SCHEDULE 14A

(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934

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þ		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to Rule 14a-12

AMKOR TECHNOLOGY, INC.

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1900 South Price Road

Chandler, Arizona 85286

 

April 7, 2010

 

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 Monday, May 3, 2010 at 9:00 a.m., at Embassy Suites, Philadelphia — Valley Forge, located at 888 Chesterbrook Blvd., Chesterbrook, Pennsylvania, telephone number (610) 647-6700.

 

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 our 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 in person, please complete, sign, date and return the accompanying proxy in the enclosed postage-prepaid envelope or submit your proxy by internet or telephone to ensure that your shares are represented at the Annual Meeting. Returning the proxy does NOT deprive you of your right to attend the meeting and to vote your shares in person for the matters to be acted upon at the meeting.

 

Thank you for your continuing support.

 

Sincerely,

 

James J. Kim
Executive Chairman of the Board

 

AMKOR TECHNOLOGY, INC.

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To be held on May 3, 2010

 

Dear Amkor Stockholder:

 

On Monday, May 3, 2010, Amkor Technology, Inc., a Delaware corporation, will hold its 2010 Annual Meeting of Stockholders at the Embassy Suites, Philadelphia — Valley Forge, 888 Chesterbrook Blvd., Chesterbrook, Pennsylvania, telephone number (610) 647-6700. The meeting will begin at 9:00 a.m.

 

Only stockholders of record who held shares of Amkor common stock at the close of business on March 15, 2010 may vote at this meeting or any adjournments or postponements that may take place. A complete list of stockholders entitled to vote at the Annual Meeting will be available for examination by the stockholders for any purpose relating to the meeting at our principal executive offices at 1900 South Price Road, Chandler, Arizona for a period of at least ten days prior to the meeting. The list also will be available at the Annual Meeting.

 

At the meeting stockholders will be asked to:

 

 

The Board of Directors recommends that you vote in favor of the two proposals outlined in this proxy statement.

 

The approximate mailing date of this proxy statement and proxy card is April 7, 2010.

 

BY ORDER OF THE BOARD OF DIRECTORS

 

Executive Vice President, Chief
Administrative Officer, General Counsel and
Corporate Secretary

 

April 7, 2010

Chandler, Arizona

 

 

 

 

AMKOR TECHNOLOGY, INC.

 

 

PROXY STATEMENT

 

 

 

 

INFORMATION CONCERNING SOLICITATION AND VOTING

 

This proxy statement is furnished in connection with the solicitation of proxies by Amkor Technology, Inc.’s Board of Directors. The proxies will be voted at the Annual Meeting of Stockholders to be held on Monday, May 3, 2010, at 9:00 a.m., and at any adjournments or postponements that may take place.

 

The Annual Meeting will be held at Embassy Suites, Philadelphia — Valley Forge, 888 Chesterbrook Blvd., Chesterbrook, Pennsylvania, telephone number (610) 647-6700. Our principal executive offices are located at 1900 South Price Road, Chandler, Arizona 85286, telephone number (480) 821-5000.

 

We intend to mail definitive copies of these proxy materials on or about April 7, 2010 to stockholders of record who held our common stock at the close of business on March 15, 2010.

 

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

 

 

 

All proposals must, under law, be an appropriate subject for stockholder action and must be submitted in writing to Amkor’s Secretary, Amkor Technology, Inc., 1900 South Price Road, Chandler, Arizona 85286. You should also be aware of certain other requirements you must meet to have your proposal brought before the 2011 Annual Meeting. These requirements are explained in Rule 14a-8 of the Securities Exchange Act of 1934, as amended, and in our bylaws.

 

 

PROPOSAL ONE

 

ELECTION OF DIRECTORS

 

There are eight incumbent candidates nominated for election to the Board of Directors (“Board of Directors” or “Board”) this year. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the election of the eight nominees named below. Each nominee has consented to be named as a nominee in this proxy statement and 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 identified below as possible (and, if additional nominees have been designated by the Board to fill any vacancies, in such manner as to elect such additional nominees). Our nominees for the election of directors include five independent directors, as defined in the applicable rules for companies traded on Nasdaq. At the recommendation of our Nominating and Governance Committee, the Board has selected the nominees to serve as directors for a one-year term until our next annual meeting or until their successor is duly elected. We expect that each nominee will be able to serve as a director.

 

Required Vote

 

Directors are elected by a plurality of votes cast, so the eight candidates receiving the highest number of affirmative votes cast will be elected as directors. Votes withheld and broker non-votes are not counted toward the total votes cast in favor of a nominee.

 

The Board unanimously recommends a vote FOR the
election of each of the nominees for director below.

 

Nominees for the Board of Directors

 

The following table sets forth the names and the ages as of March 31, 2010 of our eight incumbent directors who are being nominated for re-election to the Board of Directors.

 

 

 

Notes

 

 

Biographies of Nominees for the Board of Directors

 

James J. Kim.  James J. Kim, 74, was appointed as Executive Chairman of the Board of Directors in October 2009. Mr. Kim served as our Chairman and Chief Executive Officer from September 1997 until October 2009. Mr. Kim founded our predecessor, Amkor Electronics, Inc., in 1968 and served as its Chairman from 1970 to April

1998. Mr. James J. Kim is the father of John T. Kim, a member of our Board, and brother to JooHo Kim, the President of Amkor Technology Korea and Executive Vice President Worldwide Manufacturing Operations.

 

As a result of these and other professional experiences and his 40 years of service as our Chairman and Chief Executive Officer, Mr. Kim has a comprehensive understanding of the semiconductor industry and our business, and possesses particular knowledge and experience in strategic planning and customer relationships, manufacturing and operations, and the finance areas relevant to the company, which are among the key attributes which qualify Mr. Kim for election to Amkor’s Board.

 

Kenneth T. Joyce.  Kenneth T. Joyce, 62, was appointed to the position of Chief Executive Officer and named to the Board of Directors in October 2009. Previously, Mr. Joyce served as President and Chief Operating Officer from May 2008, as Executive Vice President and Chief Operating Officer from February 2008 and as Executive Vice President and Chief Administrative Officer from November 2007. Mr. Joyce served as Amkor’s Executive Vice President and Chief Financial Officer from July 1999 to November 2007. Mr. Joyce began his accounting career in 1971 at KPMG Peat Marwick, and is a certified public accountant. Mr. Joyce earned a B.S. in Accounting from Saint Joseph’s University and an M.B.A. in Finance from Drexel University.

 

As a result of these and other professional experiences, Mr. Joyce has a comprehensive understanding of the semiconductor industry and broad management experience in our business, and possesses particular knowledge and experience in strategic planning and customer relationships, finance, administration and operations relevant to our business, which are among the key attributes which qualify Mr. Joyce for election to Amkor’s Board.

 

Roger A. Carolin.  Roger A. Carolin, 54, was elected to our Board of Directors in February 2006. Mr. Carolin is currently a Venture Partner at SCP Partners, a multi-stage venture capital firm that invests in technology-oriented companies, a position he has held since 2004. Mr. Carolin works to identify attractive investment opportunities and assists portfolio companies in the areas of strategy development, operating management and intellectual property. Mr. Carolin co-founded CFM Technologies, Inc., a global manufacturer of semiconductor process equipment, and served as its Chief Executive Officer for 10 years until the company was acquired. Mr. Carolin formerly worked for Honeywell, Inc. and General Electric Co., where he developed test equipment and advanced computer systems for on-board missile applications. Mr. Carolin holds a B.S. in Electrical Engineering from Duke University and an M.B.A. from the Harvard Business School.

 

As a result of these and other professional experiences and his prior service on our Board, Mr. Carolin has a significant understanding of the semiconductor industry and our business and possesses particular knowledge and experience in the technology, new business opportunities, the semiconductor supply chain, operations, management and finance areas relevant to our business, which are among the key attributes which qualify Mr. Carolin for election to Amkor’s Board.

 

Winston J. Churchill.  Winston J. Churchill, 69, has been a director of Amkor since July 1998. Mr. Churchill is the managing general partner of SCP Partners, a multi-stage venture capital firm that invests in technology-oriented companies. Mr. Churchill is also Chairman of CIP Capital Management, Inc., an SBA-licensed private equity fund. Previously, Mr. Churchill was a managing partner of Bradford Associates, which managed private equity funds on behalf of Bessemer Securities Corporation and Bessemer Trust Company. From 1967 to 1983, Mr. Churchill practiced law at the Philadelphia firm of Saul Ewing, LLP, where he served as Chairman of the Banking and Financial Institutions Department, Chairman of the Finance Committee and was a member of the Executive Committee. Mr. Churchill is a director of Griffin Land and Nurseries, Inc., Innovative Solutions and Support, Inc. and of various SCP portfolio companies. In addition, he serves as a director on the boards of a number of charities and as a trustee of educational institutions including Immaculata University, the Gesu School and the Young Scholars Charter School, and is a Trustee Fellow of Fordham University. From 1989 to 1993, Mr. Churchill served as Chairman of the Finance Committee of the Pennsylvania Public School Employees’ Retirement System.

 

As a result of these and other professional experiences and his prior service on our Board, Mr. Churchill has a significant understanding of our business, and possesses particular knowledge and experience in the technology, corporate governance, finance and legal areas relevant to our business, which are among the key attributes which qualify Mr. Churchill for election to Amkor’s Board.

John T. Kim.  John T. Kim, 40, has been a director of Amkor since August 2005. Mr. Kim served in various capacities at Amkor between 1992 and 2005, as an Amkor employee and as an employee of our predecessor, Amkor Electronics, Inc., including as Director of Investor Relations, Director of Corporate Development and as Director of Procurement. Mr. Kim resigned as an Amkor employee when he was elected to our Board of Directors. Mr. John T. Kim is the son of James J. Kim, our Executive Chairman of the Board of Directors and a nephew of Mr. JooHo Kim.

 

As a result of his 18 years of service in various capacities at Amkor, including service on our Board, Mr. Kim has a significant understanding of the semiconductor industry and our business, and possesses particular knowledge and experience in our business and operations, and as an investor, which are among the key attributes which qualify Mr. Kim for election to Amkor’s Board.

 

Stephen G. Newberry.  Stephen G. Newberry, 56, was elected to our Board of Directors in March 2009. Mr. Newberry is the President and Chief Executive Officer and a director of Lam Research, a supplier of wafer fabrication and equipment services to the semiconductor industry, positions he has held since June 2005. Mr. Newberry joined Lam Research in August 1997 as Executive Vice President and Chief Operating Officer and was promoted to the position of President and Chief Operating Officer in July 1998. Prior to joining Lam Research, Mr. Newberry was Group Vice President of global operations and planning at Applied Materials, Inc. During his 17 years at Applied Materials, he held various positions of increasing responsibility including assignments in manufacturing, product development, sales and marketing, and customer service. Mr. Newberry served five years in naval aviation prior to joining Applied Materials. Mr. Newberry also serves as a director of SEMI, a global semiconductor industry trade association. Mr. Newberry is a graduate of the U.S. Naval Academy and the Harvard Business School.

 

As a result of these and other professional experiences and his prior service on our Board, Mr. Newberry has a significant understanding of the semiconductor industry and the semiconductor supply chain and possesses particular knowledge and experience in the management, operating and technology areas relevant to our business. Mr. Newberry’s position as the President and CEO of a public company in our industry also provides the Board with valuable experience regarding compensation, corporate governance, finance and other relevant matters. The foregoing are among the key attributes which qualify Mr. Newberry for election to Amkor’s Board.

 

John F. Osborne.  John F. Osborne, 65, has been a director of Amkor since August 2007. Since January 1998, Mr. Osborne has been President of Competitive Customer Support, an advisor to companies that manufacture integrated circuits or supply materials, equipment and services to the microelectronics industry. From 1988 to 1996, Mr. Osborne was a member of the executive staff of Lam Research, a supplier of wafer fabrication and equipment services to the semiconductor industry. At Lam, Mr. Osborne held the positions of Vice President of Strategic Development, Vice President of Quality and Vice President of Customer Support. Prior to joining Lam, Mr. Osborne held management positions at both Motorola, Inc. and Royal Philips Electronics from 1967 to 1985. Mr. Osborne serves on the Strategic Advisory Board of DuPont Electronic Technologies. Mr. Osborne holds a degree in Metallurgical Engineering from the Colorado School of Mines.

 

As a result of these and other professional experiences and his prior service on our Board, Mr. Osborne has a significant understanding of the semiconductor industry and possesses particular knowledge and experience in the finance, management, markets, strategic opportunities, operating and technology areas relevant to our business, which are among the key attributes which qualify Mr. Osborne for election to Amkor’s Board.

 

James W. Zug.  James W. Zug, 69, has been a director of Amkor since January 2003. Mr. Zug retired from PricewaterhouseCoopers in 2000 following a 36-year career at PricewaterhouseCoopers and Coopers & Lybrand, both public accounting firms. From 1998 until his retirement, Mr. Zug was Global Leader — Global Deployment for PricewaterhouseCoopers. From 1993 to 1998, Mr. Zug was Managing Director International for Coopers & Lybrand. He also served as the audit partner for a number of public companies over his career. PricewaterhouseCoopers is Amkor’s independent registered public accounting firm, Mr. Zug was not involved with servicing Amkor during his tenure at PricewaterhouseCoopers. Mr. Zug serves on the boards of directors of Allianz Funds, the Brandywine Group of mutual funds and Teleflex, Inc. Mr. Zug served on the boards of directors of SPS Technologies, Inc. and Stackpole Ltd. prior to the sale of both of these companies in 2003.

As a result of these and other professional experiences and his extensive experience as a certified public accountant and prior service on our Board, Mr. Zug has a significant understanding of our business and possesses particular knowledge and experience in the accounting, finance, international operations, compliance and governance areas relevant to our company, which are among the key attributes which qualify Mr. Zug for election to Amkor’s Board.

 

CORPORATE GOVERNANCE

 

Board and Committee Meetings

 

The Board of Directors held ten meetings and acted by unanimous written consent on two occasions during 2009. Each director attended at least 75 percent of all Board of Directors and applicable committee meetings.

 

The Board has established an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. All Committee members are appointed by the Board of Directors.

 

Audit Committee

 

We have a separately-designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The Audit Committee is comprised of Messrs. Zug, Carolin and Osborne. Our Board of Directors has determined that each of Messrs. Zug, Carolin and Osborne meets the independence and financial sophistication requirements set forth in the Nasdaq listing standards and SEC regulations. In addition, the Board has determined that each of Messrs. Zug, Carolin and Osborne qualifies as an “audit committee financial expert” as defined in SEC regulations.

 

Among its responsibilities, the Audit Committee:

 

 

The Board of Directors has adopted a written charter for the Audit Committee, a copy of which is available on our website at http://www.amkor.com. The Audit Committee met twelve times, and acted by unanimous written consent on one occasion in 2009. In executing its responsibilities, Audit Committee members regularly communicate with our management and independent registered public accounting firm.

 

Compensation Committee

 

The Compensation Committee is comprised of Messrs. Carolin, Newberry and Osborne. The Compensation Committee’s duties include:

 

 

The Board has adopted a written charter for the Compensation Committee, a copy of which is available on our website at http://www.amkor.com. During 2009, the Compensation Committee met seven times, and acted by unanimous written consent on one occasion.

 

Nominating and Governance Committee

 

The Nominating and Governance Committee is comprised of Messrs. Churchill, Newberry and Zug. The Nominating and Governance Committee, among its other duties:

 

 

The Board has adopted a written charter for the Nominating and Governance Committee, which is available on our website at http://www.amkor.com. The Nominating and Governance Committee met four times during 2009.

The Nominating and Governance Committee’s goal is to ensure that the Board of Directors is comprised of individuals of high integrity, personal character and ethical standards, and that the Board reflects a diverse range of professional backgrounds and experience relevant to our business. In the biographies of each of the nominees to the Board described above, we highlighted the experiences and qualifications that were among the most important to the Nominating and Governance Committee and Board in concluding that each such nominee should serve on Amkor’s Board. The Nominating and Governance Committee determines the required selection criteria and qualifications of director nominees based upon the needs of our company at the time nominees are considered. The Nominating and Governance Committee considers factors including character, judgment, independence, age, expertise, length of service and other commitments, and diversity in experience and background that will strengthen the Board’s collective qualifications, skills and experience and contribute to the Board’s performance of its responsibilities in the oversight of our business.

 

The Nominating and Governance Committee will consider the above factors for nominees identified by the Nominating and Governance Committee. The Nominating and Governance Committee uses the same process for evaluating all nominees, regardless of the original source of nomination. The Nominating and Governance Committee does not currently use the services of any third party search firm to assist in the identification or evaluation of Board member candidates. The Nominating and Governance Committee may, however, use such services in the future as it deems necessary or appropriate.

 

It is the policy of the Nominating and Governance Committee to consider both recommendations and nominations from stockholders for candidates to the Board of Directors. Stockholders wishing to recommend a candidate for consideration by the Nominating and Governance Committee for election to the Board of Directors can do so by writing to our Corporate Secretary at our principal executive offices. Stockholders shall give such candidate’s name, home and business contact information, detailed biographical data and qualifications, information regarding any relationships between the candidate and Amkor within the last three years, written indication of the candidate’s willingness to serve if elected, and evidence of the nominating person’s ownership of Amkor stock. Nominations for consideration at the 2011 Annual Meeting of Stockholders must be received by our Corporate Secretary no later than February 2, 2011.

 

Director Independence

 

The Board of Directors has determined that each of Messrs. Carolin, Churchill, Newberry, Osborne and Zug is independent under the Nasdaq listing standards and SEC rules. In reaching a determination that Mr. Churchill is independent under the Nasdaq listing standards and SEC rules, the Board of Directors considered certain relationships between entities affiliated with Mr. Churchill and entities affiliated with James J. Kim. These relationships include transactions, investments or partnerships in which Mr. Churchill and Mr. Kim, or entities affiliated with them, have a direct or indirect financial interest. None of these relationships involved Amkor. The Board determined that Mr. Churchill satisfies the independence requirements set forth by both Nasdaq and the SEC.

 

Communications with the Board of Directors

 

Although we do not currently have a formal policy regarding communications with the Board of Directors, stockholders may communicate with the Board of Directors by writing to us at Amkor Technology, Inc., Attn: Corporate Secretary, 1900 South Price Road, Chandler, Arizona 85286. Stockholders who would like their submission directed to a particular Board member may so specify, and the communication will be forwarded, as appropriate.

 

Corporate Governance Guidelines and Codes of Ethics

 

Our Board has adopted Corporate Governance Guidelines, a Code of Business Conduct and Ethical Guidelines which applies to all of our officers and employees worldwide, and a separate Director Code of Ethics which applies to our directors. These documents are available on our website under the heading “Corporate Governance” at http://www.amkor.com.

Board Leadership Structure

 

As part of its review of Amkor’s overall corporate governance practices, the Board of Directors periodically reviews its leadership structure. Historically, James J. Kim, Amkor’s founder, served as both the Chief Executive Officer and Chairman of the Board of Directors. Pursuant to a succession plan for senior management, effective October 1, 2009, Mr. Kim became the Executive Chairman of the Board of Directors and Mr. Joyce assumed the position of President and Chief Executive Officer and joined the Board of Directors. As a result of this new structure, Amkor continues to benefit from Mr. Kim’s extensive experience in the semiconductor industry and management expertise based on his longstanding leadership role, and also benefits from the expertise and broad management experience Mr. Joyce brings to Amkor’s Board. We believe this structure is effective for Amkor and an appropriate allocation of leadership responsibilities.

 

Executive Sessions

 

Consistent with our Corporate Governance Guidelines, the non-employee directors of the Board regularly hold executive sessions. The Audit Committee, in accordance with its charter, meets separately with our Chief Financial Officer throughout the year to review our financial affairs, and meets separately in sessions with the independent auditors, internal auditors and members of management at such times the Committee deems appropriate to fulfill its responsibilities under the charter. The Nominating and Governance and Compensation Committees also meet in executive session as deemed appropriate.

 

Risk Oversight

 

The Board is responsible for overseeing Amkor’s risk management process and views risk oversight as one of the important functions it performs as a Board of Directors. While the Board is ultimately responsible for risk oversight, Board committees assist the Board in fulfilling this oversight responsibility through periodic meetings and discussions with management and company advisors, and reports to the full Board with respect to certain categories of risk.

 

In 2007, with the assistance of the Nominating and Governance Committee, the Board identified certain categories of risk to the company, and assigned oversight responsibility with respect to those risks to the Board as a whole and delegated to its committees specific categories of risk based on the particular functions and responsibilities of such committees.

 

As part of its overall responsibility for risk oversight, the Board directly oversees, among other areas, business strategy, customer and industry trends, financial performance, liquidity and capital expenditures, operations, insurance coverage, intellectual property and R&D, labor and human resources, and litigation. The Audit Committee is responsible for, among other areas, financial risk oversight including issues related to financial reporting and accounting, internal controls, disaster recovery, fraud and taxes. The Compensation Committee assesses and monitors risks related to our compensation practices and other related areas. The Nominating and Governance Committee has responsibility for oversight of risks related to, among other areas, the company’s corporate governance policies and practices that help position the Board to effectively carry out its risk oversight responsibility.

 

Amkor’s management is responsible for day-to-day risk management. Management’s responsibilities include identifying, evaluating and addressing potential risks that may exist at the enterprise, strategic, financial and operating levels and the development of processes for mitigating these risks. At periodic meetings of the Board and its committees and in other meetings and discussions, management reports to and seeks guidance from the Board and its committees, as applicable, with respect to matters that could affect the company’s risk profile, strategic plans, risk mitigation strategies and other aspects of the company’s business. The Board oversees and monitors management in the execution of its risk oversight role.

Annual Meeting Attendance

 

All directors are encouraged, but not required, to attend our Annual Meeting of Stockholders. All of our incumbent directors attended the 2009 Annual Meeting of Stockholders, including Mr. Joyce who attended in his capacity as President and Chief Operating Officer.

 

Certain Relationships and Related Transactions

 

Related Party Transactions

 

As of February 26, 2010, Mr. James J. Kim, the Executive Chairman of our Board of Directors, and members of his immediate family and related trusts and an affiliate beneficially owned approximately 56% of our outstanding common stock.

 

In November 2005, we sold $100 million of our 6.25% Convertible Subordinated Notes due 2013 in a private placement to James J. Kim, our Executive Chairman of the Board of Directors and certain Kim family members (including to John T. Kim, one of our directors). The full amount of the notes remains outstanding and the aggregate amount of interest paid to Mr. Kim and his family members in respect of these notes was $6.3 million in 2009. These notes are convertible into 13,351,135 shares of our common stock.

 

On April 1, 2009, we sold $250 million of our 6% Convertible Senior Subordinated Notes due 2014 (the “2014 Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to Mr. James J. Kim and one of his affiliates in a private placement. Mr. James J. Kim and one of his affiliates purchased $150 million of the 2014 Notes which are convertible at any time prior to their maturity date into 49,594,980 shares of our common stock. In connection with their purchase of the 2014 Notes, Mr. James J. Kim and such affiliate entered into a voting agreement with us that imposes restrictions on the voting of the shares of our common stock issued upon conversion of the 2014 Notes held by Mr. James J. Kim or such affiliate. Mr. James J. Kim and such affiliate also entered into a letter agreement with us, dated March 26, 2009 (the “Letter Agreement”) pursuant to which we agreed to register the resale of the 2014 Notes (and any shares of common stock issued on the conversion thereof) that he and such affiliate purchased on a shelf registration statement under the Securities Act at any time after April 1, 2010. Pursuant to the Letter Agreement, we also agreed to bear the expenses related to such registration, including the reasonable legal fees and expenses of Mr. James J. Kim. The full amount of the 2014 Notes remains outstanding and the aggregate amount of interest paid to Mr. Kim and such affiliate in respect of these notes was $4.9 million in 2009.

 

We purchase leadframe inventory from Acqutek Semiconductor & Technology Co., Ltd. James J. Kim, our Executive Chairman of the Board of Directors, owns approximately 16.2% of Acqutek Semiconductor & Technology Co., Ltd. The purchases are arms length and on terms consistent with our non-related party vendors. During 2009, purchases from Acqutek Semiconductor & Technology Co., Ltd. were $11.4 million. Amounts due to Acqutek Semiconductor & Technology Co., Ltd. at December 31, 2009 were $1.6 million.

 

Review and Approval of Related Party Transactions

 

We review all relationships and transactions in which we and our directors, executive officers or their immediate family members are participants, to determine whether such persons have a direct or indirect material interest. Management is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related party transactions and for then determining, based on the facts and circumstances, whether we or a related party have a direct or indirect material interest in the transaction. As required under SEC rules, transactions that are determined to be directly or indirectly material to us or a related party are disclosed in our proxy statement. In addition, pursuant to the Audit Committee Charter, the Audit Committee reviews and approves any related party transaction in accordance with Nasdaq rules. In the course of its review and approval of a disclosable related party transaction, the Audit Committee considers:

 

 

 

Any member of the Audit Committee who is a related party with respect to a transaction under review may not participate in the deliberations or vote respecting approval of the transaction, provided, however, that such director may be counted in determining the presence of a quorum at a meeting of the committee that considers the transaction.

 

The sale of the 2014 Notes to James J. Kim and one of his affiliates was reviewed and approved by a special committee of the Board and by the independent and disinterested directors of the Board.

 

Compensation Committee Interlocks and Insider Participation

 

During 2009, the Compensation Committee of our Board of Directors consisted of Messrs. Osborne, Carolin and Newberry. No member of the Compensation Committee was an officer or employee of Amkor or any of Amkor’s subsidiaries during 2009, or had any relationship requiring disclosure under SEC regulations. None of Amkor’s Compensation Committee members or executive officers has served on the board of directors or on the compensation committee of any other entity of whose executive officers served on our Board of Directors or on our Compensation Committee.

 

DIRECTOR COMPENSATION

 

Annual Retainer and Meeting Fees

 

We do not compensate directors who are also employees or officers of our company for their services as directors. During 2009, non-employee directors received an annual retainer, which is paid quarterly, and Board and Committee meeting fees. The cash compensation structure for our non-employee Board members for 2009 is set forth in the following table.

 

 

 

Notes

 

 

In addition to the retainer and meeting fees, we also reimburse non-employee directors for travel and other reasonable out-of-pocket expenses incurred by them in attending Board and Committee meetings.

 

Equity Compensation

 

Upon re-election to the Board of Directors at our 2009 Annual Meeting, each non-employee director received an option to purchase 20,000 shares of our common stock under the terms of our 2007 Equity Incentive Plan, which was initially approved by our Stockholders in August 2007 and became effective January 1, 2008 (the “2007 Equity Plan”). The director option grants are automatic and non-discretionary. The 2007 Equity Plan provides for an initial grant of an option to purchase 20,000 shares of our common stock to each new non-employee director when such individual first becomes a director. In addition, each non-employee director is automatically granted an additional option to purchase 20,000 shares of our common stock when the director is re-elected to the Board of Directors by

our stockholders, provided that the director has served on our Board for at least six consecutive months prior to re-election.

 

Director option grants have a term of ten years and vest in three equal installments on the anniversary dates of the date of grant. Subject to certain customary exceptions, unvested and unexercised vested options are forfeited if a director ceases to be a member of the Board of Directors. In the event of a merger or sale of all or substantially all of our assets, the acquiring entity or corporation may either assume all outstanding options or may substitute equivalent options. Following an assumption or substitution, 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 or substitute an equivalent option, each option issued will immediately vest and become exercisable in full.

 

Summary Director Compensation Table for 2009

 

The following table shows compensation information for our non-employee directors for the year ended December 31, 2009.

 

 

 

Notes

 

 

EXECUTIVE OFFICERS

 

The name, age, position and a brief account of the business experience of our Chief Executive Officer and each of our other executive officers as of March 1, 2010 is set forth below.

 

 

Kenneth T. Joyce.  For a brief biography on Mr. Joyce, please see “Proposal One — Election of Directors”

 

James M. Fusaro.  James M. Fusaro, 47, was appointed Executive Vice President of Assembly and Test Product Management in July 2009. Prior to assuming his current position, Mr. Fusaro served as Corporate Vice President of Wire Bond Products, as Senior Vice President and General Manager of Amkor’s Japan operations, Senior Vice President of Laminate Products, and Vice President of Chip Scale Products. Prior to joining Amkor in 1997, Mr. Fusaro was a Senior Principal Engineer at Motorola Semiconductor Products Sector. Mr. Fusaro also spent nine years working in the aerospace sector, working at United Technologies, Pratt & Whitney and Allied Signal-Garrent Auxiliary Power Division. Mr. Fusaro earned a B.S. in Mechanical Engineering at Arizona State University and an M.S. in Mechanical Engineering from Rensselaer Polytechnic Institute.

 

JooHo Kim.  JooHo Kim, 57, has served as President of our subsidiary Amkor Technology Korea, and as our Executive Vice President of Worldwide Manufacturing Operations since October 2009. Prior to assuming his current role, Mr. Kim served as Corporate Vice President, Worldwide Manufacturing Services and Executive Vice President of Amkor Technology Korea, as Corporate Vice President of our Information Technology organization, as Senior Vice President of Enterprise Infrastructure, and as Vice President of Business Technology. Prior to joining Amkor in 2001, Mr. Kim was President and Chief Executive Officer of Anam Telecom Inc. in Seoul, Korea. Mr. Kim earned a Bachelor in Law from KyungHee University, an M.B.A from the Pennsylvania State University and a Ph.D. in Business Administration from the University of Colorado. Mr. JooHo Kim is the brother of James J. Kim, our Executive Chairman of the Board of Directors, and is the uncle of Mr. John T. Kim, one of our directors.

 

Michael J. Lamble.  Michael J. Lamble, 54, has served as our Executive Vice President of Worldwide Sales since July 2009, and as Corporate Vice President of Worldwide Sales since August 2002. Beginning in September 1997, Mr. Lamble was our Senior Vice President of Sales. Mr. Lamble joined Amkor in December 1992. Prior to joining Amkor, Mr. Lamble was the Vice President and General Manager for the Materials Division at Heraeus Incorporated responsible for U.S. manufacturing and sales. Mr. Lamble earned a B.S. in Business from Santa Clara University.

 

Eric R. Larson.  Eric R. Larson, 54, was appointed Executive Vice President of New Business Strategy and Corporate Development in July 2009, and previously served as Executive Vice President of the Product Management Group since April 2008. From 2003 to 2008, Mr. Larson served as a Manager of ELars LLC, providing consulting services to the semiconductor and electronics industry. During this period, Mr. Larson also served in executive management positions for startup ventures, including as Executive Vice President of Landmark Event Staffing, Inc., an event management firm, and as President and CEO of PakSense, Inc., which develops intelligent sensing products. From 1996 to 2003, Mr. Larson served in senior management positions at Amkor, including President of our former Wafer Fabrication business and Executive Vice President of Corporate Development. Mr. Larson holds a B.A. in Political Science from Colorado State University, and an M.B.A. from the University of Denver.

Joanne Solomon.  Joanne Solomon, 44, has served as Executive Vice President and Chief Financial Officer since January 2009 and as Corporate Vice President and Chief Financial Officer since November 2007. Prior to assuming her current position, Ms. Solomon served as our Senior Vice President of Finance and Corporate Controller since 2006. Ms. Solomon joined Amkor in 2000 and has held a number of finance and accounting positions, including Senior Vice President Finance and Treasurer, Vice President Finance and Business Assurance, Vice President Financial Planning and Analysis, and Senior Director Reporting and Analysis. Ms. Solomon also worked at PricewaterhouseCoopers for 10 years, and is a certified public accountant. Ms. Solomon holds a Bachelor’s degree in Business and Administration from Drexel University and an M.B.A. in International Management from the Thunderbird School of Global Management.

 

Gil C. Tily.  Gil C. Tily, 56, was appointed Executive Vice President and Chief Administrative Officer in May 2008 and has served as our General Counsel and Corporate Secretary since he joined Amkor in 2007. Prior to joining Amkor, Mr. Tily was a partner in the law firm of Dechert LLP where he worked for 28 years. Mr. Tily holds an A.B. in Politics from Princeton University and a J.D. from the University of Pittsburgh School of Law.

 

EXECUTIVE COMPENSATION

 

Compensation Discussion and Analysis

 

The primary objectives of our compensation program are to attract personnel for positions of substantial responsibility, to provide incentives for such persons to perform to the best of their abilities, and to promote the success of our business. The subcontracted semiconductor packaging and test market is very competitive. To effectively compete and succeed in this market, we need to ensure that we have key senior management and technical personnel with the talent, leadership and commitment needed to operate our business, differentiate our products and services, respond effectively to new challenges, and execute difficult decisions.

 

These objectives have guided our Chief Executive Officer and his predecessor as each sought to design pay packages with an appropriate mix of fixed and variable compensation and thereby enable Amkor to recruit, motivate and retain key executives while maintaining a competitive cost structure. The Compensation Committee evaluates the compensation packages, as presented by the Chief Executive Officer, based on the foregoing objectives.

 

As part of Amkor’s overall cost reduction efforts in response to the global economic downturn during the fourth quarter of 2008 and in 2009, on December 11, 2008, the Compensation Committee approved the recommendation by senior executives that their base salaries be reduced beginning in January 2009. The salaries of our U.S. payroll named executive officers were reduced by 10%, except for James J. Kim, the company’s then Chairman and Chief Executive Officer, who recommended that his salary be reduced by 50%. These salary reductions were part of a 10% reduction in the base salaries for all of our U.S. payroll employees beginning in January 2009. Mr. KyuHyun Kim, as a non-U.S. payroll employee, was not affected by this action. Mr. KyuHyun Kim’s Korean-based compensation for 2009 was reduced by approximately 20% in connection with cost reduction measures in the company’s manufacturing operations.

 

The Compensation Committee also approved the recommendation by senior executives that no cash bonus awards be made for the 2009 fiscal year under the company’s 2007 Executive Incentive Bonus Plan (the “Executive Bonus Plan”). Bonus awards for the 2008 fiscal year were paid in the first quarter of 2009 to the extent earned under the Executive Bonus Plan, except for the bonus for Mr. James J. Kim. To set a further example with respect to the company’s cost reduction initiatives for 2009, Mr. Kim also recommended to the Compensation Committee that he receive no bonus for 2008 and the Committee approved that recommendation.

 

As business conditions improved in 2009, the Compensation Committee approved the restoration of the 10% cut in base salaries for our U.S. payroll employees, including our U.S. payroll named executive officers, beginning October 1, 2009.

 

Given the competitive nature of our business, it has historically been the view that management and the Compensation Committee must have the flexibility to determine the appropriate executive compensation structure that, allows for a proper mix of cash, equity and other incentives, as market conditions and the industry dictate over

time. The total cash compensation component (base salary plus bonus) has historically represented a greater portion than the equity component in our total executive compensation structure.

 

With the appointment of our new Chief Executive Officer on October 1, 2009, the Compensation Committee and our Chief Executive Officer continue to evaluate our overall executive compensation arrangements. In the fourth quarter of 2009, the Compensation Committee retained a compensation consultant to assist the Committee in reviewing the company’s compensation structure for executives, including the standard elements of base salary, performance based cash bonuses, equity and other long term incentive programs, and in the selection of peer group companies for benchmarking compensation in 2010 and beyond. In February 2010, our Chief Executive Officer recommended a compensation program for the company’s senior executives. The Chief Executive Officer consulted with other senior executive officers in finance and legal and our Executive Chairman regarding his recommendation. The Compensation Committee, with the assistance of its compensation consultant, reviewed the recommendation from the Chief Executive Officer, and approved the executive compensation package for 2010 consisting of a combination of base salary, a performance based annual cash bonus and a grant of restricted stock. The compensation package for 2010 is weighted towards cash based compensation as it has been in prior years.

 

The Compensation Committee reviews and approves the total compensation for our executive officers and recommends to the independent members of our Board of Directors the compensation policy and forms of compensation to be received by our executive officers. In setting our executive officers’ overall compensation, the Compensation Committee generally considers a variety of factors related to Amkor’s performance, including in the case of our 2010 annual bonus program for executives: (i) net sales growth, (ii) gross margin percentage, (iii) return on invested capital, and (iv) customer satisfaction, each of which will be calculated based on a pre-determined method as set by the Compensation Committee. Other considerations include the achievement of Amkor’s business objectives, our fiduciary and corporate responsibilities, competitive practices and trends, and regulatory requirements.

 

All members of the Compensation Committee are independent directors in accordance with Nasdaq, SEC and Internal Revenue Code rules. The Compensation Committee operates under a written charter that has been approved by the Board of Directors.

 

Our Compensation Program Rewards Individual and Company Performance

 

Our compensation program is designed to reward high levels of performance at a company and individual level. Our key executive incentive compensation components currently consist of cash bonuses and equity grants, both of which are designed to reward our company-wide performance and superior individual performance. In addition, given the volatility of our industry and the impact that volatility has on our variable pay, we also strive to provide competitive base salaries in order to ensure a baseline level of stable income, and health and welfare benefits in order to promote the well-being of our executives.

 

Our Chief Executive Officer reviews the performance of each of his direct reports on an ongoing basis. Based on this ongoing assessment of performance, our Chief Executive Officer makes recommendations to the Compensation Committee regarding the compensation of executive officers. With the exception of the Korean-based severance benefit provided to Mr. KyuHyun Kim and Mr. JoHoo Kim, as described in the “Severance Benefits” section below, we generally do not have individual employment, severance or change-in-control agreements or arrangements with any of our executive officers.

 

Our compensation program is not designed to solely reward continued service. We do not maintain a pension program for our U.S.-based executives, other than the 401(k) plan that is generally available to U.S. employees, and all salary increases and non-benefit related compensation other than base salary are structured in a manner that rewards performance, not length of service. We do not pay our executive officers retention or stay bonuses.

 

Although our current long-term incentive program consists of stock option and restricted stock grants that vest over time, the intrinsic nature of a stock option is that it will only provide value to the executives to the extent our stock price increases over the life of the stock option. Restricted stock provides a base level of long-term incentive compensation vesting over time that promotes the retention of key employees and ties executive compensation to the creation of long-term shareholder value through appreciation in the company’s stock price.

Elements of our Compensation Program

 

Amkor provides two main types of compensation — fixed compensation and variable compensation. Fixed elements of compensation are not correlated directly to any measure of Amkor’s performance and include items such as (i) base salary, (ii) 401(k) matching contributions, (iii) health and welfare benefits, and (iv) limited perquisites and supplemental benefits. Variable elements of compensation are based on performance and include such items as annual performance bonuses, and equity awards in the form of options to purchase shares of our common stock, restricted stock, or similar equity-based incentives. We accrue an amount related to a severance benefit plan on behalf of JooHo Kim, President of Amkor Technology Korea and Executive Vice President of Worldwide Manufacturing Operations, and who is one of our named executive officers. This severance benefit is described further in the “Severance Benefits” section below. With the exception of the foregoing, we do not have any employment, severance or change-in-control arrangements in place with any of our named executive officers.

 

Base Salary and Annual Incentive Opportunities

 

We pay base salaries to our U.S.-based executives on a bi-weekly basis. Mr. KyuHyun Kim was paid monthly, as is Mr. JooHo Kim. The primary purpose of base salaries at Amkor is to provide a stable source of income in order to attract and retain key executives. We also use base salary increases to reward high performing executives and to recognize increases in the scope of an individual’s responsibilities, as applicable. We seek to set base salaries at a level that is sufficient to be attractive to current and prospective executives. The primary factors we considered when setting base salaries in 2009 include the experience and expertise of the individual, the value of the position to our organization and ongoing strategy, the competitive market environment, internal equity considerations, and the input of our then Chief Executive Officer, James J. Kim. Based on these factors, the Compensation Committee reviewed and approved the 2009 base salary levels for our executive officers. The Chief Executive Officer’s compensation for 2009 was determined by the Compensation Committee based on consideration of his recommendation for a 50% reduction in base salary in light of the global economic downturn.

 

In connection with the transition of James J. Kim to Executive Chairman and Kenneth T. Joyce to Chief Executive Officer on October 1, 2009, the Compensation Committee set Mr. Kim’s annual base salary as Executive Chairman at $600,000, reduced from $1,000,000 in 2008, and set Mr. Joyce’s annual base salary as Chief Executive Officer at $675,000, increased from $500,000 in 2008 in his previous role as President. In establishing these base salaries, the Committee considered the roles and responsibilities of each individual in his new position, level of experience, the previous level of base salary, salaries paid at other companies and other factors.

 

In connection with JooHo Kim’s promotion to President of Amkor Technology Korea and Executive Vice President of Amkor Worldwide Manufacturing Operations, the Compensation Committee increased Mr. Kim’s annual base salary to $450,000, from $350,000 in 2008, effective October 1, 2009. In connection with James Fusaro’s promotion to Executive Vice President — Assembly and Test Product Management, the Compensation Committee increased Mr. Fusaro’s base annual salary to $450,000, from $400,000 in 2008, effective October 1, 2009. In establishing these base salaries, the Committee considered the same factors described in the preceding paragraph.

 

In 2009, the Compensation Committee approved the recommendation by senior management that no cash bonus awards be made for 2009 under the company’s Executive Bonus Plan.

 

While we did not pay any bonuses for 2009, we have generally paid cash bonuses to our executives based on the executive’s performance and our financial results. We generally pay cash bonuses, if any, in the year following the year during which performance was measured. The primary purpose of the cash bonus plan is to focus the attention of key executives on our operational and financial performance. In addition, unlike stock options or restricted stock, our cash bonus program allows us to set individual and company-wide goals that are viewed as critical to our overall success on an ongoing basis. This provides us with the flexibility to adapt our focus and goals as business priorities and executives’ roles change over time. Bonuses are paid to executives for a given year only if the performance goals approved by the independent members of our Board of Directors are achieved.

Long-term Incentive Compensation

 

Historically, Amkor has generally made stock option grants to executives on an annual basis with time-based vesting requiring continued service through each vesting date, although options have not always been granted each year. The primary purpose of stock option grants at Amkor is to align all executives with each other and stockholders with a common goal of long-term stockholder value creation. Amkor believes that stock options and restricted stock grants motivate executives by allowing them to share in the value they create for stockholders. Amkor believes that stock options issued with exercise prices equal to fair market value on the date of grant that have a time-based vesting requirement can be an effective tool because the stock options only produce value to the extent that the employee continues to be employed by us and the stock price increases, which in turn creates value for all stockholders.

 

The number of stock options granted to our executive officers (other than the Chief Executive Officer), and the frequency of such option grants is recommended by the Chief Executive Officer and approved by the Compensation Committee. Although a number of factors are considered, the number of stock options granted to our executive officers is determined on a case-by-case, discretionary basis, rather than on a formula basis. Factors considered include the input of our Chief Executive Officer, individual performance potential, retention and competitive market-based compensation packages. No options were granted to our named executive officers in 2009.

 

In February 2010, the Compensation Committee, with the assistance of its compensation consultant, considered different types of long-term incentive vehicles and determined that it would be appropriate to grant restricted stock to the executive officers as an element of their total 2010 compensation package. It is the Compensation Committee’s view that restricted stock grants are an appropriate incentive compensation tool because they provide a base level of long-term incentive compensation vesting over time that promotes the retention of key employees and ties executive compensation to the creation of long-term shareholder value through appreciation in the company’s stock price.

 

Timing of Grants

 

The Compensation Committee has not granted, nor does it intend in the future to grant, stock options to executives in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, such as a significant positive or negative earnings announcement. In addition, discretionary stock option grants may not be made during certain “black out” periods established in connection with the public release of earnings information. Similarly, the Compensation Committee has not timed, nor does it intend in the future to time, the release of material nonpublic information based on stock option grant dates.

 

Other Compensation Elements

 

Health and Welfare Benefits.  Our executives are eligible to participate in benefit programs that are generally available to substantially all salaried, full-time employees, as determined by the country of their employment.

 

Retirement Benefits.  We do not have a pension plan in place for U.S. employees or executives. We do offer a tax-qualified 401(k) plan that, subject to Internal Revenue Service (“IRS”) limits, allows U.S. executives and employees to contribute a portion of their cash compensation on a pre-tax basis to an account that is eligible to receive matching contributions. Generally, after one year of employment, we match employee contributions at a rate of 75% of the amount of compensation deferred by the participant, up to a maximum matching contribution of $6,000 per year. The match vests ratably over three years. In 2009, the company’s matching contribution was reduced by 50% until reinstated, effective January 1, 2010.

 

Our Korean executives, participate in a severance program in Korea. This severance program provides executives with a one-time lump sum benefit at the time of separation, which benefit is calculated based on average monthly salary, years of service and seniority. Mr. KyuHyun Kim, our former President of Amkor Technology Korea and Head of Worldwide Manufacturing Operations participated in this program, as does his successor, Mr. JooHo Kim.

 

On October 8, 2009, KyuHyun Kim, resigned as President of Amkor Technology Korea and Head of Amkor’s Worldwide Manufacturing Operations. As part of the company’s management succession plan, JooHo Kim has

assumed the positions formerly held by KyuHyun Kim. JooHo Kim is the brother of James J. Kim, the company’s Executive Chairman.

 

In connection with KyuHyun Kim’s separation from the company described above, the company entered into a Separation Agreement and Release with Mr. Kim (the “Separation Agreement”). Under the Separation Agreement, the company made a one-time lump sum payment to Mr. Kim totaling Korean Won 3,167,222,223 (approximately $2.6 million). The total amount consists of Korean Won 2,687,222,223 (approximately $2.2 million) accrued and payable under the Amkor Technology Korea severance plan, and an additional severance amount of Korean Won 480,000,000 (approximately $400,000), equal to twelve (12) months’ base salary for Mr. Kim. Under the Separation Agreement, Mr. Kim has agreed that for the period following separation and ending on December 31, 2010 he will not engage in any business or provide employment or consulting services to another party which would compete with the company’s business, or solicit the company’s employees. The Separation Agreement also contains a release of claims in favor of the company.

 

Perquisites and Personal Benefits.  In addition to the health and welfare benefits generally available to all salaried, full-time employees, Amkor also pays for our executive officers to obtain an annual medical screening. Although they make up a small portion of total compensation for our named executive officers, the purpose of these compensation elements is to promote the continuous well-being of our executives, and to ensure that our most critical employees are able to devote their attention to our ongoing success. As is customary for senior executives in Korea, we provide JooHo Kim with a company-paid car.

 

Tax and Accounting Considerations

 

Section 162(m) of the Internal Revenue Code imposes limitations on the deductibility for federal income tax purposes of compensation over $1 million paid to each of our five most highly paid executive officers in a taxable year. Compensation above $1 million may only be deducted if it is “performance-based compensation” within the meaning of the Internal Revenue Code. Stock option awards generally are performance-based compensation meeting those requirements and, as such, are fully deductible provided that they have been granted by a committee whose members are non-employee directors. Restricted stock grants are not considered performance-based compensation for purposes of Section 162(m) unless vesting is based on the achievement of specific performance goals.

 

It is our intent, where practicable, to structure executive bonus payments under our Executive Bonus Plan to be deductible under Section 162(m). However, we retain the flexibility to pay compensation that is not entirely deductible where appropriate to promote company goals. We have also structured our compensation programs to comply with Section 409A of the Internal Revenue Code.

 

For accounting purposes equity awards are measured at their fair value at the date of grant with the resulting compensation expense recognized ratably over the service period which is generally the vesting period of the award.

 

Report of the Compensation Committee of the Board of Directors

 

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis for the year ended December 31, 2009. Based on the review and discussions, the Compensation Committee recommended to the Board of Directors, and the Board has approved, that the Compensation Discussion and Analysis be included in this Proxy Statement on Schedule 14A.

 

This report is submitted by the Compensation Committee.

 

John F. Osborne, Chair
Roger A. Carolin
Stephen G. Newberry

 

2009 Summary Compensation Table

 

The following table sets forth compensation earned for services rendered to us and our subsidiaries during each of the last three years by our Principal Executive Officer, Principal Financial Officer, our three other most highly compensated executive officers who were serving as executive officers at the end of 2009 and one former executive who retired in 2009 (collectively, our “named executive officers”):

 

 

 

Notes

 

 

2009 All Other Compensation Table

 

All Other Compensation amounts in the Summary Compensation Table consist of the following:

 

 

 

Notes

 

 

Grants of Plan-Based Awards in 2009

 

There were no equity awards granted to our named executive officers under any plan during 2009.

Outstanding Equity Awards at Year-End

 

The following table shows the number of shares covered by both exercisable and non-exercisable stock options held by our named executive officers as of December 31, 2009.

 

 

Notes

 

 

 

2009 Option Exercises and Stock Vested

 

The following table shows all stock options exercised and the value realized upon exercise by our named executive officers during 2009.

 

 

2009 Severance Benefits

 

None of our U.S. executives has a pension benefit or post-retirement health coverage arrangement provided by Amkor.

 

On October 8, 2009, Mr. KyuHyun Kim, our former President of Amkor Technology Korea and Head of Amkor’s Worldwide Manufacturing Operations, resigned.

 

In connection with his separation from the company, the company made a one-time lump sum payment to Mr. Kim totaling Korean Won 3,167,222,223 (approximately $2.6 million). The total amount consists of Korean Won 2,687,222,223 (approximately $2.2 million) accrued and payable under the Korean Severance Plan described below, and an additional severance amount of Korean Won 480,000,000 (approximately $400,000), equal to twelve (12) months’ base salary for Mr. Kim.

 

Mr. JooHo Kim participates in a severance benefit program under which Korean executives are entitled to a one-time lump sum benefit at the time of separation. This amount is calculated based on average monthly salary, years of service and seniority. Under this severance benefit, Mr. Kim will be entitled to certain benefits upon termination of his employment with Amkor, as follows:

 

 

Notes

 

 

Post Employment Compensation

 

As described in Compensation Discussion and Analysis above, our named executive officers are employees at will and do not have employment, change-in-control or severance agreements with us. The information and related tables presented below reflect the amount of compensation that would become payable to our named executive officers upon certain events if the named executive officer’s employment had terminated on December 31, 2009. The figures shown are based on Amkor’s closing stock price on that date and any actual amounts paid under these scenarios, should they occur in the future, may be different. For purposes of this section, we have excluded amounts that would become payable under programs that are generally available to Amkor’s salaried employees (e.g., our 401(k) plan and company-provided life insurance).

 

Cash Payments upon Termination of Service

 

Amkor does not have any executive contracts or agreements that provide for cash severance payments for terminations of any kind for U.S.-based executives. Furthermore, there is no policy that obligates us to pay severance under any circumstances. In the past, we have had an informal practice regarding severance payments where employees whose service is involuntarily terminated due to a reduction in force have generally received three weeks of base salary pay for their first year of service and one week of base salary for every year of service thereafter. This practice and formula has been used typically for non-executive officers. For executives, our past practice has generally ranged from providing six to twelve months of base salary and in one case, approximately 24 months. Mr. JooHo Kim participates in a severance benefit plan whereby he will be entitled to certain benefits upon termination of employment with Amkor. Mr. KyuHyun Kim received a cash payment upon his resignation in 2009, which is described under the Severance Benefits section above.

 

Treatment of Equity upon Termination

 

Our stock incentive plans and related award agreements provide that upon termination or death, unvested shares revert to the plans under which they were granted except upon a change in control or upon retirement for shares granted after April 4, 2001. The following table shows the additional vesting, if any, for unvested stock option awards and the exercise periods for vested stock option awards, if applicable, should the following events occur.

 

 

 

Notes

 

 

Based on the treatment outlined in the preceding table, the following table shows the value attributable to the acceleration of vesting for outstanding stock options, if applicable, under each event. The value shown is based on a termination date of December 31, 2009 using the closing price of our common stock on that date, which was $7.16.

 

 

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 February 26, 2010 by:

 

 

Beneficial Ownership(a)

 

 

 

Notes

 

 

 

 

James J. Kim, as general partner of the Partnership, has voting and investment power with respect to the Partnership. In addition, all of the directors and officers of the Foundation are members of the James J. Kim Family, including Susan Y. Kim, the Secretary. Accordingly, the Partnership and the Foundation might be expected to vote each of its shares of common stock in concert with other members of the James J. Kim Family.

 

James J. Kim, the Foundation and the six trusts noted above as having shares that are issuable upon the conversion of convertible notes that are convertible at any time prior to the maturity date of December 1, 2013 (the “investors”) are party to a voting agreement with Amkor dated as of November 18, 2005, where the investors agreed to vote all shares of common stock issued upon conversion of the convertible notes in accordance with the voting agreement so long as certain other conditions have been satisfied during the term of the agreement, which is the earlier of December 1, 2013 or other specified events. To date, the notes have not been converted.

 

 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

 

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 Forms 4 or 5 with the SEC. 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 our review of the copies of such forms received by us, 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 during 2009.

 

PROPOSAL TWO

 

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

 

The Audit Committee has approved the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2010.

 

PricewaterhouseCoopers has served as our independent registered public accounting firm since 2000. The Board of Directors expects that representatives of PricewaterhouseCoopers will attend the Annual Meeting to make a statement if they desire to do so, and will be available to respond to appropriate questions.

 

We are asking our stockholders to ratify the selection of PricewaterhouseCoopers as our independent registered public accounting firm. Although ratification is not required by our bylaws or otherwise, the Board is submitting the selection of PricewaterhouseCoopers to our stockholders for ratification as a matter of good corporate practice. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of our company and our stockholders.

 

The Board unanimously recommends a vote FOR the ratification of appointment of
PricewaterhouseCoopers as our independent registered public accounting firm for the year ending
December 31, 2010.

 

Fees Paid to PricewaterhouseCoopers

 

The following table shows the fees paid by us to PricewaterhouseCoopers LLP, our independent registered public accounting firm, or accrued by us for years 2009 and 2008.

 

 

 

Notes

 

 

Policy on Audit Committee’s Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

 

Our Audit Committee is required to pre-approve the audit and non-audit services performed by our independent registered public accounting firm, PricewaterhouseCoopers, in accordance with the Amkor Audit and Non-Audit Services Pre-Approval Policy. This policy provides for pre-approval of audit, audit-related, tax services and other services specifically described by the Audit Committee. The policy also provides for the general approval of additional individual engagements, which, if they exceed certain pre-established thresholds, must be separately approved by the Audit Committee.

 

This policy authorizes the Audit Committee to delegate to one or more of its members pre-approval authority with respect to permitted services, provided that any such pre-approval decisions must be reported to the Audit Committee. All of the services provided by PricewaterhouseCoopers during the year ended December 31, 2009 were approved by the Audit Committee. Additionally, the Audit Committee concluded that the provision of such services by PricewaterhouseCoopers was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.

 

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

 

The role of the Audit Committee is to oversee Amkor’s accounting and financial reporting processes on behalf of the Board of Directors. The Audit Committee is comprised solely of independent directors, as defined in the Nasdaq listing standards and SEC regulations, and it operates under a written charter adopted by the Board of Directors. The Audit Committee reviews and reassesses the adequacy of the Audit Committee Charter on an annual basis.

 

The Audit Committee’s overall responsibility is one of oversight. Management is responsible for Amkor’s consolidated financial statements as well as for maintaining effective internal controls over financial reporting, disclosure controls and procedures, compliance with laws and regulations and applicable ethical business standards. The independent registered public accounting firm is responsible for performing audits of Amkor’s consolidated financial statement and the effectiveness of Amkor’s internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and issuing reports thereon. The Audit Committee met with the independent registered public accounting firm, with and without management present, to discuss the results of their audits and the overall quality of the Company’s financial reporting.

 

In performing its oversight function, the Audit Committee:

 

(1) reviewed and discussed with management Amkor’s audited consolidated financial statements for the year ended December 31, 2009;

 

(2) discussed with Amkor’s independent registered public accounting firm the matters required to be discussed by PCAOB auditing standard AU380; and

 

(3) received the written disclosures and the letter from Amkor’s independent registered public accounting firm required by the applicable requirements of the PCAOB, and has discussed with the independent registered public accounting firm such firm’s independence. The Audit Committee considered whether the provision of non-audit services by Amkor’s independent registered public accounting firm is compatible with maintaining the independence of the independent registered public accounting firm. The Audit Committee concluded that the independent registered public accounting firm is independent from Amkor and their management.

 

Based on all of the foregoing, the Audit Committee recommended to the Board of Directors that Amkor’s audited consolidated financial statements for the year ended December 31, 2009 be included in Amkor’s Annual Report on Form 10-K and filed with the SEC. The Audit Committee also selected PricewaterhouseCoopers as Amkor’s independent registered public accounting firm for the year ending December 31, 2010.

The foregoing report has been furnished by the following directors and members of the Audit Committee:

 

James W. Zug, Chair
Roger A. Carolin
John F. Osborne

 

INCORPORATION BY REFERENCE

 

The information contained above under the captions “Report of the Compensation Committee of the Board of Directors” and “Report of the Audit Committee of the Board of Directors” shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, other than as provided therein, or to the liabilities of Section 18 of the Exchange Act of 1934, as amended, except to the extent that we specifically request such information be treated as soliciting material or specifically incorporate it by reference into a document filed under the Securities Act or Exchange Act of 1934, as amended. In addition, this Proxy Statement contains references to several website addresses. The information on these websites is not part of this Proxy Statement.

 

DELIVERY OF VOTING MATERIALS TO STOCKHOLDERS SHARING AN ADDRESS

 

To reduce the expense of delivering duplicate voting materials to our stockholders who may hold shares of Amkor common stock in more than one stock account, we are delivering only one set of the proxy solicitation materials to certain stockholders who share an address, unless otherwise requested. A separate proxy card is included in the voting materials for each of these stockholders. We will promptly deliver, upon written or oral request, a separate copy of the annual report or this proxy statement to a stockholder at a shared address to which a single copy of the documents was delivered. To obtain an additional copy, you may contact our Corporate Secretary by writing to Corporate Secretary, Amkor Technology, Inc., 1900 South Price Road, Chandler, Arizona 85286, or contact us by telephone at (480) 821-5000. Similarly, if you share an address with another stockholder and have received multiple copies of our proxy materials, you may contact us at the address or telephone number specified above to request that only a single copy of these materials be delivered to your address in the future. Stockholders sharing a single address may revoke their consent to receive a single copy of our proxy materials in the future at any time by contacting us at the address or telephone number listed above.

 

ANNUAL REPORT ON FORM 10-K

 

Our annual report on Form 10-K for the fiscal year ended December 31, 2009 is being mailed prior to or with this proxy statement to stockholders entitled to notice of the Annual Meeting.

 

WE WILL PROVIDE EACH BENEFICIAL OWNER OF OUR SECURITIES AS OF THE RECORD DATE WITH A COPY OF THE COMPANY’S 2009 ANNUAL REPORT ON FORM 10-K INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, WITHOUT CHARGE, BY FIRST CLASS MAIL, PROMPTLY UPON RECEIPT OF A WRITTEN OR ORAL REQUEST FROM SUCH PERSON. SUCH REQUEST SHOULD BE DIRECTED TO AMKOR’S CORPORATE SECRETARY, AMKOR TECHNOLOGY, INC., 1900 SOUTH PRICE ROAD, CHANDLER, ARIZONA 85286, TELEPHONE: (480) 821-5000.