The Coconino sun., 1927-05-06

i
| 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 man
ager, or those claiming under him, at
such price, a sufficient number OF
shares of common stock of the cor
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 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
1 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 causel, 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. C. 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
I would otherwise be entitled to pur-
! chase under this paragraph ~.
90 On and after January /, 1927,
4 any classified common stockholder
1 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
4 provided the book value of the COM
mon stock to be delivered to him on
i conversion shall not exceed the book
I value Of the classified common stock
1 delivered for conversion; provided
1 however, that if the book value of the
I 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
1 StOck Az Par, III duultlOtl w CliS SdAu
common stock, to make the total book
value of all stock issued in exchange
4 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-
4 ing, which is on January L, 1927, or
/ subsequently thereto, managed by a
manager who holds RIO classified COM
mon stock issued for said store. In
/ the event that manager of "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
! ii1gs 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
i stocksof such store becomes eligible
for conversion under Article XII 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-