**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K/A**

**Amendment No. 1**

**(Mark One)**
| þ     | ** ** | **ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For  the fiscal year ended December 31, 2006**

**OR**

**TRANSITION REPORT PURSUANT TO  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period  from                                      to** |
|------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ** ** |
| ** ** | ** ** |
| ** ** | ** ** |
| **o**      | ** ** |
| ** ** | ** ** |

 

Commission File Number:000-50786

**STRATAGENE CORPORATION**

(Exact name of registrantas specified in its charter)

| **Delaware**                                     | ** ** | **33-0683641**       |
|--------------------------------------------------|------------|----------------------|
| (State or other  jurisdiction of                 |       | (I.R.S. Employer     |
| incorporation or  organization)                  |       | Identification  No.) |
|                                             |       |                 |
| **11011  North Torrey Pines Road, La Jolla, CA** | ** ** | **92037**            |
| (Address of  principal executive offices)        |       | (Zip Code)           |

**(858) 373-6300**(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of theAct:

| **Common Stock, $.0001 par value** | ** ** | **Nasdaq  Global Market**               |
|------------------------------------|------------|-----------------------------------------|
| (Title of class)                   |       | (Name of  Exchange on which Registered) |

Securities registered pursuant to Section 12(g) of theAct: **None**

Indicate by check mark if the registrant is awell-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes oNo þ

Indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or Section 15(d) of the Act.Yes o No þ

Indicate by check mark whether the registrant: (1) hasfiled all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquentfilers pursuant to Item 405 of Regulation S-K is not contained herein, and willnot be contained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer andlarge accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Largeaccelerated filer o                    Accelerated filer o                              Non-acceleratedfiler þ

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Exchange Act). Yes oNo þ

As of June 30, 2006, the last day of the registrant’ssecond fiscal quarter of fiscal 2006, the aggregate market value of the commonstock held by non-affiliates of the registrant was approximately $55.0 million,based on the last reported sale price on the preceding business day. Shares ofcommon stock held by each executive officer and director and by each person orgroup who owns 10% or more of the outstanding common stock have been excludedin that such persons may be deemed to be affiliates. This determination of affiliatestatus is not necessarily a conclusive determination for other purposes.

The number of outstanding shares of the registrant’scommon stock as of April 19, 2007 was 22,491,160.

**ExplanatoryNote**

This Amendment No. 1 on Form 10-K/A amends our AnnualReport on Form 10-K for the year ended December 31, 2006 filed with theSecurities and Exchange Commission on March 13, 2007 (the “Original Report”).This amendment replaces the information previously incorporated by reference inPart III of the Original Report with the actual text for Part III of the Form10-K and updates Part IV (Item 15. Exhibits) of the Original Report.

Except for the additions and modifications describedabove, the Company has not modified or updated disclosures presented in theOriginal Report in this Form 10-K/A. Accordingly, this Form 10-K/A does notreflect events occurring after the filing of the Original Report or modify orupdate those disclosures affected by subsequent events. Information notaffected by this amendment remains unchanged and reflects the disclosures madeat the time the Original Report was filed.

 

 

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**PART III.**

**ITEM 10. DIRECTORS, EXECUTIVEOFFICERS AND CORPORATE GOVERNANCE**

Our directors and executive officers, and their agesand positions, as of March 31, 2007, are set forth below:
| Name                      | ** ** | **Age** | ** ** | **Positions**                                    |
|---------------------------|------------|---------|------------|--------------------------------------------------|
| Joseph A. Sorge, M.D      |       | 53      |       | Chairman of the Board and Chief                  |
|                           |       |    |       | Executive Officer                                |
|                      |       |    |       |                                             |
| Robert C. Manion          |       | 65      |       | Director                                         |
|                      |       |    |       |                                             |
| Carl J. Eibl              |       | 46      |       | Director                                         |
|                      |       |    |       |                                             |
| John C. Reed, M.D., Ph.D. |       | 48      |       | Director                                         |
|                      |       |    |       |                                             |
| Peter Ellman              |       | 51      |       | Director                                         |
|                      |       |    |       |                                             |
| Nelson F. Thune           |       | 61      |       | General Manager for Hycor and Senior Vice        |
|                           |       |    |       | President of Operations for Stratagene and Hycor |
|                      |       |    |       |                                             |
| John R. Pouk              |       | 52      |       | Senior Vice President, Global Sales and          |
|                           |       |    |       | International Operations                         |
|                      |       |    |       |                                             |
| Steve R. Martin           |       | 46      |       | Vice President and Chief Financial               |
|                           |       |    |       | Officer                                          |

 

Following is a summary of the background and businessexperience of our directors and executive officers as of March 31, 2007:

*Joseph A. Sorge, M.D.*,age 53, is a founder of Stratagene and has served as chairman of its board ofdirectors and as its chief executive officer since 1986. Dr. Sorge earned B.S.degrees in biology and chemistry from the Massachusetts Institute of Technologyin 1975 and earned his M.D. degree from Harvard Medical School in 1979. Dr.Sorge served as a resident surgeon at Brown University from 1979 to 1980. Inaddition to his medical experience, Dr. Sorge trained as a post-doctoral fellowat Cold Spring Harbor Laboratories from 1980 to 1983 and served as an assistantmember of the Department of Basic and Clinical Research for Scripps Clinic andResearch Foundation from January 1983 to September 1986. Dr. Sorge is currentlyan adjunct member of Scripps Clinic and Research Foundation.

*Robert C. Manion,*age 65, hasserved as a director since June 2004. Since July 2004, Mr. Manion has served as the owner and president ofCircle Tractor.  From 1998 until June2004, Mr. Manion was retired and was not actively engaged in any businessactivity.  From 1997 until 1998, Mr.Manion served as a consultant to Andersen Consulting, formerly a businessunit of Arthur Anderson and now known as Accenture. From 1966 until1997, Mr. Manion held various positions at Andersen Consulting and servedas a partner from 1970 until 1997 when he retired. His position at the time ofhis retirement was Chief Financial Officer, Global Enterprise Group.

*Carlton J. Eibl,*age 46,**hasserved as a director since February 1999. Since May 2003, Mr. Eibl has servedas a managing director of Enterprise Partners Venture Capital. From December1999 until April 2003, Mr. Eibl served as president and chief executive officerof Maxwell Technologies, Inc., a publicly-held power and computing technologycompany. From February 1999 until November 1999, Mr. Eibl served as Stratagene’spresident and chief operating officer. Before joining Stratagene, Mr. Eibl heldvarious executive positions with Mycogen Corporation, including serving asMycogen’s chief executive officer from June 1997 until February 1999 and itspresident and chief operating officer from June 1995 until June 1997. Mr. Eiblholds a B.A. degree from Cornell University and a J.D. degree from BostonUniversity School of Law. Mr. Eibl also serves on the board of directors 

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of Maxwell Technologies, Inc., the board of trusteesof The Burnham Institute and the board of directors of numerous other privatecompanies.

*****John C. Reed*******,***M.D., Ph.D*., age 48, has served as adirector since June 2004. Dr. Reed has been the president and chief executiveofficer of The Burnham Institute, an independent, nonprofit, public benefitorganization dedicated to basic biomedical research, since January 2002. Dr.Reed has been with The Burnham Institute for the past 13 years, serving as aprogram director in 1992, as the deputy director of the Cancer Center beginningin 1994, as scientific director beginning in 1995, and as Cancer Centerdirector in 2002. He also currently serves as adjunct professor in theUniversity of California, San Diego’s (UCSD) Department of Molecular Pathologyand in San Diego State University’s Biology department. In addition, Dr. Reedis an associate member of UCSD’s Cancer Center. Prior to these positions, from1989 to 1992, Dr. Reed worked as assistant director of the Laboratory ofMolecular Diagnosis at the hospital of the University of Pennsylvania andassistant professor, Department of Pathology and Laboratory Medicine at theUniversity of Pennsylvania School of Medicine. Dr. Reed also serves on theboard of directors of Isis Pharmaceuticals, Inc., a publicly held drugdiscovery and development company and Pharmion, a publicly held pharmaceuticalcompany. Dr. Reed has authored or coauthored over 700 medical research articlesand was recognized by the Institute for Scientific Information as one of tenmost highly cited scientists in the world for the decade 1995 through 2005 andthe most highly cited scientist worldwide in the field of general medicine.

*Peter Ellman,*age 51, has servedas a director since February 2006.  Mr.Ellman has more than 25 years of leadership experience working with high-growthcompanies including several years working in the consumer healthcareindustry.  In 2005, Mr. Ellman foundedThe Raisin Group, a management consulting group that primarily works withhigh-growth companies, advising them on strategies to maximize and profitablygrow their operations.   Prior to TheRaisin Group, Mr. Ellman was CEO of Nextec Applications, Inc., a technologycompany engaged in the research and manufacture of advanced materials. Mr.Ellman served as CEO from 1995 until 2004 and during his tenure he helped thecompany raise $70 million in venture capital, assembled a strong managementteam, established worldwide production facilities and brought the Company’stechnology to commercialization in three key end markets. Mr. Ellman holds aB.S. degree in biology and chemistry from The State University of New York atAlbany.

*Nelson F. Thune*, age 61,currently serves as Stratagene’s general manager for Hycor and senior vicepresident of operations for Stratagene and Hycor, and is responsible for all ofStratagene’s manufacturing sites and the operations of Hycor’s three operatingsubsidiaries.  From the date of themerger in June of 2004 to December 2005, Mr. Thune served as Stratagene’ssenior vice president of operations. From 1985 to June of 2004, he served as Hycor’s senior vice president ofoperations and planning. Prior to joining Hycor in 1985, Mr. Thune served asvice president of operations with Hyland Therapeutics, a division of BaxterInternational, and had previously held operations management responsibilitiesat several manufacturing locations for Procter and Gamble. Mr. Thune holds aBachelor of Science degree in Chemical Engineering from W.P.I., Worcester,Massachusetts.

*John R. Pouk*,**age52, currently serves as Stratagene’s senior vice president, global salesand international operations, a position he has held since September 2003.Previously, Mr. Pouk served as Stratagene’s vice president of sales fromOctober 1999 to September 2003, director of worldwide sales from December 1997until October 1999 and director of North American sales from July 1996 untilDecember 1997. From September 1979 until joining Stratagene, Mr. Pouk served invarious capacities within the life sciences and medical divisions of FisherScientific Company, including serving as the vice president and general managerof the western region from October 1989 until July 1996. Mr. Pouk holds a B.A.degree in biology and a graduate degree in medical technology from AugustanaCollege.

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*Steve R. Martin*, age 46, currently serves asStratagene’s vice president and chief financial officer. Before assuming thisposition in July 2005, he served as Stratagene’s director of finance since May2004. Prior to joining Stratagene, Mr. Martin was the Controller at Gen-Probe,a publicly traded life sciences company. Prior to Gen-Probe, Mr. Martin held various senior finance positions attwo other international manufacturing companies and was a senior audit managerat the public accounting firm of Deloitte & Touche (“Deloitte”).  Mr. Martin received a Bachelor of Sciencedegree in Accounting from San Diego State University. He is a member of theAmerican Institute of Certified Public Accountants, Financial ExecutivesInstitute and Association of  BioscienceFinancial Officers.

**BoardMeetings and Committees**

The Board of Directors held a total of 5 meetingsduring the year ended December 31, 2006. All directors attended at least 75% of the aggregate number of meetingsof the Board and of the committees of the Board on which they served. TheCompany does not have a policy regarding attendance by directors at the AnnualMeeting of Stockholders.  All fivedirectors attended the 2006 Annual Meeting of Stockholders.  The Board of Directors has established anAudit Committee, a Compensation Committee and a Nominating Committee.

The Compensation Committee of the Board consists ofMessrs. Eibl (Chair), Reed and Manion. The Compensation Committee is governed by a written charter approved bythe Board of Directors. The Compensation Committee acts for the Board inreviewing and making recommendations to the Board regarding the executivecompensation program with respect to salary, bonuses, benefits and othercompensation matters. The Compensation Committee also administers Stratagene’sstock option plans.  The CompensationCommittee held 5 meetings during the year ended December 31, 2006.

The Audit Committee of the Board consists of Messrs.Manion (Chair), Eibl and Ellman. On March 22, 2006 the Board of Directorsunanimously approved the appointment of Peter Ellman to the Audit Committee.Mr. Ellman replaced Dr. Reed on the Audit Committee following Mr. Ellman’sjoining the Board of Directors on February 28, 2006. Mr. Eibl and Mr. Manionhave served on this committee since June 2004 following the merger with Hycor.The Audit Committee is governed by a written charter approved by the Board ofDirectors.  The Audit Committee isresponsible for oversight of Stratagene’s accounting practices, appointing andoversight of the Company’s independent registered public accounting firm,monitoring the adequacy of internal accounting practices and reviewingsignificant changes in accounting policies. The Company’s Board of Directors has determined that each of Messrs.Manion, Eibl, Reed and Ellman is an “independent” director as defined by therules and regulations of the Nasdaq Stock Market.  The Company’s Board of Directors has alsodetermined that Mr. Manion meets the requirements of an “audit committeefinancial expert” as defined by the rules and regulations of the Securities andExchange Commission. The Audit Committee held 5 meetings during the year endedDecember 31, 2006.

The Board of Directors established a NominatingCommittee in June 2004 in connection with the Company’s merger with Hycor. As a“controlled company” as defined by the rules and regulations of the Nasdaq StockMarket, the Company is not required to have a nominating committee comprisedsolely of independent directors.  TheCompany is a “controlled company” because Dr. Sorge beneficially owns more than50% of the voting power of the Company’s outstanding stock.  The Nominating Committee of the Boardconsists of all of the current members of the Board. Each member of theNominating Committee, other than Dr. Sorge, is an independent director asdefined by the rules and regulations of the Nasdaq Stock Market.  The Nominating Committee is governed by awritten charter approved by the Board of Directors.  The charter is available on Stratagene’swebsite under Corporate Governance on the Investor Relations page atwww.stratagene.com.  The NominatingCommittee identifies qualified individuals for nomination to the Board ofDirectors, both at annual meetings of stockholders and to fill vacancies on theBoard of Directors.  The NominatingCommittee had 1 meeting during the year ended December 31, 2006 to appoint Mr.Ellman to the Board of Directors.

The Board of Directors has adopted a process foridentifying and evaluating director nominees, including stockholdernominees.  The Nominating Committeeconsiders all qualified candidates identified by members of the 

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Nominating Committee, senior management andstockholders.  The Nominating Committeehas not made any material changes to the procedures by which stockholders mayrecommend nominees to our Board of Directors.

The Nominating Committee reviews each candidate’sbiographical information and assesses each candidate based on a variety offactors, including the following criteria set forth in the Nominating CommitteeCharter:

·                  thecandidate’s personal and professional integrity, ethics and values;

·                  thecandidate’s experience in corporate management, such as serving as an officeror former officer of a publicly held company;

·                  thecandidate’s experience in the Company’s industry; and

·                  thecandidate’s experience as a board member of another publicly held company.

Application of these factors involves an exercise ofjudgment and cannot be measured in any purely qualitative way.  The Nominating Committee will makerecommendations regarding the proposed director candidates to the Board basedon an assessment of each candidate, including the criteria identifiedabove.  The Nominating Committee uses thesame process and criteria for evaluating candidates proposed by members of theNominating Committee, senior management and stockholders.

Mr. David Tholen resigned from the Board of Directorseffective February 23, 2006.  On February28, 2006 Mr. Ellman was nominated and approved by the Board of Directors toreplace Mr. Tholen.

**CorporateGovernance**

The Company has established a Code of Ethics that isapplicable to all of the Company’s employees, including the Company’s principalexecutive officer, principal financial officer and principal accountingofficer. A copy of the Company’s Code of Ethics is available on the Company’swebsite, and can be found under the Investors and Corporate Governancelinks.  The Company’s website address iswww.stratagene.com.  The Company may postamendments to or waivers of the provisions of the Code of Ethics, if any, onits website.  Please note, however, thatthe information contained on the website is not incorporated by reference in,or considered part of, this Form 10-K/A.

**Section16(a) Beneficial Ownership Reporting Compliance**

Section 16(a) of the Securities Exchange Act of 1934,as amended (the “Exchange Act”), requires Stratagene’s directors and executiveofficers, and persons who own more than ten percent of a registered class ofStratagene’s equity securities, to file with the SEC initial reports ofownership and reports of changes in ownership of Common Stock and other equitysecurities of Stratagene.  Officers,directors and greater-than-ten-percent-stockholders are required by SECregulation to furnish Stratagene with copies of all Section 16(a) forms theyfile.

To Stratagene’s knowledge, based solely on review ofthe copies of such reports furnished to Stratagene and written representationsthat no other reports were required during the fiscal year ended December 31,2006, each of Stratagene’s officers, directors, andgreater-than-ten-percent-beneficial owners complied with all Section 16(a) filingrequirements, except for one Form 4 that was filed late on March 3, 2006 onbehalf of Peter Ellman, a member of the Company’s Board of Directors, whichrelated to options to purchase 20,000 shares of the Company’s common stock thatwere granted at the fair market value of $10.55 per share on the grantdate.  The Form 4 was filed late becausemanagement was waiting for Compensation Committee approval of the relatedoption grant.

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**ITEM 11. EXECUTIVE COMPENSATION**

**CompensationDiscussion and Analysis**

***Compensation Objectives***

For all named executive officers total compensation isintended to be performance-based.  Thecompensation committee of our board of directors (the “Compensation Committee”)believes that compensation paid to executive officers should be aligned withthe performance of the company on both a short-term and long-term basis, linkedto specific, measurable results intended to create value for stockholders, andthat such compensation should assist us in attracting and retaining keyexecutives critical to our long-term success.

In establishing compensation for our executiveofficers, the following are the Compensation Committee’s objectives:

·                  Attractand retain individuals of superior ability and managerial talent;

·                  Ensuresenior officer compensation is aligned with our corporate strategies, businessobjectives and the long-term interests of our stockholders;

·                  Increasethe incentive to achieve key strategic and financial performance measures bylinking incentive award opportunities to the achievement of performance goalsin these areas; and

·                  Enhancethe officers’ incentive to increase our stock price and maximize stockholdervalue, as well as promote retention of key people, by providing a portion oftotal compensation opportunities for senior management in the form of directownership in the company through stock options.

Our overall compensation program is structured toattract, motivate and retain highly qualified executive officers by paying themcompetitively, consistent with our success and their contribution to thatsuccess.  We believe compensation shouldbe structured to ensure that a significant portion of compensation opportunitywill be directly related to our financial performance and other factors thatdirectly and indirectly influence stockholder value.  Accordingly, we set goals designed to linkeach executive officer’s compensation to our performance and their ownperformance within the company. Consistent with our performance-based philosophy, we provide a basesalary to our executive officers and include an incentive-based cash componentdirectly linked to the achievement of pre-established financial performancegoals.

***Determination of Compensation Awards***

The Compensation Committee is provided with primaryauthority to determine and recommend the compensation awards available to ourexecutive officers.  The performance ofour senior executive management team is reviewed annually by the CompensationCommittee.  In 2006, our CompensationCommittee reviewed each executive officer’s salary, bonus and equitycompensation package and compared them to comparable market data by positionand within similarly sized companies and to companies in the biotechnology andlife sciences industry segment. Applicable data was derived from review ofpublicly available information of this peer group, which consisted ofapproximately 17 similarly situated companies, as well as data of comparablecompanies obtained from a survey by Radford Surveys and Consulting. Theforegoing data was evaluated along with the past performance of the company,both as compared to pre-established financial performance measures and relativeto certain of our major competitors, as well as each executive’s recentindividual performance, in order to determine the appropriate totalcompensation for each executive officer for fiscal 2006.

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***Base Compensation***

Base compensation levels are established to compensateexecutive officers for the functions they perform.  As part of the Compensation Committee’sreview of 2006 executive compensation levels noted above, we generally targetedbetween the 50th and 75th percentile oftotal base compensation of peer group executives holding comparablepositions.  Base salary levels arereviewed annually and may be increased by the Compensation Committee inaccordance with certain criteria determined to be relevant by the CompensationCommittee, which include (i) individual performance, (ii) the functionsperformed by the executive officer, (iii) competitive base pay levels forofficers at similar companies performing similar functions and (iv) our overallperformance during the year. The weight given such factors by the CompensationCommittee may vary from individual to individual.  No formulaic base salary increases areprovided to named executive officers. Salary increases awarded in 2006 toexecutive officers ranged from 3.5% to 5.8% of each executive officer’s prioryear base salary. In certain cases, the Compensation Committee has made salary adjustments in consideration ofcompetitive market rates or for executive officers who took on additionalduties during the year.

***Performance-Based Cash Compensation***

In addition to base salary, we award performance-basedcash compensation under our Annual Executive Incentive Plan to reward executiveofficers based on the company’s performance and the individual executive’scontribution to that performance.  Thisallows executive officers to receive pre-established target bonus compensationin the event certain specified corporate performance measures are achieved and,in some circumstances, above target cash bonus compensation if such financialperformance measures are significantly surpassed or if our CompensationCommittee determines such executive officer’s individual performance sowarrants.  Awards in any single yearunder our Annual Executive Incentive Plan for any executive officer cannotexceed 150% of the pre-established target award for that executive officer.

In February of 2006, our Compensation Committee, basedon its review of market data as describe above, set a range forperformance-based incentive cash bonus compensation of between 0% and 30% ofbase salary for each of our named executive officers and a target cash bonus of20% of base salary.  The CompensationCommittee also established specific threshold performance levels of totalrevenues and operating income for fiscal 2006, each of which was weightedequally in evaluating cash bonus incentive compensation.  Our Compensation Committee did not award anycash incentive compensation for fiscal 2006 to our named executive officers dueto our failure to obtain pre-established revenue and net operating incomeperformance objectives for the full fiscal year ended December 31, 2006,primarily as a result of a faster decline in legacy product sales thanexpected.  In contrast, we awardedperformance-based bonuses of 30% of earned base salary to all executiveofficers for fiscal 2005 in recognition of our ability to exceed the highesttargeted levels of revenue and operating income during that fiscal year.

The Company has not yet set a performance-basedincentive cash bonus plan for 2007.

***Long-Term Incentive Program***

Our long-term incentive program consists of awardsunder our 2006 Equity Incentive Award Plan (the “2006 Plan”), which wasapproved by our stockholders on June 1, 2006 at our 2006 Annual Meeting ofStockholders.  The Compensation Committeeadministers the 2006 Plan.  Under thisplan, employees, consultants and directors may receive grants of stock options,stock appreciation rights, restricted stock awards, restricted stock units anddividend equivalents in any combination, separately or in tandem.  The objective of these awards is to advanceour and our stockholders’ longer-term interests and to complement incentivestied to annual performance.  These awardswill only produce value for the recipient as the price of our stockappreciates, thereby directly linking the interests of the executives withstockholders.  We believe that the designof the 2006 Plan helps us to reduce officer and employee turnover and to retainthe knowledge and skills of our employees. Please see “2006 Equity Incentive Plan” below for additional informationregarding the 2006 Plan.

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While the 2006 Plan provides for an array ofequity-based awards, we have historically only granted stock options under ourequity incentive plans.  The number ofstock options granted in any fiscal year to our named executive officers isbased on the executive’s performance and potential for important contributionsto the company’s success.  We generallyaward each of our named executive officers stock options on the date of ourAnnual Meeting of Stockholders in order to reward both our short-term andlong-term performance.  Except for grantsto the Chief Executive Officer, we generally target an award of 50,000non-qualified stock options to purchase common stock at the fair market valueof such common stock on the date of grant for each of our named executiveofficers, in order to achieve the objectives noted above. This quantity of 50,000has generally been granted every other year. On occasion, we also may makegrants of equity incentive awards at the discretion of the CompensationCommittee in connection with the hiring of new executive officers or undercertain other circumstances, as determined by the Compensation Committee.  Notwithstanding the foregoing, we will notmake grants of equity-based compensation when employee-stockholders areotherwise prohibited from trading in our securities in accordance with our Codeof Conduct and Ethics and insider trading policies, otherwise known as a “blackoutperiod.”  Consistent with this policy, wedo not make equity-based grants while in possession of material non-publicinformation.

Consistent with the practices described above,  on June 1, 2006, the date of our 2006 AnnualMeeting of Stockholders, the Compensation Committee granted options to purchase50,000 shares of common stock with an exercise price of $6.60 per share, theclosing sales price of our common stock on May 31, 2006 to our Senior VicePresident of Operations and General Manager of Hycor and our Senior VicePresident of Sales and Global Operations and options to purchase 60,000 sharesof common stock with an exercise price of $6.60 per share to our Vice Presidentand Chief Financial Officer.  The stockoptions vest over a four-year period and expire ten years from the date ofgrant.  Our Chief Executive officer wasnot granted options on the date of our 2006 Annual Meeting of Stockholders dueto prior awards granted to him pursuant to the terms of his employmentagreement, which are described in greater detail below under the heading “EmploymentAgreements.”

***401(k) Savings Plans***

We have established a qualified 401(k) EmployeeSavings Plan available to substantially all of our full-time employees over theage of 21.  For employees of the researchproducts business, we match 25% of the contributions of employees with one tothree years of service up to a maximum of $1,000, 25% of the contributions ofemployees with three to six years of service up to a maximum of $1,750, and 30%of the contributions of employees with six or more years of service up to amaximum of $2,500, all of which vest immediately. Our Chief Executive Officer,Chief Financial Officer and Senior Vice President, Global Sales andInternational Operations participate in this plan. For employees of theclinical diagnostics products business, primarily Hycor Biomedical Inc. (“Hycor”),we match 50% of the first 2% of salary contributed.  We then make a secondary matching contributionof 1% if the employee is employed at year end. The secondary match is funded in the first quarter following the planyear end.

***Employment Agreements***

We have entered into an employment agreement with eachof our named executive officers.

*Joseph A. Sorge, M.D. —*Dr. Sorgeand Stratagene entered into an amended and restated employment agreement onJune 2, 2004 in connection with the closing of the merger with Hycor pursuantto which Dr. Sorge is employed as Stratagene’s chief executive officer and aschairman of its board of directors. The amended employment agreement has athree year term, but is subject to successive automatic one year renewalsunless one party gives proper notice of its intention not to renew the amendedemployment agreement. Pursuant to the amended employment agreement, Dr. Sorgereduced his annual base salary from $1,100,000 to $450,000 beginning June 2,2004, the date of the merger. Dr. Sorge also is eligible to receive salaryincreases and a bonus at the discretion of Stratagene’s board of directors andis entitled to receive other benefits Stratagene makes generally available toits other executive officers under its employee benefit plans.

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Under the terms of the amended employment agreement,Dr. Sorge was granted an option to purchase 738,960 shares of Stratagene commonstock at $9.34 per share (equal to the closing price of Stratagene’s commonstock on the Nasdaq National Market on the effective date of the merger, June2, 2004). The vesting of the sharesunderlying these options was accelerated on March 31, 2005, and as a result,such options are fully vested and exercisable. For additional information, see “Compensation Committee Report onExecutive Compensation — Long-Term Incentive Program.”

Please see “Proposed Acquisition by AgilentTechnologies, Inc.” below regarding additional agreements we have with Dr.Sorge.

*Nelson P. Thune —*Hycor entered into an employment agreement with Mr.Thune on June 20, 1997.  The term of thisagreement ended June 30, 2000, but it is automatically renewed for successiveone-year periods unless the Company or Mr. Thune gives notice ofnonrenewal.  Upon the merger with Hycor,Stratagene adopted Mr. Thune’s current employment agreement.  Pursuant to the employment agreement, Mr.Thune is employed as a Vice President of the Company, and receives a minimumbase annual salary, subject to increase as determined by Company in itsdiscretion.  Additionally, Mr. Thune isentitled to participate in the Company’s Annual Executive Incentive Plan andLong-Term Incentive Program.

*Steve R. Martin and John R. Pouk  —*The Company entered intoan employment agreement with Steve Martin and an amended employment agreement with John Pouk on March 10,2006.  Pursuant to the employmentagreements, each of the executive’s duties is referenced based upon theirrespective responsibilities as vice presidents of the Company. The agreements provide for a minimum baseannual salary at the then existing earnings level for each executive, subjectto adjustments pursuant to periodic reviews by the Company.  The executives will also be eligible for abonus, at the sole discretion of the Company’s board of directors (or acommittee thereof).  In addition, eachexecutive is entitled to participate in all benefit plans generally availableto the Company’s executive management personnel.  Each executive’s employment agreement isat-will.  The term of the employmentagreement shall continue until terminated by the Company at any time or by theexecutive upon 30 days written notice.

*Severance Provisions. *Each of the aboveemployment agreements provides the applicable named executive officer withseverance benefits upon the occurrence of certain events, including suchofficer’s death or disability, our termination of the executive’s employmentother than for Cause and the executive’s termination of employment for GoodReason (as such capitalized terms are defined within the applicable employmentagreement).  A summary of the severancebenefits payable to each of our executive officers upon the occurrence of suchevents is described in further detail below.

 

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| Name and Position                                | ** ** | **Death**                                                                                                                                                                                                                                                                                                                                       | ** ** | **Disability**                                                                                                                                                                                                                         | ** ** | **Good Reason  and/or Termination Without Cause**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Joseph A. Sorge*,  M.D. Chief Executive Officer* |       | All salary and benefits immediately cease. Dr.  Sorge’s estate is entitled to payment of all compensation owing for services  previously rendered and payment of company funded life insurance benefits, if  any. Dr. Sorge’s estate or beneficiaries will also receive vested benefits,  such as accrued vacation and stock options. |       | All salary and benefits immediately cease. Dr. Sorge  is entitled to continue to participate in any medical and disability plans or  programs then in effect for our senior executive officers for the duration of  the contract term. |       | ·  A lump sum cash severance payment in an  amount equal to his then-current base salary for the remainder of the  contract term, or, if fewer than 12 months remain in the contract term, for  12 months.

·  Immediate vesting of all stock options  previously issued to Dr. Sorge. 

·  Medical plan, disability plan and other benefit  plan coverage for the remainder of the contract term. 

·  Dr. Sorge’s employment may be terminated for  “Cause” under his employment agreement if Dr. Sorge’s termination is due to  his (a) material neglect of or failure to perform his duties under his  employment agreement, (b) acceptance of a position with any other company  which conflicts with his duties to the Company (except as otherwise expressly  permitted under Dr. Sorge’s employment agreement), (c) conviction of a felony  leading to incarceration for at least 30 days, or (d) conviction of a  criminal offense having a demonstrably material adverse effect on the  Company’s financial condition (as opposed to stock price). Dr. Sorge will be  deemed to have resigned with “Good Reason” under the terms of his employment  agreement if he does so as a result of: (i) his title being reduced or his  job responsibilities being materially reduced without Dr. Sorge’s prior  written consent, except as a result of (1) a suspension of Dr. Sorge’s  employment contemplated by his employment agreement if he is contesting his  termination for Cause as a result of an event described in (c) or (d) above,  (2) a reduction while Dr. Sorge is capable of performing his duties due to a  condition or illness which if continued would permit termination of his  employment for disability, or (3) a change in title or reduction in  responsibilities required by a change in law or the rules of any securities  exchange; (ii) his base salary being reduced or other benefits to be provided  under his employment agreement are materially reduced, except in the case of  reduction of benefits which applies to all senior executives in a similar  manner, in either case without Dr. Sorge’s prior written consent; (iii) the  Company’s principal executive office being relocated outside of the greater  San Diego, California metropolitan area; or (iv) the Company failing to pay  Dr. Sorge any compensation when due. |

 

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| Nelson F. Thune*General Manager for Hycor and Senior Vice President of Operations for  Stratagene and Hycor* |   | ·  Payment of all compensation owing for  services rendered prior to death. 

·  Continued payment of base salary to Mr.  Thune’s estate for a period of 30 days following death. 

·  Periodic recoverable advances to Mr. Thune’s  estate equivalent to Mr. Thune’s then-existing salary for 90 days after such  30-day period has lapsed, or until life insurance proceeds become available,  whichever occurs first, with such advances to be repaid upon receipt of life  insurance proceeds. |   | ·  If Mr. Thune is capable of returning to work  after an up to 6 month leave of absence but chooses not to do so, or Mr.  Thune cannot return to work after a 6 month leave of absence, Mr. Thune would  receive continuation of medical, life insurance, disability and other  employee plan benefits during such leave of absence and payment of the cash  bonus to which Mr. Thune would otherwise be entitled. 

·  If Mr. Thune is capable of returning to work  after an up to 6 month leave of absence but we have already filled his position,  Mr. Thune would receive a cash lump-sum payment equal to 20 months of Mr.  Thune’s then-current salary. |   | ·  Payment of all compensation owing for  services previously rendered. 

·  A lump sum severance payment equal to 12  months of Mr. Thune’s then-current salary. 

·  Company funded medical, disability and  insurance benefits for 12 months, or, if shorter, the maximum period then  allowable by applicable law. 

·  If termination or resignation occurs after  our third fiscal quarter and at the time of such termination or resignation  we have in effect any cash bonus or incentive plan awards based on our  revenues or results of operation for the fiscal year, pro-rated participation  in any such cash awards. 

·  Mr. Thune’s employment may be terminated for  “Cause” under his employment agreement if he (a) engages in any material  misconduct, willful breach, or habitual neglect of his duties as an officer  of the Company, or (b) is finally convicted of a felony. |
|--------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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| John R. Pouk*Senior Vice President, Global Sales and International Operations* |   | All salary and benefits immediately cease. Mr.  Pouk’s estate is entitled to payment of all compensation owing for services  previously rendered and payment of company funded life insurance benefits, if  any. Mr. Pouk’s estate or beneficiaries will also receive vested benefits,  such as accrued vacation and stock options. |   | Payment of all compensation owing for services  previously rendered. We will reimburse Mr. Pouk for costs of continuation of  COBRA health coverage for up to six months. |   | ·  Mr. Pouk will receive payment in amounts  equal to continuation of his then-existing salary and reimbursement for costs  of continuation of COBRA health coverage, in each case for 12 months from the  date of such termination or resignation. The Company’s obligation to continue  salary and COBRA reimbursement benefits will cease if the executive accepts  new employment except that the benefits shall continue for a minimum of 6  months. 

·  We may terminate Mr. Pouk’s employment for  “Cause” under the terms of his employment agreement if such termination  results from (a) his personal dishonesty or willful material misconduct, (b)  his intentional or repeated failure to perform his duties or obligations, (c)  his commission of embezzlement or a felony, or (d) any material breach by Mr.  Pouk of his employment agreement or our employee invention and proprietary  information agreement with Mr. Pouk, subject in cases of clauses (b) and (d)  above, to us providing Mr. Pouk with prior written notice of such acts or  omissions constituting Cause and Mr. Pouk’s failure to cure such acts or  omissions within 90 days of receipt of such written notice. Mr. Pouk will be  deemed to have resigned with “Good Reason” under the terms of his employment  agreement if he does so as a result of our (i) assignment to Mr. Pouk of  duties that are substantially inconsistent with his position as our Senior  Vice President, Global Sales and International Operations; (ii) material  reduction of Mr. Pouk’s base salary from that in effect as of the effective  date of his employment agreement, unless such reductions are applied to all  of our executive officers; (iii) requirement that Mr. Pouk be based more than  25 miles from his present location, except for required travel commensurate with  Mr. Pouk’s title and position; or (iv) failure to provide Mr. Pouk with  employee benefits that are generally comparable in the aggregate to those  provided to Mr. Pouk immediately prior to the effective date of his  employment agreement or a material reduction of his fringe benefits unless  such reduction is applied, pro rata, to all of our executive officers. |
|--------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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| Steve R. Martin*Vice President and Chief Financial Officer* |   | All salary and benefits immediately cease. Mr.  Martin’s estate is entitled to payment of all compensation owing for services  previously rendered and payment of company funded life insurance benefits, if  any. Mr. Martin’s estate or beneficiaries will also receive vested benefits,  such as accrued vacation and stock options. |   | Payment of all compensation owing for services  previously rendered. We will reimburse Mr. Martin for costs of continuation  of COBRA health coverage for up to six months. |   | ·  Mr. Martin will receive payment in amounts  equal to continuation of his then-existing salary and reimbursement for costs  of continuation of COBRA health coverage, in each case for 12 months from the  date of such termination or resignation. The Company’s obligation to continue  salary and COBRA reimbursement benefits will cease if the executive accepts  new employment except that the benefits shall continue for a minimum of 6  months. 

·  We may terminate Mr. Martin’s employment for  “Cause” under the terms of his employment agreement if such termination  results from (a) his personal dishonesty or willful material misconduct, (b)  his intentional or repeated failure to perform his duties or obligations, (c)  his commission of embezzlement or a felony, or (d) any material breach by Mr.  Martin of his employment agreement or our employee invention and proprietary  information agreement with Mr. Martin, subject in cases of clauses (b) and  (d) above, to us providing Mr. Martin with prior written notice of such acts  or omissions constituting Cause and Mr. Martin’s failure to cure such acts or  omissions within 90 days of receipt of such written notice. Mr. Martin will  be deemed to have resigned with “Good Reason” under the terms of his  employment agreement if he does so as a result of our (i) assignment to Mr.  Martin of duties that are substantially inconsistent with his position as our  Chief Financial Officer; (ii) material reduction of Mr. Martin’s base salary  from that in effect as of the effective date of his employment agreement,  unless such reductions are applied to all of our executive officers; (iii)  requirement that Mr. Martin be based more than 25 miles from his present  location, except for required travel commensurate with Mr. Martin’s title and  position; or (iv) failure to provide Mr. Martin with employee benefits that  are generally comparable in the aggregate to those provided to Mr. Martin  immediately prior to the date of his employment agreement or a material  reduction of his fringe benefits, unless such reduction is applied, pro rata,  to all of our executive officers. |
|-------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

*Change of Control Provisions*   Each of the employment agreements with ournamed executive officers also provides for the payment of certain benefits uponour change of control and, under each employment agreement other than ouremployment agreement with our Chief Executive Officer, if the named executiveofficer is terminated within certain time periods prior to or after such changeof control.  A summary of the benefitspayable to each of our executive officers upon the occurrence of such events isdescribed in further detail below. Please see “Employment Agreements” below for additional informationregarding the employment agreements we have with each of our named executiveofficers.

 

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| Name                                                                                                         | ** ** | **Termination Trigger**                                                                                                                                                                      | ** ** | **Benefits Provided**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Joseph A. Sorge*M.D. Chief   Executive Officer*                                                              |       | Termination without Cause or Resignation for Good  Reason                                                                                                                                    |       | ·  Dr. Sorge’s severance benefits upon a  termination by us without Cause or his resignation for Good Reason are  described above under “Severance Provisions.” Dr. Sorge is not entitled to  any additional severance benefits in the event such a termination occurs  following a change of control. 

·  However, all stock options previously granted  to Dr. Sorge that are subject to vesting requirements, including those  granted under Dr. Sorge’s employment agreement, will vest immediately prior  to the effective time of a change of control, regardless of whether his  employment is terminated or not. 

·  The foregoing benefits and payments may be  reduced by the Company to the extent reasonably necessary to avoid lost  deductions under Section 280G of the Internal Revenue Code or excise taxes  under Section 4999 of the Code but shall honor any reasonable request by Dr.  Sorge about which benefits shall be reduced. 

·  Please see “Proposed Acquisition by Agilent  Technologies, Inc.” below regarding additional agreements we have with Dr.  Sorge that provide for Dr. Sorge’s wavier of certain severance benefits to which  Dr. Sorge is entitled under the terms of his employment agreement under  certain circumstances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| Nelson F. Thune*General Manager for Hycor and Senior Vice  President of Operations for Stratagene and Hycor* |       | If Mr. Thune is terminated without Cause within 90  days prior to or 24 months after a change of control, or Mr. Thune resigns  with Good Reason within 24 months after a change of control. |       | ·  A lump sum payment equal to 200% of Mr.  Thune’s average annual base salary plus bonuses for the three preceding years.  

·  Company funded medical, disability and  insurance benefits for 24 months following such termination or resignation,  or, if shorter, the maximum period then allowable by applicable law. 

·  Vesting as of the date of such termination  or resignation of all unvested stock options previously granted to Mr. Thune  under our equity compensation plans. 

·  Extension of the post-termination exercise  period for all stock options previously granted to Mr. Thune under our equity  compensation plans so that all such stock options will be exercisable for a  period of three months after such termination or resignation (other than with  respect to those options having vesting periods in excess of three months  from such date). 

·  The aforementioned payments and benefits shall  be cut back, if necessary, in the order of priority designated by Mr. Thune  to avoid triggering golden parachute penalties under Section 280G of the Internal Revenue Code.  

·  Mr. Thune will be deemed to have resigned  with “Good Reason” under the terms of his employment agreement if he does so  following a change of control of the Company as a result of the Company doing  any of the following without Mr. Thune’s express written consent: (i)  assigning Mr. Thune different duties or making changes in his reporting  responsibilities, title, or office that are substantially inconsistent with  Mr. Thune’s duties, responsibilities, titles or offices immediately prior to  such change of control; (ii) reducing Mr. Thune’s base salary from that in  effect at the time of such change of control; (iii) failing to continue any  bonus plan in substantially the same form as it existed prior to such change  of control; (iv) requiring Mr. Thune to be based more than 50 miles from his  present location, except for required travel consistent with Mr. Thune’s  present business travel obligations; (v) failing to continue any plan or  program for compensation, employee benefits, stock purchase or ownership,  life insurance, group medical, disability, or vacation in substantially the  same form as immediately prior to such change of control, or otherwise make  any material reduction in Mr. Thune’s fringe benefits; or (vi) failing to  obtain the assumption of his employment agreement by a successor-in-interest  to the Company. |

 

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| John R. Pouk *Senior Vice President, Global Sales and  International Operations* |   | If Mr. Pouk is terminated without Cause within 90  days prior to or 18 months after a change of control, or Mr. Pouk resigns  with Good Reason within 18 months after a change of control.     |   | ·  A lump sum payment equal to twice Mr. Pouk’s  then-existing salary and reimbursement for costs of continuation of COBRA  health coverage for 24 months from the date of such termination or  resignation. 

·  All of Mr. Pouk’s outstanding awards under  our equity incentive plans will vest and/or become exercisable on the later  of the date of his termination or resignation and the date immediately prior  to the change of control. 

·  The aforementioned benefits shall be cut  back, if necessary, in the order of priority designated by Mr. Pouk to avoid  triggering golden parachute penalties under Section 280G of the Internal  Revenue Code.  |
|----------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Steve R. Martin*Vice President and Chief Financial Officer*                      |   | If Mr. Martin is terminated without Cause within 90  days prior to or 18 months after a change of control, or Mr. Martin resigns  with Good Reason within 18 months after a change of control. |   | ·  A lump sum payment equal to twice his  then-existing salary and reimbursement for costs of continuation of COBRA  health coverage for 24 months from the date of such termination or  resignation. 

·  All of Mr. Martin’s outstanding awards under  our equity incentive plans will vest and/or become exercisable on the later  of the date of his termination or resignation and the date immediately prior  to the change of control. 

·  Mr. Martin’s severance payments shall be cut  back, if necessary, in the order of priority designated by Mr. Martin to  avoid triggering golden parachute penalties under Section 280G of the  Internal Revenue Code. |

 

The following tablesummarizes potential change in control and severance payments to each namedexecutive officer who was employed by us on December 31, 2006. The fiveright-hand columns describe the payments that would apply in four differentpotential scenarios — a change in control without a termination of employment;a termination of employment as a result of the named executive officer’sresignation for good reason or termination of employment by us other than forcause, in each case within 18 months (with respect to Messrs. Pouk and Martin)or 24 months (with respect to Mr. Thune) following a change in control or atermination without cause within 90 days before a change in control; atermination of employment as a result of the named executive officer’sresignation for good reason or termination of employment by us other than forcause, in each case not within 18 months (with respect to Messrs. Pouk andMartin) or 24 months (with respect to Mr. Thune) following a change in controlor within 90 days before a change in control; the named executive officer’stermination of employment as a result of disability; or the named executiveofficer’s termination of employment as a result of death.  The table assumes that the termination orchange in control occurred on December 31, 2006.  For purposes of estimating the value ofamounts of equity compensation to be received in the event of a termination ofemployment or change in control, we have assumed a price per share of ourcommon stock of $7.44, which represents the closing market price of our commonstock as reported on the Nasdaq Global Market on December 29, 2006.

 

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**Potential Change in Control andSeverance Payments**
| Name and Position                     | ** ** | **Benefit Type**                  | ** ** | **Payment in the  Case of a  Change in  Control  Without  Termination** | ** ** | **Payment in the  Case of a  Termination  Other than  for Cause or for  Good Reason  Within 18  Months (Pouk  and Martin) or  24 Months  (Thune)  Following a  Change in  Control or a  Termination  Other than for  Cause Within 90  Days Prior to a  Change in  Control (1)** | ** ** | **Payment in  the Case of a  Termination  Other than  for Cause or  for Good  Reason Not  Within 18  Months (Pouk  and Martin)  or 24 Months  (Thune)  Following and  Not Within 90  Days Prior to  a Change in  Control** | ** ** | **Payment in  the Case of  Termination  as a Result of   Disability** | ** ** | **Payment in  the Case of  Termination  as a Result of   Death** |       |
|-------------------------------------------------|------------|----------------------------------------|------------|--------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------|------------|
| Joseph A. Sorge, M.D.                           |       | Cash  Severance                        |       | —                                                                                           |       | $      1,208,333                                                                                                                                                                                                                                                                                                                                                                         | (2)        | $      1,208,333                                                                                                                                                                                                                                                                                      | (2)        | —                                                                                                   |       | —                                                                                              |       |
| *Chief Executive Officer*                       |       | Continued  Benefit  Coverage(3)        |       | —                                                                                           |       | $           23,142                                                                                                                                                                                                                                                                                                                                              |       | $           23,142                                                                                                                                                                                                                                                           |       | $           23,142                                |       | —                                                                                              |       |
|                                                 |       | Value of  Equity  Award  Acceleration  |       | —                                                                                           |       | —                                                                                                                                                                                                                                                                                                                                                                                                                 |       | —                                                                                                                                                                                                                                                                                                                              |       | —                                                                                                   |       | —                                                                                              |       |
|                                                 | ** ** | **Total Value:**                       |       | **—**                                                                                       |       | $      1,231,475                                                                                                                                                                                                                                                                                                                                                                         | (1)        | $      1,231,475                                                                                                                                                                                                                                                                                      |       | $           23,412                                |       | —                                                                                              |       |
| ** **                                      | ** ** | ** **                             | ** ** | ** **                                                                                       | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                             |       |                                                                                                                                                                                                                                                                                                                                | ** ** |                                                                                                     | ** ** | ** **                                                                                          | ** ** |
| Nelson F. Thune                                 |       | Cash                                   |       |                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                   |       |                                                                                                                                                                                                                                                                                                                                |       |                                                                                                     |       |                                                                                                |       |
| *General*                                       |       | Severance                              |       | —                                                                                           |       | $         620,600                                                                                                                                                                                                                                                                                                                                                         | (2)        | $         300,150                                                                                                                                                                                                                                                                      | (2)        | $         500,250                                           | (4)        | $           25,013                           | (5)        |
| *Manager for Hycor and Senior Vice President*   |       | Continued  Benefit  Coverage           |       | —                                                                                           |       | $           30,048                                                                                                                                                                                                                                                                                                                                              | (10)       | $           15,024                                                                                                                                                                                                                                                           | (6)        | $             7,512                     | (7)        | —                                                                                              | ** ** |
| * of  Operations for Stratagene and Hycor* |       | Value  of  Equity  Award  Acceleration |       | —                                                                                           |       | $           42,000                                                                                                                                                                                                                                                                                                                                              | (8)        | **—**                                                                                                                                                                                                                                                                                                                          | ** ** | **—**                                                                                               | ** ** | **—**                                                                                          |       |
|                                            |       |                                   |       |                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                   |       |                                                                                                                                                                                                                                                                                                                                |       |                                                                                                     |       |                                                                                                |       |
| ** **                                      | ** ** | **Total Value:**                       |       | **—**                                                                                       |       | $         692,648                                                                                                                                                                                                                                                                                                                                                         | (1)        | $         315,174                                                                                                                                                                                                                                                                      |       | $         507,762                                           |       | $           25,013                           |       |
| ** **                                      | ** ** | ** **                             | ** ** | ** **                                                                                       | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                             | ** ** | ** **                                                                                                                                                                                                                                                                                                                          | ** ** | ** **                                                                                               | ** ** | ** **                                                                                          | ** ** |
| John R. Pouk                                    |       | Cash                                   |       |                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                   |       |                                                                                                                                                                                                                                                                                                                                |       |                                                                                                     |       |                                                                                                |       |
| *Senior Vice*                                   |       | Severance                              |       | —                                                                                           |       | $         517,532                                                                                                                                                                                                                                                                                                                                                         |       | $         258,766                                                                                                                                                                                                                                                                      | (9)        | —                                                                                                   |       | —                                                                                              |       |
| *President, Global Sales and International*     |       | Continued  Benefit  Coverage(3)        |       | —                                                                                           |       | $           23,928                                                                                                                                                                                                                                                                                                                                              | (10)       | $           11,964                                                                                                                                                                                                                                                           | (11)       | $             5,982                     | (12)       | —                                                                                              |       |
| *Operation*                                     |       | Value  of  Equity  Award  Acceleration |       | —                                                                                           |       | $           42,000                                                                                                                                                                                                                                                                                                                                              | (8)        | —                                                                                                                                                                                                                                                                                                                              |       | —                                                                                                   |       | —                                                                                              |       |
|                                                 |       |                                   |       |                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                   |       |                                                                                                                                                                                                                                                                                                                                |       |                                                                                                     |       |                                                                                                |       |
|                                                 | ** ** | **Total Value:**                       |       | **—**                                                                                       |       | $         583,460                                                                                                                                                                                                                                                                                                                                                         | (1)        | $         270,730                                                                                                                                                                                                                                                                      |       | $             5,982                     |       | —                                                                                              |       |
| ** **                                      | ** ** | ** **                             | ** ** | ** **                                                                                       | ** ** | ** **                                                                                                                                                                                                                                                                                                                                                                                                             | ** ** | ** **                                                                                                                                                                                                                                                                                                                          | ** ** | ** **                                                                                               | ** ** | ** **                                                                                          | ** ** |
| Steve R. Martin                                 |       | Cash                                   |       |                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                   |       |                                                                                                                                                                                                                                                                                                                                |       |                                                                                                     |       |                                                                                                |       |
| *Vice President*                                |       | Severance                              |       | —                                                                                           |       | $         580,000                                                                                                                                                                                                                                                                                                                                                         |       | $         290,000                                                                                                                                                                                                                                                                      | (9)        | —                                                                                                   |       | —                                                                                              |       |
| *and  Chief  Financial Officer*            |       | Continued  Benefit  Coverage           |       | —                                                                                           |       | $           29,496                                                                                                                                                                                                                                                                                                                                              | (10)       | $           14,748                                                                                                                                                                                                                                                           | (11)       | $             7,374                     | (12)       | —                                                                                              |       |
| * *                                        |       | Value of  Equity  Award  Acceleration  |       | —                                                                                           |       | $           50,400                                                                                                                                                                                                                                                                                                                                              | (8)        | —                                                                                                                                                                                                                                                                                                                              |       | —                                                                                                   |       | —                                                                                              |       |
|                                            |       |                                   |       |                                                                                             |       |                                                                                                                                                                                                                                                                                                                                                                                                                   |       |                                                                                                                                                                                                                                                                                                                                |       |                                                                                                     |       |                                                                                                |       |
| ** **                                      | ** ** | **Total  Value:**                      |       | **—**                                                                                       |       | $         659,896                                                                                                                                                                                                                                                                                                                                                         | (1)        | $         304,748                                                                                                                                                                                                                                                                      |       | $             7,374                     |       | —                                                                                              |       |

 

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(1)                All benefits shallbe cut back, if necessary, to avoid triggering golden parachute penalties underSection 280G of the Internal Revenue Code.

(2)                Payable in a lumpsum. Please see “Proposed Acquisition by Agilent Technologies, Inc.” belowregarding additional agreements we have with Dr. Sorge that provide for Dr.Sorge’s wavier of certain severance benefits to which Dr. Sorge is entitledunder the terms of his employment agreement under certain circumstances.

(3)                Amount shownequals the value of premium payments for health and disability coverage for Dr.Sorge for the remainder of the term of his employment contract, which is due toexpire in June 2009.

(4)                In the event Mr.Thune is able to return to work after a leave of absence of up to 6 months dueto disability but his position has been filled by us during such leave ofabsence, Mr. Thune would be entitled to receive a cash lump-sum payment equalto 20 months of his then-current base salary.

(5)                In the event ofMr. Thune’s death, we will continue to pay his base salary for a period of 30days.  In addition, we will provideadditional advances of base salary for up to 90 days, or until life insuranceproceeds become payable.  Any suchadvances would be repaid upon receipt of Mr. Thune’s life insurance proceedsand are, therefore, not reflected above.

(6)                Amounts shownequal an aggregate of 12 months of premium payments for health, disability andinsurance coverage.

(7)                In the event Mr.Thune takes a leave of absence as a result of a disability, Mr. Thune will beentitled to continued health, disability and insurance coverage during suchleave of absence for a period of up to 6 months.

(8)                Represents thevalue of those awards that would vest as a result of the named executiveofficer’s termination of employment by us other than for cause or by the namedexecutive officer for good reason within 24 months (with respect to Mr. Thune)or 18 months (with respect to Messrs. Pouk and Martin) following a change incontrol or termination of employment by us other than for cause within 90 daysprior to a change in control.  This valueassumes that the change in control and the date of termination occur onDecember 31, 2006, and, therefore, the vesting of such award was notpreviously accelerated as a result of a change in control.

(9)                Payable in equalmonthly installments over 12 months.

(10)          Amounts shown equal anaggregate of 24 months of premium payments for health coverage.

(11)          Amounts shown equal anaggregate of 12 months of premium payments for health coverage.

(12)          Amounts shown equal anaggregate of 6 months of premium payments for health coverage.

*Separation Agreement. *In addition to theforegoing, on October 6, 2006 we entered into an Employment SeparationAgreement and Mutual General Release of all Claims (the “Employment SeparationAgreement”) with Ronni L. Sherman, our then Executive Vice President andGeneral Counsel, in connection with her retirement.  Ms. Sherman had been one of our namedexecutive officers and had served with us for over 18 years.  Ms. Sherman resigned her position as ofOctober 13, 2006, and has agreed to remain as a paid hourly consultant foran additional period of one year at rates of $250-$350 per hour depending onthe services rendered. Pursuant to the Employment Separation Agreement,Ms. Sherman received a lump sum payment of approximately $224,000 inOctober of 2006 and will be entitled to receive an additional $40,000 in quarterly$10,000 installments over 12 months from the date 

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of the Employment Separation Agreement. In addition,Ms. Sherman will be entitled to receive a minimum retainer for her consultingservices of $10,000 per three-month period during each of the four three-monthperiods following the date of the Employment Separation Agreement. Half ofMs. Sherman’s hourly consulting service billings will be credited againstsuch retainer amounts. Ms. Sherman’s medical insurance benefits will also becontinued at our expense for a period of 18 months through April of 2008.The foregoing is a summary of the material provisions of the EmploymentSeparation Agreement and Consulting Agreement. Both agreements are available intheir entirety and were filed as an Exhibit to our Quarterly Report on Form10-Q filed with the SEC on November 17, 2006.

***Other Elements of Compensation and Perquisites***

Executive officers are eligible to participate in allof our employee benefit plans, such as medical, dental, vision and group lifeand disability insurance, in each case on the same basis as other employees,subject to applicable law. We provide vacation and other paid holidays to allemployees, including our executive officers. We also provide certain of our named executive officers an automobileallowance during the term of the executive’s employment. These benefitsprograms are viewed as a very positive aspect of employment with thecompany.  We do not maintain any pensionplans or plans that provide for the deferral of compensation on the basis thatit is not tax-qualified.

***Policy onDeductibility of Executive Officer Compensation***

Section 162(m) of the Internal Revenue Code limits ourtax deduction to $1 million in any taxable year for compensation paid to ournamed executive officers, unless certain performance, disclosure andstockholder approval requirements are met. Because our compensation programprovides pay levels that in the future are unlikely to reach or exceed the $1million deduction limitation for any named executive officer, the CompensationCommittee believes that generally all or a substantial portion of thecompensation paid under our compensatory programs will be fully deductible forfederal income tax purposes. The Compensation Committee’s present intention isto qualify, to the extent reasonable, all or a substantial portion of theexecutive officers’ compensation for deductibility under applicable tax laws.

***Pension Benefits***

None of our named executive officers are covered by apension plan or other similar benefit plan that provides for payments or otherbenefits at, following, or in connection with retirement.

***Nonqualified Deferred Compensation***

None of our named executive officers are covered by adefined contribution or other plan that provides for the deferral of compensationon a basis that is not tax-qualified.

 

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**2006 Summary Compensation Table**

The following table sets forth information regardingcompensation received during the year ended December 31, 2006, by our chiefexecutive officer, chief financial officer and our two most highly compensatedexecutive officers other than our chief executive officer and chief financialofficer who were serving as executive officers as of December 31, 2006.  In addition, the table sets forth informationregarding compensation received during the year ended December 31, 2006 by ourformer Executive Vice President and General Counsel, who would have qualifiedas one of our three most highly compensated executive officers had she beenemployed at the end of 2006.  We refer tothese current and former officers in this proxy statement as the namedexecutive officers. 

**Summary Compensation Table**
| **Name and   Principal  Position**                                                                 | ** ** | **Year** | ** ** | **Salary  ($) (1)** | ** ** | **Bonus  ($)** | ** ** | **Stock   Awards  ($)** | ** ** | **Option  Awards  ($) (2)** | ** ** | **Non-Equity  Incentive Plan  Compensation   ($)** | ** ** | **Change in  Pension   Value and   Nonqualified  Deferred  Compensation   Earnings  ($)** | ** ** | **All Other  Compensation  ($) (3)** | ** ** | **Total ($)** | ** ** |
|--------------------------------------------------------------------------------------------------------------|------------|----------|------------|--------------------------|------------|----------------|------------|------------------------------|------------|----------------------------------|------------|--------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------|------------|--------------------|------------|
| **(a)**                                                                                                      | ** ** | **(b)**  | ** ** | **(c)**                  | ** ** | **(d)**        | ** ** | **(e)**                      | ** ** | **(f)**                          | ** ** | **(g)**                                                      | ** ** | **(h)**                                                                                                            | ** ** | **(i)**                                        | ** ** | **(j)**            | ** ** |
| Joseph A. Sorge, M.D.*Chairman of the Board and Chief Executive Officer*                                     |       | 2006     |       | $                        | 493,838    |           | —     |                         | —     |                             | —     |                                                         | —     |                                                                                                               | —     |                                           | $          | 13,139             |       | $ | 506,977 |   |
| Nelson F. Thune*General Manager for Hycor and Senior Vice  President of Operations for Stratagene and Hycor* |       | 2006     |       | $                        | 299,594    |           | —     |                         | —     |                             | $          | 41,796                                                       |       | —                                                                                                             |       | —                                         |       | $                  | 17,985     |   | $ | 359,375 |   |
| John R. Pouk*Senior Vice President, Global Sales and International Operations*                               |       | 2006     |       | $                        | 256,986    |           | —     |                         | —     |                             | $          | 41,796                                                       |       | —                                                                                                             |       | —                                         |       | —             |       | $ | 298,782 |   |
| Steve R. Martin*Vice President and Chief Financial Officer*                                                  |       | 2006     |       | $                        | 269,159    |           | —     |                         | —     |                             | $          | 102,571                                                      |       | —                                                                                                             |       | —                                         |       | —             |       | $ | 371,730 |   |
| Ronni L. Sherman(4)*Former Executive Vice President and General Counsel*                                     |       | 2006     |       | $                        | 298,062    |           | —     |                         | —     |                             | —     |                                                         | —     |                                                                                                               | —     |                                           | $          | 248,950            |       | $ | 547,012 |   |

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**(1)**          Represents salary before pre-tax contributions. 

(2)          Represents the2006 annual compensation cost of all option awards held by the named executiveofficers over the requisite service period in accordance with FAS 123(R),determined without regard to estimates for forfeitures.  Assumptions used in the calculation ofcompensation cost for the fiscal year ended December 31, 2006 are as follows:
| ** **                   | ** ** | **Stock Options** |
|------------------------------|------------|-------------------|
| Risk free  interest rate     |       | 4.9%              |
| Dividend yield               |       | 0%                |
| Volatility  factor           |       | 45%               |
| Expected life  (in years)    |       | 4.8 years         |
| Pre-vesting  forfeiture rate |       | 7%                |

 

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·                  The risk-free interest rate of 4.9% is basedupon observed interest rates appropriate for the expected terms of the Company’semployee stock options.  

·                  TheCompany paid a special $0.25 per share dividend to shareholders on January 6,2006 as a result of a settlement with Cambridge Antibody Technology, but thisdividend was not considered in the dividend yield of 0.0% as the Company has nointentions of paying cash dividends in the foreseeable future.  

·                  Thevolatility factor of 45% was calculated based on the historical volatility ofthe Hycor and Stratagene stock prices and the consideration of trends andfuture events.  

·                  Theexpected life of employee stock options represents the weighted-average periodthe stock options are expected to remain outstanding and is calculated usingthe simplified method as described in the SEC’s SAB No. 107, *Share-Based Payment,*(“SAB No. 107”).  Using the simplified method, options grantedto employees with a four year vesting schedule have an expected life of 6.25years and options granted to directors with a three year vesting schedule havean expected life of 6 years.  Due to thefact that options vest ratably over the vesting period, the weighted averageexpected life is calculated as 4.8 years. 

(3)          Aspermitted by rules established by the SEC, no amounts are shown with respect tocertain “perquisites” or other personal benefits, or property, where theaggregate amounts of such perquisites, other personal benefits and property fora named executive officer are less than $10,000.  Includes all other compensation as indicatedin the table below. 

 
| **Name**               | ** ** | **Year** | ** ** | **Consulting  Fees** | ** ** | **Employment  Separation  Payments** | ** ** | **Matching  401(k)  Contributions** | ** ** | **Auto  Allowances** | ** ** | **Medical  and Dental  Insurance  Premiums** | ** ** | **Memberships** | ** ** | **Total Other  Compensation** | ** ** |
|------------------------|------------|----------|------------|----------------------|------------|--------------------------------------|------------|-------------------------------------|------------|----------------------|------------|---------------------------------------------------|------------|-----------------|------------|------------------------------------|------------|
| Joseph A. Sorge,  M.D. |       | 2006     |       | —               |       | —                               |       | $                                   | 2,500      |                 | $          | 10,183                                            |       | $               | 456        |                               | —     |   | $ | 13,139 |   |
| Nelson F. Thune        |       | 2006     |       | —               |       | —                               |       | $                                   | 2,042      |                 | $          | 9,484                                             |       | $               | 6,459      |                               | —     |   | $ | 17,985 |   |
| Ronni L. Sherman       |       | 2006     |       | $                    | 10,000     |                                 | $          | 234,875                             |       | $                    | 2,500      |                                              | —     |            | $          | 380                                |       | $ | 1,195 |   | $ | 248,950 |   |
|                        |            |          |            |                      |            |                                      |            |                                     |            |                      |            |                                                   |            |                 |            |                                    |            |  |  |  |  |  |  |  |

** **

**(4)**          Effective October 13, 2006,Ms. Sherman retired as our Executive Vice President and General Counsel.  Ms. Sherman had 5,080 unvested shares at thedate of her retirement.

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**2006Grants of Plan-Based Awards**

The following table sets forth certain informationwith respect to the grants of plan-based awards for the year ended December 31,2006 to the named executive officers. 

**Grantsof Plan-Based Awards**
| ** **                                                                                                   | ** ** | ** **                     | ** ** | **Estimated Future Payouts Under  Non-Equity Incentive Plan Awards (2)** | ** ** | **Estimated Future Payouts Under    Equity Incentive Plan Awards** | ** ** | **All Other  Stock  Awards:  Number  of Shares  of Stock  or  Units(#)** | ** ** | **All Other  Option  Awards:  Number of  Securities  Underlying   Options (#)** | ** ** | **Exercise   or Base  Price of  Option  Awards  ($/Sh)** | ** ** | **Grant Date  Fair Value   of  Stock and  Option  Awards  ($) (3)** | ** ** |
|--------------------------------------------------------------------------------------------------------------|------------|--------------------------------|------------|-------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------|------------|
| **Name**                                                                                                     | ** ** | **Grant   Date (1)** | ** ** | **Threshold  ($)**                                                                                          | ** ** | **Target   ($)**                                                                                      | ** ** | **Maximum  ($)**                                                                        | ** ** | **Threshold  (#)**                                                                                  | ** ** | **Target   (#)**                                                   | ** ** | **Maximum  (#)**                                                                             | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **(a)**                                                                                                      | ** ** | **(b)**                        | ** ** | **(c)**                                                                                                     | ** ** | **(d)**                                                                                                    | ** ** | **(e)**                                                                                 | ** ** | **(f)**                                                                                             | ** ** | **(g)**                                                                 | ** ** | **(h)**                                                                                      | ** ** | **(i)** | ** ** | **(j)** | ** ** | **(k)** | ** ** | **(l)** | ** ** |
| Joseph A. Sorge,  M.D.*Chairman of the Board and Chief Executive Officer*                                    |       | —                         |       | $                                                                                                           | 0          |                                                                                                       | $          | 98,768                                                                                  |       | $                                                                                                   | 148,151    |                                                                    | —     |                                                                                         | —     |   | — |   | — |   | — |   | — |   | — |   |
| Nelson F. Thune*General Manager for Hycor and Senior Vice  President of Operations for Stratagene and Hycor* |       | 6/1/2006                       |       | $                                                                                                           | 0          |                                                                                                       | $          | 59,919                                                                                  |       | $                                                                                                   | 89,878     |                                                                    | —     |                                                                                         | —     |   | — |   | — |   | 50,000 |   | $ | 6.60 |   | $ | 146,939 |   |
| John R. Pouk*Senior Vice President, Global Sales and  International Operations*                              |       | 6/1/2006                       |       | $                                                                                                           | 0          |                                                                                                       | $          | 51,397                                                                                  |       | $                                                                                                   | 77,096     |                                                                    | —     |                                                                                         | —     |   | — |   | — |   | 50,000 |   | $ | 6.60 |   | $ | 146,939 |   |
| Steve R. Martin*Vice President and Chief Financial Officer*                                                  |       | 6/1/2006                       |       | $                                                                                                           | 0          |                                                                                                       | $          | 53,832                                                                                  |       | $                                                                                                   | 80,748     |                                                                    | —     |                                                                                         | —     |   | — |   | — |   | 60,000 |   | $ | 6.60 |   | $ | 176,327 |   |
| Ronni L. Sherman(4)*Former Executive Vice President and General  Counsel*                                    |       | —                         |       | —                                                                                                      |       | —                                                                                                     |       | —                                                                                  |       | —                                                                                              |       | —                                                                  |       | —                                                                                       |       | — |   | — |   | — |   | — |   |

(1)          Reflectsthe date on which the grant was granted and approved by the compensationcommittee/board of directors.  Optionsvest ratably each year for four years.

(2)          Represents the dollarvalue of the estimated range of future cash payouts upon satisfaction of theconditions in question under the non-equity incentive plan (StratageneExecutive Incentive Plan) for fiscal 2006 denominated in dollars.  “*Threshold*”refers to the minimum amount payable for certain performance under theplan.  “*Target*”refers to the amount payable if specified performance target(s) arereached.  “*Maximum*”refers to the maximum amount payable under the plan.  These amounts are based on the individual’ssalary and position for the applicable fiscal year 2006.

(3)          Represents the fullgrant date fair value of each individual equity award (on a grant-by-grantbasis) as computed under FAS 123R.

**(4)**          Effective October 13, 2006, Ms. Sherman retired as ourExecutive Vice President and General Counsel.

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**Discussion of 2006 Summary Compensation andPlan-Based Awards Tables**

Our executive compensation policies and practices,pursuant to which the compensation set forth in the 2006 Summary CompensationTable and the 2006 Grants of Plan Based Awards Table was paid or awarded, aredescribed above under “Compensation Discussion and Analysis.” A summary ofcertain material terms of our compensation plans and arrangements is set forthbelow.

***ChiefExecutive Officer Compensation***

Joseph A. Sorge, M.D. was employed in 1986 as founderand chief executive officer. His annual salary was reduced by $650,000 from$1.1 million to $450,000 in June 2004 as a result of negotiations during themerger with Hycor.  In April 2005, Dr.Sorge’s salary was increased by 5% to $472,500 per year.  In April 2006, Dr. Sorge’s salary was increasedby 5.8% to $500,000 per year.  Accordingto a salary survey prepared for the Board of Directors, the CompensationCommittee has concluded that Dr. Sorge’s current compensation falls within therange of salaries offered to chief executive officers of similarcompanies.  Any future changes to Dr.Sorge’s salary will be determined based on the same factors discussed above forthe executive officers.  For 2006, Dr.Sorge received no bonus due to Company’s 2006 revenue and operating incomeperformance not meeting the targets set by the Board at the beginning of theyear.  None of the named executiveofficers received a bonus for 2006. Dr. Sorge does not participate in orotherwise influence deliberation of the Committee relating to his compensation.

***2006 Equity Incentive Plan***

On June 1, 2006, at the Annual Meeting ofStockholders, our stockholders approved the Stratagene Corporation 2006 EquityIncentive Award Plan (the “2006 Plan”) that provides for the grant of equityawards to members of the board of directors, employees, and consultants. The2006 Plan replaced the Year 2000 Stock Option Plan of Stratagene Corporation(the “2000 Plan”), and no further option grants will be made under the 2000Plan.

We believe that our ability to award incentivecompensation based on equity in Stratagene is critical to our success inremaining competitive and attracting, motivating and retaining key personnel.The efforts and skill of our employees and other personnel who provide servicesto us generate much of the growth and success of our business. We believe thata broad-based equity incentive program will help us to be highly successful inmotivating and rewarding the efforts of our employees and other valuablepersonnel. By giving our employees, consultants and directors an opportunity toshare in the growth of our equity, we will align their interests with those ofour stockholders. Our employees, consultants and directors understand thattheir stake in our Company will have value only if, working together, we createvalue for our stockholders. We anticipate that awards under the 2006 Plan willgenerally vest over a period of time, giving the recipient an additionalincentive to provide services over a number of years and build on pastperformance. We believe that the 2006 Plan has helped and will continue to helpus to build a team of high achievers who have demonstrated long-term dedicationand productivity and who, in turn, help us to attract like-minded individualsto our Company.

*Number of Shares*

The initial number of shares ofour Common Stock that were authorized to be issued pursuant to awards grantedunder the 2006 Plan was 1,315,843 shares. In addition, the number ofshares reserved for issuance pursuant to awards under the 2006 Plan will beautomatically increased on each January 1 during the term of the 2006 Plan,commencing on January 1, 2007 and continuing until, and including, January 1,2016.  The annual increase in the numberof shares shall be equal to the least of:

·                  5% of ouroutstanding capital stock on such January 1;

·                  750,000 shares;or

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·                  an amountdetermined by our board of directors.

·                  750,000shares were added to the 2006 Plan on January 1, 2007 pursuant to the operationof this evergreen provision.

The number of shares of our Common Stock that may beissued pursuant to awards granted under the 2006 Plan shall not exceed, in theaggregate, 11,000,000 shares during the term of the Plan.

Any shares that are represented by awards under the2006 Plan that are forfeited, expire, or are canceled, or that are forfeitedback to us or reacquired by us after delivery for any reason, or that aretendered to us or withheld to pay the exercise price or related tax withholdingobligations in connection with any award under the 2006 Plan, will again beavailable for awards under the 2006 Plan. Only shares actually issued under the2006 Plan will reduce the share reserve.

*Administration*

The Compensation Committee of our Board administersthe 2006 Plan. To administer the 2006 Plan, our Compensation Committee mustconsist of at least two members of our Board, each of whom is a “non-employeedirector” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934,or the Exchange Act, and, with respect to awards that are intended toconstitute performance-based compensation under Section 162(m) of the InternalRevenue Code, or the Code, an “outside director” for the purposes of Section162(m). Subject to the terms and conditions of the 2006 Plan, our CompensationCommittee has the authority to select the persons to whom awards are to bemade, to determine the number of shares to be subject thereto and the terms andconditions thereof, and to make all other determinations and to take all otheractions necessary or advisable for the administration of the 2006 Plan. Our CompensationCommittee is also authorized to adopt, amend and rescind rules relating to theadministration of the 2006 Plan. Our Board may at any time revert to itself theauthority to administer the 2006 Plan.

Our Compensation Committee or our Board may (1)delegate to a committee of one or more members of our Board of Directors whoare not “outside directors” for the purposes of Section 162(m) of the Code theauthority to grant awards under the 2006 Plan to eligible persons who areeither (a) not then “covered employees” within the meaning of Section 162(m)and are not expected to be covered employees at the time of recognition ofincome resulting from such award or (b) not persons with respect to whom wewish to comply with Section 162(m) and/or (2) delegate to a committee of one ormore members of our Board who are not “non-employee director” for purposes ofRule 16b-3 under the Exchange Act the authority to grant awards under the 2006Plan to eligible persons who are not then subject to Section 16 of the ExchangeAct.

*Eligibility*

Our employees, consultants and directors and theemployees of our subsidiaries are eligible to receive awards under the 2006Plan.  Our Compensation Committeedetermines which employees, consultants and directors will be granted awards.No person is entitled to participate in the 2006 Plan as a matter of right nordoes any such participation constitute assurance of continued employment orservice with us. Only those employees, consultants and directors who areselected to receive grants by our Compensation Committee may participate in the2006 Plan.

*Types of Awards*

The 2006 Plan provides that our Compensation Committeemay grant or issue stock options, stock appreciation rights, restricted stock,restricted stock units, dividend equivalents and stock payments, or anycombination thereof. Each award will be set forth in a separate agreement withthe person receiving the award and will indicate the type, terms and conditionsof the award.

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*Nonqualified Stock Options*,or NQSOs, will provide for the right to purchase shares of our Common Stock ata specified price which may not be less than the fair market value of a shareof our Common Stock on the date of grant, and usually will become exercisable(in the discretion of the administrator) in one or more installments after thegrant date, subject to the satisfaction of individual or company performancecriteria established by the administrator. NQSOs may be granted for any termspecified by our Compensation Committee, but such term may not exceed 10 years.

*Incentive Stock Options*,or ISOs, will be designed to comply with the applicable provisions of the Codeand will be subject to certain restrictions contained in the Code. Among suchrestrictions, ISOs must have an exercise price not less than 100% of the fairmarket value of a share of our Common Stock on the date of grant, may only begranted to employees, must expire within a specified period of time followingthe optionee’s termination of employment, and must be exercised within ten yearsafter the date of grant. The total fair market value of shares with respect towhich an ISO is first exercisable by an optionee during any calendar yearcannot exceed $100,000. To the extent this limit is exceeded, the optionsgranted are NQSOs. In the case of an ISO granted to an individual who owns (oris deemed to own) at least 10% of the total combined voting power of all of ourclasses of stock, or a “10% Owner”, the 2006 Plan provides that the exerciseprice must be at least 110% of the fair market value of a common share on thedate of grant and the ISO must expire no later than the fifth anniversary ofthe date of its grant.

*Restricted Stock Awards*may be granted to participants and made subject to such restrictions as may bedetermined by our Compensation Committee. Restricted stock, typically, may be forfeited for no consideration orrepurchased by us at the original purchase price if the conditions orrestrictions are not met.  OurCompensation Committee shall establish the purchase price, if any, and form ofpayment for each restricted stock award. In general, restricted stock may not be sold, or otherwise transferred,until restrictions are removed or expire. Purchasers of restricted stock, unlike recipients of options, will havevoting rights and will receive dividends, if any, prior to the time when therestrictions lapse.

*Restricted Stock**Units* may be awarded to participants, typically withoutpayment of consideration, but subject to vesting conditions based on continuedemployment or on performance criteria established by our compensationcommittee.  Like restricted stock,restricted stock units may not be sold, or otherwise transferred orhypothecated, until vesting conditions are removed or expire.  Unlike restricted stock, shares issuablepursuant to a restricted stock unit award will not be issued until therestricted stock unit award has vested, and recipients of restricted stock unitawards generally will have no voting or dividend rights prior to the time whenvesting conditions are satisfied.

*Stock Appreciation Rights*,or SARs, may be granted in connection with stock options or other awards, orseparately. SARs granted by our Compensation Committee in connection with stockoptions or other awards typically will provide for payments to the holder basedupon increases in the price of our Common Stock over the exercise price of therelated option or other awards, but alternatively may be based upon criteriasuch as book value. Except as required by Section 162(m) of the Code with respectto a SAR intended to qualify as performance-based compensation as described inSection 162(m) of the Code, there are no restrictions specified in the plan onthe exercise of SARs or the amount of gain realizable therefrom, althoughrestrictions may be imposed by our Compensation Committee in the SARagreements.  Our Compensation Committeemay elect to pay SARs in cash or in shares of our Common Stock or in acombination of both.

*Dividend Equivalents*represent the value of the dividends, if any, per share paid by us, calculatedwith reference to the number of shares covered by the stock options, SARs orother awards held by the participant.

*Stock Payments* maybe authorized by our Compensation Committee in the form of shares of our CommonStock or an option or other right to purchase shares of our Common Stock aspart of a deferred compensation arrangement in lieu of all or any part ofcompensation, including bonuses, that would otherwise be payable in cash to theparticipant.

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Our Compensation Committee may designate employees as “coveredemployees” whose compensation for a given fiscal year may be subject to thelimit on deductible compensation imposed by Section 162(m) of the Code. OurCompensation Committee may grant to such covered employees restricted stock,deferred stock, SARs, dividend equivalents and stock payments that are paid,vest or become exercisable upon the attainment of company performance criteriawhich are related to one or more of the following performance goals asapplicable to us or any of our subsidiaries, divisions or operating units:

·                                          netearnings (either before or after interest, taxes, depreciation andamortization;

·                                          salesor revenue;

·                                          netincome (either before or after taxes);

·                                          operatingearnings;

·                                          cashflow;

·                                          returnon net assets;

·                                          returnon stockholders’ equity;

·                                          returnon sales;

·                                          grossor net profit margin;

·                                          workingcapital;

·                                          earningsper share; or

·                                          priceper share of our Common Stock.

 The maximum number of shares which may besubject to awards granted under the 2006 Plan to any individual in any calendaryear may not exceed 1,000,000 shares of Common Stock.

*Changeof Control*

In the event of any dividend, stock split, combinationor exchange of shares, merger, consolidation, spin-off, recapitalization orother distribution (other than normal cash dividends) of assets to ourstockholders or any other change affecting our Common Stock, our compensationcommittee will make appropriate adjustments in the number and type of shares ofstock subject to the 2006 Plan, the terms and conditions of any awardoutstanding under the 2006 Plan, and the grant or exercise price of any suchaward.

In the event of a change of control, each outstandingaward may be assumed or an equivalent award may be substituted by the successorcorporation. In the event of a change of control where the successor does notassume awards granted under the 2006 Plan or substitute equivalent awards, theBoard of Directors has full discretion as to the treatment of awards issuedunder the 2006 Plan.

Under the 2006 Plan, a change of control is generallydefined as:

·                                          thedirect or indirect sale or exchange in a single or series of relatedtransactions by the stockholders of the company of more than 50% of the votingstock of the company;

·                                          amerger or consolidation in which the company is a party, other than a merger orconsolidation which results in our outstanding voting securities immediatelybefore the transaction continuing to represent a majority of the voting powerof the acquiring company’s outstanding voting securities;

·                                          thesale, exchange, or transfer of all or substantially all of the assets of thecompany; or

·                                          aliquidation or dissolution of the company.

 

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*Transferability of Awards*

Awards may generally not be sold, pledged,transferred, or disposed of in any manner other than by will or by the laws ofdescent and distribution. Our Compensation Committee may allow awards otherthan ISOs to be transferable pursuant to qualified domestic relations orders orto certain permitted transferees (i.e., immediate family members for estateplanning purposes). ISOs may not be transferable. If our Compensation Committeemakes an award transferable, such award shall contain such additional terms andconditions as our Compensation Committee deems appropriate.

*Foreign Participation*

The Compensation Committee may provide for suchspecial terms as it may consider necessary or appropriate to accommodatedifferences in local law, tax policy or custom regarding awards granted toparticipants employed in foreign countries. In addition, the CompensationCommittee may approve such supplements to, or amendments, restatements oralternative versions of, the 2006 Plan as it determines is necessary orappropriate for such purposes. Any such amendment, restatement or alternativeversions that the Compensation Committee approves for purposes of using the2006 Plan in a foreign country will not affect the terms of the 2006 Plan foruse in any other country.

*Amendments*

The Board may alter, amend, suspend or discontinue the2006 Plan at any time, but no such action may be taken without stockholderapproval if such approval is required by law or listing requirements, or ifsuch action increases the number of shares that may be issued under the 2006Plan or the annual award limits. The Compensation Committee may alter or amendawards under the 2006 Plan, but no such action may be taken without the consentof the participant if it would materially adversely affect an outstandingaward.  The 2006 Plan provides that theBoard may reprice stock options to a lower exercise price without stockholderapproval.

*Term ofPlan*

          The 2006 Plan became effective as of June 1, 2006,and will remain in effect until June 1, 2016, unless it is terminated earlierby the Board. As mentioned previously, no new awards will be made under the2000 Plan now that the 2006 Plan has been approved.  Note that the 2000 Plan will continue ineffect for purposes of administering awards outstanding under such plan.

***Fiscal2006 Grants under the 2006 Plan***

On June 1, 2006, our Compensation Committeegranted the following non-qualified stock options to its executive officersunder the 2006 Plan. The per share exercise price of the stock options grantedwas $6.60, the closing sales price of the Company’s common stock onMay 31, 2006. The option term is ten years, subject to earlier terminationin connection with a termination of employment or service with the Company or asubsidiary of the Company. The option vests in equal annual installments over afour year period, subject to continued employment or service with the Companyor any subsidiary of the Company. The vested option is exercisable followingtermination of employment or service (other than by reason of discharge forcause) for three months, unless the termination is due to death or disability,in which case the option is exercisable for one year. The vested option is notexercisable following termination of employment or service by reason ofdischarge for cause.

 
| **Name and  Position**                                                                                       | ** ** | **Stock Options** |
|--------------------------------------------------------------------------------------------------------------|------------|-------------------|
| Nelson F. Thune*General Manager for Hycor and Senior Vice President of Operations for  Stratagene and Hycor* |       | 50,000            |
| John R. Pouk*Senior Vice President, Global Sales and International Operations*                               |       | 50,000            |
| Steve R. Martin*Vice President and Chief Financial Officer*                                                  |       | 60,000            |

 

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***Indemnificationof Officers and Directors***

Delaware law provides that a corporation’s certificateof incorporation may include a provision limiting the personal liability of adirector to the corporation or its stockholders for monetary damages for breachof fiduciary duty as a director. Delaware law permits a corporation toindemnify any director, officer, employee or agent of the corporation forexpenses, monetary damages, fines and settlement amounts to the extent theperson acted in good faith and in a manner he or she believed to be in the bestinterests of the corporation and, with respect to any criminal action, had noreasonable cause to believe the conduct was unlawful.

Delaware law does not permit indemnification if theperson is held liable to the corporation except to the extent that anappropriate court concludes, upon application by the person, that despite theadjudication of liability but in view of all the circumstances, the person isfairly and reasonably entitled to indemnification for those expenses that thecourt deems proper. No provision can eliminate or limit the liability of adirector for:

·                  anybreach of the director’s duty of loyalty to the Company or its stockholders;

·                  actsor omissions not in good faith or that involve intentional misconduct or aknowing violation of law;

·                  unlawfulpayment of dividends or unlawful stock purchases or redemptions;

·                  anytransaction from which the director derived an improper personal benefit; or

·                  anyact or omission before the adoption of a provision eliminating or limiting theliability of a director for breach of fiduciary duty in the certificate ofincorporation.

The Company’s certificate of incorporation and bylawslimit or eliminate the liability of officers and directors to the fullestextent permitted by Delaware law and require indemnification to the maximumextent permitted by Delaware law, provided that the Company is only required toprovide a single counsel for its indemnified officers and directors as a groupunless otherwise required by law or by written agreement.

**2006 Equity Awards At FiscalYear-End Table**

The following table sets forth certain informationwith respect to outstanding equity awards at December 31, 2006 with respect tothe named executive officers.

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**OutstandingEquity Awards At Fiscal Year-End**
|                                                           | ** ** | **Option Awards**                                                             | ** ** | **Stock Awards**                                                                | ** ** |
|-----------------------------------------------------------|------------|------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------|------------|
| **Name**                                                  | ** ** | **Number of  Securities  Underlying  Unexercised  Options  (#)  Exercisable** | ** ** | **Number of  Securities  Underlying  Unexercised  Options  (#)  Unexercisable** | ** ** | **Equity  Incentive  Plan  Awards:  Number of  Securities  Underlying  Unexercised  Unearned  Options  (#)** | ** ** | **Option  Exercise  Price  ($)** | ** ** | **Option  Expiration  Date** | ** ** | **Number of  Shares or  Units of  Stock That  Have Not  Vested  (#)** | ** ** | **Market  Value of  Shares or  Units of  Stock That  Have Not  Vested  ($)** | ** ** | **Equity  Incentive  Plan Awards:  Number of  Unearned  Shares,  Units  or Other  Rights  That  Have Not  Vested  (#)** | ** ** | **Equity  Incentive  Plan  Awards:  Market or  Payout  Value of  Unearned  Shares,  Units or  Other  Rights  That  Have Not  Vested  ($)** | ** ** |
| **(a)**                                                   | ** ** | **(b)**                                                                            | ** ** | **(c)**                                                                              | ** ** | **(d)** | ** ** | **(e)** | ** ** | **(f)** | ** ** | **(g)** | ** ** | **(h)** | ** ** | **(i)** | ** ** | **(j)** | ** ** |
| Joseph A. Sorge, M.D.**                                   |       | 17,500                                                                             | (1)        | —                                                                               |       | — |   | $         9.00 |   | 12/31/07 |   | — |   | — |   | — |   | — |   |
| *Chairman of the*                                         |       | 738,960                                                                            | (1)        | —                                                                               |       | — |   | $         9.34 |   | 06/03/14 |   | — |   | — |   | — |   | — |   |
| *Board and Chief Executive  Officer*                      |       |                                                                               |       |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nelson F. Thune                                           |       | 36,948                                                                             | (1)        | —                                                                               |       | — |   | $         3.25 |   | 04/19/12 |   | — |   | — |   | — |   | — |   |
| *General Manager*                                         |       | 25,000                                                                             | (2)        | 25,000                                                                               |       |   |   | $         8.47 |   | 05/29/14 |   | — |   | — |   | — |   | — |   |
| *for Hycor and*                                           |       | 15,210                                                                             | (1)        | —                                                                               |       | — |   | $         2.65 |   | 08/12/08 |   | — |   | — |   | — |   | — |   |
| *Senior Vice*                                             |       | —                                                                             | (3)        | 50,000                                                                               |       | — |   | $         6.60 |   | 06/01/16 |   | — |   | — |   | — |   | — |   |
| *President   of Operations for Stratagene and Hycor* |       |                                                                               |       |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| John R. Pouk Senior                                       |       | 60,000                                                                             | (1)        | —                                                                               |       | — |   | $         9.60 |   | 09/01/09 |   | — |   | — |   | — |   | — |   |
| *Vice President,*                                         |       | 41,200                                                                             | (1)        | —                                                                               |       | — |   | $         9.60 |   | 09/01/09 |   | — |   | — |   | — |   | — |   |
| *Global Sales and*                                        |       | 2,850                                                                              | (1)        | —                                                                               |       | — |   | $       12.00 |   | 09/01/09 |   | — |   | — |   | — |   | — |   |
| *International*                                           |       | 50,000                                                                             | (1)        | —                                                                               |       | — |   | $         8.11 |   | 06/16/14 |   | — |   | — |   | — |   | — |   |
| *Operations*                                              |       | —                                                                             | (3)        | 50,000                                                                               |       | — |   | $         6.60 |   | 06/01/16 |   | — |   | — |   | — |   | — |   |
| Steve R. Martin                                           |       | 10,000                                                                             | (1)        | —                                                                               |       | — |   | $         8.11 |   | 06/16/14 |   | — |   | — |   | — |   |   |   |
| *Vice President and*                                      |       | 10,000                                                                             | (4)        | 30,000                                                                               |       | — |   | $         8.61 |   | 06/03/15 |   | — |   | — |   | — |   | — |   |
| *Chief Financial*                                         |       | —                                                                             | (5)        | 60,000                                                                               |       | — |   | $         6.60 |   | 06/01/16 |   | — |   | — |   | — |   | — |   |
| *Officer*                                                 |       |                                                                               |       |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ronni L. Sherman (6)                                      |       | —                                                                             |       | —                                                                               |       | — |   | — |   | — |   | — |   | — |   | — |   | — |   |
| *Former Executive Vice President  and General Counsel*    |       |                                                                               |       |                                                                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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(1)  Options are fully vested atDecember 31, 2006.

(2)  Unvested options vest on thefollowing dates:  12,500 on 5/29/2007 and12,500 on 5/29/2008.

(3)  Unvested options vest on thefollowing dates:  12,500 each year on6/1/2007, 6/1/2008, 6/1/2009 and 6/1/2010.

(4)  Unvested options vest on thefollowing dates:  10,000 each year on6/3/2007, 6/3/2008 and 6/3/2009.

(5)  Unvested options vest on thefollowing dates:  15,000 each year on6/1/2007, 6/1/2008, 6/1/2009 and 6/1/2010.

(6)  Effective October 13,2006, Ms. Sherman retired as our Executive Vice President and General Counsel.

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**2006 Option Exercises and Stock Vested Table**

There were no option exercises during the fiscal yearended December 31, 2006 with respect to the named executive officers.

**2006 Director Compensation**

All non-employee directors receive a quarterlyretainer of $7,500 and a per-day fee of $1,000 for each board, audit andcompensation meeting attended, unless such meetings occur on the same day, inwhich case $1,000 is paid for the day of service. Non-employee directors arereimbursed for reasonable travel expenses incurred in connection with eachmeeting attended.

Each non-employee director is eligible to receivestock options under Stratagene’s 2004 Independent Directors’ Option Plan, anon-discretionary formula stock option plan. Each director who is a non-employee director and who holds officeimmediately after Stratagene’s Annual Meeting of stockholders receives anoption to purchase 10,000 shares of common stock.  The price per share at which an option may beexercised is the fair market value per share on the date the option is granted.The options vest in three equal annual installments on the first threeanniversary dates of such grant and expire ten years after the grant date.  Directors who are newly elected to theStratagene board receive an initial grant of 20,000 options with the sameoption terms.

Thefollowing table sets forth certain compensation information with respect toeach of the members of our board of directors for the fiscal year endedDecember 31, 2006.

**Director Compensation**
| **Name**               | ** ** | **Fees Earned  or Paid in  Cash  ($)**   | ** ** | **Stock  Awards  ($)** | ** ** | **Option  Awards  ($)**                                 | ** ** | **Non-Equity  Incentive Plan  Compensation  ($)** | ** ** | **Change in  Pension Value  and  Nonqualified  Deferred  Compensation  Earnings** | ** ** | **All Other  Compensation  ($)** | ** ** | **Total  ($)**                                          | ** ** |
|------------------------|------------|---------------------------------------------------------|------------|------------------------|------------|---------------------------------------------------------|------------|--------------------------------------------------------|------------|---------------------------------------------------------------------------------------------|------------|---------------------------------------|------------|---------------------------------------------------------|------------|
| **(a)**                | ** ** | **(b)**                                                 | ** ** | **(c)**                | ** ** | **(d)**                                                 | ** ** | **(e)**                                                | ** ** | **(f)**                                                                                     | ** ** | **(g)**                               | ** ** | **(h)**                                                 | ** ** |
| Joseph A. Sorge,  M.D. |       | —                                                  |       | —                 |       | —                                                  |       | —                                                 |       | —                                                                                      |       | —                                |       | —                                                  |       |
| Robert C. Manion       |       | $        35,000 |       | —                 |       | $        38,917 |       | —                                                 |       | —                                                                                      |       | —                                |       | $        73,917 |       |
| Carlton J. Eibl        |       | $        36,000 |       | —                 |       | $        38,917 |       | —                                                 |       | —                                                                                      |       | —                                |       | $        74,917 |       |
| John C. Reed           |       | $        35,000 |       | —                 |       | $        38,917 |       | —                                                 |       | —                                                                                      |       | —                                |       | $        73,917 |       |
| Peter Ellman           |       | $        35,000 |       | —                 |       | $        49,750 |       | —                                                 |       | —                                                                                      |       | —                                |       | $        84,750 |       |

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(1)          Represents the 2006annual compensation cost of all option awards held by the members of our boardof directors over the requisite service period in accordance with FAS 123(R), determined without regard to estimates forforfeitures.   The aggregate number of option awardsoutstanding and related grant date fair values at the end of fiscal 2006 foreach director were as follows:

·                  Joseph A. Sorge,M.D. (Aggregate Options Outstanding: 756,450; Grant Date Fair Value per share:$3.92 (738,960 share grant) and $1.56 (17,500 share grant).

·                  Robert C. Manion(Aggregate Options Outstanding: 40,000; Grant Date Fair Value per share: $3.71(20,000 share grant), $3.38  (10,000 sharegrant) and $3.03 (10,000 grant).

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·                  Carlton J. Eibl(Aggregate Options Outstanding: 90,000; Grant Date Fair Value per share: $0.00(50,000 share grant), $3.71 (20,000 share grant), $3.38 (10,000 share grant)and $3.03 (10,000 share grant).

·                  John C. Reed(Aggregate Options Outstanding: 40,000; Grant Date Fair Value per share: $3.71(20,000 share grant), $3.38 (10,000 share grant) and $3.03 (10,000 sharegrant).

·                  Peter Ellman(Aggregate Options Outstanding: 22,500; Grant Date Fair Value per share: $4.78(20,000 share grant) and $3.03 (2,500 share grant).

**CompensationCommittee Report***

The Compensation Committee has reviewed and discussedthe Compensation Discussion and Analysis with management, and based on suchreview and discussions, recommended to the board of directors that theCompensation Discussion and Analysis be included in our 2007 Proxy Statement.

Thisreport is submitted by the Compensation Committee.

Carlton J. Eibl, ChairRobert C. ManionJohn C. Reed

* The material in this report is not solicitingmaterial, is not deemed filed with the SEC, and is not incorporated byreference in any of our filings under the Securities Act of 1933, as amended,or the Securities Exchange Act of 1934, as amended, whether made on, before, orafter the date of this Proxy Statement and irrespective of any generalincorporation language in such filing.

**COMPENSATION COMMITTEE INTERLOCKS ANDINSIDER PARTICIPATION**

The Compensation Committee of the Board consists ofMessrs. Eibl (Chair), Reed and Manion. None of these directors has at any timebeen an officer or employee of the Company or any of its subsidiaries.

During fiscal year 2006, the following relationshipsand related transactions between Stratagene and any member of our CompensationCommittee occurred:

The Burnham Institute, whose Chief Executive Officeris John C. Reed, purchased reagent products from Stratagene during 2006 in theaggregate amount of approximately $38,017. In addition, Stratagene paidroyalties on product sales to the Burnham Institute during 2006 in the amountof $4,036. John Reed does not benefit directly from any of these monies.

**ITEM 12. SECURITY OWNERSHIP OFCERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

The following table sets forth certain informationwith respect to beneficial ownership of Stratagene common stock as of April 19,2007 as to:

·                  eachperson, or group of affiliated persons, known by Stratagene to own beneficiallymore than 5% of its outstanding common stock;

·                  eachof its directors;

·                  eachof its executive officers named in the executive compensation table (the “namedexecutive officers”); and

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·                  allof Stratagene’s directors and executive officers as a group.

Beneficial ownership is determined in accordance withthe rules of the Securities and Exchange Commission and generally includes anyshares over which a person exercises sole or shared voting or investment power.The percentage of shares beneficially owned is based on 22,491,160 shares ofcommon stock outstanding as of April 19, 2007. All shares of common stocksubject to options exercisable within 60 days following April 19, 2007 aredeemed to be outstanding and beneficially owned by the person holding thoseoptions for the purpose of computing the number of shares beneficially ownedand the percentage of ownership of that person. They are not, however, deemedto be outstanding and beneficially owned for the purpose of computing thepercentage ownership of any other person.

Except as indicated in the footnotes to the table andsubject to applicable community property laws, based on information provided bythe persons named in the table, each person identified in the table possessessole voting and investment power with respect to all shares of the common stockshown as beneficially owned by them. Unless otherwise indicated, the address ofeach of the individuals and entities named below is: 11011 North Torrey PinesRoad, La Jolla, California 92037.

 
| ** **                                                       | ** ** | **Shares Beneficially Owned** | ** ** |
|------------------------------------------------------------------|------------|-----------------------------------------|------------|
| **Name of Beneficial Owner**                      | ** ** | **Number of  Shares**              | ** ** | **Percent of  Total** | ** ** |
| Joseph A. Sorge,  M.D. (1)                                       |       | 13,136,300                              |       | 56.5 | % |
| Nelson F. Thune  (2)                                             |       | 204,679                                 |       | * |   |
| John R. Pouk(3)                                                  |       | 170,783                                 |       | * |   |
| Carlton J. Eibl  (4)                                             |       | 146,669                                 |       | * |   |
| Steve R. Martin  (5)                                             |       | 51,317                                  |       | * |   |
| Robert C. Manion  (6)                                            |       | 45,001                                  |       | * |   |
| John C. Reed (6)                                                 |       | 30,001                                  |       | * |   |
| Peter Ellman (7)                                                 |       | 8,501                                   |       | * |   |
| Wellington  Management Company (8)                               |       | 1,589,771                               |       | 7.1 | % |
| All directors and  executive officers as a group (8 persons) (9) |       | 13,793,251                              |       | 58.2 | % |

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*  Less than 1%.

(1)               Includes319,753 shares of common stock held by J. A. Sorge Trust I, 226,560 shares ofcommon stock held by J. A. Sorge Trust II, 319,753 shares of common stock heldby J. A. Sorge Trust III, 226,560 shares of common stock held by J. A. SorgeTrust IV and 1,344,000 shares of common stock held by the Joseph A. SorgeCharitable Remainder Trust dated December 26, 2002, for each of which Dr. Sorgeserves as trustee. Also includes 86,125 shares of common stock held by BioSensePartners, L.P., of which Dr. Sorge is the general partner.  Also includes options to purchase 756,460shares of common stock which are exercisable within 60 days of April 19, 2007.

(2)               Includesoptions to purchase 102,158 shares of common stock which are exercisable within60 days of April 19, 2007.

(3)               Includesoptions to purchase 166,550 shares of common stock which are exercisable within60 days of April 19, 2007.

(4)               Includesoptions to purchase 80,001 shares of common stock which are exercisable within60 days of April 19, 2007.

(5)               Includesoptions to purchase 45,000 shares of common stock which are exercisable within 60days of April 19, 2007.

 

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(6)               Representsoptions to purchase 30,001 shares of common stock which are exercisable within60 days of April 19, 2007.

(7)                Includesoptions to purchase 7,501 shares of common stock which are exercisable within60 days of April 19, 2007.

(8)                WellingtonManagement Company’s address is 75 State Street, Boston, MA 02109.

(9)                Includesoptions to purchase 1,217,672 shares of common stock which are exercisablewithin 60 days of April 19, 2007.

**SecuritiesAuthorized for Issuance Under Equity Compensation Plans**

Information about the Company’s equity compensationplans at December 31, 2006 was as follows:

 
| ** **                                                  | ** ** | **Number of   Securities to  be Issued  Upon Exercise  of Outstanding  Options,  Warrants and  Rights  (a)** | ** ** | **Weighted-  Average Exercise   Price of  Outstanding   Options,  Warrants and  Rights  (b)** | ** ** | **Number of  Securities  Remaining  Available for  Future Issuance  Under Equity  Compensation  Plans (Excluding  Securities  Reflected in  Column (a))  (c)** | ** ** |
|-------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| Equity  Compensation Plans Approved by Shareholders (1)     |       | 2,792,367                                                                                                                                       |       | $                                                                                                                      | 8.85       |                                                                                                                                                                                              | 1,852,254  | (2) |
| Equity  Compensation Plans Not Approved by Shareholders (3) |       | 165,854                                                                                                                                         |       | $                                                                                                                      | 5.97       |                                                                                                                                                                                              | —     |   |
| Total                                                       |       | 2,958,221                                                                                                                                       |       |                                                                                                                   |       | 1,852,254                                                                                                                                                                                         |       |

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(1)          Consistsof the following plans:  2000 StockOption Plan, as amended and restated, 2004 Independent Directors Option Plan,2004 Employee Stock Purchase Plan and the 2006 Equity Incentive Plan.

(2)   Includes854,718 shares reserved for issuance under the 2004 Employee Stock PurchasePlan.

(3)          The Company originallyassumed 1,229,158 options under the Hycor Biomedical Inc. 2001 Stock OptionPlan, the Hycor Biomedical Inc. 1992 Incentive Stock Plan and the HycorBiomedical Inc. Nonqualified Stock Option Plan for Non-EmployeeDirectors, as amended, pursuant to which such stock options held by formeremployees and consultants of Hycor are exercisable for 756,822 shares of theCompany’s common stock (after giving effect to the exchange ratio provided inthe merger agreement governing the merger of Hycor with a subsidiary of theCompany in June 2004).  At December 31,2006, there were 165,854 options outstanding (after giving effect to theexchange ratio).  These options have aweighted average exercise price of $5.97 per share.  No further awards were made under these planssubsequent to the merger in June of 2004. A copy of each such plan has been filed by the Company on a Form S-8with the Securities and Exchange Commission on June 10, 2004.

**Proposed Acquisition by Agilent Technologies, Inc.**

On April 5, 2007, the Company entered into anAgreement and Plan of Merger (the “Merger Agreement”) with AgilentTechnologies, Inc., a Delaware corporation (“Agilent”), and Jackson AcquisitionCorp., a Delaware 

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corporation and wholly owned subsidiary of Agilent (“MergerSub”), pursuant to which Merger Sub would merge with and into the Company, withthe Company to be the surviving corporation of the merger (the “Merger”). The Board of Directors of the Company approved the Merger Agreement and thetransactions contemplated thereby on the unanimous recommendation of a specialcommittee of the Board of Directors of the Company comprised solely ofindependent directors (the “Special Committee”), and each of the SpecialCommittee and the Board of Directors has recommended that the Merger Agreementbe submitted to the Company’s stockholders for adoption.

Subject to the terms and conditions of the MergerAgreement, at the effective time of the Merger (the “Effective Time”), eachshare of Company common stock that is issued and outstanding immediately priorto the Effective Time will be converted into and represent the right to receivean amount of cash, without interest, equal to $10.94. In addition, each vestedoption to purchase Company common stock with an exercise price per share thatis less than $10.94 and that is issued and outstanding immediately prior to theEffective Time will be converted into and represent the right to receive anamount of cash, without interest, equal to the product of (i) the number ofshares of Company common stock subject to such vested Company option multipliedby (ii) the sum of $10.94 minus the exercise price per share of Company commonstock subject to such vested Company option.  Vested options to purchaseCompany common stock with an exercise price per share equal to or greater than$10.94, and unvested options to purchase Company common stock, that are, ineach case, issued and outstanding immediately prior to the Effective Time willbe cancelled and extinguished without any payment or other considerationtherefor or the issuance of any securities in exchange or substitution therefor.

In addition to certainother covenants, the Company has agreed pursuant to the Merger Agreement that,subject to certain exceptions with respect to an unsolicited superioracquisition proposal, the Company will not, from the date of the MergerAgreement until the earlier of the closing of the Merger or the termination ofthe Merger Agreement in accordance with its terms, (i) solicit, initiate,support or knowingly encourage any inquiry, proposal or offer from, furnish anynon-public information to, or participate in any discussions or negotiations,or enter into any agreement with, any party or group regarding any alternativetransaction to the Merger, (ii) approve, endorse or recommend any alternativetransaction to the Merger (except to the extent specifically permitted by theMerger Agreement), or (iii) enter into any letter of intent or contractrelating to any alternative transaction proposal. The Company also agreed toprepare and has filed with the Securities and Exchange Commission (the “SEC”) aproxy statement in connection with the solicitation of proxies from Companystockholders for adoption of the Merger Agreement and to convene and hold aspecial meeting of the Company’s stockholders to consider adoption of theMerger Agreement.

The consummation of the Merger is subject to certainconditions set forth in the Merger Agreement, including, but not limited to,adoption of the Merger Agreement by the Company’s stockholders, there being nomaterial adverse change with respect to the Company, the expiration ortermination of the applicable waiting period with respect to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, thereceipt of approvals under antitrust, competition or similar laws of other foreignjurisdictions that are required to be obtained with respect to the Merger, thelack of any judgment, order, injunction or other legal prohibition entered orissued by any court or other governmental authority which prohibits, makesillegal or enjoins the consummation of the Merger or the Divestiture (ashereinafter defined), the continued effectiveness of the agreementsimplementing the Divestiture and other customary closing conditions.  TheMerger Agreement may be terminated by either the Company or Agilent undercertain circumstances, including, but not limited to, if (i) the Merger is notconsummated by August 31, 2007 (unless such termination date is extendedpursuant to the terms of the Merger Agreement), (ii) the Merger Agreement shallnot have been adopted by the stockholders of the Company in accordance with theMerger Agreement, and (iii) subject to satisfaction of certain conditions setforth in the Merger Agreement, the Special Committee changes its recommendationto Company stockholders to vote in favor of adopting the Merger Agreement as aresult of the Company’s receipt of an unsolicited alternative transactionproposal that the Special Committee and the Board of Directors of the Companyeach determine is more favorable to the Company’s stockholders from a financialpoint of view than the terms of the Merger Agreement and is reasonably likelyto be consummated on the terms proposed (a “Change of Recommendation”). If the Merger Agreement is terminated 

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under certain circumstances, including termination ofthe Merger Agreement by either the Company or Agilent upon a Change ofRecommendation, subject to the terms and conditions of the Merger Agreement,the Company will be required to pay to Agilent a termination fee of$8,500,000.  No assurances can be given that the conditions to closing thetransactions contemplated by the Merger Agreement will be satisfied, or thatthe transactions contemplated thereby ultimately will be consummated.  Theclosing of the Merger is expected to occur in the second quarter or thebeginning of the third quarter of 2007.

In connection with the execution of the MergerAgreement, Agilent entered into a Voting Agreement (the “Voting Agreement”),dated as of April 5, 2007, with Joseph A. Sorge, M.D., the Chairman of the Board,Chief Executive Officer and President of the Company, and certain trusts andentities controlled by Dr. Sorge (collectively, the “Principal Stockholders”)which, as of the date of the Voting Agreement, beneficially owned,collectively, an aggregate of approximately 58.6% of the Company’s votingsecurities. Pursuant to the Voting Agreement, the Principal Stockholders haveagreed, among other things, (a) not to sell or otherwise transfer shares ofCompany capital stock owned by such stockholders as of the date of the VotingAgreement or acquired subsequent thereto to any third party, subject to certainlimited exceptions (including sales of Company common stock held by Dr. Sorgepursuant to the terms of the 10b5-1(c) Sales Plan between Dr. Sorge andPacific Growth Equities, LLC dated as of June 8, 2006), (b) to vote allshares of the Company’s capital stock owned by them in favor of the adoption ofthe Merger Agreement and the transactions contemplated thereby, including theMerger (and against any proposal made in opposition to, or in competition with,consummation of the Merger and the other transactions contemplated by theMerger Agreement), (c) not to solicit, initiate, support or knowingly encourageany inquiry or proposal from, furnish any non-public information concerning theCompany and/or its subsidiaries to, or participate in any discussions ornegotiations with, any person regarding any alternative transaction to theMerger, and (d) not to approve, endorse or recommend any alternativetransaction (except to the extent expressly permitted by the MergerAgreement).  In addition, each Principal Stockholder has granted to theofficers of Agilent an irrevocable proxy to vote its shares of Company commonstock at every meeting of the stockholders of the Company, and with respect toevery written consent of the Company stockholders in lieu of any such meeting,as described above.  The Voting Agreement will terminate simultaneouslywith the consummation of the Merger, the termination of the Merger Agreement inaccordance with its terms or, subject to certain conditions, upon a Change ofRecommendation pursuant to the Merger Agreement.

On April 5, 2007, the Company also entered into anAsset Purchase Agreement (the “Asset Purchase Agreement”) with Catalyst AssetsLLC, a Delaware limited liability company of which Dr. Sorge is the sole member(“Catalyst”), and Agilent entered into a License Agreement (the “LicenseAgreement”) with Catalyst, pursuant to which, among other things, following theEffective Time, the Company will sell, transfer and assign to Catalyst, certainassets (which include, among other things, certain patent rights, a parcel ofreal property owned by the Company located in Jackson, Wyoming, certaintangible assets located at the facility on such real property, and certaincontractual arrangements and their related obligations) for an aggregate cashpurchase price of $6,600,000, the appraised value of such assets, and Agilentwill grant to Catalyst a non-exclusive, non-transferable, world-wide, fullypaid, royalty free license to certain intellectual property and Agilent will beprovided certain rights to supply, manufacture and distribute certain products(the transactions contemplated by the Asset Purchase Agreement and the LicenseAgreement, collectively, the “Divestiture”).  Pursuant to the AssetPurchase Agreement, Catalyst has agreed, among other things, not to directly orindirectly engage in or participate in the financing, operation, management orcontrol of, or permit Catalyst’s name to be used in connection with, any personor business that engages or participates in a Competing Business Purpose (asdefined in the Asset Purchase Agreement) during the three-year period followingthe closing of the transactions contemplated by the Asset Purchase Agreement.

Also in connection with the proposed Merger, Dr. Sorgeentered into a Severance Waiver Agreement (the “Severance Waiver Agreement”)with the Company pursuant to which, subject to and conditioned upon theconsummation of the Merger, Dr. Sorge and the Company have agreed that Dr.Sorge’s employment with the Company will be terminated by the Company effectiveimmediately prior to the Effective Time and Dr. Sorge will waive his rights toall cash severance benefits in the amount of approximately $1,000,000 andretain his rights to all 

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non-cash severance benefits from Stratagene inconnection with the Merger, including under his existing employment agreementwith Stratagene, which provides for medical plan, disability plan and otherbenefit plan coverage for Dr. Sorge through June 1, 2009,.  In addition,Dr. Sorge entered into a Non-Competition Agreement (the “Non-CompetitionAgreement”) with Agilent pursuant to which Dr. Sorge has agreed, among otherthings, not to, directly or indirectly, engage in or participate in thefinancing, operation, management or control of, or permit his name to be usedin connection with, any person or business that engages or participates in aCompeting Business Purpose (as defined in the Non-Competition Agreement) duringthe three-year period following the Effective Time.  Each of the AssetPurchase Agreement, the License Agreement, the Severance Waiver Agreement andthe Non-Competition Agreement will automatically terminate in the event theMerger Agreement is terminated in accordance with its terms.

The foregoing descriptions of the Merger Agreement,the Voting Agreement, the Asset Purchase Agreement, the License Agreement, theSeverance Waiver Agreement and the Non-Competition Agreement and thetransactions contemplated thereby do not purport to be complete and arequalified in their entirety by the terms of the Merger Agreement, the VotingAgreement, the Asset Purchase Agreement, the License Agreement, the SeveranceWaiver Agreement and the Non-Competition Agreement, which are filed as Exhibits2.1, 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, to the Company’s CurrentReport on Form 8-K filed with the Securities and Exchange Commission on April11, 2007, and each of which is incorporated herein by reference.

**IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC**

On April 23, 2007, the Company filed a preliminaryproxy statement with the SEC in connection with the proposed Merger.  Theproxy statement will be mailed to the stockholders of the Company.  Investorsand the Company’s stockholders are urged to read carefully the proxy statementand other relevant materials when they become available because they willcontain important information about the Merger.  Investors and securityholders may obtain free copies of these documents when they become availableand other documents filed by the Company with the SEC through the web sitemaintained by the SEC at *www.sec.gov*. In addition, investors and security holders may obtain free copies of thedocuments filed with the SEC by the Company by going to the Company’s corporatewebsite at *www.stratagene.com* orby contacting: Stratagene Corporation, 11011 North Torrey Pines Road, La Jolla,California 92037; Attn: Chief Financial Officer.

Agilent and the Company, and their respectivedirectors and executive officers, may be deemed to be participants in thesolicitation of proxies in respect of the transactions contemplated by theMerger Agreement.  A description of any interests that the Company’sofficers and directors have in the proposed Merger will be available in theproxy statement. Information regarding Agilent’s directors and executiveofficers is contained in Agilent’s Annual Report on Form 10-K for the yearended October 31, 2006, which is filed with the SEC.  Informationregarding the Company’s directors and executive officers is contained in theCompany’s Annual Report on Form 10-K for the year ended December 31, 2005,which is filed with the SEC. These documents are available free of charge atthe SEC’s web site at *www.sec.gov*or by going to the Company’s corporate website at *www.stratagene.com* or Agilent’s corporate website at *www.agilent.com*.

**ITEM13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**

During fiscal year 2006, the following relationshipsand related transactions with any Stratagene officer or director took place:

The Burnham Institute, whose Chief Executive Officeris John C. Reed (who is also a director of Stratagene), purchased reagentproducts from Stratagene during 2006 in the aggregate amount of approximately$38,017. In addition, Stratagene paid royalties on product sales to the BurnhamInstitute during 2006 in the amount of $4,036. John Reed does not benefitdirectly from any of these monies.

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The Company reviews related party transactions on anon-going basis and reports in writing to the Audit Committee of the Board ofDirectors on the nature and amounts of any monies that are associated withthese activities. Related party transactions are then ratified by the AuditCommittee of the Board of Directors following review.

The Company’s Board of Directors has determined thateach of Messrs. Manion, Eibl, Reed and Ellman is an “independent” director asdefined by the rules and regulations of the Nasdaq Stock Market.

**ITEM 14. PRINCIPAL ACCOUNTANT FEESAND SERVICES**

**PrincipalAccountant Fees and Services**

Fees for professional services provided by MayerHoffman McCann, Stratagene’s principal accountants for the fiscal year endedDecember 31, 2006 and 2005, for the indicated services were as follows:

 

|                         | ** ** | **2006** | ** ** | **2005** | ** ** |
|-------------------------|------------|----------|------------|----------|------------|
| Audit Fees (1)          |       | $        | 456,032    |     | $          | 467,369 |   |
| Audit Related  Fees (2) |       | 2,634    |       | —   |       |
| Tax Fees                |       | —   |       | —   |       |
| All Other Fees          |       | —   |       | —   |       |
| Total Fees              |       | $        | 458,666    |     | $          | 467,369 |   |

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(1)          Audit Fees consist offees associated with the audit of Stratagene’s annual financial statements,reviews of the financial statements included in Stratagene’s quarterly reportson Form 10-Q and other services associated with regulatory filings.

(2)        AuditRelated Fees consist of fees for audit services related to the registrationstatement on Form S-8 filed by Stratagene in connection with the 2006 EquityIncentive Plan.

**Policyregarding Audit Committee Pre-Approval of Audit and Non-Audit Services ofIndependent Auditors**

The Audit Committee will pre-approve all audit andpermissible non-audit services, except as permitted under the de minimusexception for non-audit services described in Section 10A(i)(1)(B) of theExchange Act and any rules of the Securities and Exchange Commission thereunder.  These services may include audit services,audit related services, tax services and other services.  The Audit Committee considers whether theprovision of each non-audit related service is compatible with maintaining theindependence of Stratagene’s auditors. All of the services performed by the Mayer Hoffman McCann in fiscal year2006 were pre-approved by the Audit Committee.

 

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**PART IV**

**Item 15. Exhibits and FinancialStatement Schedules**

3.      List of exhibits.

The exhibits listed under Item 15(b) hereof are filedas part of this Annual Report on Form 10-K/A.

*  (b) Exhibits.*

The following exhibits are filed with this AnnualReport on Form 10-K/A:

 
| Exhibit Number | ** ** | **Description**                                                                                                                                                                                                                                                                                                            |
|----------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1(1)         |       | Agreement and Plan of Reorganization dated as of  July 24, 2003 by and among the registrant, SHC Acquisition Sub, Inc. and  Hycor Biomedical Inc.                                                                                                                                                                          |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 2.2(1)         |       | Amendment No. 1 to Agreement and Plan of  Reorganization dated as of December 29, 2003 by and among the registrant, SHC  Acquisition Sub, Inc. and Hycor Biomedical Inc.                                                                                                                                                   |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 2.3(1)         |       | Amendment No. 2 to Agreement and Plan of  Reorganization dated as of February 25, 2004 by and among the registrant, SHC  Acquisition Sub, Inc. and Hycor Biomedical Inc.                                                                                                                                                   |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 3.1(2)         |       | Second Amended and Restated Certificate of  Incorporation of the registrant                                                                                                                                                                                                                                                |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 3.2(2)         |       | Amended and Restated Bylaws of the registrant                                                                                                                                                                                                                                                                              |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 4.1(1)         |       | Specimen common stock certificate of the registrant                                                                                                                                                                                                                                                                        |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 4.2(2)         |       | Registration Rights Agreement dated as of June 2,  2004 by and among the registrant and Dr. Joseph A. Sorge, the J. A. Sorge  Trust I, the J. A. Sorge Trust II, the J. A. Sorge Trust III, the J. A. Sorge  Trust IV, Biosense Partners, L.P. and the Joseph A. Sorge Charitable  Remainder Trust dated December 26, 2002 |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 10.1(3) #      |       | The Year 2000 Stock Option Plan of the registrant,  as amended and restated                                                                                                                                                                                                                                                |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 10.2(3) #      |       | The 2004 Independent Directors Option Plan of the  registrant                                                                                                                                                                                                                                                              |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 10.3(3) #      |       | Employee Stock Purchase Plan of the registrant                                                                                                                                                                                                                                                                             |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 10.4(3) #      |       | Hycor Biomedical Inc. 2001 Stock Option Plan                                                                                                                                                                                                                                                                               |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 10.5(3) #      |       | Hycor Biomedical Inc. 1992 Incentive Stock Plan                                                                                                                                                                                                                                                                            |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 10.6(2) #      |       | Amended and Restated Employment Agreement dated as  of June 2, 2004 by and between the registrant and Dr. Joseph A. Sorge                                                                                                                                                                                                  |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 10.7(1)        |       | Loan Agreement dated as of April 1, 1997 by and  between Bastrop County Industrial Development Corporation and BioCrest  Manufacturing, L.P., a wholly owned subsidiary of the registrant                                                                                                                                  |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 10.11(1)† |       | Thermal Cycler Supplier Authorization Agreement  dated as of January 1, 1995 by and between The Perkin-Elmer Corporation and  Stratagene California (formerly known as Stratagene), a wholly owned  subsidiary of the registrant                                                                                           |
|           |       |                                                                                                                                                                                                                                                                                                                       |
| 10.12(1)† |       | Patent License Agreement dated as of July 26, 1994  by and between Roche Molecular Systems, P. Hoffmann-La Roche Ltd. and  Stratagene California (formerly known as Stratagene), a wholly owned  subsidiary of the registrant                                                                                              |

 

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| Exhibit Number | ** ** | **Description**                                                                                                                                                                                                  |
|----------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.13(1)       |       | Lease Agreement by and between Slough TPSP LLC and  Stratagene California (formerly known as Stratagene), a wholly owned  subsidiary of the registrant, for 11011 North Torrey Pines Road, La Jolla,  California |
|           |       |                                                                                                                                                                                                             |
| 10.14(1)       |       | Credit Agreement dated as of January 21, 2004 by and  among Merrill Lynch Business Financial Services Inc., the registrant,  BioCrest Holdings, L.L.C. and BioCrest Manufacturing, L.P.                          |
|           |       |                                                                                                                                                                                                             |
| 10.15(5)       |       | Amendment No. 1 to Credit Agreement dated as of May  26, 2004 by and among Merrill Lynch Business Financial Services Inc., the  registrant, BioCrest Holdings, L.L.C. and BioCrest Manufacturing, L.P.           |
|           |       |                                                                                                                                                                                                             |
| 10.16(5)       |       | Amendment No. 2 to Credit Agreement dated as of  September 28, 2004 by and among Merrill Lynch Business Financial Services  Inc., the registrant, BioCrest Holdings, L.L.C. and BioCrest Manufacturing,  L.P.    |
|           |       |                                                                                                                                                                                                             |
| 10.17(6)       |       | Amendment No. 3 to Credit Agreement dated as of  February 24, 2005 by and among Merrill Lynch Business Financial Services Inc.,  the registrant, BioCrest Holdings, L.L.C. and BioCrest Manufacturing, L.P.      |
|           |       |                                                                                                                                                                                                             |
| 10.18 (7)      |       | Amendment No. 4 to Credit Agreement dated as of  January 24, 2006 by and among Merrill Lynch Business Financial Services Inc.,  the registrant, BioCrest Holdings, L.L.C. and BioCrest Manufacturing, L.P.       |
| 10.19 (8)#     |       | Form of Employment Agreement dated March 10, 2006,  with Steve R. Martin, David W. Weber and John R. Pouk.                                                                                                       |
|           |       |                                                                                                                                                                                                             |
| 10.20(8)       |       | Employment Separation Agreement and Mutual General  Release of all Claims, dated October 6, 2006, between Stratagene Corporation  and Ms. Ronni L. Sherman                                                       |
|           |       |                                                                                                                                                                                                             |
| 10.21(9)       |       | Consulting Agreement, effective October 13, 2006,  between Stratagene Corporation and Ms. Ronni L. Sherman.                                                                                                      |
|           |       |                                                                                                                                                                                                             |
| 10.22(10)      |       | Stratagene Corporation 2006 Equity Incentive Award  Plan                                                                                                                                                         |
|           |       |                                                                                                                                                                                                             |
| 21.1*          |       | List of subsidiaries of the registrant                                                                                                                                                                           |
|           |       |                                                                                                                                                                                                             |
| 23.1*          |       | Consent of Mayer Hoffman McCann P.C., Independent  Registered Public Accounting Firm                                                                                                                             |
|           |       |                                                                                                                                                                                                             |
| 23.2*          |       | Consent of Deloitte & Touche LLP, Independent  Registered Public Accounting Firm                                                                                                                             |
|           |       |                                                                                                                                                                                                             |
| 31.1           |       | Certification of Chief Executive Officer pursuant to  Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934                                                                              |
|           |       |                                                                                                                                                                                                             |
| 31.2           |       | Certification of Chief Financial Officer pursuant to  Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934                                                                              |
|           |       |                                                                                                                                                                                                             |
| 32.1**         |       | Certification of Chief Executive Officer pursuant to  18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act  of 2002                                                                       |
|           |       |                                                                                                                                                                                                             |
| 32.2**         |       | Certification of Chief Financial Officer pursuant to  18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act  of 2002                                                                       |

 

37

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(1)          Incorporated byreference to the Registration Statement on Form S-4 (No. 333-109420) filed onOctober 2, 2003, as amended.

(2)          Incorporated byreference to the Quarterly Report on Form 10-Q for the period ended June 30,2004.

(3)          Incorporated byreference to the Registration Statement on Form S-8 (No. 333-116544) filed onJune 16, 2004.

(4)          Incorporated byreference to the Current Report on Form 8-K filed on February 1, 2005.

(5)          Incorporatedby reference to the Quarterly Report on Form 10-Q for the period endedSeptember 30, 2004.

(6)          Incorporatedby reference to the Annual Report on Form 10-K for the year ended December 31,2004.

(7)          Incorporatedby reference to the Annual Report on Form 10-K for the year ended December 31,2005.

(8)          Incorporatedby reference to the Current Report on Form 8-K filed on March 15, 2006

(9)          Incorporated by reference to the Quarterly Report on Form 10-Q for theperiod ended September 30, 2006.

(10)    Incorporated by reference to the Registration Statement on Form S-8(No. 333-135720) filed on July 12, 2006.

#                 Indicates amanagement contract or compensatory plan or arrangement.

†                  Certainconfidential portions of this exhibit were omitted by means of redacting a portionof the text. An unredacted version of this exhibit was filed separately withthe Secretary of the Commission pursuant to the registrant’s ApplicationRequesting Confidential Treatment pursuant to Rule 406 under the SecuritiesAct.

*                 Previously filed.

**          These certifications arebeing furnished solely to accompany this annual report pursuant to 18 U.S.C.Section 1350, and are not being filed for purposes of Section 18 of theExchange Act and are not to be incorporated by reference into any filing of StratageneCorporation, whether made before or after the date hereof, regardless of anygeneral incorporation language in such filing.

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**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) ofthe Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: April 27, 2007 | STRATAGENE CORPORATION |                                                          |
|----------------------|------------------------|---------------------------------------------------------------|
|                 |                   |                                                          |
|                 | By:                    | /s/ JOSEPH  A. SORGE                                          |
|                 |                   | Joseph A. Sorge, M.D.                                         |
|                 |                   | Chairman of the Board, Chief Executive Officer and  President |
|                 |                   |                                                          |
|                 | By:                    | /s/ STEVE R.  MARTIN                                          |
|                 |                   | Steve R. Martin                                               |
|                 |                   | Vice President and Chief Financial Officer                    |
|                      |                        |                                                               |  |

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, this report has been signed below by the followingpersons on behalf of the registrant and in the capacities and on the datesindicated.
| Signature              | ** ** | **Title**                                                       | ** ** | **Date**       |
|------------------------|------------|-----------------------------------------------------------------|------------|----------------|
| ** **             | ** ** | ** **                                                      | ** ** | ** **     |
| /s/ JOSEPH A. SORGE    |       | Chairman of the Board, Chief Executive Officer and              |       | April 27, 2007 |
| Joseph A, Sorge,  M.D. |       | President (Principal Executive Officer)                         |       |           |
|                   |       |                                                            |       |           |
| /s/ STEVE R. MARTIN    |       | Vice President and Chief Financial Officer                      |       | April 27, 2007 |
| Steve R. Martin        |       | (Principal Financial Officer and Principal  Accounting Officer) |       |           |
|                   |       |                                                            |       |           |
| /s/ CARLTON J. EIBL    |       | Director                                                        |       | April 27, 2007 |
| Carlton J. Eibl        |       |                                                            |       |           |
|                   |       |                                                            |       |           |
| /s/ ROBERT C. MANION   |       | Director                                                        |       | April 27, 2007 |
| Robert C. Manion       |       |                                                            |       |           |
|                   |       |                                                            |       |           |
| /s/ PETER ELLMAN       |       | Director                                                        |       | April 27, 2007 |
| Peter Ellman           |       |                                                            |       |           |
|                   |       |                                                            |       |           |
| /s/ JOHN C. REED       |       | Director                                                        |       | April 27, 2007 |
| John C. Reed           |       |                                                            |       |           |

 

 

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