The Coconino sun., 1927-05-27


stock to which he is entitled upon con-
version, under the terms of Article
XII hereof, as though he had actually
delivered his shares of classified COM
mon stock for conversion.
Provided, however, commencing
with January l., 1926, that where a
store has been in continuous opera
tion 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 ag-
gregate store capital of all the stores
Of the corporation in any complete
calendar year during said five year
period, the Board of Directors at their
option may, in lieu of demanding the
conversion Of the stock, discontinue
the operation of said store and pur-
chase all the classified common stock
issued therefor in the manner pro-
vided in Article XIII hereof.
(4) After December 81, 1926, and
prior to December 81, 1881, no classi-
fled common stockholder shall have
the right to convert any shares of
classified common stock into common
and preferred stock, or either, unless
the store for which such stock was
issued shall have fulfilled one of the
two conditions above set forth in sub
paragraph A and B of paragraph ~
of this Article, but the Board of Di-
rectors of the Company, If it deems it
to be for the, best interests of the corr.
poration may convert any of said
classified common stock by agreement
with the holder thereof upon the
terms set forth in Article XII hereof,
even though the stores for which such
stock has been issued shall not have
fulfilled either of said two conditions.
(5) On December 31st, 1881, all
classified common stock then issued
and outstanding and not previously
called or purchased for retirement,
shall be forthwith delivered to
the corporation, duly endorsed for
transfer, for conversion into common
stock and preferred stock, or either,
in accordance with the method set
forth in Article XII hereof, and
whether or not the stores for which
said stock is issued have fulfilled the
two conditions, or either of them,
above set forth in sub-paragraphs A
and B of paragraph ~ of this
Article. IF any classified common
stockholder fails to deliver his stock
for conversion upon such date, all his
rights and privileges as classified
common stockholder, as defined in
this Certificate of Incorporation, shall
nevertheless cease and terminate as
of December 81, 1881, excepting his
right to receive the common and pre-
ferred stock, or either, to which he is
entitled upon delivery of his stock for
conversion, and thereafter his rights
and privileges as a stockholder of the
corporation shall be those of COM
mon and preferred stockholder, or
either, as defined in this Certificate
Of Incorporation, according to the
number and character of shares of
stock to which he is entitled upon
conversion, under the terms of Article
XII hereof, as though he had actually
delivered his shares of classified COM
mon stock for conversion.
(6) If any classified common
stockholder fails by December 81,
1882, to present his stock certificates
for conversion as above provided, the
Board Of Directors may at any time
thereafter upon thirty days (30)
written notice to such stockholder,
mailed to him at his last known adj
dress, demand that the outstanding
classified common stock certificates
be delivered to it for redemption at a
price equal to the call price. of the
preferred stock and the market value,
at the date of the notice, of the COM
mon stock to which he was entitled
under Article XII hereof on Decem-
Der 81. 1881. If he shall fail so to
present his classified stock certificates
for redemption on or before the ter
mination Of the thirty day (30) period,
all his rights and privileges as
stockholder of the corporation, and
those of any person claiming under
him shall thereupon cease and termir-
ate, excepting his right to receive the
redemption price upon his surrender
of his classified common stock GER
tificates duly endorsed for transfer,
and there shall be noted upon the
books of the corporation the fact that
his classified common stock certifi-
Gates have been cancelled.
ARTICLE XII
Basis of Conversion of Classified
Common Stock into Preferred
Stock ando Common
Stock
The conversion of classified COM
mon stock into common stock and pre-
ferred stock, or either, shall be made
upon the following basis:
~ The classified common stock
holder converting his stock, excepting
any classified common stockholder in
cluded in the provisions set forth in
paragraphs (2) and (3) of this Ar
ticle, shall receive in return First:
That number of shares of common
stock at book value which bears the
same relation to the total number Of
shares Of common stock outstanding,
as the net earnings of the shares of
classified common stock SO converted,
bear to the net earnings of the total
number 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
entitled by reason of the earning
power Of his shares Of classified COM
mon stock, shall exceed the book value
of tha classified common stock which