AMKOR TECHNOLOGY INC
DEF 14A, 1999-06-29
SEMICONDUCTORS & RELATED DEVICES
Previous: DELCO REMY INTERNATIONAL INC, 11-K, 1999-06-29
Next: PENWEST PHARMACEUTICALS CO, 11-K, 1999-06-29



<PAGE>   1
                            SCHEDULE 14A INFORMATION

                Proxy Statement Pursuant To Section 14(A) Of The
                         Securities Exchange Act Of 1934

Filed by the Registrant    [X]
Filed by a party other than the Registrant    [ ]

Check the appropriate box:
[ ]  Preliminary proxy statement
[ ]  Confidential, for use of the Commission only (as permitted by Rule
     14a-6(e)(2))
[X]  Definitive proxy statement
[ ]  Definitive additional materials
[ ]  Soliciting material pursuant to Section 240.14a-11(c) or Section 240.14a-12

                             AMKOR TECHNOLOGY, INC.
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):
[X]  No fee required.
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
     (1)  Title of each class of securities to which transactions applies:

          ----------------------------------------------------------------------

     (2)  Aggregate number of securities to which transactions applies:

          ----------------------------------------------------------------------

     (3)  Per unit price or other underlying value of transaction computed
          pursuant to Exchange Act Rule 0-11:

          ----------------------------------------------------------------------

     (4)  Proposed maximum aggregate value of transaction:

          ----------------------------------------------------------------------

     (5)  Total fee paid:  N/A

          ----------------------------------------------------------------------

[ ]  Fee paid previously with preliminary materials.
[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2) and identify the filing for which the offsetting fee was paid
     previously. Identify the previous filing by registration statement number,
     or the Form or Schedule and the date of its filing.

     (1)  Amount previously paid:

          ----------------------------------------------------------------------

     (2)  Form, Schedule or Registration Statement No.:

          ----------------------------------------------------------------------

     (3)  Filing party:

          ----------------------------------------------------------------------

     (4)  Date filed:

          ----------------------------------------------------------------------

<PAGE>   2

                                      LOGO

                             1345 ENTERPRISE DRIVE
                        WEST CHESTER, PENNSYLVANIA 19380

June 23, 1999
To our Stockholders:

     You are cordially invited to attend the Annual Meeting of Stockholders of
Amkor Technology, Inc. The Annual Meeting will be held on Friday, July 9, 1999
at 10:30 a.m., at The Sheraton Inn Great Valley located at 707 Lancaster Pike
(at the intersection of Route 202 and Route 30), Frazer, Pennsylvania 19355.

     The actions expected to be taken at the Annual Meeting are described in
detail in the attached Proxy Statement and Notice of Annual Meeting of
Stockholders.

     We also encourage you to read the Annual Report. It includes information
about our company, as well as our audited financial statements. A copy of our
Annual Report was previously sent to you or is included with this Proxy
Statement.

     Please use this opportunity to take part in the affairs of Amkor by voting
on the business to come before this meeting. WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE. Returning the proxy does NOT deprive you of
your right to attend the meeting and to vote your shares in person for the
matters acted upon at the meeting.

     We look forward to seeing you at the annual meeting.

                                          Sincerely,

                                          /s/ James J. Kim

                                          James J. Kim
                                          Chairman of the Board and
                                          Chief Executive Officer
<PAGE>   3

                             AMKOR TECHNOLOGY, INC.
                            ------------------------

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

                           TO BE HELD ON JULY 9, 1999


Dear Amkor Stockholder:

     On Friday, July 9, 1999, Amkor Technology, Inc., a Delaware corporation,
will hold its 1999 Annual Meeting of Stockholders at The Sheraton Inn Great
Valley, located at 707 Lancaster Pike (at the intersection of Route 202 and
Route 30), Frazer, Pennsylvania 19355. The meeting will begin at 10:30 a.m.

     Only stockholders who held stock at the close of business on June 18, 1999
can vote at this meeting or any adjournments that may take place. At the meeting
we will:

     1. Elect the Board of Directors.

     2. Approve the adoption of the Amkor's Executive Incentive Bonus Plan.

     3. Approve the appointment of our independent auditors for 1999.

     4. Attend to other business properly presented at the meeting.

     YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE THREE
                  PROPOSALS OUTLINED IN THIS PROXY STATEMENT.

     At the meeting we will also report on Amkor's business results and other
matters of interest to stockholders of Amkor.

     The approximate date of mailing for this proxy statement and card is June
23, 1999.

                                          THE BOARD OF DIRECTORS
June 23, 1999
West Chester, Pennsylvania

                             YOUR VOTE IS IMPORTANT

TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE AND RETURN IT
IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
<PAGE>   4

                             AMKOR TECHNOLOGY, INC.
                            ------------------------

                                PROXY STATEMENT
                            ------------------------

                 INFORMATION CONCERNING SOLICITATION AND VOTING

     This proxy statement is furnished in connection with the solicitation by
the Board of Directors of Amkor Technology, Inc. of proxies to be voted at the
Annual Meeting of Stockholders to be held on Friday, July 9, 1999, at 10:30
a.m., and at any adjournment that may take place.

     The Annual Meeting will be held at The Sheraton Inn Great Valley Hotel,
located at 707 Lancaster Pike (at the intersection of route 202 and Route 30),
Frazer, Pennsylvania 19355. Our principal executive offices located at 1345
Enterprise Drive, West Chester, Pennsylvania 19380. Our telephone number is
(610) 431-9600.

     We mailed these proxy materials on or about June 23, 1999 to stockholders
of record who held our common stock on June 18, 1999.

     The following is important information in a question-and-answer format
regarding the Annual Meeting and this Proxy Statement.

     Q: WHAT MAY I VOTE ON?

     A: (1) The election of seven nominees to serve on our Board of Directors;
        (2) The approval of the adoption of our Executive Incentive Bonus Plan;
            AND
        (3) The approval of the appointment of Arthur Andersen LLP as our
            independent auditors for 1999.

     Q: HOW DOES THE BOARD RECOMMEND I VOTE ON THE PROPOSALS?

     A: The Board recommends a vote FOR each of the nominees, FOR the adoption
        of our Executive Incentive Bonus Plan and FOR the appointment of Arthur
        Andersen LLP as independent auditors for 1999.

     Q: WHO IS ENTITLED TO VOTE?

     A: Stockholders as of the close of business on June 18, 1999 (the "Record
        Date") are entitled to vote at the Annual Meeting. Each stockholder is
        entitled to one vote for each share of common stock held on the Record
        Date. As of the Record Date, 118,259,129 shares of the Company's common
        stock were issued and outstanding, held by 423 holders of record
        (including shares held in "street name").

     Q: HOW DO I VOTE?

     A: You may vote in person at the Annual Meeting or by signing and dating
        each proxy card you receive and returning it in the prepaid envelope.

     Q: HOW CAN I CHANGE MY VOTE OR REVOKE MY PROXY?

     A: You have the right to revoke your proxy and change your vote at any time
        before the meeting by notifying the Company's Secretary, Frank J.
        Marcucci, or by returning a later-dated proxy card. You may also revoke
        your proxy and change your vote (i) by voting in person at the meeting
        or (ii) by mailing a written notice of revocation or subsequent proxy to
        the attention of the Company's Secretary.

     Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?

     A: It means you hold shares registered in more than one account. Sign and
        return all proxies to ensure that all your shares are voted.

                                        1
<PAGE>   5

     Q: WHO WILL COUNT THE VOTE?

     A: Representatives of the Company's transfer agent, will count the votes
        and act as the inspector of elections. The Company believes that the
        procedures to be used by the Inspector to count the votes are consistent
        with Delaware law concerning voting of shares and determination of a
        quorum.

     Q: WHAT IS A "QUORUM"?

     A: A "quorum" is a majority of the outstanding shares. They may be present
        at the meeting or represented by proxy. There must be a quorum for the
        meeting to be held and action, to be validly taken. If you submit a
        properly executed proxy card, even if you abstain from voting, then you
        will be considered part of the quorum. Abstentions are not counted in
        the tally of votes FOR or AGAINST a proposal. A withheld vote is the
        same as an abstention. If a broker indicates on a proxy that it does not
        have discretionary authority as to certain shares to vote on a
        particular matter (broker non-votes), those shares will not be counted
        as present or represented for purposes of determining whether
        stockholder approval of that matter has been obtained but will be
        counted for purposes of establishing a quorum.

     Q: WHO CAN ATTEND THE ANNUAL MEETING?

     A: All stockholders as of the Record Date can attend. If your shares are
        held in the name of a broker or other nominee, please bring proof of
        share ownership with you to the Annual Meeting. A copy of your brokerage
        account statement or an omnibus proxy (which you can get from your
        broker) will serve as proof of share ownership.

     Q: HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?

     A: Although we do not know of any business to be considered at the 1999
        Annual Meeting other than the proposals described in this proxy
        statement, if any other business is properly presented at the Annual
        Meeting, your signed proxy card gives authority to James J. Kim, Amkor's
        Chief Executive Officer, and Frank J. Marcucci, Amkor's Chief Financial
        Officer, to vote on such matters at their discretion.

     Q: HOW AND WHEN MAY I SUBMIT PROPOSALS FOR THE 2000 ANNUAL MEETING?


     A: To have your proposal included in the Company's proxy statement for the
        2000 Annual Meeting, you must submit your proposal in writing by March
        10, 2000, to the Company's Secretary, c/o Amkor Technology, Inc., 1345
        Enterprise Drive, West Chester, Pennsylvania 19380.



       If you submit a proposal for the 2000 Annual Meeting after March 10,
        2000, the proxy for the 2000 Annual Meeting may confer upon management
        discretionary authority to vote on your proposal.


        You should also be aware of certain other requirements you must meet to
        have your proposal brought before the 2000 Annual Meeting, and these
        requirements are explained in Rule 14a-8 promulgated by the Securities
        and Exchange Commission under the Securities Exchange Act of 1934.

                                        2
<PAGE>   6

                           PROPOSALS YOU MAY VOTE ON

                                  PROPOSAL ONE

                             ELECTION OF DIRECTORS

     The Company has nominated seven (7) candidates for election to the Board of
Directors this year. Unless otherwise instructed, the proxy holders will vote
the proxies received by them for the election of the seven nominees named below,
each of whom is presently a director. Each nominee has consented to be named a
nominee in this proxy statement and to continue to serve as a director if
elected. Should any nominee become unable or decline to serve as a director or
should additional persons be nominated at the meeting, the proxy holders intend
to vote all proxies received by them in such a manner as will assure the
election of as many nominees as possible (or, if new nominees have been
designated by the Board, in such manner as to elect such nominees) and the
specific nominees to be voted for will be determined by the proxy holders. All
directors are elected annually and serve a one-year term until our next annual
meeting. We expect that each nominee will be able to serve as a director.

REQUIRED VOTE

     Directors are elected by a plurality of votes cast. Votes withheld and
broker non-votes are not counted toward the total votes cast in favor of a
nominee.

                YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE
               ELECTION OF EACH OF THE NOMINATED DIRECTORS BELOW.

NOMINEES FOR THE BOARD OF DIRECTORS

     The following table sets forth the names and the ages as of February 1,
1999 of our incumbent directors who are being nominated for re-election to the
Board:

<TABLE>
<CAPTION>
                   NAME                     AGE                  POSITION
                   ----                     ---                  --------
<S>                                         <C>    <C>
James J. Kim..............................  63     Chief Executive Officer and Chairman
John N. Boruch............................  56     President and Director
Winston J. Churchill(1)...................  58     Director
Robert E. Denham(2).......................  53     Director
Thomas D. George(1).......................  58     Director
Gregory K. Hinckley(2)....................  52     Director
John B. Neff..............................  67     Director
</TABLE>

- ---------------
(1) Member of Compensation Committee.

(2) Member of Audit Committee.

JAMES J. KIM                                                 Director since 1997
Age 63

     James Kim has served as our Chief Executive Officer and Chairman since
September 1997. Mr. Kim founded our predecessor in 1968 and served as its
Chairman from 1970 to April 1988. He has also served as the Chairman of Anam
group of companies and a director of ASI since 1992. Mr. Kim is a director of
CFM Technologies, Inc. Mr. Kim is Chairman of The Electronics Boutique, Inc., an
electronics retail chain.

JOHN N. BORUCH                                               Director since 1997
Age 56

     John Boruch has served as our President and a director since September 1997
and our Chief Operating Officer since February 1999. Mr. Boruch has served as
President of Amkor Electronics, Inc., our predecessor, from February 1992
through April 1998. From 1991 to 1992, he served as our predecessor's Corporate
Vice

                                        3
<PAGE>   7

President in charge of Sales. Mr. Boruch joined us in 1984. Mr. Boruch earned a
B.A. in Economics from Cornell University.

WINSTON J. CHURCHILL                                         Director since 1998
Age 58

     Winston Churchill has been a director of our company since July 1998. Mr.
Churchill is a managing general partner of SCP Private Equity Partners, L.P., a
private equity fund sponsored by Safeguard Scientifics, Inc. He is also chairman
of Churchill Investment Partners, Inc. and CIP Capital Management, Inc. From
1984 to 1989, Mr. Churchill was a general partner and a managing partner of a
private investment firm. From 1967 to 1983, he practiced law at the Philadelphia
law firm of Saul, Ewing, Remick & Saul where he served as Chairman of the
Banking and Financial Institutions Department, Chairman of the Finance Committee
and a member of the Executive Committee. Mr. Churchill is chairman of the board
of Central Sprinkler Corporation and a member of the board of Griffin Land &
Nurseries, Inc. From 1989 to 1993, he served as Chairman of the Finance
Committee of the Pennsylvania Public School Employees' Retirement System. Mr.
Churchill is also a member of the Executive Committee of the Council of
Institutional Investors.

ROBERT E. DENHAM                                             Director since 1998
Age 53

     Robert Denham has been a director of our company since July 1998. He is a
partner in the law firm of Munger, Tolles & Olson, LLP, having rejoined that
firm in 1998 after serving as the Chairman and Chief Executive Officer of
Salomon Inc., an investment bank, from June 1992 to December 1997. Mr. Denham
joined Salomon Inc. in August 1991 as General Counsel of Salomon Inc. and its
subsidiary, Salomon Brothers. Prior to joining Salomon Inc., Mr. Denham worked
for twenty years at the law firm of Munger, Tolles & Olson, LLP. Mr. Denham is a
director of U.S. Trust Corporation. Mr. Denham served as a U.S. Representative
to the APEC Business Advisory Council, after being appointed to that position by
President Clinton.

THOMAS D. GEORGE                                             Director since 1997
Age 58

     Thomas George has been a director of our company since November 1997. Mr.
George was Executive Vice President, and President and General Manager,
Semiconductor Products Sector ("SPS") of Motorola, Inc., from April 1993 to May
1997. Prior to that, he held several positions with Motorola, Inc., including
Executive Vice President and Assistant General Manager, SPS, from November 1992
to April 1993 and Senior Vice President and Assistant General Manager, SPS, from
July 1986 to November 1992. Mr. George is currently retired.

GREGORY K. HINCKLEY                                          Director since 1997
Age 52

     Gregory Hinckley has been a director of our company since November 1997.
Mr. Hinckley has served as Executive Vice President, Chief Operating Officer and
Chief Financial Officer of Mentor Graphics Corporation, a software company,
since January 1997. From November 1995 until January 1997, he held the position
of Senior Vice President with VLSI Technology, Inc., a manufacturer of complex
integrated circuits. From August 1992 until December 1996, Mr. Hinckley held the
position of Vice President, Finance and Chief Financial Officer with VLSI
Technology, Inc. From December 1991 until August 1992, he was an independent
consultant. Mr. Hinckley is also a director of OEC Medical Systems, Inc., a
manufacturer of medical imaging equipment.

JOHN B. NEFF                                                 Director since 1999
Age 67

     John Neff has been a director of our company since January 1999. Mr. Neff
was portfolio manager for Windsor Fund and Gemini II mutual fund from 1964 until
his retirement in 1995. He was also Senior Vice

                                        4
<PAGE>   8

President and Managing Partner of Wellington Management, one of the largest
investment management firms in the United States. From 1996 to 1998, Mr. Neff
was a director with Chrysler Corporation. He is a trustee and member of the
executive committee at the University of Pennsylvania and a trustee and chairman
of the Investment Committee of Case Western Reserve University. He is also a
member of the board of Governors of the Association for Investment Management
and Research.

                             DIRECTOR COMPENSATION

     We do not compensate directors who are also employees or officers of our
company for their services as directors. Non-employee directors, however, are
eligible to receive: (1) an annual retainer of $15,000, (2) $1,000 per meeting
of the Board of Directors that they attend, (3) $1,000 per meeting of a
committee of the Board of Directors that they attend and (4) $500 per
non-regularly scheduled telephonic meeting of the Board of Directors in which
they participate. We also reimburse non-employee directors for travel and
related expenses incurred by them in attending board and committee meetings.

     1998 DIRECTOR OPTION PLAN: Our Board of Directors adopted the 1998 Director
Option Plan (the "Director Plan") in January 1998. Our stockholders subsequently
approved the Director Plan in April 1998. The Director Plan became effective
immediately prior to our initial public offering on April 30, 1998.

     Under the Director Plan, (1) each non-employee director who was a
non-employee director on the date of our initial public offering received an
initial grant of options to purchase 15,000 shares of our common stock, (2) each
individual who became a non-employee director after our initial public offering
received an initial grant of options to purchase 15,000 shares of our common
stock on the date that he or she became a non-employee director and (3) each
individual who becomes a non-employee director after April 30, 1998 will receive
an initial grant of options to purchase 15,000 shares of our common stock on the
date that he or she becomes a non-employee director. In addition to this initial
grant, we will subsequently grant each non-employee director who has served on
the Board of Directors for at least six months an option to purchase 5,000
shares of our common stock each time he or she is re-elected to serve as a
director of our company by our stockholders. The option grants under the
Director Plan are automatic and nondiscretionary.

     We reserved a total of 300,000 shares of our common stock for issuance
under the Director Plan. The exercise price of the initial grant of 15,000
options to our non-employee directors who were serving as directors on the date
of our initial public offering was 94% of the $11.00 price per share of the
shares of our common stock sold in our initial public offering. The exercise
price of each option under the Director Plan issued after our initial public
offering was, and will continue to be, 100% of the fair market value of our
common stock on the grant date. The term of each option issued under the
Director Plan is ten years.

     Each option granted to a non-employee director vests as to 33 1/3% of the
optioned stock one year after the date of grant and as to an additional 33 1/3%
of the optioned stock on each anniversary of the date of grant, provided that
the optionee continues to serve as a non-employee director. Therefore, three
years after the grant of an option, a non-employee director may exercise 100% of
the stock optioned under that option grant.

     If all or substantially all of our assets are sold to another entity or we
merge with or into another corporation, that acquiring entity or corporation may
either assume all outstanding options under the Director Plan or may substitute
equivalent options. Following an assumption or substitutes, if the director is
terminated other than upon a voluntary resignation, any assumed or substituted
options will vest and become exercisable in full. If the acquiring entity does
not either assume all of the outstanding options under the Director Plan or
substitute an equivalent option, each option issued under the Director Plan will
immediately vest and become exercisable in full. The Director Plan will
terminate in January 2008 unless sooner terminated by the Board of Directors.

                                        5
<PAGE>   9

                         BOARD MEETINGS AND COMMITTEES

     The Company's Board meets approximately five times a year in regularly
scheduled meetings, but will meet more often if necessary. The Board held five
meetings and acted by unanimous written consent on 6 occasions during 1998 and
all of the directors attended at least 75% of the Board meetings and Committee
meetings of which they were members.

     The full Board considers all major decisions of the Company. However, the
Board has established the following two standing committees, each of which is
chaired by an outside director:

COMPENSATION COMMITTEE

     The Compensation Committee is presently comprised of Messrs. George and
Churchill. The Compensation Committee: (1) reviews and approves annual salaries,
bonuses, and grants of stock options pursuant to our 1998 Stock Plan and (2)
reviews and approves the terms and conditions of all employee benefit plans or
changes to these plans. During 1998, the Committee did not meet apart from
regular meetings with the entire Board.

THE AUDIT COMMITTEE

     The Audit Committee is comprised of Messrs. Denham and Hinckley. The Audit
Committee: (1) recommends to the Board of Directors the annual appointment of
our independent auditors, (2) discusses and reviews in advance the scope and the
fees of the annual audit, (3) reviews the results of the audit without
independent auditors, (4) reviews and approves non-audit services of the
independent auditors, (5) reviews compliance with our existing major accounting
and financial reporting policies, (6) reviews the adequacy of our financial
organization and (7) reviews management's procedures and policies relating to
the adequacy of our internal accounting controls and compliance with applicable
laws relating to accounting practices. The Committee did not meet apart from
regular meetings with the entire Board during 1998.

     The Board currently has no nominating committee or committee performing a
similar function.

         REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION

     The Compensation Committee, (the "Committee"), of the Company's Board of
Directors currently consists of Mr. Winston Churchill (Chairman), and Mr. Thomas
George. Both members were designated by the Board on November 10, 1998. No
member of the committee during 1998 was an employee of the Company or any of its
subsidiaries. Each member meets the definition of "non employee director" under
Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and is an
"outside director" within the meaning of Section 162(m) of the Internal Revenue
Code of 1986, as amended, (the "Code").

     The Committee has overall responsibility for the Company's executive
compensation policies and practices. The Committee's functions include:

     - Determining the compensation of the Chief Executive Officer of the
       Company.

     - Reviewing and approving all other executive officers' compensation,
       including salary and payments under the executive bonus plan, in each
       case based in part upon the recommendation of the Chief Executive Officer
       of the Company.

     - Granting awards to executive officers under the Company's stock option
       incentive plans

     - Reviewing and making recommendations to the Board of Directors regarding
       compensation goals and guidelines for the Company's employees and
       criteria by which bonuses to the Company's employees are determined.

     - Administering the Company's 1998 Stock Plan, and the Employee Stock
       Purchase Plan.

                                        6
<PAGE>   10

  Compensation Philosophy

     The Company's compensation philosophy is to attract and retain top talent
within the packaging and wafer fabrication industries through a multifaceted
compensation approach. This includes aligning base pay with companies with whom
the Company competes with for top talent. These companies are within both the
semiconductor and printed circuit board manufacturing sectors. The Company's
approach to total cash compensation is that it should vary with the performance
of the Company in obtaining the financial and operational objectives of the
Company. The Company has an incentive program for all employees which is
proportional to company profitability. In addition, the Company has an executive
bonus program that is based on annual operational performance.

  Salaries

     It is the Committee's objective to establish base salaries at levels that
are comparable to those paid to executives with comparable qualifications,
experience and responsibilities at other companies in the electronics industry,
including semiconductor and printed circuit board companies. The Committee
believes that it is necessary to attract and retain the leaders in the packaging
industry, as the company competes with these companies for executive talent. At
the end of the fiscal year, each executive officer is reviewed by Mr. Kim. The
review of executive officers made in fiscal 1998 for performance related to
their specific function within the organization and results achieved by them
relative to key performance factors. The Committee reviewed independently these
recommendations and approved, with any modifications that it deemed appropriate,
the annual salary, including salary increases, for the executive officers.
Industry, peer group and national survey results were also considered in making
salary determinations to maintain parity of the company's pay practices within
the electronics and wafer fabrication industries.

  Annual Incentive Compensation

     Each executive officer's performance, as well as their total cash
compensation on a peer-market level was evaluated by the Committee to determine
the appropriate cash bonus award. Additionally, industry standards regarding
cash bonus as a percentage of total base pay were reviewed to ensure alignment
within the industry.

  Executive Incentive Bonus Plan

     A new executive incentive plan was approved by the Compensation Committee
for 1999 implementation. This Executive Incentive Bonus Plan (the "EIBP"), is a
cash based incentive bonus program. The purpose of this plan is to align
Executive Officer's as well as key employees performance with operational
performance, EBITDA, and Revenue growth. The EOIP establishes performance
targets for each of these three measures, and determines, by individual, the
targeted bonus level for 1999 performance. Please see "Proposal Two" for more
details related to the EIBP.

  Employee Profit Sharing Plan

     Most employees of the Company are eligible to participate in a cash bonus
program which is proportional to corporate profitability. Annually, a percentage
of Amkor Technology Inc.'s profit before taxes is allocated to the profit
sharing pool. This allocation is distributed as a percentage of employees base
pay, to eligible participants within the company.

  Long-Term Incentive Compensation

     Long-term incentive compensation currently consists solely of stock
options. The Committee is responsible for the administration of the Company's
stock option program. Option grants are made under the Stock Option Plan, as
amended, at the fair market price on the date of grant and expire up to ten
years after the date of the grant. The Committee believes that stock options are
a competitive necessity in the electronics industry.

     As a general rule, the Committee believes that a certain portion of the
compensation package for all Executive Officers should be based on long term
incentives.

                                        7
<PAGE>   11

                       COMPENSATION COMMITTEE INTERLOCKS

     The Compensation Committee currently consists of Messrs. George and
Churchill. No member of the Compensation Committee was an officer or employee of
ours or any of our subsidiaries during fiscal 1998. None of our executive
officers has served on the board of directors or on the compensation committee
on any other entity, any of whose officers served either on our Board of
Directors or on our Compensation Committee.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In 1956, Mr. H. S. Kim founded Anam Semiconductor, Inc. ("ASI"). Mr. H. S.
Kim currently serves as the honorary Chairman and a Representative Director of
ASI. ASI is a member of the Anam Group, consisting principally of companies in
Korea in the electronics industry. The family of Mr. H. S. Kim significantly
influences the management of ASI and the other companies in the Anam Group.

     Mr. James Kim is the eldest son of Mr. H. S. Kim. He is also our founder
and Chairman and Chief Executive Officer. Since January 1992, Mr. James Kim has
also served as Chairman of the Anam Group and a director of ASI.

     Prior to our divestiture of our interest in ASI during 1998, we and the
family of Mr. H. S. Kim collectively owned approximately 40.7% of the
outstanding common stock of ASI. As of June 1, 1999, the family of Mr. H. S. Kim
owned approximately 37% of the outstanding common stock of ASI.

     In May 1999, we purchased ASI's packaging and test facility in Kwangju,
Korea, known as K4, for $575 million, plus the assumption of up to $7.0 million
of employee benefit liabilities. In connection with the acquisition of K4, we
entered into the following additional agreements with ASI: (i) a Transition
Services Agreement, pursuant to which ASI will continue to provide many of the
same services at K4 that it provided prior to the acquisition; and (ii) an
Intellectual Property Agreement, pursuant to which ASI transferred certain
patents to us and reissued certain other intellectual property rights to us
under an exclusive, fully-paid, perpetual lease. We have licensed these patents
and these other rights back to ASI on a non-exclusive basis.

     We have executed a letter with ASI committing to make the equity investment
in installments of $41 million in each of 1999, 2000 and 2001 and $27 million in
2002. Our commitment to invest in ASI is subject to: (1) execution of a
definitive stock purchase agreement, (2) concurrent conversion of debt by the
creditor financial institutions, (3) ASI's involvement in a restructuring
program resulting from an accord among Korean financial institutions ASI's
involvement to assist in restructuring Korean businesses remaining in effect and
(4) the supply agreements between our company and ASI remaining in effect. We
would purchase the ASI shares at W500 per share. Because our commitment is in
U.S. dollars, the number of shares we would purchase will vary based on the
exchange rate of Korean won to U.S. dollars.

     In November 1998, the Board of Directors approved the acquisition of
Amkor/Anam Precision Machine Company, Inc. from ASI for $3.8 million. We believe
that we will consummate this transaction in the first half of 1999.

     In June 1998, we purchased ASI's 40% interest in Amkor/Anam Pilipinas
("AAP") for approximately $34 million.

     On a monthly basis, we incur processing charges for packaging and test and
wafer fabrication services performed for us by ASI. Historically, we paid ASI
for these services on net 30-day terms. On July 21, 1998 we entered into a
prepayment agreement with ASI related to packaging and test services. Under this
agreement, we made a $50 million non-interest bearing advance to ASI. This
advance represented approximately one month's processing charges for packaging
and test services. We completely offset this advance against billings by ASI for
packaging and test services provided in the fourth quarter of 1998.

     In connection with our wafer foundry agreement with Texas Instruments, our
company and Texas Instruments agreed to revise certain payment and other terms
contained in the Texas Instruments Manufacturing and Purchase Agreement. As part
of the revision, Texas Instruments agreed to advance our company $20 million in
June 1998 and another $20 million in December 1998. These advances represented
prepayments of wafer

                                        8
<PAGE>   12

foundry services to be provided in the fourth quarter of 1998 and first quarter
of 1999, respectively. We recorded these amounts as accrued expenses. In turn,
we advanced these funds to ASI as prepayments for foundry service charges. We
completely offset the first $20 million advance to ASI against billings for
wafer fabrication services performed for us by ASI in the fourth quarter of 1998
and intend to offset the second $20 million advance to ASI against billings for
wafer fabrication services performed for us by ASI in the first quarter of 1999.
The current portion due from an affiliate reflects the prepayment to ASI. Under
the terms of the revision to the Texas Instruments Manufacturing and Purchase
Agreement, we remain ultimately responsible for reimbursing Texas Instruments if
ASI fails to comply with the terms of the agreement.

     To facilitate capacity expansion for new product lines, some of our
customers advance us funds to purchase some equipment to fulfill their
forecasts. In some cases, the customer has requested that the equipment be
installed in ASI's factories. In these cases, we receive funds from the customer
and advance the funds to ASI. In turn, ASI purchases the necessary equipment. We
offset such advances to ASI, by reducing what we pay ASI for packaging and test
services performed by ASI. We then reduce our obligations to the customer by
reducing our selling price for packaging and test services delivered to the
customer. We reflect these amounts in accrued expenses and in the current
portion of due from affiliates. As of December 31, 1998, these amounts were
approximately $2.6 million.

     We use Anam S&T Co, Ltd. ("AST"), an affiliate of ASI, as a key supplier of
leadframes. Typically, we pay AST for these services on net 30-day terms. At the
end of July 1998, we temporarily changed our payment policy from net 30-days, to
paid-in advance. This change in payment policy created an advance to AST of
approximately $5 million in July 1998. We reflected this amount in current
portion of due from affiliates. As of December 31, 1998 this amount was
approximately $3.5 million.

     In October 1998, we entered into the joint venture with ASI, Taiwan
Semiconductor Manufacturing Corporation, Acer Inc., Scientek International
Investment Co. Ltd., and Chinfon Semiconductor & Technology Company. We called
the joint venture Taiwan Semiconductor Technology Corporation ("TSTC"). We
purchased additional TSTC shares from ASI for $10 million during the fourth
quarter of 1998. The $10 million represented ASI's investment as part of TSTC's
initial round of financing in which we did not participate. ASI did not
participate in TSTC's second round of financing, but we invested $10 million at
that time.

     Mr. James Kim owns AK Investments, Inc. ("AK Investments"). In February
1998 we sold our investment in ASI common stock to AK Investments for $13.9
million. We determined the market value by using the closing price of ASI shares
on the Korea Stock Exchange on the date of the sale. In exchange for such
shares, AK Investments assumed $13.9 million of the our long-term borrowings
from Anam USA, Inc. ("AUSA").

     In May 1999, AK Investments divested itself of 1,000,000 shares of ASI.
After the divestiture, AK Investments holds 1,471,961 shares or 4.45% of ASI.

     In August 1997, AK Investments purchased certain securities held by our
predecessor for $49.7 million by assuming from our predecessor certain
non-current payables from AUSA. After the sale of investments to AK Investments,
our predecessor loaned AK Investments an additional $12.8 million. AK
Investments repaid this loan in full in March 1998.

     At December 31, 1996 and 1997 and 1998, affiliates other than ASI and AUSA
owed us advances and notes receivable of $23.0 million, $36.5 million and $27.5
million, respectively.

     In 1996, Mr. James Kim sold his interest in Amkor Anam Test Services, Inc.
to AEI for $910,350. This sale represented half of Amkor Anam Test Services,
Inc.'s outstanding capital stock.

     In connection with a reorganization of our company and other predecessor
companies in April 1998, Mr. James Kim and members of his family exchanged their
interests in companies, which became part of our company in the reorganization,
in return for shares of our common stock. Currently, Mr. James Kim and members
of his family beneficially own approximately 65.6% of our outstanding common
stock, and Mr. James Kim and other members of his family will continue to
exercise significant control over our company.

                                        9
<PAGE>   13

     In connection with the reorganization in April 1998, we entered into tax
indemnification agreements with Mr. and Mrs. James Kim and the Kim Family
Trusts. Under these agreements, Mr. and Mrs. James Kim and the Kim Family Trusts
will indemnify us for their proportionate share of any U.S. federal or state
corporate income taxes attributable to the failure of Amkor Electronics, Inc.
("AEI") to qualify as an S Corporation for any period or in any jurisdiction for
which S Corporation status was claimed through April 28, 1998. The tax
indemnification agreements require us to indemnify Mr. and Mrs. James Kim and
the Kim Family Trusts if they are required to pay additional taxes or other
amounts attributable to taxable years on or before April 28, 1998 if AEI filed
or files tax returns claiming status as an S Corporation.

     AEI has made various distributions to Mr. and Mrs. James Kim and the Kim
Family Trusts. These distributions allowed Mr. and Mrs. James Kim and the Kim
Family Trusts to pay their income taxes on their allocable portions of the
income of AEI. Such distributions totaled approximately $13.0 million, $5.0
million and $33.1 million in 1996, 1997 and 1998, respectively. As a result of
the termination of the S Corporation election and the finalization of the AEI
tax returns, approximately $2.7 million of the 1998 distributions will be
refunded to our company.

     In 1996, the Kim Family Trusts borrowed $5.3 million at market interest
rates from our predecessor to purchase the real estate and develop the
facilities that comprise our Chandler, Arizona facility. In 1997, the Kim Family
Trusts, after making improvements, sold the real estate and facilities back to
our predecessor for $5.7 million. The Kim Family Trusts then used the proceeds
from the sale to repay the original loan from our predecessor.

     Members of the Kim family own all of the outstanding shares of Forte
Systems, Inc. ("Forte"). Our company and Forte entered into a loan agreement
under which Forte borrowed funds at market interest rates from us, subject to
our consent. Since the beginning of the 1996 fiscal year, the maximum amount
outstanding under this loan agreement was $3.8 million. In 1998, Forte repaid in
full all amounts due under this agreement.

     Members of the Kim family are the majority shareholders of The Electronics
Boutique, Inc. ("Electronics Boutique"). Our company and Electronics Boutique
entered into a loan agreement under which Electronics Boutique borrows funds at
market rates from us, subject to our consent. Since the beginning of the 1996
fiscal year, Electronics Boutique borrowed up to $3.0 million from us under this
loan agreement in the ordinary course of action. As of December 31, 1998, no
outstanding balance under this loan agreement existed. In addition, in 1996,
Electronics Boutique borrowed $50 million from our predecessor in connection
with a contemplated acquisition. However, Electronics Boutique abandoned this
acquisition and repaid the $50 million to our predecessor within eleven working
days of the date Electronics Boutique borrowed the funds. Finally, we guaranteed
certain vendor obligations and a line of credit of Electronics Boutique. During
the third quarter of 1998, we were released from our obligations under these
guarantees.

     In addition, in each of the last three years, we paid various Electronics
Boutique expenses on behalf of Electronics Boutique, and Electronics Boutique
paid many of our expenses on our behalf. These expenses include insurance
premiums, employee medical claims, interest, rent and other miscellaneous
expenses. In 1996, 1997 and 1998, we made net advancements on behalf of
Electronics Boutique of $338,000, $454,000 and $33,000, respectively. In 1997,
Electronics Boutique repaid us $2.4 million of current and prior year's
advancements.

     In addition, we also unconditionally guaranteed obligations of EB Canada, a
subsidiary of Electronics Boutique, under a $4 million term loan agreement and a
$1 million line of credit. During the third quarter of 1998, we were released
from our obligations under these guarantees.

     We lease office space in West Chester, Pennsylvania from the Kim Family
Trusts. The lease expires in 2006. We have the option to extend the lease for an
additional 10 years. The monthly rent under the lease is $94,000. We also
sub-lease a portion of this office space to Forte. Forte pays us a monthly rent
of $43,000.

     We maintain split-value life insurance policies on the joint lives of James
J. Kim and Agnes C. Kim for the benefit of the Trust of James J. Kim dated
September 30, 1992 (the "1992 Trust"). We pay approximately $700,000 in annual
premiums for these policies. We will receive in death benefits an amount equal
to the lesser of the total net premiums paid in cash by us or the net cash
surrender value of the policy as of the date of death of James J. Kim and Agnes
C. Kim.
                                       10
<PAGE>   14

     Mr. James Kim and our company were parties to a loan agreement that
terminated in 1998, pursuant to which Mr. James Kim borrowed funds from the
company, subject to our consent. In connection with these borrowed funds, Mr.
James Kim recognized compensation in 1996, 1997 and 1998 in the amount of
$101,716, $3,000 and $0, respectively from imputed interest for loans under this
agreement. Since the beginning of the 1996 fiscal year, the maximum amount
outstanding under this loan agreement was $6.5 million. Mr. James Kim repaid in
full all amounts due prior to our initial public offering consummated in 1998.

     Mr. James Kim executed certain guarantees to lenders in connection with
certain debt instruments of our subsidiaries that remain outstanding. The total
contingent liability under such guarantees as of December 31, 1998 was
approximately $28 million.

     The Board of Directors appointed Mr. Robert Denham to our company's Board
of Directors in July 1998. Until December 1997, Mr. Denham served as the
Chairman of Salomon Inc., one of the predecessors of Salomon Smith Barney, Inc.,
one of the underwriters for our initial public offering and one of the initial
purchasers of Senior Notes and Senior Subordinated Notes we issued in connection
with our acquisition of K4.

     In January 1998, we loaned $120,000 to Mr. Boruch. This loan bears interest
at 7% per year and is repayable in five equal annual installments.

     We entered into indemnification agreements with our officers and directors.
These agreements contain provisions which may require us, among other things, to
indemnify the officers and directors against certain liabilities that may arise
by reason of their status or service as directors or officers (other than
liabilities arising from willful misconduct of a culpable nature). We also
agreed to advance them any expenses for proceedings against them that we agreed
to indemnify them from.

      COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and directors, and persons who own more than ten percent of a registered class
of our equity securities, to file reports of ownership on Form 3 and changes in
ownership on Form 4 or 5 with the Securities and Exchange Commission (the "SEC")
and the National Association of Securities Dealers, Inc. Such officers,
directors and ten-percent stockholders are also required by SEC rules to furnish
Amkor with copies of all forms that they file pursuant to Section 16(a). Based
solely on its review of the copies of such forms received by it, or written
representations from certain reporting persons that no other reports were
required for such persons, Amkor believes that all Section 16(a) filing
requirements applicable to our officers, directors and ten-percent stockholders
were complied with in a timely fashion.

                             DIRECTORS AND OFFICERS

     JAMES J. KIM. For a brief biography on Mr. Kim, please see "Proposal
One -- Election of Directors-Nominees for the Board of Directors."

     JOHN N. BORUCH. For a brief biography on Mr. Boruch, please see "Proposal
One -- Election of Directors -- Nominees for the Board of Directors."

     FRANK J. MARCUCCI. Frank Marcucci, 63, has served as our Chief Financial
Officer since September 1997 and as Executive Vice President since February
1999. Mr. Marcucci served as the Chief Financial Officer of our predecessor from
1980 through April 1998. Mr. Marcucci is a certified public accountant. Mr.
Marcucci earned a B.S. in Business Administration from Duquesne University and
an M.B.A. from the University of Pittsburgh.

     ERIC R. LARSON. Eric Larson, 43, served as Vice President of our wafer
fabrication business from September 1997 to February 1998 and has served as
Executive Vice President, Wafer Fab since February 1999. Mr. Larson served as
President of the wafer fabrication division of our predecessor from December
1996 to April 1998. From 1979 to 1996, he worked for Hewlett-Packard Company in
various management

                                       11
<PAGE>   15

capacities, most recently as Worldwide Marketing Manager for disk products. In
addition, Mr. Larson was the worldwide Manager for Sales and Marketing of the IC
(integrated circuit) Business Division of Hewlett-Packard Company from July 1985
to May 1993. Mr. Larson earned a B.A. in Political Science from Colorado State
University and an M.B.A. from the University of Denver.

     MICHAEL D. O'BRIEN. Michael O'Brien, 66, served as our Vice President of
Packaging and Testing Operations from September 1997 to February 1999 and has
served as Executive Vice President, Operations since February 1999. Mr. O'Brien
served as Corporate Vice President of our predecessor from 1990 through April
1998. Mr. O'Brien joined our predecessor in 1988. Mr. O'Brien earned a B.S. in
Engineering from Texas A&M University.

     WINSTON J. CHURCHILL. For a brief biography on Mr. Churchill, please see
"Proposal One -- Election of Directors -- Nominees for the Board of Directors."

     ROBERT E. DENHAM. For a brief biography on Mr. Denham, please see "Proposal
One -- Election of Directors -- Nominees for the Board of Directors."

     THOMAS D. GEORGE. For a brief biography on Mr. George, please see "Proposal
One -- Election of Directors -- Nominees for the Board of Directors."

     GREGORY K. HINCKLEY. For a brief biography on Mr. Hinckley, please see
"Proposal One -- Election of Directors -- Nominees for the Board of Directors."

     JOHN B. NEFF. For a brief biography on Mr. Neff, please see "Proposal
One -- Election of Directors -- Nominees for the Board of Directors."

                             EXECUTIVE COMPENSATION

     Summary Compensation. The following table sets forth compensation earned
during 1998 and 1997 by our Chief Executive Officer and the four other most
highly-compensated executive officers whose total salary and bonus during such
years exceeded $100,000 (collectively, the "Named Executive Officers").

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                  ANNUAL
                                                             COMPENSATION(1)
                                                           --------------------      ALL OTHER
                      NAME                         YEAR     SALARY     BONUS(2)   COMPENSATION(3)
                      ----                         ----    --------    --------   ---------------
<S>                                                <C>     <C>         <C>        <C>
James J. Kim.....................................  1998    $779,000    $500,000      $ 12,000(4)
  Chief Executive Officer and Chairman             1997    $500,000    $500,000      $ 15,195(5)
John N. Boruch...................................  1998    $500,000    $446,200      $170,000(6)
  Chief Operating Officer and President            1997    $400,000    $413,800      $ 18,000(7)
Frank J. Marcucci................................  1998    $265,400    $291,840      $ 12,000(8)
  Executive Vice President and Chief Financial
  Officer                                          1997    $245,000    $273,765      $251,000(9)
Eric R. Larson...................................  1998    $250,300    $148,000      $  6,000
  Executive Vice President, Wafer Fab              1997    $220,000    $100,000            --
Michael D. O'Brien...............................  1998    $259,400    $173,285      $  6,000
  Executive Vice President, Operations             1997    $240,000    $173,280      $  6,000
</TABLE>

- ---------------
 (1) At the time of our initial public offering on April 30, 1998, Messrs.
     Boruch, Marcucci, Larson and O'Brien received option grants of 400,000
     shares, 110,000 shares, 90,000 shares and 90,000 shares, respectively, of
     common stock under our 1998 Stock Plan, in each case with an exercise price
     per share equal to $11.00 per share, the initial public offering price per
     share. On November 9, 1998, under the 1998 Stock Plan, Messrs. Boruch and
     Marcucci received a subsequent option grant of 47,735 shares of our common
     stock, and Mr. O'Brien received a subsequent option grant of 29,028 shares
     of our common stock.

                                       12
<PAGE>   16

 (2) Bonus amounts includes amounts earned in the year indicated but that were
     approved by our Board of Directors and paid in the following year.

 (3) All other compensation includes amounts paid to each executive's 401(k)
     plan.

 (4) All other compensation for Mr. Kim in 1998 includes a $6,000 premium paid
     by us for a term life insurance policy, of which Mr. Kim's children are the
     beneficiaries.

 (5) All other compensation for Mr. Kim in 1997 includes an aggregate of $3,195
     in inputed loan interest and a $6,000 premium paid by us for a term life
     insurance policy, of which Mr. Kim's children are the beneficiaries.

 (6) All other compensation for Mr. Boruch in 1998 includes: (1) an aggregate of
     $160,000 for a life insurance premium paid by us together with a bonus paid
     to Mr. Boruch to cover the income taxes owned by him as a result of the
     payment of this insurance premium and (2) a $4,000 premium paid by us for a
     term life insurance policy, of which Mr. Boruch's daughters are the
     beneficiaries.

 (7) All other compensation for Mr. Boruch in 1997 includes: (1) a $4,000
     premium paid by us for a term life insurance policy, of which Mr. Boruch's
     daughters are the beneficiaries and (2) $8,000 as inputed loan interest.

 (8) All other compensation for Mr. Marcucci in 1998 includes a $6,000 premium
     paid by us for a term life insurance policy, of which Mr. Marcucci's wife
     is the beneficiary.

 (9) All other compensation for Mr. Marcucci in 1997 includes: (1) an aggregate
     of $239,000 paid by us for a life insurance premium and a bonus to cover
     the income taxes owed by Mr. Marcucci as a result of the payment of this
     insurance premium and (2) a $6,000 premium paid by us for a term life
     insurance policy, of which Mr. Marcucci's wife is the beneficiary.

                          OPTION GRANTS IN FISCAL 1998

     The following table provides information concerning each grant of options
to purchase our common stock made during 1998 to the Named Executive Officers.

<TABLE>
<CAPTION>
                                               INDIVIDUAL GRANTS                    POTENTIAL REALIZABLE VALUE
                               --------------------------------------------------     MINUS EXERCISE PRICE AT
                               NUMBER OF     % OF TOTAL    EXERCISE                   ASSUMED ANNUAL RATES OF
                               SECURITIES     OPTIONS        PRICE                   STOCK PRICE APPRECIATION
                               UNDERLYING    GRANTED TO    PER SHARE                    FOR OPTION TERM(A)
                                OPTIONS     EMPLOYEES IN    ($/SH)     EXPIRATION   ---------------------------
            NAME               GRANTED(#)   FISCAL YEAR       (B)         DATE           5%            10%
            ----               ----------   ------------   ---------   ----------   ------------   ------------
<S>                            <C>          <C>            <C>         <C>          <C>            <C>
James J. Kim.................        --           --            --            --             --             --
  Chief Executive Officer and
  Chairman
John N. Boruch...............   400,000         10.6%       $11.00       4/30/08     $2,767,136     $7,012,467
  Chief Operating Officer and    47,735          1.3%         5.66      11/09/08        169,915        430,598
  President
Frank J. Marcucci............   110,000          3.0%        11.00       4/30/08        760,963      1,928,428
  Executive Vice President
  and                            47,735          1.3%         5.66      11/09/08        169,915        430,598
  Chief Financial Officer
Eric R. Larson...............    90,000          2.4%        11.00       4/30/08        622,606      1,577,805
  Executive Vice President,
  Wafer Fab
Michael D. O'Brien...........    90,000          2.4%        11.00       4/30/08        622,606      1,577,805
  Executive Vice President,      29,028          0.8%         5.66      11/09/08        103,326        261,849
  Operations
</TABLE>

- ---------------
(a) Potential realizable value is based on the assumption that: (1) our common
    stock will appreciate at the compound annual rate shown from the date of
    grant until the expiration of the 10-year option term and (2) that the
    option is exercised at the exercise price and sold on the last day of its
    term at the appreciated price. We assume stock appreciation of 5% and 10%
    pursuant to rules promulgated by the Securities and Exchange Commission, and
    these percentages do not reflect our estimate of future stock price growth.

                                       13
<PAGE>   17

(b) All options shown granted in fiscal 1998 become exercisable as to 25% of the
    share subject to the option exercisable starting one year after the date of
    grant and an additional 1/48 of such shares subject to the option becoming
    exercisable each month thereafter. Under our 1998 Stock Plan, the Board of
    Directors or a committee appointed by the Board of Directors has the power
    to reduce the exercise price of any option to the then current fair market
    price if the fair market value of the common stock covered by such option
    shall have declined since the date of the option was granted.

     OPTION EXERCISES. During 1998, none of the named executive officers
exercised any of their stock options. The following table shows the number of
shares covered by both exercisable and non-exercisable stock options held by the
named executive officers as of December 31, 1998. Also reported are the values
for "in-the-money" options which represent the positive spread between the
exercise price of any such existing stock options and the year-end price of our
common stock.

                             YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                                                      NUMBER OF SECURITIES             DOLLAR VALUE OF
                                                     UNDERLYING UNEXERCISED              UNEXERCISED
                                                           OPTIONS AT              IN-THE-MONEY OPTIONS AT
                                                        DECEMBER 31, 1998           DECEMBER 31, 1998(A)
                                                   ---------------------------   ---------------------------
                      NAME                         EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
                      ----                         -----------   -------------   -----------   -------------
<S>                                                <C>           <C>             <C>           <C>
James J. Kim.....................................      --                --          $--         $     --
  Chief Executive Officer and Chairman
John N. Boruch...................................      --           447,735           --          245,978
  Chief Operating Officer and President
Frank J. Marcucci................................      --           157,735           --          245,978
  Executive Vice President and Chief Financial
  Officer
Eric R. Larson...................................      --            90,000           --               --
  Executive Vice President, Wafer Fab
Michael D. O'Brien...............................      --           119,028           --          149,581
  Executive Vice President, Operations
</TABLE>

- ---------------
(a) The value of unexercised options equals (i) $10.813, the value of our common
    stock as of December 31, 1998 as reported by the Nasdaq Stock Market, minus
    (ii) the exercise price of such option.

                                       14
<PAGE>   18

                         SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information regarding the beneficial
ownership of our outstanding common stock as of June 1, 1999 by:

     - each person or entity who is known by us to own beneficially 5% or more
       of our outstanding common stock;

     - each of our directors;

     - each of the Named Executive Officers; and

     - all of our directors and executive officers.

<TABLE>
<CAPTION>
                                                              BENEFICIAL OWNERSHIP(A)
                                                              -----------------------
                      NAME AND ADDRESS                          NUMBER       PERCENT
                      ----------------                          ------       -------
<S>                                                           <C>            <C>
James J. and Agnes C. Kim(b)(c).............................  32,275,000       27.3%
  1345 Enterprise Drive
  West Chester, PA 19380
David D. Kim Trust of December 31, 1987(c)(d)...............  13,750,001       11.6
  1500 E. Lancaster Avenue
  Paoli, PA 19301
John T. Kim Trust of December 31, 1987(c)(d)................  13,750,001       11.6
  1500 E. Lancaster Avenue
  Paoli, PA 19301
Susan Y. Kim Trust of December 31, 1987(c)(d)(e)............  13,750,001       11.6
  1500 E. Lancaster Avenue
  Paoli, PA 19301
J. & W. Seligman & Co. Incorporated(f)......................   9,662,800        8.2
  100 Park Avenue
  New York, New York 10017
Winston J. Churchill(g).....................................      15,000          *
Robert E. Denham(g).........................................      10,000          *
Thomas D. George(g).........................................      15,000          *
Gregory K. Hinckley(g)......................................       6,000          *
John B. Neff................................................      70,000          *
John N. Boruch(h)...........................................      137342          *
Eric R. Larson(i)...........................................      37,940          *
Frank J. Marcucci(j)........................................      37,375          *
Michael D. O'Brien(k).......................................      61,125          *
All directors and executive officers as a group (10
  persons)(l)...............................................  32,626,842       27.5
</TABLE>

- ---------------
 *   Represents less than 1%

(a)  The number and percentage of shares beneficially owned is determined in
     accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
     amended. The information is not necessarily indicative of beneficial
     ownership for any other purpose. Under this rule, beneficial ownership
     includes any share over which the individual or entity has voting power or
     investment power. In computing the number of shares beneficially owned by a
     person and the percentage ownership of that person, shares of our common
     stock subject to options held by that person that will be exercisable on or
     before July 31, 1999, are deemed outstanding. Unless otherwise indicated,
     each person or entity has sole voting and investment power with respect to
     shares shown as beneficially owned.

(b)  James J. and Agnes C. Kim are husband and wife. Accordingly, each
     beneficially owns shares of our common stock held in the name of the other.

(c)  David D. Kim, John T. Kim and Susan Y. Kim are children of James J. and
     Agnes C. Kim. Each of the David D. Kim Trust of December 31, 1987, John T.
     Kim Trust of December 31, 1987 and Susan Y. Kim

                                       15
<PAGE>   19

     Trust of December 31, 1987 has in common Susan Y. Kim and John F.A. Earley
     as co-trustees, in addition to a third trustee (John T. Kim in the case of
     the Susan Y. Kim Trust and the John T. Kim Trust, and David D. Kim in the
     case of the David D. Kim Trust) (the trustees of each trust may be deemed
     to be the beneficial owners of the shares held by such trust). In addition,
     the trust agreement for each of these trusts encourages the trustees of the
     trusts to vote the shares of common stock held by them, in their
     discretion, in concert with James Kim's family. Accordingly, the trusts,
     together with their respective trustees and James J. and Agnes C. Kim, may
     be considered a "group" under Section 13(d) of the Exchange Act. This group
     may be deemed to have beneficial ownership of 73,525,000 shares of 62.4% of
     the outstanding shares of our common stock.

(d)  These three trusts together with the trusts described in note (5) below
     comprise the Kim Family Trusts.

(e)  Includes 8,200,000 shares held by the Trust of Susan Y. Kim dated April 16,
     1998 established for the benefit of Susan Y. Kim's two children.

(f)  J. & W. Seligman & Co. Incorporated ("JWS") reported in a Schedule 13G
     filed with the Commission on February 9, 1999 that it beneficially owned
     these shares as of December 31, 1998. JWS also reported that William C.
     Morris, as the owner of a majority of the outstanding voting securities of
     JWS, may be deemed to beneficially own the shares beneficially owned by
     JWS. JWS is the investment adviser for Seligman Communications and
     Information Fund, Inc. (the "Fund"). Of the 9,662,800 shares that JWS
     beneficially owns, the Fund beneficially owns 8,170,000 shares.

(g)  Includes 5,000 shares issuable upon the exercise of stock options that are
     exercisable on or before July 31, 1999.

(h)  Includes 125,000 shares issuable upon the exercise of stock options that
     are exercisable on or before July 31, 1999.

(i)  Includes 28,125 shares issuable upon the exercise of stock options that are
     exercisable on or before July 31, 1999.

(j)  Includes 34,375 shares issuable upon the exercise of stock options that are
     exercisable on or before July 31, 1999.

(k)  Includes 28,125 shares issuable upon the exercise of stock options that are
     exercisable on or before July 31, 1999 and 33,000 shares held jointly with
     Mr. O'Brien's wife.

(l)  Includes 235,625 shares issuable upon the exercise of stock options that
     are exercisable on or before July 31, 1999.

                                       16
<PAGE>   20

                                  PROPOSAL TWO

         APPROVAL OF THE ADOPTION OF THE EXECUTIVE INCENTIVE BONUS PLAN

     On March 3, 1999, the Compensation Committee unanimously approved the
adoption of the Executive Incentive Bonus Plan, and the Board directed that the
Executive Incentive Bonus Plan be submitted to the stockholders at the 1999
Annual Meeting.

     The purpose of the Executive Incentive Bonus Plan is to promote Amkor's
interests by attracting, motivating and retaining key executives. Designated
employees, under the Executive Incentive Bonus Plan, may receive cash bonuses in
order to motivate them to help achieve our financial, customer service and
employee satisfaction objectives and to reward them when we achieve such
objectives.

REQUIRED VOTE

     Approval of the adoption of the Executive Incentive Bonus Plan requires the
affirmative vote of the holders of a majority of shares of Common Stock present
or represented and entitled to vote at the Annual Meeting. Abstentions and
broker non-votes will be counted as present for purposes of determining whether
a quorum is present, and broker non-votes will not be treated as entitled to
vote on this matter at the Annual Meeting.

   YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE ADOPTION
                     OF THE EXECUTIVE INCENTIVE BONUS PLAN.

DESCRIPTION OF THE EXECUTIVE INCENTIVE BONUS PLAN

     HISTORY. The Compensation Committee approved the adoption of the Executive
Incentive Bonus Plan at a meeting held on March 3, 1999.

     PURPOSE. The purpose of the Executive Incentive Bonus Plan is to promote
Amkor's interests by attracting, motivating and retaining key executives.
Designated employees, under the Executive Incentive Bonus Plan, may receive cash
bonuses in order to motivate them to help achieve our financial, customer
service and employee satisfaction objectives and to reward them when we achieve
such objectives. Under section 162(m) of the Internal Revenue Code ("Section
162(m)"), the federal income tax deductibility of compensation paid to Amkor's
Chief Executive Officer and to each of its next four most highly compensated
executive officers may be limited to the extent that it exceeds $1 million in
any one year. Amkor can deduct compensation in excess of that amount if it
qualifies as "performance-based compensation" under Section 162(m). The
Executive Bonus Incentive Plan is intended to permit Amkor to pay incentive
compensation which qualifies as performance-based compensation, thereby
permitting Amkor to receive a federal income tax deduction for the payment of
such incentive compensation.

     ADMINISTRATION. The Executive Incentive Bonus Plan will be administered by
the Compensation Committee consisting of no fewer than two members of the Board
of Directors, all of whom qualify as "outside directors" within the meaning of
Section 162(m).

     ELIGIBILITY. Participants in the Executive Incentive Bonus Plan are chosen
solely at the discretion of the Compensation Committee and includes any employee
of ours or our subsidiary, determined by the Compensation Committee to have a
direct and measurable impact on the attainment of our annual performance goals
or those of one of our business units.

     DETERMINATION AND ALLOCATION OF AWARDS. Under the Executive Incentive Bonus
Plan, participants will be eligible to receive awards based on the achievement
of pre-established annual performance goals established by our Chief Executive
Officer and approved by the Compensation Committee. For purposes of qualifying
awards as performance-based compensation under Section 162(m), the Committee
will specify performance goals from the following list (as defined in the Plan):
(1) revenue, (2) cash flow, (3) earnings per share, (4) EBIDTA, (5) total
shareholder return, (6) return on capital or invested capital, (7) return on
assets or net assets, (8) income or net income, (9) operating income or net
operating income, (10) operating profit or net operating profit, (11) operating
margin, (12) market share, (13) customer satisfaction, (14) employee
satisfaction or (15) individual performance objectives.

                                       17
<PAGE>   21

     After the end of the plan year, the Committee will determine the extent to
which the performance goals applicable to each participant were achieved or
exceeded. However, the Committee retains discretion to eliminate or reduce the
award payable to any participant below that which otherwise would be payable.
The Committee does not have discretion to increase awards under the Plan.

     PAYMENT OF AWARDS. All awards will be paid in cash as soon as
administratively possible following the close of the applicable plan year and
annual audit unless a participant elects to defer receipt of an award payment.
Such election must be made no later than December 31 of the year preceding the
year in which an award is earned. The election must be in writing, specify the
amount of deferral (either in dollars or as a percent of the total award), and
indicate the period of deferral (a minimum of two years is required). Once an
election is made it is irrevocable. All deferred monies are held by Amkor and
subject to our general creditors in the event of bankruptcy. The Compensation
Committee may establish a level of interest to be paid on deferred funds at the
beginning of each plan year.

     ESTIMATE OF BENEFITS. The amounts that will be paid pursuant to the
Executive Incentive Bonus Plan are not currently determinable given that
payments under the plan are determined by comparing actual performance to the
performance goals established by the Committee. The maximum incentive payment
during a plan year for any participant in the Executive Incentive Bonus Plan
will not exceed $2 million.

     The following table shows the hypothetical bonus compensation payable to
the following persons and groups under the Executive Incentive Bonus Plan if the
plan had been in effect for fiscal 1998 (based on the performance criteria set
for fiscal 1999).

<TABLE>
<CAPTION>
                     NAME AND POSITION                        CASH VALUE($)
                     -----------------                        -------------
<S>                                                           <C>
James J. Kim................................................      500,000
  Chief Executive Officer and Chairman
John N. Boruch..............................................      400,000
  Chief Operating Officer and President
Frank J. Marcucci...........................................      250,000
  Executive Vice President and Chief Financial Officer
Eric R. Larson..............................................      125,000
  Executive Vice President, Wafer Fab
Michael D. O'Brien..........................................      150,000
  Executive Vice President, Operations
All executive officers, as a group..........................    1,425,000
All employees who are not current executive officers, as a      2,075,000
  group.....................................................
</TABLE>

     AMENDMENT, SUSPENSION OR TERMINATION OF PLAN. The Board of Directors may
amend, suspend, or terminate the Executive Incentive Bonus Plan at any time.
Such amendment, suspension, or termination will not adversely alter or affect
any right or obligation to any award made before this action. The Board of
Directors will determine the effect on any awards that may be affected by such
event and make adjustments and/or payments as it, in it sole discretion,
determines appropriate.

     TERMINATION OF EMPLOYMENT. In the event of a participant's death,
disability, or retirement (defined as a minimum age of 62 and five years of
employment with us) during a plan year, payment of the Award earned will be
prorated unless otherwise determined by the Committee. Such Awards will then be
paid to the participant, the participant's estate, or legal representative as
determined by the Compensation Committee.

     In the event of a participant's death, disability, or retirement after the
end of a plan year but before payment of an award to which the participant is
entitled, such award will be paid to the participant, the participant's estate,
or legal representative.

     In the event of termination of employment of a participant, voluntarily or
by Amkor, with or without cause, for reasons other than those specified above at
any time before December 31, the participant will forfeit all rights to any
Award. Termination after December 31, but, before payment will not affect the
award payment.

                                       18
<PAGE>   22

                                 PROPOSAL THREE

              RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

     The Audit Committee has recommended, and the Board has approved, the
appointment of Arthur Andersen LLP ("Arthur Andersen") as our independent
auditors for fiscal 1999 subject to your approval. Arthur Andersen has served as
our independent auditors since 1997. The Board of Directors expects that
representatives of Arthur Andersen will attend the Annual Meeting to answer
appropriate questions.

     Audit services provided by Arthur Andersen during fiscal 1998 included an
audit of the Company's consolidated financial statements, a review of the
Company's Annual Report and reviews of certain other filings with the Securities
and Exchange Commission and certain other governmental agencies. In addition,
Arthur Andersen provided various non-audit services to the Company during 1998.

REQUIRED VOTE

     The ratification of the selection of Arthur Andersen LLP requires the
affirmative vote of the holders of the majority of shares of Common Stock
present or represented and entitled to vote at the Annual Meeting. Abstentions
and broker non-votes will be counted as present for purposes of determining
whether a quorum is present, and broker non-votes will not be treated as
entitled to vote on this matter at the Annual Meeting.

  YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF APPOINTMENT OF
             ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS FOR 1999.

                                       19
<PAGE>   23

                            STOCK PERFORMANCE GRAPH
                 COMPARISON OF 8 MONTH CUMULATIVE TOTAL RETURN

     The following performance graph compares the monthly cumulative total
stockholder return on Amkor common stock with the Standard & Poor's 500 Stock
Index and the Hambrecht & Quist Semiconductors Index from (using Amkor's initial
public offering price of $11.00) May 1, 1998 through market close on December
31, 1998. The graph is based on the assumption that $100 was invested in each of
Amkor common stock, the Standard & Poor's 500 Stock Index and the Hambrecht &
Quist Semiconductors Index on May 1, 1998.

     The stock price performance graph depicted below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934. The stock price performance on the graph is
not necessarily an indicator of future price performance.

<TABLE>
<CAPTION>
                                                                                                            HAMBRECHT & QUIST
                                                 AMKOR TECHNOLOGY, INC.             S & P 500                SEMICONDUCTORS
                                                 ----------------------             ---------               -----------------
<S>                                             <C>                         <C>                         <C>
'5/1/98'                                                 100.00                      100.00                      100.00
'5/98'                                                    94.32                       97.31                       81.99
'6/98'                                                    84.94                      101.26                       78.80
'7/98'                                                    67.33                      100.18                       81.26
'8/98'                                                    42.05                       85.70                       62.11
'9/98'                                                    44.32                       91.19                       68.70
'10/98'                                                   44.32                       98.60                       86.01
'11/98'                                                   57.39                      104.58                       97.80
'12/98'                                                   98.30                      110.61                      112.29
</TABLE>

    * $100 INVESTED ON 8/1/98 IN STOCK OR INDEX --
     INCLUDING REINVESTMENT OF DIVIDENDS.
     FISCAL YEAR ENDING DECEMBER 31.

                                       20
<PAGE>   24

<TABLE>
<S>                                        <C>                               <C>
[X] Please mark your votes                                                   3060
    as in this example

         IF THIS CARD IS PROPERLY EXECUTED, SHARES WILL BE VOTED IN THE
      MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE,
              THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.

- ------------------------------------------------------------------------------------------------------
                  AMKOR'S BOARD OF DIRECTORS RECOMMENDS A VOTE
               FOR ELECTION OF DIRECTORS AND  PROPOSALS 2 AND 3.
- ------------------------------------------------------------------------------------------------------

                     FOR    WITHHELD                                         FOR    AGAINST    ABSTAIN
1. Election of       [ ]      [ ]          2. Approval of Executive          [ ]      [ ]        [ ]
   Directors.                                 Incentive Bonus Plan
   (see reverse)
                                           3. Ratification of appointment    [ ]      [ ]        [ ]
                                              of Independent Auditors.

   For, except vote withheld from the following nominee(s):

   --------------------------------------------------------





                                       Please sign exactly as name appears hereon. Joint owners should
                                       each sign. When signing as attorney, executor, administrator,
                                       trustee or guardian, please give full title as such.

                                       ---------------------------------------------------------------

                                       ---------------------------------------------------------------
                                        SIGNATURE(S)                                    DATE
</TABLE>


                              FOLD AND DETACH HERE


                            [AMKOR TECHNOLOGY LOGO]
                             1345 Enterprise Drive
                        West Chester, Pennsylvania 19380

June 23, 1999
To our Stockholders:


     You are cordially invited to attend the Annual Meeting of Stockholders of
Amkor Technology, Inc. The Annual Meeting will be held on Friday, July 9, 1999
at 10:30 a.m., at The Sheraton Inn Great Valley located at 707 Lancaster Pike
(at the intersection of Route 202 and Route 30), Frazer, Pennsylvania 19355.

     The actions expected to be taken at the Annual Meeting are described in
detail in the attached Proxy Statement and Notice of Annual Meeting of
Stockholders.

     We also encourage you to read the Annual Report. It includes information
about our company, as well as our audited financial statements. A copy of our
Annual Report was previously sent to you or is included with this Proxy
Statement.

     Please use this opportunity to take part in the affairs of Amkor by voting
on the business to come before this meeting. WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE. Returning the proxy does NOT deprive you of
your right to attend the meeting and to vote your shares in person for the
matters acted upon at the meeting.

     We look forward to seeing you at the annual meeting.

                                   Sincerely,

                                   /s/ James J. Kim
                                   ---------------------------------------
                                   James J. Kim
                                   Chairman of the Board and
                                   Chief Executive Officer

<PAGE>   25

PROXY

                             Amkor Technology, Inc.
                             1345 Enterprise Drive
                        West Chester, Pennsylvania 19380

          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
              FOR THE ANNUAL MEETING OF STOCKHOLDERS, JULY 9, 1999

The undersigned hereby appoints James J. Kim and Frank J. Marcucci the proxies
(each with power to act alone and with power of substitution) of the
undersigned to represent and vote the shares of stock which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of Amkor Technology,
Inc. to be held on July 9, 1999, and at any adjournment or postponement
thereof, as hereinafter specified and, in their discretion, upon such other
matters as may properly come before the Meeting.

     1.   Election of Directors, Nominees:

               James J. Kim, John N. Boruch, Winston J. Churchill,
               Robert E. Denham, Thomas D. George, Gregory K. Hinckley,
               John B. Neff

     2.   Approval of the adoption of Amkor's Executive Incentive Bonus Plan.

     3.   Ratification of appointment of independent auditors.

YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOXES ON
THE REVERSE SIDE. ON MATTERS ON WHICH YOU DO NOT SPECIFY A CHOICE, YOUR SHARES
WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF AMKOR'S BOARD OF
DIRECTORS. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.


                                                                     SEE REVERSE
                                                                        SIDE

- --------------------------------------------------------------------------------
                              FOLD AND DETACH HERE



                                  [AMKOR LOGO]


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission