KRATOS DEFENSE & SECURITY SOLUTIONS, INC. — Director's Dealing 2015

Jan 5, 2015

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (KTOS)
CIK: 0001069258
Period of Report: 2015-01-01

Reporting Person: Carrai Phillip D (President, TTS Division)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2015-01-02	Common Stock	M	3000	—	Acquired	38589	Direct
2015-01-03	Common Stock	M	6000	—	Acquired	44589	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2015-01-02	Restricted Stock Unit	$	M	3000	Disposed		Common Stock (3000)	Direct
2015-01-03	Restricted Stock Unit	$	M	6000	Disposed		Common Stock (6000)	Direct
2015-01-01	Restricted Stock Unit	$	A	45000	Acquired		Common Stock (45000)	Direct

Footnotes

F1: Common Stock issued to reporting person pursuant to settlement of vested shares under RSU granted on January 2, 2010, where 15,000 RSUs granted vest in five equal installments annually beginning on January 2, 2011.

F2: Common Stock issued to reporting person pursuant to settlement of vested shares under RSU granted on January 3, 2014, where 60,000 RSUs were granted, 30,000 of which vest 100% on the five year anniversary of the date of grant, unless earlier vested pursuant to the terms of the RSU agreement, and 30,000 of which vest 20% upon each 10% increase in the closing market price of the Issuer's common stock measured from the RSU grant date through the 10-year anniversary, provided that the first vesting shall not occur until the first anniversary of the RSU grant date, at which time the percentage of RSUs shall vest based on increases in the closing market price measured from the RSU grant date through the first anniversary.

F3: 22,500 of the RSUs vest 100% on the five year anniversary of the grant date, unless earlier vested or terminated pursuant to the terms of the RSU agreement. The other 22,500 RSUs vest 20% upon each 10% increase in the closing market price of the Issuer's common stock measured from the RSU grant date through the 10-year anniversary of the RSU grant date, unless earlier vested or terminated pursuant to the terms of the RSU agreement.

F4: Each RSU represents a contingent right to receive one share of Issuer's common stock.

F5: Includes 6,921 shares purchased through Issuer's Employee Stock Purchase Plan and 9,505 shares held in the Issuer's 401(k) Plan.