KRATOS DEFENSE & SECURITY SOLUTIONS, INC. — Director's Dealing 2017

Jan 5, 2017

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (KTOS)
CIK: 0001069258
Period of Report: 2017-01-03

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

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2017-01-03	Common Stock	M	30000	—	Acquired	143416	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2017-01-03	Restricted Stock Units	$	M	30000	Disposed		Common Stock (30000)	Direct
2017-01-04	Restricted Stock Units	$	A	100000	Acquired		Common Stock (100000)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	23394	Indirect

Footnotes

F1: Common Stock issued to reporting person pursuant to settlement of vested shares under Restricted Stock Unit (RSU) granted on January 3, 2012, which vest 100% on the five year anniversary of the date of grant, unless earlier vested pursuant to the terms of the RSU agreement.

F2: 50,000 RSUs vest 100% on the five year anniversary of the date of grant, unless earlier vested or terminated pursuant to the terms of the RSU agreement. The other 50,000 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 (provided that such increase in the closing market price of common stock is sustained for twenty consecutive trading days).

F3: Each RSU represents a contingent right to receive one share of Issuer's common stock.

F4: Includes 17,074 shares purchased through Issuer's Employee Stock Purchase Plan and 14,342 shares held in Issuer's 401(k) Plan.