Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 83

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 83
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ENSATION

Under the Companies Law, a public company must have a compensation
policy regarding the terms of engagement of office holders, as such term is defined in the Companies Law. The compensation policy must
be approved at least once every three years, first, by our board of directors, upon recommendation of our compensation committee, and
second, by the shareholders by a majority of the ordinary shares present, in person or by proxy, and voting at a shareholders meeting,
provided that either: (i) a majority of the shares voted by shareholders who are not controlling shareholders and shareholders who do
not have a “personal interest” in the proposal (excluding abstaining votes) voted in favor of the proposal; or (ii) the total
number of shares voted against the proposal by shareholders who are not controlling shareholders and shareholders who do not have a personal
interest in the proposal does not exceed two percent (2%) of the Company’s outstanding voting rights. Under special circumstances,
the board of directors may approve the compensation policy despite the objection of the shareholders on the condition that the compensation
committee and then the board of directors decide, on the basis of detailed grounds and after discussing again the compensation policy,
that approval of the compensation policy, despite the objection of shareholders, is for the benefit of the company.

52

Our current compensation policy for executive officers and directors,
as approved by our shareholders in July 2023 and amended in July 2024, which amendment was approved by our shareholders in July 2024, serves
as the basis for decisions concerning the financial terms of employment or engagement of our office holders (within the meaning of the
Companies Law), including cash compensation, equity-based awards, indemnification and insurance, severance and other benefits. Our compensation
policy is performance-based and is designed to align our officers’ and directors’ interests with those of our company and
shareholders in order to enhance shareholder value. Our compensation policy allows us to provide incentives to senior management that
reflect short-term, mid-term and long-term goals and performance, as well as motivate the achievement of company targets, while providing
compensation that is competitive in the global marketplace in which we recruit our senior management.

As an Israeli company with a significant global footprint, we aim
to adopt compensation policies and procedures that align with global companies of similar complexity, including companies in our industry
and other companies which compete with us for similar talent.

Under the Companies Law, a company’s compensation policy
must be determined and later reevaluated according to certain factors