Director Indemnification Agreement Template for Indonesia

The Director Indemnification Agreement is a crucial document used when appointing or maintaining directors in Indonesian companies, providing essential protection for individuals serving in director positions. This agreement becomes necessary to attract and retain qualified directors by offering them protection against personal liability while performing their duties. The document is structured in accordance with Indonesian Company Law (Law No. 40 of 2007) and related regulations, detailing the scope of indemnification, procedures for claims, and limitations under local law. It's particularly important in the Indonesian business context where directors face increasing scrutiny and potential liability in their role as corporate fiduciaries. The agreement typically includes provisions for advancement of expenses, maintenance of D&O insurance, and specific procedures for making indemnification claims, while ensuring compliance with both statutory requirements and corporate governance best practices.

1. Parties: Identification of the company and the director entering into the agreement

2. Background: Recitals explaining the context of the agreement, including the director's appointment and the company's desire to provide indemnification

3. Definitions: Definitions of key terms including 'Indemnifiable Claims', 'Expenses', 'Proceedings', and other relevant terms

4. Agreement to Indemnify: Core provision establishing the company's obligation to indemnify the director

5. Scope of Indemnification: Detailed description of what types of claims, losses, and expenses are covered by the indemnification

6. Limitations on Indemnification: Statutory and contractual limitations on the company's indemnification obligations, including restrictions under Indonesian law

7. Advancement of Expenses: Provisions regarding the company's obligation to advance legal and other expenses to the director

8. Procedures for Claims: Process for the director to make claims for indemnification or advancement of expenses

9. Insurance: Provisions regarding the company's obligations to maintain D&O insurance

10. Duration and Survival: Terms regarding how long the indemnification obligations continue after the director leaves office

11. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and choice of forum for disputes

12. General Provisions: Standard provisions including notices, amendments, assignment, and severability