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The Director Indemnification Agreement is a crucial document used when appointing new directors or updating indemnification arrangements with existing directors of New Zealand companies. It provides essential protection for directors in carrying out their duties, helping companies attract and retain qualified individuals for board positions. The agreement must carefully balance the company's ability to protect its directors with the limitations imposed by the Companies Act 1993 and other relevant New Zealand legislation. Typically implemented alongside Directors' and Officers' (D&O) insurance, this agreement details the scope of indemnification, claim procedures, and expense advancement terms. It's particularly important in today's complex business environment where directors face increasing scrutiny and potential liability.

1. Parties: Identifies the company and the director entering into the agreement

2. Background: Sets out the context of the appointment and the company's wish to provide indemnification

3. Definitions: Defines key terms including 'Proceedings', 'Liability', 'Costs', and 'Indemnified Matters'

4. Scope of Indemnification: Details what types of liabilities and costs are covered by the indemnification

5. Limitations on Indemnification: Specifies exclusions and restrictions as required by Companies Act 1993

6. Notification and Defense of Claims: Procedures for notifying the company of claims and managing defense proceedings

7. Advancement of Expenses: Terms for advancing legal costs and other expenses before final disposition

8. Determination of Entitlement: Process for determining whether indemnification is appropriate in specific cases

9. Non-Exclusivity: Clarifies that rights are in addition to other rights under law or company constitution

10. Duration and Survival: Specifies that rights continue after directorship ends for relevant periods

11. General Provisions: Standard clauses including governing law, amendments, and notices