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Stock-Based Compensation | 9 Months Ended
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Mar. 27, 2026
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation S TOCK I NCENTIVE P LANS The Company’s 2025 Long Term Incentive Plan (as amended from time to time, the “2025 Plan”) was adopted by the Company’s Board of Directors in July 2025 and approved by the Company’s shareholders on October 22, 2025. At March 27, 2026, the aggregate number of shares authorized for issuance under the 2025 Plan is 1,998 shares, including 1,900 shares approved by the Company’s shareholders on October 22, 2025 and 98 shares by virtue of awards forfeited from and after October 22, 2025 under a predecessor stock incentive plan, the Company’s Amended and Restated 2018 Stock Incentive Plan (the “2018 Plan”). The shares authorized for issuance under the 2025 Plan will continue to be increased to the extent that any award previously granted under the 2018 Plan is forfeited, terminates, expires, lapses without being exercised or is settled for cash in the future. The 2025 Plan provides for the grant to employees and non-employees of non-qualified and incentive stock options, stock appreciation rights, time-based and performance-based restricted stock awards or units, and deferred stock awards or units. Stock options and stock appreciation rights 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 have a maximum exercisable term of ten years. Under the share counting rules applicable to the 2025 Plan, each share issued pursuant to a stock option or stock appreciation right counts as 0.5 shares against the available share reserve, and each share issued pursuant to any other award (a “full value” award) counts as one share against the available reserve. Accordingly, at March 27, 2026, a maximum of 3,913 shares underlying future awards of stock options and stock appreciation rights are issuable under the 2025 Plan, and a maximum of 1,956 shares underlying future full value awards are issuable under the 2025 Plan. As part of the Company's ongoing annual equity grant program for employees, the Company grants performance-based restricted stock unit awards to certain executives and employees pursuant to the 2025 Plan (and prior to October 22, 2025, 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. Payouts under performance-based restricted stock unit awards may also be subject to modification based on market conditions, including 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 nine months ended March 27, 2026 and March 28, 2025, respectively. There were an immaterial amount of shares related to the 1997 Plan issued and returned to the reserve during the nine months ended March 28, 2025. 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 70 shares and 65 shares issued under the 2024 ESPP during the nine months ended March 27, 2026 and March 28, 2025, respectively. Shares available for future purchase under the 2024 ESPP totaled 800 at March 27, 2026. 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 March 27, 2026
Outstanding at June 27, 2025 |  | 934 |  |  | $ | 12.71 |  |  | $ | 45.00 |  |  |  |  | — |
Granted |  | — |  |  |  |  | — |  |  |  |  |
Exercised |  | — |  |  |  |  | — |  |  |  |  |
Canceled |  | — |  |  |  |  | — |  |  |  |  |
Outstanding at March 27, 2026 |  | 934 |  |  | 12.71 |  |  | 45.00 |  |  | 2.14 years |  | — |
Exercisable at March 27, 2026 |  | — |  |  | $ | — |  |  | $ | — |  |  | — |  |  | — |
There were no options vested or exercised during the nine months ended March 27, 2026. Non-vested stock options are subject to the risk of forfeiture until the fulfillment of specified conditions. As of March 27, 2026, there was $3,131 of total unrecognized compensation cost related to non-vested options granted that is expected to be recognized over a weighted-average period of 1.14 years from March 27, 2026. 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
Non-vested at June 27, 2025 |  | 1,742 |  |  | $ | 40.37 |
Granted |  | 570 |  |  | 69.28 |
Vested |  | (481) |  |  | 40.87 |
Forfeited |  | (131) |  |  | 48.52 |
Non-vested at March 27, 2026 |  | 1,700 |  |  | $ | 49.36 |
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 Income (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 Income (Loss):
| Third Quarters Ended |  | Nine Months Ended
| March 27, 2026 |  | March 28, 2025 |  | March 27, 2026 |  | March 28, 2025
Cost of revenues | $ | 950 |  |  | $ | 813 |  |  | $ | 4,573 |  |  | $ | 759 |
Selling, general and administrative | 6,556 |  |  | 6,228 |  |  | 19,878 |  |  | 17,156 |
Research and development | 1,543 |  |  | 1,507 |  |  | 4,765 |  |  | 4,687 |
Stock-based compensation expense before tax | 9,049 |  |  | 8,548 |  |  | 29,216 |  |  | 22,602 |
Income taxes(1) | (2,443) |  |  | (2,308) |  |  | (7,888) |  |  | (6,103) |
Stock-based compensation expense, net of income taxes | $ | 6,606 |  |  | $ | 6,240 |  |  | $ | 21,328 |  |  | $ | 16,499 |
(1) Federal and state statutory rate of 27% |  |  |  |  |  |  |

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