The Board of Directors of NAPM shall be authorized to determine the amount of the Employer Discount described in this Section 3 by a vote of two-thirds (2/3) of all the members of the Board of Directors; provided, however, (i) the Board of Directors shall not vote upon any proposed change in the amount of the Employer Discount unless such proposal has been presented to and considered by the Board at the regularly scheduled meeting of the Board immediately preceeding the regular meeting of the Board at which such proposal is voted upon by the Board; and (ii) a written notice of any change in the amount of the Employer Discount as authorized by this Section 3 shall be mailed to the NAPM members not less than ninety (90) days prior to the effective date of such change.

SECTION 4.The Board of Directors of NAPM shall be authorized to determine the amount of NAPM dues described in Sections 1 and 2 of this Article by a vote of two-thirds (2/3) of all the members of the Board of Directors; provided, however, (i) the Board of Directors shall not vote upon any proposed change in the amount of dues unless such proposal has been presented to and considered by the Board at the regularly scheduled meeting of the Board immediately preceding the regular meeting of the Board at which such proposal is voted upon by the Board; and (ii) a written notice of any change in the amount of dues as authorized by this Article shall be mailed to the NAPM members not less than ninety (90) days prior to the effective date of such change.

SECTION 1. Directors for National Affairs. Each Affiliated Association shall annually elect or appoint a Director for National Affairs, who shall be an NAPM member and a member of the Board of Directors of the Affiliated Association. Such person may also serve as President of the Affiliated Association.

SECTION 2. Qualifications. To be eligible to serve as Director for National Affairs, a candidate must have been a member of NAPM for not less than three (3) years; provided, however, that the foregoing requirement shall not apply to a Director for National Affairs representing an association affiliated with NAPM for less than four (4) years. In addition, a Director for National Affairs shall serve in such office only as long as he or she remains a member of NAPM.

SECTION 3. Election or Appointment. Directors for National Affairs shall be elected or appointed in accordance with the organizational documents of the Affiliated Association. Upon election or appointment of its Director for National Affairs, each Affiliated Association shall immediately notify NAPM.

SECTION 4. Alternate. In the event of the temporary inability of a Director for National Affairs to perform the duties of office resulting from illness or any other cause, the Affiliated Association shall immediately elect or appoint an alternate to perform the duties of the office until such time as the Director for National Affairs shall be able to resume these duties and the Affiliated Association revokes the authority of the alternate. The member elected or appointed as an alternate shall possess the qualifications set forth in Section 2 of this Article. Upon election or appointment of an alternate, or upon revocation of the alternate’s authority, the Affiliated Association shall immediately notify NAPM and the NAPM Director representing the District.

SECTION 5. Vacancy. In the event of a vacancy in the office of a Director for National Affairs for any reason, the Affiliated Association shall promptly elect or appoint a successor for the unexpired term. The successor shall possess the qualifications set forth in Section 2 of this Article. Upon election or appointment of such successor, the Affiliated Association shall immediately notify NAPM and the NAPM Director representing the District.

SECTION 6. Duties. It shall be the duty of a Director for National Affairs to represent the members of his or her Affiliated Association as a member of the District Council and also to represent the NAPM members of such Affiliated Association at all meetings of NAPM. A Director for National Affairs, when assembled with other Directors for National Affairs at a District Council meeting or at a meeting of the NAPM membership, shall act as the delegate for the NAPM members of his or her Affiliated Association and shall have and may exercise all the powers, rights, and privileges of the NAPM members of such Affiliated Association, including, without limitation, the right to vote on all matters requiring the vote of the NAPM membership in accordance with voting instructions as may be adopted by such Affiliated Association. The Director for National Affairs shall also perform such duties as may be required by NAPM Policy.

SECTION 1. Districts. The membership of NAPM shall be divided into Districts as determined by the Board of Directors from time to time.

SECTION 2. District Councils. Each District shall have a Council with the membership, powers, duties, and functions specified in this Article.

SECTION 3. Membership. A District Council shall be composed of the Directors for National Affairs representing the Affiliated Associations in the District.

SECTION 4. Powers and Duties. It shall be the responsibility and duty of the District Council to review and coordinate the affairs, activities, and requirements of the Affiliated Associations in the District and to perform such other responsibilities and duties as may be required by NAPM Policy.

SECTION 5. Meetings. A District Council shall meet at least twice each year within the District, with the time and place of each meeting to be fixed by the NAPM Director representing the District. A majority of the members of a District Council may call a meeting of the Council upon thirty (30) days’ written notice to the NAPM Director representing the District, the President, and the Executive Vice President. The NAPM Director or Assistant Director shall serve as Chairperson of all meetings of the District Council and, in the absence of such persons, the District Council shall elect from its own membership a Chairperson to preside at the meeting. Notice of any meeting of the District Council may be waived, in writing, by any member of the District Council before or after such meeting and any member of the District Council attending a meeting and not objecting to any lack of notice shall be deemed to have waived such notice.

SECTION 6. Quorum. At all meetings of a District Council, a quorum necessary for the transaction of business shall be the presence at such meeting of Directors for National Affairs or accredited alternates representing at least a majority of Affiliated Associations in the District, determined without reference to the number of NAPM members in the Affiliated Associations.

SECTION 7. Voting. On all questions or issues presented for vote of a District Council, each Director for National Affairs, by delegate voting pursuant to voting instructions as may be adopted by the Affiliated Association he or she represents, shall be entitled to cast votes equal in number to the NAPM membership of such Affiliated Association of record. Except as otherwise required by these Bylaws, all questions or issues presented to a vote of a District Council shall be authorized by a majority of the votes cast at a meeting of the District Council by the Directors for National Affairs entitled to vote thereon. In lieu of the foregoing delegate voting procedure, upon the unanimous consent of all Directors for National Affairs present at a meeting, each Director for National Affairs may be entitled to cast a vote as to all matters or as to a particular issue on the basis of one vote for each Director for National Affairs present.

SECTION 8. Action by District Council without a Meeting. Notwithstanding any other provision of this Article V to the contrary, whenever any question or issue is presented for a vote of a District Council, such vote may be taken without a meeting by written consents (either by mail or electronic transmission) setting forth the action so taken and signed by the number of Directors for National Affairs representing a quorum as required by Section 6 of this Article and casting a vote of their respective Affiliated Associations sufficient for District Council action in accordance with Section 7 of this Article. Action by a District Council without a meeting as permitted by this Section 8 may be authorized provided the written consents and a statement fully explaining the proposed action is mailed, via first-class mail, to all Directors for National Affairs, representing each Affiliated Association in the District not less than ten (10) and no more than fifty (50) days prior to the return date requested for such action.

SECTION 9. Changes in Districts. A change in the designation of Affiliated Associations included within a District or a change in the boundary lines of a District shall be made only with the approval of the affected District Council or Councils and the Board of Directors.

SECTION 10. Creation of New Districts. The creation of new Districts from within the boundary lines of one or more existing Districts shall be made only with the approval of the affected District Council or Councils and the Board of Directors.

SECTION 1. Qualifications. To be eligible for election as an NAPM Director, a candidate must (i) be a member of the current or of a preceding District Council voting for such Director; or the current or a former District Chairperson of the International, Membership Activities, Professional Development, or Public Relations Committee for the District which by its District Council will vote for such Director; (ii) be a member of NAPM at the time of election and for a period of five (5) years prior thereto; (iii) have served in one elective office in an Affiliated Association; and (iv) be certified as a Certified Purchasing Manager ("C.P.M.") or have completed fifty percent (50%) or more of the requirements for a C.P.M. and be actively pursuing the remaining requirements for a C.P.M. A candidate shall present a written determination of support from his or her employer to serve a two-year (2) term of office. An NAPM Director may serve out the remaining term of an incumbent who did not complete his or her term and then stand for election for another two-year (2) term; otherwise, a Director may not be elected to consecutive terms. An NAPM Director shall serve in such office only as long as he or she remains a member of NAPM.

SECTION 2. Nominations. Prior to the meeting of the District Council at which elections shall be conducted, each current NAPM Director shall request through his or her respective District Council, the names of one (1) or more qualified candidates for NAPM Director. All nominations shall be communicated promptly to the District Council by the NAPM Director.

SECTION 3. Election. Each District Council shall elect an NAPM Director who shall serve as a member of the Board of Directors of NAPM. The election of an NAPM Director shall take place at a time no later than the annual meeting of NAPM at which the term of office of the current NAPM Director expires.

SECTION 4. Election of NAPM Directors in New Districts. In the event of the creation of a new District, the office of NAPM Director shall be filled from among the qualified Directors for National Affairs included in the new District. The votes of these Directors for National Affairs shall be solicited by the NAPM Director or Directors from the District or Districts from which the NAPM members of the new District shall be drawn and may be conducted at a meeting of the Directors for National Affairs of the newly-formed District called for this purpose, or by action without a meeting, in accordance with the requirements of Article V.

SECTION 5. Term of Office. The term of office of an NAPM Director shall commence at the close of the annual meeting of NAPM immediately following his or her election in accordance with Section 3 hereof and shall terminate upon the close of the second annual meeting of NAPM, and until election and qualification of his or her successor.

SECTION 6. Assistant Directors. Each District Council shall elect, on an annual basis prior to the annual meeting of NAPM, an Assistant Director who shall possess the same qualifications set forth in Section 1 of this Article. The nomination and election procedures and the requirements for election upon the creation of a new District shall be the same as set forth in this Article with respect to an NAPM Director. The term of office of an Assistant Director shall commence at the close of the annual meeting of NAPM immediately following his or her election and shall terminate upon the close of the annual meeting of NAPM next following, and until election and qualification of his or her successor. The Assistant Director shall assist the NAPM Director in connection with the various activities of their respective District and District Council and shall also perform such other duties as may be required by NAPM Policy. In the event of the temporary inability of an NAPM Director to perform the duties of his or her office resulting from illness or any other cause, including without limitation, the inability of an NAPM Director to participate at or during any portion of a meeting of the Board of Directors, the person described in the following sentence shall be authorized to perform all duties of the NAPM Director until such time as the NAPM Director revokes such authority by written notice given to NAPM or, in the case of a meeting of the NAPM Board of Directors, the participation of the NAPM Director at such meeting. The person in the order stated shall be authorized to perform all duties of the NAPM Director as described in this Section: (i) the person who has been elected by the District Council to succeed the NAPM Director upon expiration of such Director’s term of office; or (ii) the Assistant Director.

SECTION 7. Vacancies. In the event of a vacancy in the office of an NAPM Director for any reason, the District Council which elected such Director shall promptly elect a successor for the unexpired term. The nomination and election procedures and the qualification of the successor shall be the same as set forth in this Article for an NAPM Director.

SECTION 1. Authority and Responsibility. The governing body of NAPM shall be the Board of Directors, which shall have general charge, management, and control of the affairs, funds, and properties of NAPM and, subject to the provisions of these Bylaws, shall have authority to take such action in matters of policy and procedure which in their judgment shall best promote the interests and welfare of NAPM and its members, including, without limitation, authority to promulgate, amend, or rescind in whole or in part any NAPM Policy as the Board of Directors in the exercise of its judgment may deem necessary or appropriate.

SECTION 2. Membership. The Board of Directors shall consist of the President, the President-Elect, the Immediate Former President, the NAPM Directors, the Executive Vice President, and one (1) Director at Large.

SECTION 3. Meetings. The Board of Directors shall meet immediately following the NAPM annual meeting, and shall hold at least two (2) additional regular meetings as may be scheduled by the President upon thirty (30) days’ written notice to each member of the Board of Directors. Special meetings of the Board of Directors may also be called by the President or by not less than five (5) Directors, upon ten (10) days’ written notice. Notice of any meeting of the Board of Directors may be waived in writing by any member of the Board of Directors before or after such meeting, and any member of the Board of Directors attending a meeting and not objecting to any lack of notice shall be deemed to have waived such notice.

SECTION 4. Authority to Act without a Meeting. Except as otherwise provided in these Bylaws, the Board of Directors may, with the written consent of each member of the Board of Directors, take any action without a meeting that it might take at a meeting duly held.

SECTION 5. Board Action by Conference Telephone. Any one (1) or more members of the Board of Directors, or of any committee thereof, may participate in a meeting of the Board of Directors or committee by means of conference telephone or similar equipment which enables all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence at such a meeting.

SECTION 6. Quorum. At all meetings of the Board of Directors, a quorum necessary for the transaction of business shall be seventy-five percent (75%) of all the members of the Board of Directors. Except as otherwise provided by these Bylaws, the vote of a majority of the Board of Directors present at the time of a vote, if a quorum is present at such time, shall be the act of the Board of Directors.

SECTION 7. Voting. Voting rights of a member of the Board of Directors shall not under any circumstances be delegated to another nor exercised by proxy. Members of the Board of Directors, as fiduciaries, shall vote upon matters before the Board which in their judgment shall best promote the interests and welfare of NAPM and its members. Any action or vote taken by any Affiliated Association, District Council, or any Committee of NAPM with respect to any matters before the Board of Directors shall not be binding upon any member of the Board of Directors.

SECTION 8. Recommendations and Suggestions. The Board of Directors shall be obligated at each of its regular meetings to consider Recommendations and Suggestions in accordance with the following procedures (all capitalized terms shall have the same meaning as those terms are defined in NAPM Policy):

SECTION 9. Executive Committee. The Board of Directors may appoint an Executive Committee of the Board of Directors as follows: three (3) NAPM Directors, the President, the President-Elect, and the Executive Vice President. The President shall preside over the Executive Committee and he or she shall call the meetings of the Executive Committee, designate the time and place and the matters to be discussed and acted upon. The Executive Committee shall have the authority, unless otherwise directed by the Board of Directors, to act on business and administrative matters between meetings of the Board of Directors. Actions of the Executive Committee shall be reported to the Board of Directors within ten (10) days for ratification at the next Board meeting.

SECTION 10. Term of Board of Directors. Each Board of Directors shall have an annual term which shall commence with the initial meeting of the Board described in Section 3 of this Article and shall terminate at the close of the next NAPM annual meeting.

SECTION 11. Removal of Directors. NAPM Directors may be removed for cause by a vote of the District Council which elected such Director and by a majority vote of the remaining members of the Board of Directors, and all other members of the Board of Directors may be removed for cause by a majority vote of the remaining members of the Board of Directors.

SECTION 1. Qualifications. To be eligible for election to the office of Director at Large, a candidate must have substantial experience in a responsible management position.

SECTION 2. Nomination and Election. The Selection Committee shall be responsible for recruiting and selecting a qualified candidate for the office of Director at Large based upon criteria furnished to the Committee by the Board of Directors and shall submit the name of one (1) candidate to the Board of Directors at their last regularly scheduled meeting held prior to the NAPM annual meeting at which the term of office of the current Director at Large expires. The candidate selected by the Selection Committee and submitted to the Board of Directors shall assume the office of Director at Large unless the Board of Directors by vote shall not accept the candidate submitted by the Committee. The term of office of the Director at Large shall commence as provided in Section 3 of this Article. The selection procedure for the Director at Large as described in this Section shall be exclusive and no candidate shall be selected or assume office other than in accordance with this procedure.

SECTION 3. Term of Office. The term of office of the Director at Large shall be two (2) years, commencing at the close of the next annual meeting of NAPM next following his or her selection and shall terminate upon the close of the second annual meeting of NAPM thereafter, and until selection and qualification of his or her successor. In the event of a vacancy in the office of Director at Large, the NAPM Board of Directors shall have the option to appoint a successor to the unexpired portion of the term or to appoint the successor to a new two-year (2) term. A successor shall be promptly selected in accordance with the procedures set forth in this Article (other than the times for appointment and approval of the members of the Selection Committee and the selection of the candidate to fill the vacancy).

SECTION 1. Officers. The officers of NAPM shall be the President, President-Elect, Immediate Former President, Executive Vice President, Secretary, and Treasurer. The President and Immediate Former President shall assume his or her office as provided in these Bylaws, the President-Elect shall be elected and the Executive Vice President, Secretary, and Treasurer shall be appointed in the manner provided by this Article.

SECTION 2. Qualifications for Office of President-Elect. To be eligible for election to the office of President-Elect (or to the office of President in the event of a vacancy in such office pursuant to Section 7 of this Article) a candidate must: (i) be an NAPM Director, or have been an NAPM Director, or have been the Chairperson of one or more NAPM Standing Committees (as defined in Section 1 of Article X), or an elected officer of an Affiliated Association; (ii) be a member of NAPM at the time of election and for a period of five (5) years prior thereto; and (iii) be certified as a C.P.M. A candidate shall present a written determination of support from his or her employer to serve a three-year (3) term of office. The President-Elect shall serve in such office only as long as he or she remains a member of NAPM.

SECTION 3. Nominations. Candidates for the office of President-Elect shall be solicited by the Selection Committee, which shall also determine the qualifications of all persons who request the Committee to be considered as a candidate. The Selection Committee shall establish appropriate procedures which shall be used to solicit candidates and to review their qualifications. These procedures shall be approved by the Board of Directors and may be modified from time to time based upon recommendations from the Selection Committee or the Board of Directors. The names of all candidates determined to be qualified by the Selection Committee shall be submitted to the Board of Directors prior to their meeting at which the President-Elect shall be elected. The nomination procedure for the President-Elect as described in this Section is not exclusive; therefore, the Board of Directors shall have the right to consider and vote for a candidate not submitted by the Selection Committee provided the Board of Directors determines that such candidate is qualified.

SECTION 4. Election. The President-Elect shall be elected on an annual basis by a vote of the Board of Directors at their last regularly scheduled meeting prior to the NAPM annual meeting. The Board shall cast their votes by ballot.

SECTION 5. Term of Office of the President-Elect. The term of office of the President-Elect shall commence at the close of the NAPM annual meeting held immediately following his or her election and shall terminate upon the close of the second NAPM annual meeting, and until election and qualification of his or her successor. In the event of a vacancy in the office of President-Elect for any reason, the procedures set forth in Section 3 and 4 of this Article (other than the time of the meeting of the Board of Directors at which the election shall be held) to elect a President-Elect shall be used by the Board of Directors to promptly elect a successor for the unexpired term of the President-Elect.

SECTION 6. Duties of President-Elect. The President-Elect shall have such duties and responsibilities as may be assigned to him or her by the Board of Directors and as may be required by NAPM Policy. The President-Elect shall serve as a member of the Board of Directors and shall have the right to vote on all matters which may require a vote of the Board of Directors.

SECTION 7. Term of Office of President. The President-Elect shall assume the office of President without another election and his or her term of office shall commence at the close of the second annual meeting held immediately following his or her election as President-Elect and shall terminate at the close of the third annual meeting, and until election and qualification of his or her successor. The President shall serve in such office only as long as he or she remains a member of NAPM. In the event that the Board of Directors determines that the President is unable to perform the duties of office due to temporary disability resulting from illness or any other cause, the President-Elect shall serve as President until the President shall be able to resume the duties of office. In the event of a vacancy in the office of President for any reason, the President-Elect shall promptly assume the office of President for the unexpired term and then shall continue to serve as President for a full term thereafter. In the event that the office of President-Elect is vacant and the office of President becomes vacant at any time after the last regularly scheduled meeting of the Board of Directors prior to the NAPM annual meeting, the Board of Directors shall promptly elect a successor from their own members (who meets the qualification requirements of Section 2 of this Article) for the unexpired term of the President, and the vacancy in the office of President-Elect shall be filled in accordance with Section 5 of this Article. The election may be held at a regular or special meeting of the Board of Directors and the Board shall cast their votes by ballot.

SECTION 8. Duties of President. The President shall be the Chief Executive Officer and Chairperson of the Board of Directors and shall exercise general supervision over the executive affairs of NAPM. He or she shall preside at all meetings of the NAPM membership and of the Board of Directors and shall be a member, ex officio, of all committees. The President shall have, in addition to the duties made incumbent upon the office or by any other provision of these Bylaws, such other duties which may be assigned by the Board of Directors and as may be required by NAPM Policy. The President shall not have the right to vote at meetings of the Board of Directors other than with respect to the elections of the President-Elect and the Director at Large or as may be permitted under Robert’s Rules of Order.

SECTION 9. Term of Office of the Immediate Former President. The term of office of the Immediate Former President shall commence at the close of his or her term as President and shall terminate at the close of the next annual meeting, and until election and qualification of his or her successor. In the event of a vacancy in the office of the Immediate Former President for any reason, the office shall remain vacant for the unexpired term and until the current President concludes his or her term of office and succeeds to the office of Immediate Former President.

SECTION 10. Duties of Immediate Former President. It shall be the duty of the Immediate Former President to serve as a member and Chairperson of the Finance Committee and to perform such other duties as may be assigned by the Board of Directors and as may be required by NAPM Policy. The Immediate Former President shall serve as a member of the Board of Directors and shall have the right to vote on all matters which may require a vote of the Board of Directors.

SECTION 11. Executive Vice President. The Board of Directors shall appoint or reappoint an Executive Vice President of NAPM at the expiration of the term for which the previous appointment was made or whenever, for any reason, the office shall become vacant. The Executive Vice President shall serve as a member of the Board of Directors and shall have the right to vote on all matters which may require a vote of the Board of Directors. The compensation and the term of appointment, which shall not exceed three (3) years, shall be determined by the Board of Directors.

SECTION 12. Duties of the Executive Vice President. The Executive Vice President shall be the Chief Operating Officer of NAPM and shall exercise general supervision over the operating management of NAPM. The Executive Vice President, in addition to the duties made incumbent by the office, shall also perform such other duties as may be assigned by the Board of Directors from time to time and as may be required by NAPM Policy.

SECTION 13. Secretary and Treasurer. The Board of Directors shall appoint a Secretary and a Treasurer on an annual basis at their initial meeting following the NAPM annual meeting from a list of names submitted by the Executive Vice President. The Board of Directors may approve the appointment of one person to hold both offices. The Secretary and Treasurer shall each perform the duties incumbent upon their respective office and such other duties as may be assigned by the Board of Directors from time to time and as may be required by NAPM Policy.

SECTION 1. Committees. The following NAPM committees are hereby authorized: (i) the Finance Committee, as described in Section 2 of this Article; (ii) the Selection Committee, as described in Section 3 of this Article; (iii) the Executive Committee, as described in Section 9 of Article VII; and (iv) such other committees as may be established by the Board of Directors from time to time, with the membership thereof appointed by the President and approved by the Board of Directors. Any committee established by the Board of Directors pursuant to this Section shall be designated as either a Standing Committee or Special Committee and the organization, purpose, membership, responsibilities, and duties of each Standing Committee or Special Committee shall be set forth in NAPM Policy. The Board of Directors shall be authorized to discontinue or change the designation of any Standing Committee or Special Committee as the Board of Directors may from time to time deem necessary or appropriate.

SECTION 2. The Finance Committee. The Finance Committee shall consist of the Immediate Former President who shall serve as Chairperson of the Committee, and two (2) other members from the current or preceding Boards of Directors, who shall be appointed by the President for one-year (1) terms commencing immediately following the NAPM annual meeting. This Committee shall generally review the financial activities and condition of NAPM and perform the specific duties and responsibilities required by other provisions of these Bylaws or which may otherwise be assigned by the Board of Directors or as may be required by NAPM Policy.

SECTION 3. The Selection Committee. The Selection Committee shall perform the duties and responsibilities with respect to the selection and qualification of candidates for the offices of Director at Large and President-Elect as set forth in Article VIII, Section 2 and Article IX, Section 3, respectively. The Selection Committee shall consist of the following persons: the President; the President-Elect; the Immediate Former President; the Director at Large; and, the four (4) living persons who formerly held the office of President immediately prior to the Immediate Former President. Members of the Selection Committee shall automatically assume office at the close of each NAPM annual meeting and shall serve a term which is coterminous with their eligibility. In the event of a vacancy for any reason in the offices of the President, President-Elect, or the Director at Large, the person who is selected to be the successor for such unexpired term of office shall automatically become a member of the Committee. In the event of a vacancy for any reason with respect to any other member of the Committee, the vacancy shall not be filled and the composition of the Committee shall remain unchanged until the close of the next NAPM annual meeting following such vacancy. The President shall appoint a Chairperson who shall preside at all meetings of the Committee and act as the representative of the Committee on all communications and other matters with the Board of Directors.

SECTION 1. Fiscal Year. The fiscal year of NAPM shall begin on September 1 of each year and terminate on August 31 of the following year.

SECTION 2. Expenditures. Expenditures of NAPM funds shall be made only pursuant to an annual budget which shall be approved and authorized by the Board of Directors.

SECTION 3. Permanent Reserve Fund. A permanent reserve fund shall be maintained by NAPM on its financial records in an amount which shall be equal to twenty-five percent (25%) of the gross expenditures incurred by NAPM during the preceding fiscal year, minus fifty percent (50%) of the value of any investment of NAPM in real estate and leasehold improvements, reflected at lower of cost or market and net of any secured indebtedness applicable thereto. No expenditure of NAPM funds shall be authorized which causes the Permanent Reserve Fund to be less than the amount required by this Section, unless such expenditure, in the judgment of the Board of Directors, is emergent and is approved by a two-thirds (2/3) vote of the Board of Directors. If the Permanent Reserve Fund shall become less than the amount required by this Section, the Board of Directors shall annually budget and transfer to the Permanent Reserve Fund not less than three percent (3%) of the gross income for each fiscal year until the required amount has been restored.

SECTION 4. Investments. The Permanent Reserve Fund and all other funds of NAPM in excess thereof shall be invested in accordance with the following procedures:

SECTION 1. Mandatory Indemnification. NAPM shall indemnify any director or officer, made, or threatened to be made, a party to an action or proceeding, whether civil or criminal, including an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan, or other enterprise, which any director or officer of NAPM served in any capacity at the request of NAPM, by reason of the fact that he or she, his or her testator or intestate, was a director or officer of NAPM or served such other corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise in any capacity, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorney’s fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein. Not withstanding the foregoing, no indemnification shall be made to or on behalf of any director or officer if a judgment or adjudication adverse to the director or officer establishes that his or her act was committed in bad faith or the result of active and deliberate dishonesty and was material to the cause of action so adjudicated, or that he or she personally gained in fact a financial profit or other advantage to which he or she is not legally entitled.