Exhibit 4.10
TOWER SEMICONDUCTOR LTD.
INDEPENDENT
DIRECTORS SHARE OPTION PLAN 2007
A PLAN UNDER SECTION 102 OF THE INCOME TAX ORDINANCE AND
THE UNITED STATES INTERNAL REVENUE CODE OF 1986
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1.1 |
This plan, as amended from time to time, shall be known as the
Tower Semiconductor Ltd. Independent Directors Share Option Plan
2007 (the “ Plan ”). |
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1.2 |
The purpose and intent of the Plan is to provide incentives to
directors of Tower Semiconductor Ltd. (the “ Company
”) , who are not affiliated with its major shareholders, who
are not a major shareholder and are not employees of the Company
(each an “ Independent Director ”), by providing
such Independent Directors with options (“ Options
”) to purchase ordinary shares (“ Ordinary
Shares ”) of the Company, and was approved by the
Company’s Board of Directors (the “ Board
”). Options under this Plan may be granted either (i)
pursuant to the provisions of Section 102 (“ Section
102 ”) of the Israeli Income Tax Ordinance (New Version),
1961 as amended from time to time, the Law Amending the Income Tax
Ordinance (Number 132) 2002 (as amended, the “
Ordinance ”) and the rules promulgated thereunder (the
“ Rules ”); or (ii) pursuant to the United
States Internal Revenue Code of 1986, as amended (the “
Code ”). |
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1.3 |
The Plan shall become effective upon its approval by the
Company’s shareholders (the “Effective Date
”). |
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The total number of Options that may be granted under this Plan
is 900,000. Each Option shall be exercisable into one Ordinary
Share of the Company (nominal value NIS 1.00 per share) (the
“ Underlying Share ”). |
| 3. |
Options granted under Section 102 : |
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Options granted pursuant to Section 102(b) shall be either (a)
capital gains track options under Section 102(b)(2), in which
income resulting from the sale of Underlying Shares is taxed as
capital gain (“ 102 Capital Gains Track Options
”), or (b) ordinary income track options under Section
102(b)(1), in which income resulting from the sale of Underlying
Shares 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 Income Tax
Authorities to issue 102 Capital Gains Track Options under the
Company’s Employee Share Option Plan 2003/1, the Company may
currently grant only 102 Capital Gains Track Options. The Company
may change such election, following the approval of the Board, all
in accordance with the provisions of Section 102(g) of the
Ordinance. |
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| 4. |
Options granted under the Code : |
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Options granted to US residents shall be Non-qualified Stock
Options. |
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5.1. |
On the Effective Date (also the “ Initial Grant
Date ”), each Independent Director, shall be granted such
number of Options that shall equal one hundred and fifty thousand
(150,000) less the number of options to purchase Ordinary Shares
held by such Independent Director as of the Initial Grant Date and
which, as of the Initial Grant Date, have not vested. |
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5.2. |
In the event that, after the Initial Grant Date, a new
Independent Director is appointed in any manner prescribed by the
Company’s Articles of Association (the date of such
appointment, the “ Subsequent Grant Date ”),
each such Independent Director shall, in the absence of a decision
by the Board to the contrary, be granted one hundred and fifty
thousand (150,000) Options to purchase Ordinary Shares (“
Subsequent Options ”). |
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5.3. |
Upon each 36 month anniversary of a previous grant of options
to an Independent Director under this Plan (each a “
Tenure Grant Date ”), each such Independent Director
shall, in the absence of a decision by the Board to the contrary,
be granted an additional one hundred and fifty thousand (150,000)
Options (“ Tenure Options ”). |
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5.4. |
Other than as set forth above, the grant of an Option to an
Independent Director (each referred to as 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. |
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6.1. |
102 Trustee Options may be granted from the later of (i) the
Effective Date; or (ii) 30 (thirty) days from the filing of this
Plan with the Israeli Income Tax Authorities in accordance with
applicable law. |
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6.2. |
Options granted under the Code may be granted from the
Effective Date. |
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6.3. |
Options may be granted until 10 (ten) years from the Effective
Date. |
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6.4. |
Options shall be granted by issuance of an Option letter to a
Grantee stating, inter alia, the number of Underlying Shares, the
dates when the Options may be exercised, the Option exercise price
and such other terms and conditions at the discretion of the Board,
provided that they are consistent with this Plan and with
applicable law (the “ Option Letter ”). The
Option Letter shall also list the date of grant of the respective
Options (the “ Date of Grant ”). |
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6.5. |
The Options will not be listed in any stock exchange and are
not transferable (except to a Grantee’s legal heirs or
estate). |
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6.6. |
Grantees shall have no right to vote or receive dividends
(subject to Section 12.1) or any other rights of a shareholder
prior to his/her exercise of the Options and until the issuance of
the share certificate evidencing the Underlying Shares. |
| 7. |
Vesting and Exercise of Options : |
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7.1. |
Options shall vest and become exercisable as set forth in the
Option Letter. |
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7.2. |
The consideration to be paid for the Underlying Shares,
including the method of payment, shall be determined by the Company
and may consist entirely of (1) cash, (2) check (provided
payment has cleared), or (3) cashless in the case of same day
sale. The procedure for exercise of the Options shall be provided
to each Grantee together with the Option Letter. The Company may
change the procedures for exercise of the Options at its
discretion, by giving notice thereof to the Grantees. |
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7.3. |
Unless earlier terminated in accordance with Section 11 below,
if any Option has not been exercised within ten (10) years after
the date on which the Initial Options, Subsequent Options and
Tenure Options, as applicable, first vested, such Option shall
immediately terminate and all of such Grantee’s interests in
and rights to such Option shall immediately expire. |
| 8. |
Options’ Exercise Price: |
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 on the last market trading day prior to the
Initial Grant Date, Subsequent Grant Date or Tenure Grant Date, as
applicable (but no less
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