TAX INDEMNIFICATION AGREEMENT

CORPORATION TERMINATION, TAX ALLOCATION

AND INDEMNIFICATION AGREEMENT





This S CORPORATION TERMINATION, TAX ALLOCATION AND INDEMNIFICATION AGREEMENT (the "Agreement"), between Amkor Technology, Inc., a Delaware corporation ("ATI"), Amkor Electronics, Inc., a Pennsylvania corporation ("AEI", ATI and AEI are collectively referred to the "Company"), and James J. Kim, the David D. Kim Trust of December 31, 1987, the John T. Kim Trust of December 31, 1987, and the Susan Y. Kim Trust of December 31, 1987 (each such person or entity, a "Shareholder," and such person and all such entities, collectively, the "Shareholders") (the Company and the Shareholders are hereinafter referred to individually as a "party" and collectively as the "parties").



WHEREAS, AEI is an S corporation, as defined in Section 1361(a) of the Code (as hereinafter defined) and will continue to be an S corporation until the Termination Date (as hereinafter defined); and



WHEREAS, AEI will be merged with and into ATI pursuant to a reincorporation of AEI into Delaware in a tax free reorganization; and



WHEREAS, the Shareholders own capital stock of the Company; and



WHEREAS, it is anticipated that ATI will close an underwritten initial public offering of its common stock (the "Public Offering"); and



WHEREAS, in connection with the Public Offering, it is anticipated that AEI will distribute to the Shareholders an amount which represents AEI's cumulative net income in all prior periods while it was an S corporation, less the amount of distributions previously made to the Shareholders; and



WHEREAS, prior to the merger of AEI with and into ATI, the Shareholders and the Company wish to revoke AEI's status as an S Corporation; and



WHEREAS, the Shareholders and the Company wish to enter into an agreement as to the termination of AEI's status as an S corporation, the method used to allocate AEI's income during its S Termination Year (as hereinafter defined) pursuant to Code Section 1362(e)(3), and the indemnification of the Company and the Shareholders with respect to certain tax matters.



NOW, THEREFORE, the parties agree as follows: ARTICLE I





1.1 DEFINITIONS. The following terms, as used herein, have the following meanings:



"C Short Year" means the portion of the S Termination Year of the Company beginning on the Termination Date and ending on December 31, 1998.



"Code" means the Internal Revenue Code of 1986, as amended, and, in the context of a state or local tax, a reference to the Code or a section of the Code includes any similar applicable provision of state or local law.



"Excess Distributions" means the excess of cash or property distributions by the Company to a Shareholder over the federal and state income taxes paid by the Shareholder with respect to the taxable income of the Company for all periods during which the Company has been an S corporation, including the S Short Year.



"S Short Year" means that portion of the S Termination Year of the Company beginning on January 1, 1998, and ending on the day before the Termination Date.



"S Termination Year" means the Company's fiscal year beginning January 1, 1998.



"Taxes" means all taxes, however denominated, including any interest, penalties or additions to tax that may become payable in respect therewith, imposed by any federal, state, local or foreign government or any agency or political subdivision of any such government, which taxes shall include, without limiting the generality of the foregoing, all income, payroll and employee withholding, unemployment insurance, social security, sales and use, excise, profits, value added, ad valorem, occupancy, disability, franchise, gross receipts, environmental, occupation, real and personal property, stamp, transfer, license, net worth, real property gains, capital, worker's compensation taxes.



"Tax Benefit" shall mean (i) with respect to a Shareholder the amount of the Tax savings resulting from a decrease in that Shareholder's allocable share of S Corporation taxable income if and to the extent that decrease results in an increase (or would result in an increase absent a net operating loss) in the Tax liability of the Company, and (ii) with respect to the Company the amount of the Tax savings resulting from a decrease in its taxable income if and to the extent that decrease results in an increase in the Tax liability of a Shareholder attributable to that Shareholder's allocable share of S Corporation taxable income.



"Tax Returns" means all reports, estimates, information statements and returns relating to, or required to be filed in connection with, any Taxes.







"Termination Date" means the date on which S corporation status of AEI is terminated as a result of revocation of such status in accordance with Section 1362(d)(1) of the Code or otherwise.



ARTICLE II





2.1 TERMINATION OF S STATUS. AEI's S corporation status shall be terminated as a result of revocation of such status pursuant to Section 1362(d)(1) of the Code. The Company agrees to execute and file with the Internal Revenue Service an executed election in substantially the form attached hereto to as Exhibit A, prior to the Termination Date. The termination of the AEI's S corporation status shall be effective prior to (i) its reincorporation as ATI and (ii) the closing of the Public Offering.



2.2 SHAREHOLDER CONSENT. Each Shareholder agrees to execute and deliver to the Company an executed consent in substantially the form attached hereto to as Exhibit B, prior to the Termination Date.



ARTICLE III



ALLOCATION OF INCOME



3.1 ALLOCATION ELECTION. The Company agrees to elect and the Shareholders agree to consent, pursuant to Section 1362(e)(3) of the Code, to allocate Tax items to its S Short Year and C Short Year pursuant to normal tax accounting rules (the "closing of the books method") rather than by the pro rata allocation method contained in Section 1362(e)(2) of the Code. The Company and each of the Shareholders agree to take all necessary actions under Treasury Regulation Section 1.1362-6 (or successor thereto) to cause such election and consents and the revocation election and consents to be effective for federal income tax purposes, including the execution and delivery, by the Shareholders to the Company of a consent in substantially the form attached hereto as Exhibit C, prior to the Termination Date. Additionally, the Company agrees to execute and attach to its Tax Return filed with the Internal Revenue Service an executed election in substantially the form attached hereto to as Exhibit D.



ARTICLE IV



TAX RETURNS AND INDEMNIFICATION



4.1 FILING TAX RETURN FOR THE TERMINATION YEAR. The Company shall be responsible for and shall effect the filing of all Tax Returns required to be filed by the Company with respect to all taxable periods ending prior to, with or within the Termination Year. The Company shall cause such returns to include the Com ...