Bylaws of North Jersey Flying Club, Inc.

Article I — Name, Purpose, and Offices

Section 1.1 Name. The name of the corporation is North Jersey Flying Club, Inc. (the “Club”).

Section 1.2 Nature. The Club is a nonprofit corporation organized under the New Jersey Nonprofit Corporation Act (Title 15A of the New Jersey Statutes) and is intended to operate exclusively as a tax-exempt social and recreational club within the meaning of Section 501(c)(7) of the Internal Revenue Code.

Section 1.3 Purpose. The Club is organized and operated for the pleasure, recreation, and other non-profit purposes of its members — specifically, to provide members with access to well-maintained aircraft for their personal use and enjoyment, to promote safe and affordable flying, and to foster fellowship among members who share an interest in aviation. The Club provides its members the opportunity for personal contact, commingling, and fellowship.

Section 1.4 No inurement. The Club shall not be operated for profit, and no part of its net earnings shall benefit any member, director, officer, or other private individual. This does not prevent the Club from paying reasonable compensation for services actually rendered, or from making the payments and distributions these Bylaws expressly allow — including repayment of member loans, the return of a member’s capital on exit, and the distribution of remaining assets on dissolution.

Section 1.5 Registered office and agent. The Club shall continuously maintain a registered office and a registered agent in New Jersey, as required by N.J.S.A. 15A:4-1 and as stated in the Club’s certificate of incorporation.

Section 1.6 Operating location. The Club may operate from one or more airports as the Board determines. Relocating the Club’s principal operating base is a Major Decision (§4.9).

Article II — Flying-Club Compliance Rules

Section 2.1 Members-only operation. Only members (and approved instructors and mechanics, as provided in the Operating Procedures) may operate Club aircraft. Neither the Club nor any member may use Club aircraft to offer or conduct charter, air-taxi, or aircraft-rental operations, or hold the Club out to the public as a fixed-base operator, flight school, or maintenance facility.

Section 2.2 Cost recovery. The Club shall not derive more revenue from the use of its aircraft than is needed for the operation, maintenance, and replacement of those aircraft. This does not prevent the Club from holding reserves and carrying a positive balance to fund future maintenance, engine and propeller overhauls, and the replacement or acquisition of aircraft. Such reserves shall be clearly allocated to those purposes and are not distributed to members except on dissolution (Article XIII).

Section 2.3 Equal economic treatment. All members shall be treated equally in the economic terms of membership — the same buy-in, the same dues, and the same rates for the same aircraft — except for differences tied to actual operating cost (for example, a higher hourly rate for a more expensive aircraft), reasonable compensation for services, and repayment of member loans. No member shall receive a reduced rate, reduced dues, or other economic preference in exchange for a capital contribution or loan.

Section 2.4 Nonmember income. The Club shall keep its nonmember and investment income^[1] within the limits required to maintain its 501(c)(7) status, and shall not sell goods or services to any non-member, except that it may sell or exchange its capital equipment. The Treasurer shall track member versus nonmember receipts.

Section 2.5 Required filings. The Club shall apply for and maintain its federal 501(c)(7) tax-exempt status, and shall timely file its annual IRS Form 990-series return, its New Jersey annual report, and any documents required by the airport sponsor.

Article III — Membership

Section 3.1 Eligibility. Membership is open to individuals who hold at least an FAA Private Pilot Certificate, meet the Club’s insurance, checkout, and proficiency requirements as set in the Operating Procedures, and are approved as provided below. The Club does not admit student pilots. The Operating Procedures may set additional pilot criteria — for example, minimum total time, time in type, endorsements, and higher requirements for specific aircraft such as high-performance aircraft — based on the Club’s insurance requirements and safety needs. Membership is limited in number as the Board determines based on fleet capacity.

Section 3.2 Membership classes.

(a) Regular Member — a member in good standing who holds one membership share, with full flying privileges and one vote, subject to the Founding-Member provisions of Article V during the Founding Period.

(b) Founding Member — a Regular Member who qualifies under Article V. Founding-Member status carries the governance rights described in Article V during the Founding Period and nothing more; a Founding Member’s economic terms are identical to every other member’s.

(c) Inactive Member — a member whom the Board has granted inactive status (for example, while awaiting exit on the Exit List under §6.6, or during a leave). An Inactive Member holds their share but has no flying privileges, no vote, and dues suspended for the period and on the terms set in the Operating Procedures.

Section 3.3 Admission. An applicant becomes a member upon (i) Board approval of the application, (ii) payment of the membership buy-in (Article VI), (iii) signing the Membership Agreement and the liability release/waiver, and (iv) completing the required checkout before exercising flying privileges.

Section 3.4 Rights of members. Each Regular Member in good standing may use Club aircraft under the Operating Procedures, attend membership meetings, and vote as provided in these Bylaws (subject to Article V).

Section 3.5 Obligations. Members shall pay dues, assessments, and usage charges when due; comply with these Bylaws, the Operating Procedures, and all FAA regulations; care for Club property; maintain required currency and proficiency; and conduct themselves consistent with the Club’s safety-first culture.

Section 3.6 Good standing. A member is in good standing if current on all financial obligations and not under suspension. Delinquency or rule violations may result in loss of scheduling and flying privileges, suspension, or termination as provided in Article XI.

Section 3.7 Transfer of membership. A membership share is transferable only through the Exit List and share-transfer process in Article VI, and may not be sold, pledged, or assigned by a member privately.

Article IV — Meetings of Members

Section 4.1 Annual meeting. The Annual Meeting of the members is held each January to elect directors as scheduled under Article VII, receive reports, and conduct other business.

Section 4.2 Regular meetings. Membership meetings are held at least quarterly, and may be held more often (for example, monthly) as the Board or the membership decides. The January Annual Meeting counts as that quarter’s regular meeting.

Section 4.3 Special meetings. A special meeting may be called by the President, by a majority of the Board, or on the written request of at least one-third of the voting members.

Section 4.4 Notice. Written or electronic notice stating the date, time, place (or remote-access method), and — for a special meeting — the purpose, shall be given not fewer than 10 nor more than 60 days before the meeting.

Section 4.5 Quorum. A quorum for a membership meeting is one-third of the voting members, present in person or by proxy.

Section 4.6 Voting. Except as Article V or these Bylaws provide otherwise, each Regular Member has one vote. The approval margin for any matter is set in §4.9.

Section 4.7 Proxies. A voting member may vote in person or by written or electronic proxy given to any other member or to a director of the member’s choice. A proxy may be a standing proxy (for example, naming a director as the member’s default proxy until revoked) and is revocable at any time; the member may direct how it is voted or leave that to the proxy-holder. A member may instead give a quorum-only proxy, which counts the member toward quorum but casts no vote (treated as an abstention), so a member can help the Club reach quorum without delegating their vote. Unless it states a different period, a proxy is valid for 11 months from its date, and no proxy is valid more than three years after its date (N.J.S.A. 15A:5-18); a standing proxy is renewed as needed to stay valid.

Section 4.8 Action without a meeting. Members may act without a meeting only as N.J.S.A. 15A:5-6 permits — by the unanimous written or electronic consent of the voting members, or by consent of the minimum number of votes needed to approve the action, given after notice to all members.

Section 4.9 Major Decisions and approval thresholds.

“Major Decisions” are: (a) acquiring (by purchase or lease), selling, disposing of, or terminating the lease of an aircraft; (b) incurring, guaranteeing, or refinancing debt; (c) relocating the principal operating base; (d) admitting members beyond a Board-set cap; (e) setting or materially changing the buy-in, dues, or hourly rates; (f) special assessments above $500; (g) amending these Bylaws or the certificate of incorporation; (h) dissolution or merger; (i) removing a director or officer; and (j) expelling a member for cause (after notice and a hearing, per Article XI).

Proxies count toward quorum and, unless given as quorum-only, toward the vote (§4.7). Unless the table below requires a higher margin, action is by a majority of votes cast at a meeting with a quorum. In the table, “of members” means the Founding Members during the Founding Period, and all voting members thereafter.

Article V — Founding Members and the Founding Period

Section 5.1 Purpose. The Founding Members are the individuals who take on the greatest responsibility for launching the Club — by contributing capital above the standard buy-in, personally guaranteeing Club financing, and/or devoting substantial time and effort to organizing, incorporating, and operating the Club in its early period. Founding-Member governance serves two purposes: to keep the Club established and run according to its founding principles — affordable, safe, member-owned flying — during the critical startup period; and to protect the members who put the most at risk to get the Club off the ground. To those ends, these Bylaws place authority over Major Decisions with the Founding Members during the Founding Period, after which governance reverts to all members equally. Founding-Member status is a governance mechanism only and confers no superior economic right.

Section 5.2 Who is a Founding Member. A member is a Founding Member if, on or before July 1, 2027, the member (a) contributed capital above the standard buy-in as a member loan or refundable deposit under Article VI, (b) personally guaranteed Club financing, and/or (c) served on the initial Board or otherwise contributed substantial organizing effort as the initial Board recognizes — and (d) is designated as a Founding Member in the Club’s records. The Board maintains the list of Founding Members.

Section 5.3 Equal economics preserved. A Founding Member pays the same buy-in, dues, and hourly rates, and has the same aircraft access, as every other member. The only distinctions of Founding-Member status are the governance rights in this Article. Repayment of a Founding Member’s loan or deposit is governed solely by Article VI.

Section 5.4 Major Decisions. “Major Decisions” are defined in §4.9. During the Founding Period, only Founding Members vote on them (§5.5).

Section 5.5 Voting during the Founding Period. During the Founding Period, only Founding Members vote on Major Decisions, each having one vote; all other matters are decided by the full voting membership under Article IV. The required margin for every matter is set in §4.9.

Section 5.6 Duration and automatic sunset. The Founding Period begins on incorporation and ends automatically on the earliest of:

(a) the date on which all Founding-Member surplus loans and deposits have been repaid in full, all member personal guarantees of Club financing have been released,^[2] and the Club has maintained at least 30 Regular Members and positive operating cash flow for six consecutive months;

(b) the 36-month anniversary of incorporation; or

(c) a date the Founding Members vote to end it early.

On sunset, this Article expires, Founding-Member voting ends, and every Regular Member votes equally on all matters under Article IV. The reversion is automatic and requires no further vote.

Section 5.7 No economic entrenchment. Nothing in this Article allows Founding Members to receive distributions, reduced dues or rates, or any economic benefit not equally available to all members.

Article VI — Finances: Buy-In, Dues, Rates, Member Capital, and Exit

Section 6.1 Membership buy-in. On admission, each member pays a one-time buy-in that purchases one membership share representing the member’s equal equity interest in the Club. The buy-in is equal for all members and is set in the Club’s fee schedule (initially $5,000). Materially changing the buy-in is a Major Decision (§4.9) and applies only to members who join after the change.

Section 6.2 Dues. Members pay monthly dues, set by the Board and published in the fee schedule (initially $150 per month), billed whether or not the member flies. Dues fund the Club’s fixed costs.

Section 6.3 Usage charges. Members pay an hourly usage charge for each aircraft, measured by wet tach time, at rates set by the Board and published in the fee schedule. Usage charges fund direct operating costs and reserves.

Section 6.4 Assessments and voluntary contributions.

(a) Mandatory assessments. The Board may levy a special assessment for extraordinary needs. A mandatory assessment shall be equal for all members (the total divided by the number of members). A special assessment above $500 is a Major Decision (§4.9).

(b) Voluntary contributions. Members may voluntarily contribute — individually or as a group — toward a specific Club purpose or aircraft improvement (for example, an avionics or engine upgrade), without charging the rest of the membership. No member is compelled to participate; the improvement and any resulting asset remain Club property available to all members; and a contributing member receives no exclusive use, priority, or ownership right in exchange. The Board documents each contribution as a non-refundable capital contribution or, if the contributors and the Board agree, as a member loan or refundable deposit under §6.5. An aircraft with higher operating cost may carry a higher hourly rate that its users pay (§6.3).

Section 6.5 Member loans and capital contributions.

(a) A member may, at any time during the life of the Club, lend money to the Club or contribute capital above the standard buy-in — for example, founders funding startup and the first aircraft, or any member later helping fund a Club purpose. Such a loan or contribution is not additional equity and confers no additional economic or ownership right. It is documented as either a member loan (evidenced by a written promissory note) or a refundable capital deposit (recorded as a Club liability).

(b) Each loan or contribution shall have written terms: principal; the interest rate, if any (member loans are expected to be non-interest-bearing, but the Club may agree to a reasonable, stated rate where warranted); repayment schedule and priority; and subordination to any institutional aircraft lender as required.

(c) Repayment priority. Member loans and deposits are obligations of the Club, senior to any return of equity to members, and are repaid on their written terms as the Club’s finances allow (for founder surplus contributions, consistent with the plan to reduce founders toward the standard buy-in). If the Club cannot meet these obligations, the Board may levy an equal assessment on all members to cover the shortfall, as with any Club debt. On dissolution, these obligations are paid (with other creditors, including any aircraft lender) before any distribution of remaining assets to members.

(d) No status benefit. A loan or deposit does not entitle a member to reduced dues or rates, enhanced voting (except Founding-Member status under Article V, which is governance-only and available only for qualifying founder contributions made by the enrollment cutoff), or any preference other than the repayment terms of the instrument itself.

Section 6.6 Exit and transfer of a membership share.

(a) Transferable share. A member’s buy-in is a transferable equity share. As a rule, the Club does not repurchase shares out of operating funds; a departing member’s share transfers to an approved incoming member, and the incoming member’s buy-in funds the payout to the departing member.

(b) Exit List. A member wishing to leave notifies the Board and is placed on the Exit List in order of request. As approved new members join, their buy-ins are applied to transfer the shares of members on the Exit List, in order.

(c) Payout amount. On transfer, the departing member receives 90% of the amount that member actually paid for their share (not the current posted buy-in); the Club retains 10% as a transfer fee for administrative cost and reserves. The payout is capped at what the member paid and does not include any share of the Club’s retained earnings or asset appreciation. (Example: a member who paid $5,000 receives $4,500, even if the buy-in for new members has since risen to $10,000.)

(d) Obligations pending transfer. Until their share transfers, a member on the Exit List remains responsible for dues and charges, except that after six months on the Exit List the member may elect Inactive status without further Board approval, suspending dues per the Operating Procedures until the share transfers.

(e) Board-discretionary early buy-back. Even without an incoming member, the Board may, in its sole discretion and only if the Club’s cash reserves are sufficient without impairing operations or required reserves, buy back a departing member’s share on the payout terms in §6.6(c). This is discretionary, not a member right, and creates no Club obligation.

(f) No guaranteed timing. Except under §6.6(e), the Club does not guarantee when a share will transfer; transfer depends on a new approved member joining.

Section 6.7 Reserves, budget, and Financial Procedures. The Board shall adopt Financial Procedures setting how the Club allocates incoming funds to reserves (maintenance, engine and propeller overhaul, insurance, replacement, and contingencies) and how it budgets and reports. The Treasurer maintains the reserves and prepares the budget — including a three-year rolling budget — in accordance with those Board-adopted Financial Procedures, not at the Treasurer’s sole discretion. Surpluses shall be clearly allocated to future maintenance and replacement reserves as those procedures provide.

Section 6.8 Banking and books. Club funds are held in the Club’s name. The Treasurer keeps the Club’s books and, to support the Club’s 501(c)(7) status, records member income and nonmember income separately, retaining records at least three years.

Section 6.9 Fiscal year. The fiscal year is the calendar year, January 1 through December 31.

Section 6.10 Death of a member. On a member’s death, the member’s share is handled through the exit and transfer process (§6.6): the payout under §6.6(c), less any amounts owed to the Club, is paid to the member’s estate. The Board may, in its discretion and if reserves allow, use the early buy-back (§6.6(e)) to pay the estate without waiting for a new member to join.

Article VII — Board of Directors^[3]

Section 7.1 Powers. The business and affairs of the Club are managed by the Board of Directors (the “Board”), except for matters reserved to the members under Article IV and §4.9 — or, during the Founding Period, to the Founding Members under Article V.

Section 7.2 Number of directors. The Board consists of three directors — the President, the Treasurer, and the Secretary — which is the minimum a New Jersey nonprofit corporation may have.

Section 7.3 Initial board; nominations, elections, and terms.

(a) Initial Board and offset terms. The initial Board — President, Treasurer, and Secretary — is elected by the Founding Members and takes office at incorporation. So that the seats do not all turn over at once and the Club keeps continuity of leadership, the initial terms are offset: the initial Treasurer serves through December 31, 2028, and the initial President and Secretary serve through December 31, 2029 (each serving until a successor is elected).

(b) Regular elections and terms. At each January Annual Meeting, the members elect the director whose term is expiring to a two-year term (running January 1 through December 31, and continuing until a successor is elected). Because of the offset in (a), the Treasurer is elected in odd-numbered years (first in January 2029) and the President and Secretary in even-numbered years (first in January 2030), so part of the Board always carries over. There is no limit on the number of terms a director may serve; a director may be re-elected indefinitely.

(c) Electorate. During the Founding Period, directors are elected by the Founding Members; afterward, by the full voting membership.

(d) Nominations and voting. Any member in good standing (or, during the Founding Period, any Founding Member) is eligible to serve as a director. Before each Annual Meeting at which a seat is up, the Board — or a member it designates — shall solicit and announce candidates, and additional nominations may be made from the floor. If there are more candidates than open seats, the election is by secret ballot (written, or by a secure electronic method for an online or hybrid meeting); otherwise the seat may be filled by voice vote or acclamation. A director is elected by a majority of the votes cast; if no candidate for a seat receives a majority, a run-off is held between the two candidates with the most votes, and any remaining tie is decided by lot. Newly elected directors take office at the close of the Annual Meeting, the predecessor serving until then.

Section 7.4 Vacancies. If a director’s seat becomes vacant, the remaining directors appoint an interim director for up to 60 days, by which time the seat shall be filled by election of the membership (or the Founding Members during the Founding Period). The elected director serves the remainder of the term.

Section 7.5 Removal. A director or officer may be removed, with or without cause, at the margin set in §4.9.

Section 7.6 Board meetings and quorum. The Board meets at least quarterly. A quorum is a majority of the directors. The Board may act without a meeting by unanimous written or electronic consent, as permitted by N.J.S.A. 15A:6-7.

Section 7.7 What the Board decides vs. what the members decide.

(a) Board decisions. The Board manages the Club’s ordinary business and may, without a member vote: (i) approve any expenditure provided for in the approved budget or Financial Procedures; (ii) approve routine, scheduled, and necessary maintenance and airworthiness expenses — including annual and 100-hour inspections, servicing, repairs, and compliance with airworthiness directives — and reasonable unexpected maintenance needed to keep an aircraft airworthy or return it to service; and (iii) approve other unbudgeted expenditures up to $2,500 per item. The Board also adopts and amends the Operating Procedures, Financial Procedures, and fee schedule.

(b) Member decisions. Every Major Decision requires a two-thirds member vote, and any other unbudgeted, non-maintenance expenditure above $2,500 per item requires a member majority — each at the margins set in §4.9.

Article VIII — Officers

Section 8.1 Officers and the Board. A director is a person elected by the members to the governing Board, which holds ultimate authority over the Club’s affairs (Article VII). An officer is a person who carries out a defined operational role. The two are distinct roles, though the same person may hold both. In this Club, the three principal offices — President, Secretary, and Treasurer — are filled by the three directors holding the corresponding Board positions (each director serves as, and holds the duties of, the like-named officer). The Board may appoint additional officers as provided in §8.5.

Section 8.2 President. Presides at meetings, leads the Club’s operations and its external relationships (airport, insurer, lender), and executes documents on the Club’s behalf as authorized.

Section 8.3 Treasurer. Keeps the Club’s financial records and reserves; bills and collects dues and charges; pays obligations; prepares the budget and financial statements; arranges required filings and any audit; and tracks member versus nonmember income (§6.8).

Section 8.4 Secretary. Keeps minutes and Club records, gives notices, and maintains the membership roll, the Founding-Member list, and the Exit List.

Section 8.5 Additional officers. The Board may appoint additional officers as the Club grows; an appointed officer carries out assigned duties but is not, by virtue of the office alone, a member of the Board. Common additional officers and their roles are:

• Vice President — assists the President and acts in the President’s place when the President is absent or unable to serve.
• Safety Officer (Chief Pilot) — leads the safety program and oversees checkouts, currency, and proficiency, and may ground an aircraft or suspend a member’s flying privileges for safety cause (§11.2).
• Maintenance Officer — coordinates maintenance, inspections, squawk resolution, and aircraft records with the Club’s mechanic(s).
• Social Officer — organizes meetings, events, and member communications.

The Board may also appoint other officers or roles and define or adjust their duties in the Operating Procedures or other Board-adopted documentation, without amending these Bylaws.

Section 8.6 Officer compensation.

(a) Service is voluntary. Officers and directors serve without compensation, except that the Club shall reimburse actual, documented, reasonable out-of-pocket expenses under an accountable-expense policy (which is not compensation).

(b) Compensation for working officers. Because some officers perform substantial ongoing administrative work — initially and typically the President and Treasurer — the Club may provide reasonable compensation for specified administrative services in the form of a dues credit or a flight-hour credit, one form per officer. The members may, by vote, decide which officer positions are compensated and in what amount — extending it to another officer whose workload warrants it, or reducing it to one officer or to none — as the work changes over time. The form and amount for each are set in a compensation schedule, kept with the Club’s official records and recorded in the minutes of the meeting that approves it, and may be adjusted for workload and membership size. Because a compensated officer may also sit on the Board, the compensation schedule must be approved by a majority of the votes cast at a meeting with a quorum (by the members, or the Founding Members during the Founding Period), not by the Board alone, with any officer to be compensated recused from the vote. Any such compensation:

(i) must be approved in advance and documented in the minutes (amount, basis, and recusal);

(ii) must be reasonable for the services rendered and supported by available comparable information; and

(iii) is compensation for services actually rendered, shall not exceed what is reasonable, shall not be a distribution of the Club’s net earnings, and shall be reviewed at least annually.

Section 8.7 Conflict of interest. The Club shall maintain a conflict-of-interest policy. A director or officer with a material personal interest in a matter shall disclose it and recuse from the vote.

Article IX — Aircraft, Insurance, and Guarantor Protection

Section 9.1 Ownership and leasing. Club aircraft are ordinarily owned by, and registered in the name of, the Club. The Club may also lease aircraft under a written lease that is exclusive to the Club and complies with the flying-club requirements of FAA Order 5190.6B. If a leased aircraft is owned by a member, that member must be in good standing and pay the same fees as every other member, the lease must be documented separately, and the Club must not pay more than fair market value.

Section 9.2 Guarantor protection. Where a member (a “Guarantor”) personally guarantees Club financing:

(a) the Club shall sign a written Indemnification Agreement — before or at the time the guaranty is given — holding the Guarantor harmless for any amount they pay under the guaranty, together with reasonable costs;

(b) any amount a Guarantor pays under a guaranty becomes a first-priority obligation of the Club, senior to any member refund, share payout, or distribution, and is repaid to the Guarantor before those payments resume;

(c) while any guaranty is outstanding, the Club shall not incur additional debt without the affected Guarantor’s consent;

(d) the Club shall use reasonable efforts to refinance and release each Guarantor as soon as it qualifies to do so; and

(e) reimbursing a Guarantor for amounts they actually advanced is repayment of a Club obligation, not compensation or distribution.

Section 9.3 Insurance.

(a) The Club shall maintain aircraft hull and liability insurance. The hull value on each aircraft shall be enough to replace it with an aircraft of equal value and quality at current market rates — not merely the price the Club paid — and shall be reassessed at least annually and adjusted as the market moves.

(b) Members shall meet all pilot requirements set by the Club’s insurer (hours, ratings, checkouts, current flight review) and the Club’s proficiency requirements, as detailed in the Operating Procedures.

Section 9.4 Accidents, incidents, and financial responsibility.

(a) Reporting. Any accident, incident, or damage involving a Club aircraft must be reported immediately as required by the Operating Procedures, and to the Board (and to the Safety Officer, if one has been appointed).

(b) Review. The Board designates a reviewer (who may be the Safety Officer, if one is appointed) to establish the facts and provide a written finding to the Board.

(c) Hearing before assessment. Before the Club imposes any financial assessment or lasting flight-privilege limitation arising from an accident or incident, the member(s) involved shall be offered a hearing. After the hearing (or its waiver), the Board sets the financial assessment and any privilege limitation. This does not limit the authority under §11.2 to immediately suspend a member’s privileges for a safety or insurance cause, pending the review and hearing.

(d) Financial responsibility. A member responsible for damage through negligence or a violation of these Bylaws, the Operating Procedures, or the FARs shall bear (i) the Club’s insurance deductible for the loss, and (ii) any resulting increase in the Club’s insurance premium for at least the following policy period, and — at the Board’s discretion — for the entire time the increase remains in effect. Damage occurring despite fully compliant operation is borne by the Club and its insurer.

(e) Offset. Any amount a member owes under this Section is deducted from the member’s share payout if the member leaves or is expelled (§6.6).

Article X — Indemnification of Directors and Officers

Section 10.1 Indemnification. To the fullest extent permitted by N.J.S.A. 15A:3-4, the Club shall indemnify its directors, officers, employees, and agents against expenses and liabilities incurred in proceedings arising from their Club service, subject to the good-faith and other standards of that statute, and shall advance expenses on receipt of an undertaking to repay if indemnification is ultimately not permitted.

Section 10.2 Limits. No indemnification shall be made where a final adjudication establishes a breach of the duty of loyalty, acts not in good faith or a knowing violation of law, or receipt of an improper personal benefit.

Section 10.3 D&O insurance. The Club may purchase Directors and Officers (D&O) and related insurance, whether or not it could itself indemnify (N.J.S.A. 15A:3-4(i)).

Section 10.4 Members. Protection of a member acting solely as a member (for example, as a loan Guarantor) rests on contract under Article IX, not on this Article.

Article XI — Discipline, Suspension, and Termination

Section 11.1 Grounds. Grounds for discipline, suspension, or termination include nonpayment of any amount owed; violation of these Bylaws, the Operating Procedures, or FAA regulations; unsafe conduct; and egregious or illegal conduct, or conduct harmful to the Club or its members.

Section 11.2 Immediate suspension for safety. The Safety Officer, the President, or a majority of the Board may immediately suspend a member’s scheduling and flying privileges for a safety or insurance cause, pending review. The Board shall promptly review the suspension, give the member an opportunity to be heard, and then lift, continue, or escalate it. Any lasting limitation or financial assessment follows the hearing process in §9.4(c) (for accidents) or the discipline process in §§11.4–11.5 (for conduct).

Section 11.3 Nonpayment and delinquency.

(a) Balance cap. A member’s unpaid balance may not exceed 50% of that member’s buy-in. If it reaches that limit, the member’s scheduling and flying privileges are immediately suspended until the balance is brought back below it — except that a member in good payment standing may exceed the limit for a specific reservation (for example, an extended trip or a heavy-use month) with advance approval of a Board member.

(b) Graduated action for overdue amounts. An amount not paid by its due date is handled on this schedule (which the Board may adjust in the Financial Procedures):

• 15 days overdue — the amount is delinquent and the member is notified;
• 30 days overdue — a 10% late charge is added to the unpaid balance, unless the Board waives it for good cause;
• 60 days overdue — the member’s scheduling and flying privileges are suspended until the balance is cured;
• 90 days overdue — the Board may terminate the membership. The member forfeits their share payout by default; the Board may, in its discretion, return any portion of the payout remaining after deducting what the member owes, where extenuating circumstances warrant. In all cases the Club may pursue collection (including legal action) for any amount the member owes beyond the refundable value of the forfeited share.

Section 11.4 Egregious or illegal conduct.

(a) The Board may immediately suspend a member for egregious or illegal behavior, or conduct that endangers safety or materially harms the Club or its members. Expelling (permanently terminating) such a member requires a vote at the margin set in §4.9, following notice and an opportunity to be heard.

(b) A member expelled under this Section may be paid out for their share on the same terms as a normal exit (§6.6(c)), less any outstanding balance, costs, or damages owed to the Club, at the Board’s discretion and subject to the Club’s ability to pay.

Section 11.5 Process. Except for immediate safety suspensions (§11.2) and the automatic loss of privileges for nonpayment (§11.3), the Board shall provide notice and an opportunity to be heard before suspending or terminating a member.

Section 11.6 Effect on obligations. Termination does not cancel what a member still owes the Club. It also does not forfeit the member’s documented loan or refundable deposit (§6.5), which remains payable to the member on its terms — but the Club may first offset any amount the member owes against that repayment.

Article XII — Amendments

Section 12.1 Bylaws. These Bylaws may be amended at the margin set in §4.9, at a meeting for which notice of the proposed amendment was given. The Board should review these Bylaws at least every two years.

Section 12.2 Operating and Financial Procedures. The Operating Procedures, the Financial Procedures, and the fee schedule may be adopted and amended by the Board by majority vote, provided they remain consistent with these Bylaws.

Section 12.3 Certificate of incorporation. Amendments to the certificate follow Title 15A and are a Major Decision (§4.9).

Article XIII — Dissolution

Section 13.1 Winding up. On dissolution, the Board shall wind up the Club’s affairs under N.J.S.A. 15A:12 et seq.

Section 13.2 Distribution. After paying or providing for all liabilities — including institutional debt, member loans and deposits, and any amounts owed to Guarantors — and honoring any assets held on condition, the remaining assets shall be distributed equally among the members (per membership share), as permitted for a member-funded 501(c)(7) social club under N.J.S.A. 15A:12-8.

Article XIV — General Provisions

Section 14.1 Rules of order. Meetings are governed by the current edition of Robert’s Rules of Order Newly Revised^[4] as the Club’s parliamentary authority, except as these Bylaws provide.

Section 14.2 Operating Procedures, Financial Procedures, and fee schedule. The Board shall adopt: Operating Procedures governing scheduling, checkouts, currency, proficiency, billing, fuel, maintenance, safety, instruction, and guest and passenger policy; Financial Procedures governing reserve allocation, budgeting, and financial reporting (§6.7); and a fee schedule publishing the current buy-in, monthly dues, and hourly rates. All are binding on members. The rules for buy-in, dues, and rates are in Article VI; the fee schedule is simply where the current amounts are published, so members have one place to see them.

Section 14.3 Waiver and release. Each member shall sign the Club’s liability release and assumption-of-risk agreement (governed by New Jersey law) as a condition of flying privileges.

Section 14.4 Governing law. These Bylaws are governed by the laws of the State of New Jersey.

Section 14.5 Severability. If any provision is held invalid, the remaining provisions remain in effect.

Adopted by the initial Board of North Jersey Flying Club, Inc. on ________________.