Document:

EXHIBIT 4.8

                          Option Grant Letter Agreement

                RE: GRANT OF OPTIONS - CEO SHARE OPTION PLAN 2005

Dear: Mr. Russell Ellwanger

     Tower Semiconductor Ltd. (the "Company") is pleased to grant you, subject
to the receipt of the requisite corporate approvals, options ("Options") to
purchase up to 10,743,264 Ordinary Shares, nominal value NIS 1.00 each, of the
Company (the "Shares"), pursuant to the CEO Share Option Plan of the Company,
(the "Plan"), as of September 28, 2006 (the "Date of Grant"). Capitalized terms
not defined in this letter agreement (this "Option Agreement") shall have the
meaning ascribed to them in the Plan.

     The grant and issuance of Options pursuant to this Option Agreement is
subject to the receipt of all the approvals required under Section 102 of the
Income Tax Ordinance ("Section 102"). The Options will therefore be issued to
the Trustee, as such term is defined in the Plan. The Options are granted as 102
Capital Gains Track Options.

     The exercise price of the Options shall be as detailed in the attached
Appendix. The terms and conditions set forth in this Option Agreement are
subject to and supplemented by the terms and conditions set forth in the Plan
attached hereto. 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 granted pursuant to this Option Agreement will be issued once
you sign and return to the Company: (I) this Option Agreement, (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.

     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).

<PAGE>

2.   VESTING; PERIOD OF EXERCISE.

     2.1  VESTING SCHEDULE. Subject to the terms and conditions of the Plan and
          this Option Agreement, the Options granted pursuant to this Option
          Agreement shall become exercisable (vest) over a period of four years
          in accordance with the following vesting schedule:

          (a)  Twenty five percent (25%) of the Options shall vest on May 16,
               2006.

          (b)  Twenty five percent (25%) of the Options shall vest on May 16,
               2007.

          (c)  Twenty five percent (25%) of the Options shall vest on May 16,
               2008.

          (d)  Twenty five percent (25%) of the Options shall vest on May 16,
               2009.

     2.2  Subject to Section 2.5(i), the above Options will vest and become
          exercisable only if on the date of vesting you serve as chief
          executive officer of the Company.

     2.3  Other than as set forth in applicable law and Section 2.5 below,
          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  The Company will come to an agreement with you as to how to value the
          Ordinary Shares of the Company in the event that they are not publicly
          traded at the time of an option exercise.

     2.5  In the event of the termination of your relationship with the Company
          as chief executive officer of the Company (the "Employment")
          subsequent to the Date of Grant, the Options will be treated as
          follows:

               (i)  In the event the Company terminates you without cause (as
                    defined in Section 7(a) of your employment agreement with
                    the Company (the "Employment Agreement")), all Options that
                    were to vest over the 12 months from the date of termination
                    shall become fully vested and exercisable immediately upon
                    such date of termination. All options that are vested and
                    exercisable on the date of termination shall lapse and
                    become unexercisable sixty (60) days from such date. Any
                    remaining unvested options will terminate immediately upon
                    termination.

               (ii) In the event: (a) the Company terminates you for cause, or
                    (b) you terminate your employment with the Company pursuant
                    to Section 7(c) of the Employment Agreement, all of your
                    Options (including vested Options) will terminate
                    immediately upon the date of termination.

     2.6  Notwithstanding anything to the contrary in the Plan and subject to
          any applicable law, upon the Company consummating of any transaction
          that results in the sale of all or substantially all of the assets or
          shares of the Company, all Options that were to vest over the next 12
          months from the date such transaction is consummated shall become
          exercisable immediately prior to such date.

     2.7  The procedure for exercise of the Options shall be as detailed on the
          website of the Company (www.towersemi.com). However, the Company may
          change the procedure for exercise of the Options at its discretion.
          The Company will notify you of any changes in the procedure.

<PAGE>

3.   NOTICES.

     All notices, consents and other communications under this Option 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:
               www.tamirfishman.com or Tel: +972-3-6849282 Fax: +972-3-6853773
               Email: sop@tamfish.com

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 Option 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: Mr. Russell Ellwanger                 Date: ____________

Employee signature: _____________________

Employee Passport Number: ______________

Employee address:   _____________________

<PAGE>

                                    Appendix

                  NO. OF OPTIONS                   EXERCISE PRISE- $
                  --------------                   -----------------

                     4,295,337                            1.45

                     2,860,412                            1.52

                     1,129,863                            1.52

                     1,129,863                            1.52

                        20,541                            1.50

                        15,217                            1.50

                       238,304                            1.65

                       851,087                            1.88

                       202,640                            1.88

  TOTAL             10,743,264
                    ----------

<PAGE>

EMPLOYEE'S DECLARATION

     1. I, the undersigned, confirm that the contents of this Option Agreement,
dated September 28, 2006 are acceptable and agreed to by me.

     2. Any tax consequences arising from (i) the grant or exercise of any
Option, (ii) the issuance of Underlying Shares and payment therefor, (iii) the
sale, transfer or exchange of Underlying Shares, or (iv) any other event or act
of mine or of the Company hereunder, and any commissions and other expenses
related thereto, shall be borne solely by me. The Company, any of its
Subsidiaries and/or the Trustee may withhold any taxes, expenses and commissions
as required. I agree to indemnify the Company, any of its Subsidiaries and/or
the Trustee and hold them harmless from and against any and all liability for
any such tax consequences, commissions, expenses 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 me.

     3. I acknowledge and agree that in the event the Company issues securities
as bonus shares or performs a share split or a similar dissolution, such bonus
shares or other similar rights on the shares granted to me pursuant to this
Option Agreement, shall be transferred by the Company to the Trustee, and the
terms and provisions of the Ordinance and the Rules (as such terms are defined
below) shall apply to the bonus shares and/or other similar rights, 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 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 in the Plan) is under no obligation to inform me as to
whether a particular transaction I may consider effecting complies with the
provisions of Section 102 of the Ordinance or the rules promulgated thereunder.
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.

<PAGE>

     5. APPOINTMENT OF A TRUSTEE. I acknowledge that 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 between the
Company and 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 the
Plan, certain of the functions related to the administration of my options may
be performed by the Company.

     6. REQUIRED HOLDING PERIOD. 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 my Shares during a period of twenty-four
months from the end of the tax year in which the grant took place as my options
are subject to the "capital gains track" as set forth in Section 102(b)(2) of
the Ordinance (the "Capital Gains Track"). 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, a sale of the Shares
during the Required Holding Period will forfeit my right to receive the tax
benefits of the Capital Gains Track 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 generally subject to National Insurance and Health Tax.

     7. 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 other
than any claim or right I may have pursuant to any written agreement between
myself and the Company or its subsidiary Tower Semiconductor USA, Inc.

     8. I am aware that pursuant to Section 102(b)(3) if my options are issued
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, generally 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 generally will be subject to National
Insurance and Health Tax.

<PAGE>

     9. TRANSFER OF INFORMATION. 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: Mr. Russell Ellwanger                 Signature: ___________

Passport Number: _______________                        Date: _______________EXHIBIT 4.9

                                                             Date: July 15, 2005

    RE: GRANT OF OPTIONS UNDER THE INTERNAL REVENUE CODE OF 1986 - 2005 PLAN

Dear: Mr. Russell Ellwanger

     Tower Semiconductor USA, Inc. (the "Company") is pleased to grant you
options ("Options") to purchase Ordinary Shares, nominal value NIS 1.00 each
(the "Shares"), of Tower Semiconductor Ltd. ("TSL"), pursuant to the TSL CEO
Share Option Plan 2005, (the "Plan"), as of July 15, 2005 (the "Date of Grant"),
as follows:

1.   Total Number of Options Granted 662,862.

2.   Type of Option:

               [X]  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 $1.56 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 a copy of which was provided to you. 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) 25% of the Options shall vest on May 1, 2006;

     (b) 25% of the Options shall vest on May 1, 2007;

     (c) 25%of the Options shall vest on May 1, 2008; and

     (d) 25% of the Options shall vest on May 1, 2009.

<PAGE>

6.       (a) Subject to Section 6(b), 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.

          (b) In the event of the termination of your relationship with the
     Company as its chief executive officer subsequent to the Date of Grant, the
     Options will be treated as follows:

               (i) In the event the Company terminates you without Cause (as
          defined in your employment agreement with the Company), all Options
          that were to vest over the twelve (12) months from the date of
          termination (as defined below) shall become fully vested and
          exercisable immediately upon such date of termination. All options
          that are vested and exercisable on the date of termination shall lapse
          and become unexercisable sixty (60) days from such date. Any remaining
          unvested options will terminate immediately upon termination.

               (ii) In the event: (a) the Company terminates you for Cause, or
          (b) you terminate your employment with the Company, all of your
          Options (including vested Options) will terminate immediately upon the
          date of termination.

          (c) Notwithstanding anything to the contrary in the Plan and subject
     to any applicable law, upon the Company consummating of any transaction
     that results in the sale of all or substantially all of the assets or
     shares of TSL, all Options that were to vest over the next twelve (12)
     months from the date such transaction is consummated shall become
     exercisable immediately prior to such date.

7.   The procedure for exercise of the Options shall be as detailed in the Plan
     and on TSL's Intranet. 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, TSL, TSL's 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, TSL and/or any
     of TSL's 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, TSL and/or any of TSL's 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.

<PAGE>

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, the Company 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. The Company 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 you sell or otherwise dispose 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, you shall immediately notify the Company in writing of
     such disposition. You agree that you may be subject to income tax
     withholding by TSL or the Company 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 TSL or the Company 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.

<PAGE>

          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.

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;

          (b) If to the Company: Human Resources Department, Tower Semiconductor
     USA, Inc., 2350 Mission College Blvd. #500, Santa Clara, CA 95054;

          (c) If with respect to Option exercise procedures: sob@tamfish.com or
     facsimile no: 972-3-6849282.

                                                            Sincerely,

                                                   Tower Semiconductor USA, Inc.

Approved & accepted:

Tower Semiconductor Ltd.

<PAGE>

     I HEREBY ACKNOWLEDGE THAT A COPY OF THE PLAN HAS BEEN PROVIDED TO ME 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 ADDITIONAL SHARES AND OPTIONS WILL BE
ISSUED IN THE FUTURE TO VARIOUS ENTITIES AND INDIVIDUALS, AS MAY BE DETERMINED
BY THE COMPANY OR TSL IN THEIR SOLE DISCRETION; AND (II) TSL 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 OF THE COMPANY AND TSL'S 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:   _____________________

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