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To The Shareholders Of Ezchip Semiconductor Ltd

The following excerpt is from the company's SEC filing.

You are cordially invited to attend the Annual General Meeting of Shareholders of EZchip Semiconductor Ltd. (the “Company” or “EZchip”), to be held at our principal executive offices, at 1 Hatamar Street, Yokneam 2069206, Israel, on Thursday, November 12, 2015 at 5:00 p.m. (Israel time), and thereafter as it may be adjourned from time to time (the “General Meeting”).

On September 30, 2015, the Company entered into an Agreement of Merger (the “Merger Agreement”) with Mellanox Technologies, Ltd., an Israeli company whose shares are listed on the NASDAQ Global Select Market (“Parent”), and Mondial Europe Sub Lt d., a private Israeli company and a wholly-owned subsidiary of Parent (“Merger Sub”). At the General Meeting, you will be asked to consider and vote on a resolution for (a) the approval of (i) the Merger Agreement; (ii) the merger of Merger Sub with and into the Company in accordance with Sections 314-327 of the Israeli Companies Law, 5759-1999 (the “ICL”), following which Merger Sub will cease to exist as a separate legal entity and the Company will become a wholly-owned subsidiary of Parent; (iii) the consideration of US$25.50 in cash (the “Merger Consideration”), without interest and subject to applicable withholding taxes, for each ordinary share, par value NIS 0.02 per share, of the Company (the “Ordinary Shares”) held by the Company’s shareholders as of immediately prior to the effective time of the Merger; and (iv) all other transactions contemplated by the Merger Agreement and related to the Merger, and (b) the determination that the foregoing is in the best interest of the Company (collectively, the “Merger Proposal”).

Our Board of Directors has:

(i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, our Company and its 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 our Company to its creditors; (ii) approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement; (iii) adopted further resolutions supporting the transactions contemplated by the Merger Agreement; and (iv) determined to recommend that the shareholders of our Company approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

In addition to the Merger Proposal, the following matters will be on the agenda for the General Meeting:

the reelection of five of the Company’s directors – Benny Hanigal, Eli Fruchter, Prof. Ran Giladi, Joel Maryles and Karen Sarid, until the next annual meeting or their prior termination or resignation;

the reelection of Shai Saul, an Outside Director of the Company (within the meaning of the ICL), for an additional three year term, or his prior termination or resignation;

the approval of a cash payment to Joel Maryles, a director of the Company; and

the ratification and approval of the appointment and compensation of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as the Company’s independent registered public accountants for the fiscal year ending December 31, 2015; when this proposal is raised, you will also be invited to discuss the Company’s 2014 consolidated financial statements.

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” APPROVAL OF THE MERGER PROPOSAL AND THE OTHER PROPOSALS ON THE AGENDA.

Approval of the Merger Proposal will require the affirmative vote of holders of at least seventy-five percent (75%) of the Ordinary Shares present, in person or by proxy, and voting on the Merger Proposal (not taking into consideration abstentions). Record holders of our outstanding Ordinary Shares as of the close of business on October 12, 2015, the record date for the General Meeting, are entitled to notice of, and to vote at, the General Meeting, and are entitled to one vote at the General Meeting per each Ordinary Share held. Our outstanding Ordinary Shares constitute the only outstanding class of our share capital.

The approval of each of the other proposals requires the affirmative vote of a majority of the Ordinary Shares present, in person or by proxy, and voting on such proposal (not taking into consideration abstentions). In addition, in order to approve the reelection of Shai Saul as an Outside Director of the Company and the payment of a director cash payment to Joel Maryles, the shareholders’ approval must

either

(i) include at least a majority of the Ordinary Shares voted by shareholders who are not controlling shareholders (within the meaning of the ICL) and who are not shareholders who have a personal interest (within the meaning of the ICL) in the approval of each such proposal (excluding a personal interest that is not related to a relationship with the controlling shareholders), not taking into consideration abstentions, or (ii) be obtained such that the total Ordinary Shares of non-controlling shareholders and non-interested shareholders voted against such proposal do not represent more than two percent of the outstanding Ordinary Shares.

Enclosed with this letter you will find a copy of the Notice of the Annual General Meeting and the Proxy Statement for the General Meeting. The enclosed Proxy Statement and the attachments thereto contain important information about the General Meeting, the Merger Agreement, the Merger, all the other transactions contemplated by the Merger Agreement and the other agenda items, and you are urged to read them carefully and in their entirety.

YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF ORDINARY SHARES YOU OWN. ACCORDINGLY, YOU ARE REQUESTED TO PROMPTLY COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. THIS WILL NOT PREVENT YOU FROM VOTING YOUR ORDINARY SHARES IN PERSON IF YOU SUBSEQUENTLY CHOOSE TO ATTEND THE MEETING.

Thank you for your cooperation.

Chairman of the Board of Directors

EZCHIP SEMICONDUCTOR LTD.

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

To the Shareholders of EZchip Semiconductor Ltd. (the “Company”):

The Company cordially invites you to attend the Annual General Meeting of Shareholders of the Company (the “General Meeting”) to be held on Thursday, November 12, 2015 at 5:00 p.m. (Israel time), at the Company’s principal executive offices at 1 Hatamar Street, Yokneam 2069206, Israel (the telephone number at that address is +972-4-959-6666), and thereafter, as it may be adjourned from time to time.

The following matters are on the agenda for the General Meeting:

(a) the approval of (i) the Agreement of Merger dated as of September 30, 2015 (the “Merger Agreement”) by and among the Company, Mellanox Technologies, Ltd., an Israeli company (“Parent”), and Mondial Europe Sub Ltd., an Israeli company and a wholly-owned subsidiary of Parent (“Merger Sub”); (ii) the merger of Merger Sub with and into the Company in accordance with Sections 314-327 of the Israeli Companies Law, 5759-1999 (the “ICL”), following which Merger Sub will cease to exist as a separate legal entity and the Company will become a wholly-owned subsidiary of Parent (the “Merger”); (iii) the payment of consideration of US$25.50 in cash, without interest and subject to applicable withholding taxes, for each ordinary share, par value NIS 0.02 per share, of the Company (the “Ordinary Shares”) held by the Company’s shareholders as of immediately prior to the effective time of the Merger; and (iv) all other transactions contemplated by the Merger Agreement and related to the Merger, as will be detailed in the Company’s proxy statement for the General Meeting; and (b) the determination that the foregoing is in the best interest of the Company (collectively, the “Merger Proposal”);

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE MERGER PROPOSAL AND EACH OF THE OTHER PROPOSALS.

Further information regarding the Merger Proposal and the other proposals on the agenda for the General Meeting will be included in the Company’s proxy statement, which will be mailed to the Company’s shareholders in advance of the General Meeting. The proxy statement will be furnished to the United States Securities and Exchange Commission (the “SEC”) on Form 6-K and will be available to the public on the SEC’s website at

and the Company’s website at www.ezchip.com, and, in addition, at http://www.magna.isa.gov.il or http://maya.tase.co.il. A form of proxy card will be enclosed with the proxy statement.

Record Date

Only shareholders of record at the close of business on October 12, 2015 (the “Record Date”) will be entitled to receive notice of, and to vote at, the General Meeting.

A shareholder, whose Ordinary Shares are registered with a member of TASE, is required to prove his or her share ownership to vote at the General Meeting. Such shareholder shall provide the Company with an ownership certificate (as of the Record Date) from that TASE member and is entitled to receive the ownership certificate in the branch of that TASE member or, if the shareholder so requests, by mail to his or her address (in consideration of mailing fees only). Such a request should be made in advance for a specific securities account.

Quorum and Voting

Pursuant to the Company’s Articles of Association, the quorum required for the General Meeting consists of at least two shareholders present, in person or by proxy, who hold or represent between them more than 50% of the Company’s issued and outstanding share capital. Broker non-votes and abstentions will be counted as present at the General Meeting for the purpose of determining whether a quorum is present. A broker non-vote occurs when a bank, broker or other nominee holding ordinary shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received voting instructions from the beneficial owner. While counted for quorum purposes, abstentions and broker non-votes will not be treated as voting shares and will not have any effect on whether the requisite vote is obtained for all matters placed before shareholders for their vote.

The approval of the Merger Proposal in Item 1 requires the affirmative vote of holders of at least seventy-five percent (75%) of the Ordinary Shares present, in person or by proxy, and voting on the Merger Proposal (not taking into consideration abstentions). The approval of each of the proposals in Items Nos. 2, 3, 4 and 5 require the affirmative vote of a majority of the Ordinary Shares present, in person or by proxy, and voting on such proposal (not taking into consideration abstentions). In addition, in order to approve each of Items Nos. 3 and 4, the shareholders’ approval must

(i) include at least a majority of the Ordinary Shares voted by shareholders who are not controlling shareholders (within the meaning of the ICL) and who are not shareholders who have a personal interest (within the meaning of the ICL) in the approval of such proposal (excluding a personal interest that is not related to a relationship with the controlling shareholders), not taking into consideration abstentions, or (ii) be obtained such that the total Ordinary Shares of non-controlling shareholders and non-interested shareholders voted against such proposal do not represent more than two percent of the outstanding Ordinary Shares. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting shall be adjourned to November 19, 2015, at the same time and place. At such adjourned meeting, the presence of at least two shareholders in person or by proxy (regardless of the voting power possessed by their shares) will constitute a quorum.

Position Statements by Shareholders

Shareholders are allowed to apply in writing, through the Company, to the other shareholders of the Company in order to solicit their vote on items on the agenda of the General Meeting (“Position Notice”). Position Notices must be in English and may be sent to the Company’s offices at the address below. Any Position Notice received will be furnished to the SEC on Form 6-K, and will be made available to the public on the SEC’s website at

and the Company’s website at www.ezchip.com, and, in addition, at http://www.magna.isa.gov.il and http://maya.tase.co.il. The last date for issuance of such Position Notices to the Company is November 2, 2015, and the last date for submitting a request to include a proposal in accordance with Section 66(b) of the ICL is October 20, 2015.

A shareholder whose Ordinary Shares are registered with a TASE member and are not registered on the Company’s shareholder’s register is entitled to receive from the TASE member who holds the Ordinary Shares on the shareholder’s behalf, by e-mail, for no charge, a link to the text of proxy card and to the Position Notices posted on the ISA website, unless the shareholder notified the TASE member that he or she is not interested; provided, that such notice was provided with respect to a particular securities account prior to the Record Date.

All shareholders are entitled to contact the Company directly and receive the text of the proxy materials and any Position Notice. Once made available to the public as described above, such documents will also be available for inspection at the Company’s offices, which are located at 1 Hatamar Street, Yokneam 2069206, Israel, during regular business hours and subject to prior coordination. The Company’s phone number is +972-4-959-6666.

By Order of the Board of Directors

IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE

COMPLETED, SIGNED, DATED AND RETURNED PROMPTLY

STATEMENT

TO BE HELD ON THURSDAY, NOVEMBER 12, 2015

INTRODUCTION

We are furnishing this Proxy Statement to our shareholders in connection with the solicitation by our Board of Directors of proxies to be used at the Annual General Meeting of Shareholders (which, as it may be adjourned or postponed from time to time, we refer to as the General Meeting), to be held at our principal executive offices located at 1 Hatamar Street, Yokneam 2069206, Israel, on Thursday, November 12, 2015, at 5:00 p.m. (Israel time) and thereafter as it may be adjourned from time to time. We are first mailing this Proxy Statement, the accompanying notice, letter to shareholders and proxy card on or about October 16, 2015 to the holders of our Ordinary Shares entitled to notice of, and to vote at, the General Meeting. All references to “EZchip” “the Company,” “we,” “us,” “our” and “our Company,” or words of like import, are references to EZchip Semiconductor Ltd. and its subsidiaries, references to “you” and “your” refer to our shareholders and all references to “$” or to “US$” are to United States dollars and all references to “NIS” are to New Israeli Shekels.

At the General Meeting, shareholders will be asked to consider and vote on the approval of the Merger Proposal, which includes the following:

the Agreement of Merger dated as of September 30, 2015 (which we refer to as the Merger Agreement) by and among the Company, Mellanox Technologies, Ltd., an Israeli company whose shares are listed on the NASDAQ Global Select Market (which we refer to as Parent or Mellanox), and Mondial Europe Sub Ltd., a private Israeli company and a wholly-owned subsidiary of Parent (which we refer to as Merger Sub);

the merger of Merger Sub with and into the Company pursuant to Sections 314-327 of the Companies Law, 5759-1999 of the State of Israel (which, together with the regulations promulgated thereunder, we refer to as the ICL), following which Merger Sub will cease to exist as a separate legal entity and the Company will become a wholly-owned subsidiary of Parent (which we refer to as the Merger);

the consideration of US$25.50 in cash (which we refer to as the Merger Consideration), without interest and subject to applicable withholding taxes, for each ordinary share of the Company, par value NIS 0.02 per share (which we refer to as an Ordinary Share) held by the Company’s shareholders as of immediately prior to the effective time of the Merger;

all other transactions and arrangements contemplated by the Merger Agreement; and

that the Merger Proposal is in the best interest of the Company.

the reelection of Shai Saul, an Outside Director of the Company (within the meaning of the ICL), for an additional three year term or his prior termination or resignation;

Shareholders Entitled to Vote

Shareholders of record who held Ordinary Shares at the close of business on October 12, 2015 (which we refer to as the Record Date), are entitled to notice of, and to vote at, the General Meeting.

Shareholders registered in the Company’s shareholders registry and shareholders who hold shares through members of the Tel Aviv Stock Exchange Ltd. (which we refer to as the TASE) may vote through the enclosed form of proxy by completing, signing, dating and mailing the proxy with a copy of their identity card, passport or certificate of incorporation, as the case may be, to the Company’s offices. Shareholders who hold shares through members of the TASE and intend to vote their shares either in person or by proxy must deliver to the Company an ownership certificate confirming their ownership of the Company’s shares on the Record Date, which must be certified by a recognized financial institution, as required by the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meeting) of 2000, as amended.

Alternatively, shareholders who hold shares through members of the Tel Aviv Stock Exchange may vote electronically via the electronic voting system of the Israel Securities Authority up to six hours before the time fixed for the General Meeting. You should receive instructions about electronic voting from the Tel Aviv Stock Exchange member through which you hold your shares.

In addition, shareholders who, as of the Record Date, held Ordinary Shares through a bank, broker or other nominee which is a shareholder of record of the Company or which appears in the participant list of a securities depository, are considered to be beneficial owners of shares held in “street name”. These proxy materials are being forwarded to beneficial owners by your bank, broker or other nominee that is considered the holder of record. Beneficial owners have the right to direct how their shares should be voted and are also invited to attend the General Meeting, but may not actually vote their shares in person at the General Meeting. For those beneficial owners, the bank, broker or other nominee that is a shareholder of record has enclosed a voting instruction card for you to use in directing the holder of record how to vote the shares.

As of October 12, 2015, the Record Date, there were 29,961,616 Ordinary Shares issued, outstanding and entitled to one vote each upon each of the matters to be presented at the General Meeting.

Pursuant to the Company’s Articles of Association, the quorum required for the General Meeting consists of at least two shareholders present, in person or by proxy, who hold or represent between them more than 50% of the Company’s issued and outstanding share capital. Broker non-votes and abstentions will be counted as present at the General Meeting for the purpose of determining whether a quorum is present. A broker non-vote occurs when a bank, broker or other nominee holding Ordinary Shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received instructions from the beneficial owner. While counted for quorum purposes, abstentions and broker non-votes will not be treated as voting shares and will not have any effect on whether the requisite vote is obtained for all matters placed before shareholders for their vote.

Vote Required

Provided that a quorum is present, approval of the Merger Proposal will require the affirmative vote of holders of at least seventy-five percent (75%) of the Ordinary Shares present, in person or by proxy, and voting on the Merger Proposal (not taking into consideration abstentions).

Pursuant to Section 320(c) of the ICL, in the event that shares of a merging company are held by the other merging company or by a person holding 25% or more of any kind of means of control in the other merging company, the merger will not be approved if a majority of the shareholders present and voting at the General Meeting (not counting abstainers), which are not the other merging company or the person so holding or anyone acting on behalf of either of them, including relatives or corporations under their control, are opposed to the merger;

however

, that a person will not be deemed to hold shares of the other merging company, simply because he/she holds shares of the merging company. Under the Merger Agreement, Parent has represented that no such cross-holding exists.

The approval of each of the other proposals require the affirmative vote of a majority of the Ordinary Shares present, in person or by proxy, and voting on such proposal (not taking into consideration abstentions). In addition, in order to approve the reelection of Shai Saul as an Outside Director of the Company (within the meaning of the ICL) and the payment of a director cash payment to Joel Maryles, the shareholders’ approval must

Under the ICL, in general, a person will be deemed to be a “

” if the person has the power to direct the activities of the Company, other than solely as a result of serving as a director or officer of the Company. A person is presumed to be a controlling shareholder if it holds (i) 50% or more of any type of controlling means in the Company, or (ii) 25% or more of the voting rights in the Company, if no other person holds more than 50% of the voting rights in the Company.

Under the ICL, a person is deemed to have a “

” in the Merger Proposal if this person, or certain members of this person’s family or a company that is affiliated with this person or with such members of this person’s family (namely, a company in which this person or any such family member serves as a director or chief executive officer, has the right to appoint a director or the chief executive officer, or owns 5% or more of the outstanding shares) has a personal interest in the adoption of such proposal. However, a person is not deemed to have a “personal interest” if this person’s interest arises solely from this person’s ownership of the Company’s Ordinary Shares. The term “personal interest” also includes a personal interest of an individual voting via a power of attorney given by a third party (even if the empowering shareholder has no personal interest), and the vote of an attorney-in-fact shall be considered a personal interest vote if the empowering shareholder has a personal interest, in each case regardless of whether the attorney-in-fact has the discretion in the voting.

The enclosed form of proxy card includes a certification that you are not a controlling shareholder of the Company, do not have a personal interest in the reelection of Mr. Saul as an Outside Director and in the payment of a director cash payment to Joel Maryles and are not a shareholder listed in Section 320(c) of the ICL. If you think that this statement is incorrect, please contact the Company’s proxy solicitor, MacKenzie Partners, Inc., toll-free at (800) 322-2885 (banks and brokers call collect at (212) 929-5500). If you hold your shares in “street name,” you may also contact the representative managing your account, who may contact MacKenzie Partners, Inc. on your behalf.

Each Ordinary Share is entitled to one vote on each proposal or item that comes before the General Meeting. If two or more persons are registered as joint owners of any Ordinary Share, the right to attend the General Meeting shall be conferred upon all of the joint owners, but the right to vote at the General Meeting and/or the right to be counted as part of the quorum required for the General Meeting shall be conferred exclusively upon the senior among the joint owners attending the General Meeting, in person or by proxy, and for this purpose seniority shall be determined by the order in which the names stand on the Company’s Shareholder Register.

Only Ordinary Shares that are voted will be counted towards determining whether the Merger Proposal or the other applicable agenda matter is approved by shareholders. Ordinary Shares present at the General Meeting that are not voted on a particular proposal or Ordinary Shares present by proxy where the shareholder properly withheld authority to vote on such proposal (including broker non-votes) will not be counted in determining whether such matter is approved by shareholders, but will be counted for purposes of determining whether a quorum exists.

Proposed Resolutions

It is proposed that the following resolutions be adopted at the General Meeting:

RESOLVED

, (a) to approve the Merger Proposal, including the approval of: (i) the Merger Agreement; (ii) the Merger, pursuant to Section 314-327 of the ICL, of the Company with Merger Sub, an Israeli company and a wholly-owned subsidiary of Parent; (iii) the payment of the Merger Consideration, without interest and subject to applicable withholding taxes, for each Ordinary Share held by the Company’s shareholders as of immediately prior to the effective time of the Merger; and (vi) all other transactions and arrangements contemplated by the Merger Agreement, and (b) that the Merger Proposal is in the best interest of the Company (all capitalized terms are as defined in this Proxy Statement);

FURTHER RESOLVED

, to reelect Benny Hanigal to serve as a director on the Board of Directors of the Company until the 2016 annual general meeting of shareholders or his prior termination or resignation;

, to reelect Eli Fruchter to serve as a director on the Board of Directors of the Company until the 2016 annual general meeting of shareholders or his prior termination or resignation;

, to reelect Prof. Ran Giladi to serve as a director on the Board of Directors of the Company until the 2016 annual general meeting of shareholders or his prior termination or resignation;

, to reelect Joel Maryles to serve as a director on the Board of Directors of the Company until the 2016 annual general meeting of shareholders or his prior termination or resignation;

, to reelect Karen Sarid to serve as a director on the Board of Directors of the Company until the 2016 annual general meeting of shareholders or her prior termination or resignation;

, to reelect Shai Saul to serve as an Outside Director (within the meaning of the ICL) on the Board of Directors of the Company for an additional three-year term commencing on the date of the General Meeting or his prior termination or resignation;

, to approve the payment of $154,000 to Joel Maryles, a director of the Company, for his services as director of the Company; and

, that the appointment of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, as the Company’s independent registered public accountants for the fiscal year ending December 31, 2015 be, and it hereby is, ratified and approved, and that the Audit Committee (subject to ratification of the Board of Directors) be, and it hereby is, authorized to fix the remuneration of such independent registered public accountants in accordance with the volume and nature of their services.

Our Board of Directors recommends a vote “FOR” approval of each of the proposed resolutions.

Proxies

All Ordinary Shares represented by properly executed proxies received by us no later than twenty-four (24) hours prior to the General Meeting and not revoked prior to or at the General Meeting in accordance with the procedure described below will be voted as specified in the instructions indicated in such proxies. If no instructions are indicated, such proxies will not be voted at the General Meeting.

Revocation of Proxies

A shareholder returning a proxy may revoke it at any time prior to commencement of the General Meeting by communicating such revocation in writing to us or by executing and delivering a later-dated proxy. In addition, any person who has executed a proxy and is present at the General Meeting may vote in person instead of by proxy, thereby canceling any proxy previously given, whether or not written revocation of such proxy has been given. Any written notice revoking a proxy should be sent to us at our principal executive offices located at 1 Hatamar Street, Yokneam 2069206, Israel, Attention: Chief Financial Officer. Attendance without voting at the General Meeting will not in and of itself constitute revocation of a proxy.

Solicitation of Proxies

The Company will bear the costs of solicitation of proxies for the General Meeting. We have retained MacKenzie Partners, Inc., a professional proxy solicitation firm, to assist in the solicitation of proxies for the General Meeting for a fee of approximately $25,000, plus reimbursement of reasonable out-of-pocket expenses. In addition to solicitation by mail, MacKenzie Partners’ employees and the Company’s directors, officers and employees may solicit proxies from shareholders by telephone, email, personal interview or otherwise. The Company’s directors, officers and employees will not receive additional compensation for such solicitation, but may be reimbursed for out-of-pocket expenses in connection with such solicitation.

Brokers, nominees, fiduciaries and other custodians have been requested to forward soliciting material to the beneficial owners of Ordinary Shares held of record by them, and such custodians will be reimbursed for their reasonable expenses. The Company may reimburse the reasonable charges and expenses of brokerage houses or other nominees or fiduciaries for forwarding proxy materials to, and obtaining authority to execute proxies from, beneficial owners for whose accounts they hold Ordinary Shares.

As a foreign private issuer, the Company is exempt from the rules under the Securities Exchange Act of 1934, as amended, related to the furnishing and content of proxy statements. The circulation of this notice and proxy statement should not be taken as an admission that the Company is subject to such rules.

TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE TRANSACTION AND THE MEETING

RISK FACTORS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

THE ANNUAL GENERAL MEETING

Time and Place of the General Meeting

Purposes of the General Meeting; Proposed Resolutions

Recommendation of the Board of Directors of EZchip

Record Date, Shareholders Entitled to Vote

Voting Rights and Vote Required

Adjournment

Voting Procedures; Revoking Proxies or Voting Instructions

Questions and Additional Information

PROPOSAL 1

THE PARTIES TO THE MERGER

Our Company

Background of the Merger

Our Reasons for Approving the Merger Proposal; Recommendation and Determination of Our Board

No Appraisal Rights; Objections by Creditors

Opinion of Our Financial Advisor

Financing of the Merger

Material Tax Consequences of the Merger

Regulatory Matters

Interests of Our Directors and Executive Officers in the Merger Proposal

THE MERGER AGREEMENT

PROPOSAL 2

REELECTION OF DIRECTORS

PROPOSAL 3

REELECTION OF OUTSIDE DIRECTOR

PROPOSAL 4

PAYMENT TO JOEL MARYLES, A COMPANY DIRECTOR

PROPOSAL 5

APPOINTMENT AND COMPENSATION OF THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS; REVIEW AND DISCUSSION OF 2014 CONSOLIDATED FINANCIAL STATEMENTS

MARKET PRICE INFORMATION

BENEFICIAL OWNERSHIP OF ORDINARY SHARES

WHERE YOU CAN FIND MORE INFORMATION

OTHER MATTERS

Appendix A – Agreement of Merger, dated as of September 30, 2015, by and among EZchip Semiconductor Ltd., Mellanox Technologies, Ltd. and Mondial Europe Sub Ltd.

Appendix B – Opinion of Barclays Capital Inc.

B - 1

The following questions and answers are intended to briefly address certain commonly asked questions regarding the General Meeting, the Merger Proposal and the other matters on the agenda for the General Meeting. These questions and answers may not address all the questions that may be important to you as a shareholder of EZchip. Please refer to the more detailed information contained elsewhere in this Proxy Statement, the appendices attached to this Proxy Statement and the documents referred to or incorporated by reference in this Proxy Statement, which you are urged to read carefully and in their entirety. See the section of this Proxy Statement entitled “Where You Can Find More Information” beginning on page

Why am I receiving this proxy statement?

On September 30, 2015, our Company entered into an Agreement of Merger (which we refer to as the Merger Agreement) with Mellanox Technologies, Ltd., an Israeli company whose shares are listed on the NASDAQ Global Select Market (which we refer to as Parent or Mellanox), and Mondial Europe Sub Ltd., a private Israeli company and a wholly-owned subsidiary of Parent (which we refer to as Merger Sub). Our Board is soliciting proxies for the Annual General Meeting of Shareholders of our Company for the purpose of approving the Merger Proposal, which we refer to as the General Meeting. You are receiving this Proxy Statement because you owned ordinary shares of our Company, which we refer to as Ordinary Shares, on October 12, 2015, the Record Date, and that entitles you to vote at the General Meeting. By use of a proxy, you can vote on the proposals to be acted on at the General Meeting whether or not you attend the General Meeting. This Proxy Statement describes the matters on which we would like you to vote and provides information on those matters so that you can make an informed decision.

What am I being asked to vote on?

You are being asked to vote on a resolution (a) for the approval of (i) the Merger Agreement, (ii) the merger of Merger Sub with and into the Company, following which Merger Sub will cease to exist as a separate legal entity and the Company will become a wholly-owned subsidiary of Parent (which we refer to as the Merger); (iii) the consideration of $25.50 in cash (which we refer to as the Merger Consideration), without interest and subject to applicable withholding taxes, for each Ordinary Share held by the Company’s shareholders as of immediately prior to the effective time of the Merger; and (iv) all other transactions and arrangements contemplated by the Merger Agreement; and (b) that the Merger Proposal is in the best interest of the Company (we refer to the foregoing collectively as the Merger Proposal).

In addition, you are being asked to vote on the following proposals:

the reelection of five of the Company’s directors – Benny Hanigal, Eli Fruchter, Prof. Ran Giladi, Joel Maryles and Karen Sarid until the next annual meeting or their prior termination or resignation;

the reelection of Shai Saul, an Outside Director of the Company (within the meaning of the ICL), for an additional three year term or until his prior termination or resignation;

What will I receive in the Merger?

Upon completion of the Merger, you will have the right to receive $25.50 in cash per Ordinary Share held by you immediately prior to the effective time of the Merger, which we refer to as the Merger Consideration, without any interest thereon, subject to applicable withholding taxes, if any. You will not have any ownership interest in the surviving company following the completion of the Merger.

When will the Merger be completed?

We are working to complete the Merger as soon as practicable and expect to complete the Merger during the first quarter of 2016, but because the Merger is subject to governmental and regulatory approvals and certain other conditions, some of which are beyond the control of the Company and Parent, the exact timing cannot be predicted nor can it be guaranteed that the Merger will ever be completed. Under the ICL, the Merger cannot become effective until the later of the 50th day following the date of the filing of the merger proposal by both merging companies with the Israeli Companies Registrar and the 30th day following the date on which the Merger Proposal is approved by our shareholders (the sole shareholder of Merger Sub has approved the Merger Agreement). See the section of this Proxy Statement entitled

“The Merger Agreement – Conditions to the Completion of the Merger

” beginning on page 58 for a summary description of these conditions.

The Merger Agreement may be terminated by either party if the Merger is not completed by February 5, 2016 (unless this date has been extended by mutual agreement of Parent and us), so long as the terminating party’s breach of the Merger Agreement has not been a principal cause of, or primarily resulted in, the failure to close the Merger by this date.

Are there risks I should consider in deciding how to vote on the Merger?

Yes. You should carefully read this Proxy Statement in its entirety, including the factors discussed in the section “

Risk Factors

When and where is the General Meeting?

The General Meeting will be held on November 12, 2015, at 5:00 p.m. (Israel time) at our principal executive offices located at 1 Hatamar Street, Yokneam 2069206, Israel.

What vote is required for EZchip’s shareholders to approve the Merger Proposal and the other proposals on the agenda for the General Meeting?

Provided that a quorum is present, approval of the Merger Proposal will require the affirmative vote of holders of at least seventy-five percent (75%) of the Ordinary Shares present, in person or by proxy, and voting on the Merger Proposal (not taking into consideration abstentions). We refer to this as the Company Shareholder Approval.

The approval of each of the other proposals requires the affirmative vote of a majority of the Ordinary Shares present, in person or by proxy, and voting on such proposal (not taking into consideration abstentions). In addition, in order to approve the reelection of Shai Saul as an Outside Director of the Company (within the meaning of the ICL) and the payment of a director cash payment to Joel Maryles, the shareholders’ approval must

include (i) at least a majority of the Ordinary Shares voted by shareholders who are not controlling shareholders (within the meaning of the ICL) and are not shareholders who have a personal interest (within the meaning of the ICL) in the approval of such proposal (excluding a personal interest that is not related to a relationship with the controlling shareholders), not taking into consideration abstentions, or (ii) the total Ordinary Shares of non-controlling shareholders and non-interested shareholders voted against such proposal do not represent more than two percent of the outstanding Ordinary Shares.

Are there any voting agreements with existing shareholders?

How does EZchip’s Board of Directors recommend that I vote?

Our Board of Directors has determined unanimously that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its shareholders, and has approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

Our Board of Directors recommends that our shareholders vote “FOR” the approval of the Merger Proposal and the other proposals on the agenda for the General Meeting.

For additional information see the sections of this Proxy Statement entitled “

The Merger —Background of the Merger

The Merger – Our Reasons for Approving the Merger Proposal; Recommendation and Determination of Our Board

” beginning on page 27.

Should I send my share certificates now?

No. Once all conditions to closing of the Merger are satisfied, including, but not limited to, receipt of all governmental and regulatory approvals, we will be able to effect the closing of the Merger. If you are a holder of record immediately prior to the effective time of the Merger, promptly after the Merger is completed, a paying agent appointed by Parent (which we refer to as the Paying Agent) will send you a letter of transmittal with detailed instructions regarding the surrender of your certificates representing Ordinary Shares or the transfer of your Ordinary Shares held in book entry form, as applicable, and any other required documentation, including, to the extent applicable, a United States Internal Revenue Service, which we refer to as the IRS, Form W-9 or appropriate Form W-8 (as applicable) and a tax declaration form and a representation as to whether you are an Israeli resident and satisfy other conditions, which we refer to as the Tax Declaration Form, to facilitate payment of the Merger Consideration for each Ordinary Share held by you immediately prior to the effective time of the Merger. You should not send your certificates representing Ordinary Shares to us or anyone else until you receive such instructions. The Paying Agent will send the Merger Consideration, without any interest thereon, subject to the withholding of any applicable taxes, to you as promptly as practicable following its receipt of your share certificates (unless your Ordinary Shares are held in book entry form) and other required documents, including, to the extent applicable, the Tax Declaration Form. If your shares are held in “street name” by your bank, broker or other nominee, you will receive instructions from your bank, broker or other nominee as to how to effect the surrender or transfer of your “street name” shares in exchange for the Merger Consideration. You may be required to deliver an IRS Form W-9 or appropriate Form W-8 (as applicable) and, to the extent applicable, a Tax Declaration Form prior to receiving the Merger Consideration.

If you are a United States Holder (as defined in this Proxy Statement), you may be subject to United States backup withholding as described in the section of this Proxy Statement entitled “

The Merger – Material Tax Consequences of the Merger – Material United States Federal Income Tax Consequences

if you do not deliver an IRS Form W-9 or Form W-8 (as applicable.) If you do not deliver a valid certificate issued by the Israeli Tax Authority that provides full exemption from Israeli tax withholding or, to the extent applicable, you do not deliver a Tax Declaration Form or you indicate on the Tax Declaration Form that you are a resident of Israel or that you do not satisfy the other conditions required thereon, Israeli withholding tax will be withheld from the Merger Consideration paid to you as described in the section of this Proxy Statement entitled “

The Merger – Material Tax Consequences of the Merger – Material Israeli Income Tax Consequences

” beginning on page 41.

If your shares are traded through the Tel Aviv Stock Exchange Ltd. (which we refer to as the TASE), you will receive the Merger Consideration through the bank or financial institution through which you hold your shares, which will also be responsible for administering Israeli tax withholding.

What will happen to EZchip share options and restricted share units (RSUs)?

At the effective time of the Merger, each outstanding option to acquire Ordinary Shares then outstanding that is vested and exercisable as of the effective time of the Merger will be canceled and converted into the right to receive an amount in cash equal to the product of (i) the excess, if any, of the Merger Consideration over the applicable exercise price per Ordinary Share of such option and (ii) the number of Ordinary Shares such holder had the right to purchase if such holder had exercised such option in full immediately prior to the effective time of the Merger, without interest and subject to applicable withholding taxes. Any option that has an exercise price per Ordinary Share that is greater than the Merger Consideration will be canceled without any payment.

As of the date of the Merger Agreement, all of the outstanding options to acquire Ordinary Shares of the Company are vested and exercisable.

At the effective time of the Merger, each unvested and outstanding restricted share unit (RSU) of EZchip will be assumed by Mellanox and converted into a restricted share unit of Mellanox, with the number of ordinary shares of Mellanox issuable upon the vesting of each such Mellanox restricted share unit determined by reference to the $25.50 per share merger consideration and the average closing price of Mellanox’s ordinary shares for the five trading days immediately preceding the effective time of the Merger.

What effects will the proposed Merger have on our Company?

As a result of the proposed Merger, we will cease to be a publicly-traded company and will become a privately-held company that is a wholly-owned subsidiary of Mellanox. Following the completion of the proposed Merger, the registration of our Ordinary Shares and our reporting obligations under the U.S. Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, will be terminated upon notification to the U.S. Securities and Exchange Commission, which we refer to as the SEC. In addition, upon completion of the proposed Merger, our Ordinary Shares will no longer be listed on any stock exchange, including the NASDAQ Global Select Market (which we refer to as NASDAQ) and the TASE.

What happens if the Merger is not completed?

If the Merger is not completed for any reason, our shareholders will not receive the Merger Consideration for their Ordinary Shares. Instead, we will remain a public company and the Ordinary Shares will continue to be listed on NASDAQ and the TASE. Under certain circumstances related to a termination, as specified in the Merger Agreement, we may be required to pay Parent a termination fee as described in the section of this Proxy Statement entitled

“The Merger Agreement – Remedies – Termination Fee and Expenses

” beginning on page 60.

What interests do the directors and executive officers of our Company have in the Merger Proposal?

In considering the recommendation of our Board of Directors with respect to the Merger Proposal, you should be aware that our directors and executive officers have interests in the Merger Proposal that may be different from the interests of our shareholders in general, including, among other things, the fact that:

The Merger Agreement provides for the termination of service of the non-executive members of our Board of Directors, which in accordance with the terms of their RSU award agreements will result in the accelerated vesting of any such RSUs held by them that are unvested at such time.

The Merger Agreement provides for the termination of service of our executive officers (namely, Eli Fruchter, Amir Eyal and Dror Israel), which in accordance with the terms of their RSU award agreements will result in the accelerated vesting of any such RSUs held by them that are unvested at such time.

Our directors and executive offers are entitled to certain indemnification and insurance as provided for in the Merger Agreement.

For additional details, see “

Our Board of Directors was aware of these different interests in determining to approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, and to recommend to our shareholders that they vote in favor of the Merger Proposal.

What do I need to do now?

This Proxy Statement contains important information regarding the Merger and the other proposals on the agenda for the General Meeting, as well as information about us. It also contains important information regarding the factors considered by our Board of Directors in evaluating the Merger. You are urged to read this Proxy Statement carefully and in its entirety. You should also complete, sign and date the enclosed proxy card and return it in the enclosed envelope. You should also review the documents referenced under the section of this Proxy Statement entitled “

How do I vote?

You should indicate on the enclosed proxy card how you want to vote, and date, sign and mail it in the enclosed envelope as soon as possible, so that your shares can be voted at the General Meeting. Shareholders who hold shares through members of the Tel Aviv Stock Exchange may also vote electronically as described below. You should receive instructions about electronic voting from the Tel Aviv Stock Exchange member through which you hold your shares.

The General Meeting will take place on November 12, 2015, at 5:00 p.m. (Israel time) at our principal executive offices located at 1 Hatamar Street, Yokneam 2069206, Israel. Whether or not you submit a proxy, you may attend the General Meeting and vote your shares in person.

What do I do if I want to change my vote?

You may send a written notice of revocation, or send a later-dated, completed and signed proxy card relating to the same shares, to us at our principal executive offices located at 1 Hatamar Street, Yokneam 2069206, Israel, Attention: Chief Financial Officer, so it is received prior to the General Meeting. Ordinary Shares represented by properly executed proxies received by us no later than twenty-four (24) hours prior to the General Meeting will be voted at the General Meeting in accordance with the directions on the proxies, unless such proxies have been previously revoked or superseded. Alternatively, you may attend the General Meeting and vote in person. Attendance without voting at the General Meeting will not in and of itself constitute revocation of a proxy.

If my shares are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee vote my shares for me if I do not provide instructions?

No. Your bank, broker or other nominee will vote your shares only if you provide instructions to your bank, broker or other nominee on how to vote. If you do not provide instructions to your bank, broker or other nominee, your shares will not be voted at the General Meeting. You should follow the procedures provided by your bank, broker or other nominee regarding the voting of your shares and be sure to provide your bank, broker or other nominee with instructions on how to vote your shares. If your shares are held in “street name” you must contact your bank, broker or other nominee to change or revoke your voting instructions.

If you hold shares through members of the TASE, you may vote in person or vote through the enclosed form of proxy by completing, signing, dating and mailing the proxy with a copy of your identity card, passport or certificate of incorporation, as the case may be, to the Company’s offices. Shareholders who hold shares through members of the TASE and intend to vote their shares either in person or by proxy must deliver to the Company an ownership certificate confirming their ownership of the Company’s shares on the Record Date, which must be certified by a recognized financial institution, as required by the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meeting) of 2000, as amended.

Who can vote at the General Meeting?

Only those holders of record of outstanding Ordinary Shares at the close of business on October 12, 2015, the Record Date for the General Meeting, are entitled to notice of, and to vote at the General Meeting. As of the Record Date, there were 29,961,616 Ordinary Shares outstanding and entitled to vote.

What happens if I sell my shares before the General Meeting?

The Record Date for the General Meeting is earlier than the General Meeting and the date that the Merger is expected to be completed. If you transfer your Ordinary Shares after the Record Date but before the General Meeting, you will retain your right to vote at the General Meeting, but will have transferred the right to receive the Merger Consideration with respect to such Ordinary Shares. In order to receive the Merger Consideration, you must hold your Ordinary Shares through the completion of the Merger.

Am I entitled to appraisal rights in connection with the Merger?

No. Under Israeli law, holders of Ordinary Shares are not entitled to appraisal rights in connection with the Merger. However, under the ICL, objections to the Merger may be filed by our creditors with the Israeli district court. See “

The Merger – No Appraisal Rights; Objections by Creditors

” on page

Who can help answer my questions?

If you have additional questions about the Merger Agreement, the Merger Proposal or the other proposals on the agenda for the General Meeting, or would like additional copies of this Proxy Statement or the enclosed proxy card, you should contact:

Toll-free: (800) 322-2885

Collect: (212) 929-5500

proxy@mackenziepartners.com

In addition to the other information included in this Proxy Statement, including the matters addressed under the caption titled “Cautionary Statement Regarding Forward-Looking Statements” on page

, you should carefully consider the following risk factors in determining how to vote at the General Meeting. The following is not intended to be an exhaustive list of the risks related to the merger and you should read and consider the risk factors described under Part 1, Item 3, “Key Information – Risk Factors” of the Company’s Annual Report on Form 20-F for the year ended December 31, 2014, which is on file with the SEC, and is incorporated by reference into this Proxy Statement.

Failure to complete the Merger could negatively impact our share price, business, financial condition, results of operations or prospects.

The Merger is subject to the satisfaction or waiver of certain closing conditions described in the section entitled “

” beginning on page 58, including, among others:

the approval of the Merger Proposal by the Company’s shareholders;

the receipt of clearance of the Committee on Foreign Investment in the United States (which we refer to as CFIUS);

the approval of the Israeli Investment Center of the Ministry of Economy of the State of Israel to the change of control of the Company;

not more than 33% of a list of designated employees shall have terminated their employment with the Company or tendered their resignation; and

that no Company Material Adverse Effect (as defined hereafter) has occurred since signing.

No assurance can be given that each of the conditions will be satisfied. If the conditions are not satisfied or waived in a timely manner and the Merger is delayed, payment of the Merger Consideration will also be delayed. In addition, the Merger Agreement may be terminated under the circumstances described in the section entitled “

The Merger Agreement – Termination of the Merger Agreement

” beginning on page 58. If the Merger is not completed (including in the event the Merger Agreement is terminated), our ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Merger, we will be subject to a number of risks, including the following:

we may be required to pay Parent a termination fee and reimburse Parent for certain of its expenses if the Merger is terminated under various circumstances described in the section entitled

“The Merger Agreement – Remedies – Termination Fee and Expenses”

we will be required to pay certain costs relating to the Merger, including substantial legal and accounting fees, whether or not the Merger is completed;

the price of our Ordinary Shares may decline to the extent that the current market price reflects a market assumption that the Merger will be completed;

under the Merger Agreement, we are subject to certain restrictions on the conduct of our business prior to completing the Merger that may affect our ability to execute certain of our business strategies;

we could be subject to litigation related to any failure to complete the Merger or related to any enforcement proceeding commenced against us to perform our obligations under the Merger Agreement; and

during the period before completion of the Merger our management’s attention will be diverted from the day-to-day business of the Company, which could otherwise have been devoted to other opportunities that may have been beneficial to us as an independent company, and there may be unavoidable disruptions to our employees and our relationships with customers, suppliers and other business partners.

If the Merger is not completed, these risks may materialize and may adversely affect the price of our Ordinary Shares, business, financial condition, results of operations or prospects.

The fact that there is a Merger pending could harm our business, revenue and results of operations.

While the Merger is pending, it creates uncertainty about our future. As a result of this uncertainty, customers may decide to delay, defer or cancel purchases of our products pending completion of the Merger or termination of the Merger Agreement. If these decisions represent a significant portion of our anticipated revenue, our results of operations and quarterly revenues could be substantially below the expectations of investors.

In addition, while the Merger is pending, we are subject to a number of risks that may harm our business, revenue and results of operations, including:

the diversion of management and employee attention and the unavoidable disruption to our relationships with customers and suppliers may detract from our ability to grow revenues and minimize costs;

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

we may be unable to respond effectively to competitive pressures, industry developments and future opportunities.

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

Our obligation to pay a termination fee under certain circumstances and the restrictions on our ability to solicit or engage in negotiations with respect to other acquisition proposals may discourage other transactions that may be favorable to our shareholders.

Until the Merger is completed or the Merger Agreement is terminated, with limited exceptions, the Merger Agreement prohibits us from entering into, soliciting or engaging in negotiations with respect to acquisition proposals or other business combinations. Under specified circumstances, including in connection with the termination of the Merger Agreement following a change of the Board's recommendation, we will be obligated to pay Parent a termination fee of $28,385,000 and reimburse Parent for up to $4.0 million of its expenses. These provisions could discourage other companies from proposing alternative transactions that may be more favorable to our shareholders than the Merger.

If the Merger is not consummated by February 5, 2016, either we or Parent may choose not to proceed with the Merger.

” beginning on page 58. Certain of these conditions are beyond our control, such as if the Merger does not receive clearance of CFIUS. In addition, the Merger cannot be consummated until after (i) the completion of a 50-day waiting period commencing on the date of the filing of the merger proposal by both merging companies with the Companies Registrar and (ii) 30 days after the Company Shareholder Approval has been obtained. If the Merger has not been completed by February 5, 2016, either the Company or Parent may terminate the Merger Agreement, except that this termination right is not available to a party, if the failure to consummate the Merger by February 5, 2016 solely arises from or is directly attributable to the failure by such party to perform any material obligation required to be performed by such party at or prior to the effective time of the Merger.

This Proxy Statement, including information set forth or incorporated by reference in this document, contains forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about the expected completion of the proposed transaction with Mellanox and the timing thereof, the satisfaction or waiver of any conditions to the proposed transaction, anticipated benefits, growth opportunities and other events relating to the proposed transaction, projections about the Company’s business and its future revenues, expenses and profitability. Forward-looking statements may be, but are not necessarily, identified by the use of forward-looking terminology such as “may,” “anticipates,” “estimates,” “expects,” “intends,” “plans,” “believes,” and words and terms of similar substance. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual events, results, performance, circumstances or achievements to be materially different from those expressed or implied by such forward-looking statements. Factors that could cause actual events, results, performance, circumstances or achievements to differ from such forward-looking statements include, but are not limited to, the following:

we may be unable to obtain the Company Shareholder Approval;

we may be unable to obtain required regulatory approvals or satisfy other conditions to the closing of the Merger;

the Merger may involve unexpected costs, liabilities or delays;

our business may suffer as a result of uncertainty surrounding the proposed Merger, diversion of management attention on Merger-related matters, disruption of current plans and operations, the potential difficulties in employee retention, and impact of the Merger on relationships with customers, distributors and suppliers;

the outcome of any legal proceedings related to the Merger;

our Company may be adversely affected by other economic, business, and/or competitive factors;

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

the ability to recognize benefits of the proposed Merger; and

other risks to consummation of the proposed Merger, including the risk that the proposed Merger will not be consummated within the expected time period or at all.

Factors that may affect the future events, results, performance, circumstances or achievements of the Company also include, but are not limited to, the following: (i) the impact of general economic conditions, (ii) competitive products (including in-house customer developed products), (iii) product demand and market acceptance risks, (iv) customer order cancellations, (v) reliance on key strategic alliances, (vi) fluctuations in operating results, (vii) delays in development of highly-complex products, (viii) the integration of acquired businesses, and (ix) other risks and factors disclosed in the Company’s filings with the U.S. Securities and Exchange Commission, including, but not limited to, risks and factors identified under such headings as “

Introduction

Operating and Financial Review and Prospects

” in the Company’s Annual Report on Form 20-F for the year ended December 31, 2014.

These forward-looking statements speak only as of the date on which the statements were made and we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statement included in this Proxy Statement or elsewhere.

In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements. We cannot guarantee any future results, including with respect to the Merger. The statements made in this Proxy Statement represent our views as of the date of this Proxy Statement, and it should not be assumed that the statements made herein remain accurate as of any future date. Moreover, we assume no obligation to update forward-looking statements or update the reasons that actual results could differ materially from those anticipated in forward-looking statements, except as required by law.

This Proxy Statement is being furnished to holders of Ordinary Shares in connection with the solicitation of proxies by and on behalf of our Board of Directors for use at the General Meeting to be held on November 12, 2015, at 5:00 p.m. (Israel time), at our principal executive offices, at 1 Hatamar Street, Yokneam 2069206, Israel, and at any adjournment or postponement thereof. We are first mailing this Proxy Statement, the accompanying notice, letter to shareholders and proxy card on or about October 16, 2015 to all holders of Ordinary Shares entitled to notice of, and to vote at, the General Meeting.

At the General Meeting, our shareholders will consider and vote on the Merger Proposal, which is a proposal to approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

In addition, you are being asked to vote at the General Meeting on the following proposals:

, to approve the payment of $154,000 to Joel Maryles, a director of the Company, for his services as director of the Company; and

Our shareholders must approve the Merger Proposal by an affirmative vote of holders of at least seventy-five percent (75%) of the Ordinary Shares present, in person or by proxy at the General Meeting (not taking into consideration abstentions) in order for the Merger to occur. If the shareholders fail to approve and adopt the Merger Proposal, the Merger will not occur. For more information about the Merger and the Merger Agreement, see the sections of this Proxy Statement entitled “

” beginning on pages

and 47, respectively.

OUR BOARD OF DIRECTORS DETERMINED THAT THE MERGER PROPOSAL IS FAIR TO AND IN THE BEST INTERESTS OF EZCHIP AND ITS SHAREHOLDERS AND RECOMMENDS THAT YOU AND THE OTHER EZCHIP SHAREHOLDERS VOTE “FOR” THE MERGER PROPOSAL AND THE OTHER PROPOSALS ON THE AGENDA FOR THE MEETING. See “

The Merger – Our Reasons for Approving the Merger Proposal; Recommendations and Determination of Our Board

Record Date; Shareholders Entitled to Vote

In accordance with the ICL and our Articles of Association, our Board of Directors has fixed October 12, 2015 as the record date for determining the shareholders entitled to notice of, and to vote at, the General Meeting. Accordingly, you are entitled to notice of, and to vote at, the General Meeting only if you were a record holder of Ordinary Shares at the close of business on that date, irrespective of the amount of Ordinary Shares in your possession on such date. Shareholders who hold shares through members of the Tel Aviv Stock Exchange Ltd. in Israel (which we refer to as the TASE) may participate and vote at the General Meeting if they confirm their ownership as required by the ICL and its regulations.

As of October 12, 2015, the Record Date for the General Meeting, there were 29,961,616 Ordinary Shares outstanding and entitled to vote. Your shares may be voted at the General Meeting only if you are present or your shares are represented by a valid proxy.

If, as of the Record Date, you held Ordinary Shares through a bank, broker or other nominee which is a shareholder of record of the Company or which appears in the participant list of a securities depository, you are considered to be beneficial owners of shares held in “street name”. This Proxy Statement and other proxy materials are being forwarded to beneficial owners by your bank, broker or other nominee that is considered the holder of record. Beneficial owners have the right to direct how their shares should be voted and are also invited to attend the General Meeting, but may not actually vote their shares in person at the General Meeting. The bank, broker or other nominee that is a shareholder of record has enclosed a voting instruction card for you to use in directing the holder of record how to vote the shares.

You may receive more than one set of voting materials, including multiple copies of this document and multiple proxy cards or voting instruction cards. For example, shareholders who hold shares in more than one brokerage account will receive a separate voting instruction card for each brokerage account in which shares are held.

Shareholders of record whose shares are registered in more than one name will receive more than one proxy card. You should complete, sign, date and return each proxy card and voting instruction card you receive.

A quorum must be present in order for the General Meeting to be held. Pursuant to the Company’s articles of association, the quorum required for the General Meeting consists of at least two shareholders present, in person or by proxy, who hold or represent between them more than 50% of the Company’s issued and outstanding share capital. Broker non-votes and abstentions will be counted as present at the meeting for the purpose of determining whether a quorum is present. A broker non-vote occurs when a bank, broker or other nominee holding ordinary shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received voting instructions from the beneficial owner. While counted for quorum purposes, abstentions and broker non-votes will not be treated as voting shares and will not have any effect on whether the requisite vote is obtained for all matters placed before shareholders for their vote.

If within half an hour from the time appointed for the holding of the General Meeting a quorum is not present, the General Meeting will stand adjourned until November 19, 2015 at the same time and place. If within half an hour from the time appointed for holding of the adjourned meeting the aforesaid percentage of Ordinary Shares required for a quorum is not present, two or more shareholders (regardless of the percentage of our Ordinary Shares held by them) who are present will constitute a quorum for the business for which the original Meeting was called.

include at least a majority of the Ordinary Shares voted by shareholders who are not controlling shareholders (within the meaning of the ICL) nor are they shareholders who have a personal interest (within the meaning of the ICL) in the approval of such proposal (excluding a personal interest that is not related to a relationship with the controlling shareholders), not taking into consideration abstentions, or the total Ordinary Shares of non-controlling shareholders and non-interested shareholders voted against such proposal must not represent more than two percent of the outstanding Ordinary Shares.

The enclosed form of proxy card includes a certification that you are not a controlling shareholder of the Company, do not have a personal interest in the reelection of Mr. Saul as an Outside Director and in the payment of a director cash payment to Mr. Maryles and are not a shareholder listed in Section 320(c) of the ICL. If you think that this statement is incorrect, please contact the Company’s proxy solicitor, MacKenzie Partners, Inc., toll-free at (800) 322-2885 (banks and brokers call collect at (212) 929-5500). If you hold your shares in “street name,” you may also contact the representative managing your account, who may contact MacKenzie Partners, Inc. on your behalf.

A proxy card of a record shareholder that is signed and returned that does not indicate a vote “FOR” or “AGAINST” a proposal, the shares subject to such proxy card will not be voted at the General Meeting on such proposal but will be counted for purposes of determining whether a quorum exists.

A bank, broker or nominee who holds shares for customers who are the beneficial owners of those shares has the authority to vote on “routine” proposals when it has not received instructions from the beneficial owners. However, such bank, broker or nominee is prohibited from giving a proxy to vote those customers’ shares with respect to approving non-routine matters, such as the Merger Proposal to be voted on at the General Meeting, without instructions from the customer. Shares held by a bank, broker or nominee that are not voted at the General Meeting because the customer has not provided instructions to the bank, broker or nominee will not be considered to be votes “FOR” or “AGAINST” the Merger Proposal or any other proposal and will have no effect on the result of the vote.

If within half an hour from the time appointed for the holding of the General Meeting a quorum is not present, the General Meeting will stand adjourned until one week thereafter at the same time and place. If within half an hour from the time appointed for holding of the adjourned meeting the aforesaid percentage of Ordinary Shares required for a quorum is not present, two or more shareholders (regardless of the percentage of our Ordinary Shares held by them) who are present will constitute a quorum for the business for which the original meeting was called.

Shareholders of Record

If you are a shareholder of record, meaning that your Ordinary Shares and your share certificate(s) were registered in your name with us and our transfer agent as of the Record Date, you may vote (a) in person by attending the General Meeting or (b) by marking, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

If you sign, date and return your proxy card without indicating how you want to vote, your Ordinary Shares will not be voted at the General Meeting but will be counted for purposes of determining whether a quorum exists.

Shares Held in “Street Name”

If you hold your Ordinary Shares in “street name” through a bank, broker or other nominee you should follow the instructions on the form you receive from your bank, broker or other nominee. If your Ordinary Shares are held in “street name” and you wish to vote such shares by attending the General Meeting in person, you will need to obtain a proxy from your bank, broker or other nominee. If your Ordinary Shares are held in “street name,” you must contact your bank, broker or other nominee to change or revoke your voting instructions.

Shares Traded on TASE

Shareholders who hold shares through members of the TASE may vote in person or vote through the enclosed form of proxy by completing, signing, dating and mailing the proxy with a copy of their identity card, passport or certificate of incorporation, as the case may be, to the Company’s offices. Shareholders who hold shares through members of the TASE and intend to vote their shares either in person or by proxy must deliver to the Company an ownership certificate confirming their ownership of the Company’s shares on the Record Date, which must be certified by a recognized financial institution, as required by the Israeli Companies Regulations (Proof of Ownership of Shares for Voting at General Meeting) of 2000, as amended.

Voting of Proxies

All shares represented at the General Meeting by valid proxies that we receive in time for the General Meeting as a result of this solicitation (other than proxies that are revoked or superseded before they are voted) will be voted in the manner specified on such proxy. If you submit an executed proxy but do not specify how to vote your proxy, your Ordinary Shares will not be voted at the General Meeting.

Proxies submitted with instructions to abstain from voting and broker non-votes will not be considered to be votes “FOR” or “AGAINST” the Merger Proposal or any other proposal and will have no effect on the result of the vote.

You may revoke your proxy at any time before the vote is taken at the General Meeting by (a) delivering to us at our principal executive offices located at 1 Hatamar Street, Yokneam 2069206, Israel, Attention: Chief Financial Officer, a written notice of revocation, bearing a later date than the proxy, stating that the proxy is revoked, (b) by properly submitting a later-dated proxy relating to the same shares or (c) by attending the General Meeting and voting in person (although attendance at the General Meeting will not, by itself, revoke a proxy). Ordinary Shares represented by properly executed proxies received by us no later than twenty-four (24) hours prior to the General Meeting will, unless such proxies have been previously revoked or superseded, be voted at the General Meeting in accordance with the directions on the proxies. Written notices of revocation and other communications concerning the revocation of a previously executed proxy should be addressed to us at our principal executive offices located at 1 Hatamar Street, Yokneam 2069206, Israel, Attention: Chief Financial Officer.

You may also be represented by another person present at the General Meeting by executing a proxy designating such person to act on your behalf.

SHAREHOLDERS SHOULD NOT SEND ANY CERTIFICATES REPRESENTING ORDINARY SHARES WITH THEIR PROXY CARDS. IF THE MERGER PROPOSAL IS APPROVED AND THE MERGER IS SUBSEQUENTLY COMPLETED, YOU WILL RECEIVE INSTRUCTIONS FOR SURRENDERING YOUR CERTIFICATES IN EXCHANGE FOR THE MERGER CONSIDERATION.

SHAREHOLDERS ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN RETURNING YOUR PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.

If you have questions about the Merger or how to submit your proxy, or if you need any additional copies of this Proxy Statement or the enclosed proxy card or voting instructions, please contact:

EZchip Semiconductor Ltd., which we also refer to in this Proxy Statement as EZchip or the Company, was incorporated under the laws of the State of Israel. EZchip is a fabless semiconductor company that provides high-performance processing solutions for a wide range of applications for the carrier, cloud and data center networks. EZchip’s broad portfolio of solutions scales from a few to hundreds of Gigabits-per-second, and includes network processors, multi-core processors, intelligent network adapters, high-performance appliances and a comprehensive software ecosystem.

The principal executive offices of the Company are located at 1 Hatamar Street, Yokneam 2069206, Israel, and its telephone number is +972-4-959-6666.

This Proxy Statement incorporates important business and financial information about EZchip from other documents that are not included in or delivered with this information statement. For a list of the documents incorporated by reference in this information statement, see “

” for more information.

Mellanox Technologies, Ltd., which we also refer to in this Proxy Statement as Parent or Mellanox, was incorporated under the laws of the State of Israel. Mellanox is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage. Mellanox's interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. Mellanox offers a choice of fast interconnect products: adapters, switches, software and silicon that accelerate application runtime and maximize business results for a wide range of markets including high performance computing, enterprise data centers, Web 2.0, cloud, storage and financial services.

The principal executive offices of Parent are located at 26 Hakidma Street, Beit Mellanox, Ofer Industrial park, Yokneam 2069200, Israel, and its telephone number is +972-74-723-7200.

Mondial Europe Sub Ltd., which we also refer to in this Proxy Statement as Merger Sub, is an Israeli company and a wholly-owned subsidiary of Parent formed for the purpose of effecting the Merger and the transactions contemplated by the Merger Agreement. Merger Sub has not engaged in any business except activities incidental to its formation and in connection with the transactions contemplated by the Merger Agreement. The principal executive offices of Merger Sub are located at 26 Hakidma Street, Beit Mellanox, Ofer Industrial park, Yokneam 2069200, Israel, and its telephone number is +972-74-723-7200.

The description in this Proxy Statement of the Merger is subject to, and is qualified in its entirety by reference to, the Merger Agreement, which is the legal document governing the Merger. We have attached a copy of the Merger Agreement to this Proxy Statement as Appendix A and we urge you to read it carefully and in its entirety.

In the past several years, the Company focused on developing its strategies to grow its market share and enhance its product portfolio. However, our Board and senior management periodically reviewed the Company’s operations, financial performance and industry conditions as they may affect the Company’s long-term strategic goals and plans, and considered and evaluated options for enhancing shareholder value as a stand-alone company and alternatives for strategic transactions to enhance shareholder value. During these discussions, our Board and senior management noted the challenges of continuing on the path as an independent public company, operating in both a highly competitive and consolidating industry, with a limited number of significant customers.

The following chronology sets forth a summary of the material events leading up to the execution of the Merger Agreement. At each formal Board meeting described below, a majority of our board members who were present and who participated in discussions and the approval of each and every matter that was required to be approved by our Board, were independent (as determined previously by the Board pursuant to applicable NASDAQ Listing Rules). In addition, throughout the chronology of developments described below, our President, Chief Executive Officer and member of the Board, Mr. Eli Fruchter, updated all Board members on a regular and frequent basis as to the nature and extent of such developments.

On May 25, 2015, the Chief Executive Officers of both companies, Mr. Eyal Waldman of Mellanox and Mr. Fruchter of EZchip, met in Yokneam, Israel, for lunch, during which the possibility of a strategic transaction involving the two companies was introduced.

On May 27, 2015, Mr. Waldman approached Mr. Fruchter and during a telephone conversation indicated Mellanox’s interest to commence a preliminary evaluation process towards a possible transaction involving an acquisition of EZchip by Mellanox. Mr. Fruchter noted that he thought the then-current market price of EZchip’s Ordinary Shares did not reflect EZchip’s real value, and any potential transaction would need to reflect a significant premium. The initial approach of Mr. Waldman followed the Company’s announcement on May 13, 2015 that EZchip’s new product line, the NPS-400, was not the plan of record for the next generation line cards of Cisco, EZchip’s largest customer. During the period from the Company’s May 13, 2015 announcement through May 27, 2015, EZchip’s share price ranged from $14.30 to $16.63.

Following the call between the parties, Mr. Fruchter updated Mr. Benny Hanigal, the Chairman of the Company’s Board on Mellanox’s interest to commence a preliminary evaluation process.

Between May 31, 2015 and June 1, 2015, Mr. Amir Eyal, the Company’s Vice President –

Business Development

, and Mr. Nimrod Gindi, Mellanox’s Vice President of Mergers & Acquisitions, with the assistance of Naschitz, Brandes, Amir & Co., the Company’s Israeli legal counsel (which we refer to as NBA & Co.), and Mr. Gideon Rosenberg, Mellanox’s Vice President of Legal Affairs, exchanged drafts of a confidentiality agreement in order to facilitate the sharing of preliminary confidential information and enable Mellanox to commence a preliminary evaluation process, and on June 1, 2015, Mellanox and EZchip executed the confidentiality agreement. During the next few days, senior management of Mellanox and EZchip shared preliminary confidential information.

On June 14, 2015, Mr. Waldman notified Mr. Fruchter that Mellanox was interested in pursuing a transaction involving an acquisition of EZchip by Mellanox, and that Mellanox intended to deliver a non-binding letter of intent with a price per share reflecting a 30% premium over the then-current market price of EZchip’s Ordinary Shares (which implied a purchase price of approximately $20-$21 per Ordinary Share at such time). Mr. Fruchter responded that he would recommend to the Board not to pursue a transaction at a price less than $25 per Ordinary Share.

Mr. Fruchter updated all Board members on the discussion and the intent to engage a financial advisor to advise on potential strategic and financial development of the Company’s business, including advice with respect to potential mergers, acquisitions or a sale of the Company to Mellanox or other potential parties, and to assist in locating and approaching other potential bidders and negotiating with Mellanox and other potential bidders, if and to the extent the discussions develop.

On June 16, 2015, EZchip began consulting with Barclays Capital Inc. (which we refer to as Barclays) as financial advisor. The Barclays team was very familiar with the Company, having acted as the Company’s financial advisor in connection with the Company’s November 2014 acquisition of U.S.-based Tilera Corporation. Barclays also presented a strong knowledge of the global semiconductor industry, as well as significant experience in executing strategic transactions for Israeli companies, particularly Israeli companies publicly traded in the United States. The terms of the formal engagement letter with Barclays were subsequently finalized and signed on September 7, 2015 following the approval of the Board on August 18, 2015.

On June 16, 2015, the parties introduced Barclays and J.P. Morgan Securities LLC (which we refer to as J.P. Morgan), financial advisor to Mellanox in connection with a potential acquisition of the Company.

On June 17, 2015, Mr. Fruchter, together with Mr. Eyal and Mr. Dror Israel, the Company’s Chief Financial Officer, held discussions with representatives of Barclays and representatives of NBA & Co., to address strategic alternatives and to provide an update on the status of the Company’s discussions with Mellanox.

On June 21, 2015, Mr. Fruchter discussed with Mr. Waldman the proposed purchase price.

On June 22, 2015 representatives of Barclays and representatives of J. P. Morgan met in Menlo Park, California, to discuss the merits of a potential transaction between the two companies and to attempt to analyze and bridge the differences in the proposed share price.

On June 24, 2015, J.P. Morgan, on behalf of Mellanox, delivered to Barclays a non-binding letter of intent offering to purchase the Company for $21 per Ordinary Share and requesting that the Company enter into a 45-day exclusivity period to allow Mellanox to conduct due diligence and the parties to negotiate a definitive merger agreement.

On June 25, 2015, Mr. Fruchter updated all Board members on the letter of intent and following discussions with Barclays and NBA & Co., the Board determined to reject Mellanox’s $21 proposal and directed management not to pursue negotiations of a definitive agreement, and not to share any sensitive due diligence information, with Mellanox unless Mellanox provided an offer of at least $25 per share. Following the Board discussion, Mr. Fruchter informed Mr. Waldman of the Board’s decision to reject Mellanox’s letter of intent.

On June 26, 2015, representatives of EZchip, Mellanox, Barclays and J.P. Morgan, including the Chief Executive Officers of EZchip and Mellanox, held a lengthy conference call, during which EZchip and Barclays attempted to convince Mellanox and J.P. Morgan of the basis for its price request and the parties attempted to bridge the difference between Mellanox’s proposed purchase price and the Company’s assessment of the value of its stock price. Mellanox indicated that $25 per share represented a premium in excess of 50% over the share price of EZchip at such time, which Mellanox was unwilling to offer. On June 27, 2015, Mr. Fruchter updated the Board on the discussions with Mellanox, J.P. Morgan and Barclays.

On June 30, 2015, Mr. Waldman notified Mr. Fruchter that Mellanox elected to slow down the process and evaluate other strategic alternatives.

On July 13, 2015, Mr. Waldman approached Mr. Fruchter and asked that EZchip formally respond in writing to the letter of intent delivered by Mellanox on June 24, 2015, and thereafter, EZchip formally responded to Mellanox that it rejected the letter of intent and was seeking a proposal of at least $25 per share.

On July 26, 2015, Mr. Waldman notified Mr. Fruchter that Mellanox was interested in recommencing the discussions between the two companies and that Mellanox intended to send a revised proposal in the following few days.

On July 28, 2015, representatives of EZchip, Mellanox, Barclays and J.P. Morgan, including the Chief Executive Officers of EZchip and Mellanox met in Yokneam, Israel, and Mellanox presented to EZchip a revised proposal of $22 per share.

On July 30, 2015, Mr. Fruchter updated all Board members on Mellanox’s revised proposal, and following discussion with Barclays and NBA & Co., the Board determined to reject Mellanox’s $22 proposal and directed management to restate its request for an offer of at least $25 per share. Following the Board discussion, Mr. Fruchter informed Mr. Waldman of the Board’s decision to reject Mellanox’s revised proposal of $22 per share.

On August 5, 2015, representatives of EZchip, Mellanox, Barclays and J.P. Morgan held a conference call to discuss the basis for EZchip’s position with respect to purchase price.

On August 11, 2015, the Board met at the Company’s principal executive offices in Yokneam, Israel, to review and approve EZchip’s results for the second quarter of 2015 ended June 30, 2015, and to receive an update on the strategic initiatives and discussions with Mellanox.

On August 12, 2015, EZchip publicly announced its results for the second quarter of 2015. Between the close of trading on August 11, 2015 and the close of trading on August 14, 2015, the share price of EZchip increased from $16.87 to $20.66.

On August 14, 2015, Mr. Waldman contacted Mr. Fruchter and advised him that Mellanox was interested in continuing to pursue a transaction with EZchip. Mr. Fruchter restated EZchip’s request to receive a proposal for at least $25 per share.

On August 17, 2015, J.P. Morgan, on behalf of Mellanox, delivered to Barclays a non-binding letter of intent offering to purchase the Company for $24-$25 per share and requesting a 45-day exclusivity agreement.

On August 18, 2015, Messrs. Fruchter, Eyal and Israel discussed the revised letter of intent and exclusivity agreement with representatives of Barclays and NBA & Co., and the Board subsequently held a meeting via conference call to discuss the new proposal and the engagement terms of Barclays. The Board directed management to negotiate the terms of the proposed non-binding letter of intent and to resist signing the exclusivity agreement, and authorized the Company to execute the engagement letter with Barclays.

During the period from August 18, 2015 through August 19, 2015, representatives of EZchip and NBA & Co. negotiated with representatives of Mellanox and representatives of Herzog Fox & Neeman, Mellanox’s Israeli legal counsel (which we refer to as HFN), the terms of the proposed non-binding letter of intent. EZchip also resisted signing the exclusivity agreement, emphasizing the Company’s wish to evaluate in parallel potential transactions with alternative parties.

On August 19, 2015, Mellanox accepted EZchip’s request not to sign an exclusivity agreement, and the parties agreed to proceed with n

of the terms of a proposed non-binding letter of intent.

On August 19, 2015, the Board held a meeting via conference call with representatives of Barclays and NBA & Co. and evaluated the terms of the letter of intent, the consequence of signing a non-binding letter of intent without an exclusivity agreement and the alternatives that the Company could pursue instead of or in parallel to negotiating with Mellanox, including continuing as a stand-alone independent public company. Representatives of NBA & Co. outlined legal matters relevant to our Board’s process and decision-making with respect to the evaluation of Mellanox’s indication of interest and various fiduciary duty issues under Israeli law related thereto.

Following a lengthy discussion, the Board unanimously approved signing the non-binding letter of intent with Mellanox without the exclusivity agreement, and pursuing due diligence activities and negotiations with Mellanox and its advisors. The Board further resolved to evaluate in parallel pursuing a transaction with another party that may be on terms that are preferential to those being negotiated with Mellanox. The Board instructed Barclays, with the assistance of senior management, to prepare a list of potential interested parties with sufficient resources to pursue a transaction.

On August 20, 2015, Mellanox and EZchip signed the non-binding letter of intent.

From August 20, 2015 through August 25, 2015, EZchip, with the assistance of Barclays, NBA & Co. and Carter Ledyard Milburn LLP, EZchip’s U.S. legal counsel (which we refer to as CLM), collected and responded to Mellanox and its advisors’ due diligence requests, and posted Company documentation in a virtual data room.

On August 25, 2015, EZchip opened the virtual data room and provided access to the virtual data room to Mellanox and its advisors, while continuing to collect and respond to additional requests from Mellanox.

Between August 25, 2015 and September 29, 2015, Mellanox conducted business, financial, accounting and legal due diligence of EZchip, and held meetings with members of the Company’s management.

In parallel, on August 27, 2015, HFN distributed to EZchip, NBA & Co. and CLM an initial draft of the Merger Agreement.

From August 27, 2015 through September 2, 2015, NBA & Co., with the assistance of CLM and the Company, reviewed and commented on the draft Merger Agreement provided by HFN. CLM also discussed and reviewed with Latham & Watkins LLP, Mellanox’s U.S. counsel (which we refer to as Latham), various regulatory issues associated with the transaction.

On August 30, 2015, the Board held a meeting at the offices of NBA & Co. in Tel Aviv, Israel, which was also attended by Messrs. Eyal and Israel and representatives of Barclays and NBA & Co. At the meeting, Barclays presented to the Board a list of seven potential interested parties that the Company may consider approaching, recognizing the sensitivity of approaching existing partners, customers and other parties with commercial relationships. Barclays and management described the benefits and potential risks of approaching each of the potential parties. Barclays described the contacts that it had with each of the parties and the manner in which it would propose approaching the parties while maintaining confidentiality.

Following a thorough discussion by all those attending the meeting, the Board recommended approaching six of the seven parties presented by Barclays, with the timing of the approach to be determined by Mr. Fruchter in consultation with Barclays, in order to ensure the parallel negotiations with Mellanox were not adversely affected. The Board further requested that Barclays continue to evaluate whether additional potential interested parties should be approached beyond the initial list.

On September 1, 2015, Mr. Fruchter advised Mr. Waldman of EZchip’s intent to approach other potential interested parties and examine the availability of a potential transaction on terms that are preferential to those proposed by Mellanox.

On September 2, 2015, NBA & Co. distributed comments to the Merger Agreement, as provided by EZchip, NBA & Co., CLM and EZchip’s IP and regulatory specialists.

On September 3, 2015, Mr. Waldman requested that Mr. Fruchter and EZchip await pursuing other parties for a period of 10 days, during which period Mellanox would continue devoting its full resources to evaluating and negotiating the transaction in order to be able to evaluate whether it is determined to further pursue the transaction.

On September 3, 2015, Mr. Fruchter updated the Board on Mellanox’s response and the Board determined to wait the ten day period, which included a number of non-business days in Israel due to the Jewish holidays.

Between September 6, 2015 and September 24, 2015, Mellanox, EZchip and their advisors negotiated the Merger Agreement and other ancillary documentation in person, telephonically and via the exchange of drafts. During the negotiations the members of the Board and senior management were regularly updated and consulted on the negotiations and remaining issues, including a detailed summary of all of the material terms and conditions of the Merger Agreement.

During the week of September 7, 2015, Barclays and senior management continued to evaluate the list of other parties that should be approached, and added a potential eighth party to the list. Following review and consultation with the Board, management instructed Barclays to approach six of the eight potential interested parties. The decision not to approach the other parties was primarily driven by the Company’s interest in preventing adverse commercial consequences.

From September 15, 2015 through September 22, 2015, Barclays approached senior officers at the six potential strategic partners to determine whether such parties were interested in exploring a potential strategic transaction with EZchip.

On September 23, 2015 two of the six parties (Party A and Party B) indicated to Barclays their interest in entering into a confidentiality agreement and further evaluating a potential strategic transaction with EZchip. By September 23, 2015, the other four parties that were approached by Barclays notified Barclays that they were not interested in exploring a potential strategic transaction with EZchip.

On September 23, 2015, EZchip signed a confidentiality agreement with Party A and on September 24, 2015, EZchip signed a confidentiality agreement with Party B.

On September 24, 2015, the Board held a meeting via conference call, which was also attended by Messrs. Eyal and Israel and representatives of Barclays and NBA & Co. At the meeting, Barclays described the discussions held with the six parties, and the current status of the preliminary discussions with Party A and Party B. Mr. Fruchter updated the Board on Mellanox’s interest in signing the definitive merger agreement the following week, and recommended that the Company first fully evaluate the possibility of a transaction with Party A and Party B before determining whether to sign a definitive agreement with Mellanox. Mr. Fruchter further recommended that the Board continue to negotiate with Mellanox to increase the price from the $24-$25 range to a price greater than $25 in light of EZchip’s then current trailing 30-day trading price of approximately $21.99.

Following discussion, the Board directed Mr. Fruchter to negotiate with Mellanox to increase its offer price to an amount greater than $25.

On September 24, 2015, Messrs. Fruchter, Eyal and Israel, together with representatives of Barclays, held management presentations with senior officers of Party A and with senior officers of Party B.

On September 25, 2015, a representative of Party A notified Barclays that Party A was not interested in further pursuing a potential transaction with EZchip.

On the morning of September 27, 2015, Mr. Fruchter contacted Mr. Waldman and notified him that EZchip was seeking a purchase price of $26 per share from Mellanox in light of the recent increases in EZchip’s trading price. Mr. Waldman notified Mr. Fruchter that Mellanox was not willing to proceed with a transaction at a purchase price of $26 per share and that Mellanox was ceasing all further discussions and negotiations with EZchip until such time as EZchip agreed to a purchase price of less than $26. The parties ceased further discussions and negotiations following the discussion between Messrs. Fruchter and Waldman.

Later in the evening on September 27, 2015, Mr. Fruchter contacted Mr. Waldman and following an exchange of emails between the two it was agreed that, subject to the review, consultation and approval of the Board, EZchip will drop its request for a purchase price of $26 per share but that EZchip was seeking a purchase price in excess of $25. Following which Mr. Waldman notified Mr. Fruchter that Mellanox agreed to increase the purchase price that it was offering to $25.50 per share. Further requests by EZchip to increase the price above $25.50 per share were rejected by Mellanox.

On September 28, 2015, a representative of Party B notified Barclays that Party B was not interested in further pursuing a potential transaction with EZchip.

On September 28, 2015 and September 29, 2015, EZchip, Mellanox and their respective advisors continued extensive negotiations with respect to the Merger Agreement and other ancillary documentation. During the negotiations, all members of the Board and senior management were regularly updated and consulted on the negotiations and remaining issues, including a detailed summary of all of the material terms and conditions of the Merger Agreement. NBA & Co., HFN, CLM and Latham continued to negotiate the terms of the Merger Agreement in person, telephonically and via the exchange of drafts.

By September 29, 2015, Mellanox completed the remaining outstanding items for its due diligence process with respect to EZchip. On September 29, 2015, the parties’ legal counsel completed the drafting and negotiation of the Merger Agreement and other ancillary documentation contemplated by the Merger Agreement.

On the morning of September 30, 2015 (Israel time), our Board held a meeting at the offices of NBA & Co. in Tel Aviv, Israel, at which representatives of Barclays and NBA & Co., as well as members of the Company’s senior management, were present. The purpose of the meeting was to consider the final terms of the proposed Merger transaction with Parent and Merger Sub and to approve the Merger Agreement.

Representatives of Barclays reviewed with the Board the financial analyses of the $25.50 per share merger consideration that they had performed in connection with the preparation of their fairness opinion. Representatives of Barclays discussed with the Board the low likelihood that another party would be interested in a transaction at this time at a value in excess of the proposed price offered by Mellanox given the evaluation of potential interested parties and the lack of interest from any of the parties approached.

Representatives of NBA & Co. discussed the key terms of the draft Merger Agreement, including closing conditions and termination provisions, and noted the fact that the Merger Agreement allows the Board to change its recommendation if an unsolicited superior proposal emerges after the execution of the Merger Agreement. A representative of NBA & Co. further reviewed with the Board their fiduciary duties under Israeli law in connection with a potential sale of the Company and related Israeli law matters.

Following additional updates by the Company’s advisors on the terms of the Merger Agreement and related matters, representatives of Barclays rendered to the Board an oral opinion, confirmed by delivery of a written opinion dated September 30, 2015, to the effect that, as of the date of such opinion and based upon and subject to the qualifications, limitations and assumptions set forth therein, from a financial point of view, the $25.50 per share merger consideration to be offered to the holders of our Ordinary Shares was fair to such holders.

Following an extensive and thorough discussion of the factors relevant to the transaction during the course of the Board meeting, our directors unanimously determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement were fair to, and in the best interests of, the Company and our shareholders, approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, directed that the adoption of the Merger Agreement be submitted to a vote at the annual general meeting of EZchip’s shareholders and resolved to recommend to EZchip’s shareholders that they approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, and all related matters to be brought before the shareholders at such general meeting.

On September 30, 2015, EZchip, Merger Sub and Mellanox entered into the Merger Agreement, and later on September 30, 2015, Mellanox and EZchip issued a joint press release announcing the execution of the Merger Agreement.

Our Board evaluated the terms of the Merger Proposal, including the terms and conditions of the Merger Agreement, and unanimously (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are fair to, and in the best interests of, the Company and our shareholders, (ii) approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, (iii) determined that no reasonable concern exists that as a result of the Merger we, as the surviving company in the Merger, will be unable to fulfill our obligations to our creditors, (iv) directed management to call a General Meeting of shareholders and to take such other actions as are necessary to complete the Merger and (v) resolved to recommend that our shareholders approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and directed that such matters be submitted for consideration of our shareholders at the General Meeting.

In evaluating the Merger Agreement and the Merger, our Board consulted with EZchip’s management and EZchip’s legal, financial and other outside professional advisors and considered various information and factors in connection with the Merger, including those material factors described below. Among the information and material factors considered by our Board were the following (which are not listed in any relative order of importance):

Financial Condition; Prospects of Company

Current and historical market prices for our Ordinary Shares and the fact that the Merger Consideration represents a significant premium compared with trading prices of the Ordinary Shares.

The Company’s current and historical financial condition, results of operations, competitive position, strategic options and prospects, as well as the financial plan and prospects if the Company were to remain an independent public company, and the potential impact of those factors on the trading price of the Ordinary Shares.

The prospective risks to the Company as a stand-alone public entity, including the risks and uncertainties with respect to:

our dependency on a very limited number of key customers, such as Cisco and ZTE, and the effect on our future revenues and growth if any such key customer elects not to use our future products or reduce its use of our processors, such as Cisco’s recent election not to use our NPS-400 network processor in its next generation products;

the competition we face from our competitors and potential competitors who are much larger than us and from most of our large customers’ internal chip design teams;

the importance of scale in a competitive market environment and the associated challenges to growth as a smaller stand-alone public entity;

our dependency on the networking equipment market for our growth, and in particular the markets for Carrier Ethernet edge routers and data center equipment;

difficulties or delays in the development or introduction of our new family of network processors, the NPS, and our new multi-core processors family, the TILE-Mx;

the Company’s recent entry into the data center market in which it has less experience and the greater level of competition the Company faces in this market from long established market participants, could cause us to be unsuccessful in gaining design wins and in achieving significant revenues from the data center market in the future;

changes in the levels of carriers’ expenditures on wire-line equipment;

the need to redesign our products to meet rapidly evolving industry standards and customer specifications;

the integration of the business of the recently acquired Tilera Corporation;

the lengthy design and development cycles and the development of our processors, which is a complex and uncertain process; and

other “Risk Factors” as set forth in the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2014.

Strategic Alternatives

The trends and competitive developments in our industries and the range of strategic alternatives available to EZchip. These strategic alternatives included remaining a stand-alone company, being acquired by or pursuing a business combination with other companies.

Based on the process pursued by Barclays, the Company’s financial advisor, to explore expressions of interest regarding potential acquisitions and indications received in such process, (i) our Board believed it was well-informed about the opportunities for acquisition and business combination transactions and how potential acquirers and strategic partners would likely value EZchip’s business in the context of an acquisition or business combination, and took this knowledge and experience into account in considering strategic alternatives available to EZchip, (ii) representatives of Barclays advised the Board that they did not know of any other buyer at that time that would pay more than the consideration offered in the contemplated transaction by Mellanox, and (iii) Barclays provided its opinion to the Board as to the fairness, from a financial point of view as of the date of the opinion of the Merger Consideration to be offered to the holders of Ordinary Shares.

The fact that the Merger Consideration of $25.50 per share was more favorable to our shareholders than the potential value that might result from other alternatives reasonably available to our Company, including, but not limited to, acquisitions, dividends and the continued operation of our Company on a stand-alone basis in light of a number of factors, including the risks and uncertainties associated with those alternatives.

The fact that the Company, with the assistance of Barclays, had conducted a process to explore potential strategic options, including a possible sale of the Company, during which Barclays contacted a group of potential strategic buyers, none of whom produced an offer.

Financial Terms; Fairness Opinion; Certainty of Value

Historical market prices, volatility and trading information with respect to Ordinary Shares, including that the Merger Consideration of $25.50 per share in cash:

represented a premium of 16% over the closing price of our Ordinary Shares on the NASDAQ Global Select Market on September 29, 2015 (the last trading day before the approval of the Merger Agreement by our Board; and

represented a premium of 15.2%, 31.2% and 33.1% over the 30 trading days, three months and one year, respectively, volume-weighted average closing prices of our Ordinary Shares on the NASDAQ Global Select Market prior to September 29, 2015.

The financial analysis orally presented to the Board by Barclays on September 30, 2015, confirmed by its written opinion, dated September 30, 2015, submitted to our Board as to the fairness, from a financial point of view as of the date of the opinion, and subject to qualifications, limitations and assumptions set forth in the opinion, of the $25.50 per share Merger Consideration to be offered to the holders of Ordinary Shares, as more fully described below under the caption, “

The form of consideration to be paid in the transaction is cash, which provides certainty of value and immediate liquidity to the Company’s shareholders, especially when viewed against the risks and uncertainties inherent in our Company’s business.

The Board’s belief that the Merger Consideration represents the highest consideration that Mellanox was willing to pay and the highest per share value reasonably obtainable for the Company’s shareholders, in each case, as of the date of the Merger Agreement with the Board basing this belief on a number of factors, including the fact that this price represented an increase from the $21.00 price initially offered by Mellanox.

Fiduciary Out

Subject to compliance with the Merger Agreement, our Board is permitted to participate in discussions or negotiations with, or provide non-public information to, any person in response to a bona fide unsolicited acquisition proposal for us by such person, if our Board determines, based on the advice of its outside legal counsel, that such acquisition proposal constitutes or may constitute a superior proposal, and that the failure to take such action would reasonably be expected to constitute a breach of the directors’ fiduciary duties.

The Company is permitted to terminate the Merger Agreement upon the failure of our shareholders to approve the Merger Proposal, subject to compliance with the Merger Agreement, including, in specified cases, the payment of up to $4,000,000 for reimbursement of Parent's expenditures and, in certain specified cases, a termination fee of $28,385,000 upon the consummation of an alternative transaction, which amounts our Board, based in part on advice from its financial and legal advisors, believed were reasonable in light of, among other matters, the benefits of the Merger to the Company’s shareholders, the typical size of such termination fees in similar transactions and the likelihood that a fee of such size would not be a meaningful deterrent to alternative acquisition proposals, as more fully described under “

Our Board’s belief, based in part on advice from its financial and legal advisors, that such termination fee is reasonable, customary and would not deter any interested third party from making, or inhibit our Board from approving, an acquisition proposal that would constitute a superior proposal if such proposal were available and made in accordance with the terms and conditions of the Merger Agreement.

The ability of the Board, under certain circumstances, to withhold or withdraw its recommendation that the Company’s shareholders vote to approve the Merger.

Likelihood of Consummation

The Merger Agreement has terms that were the product of arm’s-length negotiations.

The structure of the transaction as a statutory merger under the ICL which enables our shareholders to receive the Merger Consideration in a relatively short time frame (and reduces the pendency and hence the uncertainty of the transaction).

There are no third party consents that are conditions to the transaction.

There are no financing conditions, and the debt financing commitment received by Mellanox in connection with the Merger reduces the possibility that Mellanox will be unable to pay the Merger Consideration.

The identity of Mellanox, which is a reputable strategic buyer, and our Board’s assessment that Mellanox would have adequate capital resources to pay the Merger Consideration.

Other Terms

Our Board’s refusal to negotiate exclusively with Mellanox at any time, notwithstanding Mellanox’s requests for exclusivity.

The structure of the transaction as a statutory merger under the ICL which allows for an informed vote by the shareholders on the merits of the Merger Proposal.

The fact that approval of the Merger Proposal will require the affirmative vote of holders of at least 75% of the Ordinary Shares present and voting on the Merger Proposal.

Our Board took into account management’s recommendation in favor of the Merger.

The fact that our Board had engaged financial and legal advisors with significant experience in public company transactions to advise it in connection with the Merger, and that those financial and legal advisors were involved throughout the negotiations with Mellanox and updated the Board directly and regularly, which provided the Board with additional perspectives on the negotiations in addition to those of the Company’s management.

The fact that the members of the Board were unanimous in their determination to approve the Merger Agreement and the Merger.

Risks and Uncertainties

Our Board also considered a number of uncertainties and risks in its deliberations concerning the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, including the following (which are not listed in any relative order of importance):

The Company’s current shareholders would not have the opportunity to participate in any possible growth and profits of the Company following the completion of the Merger.

The regulatory notifications required for completion of the Merger and the risk that the applicable governmental authorities may challenge or decide not to approve the Merger. Our Board also considered the potential length of the regulatory approval process. See “–

The risk that the proposed transaction might not be completed, even if approved by the Company’s shareholders, and the effect of the resulting public announcement of termination of the Merger Agreement on:

The market price of our Ordinary Shares, which could be affected by many factors, including (i) the reason for the termination of the Merger Agreement and whether such termination results from factors adversely affecting the Company, (ii) the possibility that the marketplace would consider the Company to be an unattractive acquisition candidate and (iii) the possible sale of Ordinary Shares by short-term investors following the announcement of termination of the Merger Agreement.

The Company’s operating results, particularly in light of the expenses incurred in connection with the transaction, including the potential requirement to pay a termination fee to Parent and reimburse its expenses.

The ability to attract and retain key personnel.

Relationships with customers, suppliers and others that do business with the Company.

The possible disruption to the Company’s business that may result from the announcement of the transaction and the resulting distraction of the attention of the Company’s management and employees and the impact of the transaction on the Company’s customers, suppliers and others that do business with the Company.

The terms of the Merger Agreement, including (i) the operational restrictions imposed on the Company between signing and closing (which may delay or prevent the Company from undertaking business opportunities that may arise pending the completion of the transaction) and (ii) the reimbursement of Parent's expenses and the termination fee that could become payable by the Company under certain circumstances.

The restriction on soliciting competing offers and the risk that some provisions of the Merger Agreement and related documents, including the reimbursement of Parent's expenses and the termination fee that may be payable by us, might have the effect of discouraging other persons potentially interested in acquiring our company from pursuing an acquisition of the Company.

The fact that the Merger Consideration would be taxable to the Company’s shareholders. See the section entitled “

The risks described under the section entitled, “

The Board also considered that certain of our directors and officers may have interests in connection with the Merger that may be different from the interests of our shareholders in general. See the section entitled “

The Merger – Interests of Our Directors and Executive Officers in the Merger Proposal

After taking into account all of the factors set forth above, as well as others, the Board unanimously agreed that, overall, the potential benefits of the Merger to our Company and our shareholders far outweigh the risks and uncertainties.

The preceding discussion of the information and factors considered by our Board is not intended to be exhaustive but includes the material factors considered by our Board. In view of the wide variety of factors considered by our Board in connection with its evaluation of the Merger and the complexity of these matters, our Board did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the different factors that it considered in reaching its decision. In addition, in considering the factors described above, individual members of our Board may have given different weight to different factors. Our Board considered this information as a whole and overall considered the information and factors to be favorable to, and in support of, its determinations and recommendation.

Our Board realized that there can be no assurance about future results, including results considered or expected as described in the factors listed above, such as assumptions regarding potential synergies. This explanation of our Board’s reasoning and all other information presented in this section are forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “

Our Board of Directors recommends that you vote “FOR” the Merger Proposal.

Under Israeli law, holders of Ordinary Shares are not entitled to appraisal rights in connection with the Merger. Under the ICL, objections to the Merger may be filed by our creditors with the Israeli district court. The court, in its discretion, may provide a remedy to any creditor who so objects if there is a reasonable concern that, as a result of the Merger, we will not be able to satisfy our obligations to our creditors following completion of the Merger.

Starting in June 2015, Barclays consulted with the Company regarding a possible sale transaction. In September 2015, the Board of Directors of the Company formally engaged Barclays to act as its financial advisor with respect to a possible sale transaction. On September 30, 2015, Barclays rendered its oral opinion (which was subsequently confirmed in writing) to the Company’s Board of Directors that, as of such date and based upon and subject to the qualifications, limitations and assumptions stated in its opinion, the Merger Consideration to be offered to the shareholders of the Company in the contemplated Merger is fair, from a financial point of view, to such shareholders.

The full text of Barclays’ written opinion, dated as of September 30, 2015, is attached as Appendix B to this Proxy Statement. Barclays’ written opinion sets forth, among other things, the assumptions made, procedures followed, factors considered and limitations upon the review undertaken by Barclays in rendering its opinion. You are encouraged to read the opinion carefully in its entirety. The following is a summary of Barclays’ opinion and the methodology that Barclays used to render its opinion. This summary is qualified in its entirety by reference to the full text of the opinion.

Barclays’ opinion, the issuance of which was approved by Barclays’ Valuation and Fairness Opinion Committee, is addressed to the Board of Directors of the Company, addresses only the fairness, from a financial point of view, of the Merger Consideration to be offered to the shareholders of the Company in the contemplated Merger and does not constitute a recommendation to any shareholder of the Company as to how such shareholder should vote or act with respect to the proposed transaction or any other matter. The terms of the proposed transaction were determined through arm’s-length negotiations between the Company and Parent and were unanimously approved by the Company’s Board of Directors. Barclays did not recommend any specific form of consideration to the Company or that any specific form of consideration constituted the only appropriate consideration for the proposed transaction. Barclays was not requested to address, and its opinion does not in any manner address, the Company’s underlying business decision to proceed with or effect the proposed transaction or the likelihood of consummation of the proposed transaction. In addition, Barclays expressed no opinion on, and its opinion does not in any manner address, the fairness of the amount or the nature of any compensation to any officers, directors or employees of any parties to the proposed transaction, or any class of such persons, relative to the Merger Consideration to be offered to the shareholders of the Company in the proposed transaction. No limitations were imposed by the Company’s Board of Directors upon Barclays with respect to the investigations made or procedures followed by it in rendering its opinion.

In arriving at its opinion, Barclays, among other things:

reviewed and analyzed a draft of the Merger Agreement dated as of September 30, 2015, and the specific terms of the proposed transaction;

reviewed and analyzed publicly available information concerning the Company and Parent that Barclays believed to be relevant to its analysis, including the Company’s Annual Reports on Form 20-F for the fiscal years ended December 31, 2014 and December 31, 2013, Parent’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, the Company’s Reports on Form 6-K filed with the Securities and Exchange Commission on August 12, 2015 and May 13, 2015 relating to the Company’s earnings releases for the fiscal quarters ended June 30, 2015 and March 31, 2015, and Parent’s Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 2015 and March 31, 2015, and other filings with the Securities and Exchange Commission that Barclays deemed relevant;

reviewed and analyzed financial and operating information with respect to the business, operations and prospects of the Company furnished to Barclays by the Company, including financial projections prepared by management of the Company;

reviewed and analyzed a trading history of the Company’s Ordinary Shares from September 28, 2010 to September 28, 2015 and a comparison of such trading history with those of Parent and of other companies that Barclays deemed relevant;

reviewed and analyzed a comparison of the historical financial results and present financial condition of the Company and of Parent with each other and with those of other companies that Barclays deemed relevant;

reviewed and analyzed a comparison of the financial terms of the proposed transaction with the financial terms of certain other transactions that Barclays deemed relevant;

reviewed and analyzed the pro forma impact of the proposed transaction on the future financial performance of the combined company;

reviewed and analyzed published estimates of independent research analysts with respect to the future performance of Parent;

had discussions with the management of the Company concerning its business, operations, assets, liabilities, financial condition and prospects; and

undertook such other studies, analyses and investigations as Barclays deemed appropriate.

In arriving at its opinion, Barclays assumed and relied upon the accuracy and completeness of the financial and other information used by Barclays without any independent verification of such information (and did not assume responsibility or liability for any independent verification of such information). Barclays also relied upon the assurances of the Company’s management that they were not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the financial projections of the Company, upon the advice of the Company, Barclays assumed that such projections were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company as to the Company’s future financial performance and that the Company would perform in accordance with such projections. Barclays was not provided with, and did not have any access to, financial projections of Parent prepared by Parent’s management. Accordingly, with the Company’s permission, Barclays has assumed that published estimates of independent research analysts with respect to the future performance of Parent are a reasonable basis upon which to evaluate the future financial performance of Parent and that Parent will perform substantially in accordance with such estimates. In arriving at its opinion, Barclays assumed no responsibility for and expressed no view as to any such projections or estimates or the assumptions on which they were based. In arriving at its opinion, Barclays did not conduct a physical inspection of the properties and facilities of the Company and did not make or obtain any evaluations or appraisals of the assets or liabilities of the Company. Barclays’ opinion was necessarily based upon market, economic and other conditions as they existed on, and could be evaluated as of the date of its opinion. Barclays assumed no responsibility for updating or revising its opinion based on events or circumstances that may have occurred after the date of its opinion.

In connection with rendering its opinion, Barclays performed certain financial, comparative and other analyses as summarized below. In arriving at its opinion, Barclays did not ascribe a specific range of values to the Company’s Ordinary Shares but rather made its determination as to fairness, from a financial point of view, to the Company’s shareholders of the Merger Consideration to be offered to such shareholders in the contemplated Merger on the basis of various financial and comparative analyses. The preparation of a fairness opinion is a complex process and involves various determinations as to the most appropriate and relevant methods of financial and comparative analyses and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to summary description.

In arriving at its opinion, Barclays did not attribute any particular weight to any single analysis or factor considered by it but rather made qualitative judgments as to the significance and relevance of each analysis and factor relative to all other analyses and factors performed and considered by it and in the context of the circumstances of the particular transaction. Accordingly, Barclays believes that its analyses must be considered as a whole, as considering any portion of such analyses and factors, without considering all analyses and factors as a whole, could create a misleading or incomplete view of the process underlying its opinion.

Barclays assumed that the executed Merger Agreement would conform in all material respects to the last draft of such agreement reviewed by Barclays. In addition, Barclays assumed the accuracy of the representations and warranties contained in the Merger Agreement and all agreements related thereto. Barclays also assumed, upon the advice of the Company, that all material governmental, regulatory and third party approvals, consents and releases for the Merger would be obtained within the constraints contemplated by the Merger Agreement and that the Merger would be consummated in accordance with the terms of the Merger Agreement without waiver, modification or amendment of any material term, condition or agreement thereof and in accordance with Israeli law requirements to the extent applicable to the proposed transaction. Barclays did not express any opinion as to any tax or other consequences that might result from the proposed transaction, nor did Barclays’ opinion address any legal, tax, regulatory or accounting matters, as to which Barclays understands that the Company has obtained such advice as it deemed necessary from qualified professionals.

The following is a summary of the material financial analyses used by Barclays in preparing its opinion to the Company’s Board of Directors. Certain financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses used by Barclays, the tables must be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses. In performing its analyses, Barclays made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Company or any other parties to the proposed transaction. None of the Company, Parent, Merger Sub, Barclays or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value of the businesses do not purport to be appraisals or reflect the prices at which the businesses may actually be sold.

Selected Comparable Company Analysis

In order to assess how the public market values shares of similar publicly traded companies, Barclays reviewed and compared specific financial and operating data relating to the Company with selected semiconductor companies that Barclays, based on its experience in the semiconductor industry, deemed comparable to the Company. The companies that Barclays selected as comparable to the Company were:

Applied Micro Circuits Corporation

Cavium, Inc.

Integrated Device Technology, Inc.

PMC-Sierra, Inc.

Barclays calculated and compared various financial multiples and ratios of the Company, and those of the selected comparable companies. As part of its selected comparable company analysis, Barclays calculated and analyzed each company’s enterprise value, or EV, as a multiple of its calendar year 2015 and 2016 estimated revenue and its calendar year 2015 and 2016 estimated adjusted earnings before interest, taxes, depreciation and amortization, or Adj. EBITDA, and each company’s share price as a multiple of its calendar year 2015 and 2016 estimated adjusted earnings per share, or Adj. EPS. The enterprise value of each company was obtained by adding its short and long-term debt to the sum of the market value of its common equity, calculated as fully diluted equity value, using the treasury stock method, based on closing stock prices on September 28, 2015, the value of any preferred stock (at liquidation value), the value of any pension liabilities and the book value of any minority interest, and subtracting its cash, cash equivalents and liquid investments. All of these calculations were performed, and based on publicly available financial data (including FactSet, a subscription-based data source containing historical and estimated financial data) and closing prices, as of September 28, 2015. The results of this selected comparable company analysis are summarized below:

EV / Revenue

EV / Adj. EBITDA

P / Adj. EPS

CY 2015E

CY 2016E

EV / Adj. EBITDA multiples above 30.0x and below 0.0x are labeled as “NM” – not meaningful.

P / Adj. EPS multiples above 40.0x and below 0.0x are labeled as “NM” – not meaningful.

Barclays selected the comparable companies listed above because of similarities in one or more business or operating characteristics with the Company. However, because no selected comparable company is exactly the same as the Company, Barclays believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the selected comparable company analysis. Accordingly, Barclays also made qualitative judgments concerning differences between the business, financial and operating characteristics and prospects of the Company and the selected comparable companies that could affect the public trading values of each in order to provide a context in which to consider the results of the quantitative analysis. These qualitative judgments related primarily to the differing sizes, growth prospects, profitability levels and degree of operational risk between the Company and the companies included in the selected comparable company analysis. Based upon these judgments, Barclays selected a range of multiples for the Company and applied such ranges to the management projections of the Company on a standalone basis to calculate ranges of implied value per Ordinary Share. The results of these calculations are summarized as follows:

Selected Multiple Range

Implied Value per Ordinary Share

EV / CY 2015E Revenue

2.75x – 4.00x

US$16.37 – US$20.94

EV / CY 2016E Revenue

2.50x – 3.75x

US$16.55 – US$21.65

EV / CY 2015E Adj. EBITDA

10.0x – 14.0x

US$19.77 – US$25.15

EV / CY 2016E Adj. EBITDA

9.5x – 12.5x

US$21.97 – US$26.91

P / CY 2015E Adj. EPS

15.0x – 20.0x

US$19.50 – US$26.00

P / CY 2016E Adj. EPS

13.0x – 17.0x

US$20.24 – US$26.47

Barclays noted that on the basis of the selected comparable company analysis, the Merger Consideration of US$25.50 per Ordinary Share was (i) above the ranges of implied value per Ordinary Share calculated on a standalone basis using estimated calendar years 2015 and 2016 revenue and estimated calendar year 2015 adjusted EBITDA and (ii) within the ranges of implied value per Ordinary Share calculated on a standalone basis using estimated calendar year 2016 adjusted EBITDA and estimated calendar years 2015 and 2016 adjusted EPS.

Selected Precedent Transaction Analysis

Barclays reviewed and compared the purchase prices and financial multiples paid in selected other transactions that Barclays, based on its experience with merger and acquisition transactions, deemed relevant. Barclays chose such transactions based on, among other things, the similarity of the applicable target companies in the transactions to the Company with respect to the size, mix, margins and other characteristics of their businesses. Barclays reviewed the following precedent transactions:

Announcement Date

Acquirer

Target

9/4/2015

Mediatek, Inc.

Richtek Technology Corp.

9/3/2015

Diodes, Inc.

Pericom Semiconductor Corp.

Uphill Investment Co.

Integrated Silicon Solution, Inc.

5/7/2015

Microchip Technology, Inc.

Micrel, Inc.

3/18/2015

Microsemi Corp.

Vitesse Semiconductor Corp.

2/25/2015

Avago Technologies Ltd.

Emulex Corp.

2/3/2015

MaxLinear, Inc.

Entropic Communications, Inc.

1/27/2015

Lattice Semiconductor Corp.

Silicon Image, Inc.

8/22/2014

Murata Manufacturing Co. Ltd.

Peregrine Semiconductor Corp.

6/22/2014

PLX Technology, Inc.

5/22/2014

ISSC Technologies Corp.

4/29/2014

Cirrus Logic, Inc.

Wolfson Microelectronics Plc.

2/10/2014

Supertex, Inc.

11/5/2013

M/A-COM Technology Solutions Holdings, Inc.

Mindspeed Technologies, Inc.

8/15/2013

Maxim Integrated Products, Inc.

Volterra Semiconductor Corp.

5/2/2012

Standard Microsystems Corp.

1/23/2015

Semtech Corp.

Gennum Corp.

Represents date when transaction terms were amended to increase purchase price to US$23.00 per share, Uphill Investment Co. announced intent to acquire Integrated Silicon Solutions Inc. on 3/12/15.

For each of the selected transactions, based on information Barclays obtained from publicly available information, Barclays analyzed the ratio of the target company’s enterprise value to its last 12-months (“LTM”) revenue and EBITDA as of the announcement date of such transaction (referred to as EV / LTM Revenue and EV / LTM EBITDA below), and the ratio of the target company’s enterprise value to its forward 12-months (“FTM”) EBITDA as of the announcement date of such transaction (referred to as EV / FTM EBITDA below). The results of this selected precedent transaction analysis are summarized below:

1st Quartile

Median

3rd Quartile

The reasons for and the circumstances surrounding each of the selected precedent transactions analyzed were diverse and there are inherent differences in the business, operations, financial conditions and prospects of the Company and the companies included in the selected precedent transaction analysis. Accordingly, Barclays believed that a purely quantitative selected precedent transaction analysis would not be particularly meaningful in the context of considering the proposed transaction. Barclays therefore made qualitative judgments concerning differences between the characteristics of the selected precedent transactions and the proposed transaction which would affect the acquisition values of the selected target companies and the Company. Based upon these judgments, Barclays selected ranges of multiples for the Company and applied such ranges to the management projections of the Company on a standalone basis to calculate ranges of implied value per Ordinary Share. The following table sets forth the results of such analysis:

Implied Value per Ordinary Share

2.50x – 3.50x

US$14.67 – US$18.02

13.0x – 18.0x

US$19.57 – US$24.66

12.0x – 17.0x

US$24.28 – US$31.75

Barclays noted that on the basis of the selected precedent transaction analysis, the Merger Consideration of US$25.50 per Ordinary Share was (i) above the ranges of implied value per Ordinary Share calculated on a standalone basis using LTM revenue and LTM EBITDA and (ii) within the range of implied value per Ordinary Share calculated on a standalone basis using estimated FTM EBITDA.

Discounted Cash Flow Analysis

In order to estimate the present value of the Company’s Ordinary Shares, Barclays performed a discounted cash flow analysis of the Company. A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset by calculating the “present value” of estimated future cash flows of the asset. “Present value” refers to the current value of future cash flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors.

To calculate the estimated enterprise value of the Company using the discounted cash flow method, Barclays added (i) the Company’s projected after-tax unlevered free cash flows for the calendar years 2015 (starting from 9/16/2015) through 2018 based on management projections to (ii) the “terminal value” of the Company as of the end of calendar year 2018, and discounted such amount to its present value (as of September 28, 2015) using a range of selected discount rates. Barclays used the mid-year convention in its discounted cash flow analysis because it more accurately reflects the present value of future cash flows because cash flows are actually earned throughout the year rather than at the end of the year. For purposes of this analysis, Barclays excluded amortization of acquired intangibles, stock-based compensation and other non-recurring charges. The after-tax unlevered free cash flows were calculated by taking the tax-affected earnings before interest and tax, adding depreciation and amortization, subtracting capital expenditures, purchases of intellectual property and adjusting for changes in working capital. The residual value of the Company at the end of the forecast period, or “terminal value,” was estimated by selecting a range of perpetuity growth rates of 4.0% to 7.0%, which range was derived by Barclays utilizing its professional judgment and experience, taking into account the financial forecasts and market expectations regarding long-term growth of gross domestic product and inflation, and applying such range to the management projections. The range of discount rates of 12.0% to 15.0% was selected based on an analysis of the weighted average cost of capital of the Company and the selected comparable companies used in the “Selected Comparable Company Analysis” above. Barclays then calculated a range of implied value per Ordinary Share by taking estimated equity value using the discounted cash flow method and dividing such amount by the fully diluted number of Ordinary Shares, calculated using the treasury stock method, as of September 16, 2015.

This analysis implied a range of value per Ordinary Share of US$20.07 to US$34.40. Barclays noted that on the basis of the discounted cash flow analysis, the Merger Consideration of US$25.50 per Ordinary Share was within the range of implied value.

Other Factors

Barclays also noted certain additional factors that were not considered part of Barclays’ financial analyses with respect to its fairness determination but were referenced for informational purposes, including among other things the following:

Research Analysts Price Targets Analysis

Barclays considered research analysts’ per share price targets for the Company’s Ordinary Shares which were publicly available from FactSet, of which there were five. The research analysts’ per share price targets for the Company’s Ordinary Shares ranged from US$19.00 to US$25.00. The publicly available per share price targets published by securities research analysts do not necessarily reflect the current market trading prices for the Company’s Ordinary Shares and these estimates are subject to uncertainties, including future financial performance of the Company and future market conditions.

Historical Share Price Analysis

To illustrate the trend in the historical trading prices of the Company’s Ordinary Shares, Barclays considered historical data with regard to the trading prices per Ordinary Share over the 52 weeks prior to September 28, 2015. During such period, the trading price ranged from US$14.79 to US$24.73 per Ordinary Share.

Premiums Paid Analysis

In order to assess the premium offered to the shareholders of the Company in the proposed transaction relative to the premiums offered to stockholders in other transactions, Barclays reviewed the premiums paid in all announced global strategic technology merger and acquisition transactions (excluding leveraged buy-outs and mergers of equals) valued between US$500 million and US$1 billion from 2010 to 2015 year-to-date, of which there were 47 in total. For each of the transactions, Barclays calculated the premium per share paid by the acquirer by comparing the announced transaction value per share to the target company’s: (i) closing price on the last trading day prior to the announcement of the transaction; and (ii) average closing price for the 30 calendar days prior to the announcement of the transaction. The results of this premiums paid analysis are summarized below:

1-Day Prior to Announcement

30-Day Average Prior to Announcement

The reasons for and the circumstances surrounding each of the transactions analyzed in the premiums paid analysis were diverse and there are inherent differences in the business, operations, financial conditions and prospects of the Company and the companies included in the premiums paid analysis. Accordingly, Barclays believed that a purely quantitative premiums paid analysis would not be particularly meaningful in the context of considering the proposed transaction. Barclays therefore made qualitative judgments concerning the differences between the characteristics of the selected transactions and the proposed transaction which would affect the acquisition values of the target companies and the Company. Based on the 1st and 3rd quartiles for premiums offered to stockholders in precedent transactions, Barclays selected a range of premiums to (1) the closing price per Ordinary Share on September 28, 2015 and (2) the 30 calendar day average of the closing prices per Ordinary Share, ending September 28, 2015, to calculate ranges of implied value per Ordinary Share. The following summarizes the result of these calculations:

Selected Premium Range

Implied Value of Ordinary Share

1-Day Price

19.6% – 38.1

US$26.39 – US$30.48

22.6% – 39.8

US$27.70 – US$31.59

Barclays is an internationally recognized investment banking firm and, as part of its investment banking activities, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. The Company’s Board of Directors selected Barclays because of its qualifications, reputation and experience in the valuation of businesses and securities in connection with mergers and acquisitions generally, as well as substantial experience in transactions comparable to the proposed transaction.

Barclays is acting as financial advisor to the Company in connection with the proposed transaction. As compensation for its services in connection with the proposed transaction, the Company has agreed to pay Barclays certain transaction related fees, which are currently estimated to be approximately US$5.7 million, of which US$250,000 will be payable no later than the earlier of 90 calendar days after the delivery of Barclays’ opinion and the consummation of the proposed transaction, and the remainder of which will become payable solely upon the consummation of the proposed transaction. In addition, the Company, at its sole discretion and election, may elect to pay to Barclays, upon the consummation of the proposed transaction, up to $500,000 as an additional fee based on the Company’s assessment of the quality and quantity of work completed by Barclays. The Company has agreed to reimburse Barclays for a portion of its reasonable expenses incurred in connection with the proposed transaction and to indemnify Barclays for certain liabilities that may arise out of its engagement by the Company and the rendering of Barclays’ opinion. Barclays has performed various investment banking and financial services for the Company in the past, and expects to perform such services in the future, and has received, and expects to receive, customary fees for such services. Specifically, in the past two years, Barclays has performed the following investment banking and financial services: (i) advised the Company on its acquisition of Tilera Corporation in 2014 and (ii) has been executing a small scale buy-back program for the Company since May 2015. Barclays also performed the following investment banking services for Parent in the past five years: a joint bookrunner on Parent’s $110 million follow-on equity offering in September 2011, for which Barclays has received customary fees in connection therewith.

Barclays and its affiliates engage in a wide range of businesses from investment and commercial banking, lending, asset management and other financial and non-financial services. In the ordinary course of its business, Barclays and affiliates may actively trade and effect transactions in the equity, debt and/or other securities (and any derivatives thereof) and financial instruments (including loans and other obligations) of the Company and Parent for its own account and for the accounts of its customers and, accordingly, may at any time hold long or short positions and investments in such securities and financial instruments.

Barclays’ opinion, the issuance of which was approved by Barclays’ Valuation and Fairness Opinion Committee, is addressed to, and is for the use and benefit of, the board of directors of the Company, addresses only the fairness, from a financial point of view, of the consideration to be offered to the shareholders of the Company and does not constitute a recommendation to any shareholder of the Company as to how such shareholder should vote or act with respect to the proposed transaction or any other matter.

Under the Merger Agreement, consummation of the Merger is not conditioned on Parent’s receipt of financing for the Merger Consideration that it will pay to our shareholders.

Parent intends to finance the Merger Consideration from cash at hand and committed external debt financing that it will obtain prior to the effective time of the Merger. We have agreed in the Merger Agreement to reasonably cooperate with the arrangement by Parent of the debt financing as may be reasonably requested by Parent.

The following is a summary of the material United States federal income tax consequences of the Merger to United States Holders (as defined below). This summary does not discuss all aspects of United States federal income taxation that may be relevant to a United States Holder in light of its particular circumstances, including the impact of the Medicare Contribution Tax on net investment income. In addition, this summary does not describe any tax consequences arising under the laws of any local, state or foreign jurisdiction and does not consider any aspects of United States federal tax law (e.g., estate and gift tax) other than income taxation. This summary deals only with Ordinary Shares held as capital assets within the meaning of Section 1221 of the United States Internal Revenue Code of 1986, as amended, which we refer to as the Code (generally, property held for investment) and does not address tax consequences applicable to any holder of Ordinary Shares that may be subject to special treatment under the United States federal income tax laws, including, without limitation:

a bank or other financial institution;

a tax-exempt organization;

a retirement plan or other tax-deferred account;

a partnership (including any entity or arrangement treated as a partnership for United States federal income tax purposes), an S corporation or other pass-through entity (or an investor in any of the foregoing);

an insurance company;

a mutual fund;

a real estate investment trust;

a dealer or broker in stocks and securities, or currencies;

a trader in securities that elects mark-to-market treatment;

a holder of Ordinary Shares subject to the alternative minimum tax provisions of the Code;

a holder of Ordinary Shares that received the Ordinary Shares through the exercise of an employee stock option, through a tax qualified retirement plan or otherwise as compensation;

a person that has a functional currency other than the United States dollar;

a person that holds the Ordinary Shares as part of a hedge, straddle, constructive sale, conversion or other integrated transaction;

a United States expatriate; or

any holder of Ordinary Shares that beneficially owns or owned, actually, directly, indirectly or constructively, 10% or more of the Company’s stock by vote or value.

If a partnership (including any entity or arrangement treated as a partnership for United States federal income tax purposes) holds Ordinary Shares, the tax treatment of a holder that is a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Such holders should consult their tax advisors regarding the tax consequences to them of the Merger.

A non-U.S. corporation will be classified as a “passive foreign investment company” or a PFIC, for United States federal income tax purposes in any taxable year in which, after applying applicable look-through rules, either (i) at least 75% of its gross income is “passive income,” or (ii) at least 50% of the value of its gross assets is attributable to assets that produce passive income or are held for the production of passive income. Passive income for this purpose includes items such as dividends, interest, royalties, rents and gains from commodities and securities transactions. The Company does not believe that it is or ever has been a PFIC for United States federal income tax purposes. Notwithstanding this belief, should the Company prove to have been a PFIC while the United States Holder owned its Ordinary Shares the United States federal income tax consequences of the disposition of shares in the Merger could be materially different and less favorable than those described herein.

If the Company were characterized as a PFIC for any taxable year, any gain recognized by a United States Holder (as defined below) who sells Ordinary Shares, including the exchange of Ordinary Shares for cash pursuant to the Merger, absent the making and ongoing maintenance of certain elections, would be treated as ordinary income (rather than as capital gains) and would be subject to tax as if the gain had been realized ratably over the holding period of such Ordinary Shares. The amount allocated to the current taxable year and any taxable year before the Company became a PFIC would be taxed as ordinary income (rather than capital gain) earned in the current taxable year. The amount allocated to other taxable years would be taxed at the highest marginal rates applicable to ordinary income for such taxable years, and the United States Holder also would be liable for an interest charge on such tax liability for such years. You should consult your own tax advisor as to the consequences to you of owning shares of a PFIC.

This summary is based on the Code, the regulations promulgated under the Code by the United States Department of the Treasury and rulings and judicial decisions, all as in effect as of the date of this Proxy Statement, and all of which are subject to change or differing interpretations at any time, with possible retroactive effect. We have not sought, and do not intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation.

THE DISCUSSION SET OUT HEREIN IS INTENDED ONLY AS A SUMMARY OF THE MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES RELEVANT TO A UNITED STATES HOLDER (AS DEFINED BELOW). WE URGE EACH HOLDER TO CONSULT ITS TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO IT IN LIGHT OF ITS OWN PARTICULAR CIRCUMSTANCES, INCLUDING FEDERAL ESTATE, GIFT AND OTHER NON-INCOME TAX CONSEQUENCES, AND TAX CONSEQUENCES UNDER STATE, LOCAL OR FOREIGN TAX LAWS.

For purposes of this discussion, the term “United States Holder” means a beneficial owner of Ordinary Shares that is, for United States federal income tax purposes:

a citizen or individual resident of the United States;

a corporation (or any other entity or arrangement treated as a corporation for United States federal income tax purposes) organized in or under the laws of the United States or any state thereof or the District of Columbia;

an estate, the income of which is subject to United States federal income taxation regardless of its source; or

a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) have the authority to control all substantial decisions of the trust or (ii) the trust has validly elected to be treated as a “United States person” under applicable Treasury regulations.

Payments with Respect to Ordinary Shares

The exchange of Ordinary Shares for cash pursuant to the Merger will be a taxable transaction for United States federal income tax purposes. A United States Holder who receives cash for Ordinary Shares pursuant to the Merger will recognize gain or loss, if any, equal to the difference between the amount of cash received and the holder’s adjusted tax basis in the Ordinary Shares exchanged therefor. A holder’s adjusted tax basis in the Ordinary Shares will generally equal the price paid for such shares. Gain or loss will be determined separately for each block of Ordinary Shares (i.e., Ordinary Shares acquired at the same cost in a single transaction). Subject to the discussion above regarding potential treatment of the Company as a PFIC for United States federal income tax purposes, such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if such United States Holder’s holding period for the Ordinary Shares that will be cancelled in exchange for Merger Consideration in the Merger will be more than one year at the time of the exchange. Long-term capital gain recognized by an individual holder generally is subject to tax at a lower rate than short-term capital gain or ordinary income. There are limitations on the deductibility of capital losses.

Backup Withholding Tax and Information Reporting Requirements

United States Holders may be subject to information reporting and backup withholding at the applicable rate with respect to proceeds from the exchange of Ordinary Shares pursuant to the Merger. Information reporting generally will apply to proceeds from the sale or redemption of, Ordinary Shares made within the United States, or by a U.S. payor or U.S. middleman, to a holder of Ordinary Shares, other than an exempt recipient. A payor may be required to withhold backup withholding tax from the proceeds from the sale or redemption of, Ordinary Shares within the United States, or by a U.S. payor or U.S. middleman, to a holder, other than an exempt recipient, if such holder fails to furnish its correct taxpayer identification number and fails to comply with certain certification procedures (generally by providing a properly completed IRS Form W-9) or otherwise fails to comply with, or establish an exemption from, such backup withholding tax requirements. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against the beneficial owner’s U.S. federal income tax liability, if any, and any excess amounts withheld under the backup withholding rules may be refunded, provided that the required information is timely furnished to the IRS.

THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF UNITED STATES FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO PARTICULAR HOLDERS OF ORDINARY SHARES. EACH HOLDER OF ORDINARY SHARES SHOULD CONSULT ITS OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO IT OF EXCHANGING ITS ORDINARY SHARES FOR CASH IN THE MERGER UNDER ANY FEDERAL, STATE, FOREIGN, LOCAL OR OTHER TAX LAWS.

The following is a summary discussion of certain of the material Israeli income tax considerations in connection with the Merger. The following summary is included for general information purposes only, is based upon current Israeli tax law and should not be conceived as tax advice to any particular holder of Ordinary Shares. No assurance can be given that the analysis made and the views contained in this summary as well as the classification of the transaction for Israeli tax purposes as set forth below will be upheld by the tax authorities, nor that new or future legislation, regulations or interpretations will not significantly change the tax considerations described below, and any such change may apply retroactively. This summary does not discuss all material aspects of Israeli tax consequences that may apply to particular holders of Ordinary Shares in light of their particular circumstances, such as investors subject to special tax rules or other investors referred to below.

HOLDERS OF ORDINARY SHARES SHOULD CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR ISRAELI TAX CONSEQUENCES OF THE MERGER APPLICABLE TO THEM.

Sale of Ordinary Shares

In general, under the Israeli Income Tax Ordinance [New Version], 5721-1961, and the rules and regulations promulgated thereunder, which we also refer to as the Tax Ordinance, the disposition of shares of an Israeli resident company is deemed to be a sale of capital assets, unless such shares are held for the purpose of trading. The Tax Ordinance generally imposes a capital gains tax on the sale of capital assets located in Israel, including shares in an Israeli resident company, by both residents and non-residents of Israel, unless a specific exemption is available or unless a double taxation prevention treaty between Israel and the seller’s country of residence provides otherwise.

Under the Tax Ordinance, the tax rate applicable to real capital gains derived from the disposition of Ordinary Shares in the Merger is generally 25% for individuals. Additionally, if such shareholder is considered a “Significant Shareholder” at any time during the 12-month period preceding such disposition, i.e., such shareholder holds directly or indirectly, including with others, at least 10% of any means of control in our Company, the tax rate will be 30%. However the foregoing tax rates will not apply to: (a) dealers in securities; or (b) shareholders who acquired their shares prior to January 1, 2003. Companies are subject to the corporate tax rate (26.5% for the 2015 tax year) on real capital gains derived from the disposition of Ordinary Shares.

Notwithstanding the foregoing, according to the Tax Ordinance and the regulations promulgated thereunder, non-Israeli residents are generally exempt from Israeli capital gains tax on any gains derived from the disposition of Ordinary Shares, provided that such gains are not derived from a permanent establishment of such shareholders in Israel, that such shareholders did not acquire their shares prior to our initial public offering, that such capital gains are not subject to the Israeli Income Tax Law (Inflationary Adjustments), 5745-1985 or the rules promulgated under section 130A of the Tax Ordinance and in addition, for shares traded in the Tel Aviv Stock Exchange Ltd., the shares were not purchased from a related party and the purchase was not subject to certain tax-free provisions under Israeli lax law. However, a non-Israeli corporate shareholder will not be entitled to such exemption if Israeli residents (a) have, directly or indirectly, a controlling interest of 25% or more in such non-Israeli corporation or (b) are the beneficiaries of or are entitled to 25% or more of the revenues or profits of such non-Israeli corporation, whether directly or indirectly.

In addition, under 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, or the U.S.-Israel Tax Treaty, Israeli capital gains tax generally will not apply to the disposition of shares by a U.S. resident to which the U.S.-Israel Tax Treaty applies, or a U.S. Treaty Resident, who holds the shares as capital assets. However, such exemption will not apply if (a) the U.S. Treaty Resident holds, directly or indirectly, shares representing 10% or more of our voting power during any part of the 12-month period preceding the disposition, subject to specified conditions, or (b) the capital gains from such disposition can be allocated to a permanent establishment of such U.S. Treaty Resident in Israel. Under the U.S.-Israel Tax Treaty, such U.S. Treaty Resident would be permitted to claim a credit for Israeli income tax against the U.S. federal income tax imposed on the disposition, subject to the limitations in U.S. tax laws applicable to foreign tax credits.

Generally, the payment for the Ordinary Shares is subject to Israeli withholding tax at a rate of 25% or 30%. A reduced rate of, or an exemption from, Israeli withholding tax is available to shareholders that provide a valid withholding certificate issued by the Israeli Tax Authority evidencing such reduced withholding rate or withholding exemption, which we also refer to as the Valid Certificate. In addition, we will be filing with the Israeli Tax Authority an application for a ruling to provide that no Israeli withholding tax would be applicable to a shareholder who provides the required information set forth in the ruling, certifies that it is a non-Israeli resident and has no connection to Israel as set forth in the ruling, certifies that it holds less than 5 percent of the Ordinary Shares and that it purchased its shares after the Company’s initial public offering in 1992. Any payment to a shareholder that fails to provide the required documentation as set forth in the ruling, and does not present a Valid Certificate, will be made subject to withholding of Israeli tax at the Israeli applicable withholding rate.

Our shareholders who will not provide a Valid Certificate or will not provide the required information set forth in the ruling and certify that it (i) is a non-Israeli resident, (ii) has no connection to Israel as set forth in the ruling, (iii) holds less than 5 percent of the Ordinary Shares, and (iii) purchased its shares after the Company’s initial public offering in 1992, may be subject to Israeli capital gains tax on the disposition of their Ordinary Shares in the Merger. SUCH SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE MERGER TO THEM.

Shares Issued as Compensation for Employment or Service

Shareholders who received or acquired their Ordinary Shares under one or more of our incentive plans, or otherwise as compensation for employment or services provided to our Company or any of its affiliates, may be subject to different tax rates. BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, ANY SUCH HOLDERS OF ORDINARY SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE ISRAELI TAX CONSEQUENCES APPLICABLE TO THEM.

Company Awards Tax Ruling

We will be filing with the Israeli Tax Authority an application for a ruling providing, among other things, that (i) the assumption by Mellanox of the unvested Company RSUs will not result in a taxable event with respect to such compensatory awards pursuant to Section 3(i) or Section 102 of the Israeli Tax Ordinance, and with respect to such unvested Company RSUs subject to Section 102 of the Israeli Tax Ordinance that tax continuity shall apply including with regard to the requisite holding period which will be deemed to have begun at the time of the grant of the RSUs and with regard to the classification of the gain; (ii) the payments made in respect to Ordinary Shares issued upon exercise or vesting of Company RSUs and options granted under the capital gains route of Section 102 and held by Tamir Fishman Trustees 2004 Ltd., in its capacity as trustee (which we refer to as the Section 102 Trustee), shall not constitute a violation of Section 102 of the Israeli Tax Ordinance if deposited with the Section 102 Trustee and released only after the lapse of the minimum trust period required by Section 102 of the Israeli Tax Ordinance; and (iii) Parent and anyone acting on its behalf shall be exempt from withholding tax in relation to any payments made to the Section 102 Trustee or the paying agent.

Obtaining such tax ruling is not a condition to consummation of the Merger. If such tax ruling is not granted prior to the Closing, the Company will seek to obtain an interim ruling confirming that Parent and any person acting on its behalf shall be exempt from Israeli withholding tax in relation to any payments made to the paying agent and the Section 102 Trustee with respect to any of the payments made in respect to the Company’s RSUs and options issued under Section 102 of the Israeli Tax Ordinance and Ordinary Shares issued upon exercise or vesting of such RSUs and options.

Committee on Foreign Investment in the United States

Section 721 of the Defense Production Act of 1950 (which we refer to as Section 721), authorizes the President of the United States to investigate, and to suspend or to prohibit, any transaction that could result in control of a U.S. business by a foreign person (which we refer to as a Covered Transaction) where the President determines that the transaction threatens to impair U.S. national security, and no other adequate and appropriate means are available to address that threat. In the exercise of Section 721 authority, the President relies on the Committee on Foreign Investment in the United States (which we refer to as CFIUS). CFIUS an interagency committee of the U.S. government which is empowered to, among other things, (i) review and investigate Covered Transactions, (ii) negotiate an agreement with the participants in a Covered Transaction to mitigate national security concerns (which we refer to as a Mitigation Agreement), (iii) determine that no further action under Section 721 is necessary with respect to a Covered Transaction and (iv) make recommendations to the President for a final decision under Section 721.

Under the Merger Agreement, Mellanox and the Company will submit a joint voluntary notice of the merger for review by CFIUS. Once CFIUS accepts that notice as a complete notice, CFIUS ordinarily will commence a review of the merger, which CFIUS must complete no later than 30 days after commencement. Based upon that review, CFIUS may in its discretion commence a further investigation of the merger. CFIUS must complete any such investigation no later than 45 days after it commences that investigation. Upon conclusion of its review and its further investigation, if any, CFIUS may determine that no further action is warranted (including by reason of a Mitigation Agreement), or it may determine to refer the matter to the President with its report and recommendations. If CFIUS refers the matter to the President, the President may take up to another 15 days to reach a final determination.

Completion of the Merger is conditioned on receipt of CFIUS clearance. For purposes of the Merger Agreement, “

” means the parties to the Merger Agreement shall have received written notice from CFIUS that its review or investigation, if any, of the merger has concluded and either (i) Mellanox shall have received written notice that CFIUS has determined that there are no national security concerns that warrant further review or investigation under Section 721 or (ii) the President shall not have acted under Section 721 to suspend or prohibit the Merger and the applicable period of time for the President to take that action shall have expired.

Under the ICL, we and Merger Sub may not complete the Merger without first making the following filings and notifications to the Israeli Companies Registrar:

. We and Merger Sub are required each to file with the Israeli Companies Registrar a “merger proposal” setting forth specified details with respect to the Merger, within three days of calling the respective shareholders’ meeting to approve the Merger. Both Merger Sub and we filed the required merger proposals with the Israeli Companies Registrar on October 7, 2015. Under the ICL, at least 50 days must pass from the date of the filing of the merger proposal by both merging companies with the Israeli Companies Registrar before the Merger can become effective.

Notice to Creditors

. In addition, each of us and Merger Sub is required to notify its creditors of the proposed Merger. Pursuant to the ICL, a copy of the merger proposal must be sent to the secured creditors of each company within three days after the merger proposal is filed with the Israeli Companies Registrar, and, within four business days of such filing, known substantial creditors must be informed individually by registered mail of such filing and where the merger proposal can be reviewed. Non-secured creditors must be informed of the merger proposal by publication in two daily Hebrew newspapers circulated in Israel on the day that the merger proposal is filed with the Israeli Companies Registrar and, where necessary, elsewhere, and by making the merger proposal available for review. Each of us and Merger Sub has notified our respective creditors of the Merger in accordance with these requirements, to the extent applicable and, because our shares are traded on the NASDAQ, we have also published an announcement of the Merger in the U.S.

within three business days following the day on which the merger proposal was submitted to the Israeli Companies Registrar. Each of us and Merger Sub has notified the Israeli Companies Registrar of the notices to our respective creditors. In addition, pursuant to the ICL, because we employ more than 50 employees, we must provide to the workers’ union a copy of the publication placed in the newspapers or post a copy of the publication placed in the newspapers in a prominent location in the workplace within three business days after the merger proposal was filed with the Israeli Companies Registrar. We have satisfied such requirement by posting a copy of the publication in a prominent location in our office.

Shareholder Approval Notice

. After the General Meeting, and assuming the approval of the Merger thereat by the Company’s shareholders, the Company must file a notice with the Israeli Companies Registrar regarding the vote of the shareholders. The sole shareholder of Merger Sub approved the Merger on September 29, 2015, and Merger Sub filed a notice with the Israeli Companies Registrar on October 6, 2015 regarding the vote of the shareholder of Merger Sub. At least 30 days must pass from the date of the General Meeting before the Merger can become effective.

No later than the closing date of the Merger (assuming that the shareholders of the Company approved the Merger Agreement and the Merger and that all of the other conditions set forth in the Merger Agreement have been satisfied or waived (if permissible under applicable law)), each of us and Merger Sub will notify the Israeli Companies Registrar that all of the conditions to the closing have been met and request that the Israeli Companies Registrar issue a certificate evidencing the completion of the Merger in accordance with Section 323(5) of the ICL. Assuming all statutory procedures and requirements have been complied with, the Merger will then become effective and the Israeli Companies Registrar will be required to register the Merger in the surviving company’s register and to issue the surviving company a certificate regarding the Merger.

The change in the composition of our shareholders in connection with the Merger requires the approval of the Investment Center of the Ministry of Economy of the State of Israel, established under the Law for the Encouragement of Capital Investment, 5719-1959, as amended (referred to as the Encouragement Law) and the Israel Tax Authority in order to preserve certain tax benefits granted to us under the Encouragement Law. This law provides that capital investments in eligible facilities may be designated upon application as an “approved enterprise” or “privileged enterprise.” Each certificate of approval relates to a specific investment program delineated both by its financial scope, including sources of funds, and by the physical characteristics of the facility or other assets. The benefits and obligations that apply to the enterprise are set out in the regulations promulgated under law and the specific approval with regard to each enterprise. The benefits include government grants, government guaranteed loans, tax holidays and combinations thereof. The approval of the Investment Center is a condition to the closing of the Merger. On

2015, the Company submitted the requests for approval to the Investment Center and the Israel Tax Authority.

Israeli Office of the Chief Scientist

The change in the composition of the Company’s shareholders in connection with the Merger and the transfer of control therein require the submission of notice to the Office of the Chief Scientist of the Ministry of Economy of the State of Israel, referred to as the OCS. Under the Law for the Encouragement of Industrial Research and Development, 5744-1984 and the regulations, rules and procedures promulgated thereunder (which we refer to as the Research Law), research and development programs approved by the OCS are eligible to receive grants if they meet specified criteria in exchange for the payment of royalties from the sale of the products developed in the course of research and development programs funded by the OCS. On

Company submitted the notice to the OCS.

We have agreed, as soon as reasonably practicable after the execution of the Merger Agreement and no later than 10 business days after the date of the Merger Agreement, to prepare and file, with the Israel Tax Authority an application for a ruling providing that (i) with respect to holders of Ordinary Shares that are non-Israeli residents (as defined in the Tax Ordinance or as will be determined by the Israel Tax Authority), (a) that Parent, the surviving company and/or the Paying Agent will be exempt from any obligation to withhold Israeli tax at source from any consideration payable or otherwise deliverable pursuant to the Merger Agreement, including, without limitation, the Merger consideration, or clarify that no such obligation exists or (b) clearly instructing Parent, the surviving company and the Paying Agent on how such withholding should be executed including the rates of withholding to be applied, (ii) with respect to holders of Ordinary Shares that are Israeli residents (as defined in the Tax Ordinance or as will be determined by the Israeli Tax Authority), (a) that Parent, the surviving company and/or the Paying Agent will be exempt from any obligation to withhold Israeli Tax at source from any consideration payable or otherwise deliverable pursuant to the Merger Agreement including, without limitation, the Merger consideration, or clarify that no such obligation exists or (b) clearly instructing Parent, the surviving company and the Paying Agent on how such withholding should be executed including the rates of withholding to be applied. The Company has undertaken in the Merger Agreement to apply for the foregoing tax ruling in connection with the Merger, but obtaining such tax ruling is not a condition to consummation of the Merger. The Company will submit to the Israeli Tax Authority an application for a ruling that provides that no Israeli withholding tax is applicable to a shareholder who provides the required information set forth in the ruling, certifies that it is a non-Israeli resident and has no connection to Israel as set forth in the ruling, certifies that it holds less than 5 percent of the Ordinary Shares and that it purchased its shares after our initial public offering in 1992.

Other Approvals

Other than the filings described above, neither Parent nor the Company is aware of any material regulatory filings or approvals issued by the United States government, the State of Israel, or any foreign, state or local government, required to be obtained, or waiting periods required to expire, to complete the Merger. If Parent and the Company discover that other such material approvals or waiting periods are necessary, Parent and the Company will seek to obtain or comply with them.

In considering the recommendation of our Board of Directors with respect to the Merger Proposal, you should be aware that our directors and executive officers have interests in the Merger Proposal that may be different from the interests of our shareholders in general. Our Board of Directors was aware of these different or additional interests in determining to approve and adopt the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, and to recommend to our shareholders that they vote in favor of the Merger Proposal.

As of October 12, 2015, the Record Date, the executive officers and directors of EZchip (nine persons) beneficially owned an aggregate of 1,046,730 Ordinary Shares, or 3.48% of the outstanding Ordinary Shares. For ownership of Ordinary Shares by our directors and executive officers, see “

Beneficial Ownership of Ordinary Shares

” beginning on page 69. Outstanding Ordinary Shares held by executive officers and directors of EZchip will be treated in the Merger in the same manner as Ordinary Shares held by all other shareholders of EZchip (i.e., they will be canceled and entitle the holders thereof to receive the Merger Consideration).

Company Share Options and RSUs

Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding option to acquire Ordinary Shares then outstanding that is vested and exercisable as of the effective time of the Merger will be canceled and converted into the right to receive an amount in cash equal to the product of (i) the excess, if any, of the Merger Consideration over the applicable exercise price per Ordinary Share of such option (which excess cash amount we refer to as the Option Consideration) and (ii) the number of Ordinary Shares such holder had the right to purchase if such holder had exercised such option in full immediately prior to the effective time of the Merger, without interest and subject to applicable withholding taxes. Any such option that has...


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