Mercury Systems (MRCY) Adopts Poison Pill Following JANA Stake

Mercury Systems Inc. (NASDAQ: MRCY) announced that its Board of Directors has adopted a limited-duration shareholder rights plan.

The Mercury Board unanimously adopted the Rights Plan to protect the investment of shareholders during a period in which it believes shares of the Company do not reflect the inherent value of the business or its long-term growth potential.

William O’Brien, Independent Chair of the Mercury Board, said, “In light of current market conditions, the Board believes adoption of the Rights Plan is an appropriate action to help ensure we are able to protect the long-term interests of all Mercury shareholders. The Company regularly engages and maintains an ongoing dialogue with shareholders, and we have a history of seeking, considering and incorporating their feedback. Our Board and management team remain focused on executing our strategic plan to deliver sustainable, long-term growth and will continue to evaluate opportunities to enhance value for our shareholders.”

The Rights Plan has a one-year duration. By adopting the Rights Plan, the Board intends to enable all shareholders to realize the full potential value of their investment in Mercury while reducing the likelihood that any person or group gains control of the Company without paying full and fair value. The Rights Plan also provides the Board with time to make informed decisions that are in the best long-term interests of the Company and its shareholders and does not deter the Board from considering any offer that it determines is in the best interest of shareholders.

Pursuant to the Rights Plan, the Company will distribute one right (“Right”) for each common share outstanding as of the record date, January 10, 2022. Under the Rights Plan, the Rights generally would become exercisable only if a person or group acquires beneficial ownership of 7.5% or more of Mercury common shares in a transaction not approved by the Mercury Board (or 10% if the person or group is a passive investor). In the event the Rights under the Rights Plan become exercisable, each holder of a Right (other than such acquiring person or group, whose Rights will become void and will not be exercisable) will have the right to purchase, upon payment of the exercise price and in accordance with the terms of the Rights Plan, preferred shares of Mercury having a value of twice the market value of Mercury’s common shares.

The ownership threshold for passive investors in Mercury, meaning holders of common shares of Mercury without a plan or an intent to change or influence the control of Mercury (including Schedule 13G filers), is 10% (as opposed to 7.5% for other investors).

Additional details regarding the Rights Plan, including the Rights Plan itself, are contained in a Form 8-K that will be filed by the Company with the U.S. Securities and Exchange Commission as required by applicable rules.

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