**EXHIBIT 10.42****Third Wave Technologies, Inc. Long Term Incentive Plan No. 5****1. Plan Objective**     The Third Wave Technologies, Inc. Long Term Incentive Plan (referred to as the “Plan”) isdesigned to encourage results-oriented actions on the part of members of the executive managementteam and other key employees of Third Wave Technologies, Inc. (the “Company”). The Plan isintended to align closely financial rewards for the employees with the achievement of specificperformance objectives by the Company. The Plan effective as of January 1, 2008, provides asfollows:**2. Eligibility**     Members of the executive management team of the Company (“Tier 1 Employees”) and other keyemployees of the Company (“Tier 2 Employees”) are eligible to participate in the Plan. TheAdministrator (as defined in Section 3 below) shall select the Tier 1 Employees and Tier 2Employees 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 ofDirectors (the “Administrator”). The Administrator may delegate its authority to administer thePlan to an individual or committee. The term “Administrator” shall mean the Compensation Committeeor such individual or committee to which authority has been delegated.     **(b) **The Administrator shall have full power and authority to establish the rules andregulations relating to the Plan, to interpret the Plan and those rules and regulations, to selecteach Participant for the Plan, to determine the Participant’s target award, performance goals andfinal award, to make all factual and other determinations in connection with the Plan, and to takeall other actions necessary or appropriate for the proper administration of the Plan, including thedelegation of such authority or power, where appropriate. The Administrator may adjust theperformance goals to take into account corporate transactions that take into account new revenueassociated with mergers and/or acquisitions or other corporate transactions in an equitable mannerthat 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 bestinterest of the Company, not as a fiduciary, and in keeping with the objectives of the Plan andneed not be uniform as to similarly situated individuals. The Administrator’s administration ofthe Plan, including all such rules and regulations, interpretations, selections, determinations,approvals, decisions, delegations, amendments, terminations, and other actions, shall be final andbinding upon the Company and all employees of the Company, including each Participant and his orher respective beneficiary(ies).
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**4. Target Awards and Performance Goals**     **(a) **The Administrator shall establish for each Participant who completes and returns anenrollment agreement, in a form designated by the Administrator, a target award that shall bepayable if and to the extent the Company attains the performance goals set by the Administrator fora specified performance period. The executed enrollment agreement shall constitute a Participant’sconsent to be subject to the terms of the Plan and to be bound by the authority of theAdministrator as set forth in Section 3.          **(i)**Unless the Administrator determines otherwise, the target award for a Participant who is aTier 1 Employee shall be an amount equal to three times the highest annual incentive target amountestablished for the Participant during the performance period under the Company’s annual incentiveplan applicable to the Participant.          **(ii)**Unless the Administrator determines otherwise, the target award for a Participant who isa Tier 2 Employee shall be an amount equal to two times the highest annual incentive target amountestablished for the Participant during the performance period under the Company’s annual incentiveplan applicable to the Participant.     **(b) **The Administrator shall establish the performance goals and related calculation matricesfor each performance period and shall promptly provide this information to each Participant who iseligible for an award for that performance period. The performance goals are attached as Exhibit Aand are hereby fully incorporated into and shall be considered as part of this Plan. Unless theAdministrator determines otherwise, the performance goals shall be based upon (i) the Company’stotal shareholder return ranking as compared to its peer group, (ii) the Company’s stock pricegrowth, and (iii) the growth in the Company’s revenue. The Administrator may adjust theperformance goals as it deems appropriate to take into account corporate transactions or otherextraordinary events that occur during the performance period.     **(c) **For the purposes of subsection (b), the Administrator shall have the discretion todetermine which companies are included in the peer group. The Administrator may adjust the peergroup from time to time as it deems appropriate, including by adding, deleting, or replacingcompanies, to take into account mergers and other changes in the companies comprising the peergroup.     **(d) **Unless the Administrator determines otherwise, the performance period shall be thethree-year period beginning on January 1, 2008 and ending on December 31, 2010.**5. Calculation of Incentive Awards**     **(a) **At the end of the performance period, the Administrator shall determine for eachparticipant whether and to what extent the performance goals have been met and the percentage ofthe target award that is earned. The Administrator shall rely upon the audited financialstatements of the Company and its subsidiaries to determine whether and to what extent theperformance goals are met.
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     **(b) **The Administrator shall compute each Participant’s award for the performance period basedupon 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, theCompany 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 vestingprovisions of Section 6 below.     **(c) **Participants must be employed on the last day of the applicable performance period to beeligible for an incentive award under the Plan, except as described below or except as theAdministrator may otherwise determine.          **(i)**The beneficiary(ies) of a Participant who dies during the performance period shall receivea prorated award based upon the Company’s performance at the end of such performance period. Theprorated award shall be calculated from the commencement of the performance period, or, ifapplicable, such later date on which the Participant became eligible to participate for theperformance 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 performanceperiod pursuant to Section 8 below.          **(ii)**Participants who retire on or after their normal retirement age (as defined below) duringthe performance period shall receive a prorated award based upon the Company’s performance at theend of such performance period. The prorated award shall be calculated from the commencement ofthe performance period, or, if applicable, such later date on which the Participant became eligibleto participate for the performance period as established by the Administrator, to the date of theParticipant’s normal retirement. The Company shall pay the prorated award to the Participant afterthe end of the performance period pursuant to Section 8 below. For purposes of this Plan, “normalretirement 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 shallreceive a prorated award based upon the Company’s performance at the end of such performanceperiod. 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 theperformance 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 periodpursuant to Section 8 below. For purposes of this Plan, “disabled” means eligible for long-termdisability 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, (A)all performance goals pertaining to awards during such performance period shall be deemed to havebeen met as of the effective date of the Change in Control as follows: 100 percent provided theChange in Control is an acquisition or merger and such transaction occurs for $500 million or morein total value; 75 percent if such transaction occurs between $425 and $499 million in total value;or 50 percent if such transaction occurs between $350 and $424 million in total value, (B) Tier 1and Tier 2 Participants shall be deemed to have immediately earned 100% of the maximum award forsuch performance period (such that the amount payable
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under the Plan pursuant to this Section 5(c)(iv) to a Participant is 200% of his or her targetaward if Change of Control occurs for $500 million or more in total value or 150% of his or hertarget award if the transaction occurs between $425 and $499 million in total value or 100% if suchtransaction occurs between $350 and $424 million in total value), and (C) a Participant’s awardunder this Section 5(c)(iv) shall vest and be paid as described in Section 6(d); provided, however,that if the Change of Control is an acquisition or merger and such transaction occurs for less than$200 million in total value, the Company shall not have been deemed to have met 100, 75 or 50percent of the performance goals as noted above, rather the performance goals shall be measured bythe Matrix in Exhibit A as reconfigured to take into account a shortened period within which toachieve such targets by reducing the TWT Stock Price Column and 2010 Revenue Targets on astraight-line method based on the percentage of the performance period that has occurred. Forexample, if 1/2 of the performance period has expired, then the Stock Price and Revenue targets shallbe revised based on 1/2 of the expected growth. The Company shall credit a Participant’s award underthis Section 5(c)(iv) to a book account established for the Participant as soon as practicableafter the Change of Control.For purposes of the Plan, the term “Change in Control” shall mean, and shall be deemed to haveoccurred if, (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the SecuritiesExchange Act of 1934, as amended) or group acting in concert, other than a trustee or otherfiduciary holding securities under an employee benefit plan of the Company acting in such capacityor a corporation owned directly or indirectly by the stockholders of the Company in substantiallythe same proportions as their ownership of stock of the Company, becomes the “beneficial owner” (asdefined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Companyrepresenting more than 50 percent of the total voting power represented by the Company’s thenoutstanding voting securities; (ii) during any period of two consecutive years, individuals who atthe beginning of such period constitute the Board of Directors of the Company and any new directorwhose election by the Board of Directors or nomination for election by the Company’s stockholderswas approved by a vote of at least two thirds (2/3) of the directors then still in office whoeither were directors at the beginning of the period or whose election or nomination for electionwas 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 amerger or consolidation which would result in the voting securities of the Company outstandingimmediately prior thereto continuing to represent (either by remaining outstanding or by beingconverted into voting securities of the surviving entity) at least 80 percent of the total votingpower represented by the voting securities of the Company or such surviving entity outstandingimmediately after such merger or consolidation; (iv) the stockholders of the Company approve a planof complete liquidation of the Company; or (v) the Company consummates a sale or disposition of (inone 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 the performanceperiod, Participants who are employed by the Company on the day of such termination shall receivean award based upon the Company’s performance through the end of such performance period as if nosuch termination had occurred. The award shall be calculated from the commencement of theperformance period, or, if applicable, such later date on which the Participant became eligible toparticipate for the performance period as established by the Administrator, to the end of theperformance period. The Company shall credit the award to a
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book account established for the Participant as soon as practicable after the end of theperformance period. Awards made pursuant to this subsection shall vest and be paid in accordancewith 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 newlyhired and transferred employees. For example, upon a Participant’s being designated to participatein the Plan, the Administrator may establish, in its discretion, the effective commencement datefor such Participant for the performance period that has commenced but not then ended, and if sucheffective commencement date is established as a date later than the commencement of the performanceperiod, any award for the performance period may be prorated based on such later effectivecommencement date. Absent any action to the contrary, new employees that become Participants shallbe entitled to a commencement date effective as of the beginning of the performance period.**6. Vesting of Incentive Awards**     **(a) **If a Participant earns an award as described in Section 5 for the performance period,except as provided below in this Section 6, 25 percent of the award shall vest on the last day ofthe performance period, 50 percent of the award shall vest on the last day of the year followingthe end of such performance period, and the remaining 25 percent of the award shall vest on thelast day of the second year following the end of such performance period, provided the Participantcontinues 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 ofthe performance period or at the time such event occurs, whichever is later.     **(c) **Unless otherwise specified elsewhere in this Plan or any valid employment or otheragreement between the Participant and the Company, if a Participant’s employment with the Companyand its affiliates terminates for any reason, any unvested award shall be forfeited to the Companyas of his or her termination date.     **(d) **In the event of a Change in Control during the performance period, Participants who areemployed by the Company on the effective date of the Change in Control shall be eligible toreceive, and shall be deemed vested in, the award payout determined under Section 5(c)(iv) for theperformance period, as follows: (A) 50 percent of the award payout shall be deemed vested andshall be paid upon the effective date of the Change in Control, and (B) 50 percent of the awardpayout shall be deemed vested and shall be paid on the earlier of (x) six months after theeffective date of the Change in Control, or (y) the date on which such portion of the award wouldhave vested in the absence of a Change in Control pursuant to Section 6(a) or (b) above.Notwithstanding (B) above, distribution to a Participant who is (I) a Key Employee and (II) incursa separation from service (within the meaning of section 409A of the Internal Revenue Code of 1986,as amended (the “Code”)) on account of termination by the Company without Cause or resignation bythe Participant for Good Reason prior to the applicable date under (x) or (y) above, shall bepostponed to a date that is not less than 6 months following the Participant’s
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separation date. A Participant who is not a Key Employee who incurs a separation from service(within the meaning of section 409A of the Code) on account of termination by the Company withoutCause or resignation by the Participant for Good Reason prior to the applicable date under (x) or(y) above, shall be deemed vested and paid on the earlier of the dates described in (x) and (y)without regard to the Participant’s separation from service. If any Participant incurs aseparation from service (within the meaning of section 409A of the Code) for any reason other thantermination by the Company without Cause or resignation by the Participant for Good Reason prior tothe applicable date under (x) or (y) above, any unvested award shall be forfeited to the Company asof the Participant’s separation date.For purposes of the Plan, the term “Cause” shall mean any of the following grounds for terminationof 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 theEmployee’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 orany 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 ofParticipant’s job with the Company;          **(vii)**any willful and material violation by the Employee of any statutory or common law dutyof loyalty to the Company or any of its subsidiaries resulting in a material economic loss; or          **(viii)**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 themeaning set forth in any valid employment agreement being Participant and Company.For purposes of the Plan, the term “Key Employee” shall mean (i) officers of the Company havingannual compensation greater than $130,000 (adjusted for inflation and limited to 50 employees),(ii) five percent owners, and (iii) one percent owners having annual compensation greater than$150,000, all as determined by the Committee in a manner consistent with the regulations issuesunder section 409A of the Code.     **(e) **Notwithstanding (a) above, if a Participant earns an award as described in Section 5 forthe performance period, and thereafter there is a Change in Control, Participants who are employedby the Company on the effective date of the Change in Control shall be eligible to receive, andshall be deemed vested in, the unvested portion of the award as of the effective date
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of the Change in Control as follows: (A) 50 percent of such unvested portion of the awardshall be deemed immediately vested and shall be paid on the effective date of the Change inControl, and, (B) 50 percent of the award payout shall be deemed vested and shall be paid on theearlier of (x) six months after the effective date of the Change in Control, or (y) the date onwhich such portion of the award would have vested in the absence of a Change in Control pursuant toSection 6(a) or (b) above.Notwithstanding (B) above, distribution to a Participant who is (I) a Key Employee and (II) incursa separation from service (within the meaning of section 409A of the Code) on account oftermination by the Company without Cause or resignation by the Participant for Good Reason prior tothe applicable date under (x) or (y) above, shall be postponed to a date that is not less than 6months following the Participant’s separation date. A Participant who is not a Key Employee whoincurs a separation from service (within the meaning of section 409A of the Code) on account oftermination by the Company without Cause or resignation by the Participant for Good Reason prior tothe applicable date under (x) or (y) above, shall be deemed vested and paid on the earlier of thedates described in (x) and (y) without regard to the Participant’s separation from service. If anyParticipant incurs a separation from service within the meaning of section 409A of the Code) forany reason other than termination by the Company without Cause or resignation by the Participantfor Good Reason prior to the applicable date under (x) or (y) above, any unvested award shall beforfeited to the Company as of the Participant’s separation date.     **(f) **A transfer of employment between the Company and an affiliate shall not be considered atermination of employment for purposes of the Plan.     **(g) **The Administrator reserves the right to accelerate vesting whenever the Administratordeems such action appropriate.     **(h) **Prior to a Change in Control, the Company shall deposit in a separate bank accountsufficient funds to cover both the vested and unvested cumulative award amounts so that funding ofvested 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 theBoard of Directors no longer exists, the Administrator shall be deemed to be the individual who atthe time of the Change of Control are the Company’s General Counsel and principal financialofficer.**7. Changes to Performance Goals and Target Awards**     At any time prior to the final determination of awards pursuant to Section 5, theAdministrator may adjust the performance goals and target awards to reflect a change in corporatecapitalization (such as a stock split or stock dividend), or a corporate transaction (such as amerger, consolidation, separation, reorganization, or partial or complete liquidation), or toreflect equitably the occurrence of any extraordinary event, any change in applicable accountingrules or principles, any change in the Company’s method of accounting, any change in applicablelaw, any change due to any merger, consolidation, acquisition, reorganization, stock split, stock
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dividend, combination of shares, or other changes in the Company’s corporate structure orshares, or any other change of a similar nature.**8. Payment of Awards**     **(a) **The Administrator may pay awards under this Plan in cash, shares of the Company’s commonstock, or a combination of cash and shares of the Company’s common stock, in the Administrator’ssole discretion. Unless specified otherwise by the Administrator pursuant to the prior sentence, aParticipant may elect, in the manner specified by the Administrator, to receive payment of his orher award in (i) cash, (ii) shares of the Company’s common stock valued as of the day that is fivebusiness days before the date of distribution, or (iii) a combination. Except as provided insubsection (b), payment shall be made as soon as administratively possible following the vesting ofan award. Participants who elect to take a distribution of their award in the form of theCompany’s stock, rather than in cash, shall receive a 10 percent increase in the number of sharesof the Company’s stock otherwise to be distributed (this provision shall not apply, except to theextent determined otherwise by the Administrator, if the Administrator determines to pay awards inwhole or in part in shares of the Company’s common stock pursuant to the first sentence of thisSection 8(a)). Any distribution of the Company’s stock under this Plan shall be made in accordancewith the Third Wave Technologies, Inc. 2000 Stock Plan, pursuant to Section 11 of such plan, or thecomparable provisions of any successor stock plan adopted by the Company.     **(b) **Unless the Administrator determines otherwise, a Participant who is eligible toparticipate in the Company’s deferred compensation program, if one exists, may make an irrevocablewritten election to defer all or any part of the payment of such award pursuant to a separatedeferred compensation arrangement sponsored by the Company.     **(c) **Subject to applicable state law and the notification to, or consent of, a Participant’sspouse, as required, each Participant may designate a beneficiary or beneficiaries (whichbeneficiary may be an entity other than a natural person) to receive any payments which are to bemade following the Participant’s death. Such designation may be changed or canceled at any timewithout the consent of any such beneficiary but again subject to applicable state law and thenotification 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 effectiveuntil received by the Administrator or its designee. If no beneficiary has been named, or thedesignated beneficiary or beneficiaries shall have predeceased the Participant, the beneficiaryshall be the Participant’s surviving spouse or, if none, the Participant’s estate. If aParticipant designates more than one beneficiary, the interests of such beneficiaries shall be paidin 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 effectwithout such Participant’s prior written consent. Notwithstanding the foregoing, the Company shallhave the right to modify the terms of the Plan as may be necessary or desirable to comply withapplicable laws.
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**10. Miscellaneous Provisions**     **(a) **Neither the establishment of this Plan, nor any action taken hereunder, shall be construedas giving any Participant any right to be retained in the employ of the Company or any of itssubsidiaries. Nothing in the Plan, and no action taken pursuant to the Plan, shall affect theright of the Company or a subsidiary to terminate a Participant’s employment at any time and forany or no reason. The Company is under no obligation to continue the Plan. Notwithstanding theforegoing, the Company acknowledges that certain Participants may have separate employment or otheragreements with the Company and those agreements may include terms and conditions affecting theterms 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 ortransfer shall be null and void and shall extinguish, in the Company’s sole discretion, theCompany’s obligation under the Plan to pay award(s) with respect to the Participant. The Company’sobligations under the Plan may be assigned to any corporation which acquires all or substantiallyall of the Company’s assets or any corporation into which the Company may be merged orconsolidated.     **(c) **The Plan shall be unfunded. The Company shall not be required to establish any special orseparate fund, or to make any other segregation of assets, to assure payment of awards. TheCompany’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 anyright to any specific assets of the Company.     **(d) **The Company shall have the right to deduct from awards any and all federal, state, andlocal taxes or other amounts required by law to be withheld.     **(e) **The Company’s obligation to pay compensation as herein provided is subject to anyapplicable orders, rules, or regulations of any government agency or office having authority toregulate the payment of wages, salaries, and other forms of compensation.     **(f) **The validity, construction, interpretation, and effect of the Plan shall exclusively begoverned 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 – 5**(1/1/08 – 12/31/010)Payout as a Percent of Target (Target = 3x target bonus for Tier 1; 2x target bonus for Tier 2)                                         **TWT Stock Price**  3$12.50   25%  35%  40%  45%  50%  62.5%  75%  87.5%  100%  $10.50 - $12.49   12.5%  20%  25%  32.5%  40%  50%  62.5%  75%  87.5%  $8.50 - $10.49   0%  5%  10%  17.5%  25%  37.5%  50%  62.5%  75%   <$8.50   0%  0%  5%  10%  17.5%  25%  35%  45%  55%**2010 Revenue ($M)**      <$70  $75  $80  $85  $90  $95  $100  $105  $110 **CAGR**      <31.9%  35.0%  37.9%  40.7%  43.4%  46.0%  48.6%  51.0%  53.4%**3 Year Compounded Annual Growth Rate (CAGR)**