed to be issued, and further
that the net quick assets after pay
znent of the dividends on the outstand
ing first preferred stock and including
the consideration to be received for
that proposed to be issued shall equal
at least one hundred fifty per cent
S15001) of the par amount of the first
preferred stock outstanding plus that
proposed to be issued. While any of
the first preferred stock is outstand-
ing no dividends shall be set apart,
declared or paid on any classified COM
mon stock, class A preferred stock
or unclassified common stock, nor shall
there be any purchase, redemption or
retirement by the corporation of any
classified common stock, class A pre-
ferred stock or unclassified common
stock, unless the net quick assets
after payment of such dividends or
after any purchase, redemption or re-
tirement of such stock are one hum
dred fifty per cent (150@o) of the par
amount of such outstanding first pre-
ferred stock, nor unless the total
quick assets at the end of the pre-
ceding fiscal year are one hundred
seventy-five per cent (175qo) of the
total liabilities, nor unless the net
earnings for said preceding fiscal
year, after deducting the amount paid
20 tot tn ta
year, are equal to three times the an
nual dividend requirements on first
preferred stock outstanding either at
the time of the declaration of such
dividend on classified common stock,
class A preferred stock or unclassi-
fed common stock or at the time of
any purchase or retirement Of such
stock, nor if the sinking fund pro-
vided for in paragraph numbered (4)
of this Article is in arrears. Quick
assets as used in this paragraph shall
consist of cash on hand and in bank
bills, notes and accounts receivable,
inventories and marketable securities,
other than securities of this corpora
tion. Liabilities shall consist of in
debtedness for borrowed money, bills,
notes and accounts payable and taxes
accrued. Net quick assets shall con-
sist of the excess assets over liabili
ties as above defined.
(3) First preferred stock shall have
no voting power except as in this
paragraph provided In the event of
two (2) consecutive defaults in the
payment of quarterly dividends on the
first preferred stock, the first prefer
rod Cfnolybn16arc chs IL haUA tho priui-
lege of electing one member of the
Board of Directors at the next sue
ceeding annual election; and, in the
event of four (4) consecutive defaults
in the payment of quarterly dividends
ON the first preferred stock, the first
preferred stockholders shall have the
privilege of electing majority of the
Board of Directors at the next sue
ceeding annual election. Any such
privilege shall be retained, when once