Director Indemnity Agreement Template for Saudi Arabia

The Director Indemnity Agreement is a fundamental document used to protect individuals serving as directors on company boards in Saudi Arabia. It is typically implemented upon the appointment of a new director or the establishment of new indemnification policies. The agreement outlines the company's commitment to protect directors from personal liability for actions taken in good faith while performing their duties, subject to limitations under Saudi law. This document has become increasingly important in the Saudi Arabian business environment due to enhanced corporate governance requirements and growing director responsibilities under the Companies Law 2015 and CMA regulations. It typically includes detailed provisions on claim procedures, insurance arrangements, and exclusions, while ensuring compliance with local legal requirements and Islamic law principles.

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

2. Background: Context of the agreement, director's appointment, and purpose of the indemnification

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

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

5. Limitations and Exclusions: Circumstances where indemnification will not apply, including statutory limitations under Saudi law

6. Procedure for Claims: Process for the director to make claims under the indemnity, including notice requirements and timing

7. Company's Rights and Obligations: Company's responsibilities in handling claims and providing defense

8. Director's Obligations: Director's duties to cooperate, provide information, and mitigate losses

9. Insurance: Provisions regarding D&O insurance and its relationship to the indemnity

10. Duration and Survival: Term of the agreement and provisions that continue after termination

11. Governing Law and Jurisdiction: Specification of Saudi law as governing law and jurisdiction for disputes

12. General Provisions: Standard boilerplate clauses including amendments, notices, and severability