The Coconino sun., 1927-04-22

version the classified common stock
owned and held by him, issued for the
store of which he is the active man
ager, shall receive, upon such con-
version, preferred stock of the cor
poration equal to the book value Of the
classified common stock so delivered
by him for conversion.
In addition to the preferred stock
so received as above, such store man.
ager, or those claiming under him,
shall, upon his ceasing to be manager
of such store, whether by death or
otherwise, have the right to purchase,
at book value and the corporation shall
issue and deliver to such store mar
ager, or those claiming under him, at
such price, sufficient number OF
shares of common stock of the coz
poration the earnings on which will
equal two-thirds of his proportion of
the average annual net earnings of
the store for three full calendar years,
Tor for the full number of calendar
years, during which the store has been
in existence if less than three years.,
which he would have had, had he con-
tinued to hold the classified common
stock which he converted into pre-
ferred stock.
If such store manager ceases to be
the manager of such store within the
first six months Of a calendar year,
then for the purpose Of fixing the
number of shares of common stock
which he, or those claiming under him,
are entitled to purchase, all figures
shall be taken as of December 31st,
Of the preceding year and the calendar
year in which he ceases to be manager
shall not be taken into consideration
in ascertaining the average annual
net earnings of the store; If he ceases
to be manager within the last six
months of calendar year all figures
shall be taken as of the last day of
the calendar year in which he ceases
to be manager, and such year shall be
considered in ascertaining the average
annual net earnings of the store.
Providing however, that if any man
ager, after converting the classified
common stock of the store of which
he is manager into preferred stock
leaves the employ of the corporation
voluntarily Except by reason of i'll
ness or other unavoidable cause), or
is discharged for cause by the Board
of Directors, within ten years from
the earliest date when he subscribed
for classified common stock issued to
him either by this corporation or by its
predecessor, j. G. Penney Company, a
Utah corporation, he, or those claim
ing under him, shall have no right
whatsoever to purchase all or any
part of the common stock which he
would otherwise be entitled to pur-
chase under this paragraph (2).
(3) On and after January /, 1927,
any classified common stockholder
delivering for conversion the classi-
fled common stock owned and held by
him and issued for any "try out
store, shall receive-First: That
number Of shares of common stock
which bears the same relation to the
total number of shares of common
stock outstanding, as two-thirds of the
net earnings of the shares of classi-
fled common stock so converted bear
to the net earnings of the total num-
ber of shares of the common stock
outstanding, but except as hereinafter
provided the book value Of the COM
mon stock to be delivered to him on
conversion shall, not exceed the book
value Of the classified common stock
delivered for conversion; provided
however, that if the book value of the
shares of common stock to which the
classified common stockholder is en-
titled by reason of the earning power
of his shares of classified common
stock shall exceed the book value of
the classified common stock which he
is delivering for conversion, such
stockholder shall have the right either
to receive the full number of shares
Of common stock to which the earning
power of his shares of classified COM
mon stock entities him, upon paying
to the corporation the amount of the
excess book value of such shares of
common stock over the book value Of
the classified common stock, or to re-
ceive the number of shares of COM
mon stock having the same book value
as the shares of classified common
stock converted by him; Second: If
the book value of the shares of COM
mon stock so issued upon the conver-
sion for the said classified common
stock shall be less than the book value
of said classified common stock SO
converted, there shall be issued and
delivered to the stockholder effecting
the conversion, sufficient preferred
stock at par, in addition to the said
common stock, to make the total book
value of all stock issued in exchange
for said classified common stock equal
the book value Of the classified COM
mon stock so converted.
"Try out Store" as used In this Ar
ticle is a store for which classified
common stock is issued and outstand
ing, which is on January /, 1927, or
subsequently thereto, managed by a
manager who holds no classified COM
mon stock issued for said store. In
the event that a manager of a TRY
out store" as above defined shall be
given contract at any time prior to
December 81, 1881, emitting him to
receive percentage of the net earn
ings of such store, the amount so re-
ceived by such manager shall not be
deducted from the total earnings of
said store for the purpose of fixing
the time when the classified common
stock of such store becomes eligible
for conversion under Article XI here
of, and the number of shares of COM
mon stock to be exchanged for the
classified common stock of such store
upon conversion as provided for IN
this Article.
Provided, however, that no frac-
~ T. - 4 a