Specialty foundry Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) will raise an additional $3 million from Yorkville Advisors LLC unit YA Global Master SPV Ltd. tomorrow. Tower will allot the company 3.4 million shares at $0.88 per share, as part of the Standby Equity Purchase Agreement (SEPA) from August under which Yorkville will invest up to $25 million in Tower.
Tower's share rose 1.1% on Friday to close at $0.93, giving a market cap of $149 million. The share rose 0.9% at the opening on the TASE today to NIS 3.44.
Tower has already allotted 5.39 million shares to Yorkville for $5.2 million. Yorkville can resell the shares it receives on the market.
In a separate announcement, Tower will convene a general shareholders meeting on November 15 to approve extended terms of office for directors, CEO Russell Ellwanger and chairman Amir Elstein. The shareholders will also be asked to approve new compensation for Ellwanger and Elstein, who is also Israel Corp's vice chairman. Israel Corp. is the second largest shareholder in Tower after the 8.49% stake of SanDisk Corporation (Nasdaq:SNDK).
Elstein is due to receive 11.5 million Tower warrants, which, if exercised, amount to 1.7% of Tower's share capital as of June 17 when the company's board approved the compensation. The strike price of the warrants is $0.29, the share's closing price on June 18. Tower says that the paper value of the warrants is $8.1 million. Half the warrants can be exercised on September 17, 2011, and the other half one year later. The warrants are valid through June 2016.
Ellwanger's base salary will remain unchanged at $449,050 per year. His annual salary cost is $546,770, after an 8.1% pay hike in August 2008 when Tower was in talks with the banks to reduce its debt. He is also eligible to a bonus of 15% to 150% of his base salary, depending on the company's performance.
Published by Globes [online], Israel business news - www.globes-online.com - on October 11, 2009
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