LOCKWOOD FOLLY COUNTRY CLUB, INC.

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1 Mailing Address: 19 Clubhouse Drive Supply NC LOCKWOOD FOLLY COUNTRY CLUB, INC. Pro Shop = Business Office = Toll Free = POA Clubhouse = Lockwood Grill = Pro Shop Fax = Lockwoodfolly@mindspring.com Website Table of Contents FRONT SECTION Pages 1-3 OFFICERS & COMMITTEES Pages 4-6 BYLAWS Pages 7-16 RULES, REGULATIONS & POLICY Pages EVENTS On Website DUES & FEES (Mailed Annually) VERSION DATED: Page 1

2 MISSION STATEMENT The mission of the Lockwood Folly Country Club, Inc. is to maximize the book and market value of our members equity by creating a premier Coastal Carolina member-owned golf and community-spirited social club for the use of the members and their guests and such outside golf play as the Board determines necessary to meet our financial obligations. Golf is a gift to nature Gary Player In a recent interview, Gary Player was asked about his role as a golf course architect, planner and developer. Preserving beauty and assuring playability, is foremost in his mind when he carves out a course for a client. The Vision That very philosophy was the deciding factor when the developers of Lockwood Folly chose Willard C. Byrd as architect for their golf course. After interviewing many qualified candidates, the developers decided on North Carolinian Byrd because he had the total picture in mind. He had the vision of a golf course co-existing with, as well as complimenting a community, and vice-versa. He clearly communicated that concept to us. He wasn t just building a golf course but he illustrated how the homes would fit into the 500 acres of picturesque property, stated the developers. Pursuing the Dream The site, relatively untouched for centuries, had caught the eye of several development companies in the 1980 s. They each approached the landowners with their respective proposals. Because preserving the beauty and ecological balance of the property was paramount in the minds of the landowners, the coveted acreage was sold to the Channelside Corporation and a working partnership was formed. Determined to keep the promise of preserving the beauty and serenity of the surroundings, the developers overcame many obstacles as they pursued their dreams. VERSION DATED: Page 2

3 The Past It was a real wilderness. You could barely walk through the brambles and bushes. The only structure was Harlee Hewett s cabin, said a Channelside representative. That same cabin, which originally stood on the site where the clubhouse is now located, was moved and eventually, for sentimental reasons, was incorporated into Hewett s new home on Channelside Drive. As Hewett explained, My father purchased the land from the Holden family in We grew peanuts and watermelons, and raised hogs on the property. The most watermelons I ever saw were in a huge patch which is now part of the first fairway and the practice range. Since he also had a sawmill business located on what is now Bogie Court, my father had bought the land primarily for its timber. After the death of my father in 1975, this area began to grow rapidly. My dream was that, when this property was finally developed, it would retain its natural beauty. I emphasized this as the development plans proceeded and I hope that those who have purchased property here share the same feelings for Lockwood Folly that I have. The Present A group of concerned and committed property owners felt just as strongly as Harlee Hewett about preserving the beauty and integrity of the community. After thoughtful consideration and careful negotiations, they purchased the golf course from the Channelside Corporation on June 1, By January 1, 1998, more than 200 property owners and investors had demonstrated their faith in the venture by purchasing equity memberships and dedicating themselves to preserving the playability of the course and the beauty of the entire community. The Club The Lockwood Folly Country Club is an incorporated, not-for-profit organization. Each equity member has an equal proprietary interest in the assets of the club and an equal vote in annually electing Directors who manage the Club. According to the By-Laws approved by the Members, total equity memberships are limited to 600. Outside play is offered to local golfers and nationally through Myrtle Beach and Wilmington golf and hotel packages. It is the Board s intention to balance such outside play with member needs. As membership grows, the plan is to slowly limit outside play through market pricing, as well as maintaining preferential dues structures and privileges for equity members. At the same time, cash reserves will be accumulated for golf course improvements, top-quality maintenance equipment and dedicated personnel. Our most singular asset is the Lockwood Folly links course itself. This is our product and we believe that through quality management, and the dedication of the owner members, it can become one of the shining gems of the Carolina Coast. It is our family dream now, along with Harlee Hewett s family, that this breathtaking visual and environmental beauty spot can be preserved for future generations. VERSION DATED: Page 3

4 Lockwood Folly Country Club Board of Directors 2010 The determination of operating policy for and the responsibility for the general management of the corporation, its affairs, property and funds shall be entrusted to the Board of Directors Article IV, Section 1 LFCCI By-Laws Office Name / Year Term Expires (Dec) President...Jon Peters 11 Vice-President Don Brewer 11 Secretary.. Mary Ward 12 Treasurer (appointee to Dave Notter Treasurer (appointee to Ken Palumbo Director, Golf Myrna Robinson 12 Director, Greens Charlie Roland 11 Director, House...Joe Troiano 12 Director, Marketing Jan Kelley 11 Director, Membership....Sharon Van Dusen 11 VERSION DATED: Page 4

5 COMMITTEES Finance = 2011 Dave Notter = Chair Jon Peters, Board President Ben D Addario Tom Humenay Russ Kleinbauer Janette Schroeder, Comptroller Golf = 2011 Myrna Robinson, Chair Charlie Pepe MGA Carol Bowers LGA Mike Ritterbusch Handicap Committee Mike Verhoosky Course Markings Gene Esposito Jeff Ruth Head Golf Professional Grounds/Greens = 2011 Charlie Roland, Chair Don Brewer Benny Benardo Patti Hogan Russ Mavis Jason Crawford- Grounds Superintendant Marketing = 2011 Jan Kelley, Chairperson Sandi Emerson Mary Knopfle Mike Newland Myrna Robinson Sharon Van Dusen Jeff Ruth Head Golf Professional Membership = 2011 Sharon Van Dusen, Chair Joy Buchholz Gene Esposito Karen Manor Bob Morris Don perham Tony Regnier Debi Worley Planning = 2011 Don Brewer, Chair Joe Geise Dave Notter Ken Palumbo VERSION DATED: Page 5

6 House = 2011 Ed Klosowski, Chair Jim Bowers Fred Buchholz George Gisel Paul Hursh Russ Kleinbauer Leroy Knopfle Mickey Manor Jim Platukis Beecher Washburn Food & Beverage = 2011 Joe Troiano, Chair Linda Issitt Marlene Kleinbauer Dee Peters Adopt-A-Hole Sharon Van Dusen, Chairperson VERSION DATED: Page 6

7 By-Laws Of the LOCKWOOD FOLLY COUNTRY CLUB, INC. A Non-Profit Corporation of North Carolina ByLaws Revised: September 23, 2003 Last Revised: November 8, 2007 ARTICLE I IDENTITY AND PURPOSE Section 1. Identity The Corporation shall operate under the name of Lockwood Folly Country Club (the Club). Section 2. Purpose The Club is a non-profit North Carolina corporation formed for the purpose of owning and operating a golf course, clubhouse and other common areas as the membership may develop for common use. ARTICLE II CLUB MEMBERSHIPS Section 1, Membership in General The Board shall have the right to establish the different categories and classes of membership in the Club; to limit the number of members in any of the categories and classes of membership in the Club, and to determine the eligibility requirements for each; to establish the varying dues categories and classes for membership, to offer or cease offering any class or category of membership and to modify the privileges associated with any class or category of membership. Effective , redemption of the LFCCI Equity Membership fee for all new members after this date will be eliminated. All members prior to this date and those currently on the redemption list will continue to be eligible for redemption under the current by-law (Article VI, Section(s) 1, 2, 3). This action will establish a new membership category entitled, Equity membership (Non Redemptive). a). Equity, Equity (NR) and Associate Member Categories and dues classification are determined by the Board. Changes to these may be made upon 30 days notice. b). The annual dues structure may include a mortgage debt service (Core) assessment, and operational dues and fees for active members. Members who have resigned or been suspended, (become inactive), will retain liability for payment of Core assessments until they have been placed on a redemption schedule in accordance with Article VII of these By-laws. Section 2. EQUITY Membership Category An equity member is a person(s) over the age of eighteen who owns a numbered Equity Membership Certificate and is registered as such by the Club and has a proprietary interest in the assets of the Club. If the Certificate shows a partnership, the partners must designate the voting partner. Equity members shall have the following rights: a). To vote b). To serve on the Board of Directors c). To serve as an Officer of the Club d). To serve as a member of a committee e). To receive other rights and benefits available exclusively to equity members. These rights will be determined by the Board acting upon Committee recommendation. f). To use Club facilities in accordance with the rules and regulations determined by the Board. An equity membership will entitle the member and the member s immediate family to the use of the Club facilities. An equity membership is transferable to the immediate family of the equity member; however, the equity member VERSION DATED: Page 7

8 shall not receive a consideration from his or her family member transferee for such membership transfer. Prior to a transferred intra-family equity membership becoming effective on the Club s records, each transferor will be required to provide the Club with an affidavit attesting that the transferor received no consideration for the transfer of equity membership. g). An equity membership may be considered for redemption when the Club receives new equity members, who bring new equity capital for memberships in an amount equal to or greater than two hundred percent (200%) of the outstanding qualified request for redemption. Since the amount of redemption for each qualified request may vary, the new equity capital ratio of 200% will apply to each qualified redemption request on an individual basis. A qualified redemption request is one which has satisfied the priorities and procedures detailed in Article VII of these By-Laws. Other redemption activities may be subject to the procedures of Article VII, Section 3. h). Upon redemption of his or her equity membership, an equity member will receive an amount equal to eighty percent (80%) of the current price of an equity membership, less any dues and fees currently owed. The current price being that amount charged for an equity membership at the time of its redemption, over and above any non-refundable initiation fee paid prior to purchasing the equity membership. In addition, members who purchased an equity membership prior to the effective date of this by-law change will receive, upon redemption, an amount equal to eighty percent (80%) of their original equity membership investment in excess of the strike price less any dues and fees owed and excluding any non-refundable initiation fee paid prior to purchasing the equity membership. The strike price being that amount charged for an equity membership on the first day this by-law change is in effect. i). The maximum number of equity memberships combined shall be no more than six hundred (600). Section 2.2 EQUITY (NR) Membership Category An equity (NR) member is a person(s) over the age of eighteen who owns a numbered Equity Membership Certificate (NR) and is registered as such by the Club and has a proprietary interest in the sale of the Club. If a certificate shows a partnership, the partners must designate the voting partner. Equity (NR) members shall have the following rights: a). To vote b). To serve on the Board of Directors c). To serve as an Officer of the Club d). To serve as a member of a committee e). To receive other rights and benefits available exclusively to equity NR) members. These rights will be determined by the Board acting upon Committee recommendation. f). To use Club facilities in accordance with the rules and regulations determined by the Board. An equity (NR) membership will entitle the member and the member s immediate family to the use of Club facilities. An equity (NR) membership is transferable to the immediate family of the equity (NR) member; however the equity (NR) member shall not receive a consideration from his or her family member transferee for such membership transfer. Prior to a transferred intra-family equity (NR) becoming effective on the Cub s records, each transferor will be required to provide the Club with an affidavit attesting that the transferor received no consideration for the transfer of the Equity (NR) membership. g). Consideration for redemption for equity (NR) member does not apply. Section 3 ASSOCIATE Membership Category An Associate Member is one who has purchased a lot or unit in Lockwood Folly and who has paid the nonrefundable initiation fee for Club membership but who has not bought an equity membership. Associate Memberships are transferable to Lockwood Folly property owners only. In the event that a Lockwood property owner sells his/her property, and has a current Associate Membership, that membership may be transferred under the terms and conditions of these By-Laws to the purchaser of that property, if the selling member is in good standing. Upon resignation for any reasons or suspension, other than a Limited Board Approved Voluntary Suspension as provided in Article II Section 6 (3), by an Associate Member prior to the closing transaction date of the sale of their real property, then the Associate Membership shall be deemed forfeited and ineligible for transfer to the purchaser of an Associate Member s real property. At the time of transfer, a fee of $500 shall be paid to Lockwood Folly Country Club. A Lockwood property owner may purchase an Associate membership from the Club. Pursuant to the Contract of Sale with Channelside Corporation, an Associate membership shall be valued at two thousand, five hundred dollars ($2,500). Associate members shall have rights as specified in the Appendix. Section 4. HONORARY Membership Category VERSION DATED: Page 8

9 An Honorary member is one who has been granted Honorary status by the Board of Directors. As defined by the closing contract with Channelside Corporation, seven persons have been granted Honorary status as of closing. Honorary members shall pay no initiation or membership fees. Honorary Memberships are not transferable. The Board may in future, by unanimous vote and for cause, grant to persons who bring special value to the Club additional Honorary Membership [however these are granted at the discretion of the Board and may at any time be withdrawn by the Board]. Section 5. Change in Membership Classification a). Member Initiated Any Member initiated change of classification must be made in writing by the Member to the Membership Committee, which shall investigate the circumstances of the requested change and report to the Board at the next monthly Board meeting. If approved by the Board, the change shall become effective the first of the month following the Board meeting, and the Member shall be notified. Section 6, Membership Provisions a). Financial Responsibility If a Membership is comprised of both husband and wife as members (Family Membership), or two adult coowners of property (Joint Membership), they shall be jointly and severally liable for all charges against the membership, unless and until one of the members resigns as a member and disclaims any right to future membership privileges, in which event such person s obligation for future charges shall terminate. b). Divorce If a husband and wife are divorced, or a Joint Membership separates, one or the other but not both, may continue to hold the Membership. If the parties cannot agree who shall continue the Membership, the Board shall have the right to suspend the membership until such time as the parties or a court of competent jurisdiction shall make such a decision. The Board shall also have the right, during a period of separation prior to a divorce, or prior to a decision by the parties or the court as to ownership of the Membership, to set special terms, fees, or dues, on a temporary basis for individual member privileges, if they so desire, and if the Board feels it is in the best interests of the Club to accommodate the parties. c). Modification of Certificate of Membership The Membership granted any individual shall not include any persons not listed on the original certificate. Any such subsequent person must be approved by the Board before he or she will become a member or granted privileges of the use of the Club under Member s membership. It is the responsibility of the member to initiate this procedure. d). Membership Decisions In any membership where there is more than one adult member listed on the Certificate of Membership, the decision to tender a resignation, to change the class of membership, or to effect any other voluntary change in member status shall be made jointly. If there is a resignation or change of classification to which the other spouse or party dissents, such person can appeal to the Board of Directors to allow membership to continue as is. e). Voluntary Suspension Upon receipt of a Member s written petition to the Board, citing good and sufficient reason thereof, suspension of a membership, without penalty, may be granted for a period of up to (6) months with the approval of a majority of the Board, providing the requesting member is in good standing at the time of the request. Generally this provision is designed to cover instances of temporary financial hardship, disability, and other unexpected member problems. f). Transfer of Certificate of Membership The Certificate of Membership is transferable, by gift or inheritance only, to members of the Certificate holder(s) immediate family. Gift of the membership is limited to a legal child of the member, and must be accompanied by Statement of No Consideration referred to in Article II, Section 2(f). Such gift of membership must also be in conjunction with transfer of property rights in the transferor s local property. If a spouse or partner dies the certificate is transferable only to the surviving spouse or partner, unless specifically stated otherwise in the decedent s will. In the event that the surviving spouse or partner is not willed the membership, or if the decedent was the surviving spouse or partner, transfer is limited to the decedent s legal children. In the event there is no surviving member, or no surviving child of the original certificate holder(s), the decedent s estate has the right to request redemption in accordance with the policies for redemption. VERSION DATED: Page 9

10 ARTICLE III, MEETINGS AND VOTING Section 1. Annual Membership Meeting Annual meeting of the equity members shall be held at a site designated by the Club at 10:00 AM Eastern Standard Time on the fourth Saturday in January of each year for the purpose of receiving an annual report, electing Directors and transacting such other business as may be presented. The approved budget for the coming year will be presented and discussed at the Annual Meeting. See Section 3-06 for quorum constitution. Section 2. Election for Directors The Board of Directors shall appoint a Board member in July of each year to form an Election Committee consisting of five non-board equity members. The Election Committee shall advertise for candidates to fill Board vacancies arising in the following year. Any equity member in good standing may self-nominate by submitting a biography to the Committee no less than ninety-(90) days before the Annual Membership Meeting, at which there shall be no nominations from the floor. The Committee shall prepare a ballot package to include an alphabetic list of candidates with a single biography sheet for each, ballot, proxy form with statement, return envelope, and a cover letter stating the number of vacancies and terms of office to be filled. The ballot package shall be mailed to each equity member no later than forty-five (45) days before the Annual Membership meeting, at which the election results shall be announced. Decisions made by the Election Committee as to missing or incorrect ballots and proxy returns will be final. A ballot shall be void if it contains votes for more than the number of vacancies to be filled. Cumulative voting shall not be permitted. Candidates receiving the largest number of votes will fill the longest term Board vacancies. Section 3. Special Meetings Special meetings of membership, for any purpose or purposes, may be called by the president or by the Board, and shall be called by the President at the written request of not less than on-fifth (1/5) of all membership entitled to vote at the meeting. The call for the special meeting shall set forth the purpose of the meeting, and the notice thereof shall be mailed by the Secretary to each member at least fourteen (14) days prior to the date of such meeting. No business other than that specified in the notice shall be transacted at a special meeting. Section 4. Voting Each equity membership represents one vote. A family or joint membership must designate which person in the membership is to cast the ballot for that membership. A simple majority of votes will decide the election. Section 5. Conduct of Meeting All Meetings of Members, whether Annual or Special, shall be conducted in accordance with Robert s Rules of Order unless modified herein. Section 6. Quorum Attendance in person of at least ten (10)% per centum of the total members shall constitute a quorum. If less than a quorum is present at any meeting, a majority of those present in person may adjourn the meeting to another time and date at least thirty (30) days later and to any place within the service area of the Corporation; PROVIDED that the Secretary shall notify any absent members of the time, date and place of such adjourned meeting by delivering notice thereof as provided in SECTION At all meetings of the members, whether a quorum be present or not, the Secretary shall annex to the meeting minutes, or incorporate therein by reference, a list of those who were present in person or by proxy. Section 7. Proxies At any meeting of the members or any adjournment thereof, any member may vote by proxy, but only if such proxy: (a) Is registered with and duly certified by the Secretary or his/her duly designated registrar on or before the time and date designated in the notice of the meeting or any adjournment thereof. (b) Is executed by the member in writing and designated one and only one holder thereof, which holder shall be either the member s spouse or another member who is a natural person, and (c) Specified the particular meeting and/or any adjournment thereof at which it is to be voted and is dated not more than sixty (60) days prior to the date of such meeting or any adjournment thereof; PROVIDED that any mailed proxies not otherwise dated shall be deemed dated as postmarked if postmark is satisfactorily evidenced: AND PROVIDED FURTHER, that any proxy valid at any VERSION DATED: Page 10

11 meeting shall be valid at any adjournment thereof unless the proxy itself designates otherwise or is subsequently revoked by another proxy or by the presence in person of the member at such adjournment; and (d) Can be confirmed by the Secretary or his/her duly designated registrar when presented for certification to have been validly executed by the member and has not otherwise been revoked. A proxy may be unlimited as to the matter on which it may be voted or may be restricted; a proxy containing no restrictions shall be deemed to be unlimited. In the event a member executes two or more proxies for the same meeting or for any adjournment thereof, the first proxy certified by the Corporation shall revoke all others. The presence in person of a member at a meeting or any adjournment thereof shall revoke any proxy theretofore executed by him/her for such meeting, or for such adjournment thereof, as the case may be, and he/she shall be entitled to vote in the same manner and with the same effect as if he had not executed a proxy. A person may vote as proxy for an unlimited number of members on any matter. ARTICLE IV BOARD OF DIRECTORS Section 1. Form of Government and Responsibilities The determination of operating policy for, and the responsibility for the general management of the corporation, its affairs, property and funds shall be entrusted to the Board of Directors, herein sometimes referred to as the Board. Section 2. Number, Qualification and Tenure Initially the membership will choose nine (9) Board members. For annual elections: a. In even numbered years, five (5) new Board members shall be elected, and in odd numbered years four (4) new members will be elected, all to serve two year terms. b. In the event of Board vacancies (ref. Section 5 below), the number of new Board members elected shall be increased and their term of office shall be adjusted to ensure than there will be four members with one year left to serve in an even, or five members with one year left to serve, in an odd numbered year. Section 3. Powers In addition to, and not in restriction or limitation of the usual powers of like bodies, the Board shall oversee and have responsibility for all aspects of Club operation by determining basic policies. These policies will be administered by the officers and committee chairpersons, as is necessary for the proper function of the Club. Included in the Board s responsibilities are those pertaining to: a). all financial operations b). all membership activities; including applications for membership, discipline, and expulsion of members as deemed necessary c). appointment of such committees as needed for operations d). interpretation of Rules and By-Laws e). adoption of annual operating and capital budgets f). borrowing monies, not to exceed $100,000 at any one time, excluding mortgage indebtedness. Any amount borrowed in excess of $100,000 shall be approved by a legal majority vote of the equity members. g). carrying appropriate insurance h). the exercise of all powers and duties given to a non-profit corporation under Chapter 55, NC Business Corporation Act and all amendments thereto. Section 4. Removal of Directors The Board shall have the power, by vote of 2/3 of the Directors of record for the sitting Board, to permanently remove a director of the Board if that Director misses three consecutive monthly Board meetings, unless previously approved by the Board, or a director may be removed for cause, provided the accused Director receives a written list of all charges prior to said meeting and the Director is given an opportunity to defend against those charges at such meeting. The decision of the Board of Directors shall be absolute and final. Section 5. Vacancies VERSION DATED: Page 11

12 The Board may fill a vacancy of a Director caused by death, resignation, or removal from office, and the replacement shall be an equity member of the Club in good standing, and shall serve until the next Annual Membership Meeting. Such Director shall be eligible for nomination to the next succeeding Board of Directors. Section 6. Compensation No director shall receive any monetary compensation for acting as a Director Section 7 Advisory Members The immediate past President, if not a regular member of the Board, or other individuals may be non-voting advisors to the Board at the invitation and pleasure of the Board. Section 8. Regular Meetings The newly elected Board shall convene within one week after the Annual General Meeting, to elect Officers, as required by Article V of these By-Laws. Board meetings shall be held at least once each calendar month at a mutually acceptable time and place. Section 9. Special Meetings The President or any two (2) Directors may call a special meeting with reasonable notice to other Directors. However, no motions may be passed, or actions taken, with less than a total of five (5) Board members approval. Section 10. Actions Without Meetings Any action required or permitted to be taken by the Board of Directors at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by at least five (5) Directors. Section 11. Conduct of Meetings Meetings of the Board shall be conducted according to Roberts Rules of Order, unless modified herein. Section 12. Limitations The Board of Directors or any Officer of the Club shall not invest in any capital improvement exceeding the sum of one hundred thousand dollars ($100,000) without the consent and vote of the majority of the Membership at a yearly meeting or special meeting called for the said purpose of approving the same. Section 13. Conflict of Interest No Director may be involved in voting on, or discussion of, any area where it would be deemed that the Director is an interested party in the outcome of the transaction. A Director is considered interested in a transaction of the Corporation when the Director stands to personally profit from it; if the Director is related by family to those members that have a financial interest in the transaction; has a relationship with the other parties to the transaction such that the relationship might reasonably be expected to affect the Director s judgment in a manner adverse to the Corporation; is under the control of another Director who stand to profit from the transaction; or, is a member of the board of directors of another corporation involved in the transaction. Only the votes of Directors who have no direct or indirect interest in the transaction may be counted in determining whether to authorize, approve, or ratify the transactions. The presence of the interested Director at the meeting does not affect the validity of the action by the disinterested Directors. ARTICLE V OFFICERS, DUTIES AND POWERS The Officers of the Club shall be President, Vice-President, Secretary and Treasurer. All Officers shall be Directors. The Board of Directors, at the first meeting after election, shall, from among themselves, choose a President, Vice-President, Secretary and Treasurer. Section 1. The President The President shall be the principal executive officer of the Club and, subject to the control of the Board of Directors, shall in general supervise and control the business affairs of the Club VERSION DATED: Page 12

13 Section 2. The Vice-President The Vice-President shall perform the duties of the President in his/absence, death or inability to act and shall perform such duties as the President should assign him/her. Section 3. The Secretary The Secretary shall a). keep the minutes of the proceedings of the Membership and the Board of Directors in one of more books provided for that purpose; b). see that all notices are duly given in accordance with these By-Laws or as required by law; c). be custodian of the corporate records; d). keep a register of the addresses of all members as provided to the Secretary by each member; e). sign with the President or Vice-President Certificates of Membership as authorized by the board of Directors; f). have general charge of the membership transfers of the Club, and shall maintain a register of all equity membership certificates and the status of all Equity and Associate Members g). in general perform all duties incidental to the position of the Secretary and such other duties as may from time to time by assigned to him/her. Section 4 The Treasurer The Treasurer shall: a). direct the banking, investments, borrowing and financing activities of the Club; b). see that an Annual Capital Budget and an Annual Operating Plan are prepared each fall for the forthcoming year, as submitted by the Planning Committee, and are approved by the Board; c). determine the placement of all savings funds in safe, interest-bearing investments such as insured Certificates of Deposit, US Treasury instruments, etc., balancing after-tax return, duration of placement and safety of funds; d). monitor accounting and recommend to the board policy that will ensure accurate accounting records including accounts receivable, accounts payable, accounting statements, annual certified audits, federal and state tax returns, etc., and; e). chair the Finance Committee ARTICLE VI COMMITTEES The standing committees of the Corporation shall be: Planning, Finance, Golf, House, Greens, Marketing and Membership. All standing committees shall be appointed annually by the President with approval of the Board of Directors and shall consist of at least three (3) equity members and a chairperson designated by the President. Special committees, when authorized by the Board, may be appointed by the President provided the chairperson is approved by the Board. A special committee must be for a specific purpose limited in time and scope and will cease to exist upon expiration of time or purpose. No committee, standing or special, shall exercise any power except as expressly delegated to it by the Board or by these by-laws. In general, the several standing and special committees shall be an arm of the Board and shall assist the Board in the formation of policies and direction in particular areas. Section 1. Committee Chairpersons The chairperson of each and all committees shall be appointed by the President as soon as it is feasible after the President is elected by the Board. The chairperson will be a member of the Board of Directors and will answer directly to the Board regarding his/her Club responsibilities. a). Term of Office The chairperson s term of office will normally be for the balance of the Club year following appointment. b). Membership of each Committee The chairperson will select a slate of no less than three (3) equity members for the committee and submit the names for approval at the next Board meeting before members are invited to serve on the committee. Upon receiving Board approval, names of committee members and chairpersons must be published and posted for information to the Members. Generally, about one-third of the members appointed should be carried over from the last year in order to provide continuity. Former past chairperson to be ex-officio. VERSION DATED: Page 13

14 Section 2. Planning Committee (Standing Committee) Required to construct, during the course of the year, an operations budget and a capital expenditures budget for the following year, with an addendum of recommendations for capital expenditures specified for years to follow. The budgets are to be developed in conjunction with other committee chairs, and their department managers and deliverable to the Treasurer, ready for Board approval by November 1 of the Board year. The chairperson of this committee should be giving direction that, where possible, there be emphasis on continuity of membership on this committee, as well as members with past experience on the Board. The Treasurer will be an ex-officio member of this committee. Section 3. Financial Committee (Standing Committee) The Finance Committee shall be appointed by the Board. In addition to the Treasurer as Chair, it shall consist of at least three (3) equity members in good standing, preferably with qualifications to assist in establishing sound financial policies. The Committee shall recommend policies to the Board and monitor the activities, procedures, and business systems of the Club s administration. It shall act, in an advisory capacity, to the Board on all financial and business matters and shall determine policies for dealing with banks, insurance companies and other financial relationships. It will assist in special projects approved by the Board. It shall render a monthly report to the Board reflecting the financial condition of the Club. Staff: Comptroller. Section 4. Membership Committee (Standing Committee) This Committee shall include one active member of the Marketing Committee. Duties of this standing committee include: a). Implementation of Board policy on membership b). Maintenance of the register of all members and equity certificate ownership c). Solicitation for and recruitment of new members d). Administering changes in membership classification e). Representing member interests and concerns to the Board f). Communications with the Membership Section 5. Marketing Committee (Standing Committee) This Committee shall include one active member of the Golf Committee. It shall execute Board policy on optimizing outside play, control public relations, advertising, and signboards. It also supports the Golf Committee and Golf Professionals in obtaining package play. Section 6. Greens Committee (Standing Committee) This Committee shall administer Board policy for the management of golf course maintenance operations, including grounds, greens, maintenance building, materials and equipment. Staff: Greens Superintendent and crew. Section 7. House Committee (Standing Committee) This Committee shall apply Board policy for management of all Club buildings; pro shop, kitchen and dining facility, cart barn, and bag drop. It shall manage maintenance of the parking area. It negotiates contracts for food & beverage service, and for cleaning, maintenance and security. Section 8. Golf Committee (Standing Committee) The Golf Committee shall include the Head Golf Professional, chairpersons of member golf associations, and a member of the Marketing Committee. The Committee shall apply Board policy in: a). Controlling the Lockwood golf tournament schedule. b). Operation of the Pro Shop and management of inventory and supplies c). Management of the cart barn, carts, cart maintenance, and supplies d). Managing the ranger staff e). Setting and monitoring local rules of play, tee time schedules and bookings f). Assisting Lockwood golf associations in operating special fund raising tournaments and travel league events g). Monitoring the finances of all Lockwood golf associations, including fund raisers Staff: Head Golf Professional, Golf Assistants, counter staff, rangers, bag drop personnel and cart barn maintenance VERSION DATED: Page 14

15 ARTICLE VII MEMBERSHIP REDEMPTIONS AND PRIORITY LISTS Section 1. Priorities Equity memberships may not be transferable except to an immediate family member of the certificate holder with an affidavit of no consideration as specified in Article II, Section 2 (f). An Equity Member who requests withdrawal from the Club must notify the President of the Club of such request in writing. Redemption will be considered on proof of sale of the member s property. In order to permit members of the Club to redeem their memberships, and not cause a financial burden on the Club, their application will be placed on a priority list and they will receive their payments when conditions specified under Article II, Section 2 (g) of these By-Laws are met. Earlier redemption may be granted by the Board in the event of special hardship under Sections 1 (b) and 1 (c) below. Equity members whose request for redemption has been approved by the Board of Directors before the date on which this By-Law change is proposed shall retain their earlier redemption and priority rights. a). PRIORITY 1. An equity member who plans to sell his/her home or lot to a party who wishes to purchase the equity membership from the Club at the closing of the property transaction. Since this membership change does not take place until the closing of the property transaction, it has no effect on the status of the Priority 2 list (see below) until the sale of this equity membership in completed. (1) At the time the Club receives the current (at the time of the sale) equity membership price, whether directly from the new Member or from the proceeds of the property closing, the Club will pay eighty percent (80%) of this price to the withdrawing Member, less any dues or fees owing. b). PRIORITY 2. In the event of the death of an equity member, the widow or widower may wish to withdraw from the Club. After notifying the President of the Club in writing of this intention, and delivering the Certificate of Membership to the Secretary of the Club, this membership will be given priority after other currently listed Priority 2 certificates and before all Priority 3 certificates. However, if the surviving member gives up membership in this fashion, and later remarries, the surviving member and new spouse must reapply for membership and pay the then current full price for any equity members. c). PRIORITY 3. Other members who own no property in the area, or members who have sold their local property to a buyer who does not wish to become an equity member, who wish to withdraw from the Club must notify the President of their intention, and they will be given priority after currently listed Priority 3 certificates. Their name will be placed on the list at the time of closing of the sale of their property. 1). At the time the Club receives new equity capital in an amount equal to or greater than two hundred percent (200%) of the total amount of the outstanding qualified redemption request with the highest priority and position on the list, the Club will pay eighty percent (80%) of the then current membership fee price, unless paid by a prior transaction. In addition, the Club will pay 80% of the amount over the strike price and invested prior to its effective date (excluding any non-refundable initiation fees and less any dues or fees owing). If the new equity member purchases his/her membership on installment, the Board of Directors will have the option to pay the withdrawing member 80% of the installment as they are paid. 2). In cases of severe disability or financial hardship, the Board may, after a hearing and a vote, advance a membership certificate to a higher place on a priority list. Section 2. Deferral of Payment for Redemption If in the majority judgment of the Board, such redemption might create temporary financial stress on the Club s treasury, the Board may defer redemption payment to the withdrawing member for no more than two (2) years from the date such payment is normally due. Section 3. Resignations and Suspensions Upon resignation for any reason or any suspension, other than a limited time approved voluntary suspension as provided in Article II, Section 6 (3), by any equity member prior to the closing transaction date for the sale of their real property, then the following procedures establish the limits of the Club s obligation for redemption of the equity membership. a). The value of the equity membership shall be established as the lesser of the following: 1. Eighty percent of market value which is defined to be the current selling price of an equity membership at the date of the resignation or suspension. 2. Eighty percent of market value which is defined to be the current selling price of an equity membership at the date of sale of the equity member s real property. VERSION DATED: Page 15

16 3. Eighty percent of market value which is defined to be the current selling price of an equity membership at the date eligibility arises for redemption pursuant to the ordinary priority list for redemption, ref. Article VII, Section 1 c. 4. Eighty percent of the Book Value as of the date of the resignation or suspension which is defined to be the total members equity divided by the total shares outstanding as determined by the annual independent audit by a certified public accounting firm for that December 31 st year end immediately prior to the date of resignation or suspension. 5. Eighty percent of the Book Value as of the date of the sale of the equity members property which is defined to be the total Member s equity divided by the total equity shares outstanding as determined by the annual independent audit by a certified public accounting firm for that December 31 st year end immediately prior to the sale of the equity members real property. 6. Eighty percent of the Book Value as of the date eligibility arises for redemption pursuant to the ordinary priority list for redemption (ref Article VII, Section 1 c which is defined to be the total Members Equity divided by the total equity shares outstanding as determined by the annual independent audit by a certified public accounting firm for that December 31 st year end immediately prior to the date eligibility arises for redemption pursuant to the ordinary priority list for redemption, ref. Article VII, Section 1 c. b). Nothing herein shall entitle the equity member to be paid for redemption at any earlier date than the simultaneous transfer of the equity membership to one purchasing the original member s real property pursuant to Article VII, Section 1 a) or the ordinary priority list for redemption as provided for herein pursuant to Article VII, Section 1 c. ARTICLE VIII MISCELLANEOUS Section 1. Reports and Audits A certified audit will be carried out annually by an independent accounting firm, selected by the Board with the recommendation of the Treasurer and the Finance Committee. A full report will be made to the Board as soon as it is available each year, and the Board will direct changes in policies and procedures as required to correct any deficiencies. An audited Annual Report will be mailed to all equity members as quickly as is reasonably possible thereafter. In deference to timing limitations, un-audited figures may be used for discussion and presentation at the Annual Meeting, and be so designated. Section 2. Amendments These By-Laws may be amended, repealed or altered in whole or part by a majority vote of the regular voting members at any Annual Meeting or Special Meeting of the Club called solely for that purpose provided the proposed change is submitted by mail to each voting member in good standing at his last recorded address at least thirty (30) days prior to the time of the meeting, at which time the proposed changes are to be considered and acted upon. Any member may submit, in writing, recommendation for changes in the By-Laws to the Board of Directors. The Board of Directors will give due consideration to the recommendation made by the member and will notify the member of the action it took with respect to said recommendation submitted. Proposals to amend the By-Laws shall be placed on the agenda at the next Annual Meeting, or, at the Board s discretion at a Special Meeting, upon resolution of a majority of the Board of Directors or a written petition signed by no less than onefifth (1/5) of the equity members in good standing requesting a proposed amendment. ***** VERSION DATED: Page 16

17 Policy and Procedure Statement(S) POLICY: ARTICLE II, SECTION 6 Adopted by the Board of Directors, In order to provide a fair and equitable membership opportunity for all members and to be consistent with our by-laws, the LFCCI Board of Directors adopted on October 12, 2005 the following expanded eligibility definition for Equity Membership to be effective, November 12, 2005: Eligibility for one Equity Membership, one Core Assessment and one Play Package, as offered, is limited to the following criteria: One but not more than two adult individuals who reside entirely or part-time in the same household. They shall be jointly and severally liable for all charges against the membership, unless and until one of the named members on the certificate resigns and disclaims any right to future membership privileges, in which event such person's obligations for future charges shall terminate. The Board stipulates that in the event a membership certificate is passed to heirs through a trust or a will, the LFCCI Board will limit this membership to just two names as per the by-laws. Further, the Board will look to the Trustee to limit the reassignment to just two names. If there were more than two heirs, the Board could allow the Trustee to change the names once during a year but would impose a $500 fee to cover administrative costs. This fee would be payable each time a transfer of membership by the Trustee is accomplished. Heirs of a member's estate through probate, a will or a trust have one of two options: 1) place the membership for redemption under prevailing by-laws which eliminates future charges and obligations or (2) agree to maintain an active membership. All active memberships will be subject to the eligibility rules in effect at the time the heirs legally inherit the membership. Either selection must be in writing to the Board of Directors and acknowledged by the Board in writing. Be it known that persons who become members under this eligibility definition may or may not live inside the gates of Lockwood Folly and may or may not own property in Lockwood Folly. These names would be on record with LFCCI and, if they are in good standing, they would only have to show valid identification at the check-in desk for them to use the amenities of the golf course. All persons who apply for equity membership under this expanded eligibility definition will need written approval by the Board. POLICY: ARTICLE II, SECTION 6 (e) VOLUNTARY SUSPENSION Adopted by the Board of Directors, Upon receipt of a Member s written petition to the Board, citing good and sufficient reason thereof, suspension of a membership, without penalty, may be granted for a period of up to six (6) months with the approval of a majority of the Board, providing the requesting member is in good standing at the time of the request. Generally this provision is designed to cover instances of temporary financial hardship, disability, and other unexpected member problems. Although Member s petitions are reviewed on a case-by-case basis by the Board, it is the policy of the Club that voluntary suspension of a membership shall not be granted except in extraordinary cases. Disability is not viewed as a situation where the Member is temporarily unable to play golf due to corrective surgery or physical therapy, but is otherwise able to engage in activities of daily living. VERSION DATED: Page 17