Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 197

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 5
Chunk 197
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 principally concern the minimum wage laws,
procedures for dismissing employees, determination of severance pay, leaves of absence (such as annual vacation or maternity leave), sick
pay and other conditions for employment. The expansion orders that apply to our employees principally concern the requirement for length
of the workday and workweek, mandatory employer’s payments to employees’ pension funds, annual recreation allowance, travel
expenses payment and other conditions of employment.

There have been attempts, including recently, by the Histadrut
to organize and establish a representative labor union for our Israeli employees. Under Israeli law, establishing a representative labor
union requires that at least one-third of the Israeli employees join the Histadrut and in such case, all employees would be liable to
pay its membership fees. While the Histadrut’s attempts have not succeeded to date, if a representative labor union would
be established in the future, we would need to conduct negotiations with the representative labor union and the Histadrut regarding the
employees’ terms of employment and benefits.

Under the special collective bargaining agreement to which we are
party relating to our Israeli employees, we are required to pay funds to an employee’s insurance fund and/or pension fund. Such
funds generally provide a combination of savings plans, insurance and severance pay benefits to the employee, securing his or her right
to receive pension or giving the employee a lump sum payment upon retirement, under certain circumstances, if legally entitled, upon termination
of employment. Tower’s Israeli employees pay an amount equal to 6% of his or her wages to the insurance fund or pension fund, and
Tower pays an additional 14.83% to 15.83% of the employee’s wages to such funds. Israeli law generally requires severance pay upon
the retirement or death of an employee or termination of employment by the employer without due cause. Under the special collective bargaining
agreement, Section 14 to the Israeli Severance Pay Law, 5723-1963 applies to Tower, according to which the employer’s payments to
severance pay is in lieu of payment of severance pay upon termination of employment. Therefore, the monthly payments as mentioned above
constitute the entire required payments for severance pay, and we are not required to pay any additional severance upon termination of
employment of our Israeli employees.

62

A portion of the employees at our Newport Beach, California fab
are represented by a union and covered by a collective bargaining agreement. NPB Co. maintains a defined