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1.

a proposal to approve the acquisition of the Company by Intel FS Inc., a Delaware corporation (“Parent”), including the approval of (a) the Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated February 15, 2022, by and among Parent, Steel Titanium 2022 Ltd., a company organized under the laws of the State of Israel and a wholly‑owned subsidiary of Parent (“Merger Sub”), Intel Corporation, a Delaware corporation (“Intel”), and the Company, pursuant to which Merger Sub will merge with and into the Company (and will cease to exist as a separate legal entity), and the Company will be the surviving company (the “Surviving Company”) and will become a wholly‑owned subsidiary of Parent and a subsidiary of Intel (the “Merger”); (b) the Merger itself, on the terms and subject to the conditions set forth in the Merger Agreement; (c) the consideration to be received by the shareholders of the Company in the Merger, consisting of $53.00 per share in cash, without interest and less any applicable withholding taxes, for each ordinary share, par value NIS 15.00 per share, of the Company (each, a “Company Share”) owned immediately prior to the effective time of the Merger; and (d)  all other transactions and arrangements contemplated by the Merger Agreement, a copy of which is attached as Annex A to the proxy statement (collectively, the “Merger Proposal”); and

2.

a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates if necessary to solicit additional proxies if there are insufficient votes to approve the Merger Proposal at the time of the extraordinary general meeting (the “Adjournment Proposal”).

1.

The Merger Proposal. To approve the acquisition of the Company by Intel FS Inc., a Delaware corporation (“Parent”), including the approval of (a) the Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), dated February 15, 2022, by and among Parent, Steel Titanium 2022 Ltd., a company organized under the laws of the State of Israel and a wholly‑owned subsidiary of Parent (“Merger Sub”), Intel Corporation, a Delaware corporation (“Intel”), and the Company, pursuant to which Merger Sub will merge with and into the Company (and will cease to exist as a separate legal entity), and the Company will be the surviving company (the “Surviving Company”) and will become a wholly‑owned subsidiary of Parent (the “Merger”); (b) the Merger itself, on the terms and subject to the conditions set forth in the Merger Agreement; (c) the consideration to be received by the shareholders of the Company in the Merger, consisting of $53.00 per share in cash, without interest and less any applicable withholding taxes, for each ordinary share, par value NIS 15.00 per share, of the Company (each, a “Company Share”) owned immediately prior to the effective time of the Merger; and (d)  all other transactions and arrangements contemplated by the Merger Agreement, a copy of which is attached as Annex A to the proxy statement (collectively, the “Merger Proposal”); and

2.

The Adjournment Proposal. To approve the adjournment of the Meeting to a later date or dates if necessary to solicit additional proxies if there are insufficient votes to approve the Merger Proposal at the time of the Meeting.

	By the Order of the Board,
	Amir Elstein
	Chairman of the Board
	February 17, 2022

	Page
SUMMARY	1
Parties Involved in the Merger	1
The Merger	2
Treatment of Company Equity Awards	2
The Extraordinary General Meeting	3
Interests of the Company’s Directors and Executive Officers in the Merger	5
Market Price Information	5
Recommendation of the Board	5
Fairness Opinion of J.P. Morgan	5
Fairness Opinion of BDO	5
Merger Agreement	6
Financing of the Merger	7
U.S. Federal and Israeli Income Tax Consequences of the Merger	8
Regulatory Approvals Required for the Merger and Other Regulatory Filings	8
No Appraisal Rights	8
QUESTIONS AND ANSWERS	9
CAUTIONARY STATEMENT REGARDING FORWARD‑LOOKING STATEMENTS	18
RISK FACTORS	20
THE EXTRAORDINARY GENERAL MEETING	22
Date, Time and Place	22
Purpose of the Extraordinary General Meeting	22
Board Recommendation	22
Record Date; Shares Entitled to Vote; Quorum	22
Vote Required; Abstentions and Broker Non‑Votes	22
Shares Held by the Company’s Directors and Executive Officers	23
Voting of Proxies	23
Revocability of Proxies	24
Solicitation of Proxies	24
Adjournments or Postponements	24
Questions and Additional Information	24
PROPOSAL 1: APPROVAL OF THE MERGER AGREEMENT	25
PROPOSAL 2: ADJOURNMENT OF THE EXTRAORDINARY GENERAL MEETING	26
THE MERGER	27
Parties Involved in the Merger	27
Effect of the Merger	27
Effect on the Company if the Merger is Not Completed	28
Merger Consideration	28
Background of the Merger	28
Reasons for the Merger and Recommendation of the Board	34
Unaudited Prospective Financial Information	39
Fairness Opinion of J.P. Morgan	41
Fairness Opinion of BDO	44
Interests of the Company’s Directors and Executive Officers in the Merger	47
Financing of the Merger	49
Closing and Effective Time	49
No Appraisal Rights	49
Federal and Israeli Income Tax Consequences of the Merger	49
Regulatory Approvals Required for the Merger	55

THE MERGER AGREEMENT	58
Explanatory Note Regarding the Merger Agreement	58
Effects of the Merger; Directors and Officers; Articles of Association	58
Closing and Effective Time	58
Merger Consideration	59
Treatment of Company Equity Awards	59
Exchange and Payment Procedures	60
Representations and Warranties	60
Conduct of Business Pending the Merger	63
Competing Proposals	66
The Board’s Recommendation; Company Board Recommendation Change	68
Employee Benefits	69
Efforts to Close the Merger	69
Indemnification and Insurance	70
Other Covenants	70
Conditions to the Closing of the Merger	71
Termination of the Merger Agreement	72
Termination Fees	73
Other Material Provisions of the Merger Agreement	75
MARKET PRICES AND DIVIDEND DATA	76
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND DIRECTORS AND OFFICERS	77
WHERE YOU CAN FIND MORE INFORMATION	78
MISCELLANEOUS	79
Annex A – The Merger Agreement	A-1
Annex B – Fairness Opinion of J.P. Morgan	B-1
Annex C – Fairness Opinion of BDO	C-2

•

“Board” means the Company’s Board of Directors;

•

“Companies Law” or “ICL” means the Israeli Companies Law, 5759-1999, as amended (together with the rules and regulations promulgated thereunder);

•

“Company Shares” means the Company’s ordinary shares, par value NIS 15.00 per share;

•

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended;

•

“ISA” means the Israel Securities Authority;

•

“Nasdaq” means the Nasdaq Global Select Market;

•

“NIS” means New Israeli Shekels, the official currency of the State of Israel;

•

“SEC” means the U.S. Securities and Exchange Commission; and

•

“TASE” means the Tel Aviv Stock Exchange Ltd.

(1)

approve the acquisition of the Company by Parent, including the approval of (a) the Merger Agreement, dated February 15, 2022, by and among Parent, Merger Sub, Intel and the Company, pursuant to which Merger Sub will merge with and into the Company (and will cease to exist as a separate legal entity), and the Company will be the surviving company and will become a wholly‑owned subsidiary of Parent and a subsidiary of Intel; (b) the Merger itself, on the terms and subject to the conditions set forth in the Merger Agreement; (c) the consideration to be received by the shareholders of the Company in the Merger, consisting of $53.00 per share in cash, without interest and less any applicable withholding taxes, for each Company Share owned immediately prior to the effective time of the Merger; and (d)  all other transactions and arrangements contemplated by the Merger Agreement, a copy of which is attached as Annex A to this proxy statement (collectively, the “Merger Proposal”); and

(2)

approve the adjournment of the extraordinary general meeting to a later date or dates if necessary to solicit additional proxies if there are insufficient votes to approve the Merger Proposal at the time of the extraordinary general meeting (the “Adjournment Proposal”).

•

the approval of the Merger Agreement, the Merger and the consummation of the Transactions by the requisite affirmative vote of the Company’s shareholders;

•

no governmental authority in any jurisdiction has by any law or order that is continuing and remains in effect, restrained, enjoined or otherwise prohibited the consummation of the Merger;

•

expiration or termination of the applicable waiting period under the Hart‑Scott‑Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”);

•

expiration or termination of the applicable waiting period, or, where applicable, approvals have been obtained, and all notices to, filings with and consents of the applicable governmental authority have been made or obtained under (1) the Anti‑Monopoly Law of August 1, 2008, as amended and completed and its implementing regulations, in the People’s Republic of China (“PRC”); (2) the Act against Restraints of Competition of 1958, as amended, in Germany; (3) the Economic Competition Law 5748-1988, as amended, in Israel; (4) the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade of 1947, as amended, in Japan; (5) the Enterprise Act 2002, as amended, only if a merger control notification in relation to the Transactions to the Competition and Markets Authority (the “CMA”) is necessary or reasonably required in the opinion of Parent after consulting with, and considering in good faith the view of the Company relating to such strategy, in the United Kingdom; and (6) Law Decree no. 56, dated May 11, 2012 and the Law Decree no. 105, dated September 21, 2019, as subsequently amended and integrated, together with all connected or subordinated implementing decrees and regulations, in Italy (together with the expiration or termination of the applicable waiting period under the HSR Act, the “Required Clearances”); and

•

at least 50 days shall have elapsed after the filing of the Merger Proposal with the Companies Registrar (as defined in the section of this proxy statement captioned “The Merger—Effect of the Merger”) and at least 30 days shall have elapsed after the approval of the Merger Agreement, the Merger and the consummation of the Transactions by the Company’s shareholders has been received.

•

with specified qualifications and exceptions, the truth and correctness of the Company’s representations and warranties contained in the Merger Agreement as of the Effective Time;

•

the Company having complied with or performed, in all material respects, the covenants, obligations and agreements to be complied with or performed by it under the Merger Agreement on or prior to the Effective Time;

•

no Company Material Adverse Effect (as defined in the section of this proxy statement captioned “The Merger Agreement—Representations and Warranties,” excepting any effects that, individually or in the aggregate, would not prevent or materially impair the Company from consummating the Merger or performing any of its material obligations under the Merger Agreement) shall have occurred since February 15, 2022, and be continuing;

•

the receipt by Parent of a certificate dated as of the Closing Date and signed on behalf of the Company by the Company’s chief executive officer or chief financial officer, to the effect that the conditions described in the preceding three items have been satisfied; and

•

the Company having furnished to Parent a duly executed payoff letter in customary form from each holder of specified indebtedness for borrowed money of the Company.

•

with specified qualifications and exceptions, the truth and correctness of the representations and warranties of Parent, Merger Sub and Intel contained in the Merger Agreement as of the Closing Date;

•

each of Parent and Merger Sub having complied with or performed, in all material respects, the covenants, obligations and agreements to be complied with or performed by it under the Merger Agreement on or prior to the Effective Time; and

•

the receipt by the Company of a certificate, dated as of the Closing Date and signed on behalf of Parent and Merger Sub by the chief executive officers or chief financial officers of Parent and Merger Sub, to the effect that the conditions described in the preceding two items have been satisfied.

Q:	Why am I receiving these materials?

A:

You are receiving this proxy statement from us because you were a shareholder of record at the close of business on March 16, 2022. You are entitled to attend the extraordinary general meeting and are entitled to vote on the items of business described in this proxy statement if you own Company Shares at the close of business on the Record Date of March 16, 2022. Your vote is very important and we encourage you to vote by proxy or voting instruction form as soon as possible.

Q:	What am I being asked to vote on at the extraordinary general meeting?

A:	You are being asked to vote on the following proposals:

Q:	What happens if additional matters are presented at the extraordinary general meeting?

A:

The only items of business that the Board intends to present at the extraordinary general meeting are set forth in this proxy statement. No shareholder has advised us of the intent to present any other matter, and we are not aware of any other matters to be presented at the meeting. If any other matter or matters are brought before the meeting in accordance with the provisions of our articles of association and the ICL, the person(s) named as your proxyholder(s), if any, will have the discretion to vote your Company Shares on the matters in accordance with their best judgment and as they deem advisable.

Q:	When and where is the extraordinary general meeting?

A:	The extraordinary general meeting will take place on April 25, 2022, at 4:00 p.m. (Israel time) (9:00 a.m. Eastern time), at the Company’s offices at 20 Shaul Amor Street, Ramat Gavriel Industrial Park, Migdal Haemek 2310502, Israel.

Q:	Who is entitled to vote at the extraordinary general meeting?

A:

Shareholders as of the Record Date of March 16, 2022 are entitled to notice of the extraordinary general meeting and to vote at the extraordinary general meeting. Each holder of Company Shares is entitled to cast one vote on each matter properly brought before the extraordinary general meeting for each Company Share owned as of the Record Date.

Q:	What shares can I vote at the extraordinary general meeting?

A:

You may vote all of the Company Shares you owned as of the Record Date, including Company Shares held directly in your name as the shareholder of record, all Company Shares held on Nasdaq held for you in “street name” as the beneficial owner through a broker, trustee or other nominee such as a bank, and all Company Shares held on the TASE held for you as the beneficial owner through a member of the TASE.

Q:	If I purchased my Company Shares after the Record Date, may I vote these shares at the extraordinary general meeting?

Q:	How may I vote?

A:	Shareholders of Record: If you are a shareholder of record, you can vote either in person at the extraordinary general meeting or by authorizing another person as your proxy, whether or not you attend the extraordinary general meeting. You may vote by proxy in any of the manners below:

•

By telephone—If you are a shareholder of record, you can submit a proxy by telephone by calling the toll-free number listed on the enclosed proxy card or voting instruction form, entering your control number located on the enclosed proxy card or voting instruction form and following the prompts.

•

By Internet—If you are a shareholder of record, you can submit a proxy over the Internet by logging on to the website listed on the enclosed proxy card or voting instruction form, entering your control number located on the enclosed proxy card or voting instruction form and submitting a proxy by following the on-screen prompts.

Q:	What happens if I do not indicate how to vote on the proxy card or voting instruction form?

Q:	If any broker, bank or other nominee holds my shares in “street name,” will my nominee vote my shares for me?

A:

No. Your bank, broker or other nominee is not permitted to vote your Company Shares on any proposal currently scheduled to be considered at the extraordinary general meeting unless you instruct your bank, broker or other nominee how to vote. You should follow the procedures provided by your bank, broker or other nominee to vote your Company Shares. Without instructions, your Company Shares will not be counted as voted at the extraordinary general meeting.

Q:	How are “broker non‑votes” counted?

A:	Broker non‑votes will be counted as present for the purpose of determining the presence or absence of a quorum for the extraordinary general meeting, but they will not be counted in tabulating the voting result for either proposal.

Q:	How are abstentions counted?

A:

If you return a proxy card that indicates an abstention from voting on all matters, the Company Shares represented by your proxy will be counted as present for the purpose of determining the presence or absence of a quorum for the transaction of business, but they will not be counted in tabulating the voting result for any particular proposal.

Q:	May I attend the extraordinary general meeting and vote in person?

A:

Yes. All shareholders of record as of the Record Date may attend the extraordinary general meeting and vote in person. Even if you plan to attend the extraordinary general meeting in person, to ensure that your Company Shares will be represented at the extraordinary general meeting, we encourage you to sign, date and return the enclosed proxy card in the accompanying prepaid reply envelope (if you hold Company Shares through a member of the TASE, together with a valid Ownership Certificate as of the record date) or grant your proxy electronically over the Internet or by telephone or if you hold your Company Shares through members of the TASE, electronically via the voting system of the ISA.

Q:	What is the proposed Merger and what effects will it have on the Company?

A:

The proposed Merger is the acquisition of the Company by Parent. If the Merger Proposal is approved by shareholders and the other closing conditions under the Merger Agreement have been satisfied or waived, Merger Sub will merge with and into the Company, with the Company continuing as the Surviving Company. As a result of the Merger, the Company will become a wholly‑owned subsidiary of Parent, and the Company Shares will no longer be publicly traded and will be delisted from Nasdaq and the TASE. In addition, the Company Shares will be deregistered under the Exchange Act, and the Company will no longer file periodic reports with the SEC or the ISA.

Q:	What will I receive if the Merger is completed?

A:	Upon completion of the Merger, you will be entitled to receive the merger consideration for each Company Share that you own. For example, if you own 100 Company Shares, you will receive $5,300.00 in cash in exchange for your Company Shares, less any applicable withholding taxes.

Q:	How does the merger consideration compare to the unaffected market price of the Company Shares?

A:

The $53.00 per share merger consideration (before any applicable withholding taxes) constitutes a premium of: approximately 60% and 56% (using the exchange rate between the NIS and the U.S. dollar, as quoted by the Bank of Israel on February 14, 2022), to the per share closing price of the Company Shares on Nasdaq and the TASE, respectively, on February 14, 2022, the last trading day prior to the execution of the Merger Agreement. On March 10, 2022, the closing price of our Company Shares on Nasdaq and the TASE was $47.29 and NIS 153.80, respectively.

Q:	What do I need to do now?

A:

We encourage you to read this proxy statement, the annexes to this proxy statement and the documents that we refer to in this proxy statement carefully and consider how the Merger affects you. Then sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope (if you hold Company Shares through a member of the TASE, together with a valid Ownership Certificate as of the record date), or grant your proxy electronically over the Internet or by telephone, or if you hold Company Shares through members of the TASE, electronically via the voting system of the ISA so that your Company Shares can be voted at the extraordinary general meeting. If you hold your Company Shares in “street name,” please refer to the voting instruction forms provided by your bank, broker or other nominee to vote your Company Shares.

Q:	Should I send in my share certificates now?

A:

No, please do not send in your Company Share certificates with your proxy card. After the Merger is completed, you will receive a letter of transmittal containing instructions for how to send your share certificates to the bank or trust company the Company selects to act as the exchange agent for the Merger (the “exchange agent”) in order to receive the appropriate cash payment for the Company Shares represented by your share certificates.

Q:	What happens if I sell or otherwise transfer my Company Shares after the Record Date but before the extraordinary general meeting?

A:	The Record Date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting and the date the Merger is expected to be completed.

Q:	How does the Board recommend that I vote?

A:

The Board, after considering the various factors described under the caption “The Merger—Reasons for the Merger and Recommendation of the Board,” has unanimously (1) determined that the Merger Agreement and the Transactions, including the Merger, are fair to, and in the best interests of, the Company’s shareholders and that, considering the financial position of the merging companies, no reasonable concern exists that the Surviving Company will be unable to fulfill the obligations of the Company to its creditors; and (2) approved the Merger, the execution of the Merger Agreement and the consummation of the Transactions.

Q:	What happens if the Merger is not completed?

A:

If the Merger Proposal is not approved by shareholders or if the Merger is not completed for any other reason, shareholders will not receive any merger consideration for their Company Shares. Instead, the Company will remain an independent public company, the Company Shares will continue to be listed and traded on Nasdaq and the TASE, respectively, and registered under the Exchange Act, and the Company will continue to file periodic reports with the SEC and the ISA.

Q:	What vote is required to approve the Merger Proposal?

A:

The affirmative vote of the holders of at least a majority of the Company Shares represented at the extraordinary general meeting (or any adjournment or postponement thereof), in person, by proxy or electronic voting, and voting on the proposal, excluding abstentions and broker non-votes, is required to approve the Merger Proposal. The foregoing majority must be achieved after excluding any votes on account of Company Shares held by Parent, Merger Sub or any other Parent Affiliate.

Q:	What vote is required to approve the Adjournment Proposal?

A:

The affirmative vote of the holders of a majority of the Company Shares represented at the extraordinary general meeting (or any adjournment or postponement thereof), in person, by proxy or electronic voting, and voting on the proposal, excluding abstentions and broker non-votes, is required to approve the Adjournment Proposal.

Q:	How many shares must be present or represented to conduct business at the extraordinary general meeting (that is, what constitutes a quorum)?

A:

The presence at the extraordinary general meeting, in person or represented by proxy or by electronic voting, of at least two shareholders (not in default in payment of all calls and other sums then payable by such shareholder in respect of his or her shares) holding at least 33% of the voting power of the Company on the Record Date will constitute a quorum for the extraordinary general meeting.

Q:	What happens if a quorum is not present?

A:

In the absence of the requisite quorum of the Company’s shareholders at the extraordinary general meeting, the extraordinary general meeting will be adjourned to the same day in the immediately following week, May 2, 2022, and will be held at the same time and place, without any notification to shareholders, unless otherwise determined at the extraordinary general meeting in accordance with the Company’s articles of association. At such adjourned meeting, if a quorum is not present, within half an hour of the time fixed for the commencement thereof, subject to the terms of applicable law, the Company’s shareholders present, in person, by proxy or by electronic voting, will constitute a quorum. Under the terms of the Merger Agreement, the extraordinary general meeting cannot be adjourned for more than five business days at a time or 15 business days in the aggregate after the date for which the extraordinary general meeting was originally scheduled without the prior written consent of Parent.

Q:	What is the difference between holding Company Shares as a shareholder of record and as a beneficial owner?

A:	Most of our shareholders hold their Company Shares through a broker or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

Q:	May I change my vote after I have mailed my signed proxy card?

A:	Yes. You may change your vote or revoke your proxy at any time prior to the vote at the extraordinary general meeting.

Q:	What is a proxy?

A:

A proxy is a document by which you authorize a person to be your representative at a meeting of the Company and to vote for you at that meeting of shareholders in the way that you have directed. That document is called a “proxy card” or, if your Company Shares are held in street name and you give instructions to the record holder of your Company Shares, is called a “voting instruction form.”

Q:	What should I do if I receive more than one proxy card or voting instruction form?

A:

You may receive more than one set of these proxy solicitation materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction forms. Please complete, sign date and return all proxy cards and voting instruction forms you receive, or vote each group of Company Shares by mail, telephone or over the Internet to ensure that all your Company Shares are voted. For example, if you hold your Company Shares in more than one brokerage account, you may receive a separate voting instruction form for each brokerage account in which you hold Company Shares. In addition, if you are a shareholder of record and your Company Shares are registered in more than one name, you may receive more than one proxy card.

Q:	Where can I find the voting results of the extraordinary general meeting?

A:

If available, the Company may announce preliminary voting results at the conclusion of the extraordinary general meeting. The Company intends to publish final voting results in a Report of Foreign Private Issuer on Form 6‑K to be furnished to the SEC and ISA following the extraordinary general meeting. All reports that the Company files or furnishes with the SEC and ISA are publicly available when filed or furnished. See the section of this proxy statement captioned “Where You Can Find More Information.”

Q:	Will the merger consideration payable to me be subject to Israeli capital gains tax?

A:

As a general rule, Israeli resident shareholders are subject to Israeli capital gains tax on the merger consideration. Non‑Israeli resident shareholders who acquired their Company Shares prior to October 25, 1994 (the date on which these shares were registered for trading on Nasdaq) and who do not qualify for an exemption from Israeli capital gains tax under the Ordinance (as defined below) and regulations promulgated thereunder or an applicable tax treaty to which the State of Israel is a party (subject to the receipt in advance of a valid certificate from the Israel Tax Authority (the “ITA”) allowing for an exemption), including the Convention Between the Government of the United States of America and the Government of the State of Israel with Respect to Taxes on Income (the “Treaty”) described in this proxy statement, may be subject to Israeli capital gains tax on the disposition of their Company Shares in the Merger. Such shareholders, as well as shareholders who were Israeli residents in the past, should consult their tax advisors regarding the tax consequences of the Merger to them.

Q:	Will the merger consideration payable to me be subject to Israeli tax withholding?

A:

According to Israeli law, Parent is required to withhold Israeli taxes from the merger consideration even if you are not subject to Israeli capital gains tax. We intend to submit an application to the ITA in order to clarify the withholding mechanism. As part of the application, we will request that non‑Israeli shareholders holding Company Shares subject to the shares register maintained by the Company’s U.S. transfer agent that are held through non‑Israeli or Israeli brokers who hold less than 5% of the outstanding Company Shares and which were purchased after October 25, 1994 (the date on which the Company listed its shares on Nasdaq) be exempt from withholding to the extent that such shareholders provide the paying agent with certain declarations regarding their residency (and to the extent that the merger consideration to be received by a shareholder shall exceed $300,000, a valid certificate of residency for tax purposes issued by the tax authority of such shareholder’s country of residence) and the date on which the Company Shares were purchased. We cannot assure you that our application will be accepted.

Q:	Will U.S. Holders (as defined in “The Merger—U.S. Federal and Israeli Income Tax Consequences of the Merger—U.S. Federal Income Tax Consequences”) be subject to U.S. federal income tax upon the exchange of Company Shares for cash pursuant to the Merger?

A:	The exchange of the Company Shares for cash pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. For more details, see “The Merger—U.S. Federal and Israeli Income Tax Consequences of the Merger—U.S. Federal Income Tax Consequences.”

Q:	What will the holders of Company equity awards receive in the Merger?

A:	Cashed-Out Company Options

Q:	When do you expect the Merger to be completed?

A:

The Merger has been approved by the boards of directors of Intel, Parent, the Company and Merger Sub and we are working towards completing the Merger as quickly as reasonably possible. Several conditions must be satisfied or waived before the Merger is completed. See the section of this document titled “The Merger Agreement—Conditions to the Closing of the Merger” for further information. The Merger is expected to close in approximately 11 months from the date of this proxy statement. However, the exact timing of completion of the Merger cannot be predicted because the Merger is subject to the closing conditions specified in the Merger Agreement, many of which are outside of our control.

Q:	Am I entitled to appraisal rights?

A:	No. Under Israeli law, holders of Company Shares are not entitled to statutory appraisal rights in connection with the Merger.

Q:	Do any of the Company’s directors or officers have any interests in the Merger?

A:

Yes. Our directors and executive officers may have interests in the Merger that may be different from, or in addition to, your interests as a shareholder. The Board was aware of these interests during its deliberations on the merits of the Merger and in deciding to recommend that shareholders vote in favor of the Merger Proposal. These interests are described in more detail under the caption “The Merger—Interests of the Company’s Directors and Executive Officers in the Merger.”

Q:	Who can help answer my questions?

A:	If you have any questions concerning the Merger, the extraordinary general meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your Company Shares, please contact our Proxy Solicitor:

•

the risk that the Transactions may not be completed in a timely manner or at all, which may adversely affect the Company’s business and the price of the Company Shares;

•

uncertainties as to the timing of the consummation of the Transactions and the potential failure to satisfy the conditions to the consummation of the Transactions, including the receipt of certain governmental and regulatory approvals;

•

the potential for regulatory authorities to require divestitures, behavioral remedies or other concessions in order to obtain their approval of the Transactions;

•

the potential failure to obtain approvals and/or consents for the Transactions from third parties, including governmental and regulatory approvals;

•

the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement;

•

the effect of the announcement or pendency of the Transactions on the Company’s business relationships, operating results and business generally;

•

the effects of the delays, disruptions or increased costs in the integration of the Company’s technology into existing or new products;

•

the potential that the Company’s shareholders may not approve the Merger Proposal;

•

the risk that expected benefits, including financial benefits, of the Transactions may not be realized;

•

the risk that integration of the acquisition post-closing of the Transactions may not occur as anticipated, and the combined companies’ ability to achieve the growth prospects and synergies expected from the Transactions, as well as delays, challenges and expenses associated with integrating the combined companies’ existing businesses may incur;

•

the risk of potential litigation related to the Transactions or otherwise;

•

unanticipated restructuring costs may be incurred or undisclosed liabilities assumed;

•

attempts to retain key personnel and customer may not succeed, the potential departure of key employees from the Company due to the contemplated Merger, as well as the risk of employees becoming unionized;

•

risks related to diverting management’s attention from the Company’s ongoing business operations, including potential cyberattacks on the Company, fires, wars and earthquakes;

•

potential loss of customers or business or reduction in business with current customers due to the contemplated Merger;

•

the risk of potential inability to respond effectively to competitive pressures, industry developments and future opportunities, including new strategic transactions, new business deals and/or renewals of certain agreements with third parties, in particular, given the restrictions on the conduct of the Company’s business during the interim period between signing and closing due to the pre-closing covenants in the Merger Agreement;

•

exposure to inflation, currency rate (mainly the Israeli Shekel and Japanese Yen) and interest rate fluctuations and risks associated with doing business locally and internationally, as well as fluctuations in the market price of Intel and the Company’s traded securities;

•

the impact of the COVID-19 pandemic on Intel and the Company’s business and general economic conditions;

•

demands in the Company’s customer end markets and for the Company’s foundry services and/or products that exceed the Company’s capacity;

•

ongoing or potential litigations or disputes, incidental to the conduct of the Company’s ongoing business, with customers, suppliers, landlords, or other third parties;

•

the business combination or the Company’s products after the closing of the Transactions may not be supported by third parties;

•

actions by competitors may negatively impact results;

•

potential negative changes in general economic conditions in regions or the industries in which Intel and the Company operate; and

•

the other risks factors described from time to time by the Company in the most recent Annual Report on Form 20-F and in any subsequent reports on Form 6-K, each of which is on file with or furnished to the SEC and the ISA available at the SEC’s website at www.sec.gov and the ISA’s website at www.magna.isa.gov.il and in the Investor Relations section of the Company’s website at ir.towersemi.com.

•

the approval of the Merger Agreement, the Merger and the consummation of the Transactions by the requisite affirmative vote of the Company’s shareholders;

•

no governmental authority in any jurisdiction has by any law or order, restrained, enjoined or otherwise prohibited the consummation of the Merger;

•

expiration or termination of the applicable waiting period under the HSR Act;

•

expiration or termination of the applicable waiting period, or, where applicable, approvals have been obtained, and all notices to, filings with and consents of the applicable governmental authority have been made or obtained under the Required Clearances;

•

at least 50 days shall have elapsed after the filing of the Merger Proposal with the Companies Registrar (as defined in the section of this proxy statement captioned “The Merger—Effect of the Merger”) and at least 30 days shall have elapsed after the approval of the Merger Agreement, the Merger and the consummation of the Transactions by the Company’s shareholders has been received; and

•

no Company Material Adverse Effect (as defined in the section of this proxy statement captioned “The Merger Agreement—Representations and Warranties,” excepting any effects that, individually or in the aggregate, would not prevent or materially impair the Company from consummating the Merger or performing any of its material obligations under the Merger Agreement) shall have occurred since February 15, 2022, and be continuing.

•

the diversion of management and employee attention from implementing our growth strategy in our existing markets or in new markets that we are targeting;

•

the fact that we have and will continue to incur expenses related to the Merger prior to its closing;

•

our potential inability to respond effectively to competitive pressures, industry developments and future opportunities, in particular, given the restrictions on the conduct of the Company’s business during the interim period between signing and closing due to the pre-closing covenants in the Merger Agreement;

•

we could be subject to costly litigation associated with the Merger; and

•

our current and prospective employees may be uncertain about their future roles and relationships with the Company following completion of the Merger, which may adversely affect our ability to attract and retain key personnel.

(1)

the Merger Proposal; and

(2)

the Adjournment Proposal.

•

By mail—If you are a shareholder of record, you can submit a proxy by completing, dating, signing and returning your proxy card or voting instruction form in the postage‑paid envelope provided, to be received by the Company’s transfer agent by 5:00 p.m. (Eastern time) on April 22, 2022, or, if sent to the Company’s Israeli registered office, to be received no later than 9:00 a.m. (Israel time) on April 25, 2022. You should sign your name exactly as it appears on the enclosed proxy card or voting instruction form. If you are signing in a representative capacity (for example, as a guardian, executor, trustee, custodian, attorney or officer of a corporation), please indicate your name and title or capacity. If you are a beneficial owner, you have the right to direct your brokerage firm, bank or other similar organization on how to vote your Company Shares, and the brokerage firm, bank or other similar organization is required to vote your Company Shares in accordance with your instructions. To provide instructions to your brokerage firm, bank or other similar organization by mail, please complete, date, sign and return your proxy card or voting instruction form in the postage‑paid envelope provided by your brokerage firm, bank or other similar organization.

•

By telephone—If you are a shareholder of record, you can submit a proxy by telephone by calling the toll‑free number listed on the enclosed proxy card or voting instruction form, entering your control number located on the enclosed proxy card or voting instruction form and following the prompts. If you are a beneficial owner and if the brokerage firm, bank or other similar organization that holds your Company Shares offers telephone voting, you will receive instructions from the brokerage firm, bank or other similar organization that you must follow in order to submit a proxy by telephone.

•

By Internet—If you are a shareholder of record, you can submit a proxy over the Internet by logging on to the website listed on the enclosed proxy card or voting instruction form, entering your control number located on the enclosed proxy card or voting instruction form and submitting a proxy by following the on‑screen prompts. If you are a beneficial owner, and if the brokerage firm, bank or other similar nominee that holds your Company Shares offers Internet voting, you will receive instructions from the brokerage firm, bank or other similar organization that you must follow in order to submit your proxy over the Internet.

		Year ended December 31,
($ in millions, except where noted)		2021				2022				2023				2024				2025				2026
Revenue		$	1,501.3			$	1,656.5			$	1,862.8			$	2,033.4			$	2,247.8			$	2,402.8
Gross profit			328.1				459.5				519.9				584.5				709.3				762.2
Gross margin (%)			21.9	%			27.7	%			27.9	%			28.7	%			31.6	%			31.7	%
Operating Profit			166.5				294.7				354.5				416.5				538.4				588.7
Operating margin (%)			11.1	%			17.8	%			19.0	%			20.5	%			24.0	%			24.5	%
Net Profit			151.6				250.2				303.7				356.6				459.7				496.3
Net Profit margin (%)			10.1	%			15.1	%			16.3	%			17.5	%			20.5	%			20.7	%

•

reviewed a draft dated February 13, 2022 of the Merger Agreement;

•

reviewed certain publicly available business and financial information concerning the Company and the industries in which it operates;

•

compared the financial and operating performance of the Company with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of the Company Shares and certain publicly traded securities of such other companies;

•

reviewed certain internal financial analyses and forecasts provided by the management of the Company relating to its business; and

•

performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion.

•

GlobalFoundries Inc.;

•

Magnachip Semiconductor Corporation;

•

Powerchip Semiconductor Manufacturing Corp.;

•

Semiconductor Manufacturing International Corporation;

•

Taiwan Semiconductor Manufacturing Company Ltd.;

•

United Microelectronics Corporation;

•

Vanguard International Semiconductor Corp.; and

•

WIN Semiconductors Corp.

•

In arriving at its opinions, BDO, among other things:

•

reviewed a draft date February 14, 2022 of the Merger Agreement;

•

reviewed certain publicly available business and financial information concerning the Company and the industries in which it operates;

•

compared the proposed financial terms of the Merger with the publicly available financial terms of certain transactions involving companies BDO deemed relevant and the consideration received for such companies;

•

compared the financial and operating performance of the Company with publicly available information concerning certain other companies BDO deemed relevant and reviewed the current and historical market prices of the Company Shares and certain publicly traded securities of such other companies;

•

reviewed the Company Financial Projections, which are summarized in the section entitled “The Merger—Unaudited Prospective Financial Information”); and

•

performed such other financial studies and analyses and considered such other information as BDO deemed appropriate for the purposes of its opinion.

•

Taiwan Semiconductor Manufacturing;

•

Micron Technology Inc.;

•

Intel Corporation;

•

Texas Instruments Inc.;

•

SK Hynix Inc.;

•

United Microelectronics Corporation;

•

Vanguard International Semiconductor; and

•

WIN Semiconductors Corp.

•

pay the Company’s shareholders the amounts due under the Merger Agreement; and

•

make payments in respect of certain of the Company’s outstanding equity‑based awards pursuant to the Merger Agreement in exchange for cancellation of such awards.

•

banks, insurance companies and other financial institutions;

•

real estate investment trusts and regulated investment companies;

•

traders in securities who elect to apply a mark‑to‑market method of accounting;

•

brokers, dealers or traders in securities;

•

tax‑exempt organizations or governmental organizations;

•

dealers or brokers in securities or foreign currency;

•

tax-qualified retirement plans;

•

corporations that accumulate earnings to avoid U.S. federal income tax (and investors therein);

•

persons whose functional currency is not the U.S. dollar;

•

U.S. expatriates and former citizens or long‑term residents of the United States;

•

persons who hold their Company Shares as part of a straddle, hedging, conversion, constructive sale or other risk reduction transaction or integrated investment;

•

persons who purchase or sell their Company Shares as part of a wash sale for tax purposes;

•

“S corporations,” partnerships or other entities or arrangements classified as partnerships for U.S. federal income tax purposes, or other pass‑through entities (and investors therein);

•

persons who hold their Company Shares through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside of the United States;

•

persons who own or have owned (directly, indirectly or through attribution) more than 5% of the voting power or value of Company Shares; and

•

persons who received their Company Shares pursuant to the exercise of employee stock options or other compensation arrangements.

•

an individual who is a citizen or resident of the United States;

•

a corporation created or organized under the laws of the United States, any state thereof or the District of Columbia;

•

an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

•

a trust that (1) is subject to the primary supervision of a court within the United States and all substantial decisions of which are subject to the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

•

The first request (the “Options Ruling”) will address, among others:

•

That the payment of the cash consideration with respect to shares and employee equity awards which are subject to a capital gains route trustee arrangement pursuant to Section 102 of the Ordinance prior to the lapse of the requisite holding period of Section 102 of the Ordinance shall not constitute a violation of the requirements of Section 102 if deposited with I.B.I. Trust Management, in its capacity as trustee (which we refer to as Section 102 Trustee) and released only after the lapse of the requisite holding period required by Section 102 of the Ordinance, and the applicable withholding of Israeli taxes will be executed upon release from the Section 102 Trustee.

•

The assumption of the Company’s unvested equity awards which are subject to capital gains route trustee arrangement pursuant to Section 102 of the Ordinance shall not result in a taxable event and that tax continuity shall apply with respect to the assumed awards including with regard to the requisite holding period of Section 102 of the Ordinance, and the applicable withholding of Israeli taxes will be executed upon release from the Section 102 Trustee or sale of the underlying shares.

•

Parent and anyone acting on its behalf shall be exempt from withholding of tax in relation to any payments made to the Section 102 Trustee with respect to shares and employee equity awards which are subject to a capital gains route trustee arrangement pursuant to Section 102 of the Ordinance.

•

The second request (the “Tax Withholding Ruling”) will ask that the ITA either exempts payments to be made to eligible brokers or financial institutions from any obligation to withhold Israeli tax at source or provides that no such obligation exists, or otherwise provides detailed instructions on how such withholding at source is to be executed in connection with the Merger. In addition, the request will ask that non‑Israeli shareholders that purchased their Company Shares on or after October 25, 1994 (the date on which the Company listed its shares on the Nasdaq) and hold less than 5% of the outstanding Company Shares will be exempt from withholding to the extent that such shareholders will provide the paying agent with certain declarations regarding their non-Israeli residency (and to the extent that the merger consideration to be received by a shareholder shall exceed $300,000, a valid certificate of residency for tax purposes issued by the tax authority of such shareholder’s country of residence) and the date on which the Company Shares were purchased. Such a tax ruling is also expected to include a process for exempting non-Israeli holders of options, RSUs and PSUs from Israeli withholding tax. The Company cannot assure you that our requests will be accepted. Pursuant to the Merger Agreement, the paying agent and Parent are entitled to deduct and withhold from any consideration payable in the Merger such amounts as may be required to be deducted or withheld therefrom under the Ordinance and regulations promulgated thereunder, subject to providing the paying agent or Parent a certificate issued by the ITA providing for a specific exemption or reduction with respect to Israeli tax withholding.

(i)

cause the expiration or termination of the applicable waiting period under the HSR Act;

(ii)

obtain the approval or clearance by the relevant governmental authorities in the PRC, Germany, Israel, Japan, United Kingdom (only if a merger control notification in relation to the Transactions to the CMA is necessary or reasonably required in the opinion of Parent after consulting with, and considering in good faith the view of the Company relating to such strategy) and Italy, or, as applicable, the expiration of the mandatory waiting period;

(iii)

take all reasonable action and do all things necessary, proper or advisable to obtain the Investment Center Approval as promptly as reasonably practicable (however, such approval is not a condition to the consummation of the Transactions); and

(iv)

obtain the approval of any governmental authority in any other jurisdiction which has review, approval or regulatory authority over the acquisition of the Company.

(i)

changes in the industry in which the Company and the Company’s subsidiaries operate;

(ii)

general economic conditions;

(iii)

changes in securities markets, credit markets, currency markets or other financial markets;

(iv)

political conditions or changes in such conditions or acts of war, sabotage or terrorism (including any escalation or general worsening of any such acts of war, sabotage or terrorism);

(v)

earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events;

(vi)

changes in Law or other legal or regulatory conditions (or the controlling interpretation thereof) or changes in GAAP or other accounting standards (or the interpretation thereof);

(vii)

Effects directly arising from the announcement (whether or not authorized by the parties, including any pre‑signing reports in the press or otherwise, reporting on a potential transaction among the parties or otherwise relating to the acquisition of the Company) or pendency of the Merger Agreement or the Transactions, including the identity of, or Effects relating to, Parent or any of its affiliates or any communication by Parent or any of its affiliates regarding plans, proposals or projections with respect to the Company, the Company’s subsidiaries or their employees (including any impact on the relationship of the Company or any of the Company’s subsidiaries, contractual or otherwise, with its customers, suppliers, distributors, vendors, licensors, licensees, lenders, employees or partners), provided that such exceptions will not apply with respect to any representation or warranty set forth in Section 3.5 of the Merger Agreement that by its terms addresses the consequences of the announcement or pendency of the Merger Agreement or the Transactions contemplated;

(viii)

changes in the Company’s share price or the trading volume (including suspension of trading) of the Company’s share capital, or any failure by the Company to meet any public estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period, or any failure by the Company to meet any internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations (but not, in each case, the underlying cause of such changes or failures, unless such changes or failures would otherwise be excepted from this definition);

(ix)

any breach, violation or non‑performance of any provision of the Merger Agreement by Parent or any of its affiliates;

(x)

actions or omissions by the Company under this Agreement taken or not taken at the request of Parent; and

(xi)

the effects of COVID-19 (as defined in the Merger Agreement), epidemics, pandemics, disease outbreaks or any COVID-19 Measures (as defined in the Merger Agreement) or any change in such COVID-19 Measures.

•

due organization, valid existence, good standing (to the extent applicable) and authority and qualification to conduct business with respect to the Company and its subsidiaries;

•

the Company’s corporate power and authority to enter into and perform the Merger Agreement, and the enforceability of the Merger Agreement;

•

the absence of any conflict, violation or material alteration of any organizational documents, existing contracts, applicable laws to the Company or its subsidiaries or the resulting creation of any lien upon the Company’s assets due to the performance of the Merger Agreement;

•

the capital structure of the Company and its subsidiaries;

•

the absence of any contract relating to the voting of any of the Company’s or its subsidiaries’ securities and of any contractual obligations of the Company and its subsidiaries to acquire any of the Company’s or its subsidiaries’ securities;

•

required consents, approvals and regulatory filings in connection with the Merger Agreement and performance thereof;

•

the Company’s and its subsidiaries’ compliance with laws, including applicable anti-bribery and anti-corruption laws, applicable customs and trade laws, and applicable laws relating to government contracts;

•

the Company’s and its subsidiaries’ possession of necessary permits and internal controls, policies and procedures;

•

the accuracy and timeliness of all documents required to be filed or furnished by the Company’s and its subsidiaries’ with the SEC, the TASE and the ISA, and the Company’s compliance with the Israeli Securities Law

•

the accuracy and completeness of the Company’s consolidated financial statements;

•

the Company’s internal accounting controls and procedures;

•

the Company’s disclosure controls and procedures;

•

the conduct of the business of the Company and its subsidiaries in the ordinary course consistent with past practice and the absence of a Company Material Adverse Effect, in each case since June 30, 2021;

•

the absence of litigation;

•

employee benefit plans;

•

labor and employment matters;

•

the accuracy of information to be provided in this proxy statement;

•

tangible assets of the Company and its subsidiaries and the absence of certain liens thereon;

•

real property owned or leased by the Company and its subsidiaries;

•

trademarks, patents, copyrights and other intellectual property matters;

•

cybersecurity matters;

•

tax matters;

•

environmental matters;

•

the existence and enforceability of specified categories of the Company’s and its subsidiaries’ material contracts and the violation or breach of or default thereunder;

•

compliance with Nasdaq and the TASE listing criteria and the absence of listing on any stock exchange other than Nasdaq and the TASE;

•

the identities of and status of relationships with the Company’s and its subsidiaries’ top customers, suppliers and resellers, distributors and sales agents;

•

insurance matters;

•

payment of fees to brokers in connection with the Merger Agreement;

•

the inapplicability of anti‑takeover statutes to the Merger;

•

absence of any transactions, relations or understandings between the Company or any of its subsidiaries and any affiliate or related person;

•

the necessary vote of shareholders in connection with the Merger Agreement;

•

the rendering of J.P. Morgan’s and BDO’s fairness opinions to the Board; and

•

the Company’s authority to dispose of and the status of certain debentures held by the Company.

•

due organization, good standing and authority and qualification to conduct business with respect to Intel, Parent and Merger Sub;

•

Intel’s, Parent’s and Merger Sub’s corporate authority to enter into and perform the Merger Agreement and the enforceability of the Merger Agreement;

•

the absence of any conflict, violation or material alteration of any organizational documents, or applicable laws due to the performance of the Merger Agreement;

•

required consents and regulatory filings in connection with the Merger Agreement;

•

the absence of litigation;

•

accuracy of information supplied by Intel, Parent and Merger Sub for inclusion in this proxy statement;

•

ownership of the Company’s share capital by Intel, Parent and Merger Sub;

•

matters with respect to Intel’s Parent’s and Merger Sub’s sufficiency of funds;

•

payment of fees to brokers in connection with the Merger Agreement; and

•

the operations of Merger Sub.

(a)

will, and will cause each of its subsidiaries to, subject to the restrictions and exceptions in the Merger Agreement, conduct its business, in all material respects, in the ordinary course of business in a manner consistent with past practice, including, to the extent consistent therewith, using commercially reasonable efforts to preserve intact its and their present business organizations and to preserve its and their present relationships with customers, suppliers and other persons with whom it and they have material business relations;

(b)

will not, and will not permit any of its subsidiaries to, among other things (subject to certain exceptions set forth in the Merger Agreement and Company Disclosure Letter to the Merger Agreement):

(i)

declare, accrue, set aside or pay any dividends on its outstanding shares, except dividends and distributions by a wholly-owned subsidiary of the Company to the Company or another wholly-owned subsidiary of the Company;

(ii)

split, combine, reduce or reclassify any of its share capital except for any such transaction by a wholly-owned subsidiary of the Company that remains a wholly-owned subsidiary of the Company after such transaction;

(iii)

except as required by any Company Plan in effect on the date of the Merger Agreement and set forth in the Company Disclosure Letter to the Merger Agreement or as required by applicable law: (A) grant, provide, amend or increase any retention or change in control payments to any current or former employee, director or individual independent contractor; (B) grant, provide, amend or increase any severance payments or benefits to any current or former employee, director or individual independent consultant; (C) grant, provide, amend or materially increase the cash or equity compensation or benefits payable or to become payable to any of its current or former employees, directors or individual independent contractors, including any bonus discretionary cash payments or incentive compensation; (D) accelerate the vesting or payment date of any equity awards of the Company or accelerate any payment or benefit, or the funding of any payment or benefit, payable or to become payable under a Company Plan; (E) other than to directly replace an employee below the level of vice president whose employment with the Company terminates after the date of the Merger Agreement, hire or retain any person for employment or promote, or other than for cause, terminate the employment or engagement of an employee of the Company or any of its subsidiaries, at the level of manager or above; (F) establish, adopt, enter into, amend or terminate collective bargaining agreement, or recognize or certify any labor organization or group of employees as the bargaining representative for any employee; (G) establish, adopt, enter into, amend or terminate any Company Plan (or any arrangement that would be a material Company Plan if in effect on the date of the Merger Agreement), other than (1) employment agreements and offer letters entered into in the ordinary course of business consistent with past practice that do not provide for change in control benefits, and (2) annual renewals of or modifications to Company Plans in the ordinary course of business consistent with past practice that are health or welfare plans and that do not increase the cost to the Company or any of the Company’s subsidiaries of such Company Plan; or (H) waive, release or amend any restrict covenants of any current or former employee or other worker;*

(iv)

make any material change in its financial accounting policies, practices or methodologies, except as required by law, GAAP, SEC, Nasdaq or TASE policy;

(v)

acquire or agree to acquire, directly or indirectly (including by merger, consolidation, operation of law, or acquisition of shares, other equity interests or assets or any other business combination), (A) any corporation, partnership other business organization or any division, business, assets or properties of any other person (other than (1) acquisition by the Company from any of the Company’s wholly-owned subsidiaries or among any of the Company’s wholly-owned subsidiaries, (2) the purchase of inventory, equipment, raw material or supplies in the ordinary course of business consistent with past practice, or (3) non-exclusive inbound licenses of intellectual property in the ordinary course of business) in an amount in excess of $2.5 million individually or $10 million in the aggregate, or (B) any investment in any other person in an amount in excess of $2.5 million individually or $10 million in the aggregate, including by purchase of capital stock or securities, contributions to capital or property transfer (other than between the Company and any of the Company’s wholly-owned subsidiaries or between any of the Company’s wholly-owned subsidiaries);*

(vi)

cause, permit or propose any amendment to, or otherwise amend the Company’s or any of the Company’s subsidiaries governing documents;

(vii)

adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, recapitalization, restructuring or other reorganization of the Company or any of the Company’s subsidiaries other than (A) the Merger and (B) transactions between or among the Company’s direct or indirect wholly-owned subsidiaries;

(viii)

issue, deliver, grant, sell, pledge, dispose of or encumber, or subject to any Lien, other than Permitted Liens (each, as defined in the Merger Agreement), any shares or voting securities of the Company or any of its subsidiaries or any securities convertible into or exchangeable for any such shares or voting securities, or any rights, warrants or options to acquire any such shares or voting securities or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock‑based performance units;*

(ix)

directly or indirectly, purchase, redeem, or otherwise acquire any shares in its capital or any rights, warrants or options to acquire any such shares in its capital;

(x)

redeem, repurchase, prepay (other than prepayments of revolving loans), defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any Indebtedness (as defined in the Merger Agreement) for borrowed money or issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities, except for (A) any Indebtedness among the Company and the Company’s subsidiaries or between the Company’s subsidiaries, (B) guarantees by the Company of the Indebtedness of the Company’s subsidiaries or guarantees by the Company’s subsidiaries of Indebtedness of the Company or a Company’s subsidiary, (C) any other Indebtedness in an amount not to exceed $1 million in aggregate principal amount, and purchase money financings and capital leases entered into in the ordinary course of business in an amount not to exceed $25 million in the aggregate at any time outstanding, in each case, except as otherwise set forth in the Company Disclosure Letter to the Merger Agreement, and (D) any hedging obligations of the Company or a Company’s subsidiary in the ordinary course of business consistent with past practice;*

(xi)

make any loans or advances, or cancel any Indebtedness for borrowed money owed to the Company, other than to wholly‑owned subsidiaries and in respect of travel or other business expenses in the ordinary course of business consistent with past practice;*

(xii)

allow to lapse, encumber, sell, lease, license, transfer, assign, exchange, swap, abandon, pledge or otherwise waive or dispose of, or subject to any Lien, other than Permitted Liens, any of its properties, rights or assets, except for (A) sales of inventory or Company Products (as defined in the Merger Agreement), or dispositions of obsolete or worthless equipment, in the ordinary course of business, (B) the licensing, sale, abandonment or allowance to lapse of the Company’s registered intellectual property that is not material Company-owned intellectual property, and (C) non‑exclusive licenses of intellectual property in the ordinary course of business consistent with past practice;*

(xiii)

release any Sensitive Technology (as defined in the Merger Agreement) under any Copyleft Terms (as defined in the Merger Agreement) or use any open source material in such a way that would require the release of any Sensitive Technology under any Copyleft Terms;*

(xv)

institute any action by the Company or any of the Company’s subsidiaries, other than in the ordinary course of business consistent with past practice;*

(xvi)

(A) make (except for elections made in the ordinary course of business consistent with past practice) or change any material tax election; (B) change any tax accounting period with respect to a material tax or material method of tax accounting; (C) file any amended tax return (other than any amended immaterial tax return which filing would reasonably be expected to be beneficial to the Company or any of the Company’s subsidiaries); (D) settle or compromise any audit or proceeding relating to a material tax or a material amount of taxes; (E) except in the ordinary course of business consistent with past practice, agree to an extension or waiver of the statute of limitations with respect to a material amount of taxes; (F) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local, or non-U.S. Law) with respect to any material tax or surrender any right to claim a material tax refund; or (G) request a tax pre-ruling or ruling from any governmental authority (other than any such request (1) expressly contemplated by the Merger Agreement or (2) that relates to an immaterial amount of tax and that would reasonably be expected to be beneficial to the Company or any of the Company’s subsidiaries);*

(xvii)

except for renewals or extensions of any existing Company Material Contract (as defined in the Merger Agreement) in the ordinary course of business consistent with past practice (as long as the terms of such renewals or extensions are substantially consistent with existing Company Material Contracts), (A) enter into any contract that if entered into prior to February 15, 2022 would have been a Company Material Contract described in subsections (iii)-(ix), (xii), (xiii), (xiii), (xiv) or (xvi) of Section 3.17(a) of the Merger Agreement, (B) materially modify or amend to the extent related to, or waive, release or assign any rights or claims under, any Company Material Contract described in subsections (iii)-(ix), (xii), (xiii), (xiii), (xiv) or (xvi) of Section 3.17(a) of the Merger Agreement, or (C) enter into, materially modify, amend, waive, release or assign any material rights or claims under any other Company Material Contract other than in the ordinary course of business consistent with past practice;*

(xix)

except for certain expenditures specified in the Company Disclosure Letter, make any capital expenditures;*

(xx)

apply for or accept (A) any governmental grant from the IIA or any other Israeli governmental authority, which government grant is extended to support the Company’s or any of the Company’s subsidiaries’ research and development operations or (B) any material government grants from any other governmental authority, provided, however, that the Company shall have the right to accept additional funds under existing government grants from the IIA for which the Company has already received funds if such acceptance of funds by the Company does not impose any additional restrictions on the Company;

(xxi)

write up, write down or write off the book value of any assets, except (A) for depreciation and amortization in accordance with GAAP consistently applied, (B) as otherwise required under GAAP (including to increase any reserves for contingent liabilities) or (C) in the ordinary course of business consistent with past practice in accordance with GAAP;*

(xxii)

change the Company’s or any of its subsidiaries’ accounting and financial reporting controls and procedures, except as permitted by concurrent changes in GAAP or in Regulation S-X of the Exchange Act, as agreed to by the Company’s independent public accountants;

(xxiii)

change the Company’s or any of its subsidiaries’ fiscal year;*

(xxiv)

cancel or fail to use commercially reasonable efforts to replace or renew any material insurance policies;

(xxv)

enter into any new line of business outside of the existing business of the Company and the Company’s subsidiaries, taken as a whole;*

(xxvi)

become party to or approve or adopt any stockholder right plan or “poison pill” arrangement;*

(xxvii)

call or convene any general or extraordinary meeting of the Company’s shareholders or seek any action or other approval of or from the Company’s shareholders with respect to any action prohibited by Section 5.1 of the Merger Agreement;* or

(xxviii)

agree in writing to take any or authorize any of the foregoing actions.

(i)

solicit or initiate or knowingly assist, facilitate or encourage any inquiry, proposal or offer that constitutes or would be reasonably expected to lead to a Competing Proposal (as defined below) or engage in any discussions or negotiations with respect thereto;

(ii)

provide any information regarding, cooperate with or provide access to the properties, personnel, books and records of, the Company or any subsidiary of the Company to any person or “group” (as defined under Section 13(d) of the Exchange Act) (other than Parent, Merger Sub or any designees of Parent or Merger Sub) in connection with or under circumstances that would reasonably be expected to lead to a Competing Proposal;

(iii)

participate or engage in discussions or negotiations with any person with respect to a Competing Proposal;

(iv)

approve, endorse or publicly recommend, or propose publicly to approve, endorse or recommend, any Competing Proposal;

(v)

withdraw or change or qualify in a manner adverse to Parent, the Board’s recommendation that the Company’s shareholders approve the Merger, the Merger Agreement and the consummation of the Transactions (the “Company Board Recommendation”) or fail to include the Company Board Recommendation in the proxy statement when disseminated to the shareholders of the Company;

(vi)

fail to publicly reaffirm the Company Board Recommendation within 10 business days after receipt of a written request by Parent following a Competing Proposal becoming publicly known;

(vii)

if a tender offer or exchange offer that constitutes a Competing Proposal is commenced, fail to publicly recommend against acceptance of such tender offer or exchange offer by the shareholders of the Company within 10 business days after the commencement thereof;

(viii)

enter into any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture agreement, alliance agreement, partnership agreement or other similar contract or understanding relating to any Competing Proposal (whether binding or nonbinding); or

(ix)

resolve or agree to do any of the foregoing (each of the acts described in (iv)-(viii), or this clause (ix) (to the extent related to clauses (iv)-(viii) above) shall be referred to as a “Company Change of Recommendation”).

•

furnish information (including nonpublic information) to the person making such Competing Proposal if, and only if, prior to so furnishing such information, the Company receives (or has previously received) from such Person an executed Acceptable Confidentiality Agreement; and

•

participate or engage in discussions or negotiations with such person with respect to such Competing Proposal and any changes thereto, including by making counterproposals thereto.

•

the Board has determined in good faith after consultation with the Company’s outside legal counsel and financial advisor that the failure to make a Company Change of Recommendation would be reasonably likely to be inconsistent with the fiduciary duties of the members of the Board to the Company’s shareholders under Israeli law;

•

the Company has provided Parent with a written notice of such determination stating that the Board intends to effect a Company Change of Recommendation; and

•

during the period commencing on the date of Parent’s receipt of such notice and ending at 5:00 p.m. California time on the date that is the fourth business day thereafter the Company has made its Representatives reasonably available for the purpose of engaging in discussions and negotiations with Parent (to the extent Parent desires to negotiate) regarding a possible amendment to the Merger Agreement and has considered in good faith any proposals made by Parent, and after taking account of Parent’s proposals, if any, the Board again makes the determination described in the first bullet point above.

•

the Board has determined in good faith after consultation with the Company’s outside legal counsel and financial advisor that (x) such Competing Proposal constitutes a Superior Proposal and (y) the failure to make such Company Change of Recommendation or to terminate the Merger Agreement would be reasonably likely to be inconsistent with the fiduciary duties of the members of the Board to the Company’s shareholders under Israeli law;

•

the Company has provided Parent with a written notice of such determination and that the Board intends to effect a Company Change of Recommendation or that the Company intends to terminate the Merger Agreement; and

•

during the period commencing on the date of Parent’s receipt of such notice and ending at 11:59 p.m. California time on the date that is the fifth business day thereafter the Company has made its Representatives reasonably available for the purpose of engaging in discussions and negotiations with Parent and its Representatives (to the extent Parent desired to negotiate) regarding a possible amendment to the Merger Agreement and has considered in good faith any written proposals made by Parent that if accepted by the Company would be binding upon Parent, and after taking account of Parent’s proposals, if any, the Board again makes the determination described in the first bullet point above.

•

may not terminate, waive, amend or modify, or grant permission under, any standstill provision in any confidentiality agreement to which it or any of its subsidiaries is or becomes a party (other than as occurs in accordance with the terms of any such standstill provision in effect as of the date of the Merger Agreement), and

•

must use reasonable best efforts to enforce such standstill provisions if it becomes aware of any material breach of any such standstill provision by the party subject thereto.

•

a total target cash compensation opportunity (inclusive of an annual base salary or base wage rate and a target annual cash bonus opportunity, and excluding any equity or equity-linked compensation opportunity) that is no less favorable in the aggregate than the total target cash compensation opportunity that was provided to such Continuing Employee immediately before the Effective Time; and

•

employee benefits (excluding benefits under any defined benefit pension plan or post-retirement medical plan, and excluding any equity or equity-linked compensation opportunity) that are no less favorable in the aggregate than those provided to such Continuing Employee immediately before the Effective Time.

•

the approval of the Merger Agreement, the Merger and the consummation of the Transactions by the requisite affirmative vote of the Company’s shareholders;

•

no governmental authority in any jurisdiction has by any law or order restrained, enjoined or otherwise prohibited the consummation of the Merger that is continuing and remains in effect;

•

(1) expiration or termination of the applicable waiting period, or otherwise the receipt of applicable approvals, under the HSR Act and other specified regulatory laws; and (2) the making of, or the receipt of, all notices to, filings with and consents of specified governmental authorities; and

•

at least 50 days shall have elapsed after the filing of the merger proposal with the Companies Registrar and at least 30 days shall have elapsed after the approval of the Merger Agreement, the Merger and the consummation of the Transactions by the Company’s shareholders has been received.

•

with specified qualifications and exceptions, the truth and correctness of the Company’s representations and warranties contained in the Merger Agreement as of immediately prior to the Effective Time;

•

the Company having complied with or performed, in all material respects, the covenants, obligations and agreements to be complied with or performed by it under the Merger Agreement on or prior to the Effective Time;

•

no Company Material Adverse Effect, excepting any Effects that, individually or in the aggregate would not prevent or materially impair the Company from consummating the Merger or performing any of its material obligations under the Merger Agreement, shall have occurred since February 15, 2022, and be continuing;

•

the receipt by Parent of a certificate dated as of the Closing Date and signed on behalf of the Company by the Company’s chief executive officer or chief financial officer, to the effect that the conditions described in the preceding three items have been satisfied; and

•

the Company having furnished to Parent a duly executed payoff letter from each holder of specified indebtedness for borrowed money of the Company.

•

with specified qualifications and exceptions, the truth and correctness of the representations and warranties of Parent, Merger Sub and Intel contained in the Merger Agreement as of immediately prior to the Effective Time;

•

each of Parent and Merger Sub having complied with or performed, in all material respects, the covenants, obligations and agreements to be complied with or performed by it under the Merger Agreement on or prior to the Closing Date; and

•

the receipt by the Company of a certificate, dated as of the Closing Date and signed on behalf of the Parent and Merger Sub by the chief executive officers or chief financial officers of Parent and Merger Sub, to the effect that the conditions described in the preceding two items have been satisfied.

•

by mutual written consent of the Company and Parent;

•

by either the Company or Parent, at any time prior to the Effective Time, if a governmental authority of competent jurisdiction has issued a final and non-appealable adverse law or order that remains in effect and that permanently restrains, permanently enjoins or otherwise permanently prohibits the consummation of the Merger;

•

by Parent, if:

(i)

there has been a breach by the Company of its representations, warranties or covenants contained in the Merger Agreement such that any of the conditions relating to the obligations of Parent and Merger Sub to consummate the Merger is not reasonably capable of being satisfied while such breach is continuing; provided that the right to terminate the Merger Agreement will not be available to any party where material failure to fulfill any obligation under the Merger Agreement has been the principal cause of, or resulted in, such adverse law or order;

(ii)

Parent has delivered to the Company written notice of such breach; and

(iii)

either such breach is not capable of cure in a manner sufficient to allow satisfaction of these conditions prior to 11:59 p.m., local time in California, on February 15, 2023 (the “Outside Date”) or at least 30 days have elapsed since the date of delivery of such written notice to the Company and such breach has not been cured in all material respects; provided that Parent will not be permitted to terminate pursuant to this provision of the Merger Agreement if there has been any material breach by Parent or Merger Sub of its representations, warranties or covenants contained in the Merger Agreement that has not been cured in all material respects;

•

by the Company if:

(i)

there has been a breach by Parent or Merger Sub of any of its representations, warranties or covenants contained in the Merger Agreement such that any condition relating to the obligation of the Company to consummate the Merger is not reasonably capable of being satisfied while such breach is continuing;

(ii)

the Company has delivered to Parent written notice of such breach; and

(iii)

either such breach is not capable of cure in a manner sufficient to allow satisfaction of these conditions prior to the Outside Date or at least 30 days have elapsed since the date of delivery of such written notice to Parent and such breach has not been cured in all material respects; provided that the Company will not be permitted to terminate pursuant to this provision of the Merger Agreement if there has been any material breach by the Company of its representations, warranties or covenants contained in the Merger Agreement that has not been cured in all material respects;

•

by either Parent or the Company, if the Effective Time has not occurred by the Outside Date, provided that (i) if on the Outside Date all of the conditions to Closing, other than certain exceptions contained in the Merger Agreement, have been satisfied or waived, the Outside Date will automatically be extended one time for an additional three months; and (ii) on the Outside Date as so extended pursuant to the preceding clause, all of the conditions to Closing, other than certain exceptions contained in the Merger Agreement, have been satisfied or waived, the Outside Date will automatically be extended one additional time by an additional three months;

•

by Parent, if, prior to approval of the Merger Agreement, the Merger and the consummation of the Transactions by the Company’s shareholders, (i) the Company materially breaches its obligations described above under the captions “The Merger Agreement—Competing Proposals” and “The Merger Agreement—The Board’s Recommendation; Company Board Recommendation Change” or (ii) the Board has effected a Company Change of Recommendation;

•

by either the Company or Parent, if the Company’s shareholders fail to approve the Merger Agreement, the Merger and the consummation of the Transactions at the extraordinary general meeting or any adjournment or postponement thereof, in each case at which a vote on such approval was taken; or

•

by the Company in order to accept a Superior Proposal in accordance with the requirements set forth in the Merger Agreement, provided that as a condition to such a termination of the Merger Agreement, the Company pays Parent the Company Termination Fee (as defined below).

•

the Merger Agreement is terminated by the Company because, either (i) the Effective Time has not occurred by or on the Outside Date or (ii) the Company’s shareholders have failed to approve the Merger Agreement, the Merger and the consummation of the Transactions at the extraordinary general meeting or any adjournment or postponement thereof, in each case at which a vote on such approval was taken (in each case (i) and (ii), as described above under the caption “The Merger Agreement—Termination of the Merger Agreement”), at a time when Parent would have been entitled to terminate the Merger Agreement prior to the approval of the Merger Agreement by the Company’s shareholders, because the Company materially breached its obligations described above under the captions “The Merger Agreement—Competing Proposals” and “The Merger Agreement—The Board’s Recommendation; Company Board Recommendation Change” or the Board had effected a Company Change of Recommendation;

•

the Merger Agreement is terminated by the Company in order to accept a Superior Proposal in accordance with the requirements described above under the caption: “The Merger Agreement—The Board’s Recommendation; Company Board Recommendation Change”;

•

the Merger Agreement is terminated by Parent because, prior to approval of the Merger Agreement by the Company’s shareholders, the Company materially breached its obligations described above under the captions “The Merger Agreement—Competing Proposals” and “The Merger Agreement—The Board’s Recommendation; Company Board Recommendation Change” or the Board has effected a Company Change of Recommendation; or

•

(A) (i) the Merger Agreement is terminated by Parent because of a breach by the Company of its representations, warranties or covenants contained in the Merger Agreement, (ii) the Merger Agreement is terminated by Parent or the Company because the Effective Time had not occurred on or prior to the Outside Date, provided that in the case of any such termination by the Company, if Parent had the right to terminate the Merger Agreement, the Company is not entitled to the Parent Termination Fee (as described below) or (iii) the Merger Agreement is terminated by Parent or the Company because the Company’s shareholders failed to approve the Merger Agreement at the extraordinary general meeting or any adjournment or postponement thereof (in case of each of clauses (i), (ii) and (iii) as described above under the caption “The Merger Agreement—Termination of the Merger Agreement”); (B) (i) the Merger Agreement is terminated by Parent or the Company because the Company’s shareholders failed to approve the Merger Agreement, the Merger and the consummation of the Transactions at the extraordinary general meeting or any adjournment or postponement thereof, in each case, at which a vote on such approval was taken and a Competing Proposal (as defined below) made by a third party had been publicly disclosed (and not publicly withdrawn) after the date of the Merger Agreement and prior to the date of the extraordinary general meeting and or (ii) a Competing Proposal is made (and not withdrawn) by a third party (regardless of whether or not such Competing Proposal is publicly disclosed) after the date of the Merger Agreement and prior to (x) the date of termination in the case the Merger Agreement is terminated by Parent because of a breach by the Company of its representations, warranties or covenants contained in the Merger Agreement or (y) the Outside Date, in the case that the Merger Agreement is terminated by either Parent or the Company because the Effective Time has not occurred on or prior to the Outside Date (in case of each of clauses (i) and (ii) as described above under the caption “The Merger Agreement—Termination of the Merger Agreement”); and (C) within 12 months after such termination, the Company either consummates a Competing Proposal or enters into a definitive agreement with respect to any Competing Proposal and such Competing Proposal (or any “superior proposal” permitted by the terms of such Competing Proposal) is subsequently consummated, whether or not within such 12 month period.

•

the Merger Agreement is terminated by either the Company or Parent because a governmental authority of competent jurisdiction has issued a final and non-appealable adverse law or order related to any antitrust laws that remains in effect and that permanently restrains, permanently enjoins or otherwise permanently prohibits the consummation of the Merger; or

•

the Merger Agreement is terminated by either the Company or Parent because the Effective Time has not occurred on or prior to the Outside Date (as described above under the caption “The Merger Agreement—Termination of the Merger Agreement”) and on the date of such termination under this clause (i), all conditions to the Merger Agreement are satisfied or waived other than (A) the condition that no governmental authority in any jurisdiction has by any law or order related to antitrust laws restrained, enjoined or otherwise prohibited the consummation of the Merger that is continuing and remains in effect or (B) the Required Clearances (as defined in the section of this proxy statement captioned “The Merger Agreement—Conditions to the Closing of the Merger”) related to the antitrust laws (and not the foreign direct investment laws) and (ii) the Company is not then in material breach of the Merger Agreement where such breach by the Company is the primary cause of the failure of any condition to the Merger Agreement being satisfied.

•

each shareholder known by us to own beneficially 5% or more of our Company Shares;

•

each of our directors and executive officers individually; and

•

all of our current executive officers and current directors as a group.

		Beneficial Ownership
Name of Beneficial Owner		Ordinary Shares				Options Exercisable within 60 Days				Restricted Share Units Vesting or Settled within 60 Days				Shares Beneficially Owned				Percentage of Shares Outstanding
Wellington Management Group LLP(1)			10,193,538				—				—				10,193,538				9.35	%
Senvest Management, LLC(2)			7,677,933				—				—				7,677,933				7.05	%
Phoenix Holdings Ltd.(3)			7,345,476				—				—				7,345,476				6.74	%
Migdal Insurance & Financial Holdings Ltd(4)			6,694,548				—				—				6,694,548				6.14	%
Clal Insurance Enterprises Holdings Ltd.(5)			5,630,891				—				—				5,630,891				5.17	%
Executive Officers and Directors**
All current executive officers and current directors as a group (19 persons)			*				*				*				*				*

*	Represents beneficial ownership of less than one percent (1%) of the outstanding Company Shares.

**	Israeli directors and officers (including the Chief Executive Officer) have no voting power with respect to the Company Shares beneficially owned by them.

•

Annual Report on Form 20‑F for the fiscal year ended December 31, 2020, filed on April 30, 2021; and

	By order of the Board of Directors,
	/s/ Amir Elstein
	Amir Elstein
	Chairman of the Board of Directors

Annex A