MERCURY SYSTEMS INC 10-K

ITEM 9A. CONTROLS AND PROCEDURES (a) E FFECTIVENESS OF D ISCLOSURE C ONTROLS AND P ROCEDURES We conducted an evaluation as of July 3, 2026 under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial 78 Table of Contents officer, respectively), and concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended, the “Exchange Act”) were effective as of July 3, 2026 and designed to ensure that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that it is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. (b) I NHERENT L IMITATIONS ON E FFECTIVENESS OF C ONTROLS Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that our internal control over financial reporting or our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. (c) M ANAGEMENT ’ S A NNUAL R EPORT ON I NTERNAL C ONTROL O VER F INANCIAL R EPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision of the Chief Executive Officer and Chief Financial Officer, management conducted an assessment of the effectiveness of our internal control over financial reporting as of July 3, 2026 based on the framework in Internal Control - Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that our internal control over financial reporting was effective as of July 3, 2026. The effectiveness of our internal control over financial reporting as of July 3, 2026 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its report. (d) C HANGES IN I NTERNAL C ONTROL O VER F INANCIAL R EPORTING There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of fiscal 2026 identified in connection with our Chief Executive Officer’s and Chief Financial Officer’s evaluation that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION Insider Trading Arrangements During the fourth quarter ended July 3, 2026, other than the arrangements discussed in Part II - Item 5 Insider Trading Arrangements, 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. Amendments to Performance Stock Awards Granted During Fiscal 2024 Effective August 14, 2026, the Human Capital and Compensation Committee of the Board of Directors (the “Compensation Committee”) approved amendments to performance stock awards granted during fiscal 2024 (the “2024 PSAs”) to each of our named executive officers other than our Chief Executive Officer, as further described below. Prior to the effectiveness of the amendments, the 2024 PSAs provided for stock-based payouts of up to 200% of each recipient’s target shares based on the Company’s adjusted EBITDA margin and organic revenue performance for fiscal 2024-2026, subject to a modifier that could adjust award payouts upward or downward by up to 25 percentage points based on the Company’s total shareholder return relative to other Spade® Defense Index companies (“Relative TSR”) for fiscal 2024-2026. The specific details of these performance and payout criteria are set forth below. Financial Performance Measures Market Performance Modifier Adjusted EBITDA Margin (50% Weighting) Organic Revenue (50% Weighting) Payout Factor (% of Target Shares) Relative TSR Percentile Ranking Adjustment to Payout Factor Maximum ≥ 21.7% ≥ $3,467.2 200% ≥ 75 th Percentile Add 25% Target 19.7% 3152.0 100% 50-55 th Percentile None Threshold 17.7% 2836.8 50% 25 th Percentile Subtract 25% Below Threshold < 17.7% < 2,836.8 0% < 25 th Percentile Subtract 25% 79 Table of Contents For the fiscal 2024-2026 performance period, the Company’s adjusted EBITDA margin and organic revenue were 10.2% and $2,731, respectively, each of which was insufficient to earn any payout under the 2024 PSAs. However, during this same performance period the Company achieved a strong shareholder return of 265%, and a Relative TSR at the 74.4 th percentile of Spade Defense Index companies, resulting in award recipients earning a calculated payout of 24.4% of their target shares. Following the end of fiscal 2026, the Compensation Committee engaged in a comprehensive review of the Company’s fiscal 2024-2026 performance. As noted in our 2024 proxy statement, the Company’s 2024 financial performance was negatively impacted by transitory challenges – 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 processing architecture – which were not anticipated at the time the performance targets for the 2024 PSAs were established, obscuring solid performance elsewhere in the business. Furthermore, these challenges emerged at a time that our leadership team was newly reconstituted, including our Chief Executive Officer, Chief Financial Officer and Chief Legal Officer, each of whom was appointed to their respective roles during or immediately prior to the start of fiscal 2024. Nonetheless, the Company responded to these challenges with considerable progress in our priority areas during 2024, accompanied by substantially improved financial results in the second half of fiscal 2024 and continuing with strong performance through fiscal 2025 and 2026. The Committee further instructed its independent compensation consultant to prepare a review of the alignment of pay with performance for each of our named executive officers during the fiscal 2024-2026 time period, including alternatives for addressing dislocations in a manner that maintains our desired pay-for-performance philosophy consistent with the continuing leadership team’s financial and shareholder return achievements. Following a review of this analysis and of the Company’s performance as described above, the Committee determined to amend the 2024 PSAs awarded to our Chief Financial Officer, Chief Legal Officer and Chief Human Resources Officer to provide for an additional payout of 50% of their respective target shares (representing the Threshold payout under the 2024 PSAs based on financial performance measures), contingent on their continued employment for an additional one-year vesting period, with each of the recipients consenting to the amendment of their respective 2024 PSA award agreement. The Committee further determined that it would not amend the 2024 PSAs awarded to our Chief Executive Officer, who agreed with the Committee’s determination. No other Company employees held 2024 PSAs at the time of the Committee’s determinations. The specific details of the amended payouts under the 2024 PSAs are set forth below. Grant Date Target Shares Granted Calculated Payout Calculated Shares Earned Vesting Date for Calculated Shares Additional Payout Additional Shares Earned Vesting Date for Additional Shares David E. Farnsworth , Chief Financial Officer 8/15/2023 63,576 (1) 24.4 % 15,512 8/15/2026 50.0 % 31,789 8/15/2027 Stuart H. Kupinsky , Chief Legal Officer 2/15/2024 27,255 24.4 % 6,650 2/15/2027 50.0 % 13,628 2/15/2028 Steven V. Ratner , Chief Human Resources Officer 8/15/2023 10,528 24.4 % 2,569 8/15/2026 50.0 % 5,264 8/15/2027 (1) Reflects two separate awards made to Mr. Farnsworth on the same date, under which he was granted 41,017 target shares in connection with his hire and 22,559 target shares as part of his annual compensation for fiscal year 2024. The foregoing description of the amendments to the 2024 PSAs does not purport to be complete and is qualified in its entirety by reference to the full text of the form of amendment filed as Exhibit 10.16 to this Annual Report on Form 10-K and is incorporated by reference into this Item 9B. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 80 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this item is incorporated herein by reference to our Proxy Statement for our 2026 Annual Meeting of Shareholders (the “Shareholders Meeting”), except that information required by this item concerning our executive officers appears in Part I, Item 4.1. of this Annual Report on Form 10-K. ITEM 11. EXECUTIVE COMPENSATION The information required by this item is incorporated by reference to our Proxy Statement for the Shareholders Meeting. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item is incorporated herein by reference to our Proxy Statement for the Shareholders Meeting. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item is incorporated herein by reference to our Proxy Statement for the Shareholders Meeting. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Our independent registered public accounting firm is KPMG LLP , Boston, MA , Auditor Firm ID: 185 The information required by this item is incorporated herein by reference to our Proxy Statement for the Shareholders Meeting. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS The financial statements, schedule, and exhibits listed below are included in or incorporated by reference as part of this report: 1. Financial statements: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of July 3, 2026 and June 27, 2025 Consolidated Statements of Operations and Comprehensive Loss for the fiscal years ended July 3, 2026, June 27, 2025, and June 28, 2024 Consolidated Statements of Shareholders’ Equity for the fiscal years ended July 3, 2026, June 27, 2025, and June 28, 2024 Consolidated Statements of Cash Flows for the years ended July 3, 2026, June 27, 2025, and June 28, 2024 Notes to Consolidated Financial Statements 2. Financial Statement Schedule: II. Valuation and Qualifying Accounts ITEM 16. FORM 10-K SUMMARY None. 81 Table of Contents MERCURY SYSTEMS, INC. SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS FOR FISCAL YEARS ENDED JULY 3, 2026, JUNE 27, 2025, and JUNE 28, 2024 (In thousands) Accounts receivable, Unbilled receivables and costs in excess of billings, allowance for credit losses BALANCE AT BEGINNING OF PERIOD ADDITIONS REVERSALS WRITE- OFFS BALANCE AT END OF PERIOD 2026 $ 7,078 $ 209 $ 99 $ 1,715 $ 5,473 2025 $ 8,360 $ 982 $ 106 $ 2,158 $ 7,078 2024 $ 1,335 $ 15,439 $ 138 $ 8,276 $ 8,360 Deferred Tax Asset Valuation Allowance BALANCE AT BEGINNING OF PERIOD CHARGED TO COSTS & EXPENSES CHARGED TO OTHER ACCOUNTS DEDUCTIONS BALANCE AT END OF PERIOD 2026 $ 17,416 $ 2,544 $ (548) $ — $ 19,412 2025 $ 17,575 $ (159) $ — $ — $ 17,416 2024 $ 14,785 $ 2,394 $ 396 $ — $ 17,575 3. Exhibits: Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index on page 84, which is incorporated herein by reference. 82 Table of Contents Signatures Pursuant to the requirements of Section 13 or 15(d) 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 August 18, 2026. MERCURY SYSTEMS, INC. By /S/ DAVID E. FARNSWORTH David E. Farnsworth EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER [PRINCIPAL FINANCIAL OFFICER] Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title(s) Date /S/ WILLIAM L. BALLHAUS President, Chief Executive Officer, and Chairman of the Board of Directors (principal executive officer) August 18, 2026 William L. Ballhaus /S/ DAVID E. FARNSWORTH Executive Vice President, Chief Financial Officer (principal financial officer) August 18, 2026 David E. Farnsworth /S/ DOUGLAS D. MUNRO Senior Vice President, Chief Accounting Officer (principal accounting officer) August 18, 2026 Douglas D. Munro /S/ ORLANDO P. CARVALHO Director August 18, 2026 Orlando P. Carvalho /S/ GERARD J. DEMURO Director August 18, 2026 Gerard J. DeMuro /S/ LISA S. DISBROW Director August 18, 2026 Lisa S. Disbrow /S/ JEAN BUA Director August 18, 2026 Jean Bua /S/ HOWARD L. LANCE Director August 18, 2026 Howard L. Lance /S/ BARRY R. NEARHOS Director August 18, 2026 Barry R. Nearhos /S/ SCOTT OSTFELD Director August 18, 2026 Scott Ostfeld /S/ DEBORA A. PLUNKETT Director August 18, 2026 Debora A. Plunkett 83 Table of Contents EXHIBIT INDEX ITEM NO. DESCRIPTION OF EXHIBIT 3.1.1 Articles of Organization (incorporated herein by reference to Exhibit 3.1.1 of the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2009) 3.1.2 Articles of Amendment (incorporated herein by reference to Exhibit 3.1.2 of the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2010) 3.1.3 Articles of Amendment (incorporated herein by reference to Exhibit 1 of the Company’s registration statement on Form 8-A filed on December 15, 2005) 3.1.4 Articles of Amendment (incorporated herein by reference to Exhibit 3.1 of the Company's current report on Form 8-K filed on November 13, 2012) 3.1.5 Articles of Amendment (incorporated herein by reference to Exhibit 3.1 of the Company's current report on Form 8-K filed on June 30, 2015) 3.1.6 Articles of Amendment (incorporated herein by reference to Exhibit 3.1 of the Company’s current report on Form 8-K filed on December 29, 2021) 3.2 Bylaws, amended and restated, effective as of October 26, 2022 (incorporated herein by reference to Exhibit 3.1 of the Company’s current report on Form 8-K filed on October 28, 2022 ) 4.1 Form of Stock Certificate (incorporated herein by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-1/A filed on January 7, 1998) 4.2 Description of Registrant's Securities (incorporated herein by reference to Exhibit 4.2 of the Company’s annual report on Form 10-K for the fiscal year ended July 3, 2020) 10.1* 2024 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s Registration Statement on Form S-8 filed May 8, 2024) 10.2* Form of Indemnification Agreement between the Company and each of its current directors and officers (incorporated herein by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q for the quarter ended December 26, 2025) 10.3* 2018 Stock Incentive Plan, as amended and restated (incorporated herein by reference to Exhibit 10.3 of the Company's annual report on Form 10-K for the fiscal year end June 28, 2024) 10.4.1* Form of Stock Option Agreement under the 2018 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2019) 10.4.2* Form of Restricted Stock Award Agreement under the 2018 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.2 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2019) 10.4.3* Form of Deferred Stock Award Agreement under the 2018 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.3 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2019) 10.4.4* Form of Performance-Based Restricted Stock Award Agreement under the 2018 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.5 of the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2019) 10.5* 2025 Long Term Incentive Plan (incorporated herein by reference to Appendix A of the Company’s proxy statement filed on September 10, 2025) 10.6.1* Form of Restricted Stock Unit Agreement under the 2025 Long Term Incentive Plan (Non-Employee Directors) (incorporated herein by reference to Exhibit 10.6 of the Company’s quarterly report on Form 10-Q for the quarter ended September 26, 2025) 10.6.2* Form of Deferred Stock Unit Agreement under the 2025 Long Term Incentive Plan (incorporated herein by reference to Exhibit 10.7 of the Company’s quarterly report on Form 10-Q for the quarter ended September 26, 2025) 10.6.3* Form of Restricted Stock Unit Agreement under the 2025 Long Term Incentive Agreement (Employees) (incorporated herein by reference to Exhibit 10.8 of the Company’s quarterly report on Form 10-Q for the quarter ended September 26, 2025) 10.6.4* Form of Deferred Stock Unit Agreement under the 2025 Long term Incentive Plan (DCMP) (incorporated herein by reference to Exhibit 10.9 of the Company’s quarterly report on Form 10-Q for the quarter ended September 26, 2025) 10.7* Form of Change in Control Severance Agreement between the Company and Non-CEO Executives (incorporated herein by reference to Exhibit 10.3 of the Company’s quarterly report on Form 10-Q for the quarter ended September 26, 2025) 10.8* Form of Severance Benefits Agreement between the Company and Non-CEO Executives (incorporated herein by reference to Exhibit 10.4 of the Company’s quarterly report on Form 10-Q for the quarter ended September 26, 2025) 84 Table of Contents ITEM NO. DESCRIPTION OF EXHIBIT 10.9* Compensation Policy for Non-Employee Directors (incorporated herein by reference to Exhibit 10.5 of the Company's quarterly report on Form 10-Q for the quarter ended September 26, 2025) 10.10.1 Credit Agreement, dated May 2, 2016, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1 of the Company's current report on Form 8-K filed on May 2, 2016) 10.10.2 Amendment No. 1 to Credit Agreement, dated June 27, 2017, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1 of the Company's current report on Form 8-K filed on June 27, 2017) 10.10.3 Amendment No. 3 to Credit Agreement, dated September 28, 2018, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed on October 1, 2018) 10.10.4 Amendment No. 4 to Credit Agreement, dated February 28, 2022, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed on February 28, 2022) 10.10.5 Amendment No. 5 to Credit Agreement, dated November 7, 2023, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed on November 7, 2023) 10.10.6 Amendment No. 6 to Credit Agreement, dated August 13, 2024, among the Company, the Guarantors party thereto, the Lenders party thereto and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed August 13, 2024) 10.10.7 Amendment No. 7 to 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 10.1 to the Company’s current report on Form 8-K filed on November 4, 2025) 10.11.1* Employment Agreement, dated August 15, 2023, between the Company and William L. Ballhaus (incorporated herein by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed on August 15, 2023) 10.11.2 Amendment No. 1 to the Employment Agreement, dated October 31, 2025, between the Company and William L. Ballhaus (incorporated herein by reference to Exhibit 10.2 of the Company’s quarterly report on Form 10-Q for the quarter ended September 26, 2025) 10.12* Letter Agreement, dated June 20, 2023, between the Company and David E. Farnsworth (incorporated herein by reference to Exhibit 10.1 of the Company’s current report on Form 8-K filed on June 29, 2023) 10.13* Deferred Compensation Matching Plan (incorporated herein by reference to Exhibit 99.1 of the Company’s Registration Statement on Form S-8 filed on November 9, 2023) 10.14* Deferred Compensation Matching Plan Adoption Agreement (incorporated herein by reference to Exhibit 99.2 of the Company’s Registration Statement on Form S-8 filed on November 9, 2023) 10.15* Restricted Stock Unit Agreement, dated April 15, 2025, between the Company and David E. Farnsworth (incorporated by reference to Exhibit 10.13 of the Company’s annual report on Form 10-K for the fiscal year ended June 27, 2025) 10.16*† Form of Amended Fiscal Year 2024 Performance Stock Award Agreement, dated August 14, 2026, between the Company and each of David E. Farnsworth, Stuart H. Kupinsky, and Steve V. Ratner 19.1† Insider Trading Policy 21.1† Subsidiaries of the Company 23.1† Consent of KPMG LLP 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 97.1* Compensation Recoupment Policy (incorporated herein by reference to Exhibit 10.3 of the Company's annual report on Form 10-K for the fiscal year end June 28, 2024) 85 Table of Contents ITEM NO. DESCRIPTION OF EXHIBIT 101† Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheet, (ii) Consolidated Statement of Operations, (iii) Consolidated Statement of Shareholders’ Equity, (iv) Consolidated Statement of Cash Flows, and (v) Notes to Consolidated Financial Statements 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 Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Identifies a management contract or compensatory plan or arrangement in which an executive officer or director of the Company participates. † Filed with this Form 10-K. + Furnished herewith. This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, 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 or the Securities Exchange Act of 1934. 86