Form 4: Kratos Executive's RSU Vesting & New Grant

Steven S. Fendley, President of Kratos Defense & Security Solutions' US Division, reported the vesting of 50,000 restricted stock units and a new grant of 50,000 restricted stock units.

Summary

• Steven S. Fendley, President of the US Division of Kratos Defense & Security Solutions, Inc. (KTOS), acquired a total of 50,000 shares of common stock on January 3 and 4, 2026, through the vesting of Restricted Stock Units (RSUs).
• These vested shares originated from previously reported RSU grants from 2021, 2022, 2023, 2024, and 2025, with 10,000 units vesting from each grant.
• In connection with the vesting, 19,781 shares were withheld by the issuer at a price of $79.29 per share to satisfy tax liabilities.
• Fendley's direct beneficial ownership of common stock increased from an implied 318,434 shares (before these transactions) to 348,653 shares after all reported transactions, which includes approximately 2,307 shares held through the Issuer's 401(k) Plan.
• A new grant of 50,000 Restricted Stock Units (RSUs) was reported on January 3, 2026, with a grant price of $0. These RSUs are set to vest ratably on each of the first five anniversaries of the grant date.

Sentiment

Score: 5

Explanation: The filing reports routine executive compensation events (RSU vesting and a new grant) and associated tax transactions. It does not contain information that would significantly alter the company's financial outlook or operational performance, thus maintaining a neutral sentiment.

Positives

• The vesting of 50,000 Restricted Stock Units (RSUs) demonstrates the executive's continued long-term compensation and alignment with shareholder interests.
• A new grant of 50,000 RSUs indicates ongoing commitment and future incentive for the executive.
• The executive's net beneficial ownership of common stock increased by 30,219 shares (50,000 acquired 19,781 disposed).

Negatives

• 19,781 shares were withheld to cover tax liabilities, reducing the net shares received from vesting.

Future Outlook

The newly granted 50,000 Restricted Stock Units will vest ratably on each of the first five anniversaries of the January 3, 2026 grant date, unless earlier vested or terminated pursuant to the terms of the RSU agreement.

Industry Context

This filing represents a routine executive compensation event within the defense and security solutions industry, reflecting the standard practice of using equity awards like Restricted Stock Units to incentivize and retain key management personnel. Such transactions are common across publicly traded companies in the sector.

Comparison to Industry Standards

• Executive compensation through Restricted Stock Units (RSUs) with multi-year vesting schedules is a standard practice across the defense and technology sectors, aligning executive incentives with long-term company performance.
• The withholding of shares for tax liabilities upon vesting is also a common mechanism. Specific comparable companies like Lockheed Martin (LMT), Raytheon Technologies (RTX), or Northrop Grumman (NOC) frequently utilize similar equity compensation structures for their executives, with vesting schedules typically ranging from 3 to 5 years.

Stakeholder Impact

• Shareholders: Minor, routine dilution from RSU vesting is expected as part of compensation plans. The increase in executive ownership can be seen as a positive alignment of interests.
• Employees: Reflects standard executive compensation practices, which may influence broader employee incentive programs.

Next Steps

• The newly granted 50,000 Restricted Stock Units will vest ratably on each of the first five anniversaries of the January 3, 2026 grant date.

Key Dates

Keywords

Kratos Defense, KTOS, SEC Form 4, Insider Transaction, Restricted Stock Units, RSU Vesting, Executive Compensation, Steven S. Fendley, Stock Grant