EMPLOYMENT AGREEMENT

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Exhibit 10.1

EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT (this " Agreement ") is made as of this 31 ^st day of December, 2007, by and between, Haverstick Consulting, Inc ., an Indiana corporation (the " Company "), and Howard W. Bates , an Indiana resident (" Executive ").

        WHEREAS, the Company and Kratos Defense & Security Solutions, Inc., a Delaware corporation (" Kratos "), and Kratos Government Solutions, Inc., a wholly owned subsidiary of Kratos (" KGS "), have entered into a Merger Agreement dated November 2, 2007 (the " Merger Agreement ") whereby a wholly-owned newly-formed merger subsidiary of KGS is being merged with and into the Company, with the Company being the surviving corporation;

        WHEREAS, Executive has been a shareholder and key employee of the Company for many years and is intimately familiar with the Company and its business; and

        WHEREAS, the Company desires that Executive continue to provide services for the benefit of the Company and Executive desires to accept such continued employment with the Company; and

        WHEREAS, the execution and delivery of this Agreement is a condition precedent to Kratos', KGS' and the Company's obligations under the Merger Agreement; and

        WHEREAS, upon consummation of the transactions contemplated by the Merger Agreement the Company will be a wholly-owned subsidiary of KGS.

        NOW, THEREFORE, in consideration of the recitals, the employment of Executive by the Company, and the promises and covenants stated in this Agreement, the parties agree as follows:

        1.      Employment.     The Company shall employ Executive as President of the Company, such position being the president of a subsidiary of Kratos, and Executive hereby accepts such employment by the Company subject to the terms and conditions of this Agreement.

        2.      Duties .

        (a)   Executive shall report to, and shall have the powers, authority and duties assigned by, the President and CEO of Kratos and CEO of the Company (the " CEO "). It is understood by Executive and agreed by the Company, that such powers, authority and duties of the Executive as President of the Company shall always be consistent with those which are customary for, commensurate with, or necessary to the position of President of a subsidiary of a public company, or as that position is modified per Section 2(c) below. Throughout the Term (as defined in Section 3), Executive shall: (i) devote the Executive's business effort, time, energy and skill to the duties of Executive's employment hereunder; (ii) faithfully, loyally, and industriously perform such duties; and (iii) diligently follow and implement the lawful management policies and decisions of the Board or the CEO that are communicated to Executive. During the Term, Executive shall not be engaged during normal business hours in any other business or professional activity, whether or not such activity is pursued for gain, profit or other pecuniary advantage; provided, however, that Executive may (i) serve on religious, industry, civic or charitable boards or committees, (ii) deliver lectures, fulfill speaking engagements and teach at educational institutions, (iii) devote time to his personal and family matters (including without limitation his and their investments and business affairs), or (iv) serve, with the approval of the CEO, which approval shall not be unreasonably withheld, on the boards of directors of non-competitive businesses, so long as such activities do not interfere with the performance of Executive's responsibilities as an employee of the Company in accordance with this Agreement.

        (b)   Executive shall maintain his office at the Company's corporate offices located in Indianapolis, Indiana, from which his services to the Company shall be rendered. Executive may be required to relocate from such office but shall not be required to relocate to a site outside of the area represented by Marion County, Indiana, and the counties contiguous to Marion County,

Indiana, without (i) the prior written consent of Executive and (ii) a comprehensive relocation package. Notwithstanding the foregoing, Executive shall be required to travel from time to time in accordance with the past practices of Executive as shall be reasonably required for the fulfillment of his duties hereunder.

        (c)   It is understood by Executive that it may be in the best interests of Kratos to reorganize its various business units from time to time. Provided that in any such reorganization the position of the Executive is maintained reasonably equivalent to his position as a president of the Company as subsidiary, there shall be no breach of this Section 2. For example, Kratos may combine all business units into one corporate entity and dissolve the subsidiary corporations, in which case the presidents of the subsidiaries will then be named as presidents of divisions or sectors. The term "reasonably equivalent" shall include the title, powers, authority, duties, responsibilities, bonus potential, base salary, business unit size and other appropriate measures.

        3.      Term.     Subject to early termination pursuant to Section 5 hereof, the term of Executive's employment with the Company under this Agreement shall commence as of the close of business on December 31, 2007 (the " Commencement Date ") and shall end on December 31, 2010 (the " Term "). The Company and the Executive agree that they shall have the option to renew this Agreement for subsequent terms. The CEO and Executive shall discuss the renewal of this Agreement on or about January 15, 2010.

        4.      Compensation.     During the Term, Executive shall be entitled to the compensation and benefits set forth in this Section. The payment of any compensation hereunder shall be subject to applicable withholding and payroll taxes, and such other deductions as may be required under the employee benefit plans of the Company and/or its affiliates, and shall be paid in accordance with the normal payroll and incentive administration practices of the Company and/or its affiliates as they may exist from time to time, but not less frequently than monthly.

        (a)    Salary .    The Company shall pay Executive an annual salary of not less than $250,000 (the " Salary "). Commencing in the first quarter of fiscal year 2009, Executive shall receive an annual performance and salary review, with any corresponding increase in the Salary to be determined by the Compensation Committee of the Board of Directors of Kratos, in its sole discretion.

        (b)    Annual Bonus .    For each of the three fiscal years of the Company commencing January 1, 2008, January 1, 2009, January 1, 2010, respectively, Executive shall be eligible to earn an annual bonus (the " Bonus ") up to an amount equal to the Salary. As a president of a subsidiary, he will be eligible to earn up to fifty percent (50%) of his salary for making the revenue and profit numbers in his annual operating plan ("AOP"). If the Company exceeds revenue and profit numbers in the AOP by specific targets, Executive shall be eligible to earn up to an aggregate amount equal to his Salary. At or about the beginning of each fiscal year, the CEO shall present the Executive with his bonus target criteria ("Bonus Letter"), which shall be tied to the Company's AOP and other factors used by Kratos with all operating units. Except as otherwise provided in Section 6(b), in the event that the Executive is employed by the Company only a portion of a fiscal year, the Bonus shall be calculated to reflect the portion of such fiscal year for which the Executive was employed by the Company under this Agreement, and tied to the above described performance criteria through the portion of the fiscal year completed. Within one hundred twenty (120) days after the end of each fiscal year for which a Bonus may be payable hereunder, the Company shall determine from its financial records and/or financial statements whether or not a Bonus has been earned and the amount of any Bonus payable. Any Bonus shall be paid to Executive at the same time as bonuses are paid generally to other officers of Kratos.

        (c)    Expense Reimbursement .    Executive will be entitled to prompt reimbursement for all necessary and reasonable business expenses incurred by Executive in connection with the business of the Company, subject to Executive's compliance with expense reimbursement policies

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established by the Company and/or its affiliates from time to time and in sufficient detail to comply with Internal Revenue Service regulations.

        (d)    Retirement Plans .    Executive shall be eligible to participate in all present and future pension benefit and retirement plans, practices, policies and programs established or maintained by the Company and/or its affiliates from time to time to the extent applicable generally to executive officers of the Company and/or its affiliates with the same years of service.

        (e)    Welfare Benefit Plans.     Executive and/or Executive's family, as the case may be, shall be eligible to participate in any present and future welfare, fringe, and other similar benefit plans, including, without limitation, participation in any hospitalization, major medical, disability and group life insurance plans, if any, practices, policies and programs established or maintained by the Company and/or its affiliates from time to time to the extent applicable generally to executive officers of the Company and/or its affiliates with the same years of service. Notwithstanding, and in addition to, the foregoing, the Executive shall be entitled to the following: (i) payment by the Company of 100 percent of the premiums at Commencement Date for disability insurance coverage not less than the coverage as of the Commencement Date, (ii) payment by the Company of 100 percent of the premiums at Commencement Date for family coverage for medical insurance, dental insurance and other ancillary insurance and plan benefits with coverage not less than the coverage as of the Commencement Date, and (iii) payment by the Company of all charges, costs, expenses and premiums at Commencement Date related to Priority Access medical service. Any premium increases in these above listed benefits from the premiums paid at Commencement Date, shall be borne by Executive, unless approved by the Compensation Committee of the Board of Directors of Kratos.

        (f)     Equity Plans .    Commencing with the fiscal year beginning January 1, 2008, Executive shall be eligible to participate in all present and future equity incentive plans established by the Kratos to the same extent applicable generally to executive officers of the Kratos with the same years of service.

        (g)    Paid Time Off .    Executive shall be eligible for no less than that amount of paid time off during the Term established by the Company and/or its affiliates from time to time as is provided to employees who are executive officers of the Company and/or its affiliates with the same years of service; provided, however, that Executive shall be entitled to at least six weeks of paid time off with pay each year and Executive shall be entitled to carry over such unused paid time off as is consistent with the policies of Kratos. Upon expiration of the Term or earlier termination of the Executive's employment with the Company, the Executive shall be paid for all unused paid time off.

        (h)    Restricted Stock .    Effective on December 28, 2007, Executive shall be awarded 75,000 Restricted Stock Units ("RSUs) related to Common Stock of Kratos pursuant to the terms of the Restricted Stock Unit Agreement attached hereto as Exhibit A (the " Restricted Stock Unit Agreement "). The restrictions on such RSUs shall lapse at the rate of 25 percent per year over four years with the first such vesting occurring on the first anniversary of the date of this Agreement; provided, however, that (i) in the event of the termination of Executive's employment pursuant to Section 5(b), or (ii) in the event of a "Change of Control" (as such term is defined in the Restricted Stock Agreement), or (iii) in the event of the expiration of the Term on December 31, 2010, such restrictions shall lapse immediately.

        (i)     Years of Service .    For purposes of Executive's participation in the plans of the Kratos contemplated by Section 4(d), 4(e), 4(f) and 4(g), Executive's years of service shall include that time prior to the date hereof during which Executive had been employed by the Company.

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        (j)     Vehicle Allowance .    Executive shall be entitled to a vehicle allowance of $250 per pay period.

        (k)    Disability .    If Executive shall become disabled during the Term, and such Disability shall continue for a period in excess of one month, the Salary shall be paid to the Executive during the period of such Disability until the earlier of six (6) calendar months or the date Executive begins receiving long term disability payments under a long term disability policy provided by the Company. Any Salary paid to the Executive under this Section shall be reduced by insurance benefits that the Executive may receive from any disability insurance purchased on Executive's behalf by the Company. For purposes of this Agreement, the terms "Disabled" and "Disability" shall be defined as Executive's inability, because of physical or mental illness or injury or incapacity, to perform Executive's essential duties, with reasonable accommodation.

        (l)     Bonus Upon Change of Control.     Upon the occurrence of a "Change of Control" of the Company (as such term is defined in the Restricted Stock Unit Agreement) at any time during the Term following the Commencement Date, the Executive shall be paid immediately in cash, a bonus in an amount equal to the amount of the Executive's then current Salary in addition to other amounts required to be paid to Executive pursuant to Section 6 hereof, if his position as President of the Company (or as changed per Section 2 (c) above) or if his powers, authority, duties or responsibilities are materially diminished during the remaining period of the Term following the Change of Control. For purposes of clarification, this Section 4 (l) only applies to a Change of Control of the Company and not Kratos or KGS.

        5.      Termination .     Subject to the respective continuing obligations of the parties hereto set forth in Sections 6 and 7 hereof, the Term and Executive's employment with the Company may be terminated as follows:

        (a)    By the Company for Cause .    The Company may terminate the Term and Executive's employment with the Company immediately for cause. For purposes of this Agreement, "for cause" shall mean:

          (i)  any act that constitutes on the part of Executive common law fraud, provided that such fraud resulted in, or was intended to result in, a financial benefit to Executive, or any third party, at the expense of the Company;

         (ii)  any material dishonesty on the part of Executive that results in actual financial harm to the Company;

        (iii)  any intentional or grossly negligent material breach by Executive of the regulations of the Securities and Exchange Commission or the NASDAQ stock exchange, or any subsequent stock exchange to which Kratos may list its shares;

        (iv)  Executive's conviction of, or plea of no contest with respect to, any criminal offense, which involves dishonesty, moral turpitude or breach of trust, or a felony;

         (v)  the willful failure of Executive to perform material duties or responsibilities in connection with Executive's employment with the Company (other than any such failure resulting from a disability pursuant to Section 5(d) hereof) which failure has not been cured within thirty (30) days after written notice to Executive identifying such failure with reasonable specificity;

        (vi)  a willful and material breach of this Agreement by Executive (other than any such breach resulting from a disability pursuant to Section 5(d) hereof) which breach has not been cured within thirty (30) days after written notice to Executive identifying such breach with reasonable specificity;

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       (vii)  any willful violation by Executive in any material respect of any of the Company's or Kratos' material policies (other than any such violation resulting from a disability pursuant to Section 5(d) hereof), which violation continues uncured for thirty (30) days after written notice to Executive identifying such violation with reasonable specificity; or

      (viii)  the willful failure by Executive (other than any such failure resulting from a disability pursuant to Section 5(d) hereof) to comply with any reasonable order or directive of the Board of Directors of the Company or the CEO which failure continues uncured for thirty (30) days after written notice to Executive identifying such failure with reasonable specificity.

        (b)    By Executive for Good R