Document:

starboardagreementexecut

Execution Version  AGREEMENT  This Agreement (this “Agreement”) is made and entered into as of June 23, 2022, by and  among Mercury Systems, Inc., a Massachusetts corporation (the “Company”), and the entities and  natural persons set forth on the signature pages hereto (collectively, “Starboard”) (each of the  Company and Starboard, a “Party” to this Agreement, and collectively, the “Parties”).  RECITALS  WHEREAS, the Company and Starboard have engaged in discussions and  communications concerning the Company’s business, financial performance and strategic plans;  WHEREAS, as of the date hereof, Starboard has a combined economic and beneficial  ownership (as determined under Rule 13d-3 promulgated under the Securities Exchange Act of  1934, as amended, or the rules or regulations promulgated thereunder (the “Exchange Act”))  interest in shares of the Company’s common stock, par value $0.01 per share (the “Common  Shares”), totaling, in the aggregate, 4,156,831 shares of Common Shares, including 573,082 shares  of Common Shares underlying certain forward purchase contracts exercisable within sixty (60)  days hereof (“Starboard’s Ownership”), or approximately 7.2% of the shares of Common Shares  issued and outstanding as of June 23, 2022; and  WHEREAS, as of the date hereof, the Company and Starboard have determined to come  to an agreement with respect to the addition of new independent members to the Company’s board  of directors (the “Board”) and certain other matters, as provided in this Agreement.  NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants  and agreements contained herein, and for other good and valuable consideration, the receipt and  sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound  hereby, agree as follows:  1. Board Appointment and Related Agreements. (a) Board Appointment. (i) The Company agrees that immediately following the execution of this Agreement, the Board and all applicable committees of the Board shall take all necessary actions  to (A) increase the size of the Board from nine (9) to eleven (11) directors (provided that the size  of the Board shall automatically decrease to nine (9) directors at the conclusion of the Company’s  2022 Annual Meeting of Stockholders (the “2022 Annual Meeting”)) and, in connection therewith,  expand the number of directors comprising the Class I directors of the Board by two (2) directors,  (B) subject to Section 1(a)(ii), appoint Howard Lance to the Board as a Class I director, an independent director who will fill the vacancy among the Class I directors created by the expanded class (Mr. Lance is referred to herein as the “Starboard Appointee”), and (C) subject to requirements similar to those in Section 1(a)(ii), appoint Bill Ballhaus (as agreed to by the Company and JANA Partners LLC in that certain Cooperation Agreement by and among the Company and JANA Partners LLC (and any other members or affiliates of JANA Partners LLC signing such agreement (collectively with JANA Partners LLC, the “Other Stockholder”)), dated 

 

    2          as of June 23, 2022 (the “Other Stockholder Agreement”) to the Board as a Class I director, an  independent director, who will fill the vacancy among the Class I directors created by the expanded  class (the “JANA Appointee” and, together with the Starboard Appointee, the “New Independent  Appointees”).   (ii) The Starboard Appointee and any Replacement Director (as defined below)  shall (A) have submitted to the Company (1) a fully completed copy of the Company’s standard  director and officer and independence questionnaire and other reasonable and customary director  onboarding documentation (including an authorization form to conduct a background check, a  representation agreement, consent to be named as a director in the Company’s proxy statement (if  applicable) and certain other agreements), in each case, as reasonably required by the Company in  connection with the appointment or election of Board members, and (2) a written representation  that such person, if appointed or elected as a director of the Company, would be in compliance,  and will comply with, all applicable publicly disclosed confidentiality, corporate governance,  conflict of interest, Regulation FD, code of conduct and ethics, and stock ownership and trading  policies and guidelines of the Company that have been provided to such person prior to such date,  (B) be independent of Starboard (for the avoidance of doubt, the nomination by Starboard of such  person to serve on the board of any other company shall not (in and of itself) cause such person  not to be deemed independent of Starboard), (C) qualify as independent director of the Company  pursuant NASDAQ listing standards, and (D) have the relevant financial and business experience  to be a director of the Company (in the case of the matters set forth in clauses (B) through (D), as  reasonably determined by the Nominating and Governance Committee of the Board (the “N&G  Committee”).  (iii) Provided that the New Independent Appointees (or any Replacement  Director) are able and willing to continue to serve on the Board, the Company shall include the  New Independent Appointees in the Company’s slate of recommended nominees as Class I  directors standing for election at the 2022 Annual Meeting with terms expiring at the Company’s  2025 Annual Meeting of Stockholders and shall recommend, support and solicit proxies for the  election of the New Independent Appointees at the 2022 Annual Meeting in the same manner as  for the Company’s other nominees at the 2022 Annual Meeting. The Company shall use its  reasonable best efforts to schedule and hold the 2022 Annual Meeting no later than November 15,  2022.  (iv) If the Starboard Appointee (or any replacement thereof pursuant to this  section) is unable or unwilling to serve as a director, resigns as a director or is removed as a director  prior to the expiration of the Standstill Period (as defined below), Starboard shall have the ability  to recommend a person to be a Replacement Director in accordance with this Section 1(a)(iv) (any  such replacement nominee, when appointed to the Board, shall be referred to as a “Replacement  Director”). Any Starboard Replacement Director must (A) be reasonably acceptable to the Board  (such acceptance not to be unreasonably withheld), (B) qualify as “independent” pursuant to  NASDAQ listing standards, and (C) have the relevant financial and business experience to be a  director of the Company.  The N&G Committee shall make its determination and recommendation  regarding whether such Replacement Director meets the foregoing criteria within five (5) business  days after (1) such nominee has submitted to the Company the documentation required by Section  1(a)(ii) and (2) representatives of the Board have conducted customary interview(s) of such  

 

    3          nominee, if such interviews are requested by the Board or the N&G Committee. The Company  shall use its reasonable best efforts to conduct any interview(s) contemplated by this Section  1(a)(iv) as promptly as practicable, but in any case, assuming reasonable availability of the  nominee, within ten (10) business days after Starboard’s submission of such nominee. In the event  the N&G Committee does not accept a person recommended by Starboard as the Replacement  Director, Starboard shall have the right to recommend additional substitute person(s) whose  appointment shall be subject to the N&G Committee recommending such person in accordance  with the procedures described above. Upon the recommendation of a Replacement Director  nominee by the N&G Committee, the Board shall vote on the appointment of such Replacement  Director to the Board no later than five (5) business days after the N&G Committee’s  recommendation of such Replacement Director; provided, however, that if the Board does not  appoint such Replacement Director to the Board pursuant to this Section 1(a)(iv), the Parties shall  continue to follow the procedures of this Section 1(a)(iv) until a Replacement Director is elected  to the Board. Subject to NASDAQ rules and applicable law, upon a Replacement Director’s  appointment to the Board, the Board and all applicable committees of the Board shall take all  necessary actions to appoint such Replacement Director to any applicable committee of the Board  of which the Starboard Appointee (or any Replacement Director) was a member immediately prior  to such director’s resignation or removal or, if the Board or the applicable committee of the Board  determines that the Replacement Director does not satisfy the requirements of the NASDAQ rules  and applicable law with respect to service on the applicable committee (which determination shall  be made reasonably and in good faith), to an alternative committee of the Board. Any Replacement  Director designated pursuant to this Section 1(a)(iv) replacing the Starboard Appointee prior to the  mailing of the Company’s definitive proxy statement for the 2022 Annual Meeting shall stand for  election at the 2022 Annual Meeting together with the other director nominees.  (v)  During the period commencing with the date of this Agreement through the  conclusion of the 2022 Annual Meeting, the Board and all applicable committees of the Board  shall take all necessary actions so that the size of the Board is no more than eleven (11) directors  unless otherwise agreed by Starboard in writing.  Effective upon conclusion of the 2022 Annual  Meeting through the expiration of the Standstill Period, the size of the Board will not exceed nine  (9) directors unless otherwise agreed by Starboard in writing.  (vi) The Company agrees that two (2) existing Class I directors of the Board as  of the date hereof to be selected by the N&G Committee shall not be included in the Company’s  slate of recommended nominees standing for election at the 2022 Annual Meeting.  (b) Board Committees.   (i) Immediately following the execution of this Agreement, the Board and all  applicable committees of the Board shall take all necessary actions to appoint (A) each of the New  Independent Appointees to each of the N&G Committee and the M&A and Finance Committee of  the Board and (B) one (1) of the New Independent Appointees to the Human Capital and  Compensation Committee of the Board; it being understood that, notwithstanding any committee  appointments of the JANA Appointee, the Starboard Appointee shall be appointed to the M&A  and Finance Committee of the Board and that, subject to the terms of Section 1 of this Agreement,  

 

    4          the Starboard Appointee shall maintain his position on the M&A and Finance Committee at least  through the Standstill Period.  (ii) Without limiting the foregoing, the Company agrees that the New  Independent Appointees (and any Replacement Director) shall be given the same due  consideration for membership to committees of the Board as any other independent director,  including any new committee(s) and subcommittee(s) that may be established.   (c) Additional Agreements.  (i) Starboard shall comply, and shall cause each of its controlled Affiliates and  Associates (collectively, “Covered Persons”) to comply, with the terms of this Agreement and  shall be responsible for any breach of this Agreement by any such Covered Person. As used in this  Agreement, the terms “Affiliate” and “Associate” shall have the respective meanings set forth in  Rule 12b-2 promulgated by the Securities and Exchange Commission under the Exchange Act and  shall include all persons or entities that at any time during the term of this Agreement become  Affiliates or Associates of any person or entity referred to in this Agreement.  (ii) During the Standstill Period, Starboard shall not, and shall cause each of its  Covered Persons not to, directly or indirectly, (A) nominate or recommend for nomination any  person for election at any annual or special meeting of the Company’s stockholders, or any  stockholder action by written consent, directly or indirectly, (B) submit any proposal for  consideration at, or bring any other business before, any annual or special meeting of the  Company’s stockholders, or any stockholder action by written consent, directly or indirectly, or  (C) initiate, encourage or participate in any solicitation of proxies or consents, “vote no,”  “withhold” or similar campaign with respect to any annual or special meeting of the Company’s  stockholders, or any stockholder action by written consent, directly or indirectly. Starboard shall  not publicly or privately encourage or support any other stockholder, person or entity to take any  of the actions described in this Section 1(c)(ii).  (iii) Starboard shall appear in person or by proxy at the 2022 Annual Meeting  and vote all Common Shares beneficially owned by Starboard at the 2022 Annual Meeting (A) in  favor of all of the Company’s nominees, (B) in accordance with the Board’s recommendation with  respect to the Company’s stock incentive plan to replenish shares available for grants under that  plan in an amount not to exceed 2,000,000 shares, (C) in favor of the ratification of the appointment  of KPMG LLP as the Company’s independent registered public accounting firm, and (D) in  accordance with the Board’s recommendation with respect to any other Company proposal or  stockholder proposal presented at the 2022 Annual Meeting other than with respect to the  Company’s “say-on-pay” proposal which Starboard shall be permitted to vote on as it sees fit;  provided, however, that in the event Institutional Shareholder Services Inc. (“ISS”) or Glass Lewis  & Co., LLC (“Glass Lewis”) recommends otherwise with respect to any Company proposal or  stockholder proposal presented at the 2022 Annual Meeting (other than proposals relating to the  election or removal of directors), Starboard shall be permitted to vote in accordance with the ISS  or Glass Lewis recommendation. Starboard further agrees that it will (x) appear in person or by  proxy at any special meeting of the Company’s stockholders held during the Standstill Period and  vote all Common Shares beneficially owned by Starboard as of the record date at such meeting,  

 

    5          and (y) execute valid written consents with respect to all Common Shares beneficially owned by  Starboard as of the record date in any stockholder action by written consent during the Standstill  Period, in the case of each of (x) and (y) in accordance with the Board’s recommendation on any  proposal relating to the appointment, election or removal of director(s). For the avoidance of doubt,  Starboard shall be permitted to vote in its discretion on any proposal of the Company in respect of  any extraordinary transaction, including any merger, acquisition, amalgamation, tender offer,  exchange offer, recapitalization, restructuring, disposition, distribution, spin-off, asset sale, joint  venture or other business combination involving the Company or any of its subsidiaries or that  would result in (i) any person becoming a beneficial owner, directly or indirectly, of securities of  the Company representing more than fifty percent (50%) of the equity interests and voting power  of the Company’s then-outstanding equity securities or (ii) the Company entering into a stock-for- stock transaction whereby immediately after the consummation of the transaction the Company’s  shareholders retain less than fifty percent (50%) of the equity interests and voting power of the  surviving entity’s then-outstanding equity securities.  (iv) Starboard acknowledges that all directors (including the New Independent  Appointees and any Replacement Directors) are (A) governed by, and required to comply with, all  policies, procedures, codes, rules, standards and guidelines applicable to all members of the Board  and (B) required to keep confidential all Company confidential information and not disclose to  any third parties (including Starboard) any such Company confidential information.  (v) The Company agrees that the Board and all applicable committees of the  Board shall take all necessary actions, effective as promptly as practicable following the execution  of this Agreement, to determine, in connection with their initial appointment as a director and  nomination by the Company at the 2022 Annual Meeting, that each of the New Independent  Appointees is deemed to be (A) an “Incumbent Director” or “Continuing Director” (as such term  may be defined in the definition of “Change in Control,” “Change of Control” or any similar term  under the Company’s incentive plans, options plans, equity plans, deferred compensation plans,  employment agreements, severance plans, retention plans, loan agreements, or indentures,  including, without limitation, the Company’s Change in Control Severance Agreements, Credit  Agreement, Amended and Restated 2018 Stock Incentive Plan, or any other related plans or  agreements (the “Existing Plans and Agreements”) that refer to any such plan, policy or  agreement’s definition of “Change in Control,” “Change of Control” or any similar term) and (B)  a member of the Board as of the beginning of any applicable measurement period for the purposes  of the definition of “Change in Control,” “Change of Control” or any similar term under such  Existing Plans and Agreements. For the avoidance of doubt, nothing in this Section 1(c)(v) shall  require, or be deemed to be, an amendment or modification to any Existing Plans and Agreements,  including any outstanding award thereunder.  2. Standstill Provisions.  (a) Starboard agrees that, from the date of this Agreement until the earlier of (x) the  date that is thirty (30) days prior to the deadline for the submission of stockholder nominations for  the Company’s 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”) pursuant to  the Company’s By-Laws or (y) the date that is one hundred forty-five (145) days prior to the first  

 

    6          anniversary of the 2022 Annual Meeting (the “Standstill Period”), Starboard shall not, and shall  cause each Covered Person not to, in each case directly or indirectly, in any manner:  (i) engage in any solicitation of proxies or consents or become a “participant”  in a “solicitation” (as such terms are defined in Regulation 14A under the Exchange Act) of proxies  or consents (including, without limitation, any solicitation of consents that seek to call a special  meeting of stockholders, or any action by written consent), in each case, with respect to any  securities of the Company;  (ii) form, join or in any way participate in any “group” (within the meaning of  Section 13(d)(3) of the Exchange Act) with respect to any securities of the Company; provided,  however, that nothing herein shall limit the ability of an Affiliate of Starboard to join the “group”  following the execution of this Agreement, so long as any such Affiliate agrees to be bound in  writing by the terms and conditions of this Agreement (other than a “group” that includes all or  some of the members of Starboard, but does not include any other entities or persons that are not  members of Starboard as of the date hereof);  (iii) deposit any Common Shares in any voting trust or subject any Common  Shares to any arrangement or agreement with respect to the voting of any Common Shares, other  than any such voting trust, arrangement or agreement solely among the members of Starboard and  otherwise in accordance with this Agreement;  (iv) seek or submit, or knowingly encourage any person or entity to seek or  submit, nomination(s), proxies or consents in furtherance of a “contested solicitation” for the  appointment, election or removal of directors with respect to the Company or seek, knowingly  encourage or take any other action with respect to the appointment, election or removal of any  directors, except as permitted under Section 1(a); provided, however, that nothing in this  Agreement shall prevent Starboard or its Affiliates or Associates from taking actions in furtherance  of identifying director candidates in connection with the 2023 Annual Meeting so long as such  actions do not create a public disclosure obligation for Starboard or the Company, are not publicly  disclosed by Starboard or its representatives, Affiliates or Associates and are undertaken on a basis  reasonably designed to be confidential and in accordance in all material respects with Starboard’s  normal practices in the circumstances;  (v) (A) make any proposal for consideration by stockholders at any annual or  special meeting of stockholders of the Company or through any stockholder action by written  consent, (B) make any offer or proposal (with or without conditions) with respect to any merger,  takeover offer, tender (or exchange) offer, acquisition, recapitalization, restructuring, disposition  or other business combination involving the Company or any of its subsidiaries, (C) affirmatively  solicit a third party to make an offer or proposal (with or without conditions) with respect to any  merger, takeover offer, tender (or exchange) offer, acquisition, recapitalization, restructuring,  disposition or other business combination involving the Company or any of its subsidiaries, or  knowingly publicly encourage, initiate or support any third party in making such an offer or  proposal, (D) publicly comment on any third party proposal regarding any merger, takeover offer,  tender (or exchange) offer, acquisition, recapitalization, restructuring, disposition, or other  business combination with respect to the Company or any of its subsidiaries by such third party  

 

    7          (provided that this clause (D) shall not prevent such public comment after such proposal has  become generally known to the public other than as a result of a disclosure by Starboard), or  (E) call or seek to call a special meeting of stockholders, or initiate or participate in any stockholder  action by written consent;  (vi) seek, alone or in concert with others, representation on the Board, except as  specifically provided in Section 1;  (vii) advise, knowingly encourage, knowingly support or knowingly influence  any person or entity with respect to the voting or disposition of any securities of the Company at  any annual or special meeting of stockholders or any stockholder action by written consent, except  in accordance with Section 1; or  (viii) make any request or submit any proposal to amend the terms of this  Agreement other than through non-public communications with the Company that would not be  reasonably determined to trigger public disclosure obligations for any Party.  (b) Except as expressly provided in Section 1 or Section 2(a), Starboard shall be  entitled to (i) vote the Common Shares that it beneficially owns as it determines in its sole  discretion and (ii) disclose, publicly or otherwise, how it intends to vote or act with respect to any  securities of the Company on any stockholder proposal or other matter to be voted on by the  stockholders of the Company and the reasons therefor.  (c) Nothing in Section 2(a) shall be deemed to limit the exercise in good faith by a  Starboard Appointee or a Replacement Director of such persons’ fiduciary duties solely in such  person’s capacity as a director of the Company and in a manner consistent with such person’s and  Starboard’s obligations under this Agreement.  3. Stockholders Rights Plan.    Immediately following the execution of this Agreement, the Company agrees to take all  necessary actions to amend that certain Rights Agreement, dated as of December 27, 2021,  between the Company and Computershare Trust Company, N.A., as Rights Agent (the “Rights  Agreement”), such that (A) (i) the ownership threshold for a person to become an Acquiring  Person (as defined in the Rights Agreement) is increased from 7.5% of the Common Shares to  10% of the Common Shares and (ii) the ownership threshold for a Passive Institutional Investor  (as defined in the Rights Agreement) to become an Acquiring Person is increased from 10% of  the Common Shares to 20% of the Common Shares, and (B) the Final Expiration Date (as defined  in the Rights Agreement) shall occur no later than upon conclusion of the 2022 Annual Meeting.  4. Representations and Warranties of the Company.  The Company represents and warrants to Starboard that (A) the Company has the corporate  power and authority to execute this Agreement and to bind it thereto, (B) this Agreement has been  duly and validly authorized, executed and delivered by the Company, and assuming due execution  by each counterparty hereto, constitutes a valid and binding obligation and agreement of the  Company, and is enforceable against the Company in accordance with its terms, except as  

 

    8          enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization,  moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and  subject to general equity principles, (C) as of the date of this Agreement, the Board is comprised  of nine (9) directors, and (D) the execution, delivery and performance of this Agreement by the  Company does not and will not (1) violate or conflict with any law, rule, regulation, order,  judgment or decree applicable to the Company or (2) result in any breach or violation of or  constitute a default (or an event which with notice or lapse of time or both would constitute such  a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under,  or give any right of termination, amendment, acceleration or cancellation of, any organizational  document or material agreement to which the Company is a party or by which it is bound.  5. Representations and Warranties of Starboard.  Starboard represents and warrants to the Company that (A) the authorized signatory of  Starboard set forth on the signature page hereto has the power and authority to execute this  Agreement and any other documents or agreements to be entered into in connection with this  Agreement and to bind Starboard thereto, (B) this Agreement has been duly authorized, executed  and delivered by Starboard, and assuming due execution by each counterparty hereto, constitutes  a valid and binding obligation of Starboard, and is enforceable against Starboard in accordance  with its terms except as enforcement thereof may be limited by applicable bankruptcy, insolvency,  reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights  of creditors and subject to general equity principles, (C) the execution of this Agreement, the  consummation of any of the transactions contemplated hereby, and the fulfillment of the terms  hereof, in each case in accordance with the terms hereof, will not conflict with, or result in a breach  or violation of the organizational documents of Starboard as currently in effect, (D) the execution,  delivery and performance of this Agreement by Starboard does not and will not (1) violate or  conflict with any law, rule, regulation, order, judgment or decree applicable to Starboard or (2)  result in any breach or violation of or constitute a default (or an event which with notice or lapse  of time or both would constitute such a breach, violation or default) under or pursuant to, or result  in the loss of a material benefit under, or give any right of termination, amendment, acceleration  or cancellation of, any organizational document, agreement, contract, commitment, understanding  or arrangement to which Starboard is a party or by which it is bound, (E) as of the date of this  Agreement, Starboard’s Ownership is 4,156,831 Common Shares, including 573,082 Common  Shares underlying certain forward purchase contracts exercisable within sixty (60) days hereof;  (F) as of the date hereof, and except as set forth in clause (E) above, Starboard does not currently  have, and does not currently have any right to acquire, any interest in any securities or assets of  the Company or its Affiliates (or any rights, options or other securities convertible into or  exercisable or exchangeable (whether or not convertible, exercisable or exchangeable immediately  or only after the passage of time or the occurrence of a specified event) for such securities or assets  or any obligations measured by the price or value of any securities of the Company or any of its  controlled Affiliates, including any swaps or other derivative arrangements designed to produce  economic benefits and risks that correspond to the ownership of Common Shares or any other class  or series of the Company’s stock, whether or not any of the foregoing would give rise to beneficial  ownership (as determined under Rule 13d-3 promulgated under the Exchange Act), and whether  or not to be settled by delivery of Common Shares, payment of cash or by other consideration, and  without regard to any short position under any such contract or arrangement), and (G) Starboard  

 

    9          has not directly or indirectly, compensated or agreed to compensate, and will not, directly or  indirectly, compensate or agree to compensate any director or director nominee of the Company  for his or her respective service as a director of the Company, including the New Independent  Appointees, with any cash, securities (including any rights or options convertible into or  exercisable for or exchangeable into securities or any profit sharing agreement or arrangement), or  other form of compensation directly or indirectly related to the Company or its securities. For the  avoidance of doubt, nothing herein shall prohibit Starboard from compensating or agreeing to  compensate any person for his or her respective service as a nominee or director of any other  company.  6. Press Release.  Promptly following the execution of this Agreement, the Company and Starboard shall  jointly issue a mutually agreeable press release (the “Press Release”) announcing certain terms of  this Agreement in the form attached hereto as Exhibit A. Prior to the issuance of the Press Release  and subject to the terms of this Agreement, neither the Company (including the Board and any  committee thereof) nor Starboard shall issue any press release or make any public announcement  regarding this Agreement or the matters contemplated hereby without the prior written consent of  the other Party, except as required by law or the rules of any stock exchange. During the Standstill  Period, neither the Company nor Starboard shall make any public announcement or statement that  is inconsistent with or contrary to the terms of this Agreement, except as required by law or the  rules of any stock exchange.   7. Specific Performance.  Each of Starboard, on the one hand, and the Company, on the other hand, acknowledges  and agrees that irreparable injury to the other Party hereto would occur in the event any of the  provisions of this Agreement were not performed in accordance with their specific terms or were  otherwise breached and that such injury would not be adequately compensable by the remedies  available at law (including the payment of money damages). It is accordingly agreed that  Starboard, on the one hand, and the Company, on the other hand (the “Moving Party”), shall each  be entitled to specific enforcement of, and injunctive relief to prevent any violation of, the terms  hereof, and the other Party hereto will not take action, directly or indirectly, in opposition to the  Moving Party seeking such relief on the grounds that any other remedy or relief is available at law  or in equity. This Section 7 is not the exclusive remedy for any violation of this Agreement.  8. Expenses.  The Company shall reimburse Starboard for its reasonable, documented out-of-pocket fees  and expenses (including legal expenses) incurred in connection with Starboard’s involvement at  the Company through the date of this Agreement, including, but not limited to its Schedule 13D  filings and the negotiation and execution of this Agreement, provided that such reimbursement  shall not exceed $350,000 in the aggregate.  

 

    10          9. Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of  competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions,  covenants and restrictions of this Agreement shall remain in full force and effect and shall in no  way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of  the Parties that the Parties would have executed the remaining terms, provisions, covenants and  restrictions without including any of such which may be hereafter declared invalid, void or  unenforceable. In addition, the Parties agree to use their best efforts to agree upon and substitute a  valid and enforceable term, provision, covenant or restriction for any of such that is held invalid,  void or enforceable by a court of competent jurisdiction.  10. Notices.  Any notices, consents, determinations, waivers or other communications required or  permitted to be given under the terms of this Agreement must be in writing and will be deemed to  have been delivered: (A) upon receipt, when delivered personally; (B) upon confirmation of  receipt, when sent by email (provided such confirmation is not automatically generated); or (C)  two (2) business days after deposit with a nationally recognized overnight delivery service, in each  case properly addressed to the Party to receive the same. The addresses for such communications  shall be:  If to the Company, to:   Mercury Systems, Inc.   50 Minuteman Road  Andover, Massachusetts 01810  Attention: Christopher C. Cambria, General Counsel  Email:       Christopher.Cambria@mrcy.com     with a copy (which shall not constitute notice) to:  Latham & Watkins LLP  330 North Wabash Avenue, Suite 2800  Chicago, IL 60611  Attention:  Josh Dubofsky   Bradley Faris  Mark Gerstein   E-mail: Josh.Dubofsky@lw.com   Bradley.Faris@lw.com   Mark.Gerstein@lw.com    If to Starboard or any member thereof, to:   Starboard Value LP  777 Third Avenue, 18th Floor  

 

    11          New York, New York 10017   Attention: Jeffrey C. Smith   Peter A. Feld  Email: jsmith@starboardvalue.com    pfeld@starboardvalue.com     with a copy (which shall not constitute notice) to:   Olshan Frome Wolosky LLP  1325 Avenue of the Americas  New York, New York 10019  Attention: Steve Wolosky, Esq.   Andrew Freedman, Esq.  Email: swolosky@olshanlaw.com    afreedman@olshanlaw.com   11. Applicable Law.  This Agreement and all claims and causes of action hereunder, whether in tort or contract,  or at law or in equity, shall be governed by and construed and enforced in accordance with the  laws of the Commonwealth of Massachusetts without reference to the conflict of laws principles  thereof that would result in the application of the law of another jurisdiction. Each of the Parties  hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and  the rights and obligations arising hereunder, or for recognition and enforcement of any judgment  in respect of this Agreement and the rights and obligations arising hereunder brought by the other  Party hereto or its successors or assigns, whether in tort or contract or at law or in equity, shall be  brought and determined exclusively in the state courts of the Commonwealth of Massachusetts  located in Essex County (or, if such state court declines to accept jurisdiction over a particular  matter, any federal court within the Commonwealth of Massachusetts). Each of the Parties hereto  hereby irrevocably submits with regard to any such action or proceeding for itself and in respect  of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts  and agrees that it will not bring any action relating to this Agreement in any court other than the  aforesaid courts. Each of the Parties hereto hereby irrevocably waives, and agrees not to assert in  any action or proceeding with respect to this Agreement, (A) any claim that it is not personally  subject to the jurisdiction of the above-named courts for any reason, (B) any claim that it or its  property is exempt or immune from jurisdiction of any such court or from any legal process  commenced in such courts (whether through service of notice, attachment prior to judgment,  attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) to the  fullest extent permitted by applicable legal requirements, any claim that (1) the suit, action or  proceeding in such court is brought in an inconvenient forum, (2) the venue of such suit, action or  proceeding is improper or (3) this Agreement, or the subject matter hereof, may not be enforced  in or by such courts.  

 

    12          12. Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be  considered one and the same agreement and shall become effective when counterparts have been  signed by each of the Parties and delivered to the other Party (including by means of electronic  delivery or facsimile).  13. Mutual Non-Disparagement.  Subject to applicable law, each of the Parties covenants and agrees that, during the  Standstill Period, or if earlier, until such time as the other Party or any of its agents, subsidiaries,  controlled affiliates, successors, assigns, partners, members, officers, key employees or directors  shall have breached this Section 13, neither it nor any of its respective agents, subsidiaries,  controlled affiliates, successors, assigns, partners, members, officers, key employees or directors,  shall in any way publicly criticize, disparage, call into disrepute, or otherwise defame or slander  the other Party or such other Party’s subsidiaries, affiliates, successors, assigns, partners, members,  officers (including any current officer of a Party or a Party’s subsidiaries who no longer serves in  such capacity following the execution of this Agreement), directors (including any current officer  or director of a Party or a Party’s subsidiaries who no longer serves in such capacity following the  execution of this Agreement), employees, stockholders, agents, attorneys or representatives, or any  of their businesses, products or services, in any manner that would reasonably be expected to  damage the business or reputation of such other Party, their businesses, products or services or  their subsidiaries, affiliates, successors, assigns, officers (or former officers), directors (or former  directors), employees, stockholders, agents, attorneys or representatives, provided, however, that  each Party shall be permitted to make objective statements that reflect such Party’s view with  respect to factual matters concerning specific acts or determinations of the other Party occurring  after the date of this Agreement, as long as such statements do not violate any other provision of  this Agreement.  The limitations set forth in this Section 13 shall not prevent either Party from responding  to any public statement made by the other Party of the nature described in this Section 13 if such  statement by the other Party was made in breach of this Agreement. The limitations set forth in  this Section 13 shall not (x) apply (i) in any compelled testimony or production of information,  whether by legal process or subpoena or as part of a response to a request for information from  any governmental or regulatory authority with jurisdiction over the Party from which information  is sought, in each case, solely to the extent required, or (ii) to any disclosure that such Party  reasonably believes, after consultation with outside counsel, to be legally required by applicable  law, rules or regulations; or (y) prohibit any Party from reporting what it reasonably believes, after  consultation with outside counsel, to be violations of federal law or regulation to any governmental  authority pursuant to Section 21F of the Exchange Act or the rules of the SEC promulgated under  such Section 21F.  14. Securities Laws.  Starboard acknowledges that it is aware, and will advise each of its representatives who are  informed as to the matters that are the subject of this Agreement, that the United States securities  

 

    13          laws may prohibit any person who directly or indirectly has received from an issuer material, non- public information from purchasing or selling securities of such issuer or from communicating  such information to any other person under circumstances in which it is reasonably foreseeable  that such person is likely to purchase or sell such securities.  15. Entire Agreement; Amendment and Waiver; Successors and Assigns; Third Party  Beneficiaries; Term.  This Agreement (including its exhibits) contains the entire understanding of the Parties  with respect to its subject matter. There are no restrictions, agreements, promises, representations,  warranties, covenants or undertakings between the Parties other than those expressly set forth  herein. No modifications of this Agreement can be made except in writing signed by an authorized  representative of each the Company and Starboard. No failure on the part of any Party to exercise,  and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof,  nor shall any single or partial exercise of such right, power or remedy by such Party preclude any  other or further exercise thereof or the exercise of any other right, power or remedy. All remedies  hereunder are cumulative and are not exclusive of any other remedies provided by law. The terms  and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable  by the Parties hereto and their respective successors, heirs, executors, legal representatives, and  permitted assigns. No Party shall assign this Agreement or any rights or obligations hereunder  without, with respect to Starboard, the prior written consent of the Company, and with respect to  the Company, the prior written consent of Starboard. The term “ including” shall be deemed to be  followed by the words “ without limitation.” This Agreement is solely for the benefit of the Parties  and is not enforceable by any other persons or entities. This Agreement shall terminate at the end  of the Standstill Period, except the provisions of Sections 7, 10, 11, 14 and 15, which shall survive  such termination; provided, however, that any Party may bring an action following such  termination alleging a breach of this Agreement occurring prior to the end of the Standstill Period.  16. Other Stockholder Agreement.    From and after the date hereof through the Standstill Period, so long as (a) the Starboard  Appointee is a member of the Board and (b) Starboard continues to maintain beneficial ownership  of the lesser of 1% of the Company’s then outstanding common shares and 576,732 common  shares (subject to adjustment for stock splits, reclassifications, combinations and similar  adjustments), the Company agrees that if it (i) amends, modifies or waives the Other Stockholder  Agreement, or otherwise enters into any arrangement, agreement or understanding with the Other  Stockholder relating to the types of matters contemplated by Sections 1, 2, 3, 6, or 13 of this  Agreement, this Section 16, or any exhibits hereto that provides any right more favorable than  those set forth in this Agreement or (ii) otherwise enters into any arrangement, agreement or  understanding with the Other Stockholder on terms materially more favorable than those set forth  in this Agreement or that provides any right materially more favorable than those set forth in this  Agreement, the Company shall offer the same terms or rights to Starboard. Prior to the execution  of this Agreement, the Company has provided Starboard reasonable time to review the Other  Stockholder Agreement. As of the date hereof, and except with respect the Other Stockholder  Agreement, as applicable, the Company represents that it has not entered into, is not engaging in  discussions or negotiations to enter into, and is not in the process of entering into, any agreement,  

 

    14          arrangement, or understanding with any other stockholder that grants rights to such stockholder(s)  more favorable than those set forth in this Agreement.    [The remainder of this page intentionally left blank] 

 

 

 

       [Signature Page to Agreement]        STARBOARD:  STARBOARD VALUE AND  OPPORTUNITY MASTER FUND LTD  By: Starboard Value LP,         its investment manager    STARBOARD VALUE AND  OPPORTUNITY S LLC  By: Starboard Value LP,         its manager    STARBOARD VALUE AND  OPPORTUNITY C LP  By: Starboard Value R LP,         its general partner    STARBOARD VALUE AND  OPPORTUNITY MASTER FUND L LP  By: Starboard Value L LP,         its general partner    STARBOARD VALUE L LP  By: Starboard Value R GP LLC,         its general partner    STARBOARD VALUE R LP  By: Starboard Value R GP LLC,         its general partner       STARBOARD X MASTER FUND LTD  By: Starboard Value LP,         its investment manager    STARBOARD VALUE LP  By: Starboard Value GP LLC,         its general partner    STARBOARD VALUE GP LLC  By: Starboard Principal Co LP,         its member    STARBOARD PRINCIPAL CO LP  By: Starboard Principal Co GP LLC,         its general partner    STARBOARD PRINCIPAL CO GP LLC    STARBOARD VALUE R GP LLC      By:                                             Name:  Jeffrey C. Smith  Title:  Authorized Signatory             JEFFREY C. SMITH             PETER A. FELD    

 

             EXHIBIT A  [Press Release]    

 

    CONFIDENTIAL DRAFT    Global Settlement Press Release           NOT FOR IMMEDIATE RELEASE    Mercury Systems Appoints Howard Lance and Bill Ballhaus to Board of Directors    Enters Into Cooperation Agreements with JANA Partners and Starboard Value     ANDOVER, Mass. – June 24, 2022 – Mercury Systems, Inc. (“Mercury” or the “Company”), (NASDAQ:  MRCY, www.mrcy.com), a leader in trusted, secure mission-critical technologies for aerospace and  defense, today announced that Howard Lance, Former Chief Executive Officer of Maxar Technologies,  and Bill Ballhaus, Former Chairman and Chief Executive Officer of Blackboard, have been appointed to  the Mercury Board of Directors, effective immediately. The addition of these two independent directors  to the Board is being made in conjunction with cooperation agreements that the Company has reached  with JANA Partners LLC (“JANA”) and Starboard Value LP (“Starboard”) (the “Agreements”).    William K. O’Brien, Chairman of Mercury’s Board of Directors, stated, “We are pleased to welcome  Howard and Bill, two outstanding leaders with strong track records of overseeing growth and  profitability, as well as valuable aerospace and defense and technology industry expertise, to our Board.  Their appointments further the Board’s ongoing commitment to adding new directors with fresh insights  and perspectives, diverse backgrounds and relevant expertise.”    Mr. O’Brien continued, “We are pleased to have been able to work constructively with JANA and  Starboard and appreciate their thoughts, perspectives, input, and recommended board members. The  Company continues to make strong progress in executing its strategic plan in a rapidly evolving global  economic environment. Mercury is uniquely positioned within the defense industry and has created a  competitive advantage through significant investment and an unparalleled ability to deliver customer  solutions with innovation and speed. We have great confidence in our ability to deliver enhanced value  for all of our stakeholders.”     Barry Rosenstein, Managing Partner of JANA, said, “We believe Mercury is well-positioned in the  defense industry with a critical mission and strong customer relationships. We are encouraged by  Mercury’s ongoing commitment to Board refreshment, and we look forward to the contributions from  these new directors as the Company works to maximize value for shareholders.”    Jeff Smith, CEO of Starboard, said, “We invested in Mercury because of its leadership position in a  dynamic market and our confidence that the Company will enhance value for shareholders. The  Company has a terrific opportunity, and we believe these appointments will add a fresh perspective as  Mercury focuses on execution of its strategic plan.”    In connection with the new director appointments, the Mercury Board will be temporarily expanded to  comprise 11 directors. The addition of two new independent directors continues the Board’s ongoing  refreshment program, which has diversified and broadened the expertise of the Board’s membership to  reflect Mercury’s ongoing strategic objectives. Following the 2022 Annual Meeting of Shareholders, the  Board will comprise nine directors, eight of whom will be independent and seven of whom will have  been appointed to the Board in the last five years.     

 

    CONFIDENTIAL DRAFT    Global Settlement Press Release           The Agreements include customary standstill, voting, and other provisions. The full agreements will be  filed by the Company with the U.S. Securities and Exchange Commission as an exhibit to the Current  Report on Form 8-K.    Citi and Goldman Sachs & Co. LLC are serving as financial advisors to Mercury, and Latham & Watkins  LLP is serving as legal counsel.    About Howard Lance      Howard L. Lance is currently Managing Partner at Lance Advisors LLC, an advisory firm serving private  equity and institutional investors. He serves as non-executive Chairman of Summit Materials, a leading  provider of aggregates and cement, and as non-executive Chairman of Change Healthcare, a leading  provider of healthcare information technology and services. He also serves as a Director of New Vista  Acquisition Corporation, a SPAC focused on emerging technologies in aerospace, defense and logistics,  and as non-executive Chairman of privately-held Covanta Energy LLC, a leading provider of sustainable  environmental solutions.    He previously served on the public-company boards of Ferrovial S.A., Eastman Chemical Company,  Stryker Corporation, and Aviat Networks.     Mr. Lance was President and Chief Executive Officer of Maxar Technologies, a leading provider of space  technology solutions including satellites, robotics, geospatial imagery and services from 2016 to 2019.  Previously, he was Executive Advisor – Private Equity at the Blackstone Group from 2012 to 2016. He  served as Chairman, President and Chief Executive Officer of Harris Corporation (now L3Harris), a  leading global provider of communications and information technology products, software, systems and  services to government, defense and commercial markets, from 2003 to 2012. He was Co-President of  NCR Corporation and Chief Operating Officer of its Retail and Financial Group from 2001 to 2002.  Previously, he spent 17 years at Emerson Electric Company including as Executive Vice President of its  Electronics and Telecom businesses, Group President of its Climate Technologies businesses, and Chief  Executive Officer of Astec PLC, a UK-listed subsidiary based in Hong Kong.    Mr. Lance holds a Bachelor’s degree in Industrial Engineering from Bradley University and a Master’s  degree in Management from Purdue University.      About Bill Ballhaus     Bill Ballhaus currently serves as Chairman of MilestoneRoad Partners, a business consulting firm he  founded in 2021 and as Executive Chairman at Government Brands LLC, a provider of software and  payments solutions for government customers. He previously served as Chairman and Chief Executive  Officer of Blackboard, a leading EdTech company, from 2016 until its merger with Anthology in 2021.  Prior to that, he served as Chief Executive Officer and President of SRA International, Inc., a provider of  information technology services from 2011 until the creation of CSRA from SRA and CSC’s U.S. public  sector business.  Before that, Mr. Ballhaus served as Chief Executive Officer and President of private  military contractor DynCorp International from 2008 to 2010. Mr. Ballhaus has also held senior  leadership positions at BAE Systems, Boeing and Hughes where he led global government and  commercial technology businesses particularly focused on software and IT.     

 

    CONFIDENTIAL DRAFT    Global Settlement Press Release           He currently serves on the Board of Directors of Qmulos, a leading cybersecurity and IT compliance  company, and as a senior advisor at PSG, a private equity firm focused on the software industry. He is  also a Fellow of the American Institute of Aeronautics and Astronautics.    Mr. Ballhaus holds a Bachelor’s degree in Mechanical Engineering from the University of California,  Davis and Master’s and Doctorate degrees in Aeronautics and Astronautics from Stanford University. He  also earned a Master’s degree in Business Administration from the Anderson Graduate School of  Management at UCLA.     Mercury Systems – Innovation That Matters®    Mercury Systems is a global commercial technology company serving the aerospace and defense  industry. Headquartered in Andover, Mass., the company delivers trusted, secure open architecture  processing solutions powering a broad range of mission-critical applications in the most challenging and  demanding environments. Inspired by its purpose of delivering Innovation that Matters, By and For  People Who Matter, Mercury helps make the world a safer, more secure place for all. To learn more,  visit mrcy.com, or follow us on Twitter.    Forward-Looking Safe Harbor Statement    This press release contains certain forward-looking statements, as that term is defined in the Private  Securities Litigation Reform Act of 1995, including those relating to the cooperation agreements and  changes to the Board of Directors discussed herein. You can identify these statements by the use of the  words “may,” “will,” “could,” “should,” “would,” “plans,” “expects,” “anticipates,” “continue,”  “estimate,” “project,” “intend,” “likely,” “forecast,” “probable,” “potential,” and similar expressions.  These forward-looking statements involve risks and uncertainties that could cause actual results to differ  materially from those projected or anticipated. Such risks and uncertainties include, but are not limited  to, continued funding of defense programs, the timing and amounts of such funding, general economic  and business conditions, including unforeseen weakness in the Company’s markets, effects of epidemics  and pandemics such as COVID, effects of any U.S. Federal government shutdown or extended continuing  resolution, effects of continued geopolitical unrest and regional conflicts, competition, inflation, changes  in technology and methods of marketing, delays in completing engineering and manufacturing  programs, changes in customer order patterns, changes in product mix, continued success in  technological advances and delivering technological innovations, changes in, or in the U.S.  Government’s interpretation of, federal export control or procurement rules and regulations, changes  in, or in the interpretation or enforcement of environmental rules and regulations, market acceptance of  the Company's products, shortages in or delays in receiving components, production delays or  unanticipated expenses due to performance quality issues with outsourced components, inability to  fully realize the expected benefits from acquisitions, restructurings and value creation initiatives such as  1MPACT, or delays in realizing such benefits, challenges in integrating acquired businesses and achieving  anticipated synergies, effects of shareholder activism, increases in interest rates, changes to industrial  security and cyber-security regulations and requirements, changes in tax rates or tax regulations,  changes to interest rate swaps or other cash flow hedging arrangements, changes to generally accepted  accounting principles, difficulties in retaining key employees and customers, unanticipated costs under  fixed-price service and system integration engagements, and various other factors beyond our control.  These risks and uncertainties also include such additional risk factors as are discussed in the Company's  filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for  

 

    CONFIDENTIAL DRAFT    Global Settlement Press Release           the fiscal year ended July 2, 2021. The Company cautions readers not to place undue reliance upon any  such forward-looking statements, which speak only as of the date made. The Company undertakes no  obligation to update any forward-looking statement to reflect events or circumstances after the date on  which such statement is made.    INVESTOR CONTACT  Michael D. Ruppert, CFO  Mercury Systems Inc.  ir@mrcy.com | (978) 967-1990    MEDIA CONTACT  Michael Freitag / Dan Moore   Joele Frank, Wilkinson Brimmer Katcher  pr@mrcy.com | (212) 355-4449EX-10.1

 Exhibit 10.1 

Execution Version 

TRANSITION AGREEMENT 

This Transition Agreement (this “Agreement”) is by and between LISA FUNK (“Executive”) and MISTER CAR WASH, INC.
(“MCW” or the “Company”), and is entered into as of June 21, 2022 (the “Effective Date”). Executive and the Company will be collectively referred to as the “Parties.” 

RECITALS 
 WHEREAS,
Executive currently is employed by the Company as General Counsel; 
 WHEREAS, Executive has provided notice of her intent to voluntarily
resign and retire from her employment and officer positions with the Company and its affiliates (the “Resignation Notice”), effective as of December 31, 2022 (the “Separation Date”); and 

WHEREAS, the Company and the Executive deem it to be in their respective best interests to enter into this Agreement. 

AGREEMENT 
 NOW,
THEREFORE, for and in consideration of the mutual promises and commitments described herein, the Parties agree as follows: 
  

	A.	 Transition Period. 

1. During the period commencing on the date of this Agreement and ending on the Separation Date (the “Transition Period”), Executive
agrees that she will continue to serve the Company in such capacities and perform such duties as may be specified by the Board of Directors of the Company (the “Board”). In particular, during the Transition Period, Executive agrees she
will (i) continue to perform her duties as General Counsel of the Company through the earlier of (x) the Separation Date and (y) the date a successor to Executive’s position as General Counsel commences employment with the
Company and is appointed as General Counsel, (ii) use her reasonable best efforts to advance the interests of the Company and facilitate the successful transition of her authority, duties and/or responsibilities to the individual who succeeds
her as General Counsel in whatever reasonable capacity as may be requested by the Chief Executive Officer consistent with her current position as General Counsel, (iii) continue to advise the Company on legal and compliance matters, and
(iv) communicate a message consistent with the Board’s and/or Chief Executive Officer’s direction to key employees, customers and suppliers. Executive acknowledges and agrees that any change in her position, authority, duties and/or
responsibilities implemented in good faith by the Company during the Transition Period in connection with the transition to her successor shall not constitute “Good Reason” for purposes of the Mister Car Wash, Inc. Executive Severance Plan
(the “Severance Plan”). 

  
 1 

 2. During the Transition Period, Executive will continue to receive a base salary at the
annual rate of $350,860. Further, in consideration for (and subject to) Executive’s services during the Transition Period in accordance with Section 1, and notwithstanding anything to the contrary in the MCW Executive Bonus Program or
applicable award agreement(s), Executive will be continue to eligible to earn an annual cash performance bonus under the MCW Executive Bonus Program for the 2022 fiscal year with a target bonus opportunity of 40% of Executive’s annual base
salary, which bonus, if earned, will be paid out when annual bonuses are typically paid under the MCW Executive Bonus Program (but in any event no later than December 31 of the calendar year immediately following the calendar year with respect
to which any such annual bonus relates) without regard for any requirement of continued employment at the time of payment under the MCW Executive Bonus Program (the “Supplemental Benefit”). Without limiting the foregoing, the eligibility
to receive the Supplemental Benefit will be contingent upon Executive’s execution and non-revocation of a release and waiver of claims in the form attached hereto as Exhibit A (a “Release”) on
or prior to the 30th day following the Separation Date, which Release will be considered an integral part of this Agreement. 

 

	B.	 Separation 

3. Effective as of the Separation Date, Executive hereby voluntarily resigns as General Counsel and as an employee and officer of the Company
and its affiliates. Executive agrees to take all actions necessary or appropriate to timely effect such resignations. Executive acknowledges that, for the avoidance of doubt, Executive will not be entitled to any payments or benefits under the
Severance Plan in connection with the termination of Executive’s employment with the Company as of the Separation Date. 
 4. The
Parties acknowledge that, as of the date hereof, Executive holds (i) options to purchase 283,323 shares of common stock of MCW pursuant to the Non-Qualified Stock Option Agreement dated July 15, 2015
(the “2015 Option Agreement”) and the 2014 Stock Option Plan of Hotshine Holdings, Inc. (the “2014 Plan”) (the “2015 Options”); (ii) options to purchase 371,520 shares of common stock of MCW pursuant to the Non-Qualified Stock Option Agreement dated November 23, 2016 (the “2016 Option Agreement”) and the 2014 Plan (the “2016 Options” and together with the 2015 Options, the “2014 Plan
Options”); (iii) options to purchase 62,500 shares of common stock of MCW pursuant to the Option Agreement dated June 25, 2021 (the “2021 Option Agreement”) and the Mister Car Wash, Inc. 2021 Incentive Award Plan (the “2021
Plan”) (the “2021 Options”); and (iv) 25,000 restricted stock units pursuant to the Restricted Stock Unit Agreement dated June 25, 2021 (the “RSU Agreement”) and the 2021 Plan (the “RSUs”). For the avoidance
of doubt, as Executive provided the Resignation Notice on June 21, 2022 (the “Notice Date”), Executive’s termination of employment on December 31, 2022 shall constitute a “Retirement Qualifying Termination” for
purposes of the applicable award agreements under the 2021 Plan and accordingly (a) as of the Separation Date, Executive will be entitled to accelerated vesting of the respective portions of the 2021 Options and RSUs that would have vested
during the twelve-month period following the Notice Date, or 12,500 Options and 5,000 RSUs, and (b) the vested 2021 Options that Executive holds as of the Separation Date shall be eligible to be exercised on or prior to the twenty-four month
anniversary of the Separation Date. Any other equity awards held by Executive that do not vest in accordance with their terms prior to the Separation Date shall be forfeited. Notwithstanding anything to the contrary in the 2015 Option Agreement or
the 2016 Option Agreement, the post-termination exercise period applicable to the 2014 Plan Options held by Executive as of the Separation Date shall be extended for a period of six months following the later of (i) the Separation Date, or
(ii) the expiration date of any lock-up agreement or arrangement that is applicable to or otherwise binding on the Executive at any time during the six-month period
immediately following the Separation Date, provided that the expiration of each 2014 Plan Option shall in no event be later than the original expiration date of such 2014 Plan Option. 

  
 2 

 C. Restrictive Covenants. Executive acknowledges that the Company is providing Executive with the
Supplemental Benefit in material part in consideration for Executive’s services during the Transition Period and reaffirmation of Executive’s prior agreement to comply with the restrictive covenants set forth in Article IV of each of the
2015 Option Agreement and 2016 Option Agreement, Article V of the 2021 Option Agreement and Article III of the RSU Agreement, respectively (collectively, the “Restrictive Covenants”); provided, that the Parties hereby acknowledge and agree
that the applicable restricted period following termination of employment applicable to any post-employment non-competition or non-solicitation restriction in the
Restrictive Covenants (i) shall be increased to twenty-four months and (ii) shall not commence until the Separation Date. Executive shall no longer be entitled to the Supplemental Benefit following the date that Executive first materially
violates any such Restrictive Covenants, as reasonably determined by the Board of Directors (and, to the extent any Supplemental Benefit has been already paid, the amount thereof shall be repaid to the Company ). 

D. No Other Promises. Executive represents and agrees that neither the Company nor any of its employees, agents, representatives or attorneys made any
representations concerning the terms or the effects of this Agreement other than those contained herein and that Executive’s decision to sign this Agreement is not based in whole or in part on any statement or promise that does not appear
within the four corners of this document. Executive acknowledges and agrees that nothing herein changes the at-will nature of Executive’s employment and, notwithstanding anything to the contrary herein,
nothing shall limit the Company’s ability to terminate Executive’s employment at any time following the date hereof, subject to compliance with the Severance Plan (if applicable). 

E. Non-Admissions. Executive expressly acknowledges that neither this Agreement nor the furnishing of the
consideration of this Agreement shall be deemed or construed at any time for any purpose as an admission by the Company of any liability or unlawful conduct of any kind. 

F. Conditions. Should either of the Parties breach any provision or obligation under this Agreement, such breaching Party explicitly agrees to pay all
damages (including, but not limited to, litigation or defense costs, expenses, and reasonable attorneys’ fees) incurred by the other Party as a result of such breach. Nothing in this paragraph shall, or is intended to, limit or restrict any
other rights or remedies the Company or the Executive may have by virtue of this Agreement or otherwise. 
  

	G.	 Additional Terms 

1. This Agreement shall in all respects be interpreted, enforced and governed under the laws of the State of Arizona. The parties hereby
consent to the jurisdiction of the federal or state courts within the State of Arizona in connection with any dispute concerning this Agreement. 

  
 3 

 2. Each and every term of this Agreement shall be binding upon and inure to the benefit of
the heirs, successors and assigns of the parties hereto. 
 3. The language of all parts of this Agreement shall be construed as a whole,
according to its fair meaning, and not strictly for or against either party, regardless of who drafted it. 
 4. In the event any provision
of this Agreement should be held by a court of competent jurisdiction to be unenforceable and incapable of being modified to be legal, each and all of the other provisions of this Agreement shall remain in full force and effect. 

5. This Agreement, including this paragraph, may not be altered in any respect except by a writing duly executed by all parties. This
Agreement may not be modified orally. No waiver of any provision of this Agreement will be valid unless it is in writing and signed by the party against whom such waiver is charged. 

[signature page follows] 

  
 4 

 EXECUTIVE FULLY UNDERSTANDS THE FOREGOING TRANSITION AGREEMENT, AND FULLY UNDERSTANDS ITS TERMS. EXECUTIVE
HAS SIGNED THIS AGREEMENT VOLUNTARILY THIS THE 21st DAY OF JUNE, 2022. 
  

	
	EXECUTIVE:
	
	 /s/ Lisa Funk

	Lisa Funk

 Signature Page for Transition Agreement 

 THE FOREGOING TRANSITION AGREEMENT IS HEREBY EXECUTED BY DULY AUTHORIZED REPRESENTATIVE THIS
21st DAY OF JUNE, 2022. 
  

			
	COMPANY:
	
	MISTER CAR WASH, INC.
		
	By:	 	 /s/ John Lai

		 	John Lai, President and CEO

  
 6 

 EXHIBIT A 

WAIVER AND RELEASE OF CLAIMS AGREEMENT 

PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS AND A WAIVER OF RIGHTS TO MAKE CLAIMS AGAINST YOUR EMPLOYER. YOU
SHOULD CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT. 
 This Waiver and General Release (this “Agreement”) is by and
between LISA FUNK (“EXECUTIVE”) and MISTER CAR WASH, INC. and all its related corporations, parents, subsidiaries and affiliates, and their respective current and former officers, employees, trustees, directors, attorneys, insurers,
agents, and their successors and assigns, individually and in their representative capacities, and any entity or individual affiliated with any of the foregoing (the “Company”). Executive and the Company will be collectively referred to as
“the Parties.” 
 RECITALS 

WHEREAS, Executive currently is employed by the Company and providing transition services to the Company pursuant to that certain Transition
Agreement, dated June 21, 2022 (“Transition Agreement”); and 
 WHEREAS, the Company and the Executive deem it to be in their
respective best interests to enter into this Agreement. 
 AGREEMENT 

NOW, THEREFORE, for and in consideration set forth herein, the Parties agree as follows: 

A. Waiver/General Release 
 1. In exchange
for the benefits set forth in the Transition Agreement and for other good and valuable consideration, Executive, for herself and on behalf of Executive’s successors, heirs, agents, and assigns, releases and forever discharges the Company and
its current and former parent companies, subsidiaries, agents, employees, officers, directors, owners, executives, trustees, representatives, attorneys, related organizations, affiliated companies, assigns, and successors (hereafter referred to
collectively as the “Released Parties”), and each of them, from any and all liabilities, claims, causes of action, charges, complaints, commissions, obligations, costs, losses, damages, injuries, attorneys’ fees, expenses, benefits,
compensation of any nature, and other legal responsibilities, of any form whatsoever, whether known or unknown, unforeseen, unanticipated, unsuspected or latent, that Executive has incurred or expects to incur, or now owns or holds, or has at any
time heretofore owned or held, or may at any time own, hold, or claim to hold by reason of any matter or thing arising from any cause whatsoever against the Released Parties prior to the date of Executive’s execution of this Agreement,
including but not limited to Executive’s employment with the Company, and the termination of that employment. This release extends to any and all claims including, but not limited to, any alleged: (a) violation of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), Title VII of the Civil Rights Act, the Age Discrimination in Employment Act (as amended, the “ADEA”), the 

  
 1 

 
Older Workers Benefit Protection Act; the Worker Adjustment and Retraining Notification Act, the Fair Labor Standards Act, the Occupational Safety and Health Act, the Consolidated Omnibus Budget
Reconciliation Act of 1985, the Americans With Disabilities Act, as amended by the ADA Amendments Act, the Family Medical Leave Act, the Arizona Civil Rights Act, the Arizona Employment Protection Act, the Arizona wage statutes including the Arizona
Paid Sick Leave Law, state and federal False Claims acts, and any amendments to the foregoing, as well as any and all claims under any other federal, state or local constitution, laws or regulations; (b) discrimination, harassment, retaliation,
breach of any express or implied employment contract or agreement, wrongful discharge, breach of the implied covenant of good faith and fair dealing, intentional or negligent infliction of emotional distress, misrepresentation, fraud, defamation,
interference with prospective economic advantage, and/or failure to pay wages due or other monies owed; and (c) violation of any local, state or federal law, regulation, ordinance, and/or public policy, violation of any contract, or tort or
common law claim having any bearing whatsoever on the terms and conditions and/or cessation of employment with any of the Released Parties. Notwithstanding the releases set forth above, this Agreement does not release any claim for vested benefits
under any ERISA-governed benefit plan or any claim that is prohibited from being released as a matter of law. Executive understands that nothing in this release in this Section B (the “Release”) prevents Executive from filing a charge or
complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”), National Labor Relations Board (“NLRB”), the Securities and Exchange Commission
(“SEC”), or any other federal, state, or local agency charged with the enforcement of any employment laws, although Executive understands that by signing this Agreement, Executive waives the right to recover any damages or to receive other
relief in any claim or suit brought by or through the EEOC or any other state or local deferral agency on Executive’s behalf, to the extent permitted by law. Executive further releases and waives any right to become, and promises not to consent
to become, a named plaintiff in a class, collective, or representative action, or a class or collective member in any case in which claims are asserted against the Released Parties that are related in any way to Executive’s employment with, or
separation of employment from, the Company, arising from the beginning of time to the date of execution hereof. In that regard, Executive agrees that Executive may not and will not submit a claim form in any class, collective, or representative
action in which Employee is included as a putative class member, if any. 
 2. Executive acknowledges that Executive has been advised of and
is familiar with the provisions of California Civil Code § 1542, which states, in part: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE AND THAT, WHICH IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.” Executive expressly waives and releases any and all rights that Executive may have under
California Civil Code § 1542 as well as under any other statutes or common law principles of similar effect, to the fullest extent Executive may do so lawfully. Executive acknowledges and agrees that Executive is aware of her rights under the
laws specifically and generally described above and that Executive knowingly and voluntarily waives those rights to the full extent that waiver is allowed by law. Executive further acknowledges that Executive may later discover facts different from
or in addition to those facts now known to Executive or believed by Executive to be true with respect to any or all of the matters covered by this Agreement, and Executive agrees that this Agreement nevertheless shall remain in full and complete
force and effect. 

  
 2 

 3. This Agreement constitutes a knowing and voluntary waiver of any and all rights or claims
that Executive has or may have under the ADEA prior to the date Executive executes this Agreement (the “ADEA Release”). This paragraph and this Agreement are written in a manner calculated to be understood by Executive and Executive agrees
that she fully understands all of the provisions of this paragraph and this Agreement. Executive is hereby advised in writing to consult with an attorney before signing this Agreement. Executive acknowledges that, in return for this Agreement,
Executive will receive consideration beyond that which Executive was already entitled to receive before entering into this Agreement. Executive acknowledges that Executive has had 21 days to consider signing this Agreement. If Executive decides not
to use all 21 days, Executive knowingly and voluntarily waives any claims that Executive was not given the 21-day period or did not have the opportunity to use the entire 21 days to consider this
Agreement. Executive may revoke this Agreement at any time within the 7-day period following the date Executive signs this Agreement by providing written notice of revocation to the Company, c/o Anna Zappia
(azappia@mistercarwash.com). The ADEA Release shall not become effective or enforceable until 12:01 a.m. on the 8th day after Employee signs the Agreement (the “ADEA Release Effective Date”). Notwithstanding Executive’s right to
revoke the ADEA Release, the remaining terms of this Agreement (including, without limitation, the Release as it applies to all claims other than claims under the ADEA) shall become effective and enforceable as of the date that Executive signs this
Agreement. Executive agrees that if she revokes the ADEA Release, (a) her signature on the signature page to this Agreement applicable to the ADEA Release will be null and void and the Release shall become null and void solely with respect to
the claims released under the ADEA Release (but, for the avoidance of doubt, no other claims or matters) and (b) this Agreement will otherwise be in full force and effect. 

B. No Other Promises. Executive represents and agrees that neither the Company nor any of its employees, agents, representatives or attorneys made any
representations concerning the terms or the effects of this Agreement other than those contained herein and that Executive’s decision to sign this Agreement is not based in whole or in part on any statement or promise that does not appear
within the four corners of this document. 
 C. Non-Admissions. Executive expressly acknowledges that neither
this Agreement nor the furnishing of the consideration of this Agreement shall be deemed or construed at any time for any purpose as an admission by the Company of any liability or unlawful conduct of any kind. 

D. Conditions. Should Executive ever breach any provision or obligation under this Agreement, Executive explicitly agrees to pay all damages
(including, but not limited to, litigation or defense costs, expenses, and reasonable attorneys’ fees) incurred by the Company as a result of Executive’s breach. Nothing in this paragraph shall, or is intended to, limit or restrict any
other rights or remedies the Company may have by virtue of this Agreement or otherwise. 

  
 3 

 E. Additional Terms 

1. This Agreement shall in all respects be interpreted, enforced and governed under the laws of the State of Arizona. The parties hereby
consent to the jurisdiction of the federal or state courts within the State of Arizona in connection with any dispute concerning this Agreement. 

2. Each and every term of this Agreement shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties
hereto. 
 3. The language of all parts of this Agreement shall be construed as a whole, according to its fair meaning, and not strictly for
or against either party, regardless of who drafted it. 
 4. In the event any provision of this Agreement should be held by a court of
competent jurisdiction to be unenforceable and incapable of being modified to be legal, each and all of the other provisions of this Agreement shall remain in full force and effect. 

5. This Agreement, including this paragraph, may not be altered in any respect except by a writing duly executed by all parties. This
Agreement may not be modified orally. No waiver of any provision of this Agreement will be valid unless it is in writing and signed by the party against whom such waiver is charged. 

[signature page follows] 

  
 4 

 EXECUTIVE FULLY UNDERSTANDS THE FOREGOING WAIVER AND GENERAL RELEASE AGREEMENT, AND FULLY UNDERSTANDS ITS
TERMS. EXECUTIVE HAS BEEN GIVEN TWENTY-ONE (21) DAYS TO CONSULT WITH AN ATTORNEY, AND HAS CONSULTED WITH AN ATTORNEY OR HAS WILLINGLY CHOSEN NOT TO SEEK LEGAL COUNSEL ABOUT THIS AGREEMENT. EXECUTIVE HAS
SIGNED THIS AGREEMENT VOLUNTARILY THIS THE _____DAY OF ______________, 202[_]. 
  

	
	EXECUTIVE (applicable to all matters other than the ADEA Release):
	
	  

	Lisa Funk
	
	EXECUTIVE (applicable to the ADEA Release):
	  

	Lisa Funk

 Signature Page to Waiver and Release Agreement 

 THE FOREGOING WAIVER AND GENERAL RELEASE AGREEMENT IS HEREBY EXECUTED BY DULY AUTHORIZED
REPRESENTATIVE THIS ___ DAY OF ___________, 202[_]. 
  

			
	COMPANY:
	
	MISTER CAR WASH, INC.
		
	By:	 	  

		 	[Name, Title]

 Signature Page to Waiver and Release Agreement

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