Item 5. Other Information
ITEM 5. OTHER INFORMATION
10b5-1 Plans
During the first quarter ended September 26, 2025, none of the Company’s directors or executive officers adopted , modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement as each term is defined in Section 408(a) of Regulation S-K.
Amendment No. 1 to CEO Employment Agreement
On October 31, 2025, the independent directors on the Board of Directors, upon the recommendation of the Human Capital and Compensation Committee, approved Amendment No. 1 to the Employment Agreement for our Chief Executive Officer. The amendment was approved following a periodic review of the Company's executive severance arrangements performed by the Human Capital and Compensation Committee in consultation with its independent compensation consultant. The amendment provides for a best net benefit limitation provision for purposes of Section 280G of the Internal Revenue Code consistent with the terms of Company’s prior and updated forms of Change of Control Severance Agreement for Executive Vice Presidents. Under this provision, any executive payments or benefits to be provided to our CEO upon a qualified termination in connection with a change in control (“CIC”) would be reduced to the extent necessary to avoid imposition of a CIC excise tax if doing so would maximize our CEO’s net after-tax income. The CEO’s employment agreement is otherwise unchanged by the amendment.
The foregoing description of the Amendment No. 1 to the Employment Agreement for the CEO does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment No. 1, which is filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q and is incorporated by reference into this Item 5.
Form of Change in Control Agreement and Severance Benefits Agreement for Non-CEO Executives
On October 31, 2025, the Human Capital and Compensation Committee of the Board of Directors approved updated forms of our Change in Control Severance Agreement and our Severance Benefits Agreement for the Company’s Executive Vice Presidents. The updated forms were approved following a periodic review of the Company's executive severance arrangements performed by the Human Capital and Compensation Committee in consultation with its independent compensation consultant. For the form of Change in Control Severance Agreement for Executive Vice Presidents, the cash severance provision has been updated to 2.0x annual target cash compensation from the 1.5x in the prior form of such agreement and provides that all the benefits in the agreement are contingent upon a CIC actually occurring within 18 months prior to or three months after the executive’s termination. The updated Change in Control Severance Agreement also narrows the circumstances under which a qualifying termination giving rise to severance benefits may be deemed to have occurred, and eliminates payments to the executive of compensation during the pendency of, and reimbursement of legal fees in connection
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with, good faith disputes that may arise under the agreement. For the form of Severance Benefits Agreement for Executive Vice Presidents, which apply to terminations outside the context of a CIC, the updated form provides for a prorated in-flight bonus for the year of termination tied to full-year actual performance compared with the prior form which did not provide such a bonus.
The foregoing description of the forms of Change in Control Agreement and Severance Benefits Agreement for Executive Vice Presidents does not purport to be complete and is qualified in its entirety by reference to the full text of such forms which are filed as Exhibits 10.2. and 10.3, respectively, to this Quarterly Report on Form 10-Q and are incorporated by reference into this Item 5.
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ITEM 6. EXHIBITS
The following Exhibits are filed or furnished, as applicable, herewith:
10.1
Amendment No. 7 to the Credit Agreement, dated November 4, 2025, among the Company, the Guarantors party thereto, the Lenders party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (incorporated herein by reference to Exhibit No. 10.1 to the Company’s Current Report on Form 8-K filed on November 4, 2025)
10.2*
Amendment No. 1 to the Employment Agreement, dated October 31, 2025, between the Company and William L. Ballhaus
10.3*
Form of Change in Control Severance Agreement between the Company and Non-CEO Executives
10.4*
Form of Severance Benefits Agreement between the Company and Non-CEO Executives
10.5*
Compensation Policy for Non-Employee Directors
10.6*
Form of Restricted Stock Unit Agreement under the 2025 Long Term Incentive Plan (Non-Employee Directors)
10.7*
Form of Deferred Stock Unit Agreement under the 2025 Long Term Incentive Plan
10.8*
Form of Restricted Stock Unit Agreement under the 2025 Long Term Incentive Agreement (Employees)
10.9*
Form of Deferred Stock Unit Agreement under the 2025 Long term Incentive Plan (DCMP)
31.1
Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+
Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS
eXtensible Business Reporting Language (XBRL) Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
* Identifies a management contract or compensatory plan in which an executive officer or director of the Company participates.
+ Furnished herewith. This certificate shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
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MERCURY SYSTEMS, INC.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Andover, Massachusetts, on November 4, 2025.
MERCURY SYSTEMS, INC.
By: / S / DAVID E. FARNSWORTH
David E. Farnsworth
Executive Vice President,
Chief Financial Officer
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