SEVERANCE AND CHANGE OF CONTROL AGREEMENT

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Exhibit 10.5

SEVERANCE AND
CHANGE OF CONTROL AGREEMENT

        This Amended and Restated Severance and Change of Control Agreement (" Agreement ") is effective as of August 4, 2008, between Kratos Defense & Security Solutions, Inc. (the " Company ") and Laura Siegal (" Siegal "), as approved by the Company's Board Compensation Committee.

        A.    Siegal is presently employed as Vice President & Controller of the Company.

        B.    The Company and Siegal entered into the original Severance and Change of Control Agreement, dated as of July             , 2007 (the " Original Agreement ") to (i) provide for the payment of severance compensation to Siegal upon a termination without Cause, or (ii) in the event of a Change of Control, as defined herein.

        C.    As consideration for Siegal's agreement to continue her duties and responsibilities in her role as Chief Financial Officer, the Company and Siegal desire to amend the Original Agreement to (i) make changes to comply with Section 409A of the Code, and (ii) to give Siegal additional protection if there is a Change of Control of the Company as set forth in paragraph            hereof.

        Therefore, in consideration of the promises and the mutual covenants contained below, and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties agree as follows:

        1.     Vesting Upon Change of Control.     Upon the closing of a transaction that constitutes a Change of Control (as defined in paragraph 3(a) below), the vesting of 50% of all stock options, stock appreciation rights, restricted stock units and any other equity awards granted to Siegal under the Company's equity incentive plans that as of the date of such Change of Control remain unvested shall accelerate, to the extent permissible by law, notwithstanding and in addition to any existing vesting provisions set forth in the applicable equity award agreement and/or the Company equity incentive plan. On the one year anniversary of such Change of Control or upon a Triggering Event (as defined in paragraph 3(b) below), whichever occurs sooner, the remaining unvested portion of any outstanding equity awards shall immediately vest.

        2.     Severance Payments.     

        (a)   If Siegal is (x) terminated without Cause (as defined in paragraph 3(c) below) prior to a Change of Control or (y) terminates as a result of a Triggering Event (as defined in paragraph 3(b) below) after a Change of Control (as defined in paragraph 3(a) below), then Siegal will be entitled to receive in satisfaction of all obligations (other than as provided in paragraph 1 above) that the Company may have to Siegal: (i) in the case of clause (x) hereof, severance compensation equal to nine (9) months of her base salary then in effect; or in the case of clause (y) hereof, severance compensation equal to nine (9) months of her base salary plus her maximum potential bonus amount for nine (9) months; in either case, less applicable taxes and withholding; and, if needed by Siegal, (ii) her then-current health insurance coverage, at the then current employee cost, during the nine (9) month period following a termination in the case of clause (x) or during the nine (9) month period following a resignation in the case of clause (y). Such benefits will be provided for the nine (9) month period following the date of Siegal's termination. In addition, in the event that Siegal is terminated without Cause, the vesting of 100% of all stock options, stock appreciation rights, restricted stock units and any other equity awards granted to Siegal under the Company's equity incentive plans that as of the date of such termination remain unvested shall accelerate, to the extent permissible by law, notwithstanding and in addition to any existing vesting provisions set forth in the applicable equity award agreement and/or the Company equity incentive plan. The foregoing severance compensation, health insurance coverage and acceleration of vesting will be conditioned upon Siegal's execution of a separation agreement with a release of claims reasonably satisfactory to the Company and such cash severance compensation shall be paid in a

single lump sum payment within thirty (30) days following Siegal's execution of such separation agreement.

        (b)   Notwithstanding any other provision of this Agreement to the contrary, if Siegal is a "specified employee" within the meaning of Section 409A of the Code and the related guidance (" Section 409A ") at the time of Siegal's separation from service, then only that portion of the severance and benefits set forth in paragraph 2(a) above, together with any other severance payments or benefits, that may be considered deferred compensation under Section 409A, which (when considered together) do not exceed the Section 409A Limit (as defined below) and which qualify as separation pay under Treasury Regulation Section 1.409A-1(b)(9)(iii), may be paid within the first six (6) months following Siegal's separation from service in accordance with paragraph 2(a) above or (for payments or benefits not provided under this Agreement) with the payment schedule applicable to each such other payment or benefit. Otherwise, the portion of the severance and benefits provided under this Agreement, together with any other severance payments or benefits that may be considered deferred compensation under Section 409A, that would otherwise be payable within the six (6) month period following Siegal's separation from service will accrue during such six (6) month period and will be paid in a lump sum on the date six (6) months and one (1) day following the date of Siegal's separation from service (or the next business day if such date is not business day). All remaining severance payments and benefits will be payable in accordance with the payment schedule applicable to such payments or benefits. For purposes of this Agreement, "Section 409A Limit" means the lesser of two (2) times: (i) the sum of Siegal's annualized compensation based upon the annual rate of pay for services provided to the Company for the taxable year of Siegal preceding the taxable year of Siegal's separation from service from the Company as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any related Internal Revenue Service guidance; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which such separation from service occurs.

        3.     Definition of Change of Control and Triggering Event.     

        (a)   A Change of Control means: (i) the acquisition by an individual person or entity or a group of individuals or entities acting in concert, directly or indirectly, through one transaction or a series of transactions, of more than 50% of the outstanding voting securities of the Company; (ii) a merger or consolidation of the Company with or into another entity after which the stockholders of the Company immediately prior to such transa