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Stock-Based Compensation | 3 Months Ended
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Sep. 26, 2025
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation S TOCK I NCENTIVE P LANS At September 26, 2025, the aggregate number of shares authorized for issuance under the Company’s Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”) is 7,862 shares, including 3,000 shares approved by the Company's shareholders on October 28, 2020 and 2,000 shares approved for future grant under the 2018 Plan by the Company's shareholders on October 26, 2022. On October 25, 2023, the Company's shareholders approved an additional 3,450 shares to be added to the 2018 plan. The 2018 Plan shares available for issuance also include 948 shares rolled into the 2018 Plan that were available for future grant under the Company’s 2005 Stock Incentive Plan, as amended and restated (the “2005 Plan”). The 2018 Plan replaced the 2005 Plan. The 2018 Plan provides for the grant of non-qualified and incentive stock options, restricted stock, stock appreciation rights and deferred stock awards to employees and non-employees. Stock options must be granted with an exercise price of not less than 100% of the fair value of the Company’s common stock on the date of grant and the options generally have a term of seven years. There were 2,774 available shares for future grant under the 2018 Plan at September 26, 2025. As part of the Company's ongoing annual equity grant program for employees, the Company grants performance-based restricted stock awards to certain executives and employees pursuant to the 2018 Plan. Performance awards vest based on the requisite service period subject to the achievement of specific financial performance targets. Based on the performance targets, some of these awards require graded vesting which results in more rapid expense recognition compared to traditional time-based vesting over the same vesting period. The Company monitors the probability of achieving the performance targets on a quarterly basis and may adjust periodic stock compensation expense accordingly based on its determination of the likelihood for reaching targets. The performance targets generally include the achievement of financial performance goals, either on an absolute basis or relative to a peer group of companies. Payouts under performance-based restricted stock awards may also be subject to modification based on Mercury’s total shareholder return relative to the component companies within the Spade Defense Index. E MPLOYEE S TOCK P URCHASE P LAN The Company’s 1997 Employee Stock Purchase Plan, as amended and restated (the “1997 ESPP”) was terminated in accordance with its terms effective May 14, 2024. Under the 1997 ESPP, rights were granted to purchase shares of common stock at 85% of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period. The 1997 ESPP permitted employees to purchase common stock through payroll deductions, which may not have exceeded 10% of an employee’s compensation as defined in the 1997 ESPP. There were no shares issued under the 1997 ESPP during the first quarters ended September 26, 2025 and September 27, 2024, respectively. The Company adopted a new employee stock purchase plan (the “2024 ESPP”) in April 2024. The Company's shareholders approved the plan at the Company’s 2024 annual meeting of shareholders, held on October 23, 2024. The number of shares authorized for issuance under the 2024 ESPP is 1,000 shares. Under the 2024 ESPP, rights are granted to purchase shares of common stock at 85% of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period. The 2024 ESPP permits employees to purchase common stock through payroll deductions, which may not exceed 10% of an employee’s compensation as defined in the 2024 ESPP. There were no shares issued under the 2024 ESPP during the first quarters ended September 26, 2025 and September 27, 2024, respectively. Shares available for future purchase under the 2024 ESPP totaled 870 at September 26, 2025. S TOCK O PTION A ND A WARD A CTIVITY The following table summarizes activity with respect to Company-issued stock options since June 27, 2025:
|  | Options Outstanding |  |
|  | Number of Shares |  | Weighted Average Grant Date Fair Value |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value as of September 26, 2025
Outstanding at June 27, 2025 |  | 934 |  |  | $ | 12.71 |  |  | $ | 45.00 |  |  |  |  | — |
Granted |  | — |  |  |  |  | — |  |  |  |  |
Exercised |  | — |  |  |  |  | — |  |  |  |  |
Canceled |  | — |  |  |  |  | — |  |  |  |  |
Outstanding at September 26, 2025 |  | 934 |  |  | 12.71 |  |  | 45.00 |  |  | 2.53 years |  | — |
Exercisable at September 26, 2025 |  | — |  |  | $ | — |  |  | $ | — |  |  | — |  |  | — |
There were no options vested or exercised during the first quarter ended September 26, 2025. Non-vested stock options are subject to the risk of forfeiture until the fulfillment of specified conditions. As of September 26, 2025, there was $4,943 of total unrecognized compensation cost related to non-vested options granted that is expected to be recognized over a weighted-average period of 1.53 years from September 26, 2025. The following table summarizes the status of the Company’s non-vested restricted stock awards and deferred stock awards since June 27, 2025:
|  | Non-vested Restricted Stock Awards
|  | Number of Shares |  | Weighted Average Grant Date Fair Value
Outstanding at June 27, 2025 |  | 1,742 |  |  | $ | 40.37 |
Granted |  | 543 |  |  | 66.68 |
Vested |  | (345) |  |  | 39.91 |
Forfeited |  | (45) |  |  | 42.58 |
Outstanding at September 26, 2025 |  | 1,895 |  |  | $ | 48.00 |
S TOCK-B ASED C OMPENSATION E XPENSE The Company recognizes expense for its share-based payment plans in the Consolidated Statements of Operations and Comprehensive Loss in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”). Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the service period, net of estimated forfeitures. The following table presents share-based compensation expenses included in the Company’s Consolidated Statements of Operations and Comprehensive Loss:
| First Quarters Ended |  |
| September 26, 2025 |  | September 27, 2024 |  |  |  |
Cost of revenues | $ | 1,760 |  |  | $ | 113 |  |  |  |  |
Selling, general and administrative | 6,296 |  |  | 4,611 |  |  |  |  |
Research and development | 1,517 |  |  | 1,368 |  |  |  |  |
Stock-based compensation expense before tax | 9,573 |  |  | 6,092 |  |  |  |  |
Income taxes(1) | (2,585) |  |  | (1,645) |  |  |  |  |
Stock-based compensation expense, net of income taxes | $ | 6,988 |  |  | $ | 4,447 |  |  |  |  |
(1) Federal and state statutory rate of 27% |  |  |  |  |  |  |

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