SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Tower Semiconductor Ltd.
(Exact Name of Registrant as Specified in Its Charter)
Israel
(State or Other Jurisdiction of Incorporation or Organization)
Not Applicable
(I.R.S. Employer Identification No.)
Ramat Gavriel Industrial Park
Migdal Haemek, Israel 23105
(Address of Principal Executive Offices)
Employee Share Option Plan 2004
(Full Title of Plan)
Tower Semiconductor USA
4300 Stevens Creek Blvd., Suite 175
San Jose, California 95129
Tel: 408-551-6500
Facsimile: 408-551-6509
(Name, address and telephone number of agent for service)
Copies of all Correspondence to:
DAVID H. SCHAPIRO, ESQ. SHELDON KRAUSE, ESQ.
Yigal Arnon & Co. Ehrenreich Eilenberg & Krause LLP
1 Azrieli Center 11 East 44th Street
Tel Aviv, 67021 Israel New York, NY 10017
Tel: 972-3-608-7856 Tel: 212-986-9700
CALCULATION OF REGISTRATION FEE
- -------------------------------- --------------------- ------------- ---------------------- ----------------
Title of Securities to be Amount to be Proposed Proposed Maximum Amount of
Registered Registered Maximum Aggregate Offering Registration
- -------------------------- ---------------- Offering Price(1) Fee
Price Per --------------- ------------------
Share(1)
- -------------------------------- --------------------- ------------- ---------------------- ----------------
Ordinary Shares, par 2,071,578 (2)(3) $5.29 $10,958,648 $1388.46
value NIS 1.00 per share
("Ordinary Shares")
(relating to 2004 Plan)
- -------------------------------- --------------------- ------------- ---------------------- ----------------
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(1) Calculated solely for the purpose of determining the registration fee
based upon the assumed offering prices of the shares determined pursuant
to Rule 457(h) under the Securities Act of 1933, based upon the weighted
average per share exercise price of the options assumed by the Registrant.
With respect to 323,500 shares purchasable upon exercise of outstanding
options granted to date under the Registrant's Employee Share Option Plan
2004, the Proposed Maximum Offering Price Per Share is $ 6.35, the
weighted average exercise price per share of such options. With respect to
the shares that may be issued pursuant to options which may be granted in
the future pursuant to such Plan, the Proposed Maximum Offering Price Per
Share is $5.09, which represents the average of the high and low sales
prices of the Ordinary Shares as quoted through the Nasdaq National Market
on July 20, 2004.
(2) Represents shares that may be issued pursuant to options which have been
or may be granted pursuant to the Registrant's Employee Share Option Plan
2004.
(3) This Registration Statement also registers an indeterminate number of
Ordinary Shares which may become issuable pursuant to the anti-dilution
provisions of the plans and options to which this Registration Statement
relates.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
EXPLANATORY NOTE
As permitted by the rules of the Securities and Exchange Commission, this
Registration Statement omits the information specified in Part I of Form S-8.
THE COMPANY HAS APPLIED TO THE SECURITIES AUTHORITY OF THE STATE OF ISRAEL FOR
AN EXEMPTION FROM THE OBLIGATION TO PUBLISH THIS PROSPECTUS IN THE MANNER
REQUIRED PURSUANT TO THE PREVAILING LAWS OF THE STATE OF ISRAEL. NOTHING IN SUCH
EXEMPTION OF THE SECURITIES AUTHORITY OF THE STATE OF ISRAEL, IF RECEIVED, SHALL
BE CONSTRUED AS AUTHENTICATING THE MATTERS CONTAINED IN THIS PROSPECTUS OR AS AN
APPROVAL OF THEIR RELIABILITY OR ADEQUACY OR AS AN EXPRESSION OF OPINION AS TO
THE QUALITY OF THE SECURITIES OFFERED HEREBY.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
(the "Commission") by the Registrant, Tower Semiconductor Ltd., a company
organized under the laws of the State of Israel (the "Company"), pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference in this registration statement:
o Annual Report on Form 20-F for the year ended December 31, 2003 (filed on
March 2, 2004).
o Report on Form 6-K dated March 2004 (filed on March 16, 2004).
o Report on Form 6-K dated April 2004 (filed on April 30, 2004).
o Report on Form 6-K dated June 2004 (filed on June 28, 2004).
o Report on Form 6-K dated July 2004 No.1 (filed on July 13, 2004).
o Report on Form 6-K dated July 2004 No.2 (filed on July 22, 2004).
o The description of the Company's Ordinary Shares which is contained in its
Registration Statement on Form 8-A declared effective on October 25, 1994.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all shares offered hereby have
been sold or which deregisters all then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this registration statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Israeli Companies Law, or the Companies Law, provides that a company
may include in its articles of association provisions allowing it to:
1. partially or fully exempt, in advance, an office holder of the company
from his responsibility for damages caused by the breach of his duty of
care to the company;
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2. enter into a contract to insure the liability of an office holder of the
company by reason of acts or omissions committed in his capacity as an
office holder of the company with respect to the following:
(a) the breach of his duty of care to the company or any other person;
(b) the breach of his duty of loyalty to the company to the extent he acted in
good faith and had a reasonable basis to believe that the act or omission
would not prejudice the interests of the company; and
(c) monetary liabilities or obligations which may be imposed upon him in favor
of other persons;
3. indemnify an office holder of the company for:
(a) monetary liabilities or obligations imposed upon him in favor of other
persons pursuant to a court judgment, including a compromise judgment or
an arbitrator's decision approved by a court, by reason of acts or
omissions of such person in his capacity as an office holder of the
company; and
(b) reasonable litigation expenses, including attorney's fees, actually
incurred by such office holder or imposed upon him by a court, in an
action, suit or proceeding brought against him by or on behalf of the
company or by other persons, or in connection with a criminal action from
which he was acquitted, or in connection with a criminal action which does
not require criminal intent in which he was convicted, in each case by
reason of acts or omissions of such person in his capacity as an office
holder.
The Companies Law provides that a company's articles of association
may provide for indemnification of an office holder post-factum and may
also provide that a company may undertake to indemnify an office holder in
advance, provided such undertaking is limited to types of occurrences,
which, in the opinion of the company's board of directors, are, at the
time of the undertaking, foreseeable and to an amount the board of
directors has determined is reasonable in the circumstances.
The Companies Law provides that a company may not indemnify or
exempt the liabilities of an office holder or enter into an insurance
contract which would provide coverage for the liability of an office
holder with respect to the following:
o a breach of his duty of loyalty, except to the extent described above;
o a breach of his duty of care, if such breach was done intentionally,
recklessly or with disregard of the circumstances of the breach or its
consequences;
o an act or omission done with the intent to unlawfully realize personal
gain; or
o a fine or monetary settlement imposed upon him.
Under the Companies Law, the term "office holder" includes a
director, managing director, general manager, chief executive officer,
executive vice president, vice president, other managers directly
subordinate to the managing director and any other person fulfilling or
assuming any such position or responsibility without regard to such
person's title.
The grant of an exemption, an undertaking to indemnify or
indemnification of, and procurement of insurance coverage for, an office
holder of a company requires, pursuant to the Companies Law, the approval
of the company's audit committee and board of directors, and, in certain
circumstances, including if the office holder is a director, the approval
of the company's shareholders.
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Our Articles of Association have been amended to allow for
indemnification of, and procurement of insurance coverage for our officers
and directors to the maximum extent provided for by the Companies Law.
We have entered into an insurance contract for directors and
officers and have procured indemnification insurance for our office
holders to the extent permitted by our Articles of Association. We have
approved the indemnification of our office holders up to 25% of our then
current fully paid up equity (in addition to any amounts paid under an
insurance coverage) with respect to each case of indemnification
(including all matters connected therewith), by authorizing and empowering
us to enter into Exemption and Indemnification Agreements with our office
holders. We have never had the occasion to indemnify any of our office
holders.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
ITEM 8. EXHIBITS.
4.2. Articles of Association of the Registrant (incorporated by
reference to Exhibit 1.1 to the Registrant's Annual Report on
Form 20-F for the year ended December 31, 2000) and Amendment to
the Articles of Association of the Registrant (approved by
shareholders on December 7, 2003) filed herewith
4.3. Employee Share Option Plan 2004
4.4. Form of Grant Letter to Israeli Employees
4.5. Form of Grant Letter to U.S. Employees
5.1. Opinion of Yigal Arnon & Co.
15.1. Awareness letter of Brightman Almagor & Co.
23.1. Consent of Yigal Arnon & Co. (included in the opinion filed as
Exhibit 5.1)
23.2. Consent of Brightman Almagor & Co.
24.1. Power of Attorney (included on signature page)
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ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement; provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities and Exchange Act of 1934) that is incorporated by reference in
the Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8, and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Migdal Haemek, Israel, on the 21st day of July, 2004.
Tower Semiconductor Ltd.
By: /s/Carmel Vernia
--------------------------------------
Carmel Vernia
Chairman of the Board of Directors and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in their
respective capacities and on the respective dates indicated. Each person whose
signature appears below hereby authorizes Carmel Vernia with full power of
substitution, to execute in the name and on behalf of such person any amendment
or any post-effective amendment to this Registration Statement and to file the
same, with exhibits thereto, and other documents in connection therewith, making
such changes in this Registration Statement as the Registrant deems appropriate,
and appoints Carmel Vernia, with full power of substitution, attorney-in-fact to
sign any amendment and any post-effective amendment to this Registration
Statement and to file the same, with exhibits thereto, and other documents in
connection therewith.
/s/ Carmel Vernia
- -----------------
Carmel Vernia, Chairman and Chief Executive Officer
July 21, 2004
/s/ Amir Harel
- --------------
Amir Harel, Vice President and Chief Financial Officer (principal financial and
accounting officer) July 21, 2004
/s/ Idan Ofer
- -------------
Idan Ofer, Director
July 21, 2004
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- --------------------------
Ehud Hillman, Director
July 21, 2004
/s/ Eli Harari
- --------------
Eli Harari, Director
July 21, 2004
- --------------------------
Miin Wu, Director
July 21, 2004
/s/ N.D. Reddy
- --------------
N.D. Reddy, Director
July 21, 2004
- --------------------------
Zehava Simon, Director
July 21, 2004
/s/ Hans Rohrer
- ---------------
Hans Rohrer, Director
July 21, 2004
AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Tower Semiconductor USA
/s/ Doron Simon
- ---------------
Doron Simon
President
July 21, 2004
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Exhibit Index
Exhibit No. Exhibit
4.2 Amendment to the Articles of Association of the Registrant
(approved by shareholders on December 7, 2003)
4.3 Employee Share Option Plan 2004
4.4 Form of Grant Letter to Israeli Employees
4.5 Form of Grant Letter to U.S. Employees
5.1 Opinion of Yigal Arnon & Co.
15.1 Awareness letter of Brightman Almagor & Co.
23.1 Consent of Yigal Arnon & Co. (included in the opinion filed as
Exhibit 5.1)
23.2 Consent of Brightman Almagor & Co.
24.1 Power of Attorney (included on signature page)
Exhibit 4.2
AMENDMENT TO THE ARTICLES OF ASSOCIATION
At the shareholders' meeting that was held on December 7, 2003, it was proposed
that for the purpose of reserving sufficient quantities of shares to permit the
issuance of shares in connection with the raising of capital for the Fab 2
project, Tower Semiconductor Ltd. increase its authorized share capital from
100,000,000 shares NIS 1.00 per share to 150,000,000, NIS 1.00 per share.
The shareholders of Tower Semiconductor Ltd. resolved the following:
"That the increase in the number of the Company's authorized ordinary shares to
150,000,000 and authorized share capital to NIS 150,000,000 and the amendment of
the Company's Articles of Association to reflect such increase, is hereby
approved."
The above resolution was adopted by a majority of the Shareholders present in
person or by proxy.
Exhibit 4.3
TOWER SEMICONDUCTOR LTD.
EMPLOYEE SHARE OPTION PLAN 2004
A PLAN UNDER SECTION 102 OF THE INCOME TAX ORDINANCE AND THE UNITED STATES
INTERNAL REVENUE CODE OF 1986
1. Name and Purpose:
1.1 This plan, as amended from time to time, shall be known as the Tower
Semiconductor Limited Employee Share Option Plan 2004 (the "2004
Plan" or the "Plan").
1.2 The purpose and intent of the Plan is to provide incentives to
employees of Tower Semiconductor Ltd. (the "Company") and its
wholly-owned subsidiaries (each, a "Subsidiary") by providing them
with options ("Options") to purchase shares in the Company, pursuant
to a plan approved by the Board of Directors of the Company (the
"Board"). Options granted under this Plan to the Company's employees
will be made pursuant to the provisions of Section 102 ("Section
102") of the Israeli Income Tax Ordinance (New Version), 1961 as
amended from time to time and, most recently, by the Law Amending
the Income Tax Ordinance (Number 132) 2002 (as amended, the
"Ordinance") and the rules promulgated thereunder (the "Rules").
Options granted under this Plan to United States residents who are
employees of the Company's United States Subsidiary, Tower
Semiconductor USA, Inc. ("TSU") will be made pursuant to the United
States Internal Revenue Code of 1986, as amended (the "Code").
2. Section 102 Election:
Options granted pursuant to Section 102(b) shall be granted pursuant
to either (a) Section 102(b)(2) thereof as capital gains track options,
pursuant to which income resulting from the sale of shares derived from
such Options is taxed as a capital gain ("102 Capital Gains Track
Options"), or (b) Section 102(b)(1) thereof as ordinary income track
options, pursuant to which income resulting from the sale of shares
derived from such Options is taxed as ordinary income ("102 Ordinary
Income Track Options"; together with 102 Capital Gains Track Options, "102
Trustee Options"). Pursuant to the Company's election filed with the
Israeli Tax Authorities to issue 102 Capital Gains Track Options under the
Company's Employee Share Option Plan 2003/1, the Company may only grant
102 Capital Gains Track Options at any given time unless it elects to
change such election, which may be made no earlier than January 1, 2005
and following the approval of the Board, all in accordance with the
provisions of Section 102(g).
3. Types of Options granted under the Code:
Options granted to US residents who are employees of TSU under the
Code shall be either an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code ("ISO"), or an Option
not intended to qualify as an ISO ("NSO").
4. Scope:
The total number of Options which can be granted under this Plan are
Options to purchase up to 2,071,578 Ordinary Shares of the Company
(nominal value NIS 1.00 per share), subject to adjustments as provided in
Section 13 below.
5. Administration:
5.1. The Plan will be administered by the Board of Directors of the
Company, taking into account the recommendations of the Compensation
and Options Committee (the "Committee"), a sub-committee of the
Board.
5.2. No member of the Board shall be liable for any action or
determination made in good faith with respect to the Plan or any
Option granted hereunder.
6. Eligible Grantees:
6.1. Subject to the provisions of the Plan and any restriction imposed by
any applicable law, Options may be granted to any employee of the
Company or any Subsidiary ("Grantee"). No option award under this
Plan (an "Option Award") may be granted to any person serving as a
member of the Board. The grant of an Option Award to a Grantee
hereunder, shall neither entitle such Grantee to participate, nor
disqualify him/her from participating, in any other grant of Options
pursuant to this Plan or any other share incentive or share option
plan of the Company or any Subsidiary.
6.2. Grants of ISO's shall be made only to US residents who are employees
of TSU eligible to receive them under Section 422 of the Code. If
(i) a Grantee of ISO's at the time of the Option Award owns shares
representing more than 10% of the voting power of the Company or its
parent or a Subsidiary, (ii) the aggregate Fair Market Value (as
defined hereunder), as at the time of the grant, of the shares
underlying ISOs which first become exercisable during any calendar
year exceeds $100,000 (taking such Options into account in the order
in which they were granted) or (iii) such Options otherwise fail to
fully comply with the requirements for ISO's under the Code, such
Options shall be treated as NSOs. Options designated as ISO's will
be treated as NSOs if a disposition of underlying shares exercisable
under the Option is made within two years from the date of the
granting of the Option or within one year after the exercise of the
Option.
7. Trustee; Required Holding Periods:
7.1. Option Awards and/or shares in the Company which will be issued upon
the exercise of the Option Awards will be held in trust by David H.
Schapiro Legal Services (the "Trustee") in accordance with Section
102 and the regulations, rules, orders or procedures promulgated
thereunder with respect to Israeli residents, and with respect to
non-Israeli residents, the Trustee shall hold such Options, and any
shares issued upon the exercise of any of such Options, in trust
pursuant to the Company's instructions from time to time and
according to all applicable laws.
7.2. 102 Trustee Options and any shares received following exercise of
102 Trustee Options shall be held by the Trustee for the requisite
period prescribed by the Ordinance and the Rules, or such other
period as may be required or unless otherwise permitted by the
Israeli Income Tax Authorities (the "Required Holding Period").
7.3. The Trustee and each Grantee shall comply with the applicable laws
and the terms and conditions of the Trust Agreement entered into
between the Company and the Trustee.
7.4. In the event that the Company issues securities as bonus shares
(ioeau aeaa) on shares which derive from 102 Trustee Options, such
bonus shares shall also be subject to the provisions of this Section
and the Required Holding Period for such bonus shares shall be
measured from the commencement of the Required Holding Period for
the 102 Trustee Option from which the bonus shares were issued.
7.5. The Trustee shall not use the voting rights vested in such shares
issuable upon exercise of Options, unless the Trustee believes,
after consulting with the Committee and the Grantees who hold a
majority of the issued Options, that the said rights should be
exercised for the protection of the Grantees as a minority among the
Company's shareholders.
7.6. The Company shall be entitled to replace the Trustee with another
appointee from time to time and shall notify the Grantees of such
replacement.
8. Reserved Shares:
8.1 The Company has reserved 2,071,578 authorized but unissued Ordinary
Shares (nominal value NIS 1.00 per share) for purposes of the Plan,
subject to adjustments as provided in Section 13 below. If any
Options granted under the Plan terminate, expire or otherwise cease
to exist, they shall again be available for grant through Option
Awards under the Plan or under any other incentive plan that the
Company may adopt.
8.2 The Company will maintain a sufficient quantity of Ordinary Shares,
NIS 1.00 nominal value, in its registered capital to ensure the
execution of the exercise right hereunder, and if necessary it will
cause its registered capital to be increased.
9. Option Awards:
9.1. Option Awards may be granted as of the Effective Date (as defined
hereunder), provided that Option Awards to the Company's employees
may be granted as of the Effective Date and 30 (thirty) days from
the filing of this Plan with the Israeli Income Tax Authorities in
accordance with applicable law. The date of grant of each Option
Award shall be the date of the Option Award letter issued to the
Grantee (the "Date of Grant").
9.2. The instrument granting the Option Award shall state, inter alia,
the number of shares covered thereby, the dates when it may be
exercised, the option price and such other terms and conditions as
the Committee at its discretion may prescribe, provided that they
are consistent with this Plan and with applicable laws.
9.3. The Options hereunder will not be listed in any stock exchange and
are not transferable (except to the Grantee's legal heirs or
estate).
9.4. The Grantee shall have no right to vote or receive dividends
(subject to Section 13.1) or any other rights of a shareholder prior
to its exercise of the Options and until the issuance of the stock
certificate evidencing such shares.
10. Options' Exercise Prices:
The purchase price in $US of each share will be the closing sales
price of the Company's shares as reported by NASDAQ or the principal
national securities exchange upon which the Company's shares are listed or
traded for the last market trading day (the "Fair Market Value") prior to
the Date of Grant.
11. Vesting and Exercise of Option Award:
11.1. Option Awards shall become exercisable (vest) pursuant to the terms
under which they were awarded, subject to the terms and conditions
of this Plan: one-quarter (1/4) of the Options granted in each
Option Award shall vest and become exercisable 12 months after the
Date of Grant, one-quarter (1/4) of the Options granted in each
Option Award shall vest and become exercisable 24 months after the
Date of Grant, one-quarter (1/4) of the Options granted in each
Option Award shall vest and become exercisable 36 months after the
Date of Grant, and one-quarter (1/4) of the Options granted in each
Option Award shall vest and become exercisable 48 months after the
Date of Grant, subject to the Grantee's continuing to be an Employee
on such dates. Each option will be exercisable into one Ordinary
Share.
11.2. The consideration to be paid for the shares to be issued upon
exercise of an Option, including the method of payment, shall be
determined by the Company and may consist entirely of (1) cash, (2)
check, or (3) cashless in case of same day sale. The procedure for
exercise of the Options shall be published in the Company's website.
The Company may change the procedures for exercise of the Options at
its discretion, by giving notice thereof to the Grantees.
11.3. Anything herein to the contrary notwithstanding, if any Option
Award, or any part thereof, has not been exercised within ten (10)
years after the Date of Grant (or any shorter period set forth in
the instrument granting such Option Award), such Option Award, or
such part thereof, shall terminate, and all interests and rights of
the Grantee in and to the Option Award or such part thereof shall
expire.
12. Termination of Employment; Termination of Right to Exercise:
12.1. Subject to the provisions of paragraph 12.2 and 12.3 hereof, unless
determined otherwise by the Board of Directors if a Grantee should
cease to be employed by the Company for any reason, all of the
Grantee's rights which have vested and are exercisable in respect of
all Option Awards granted to the Grantee under the Plan, and which
are not exercised within sixty (60) days after the date of
termination of the employee-employer relationship, shall terminate
upon the expiration of such sixty-day period. Options which are
unvested at the time of termination of the Grantee's employment with
the Company will become void and unexercisable at the time of such
termination.
12.2. Notwithstanding paragraph 12.1, in the event the employment of a
Grantee is terminated by the Company under circumstances that
entitle the Company (1) not to pay severance pay, or to pay only
part of the severance pay, pursuant to the provisions of the
Severance Pay Law, 5723-1963, or (2) to terminate the Grantee for
Cause as such term is defined in such Grantee's employment
agreement, vested Options shall lapse and become void and
unexercisable on the last day of the Grantee's employment with the
Company or on such date as set forth in the Grantee's employment
agreement.
12.3. Anything herein to the contrary notwithstanding, if a Grantee should
die, or become unable to continue to be employed by the Company by
reason of becoming incapacitated while in the employ of the Company
due to an accident, illness or other cause approved by the
Committee, or if a Grantee should retire at the legal retirement
age, vested Options can be exercised by the Grantee or the Grantee's
estate or legal representative, as the case may be, within one (1)
year after the Grantee's last day of employment with the Company.
Thereafter, such Options shall lapse and become void and
unexercisable. In the case of an ISO, if such disability is not a
"disability" as such term is defined in Section 22(e)(3) of the
Code, such ISO shall be treated for tax purposes as an NSO as of
three months and one day from the date of such termination.
13. Adjustments:
13.1. In the event that the Company shall issue any of its Ordinary Shares
or other securities as bonus shares (ioeau aeaa) upon or with
respect to any shares which shall at the time be subject to a right
of purchase by a Grantee hereunder, each Grantee upon exercising
such right shall be entitled to receive (for the purchase price
payable upon such exercise), the shares as to which he is exercising
such right and, in addition thereto (at no additional cost), such
number of shares of the class or classes in which such bonus shares
(stock dividend) were declared, as the Grantee would have received
had he been the holder of the shares as to which he is exercising
his right at all times between the date of the granting of such
right and the date of its exercise. No fractional shares will be
issued under this Section. All resulting fractional shares may be
aggregated and sold by the Company, who will be entitled to the
proceeds of the sale thereof.
13.2. If securities of any kind are offered to the Company's shareholders
by means of a rights offering, the exercise price of the Options
will not be adjusted but the number of shares into which the Options
are exercisable ("Underlying Shares") will be increased to take into
account the element of economic benefit of the rights issue ("i0eea
aaeaa"), as such element is calculated by the Tel-Aviv Stock
Exchange (the "TASE") in accordance with its rules.
13.3. If the Company consolidates its Ordinary Shares, NIS 1.00 nominal
value, into shares having a larger nominal value, or if it splits
them into a larger number of shares having a lesser nominal value,
then the number of Underlying Shares that is allotted due to the
Options' exercise will be decreased or increased, as the case may
be, after such an action.
13.4. In the event that the Company is a party to any agreement or
arrangement for exchanging shares (such as a merger or
reorganization) (hereinafter, the "Exchange Transaction"), in which
the holders of the Company's ordinary shares are offered the
opportunity to exchange their shares for the securities of any other
corporation, the Company will cause such other corporation to allot
such securities as were offered to its ordinary shareholders as
aforesaid to any Grantee who exercises his/her options during the
exercise period and subject to the exercise conditions, as if that
Grantee was the holder of the Underlying Shares on the determining
date for purposes of the said Exchange Transaction.
13.5. Voluntary Liquidation: In the event of a decision to voluntarily
liquidate the Company, each Grantee will be deemed to have used his
exercise right immediately prior to the decision having been taken,
without having to pay the exercise price. In this event, the Grantee
will be entitled to a payment which is equal to the amount that he
would receive in liquidation if he were a holder of Underlying
Shares immediately prior to the decision to liquidate, less the
exercise price.
13.6. In any event in which the execution of an adjustment is actually
required as detailed in this Section 13, the Committee is authorized
to implement the actual adjustment and to execute the required
calculations, all subject to the principles in this Section 13.
14. Continuance of Employment:
Neither the Plan nor the Option Award letter shall impose any
obligation on the Company or a Subsidiary, to continue any Grantee in its
employ or as a member of its Board of Directors, and nothing in the Plan
or in any Option Award pursuant thereto shall confer upon any Grantee any
right to continue in the employ or as a member of the Board of Directors
of the Company or a Subsidiary, or restrict the right of the Company or a
Subsidiary, to terminate such employment or position as a member of its
Board of Directors at any time.
15. Governing Law:
15.1. The Plan and all instruments issued hereunder in connection with
Options granted pursuant to the provisions of Section 102, shall be
governed by, and interpreted in accordance with, the laws of the
State of Israel.
15.2. The Plan and all instruments issued hereunder in connection with
Options granted pursuant to the provisions of the Code, shall be
governed by, and interpreted in accordance with, the laws of the
State of California.
16. Application of Funds:
The proceeds received by the Company from the sale of shares
pursuant to Option Awards granted under the Plan will be used for general
corporate purposes of the Company or any Subsidiary.
17. Tax Consequences:
17.1. Any tax consequences arising from the grant or exercise of any
Option Award, from the payment for shares covered thereby or from
any other event or act (of the Company or the Grantee) hereunder,
and commissions and other expenses relating thereto shall be borne
solely by the Grantee. Furthermore, the Grantee shall agree to
indemnify the Company and/or any of its Subsidiaries and/or the
Trustee and hold them harmless against and from any and all
liability for any such tax or interest or penalty thereon, including
without limitation, liabilities relating to the necessity to
withhold, or to have withheld, any such tax from any payment made to
the Grantee. The Company and/or any of its Subsidiaries and/or the
Trustee may withhold any taxes, expenses and commissions from the
exercise of the Options and/or the sale of the underlying shares.
17.2. The Grantee will confirm in writing that he/she (1) understands that
the Options are granted pursuant to a Plan under Section 102, (2) is
aware which taxation track applies to the Options and (3) will
undertake that he/she will not exercise the Options prior to the end
of the Required Holding Period unless otherwise permitted.
18. Amendment and Termination of the Plan
The Plan shall become effective upon its adoption by the Company's
shareholders (the "Effective Date"), and the Company may issue Options
under this Plan until the date that is ten (10) years from the Effective
Date. The Board may, at any time and from time to time, terminate, alter,
adjust or amend the Plan in any respect, except that if at any time the
approval of the shareholders of the Company is required, the Board may not
effect such modification or amendment without such approval.
Exhibit 4.4
RE: GRANT OF OPTIONS UNDER SECTION 102 - 2004 PLAN TO ISRAELI EMPLOYEES
Dear: ________
We are pleased to grant you options ("Options") to purchase up to
__________ Ordinary Shares, nominal value NIS 1.00 each, of Tower Semiconductor
Ltd. (the "Company"), pursuant to the Employee Share Option Plan 2004 of the
Company, (the "Plan"), as of __________ (the "Date of Grant").
The Plan is a Plan under Section 102 of the Income Tax Ordinance ("Section
102") and the United States Internal Revenue Code of 1986, as amended, and the
grant and issuance of Options pursuant to this letter is subject to the receipt
of all the approvals required under applicable law. The Options will be issued
to David H. Schapiro Legal Services (the "Trustee").
The exercise price of the Options shall be $________ per share. The terms
and conditions set forth in this letter are subject to and supplemented by the
terms and conditions set forth in the Plan posted on our website. You are urged
to review the Plan and shall be deemed to be fully aware of all the terms and
conditions governing the Options set forth in the Plan. By your signature below,
you agree to be bound by the terms and conditions of the Plan.
The Options pursuant to this letter will be issued once you sign: (I) this
letter, (II) the attached Employee's Declaration, and (III) any other form which
is required under Section 102 and which will be provided to you by the Company,
and return them to the Company. The forms referred to above must be SENT to the
Human Resources Manager only, no later than ________ on 15:00. No options will
be granted to you if the forms are not returned by such date. If you are unable
to return the forms by such date, you may contact the CFO or VP Human Resources
of the Company, who is authorized, at his/her discretion, to extend such date,
but in any event no later than ________.
The issuance of the Options is subject to the main terms and conditions
set out below. The full terms and conditions of the Options are set out in the
Plan.
1. ISSUANCE OF OPTIONS.
The Options are hereby issued to the Trustee for your benefit,
subject to the terms and conditions hereunder.
The Options will not be listed in any stock exchange and are not
transferable (except to your legal heirs or estate).
2. VESTING; PERIOD OF EXERCISE.
2.1. Subject to the terms and conditions of the Plan and this letter, the
Options granted pursuant to this letter shall become exercisable
(vest) in accordance with the following schedule:
(a) ________ of the Options shall vest 12 months from the Date of
Grant;
(b) ________ of the Options shall vest 24 months from the Date of
Grant;
(c) ________ of the Options shall vest 36 months from the Date of
Grant; and
(d) ________ of the Options shall vest 48 months from the Date of
Grant;
2.2. The above Options will vest and become exercisable only if on the
date of vesting you are still employed by the Company.
2.3. Vested Options may be exercised in whole or in part, at any time
within a period of ten (10) years from the Date of Grant (the
"Exercise Period"). Any Option not exercised within the Exercise
Period shall lapse and become void and unexercisable.
2.4. Options which are unvested at the time of termination of your
employment with the Company will become void and unexercisable at
the time of such termination. In addition, if your employment with
the Company is terminated voluntarily by you or is terminated by the
Company for any reason, vested Options can be exercised by you
within sixty (60) days after your last day of employment with the
Company. Thereafter, such options shall lapse and become void and
unexercisable.
2.5. The procedure for exercise of the Options shall be as it appears on
the web-site of the Company. However, the Company may change the
procedure for exercise of Options at its discretion. The Company
will notify you of any changes in the procedure.
3. NOTICES.
All notices, consents and other communications under this Agreement
shall be sent in writing and shall be deemed to have been given when (a)
delivered by hand, (b) mailed by certified or registered mail, return
receipt requested or express delivery service, or (c) when received by the
addressee, if sent by Express Mail, Federal Express or other express
service, in each case to the appropriate addresses set forth below (or to
such other addresses as a party may designate as to itself by notice to
the other parties).
(a) If to you, at your address listed beneath your signature below;
(b) If to the Company: Human Resources Department, Tower Semiconductor,
P.O. Box 619, Migdal Ha'emek, Israel;
(c) If with respect to Option exercise procedures:
benefit@mybenefit.co.il or facsimile no.: 09-766-5080.
4. NO WAIVER.
The delay or failure on the part of any party hereto to insist, in
any one instance or more, upon strict performance of any of the terms or
conditions of this Agreement, or to exercise any right or privilege herein
conferred shall not be construed as a waiver of any such terms,
conditions, rights or privileges but the same shall continue and remain in
full force and effect.
Sincerely,
Tower Semiconductor Limited
Name of Employee: ___________ Date: _____________
Employee signature: _____________
Employee ID number: _____________
Employee address: _____________
EMPLOYEE'S DECLARATION
1. I, the undersigned, confirm that the contents of this letter, dated
____________ are acceptable and agreed to by me.
2. All taxes, commissions and other expenses and payments payable in
connection with the grant of the Options, the exercise thereof, the sale
of the shares purchased by way of exercise of the Options (to the extent
payable) and/or the transfer of funds (including currency conversions)
will be borne by me. I will promptly indemnify the Company in the event it
makes any of such payments.
3. I acknowledge and agree that in the event that bonus shares are issued by
the Company in respect of the shares granted to me pursuant to this
letter, such bonus shares shall be transferred by the Company to the
Trustee, and the terms and provisions of the Income Tax Rules mentioned
above shall apply to the bonus shares, as shall the Trustee's undertakings
under the Agreement between the Trustee and the Company.
4. Without derogating from the former provisions, I acknowledge that the
ultimate liability for income tax, social insurance or other tax-related
withholding in connection with this grant or its exercise is my
responsibility. I specifically acknowledge that any and all applicable
laws and regulations in Israel pertaining to the granting of options
including but not limited to the provisions set forth in Section 102 of
the Income Tax Ordinance [New Version] - 1961 (the "Ordinance") and any
rules promulgated thereunder including any amendment thereto, any
interpretation published by the Israeli tax authorities in their official
guidelines and any judicial interpretation of the Israeli courts, shall
each apply with respect to my Options and may affect the terms of my
Options. Any exercise of an Option and sale of shares received upon the
exercise of my Options (the "Shares"), which deviates from the rules set
forth in Section 102 of the Ordinance or in regulations promulgated
thereunder (the "Rules") may result in adverse tax consequences for me. I
further acknowledge that each of the Company, brokers effecting
transactions relating to my Options and the Trustee (as defined below) is
under no obligation to inform me as to whether a particular transaction I
may consider effecting complies with the Rules. I further acknowledge that
the Company has not, nor does it intend to, provide tax advice with
respect to the tax ramifications of an Option grant under the laws of any
jurisdiction, including Section 102 of the Ordinance or any Rules
promulgated thereunder, and that I am urged to seek my own personal tax
advice.
5. I acknowledge that a trustee (the "Trustee") has been appointed to
administer my Options in accordance with Section 102 of the Ordinance and
the Income Tax Rules (Tax Benefits Regarding the Grant of Options to
Employees), 2003 (the "Rules") and pursuant to an agreement with the
Trustee that may be amended from time to time (the "Trust Agreement"). In
accordance with the terms of this Option Agreement, the Company and/or the
Trustee are responsible, among other things, to: (a) withhold and pay any
applicable taxes owed to the tax authorities in Israel in connection with
my Options, including as a result of an exercise of my Options and sale of
the Shares by me, prior to releasing any funds owed to me, (b) provide the
tax authorities in Israel with an annual report in accordance with the
Rules and (c) provide the Israeli tax authorities with a report regarding
the grant of Options under the Plan, within ninety (90) days from the
Grant Date in accordance with the Rules. Any fees associated with the
exercise of my Options as specified in the Trust Agreement will be borne
solely by me. In accordance with the approval granted by the Israel Tax
authorities in connection with this Plan, certain of the functions related
to the administration of my options may be performed by the Company.
6. In accepting this grant, I acknowledge that unless otherwise permitted by
the Income Tax Authorities, the Rules as of the Option Date prohibit me
from selling Shares issued upon exercise of my Options during a period of
twenty-four months from the end of the tax year in which the grant took
place in the event that my Options are subject to the "capital gains
track" as set forth in Section 102(b)(2) (the "Capital Gains Track") of
the Ordinance (the "Capital Gains Track"), or during a period of twelve
months from the end of the tax year in which the grant took place in the
event that my Options are subject to the "employment income track" as set
forth in Section 102(b)(1) of the Ordinance (the "Required Holding
Period"). Notwithstanding the above, if I elect to sell my Shares during
the Required Holding Period, I hereby acknowledge that the sale of the
Shares will be taxed in accordance with the relevant provisions of Section
102 of the Ordinance and the Rules regarding a breach of the terms of the
Required Holding Period. For the avoidance of doubt, in the event that my
Options are subject to the "capital gains track", a sale of the shares
issued upon exercise of my Options during the Required Holding Period will
forfeit my right to receive the tax benefits of the "capital gains track"
under Section 102(b)(2) of the Ordinance and the income derived from the
exercise of the Options and the sale of the Shares will be taxed as
regular employment income (and not at the reduced capital gains tax rate,
if applicable) and will be subject to National Insurance and Health tax.
7. I hereby acknowledge that Options granted pursuant to Section 102 as
capital gains track options, pursuant to which income resulting from the
sale of shares derived from such Options is taxed as a capital gain ("102
Capital Gains Track Options"), or as ordinary income track options,
pursuant to which income resulting from the sale of shares derived from
such Options is taxed as ordinary income ("102 Ordinary Income Track
Options"; together with 102 Capital Gains Track Options, "102 Trustee
Options"), shares issuable upon exercise of 102 Trustee Options or
proceeds arising from the sale of such shares may be released to an
Israeli resident Grantee only in compliance with the Ordinance, the Rules,
and the terms and conditions of the Trust Agreement entered into between
the Company and the Trustee, including without derogation, the withholding
of any applicable tax due pursuant to the Ordinance and Rules.
8. I am aware that 102 Trustee Options may be granted before the Plan has
been approved by the Income Tax Authorities as a plan under Section 102,
but not prior than 30 (thirty) days from the filing of the Plan with the
Income Tax Authorities; however, in the event that the Income Tax
Authorities may require certain changes to the Plan, the Option Awards
shall be subject to these changes
9. I am aware that: (i) the Company intends to issue additional shares and
options in the future to various entities and individuals, as the Company
in its sole discretion shall determine; and (ii) the Company may increase
its share capital by new securities in such amount as it finds expedient;
and I hereby waive any claim I might or may have regarding such issuance
or increase.
10. I am aware that pursuant to Section 102(b)(3), if my Options are issued on
the Capital Gains Track with an exercise price lower than the average
closing price of the Company's shares on the 30 (thirty) trading days
preceding the issuance of the Options, a part of any benefit ultimately
derived from the exercise of the Options and the sale of the shares issued
upon exercise of my Options, up to the amount equivalent to the difference
between these prices, will be taxed as regular employment income and not
at the reduced capital gains tax rate and will be subject to National
Insurance and Health tax.
11. I hereby consent to the transfer of information that the Company is
required to report to the tax authorities and to the Trustee relating to
the Options in accordance with the provisions of Section 102 of the
Ordinance and the Rules.
Name of Employee: ___________ Signature: ___________
I.D. Number: _______________ Date: _______________
Exhibit 4.5
RE: GRANT OF OPTIONS UNDER THE INTERNAL REVENUE CODE
OF 1986 - 2004 PLAN TO U.S. EMPLOYEES
Dear: ________
We are pleased to grant you options ("Options") to purchase Ordinary
Shares, nominal value NIS 1.00 each (the "Shares"), of Tower Semiconductor Ltd.
(the "Company"), pursuant to the Employee Share Option Plan 2004 of the Company,
(the "Plan"), as of __________ (the "Date of Grant"), as follows:
1. Total Number of Options Granted _________________________
2. Type of Option:
|_| Option intended to qualify as an incentive stock option ("ISO") within
the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended ("Code").
|_| Option not intended to qualify as an Incentive Stock Option ("NSO").
3. The exercise price of the Options shall be $________ per Share.
4. The Options are hereby issued (the "Option Award") to the Trustee (as
defined in the Plan) for your benefit, subject to the terms and conditions
hereunder and the Plan which we have posted on our website. You are urged
to review the Plan and shall be deemed to be fully aware of all the terms
and conditions governing the Options set forth in the Plan. By your
signature below, you agree to be bound by the terms and conditions of the
Plan.
5. Subject to the terms and conditions of the Plan and this letter, the
Options granted pursuant to this letter shall become exercisable (vest) in
accordance with the following schedule:
(a) ________ of the Options shall vest 12 months from the Date of Grant;
(b) ________ of the Options shall vest 24 months from the Date of Grant;
(c) ________ of the Options shall vest 36 months from the Date of Grant;
and
(d) ________ of the Options shall vest 48 months from the Date of Grant.
6. The above Options will vest and become exercisable only if on the date of
vesting you are still employed by the Company. Vested Options may be
exercised in whole or in part, at any time within a period of ten (10)
years from the Date of Grant (the "Exercise Period"). Any Option not
exercised within the Exercise Period shall lapse and become void and
unexercisable. In addition, Options which are unvested at the time of
termination of your employment with the Company will become void and
unexercisable at the time of such termination. In addition, if your
employment with the Company is terminated voluntarily by you or is
terminated by the Company for any reason (other than as set forth in the
Plan), vested Options can be exercised by you within sixty (60) days after
your last day of employment with the Company. Thereafter, such options
shall lapse and become void and unexercisable.
7. The procedure for exercise of the Options shall be as detailed on our
website. However, the Company may change the procedures for exercise of
the Options at its discretion. The Company will notify you of any changes
in the procedure.
8. Any tax consequences arising from the grant or exercise of any Option
Award, from the payment for Shares covered thereby or from any other event
or act (of the Company, its subsidiaries or you) hereunder, and
commissions and other expenses relating thereto shall be borne solely by
you. Furthermore, you shall agree to indemnify the Company and/or any of
its subsidiaries and/or the Trustee and hold them harmless against and
from any and all liability for any such tax or interest or penalty
thereon, including without limitation, liabilities relating to the
necessity to withhold, or to have withheld, any such tax from any payment
made to you. The Company and/or any of its subsidiaries and/or the Trustee
may withhold any taxes, expenses and commissions from the exercise of the
Options and/or the sale of the underlying Shares.
9. While we are not providing you any tax advice with respect to the grant of
Options, we understand that:
a. In the case of an ISO, the exercise of the Option, under current
applicable law that is subject to change, will not be subject to U.S.
federal income tax, although the excess, if any, of the Fair Market Value
(as defined below) of the Shares on the date of exercise over the Fair
Market Value of the Shares on the date of grant will be included in
computing the alternative minimum tax for federal income tax purposes and
may subject you to the alternative minimum tax in the year of exercise.
b. The exercise of an NSO will be subject to U.S. federal income tax
liability (at ordinary tax rates) upon the excess, if any, of the fair
market value of the Shares on the date of exercise over their exercise
price. If you are an employee or a former employee, we will be required to
treat such excess as compensation income and withhold from your
compensation or collect from you and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation
income at the time of exercise. We may refuse to honor the exercise and
refuse to deliver Shares if such withholding amounts are not delivered at
the time of exercise.
c. In the case of an NSO, if Shares are held for at least one year
after exercise, any gain realized on disposition of the Shares, i.e. the
excess of the sale proceeds over the basis in the Shares (which will
generally be equal to the Fair Market Value of the Shares on the date of
exercise), will be treated as long-term capital gain for U.S. federal
income tax purposes. In the case of an ISO, if Shares transferred pursuant
to the Option are held for at least one year after exercise and for at
least two years after the Date of Grant, any gain realized on disposition
of the Shares will also be treated as long-term capital gain for U.S.
federal income tax purposes. If Shares purchased under an ISO are disposed
of within one year after exercise or within two years after the Date of
Grant, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of
the difference between the lesser of (1) the Fair Market Value of the
Shares on the date of exercise, or (2) the sale price of the Shares and
the exercise price. Any additional gain will be taxed as capital gain.
d. In the case of an ISO, if a Grantee sells or otherwise disposes
of any of the Shares acquired pursuant to the ISO on or before the later
of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, such Grantee shall immediately notify the
Company in writing of such disposition. You agree that you may be subject
to income tax withholding by the Company or the Subsidiary on the
compensation income recognized by you.
e. In the case of an ISO, the Option shall not be considered an ISO
to the extent that the aggregate Fair Market Value (determined at the time
each ISO is granted) of the Shares with respect to which Options
designated as ISOs are exercisable for the first time by you during any
calendar year exceeds $100,000 or if you own shares representing more than
10% of the voting power of the Company or the Subsidiary ISO's at the time
of the Option Award; such Options shall be treated as NSOs. Options shall
be taken into account in the order in which they were granted, and the
Fair Market Value of the Shares shall be determined as of the time the
Option with respect to such Shares is granted. For the purposes of this
letter, "Fair Market Value" means the last reported sales price of the
Company's Shares as reported by NASDAQ or the principal national
securities exchange upon which the Company's Shares are listed or traded.
f. You are hereby informed that other and/or additional tax
consequences may be applicable to you with respect to the particular
circumstances relating to the grant or exercise of any Option Award or
from the payment for Shares covered thereby or from a change in your
residence or from any other event or act under applicable law, and the
above provisions are not a comprehensive description of all tax law
provisions which may apply to you and do not replace professional tax
advice in these matters.
10. The Options pursuant to this letter will be issued once you sign and
return to the Company: (I) this letter and (II) any other form which is
required under applicable law and which will be provided to you by the
Company. The forms referred to above must reach the Human Resources
Manager only, no later than ________ on 15:00. No options will be granted
to you if the forms are not returned by such date. If you are unable to
return the forms by such date, you may contact the CFO or VP, Human
Resources of the Company, who is authorized, at his/her discretion, to
extend such date, but in any event no later than ________.
11. All notices, consents and other communications under this Agreement shall
be sent in writing and shall be deemed to have been given when (a)
delivered by hand, (b) mailed by certified or registered mail, return
receipt requested or express delivery service, or (c) when received by the
addressee, if sent by Express Mail, Federal Express or other express
service, in each case to the appropriate addresses set forth below (or to
such other addresses as a party may designate as to itself by notice to
the other parties).
(a) If to you, at your address listed beneath your signature below;
(d) If to the Company: Human Resources Department, Tower
Semiconductor, P.O. Box 619, Migdal Ha'emek, Israel;
(e) If with respect to Option exercise procedures:
benefit@mybenefit.co.il or facsimile no.: 972-9-766-5080.
Sincerely,
Tower Semiconductor Limited
I HEREBY ACKNOWLEDGE THAT A COPY OF THE PLAN HAS BEEN POSTED ON THE
COMPANY'S WEBSITE AND REPRESENT THAT I AM FAMILIAR WITH THE TERMS AND PROVISIONS
THEREOF, AND HEREBY ACCEPT THIS OPTION SUBJECT TO ALL OF THE TERMS AND
PROVISIONS THEREOF. I FURTHER ACKNOWLEDGE THAT I AM AWARE THAT (I) THE COMPANY
INTENDS TO ISSUE ADDITIONAL SHARES AND OPTIONS IN THE FUTURE TO VARIOUS ENTITIES
AND INDIVIDUALS, AS THE COMPANY IN ITS SOLE DISCRETION SHALL DETERMINE; AND (II)
THE COMPANY MAY INCREASE ITS SHARE CAPITAL BY NEW SECURITIES IN SUCH AMOUNT AS
IT FINDS EXPEDIENT; AND I HEREBY WAIVE ANY CLAIM I MIGHT OR MAY HAVE REGARDING
SUCH ISSUANCE OR INCREASE. I HAVE REVIEWED THE PLAN AND THIS OPTION IN THEIR
ENTIRETY, HAVE HAD AN OPPORTUNITY TO OBTAIN THE ADVICE OF COUNSEL PRIOR TO
EXECUTING THIS OPTION AND FULLY UNDERSTAND ALL PROVISIONS OF THE OPTION. I
HEREBY AGREE TO ACCEPT AS BINDING, CONCLUSIVE AND FINAL ALL DECISIONS OR
INTERPRETATIONS OF THE BOARD OF DIRECTORS UPON ANY QUESTIONS ARISING UNDER THE
PLAN OR THIS OPTION. I FURTHER AGREE TO NOTIFY THE COMPANY UPON ANY CHANGE IN
THE ADDRESS INDICATED BELOW.
Name of Employee: ___________
Date: _____________
Employee signature: _____________________
Employee Social Security number: ___________________
Employee address: _____________________
Exhibit 5.1
July 21, 2004
Tower Semiconductor Ltd.
P.O. Box 619
Migdal Haemek, Israel 10556
Re: Registration Statement on Form S-8
Dear Sirs:
We have acted as Israeli counsel for Tower Semiconductor Ltd., a company
organized under the laws of Israel (the "Company"), in connection with the
Registration Statement on Form S-8 (the "Registration Statement") being filed by
the Company under the Securities Act of 1933 for the purposes of registering
2,071,578 of its Ordinary Shares, par value New Israeli Shekel 1.00 per share.
These shares are all shares that may be issued pursuant to options that have
been, or may hereafter be, granted pursuant to the plan ("Plan") identified in
the Registration Statement (the "Option Shares").
On the basis of such investigation as we have deemed necessary, we are of
the opinion that the Option Shares have been duly and validly authorized for
issuance and, when issued upon due exercise of options granted or hereafter
granted under the Plan in accordance with the provisions of the Plan and the
related option agreements (including payment of the option exercise price
provided for therein), will be fully paid and non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
The above opinion is based on facts existing on the date hereof and of
which we are aware. We express no opinion as to any laws other than the laws of
the State of Israel as the same are in force on the date hereof and we have not,
for purpose of giving this opinion, made any investigation of the laws of any
other jurisdiction.
Very truly yours,
/s/ Yigal Arnon & Co.
Exhibit 15.1 Date: July 21, 2004 Tower Semiconductor Ltd. Migdal Ha'emek Israel - ------ We have made a review, in accordance with standards established by the Institute of Certified Public Accountants in Israel, of the unaudited interim consolidated financial statements of Tower Semiconductor Ltd. (the "Company") and its subsidiary for the six-month and three-month periods ended June 30, 2004, as indicated in our report dated July 21, 2004; because we did not perform an audit, we expressed no opinion on such interim financial statements. We are aware that our report relating to the Company's unaudited interim consolidated financial statements for the six-month and three-month periods ended June 30, 2004 is incorporated by reference to the Registration Statement (Form S-8) pertaining to the Company's Employee Share Option Plan 2004 and the registration of 2,071,578 ordinary shares of the Company. We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a "part" of the Registration Statement prepared or certified by an accountant, or a "report" prepared or certified by an accountant, within the meaning of Sections 7 and 11 of that Act. /s/ Brightman Almagor & Co. Certified Public Accountants A Member Firm of Deloitte Touche Tohmatsu Tel Aviv, Israel
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-8 (pertaining to the Employee Share Option Plan 2004 of Tower
Semiconductor Ltd. ("the Company") and the registration of 2,071,578 ordinary
shares of the Company) of our report dated February 2, 2004, appearing in the
annual report on Form 20-F of the Company for the year ended December 31, 2003.
/s/ Brightman Almagor & Co.
Certified Public Accountants
A Member Firm of Deloitte Touche Tohmatsu
Tel Aviv, Israel
July 21, 2004