KRATOS DEFENSE & SECURITY SOLUTIONS, INC. — Director's Dealing 2014

Mar 31, 2014

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (KTOS)
CIK: 0001069258
Period of Report: 2014-03-28

Reporting Person: CARANO BANDEL L (Director, 10% Owner)
Reporting Person: Oak Investment Partners XIII, Limited Partnership (10% Owner)
Reporting Person: OAK INVESTMENT PARTNERS X LTD PARTNERSHIP (10% Owner)
Reporting Person: OAK X AFFILIATES FUND LP (10% Owner)
Reporting Person: OAK INVESTMENT PARTNERS IX L P (10% Owner)
Reporting Person: OAK IX AFFILIATES FUND LP (10% Owner)
Reporting Person: OAK IX AFFILIATES FUND A LP (10% Owner)

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2014-03-28	Director Option (Right to Buy)	$7.30	A	2227	Acquired	2024-03-28	Common Stock (2227)	Direct

Footnotes

F1: Represents options received in lieu of cash fees from Mr. Carano's service on the Issuer's Board of Directors as approved by the Board of Directors. The grant is effective March 28, 2014.

F2: The Director Options became fully exerciseable on the date of the grant.

F3: Not applicable

F4: Includes Director Option to purchase 104 shares of Common Stock, which is held by Mr. Carano on behalf of Oak Investment Partners X, Limited Partnership ("Oak X"); Director Option to purchase 2 shares of Common Stock, which is held by Mr. Carano on behalf of Oak X Affiliates Fund, Limited Partnership ("Oak X Affiliates"); and Director Option to purchase 2,121 shares of Common Stock, which is held by Mr. Carano on behalf of Oak Investment Partners XIII, Limited Partnership ("Oak XIII"). Mr. Carano is a Managing Member of Oak Associates X, L.L.C., the General Partner of Oak X, a Managing Member of Oak X Affiliates, L.L.C., the General Partner of Oak X Affiliates and a Managing Member of Oak Associates XIII, L.L.C., the General Partner of Oak XIII.