EXHIBIT 10.19
SHAREHOLDERS AGREEMENT
This Shareholders Agreement ("Agreement") is made and entered into as of the
29th day of July 2002, by and among:
AMKOR TECHNOLOGY, INC., a Delaware corporation with a place of business at 1345
Enterprise Drive, West Chester, Pennsylvania 19380 U.S.A ("ATI");
DONGBU CORPORATION, a Korean corporation with its registered office located at
Dongbu Financial Center, 891-10 Daechi-dong, Kangnam-ku, Seoul, Korea ("Dongbu
Corporation");
DONGBU FIRE INSURANCE CO., LTD., a Korean corporation with its registered office
located at Dongbu Financial Center, 891-10 Daechi-dong, Kangnam-ku, Seoul, Korea
("Dongbu Fire"); and
DONGBU LIFE INSURANCE CO., LTD., a Korean corporation with its registered office
located at Dongbu Financial Center, 891-10 Daechi-dong, Kangnam-ku, Seoul, Korea
("Dongbu Life").
Dongbu Corporation, Dongbu Fire and Dongbu Life shall hereinafter be
collectively referred to as "Dongbu". ATI, and Dongbu shall hereinafter be
referred to individually as a "Shareholder" or a "Party" and collectively as the
"Shareholders" or the "Parties".
RECITAL:
A. ATI currently owns 47,707,039 commons shares (having par value of KRW5,000
each) of Anam Semiconductor, Inc., a Korean corporation with its
registered office located at 154-17, Samsung-Dong, Gangnam-Ku, Seoul,
Korea (the "Company").
B. Pursuant to the Share Sale and Purchase Agreement, dated July 10, 2002, by
and between the ATI and Dongbu Corporation (the "Share Sale and Purchase
Agreement"), ATI has agreed to sell and Dongbu Corporation has agreed to
purchase an aggregate of 20,000,000 common shares in the Company (the
"Share Sale and Purchase").
C. The Company has agreed to issue and Dongbu Fire and Dongbu Life have
agreed to subscribe an aggregate of 12,000,000 common shares in the
Company (the "Share Subscription").
D. The Parties wish to memorialize herein their agreements with respect to
the Shareholders' joint ownership and management of the Company after the
consummation of the Share Sale and Purchase and the Share Subscription.
Now, it is hereby agreed as follows:
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ARTICLE 1. DEFINITIONS & INTERPRETATION
1.1 The terms defined in this Article shall have the meanings ascribed to them
herein whenever they are used in this Agreement, unless otherwise clearly
indicated by the context.
"AOI" means the articles of incorporation of the Company.
"BOD" means the board of directors of the Company.
"Business Day" means a day other than Saturday, Sunday or a day on which
banking institutions are authorized or required by law or executive order
to remain closed in Seoul, Korea.
"Dongbu Electronics" means Dongbu Electronics Co., Ltd., a Korean company
with its registered office located at Dongbu Financial Center, 891-10
Daechi-Dong, Gangnam-Ku, Seoul, Korea.
"Encumbrances" means any lien, pledge, mortgage, security interest, charge
or other encumbrance.
"Government Approval" means any approval, consent or authorization from,
registration or filing with, notice to, or license, permit or
certification from, any Government Authority. Government Approvals with
respect to any action to be taken by any Party hereunder means such
Government Approvals as are required for the action under applicable Law.
"Government Authority" means any national, provincial, local or foreign
government, governmental, regulatory or administrative authority or
agency, or tribunal, court, or other judicial or arbitral body.
"GSM" means the general shareholders' meeting of the Company, duly
constituted from time to time.
"Korea" means the Republic of Korea.
"KRW" means the Korean Won, the lawful currency of Korea.
"Law" means any (i) national, provincial, state, or local statutes,
regulations, ordinances, rules, codes, judgments, awards, orders or
policies of Government Authorities, terms and conditions of Government
Approvals, and any other rules, standards or specifications having the
force or effect of law, whether Korean or foreign; and (ii) treaties,
conventions, protocols and other promulgations having transnational legal
effect.
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"Person" means any entity, corporation, company, partnership, association,
trust, organization, Government Authority or individual.
"Share Purchase Closing" means the consummation of the Share Sale and
Purchase.
"Shares" means the shares of common stock of the Company, having par value
of KRW5,000 each, with full voting rights.
"Share Subscription Closing" means the consummation of the Share
Subscription.
"Texas Instruments" means Texas Instruments Incorporated, a Delaware
corporation with a place of business at 13500 North Central Expressway,
Dallas, Texas, 75265.
1.2 Except where the context otherwise requires, the masculine gender shall
include the feminine and neuter and the singular shall include the plural
and vice versa and references to persons include bodies corporate and
incorporate.
1.3 References in this Agreement to Articles, Sections and Schedules shall
refer to the articles, sections and schedules of this Agreement, and the
same shall form part of this Agreement and shall have the same force and
effect as if expressly set out in the body of this Agreement.
1.4 Headings of Articles in this Agreement are for convenience only and do not
substantively affect the terms of this Agreement.
ARTICLE 2. GENERAL
2.1 Each of the Shareholders shall at all times vote any Shares owned by it,
instruct any BOD members nominated by it and exercise any other powers of
control in relation to the Company (as shareholder, director, officer or
otherwise) in a timely manner so as to give full effect to, and to cause
the Company to comply with, the provisions of this Agreement and to ensure
that the AOI do not, at any time hereafter, conflict in any respect with
the provisions of this Agreement.
2.2 The Shareholders shall within 7 days after the payment of the Interim
Payment (as defined in the Sale Share and Purchase Agreement) commence the
procedures to convene a GSM as soon as possible after the execution of
this Agreement so that such GSM may be held without delay after both the
Share Purchase Closing and the Share Subscription Closing have occurred,
for the purpose of electing directors of the Company in accordance with
the terms of this Agreement.
2.3 The Shareholders shall meet before any GSM to agree with respect to how to
exercise their voting rights at such GSM in accordance with this
Agreement, provided that in the case of a GSM voluntarily convened by the
Board, the Shareholders shall vote their Shares to effect the proposals to
the GSM as determined by the Board.
2.4 Dongbu Corporation, Dongbu Fire and Dongbu Life acknowledge that they have
collectively authorized Dongbu Corporation to act as their representative
to facilitate convenience of communications between the Parties. All
actions of Dongbu
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Corporation, including the giving and receiving of notices, notification
of determinations or waivers of any matter and any other action taken or
purported to be taken with the consent of Dongbu Fire and Dongbu Life,
shall be binding on Dongbu, and ATI may rely thereon. Dongbu may change
the party which will act as their representative hereunder by written
notice to ATI. Nothing herein is intended to constitute Dongbu Corporation
or any other representative the agent of the other parties except for the
purposes set forth in this Section.
ARTICLE 3. BOARD OF DIRECTORS AND OFFICERS
3.1 On and from the GSM first held after both the Share Purchase Closing and
the Share Subscription Closing have occurred and until the earlier of (i)
the second anniversary of the date of the above GSM and (ii) date on which
ATI's shareholding in the Company becomes less than 10% of all issued and
outstanding Shares, each Shareholder shall vote its Shares at any GSM
called for the purpose of filling the positions on the BOD and take all
other actions necessary to ensure that the Company shall have a total of 7
directors, out of whom 3 directors shall be nominated by ATI or its
designee and 4 directors shall be nominated by Dongbu. One director
nominated by ATI or its designee and one director nominated by Dongbu
shall qualify as independent outside directors under Korean securities
laws. One director nominated by ATI shall oversee the securities offerings
and M&A transactions of the Company and its subsidiaries.
3.2 After the earlier of (i) the second anniversary of the date of the above
GSM and (ii) date on which ATI's shareholding in the Company becomes less
than 10% of all issued and outstanding Shares, each Shareholder shall vote
its Shares at any GSM called for the purpose of filling the positions on
the BOD and take all other actions necessary to ensure that the Company
shall have a total of 7 directors, out of whom 2 directors shall be
nominated by ATI or its designee and 5 directors shall be nominated by
Dongbu. One director nominated by ATI or its designee and one director
nominated by Dongbu shall qualify as independent outside directors under
Korean securities laws. One director nominated by ATI shall oversee the
securities offerings and M&A transactions of the Company and its
subsidiaries.
3.3 On and from the GSM first held after both the Share Purchase Closing and
the Share Subscription Closing have occurred, each Shareholder shall take
all reasonable actions, including voting of its Shares and instructing
directors nominated by it, to appoint (i) as the Chief Executive Officer
of the Company a person designated by Dongbu and (ii) as the Chief
Operating Officer of the Company a person designated by Dongbu with the
agreement of ATI.
3.4 In addition to any other resolutions or approvals required under
applicable Law or under the AOI, the special resolution of the BOD, which
shall be adopted by affirmative votes of at least 5 directors, shall be
required for the Company to take any of the following actions:
(a) any merger, consolidation, comprehensive share transfer (under
Article 360-15 of the Korean Commercial Code) or comprehensive share
exchange (under Article
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360-2 of the Korean Commercial Code) with or into any Person
(regardless of whether or not the Company is the surviving entity),
or acquisition of all or substantially all the assets or more than
50% of the capital stock of any Person;
(b) any creation or issuance of Shares or any creation or issuance of
rights to subscribe for Shares, including any options, bonds or
other instruments convertible or exercisable for Shares; or
(c) any transaction, whose contract value together with that of all
other transactions described in this clause (c) of Article 3.4 in a
fiscal year exceeds KRW50,000,000,000, between the Company and its
directors, officers, employees, major shareholders or affiliates or
directors, officers, employees of an affiliate or any major
shareholders or affiliates or directors, officers or employees of an
affiliate or any major shareholder; provided that (i) employment
contracts in the ordinary course of business, (ii) such transactions
which are on an arm's length basis and normal commercial terms,
including but not limited to any transaction related to the
termination of the Foundry Agreement in accordance with Article 4.3
hereof and (iii) any transactions between the Company and Dongbu
Electronics shall be excluded.
3.5 Effective on the date of the GSM to be held pursuant to Section 3.1
hereof, the Parties agree that (A) they shall, and they shall use their
best efforts to cause the Company to, release to the fullest extent
permitted by law, the chairman, directors and officers (with the title of
non-registered director or higher) of the Company, either past or
incumbent ("Indemnified Persons"), from any and all liabilities, costs or
expenses which may arise (i) from any matters occurring since January 1,
1995 until the Closing Date of this Agreement, the consequences of which
are reflected in the financial statements of the Company, up to December
31, 2001 and (ii) from the contingent liabilities as shown in the
financial statement of the Company dated as of December 31, 2001, and (B)
they shall use their best efforts to cause the Company to provide
indemnity to said Indemnified Persons to the fullest extent permitted by
law with respect to any third party claims related to the aforementioned
liabilities. The Parties agree that they shall cause the Company to waive
any subrogation rights, whether arising at law or in equity, against the
Indemnified Persons if the legal grounds or basis for such subrogation
occurred prior to the Closing Date of this Agreement. Dongbu further
agrees that effective on the date of the GSM to be held pursuant to
Section 3.1 hereof, Dongbu will use its best efforts to cause the Company
to give ATI a release to the fullest extent permitted by law from the
Company from any and all liabilities to the Company as a result of having
been a major shareholder of the Company, the consequences of which are
reflected in the financial statements of the Company, up to December 31,
2001 (including but not limited to any matters related to the Foundry
Agreement as defined in Article 4.3).
3.6 From the date of the GSM to be held pursuant to Section 3.1 hereof, Dongbu
shall hold harmless and indemnify each director of the Company nominated
by ATI from any and all liabilities, costs or expenses incurred in
connection with any action, suit , claim or proceeding in which such
director becomes involved by reason of the fact that such director is or
was a director, employee, agent, or fiduciary of the Company or by reason
of anything done or not done by such director in any such capacity;
provided, however, that the foregoing indemnification shall not apply to
actions taken pursuant to Section
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3.4 hereto prior to the earlier of (i) the second anniversary of the date
of the GSM to be held pursuant to Section 3.1 hereof and (ii) date on
which ATI's shareholding in the Company becomes less than 10% of all
issued and outstanding Shares.
3.7 As soon as practicable after both the Share Purchase Closing and the Share
Subscription Closing have occurred, Dongbu shall cause a designee of ATI
to be elected as a director of Dongbu Electronics.
ARTICLE 4. COVENANTS
4.1 The Parties shall make their reasonable best efforts to cause Dongbu
Electronics and the Company to be merged as soon as practicable, under
terms mutually satisfactory to the Shareholders and in compliance with all
applicable Laws.
4.2 As soon as practicable after the election of directors pursuant to Article
3.1, the Parties shall cause the Company to apply all of the proceeds of
the Share Subscription to purchase common shares issued by Dongbu
Electronics. In connection with such purchase, Dongbu shall indemnify the
directors and officers of the Company against any and all losses, claims,
damages, liabilities or expenses (including reasonable legal fees and
expenses) incurred by them as a result of any third party claim, action or
suit arising from such purchase of common shares of Dongbu Electronics,
including, but not limited to, claims, actions or suits alleging that such
purchase, the structure of the transaction or the price paid for the
shares of Dongbu Electronics was in violation of applicable Law.
4.3 As soon as practicable after the date hereof, the Parties shall begin
discussing the terms under which the Foundry Agreement dated January 1,
1998 (the "Foundry Agreement") by and among ATI, Amkor Electronics, Inc.,
C.I.L. Limited (Cayman), Anam USA and the Company will be terminated.
(ATI, Amkor Electronics, Inc. and C.I.L. Limited shall be referred to as
the "Amkor Parties.") The Parties shall cause the Foundry Agreement to be
terminated no later than September 30, 2002. In the event that the Parties
and the parties to the Foundry Agreement cannot agree by September 10,
2002 on the terms and conditions under which the Foundry Agreement shall
be terminated, the Parties shall within five days thereafter appoint an
independent financial adviser mutually agreeable to the Parties, and such
financial adviser shall determine the fair value of such Foundry Agreement
to the Amkor Parties, with due consideration given to anticipated future
business of the Company, including business with Texas Instruments. The
Parties agree that the fair value of the Foundry Agreement to the Amkor
Parties, as determined by the independent financial adviser as aforesaid,
shall be paid to the Amkor Parties by the Company in consideration for
their agreement to terminate the Foundry Agreement; provided such amount
paid to the Amkor Parties shall not exceed US$65,000,000 and shall not be
lower than US$45,000,000.
4.4 The Parties shall cause the Company, and Dongbu shall cause Dongbu
Electronics, to grant to ATI the right of first refusal to package and
test any wafers produced by the Company and Dongbu Electronics, unless
otherwise specifically requested by customers of the Company or Dongbu
Electronics, as the case may be. ATI shall make
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all reasonable efforts to support the Company's marketing activities.
4.5 From the date hereof until the date of the GSM to be held pursuant to
Section 3.1 hereof, ATI shall make its best efforts to cause the Company
(i) not to issue any new Shares or securities convertible or exchangeable
into, or which grant the right to purchase, new Shares and (ii) to conduct
its business only in the ordinary course of business, consistent with past
practice and not to enter into any extraordinary transactions which may
have a material adverse effect on the Company.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
5.1 Each Party represents and warrants to the other Parties that the
statements contained in this Section 5.1 are correct and complete in all
material respects as of the date of this Agreement.
(a) Organization. It is a corporation duly organized and existing under
the laws of the jurisdiction of its organization.
(b) Corporate Authorization. It has all requisite corporate power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder. It has taken all requisite corporate action
to execute, deliver and perform this Agreement, and no other
corporate proceedings on its part are required in connection with
its execution, delivery and performance of this Agreement.
(c) Binding Effect. This Agreement has been duly executed and delivered
by it. Assuming the due authorization, execution and delivery by the
other Parties, this Agreement constitutes its legally binding
obligation, enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting creditors'
rights generally.
(d) Non-Contravention. Its execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated
hereby, do not and will not (i) violate any provision of its
articles of incorporation or other organizational documents, (ii)
violate, conflict with, or constitute a default under any material
contract or other agreement or other instrument to which it is a
party or by which it or its property is bound or (iii) violate or
result in a breach of or constitute a default under any Law to which
it is subject.
(e) Governmental Consents and Approvals. Its execution and delivery of
this Agreement, and its performance of its obligations hereunder, do
not and will not require any material filing with, or clearance,
consent or approval of, any Governmental Authority.
5.2 ATI represents and warrants to Dongbu that as of the date of this
Agreement:
(a) it is the legal and beneficial owner of 47,707,039 Shares and such
Shares are validly issued, fully paid and non-assessable.
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(b) Other than this Agreement, there is no agreement, proxy or other
understanding between ATI and any other person with respect to the
exercise of voting or other rights of a shareholder of the Company
nor, to the best knowledge of ATI, is there any such agreement among
any other shareholder of the Company.
ARTICLE 6. NOTICE
6.1 Any notices given hereunder shall be in writing and shall be served by
hand at, or by being sent by facsimile transmission or prepaid post to,
the following addresses and numbers:
To ATI: Amkor Technology, Inc.
Address: 1345 Enterprise Drive
West Chester, Pennsylvania 19380
U.S.A
Fax: 1-610-431-7189
Attn: Kevin Heron, General Counsel
To Dongbu: Dongbu Corporation
Address: Dongbu Financial Center
891-10 Daechi-dong, Kangnam-ku
Seoul, Korea
Fax: 822-3484-2354
Attn: Woo Sup Baek (Chief of Legal Department)
6.2 Any such notice shall be deemed to be served at the time of delivery (if
delivered by hand, by commercial courier or by post), or at the time of
transmission (if served by facsimile). Evidence that the notice was
properly addressed, stamped and put into the post shall be conclusive
evidence of posting. Without prejudice to the effectiveness thereof, a
notice served by facsimile shall be confirmed promptly in writing
delivered by hand or sent by commercial courier or prepaid post.
6.3 Any Party may, by 7 days written notice served to the aforesaid addresses
of the other Party, change the address or facsimile number for service
referred to above.
ARTICLE 7. MISCELLANEOUS
7.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Korea.
7.2 Arbitration. Any dispute or claim arising out of or relating to this
Agreement shall be resolved exclusively and finally by arbitration. The
arbitration shall be conducted pursuant to the Rules of Arbitration of the
International Chamber of Commerce. The
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arbitral tribunal shall consist of 3 arbitrators. One arbitrator shall be
appointed by ATI, one arbitrator shall be appointed by Dongbu and the 3rd
arbitrator shall be appointed by mutual consent of the 2 arbitrators so
appointed. The arbitration shall be conducted in Seoul, Korea. The
language used in the arbitration shall be the English language. Any
decision or award of the arbitral tribunal shall be final and binding upon
the Parties. The Parties waive to the extent permitted by law any rights
to appeal or to review of such award by any court or tribunal. The Parties
agree that the arbitral award may be enforced against the parties to the
arbitration proceeding or their assets wherever they may be found and that
a judgment upon the arbitral award may be entered in any court having
jurisdiction thereof.
7.3 Confidentiality of Information.
(a) Each Party agrees to keep secret and confidential all information
obtained pursuant to this Agreement from the other Parties. The
Parties agree to take reasonable precautions, in a manner reasonably
acceptable to the Party furnishing the information, in order to keep
secret and confidential such information and to restrict its use
outside and beyond the scope of this Agreement without the prior
written consent of the party furnishing such information; provided,
however, that any Party may disclose such information to any Party's
advisors or to Government Authorities as is required to bring about
the purposes intended by this Agreement and provided, further, that
the above restrictions shall not apply to information:
(i) which was or becomes generally available to the public;
(ii) which was or becomes known to the recipient without breach of
this or any obligation of confidentiality;
(iii) which is provided to Texas Instruments for the purpose of
negotiating, entering into or amending contracts or other
commercial arrangements; or
(iv) the disclosure of which is required by Law or by a Government
Authority.
The term "information" shall mean any information concerning
proprietary, confidential, trade secrets and other non-public
information and data, including information concerning the property,
operations and business of the Company or a Shareholder.
(b) Each Party shall take reasonable steps to ensure that its directors,
officers, employees, agent and advisers will comply in all respects
with this Article 7.3.
(c) In the event of termination of this Agreement pursuant to Article
7.3, each Party shall return to the other Party all information (and
all reproductions, thereof) received from such Party.
7.4 Entire Agreement. This Agreement shall, as of the date of execution
hereof, supersede all previous representations, understandings or
agreements, oral or written, among the Parties with respect to the subject
matter hereof.
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7.5 Waivers. No waiver by any Party of any breach or failure to comply with
any provision of this Agreement shall be construed as, or constitute, a
continuing waiver of such provision or a waiver of any other breach of, or
failure to comply with, any other provision of this Agreement.
7.6 Successors and Assigns. This Agreement and each and every covenant, term
and condition hereof shall be binding upon and inure to the benefit of the
Parties and their respective successors and assigns. No Party may assign
any of its rights or delegate any of its duties under this Agreement
without obtaining the prior consent of the other Parties. Dongbu may
freely transfer their Shares to any of their affiliates, in which case
such transferee shall become a party to this Agreement as a part of
Dongbu.
7.7 Amendments. This Agreement may be amended or modified only by an
instrument in writing duly executed by the Parties.
7.8 Severability of Provisions. If any term or provision of this Agreement is
for any reason found invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect the
validity of any remaining portion, which shall remain in full force and
effect as if the invalid portion was never a part of this Agreement when
it was executed.
7.9 Language/Counterparts. This Agreement is written in the English language
and may be executed in counterparts, each of which shall be deemed an
original when executed and delivered, but all counterparts together shall
constitute the same document. The English language text of this Agreement
shall prevail over any translation thereof.
7.10 Term of Agreement. This Agreement shall become effective upon the Closing
Date as defined in the Share Sale and Purchase Agreement and terminate
upon the later of (i) the date on which ATI's shareholding in the Company
becomes less than 3% of all issued and outstanding Shares and (ii) the
third anniversary of the date hereof.
7.11 Termination. Notwithstanding the provisions of Article 7.10, either ATI or
Dongbu, upon written notice to that effect to the other Party, shall have
the right to terminate this Agreement at any time in the event that the
other Party fails to observe the material provisions and conditions hereof
and fails to correct any material default within 30 Business Days after
the Party alleging such default has given written notice thereof.
7.12 Effect of Termination. In the event of termination of this Agreement under
Article 7.10 or 7.11, this Agreement shall immediately, as from the date
of such termination become void, except for Article 7. Nothing shall
relieve any of the Parties from liability for actual damages resulting
from a breach that leads to the termination of this Agreement pursuant to
Article 7.11, provided that none of the Parties shall have any liability
for speculative, unforeseeable, consequential, incidental or indirect
damages resulting from any breach of this Agreement.
[signature page to follow]
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IN WITNESS WHEREOF, the Parties executed this Agreement as of the date first
above written.
AMKOR TECHNOLOGY, INC.
By /s/ John Boruch
________________________
Name: John Boruch
Title: Chief Operating Officer and President
DONGBU CORPORATION
By /s/ HO IK Paik
________________________
Name: HO IK Paik
Title: Representative Director
DONGBU FIRE INSURANCE CO., LTD.
By /s/ Su Kwang Lee
________________________
Name: Su Kwang Lee
Title: Chief Executive Officer and President
DONGBU LIFE INSURANCE CO., LTD.
By /s/ K.J. Chang
________________________
Name: K.J. Chang
Title: President
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