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Exhibit 10.4

AMENDED AND RESTATED 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 Deanna Lund ("Lund"), as approved
by the Company's Board Compensation Committee.

        A.    Lund is presently employed as Chief Financial Officer pursuant to
an offer letter dated March 15, 2004 (the "Offer Letter").

        B.    On March 28, 2005, the Company and Lund entered into a Change of
Control Agreement, which memorialized in writing their understanding regarding
the vesting of stock options and stock appreciation rights granted to Lund under
the Company's equity incentive plans in the event of a Change of Control, which
was amended and restated on March 28, 2006 (the original agreement together with
any and all prior amendments is hereinafter referred to as the "Original
Agreement") to enhance severance and address compliance with Section 409A of the
Internal Revenue Code of 1986 (the "Code").

        C.    As consideration for Lund's agreement to undertake and continue
her duties and responsibilities in her role as Chief Financial Officer, the
Company and Lund desire to enter into this Agreement to (i) make further changes
to comply with subsequent guidance issued under Section 409A of the Code, and
(ii) to give Lund additional protection if there is a Change of Control of the
Company as set forth in paragraph 6 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 Lund 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 Lund 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 Lund will be entitled to
receive in satisfaction of all obligations (other than as provided in
paragraph 1 above) that the Company may have to Lund: (i) in the case of
clause (x) hereof, severance compensation equal to one year of her base salary
then in effect; or in the case of clause (y) hereof, severance compensation
equal to two years of her base salary plus her maximum potential bonus amount
for two years; in either case, less applicable taxes and withholding; and, if
needed by Lund, (ii) her then-current health insurance coverage, at the then
current employee cost, during the twelve (12) month period following a
termination in the case of clause (x); or during the twenty-four (24) month
period following a resignation in the case of clause (y). Such benefits will be
provided for the twelve (12) month or twenty-four (24) month period, as
applicable, following the date of Lund's termination. In addition, in the event
that Lund is terminated without Cause, the vesting of

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100% of all stock options, stock appreciation rights, restricted stock units and
any other equity awards granted to Lund 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
Lund'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 Lund's execution
of such separation agreement.

        (b)   Notwithstanding any other provision of this Agreement to the
contrary, if Lund is a "specified employee" within the meaning of Section 409A
of the Code and the related guidance ("Section 409A") at the time of Lund'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 Lund'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 Lund'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 Lund'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 Lund's annualized compensation based upon the annual rate of pay for services
provided to the Company for the taxable year of Lund preceding the taxable year
of Lund'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 transaction hold less than
50% of the voting securities of the surviving entity; (iii) any action or event
that results in the Board of Directors consisting of fewer than a majority of
Incumbent Directors ("Incumbent Directors" shall mean directors who either
(A) are directors of the Company as of the date hereof, or (B) are elected or
nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination);
or (iv) a sale of all or substantially all of the assets of the Company.

        (b)   A Triggering Event means (i) Lund's termination from employment by
the Company without Cause; (ii) a material change in the nature of Lund's role
or job responsibilities so that Lund's job duties and responsibilities after the
Change of Control, when considered in their totality as a whole, are
substantially different in nature from the job duties Lund performed immediately

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prior to the Change of Control; or (iii) the relocation of Lund's principal
place of work to a location of more that thirty (30) miles from the location
Lund was assigned to immediately prior to the Change of Control; provided,
however, in the case of a Triggering Event described in clause (ii) or
(iii) hereof, such condition shall not exist unless Lund provides written notice
to the Company within ninety (90) days of its initial existence and the Company
does not cure such condition within thirty (30) days from the date it receives
such notice from Lund. In addition, no Triggering Event will be deemed to have
occurred unless Lund separates from service within twelve (12) months from the
date such Triggering Event initially occurs.

        (c)   "Cause" means (i) acts or omissions constituting gross negligence,
recklessness or willful misconduct on the part of Lund with respect to Lund's
obligations or otherwise relating to the business of the Company; (ii) Lund's
material breach of this Agreement or the Company's standard form of
confidentiality agreement; (iii) Lund's conviction or entry of a plea of nolo
contendere for fraud, misappropriation or embezzlement, or any felony or crime
of moral turpitude; (iv) Lund's failure to perform her duties and
responsibilities as Chief Financial Officer to the reasonable satisfaction of
the Board after being provided with notice thereof and thirty (30) days
opportunity to remedy such failure; and (v) Lund's willful neglect of duties or
poor performance. Notwithstanding the foregoing, a termination under
subsection (v) shall not constitute a termination for "Cause" unless the Company
has first given Lund written notice of the offending conduct (such notice shall
include a description of remedial actions that the Company reasonably deems
appropriate to cure such offending conduct) and a thirty (30) day opportunity to
cure such offending conduct. In the event the Company terminates Lund's
employment under subsection (v), the Company agrees to participate in binding
arbitration, if requested by Lund, to determine whether the cause for
termination was willful neglect of duties or poor performance as opposed to some
other reason that does not constitute Cause under this Agreement.

        4.    General Provisions.    Except as set forth in this Agreement, the
terms of the Offer Letter remain unchanged. Nothing in this Agreement is
intended to change the at-will nature of Lund's employment with the Company.
This Agreement and the Offer Letter, including the Additional Terms and
Conditions attached thereto and the Proprietary Information and Innovations
Agreement signed by Lund, constitute the entire agreement between Lund and the
Company with respect to Lund's employment with the Company, and supersedes and
replaces the Original Agreement in its entirety. No amendment or modification of
the terms or conditions of this Agreement shall be valid unless in writing and
signed by the parties.

        5.    Compliance with Section 409A of the Code.    This Agreement is
intended to comply with Section 409A of the Code (or any regulations or rulings
thereunder), and shall be construed and interpreted in accordance with such
intent. Notwithstanding anything to the contrary in this Agreement, the Company,
in the exercise of its sole discretion and without the consent of Lund, may
amend or modify this Agreement in any manner in order to meet the requirements
of Section 409A of the Code as amplified by any Internal Revenue Service or U.S.
Treasury Department guidance. Any provision of this Agreement that would cause
the payment of any benefit to fail to satisfy Section 409A of the Code shall
have no force and effect until amended to comply with Code Section 409A (which
amendment may be retroactive to the extent permitted by the Code or any
regulations or rulings thereunder). Lund is encouraged to consult a tax adviser
regarding the potential impact of Section 409A of the Code.

        6.    Parachute Payment Excise Tax.    

        (a)   In the event that any payment or benefit (within the meaning of
Section 280G(b)(2) of the Code) to Lund for Lund's benefit, paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise in connection with, or arising out of, the Lund's employment with the
Company or a Change of Control (a "Payment" or "Payments"), would be subject to
the excise tax imposed by Code Section 4999, or any interest or penalties are
incurred

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by Lund with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the "Excise
Tax"), then Lund will be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by Lund of all taxes (including
any interest or penalties (other than interest and penalties imposed by reason
of Lund's failure to file timely a tax return or pay taxes shown due on Lund's
return) imposed with respect to such taxes and the Excise Tax), including any
Excise Tax imposed upon the Gross-Up Payment, Lund retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

        (b)   An initial determination as to whether a Gross-Up Payment is
required pursuant to this Agreement and the amount of such Gross-Up Payment
shall be made by the Company. the Company shall provide its determination (the
"Determination"), together with detailed supporting calculations and
documentation, to Lund within fifteen (15) days of the date of Lund's
termination, if applicable, or such other time as requested by Lund (provided
Lund reasonably believes that any of the Payments may be subject to the Excise
Tax). If requested by the Lund, the Company shall furnish Lund, at the Company's
expense, with an opinion reasonably acceptable to Lund from the Company's
accounting firm (or an accounting firm of equivalent stature reasonably
acceptable to Lund) that there is a reasonable basis for the Determination. Any
Gross-Up Payment determined pursuant to this paragraph 6 shall be paid by the
Company to Lund within five (5) days of receipt of the Determination.

        (c)   As a result of the uncertainty in the application of Sections 4999
and 280G of the Code, it is possible that a Gross-Up Payment (or a portion
thereof) will be paid which should not have been paid (an "Excess Payment") or a
Gross-Up Payment (or a portion thereof) which should have been paid will not
have been paid (an "Underpayment").

        (d)   An Underpayment shall be deemed to have occurred (A) upon notice
(formal or informal) to Lund from any governmental taxing authority that Lund's
tax liability (whether in respect of Lund's current taxable year or in respect
of any prior taxable year) may be increased by reason of the imposition of the
Excise Tax on a Payment or Payments with respect to which the Company has failed
to make a sufficient Gross-Up Payment, (B) upon a determination by a court, or
(C) by reason of determination by the Company (which shall include the position
taken by the Company, together with its consolidated group, on its federal
income tax return). If an Underpayment occurs, Lund shall promptly notify the
Company and the Company shall promptly, but in any event at least five (5) days
prior to the date on which the applicable government taxing authority has
requested payment, pay to Lund an additional Gross-Up Payment equal to the
amount of the Underpayment plus any interest and penalties (other than interest
and penalties imposed by reason of Lund's failure to file timely a tax return or
pay taxes shown due on Lund's return) imposed on the Underpayment.

        (e)   An Excess Payment shall be deemed to have occurred upon a Final
Determination (as hereinafter defined) that the Excise Tax shall not be imposed
upon a Payment or Payments (or portion thereof) with respect to which Lund had
previously received a Gross-Up Payment. A "Final Determination" shall be deemed
to have occurred when Lund has received from the applicable government taxing
authority a refund of taxes or other reduction in Lund's tax liability by reason
of the Excise Payment and upon either (A) the date a determination is made by,
or an agreement is entered into with, the applicable governmental taxing
authority which finally and conclusively binds Lund and such taxing authority,
or in the event that a claim is brought before a court of competent
jurisdiction, the date upon which a final determination has been made by such
court and either all appeals have been taken and finally resolved or the time
for all appeals has expired or (B) the statute of limitations with respect to
Lund's applicable tax return has expired. If an Excess Payment is determined to
have been made, the amount of the Excess Payment shall be repaid by Lund to the
Company unless, and only to the extent that, the repayment would either

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reduce the amount on which Lund is subject to tax under Code Section 4999 or
generate a refund of tax imposed under Code Section 4999.

        (f)    Notwithstanding anything contained in this Agreement to the
contrary, in the event that, according to the Determination, an Excise Tax will
be imposed on any Payment or Payments, the Company shall pay to the applicable
government taxing authorities, as Excise Tax withholding, the amount of the
Excise Tax that the Company has actually withheld from the Payment or Payments.

    Deanna H. Lund
Dated:
 
  

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Kratos Defense & Security Solutions, Inc.
Dated:
 
By:
 
  

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Exhibit 10.4

AMENDED AND RESTATED SEVERANCE AND CHANGE OF CONTROL AGREEMENT