Company: TSEM
Filing Date: 2025-04-30
Form Type: 20-F
Source: 0001178913-25-001537
Chunk: 98

Company: TOWER SEMICONDUCTOR LTD
Filing Date: 2025-04-30
Form: 20-F
Item: Item 3
Chunk 98
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 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 benefit pension plan for certain
of its employees covered by a collective bargaining agreement that provides for monthly pension payments to eligible employees upon retirement.
The pension benefits are based on years of service and specified benefit amounts. In addition, the bargaining agreement includes a post-retirement
medical plan for certain employees. Certain eligible union employees who terminate employment are provided with a lump-sum benefit payment.

Most of TPSCo’s employees at its Japan fabs are represented
by a union and covered by a collective bargaining agreement. TPSCo established a Defined Contribution Retirement Plan (the “ DC Plan”)
for its employees, through which TPSCo pays approximately 8% with employee average match of 1% from the employees’ base salary to
the DC Plan. Such payment releases the employer from further obligation to any payments upon termination of employment. The payment is
remitted either to third party benefit funds that are responsible for investing the funds based on employee preference, or directly, to
those employees who elected not to enroll in the DC Plan.

E. SHARE OWNERSHIP