(a) (1) Director Stock Awards. Our directors were reelected to the Applera Corporation (the “Company”) Board of Directors (the “Board”) at our 2005 Annual Meeting of Stockholders, which was held on October 20, 2005 (the “2005 Annual Meeting”). In connection with their reelection, on October 20, 2005, the Management Resources Committee of our Board of Directors (the “MRC”) authorized for each director an award of 2,600 shares of Applera Corporation – Applied Biosystems Group Common Stock (“Applera-Applied Biosystems stock”) pursuant to the Applera Corporation/Applied Biosystems Group Amended and Restated 1999 Stock Incentive Plan (the “Applera-Applied Biosystems Plan”) and 1,000 shares of Applera Corporation – Celera Genomics Group Common Stock (“Applera-Celera Genomics stock”) pursuant to the Applera Corporation/Celera Genomics Group Amended and Restated 1999 Stock Incentive Plan (the “Applera-Celera Genomics Plan”). Each of these awards will vest on the date immediately preceding the Applera 2006 Annual Meeting of Stockholders and will be forfeited by a director, subject to certain exceptions, if the director ceases to serve as a member of the Board prior to that date. Prior to vesting, a director has the right to receive cash dividends and to vote but may not transfer or otherwise dispose of the shares.

     (2) Director Stock Options. In connection with the reelection of our directors at the 2005 Annual Meeting, on October 20, 2005, the MRC authorized for each director a grant of stock options for 9,000 shares of Applera-Applied Biosystems stock pursuant to the Applera-Applied Biosystems Plan and 3,600 shares of Applera-Celera Genomics stock pursuant to the Applera-Celera Genomics Plan. The options become exercisable in four equal annual installments commencing on October 20, 2006, the first anniversary of the grant, and have a term of ten years. The exercise price for the Applera-Applied Biosystems stock options is $23.25 per share, which was the fair market value of a share of Applera-Applied Biosystems stock on October 20, 2005, as determined in accordance with the Applera-Applied Biosystems Plan. The exercise price for the Applera-Celera Genomics stock options is $11.775 per share, which was the fair market value of a share of Applera-Celera Genomics stock on October 20, 2005, as determined in accordance with the Applera-Celera Genomics Plan.

     (3) Incentive Compensation Program. Most employees of the Company not compensated on a commission basis, including the executive officers, participate in the Company’s Incentive Compensation Program. Award amounts vary for each executive officer based on: a competitive market target bonus level; overall business performance; and individual performance.

     The MRC uses specific performance objectives for each business of the Company as a basis on which to measure business performance under this program. For the Company’s Applied Biosystems Group, the MRC uses EBIT (earnings before interest and taxes), revenue, cash flow, EPS (earnings per share), and the achievement of specific business goals. For the Company’s Celera Genomics Group, the MRC uses EBIT, cash flow, and the achievement of specific business goals. For Celera Diagnostics, a joint venture between the Applied Biosystems Group and the Celera Genomics Group, the MRC uses EBIT, revenue, cash flow, operating expenses, and the achievement of specific business goals. For corporate employees (including Tony White, the Company’s Chief Executive Officer, and certain other executive officers), the MRC uses a combination of the performance results for the Applied Biosystems Group and the Celera Genomics Group.