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: Carter David M (President, DRSS Division)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2015-01-02	Common Stock	M	3000	—	Acquired	34106	Direct
2015-01-03	Common Stock	M	1500	—	Acquired	35606	Direct
2015-01-03	Common Stock	M	4000	—	Acquired	39606	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	1500	Disposed		Common Stock (1500)	Direct
2015-01-03	Restricted Stock Unit	$	M	4000	Disposed		Common Stock (4000)	Direct
2015-01-01	Restricted Stock Unit	$	A	30000	Acquired		Common Stock (30000)	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, 2011, where 15,000 RSUs were granted, 7,500 of which vest in five equal installments annually beginning on January 3, 2012 and 7,500 of which vest 100% on the fifth anniversary of the grant date.

F3: Common Stock issued to reporting person pursuant to settlement of vested shares under RSU granted on January 3, 2014, where 40,000 RSUs were granted, 20,000 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 20,000 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.

F4: 15,000 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 15,000 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.

F5: Each RSU represents a contingent right to receive one share of Issuer's common stock.

F6: Includes 6,963 shares purchased through Issuer's Employee Stock Purchase Plan and 6,828 shares held in the Issuer's 401(k) Plan.