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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549


Form 10-K/A

Amendment No. 1


|   |  |                                                                                             
|-- |  | --------------------------------------------------------------------------------------------
|þ  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|  
|   |  | For the fiscal year ended October 31,
    2004                                              
|  
|or
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-22354

MARTEK BIOSCIENCES CORPORATION

(Exact name of registrant as specified in its
charter)


|                                                                   |  |                                            
|------------------------------------------------------------------ |  | -------------------------------------------
|Delaware                                                           |  | 52-1399362                                 
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification Number)

6480 Dobbin Road, Columbia, Maryland
21045

(Address of principal executive
offices)


Registrants telephone number, including
area code:

(410) 740-0081


Securities registered pursuant to
Section 12(b) of the Act:

|                              |  |                                                    
|----------------------------- |  | ---------------------------------------------------
|Title of Each Class:
    None |  | Name of Each Exchange on Which Registered:
    None

Securities registered pursuant to
Section 12(g) of the Act:

Common Stock, $.10 Par Value

(Title of Class)


Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
last
90 days.     þ Yes          o No

Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be
contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any
amendment to this
Form 10-K.     o

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Act).     þ Yes          o No

The aggregate market value of Common Stock held
by non-affiliates of the registrant as of April 30, 2004
was $1,693,466,394.

The number of shares of Common Stock outstanding
as of January 7, 2005 was 29,507,058.



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EXPLANATORY NOTE

This is Amendment No. 1 to the
Registrants annual report on Form 10-K for the year
ended October 31, 2004, which was originally filed with the
Securities and Exchange Commission on January 13, 2005.
This amendment is being filed to include responses to the items
required by Part III, which originally were expected to be
incorporated by reference to the Registrants definitive
Proxy Statement to be delivered to its stockholders in
connection with its 2005 Annual Meeting of Stockholders. This
amendment is also being filed to update the exhibit index in
Item 15 of Part IV.

INDEX

MARTEK BIOSCIENCES CORPORATION

AMENDMENT NO. 1 TO FORM 10-K


FOR THE FISCAL YEAR ENDED OCTOBER 31,
2004


|         |  |                                                                                                    |  |      |    | 
|-------- |  | -------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|         |  |                                                                                                    |  | Page |   
|         |  |                                                                                                    |  |      |   
|PART III
|Item 10  |  | Directors and Executive Officers of the Registrant                                                 |  |      | 1  | 
|Item 11  |  | Executive Compensation                                                                             |  |      | 5  | 
|Item 12  |  | Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters |  |      | 8  | 
|Item 13  |  | Certain Relationships and Related Transactions                                                     |  |      | 10 | 
|Item 14  |  | Principal Accountant Fees and Services                                                             |  |      | 11 | 
|        
|PART IV 
|Item 15  |  | Exhibits and Financial Statement Schedules                                                         |  |      | 12 | 
|        
|         |  | Signatures                                                                                         |  |      | 13 | 



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##### 



PART III



|         |                                                        
|-------- | -------------------------------------------------------
|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE
    REGISTRANT.

DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT

Our directors and executive officers are as
follows:

|                                |  |     |    |  |          |                                                         
|------------------------------- |  | --- | -- |  | -------- | --------------------------------------------------------
|Name                            |  | Age |    |  | Position
|                                |  |     |    |  |         
|James R. Beery(2)               |  |     | 63 |  |          | Director                                                
|Jules Blake, Ph.D.(1)           |  |     | 80 |  |          | Director                                                
|Robert J. Flanagan(3)           |  |     | 48 |  |          | Director                                                
|Ann L. Johnson, M.D.(1)         |  |     | 68 |  |          | Director                                                
|Henry Linsert, Jr.              |  |     | 64 |  |          | Chairman, Chief Executive Officer and Director          
|Gordon S. Macklin               |  |     | 76 |  |          | Director                                                
|Douglas J. MacMaster, Jr.(1)(3) |  |     | 74 |  |          | Director                                                
|John H. Mahar(1)                |  |     | 70 |  |          | Director                                                
|Sandra Panem, Ph.D.(2)          |  |     | 58 |  |          | Director                                                
|Richard J. Radmer, Ph.D.        |  |     | 62 |  |          | Director                                                
|Eugene H. Rotberg(2)(3)         |  |     | 75 |  |          | Director                                                
|David M. Abramson               |  |     | 51 |  |          | Senior Vice President, Business Development             
|George P. Barker                |  |     | 65 |  |          | Senior Vice President, General Counsel and
    Secretary
|Peter L. Buzy                   |  |     | 45 |  |          | Chief Financial Officer and Treasurer                   
|Steve Dubin                     |  |     | 51 |  |          | President                                               
|Barney B. Easterling            |  |     | 59 |  |          | Senior Vice President, Manufacturing                    
|James H. Flatt, Ph.D.           |  |     | 45 |  |          | Senior Vice President, Research and Development         
|Jerome C. Keller                |  |     | 62 |  |          | Senior Vice President, Sales and Marketing              



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|    |                                                            
|--- | -----------------------------------------------------------
|(1) | Member of Compensation Committee                           
|   
|(2) | Member of Audit Committee                                  
|   
|(3) | Member of Nominating and Corporate Governance
    Committee



| |           
| | ----------
| | Directors:

Mr. Beeryserved as Senior Vice President and General Counsel for
SmithKline Beecham and subsequently GlaxoSmithKline from 1993
until his retirement in 2001. Prior to that, Mr. Beery
practiced law with international law firms in New York, Tokyo
and London, including serving as Managing Partner of the London
office of Morrison & Foerster, specializing in
strategic transactions and general corporate matters for a
variety of industries. Following his retirement from
GlaxoSmithKline, Mr. Beery became Senior Of Counsel to the
London office of Covington & Burling. Mr. Beery
also serves as a director for deCODE genetics, Inc. and Orchid
BioSciences, Inc. (biotechnology). Mr. Beery has been a
director of the Company since March 2004. His term expires in
2006.

Dr. Blakeserved as Vice President of Research and Development, and later
Vice President, Corporate Scientific Affairs, for
Colgate-Palmolive from 1973 until 1989. Following his retirement
in 1989, Dr. Blake accepted an appointment as Industrial
Research Institute Fellow at the Office of Science and
Technology Policy, Executive Office of the President, where he
served until 1991. Dr. Blake also serves as a director for
Gene Logic, Inc. (biotechnology). Dr. Blake has been a
director of the Company since 1990. His term expires in 2005.

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Mr. Flanaganis
Executive Vice President of Clark Enterprises, Inc.
(Clark), one of the largest privately-held
construction companies in the United States. Prior to joining
Clark, Mr. Flanagan was the Treasurer, Secretary and member
of the Board of Directors of the Baltimore Orioles, Inc. and was
also employed as a member of Arthur Andersens audit
division in the Washington, D. C. office. Certified as a public
accountant in Washington, D.C., Mr. Flanagan has been
a director of the Company since April 2002. His term expires in
2006.

Dr. Johnsonserved as a physician on the psychiatry staff of Mills Peninsula
Hospital and the neonatology staff of Childrens Hospital
Stanford from 1992 to 2001. Dr. Johnson has a private
practice in psychiatry and psychopharmacology. Dr. Johnson
has been a director of the Company since March 1995. Her term
expires in 2005.

Mr. Linsertjoined Martek as Chairman of the Board in 1988 and became Chief
Executive Officer in 1989. From 1987 to 1988 he was primarily
engaged as President of American Technology Investments Corp., a
consulting company specializing in the development and financing
of early stage companies in the Mid-Atlantic area. He was
President and Chief Executive Officer of Suburban Capital
Corporation, a venture capital subsidiary of Sovran Financial
Corporation (now Bank of America), from 1983 to 1987. Prior to
1983, Mr. Linsert was Vice President of Inverness Capital
Corporation, a small business investment company, and Vice
President of First Virginia Bank. He also served as a Captain in
the U.S. Marine Corps and as an artillery officer in
Vietnam. His term expires in 2005.

Mr. Macklinserves as a director of MedImmune, Inc. (biotechnology) and
Overstock.com (internet sales), and is a director, trustee, or
managing general partner, as the case may be, of 48 of the
investment companies in the Franklin Templeton Group of Funds.
Mr. Macklin was formerly the Deputy Chairman of White
Mountains Insurance Group, Inc. from 2001 to 2004, Chairman of
White River Corporation (financial services) from 1993 to 1998,
President of the National Association of Securities Dealers,
Inc. (1970-1987) and Chairman of Hambrecht and Quist Group
(1987-1992). From 1998-2002, Mr. Macklin was also a member
of the Board of Directors of WorldCom, Inc. (now called MCI,
Inc). Mr. Macklin has been a director of Martek since 1998.
His term expires in 2006.

Mr. MacMasterserved in various management positions at Merck & Co.,
Inc. (Merck) from 1961 to 1988, at which time he was
appointed Senior Vice President responsible for ten divisions,
including Manufacturing and Technology, and Pharmaceutical
Manufacturing. Mr. MacMaster retired from Merck in 1991 and
currently serves as a director for Neose Technologies, Inc.
(biotechnology) and Stratton Mutual Funds.
Mr. MacMaster has been a director of the Company since
1993. His term expires in 2007.

Mr. Maharhas
served as President of Hillside Management, a consulting firm,
since 1992. From 1991 to 1992, Mr. Mahar was a Vice
President at Salomon Brothers Inc., serving as a principal for
the Venture Capital Fund. From 1985 to 1991, Mr. Mahar was
Executive Vice President and Chief Operating Officer of Elf
Technologies, Inc., a venture capital firm. Mr. Mahar was
reelected as a director of the Company in February 1993. Prior
to that time, he served as a director of the Company from 1988
until 1991. His term expires in 2007.

Dr. Panemis a
partner in Cross Atlantic Partners, an investment company
specializing in biotechnology and healthcare. Prior to 1999,
Dr. Panem was President of Vector Fund Management,
L.P. (VFM), which focused on later-stage companies.
Prior to joining VFM, she served as Vice President and Portfolio
Manager for the Oppenheimer Global BioTech Fund, a mutual fund
that invested in public and private biotechnology companies.
Prior to joining Oppenheimer, Dr. Panem was a Vice
President at Salomon Brothers Venture Capital, a fund focused on
early and later-stage life sciences and technology investments.
Dr. Panem has been a director of the Company since May
1995. Prior to that time, she served as a director from June
1990 until February 1993. Dr. Panem also serves as a
director for Bioject, Inc. (healthcare equipment manufacturer).
Her term expires in 2005.

Dr. Radmer,a
founder of Martek, has served since 1985 as a director. He
served as our President and Chief Scientific Officer through
March 2003. Prior to 1985, he worked for 17 years at Martin
Marietta Corp. where he headed the Biosciences Department which
performed research to develop new products from

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microalgae, among other activities. He has served
as an Adjunct Associate Professor and Associate Member of the
Graduate Faculty at the University of Maryland. His term expires
in 2006.


Mr. Rotberghas
been an independent advisor to international development and
financial institutions since 1990. From 1987 to 1990,
Mr. Rotberg was Executive Vice President and a member of
the Executive Committee at Merrill Lynch & Co., Inc.
From 1969 to 1987, Mr. Rotberg was Vice President and
Treasurer of the World Bank. Mr. Rotberg has been a
director of the Company since 1992. His term expires in 2007.



| |                                                     
| | ----------------------------------------------------
| | Executive Officers (in addition to
    Mr. Linsert):

Mr. Abramsonjoined Martek in 2003 as head of Business Development. Prior to
joining Martek, he was the Executive Vice President and General
Counsel for U.S. Foodservice from 1996 to 2003. In this
position, Mr. Abramson oversaw the legal and regulatory
affairs of U.S. Foodservice, a large foodservice
distributor in the United States, and advised on business
development opportunities for this company.
U.S. Foodservice became a subsidiary of Royal Ahold in
2002. In addition, Mr. Abramson was also the Executive Vice
President for Legal Affairs at Ahold, U.S.A. from 2000 to 2003.
Mr. Abramson also served on the Board of Directors of
U.S. Foodservice from 1994 to 2003. Prior to joining
U.S. Foodservice, from 1983 until 1996, Mr. Abramson
was a partner at Levan, Schimel, Belman & Abramson,
P.A., now a part of Miles & Stockbridge.
Mr. Abramson graduated from George Washington University in
1975, where he obtained a Bachelors of Business Administration
in accounting. He received his Juris Doctor degree, with honors,
from the University of Maryland School of Law in 1978.
Mr. Abramson is a member of the Maryland Bar.

Mr. Barkerjoined Martek in 2000 as Senior Vice President, General Counsel
and Secretary. Prior to joining Martek, Mr. Barker was
Senior Vice President of Howard County General Hospital, Inc: A
Member of Johns Hopkins Medicine and its affiliate Howard County
Health Services, Inc. From 1982 to 1991, Mr. Barker was
Senior Vice President for Development, General Counsel and
Secretary of The Enterprise Development Company, a real estate
development company located in Columbia, Maryland. Prior to
1982, Mr. Barker held positions as a partner of a
Baltimore, Maryland law firm and Associate General Counsel and
Assistant Secretary of The Rouse Company, a real estate
development company also located in Columbia, Maryland.
Mr. Barker has an A.B. degree from Princeton University and
a LL.B. degree from Columbia University.

Mr. Buzyjoined
Martek in 1998 as Chief Financial Officer. Prior to joining
Martek, Mr. Buzy spent 13 years with the accounting
firm of Ernst & Young LLP, most recently as an audit
partner in the Northern Virginia High Technology/ Life Sciences
Practice. Mr. Buzy is a Certified Public Accountant and a
member of the American Institute of Certified Public
Accountants. He received his B.S. in accounting from Salisbury
University.

Mr. Dubinjoined Martek in 1992, where he served in various management
positions, including CFO, Treasurer, Secretary, General Counsel
and Senior Vice President of Business Development. In 2000, he
moved to a part-time position of Senior Advisor 
Business Development, a role he filled until his election to
President of the Company in September 2003. He also spent time
during 2000 through 2003 co-founding and co-managing a
Maryland-based, angel-investing club that funds early-stage,
high-potential businesses. He was also Of Counsel to
the law firm Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C. during part of 2001 and 2002. Prior to 1992,
Mr. Dubin worked in the financing and management of
early-stage businesses and, over a period of 12 years,
served in various positions at Suburban Bank, now part of Bank
of America, including Vice President and Treasurer of their
venture capital subsidiary, Suburban Capital Corporation.
Mr. Dubin received a B.S in accounting from the University
of Maryland and a Juris Doctor degree from the George Washington
University. Mr. Dubin is a Certified Public Accountant and
a member of the Maryland Bar.

Mr. Easterlingjoined Martek in 2003 in connection with Marteks
acquisition of FermPro Manufacturing, LP (FermPro).
With the acquisition, he was named Vice President of
Manufacturing of Martek, and in March 2004, he was elected to
the position of Senior Vice President of Manufacturing. From
1994 to 2003, Mr. Easterling served as President and CEO of
FermPro, a provider of contract fermentation services with a

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workforce of over 100 personnel. From 1980 to
1994, Mr. Easterling served in various management
capacities for Gist-Brocades. He received a B.S. in premedicine
from Clemson University.


Dr. Flattjoined Martek in 2002 as Senior Vice President, Research and
Development. Prior to joining Martek, Dr. Flatt was the
Vice President of Research and Development for OmegaTech, Inc.,
a DHA producer in Boulder, Colorado that was acquired by Martek
in April 2002. In his position with OmegaTech, Dr. Flatt
managed all corporate research and development, including
discovery, ingredient technology, food and analytical sciences
and process development. Prior to joining OmegaTech,
Dr. Flatt held a position at Procter & Gamble and
was Vice President of Fermentation and Process Research for the
Kelco division of Merck, where he led the development and
commercialization of several major new products and processing
technologies. Dr. Flatt is the author of six patents and
numerous professional papers. He received his B.S. in chemical
engineering from the Massachusetts Institute of Technology, his
M.S. in chemical engineering from the University of
California  Berkeley, and his Ph.D. in chemical and
biochemical engineering from the University of
Wisconsin  Madison.

Mr. Kellerjoined Martek in 1997 as Senior Vice President of Sales and
Marketing. Prior to joining Martek, Mr. Keller had been
consulting after spending a 25-year career at Merck, most
recently as Vice President of Sales from 1986 to 1993. In this
position, he was responsible for all U.S. sales operations,
including the direction of a support staff of 4,500 personnel
and a sales volume of $4.2 billion. Mr. Keller has a
M.S. degree from the University of Pittsburgh and a B.S. degree
from Duquesne University.

AUDIT COMMITTEE

The Board of Directors of the Corporation has a
standing Audit Committee established in accordance with
Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended. The Audit Committee of the Board of Directors
consists of Messrs. Beery and Rotberg and Dr. Panem.
Mr. Rotberg also serves as Audit Committee Chairman. The
Board has determined that Mr. Rotberg is an audit
committee financial expert as defined by the rules of the
SEC.

SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE

The Securities Exchange Act of 1934 requires that
the Companys directors, executive officers and 10%
stockholders file reports of ownership of equity securities of
the Company with the Securities and Exchange Commission and
furnish copies of such reports to the Company. Based solely on a
review of such reports furnished to the Company, except as set
forth below, the Company believes that, for fiscal 2004, all
such filing requirements were met. Mr. William Smart, a
former Director of the Company, inadvertently failed to timely
file a Form 4 with respect to the acquisition of
7,500 shares of Company common stock via stock option
exercise and subsequent sale of these 7,500 shares on
November  7, 2003. Mr. Smart also inadvertently
failed to timely file Forms 4 with respect to the
acquisition of 7,500 shares of Company common stock via
stock option exercises and the subsequent sales of
7,500 shares on each of November 14, 2003 and
December 12, 2003. Mr. Linsert inadvertently failed to
timely file Forms 4 with respect to the acquisition of
150,000 and 395,000 shares of Company common stock via
stock option exercises and the subsequent sales of 150,000 and
146,700 shares on January 15, 2004 and
January 16, 2004, respectively. Mr. Thomas Fisher, a
former executive officer of the Company, inadvertently failed to
timely file a Form 4 with respect to the acquisition of
209,000 shares of Company common stock via stock option
exercises and the subsequent sale of 99,800 shares on
January 16, 2004. Mr. Easterling inadvertently failed
to timely file a Form 3 for 20,798 shares owned by him
pursuant to the Asset Sale and Purchase Agreement dated
September 5, 2003, in which the Company acquired certain
assets of FermPro Manufacturing, LP, as well as for the grant of
25,000 stock options upon his promotion to Senior Vice
President, Manufacturing on March 18, 2004. Dr. Radmer
inadvertently failed to timely file a Form 4 with respect
to the acquisition of 10,000 shares of Company common stock
via stock option exercise and subsequent sale of
10,000 shares on September 24, 2004, as well as the
sale of 4,200 shares on September  24, 2004 of
Company common stock held by the Radmer Family L.P. of which
Dr. Radmer is the general partner.

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CODE OF ETHICS

As part of our system of corporate governance,
our Board of Directors has adopted a code of ethics that is
specifically applicable to our chief executive officer,
president, chief financial officer and controller. This code of
ethics is available on our website at
http://media.corporate-ir.net/media_files/nsd/matk/codeofconduct.pdf.



|         |                        
|-------- | -----------------------
|ITEM 11. | EXECUTIVE COMPENSATION.

SUMMARY COMPENSATION TABLE

The table below sets forth the annual and
long-term compensation for services in all capacities to the
Company for the fiscal years ended October 31, 2004, 2003
and 2002 of (i) the Chief Executive Officer and
(ii) the four other most highly compensated executive
officers of the Company whose salary and bonus exceeded $100,000
(with the Chief Executive Officer, the Named Executive
Officers).

|                            |                             |      |      |                     |        |                       |                     |          |              |           |         |         |  |     |        |        |  |   |       |   | 
|--------------------------- | --------------------------- | ---- | ---- | ------------------- | ------ | --------------------- | ------------------- | -------- | ------------ | --------- | ------- | ------- |  | --- | ------ | ------ |  | - | ----- | - | 
|                            |                             |      |      |                     |        | Long-Term             |                     |          |             
|                            |                             |      |      | Annual Compensation |        |                       | Compensation Awards |          |              |          
|                            |                             |      |      |                     |        |                       |                     |          |              | All Other |        
|                            |                             |      |      |                     |        | Securities Underlying |                     |          | Compensation |          
|Name and Principal Position |                             | Year |      |                     | Salary |                       |                     | Bonus(1) |              |           | Options |         |  | (2) |       
|                            |                             |      |      |                     |        |                       |                     |          |              |           |         |         |  |     |       
|Henry Linsert, Jr.,         |                             |      | 2004 |                     |        | $                     | 439,754             |          |              | $         | 165,103 |         |  |     | 45,000 |        |  | $ | 2,754 |  
|                            | Chief Executive Officer     |      |      | 2003                |        |                       | $                   | 361,293  |              |           | $       | 219,438 |  |     |        | 50,000 |  |   |       |  | 
|                            |                             |      |      | 2002                |        |                       | $                   | 311,250  |              |           | $       | 90,676  |  |     |        | 75,000 |  |   |       |  | 
|Steve Dubin,                |                             |      | 2004 |                     |        | $                     | 349,426             |          |              | $         | 129,441 |         |  |     | 40,000 |        |  | $ | 2,754 |  
|                            | President                   |      |      | 2003                |        |                       | $                   | 129,062  |              |           | $       | 79,092  |  |     |        | 18,000 |  |   |       |  | 
|                            |                             |      |      | 2002                |        |                       | $                   | 49,091   |              |           |         |        |  |     |        | 30,000 |  |   |       |  | 
|Jerome C. Keller,           |                             |      | 2004 |                     |        | $                     | 270,983             |          |              | $         | 100,382 |         |  |     | 30,000 |        |  |   |      |  
|                            | Sr. Vice President,         |      |      | 2003                |        |                       | $                   | 226,759  |              |           | $       | 138,977 |  |     |        | 35,000 |  |   |       |  | 
|                            | Sales and Marketing         |      |      | 2002                |        |                       | $                   | 196,067  |              |           | $       | 55,917  |  |     |        | 50,000 |  |   |       |  | 
|Peter L. Buzy,              |                             |      | 2004 |                     |        | $                     | 270,983             |          |              | $         | 100,382 |         |  |     | 30,000 |        |  | $ | 2,754 |  
|                            | Chief Financial Officer     |      |      | 2003                |        |                       | $                   | 231,714  |              |           | $       | 138,977 |  |     |        | 35,000 |  |   |       |  | 
|                            |                             |      |      | 2002                |        |                       | $                   | 197,125  |              |           | $       | 57,428  |  |     |        | 50,000 |  |   |       |  | 
|George P. Barker,           |                             |      | 2004 |                     |        | $                     | 270,983             |          |              | $         | 100,382 |         |  |     | 30,000 |        |  | $ | 2,423 |  
|                            | Sr. Vice President, General |      |      | 2003                |        |                       | $                   | 226,347  |              |           | $       | 138,977 |  |     |        | 35,000 |  |   |       |  | 
|                            | Counsel and Secretary       |      |      | 2002                |        |                       | $                   | 190,900  |              |           | $       | 55,614  |  |     |        | 50,000 |  |   |       |  | 



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|    |                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | All Named Executive Officers received bonuses
    based on performance in fiscal 2004 pursuant to the
    Companys Management Cash Bonus Incentive Plan (the
    Bonus Plan).                                                                                                                                                                              
|   
|(2) | Beginning in fiscal 2004, the Company made
    matching contributions under the Companys
    401(k) Plan, to the extent allowable by law, equal to a
    discretionary percentage up to three percent of the
    participants salary reductions. The fiscal 2004
    matching contributions related to participant salary
    reductions in fiscal 2003.

5



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OPTIONS GRANTED IN LAST FISCAL YEAR

Shown below is information on grants to the
Companys Named Executive Officers of stock options
pursuant to the Companys option plans during the year
ended October 31, 2004.

|                   |  |                   |        |  |                               |  |     |           |  |                         |            |  |                              |    |           |  |     |   |           |  |  |   |           | 
|------------------ |  | ----------------- | ------ |  | ----------------------------- |  | --- | --------- |  | ----------------------- | ---------- |  | ---------------------------- | -- | --------- |  | --- | - | --------- |  |  | - | --------- | 
|                   |  |                   |        |  |                               | 
|                   |  | Individual Grants |        |  |                              
|                   |  |                   |        |  | Potential Realizable Value at | 
|                   |  | Number of         |        |  | Percentage of                 |  |     |           |  | Assumed Annual Rates of |           
|                   |  | Securities        |        |  | Total Options                 |  |     | Exercise  |  |                         |            |  | Stock Price Appreciation for |   
|                   |  | Underlying        |        |  | Granted to                    |  |     | or Base   |  |                         |            |  | Option Term(3)               |   
|                   |  | Options           |        |  | Employees in                  |  |     | Price     |  |                         | Expiration |  |                              |    |          
|Name               |  | Granted(1)        |        |  | Fiscal 2004                   |  |     | ($/Sh)(2) |  |                         | Date       |  |                              | 5% |           |  | 10% |  
|                   |  |                   |        |  |                               |  |     |           |  |                         |            |  |                              |    |           |  |     |  
|Henry Linsert, Jr. |  |                   | 45,000 |  |                               |  | 4.2 | %         |  | $                       | 61.15      |  |                              |    | 3/18/2014 |  |     | $ | 1,730,561 |  |  | $ | 4,385,581 | 
|Steve Dubin        |  |                   | 40,000 |  |                               |  | 3.7 | %         |  | $                       | 61.15      |  |                              |    | 3/18/2014 |  |     | $ | 1,538,276 |  |  | $ | 3,898,294 | 
|Jerome C. Keller   |  |                   | 30,000 |  |                               |  | 2.8 | %         |  | $                       | 61.15      |  |                              |    | 3/18/2014 |  |     | $ | 1,153,707 |  |  | $ | 2,923,721 | 
|Peter L. Buzy      |  |                   | 30,000 |  |                               |  | 2.8 | %         |  | $                       | 61.15      |  |                              |    | 3/18/2014 |  |     | $ | 1,153,707 |  |  | $ | 2,923,721 | 
|George P. Barker   |  |                   | 30,000 |  |                               |  | 2.8 | %         |  | $                       | 61.15      |  |                              |    | 3/18/2014 |  |     | $ | 1,153,707 |  |  | $ | 2,923,721 | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Upon grant, the vesting for these options was
    such that 20% became exercisable six months from the date of
    grant, and 20% would vest on the first, second, third and fourth
    anniversaries from the date of grant. On December 16, 2004,
    the Board of Directors of the Company approved a modification of
    all outstanding and unvested stock options whose exercise prices
    were greater than Marteks closing price on that date of
    $49.71. This modification served to immediately vest all such
    stock options which included the unvested portion of the stock
    options noted above. With respect to other options held by the
    Companys Named Executive Officers, the effect of this
    acceleration was also to accelerate the vesting of 14,400
    unvested stock options held by Mr. Dubin and granted on
    October 13, 2003 at an exercise price of $51.92.
|   
|(2) | Options were granted at the closing price for the
    Companys common stock as reported on the NASDAQ National
    Market on the date of the grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(3) | The dollar amounts set forth under these columns
    are the result of calculations of assumed annual rates of stock
    price increases from the respective dates of grant in fiscal
    2004 to the respective dates of expiration of such options in
    2014 of 5% and 10%. These assumptions are not intended to
    forecast future price appreciation of the Companys stock
    price. The Companys stock price may increase or decrease
    in value over the time period set forth above.                                                                                                                                                                                                                                                                                                                                                                                                        

OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES

Shown below is information with respect to the
Named Executive Officers exercise of options to purchase
the Companys common stock during fiscal 2004 under the
Companys option plans and unexercised options held under
the Companys option plans as of October 31, 2004.

|                   |  |             |         |  |          |                       |                             |             |                      |                        |               |  |  |             |        |  |               |   |           |  |  |   |         | 
|------------------ |  | ----------- | ------- |  | -------- | --------------------- | --------------------------- | ----------- | -------------------- | ---------------------- | ------------- |  |  | ----------- | ------ |  | ------------- | - | --------- |  |  | - | ------- | 
|                   |  |             |         |  |          |                       |                             |             |                      |                       
|                   |  |             |         |  |          | Number of             |                             |             |                     
|                   |  |             |         |  |          | Securities Underlying |                             |             | Value of Unexercised |                       
|                   |  |             |         |  |          | Unexercised Options   |                             |             | In-the-Money Options |                       
|                   |  | Shares      |         |  |          |                       | Held at October 31, 2004(1) |             |                      | at October 31, 2004(1) |              
|                   |  | Acquired    |         |  | Value    |                       |                             |             |                      |                        |               | 
|Name               |  | on Exercise |         |  | Realized |                       |                             | Exercisable |                      |                        | Unexercisable |  |  | Exercisable |        |  | Unexercisable |  
|                   |  |             |         |  |          |                       |                             |             |                      |                        |               |  |  |             |        |  |               |  
|Henry Linsert, Jr. |  |             | 545,000 |  |          | $                     | 28,472,600                  |             |                      |                        | 49,000        |  |  |             | 71,000 |  |               | $ | 956,800   |  |  | $ | 660,200 | 
|Steve Dubin        |  |             |        |  |          |                       |                            |             |                      |                        | 48,600        |  |  |             | 64,400 |  |               | $ | 713,060   |  |  | $ | 537,840 | 
|Jerome C. Keller   |  |             | 30,000  |  |          | $                     | 1,531,434                   |             |                      |                        | 247,000       |  |  |             | 48,000 |  |               | $ | 7,396,290 |  |  | $ | 452,860 | 
|Peter L. Buzy      |  |             |        |  |          |                       |                            |             |                      |                        | 183,000       |  |  |             | 48,000 |  |               | $ | 4,907,250 |  |  | $ | 452,860 | 
|George P. Barker   |  |             | 25,000  |  |          | $                     | 851,720                     |             |                      |                        | 117,000       |  |  |             | 48,000 |  |               | $ | 2,558,790 |  |  | $ | 452,860 | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Total value of unexercised options is based on
    the closing price of the Companys common stock of
    $47.06 per share on October 31, 2004. See footnote
    (1) to the Options Granted in Last Fiscal Year
    table above with regards to the acceleration of the vesting of
    certain stock options after October 31, 2004. The
    information in this table does not reflect this acceleration.

6



---



##### 



DIRECTORS FEES

Each director who is not an employee of the
Company receives an annual retainer of $10,000 plus $500 and
expenses per Board meeting. Committee members receive an annual
retainer, which varies by committee, plus $500 per
committee meeting. The annual retainer for committee members is
as follows: Audit Committee Chairman  $4,000; Audit
Committee members  $2,000; Compensation Committee
Chairman  $2,000; Compensation Committee
members  $1,000; Nominating and Corporate Governance
Committee Chairman  $2,000; Nominating and Corporate
Governance Committee members  $1,000. Each director
is also eligible to receive options under the Companys
stock option plans. Currently, each eligible director receives
options to purchase 15,000 shares of stock each year
on the day of the Companys Annual Meeting of Stockholders,
provided he or she has served as a director of the Company for
at least one year as of such Annual Meeting of Stockholders or
otherwise has received Board approval for the grant. In
addition, each newly elected director receives options to
purchase 20,000 shares of the Companys common
stock upon joining the Board. During the year ended
October 31, 2004, each non-employee director received
options resulting from their service as a director to
purchase 15,000 shares at $61.15 per share under
the Companys 2004 Stock Incentive Plan and Mr. James
Beery, given his status as a newly elected director, received
options to purchase 20,000 shares at $61.15 per
share under the Companys 2004 Stock Incentive Plan. All
option grants to directors are granted at the closing price for
the Companys common stock as reported on the NASDAQ
National Market on the date of grant. Directors may also be
compensated for special assignments delegated by the Board,
although no such compensation was provided in fiscal 2004.

EMPLOYMENT AGREEMENTS

The Company entered into an employment agreement
with Mr. Linsert in May of 1990. The agreement with
Mr. Linsert provides for an annual salary of $120,000,
which is subject to normal periodic review. In 2004, the
Compensation Committee of the Board of Directors voted to
increase Mr. Linserts base annual salary to $475,410.
This agreement does not have a fixed term, but can be terminated
with six months written notice by either Mr. Linsert or the
Company. This agreement also prohibits Mr. Linsert from
engaging in activities competitive with those of the Company
during the period of Mr. Linserts employment and for
one year after leaving the employ of the Company.

COMPENSATION COMMITTEE INTERLOCK AND INSIDER
PARTICIPATION IN FISCAL 2004 COMPENSATION DECISIONS

No member of the Companys Compensation
Committee (consisting of Messrs. MacMaster and Mahar and
Drs. Blake and Johnson) is a current or former officer or
employee of the Company or any of its subsidiaries, and no
director or executive officer is a director or executive officer
of any other corporation that has a director or executive
officer who is also a director of the Company.

7



---



##### 





|         |                                                                                                        
|-------- | -------------------------------------------------------------------------------------------------------
|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
    OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
    MATTERS.

BENEFICIAL OWNERSHIP OF COMMON STOCK

The following table sets forth certain
information as of December 31, 2004 (unless otherwise
specified) with respect to the beneficial ownership of the
Companys common stock of each person who is known by the
Company to own beneficially more than 5% of the outstanding
shares of common stock, each director and nominee, each Named
Executive Officer (as defined above in Item 11,
Executive Compensation) and all directors and
executive officers as a group:

|                                                                 |  |                           |           |      |            |  |      |  
|---------------------------------------------------------------- |  | ------------------------- | --------- | ---- | ---------- |  | ---- | -
|                                                                 |  | Shares Beneficially Owned |           |      | Percentage | 
|Name and Address of Beneficial Owners                            |  | (1)                       |           |      | of Class   | 
|                                                                 |  |                           |           |      |            | 
|Henry Linsert, Jr.                                               |  |                           | 488,530   | (2)  |            |  | 1.65 | %
|Steve Dubin                                                      |  |                           | 101,000   | (3)  |            |  | *    |  
|Jerome C. Keller                                                 |  |                           | 275,000   | (4)  |            |  | *    |  
|Peter L. Buzy                                                    |  |                           | 207,000   | (5)  |            |  | *    |  
|George P. Barker                                                 |  |                           | 142,526   | (6)  |            |  | *    |  
|James R. Beery                                                   |  |                           | 20,500    | (7)  |            |  | *    |  
|Jules Blake, Ph.D                                                |  |                           | 52,955    | (8)  |            |  | *    |  
|Robert J. Flanagan                                               |  |                           | 352,591   | (9)  |            |  | 1.19 | %
|Ann L. Johnson, M.D                                              |  |                           | 78,000    | (10) |            |  | *    |  
|Gordon S. Macklin                                                |  |                           | 225,783   | (11) |            |  | *    |  
|Douglas J. MacMaster                                             |  |                           | 100,189   | (12) |            |  | *    |  
|John H. Mahar                                                    |  |                           | 88,500    | (13) |            |  | *    |  
|Sandra Panem, Ph.D                                               |  |                           | 257,156   | (14) |            |  | *    |  
|Richard J. Radmer, Ph.D                                          |  |                           | 125,800   | (15) |            |  | *    |  
|Eugene H. Rotberg                                                |  |                           | 136,350   | (16) |            |  | *    |  
|All Executive Officers and Directors as a group
    (19 persons) |  |                           | 2,824,220 | (17) |            |  | 9.07 | %



---



| |   |                      
| | - | ---------------------
| | * | Less than one percent



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Beneficial ownership is determined in accordance
    with the rules of the Securities and Exchange Commission and
    generally includes shares of common stock to which the person
    has sole or shared voting or investment power with respect to
    the shares or shares of common stock which the person has the
    right to acquire as of March 1, 2005, 60 days after
    December 31, 2004, through the exercise of any stock option
    or other right. Shares of common stock subject to options or
    rights currently exercisable or exercisable as of March 1,
    2005 are deemed outstanding for purposes of computing the
    percentage ownership of the person holding such option or right
    but are not deemed outstanding for purposes of computing the
    percentage ownership of any other person. Except where indicated
    otherwise, and subject to community property laws where
    applicable, the persons named in the table above have sole
    voting and investment power with respect to all shares of common
    stock shown as beneficially owned by them.
|
| | (2) | Includes currently exercisable options to
    purchase 85,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (3) | Includes currently exercisable options to
    purchase 95,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (4) | Includes currently exercisable options to
    purchase 275,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (5) | Consists of currently exercisable options to
    purchase 207,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (6) | Includes currently exercisable options to
    purchase 141,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (7) | Includes currently exercisable options to
    purchase 20,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (8) | Includes currently exercisable options to
    purchase 50,000 shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

8



---



##### 





| |     |                                                                                                                                                                                                                                                                                                           
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (9) | Includes 307,268 shares owned by CNF
    Investments, LLC of which Mr. Flanagan is a manager and
    member, and 5,000 shares owned by The Flanagan Family
    Foundation, of which Mr. Flanagan is a general partner.
    Mr. Flanagan currently holds exercisable options to
    purchase 40,323 shares.



|     |                                                                                                                                                                                                                                                                                                                      
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Consists of currently exercisable options to
    purchase 75,000 shares.                                                                                                                                                                                                                                             
|    
|(11) | Includes 31,143 shares owned by The Macklin
    Family Limited Partnership I, 30,000 shares owned by
    The Macklin Family Limited Partnership  MD,
    20,000 shares owned by Mr. Macklins wife and
    currently exercisable options to
    purchase 95,000 shares.                                             
|    
|(12) | Includes currently exercisable options to
    purchase 85,000 shares.                                                                                                                                                                                                                                                
|    
|(13) | Consists of currently exercisable options to
    purchase 88,500 shares.                                                                                                                                                                                                                                             
|    
|(14) | Includes 141,917 shares owned by Cross
    Atlantic Partners, of which Dr. Panem is a partner.
    Dr. Panem currently holds exercisable options to
    purchase 93,400 shares.                                                                                                                                      
|    
|(15) | Includes 45,800 shares owned by the Radmer
    Family L.P., and currently exercisable options to
    purchase 65,000 shares.                                                                                                                                                                                         
|    
|(16) | Includes 7,300 shares owned by the Rotberg/
    Comens/ Booth Foundation and 7,300 shares owned by the
    Rotberg/ Comens/ Bray Foundation, of which Mr. Rotberg
    shares voting and dispositive powers with members of his family.
    Also includes currently exercisable options to
    purchase 80,000 shares.
|    
|(17) | Includes currently exercisable options to
    purchase 1,642,223 shares.                                                                                                                                                                                                                                             

EQUITY COMPENSATION PLAN INFORMATION

The table below sets forth the following
information as of the end of the Companys 2004 fiscal year
for all compensation plans previously approved by the
Companys shareholders and all compensation plans not
previously approved by the Companys shareholders:



| |     |                                                                                                                                                                           
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | the number of securities to be issued upon the
    exercise of outstanding options;                                                                                       
|
| | (b) | the weighted-average exercise price of such
    outstanding options; and                                                                                                  
|
| | (c) | other than securities to be issued upon the
    exercise of such outstanding options, the number of securities
    remaining available for future issuance under the plan.

|                                                           |  |                      |           |   |                     |                      |                     |                          |  |  |         | 
|---------------------------------------------------------- |  | -------------------- | --------- | - | ------------------- | -------------------- | ------------------- | ------------------------ |  |  | ------- | 
|                                                           |  |                      |           |   |                     | Number of Securities |                    
|                                                           |  |                      |           |   |                     | Remaining Available  |                    
|                                                           |  | (a)                  |           |   |                     |                      | for Future Issuance |                         
|                                                           |  | Number of Securities |           |   | (b)                 |                      |                     | Under Equity             | 
|                                                           |  | to be Issued upon    |           |   | Weighted-Average    |                      |                     | Compensation Plans       | 
|                                                           |  | Exercise of          |           |   | Exercise Price of   |                      |                     | (Excluding Securities    | 
|Plan Category                                              |  | Outstanding Options  |           |   | Outstanding Options |                      |                     | Reflected in Column (a)) | 
|                                                           |  |                      |           |   |                     |                      |                     |                          | 
|Equity compensation plans approved by shareholders         |  |                      | 2,473,269 |   |                     | $                    | 40.73               |                          |  |  | 219,171 | 
|Equity compensation plans not approved by
    shareholders |  |                      | 1,515,830 | * |                     | $                    | 23.24               |                          |  |  | 166,105 | 
|                                                           |  |                      |           |   |                     |                      |                     |                          | 
|Total                                                      |  |                      | 3,989,099 |   |                     | $                    | 33.94               |                          |  |  | 385,276 | 
|                                                           |  |                      |           |   |                     |                      |                     |                          | 



---



|  |                                                                                                                                                                                                                                                       
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Excludes 10,424 shares of Martek common
    stock reserved for issuance upon exercise of options assumed in
    connection with the acquisition of OmegaTech on April 25,
    2002. The weighted average exercise price of these shares is
    $13.71.

The equity compensation plans approved by the
Company shareholders are the 2002 Stock Incentive Plan and the
2004 Stock Incentive Plan. The equity compensation plans not
approved by the Companys shareholders include the
Companys 1986 Stock Option Plan, as amended and restated
in 1992, the 1994 Directors Option Plan, the 1997
Stock Option Plan, the 2001 Stock Option Plan, and the 2003 New
Employee Stock Option Plan. Options to purchase common stock
under the Companys stock option plans, including the plans
not approved by shareholders, are granted at prices as
determined by the Compensation

9



---



##### 



Committee of the Board of Directors, but shall
not be less than the fair market value of the Companys
common stock on the date of grant. The Company does not intend
to issue the 159,430 options available under the Companys
1986 Stock Option Plan, as amended and restated in 1992, the
1994 Directors Option Plan, the 1997 Stock Option
Plan and the 2001 Stock Option Plan. With the exception of the
2003 New Employee Stock Option Plan and the 2004 Stock Incentive
Plan, which only consists of non-qualified options, the options
may be incentive stock options or non qualified stock options
and generally vest over a period of up to five years. The
Compensation Committee determines the vesting schedule and
expiration date (up to a maximum of ten years from the date of
grant) for each individual grant of options.




|         |                                                    
|-------- | ---------------------------------------------------
|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED
    TRANSACTIONS.

CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

The Clark Construction Group (Clark
Construction) has the overall construction and project
management role related to the expansion of the Companys
production facilities in Kingstree, SC. Clark Construction is a
wholly-owned subsidiary of Clark Enterprises, Inc., of which
Mr. Robert Flanagan, a Director of the Company, is
Executive Vice President. Mr. Flanagan is also a director
of Clark Construction. In return for Clark Constructions
services, the Company is reimbursing Clark Constructions
direct costs, currently estimated at approximately
$3.0 million, and is paying a services fee currently
estimated at approximately $3.0 million. During fiscal
2004, the Company paid Clark Construction $4.7 million in
connection with its construction and project management
services. To date, the Company has paid Clark Construction
approximately $5.4 million for such services. The
Nominating and Corporate Governance Committee met on
August 15, 2003, without Mr. Flanagan taking part in
the discussions, and voted to recommend approval of the Clark
Construction contract to the full Board provided that the
Nominating and Corporate Governance Committee receive opinions
from independent consultants that the proposal was fair and
reasonable to the Company and the compensation structure was
consistent with structures for comparable projects managed by
Clark Construction. After receipt and review of the information
requested by the Nominating and Corporate Governance Committee,
the full Board approved the Clark Construction contract, with
Mr. Flanagan abstaining.

Mr. James Flatt, Senior Vice President,
Research and Development, of the Company, and Mr. Robert
Flanagan, a Director of the Company, are former security holders
of OmegaTech, Inc. (OmegaTech). Mr. Flanagan is
also a manager and member of CNF Investments, LLC, which was
also a security holder in OmegaTech. On October 18, 2004,
the Company filed a Declaratory Judgment Complaint in the United
States District Court for the District of Maryland against
Robert Zuccaro, as stockholders representative of the
former security holders of OmegaTech. The complaint was brought
to seek to resolve Mr. Zuccaros claim that the former
OmegaTech security holders are owed 666,119 additional Martek
shares under the Agreement and Plan of Merger by which we
acquired OmegaTech because a milestone under that agreement was
allegedly met. If the milestone were to be deemed to have been
met, Mr. Flatt, Mr. Flanagan and CNF Investments, LLC
would receive a portion of the milestone shares based on their
pro rata interest in OmegaTech immediately prior to
Marteks acquisition of OmegaTech. See Item 3 of
Part I of the Companys Form 10-K for the fiscal
year ended October 31, 2004, Legal Proceedings.

10



---



##### 





|         |                                            
|-------- | -------------------------------------------
|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND
    SERVICES.

PRINCIPAL ACCOUNTANT FEES AND
SERVICES

The following is a summary of the fees billed to
Martek by Ernst & Young LLP for professional services
rendered for the fiscal years ended October 31, 2004 and
2003:

|                   |  |                  |         |  |                  |   |         | 
|------------------ |  | ---------------- | ------- |  | ---------------- | - | ------- | 
|Fee Category       |  | Fiscal 2004 Fees |         |  | Fiscal 2003 Fees |  
|                   |  |                  |         |  |                  |  
|Audit Fees         |  | $                | 326,246 |  |                  | $ | 277,056 | 
|Audit-Related Fees |  |                  | 12,580  |  |                  |   | 35,000  | 
|Tax Fees           |  |                  | 93,495  |  |                  |   | 83,215  | 
|All Other Fees     |  |                  |        |  |                  |   |        | 
|                   |  |                  |         |  |                  |  
|Total Fees         |  | $                | 432,321 |  |                  | $ | 395,271 | 
|                   |  |                  |         |  |                  |  

Audit FeesConsists
of fees billed for professional services rendered for the audit
of the Companys consolidated financial statements, review
of the interim consolidated financial statements included in
quarterly reports and services provided by Ernst &
Young LLP in connection with registration statements.

Audit-Related FeesConsists of fees billed for assurance
and related services that are reasonably related to the
performance of the audit or review of Marteks consolidated
financial statements and are not reported under Audit
Fees. These services include consultations related to the
Sarbanes-Oxley Act, due diligence related to mergers and
acquisitions and consultations concerning financial accounting
and reporting standards.

Tax FeesConsists of
fees billed for professional services for tax compliance, tax
advice and tax planning. These services include assistance
related to state tax incentives.

All Other Fees.There were no fees billed for professional services in fiscal
2004 and 2003 that are not included in one of the above
categories.



| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | Policy on Audit Committee Pre-Approval of
    Audit Services and Permissible Non-Audit Services of Independent
    Auditors

The Audit Committees policy is to
pre-approve all audit and permissible non-audit services
performed by the independent auditors. These services may
include audit services, audit-related services, tax services and
other services. For audit services, the independent auditor
provides an engagement letter in advance of the March meeting of
the Audit Committee, outlining the scope of the audit and
related audit fees. If agreed to by the Audit Committee, this
engagement letter is formally accepted by the Audit Committee at
its March Audit Committee meeting. For non-audit services, the
Companys senior management will submit from time to time
to the Audit Committee for approval non-audit services that it
recommends the Audit Committee engage the independent auditor to
provide for the fiscal year. The Companys senior
management and the independent auditor will each confirm to the
Audit Committee that each non-audit service is permissible under
all applicable legal requirements. A budget, estimating
non-audit service spending for the fiscal year, will be provided
to the Audit Committee along with the request. The Audit
Committee must approve both permissible non-audit services and
the budget for such services. The Audit Committee will be
informed routinely as to the non-audit services actually
provided by the independent auditor pursuant to this
pre-approval process. The Audit Committee may delegate
pre-approval authority to its Chairman. The Chairman must report
any decisions to the Audit Committee at the next scheduled
meeting.

11



---



##### 



PART IV



|         |                                                
|-------- | -----------------------------------------------
|ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES.

(c) Exhibits

| |       |  |  |                                                                                                                                                                                                                             
| | ----- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.48 |  |  | Continuing Guaranty of Martek Biosciences
    Corporation pursuant to Master Equipment Lease, dated
    October 29, 2004, between Martek Biosciences Kingstree
    Corporation and M&T Credit Services, LLC. Filed herewith.
| | 31.01 |  |  | Certification of Chief Executive Officer Pursuant
    to Rule 13a-14(a)/15d-14(a). Filed herewith.                                                                                                                          
| | 31.02 |  |  | Certification of Chief Financial Officer Pursuant
    to Rule 13a-14(a)/15d-14(a). Filed herewith.                                                                                                                          
| | 99.01 |  |  | Cautionary Statements for Purposes of the
    Safe Harbor Provisions of the Private Securities
    Litigation Reform Act of 1995. Filed herewith.                                                                         

12



---



##### 



SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized on January 20, 2005.



| |                               
| | ------------------------------
| | MARTEK BIOSCIENCES CORPORATION



| |    |                       
| | -- | ----------------------
| | By | /s/ Henry Linsert, Jr.

| |                                     
| | ------------------------------------
| |                                     
| | Henry Linsert, Jr.                  
| | Chief Executive Officer and Director

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