EX-3 5 doc4.txt Exhibit 3 NEWS RELEASE TOWER SEMICONDUCTOR'S SHAREHOLDERS APPROVE APPOINTMENT OF NEW CHAIRMAN AND ACTING CHIEF EXECUTIVE OFFICER AND AMENDMENT TO FAB 2 INVESTMENT AGREEMENTS o CARMEL VERNIA TO SERVE AS CHAIRMAN TO TOWER'S BOARD OF DIRECTORS AND ACTING CEO AS OF JUNE 1, 2003 o AMENDMENT TO TERMS OF FINAL MILESTONE PAYMENT WITH FAB 2 INVESTORS APPROVED MIGDAL HAEMEK, Israel - May 14, 2003 - Tower Semiconductor Ltd. (NASDAQ: TSEM; TASE: TSEM) today announced that Tower's shareholders have approved the previously announced appointment of Carmel Vernia as Chairman of Tower's Board of Directors and as its Acting Chief Executive Officer. Mr. Vernia's positions with Tower will officially commence on June 1, 2003. Tower's shareholders also approved the previously announced amendment to its Fab 2 investment agreements in connection with the terms of the fifth and final milestone payment. This amendment is subject to Tower concluding arrangements with its banks for the completion of its 2003 financing package. Also approved is an increase in Tower's authorized share capital to NIS 100,000,000 divided into 100,000,000 ordinary shares. ABOUT TOWER SEMICONDUCTOR LTD. Tower Semiconductor Ltd. is a pure-play independent wafer foundry established in 1993. The company manufactures integrated circuits with geometries ranging from 1.0 to 0.18 microns; it also provides complementary manufacturing services and design support. In addition to digital CMOS process technology, Tower offers advanced non-volatile memory solutions, mixed-signal and CMOS image-sensor technologies. To provide world-class customer service, the company maintains two manufacturing facilities: Fab 1 has process technologies from 1.0 to 0.35 microns and can produce up to 20,000 150mm wafers per month. Fab 2 features 0.18-micron and below process technologies, including foundry-standard technology, and will offer full production capacity of 33,000 200mm wafers per month. The Tower Web site is located at www.towersemi.com. SAFE HARBOR This press release includes forward-looking statements, which are subject to risks and uncertainties. Our actual results may vary from those projected or implied by such forward-looking statements. Potential risks and -MORE- uncertainties include, without limitation, risks and uncertainties associated with (i) obtaining required approvals of our banks to the amendment to the Fab 2 investment agreements, (ii) our need to renegotiate our Fab 2 credit facility to extend the deadlines by which were and are required to raise additional financing in 2002 and 2003 and meet the fifth and sixth milestones, which, in the absence of a renegotiated agreement, would result in an event of default under the credit facility in which event the banks would have the right to call our loans and exercise their liens against our assets, (iii) the review of our Fab 2 plan currently being conducted by a leading consulting company engaged by the Company which may affect the renegotiation of the terms of the credit facility, (iv) the possible claim by our wafer partners, financial investors and the Investment Center of the State of Israel of a breach of and suspension of performance under our agreements if an event of default should be declared under the credit facility, (v) raising at least $26 million of additional funding for Fab 2 before the end of 2003, which is a condition to completion of the fifth milestone investment by our major wafer and equity partners, (vi) securing at least $33 million in interim funding from our banks prior to their approval of the amendment to the Fab 2 investment agreements in order to receive an advance of at least $13 million from its major shareholders (vii) our ability to obtain additional financing for the Fab 2 project from equity and/or wafer partners, the Israeli Investment Center, our banks, and/or other sources, as required under the Fab 2 business plan and pursuant to our agreements with our wafer and equity partners, banks and the Israeli Investment Center (viii) our satisfaction of all other conditions under our agreements with our Fab 2 equity and wafer partners, the Israeli Investment Center and our banks, (ix) obtaining the approval of the Israeli Investment Center to extend the five-year investment period under our Fab 2 approved enterprise program and of amendments to our modified business plan, (x) ramp-up of production at Fab 2, (xi) completion of the development and/or transfer of advanced process technologies to be utilized in our existing facility and in Fab 2, (xi) market acceptance and competitiveness of the products to be manufactured by us for customers using these technologies, (xii) obtaining additional business from new and existing customers (xiii) conditions in the market for foundry manufacturing services and in the market for semiconductor products generally and (xiv) possible loss of our exclusive foundry license with Saifun if we fail to meet certain sales levels and other conditions. A more complete discussion of risks and uncertainties that may affect the accuracy of forward-looking statements included in this press release or which may otherwise affect our business is included at "Risk Factors" in our most recent Annual Report on Form 20-F, as filed with the Securities and Exchange Commission and the Israel Securities Authority. # # # PR Agency Contact Investor Relations Contact Corporate Contact JULIE LASS SHELDON LUTCH TAMAR COHEN Loomis Group Fusion IR & Communications Tower Semiconductor Ltd. +1 (713) 526 3737 +1 (212) 268 1816 +972-4650-6998 lassj@loomisgroup.com sheldon@fusionir.com pr@towersemi.com