Halozyme Therapeutics, Inc 10-Q for FY2026 Q3

Halozyme Therapeutics, Inc. (HALO)

10-Q 2026-11-05 For: 2026-09-30

Added on November 06, 2026

About this 10-Q

Halozyme Therapeutics, Inc filed this 10-Q on November 5, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).

Halozyme Therapeutics said a Dutch patent court found MSD BV infringed one of its MDASE patents, barred Keytruda Qlex manufacturing and sales in specified European countries, and rejected MSD BV’s patent-invalidity arguments. AI summary

Headline figures

Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $492.97M; up 39.2% from $354.26M a year earlier
Net income: $247.05M; up 41.0% from net income of $175.23M a year earlier
Diluted EPS: $2.01; up 40.6% from $1.43 a year earlier

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Delaware						88-0488686
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

12390 El Camino Real						92130
San Diego						(Zip Code)
California
(Address of principal executive offices)


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


	September 30, 2026		December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$	1,029,988	$	133,820
Marketable securities, available-for-sale	44,399		9,000
Accounts receivable, net and contract assets	525,592		441,273
Inventories	132,613		176,475
Prepaid expenses and other current assets	114,138		64,639
Total current assets	1,846,730		825,207
Property and equipment, net	82,286		82,137
Prepaid expenses and other assets	68,806		53,551
Goodwill	581,732		580,360
Intangible assets, net	892,931		981,467

Restricted cash	861		2,601
Total assets	$	3,473,346	$	2,525,323

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities
Accounts payable	$	33,546	$	20,899
Accrued expenses	136,930		156,193

Current portion of long-term debt, net	305,612		—
Total current liabilities	476,088		177,092

Long-term debt, net	2,944,691		2,142,630
Other long-term liabilities	101,466		113,863
Deferred tax liabilities, net	6,340		42,924

Total liabilities	3,528,585		2,476,509
Commitments and contingencies (Note 11)
Stockholders’ (deficit) equity
Preferred stock - $0.001 par value; 20,000 shares authorized; no shares issued and outstanding	—		—
Common stock - $0.001 par value; 300,000 shares authorized; 113,936 and 117,782 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively	114		118
Additional paid-in capital	—		12,002
Accumulated other comprehensive loss	2,781		(18,092)
(Accumulated deficit) Retained earnings	(58,134)		54,786
Total stockholders’ (deficit) equity	(55,239)		48,814
Total liabilities and stockholders’ (deficit) equity	$	3,473,346	$	2,525,323


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2026		2025		2026		2025
Revenues
Royalties	$	341,001	$	236,038	$	889,381	$	609,869
Product sales, net	137,328		94,228		397,378		253,779
Revenues under collaborative agreements	14,645		23,998		63,922		81,196
Total revenues	492,974		354,264		1,350,681		944,844
Operating expenses
Cost of sales	82,475		55,242		240,884		150,004
Amortization of intangibles	29,512		17,762		88,536		53,286
Research and development	27,778		17,251		81,002		49,593
Selling, general and administrative	58,240		46,088		173,119		130,064

Total operating expenses	198,005		136,343		583,541		382,947
Operating income	294,969		217,921		767,140		561,897
Other income (expense)
Investment and other income, net	2,172		5,333		6,326		19,042
Inducement expense related to convertible notes	(465)		—		(465)		—

Interest expense	(6,045)		(4,296)		(17,141)		(13,215)
Income before income tax expense	290,631		218,958		755,860		567,724
Income tax expense	43,582		43,733		128,849		109,244
Net income	$	247,049	$	175,225	$	627,011	$	458,480

Earnings per share
Basic	$	2.17	$	1.49	$	5.39	$	3.80
Diluted	$	2.01	$	1.43	$	5.12	$	3.68

Weighted average common shares outstanding
Basic	113,797		117,219		116,389		120,570
Diluted	122,611		122,331		122,349		124,449


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2026		2025		2026		2025
Net income	$	247,049	$	175,225	$	627,011	$	458,480
Other comprehensive income
Unrealized (loss) gain on marketable securities, net	(16)		312		(91)		466
Foreign currency translation adjustment	1		(3)		17		(6)

Unrealized gain (loss) on derivative instruments, net	10,850		3,671		19,033		(30,599)
Realized (gain) loss on derivative instruments, net	(224)		2,165		1,914		4,052
Comprehensive income	$	257,660	$	181,370	$	647,884	$	432,393


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Supplemental disclosure of non-cash investing and financing activities
Amounts accrued for purchases of property and equipment	$	3,407	$	818
Right-of-use assets obtained in exchange for lease obligation	$	1,078	$	425

Debt issuances cost included in accounts payable	$	749	$	—


	Three Months Ended September 30, 2026
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings (Accumulated Deficit)		Total Stockholders’ Equity (Deficit)
	Shares	Amount
BALANCE AS OF JUNE 30, 2026	114,042	$	114	$	—	$	(7,830)	$	151,259	$	143,543

Share-based compensation expense	—	—		17,046		—		—		17,046

Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock and performance stock units, net	740	1		22,797		—		—		22,798


Repurchase of common stock	(846)	(1)		(21,567)		—		(45,664)		(67,232)
Purchase of 2033 Capped Call Transactions, net of tax	—	—		(18,276)		—		(128,441)		(146,717)
Premium on repayment of 2027 Convertible Notes settled in cash and accelerated debt discount	—	—		—		—		(65,424)		(65,424)
Premium on repayment of 2028 Convertible Notes settled in cash and accelerated debt discount	—	—		—		—		(216,913)		(216,913)
Other comprehensive income	—	—		—		10,611		—		10,611
Net income	—	—		—		—		247,049		247,049
BALANCE AS OF SEPTEMBER 30, 2026	113,936	$	114	$	—	$	2,781	$	(58,134)	$	(55,239)

	Nine Months Ended September 30, 2026
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings (Accumulated Deficit)		Total Stockholders’ Equity (Deficit)
	Shares	Amount
BALANCE AS OF DECEMBER 31, 2025	117,782	$	118	$	12,002	$	(18,092)	$	54,786	$	48,814

Share-based compensation expense	—	—		51,985		—		—		51,985

Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock and performance stock units, net and shares issued under the ESPP plan	1,802	2		27,661		—		—		27,663


Repurchase of common stock	(5,648)	(6)		(73,372)				(329,153)		(402,531)

Purchase of 2033 Capped Call Transactions, net of tax	—	—		(18,276)		—		(128,441)		(146,717)
Premium on repayment of 2027 Convertible Notes settled in cash and accelerated debt discount	—	—		—		—		(65,424)		(65,424)
Premium on repayment of 2028 Convertible Notes settled in cash and accelerated debt discount	—	—		—		—		(216,913)		(216,913)
Other comprehensive income	—	—		—		20,873		—		20,873
Net income	—	—		—		—		627,011		627,011
BALANCE AS OF SEPTEMBER 30, 2026	113,936	$	114	$	—	$	2,781	$	(58,134)	$	(55,239)

	Three Months Ended September 30, 2025
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders’ Equity (Deficit)
	Shares	Amount
BALANCE AS OF JUNE 30, 2025	117,621	$	118	$	—	$	(28,403)	$	361,033	$	332,748

Share-based compensation expense	—	—		12,160		—		—		12,160

Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock units, net	627	1		16,480		—		—		16,481


Repurchase of common stock	(725)	(1)		(4,731)		—		(34,112)		(38,844)

Other comprehensive income	—	—		—		6,145		—		6,145
Net income	—	—		—		—		175,225		175,225
BALANCE AS OF SEPTEMBER 30, 2025	117,523	$	118	$	23,909	$	(22,258)	$	502,146	$	503,915

	Nine Months Ended September 30, 2025
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders’ Equity (Deficit)
	Shares	Amount
BALANCE AS OF DECEMBER 31, 2024	123,138	$	123	$	—	$	3,829	$	359,869	$	363,821

Share-based compensation expense	—	—		34,994		—		—		34,994

Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock and performance stock units, net and shares issued under the ESPP plan	1,381	2		17,681		—		—		17,683


Repurchase of common stock	(6,996)	(7)		(28,766)		—		(316,203)		(344,976)

Other comprehensive loss	—	—		—		(26,087)		—		(26,087)
Net income	—	—		—		—		458,480		458,480
BALANCE AS OF SEPTEMBER 30, 2025	117,523	$	118	$	23,909	$	(22,258)	$	502,146	$	503,915


Cash consideration payments to stockholders and option holders as of November 18, 2025	$	787,392


Estimated fair value of contingent consideration	23,000
Total purchase consideration	$	810,392


	Amounts recognized as of acquisition date (as initially reported)		Measurement period adjustments (3)		Amounts recognized as of September 30, 2026 (as adjusted)
Assets acquired
Cash and cash equivalents	$	84,427	$	710	$	85,137
Accounts receivable, net	4,755		(2,831)		1,924
Prepaid expenses and other current assets	879		—		879
Total current assets	90,061		(2,121)		87,940
Property and equipment, net	7,338		—		7,338
Operating lease right-of-use assets	8,441		—		8,441
Goodwill (1)	163,539		1,372		164,911
Intangible assets	705,000		—		705,000
Other assets	182		—		182
Total assets acquired	$	974,561	$	(749)	$	973,812
Liabilities assumed
Accounts payable	$	(929)	$	—	$	(929)
Accrued expenses and other current liabilities	(26,803)		158		(26,645)
Deferred revenue, current	(5,674)		—		(5,674)
Operating lease liabilities, current	(3,440)		—		(3,440)
Other current liabilities	(51)		—		(51)
Total current liabilities	(36,897)		158		(36,739)
Deferred revenue, net of current portion	(19,974)		—		(19,974)
Operating lease liabilities, net of current portion	(4,484)		—		(4,484)
Other liabilities (2)	(102,816)		591		(102,225)
Total liabilities assumed	$	(164,171)	$	749	$	(163,422)

Net assets acquired	810,392		—		810,392
Less cash acquired	(84,427)		(710)		(85,137)
Total purchase price, net of cash acquired	$	725,965	$	(710)	$	725,255


	Amount (in thousands)		Useful life (years)
Hypercon developed technology platform	$	230,000	15
Customer relationships	470,000		15
Trade name	5,000		15
Estimated fair value of intangible assets acquired	$	705,000


	September 30, 2026
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value


U.S. treasury securities	$	44,492	$	—	$	(93)	$	44,399



Total marketable securities, available-for-sale	$	44,492	$	—	$	(93)	$	44,399


	December 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value


U.S. treasury securities	$	9,002	$	—	$	(2)	$	9,000



Total marketable securities, available-for-sale	$	9,002	$	—	$	(2)	$	9,000


	September 30, 2026						December 31, 2025
	Level 1		Level 2		Total Estimated Fair Value		Level 1		Level 2		Total Estimated Fair Value
Assets
Cash equivalents
Money market funds	$	924,116	$	—	$	924,116	$	175	$	—	$	175



Available-for-sale marketable securities


U.S. treasury securities	44,399		—		44,399		9,000		—		9,000



Derivative instruments
Currency hedging contracts (1)	—		7,935		7,935		—		—		—
Total assets measured at fair value	$	968,515	$	7,935	$	976,450	$	9,175	$	—	$	9,175

Liabilities
Derivative instruments
Currency hedging contracts (1)	$	—	$	4,276	$	4,276	$	—	$	22,891	$	22,891


	September 30, 2026		December 31, 2025
Product sales to partners	$	112,878	$	69,832
Revenues under collaborative agreements	5,479		40,020
Royalty payments	343,120		259,298
Other product sales	68,030		65,117
Other receivable	—		1,612
Contract assets	7,000		15,000
Total accounts receivable and contract assets	536,507		450,879
Allowance for distribution fees and discounts	(10,915)		(9,606)
Total accounts receivable, net and contract assets	$	525,592	$	441,273


	September 30, 2026		December 31, 2025
Raw materials	$	27,825	$	21,869
Work-in-process	51,733		30,920
Finished goods	67,894		144,454
Total inventories	147,452		197,243
Less long-term portion (1)	(14,839)		(20,768)
Total inventories, current	$	132,613	$	176,475


	September 30, 2026		December 31, 2025
Prepaid manufacturing expenses	$	93,966	$	71,925

Other prepaid expenses	22,635		14,563
Long-term inventories	14,839		20,768
Other assets	51,504		10,934
Total prepaid expenses and other assets	182,944		118,190
Less long-term portion	(68,806)		(53,551)
Total prepaid expenses and other assets, current	$	114,138	$	64,639


	September 30, 2026		December 31, 2025
Research equipment	$	24,061	$	18,305
Manufacturing equipment	46,496		41,863
Computer and office equipment	7,089		8,034
Internal-use software	1,987		1,878
Leasehold improvements	7,521		7,521
Subtotal	87,154		77,601
Accumulated depreciation and amortization	(35,954)		(33,159)
Subtotal	51,200		44,442
Right of use of assets	31,086		37,695
Total property and equipment, net	$	82,286	$	82,137


	September 30, 2026		December 31, 2025

Accrued compensation and payroll taxes	$	26,450	$	28,621
Accrued outsourced manufacturing expenses	8,458		11,775
Taxes payable	28,685		44,148
Product returns and sales allowance	46,740		46,594
Other accrued expenses	99,241		104,349
Lease liability	28,822		34,569
Total accrued expenses	238,396		270,056
Less long-term portion	(101,466)		(113,863)
Total accrued expenses, current	$	136,930	$	156,193


Balance as of December 31, 2025	$	580,360
Measurement period adjustment	1,372
Balance as of September 30, 2026	$	581,732


	Weighted Average Useful Life (in years)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Auto-injector technology platform	7	$	402,000	$	250,092	$	151,908
XYOSTED proprietary product	10	136,200		59,313		76,887
Hypercon developed technology platform	15	230,000		13,331		216,669
Customer relationships (1)	15	470,000		27,243		442,757
Trade name	15	5,000		290		4,710
Total intangible assets, net		$	1,243,200	$	350,269	$	892,931


Year	Amortization Expense
Remainder of 2026	$	29,512
2027	118,049
2028	118,049
2029	83,314
2030	60,620
Thereafter	483,387
Total	$	892,931


	September 30, 2026		December 31, 2025
Principal amount

2027 Convertible Notes	$	57,841	$	209,575
2028 Convertible Notes	249,999		469,999
2031 Convertible Notes	750,000		750,000
2032 Convertible Notes	750,000		750,000
2033 Convertible Notes	1,500,000		—
Total principal amount	$	3,307,840	$	2,179,574

Unamortized debt discount

2027 Convertible Notes	$	(105)	$	(1,058)
2028 Convertible Notes	(2,123)		(5,561)
2031 Convertible Notes	(12,915)		(15,108)
2032 Convertible Notes	(13,616)		(15,217)
2033 Convertible Notes	(28,778)		—
Total unamortized debt discount	$	(57,537)	$	(36,944)

Carrying amount

2027 Convertible Notes	$	57,736	$	208,517
2028 Convertible Notes	247,876		464,438
2031 Convertible Notes	737,085		734,892
2032 Convertible Notes	736,384		734,783
2033 Convertible Notes	1,471,222		—
Total carrying amount	$	3,250,303	$	2,142,630

Fair value based on trading levels (Level 2)

2027 Convertible Notes	$	82,850	$	229,736
2028 Convertible Notes	495,263		624,690
2031 Convertible Notes	1,009,875		755,655
2032 Convertible Notes	1,038,458		764,213
2033 Convertible Notes	1,498,515		—
Total fair value of outstanding notes	$	4,124,961	$	2,374,294


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026	2025	2026	2025
Expected volatility	40.12 - 40.94%	41.23 - 42.14%	29.91 - 41.95%	39.68 - 42.14%
Average expected term (in years)	4.8	4.8	4.8	4.8
Risk-free interest rate	4.24 - 4.55%	3.74 - 3.84%	3.62 - 4.55%	3.74 - 4.34%
Expected dividend yield	—	—	—	—


	September 30, 2026
	Unrecognized Expense		Remaining Weighted-Average Recognition Period (in years)
Stock options	$	34,876	2.46

RSUs	66,690		2.53
PSUs	37,137		1.79
ESPP	127		0.15


	2026
	Total Number of Shares Purchased	Weighted-Average Price Paid Per Share		Total Cost
First quarter	—	$	—	$	—
Second quarter(1)	4,801,364	$	69.30	332,729
Third quarter(1)	846,457	$	79.47	67,271

	5,647,821	$	—	$	400,000


	Three Months Ended				Increase / (Decrease)
	September 30,
	2026		2025		Dollar		Percentage
DARZALEX	$	153,465	$	127,502	$	25,963	20	%
VYVGART Hytrulo	88,114		46,695		41,419		89	%
Phesgo	34,277		27,830		6,447		23	%
Other	65,145		34,011		31,134		92	%
Total royalties	$	341,001	$	236,038	$	104,963	44	%


	Nine Months Ended
	September 30,
(in thousands)	2026		2025		Change
Net cash provided by operating activities	$	679,237	$	432,529	$	246,708
Net cash (used in) provided by investing activities	(44,590)		195,975		(240,565)
Net cash provided by (used in) financing activities	259,781		(324,689)		584,470
Net increase in cash and cash equivalents	$	894,428	$	303,815	$	590,613


Period	Total Number of Shares Purchased	Average Price paid per share (1)		Total Number of Shares Purchased as Part of Publicly Announced Programs	Approximate Dollar Value of Shares That May Yet Be purchased under the Programs (in thousands) (2)
July 1, 2026 through July 31, 2026	730,992	$	78.94	730,992	$	767,194
August 1, 2026 through August 31, 2026	115,465	$	82.84	115,465	$	757,629
September 1, 2026 through September 30, 2026	—	$	—	—	$	757,629
Total	846,457			846,457


3.1						Amended and Restated Certificate of Incorporation of Halozyme Therapeutics, Inc. (filed as Exhibit 3.1 to the Company’s Form 8-K filed April 26, 2024 and incorporated herein by reference)

3.2						The Company Bylaws, as amended (filed as Exhibit 3.1 to the Company’s Form 8-K filed April 24, 2026 and incorporated herein by reference)

4.1						Indenture, dated March 1, 2021, between Halozyme Therapeutics, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.1 to the Company’s Form 8-K filed March 1, 2021 and incorporated herein by reference )

4.2						Form of Note, dated March 1, 2021, between Halozyme Therapeutics, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K filed March 1, 2021 and incorporated herein by reference )

4.3						Indenture, dated August 18, 2022, between Halozyme Therapeutics, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.1 to the Company’s Form 8-K filed August 18, 2022 and incorporated herein by reference )

4.4						Form of Note, dated August 18, 2022, between Halozyme Therapeutics, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (included within Exhibit 4.3) (filed as Exhibit 4.2 to the Company’s Form 8-K filed August 18, 2022 and incorporated herein by reference )

4.5						2031 Convertible Notes Indenture, dated November 12, 2025, between Halozyme Therapeutics, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.1 to the Company’s Form 8-K filed November 12, 2025 and incorporated herein by reference)

4.6						Form of 0% Convertible Senior Notes due 2031 (included within Exhibit 4.5) (filed as Exhibit 4.2 to the Company’s Form 8-K filed November 12, 2025 and incorporated herein by reference)

4.7						2032 Convertible Notes Indenture, dated November 12, 2025, between Halozyme Therapeutics, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.3 to the Company’s Form 8-K filed November 12, 2025 and incorporated herein by reference)

4.8						Form of 0.875% Convertible Senior Notes due 2032 (included within Exhibit 4.7) (filed as Exhibit 4.4 to the Company’s Form 8-K filed November 12, 2025 and incorporated herein by reference)

4.9						Convertible Notes Indenture, dated September 22, 2026 between Halozyme Therapeutics, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.1 to the Company’s Form 8-K filed September 22 , 202 6 and incorporated herein by reference)

4.10						Form of 1.50 % Convertible Senior Notes due 203 3 (included within Exhibit 4.1 ) (filed as Exhibit 4.2 to the Company’s Form 8-K filed September 22 , 202 6 and incorporated herein by reference)

10.1#						Halozyme Therapeutics, Inc. 2021 Employee Stock Purchase Plan (filed herewith)

10.2						Form of Capped Call Confirmation in connection with 1 .5 0% Convertible Senior Notes due 203 3 (filed as Exhibit 10.1 to the Company’s Form 8-K filed September 22, 2026 and incorporated herein by reference)

31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith)

31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended (filed herewith)

32						Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

101.INS						Instance Document - the instance document does not appear in the interactive Data File because its XBRL tags are embedded within the Inline XBRL document (filed herewith)

101.SCH						Inline Taxonomy Extension Schema Document (filed herewith)

101.CAL						Inline Taxonomy Extension Calculation Linkbase Document (filed herewith)

101.DEF						Inline Taxonomy Extension Definition Linkbase Document (filed herewith)

101.LAB						Inline Taxonomy Extension Label Linkbase Document (filed herewith)

101.PRE						Inline Taxonomy Extension Presentation Linkbase Document (filed herewith)

104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) (filed herewith)


			Halozyme Therapeutics, Inc. (Registrant)


Dated:	November 5, 2026	By:	/s/ Helen I. Torley, M.B. Ch.B., M.R.C.P.
			Helen I. Torley, M.B. Ch.B., M.R.C.P. President and Chief Executive Officer (Principal Executive Officer)



Dated:	November 5, 2026	By:	/s/ Darren Snellgrove
			Darren Snellgrove Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)


1. Establishment, Purpose and Term of Plan			4
1.1 Establishment			4
1.2 Purpose			4
1.3 Term of Plan			4
2. Definitions and Construction			4
2.1 Definitions			4
2.2 Construction			8
3. Administration			8
3.1 Administration by the Committee			8
3.2 Authority of Officers			8
3.3 Power to Vary Terms with Respect to Non-U.S. Employees			8
3.4 Power to Establish Separate Offerings with Varying Terms			8
3.5 Policies and Procedures Established by the Company			9
3.6 Indemnification			9
4. Shares Subject to Plan			9
4.1 Maximum Number of Shares Issuable			9
4.2 Adjustments for Changes in Capital Structure			9
5. Eligibility			10
5.1 Employees Eligible to Participate			10
5.2 Exclusion of Certain Stockholders			10
5.3 Determination by Company			10
6. Offerings			11
6.1 Offering Periods			11
6.2 Non-United States Offerings			11
7. Participation in the Plan			11
7.1 Initial Participation			11
7.2 Continued Participation			12
8. Right to Purchase Shares			12
8.1 Grant of Purchase Right			12
8.2 Calendar Year Purchase Limitation			12
9. Purchase Price			12
10. Accumulation of Purchase Price through Payroll Deduction			13
10.1 Amount of Payroll Deductions			13
10.2 Commencement of Payroll Deductions			13
10.3 Election to Decrease or Stop Payroll Deductions			13
10.4 Election to Increase Payroll Deductions for Subsequent Offering			13
10.5 Administrative Suspension of Payroll Deductions			13
10.6 Participant Accounts			14


10.7 No Interest Paid			14
10.8 Voluntary Withdrawal from Plan Account			14
11. Purchase of Shares			14
11.1 Exercise of Purchase Right			14
11.2 Pro Rata Allocation of Shares			15
11.3 Delivery of Title to Shares			15
11.4 Return of Plan Account Balance			15
11.5 Tax Withholding			15
11.6 Expiration of Purchase Right			15
11.7 Provision of Reports and Stockholder Information to Participants			15
12. Withdrawal from Plan			16
12.1 Voluntary Withdrawal from the Plan			16
12.2 Automatic Withdrawal from Offering and Re-enrollment			16
12.3 Return of Plan Account Balance			16
13. Termination of Employment or Eligibility			16
14. Effect of Change in Control on Purchase Rights			17
15. Nontransferability of Purchase Rights			17
16. Compliance with Applicable Law			17
17. Rights as a Stockholder and Employee			17
18. Notification of Disposition of Shares			18
19. Legends			18
20. Designation of Beneficiary			18
20.1 Designation Procedure			18
20.2 Absence of Beneficiary Designation			18
21. Notices			19
22. Amendment or Termination of the Plan			19
23. No Representations with Respect to Tax Qualification			19
24. Choice of Law			19