<PAGE>

                                                                   EXHIBIT 10.17

          THIRD WAVE TECHNOLOGIES, INC. LONG TERM INCENTIVE PLAN NO. 1

1.    PLAN OBJECTIVE

        The Third Wave Technologies, Inc. Long Term Incentive Plan (referred to
as the "Plan") is designed to encourage results-oriented actions on the part of
members of the executive management team and other key employees of Third Wave
Technologies, Inc. (the "Company"). The Plan is intended to align closely
financial rewards for the employees with the achievement of specific performance
objectives by the Company. The Plan, as amended and restated effective as of
January 1, 2004, provides as follows:

2.    ELIGIBILITY

      Members of the executive management team of the Company ("Tier 1
Employees") and other key employees of the Company ("Tier 2 Employees") are
eligible to participate in the Plan. The Administrator (as defined in Section 3
below) shall select the Tier 1 Employees and Tier 2 Employees who may
participate in the Plan (a "Participant").

3.    ADMINISTRATION

      (a) The Plan shall be administered by the Compensation Committee of the
Company's Board of Directors (the "Administrator"). The Administrator may
delegate its authority to administer the Plan to an individual or committee. The
term "Administrator" shall mean the Compensation Committee or such individual or
committee to which authority has been delegated.

      (b) The Administrator shall have full power and authority to establish the
rules and regulations relating to the Plan, to interpret the Plan and those
rules and regulations, to select each Participant for the Plan, to determine the
Participant's target award, performance goals and final award, to make all
factual and other determinations in connection with the Plan, and to take all
other actions necessary or appropriate for the proper administration of the
Plan, including the delegation of such authority or power, where appropriate.
The Administrator may adjust the performance goals to take into account
corporate transactions that take into account new revenue associated with
mergers and/or acquisitions or other corporate transactions in an equitable
manner that does not make it more difficult for the Company to achieve the
original performance goals.

      (c) All powers of the Administrator shall be executed in its sole
discretion, in the best interest of the Company, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to similarly
situated individuals. The Administrator's administration of the Plan, including
all such rules and regulations, interpretations, selections, determinations,
approvals, decisions, delegations, amendments, terminations, and other actions,
shall be final and binding upon the Company and all employees of the Company,
including each Participant and his or her respective beneficiary(ies).

                                      -1-
<PAGE>

4.    TARGET AWARDS AND PERFORMANCE GOALS

      (a) The Administrator shall establish for each Participant who completes
and returns an enrollment agreement, in a form designated by the Administrator,
a target award that shall be payable if and to the extent the Company attains
the performance goals set by the Administrator for a specified performance
period. The executed enrollment agreement shall constitute a Participant's
consent to be subject to the terms of the Plan and to be bound by the authority
of the Administrator as set forth in Section 3.

           (i) Unless the Administrator determines otherwise, the target award
for a Participant who is a Tier 1 Employee shall be an amount equal to three
times the highest annual incentive target amount established for the Participant
during the performance period under the Company's annual incentive plan
applicable to the Participant.

           (ii) Unless the Administrator determines otherwise, the target award
for a Participant who is a Tier 2 Employee shall be an amount equal to two times
the highest annual incentive target amount established for the Participant
during the performance period under the Company's annual incentive plan
applicable to the Participant.

      (b) The Administrator shall establish the performance goals and related
calculation matrices for each performance period and shall promptly provide this
information to each Participant who is eligible for an award for that
performance period. The performance goals are attached as Exhibit A and are
hereby fully incorporated into and shall be considered as part of this Plan.
Unless the Administrator determines otherwise, the performance goals shall be
based upon (i) the Company's total shareholder return ranking as compared to its
peer group, (ii) the Company's stock price growth, and (iii) the growth in the
Company's Clinical Molecular Diagnostics revenue. The Administrator may adjust
the performance goals as it deems appropriate to take into account corporate
transactions or other extraordinary events that occur during the performance
period.

      (c) For the purposes of subsection (b), the Administrator shall have the
discretion to determine which companies are included in the peer group. The
Administrator may adjust the peer group from time to time as it deems
appropriate, including by adding, deleting, or replacing companies, to take into
account mergers and other changes in the companies comprising the peer group.

      (d) Unless the Administrator determines otherwise, each performance period
shall be a three-year period beginning on January 1, 2004 and ending on December
31, 2007.

5.    CALCULATION OF INCENTIVE AWARDS

      (a) At the end of the performance period, the Administrator shall
determine for each participant whether and to what extent the performance goals
have been met and the percentage of the target award that is earned. The
Administrator shall rely upon the audited financial statements of the Company
and its subsidiaries to determine whether and to what extent the performance
goals are met.

                                      -2-
<PAGE>

      (b) The Administrator shall compute each Participant's award for the
performance period based upon the Company's achievement of the performance goals
and the matrices set forth on Exhibit A. On or around March 15 of the year
following the end of the applicable performance period, the Company shall credit
each Participant's award to a book account established for the Participant. All
amounts credited to a Participant's book account shall be administered according
to the vesting provisions of Section 6 below.

      (c) Participants must be employed on the last day of the applicable
performance period to be eligible for an incentive award under the Plan, except
as described below or except as the Administrator may otherwise determine.

           (i) The beneficiary(ies) of a Participant who dies during a
performance period shall receive a prorated award based upon the Company's
performance at the end of such performance period. The prorated award shall be
calculated from the commencement of the performance period, or, if applicable,
such later date on which the Participant became eligible to participate for the
performance period as established by the Administrator, to the date of the
Participant's death. The Company shall pay the prorated award to the
beneficiary(ies) after end of the performance period pursuant to Section 8
below.

           (ii) Participants who retire on or after their normal retirement age
(as defined below) during the performance period shall receive a prorated award
based upon the Company's performance at the end of such performance period. The
prorated award shall be calculated from the commencement of the performance
period, or, if applicable, such later date on which the Participant became
eligible to participate for the performance period as established by the
Administrator, to the date of the Participant's normal retirement. The Company
shall pay the prorated award to the Participant after the end of the performance
period pursuant to Section 8 below. For purposes of this Plan, "normal
retirement age" is age 65, or, if the Participant has at least five years of
service, age 55.

           (iii) Participants who become disabled (as defined below) during the
performance period shall receive a prorated award based upon the Company's
performance at the end of such performance period. The prorated award shall be
calculated from the commencement of the performance period, or, if applicable,
such later date on which the Participant became eligible to participate for the
performance period as established by the Administrator, to the date the
Participant is disabled. The Company shall pay the prorated award to the
Participant after the end of the performance period pursuant to Section 8 below.
For purposes of this Plan, "disabled" means eligible for long-term disability
benefits as determined under a Company-sponsored disability plan.

           (iv) Upon a Change in Control (as defined below) of the Company
during the performance period, all performance goals pertaining to awards during
such performance period shall be deemed to have been met 100 percent as of the
effective date of the Change in Control and the maximum award for such
performance period shall be deemed immediately earned, and such maximum award
shall vest and be paid as described in Section 6(d). The Company shall credit
the maximum award to a book account established for the Participant as soon as
practicable after the Change of Control.

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For purposes of the Plan, the term "Change in Control" shall mean, and shall be
deemed to have occurred if, (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) or group
acting in concert, other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company acting in such capacity or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing more than 50
percent of the total voting power represented by the Company's then outstanding
voting securities; (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors of the
Company and any new director whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by a vote of
at least two thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; (iii) consummation of a merger or consolidation of the Company
with any other corporation other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80 percent of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation; (iv) the stockholders of the Company approve a plan of complete
liquidation of the Company; or (v) the Company consummates a sale or disposition
of (in one transaction or a series of related transactions) all or substantially
all of its assets.

      (d) In the event this Plan is terminated or suspended before the last day
of a performance period, Participants who are employed by the Company on the day
of such termination period shall receive an award based upon the Company's
performance through the end of such performance period as if no such termination
had occurred. The award shall be calculated from the commencement of the
performance period, or, if applicable, such later date on which the Participant
became eligible to participate for the performance period as established by the
Administrator, to the end of the performance period. The Company shall credit
the award to a book account established for the Participant as soon as
practicable after the end of the performance period. Awards made pursuant to
this subsection shall vest and be paid in accordance with the terms of the Plan
as though the Plan had not been terminated or suspended.

      (e) The Administrator may establish appropriate terms and conditions to
accommodate newly hired and transferred employees. For example, upon a
Participant's being designated to participate in the Plan, the Administrator may
establish, in its discretion, the effective commencement date for such
Participant for each performance period that has commenced but not then ended,
and if such effective commencement date is established as a date later than the
commencement of a particular pending performance period, any award for that
performance period may be prorated based on such later effective commencement
date. Absent any action to the contrary, new employees that become Participants
shall be entitled to a commencement date effective as of the beginning of the
plan period.

                                      -4-
<PAGE>

6.    VESTING OF INCENTIVE AWARDS

      (a) If a Participant earns an award as described in Section 5 for a
performance period, except as provided below in this Section 6, 25 percent of
the award shall vest on the last day of the performance period, 50 percent of
the award shall vest on the last day of the year following the end of such
performance period, and the remaining 25 percent of the award shall vest on the
last day of the second year following the end of such performance period,
provided the Participant continues to be employed by the Company or an affiliate
through such applicable vesting date.

      (b) If a Participant retires at or after his or her normal retirement age,
becomes disabled, or dies while employed by the Company, the Participant's award
shall be fully vested at the end of the performance period or at the time such
event occurs, whichever is later.

      (c) Unless otherwise specified elsewhere in this agreement or any valid
employment or other agreement between the Participant and the Company, if a
Participant's employment with the Company and its affiliates terminates for any
reason, any unvested award shall be forfeited to the Company as of his or her
termination date.

      (d) In the event of a Change in Control during any performance period,
Participants who are employed by the Company on the effective date of the Change
in Control shall be eligible to receive, and shall be deemed vested in, the
maximum award payout for each such performance period as follows: (A) fifty
percent (50%) of the maximum award payout shall be deemed vested and shall be
paid upon the effective date of the Change in Control, and (B) fifty percent
(50%) of the maximum award payout shall be deemed vested and shall be paid on
the earliest date at either (x) six (6) months after the effective date of the
Change in Control, (y) upon Participant's termination without Cause, or
resignation for Good Reason (applicable only if "Good Reason" concept is defined
in a valid employment agreement between Company and Participant), occurring
prior to the six (6) month anniversary of the effective date of the Change in
Control, or (z) the date on which such portion of the award would have vested in
the absence of a Change in Control pursuant to Section 6(a) or (b) above. For
purposes of the Plan, the term "Cause" shall mean any of the following grounds
for termination of the Participant's employment:

           (i) any willful refusal to perform essential job duties which
continues for more than ten (10) days after notice from the Company;

           (ii) any intentional act of fraud or embezzlement by the Employee in
connection with the Employee's duties or committed in the course of Employee's
employment;

           (iii) any gross negligence or willful misconduct of the Employee with
regard to the Company or any of its subsidiaries resulting in a material
economic loss to the Company;

           (iv) the Participant is convicted of a felony;

           (v) the Participant is convicted of a misdemeanor the circumstances
of which involve fraud, dishonesty or moral turpitude and which is substantially
related to the circumstances of Participant's job with the Company;

                                      -5-
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           (vii) any willful and material violation by the Employee of any
statutory or common law duty of loyalty to the Company or any of its
subsidiaries resulting in a material economic loss; or

           (vii) any material breach by the Employee of his or her employment or
non-compete agreements, if any exist.

For purposes of the Plan, the term "Good Reason" shall mean, and shall be deemed
to have the meaning set forth in any valid employment agreement being
Participant and Company.

      (e) If a Participant earns an award as described in Section 5 for a
performance period, and thereafter there is a Change in Control, Participants
who are employed by the Company on the effective date of the Change in Control
shall be eligible to receive, and shall be deemed vested in, the unvested
portion of the award as of the effective date of the Change in Control as
follows: (A) fifty percent (50%) of such unvested portion of the award shall be
deemed immediately vested and shall be paid on the effective date of the Change
in Control, and (B) fifty percent (50%) of such unvested portion of the award
shall be deemed vested and shall be paid on the earliest date of (x) six (6)
months after the effective date of the Change in Control, (y) upon the
Participant's termination without Cause, or resignation for Good Reason,
occurring prior to the six (6) month anniversary of the effective date of the
Change in Control, or (z) the date on which such portion of the award would have
vested in the absence of a Change in Control pursuant to Sections 6(a) or 6(b)
above.

      (f) A transfer of employment between the Company and an affiliate shall
not be considered a termination of employment for purposes of the Plan.

      (g) The Administrator reserves the right to accelerate vesting whenever
the Administrator deems such action appropriate.

      (h) Prior to a Change in Control, the Company shall deposit in a separate
bank account sufficient funds to cover both the vested and unvested cumulative
award amounts so that funding of vested awards can take place upon the Change in
Control closing.

      (i) In the event of a Change in Control whereby the Company's Compensation
Committee of the Board of Directors no longer exists, the Administrator shall be
deemed to be the individual who at the time of the Change of Control are the
Company's General Counsel and principal financial officer.

7.    CHANGES TO PERFORMANCE GOALS AND TARGET AWARDS

      At any time prior to the final determination of awards pursuant to Section
5, the Administrator may adjust the performance goals and target awards to
reflect a change in corporate capitalization (such as a stock split or stock
dividend), or a corporate transaction (such as a merger, consolidation,
separation, reorganization, or partial or complete liquidation), or to reflect
equitably the occurrence of any extraordinary event, any change in applicable
accounting rules or principles, any change in the Company's method of
accounting, any change in applicable law, any change due to any merger,
consolidation, acquisition, reorganization, stock split, stock

                                      -6-
<PAGE>

dividend, combination of shares, or other changes in the Company's corporate
structure or shares, or any other change of a similar nature.

8.    PAYMENT OF AWARDS

      (a) Unless determined otherwise by the Administrator, a Participant may
elect, in the manner specified by the Administrator, to receive payment of his
or her award in (i) cash, (ii) shares of the Company's common stock valued as of
the day that is five business days before the date of distribution, or (iii) a
combination. Except as provided in subsection (b), payment shall be made as soon
as administratively possible following the vesting of an award. Participants who
elect to take a distribution of their award in the form of the Company's stock,
rather than in cash, shall receive a 10 percent increase in the number of shares
of the Company's stock otherwise to be distributed. The distribution of the
Company's stock shall be made in accordance with the Third Wave Technologies,
Inc. 2000 Stock Plan, pursuant to Section 11 of such plan, or the comparable
provisions of any successor stock plan adopted by the Company.

      (b) Unless the Administrator determines otherwise, a Participant who is
eligible to participate in the Company's deferred compensation program, if one
exists, may make an irrevocable written election to defer all or any part of the
payment of such award pursuant to a separate deferred compensation arrangement
sponsored by the Company.

      (c) Subject to applicable state law and the notification to, or consent
of, a Participant's spouse, as required, each Participant may designate a
beneficiary or beneficiaries (which beneficiary may be an entity other than a
natural person) to receive any payments which are to be made following the
Participant's death. Such designation may be changed or canceled at any time
without the consent of any such beneficiary but again subject to applicable
state law and the notification to, or consent of, a Participant's spouse, as
required. Any such designation, change, or cancellation must be made on a form
approved by the Administrator and shall not be effective until received by the
Administrator or its designee. If no beneficiary has been named, or the
designated beneficiary or beneficiaries shall have predeceased the Participant,
the beneficiary shall be the Participant's surviving spouse or, if none, the
Participant's estate. If a Participant designates more than one beneficiary, the
interests of such beneficiaries shall be paid in equal shares, unless the
Participant has specifically designated otherwise.

9.    AMENDMENTS AND TERMINATION

The Company may at any time amend, suspend, or terminate the Plan or any portion
thereof; provided that no amendment that would adversely affect the rights of a
Participant may take effect without such Participant's prior written consent.
Notwithstanding the foregoing, the Company shall have the right to modify the
terms of the Plan as may be necessary or desirable to comply with applicable
laws.

10.   MISCELLANEOUS PROVISIONS

      (a) Neither the establishment of this Plan, nor any action taken
hereunder, shall be construed as giving any Participant any right to be retained
in the employ of the Company or any of its subsidiaries. Nothing in the Plan,
and no action taken pursuant to the Plan, shall affect the

                                      -7-
<PAGE>

right of the Company or a subsidiary to terminate a Participant's employment at
any time and for any or no reason. The Company is under no obligation to
continue the Plan. Notwithstanding the foregoing, the Company acknowledges that
certain Participants may have separate employment or other agreements with the
Company and those agreements may include terms and conditions affecting the
terms and conditions of awards that may be made under this Plan.

      (b) A Participant's right and interest under the Plan may not be assigned
or transferred, except as provided in Section 5(c)(i) of the Plan upon death,
and any attempted assignment or transfer shall be null and void and shall
extinguish, in the Company's sole discretion, the Company's obligation under the
Plan to pay award(s) with respect to the Participant. The Company's obligations
under the Plan may be assigned to any corporation which acquires all or
substantially all of the Company's assets or any corporation into which the
Company may be merged or consolidated.

      (c) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund, or to make any other segregation of
assets, to assure payment of awards. The Company's obligations hereunder shall
constitute a general, unsecured obligation of the Company, and awards shall be
paid solely from the Company's general assets. No Participant shall have any
right to any specific assets of the Company.

      (d) The Company shall have the right to deduct from awards any and all
federal, state, and local taxes or other amounts required by law to be withheld.

      (e) The Company's obligation to pay compensation as herein provided is
subject to any applicable orders, rules, or regulations of any government agency
or office having authority to regulate the payment of wages, salaries, and other
forms of compensation.

      (f) The validity, construction, interpretation, and effect of the Plan
shall exclusively be governed by and determined in accordance with the laws of
the State of Wisconsin.

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                                    EXHIBIT A

            THIRD WAVE LONG TERM INCENTIVE MATRIX (1/1/04 - 12/31/06)

Payout as a Percent of Target

<TABLE>
<S>                    <C>      <C>       <C>       <C>       <C>      <C>      <C>      <C>      <C>      <C>
TWT STOCK              >$  12     25.0%     35.0%      40.0%    45.0%    50.0%    62.5%    75.0%    87.5%    100.0%
  PRICE
                        $9-12     12.5%     20.0%      25.0%    32.5%    40.0%    50.0%    62.5%    75.0%     87.5%

                        $ 6-9      0.0%      5.0%      10.0%    17.5%    25.0%    32.5%    40.0%    50.0%     62.5%

                        $ 4-6      0.0%      0.0%       0.0%     5.0%    10.0%    17.5%    25.0%    35.0%     45.0%

                                <$  32    $   32    $  33.5   $   39   $   43   $   47   $   51   $   55   $    60
  2006 Clinical
  Revenue ($M)

CAGR                               <50%    50-54%     55-59%   60-64%   65-69%   70-74%   75-79%   80-84%       85+%
</TABLE>

                   3 YEAR COMPOUNDED ANNUAL GROWTH RATE (CAGR)
                   FOR CLINICAL MOLECULAR DIAGNOSTICS REVENUE

                                      -1-
<PAGE>

                               EXHIBIT A (CONT'D)

            THIRD WAVE LONG TERM INCENTIVE MATRIX (1/1/04 - 12/31/06)

Payout as a Percent of Target

<TABLE>
<CAPTION>
<S>                 <C>         <C>       <C>       <C>       <C>       <C>        <C>        <C>         <C>        <C>
    3 Year             1st        25.0%     35.0%     40.0%     45.0%     50.0%       62.5%      75.0%      87.5%      100.0%
   Quartile         Quartile
    Ranking
    Total
  Shareholder
  Return vs.
  Peer Group

                      2nd         12.5%     20.0%     25.0%     32.5%     40.0%       50.0%      62.5%      75.0%       87.5%
                    Quartile

                      3rd          0.0%      5.0%     10.0%     17.5%     25.0%       32.5%      40.0%      50.0%       62.5%
                    Quartile

                      4th          0.0%      0.0%      0.0%      5.0%     10.0%       16.5%      25.0%      35.0%       45.0%
                    Quartile

                                <$  32    $   32    $ 33.5    $   39    $   43     $    47    $    51     $   55     $    60

  2006 Clinical
  Revenue ($M)

CAGR                               <50%    50-54%    55-59%    60-64%    65-69%      70-74%     75-79%     80-84%         85+%
</TABLE>

                   3 YEAR COMPOUNDED ANNUAL GROWTH RATE (CAGR)
                   FOR CLINICAL MOLECULAR DIAGNOSTICS REVENUE

-   CAGR for 2004-2006 period calculated on 2003 clinical revenue of $9.5M.

-   Peer group is targeted at 8 companies which would include GenProbe,
    Digene, Celera, Ventana, BioRad, Abbott, Roche, Bayer

-   Total payout equals the combined total of the two matrix charts above.
    Maximum payout after properly combining the two matrix charts equals 200%
    of target award.

                                      -2-