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Director Indemnity Agreement Template for Malaysia

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Key Requirements PROMPT example:

Director Indemnity Agreement

"I need a Director Indemnity Agreement under Malaysian law for our fintech company, covering three newly appointed directors starting from January 2025, with specific provisions for regulatory compliance in the financial services sector."

Document background
The Director Indemnity Agreement is essential for companies operating in Malaysia to attract and retain qualified directors by providing them with protection against personal liability. This document is typically implemented upon the appointment of new directors or as part of the company's corporate governance review. It aligns with the Malaysian Companies Act 2016 and related legislation, detailing the scope of protection, claim procedures, and limitations of the indemnity. The agreement becomes particularly important in today's complex business environment where directors face increasing scrutiny and potential liability. It should be reviewed regularly to ensure compliance with current laws and regulations, especially when there are significant changes in Malaysian corporate governance requirements or the company's risk profile.
Suggested Sections

1. Parties: Identification of the company and the director(s) being indemnified

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

3. Definitions: Key terms used throughout the agreement, including 'Indemnified Events', 'Claims', 'Losses', and 'Proceedings'

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

5. Limitations and Exclusions: Statutory limitations and specific exclusions where indemnity will not apply, in compliance with Companies Act 2016

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

7. Company's Obligations: Specific obligations of the company in providing the indemnity and handling claims

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

9. Duration and Survival: Term of the indemnity and provisions that survive termination

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

Optional Sections

1. D&O Insurance: Provisions regarding the company's obligations to maintain directors' and officers' insurance, used when the company agrees to provide additional insurance coverage

2. Advance Payment of Costs: Provisions for advance payment of legal costs before final determination, included when immediate access to funds for defense is required

3. Multiple Directors: Additional provisions for agreements covering multiple directors, used when the indemnity applies to more than one director

4. Subsidiary Coverage: Extended coverage for directorships in subsidiary companies, included when the director serves on boards of subsidiary companies

5. Tax Implications: Provisions dealing with tax consequences of indemnity payments, included when tax treatment needs to be explicitly addressed

6. Alternative Dispute Resolution: Mediation and arbitration provisions, included when parties prefer alternative dispute resolution to court proceedings

Suggested Schedules

1. Schedule 1: Scope of Indemnified Events: Detailed list of specific events, actions, and circumstances covered by the indemnity

2. Schedule 2: Claims Notification Form: Standard form for directors to notify the company of claims under the indemnity

3. Schedule 3: Insurance Requirements: Specific details of required D&O insurance coverage, if applicable

4. Appendix A: Board Resolution: Copy of board resolution approving the indemnity agreement

5. Appendix B: Subsidiary Companies: List of subsidiary companies covered by the indemnity, if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions






















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Relevant Industries

Financial Services

Manufacturing

Technology

Healthcare

Real Estate

Retail

Energy

Telecommunications

Transportation

Professional Services

Education

Mining

Construction

Agriculture

Hospitality

Relevant Teams

Legal

Corporate Secretariat

Risk Management

Compliance

Board of Directors

Executive Management

Corporate Governance

Internal Audit

Finance

Human Resources

Relevant Roles

Director

Executive Director

Non-Executive Director

Independent Director

Managing Director

Chief Executive Officer

Company Secretary

General Counsel

Chief Financial Officer

Chief Risk Officer

Head of Legal

Corporate Governance Officer

Board Chairman

Audit Committee Chairman

Risk Committee Chairman

Industries





Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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