Director Indemnity Agreement Template for Indonesia

The Director Indemnity Agreement is a crucial document used to provide protection and security for individuals serving as directors in Indonesian companies. It is typically implemented upon the appointment of new directors or the revision of existing indemnification arrangements. The agreement is structured to comply with Indonesian Company Law (Law No. 40 of 2007) and related regulations, including OJK requirements for public companies. This document becomes particularly important in the context of increasing personal liability risks for directors and the need for clear indemnification frameworks. It details the scope of protection, claim procedures, and limitations, while ensuring alignment with Indonesian corporate governance requirements and market practice. The agreement is essential for both private and public companies seeking to attract and retain qualified directors by providing them with appropriate protection against personal liability risks.

1. Parties: Identification of the Company and the Director entering into the agreement

2. Background: Recitals explaining the director's appointment and the company's intention to provide indemnification

3. Definitions: Key terms including 'Claims', 'Losses', 'Indemnified Events', 'Excluded Events', and other relevant definitions

4. Scope of Indemnification: Detailed description of what events, actions, and circumstances are covered by the indemnity

5. Exclusions: Specific circumstances where indemnification will not apply, such as fraud, willful misconduct, or criminal acts

6. Procedure for Claims: Process for making claims under the indemnity, including notification requirements and timeframes

7. Company's Obligations: Specific obligations of the company in defending claims and providing advances for legal costs

8. Director's Obligations: Director's duties in relation to claims, including cooperation and notification requirements

9. Duration and Survival: Term of the agreement and survival of indemnification obligations after directorship ends

10. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

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