DEF 14A of Mercury Systems Inc, Sep 12, 2024

DEF 14A of Mercury Systems Inc

Filed Sep 12, 2024 · FY20240001049521-24-000036

Open on EDGAR

  1. Our Board of Directors

    Our Board of Directors The following table provides summary information about our Directors as of the date of this proxy statement.

  2. Our Board of Directors

    | | | | | Committee Memberships | | | | | | Name | Director Since | Primary Occupation | Independent | AC | HC | NGC | GRC | M&A | | William L. Ballhaus Chairman of the Board Class I Director Term Ending in 2025 | 2022 | President and CEO, Mercury Systems | No | | | | | | | Orlando P. Carvalho Class III Director Nominated for a Term Ending in 2027 | 2020 | Former Executive Vice President Aeronautics, Lockheed Martin | Yes | | M | M | | C | | Gerard J. DeMuro Class II Director Term Ending in 2026 | 2023 | Former Co-CEO, Eve Air Mobility and Former President and CEO of BAE Systems, Inc. (U.S.) | Yes | M,F | | | M | | | Lisa S. Disbrow Class I Director Term Ending in 2025 | 2017 | Under Secretary of the U.S. Air Force (Retired) | Yes | M,F | M | | C | | | Roger A. Krone Class II Director Term Ending in 2026 | 2023 | President and CEO, Boy Scouts of America Former Chairman and CEO, Leidos | Yes | | | M | | M | | Howard L. Lance Class I Director Term Ending in 2025 | 2022 | Former President and CEO Maxar Technologies and Harris Corporation | Yes | | C | M | | M | | Barry R. Nearhos Lead Independent Director Class III Director Nominated for a Term Ending in 2027 | 2018 | Former Managing Partner, PricewaterhouseCoopers | Yes | C,F | | C | | | | Scott Ostfeld Class II Director Term Ending in 2026 | 2023 | Managing Partner and Portfolio Manager, JANA Partners | Yes | | M | | | M | | Debora A. Plunkett Class III Director Nominated for a Term Ending in 2027 | 2021 | Federal Senior Executive National Security Agency (Retired) | Yes | M | | | M | |

  3. Our Board of Directors

    | AC = Audit Committee | GRC = Government Relations Committee | M = Member | | HC = Human Capital and Compensation Committee | M&A = M&A and Finance Committee | C = Committee Chair | | NGC = Nominating and Governance Committee | | F = Financial Expert |

  4. Our Board of Directors

    We are proposing that Orlando P. Carvalho, Barry R. Nearhos, and Debora A. Plunkett, three continuing Class III directors, be elected to serve terms of three years, and in each case until their successors are duly elected and qualified or until they sooner die, resign, or are removed. Mr. Nearhos, our Lead Independent Director, was appointed to the Board in 2018, Mr. Carvalho was appointed to the Board in 2020, and Ms. Plunkett was appointed to the Board in 2021.

  5. •FOR the election of the three nominees for Class III directors named below under "Proposal 1: Election of Three Class III Directors;"

    •FOR the election of the three nominees for Class III directors named below under "Proposal 1: Election of Three Class III Directors;" •FOR the approval of, on an advisory basis, the fiscal 2024 compensation of our named executive officers as disclosed in this proxy statement; •FOR the approval of our new 2024 Employee Stock Purchase Plan;

  6. PROPOSAL 1: ELECTION OF THREE CLASS II DIRECTORS

    PROPOSAL 1: ELECTION OF THREE CLASS II DIRECTORS

  7. Information about the Directors

    Information about the Directors The persons named as proxies in the accompanying proxy card will vote, unless authority is withheld, for the election of the three Class III nominees named below. We have no reason to believe that any of the nominees will be unavailable for election. However, if any one of them becomes unavailable, the persons named as proxies in the accompanying proxy card have discretionary authority to vote for a substitute chosen by the Board. Any vacancies not filled at the meeting may be filled by the Board. The following information was provided by each of the incumbent directors whose term will continue after the meeting. Class III Directors - Nominated for a Term Ending in 2027:

  8. Information about the Directors

    | | Orlando P. Carvalho | | | | Age: 66 | Committee Memberships: | | | Director Since: 2020 | Human Capital & Compensation M&A and Finance (Chair) Nominating and Governance | | Primary Occupation: | | | | Former Executive Vice President, Aeronautics, Lockheed Martin | | | | Description of Business Experience: | | Skills and Qualifications: | | Mr. Carvalho has over 38 years of experience in the aerospace and defense industry with Lockheed Martin. Before his retirement from Lockheed Martin in 2018, he was Executive Vice President of Lockheed Martin's Aeronautics business, a 24,000-employee enterprise. Mr. Carvalho held several integral leadership positions with Lockheed Martin, including Executive Vice President and General Manager of the F-35 Lightning II Joint Strike Fighter program, President of Lockheed Martin Mission Systems & Sensors, and General Manager and Vice President of Surface-Sea Based Ballistic Missile Defense Systems. Mr. Carvalho presently serves on the Board of Advisors for the University of Maryland Robert H. Smith School of Business and he is an Associate Fellow of the American Institute of Aeronautics and Astronautics. Mr. Carvalho's qualifications to serve on our Board of Directors include his executive experience with defense contracting and his knowledge of defense and aerospace technology, operations, and program management. | | Senior Leadership Defense Industry Technology Industry Corporate Governance Risk Management Finance and Accounting Business Operations & Strategy Regulatory Talent Management Mergers & Acquisitions | | Other Public Company Directorships Held in the Last Five Years: | | | | None | | |

  9. Information about the Directors

    | | Barry R. Nearhos | | | | Age: 66 | Committee Memberships: | | | Director Since: 2018 | Audit (Chair) Nominating and Governance (Chair) | | Primary Occupation: | | Lead Independent Director | | Former Managing Partner, PricewaterhouseCoopers | | | | Description of Business Experience: | | Skills and Qualifications: | | Mr. Nearhos has over 35 years of experience with PricewaterhouseCoopers (PwC) providing assurance, business advisory, and other services to clients across multiple industries, including technology, life sciences, telecom, and manufacturing. Before his retirement from PwC in 2015, Mr. Nearhos was Market Managing Partner for PwC's Northeast region, responsible for directing the strategy and operations of the firm's Boston, Hartford, and Albany offices. During his tenure, he also served as the leader of PwC's Northeast Assurance practice, a position he held from 2005 until 2008, and as a partner in PwC's Assurance practice from 1989 to 2015. He was a director of Virtusa Corporation, a publicly traded IT services and outsourcing company, from 2016 until its acquisition by private equity in 2021. Mr. Nearhos is one of our "audit committee financial experts" and became our lead independent director in October 2023. Mr. Nearhos' qualifications to serve on our Board of Directors include his strong accounting and financial expertise as well as his expertise in capital markets, M&A, strategy, corporate governance, and talent and risk management. | | Senior Leadership Corporate Governance Risk Management Business Operations & Strategy Finance and Accounting Mergers & Acquisitions Talent Management Debt and Equity Capital Markets | | Other Public Company Directorships Held in the Last Five Years: | | | | Virtusa Corporation (Ticker: VRTU) (2016 - 2021) | | |

  10. Information about the Directors

    | | Debora A. Plunkett | | | | Age: 64 | Committee Memberships: | | | Director Since: 2021 | Audit Government Relations | | Primary Occupation: | | | | Federal Senior Executive, National Security Agency (Retired) | | | | Description of Business Experience: | | Skills and Qualifications: | | Ms. Plunkett's previous National Security Agency (NSA) positions include Director of Information Assurance from April 2010 to November 2014 and Deputy Director of Information Assurance from August 2008 to April 2010, where she led the agency's information assurance/cyber defense mission and directed thousands of NSA professionals worldwide. She also conceived and established the National Cyber Security Assistance Program to qualify commercial organizations for accreditation in performing cyber security services for national security systems, and advised Executive Branch decision-makers, including the National Security Council, on cyber issues. Most recently, Ms. Plunkett was the first person to serve in the newly established position of Senior Advisor to the NSA Director, from November 2014 to January 2016, with a focus on enhancing equality, diversity, and inclusion for the agency's highly technical workforce. A highly credentialed professional, Ms. Plunkett received the Distinguished Service Medal and Exceptional Civilian Service Award from the NSA Director. She was awarded the Rank of Distinguished Executive by President Barack Obama, and the Rank of Meritorious Executive by President George W. Bush. As a recognized expert in national security, she has appeared on CBS/60 Minutes and Federal News Radio, been interviewed in the Washington Post, and given keynote addresses at high-profile cyber security and defense conferences. She currently serves on the CACI International and Nationwide Mutual Insurance Boards of Directors, is a Senior Fellow at Harvard University’s Belfer Center, and a professor in the cybersecurity graduate program at the University of Maryland. Ms. Plunkett's qualifications to serve on our Board of Directors include her extensive experience in cyber and national security as well as information assurance. | | Senior Leadership Defense Industry Technology Industry Risk Management Finance & Accounting Business Operations & Strategy Regulatory Talent Management | | Other Public Company Directorships Held in the Last Five Years: | | | | CACI International Inc. (Ticker: CACI) (2018 - present) | | | | J. C. Penney Company, Inc. (Ticker: JCP) (2017 - 2020) | | |

  11. Information about the Directors

    Class I Directors - Serving a Term Ending in 2025:

  12. Information about the Directors

    | | William L. Ballhaus | | | | Age: 57 | Committee Memberships: | | | Director Since: 2022 | None | | Primary Occupation: | | Chairman of the Board | | Chairman, President and CEO, Mercury Systems | | | | Description of Business Experience: | | Skills and Qualifications: | | Mr. Ballhaus joined the Company's Board of Directors as a non-employee director in June 2022, was appointed interim President and Chief Executive Officer on June 24, 2023, and was appointed President and CEO effective August 15, 2023. In October 2023, Mr. Ballhaus became the Company's Chairman of the Board effective with the annual meeting of shareholders. Mr. Ballhaus has significant experience in the aerospace, defense, and technology industries, including multiple CEO roles, as well as experience in operational transformations and delivering strong results. He previously served as Chairman and CEO of Blackboard, Inc., a leading EdTech company, from 2016 until its merger with Anthology in 2021. Prior to that, he served as CEO and President of SRA International, Inc., a provider of information technology services, from 2011 until the creation of CSRA Inc. from SRA International Inc.'s and CSC's U.S. public sector business. Before that, Mr. Ballhaus served as CEO and President of government contractor DynCorp International from 2008 to 2010. Mr. Ballhaus has also held senior leadership positions at BAE Systems, Boeing, and Hughes, where he led global government and commercial technology businesses particularly focused on software and IT. | | Public Co. CEO Senior Leadership Defense Industry Technology Industry Corporate Governance Risk Management Finance and Accounting Business Operations & Strategy Regulatory Talent Management Mergers & Acquisitions Debt and Equity Capital Markets | | Other Public Company Directorships Held in the Last Five Years: | | | | None | | |

  13. Information about the Directors

    | | Lisa S. Disbrow | | | | Age: 61 | Committee Memberships: | | | Director Since: 2017 | Audit Government Relations (Chair) Human Capital & Compensation | | Primary Occupation: | | | | Under Secretary of the Air Force (Retired) | | | | Description of Business Experience: | | Skills and Qualifications: | | Ms. Disbrow is an appointed member of the President's Export Council and serves as Chair of the Secretary of Defense's Reserve Forces Policy Board. She previously served as an appointed Commissioner on the U.S. Congress' Commission on DoD Planning, Programming, Budgeting and Execution Reform. She is a Senior Fellow at Johns Hopkins University Applied Physics Lab, and the Vice Chairman of the National Defense Industrial Association's (NDIA) Board and will serve as the NDIA's Chairman starting in October 2024. Ms. Disbrow retired from federal service in 2017 as U.S. Senate-confirmed Air Force Under Secretary, where she was responsible for training, equipping, and providing for the welfare of approximately 660,000 personnel worldwide. She oversaw an annual budget and directed strategy, risk management, business processes, weapons requirements and acquisition, military force development, technology investments, and personnel management across a global enterprise. She was Acting Secretary of the Air Force during the change of Presidential administrations, and previously served as the Air Force's Assistant Secretary for Financial Management and Comptroller, the principal senior official on financial matters with a workforce of 10,000 personnel world-wide. Over a 32-year national security career, she held numerous senior civilian positions on the United States Joint Chiefs of Staff, leading joint warfighting requirements and operational assessments as the Vice Director of J8; in the National Reconnaissance Office as a Systems Engineer; and on the National Security Council in the White House. Her recognitions include the Distinguished and the Meritorious Presidential Rank awards, and DoD's Distinguished Civilian Service award. She is a retired U.S. Air Force Colonel with over 23 years of total active and reserve service in intelligence, operational plans, and programming. Ms. Disbrow's qualifications to serve on our Board of Directors include her extensive military and defense budget experience, responsible for an annual budget of over $165 billion in appropriated funding, in the Company's target defense market, her defense procurement experience, and her knowledge of defense and aerospace technology. | | Senior Leadership Defense Industry Technology Industry Risk Management Finance and Accounting Business Operations & Strategy Regulatory Talent Management | | Other Public Company Directorships Held in the Last Five Years: | | | | Blackberry Limited (Ticker: BB) (2019 - present) | | | | CACI International Inc. (Ticker: CACI) (2021 - present) | | | | Perspecta, Inc. (Ticker: PRSP) (2018 - 2021) | | |

  14. Information about the Directors

    | | Howard L. Lance | | | | Age: 68 | Committee Memberships: | | | Director Since: 2022 | Human Capital & Compensation (Chair) M&A and Finance Nominating & Governance | | Primary Occupation: | | | | Former President and CEO, Maxar Technologies, Inc. and Harris Corporation | | | | Description of Business Experience: | | Skills and Qualifications: | | Mr. Lance is currently Managing Partner at Lance Advisors LLC, an advisory firm serving private equity and institutional investors. He serves as non- executive Chairman of Summit Materials, a publicly traded provider of aggregates and cement, non-executive Chairman of privately held Reworld Waste, a provider of sustainable materials management solutions, non-executive Chairman of privately held Heritage Environmental Solutions, a provider of regulated environmental solutions, and a director of Mercury Systems, a defense electronics supplier. He previously served on the public company boards of Change Healthcare, New Vista Acquisition Corp., Ferrovial S.A., Eastman Chemical Co., Stryker Corp., and Aviat Networks. Mr. Lance was President and Chief Executive Officer of Maxar Technologies, a publicly traded provider of space technology solutions including satellites, robotics, geospatial imagery, and services from 2016 to 2019. Previously, he was Executive Advisor – Private Equity at the Blackstone Group from 2012 to 2016. He served as Chairman, President and Chief Executive Officer of Harris Corporation (now L3Harris Technologies), a publicly traded provider of communications and information technology solutions to government, defense, and commercial markets from 2003 to 2012. He was Co-President of NCR Corporation and Chief Operating Officer of its Retail and Financial Group from 2001 to 2002. Previously, he spent 17 years at Emerson Electric Company including as Executive Vice President of its Electronics and Telecom businesses, Group President of its Climate Technologies businesses, and Chief Executive Officer of Astec PLC, a publicly listed subsidiary based in Hong Kong. Mr. Lance’s qualifications to serve on our Board of Directors include his extensive experience in the defense industry and his executive and operational experience as the Chief Executive Officer of multiple public companies. | | Public Co. CEO Senior Leadership Defense Industry Technology Industry Corporate Governance Risk Management Finance and Accounting Business Operations & Strategy Regulatory Talent Management Mergers & Acquisitions Debt and Equity Capital Markets | | Other Public Company Directorships Held in the Last Five Years: | | | | Summit Materials, Inc. (Ticker: SUM) (2015 - present) | | | | Change Healthcare, Inc. (Ticker: CHNG) (2017 - 2022) | | | | New Vista Acquisition Corp. (Ticker: NVSA) (2021 - 2022) | | | | Maxar Technologies Inc. (Ticker: MAXR) (2016 - 2019) | | |

  15. Information about the Directors

    Class II Directors - Serving a Term Ending in 2026:

  16. Information about the Directors

    | | Gerard J. DeMuro | | | | Age: 67 | Committee Memberships: | | | Director Since: 2023 | Audit Government Relations | | Primary Occupation: | | | | Former Co-CEO, Eve Air Mobility and Former President and CEO, BAE Systems, Inc. | | | | Description of Business Experience: | | Skills and Qualifications: | | Mr. DeMuro served as Co-CEO of Eve Air Mobility, a publicly traded producer of eVTOL aircraft and urban air mobility infrastructure, from September 2021 to September 2023. From 2014 to 2020, Mr. DeMuro served as President and CEO of BAE Systems, Inc., the U.S.-based subsidiary of BAE Systems PLC, a provider of technology-led defense, aerospace, and security solutions. From 1999 to 2013, he held several roles of increasing responsibility at General Dynamics, a global aerospace and defense company, including Executive Vice President and Corporate Vice President of Information Systems & Technology. Earlier in his career, Mr. DeMuro held roles at GTE Corporation (now part of Verizon Communications) and the U.S. Department of Defense. Mr. DeMuro's qualifications to serve on our Board of Directors include his extensive experience in the defense industry and his executive and operational experience with public and private companies. | | Public Co. CEO Senior Leadership Defense Industry Technology Industry Corporate Governance Risk Management Finance and Accounting Business Operations & Strategy Regulatory Talent Management Mergers & Acquisitions Debt and Equity Capital Markets | | Other Public Company Directorships Held in the Last Five Years: | | | | BAE Systems Plc (Ticker: BAESY) (2014 - 2020) | | | | Zanite Acquisition Corporation (Ticker: ZNTE) (2020 - 2021) | | | | Eve Holding Inc. (Ticker: EVEX) (2023 - present) | | |

  17. Information about the Directors

    | | Roger A. Krone | | | | Age: 68 | Committee Memberships: | | | Director Since: 2023 | Government Relations M&A and Finance Nominating and Governance | | Primary Occupation: | | | | President and CEO, Boy Scouts of America and Former Chairman and CEO, Leidos | | | | Description of Business Experience: | | Skills and Qualifications: | | Mr. Krone is President and Chief Executive Officer of the Boy Scouts of America. He served as the Chairman and CEO at Leidos, a Fortune 500 science and technology company focused on the software, hardware, and complex integrated system solutions of large- and small-scale defense, civil, and health applications, from 2014 until his retirement in 2023. Mr. Krone spent over 15 years at Boeing, where he served in several leadership positions, including President of its Network & Space Systems business, and was previously a Vice President at McDonnell Douglas Corporation, which was later acquired by Boeing. Mr. Krone began his career at General Dynamics Corporation. Mr. Krone has served on the Board of Directors of Lear Corporation, a publicly traded global automotive technology company, since 2020. He previously served on the Board of Directors of BorgWarner, a publicly traded automotive supplier, from 2017 to 2019. Mr. Krone is a Certified Public Accountant. Mr. Krone's qualifications to serve on our Board of Directors include his extensive experience in the defense industry and his executive and operational experience with public companies. | | Public Co. CEO Senior Leadership Defense Industry Technology Industry Corporate Governance Risk Management Finance and Accounting Business Operations & Strategy Regulatory Talent Management Mergers & Acquisitions Debt and Equity Capital Markets | | Other Public Company Directorships Held in the Last Five Years: | | | | Lear Corporation (Ticker: LEA) (2020 - present) | | | | Leidos Holdings, Inc. (Ticker: LDOS) (2014 - 2023) | | | | BorgWarner Inc. (Ticker: BWA) (2017 - 2019) | | |

  18. Information about the Directors

    | | Scott Ostfeld | | | | Age: 47 | Committee Memberships: | | | Director Since: 2023 | Human Capital & Compensation M&A and Finance | | Primary Occupation: | | | | Managing Partner and Portfolio Manager, JANA Partners | | | | Description of Business Experience: | | Skills and Qualifications: | | Mr. Ostfeld is a Managing Partner and Portfolio Manager at JANA Partners where he has nearly 20 years of experience enhancing value as an engaged shareholder. Prior to joining JANA in 2006, Mr. Ostfeld was at GSC Partners, where he served in their distressed debt private equity group and focused on acquiring companies through the restructuring process and enhancing value as an equity owner. He was previously an investment banker at Credit Suisse First Boston Corporation. Mr. Ostfeld currently serves on the Board of Directors of TreeHouse Foods, a publicly traded private label food company. He was previously a director at Conagra Brands, a publicly traded packaged good company from 2019 to 2022, HD Supply Holdings, a publicly traded industrial distribution company, from 2017 until its sale to Home Depot in 2020, and Team Health, publicly traded physician services company, from 2016 until its sale to Blackstone Group in 2017. Mr. Ostfeld serves on the Board of Columbia University’s Richman Center for Business, Law and Public Policy. Mr. Ostfeld's qualifications to serve on our Board of Directors include his experience investing in companies and driving shareholder value as well as his expertise in capital markets, M&A, strategy, corporate governance, and talent and risk management. | | Senior Leadership Corporate Governance Risk Management Finance and Accounting Business Operations & Strategy Talent Management Mergers & Acquisitions Debt and Equity Capital Markets | | Other Public Company Directorships Held in the Last Five Years: | | | | TreeHouse Foods, Inc. (Ticker: THS) (2022 - present) | | | | Conagra Brands, Inc. (Ticker: CAG) (2019 - 2022) | | | | HD Supply Holdings, Inc. (Ticker: HDS) (2017 - 2020) | | |

  19. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The Human Capital and Compensation Committee performs an annual review of non-employee director compensation. Our director compensation philosophy is to provide our non-employee directors with competitive compensation. Our compensation philosophy is intended to offer compensation that attracts highly qualified non-employee directors and retain the leadership and skills necessary to build long-term shareholder value. Directors who are also our employees receive no additional compensation for serving on the Board of Directors.

  20. Non-Employee Director Compensation

    Non-Employee Director Compensation

  21. Non-Employee Director Compensation

    | Name | Fees Earned | Stock Awards ($)(1) | Total | | Orlando P. Carvalho (2) | $77,000 | $169,535 | $246,535 | | Gerard J. DeMuro (3) | 65,000 | 169,535 | 234,535 | | Lisa S. Disbrow (4) | 77,000 | 169,535 | 246,535 | | Mary Louise Krakauer (5) | 42,500 | — | 42,500 | | Roger A. Krone (6) | 65,000 | 169,535 | 234,535 | | Howard L. Lance (7) | 80,000 | 169,535 | 249,535 | | Barry R. Nearhos (8) | 125,250 | 169,535 | 294,785 | | William K. O'Brien (9) | 55,000 | — | 55,000 | | Scott Ostfeld (10) | — | — | — | | Debora A. Plunkett (11) | 65,000 | 169,535 | 234,535 |

  22. Non-Employee Director Compensation

    (1)This column represents the grant date fair value of restricted stock awards for fiscal 2024 in accordance with FASB ASC Topic 718. The grant date fair value of the restricted stock awards granted to non-employee directors in fiscal 2024 has been calculated by multiplying the number of shares granted by the closing price of our common stock as reported on the Nasdaq Global Select Market on the date of grant. (2)Mr. Carvalho served on our Board of Directors for all of fiscal 2024. His fees reflect four quarterly Board retainer fees plus additional fees for such period for service as Chair of the M&A and Finance Committee. He received a grant of 4,682 restricted shares on October 25, 2023 when the closing price per share was $36.21. (3)Mr. DeMuro served on our Board for all of fiscal 2024. His fees reflect four quarters as a non-employee director as well the grant of 4,682 restricted shares on October 25, 2024 when the closing price per shares was $36.21. (4)Ms. Disbrow served on our Board of Directors for all of fiscal 2024. Her fees reflect four quarterly Board retainer fees plus additional fees for service as Chair of the Government Relations Committee for four quarters. She received a grant of 4,682 restricted shares on October 25, 2023 when the closing price per share was $36.21. (5)Ms. Krakauer's service on our Board of Directors ended in October 2023 at our 2023 Annual Meeting of Shareholders. She did not receive a restricted stock award for fiscal 2024 and her fees reflect service on the Board during the first and second quarter of fiscal 2024 as well as serving as the Chair of the Human Capital and Compensation Committee for such period. (6)Mr. Krone served on our Board of Directors for all of fiscal 2024. His fees reflect four quarters as a non-employee director as well the grant of 4,682 restricted shares on October 25, 2023 when the closing price per shares was $36.21. (7)Mr. Lance served on our Board of Directors for all of fiscal 2024. His fees reflect four quarterly Board retainer fees as well as serving as Chair of the Human Capital and Compensation Committee for three quarters of fiscal 2024. He received a grant of 4,682 restricted shares on October 25, 2023 when the closing price per share was $36.21. (8)Mr. Nearhos served on our Board of Directors for all of fiscal 2024. His fees reflect four quarterly Board retainer fees plus additional fees for service as Chair of the Audit Committee for four quarters, service as Chair of the Nominating and Governance Committee for three quarters, and service as Lead Independent Director for three quarters. He received a grant of 4,682 restricted shares on October 25, 2023 when the closing price per share was $36.21. (9)Mr. O'Brien's service on our Board of Directors ended in October 2023 at our 2023 Annual Meeting of Shareholders. He did not receive a restricted stock award for fiscal 2024 and his fees earned reflect service on the Board during the first and second quarter of fiscal 2024 as well as serving as the Independent Chairman of the Board during such period. (10)Mr. Ostfeld assigns all of the compensation related to his service on our Board of Directors to JANA Partners, LLC ("JANA"). For fiscal 2024, the compensation assigned to JANA by Mr. Ostfeld consisted of a non-employee director cash retainer of $65,000 for four quarters of service on our Board and a grant of 6,137 restricted shares on July 10, 2023 when the closing price per share was $33.85. (11)Ms. Plunkett served on our Board of Directors for all of fiscal 2024. Her fees reflect four quarterly Board retainer fees. She received a grant of 4,682 restricted shares on October 25, 2023 when the closing price per share was $36.21. The aggregate number of unvested restricted stock awards outstanding for each non-employee director at June 29, 2024 was as follows:

  23. Non-Employee Director Compensation

    | Name | Aggregate Unvested Stock Awards (# of shares) | | Orlando P. Carvalho | 4,682 | | Gerard J. DeMuro | 7,485 | | Lisa S. Disbrow | 4,682 | | Roger A. Krone | 10,479 | | Howard L. Lance | 4,682 | | Barry R. Nearhos | 4,682 | | Scott Ostfeld (1) | — | | Debora A. Plunkett | 4,682 |

  24. Non-Employee Director Compensation

    (1) Mr. Ostfeld assigns all of the compensation related to his service on our Board of Directors to JANA. As of June 29, 2024, the unvested restricted stock awards held by JANA related to Mr. Ostfeld's service on the Board were 6,137 restricted shares.

  25. How much stock does each of Mercury’s directors and executive officers own?

    How much stock does each of Mercury’s directors and executive officers own? The following information is furnished as of August 26, 2024, the record date, with respect to common stock beneficially owned by: (1) our directors and director nominees (including our CEO); (2) our CFO and the three most highly compensated executive officers other than the CEO and the CFO; and (3) all directors and executive officers as a group. Unless otherwise indicated, the individuals named below held sole voting and investment power over the shares listed. The address for each director and executive officer is c/o Mercury Systems, Inc., 50 Minuteman Road, Andover, Massachusetts 01810.

  26. How much stock does each of Mercury’s directors and executive officers own?

    | | Number of Shares Beneficially Owned (1) | Percent of Class (1) | | William L. Ballhaus (2) | 361,232 | * | | Orlando P. Carvalho (3) | 52,254 | * | | Gerard J. DeMuro (4) | 10,287 | * | | Lisa S. Disbrow (5) | 24,042 | * | | Roger A. Krone (6) | 25,479 | * | | Howard L. Lance (7) | 34,160 | * | | Barry R. Nearhos (8) | 24,171 | * | | Scott Ostfeld (9) | — | * | | Debora A. Plunkett (10) | 13,182 | * | | David E. Farnsworth (11) | 141,610 | * | | Stuart H. Kupinsky (12) | 65,618 | * | | Steven V. Ratner (13) | 60,079 | * | | Charles R. Wells, IV (14) | 131,521 | * | | All directors and executive officers as a group (13 persons) (15) | 943,635 | 1.6% |

  27. How much stock does each of Mercury’s directors and executive officers own?

    * Less than 1.0%. (1)The number and percent of the shares of common stock with respect to each beneficial owner are calculated by assuming that all shares which may be acquired by such person within 60 days of August 26, 2024 are outstanding. (2)Includes (a) 39,947 shares owned by Mr. Ballhaus individually; (b) 26,683 shares owned by Mr. Ballhaus jointly with his spouse; (c) 7,066 shares owned by a family trust controlled by Mr. Ballhaus; (d) 286,851 restricted shares awarded to Mr. Ballhaus under our stock-based plans (as to which Mr. Ballhaus has sole voting power, but which are subject to restrictions on transfer), and (e) 685 shares owned indirectly by Mr. Ballhaus through the Company stock fund in our 401(k) plan. Excludes 934,000 shares underlying stock options which are not exercisable within 60 days of August 26, 2024. (3)Includes (a) 47,572 shares owned by Mr. Carvalho individually; and (b) 4,682 restricted shares awarded to Mr. Carvalho under our stock-based plans (as to which Mr. Carvalho has sole voting power, but which are subject to restrictions on transfer). (4)Includes (a) 2,803 shares owned by Mr. DeMuro individually; and (b) 7,484 restricted shares awarded to Mr. DeMuro under our stock-based plans (as to which Mr. DeMuro has sole voting power, but which are subject to restrictions on transfer). (5)Includes (a) 19,360 shares owned by Ms. Disbrow individually; and (b) 4,682 restricted shares awarded to Ms. Disbrow under our stock-based plans (as to which Ms. Disbrow has sole voting power, but which are subject to restrictions on transfer). (6)Includes (a) 2,899 shares owned by Mr. Krone individually; (b) 15,000 shares owned by family trusts controlled by Mr. Krone; and (c) 7,580 restricted shares awarded to Mr. Krone under our stock-based plans (as to which Mr. Krone has sole voting power, but which are subject to restrictions on transfer). (7)Includes (a) 20,228 shares owned by Mr. Lance individually; (b) 9,250 shares owned by family trusts controlled by Mr. Lance; and (c) 4,682 restricted shares awarded to Mr. Lance under our stock-based plans (as to which Mr. Lance has sole voting power, but which are subject to restrictions on transfer). (8)Includes (a) 15,989 shares owned by Mr. Nearhos individually; (b) 3,500 shares owned jointly by Mr. Nearhos with his spouse and; (c) 4,682 restricted shares awarded to Mr. Nearhos under our stock-based plans (as to which Mr. Nearhos has sole voting power, but which are subject to restrictions on transfer). (9)Mr. Ostfeld assigns all of his restricted shares that he receives as a director to JANA Partners, LLC ("JANA"). JANA may be deemed to be a director by deputization by virtue of the fact that Mr. Ostfeld currently serves on our Board of Directors. JANA's common stock ownership is included within the table above titled "Who owns more than 5% of our common stock?" (10)Includes (a) 8,500 shares owned by Ms. Plunkett individually; and (b) 4,682 restricted shares awarded to Ms. Plunkett under our stock-based plans (as to which Ms. Plunkett has sole voting power, but which are subject to restrictions on transfer). (11)Includes (a) 16,677 shares owned by Mr. Farnsworth individually; (b) 124,101 restricted shares awarded to Mr. Farnsworth under our stock-based plans (as to which Mr. Farnsworth has sole voting power, but which are subject to restrictions on transfer); and (c) 832 shares owned indirectly by Mr. Farnsworth through the Company stock fund in our 401(k) plan. (12)Includes (a) 65,211 restricted shares awarded to Mr. Kupinsky under our stock-based plans (as to which Mr. Kupinsky has sole voting power, but which are subject to restrictions on transfer); and (b) 407 shares owned indirectly by Mr. Kupinsky through the Company stock fund in our 401(k) plan. (13)Includes (a) 3,892 shares owned by Mr. Ratner individually; and (b) 56,187 restricted shares awarded to Mr. Ratner under our stock-based plans (as to which Mr. Ratner has sole voting power, but which are subject to restrictions on transfer). (14)Includes (a) 16,452 shares owned by Mr. Wells individually; (b) 113,956 restricted shares awarded to Mr. Wells under our stock-based plans (as to which Mr. Wells has sole voting power, but which are subject to restrictions on transfer); and (c) 1,113 shares owned indirectly by Mr. Wells through the Company stock fund in our 401(k) plan. (15)Includes (a) 255,818 shares owned by directors and executive officers individually, jointly with spouses, or by family trusts controlled by directors or executive individually; (b) 684,780 restricted shares awarded to the directors and executive officers under our stock-based plans (as to which each has sole voting power, but which are subject to restrictions on transfer); and (c) 3,037 shares owned indirectly by executive officers through the Company stock fund in our 401(k) plan.

  28. EXECUTIVE SUMMARY

    (1)Mr. Ballhaus was appointed as our Interim President and Chief Executive Officer on June 25, 2023. Following the completion of a formal search process, he was named as our President and Chief Executive Officer effective August 15, 2023. Mr. Ballhaus was named Chairman of Mercury's Board of Directors immediately prior to our 2023 annual shareholders meeting on October 25, 2023. (2) Mr. Farnsworth joined Mercury on July 17, 2023 as our Chief Financial Officer and Treasurer. He served in this capacity through October 25, 2023, after which he has continued to serve as our Chief Financial Officer. (3) Mr. Kupinsky joined Mercury on January 29, 2024. (4) Mr. Ratner served as Senior Vice President and Chief Human Resources Officer until September 23, 2023, when he was promoted to the office of Executive Vice President and Chief Human Resources Officer. (5) Mr. Wells served as President of Microelectronics until January 22, 2024, when he was named as our Chief Operating Officer. (6) Mr. Cambria served as our Executive Vice President, General Counsel and Secretary until his termination by Mercury without cause effective March 1, 2024. For a further discussion, see "—Separation Agreement with Christopher Cambria." (7) Mr. Couture served as a Senior Vice President, Execution Excellence, until July 26, 2023, when he was promoted to the office of Executive Vice President, Execution Excellence. He was terminated by Mercury without cause effective February 16, 2024. For a further discussion, see "—Separation Agreement with Allen Couture." (8) Ms. McCarthy was appointed as our Interim Chief Financial Officer and Treasurer effective February 18, 2023 and served in this capacity through July 16, 2023. She also retained her prior title and responsibilities as our Chief Accounting Officer during and after this period until February 12, 2024, and resigned from Mercury effective March 1, 2024.

  29. Shareholder Engagement and 2023 Advisory "Say-on-Pay" Vote on Executive Compensation

    | What We Heard Concerns Identified Through Shareholder Engagement | How we Responded to Shareholder Feedback Evolution of our Programs for Fiscal 2023 and Fiscal 2024 | | Annual Incentive Plan ("AIP") •Preference to see diversified performance measures. •Concerns about semi-annual performance periods, with second-half targets established mid-year. •Importance of driving free cash flow. | Beginning with the AIP for fiscal 2023: •Expanded performance measures under the plan by adding Organic Revenue and Adjusted Free Cash Flow to the legacy Adjusted EBITDA measure. •Used a full one-year performance period based on performance targets set at the start of the fiscal year. For fiscal 2024, placed more emphasis on Adjusted Free Cash Flow results in calculating AIP payouts. | | Long-Term Incentive Plan ("LTI") •Desire for greater allocation of equity incentives to performance-based awards. •Use of performance measures that could reward M&A activities regardless of value creation. •Rigor of relative performance targets and appropriateness of using our compensation peer group to assess relative performance achievements. •Magnitude of maximum incentive opportunity. | Beginning with annual LTI awards for fiscal 2024: •Increased allocation of our annual LTI granted in the form of performance awards from 50% to 60% for our CEO and 55% for all other executive officers. •Used absolute financial performance measures aligned with internal forecasts, instead of relative measures, to encourage and reward predictable performance. •Targeted Organic Revenue instead of Total Revenue to more effectively drive intended value-creation behaviors. •Added relative total shareholder return ("TSR") modifier to align performance award payouts with shareholder outcomes. •Measured relative TSR performance using the SPADE® Defense Index components instead of our compensation peer group to promote relative performance against a broader industry index that is more representative of comparable investment opportunities available to our shareholders. •Reduced maximum payout opportunity under performance awards from 300% to 200% of target shares, subject to a modifier based on relative TSR of up to ±25% of target shares. | | Compensation Benchmarking •Use of compensation peer groups that are misaligned with current Company size. | Beginning with benchmarking of executive pay levels for fiscal 2024: •Developed a new peer group with median revenues aligned with the Company's current size to replace our prior approach of using multiple peer groups, including one comprised of companies larger than Mercury, in anticipation of our future growth. |

  30. 2024 Compensation Program Highlights

    | 2024 CEO Compensation aligned with Shareholder Interests | | | | | Pay Element | Amount | | Shareholder Alignment | | Annual Target Pay | Base Salary | $950,000 | •Formula-based annual and long-term incentives •Approximately 60% of annual compensation is in the form of performance-based variable pay | | | Target Bonus | 1,425,000 | | | | Performance Stock | 3,400,000 | | | | Restricted Stock | 2,350,000 | | | | Total | $8,125,000 | | | Stock Matching New-Hire Awards | $3 million | | •Contingent on CEO-funded stock purchase of $1.5 million •CEO must maintain this investment through August 17, 2026 •Matching awards are granted in the form of restricted stock, subject to a three-year cliff vesting period | | Premium Priced Stock Option New-Hire Awards | $11.87 million | | •Contingent on significant stock price appreciation to have any realizable value •Staggered vesting periods with escalating exercise prices promote sustained price appreciation over multiple periods •The grant-date fair value of these awards is $11.87 million. Mr. Ballhaus' opportunity to actually realize this value from the exercise of these awards is contingent on Mercury's stock price increasing to at least $57.71 during each of the two years ended August 17, 2027 and 2028 |

  31. 2024 Target Pay

    2024 Target Pay The table below details each named executive officer's annual base salary, target annual incentive opportunity ("target bonus") and grant date target value of annual LTI awards (collectively, "target pay") for fiscal 2024. We use target pay as the basis for benchmarking our named executive officers' annual compensation and for allocating compensation among different pay elements.

  32. 2024 Target Pay

    | Target Pay for Fiscal 2024 | | | | | | | | Salary(1) | Target Bonus as % of Salary(1) | Annual LTI Awards(2) | Target Pay | | | Current Employees: | | | | | | | William L. Ballhaus | $950,000 | 150% | $5,750,000 | | 8,125,000 | | David E. Farnsworth | 450,000 | 110% | 1,500,000 | 2,445,000 | | | Stuart H. Kupinsky | 450,000 | 100% | 850,000 | 1,750,000 | | | Steven V. Ratner | 437,750 | 100% | 700,000 | 1,575,500 | | | Charles R. Wells, IV | 450,000 | 110% | 1,400,000 | 2,345,000 | | | Former Employees: | | | | | | | Christopher C. Cambria | 407,968 | 100% | 800,000 | 1,615,936 | | | Allen Couture | 437,750 | 100% | 800,000 | 1,675,500 | | | Michelle M. McCarthy | 350,200 | 50% | 350,000 | 875,300 | |

  33. SOUND PAY PRACTICES

    | Executive Compensation Program Features | | | Executive Compensation Program Includes | •Transparent, formulaic incentive plans designed to promote short - and long-term business success based on expanded measures tied to our strategic priorities and better aligned with investor outcomes •Limits on maximum payouts under incentive plans •Stronger emphasis on long-term, performance-based compensation •Limited perquisites consistent with competitive practices •Meaningful stock ownership guidelines that align executive and shareholder interests •Clawback policy that provides for recoupment of performance-based compensation and time-based LTI awards in connection with restatements of financial results that reduce previously earned payouts, regardless of individual culpability •Double trigger provisions for accelerated equity vesting and cash severance payable in connection with a change in control •Retention of an independent executive compensation consulting firm that reports directly to the Committee and does not perform any additional services for management •Annual reviews and, when appropriate, modifications of the compensation of the compensation peer group used to benchmark executive pay levels and practices •Annual Say-on-Pay advisory votes and shareholder engagement that provides the Committee with feedback considered when making future executive compensation decisions | | Executive Compensation Program Does not Include or Prohibits | •Guarantees regarding future increases in target pay, or future payouts under annual or long-term incentive programs •Excise tax gross-ups on severance/change in control payments •Repricing of stock options or other stock-based awards without shareholder approval •Excessive severance or change in control provisions •Hedging or pledging of Company stock by executives, employees and non-employee directors |

  34. PROGRAM OVERVIEW

    | 2024 Compensation Program Design | | | | | | Plan | Annual Pay Element and Weightings | Performance and Vesting Period | Performance Measures (and Weightings) | Payout Range (vs. Target) | | — | Base Salary | — | — | — | | Annual Incentive Plan | Cash Bonus | Annual | Adjusted EBITDA (50%) | 0% to 150% | | | | | Adjusted Free Cash Flow (35%) | | | | | | Organic Revenue (15%) | | | Long-Term Incentive Plan | Performance Stock Awards •60% CEO •55% Other NEOs* | Three Years with Cliff Vesting | Adjusted EBITDA Margin (50%) | 0% to 225% | | | | | Organic Revenue Growth (50%) | | | | | | Relative TSR (± 25%) | | | | Restricted Stock Awards •40% CEO •45% Other NEOs* | Three Years with Annual Vesting | — | |

  35. PROGRAM OVERVIEW

    * Ms. McCarthy, whose service as an executive officer in fiscal 2024 was only in an interim capacity, received all of her stock-based awards under our long-term incentive plan in the form of restricted stock awards.

  36. Role of the Compensation Consultant

    Role of the Compensation Consultant The Committee has the sole authority to select, retain, terminate and approve the fees payable to outside consultants to provide it with advice on various aspects of executive compensation design and delivery. During fiscal 2024, the Committee retained Meridian to provide information, analyses and advice regarding executive and non-employee director compensation generally. In the course of conducting its activities, representatives of Meridian attended meetings of the Committee and presented findings and recommendations to the Committee for discussion. Representatives of Meridian also met with management to obtain and validate data and review materials. Beyond providing advice and recommendations on the amount and form of executive and director compensation, Meridian provided no additional services to either the Committee or management during fiscal 2024.

  37. USE OF MARKET DATA AND COMPETITIVE COMPENSATION POSITIONING

    USE OF MARKET DATA AND COMPETITIVE COMPENSATION POSITIONING

  38. Compensation Peer Groups

    Compensation Peer Groups The Committee believes that Mercury's success is dependent upon its ability to continue to attract and retain high-performing executives. To ensure the comparability of our executive compensation practices and pay levels, the Committee has historically monitored executive pay at selected technology, aerospace and defense, and other industrial companies ("peers") with whom Mercury competes for business, executive talent or investor capital. On an annual basis, the Company selects a group of peer companies for use in benchmarking target pay levels and practices towards the end of each fiscal year and in making pay decisions for the following fiscal year. For fiscal 2024, peer companies were selected using a scorecard approach that took relevant factors into account for each potential peer considered, including comparable industry and financial demographics; representation in defense and aerospace stock indices; use as a Mercury comparator by one of Mercury's stock analysts or by nationally-recognized proxy advisors; use of Mercury by the potential peer as one of its own peers for executive pay benchmarking; and prior inclusion by Mercury as a component in one of its compensation peer groups used for making pay decisions for fiscal 2023. The table below shows the composition of our peer group that was established by the Committee in April 2023 for use in benchmarking target pay levels and practices to support pay decisions for fiscal 2024.

  39. Compensation Peer Groups

    | Compensation Peer Group for Fiscal 2024 | | | | 3D Systems Corporation | FormFactor, Inc. | Novanta Inc. | | Aerojet Rocketdyne Holdings, Inc. | Infinera Corporation | Onto Innovation Inc. | | AeroVironment, Inc. | iRobot Corporation | OSI Systems, Inc. | | Axcelis Technologies, Inc. | Kaman Corporation | RBC Bearings Incorporated | | Belden Inc. | Kratos Defense & Security Solutions, Inc. | Rogers Corporation | | BWX Technologies, Inc. | Leonardo DRS, Inc. | Viasat, Inc. | | Curtiss-Wright Corporation | MACOM Technology Solutions Holdings, Inc. | | | Diodes Incorporated | Maxar Technologies Inc. | |

  40. Compensation Peer Groups

    The Committee subsequently met in January 2024 to consider whether, referencing relevant factors and changes in financial demographics for both Mercury and its current or potential peers since April 2023, any changes should be made to the peer group to support its suitability for use in connection with target pay decisions for fiscal 2025. As compared to the peer group used to set target pay for fiscal 2024, the Committee determined to remove two of the above companies, Aerojet Rocketdyne and Maxar Technology, due to recent mergers and acquisitions activities, and made no other changes to the group.

  41. Use of Market Data

    Use of Market Data In reviewing competitive compensation levels of our named executive officers at the beginning of fiscal 2024 (or at such later time during fiscal 2024 at which they became an executive officer), the Committee considered compensation peer group data for Messrs. Ballhaus and Farnsworth (respectively our Chief Executive Officer and Chief Financial Officer for all or substantially all of fiscal 2024). For Mr. Wells (who began fiscal 2024 as President of our Microelectronics division and was promoted in January 2024 to be our Chief Operating Officer) and Messrs. Cambria and Kupinsky (who successively served during fiscal 2024 and our General Counsel and Chief Legal Officer, respectively), the Committee considered competitive compensation levels based on the average of the compensation peer group data and survey data from the Radford Global Technology Survey ("Survey Data") specific to publicly traded companies of similar industry and revenue size to our own because it believed that including a broader survey group more accurately reflects the labor market for these positions and ensures a meaningful sample size. Finally, the Committee considered only Survey Data for reviewing competitive compensation levels for all of our other named executive officers.

  42. Competitive Market Positioning

    Competitive Market Positioning The Committee's practice is to make pay decisions regarding the elements of compensation that compose each named executive officer's target pay (base salary, target bonus and grant date target value of long-term incentives) in July or August of each fiscal year. As part of its decision-making process, the Committee compares each named executive officer's target pay for the fiscal year against the market median as its reference point in making executive pay decisions; however, the Committee does not use market data in isolation in determining pay. Instead, competitive market data serves as one of many considerations used by the Committee in determining base salary adjustments and target pay opportunities for both annual and long-term incentives. The primary factors considered by the Committee in making its annual pay determinations are shown below.

  43. Competitive Market Positioning

    | Target Pay Determinants | | | | •Positioning to competitive market median | •Long-term financial and individual performance | •Role and responsibilities relative to benchmark, including as a result of leadership team size | | •Competitive mix of fixed and variable pay | •Tenure and experience in role | •Internal pay equity | | •Competitive mix of cash and equity | •Expected future contributions and market conditions | •Prior year's compensation levels |

  44. Annual Incentives

    Annual Incentives

  45. Annual Incentives

    | Key Features of the AIP for Fiscal 2024 | | •Performance compared to pre-established annual goals for adjusted EBITDA, revenue and adjusted free cash flow that reflect or are aligned with our internal annual operating plan | | •Individual weightings used for each performance measure to calculate plan payouts are reviewed annually to ensure alignment with our priority focus areas for the fiscal year | | •Payouts can range from 0% to 150% of target bonus based on performance | | •As described below, the Committee retains discretion to adjust payouts, including to provide for a holistic assessment of our overall performance that is not limited to pre-established financial goals embedded in our annual operating plan |

  46. Annual Incentives

    The AIP provides our executives with the opportunity to earn annual cash incentive awards based on their respective target bonuses and on company performance relative to pre-established goals for adjusted EBITDA, adjusted free cash flow and organic revenue. We chose these performance measures for our annual incentive plan because we believe that they constitute the most important financial measures that drive long-term shareholder value creation. While these performance measures are limited to financial measures, we believe that other items not captured in annual financial performance can drive long-term shareholder value creation, and the Committee therefore retains discretion to adjust plan payouts based on its holistic assessment of overall performance as appropriate. For fiscal 2024, 50%, 35% and 15% of each participant's payout is tied to our results for the above performance measures, respectively. We selected these different weightings for the performance measures under the AIP to align with their relative importance in respect of our priority focus areas for the 2024 fiscal year. As compared to our fiscal 2023 AIP, we emphasized the importance of free cash flow generation over organic revenue growth consistent with our priorities and feedback received through recent shareholder engagement.

  47. Target Bonuses for Fiscal 2024

    Target Bonuses for Fiscal 2024 AIP target bonuses are established annually for each named executive officer as a percentage of their base salary for the fiscal year.

  48. Target Bonuses for Fiscal 2024

    | | Fiscal 2024 Base Salary(1) | Fiscal 2024 Target Bonus (%) | Fiscal 2024 Target Bonus ($) | | Current Employees: | | | | | William L. Ballhaus(2) ) | 950,000 | 150% | 1,425,000 | | David E. Farnsworth(2) | 450,000 | 110% | 495,000 | | Stuart H. Kupinsky(2)(3) | 450,000 | 100% | 187,500 | | Steven V. Ratner(4) | 437,750 | 100% | 437,750 | | Charles R. Wells, IV(5) | 450,000 | 110% | 495,000 | | Former Employees: | | | | | Christopher C. Cambria(6) | 407,968 | 100% | 407,968 | | Allen Couture(4) | 437,750 | 100% | 437,750 | | Michelle M. McCarthy(7) | 350,200 | 50% | 175,100 |

  49. Target Bonuses for Fiscal 2024

    (1)Reflects each executive's annual base salary rate at the end of fiscal 2024 or at such earlier time during fiscal 2024 on which their employment with Mercury terminated. (2)Target bonuses for Messrs. Ballhaus, Farnsworth and Kupinsky were established in connection with the commencement of their employment with Mercury. For a further discussion, see "—Employment Agreement with Bill Ballhaus," "—Offer Letter with David Farnsworth" and "—Officer Letter with Stuart Kupinsky." (3)For fiscal 2024, Mr. Kupinsky's target bonus was prorated to reflect the commencement of his employment with Mercury on January 29, 2024. (4)Target bonuses for Messrs. Ratner and Couture were increased from 75% to 100% in connection with their respective promotions from Senior Vice President to Executive Vice President in the first quarter of the fiscal year. (5)The target bonus for Mr. Wells was increased from 100% to 110% in connection with his promotion to Chief Operating Officer on January 22, 2024. For a further discussion, see "—Offer Letter with Charles Wells." (6)Mr. Cambria's target bonus was increased from 90% to 100% during the first quarter to achieve better alignment with target bonus levels of the Company's other Executive Vice Presidents generally. (7)Ms. McCarthy's target bonus was held constant at her fiscal 2023 level.

  50. Performance Goals and Payout Ranges for Fiscal 2024

    Performance Goals and Payout Ranges for Fiscal 2024 The Committee established threshold, target and maximum performance goals and related payout factors for each of our performance measures under the AIP at the beginning of our fiscal year in early August. Our target performance goal for each measure reflects, or is aligned with, our internal annual operating plan. The table below sets forth the specific performance goals and related payout factors established by the Committee under the AIP for fiscal 2024.

  51. Performance Goals and Payout Ranges for Fiscal 2024

    | Performance Goals for Fiscal 2024(1) | | | | | | Achievement Levels | Adjusted EBITDA (50% Weighting) | Adjusted Free Cash Flow (35% Weighting) | Revenue (15% Weighting) | Payout Factor (% of Target Bonus)(2) | | Maximum | ≥ 212.8 | ≥ 114.4 | ≥ 1,150.0 | 150% | | Target | 185.0 | 88.0 | 1,000.0 | 100% | | Threshold | 157.3 | 61.6 | 900.0 | 50% | | Below Threshold | < 157.3 | < 61.6 | < 900.0 | 0% |

  52. Performance Goals and Payout Ranges for Fiscal 2024

    (1)All performance goals are expressed in millions. (2)Payouts for performance between the stated achievement levels are calculated using linear interpolation.

  53. Results and AIP Payouts for Fiscal 2024

    Results and AIP Payouts for Fiscal 2024 For purposes of calculating actual financial results under the AIP relative to threshold, target and maximum performance goals, the Committee excludes the effects of pre-established categories of items that it believes are not reflective of operating performance. For a further discussion of these adjustments, see "Appendix B: Reconciliation of GAAP Measures to Non-GAAP Measures." After giving effect to these adjustments, our performance under the AIP for fiscal 2024 fell below the requirements necessary for our executives to earn a calculated payout under the plan.

  54. Results and AIP Payouts for Fiscal 2024

    | Calculated Results under the AIP for Fiscal 2024 | | | | | | Performance Goal | Performance Achieved(1) | Payout Factor | Weighting | Payout Earned (% of Target Bonus) | | Adjusted EBITDA | 9.4 | 0.0% | 50% | 0.0% | | Adjusted Free Cash Flow | 40.8 | 0.0% | 35% | 0.0% | | Revenue | 835.3 | 0.0% | 15% | 0.0% | | Total | | | | 0.0% |

  55. Results and AIP Payouts for Fiscal 2024

    (1)Performance results are expressed in millions. Following the end of the fiscal year, the Committee engaged in a comprehensive review of the Company's 2024 performance. As described in "Executive Summary – 2024 Performance Focus Areas and Highlights," our financial results for fiscal 2024 were negatively impacted by unexpected challenges that we believe to be transitory – primarily relating to warranty and inventory reserves, changes in contract cost estimates, renegotiation of underperforming contracts and technical and production challenges relating to our common product architecture – which obscured solid performance elsewhere in the business. Under the leadership of Mr. Ballhaus, our refreshed management team responded to these challenges with considerable progress in our priority areas, accompanied by substantially improved financial results for the second half of the year with respect to our adjusted EBITDA, free cash flow and backlog. After considering these meaningful and tangible achievements, the Committee determined to award our executives 40% of their respective target bonuses for fiscal 2024.

  56. Results and AIP Payouts for Fiscal 2024

    | | Fiscal 2024 Target Bonus | Fiscal 2024 AIP Payout (%) | Fiscal 2024 AIP Payout ($) | | William L. Ballhaus ) | 1,425,000 | 40.0% | 570,000 | | David E. Farnsworth | 495,000 | 40.0% | 198,000 | | Stuart H. Kupinsky | 187,500 | 40.0% | 75,000 | | Steven V. Ratner | 437,750 | 40.0% | 175,100 | | Charles R. Wells, IV | 495,000 | 40.0% | 198,000 |

  57. Results and AIP Payouts for Fiscal 2024

    Over the past three years, bonus payouts to our executive officers have averaged 50% of target (40%, 19% and 90%, for fiscal years 2024, 2023 and 2022, respectively).

  58. Long-Term Incentives

    Long-Term Incentives LTI awards are intended to align the interests of the named executive officers with shareholders by linking a meaningful portion of executive pay to shareholder value creation over a multi-year period. LTI awards are also provided to drive the performance of our long-term business strategy, engage and retain our key executives and facilitate ownership of our common stock. The Committee generally grants long-term incentives to our named executive officers in the form of restricted stock awards ("RSAs") and performance stock awards ("PSAs").

  59. Restricted Stock Awards

    Restricted Stock Awards RSAs are awarded to named executive officers under our LTI program to facilitate executive ownership of company stock, to align the interests of our executives with those of our shareholders and to support retention. RSAs vest in equal annual increments over a three-year period (or in the case of recipients who do not serve as executive officers in a permanent capacity, a four-year period), and the ultimate value of these awards to recipients is dependent on our stock price at the time of vesting.

  60. Performance Stock Awards

    Performance Stock Awards PSAs are awarded to named executive officers under our LTI program primarily to motivate multi-year financial achievements that are aligned with shareholder value creation. In response to feedback received through our shareholder engagement program, the Committee instituted the following changes with respect to the performance terms of the PSAs, beginning with awards granted during fiscal 2024: •the PSAs use absolute financial performance measures instead of relative financial performance measures for greater alignment with internal forecasts and better line-of-sight for recipients; •the PSAs use Organic Revenue instead of Total Revenue to more effectively drive intended value-creation behaviors; •the PSAs are subject to a modifier based on relative TSR to further align payouts with shareholder outcomes; •our relative TSR performance will be assessed against the SPADE® Defense Index components instead of our compensation peer group, for better correlation with Mercury's long-term value creation as compared to our sector and enhanced objectivity in selecting benchmark components; and •the maximum payout opportunity under our PSAs was reduced from 300% to 225% of target shares. Award payouts under PSAs granted in fiscal 2024 are tied to Mercury's performance for the three-year fiscal period ending with fiscal 2026. As described above, the performance measures used to calculate award payouts are organic revenue and adjusted EBITDA margin (which is adjusted EBITDA divided by organic revenue), each of which is equally weighted in determining overall performance. The payout factor for each measure ranges from 0% to 200%. The award payout is also subject to a modifier based on Mercury's TSR for the performance period relative to the companies within the SPADE® Defense Index. This modifier can increase or decrease the payout percentage of the award by up to 25 percentage points. Accordingly, if maximum performance is achieved for the two performance measures (200%) and the TSR modifier (+ 25%), the award payout would be 225% of target shares. While the Committee has elected to use organic growth and adjusted EBITDA as a factor in determining performance under both our annual incentive awards and our PSAs, the performance requirements under these awards are designed so that resulting payouts reflect different and important aspects of company performance that are not duplicative. Payouts under the AIP are based on performance for a single fiscal year, while payouts under the PSAs require sustained performance achievements over a three-year fiscal period. The Committee believes it is appropriate to separately reward annual and long-term organic revenue and adjusted EBITDA performance achievements because of the importance of these measures in creating long-term shareholder value.

  61. Annual Long-Term Incentive Awards Granted in Fiscal 2024

    Annual Long-Term Incentive Awards Granted in Fiscal 2024 The Committee typically approves the grant of long-term incentive awards for named executive officers on an annual basis in mid-August. For fiscal 2024, the Committee (and in the case of Mr. Ballhaus, the independent directors on the Board) approved the annual long-term incentive awards below, which were granted on August 17, 2023. In response to feedback received through our shareholder engagement program, the Committee increased the portion of LTI awards granted in the form of PSAs from 50% to 60% in the case of our CEO (as compared to our prior CEO for fiscal 2023), and to 55% in the case of the other named executive officers.

  62. Annual Long-Term Incentive Awards Granted in Fiscal 2024

    | Grant Date Target Value of Annual LTI Awards For Fiscal 2024(1) | | | | | | Restricted Stock Awards(2) ($) | Performance Stock Awards(2) ($) | Total ($) | | Current Employees: | | | | | William L. Ballhaus | $2,350,000 | $3,400,000 | $5,750,000 | | David E. Farnsworth | 675,000 | 825,000 | 1,500,000 | | Stuart H. Kupinsky(3) | — | — | — | | Steven V. Ratner | 315,000 | 385,000 | 700,000 | | Charles R. Wells, IV(4) | 495,000 | 605,000 | 1,100,000 | | Former Employees: | | | | | Christopher C. Cambria | 360,000 | 440,000 | 800,000 | | Allen Couture | 360,000 | 440,000 | 800,000 | | Michelle M. McCarthy(5) | 350,000 | — | 350,000 |

  63. Annual Long-Term Incentive Awards Granted in Fiscal 2024

    (1)The grant date target values reported in the table above differ from the grant date fair values for these awards that are disclosed in the tables underlying the Tabular Executive Compensation Disclosure because they are calculated using different methodologies and assumptions. For a further discussion, see Note 2 to the Summary Compensation Table. (2)Grant date target values were converted into the number of shares underlying each award based on the average closing price of Mercury's common stock during the 30 calendar days prior to the grant date. (3)Mr. Kupinsky was not employed by Mercury at the time the annual LTI awards for fiscal 2024 were granted. However, Mr. Kupinsky received "new-hire" LTI awards in connection with his commencement of employment on January 29, 2024. For a further discussion of these awards, see "—Offer Letter with Stuart Kupinsky." (4)This table does not include promotional LTI awards granted to Mr. Wells in connection with his promotion to Chief Operating Officer on January 22, 2024. For a further discussion, see "—Offer Letter with Charles Wells." (5)Ms. McCarthy was not eligible to receive PSAs because PSAs are granted only to recipients who serve as an executive officer at the time of grant, and in a permanent capacity. This table does not include recognition LTI awards granted to Ms. McCarthy in connection with her additional responsibilities as Interim Chief Financial Officer and Treasurer between February and July of 2023. For a further discussion of these awards, see "—Recognition Awards for Michelle McCarthy."

  64. EMPLOYMENT, SEVERANCE AND CHANGE IN CONTROL ARRANGEMENTS

    EMPLOYMENT, SEVERANCE AND CHANGE IN CONTROL ARRANGEMENTS We have entered into an employment agreement with Mr. Ballhaus, and severance agreements with each of our other executive officers, that provide specified benefits in connection with certain terminations of employment. Our severance benefits are designed to be market competitive and do not include tax gross-ups. Consistent with market practice, these arrangements provide enhanced benefits in the event of a termination in connection with a change in control, which are designed to ensure that our executives entertain proposals that are in the best interests of our shareholders even when it may not be in their own personal best interest, thereby aligning the interests of the executives with those of our shareholders. For a further description of these severance agreements, other than in the case of Messrs. Cambria and Couture, see "Tabular Executive Compensation Disclosure — Potential Payments Upon Change in Control or Termination of Employment." For a description of the separation agreements entered into in connection with the termination of Messrs. Cambria and Couture in fiscal 2024, see "—Separation Agreement with Christopher Cambria" and "—Separation Agreement with Allen Couture."

  65. EMPLOYMENT AGREEMENT WITH WILLIAM BALLHAUS

    EMPLOYMENT AGREEMENT WITH WILLIAM BALLHAUS Following a detailed review of internal and external candidates to serve as our permanent Chief Executive Officer, the Company and Mr. Ballhaus entered into an employment agreement as of August 15, 2023. Under the agreement, Mr. Ballhaus serves as Mercury's President and Chief Executive Officer, and after the 2023 annual shareholders meeting on October 25, 2023, as Chairman of Mercury's Board. The agreement has an initial employment term of four years, with successive 12-month renewals absent notice of non-renewal at least 30 days prior to the end of the applicable employment period. Mr. Ballhaus' employment agreement provided for his annual target compensation for fiscal 2024 to be $8.125 million, consisting of a base salary of $950,000 retroactive to July 1, 2023 (the beginning of Mercury's 2024 fiscal year), a target bonus opportunity under the AIP of 150% of base salary, and awards of $3.4 million in PSAs and $2.35 million in RSAs to be granted on August 17, 2023. In addition to his annual target compensation, the agreement provided for Mr. Ballhaus to receive a new-hire grant of premium-priced stock options on August 17, 2024 in four tranches with the following terms:

  66. EMPLOYMENT AGREEMENT WITH WILLIAM BALLHAUS

    | Premium Priced Stock Option Terms | | | | | | Tranche | Option Shares | Per Share Exercise Price | Cliff Vesting Date | Termination Date | | 1 | 233,500 | $42.00 | 8/17/2026 | 8/17/2027 | | 2 | 233,500 | 43.00 | 8/17/2026 | 8/17/2027 | | 3 | 233,500 | 46.00 | 8/17/2027 | 8/17/2028 | | 4 | 233,500 | 49.00 | 8/17/2027 | 8/17/2028 |

  67. EMPLOYMENT AGREEMENT WITH WILLIAM BALLHAUS

    While these stock options have a grant date fair value of $11.87 million, the terms of the awards feature staggered vesting and exercise periods that require significant shareholder value creation to be both achieved within a relatively short period of time, and sustained over multiple periods, to have any realizable value. The 30-day average closing price of our stock prior to the date on which these sign-on awards were granted was $36.57. In order to recognize the full grant date fair value of these awards, the per-share value of our stock would need to increase to at least $57.71 during each of the two years ended August 17, 2027 and August 17, 2028. The agreement also provides for Mr. Ballhaus to receive a $3 million new-hire matching grant of RSAs on August 17, 2023. These awards will vest on August 17, 2026, contingent upon Mr. Ballhaus' purchase of at least $1.5 million in Mercury stock on the open market between the date of the agreement and December 15, 2023, which he must continue to hold through August 17, 2026. Mr. Ballhaus subsequently purchased $1.5 million in Mercury stock on August 18, 2023, which he has continued to hold through the date of this proxy statement. In addition to the above compensation terms, the agreement also provides for specified benefits in connection with certain terminations of employment. For a further description, see "Tabular Executive Compensation Disclosure — Potential Payments Upon Change in Control or Termination of Employment." The independent directors on the Board approved the terms of Mr. Ballhaus' employment agreement at the recommendation of the Human Capital and Compensation Committee, following consultation with its independent compensation consultant, Meridian Partners, and after gaining further insight from Spencer Stuart, a leading executive search firm engaged by the Board as part of the CEO search process, on pay packages sought by other candidates based on Mercury’s current business profile.

  68. EQUITY GRANT TIMING

    EQUITY GRANT TIMING We do not time the grant of equity awards to precede the release of non-public information. Grants of annual LTI awards to executives and employees are typically made on or about the 15th day of each August. Grants of other equity awards (in connection with new hires, promotions and recognition awards), if any, are typically made on or about the 15th day of each month. Under the terms of the Company's LTI plans, the exercise price of stock options awarded under such plans may not be less than the fair market value of the underlying company stock on the date of grant. The Committee does not grant discounted stock options, and our long-term equity incentive plans do not permit stock option repricing without shareholder approval. When calculating the number of shares to be granted in respect of an LTI award with an intended grant date target value, the Company's practice is to value each share underlying the award to be granted based on the 30-day average closing price of our stock prior to the grant date.

  69. Summary Compensation Table

    Summary Compensation Table The following table provides summary information concerning compensation paid or accrued by us to or on behalf of all individuals serving as our principal executive officer or principal financial officer at any time during fiscal 2024, each of our three other most highly compensated executive officers serving at our 2024 fiscal year end and two other persons who would have been among those three except for the fact that they were no longer serving as executive officers at year end. These officers are collectively referred to as our "named executive officers."

  70. Summary Compensation Table

    | Name and Principal Position | Fiscal Year | Salary | Bonus(1) | Stock Awards(2)(3) | Option Awards(4) | Non-Equity Incentive Plan Compensation | All Other Compensation(5) | Total | | Current Employees: | | | | | | | | | | William L. Ballhaus(6) Chairman, President and Chief Executive Officer | 2024 | $913,462 | $570,000 | $9,036,147 | $11,870,199 | $— | $32,700 | 22,422,508 | | | 2023 | — | — | — | | — | 255,967 | 255,967 | | David E. Farnsworth(7) EVP and Chief Financial Officer | 2024 | 415,385 | 398,000 | 4,674,584 | — | — | 34,846 | 5,522,815 | | Stuart H. Kupinsky(8) EVP, Chief Legal Officer and Corporate Secretary | 2024 | 173,077 | 75,000 | 1,568,385 | — | — | 8,308 | 1,824,770 | | Steven V. Ratner(9)(10) EVP and Chief Human Resources Officer | 2024 | 434,317 | 175,100 | 728,296 | — | — | 33,163 | 1,370,876 | | Charles R. Wells, IV(11) EVP and Chief Operating Officer | 2024 | 434,562 | 198,000 | 1,667,249 | — | — | 32,939 | 2,332,750 | | | 2023 | 415,000 | — | — | | 78,020 | 168,709 | 661,729 | | | 2022 | 263,365 | — | 3,600,657 | | 371,783 | 9,498 | 4,245,303 | | Former Employees: | | | | | | | | | | Christopher C. Cambria(10)(12)(13) Former EVP, General Counsel and Corporate Secretary | 2024 | 287,606 | — | 1,785,271 | — | — | 1,970,278 | 4,043,155 | | Allen Couture(10)(13)(14) Former EVP, Execution Excellence | 2024 | 291,207 | — | 1,288,747 | — | — | 973,664 | 2,553,618 | | Michelle M. McCarthy(15) Former SVP and Chief Accounting Officer and Former Interim Chief Financial Officer and Treasurer | 2024 | 246,435 | — | 556,256 | — | — | 14,045 | 816,736 | | | 2023 | 324,500 | 215,000 | 341,140 | — | 31,960 | 18,365 | 930,965 |

  71. Summary Compensation Table

    (1)The amounts reported in this column for fiscal 2024 represent payouts for 2024 performance and, in the case of Mr. Farnsworth, a sign-on bonus of $200,000 that was paid to him in connection with the commencement of his employment at Mercury and was intended to restore compensation forfeited with a prior employer. For a further discussion, see "Compensation Discussion and Analysis — Elements of Fiscal 2024 Target Pay — Annual Incentives — Actual Results and AIP Payouts for Fiscal 2024" and "Compensation Discussion and Analysis — Offer Letter with David Farnsworth." (2)The amounts reported in this column for fiscal 2024 represent the aggregate grant date fair value of the following stock awards granted to our named executive officers.

  72. Summary Compensation Table

    | Grant Date Fair Value of 2024 Stock Awards(a) | | | | | | | | Name | Annual Stock Awards(b) | New-Hire Stock Awards(c) | Promotional Stock Awards(d) | Recognition Stock Awards(e) | Modifications of Prior Stock Awards(f) | Total Grant Date Fair Value | | Current Employees: | | | | | | | | William L. Ballhaus | $5,993,506 | $3,042,641 | $— | $— | $— | $9,036,147 | | David E. Farnsworth | 1,560,573 | 3,114,011 | — | — | — | 4,674,584 | | Stuart H. Kupinsky | — | 1,568,385 | — | — | — | 1,568,385 | | Steven V. Ratner | 728,295 | — | — | — | — | 728,295 | | Charles R. Wells, IV | 1,144,454 | — | 522,795 | — | —(e) | 1,667,249 | | Former Employees: | | | | | | | | Christopher C. Cambria | 832,317 | — | — | — | 952,954 | 1,785,271 | | Allen Couture | 832,317 | — | — | — | 456,431 | 1,288,748 | | Michelle M. McCarthy | 354,988 | — | — | 201,268 | —(f) | 556,256 |

  73. Summary Compensation Table

    (a)The grant date fair values of stock awards are computed in accordance with Accounting Standards Codification Topic 718 (ASC Topic 718), and do not reflect whether the named executive officer has actually realized a financial benefit from the related awards. For a discussion of the assumptions and methodologies used to calculate the grant date fair value of stock awards in this proxy statement, please refer to Note B of the financial statements in our annual report on Form 10-K for the fiscal year ended June 28, 2024. The grant date fair values of stock awards reported in this Summary Compensation Table and the other tables in the "Tabular Executive Compensation Disclosure" section of this proxy statement are different than the grant date target values for such awards that are reported in the Compensation Discussion and Analysis. The amounts that appear in the Compensation Discussion and Analysis reflect our practice of valuing stock awards based on the average per share closing price of Mercury's common stock over the 30 days prior to the date of grant, while the amounts that appear in the Tabular Executive Compensation Disclosure section are calculated using the closing price of Mercury common stock only on the grant date itself. In addition, the grant date values ascribed to awards of PSAs discussed in the Compensation Discussion and Analysis assume that the target level of performance for these awards will be achieved, while the values reported for these awards in the Tabular Executive Compensation Disclosure section are based on a Monte-Carlo simulation model that may result in a different expectation of performance at the time of grant. For a further discussion, see Note 3 below. (b)Reflects awards of PSAs and RSAs granted on August 17, 2023 as part of the executive's annual compensation for fiscal 2024. For a further discussion, see "Compensation Discussion and Analysis — Long-Term Incentives." (c)In the case of Mr. Ballhaus, reflects a new-hire matching award of RSAs granted on August 17, 2023, the vesting of which is contingent upon Mr. Ballhaus' purchase of at least $1.5 million in Mercury stock on the open market between August 15, 2023 and December 15, 2023, which he must continue to hold through August 17, 2026. Mr. Ballhaus purchased $1.5 million in Mercury stock on August 18, 2023, which he has continued to hold through the date of this proxy statement. For a further discussion, see "Compensation Discussion and Analysis — Employment Agreement with William Ballhaus." For each of Messrs. Farnsworth and Kupinsky, represents awards of PSAs and RSAs intended to restore compensation forfeited with a prior employer. For a further discussion, see "Compensation Discussion and Analysis — Offer Letter with David Farnsworth" and "Compensation Discussion and Analysis — Offer Letter with Stuart Kupinsky." (d)Represents awards of PSAs and RSAs granted to Mr. Wells in connection with his promotion to serve as our Chief Operating Officer. For a further discussion, see "Compensation Discussion and Analysis — Offer Letter with Charles Wells." (e)Represents awards of RSAs granted to Ms. McCarthy in connection with her service as our interim Chief Financial Officer and Treasurer from February 18, 2023 through July 16, 2023. For a further discussion, see Note 15 below. (f)Messrs. Cambria and Couture each entered into separation agreements with the Company providing for the modification of outstanding PSAs and RSAs held by them, pursuant to which they would receive additional vesting in connection with their respective terminations without cause. Consistent with SEC rules, the amounts reported in the Stock Awards column for fiscal 2024 includes the incremental fair values of these modified awards, calculated as of their respective modification dates (the effective dates of their applicable separation agreements with the Company) in accordance with ASC Topic 718. The incremental shares issuable as a result of these modifications appear in the "Grants of Plan-Based Awards" table as new grants awarded as of the applicable modification dates. For a further discussion, see Note 13 below. (3)The fiscal 2024 amounts reported for PSAs in this column reflect the grant date fair value of such awards based on a Monte-Carlo valuation of each award on the date of grant, determined under ASC Topic 718. Excluding the incremental value of modified PSA awards discussed in Note 13 below, the fiscal 2024 amounts included in this column for PSAs are: Mr. Ballhaus – $3,610,103; Mr. Farnsworth – $2,468,656; Mr. Kupinsky – $889,603; Mr. Ratner – $408,802; Mr. Wells – $938,938; Mr. Cambria – $467,203; and Mr. Couture -– $467,203. If these PSAs had been valued as of the grant date assuming that the highest level of performance would be achieved, the amounts included for each named executive officer would have been as follows (reflecting, in each case, the number of shares issuable for maximum performance, multiplied by the per share closing price of our stock on the grant date of these awards as determined under ASC Topic 718): Mr. Ballhaus – $7,574,661; Mr. Farnsworth – $5,179,696; Mr. Kupinsky – $1,866,695; Mr. Ratner – $857,742; Mr. Wells – $1,970,113; Mr. Cambria – $980,277; and Mr. Couture – $980,277. For a further discussion of the grant date fair values attributable under ASC Topic 718 to PSAs issued to our named executive officers on August 17, 2023, see Note 3 to the "Grants of Plan-Based Awards" table. (4)Represents the aggregate grant date fair value of the premium-priced stock options granted to Mr. Ballhaus as a new-hire award. As discussed in "Compensation Discussion and Analysis — Employment Agreement with William Ballhaus," the terms of these awards feature staggered vesting and exercise periods that require significant shareholder value creation to be both achieved within a relatively short period of time, and sustained over multiple periods, to have any realizable value. The grant date fair values of stock options are computed in accordance with ASC Topic 718, and do not reflect whether Mr. Ballhaus has actually realized a financial benefit from the awards. For a discussion of the assumptions and methodologies used to calculate the grant date fair value of stock options in this proxy statement, please refer to Note B of the financial statements in our annual report on Form 10-K for the fiscal year ended June 28, 2024. (5)The table below shows the components of this column for fiscal 2024:

  74. Summary Compensation Table

    | Name | Employer Contributions to 401(k) Plan(a) | Personal Tax and Financial Planning(b) | Relocation Expenses(c) | Severance(d)(e) | Total All Other Compensation | | Current Employees: | | | | | | | William L. Ballhaus | $20,700 | $12,000 | $— | $— | $32,700 | | David E. Farnsworth | 22,846 | 12,000 | — | — | 34,846 | | Stuart Kupinsky | 8,308 | — | — | — | 8,308 | | Steven V. Ratner | 21,163 | 12,000 | — | — | 33,163 | | Charles R. Wells, IV | 20,744 | 12,000 | 195 | —(e) | 32,939 | | Former Employees: | | | | | | | Christopher C. Cambria | 13,038 | 12,000 | — | 1,945,241 | 1,970,279 | | Allen Couture | 11,611 | 12,000 | 40,913 | 909,140 | 973,664 | | Michelle M. McCarthy | 14,045 | — | — | —(f) | 14,045 |

  75. Summary Compensation Table

    (a)Reflects company contributions credited to accounts of our named executive officers under the Mercury Employees Retirement Investment Trust, which is a tax-qualified, 401(k) defined contribution plan. Employer contributions vest in equal annual increments over the two-year period following the participant's date of hire or, if earlier, upon the applicable participant attaining the age of 55. (b)The amounts in this column represent an annual stipend paid in lump sum to secure personal tax and financial planning advisory services. (c)Represents payments or reimbursements of relocation expenses under our employee relocation policy at a tier of benefits generally available to employees serving at or above the job level of Vice President. Consistent with this policy, the amount for relocation expenses for Mr. Couture includes a gross-up payment of $12,008 related to the portion of the relocation expenses treated as taxable compensation, in order to make the relocation tax neutral to the employee. (d)Represents the following amounts in connection with the separation agreement entered into between Mr. Cambria and the Company effective January 25, 2024: (i) cash severance payments of $1,495,883 over the 18-month period following Mr. Cambria's termination; (ii) post-employment healthcare premiums of $21,762 over the 18-month period following Mr. Cambria's termination, allowing him to receive COBRA coverage for this period at active employee rates; (iii) a lump sum payment of $30,000 in lieu of outplacement services; and (iv) a monthly cash retainer of $33,133 payable under a post-employment consulting agreement for the 12 months following his termination under which he would provide legal advice, services and support to the Company. For a further discussion, see "Compensation Discussion and Analysis — Separation Agreement with Christopher Cambria." (e)Represents the following amounts in connection with the separation agreement entered into between Mr. Couture and the Company effective February 16, 2024: (i) cash severance payments of $875,500 over the 12-month period following Mr. Couture's termination; (ii) post-employment healthcare premiums of $3,640 for the two-month period following Mr. Couture's termination, allowing him to receive COBRA coverage for this period at active employee rates (after which he cancelled this coverage); and (iii) a lump sum payment of $30,000 in lieu of outplacement services. For a further discussion, see "Compensation Discussion and Analysis — Separation Agreement with Allen Couture." (6)Mr. Ballhaus has served as a member of Mercury's Board of Directors since June 21, 2022. Although Mr. Ballhaus was appointed as our Interim President and Chief Executive Officer on June 25, 2023, he did not receive any compensation for fiscal 2023 other than in connection with his non-employee director service. Following the completion of a detailed search process, he was named as our President and Chief Executive Officer effective August 15, 2023, and as Chairman of our Board effective October 25, 2023. (7)Mr. Farnsworth joined Mercury on July 17, 2023 as our Chief Financial Officer and Treasurer. He served in this capacity through October 25, 2023, after which he has continued to serve as our Chief Financial Officer. (8)Mr. Kupinsky joined Mercury on January 29, 2024. (9)Mr. Ratner served as Senior Vice President and Chief Human Resources Officer until September 23, 2023, when he was promoted to the office of Executive Vice President and Chief Human Resources Officer. Mr. Ratner was not a named executive officer prior to fiscal 2024. (10)Messrs. Ratner, Cambria and Couture were not named executive officers during for our 2022 and 2023 fiscal years. (11)Mr. Wells served as President of Microelectronics until January 22, 2024, when he was named as our Chief Operating Officer. (12)Mr. Cambria served as our General Counsel and Secretary until his termination by Mercury without cause effective March 1, 2024. For a further discussion, see "Compensation Discussion and Analysis — Separation Agreement with Christopher Cambria." (13)As described in Note 2 above, each of Messrs. Cambria and Couture entered into separation agreements with the Company during fiscal 2024 providing for the modification of outstanding RSAs and PSAs held by them, pursuant to which they would receive additional vesting in connection with their respective terminations without cause. Consistent with SEC rules, the amounts reported in the Stock Awards column for fiscal 2024 include the incremental fair values of these modified awards, calculated as of their modification dates (the effective dates of their respective separation agreements with the Company) in accordance with ASC Topic 718, as follows.

  76. Summary Compensation Table

    | Name | Original Grant Date | Modification Date | Grant Type | Incremental Fair Value of Modified Award | | Christopher C. Cambria | August 16, 2021 | January 25, 2024 | PSAs | $148,558 | | | August 16, 2021 | January 25, 2024 | RSAs | 67,096 | | | February 15, 2022 | January 25, 2024 | PSAs | 353,444 | | | February 15, 2022 | January 25, 2024 | RSAs | 149,900 | | | August 17, 2023 | January 25, 2024 | PSAs | 132,507 | | | August 17, 2023 | January 25, 2024 | RSAs | 101,449 | | | | Total | | $952,954 | | Allen Couture | October 17, 2022 | February 16, 2024 | PSAs | $233,557 | | | October 17, 2022 | February 16, 2024 | RSAs | 222,874 | | | | Total | | $456,431 |

  77. Summary Compensation Table

    As reflected in the above table, the amounts reported in the Stock Awards column for Messrs. Cambria and Couture for fiscal 2024 include $634,509 and $233,557, respectively, attributable to the incremental fair value of PSA awards modified during the fiscal year. The incremental fair values of these awards were calculated based on a Monte-Carlo valuation of such awards on their respective modification dates, determined under ASC Topic 718. If the incremental fair values of these PSAs had been calculated as of the modification date assuming that the highest level of performance would be achieved, the amounts included for each named executive officer would have been as follows (reflecting, in each case, the number of incremental shares issuable for maximum performance, multiplied by the per share closing price of our stock on the modification date): Mr. Cambria – $2,231,064; and Mr. Couture – $891,291. (14)Mr. Couture served as a Senior Vice President, Execution Excellence, until July 26, 2023, when he was promoted to the office of Executive Vice President, Execution Excellence. He was terminated by Mercury without cause effective February 16, 2024. For a further discussion, see "Compensation Discussion and Analysis — Separation Agreement with Allen Couture." (15)Ms. McCarthy was appointed as our Interim Chief Financial Officer and Treasurer effective February 18, 2023 and served in this capacity through July 16, 2023. She also retained her prior title and responsibilities as our Chief Accounting Officer during and after this period until February 12, 2024, and resigned from Mercury effective March 1, 2024. In recognition of her additional service for her interim role, Ms. McCarthy received a cash payment of $215,000 on July 6, 2023, and RSAs on February 15, 2023 and July 17, 2023 with grant date fair values of $212,307 and $201,268, respectively. The cash payment and the RSAs granted on February 15, 2023 appear in the Bonus and Stock Award columns for fiscal 2023. The RSAs granted on July 17, 2023 appear in the Stock Awards column as part of her fiscal 2024 compensation in accordance with SEC rules because they were granted during that fiscal year. For a further discussion of the awards described in this paragraph, see "Compensation Discussion and Analysis — Recognition Awards for Michelle McCarthy." Ms. McCarthy was not a named executive officer during for our 2022 fiscal year.

  78. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table provides information regarding: (1) annual incentive plan awards and (2) PSA, RSA and stock option awards under the Mercury Systems, Inc. Amended and Restated 2018 Stock Incentive Plan. Except as set forth below, plan-based awards granted to the named executive officers in fiscal year 2024 were approved by the Human Capital and Compensation Committee (the "Committee"), or by the independent directors on our Board of Directors (in the case of all awards granted to our Chief Executive Officer) on the dates below.

  79. Grants of Plan-Based Awards

    | Name | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | | | Award | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Current Employees: | | | | | | | | | | | | | | | William L. Ballhaus | AIP(1) | — | — | 712,500 | 1,425,000 | 2,137,500 | | | | | | | | | | PSA(2)(3) | 8/17/23 | 8/11/23 | | | | 23,243 | 92,972 | 209,187 | | | | 3,610,103 | | | RSA(4) | 8/17/23 | 8/11/23 | | | | | | | 64,260 | | | 2,383,403 | | | Matching RSA(5) | 8/17/23 | 8/11/23 | | | | | | | 82,034 | | | 3,042,641 | | | Option(6) | 8/17/23 | 8/11/23 | | | | | | | | 233,500 | 42.00 | 3,007,219 | | | Option(6) | 8/17/23 | 8/11/23 | | | | | | | | 233,500 | 43.00 | 2,939,213 | | | Option(7) | 8/17/23 | 8/11/23 | | | | | | | | 233,500 | 46.00 | 3,048,763 | | | Option(7) | 8/17/23 | 8/11/23 | | | | | | | | 233,500 | 49.00 | 2,875,005 | | David E. Farnsworth | AIP(1) | — | — | 247,500 | 495,000 | 742,500 | | | | | | | | | | PSA(2)(3) | 8/17/23 | 8/10/23 | | | | 5,640 | 22,559 | 50,758 | | | | 875,966 | | | PSA(2)(3)(8) | 8/17/23 | 8/10/23 | | | | 10,254 | 41,017 | 92,288 | | | | 1,592,690 | | | RSA(4) | 8/17/23 | 8/10/23 | | | | | | | 18,458 | | | 684,607 | | | RSA(4)(8) | 8/17/23 | 6/20/23 | | | | | | | 41,017 | | | 1,521,321 | | Stuart H. Kupinsky | AIP(1) | — | — | 93,750 | 187,500 | 281,250 | | | | | | | | | | PSA(2)(3) | 2/15/24 | 1/11/24 | | | | 6,814 | 27,255 | 61,324 | | | | 889,603 | | | RSA(4) | 2/15/24 | 1/11/24 | | | | | | | 22,299 | | | 678,782 | | Steven V. Ratner | AIP(1) | — | — | 218,875 | 437,750 | 656,625 | | | | | | | | | | PSA(2)(3) | 8/17/23 | 8/10/23 | | | | 2,632 | 10,528 | 23,688 | | | | 408,802 | | | RSA(4) | 8/17/23 | 8/10/23 | | | | | | | 8,614 | | | 319,493 | | Charles R. Wells, IV | AIP(1) | — | — | 247,500 | 495,000 | 742,500 | | | | | | | | | | PSA(2)(3) | 8/17/23 | 8/10/23 | | | | 4,136 | 16,544 | 37,224 | | | | 642,404 | | | PSA(2)(3) | 2/15/24 | 1/11/24 | | | | 2,271 | 9,085 | 20,441 | | | | 296,534 | | | RSA(4) | 8/17/23 | 8/10/23 | | | | | | | 13,536 | | | 502,050 | | | RSA(4) | 2/15/24 | 1/11/24 | | | | | | | 7,433 | | | 226,261 | | Former Employees: | | | | | | | | | | | | | | | Christopher C. Cambria | AIP(1) | — | — | 203,984 | 407,968 | 611,952 | | | | | | | | | | PSA(2)(3) | 8/17/23 | 8/10/23 | | | | 3,008 | 12,032 | 27,072 | | | | 467,203 | | | 8/16/21 PSA Modification (9)(10) | 1/25/24 | 1/21/24 | | | | — | 6,510 | 19,530 | | | | 148,558 | | | 2/15/22 PSA Modification (9)(10) | 1/25/24 | 1/21/24 | | | | — | 14,545 | 43,635 | | | | 353,444 | | | 8/17/23 PSA Modification (9)(10) | 1/25/24 | 1/21/24 | | | | 999 | 3,996 | 8,991 | | | | 132,507 | | | RSA(4) | 8/17/23 | 8/10/23 | | | | | | | 9,844 | | | 365,114 | | | 8/16/21 RSA Modification (9)(11) | 1/25/24 | 1/21/24 | | | | | | | 2,170 | | | 67,096 | | | 2/15/22 RSA Modification (9)(11) | 1/25/24 | 1/21/24 | | | | | | | 4,848 | | | 149,900 | | | 8/17/23 RSA Modification (9)(11) | 1/25/24 | 1/21/24 | | | | | | | 3,281 | | | 101,449 |

  80. Grants of Plan-Based Awards

    | Name | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | | | Award | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Allen Couture | AIP(1) | — | — | 218,875 | 437,750 | 656,625 | | | | | | | | | | PSA(2)(3) | 8/17/23 | 8/10/23 | | | | 3,008 | 12,032 | 27,072 | | | | 467,203 | | | 10/17/22 PSA Modification (9)(10) | 1/25/24 | 1/21/24 | | | | — | 10,199 | 22,948 | | | | 233,557 | | | RSA(4) | 8/17/23 | 8/10/23 | | | | | | | 9,844 | | | 365,114 | | | 10/17/22 RSA Modification (9)(11) | 1/25/24 | 1/21/24 | | | | | | | 7,651 | | | 222,874 | | Michelle M. McCarthy | AIP(1) | — | — | 87,550 | 175,100 | 262,650 | | | | | | | | | | RSA(4)(12) | 7/17/23 | 6/16/23 | | | | | | | 5,767 | | | 201,268 | | | RSA(4) | 8/17/23 | 8/10/23 | | | | | | | 9,571 | | | 354,988 |

  81. Grants of Plan-Based Awards

    (1)Represents the cash payout opportunities under our annual incentive plan for fiscal 2024 that would be earned assuming achievement of the specific Threshold, Target or Maximum levels of performance established by the Committee for the performance measures under the plan. For a further discussion of the performance measures and payout opportunities for 2024, see "Compensation Discussion and Analysis – Elements of 2024 Target Pay – Annual Incentives." (2)PSAs granted during fiscal 2024 vest on the third anniversary following their grant date. The final number of shares of our common stock earned in respect of these awards will vary based upon Mercury's organic revenue and adjusted EBITDA margin over the three-year fiscal performance period ending with fiscal year 2026, and is also subject to a modifier based on Mercury's TSR for the performance period relative to the companies within the Spade Defense Index. The amounts disclosed in the Estimated Future Payouts Under Equity Incentive Plan Awards columns for these awards represent the number of shares of our common stock that would be earned assuming achievement of the specific Threshold, Target or Maximum levels of performance established by the Committee in respect of each award, applying the lowest (- 25%), the mid-point (0%) and the highest (+ 25%) TSR modifiers to these achievements, respectively. For a further discussion of these PSAs, see "Compensation Discussion and Analysis – Elements of Fiscal 2024 Target Pay – Long-Term Incentives – Performance Stock Awards." See also "– Potential Payments Upon Change in Control or Termination of Employment" for a discussion concerning the effect of a change in control or termination of employment on outstanding PSAs. (3)The amount disclosed in the Grant Date Fair Value of Stock and Option Awards column for PSAs granted during fiscal 2024 represents the grant date fair value of each award based on a Monte-Carlo valuation on the date of grant, determined under ASC Topic 718. However, with respect to PSAs granted on August 17, 2023, the grant date of these awards for purposes of ASC Topic 718 is considered to be October 25, 2023 because the specific performance goals for the performance measures under the awards were not finalized and approved by the Committee (or in the case of the CEO, by the independent directors on the Board) until this later date. Accordingly, for PSA awards listed as being granted on August 17, 2023 in the Grant Date column, the amounts disclosed in the Grant Date Fair Value of Stock and Option Awards column represent the grant date fair value of each award as of October 25, 2023 based on a Monte-Carlo valuation thereof at that date, determined under ASC Topic 718. (4)Except as set forth in Note 5 below, RSAs vest in equal annual increments over a three-year period (or in the case of recipients who do not serve as executive officers in a permanent capacity, a four-year period) following their grant date. The amount disclosed in the Grant Date Fair Value of Stock and Option Awards column represents the grant date fair value of each award, as calculated in accordance with ASC Topic 718. For a further discussion of our RSAs, see "Compensation Discussion and Analysis – Elements of Fiscal 2024 Target Pay – Long-Term Incentives – Restricted Stock Awards." For a discussion concerning the effect of a change in control or termination of employment on outstanding RSAs, see "– Potential Payments Upon Change in Control or Termination of Employment." (5)Represents a new-hire matching award of RSAs granted to Mr. Ballhaus. These RSAs will vest on August 17, 2026, contingent upon Mr. Ballhaus' purchase of at least $1.5 million in Mercury stock on the open market between the date of the agreement and December 15, 2023, which he must continue to hold through August 17, 2026. Mr. Ballhaus purchased $1.5 million in Mercury stock on August 18, 2023, which he has continued to hold through the date of this proxy statement. The amount disclosed in the Grant Date Fair Value of Stock and Option Awards column represents the grant date fair value of the new-hire matching award, as calculated in accordance with ASC Topic 718. For a further discussion of Mr. Ballhaus' new-hire awards, see "Compensation Discussion and Analysis – Employment Agreement with William Ballhaus." For a discussion concerning the effect of a change in control or termination of employment on these RSAs, see "– Potential Payments Upon Change in Control or Termination of Employment." (6)Represents a new-hire grant of premium priced stock options that vest on August 17, 2026 and expire on August 17, 2027. The amount disclosed in the Grant Date Fair Value of Stock and Option Awards column represents the grant date fair value of each award, as calculated in accordance with ASC Topic 718. For a further discussion of Mr. Ballhaus' new-hire awards, see "Compensation Discussion and Analysis – Employment Agreement with William Ballhaus." For a discussion concerning the effect of a change in control or termination of employment on these stock options, see "– Potential Payments Upon Change in Control or Termination of Employment." (7)Represents a new-hire grant of premium priced stock options that vest on August 17, 2027 and expire on August 17, 2028. The amount disclosed in the Grant Date Fair Value of Stock and Option Awards column represents the grant date fair value of each award, as calculated in accordance with ASC Topic 718. For a further discussion of Mr. Ballhaus' new-hire awards, see "Compensation Discussion and Analysis – Employment Agreement with William Ballhaus." For a discussion concerning the effect of a change in control or termination of employment on these stock options, see "– Potential Payments Upon Change in Control or Termination of Employment." (8)Represents new-hire awards that are subject to enhanced protections in the event of a termination of employment. For a further discussion, see "– Potential Payments Upon Change in Control or Termination of Employment." (9)During fiscal 2024, Messrs. Cambria and Couture each entered into separation agreements with the Company providing for the modification of outstanding PSAs and RSAs held by them, pursuant to which they would receive additional vesting in connection with their respective terminations without cause. Consistent with SEC rules, the incremental shares issuable as a result of these modifications (subject, in the case of PSAs, to the original performance conditions of the applicable awards) appear in this table as new grants awarded as of the applicable modification date (the effective date of the applicable separation agreement). The date that appears in the Award column represents the original grant date of each modified award.

  82. Grants of Plan-Based Awards

    (10)PSAs vest on the third anniversary following their original grant date. The amounts disclosed in the Estimated Future Payouts Under Equity Incentive Plan Awards columns for these awards represent the incremental number of shares of our common stock that would be earned as a result of the modification described in Note 9 above assuming achievement of the original Threshold, Target or Maximum levels of performance established by the Committee in respect of each award. For PSAs that were originally granted prior to fiscal 2024, the final number of shares of our common stock earned in respect of these awards will vary based upon Mercury's results for revenue and EBITDA margin over the three-year fiscal performance period beginning with the fiscal year in which the PSAs were originally granted, relative to the results for these measures reported by the companies included within a peer group established by the Committee at the time of the original grant date. For a discussion of the performance terms of the PSAs originally granted during fiscal 2024, see Note 2 above. The amount disclosed in the Grant Date Fair Value of Stock and Option Awards column represents: (a) for PSAs originally granted prior to fiscal 2024, the incremental fair value of the modified award, calculated in accordance with ASC Topic 718 assuming that the probable outcome as of the modification date of the performance conditions in respect of the award is achieved; and (b) for PSAs originally granted during fiscal 2024, the incremental fair value of the modified award, calculated based on a Monte-Carlo valuation of the award on the modification date in accordance with ASC Topic 718. (11)RSAs vest in equal annual increments over a three-year period following their original grant date. The amount disclosed in the Grant Date Fair Value of Stock and Option Awards column represents the incremental fair value of the modified award on the modification date, as calculated in accordance with ASC Topic 718. For a further discussion of our RSAs, see "Compensation Discussion and Analysis – Elements of Fiscal 2024 Target Pay – Long-Term Incentives – Restricted Stock Awards." (12)These RSAs were granted to Ms. McCarthy in recognition of her additional responsibilities as Interim Chief Financial Officer and Treasurer. For a further discussion of the awards, see "Compensation Discussion and Analysis – Recognition Awards for Michelle McCarthy."

  83. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table provides information with respect to holdings of exercisable and unexercisable stock options, and unvested RSAs and PSAs, held by the named executive officers at June 28, 2024. Ms. McCarthy does not appear in this table because her LTI awards were forfeited in connection with her resignation. In addition, no shares are disclosed in this table with respect to performance stock awards that were scheduled to vest on August 16, 2024 because the threshold performance requirements for these awards (which are based on performance over the three-year fiscal period ending with fiscal 2024) were not achieved.

  84. Outstanding Equity Awards at Fiscal Year-End

    | | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) | | Current Employees: | | | | | | | | | | | William L. Ballhaus | 8/17/23 | — | 233,500 | 42.00 | 8/17/27 | 64,260 | 1,734,377 | 23,243 | 627,329 | | | 8/17/23 | — | 233,500 | 43.00 | 8/17/27 | 82,034 | 2,214,098 | | | | | 8/17/23 | — | 233,500 | 46.00 | 8/17/28 | | | | | | | 8/17/23 | — | 233,500 | 49.00 | 8/17/28 | | | | | | David E. Farnsworth | 8/17/23 | — | — | — | — | 18,458 | 498,181 | 5,640 | 152,224 | | | 8/17/23(5) | — | — | — | — | 41,017 | 1,107,049 | 10,254 | 276,755 | | Stuart H. Kupinsky | 2/15/24 | — | — | — | — | 22,299 | 601,850 | 6,814 | 183,910 | | Steven V. Ratner | 5/16/22 | — | — | — | — | 6,391 | 172,493 | 19,174 | 517,506 | | | 8/17/23 | — | — | — | — | 8,614 | 232,492 | 2,632 | 71,038 | | Charles R. Wells, IV | 11/15/21 | — | — | — | — | 5,131 | 138,486 | 15,393 | 415,457 | | | 2/15/22 | — | — | — | — | 5,030 | 135,760 | 15,091 | 407,306 | | | 8/17/23 | — | — | — | — | 13,536 | 365,337 | 4,136 | 111,631 | | | 2/15/24 | — | — | — | — | 7,433 | 200,617 | 2,271 | 61,294 | | Former Employees: | | | | | | | | | | | Christopher C. Cambria | 2/15/22(6) | — | — | — | — | — | — | 14,545 | 392,570 | | | 8/17/23(6) | — | — | — | — | — | — | 1,540 | 41,565 | | Allen Couture | 10/17/22(6) | — | — | — | — | — | — | 10,199 | 275,271 | | | 8/17/23(6)(7) | — | — | — | — | — | — | — | — |

  85. Outstanding Equity Awards at Fiscal Year-End

    (1)Represents stock options that vest one year prior to the option expiration date reported in the table above. (2)Represents RSAs, which vest in three equal annual increments commencing on the first anniversary following the grant date. For a discussion concerning the effect of a change in control or termination of employment on outstanding RSAs, see "– Potential Payments Upon Change in Control or Termination of Employment." (3)The market value of each award is based on the closing price of our common stock on June 28, 2024 of $26.99, multiplied by the number of shares reported for the award. (4)Represents PSAs, which vest on the three-year anniversary following the grant date, subject to the applicable performance requirements of the awards. Consistent with SEC rules, (a) the number of shares reported for PSA awards granted on November 15, 2021, February 15, 2022 and May 16, 2022 reflects the Target level of performance for these awards because our actual performance through the end of fiscal 2024 was between the Threshold and Target levels of performance under these awards (which is based on the Company's performance over the three fiscal years ending in 2024, as compared to peer group performance that has yet to be fully publicly reported as of the date of this proxy statement and is subject to review and certification by the Committee); (b) the number of shares reported for PSA awards granted on October 17, 2022 reflects the Threshold level of performance for these awards because our actual performance through the end of fiscal 2024 was below the Threshold level of performance under these awards (which is based on the Company's performance over the three fiscal years ending in 2025); and (c) the number of shares reported for PSA awards granted on August 17, 2023 and February 15, 2024 reflect the Threshold level of performance because our actual performance through the end of fiscal 2024 was below the Threshold level of performance under these awards (which is based on performance over the three fiscal years ending in 2026). For a discussion concerning the effect of a change in control or termination of employment on outstanding PSAs, see "– Potential Payments Upon Change in Control or Termination of Employment." (5)Represents new-hire awards that are subject to enhanced protections in the event of a termination of employment. For a further discussion, see "– Potential Payments Upon Change in Control or Termination of Employment." (6)Represents PSAs granted on the date set forth in the Grant Date column, after giving effect to the modification of these awards effective January 25, 2024 and February 16, 2024 under individual separation agreements entered into between the Company and Messrs. Cambria and Couture, respectively, in connection with their terminations without cause. (7)The number of outstanding PSA awards granted on October 17, 2022 is disclosed as zero because the number of shares issuable under these awards based on Threshold performance is zero.

  86. Options Exercised and Stock Vested

    Options Exercised and Stock Vested The following table provides information regarding the vesting of RSAs and PSAs held by our named executive officers during fiscal 2024. No stock options were exercised by any of the named executive officers during fiscal 2024.

  87. Options Exercised and Stock Vested

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting(1) (#) | Value Realized on Vesting(2) ($) | | Current Employees: | | | | William L. Ballhaus | 5,859 | 196,431 | | David E. Farnsworth | — | — | | Stuart H. Kupinsky | — | — | | Steven V. Ratner | 6,391 | 199,591 | | Charles R. Wells, IV | 10,161 | 331,569 | | Former Employees: | | | | Christopher C. Cambria | 26,555 | 850,733 | | Allen Couture | 18,584 | 614,267 | | Michelle M. McCarthy | 6,067 | 202,712 |

  88. Options Exercised and Stock Vested

    (1)The amounts reported in this column represent the gross number of shares of our common stock acquired upon the vesting of RSAs and PSAs without taking into account shares sold on behalf of the recipient to satisfy applicable tax withholding obligations. (2)The amounts reported in this column are calculated based on the closing market price of our common stock on the date of vesting.

  89. Potential Payments upon Change in Control or Termination of Employment

    Potential Payments upon Change in Control or Termination of Employment

  90. CEO Pay Ratio

    CEO Pay Ratio We are providing the following information about the ratio for fiscal 2024 of our CEO's total compensation to the total compensation of our median compensated employee (our "CEO pay ratio") pursuant to the SEC's guidance under Item 402(u) of Regulation S-K. The CEO pay ratio disclosed below represents a reasonable good faith estimate, calculated in a manner consistent with SEC rules, based on our payroll and employment records and the methodology described below. –Our CEO's total annual compensation for fiscal 2024, as reflected in the Summary Compensation Table, is $22,422,508. –Our median employee's total annual compensation for fiscal 2024, calculated using the same methodology we used in the Summary Compensation Table with respect to our named executive officers, is $105,771. –The resulting CEO pay ratio for fiscal 2024 is approximately 212:1. –Our CEO's total annual compensation for fiscal 2024 includes new-hire awards in the form of premium-priced stock options, as well as a new-hire matching grant of RSUs. For a further discussion, see "Compensation Discussion and Analysis – Employment Agreement with William Ballhaus." Excluding these new-hire awards, our CEO's total annual compensation for fiscal 2024 would have been $7,509,668, and the resulting CEO pay ratio for fiscal 2024 would have been approximately 71:1. We identified our median employee using our employee population as of April 1, 2024. As of that date, we employed 2,473 employees. This includes all full-time, part-time, and temporary employees. It does not include independent contractors. To determine our median compensated employee, we chose target cash compensation as our consistently applied compensation measure. We calculated target cash compensation for each employee by aggregating annual base pay and annual target bonus for fiscal 2024, annualizing pay for those employees who commenced work during fiscal 2024 and any employees who were on leave for a portion of fiscal 2024. For hourly employees, we used a reasonable estimate of hours worked to determine annual base pay. We then identified the median employee by ranking all employees according to the target cash compensation we calculated, from lowest to highest. After we identified the median employee based on this ranking, we calculated annual total compensation for that employee using the same methodology we used for our named executive officers in the Summary Compensation Table. The SEC rules for identifying the median compensated employee and calculating the CEO pay ratio based on that employee's annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the CEO pay ratio reported by other companies, including in our own industry, may not be comparable to the CEO pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own CEO pay ratios.

  91. Pay Versus Performance

    Pay Versus Performance As required by Item 402(v) of Regulation S-K (the "PVP Rules"), the following sets forth information regarding an amount referred to as "compensation actually paid" (or "CAP") to our current CEO, William L. Ballhaus, and to our former CEO, Mark Aslett, who collectively served as our principal executive officers (or “PEOs”) during our four most recently completed fiscal years, and to our named executive officers other than the PEOs during this this period (our "Other NEOs") whose compensation is reported either in our Summary Compensation Table in this proxy statement, or in the Summary Compensation Tables that appear in our prior proxy statements that report on executive compensation during the covered period. Our Summary Compensation Tables disclose the total compensation paid to our PEOs and Other NEOs during the reported fiscal years, including the grant date fair value of stock-based awards granted during each fiscal year. As detailed further below, CAP for our PEOs and Other NEOs is calculated by replacing the value of these stock-based awards with an amount that reflects annual changes in the fair value of stock awards granted or held by the covered officer, including for each covered fiscal year: ◦Grants of LTI Awards: the year-end fair value of the awards granted in the covered fiscal year that remain outstanding and unvested as of the end of the year; ◦Vestings of LTI Awards: the change in fair value from the end of the prior fiscal year to the vesting date with respect to any awards granted in prior years that vested in the covered fiscal year; ◦Forfeitures of LTI Awards: the loss in fair value as of the end of the prior fiscal year with respect to any awards granted in prior years that were forfeited in the covered fiscal year; and ◦Prior LTI Awards that Remain Outstanding: the change in fair value from the end of the prior fiscal year to the end of the covered fiscal year with respect to any awards granted in prior years that are outstanding and unvested as of the end of the covered fiscal year. Accordingly, a substantial portion of the amounts reported as CAP for the fiscal years indicated relate to unvested awards that are contingent upon unsatisfied service and performance requirements and that remain subject to stock price fluctuation. For a discussion of the amounts actually realized by our named executive officers upon the vesting of stock awards during fiscal 2024, see "— Options Exercised and Stock Vested." The "Compensation Discussion and Analysis" section of this proxy statement sets forth the factors considered by the Human Capital and Compensation Committee (and with respect to our CEO, the independent directors on the Board) when reviewing and setting the compensation of our named executive officers for fiscal 2024. The amounts reported below as CAP, which are disclosed in accordance with the PVP rules, were not considered as part of this process.

  92. Pay Versus Performance

    | Fiscal Year | | | | | | | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | Net Income(4) | | Adjusted EBITDA(5) | | | | Summary Compensation Table Total for Current PEO(1) | | CAP to Current PEO(1)(2) | | Summary Compensation Table Total for Former PEO(1) | | CAP to Former PEO(1)(2) | | Average Summary Compensation Table Total for Other NEOs(1) | | Average CAP to Other NEOs(1)(2) | | Company Total Shareholder Return(3) | | SPADE® Defense Index Total Shareholder Return(3) | | | | | | | 2024 | | 22,422,508 | | 12,424,701 | | — | | — | | 2,663,671 | | 1,311,059 | | 33.58 | | 186.03 | | (137.60) | | 9.40 | | 2023 | 255,967 | | 92,270 | | 836,533 | | (22,242,077) | | 813,657 | | (1,656,080) | | 43.06 | | 152.99 | | (28.30) | | 132.30 | | | 2022 | — | | — | | 18,859,871 | | 22,797,417 | | 4,959,848 | | 7,195,351 | | 79.73 | | 128.13 | | | 11.30 | | 200.50 | | 2021 | — | | — | | 4,949,119 | | 1,559,821 | | 1,709,461 | | 597,369 | | 82.20 | | 136.60 | | | 62.00 | | 201.90 |

  93. Pay Versus Performance

    (1) The PEOs and Other NEOs whose compensation is reported in the table above include the current and former officers disclosed in the table below.

  94. Pay Versus Performance

    | Covered Officer or Group | Fiscal Year(s) | Name | Title | | Current PEO | 2024-2023 | William L. Ballhaus(a) | Chairman, President and Chief Executive Officer | | Former PEO | 2023-2021 | Mark Aslett | Former President and Chief Executive Officer | | Other NEOs | 2024 | David E. Farnsworth(a) | EVP, Chief Financial Officer | | | 2024 | Stuart H. Kupinsky(a) | EVP, Chief Legal Officer and Corporate Secretary | | | 2024 | Steven V. Ratner | EVP, Chief Human Resources Officer | | | 2024-2022 | Charles R. Wells, IV(a) | EVP, Chief Operating Officer | | | 2024, 2021 | Christopher C. Cambria(a) | Former EVP, General Counsel and Secretary | | | 2024 | Allen Couture(a) | Former EVP, Execution Excellence | | | 2024-2023 | Michele M. McCarthy (a) | Former SVP, Chief Accounting Officer and Former Interim Chief Financial Officer and Treasurer | | | 2023 | Christine Harbison | Former EVP, Chief Growth Officer | | | 2023-2021 | Michael D. Ruppert | Former EVP, Chief Financial Officer and Treasurer | | | 2023-2022 | James M. Stevison | Former EVP, President of Mission Systems | | | 2022 | Thomas Huber | Former EVP, Chief Transformation Officer | | | 2021 | Didier M.C. Thibaud | Former EVP, Chief Operating Officer |

  95. Pay Versus Performance

    (a) For a discussion of changes in employment, roles and responsibilities during fiscal 2024, see the Notes to the Summary Compensation Table. (2) CAP reflects the total compensation reported in the Summary Compensation Table for the applicable fiscal year, as adjusted in accordance with the table below.

  96. Pay Versus Performance

    | Covered Officer or Group | Fiscal Year | Summary Compensation Table Total | Deduction of Stock Awards Included in Summary Compensation Table Total | Year End Fair Value of Outstanding and Unvested Equity Awards Granted in Covered Fiscal Year | Year-Over-Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Year | Fair Value at End of Prior Fiscal Year of Equity Awards Forfeited in Covered Fiscal Year(a) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Same Fiscal Year(b) | Year-over-Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Covered Fiscal Year | Compensation Actually Paid | | Current PEO | 2024 | $22,422,508 | $(20,906,346) | $10,914,774 | $— | $— | $— | $(6,235) | $12,424,701 | | | 2023 | 255,967 | (190,967)(c) | 137,530 | (55,394) | — | — | (54,866) | 92,270 | | Former PEO | 2023 | 836,533 | — | — | — | (21,075,879) | — | (2,002,731) | (22,242,077) | | | 2022 | 18,859,871 | (16,981,781) | 21,054,950 | 671,932 | — | — | (807,555) | 22,797,417 | | | 2021 | 4,949,119 | (3,732,297) | 4,049,633 | (3,677,514) | — | — | (29,120) | 1,559,821 | | Other NEOs (group average) | 2024 | 2,663,671 | (1,776,823) | 892,415 | (319,226) | (170,680) | 41,529 | (19,827) | 1,311,059 | | | 2023 | 813,657 | (361,958) | 277,383 | (875,095) | (1,313,428) | — | (196,639) | (1,656,080) | | | 2022 | 4,959,848 | (2,745,023) | 4,992,208 | 54,101 | — | — | (65,783) | 7,195,351 | | | 2021 | 1,709,461 | (1,078,205) | 665,928 | (693,131) | — | — | (6,684) | 597,369 |

  97. Pay Versus Performance

    (a) Amounts reported in this column for fiscal 2024 represent the fair value of unvested LTI awards forfeited by virtue of the terminations of Messrs. Cambria and Couture without cause effective March 1, 2024 and February 16, 2024, respectively, and the resignation of Ms. McCarthy effective March 1, 2024. (b) Amount reported in this column for fiscal 2024 represents the fair value of shares underlying LTI awards that were granted on August 17, 2023 and vested in connection with the termination of Messrs. Cambria and Couture by the Company without cause pursuant to separation agreements effective on January 25, 2024 and February 16, 2024, respectively, including as a result of a modification to the awards made pursuant to Mr. Cambria's separation agreement. For a discussion concerning the effect of termination of employment without cause on outstanding LTI awards, see "– Potential Payments Upon Change in Control or Termination of Employment." For a further discussion concerning the modifications made to Mr. Cambria's outstanding LTI awards in connection with his termination without cause, see "Compensation Discussion and Analysis — Separation Agreement with Christopher Cambria." (3) Total shareholder returns ("TSRs") are based on an initial $100 investment, measured on a cumulative basis from the market closing price on July 2, 2020 through the market close on the last trading day of each covered fiscal year in each of Mercury common stock and the SPADE® Defense Index. We use the SPADE® Defense Index both as a performance modifier under our PSAs granted in fiscal 2024 and in the stock performance graph required by Item 201(e) of Regulation S-K included in our annual report to shareholders. (4) Amounts reported in millions. (5) We have designated adjusted EBITDA as our Company-Selected Measure under the PVP Rules, which is reported in this table in millions. Adjusted EBITDA is the principal financial measure used under our AIP to align annual payouts with performance. Adjusted EBITDA is a non-GAAP financial measure that excludes the effects of pre-established categories of items that the Human Capital and Compensation Committee believes are not reflective of operating performance. These categories are identical to the adjustments that we use for the external reporting of our adjusted EBITDA results in our periodic earnings releases. For a further discussion, see "Compensation Discussion and Analysis—Elements of Target Pay—Annual Incentives" and "Appendix B: Reconciliation of GAAP Measures to Non-GAAP Measures." The Committee does not consider the calculation of CAP as part of its executive compensation determinations; accordingly, the Committee does not actually use any financial performance measure specifically to link CAP to Company performance.