Document:

exv10w17

 

Exhibit 10.17

December 14, 2005

VIA HAND DELIVERY

Mr. John J. Puisis

811 Lenox

Glenview, IL 60025

     RE:       Severance Agreement and Release

Dear John:

     This will confirm our proposal concerning the termination of your employment with Third Wave
Technologies, Inc. (“Company”) on December 14, 2005 (“Separation Date”). In connection with the
separation, the Company offers you the following benefits:

     (1)       The Company shall provide you with the following:

          (A)       The Company will pay you your regular wages through the Separation Date;

          (B)       The Company will pay you for any accrued vacation that you have not used as of the
Separation Date;

          (C)       If you participated, you will retain all your vested rights in the Company’s 401(k)
plan;

          (D)       You will receive a severance payment equal to 24 months of your then current Base
Salary, 6/24th of which shall be paid in a lump sum within 3 business days of the
Revocation Date, with the balance to be paid in 18 equal monthly installments (the first
installment due on the first day of the calendar month following the month in which
termination occurs).

          (E)       All stock options granted to you shall immediately be accelerated and shall be
considered fully vested. Notwithstanding anything contained in the Option Grant Agreements
to the contrary, your vested Non-Qualified Stock Options shall be open for exercise until
the latest date on which those options would expire or are eligible to be exercised under
the Option Grant Agreements, determine without regard to such termination or resignation;
provided, however, that in the event of a conflict between any Option Grant Agreement this
Agreement shall control. You and the Company acknowledge and agree that such extended
exercise period shall not apply to any Incentive Stock Options the exercise periods for
which shall continue to be governed by the terms of the Option Grant Agreements. You
understand and agree that any extended exercise period granted to Incentive Stock Options
issued to Executive on or prior to July 17, 2003 converted those Incentive Stock Options
into Non-Qualified Stock Options.

 

 

December 14, 2005

Page 2

          (F)       The Company will provide you and your eligible dependents, with the right to
participate, at your own expense, in the plan in accordance with the mandates of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”). Unless you
and, if applicable, your eligible dependents exercise these rights in a timely manner,
coverage under the Company’s group health insurance plan will cease as of the last day of
the month in which the Separation Date occurred. In addition, you will receive an amount
equal to 1/12th of 7.6% of your Base Salary payable each month (the first
installment due on the first day of the calendar month following the month in which
termination occurs) in twelve (12) monthly installments, or a monthly amount equal to
1/12th of such greater percentage as may be in effect for senior employees of the
Company immediately prior to your termination; which amount is intended, but not required,
to be used by you to acquire such medical, dental, hospitalization, accident, disability,
life insurance and any other benefits as you may determine. As of the Separation Date, you
will cease to participate in all other Company benefit plans.

          (G)       You will receive an outplacement consulting package up to a maximum value of
$15,000 that shall be selected at your discretion.

          (H)       The Company agrees not to contest any claim for unemployment filed after the
Separation Date.

All payments described above, will be subject to normal deductions for income and employment taxes
and will be made to you no later than the time required by applicable law.

     (2)       Your Undertakings. In exchange for the benefits provided to you under Paragraph
2, above, you agree as follows:

          (A)       You agree, on behalf of yourself, your heirs, successors and assigns, to release
the Company, its affiliates and subsidiaries and their respective past and present officers,
directors, stockholders, partners, members, agents and employees (collectively “Released
Parties”) from any claims arising on or before the date you sign this agreement. This
includes, but is not limited to, giving up: (i) any claims under the Age Discrimination in
Employment Act (ADEA) of 1967, the Older Worker Benefit Protection Act, the Americans with
Disabilities Act, the Employee Retirement Income Security Act, the Civil Rights Act of 1964,
as amended, or claims under any other federal, state or local employment discrimination or
employee benefit laws, (ii) any defamation, privacy, wrongful discharge or other tort or
breach of contract claims under state law, (iii) any retaliation claims, (iv) any claims for
compensatory, consequential or punitive damages, back pay, front pay, costs, attorneys fees,
interest or other expenses, and (v) any other legal obligation or responsibility arising
from or in respect to your employment or termination of employment except for a claim to
enforce this Agreement. This release of claims includes any claims, whether they are
presently known or unknown, or anticipated or unanticipated by you. You should not construe
references to specific claims as in any way limiting the general and comprehensive nature of
the release of claims provided under this Paragraph 2(A). You agree to waive and give up
any benefit conferred on you by any order or judgment issued in connection with any
proceeding filed against the Released Parties regarding

 

 

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 any claim released in this agreement. This release does not apply to claims for
benefits under any applicable workers’ compensation law;

          (B)       You agree that, as of the Separation Date, you have or will expeditiously return to
the Company all of its property and all of the property of its present and former officers,
directors, stockholders, partners, members, agents, employees and customers which you
possess or over which you have direct or indirect control, including, but not limited to,
all monies, documents, electronic or otherwise, records and files, credit cards, office
keys, Company vehicles, cellular telephones, and electronically encoded information such as
computer disks, etc. (and all copies of such Company property);

          (C)       You agree not to engage at any time in any form of conduct or make any statements
or representations, or direct any other person or entity to engage in any conduct or make
any statements or representations, that disparage, criticize or otherwise impair the
reputation of the Company or any of the Released Parties (defined above). Nothing contained
in this Paragraph 2(C) shall preclude you from providing truthful testimony required
pursuant to subpoena or other legal process;

          (D)       You agree to actively cooperate with the Company, including giving depositions and
as a witness, in connection with the legal proceedings or matters in which the Company is or
may become involved;

          (E)       You agree that all post-employment obligation set forth in that certain Employment
Agreement, date September 19, 2001, between you and the Company, as amended on July 17, 2003
and June 14, 2004 (the “Employment Agreement”), shall remain in full force and effect
according to the terms of such agreement; and

          (F)       You understand that the Company has no obligation to rehire you, and you agree not
to seek employment or re-employment from the Company.

     (3)       Acceptance and Revocation Procedures. The Company wishes to ensure that you
voluntarily agree to the terms contained in this agreement and do so only after you fully
understand them. Accordingly, the following procedures shall apply:

          (A)       You agree and acknowledge that you have read this agreement, understand its
contents, and may agree to the terms of this agreement by signing and dating it and
returning the signed and dated document, via mail, hand delivery, or overnight delivery, so
that it is received by Peter L. Coffey, c/o Michael Best & Friedrich, LLP, 100 East
Wisconsin Avenue, Suite 3300, Milwaukee, Wisconsin 53202-4108 on or before 5:00 p.m. Central
Time on the twenty-first (21st) calendar day after you receive it.

          (B)       You agree and acknowledge that you have been advised by the Company to consult with
an attorney prior to signing this agreement;

 

 

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          (C)       You understand that this agreement, at Paragraph 2(A), above, includes a final
general release, including a release of all claims under the Age Discrimination in
Employment Act;

          (D)       You understand that you have seven (7) calendar days after signing this agreement
within which to revoke your acceptance of it (“Revocation Period”). Such revocation will
not be effective unless written notice of the revocation is, via mail, hand delivery, or
overnight delivery, directed to and received by Peter L. Coffey, c/o Michael Best &
Friedrich, LLP, 100 East Wisconsin Avenue, Suite 3300, Milwaukee, Wisconsin 53202-4108 on or
before 5:00 p.m. Central Time.

          (E)       This agreement will not be binding or enforceable unless you have signed and
delivered it as provided in Paragraph 3(A), above, and have chosen not to exercise your
revocation rights, as described in Paragraph 3(D), above. If you give timely notice of your
intention to revoke your acceptance of the terms set forth in this agreement, this agreement
shall become null and void, and all rights and claims of the parties which would have
existed, but for the acceptance of this agreement’s terms, shall be restored; and

          (F)       You represent and warrant to the Company that, in the event, you choose to accept
the terms of this agreement by signing it, the date and time appearing above your name on
the last page of this agreement shall be the actual date and time on which you have signed
the agreement.

     (4)       Miscellaneous. Should you accept the terms of this agreement, its terms will be
governed by the following:

          (A)       This agreement constitutes the complete understanding between you and the Company
concerning all matters affecting your employment with the Company and the termination
thereof. If you accept this agreement, this agreement supersedes all prior agreements,
understandings and practices concerning such matters, including, but not limited to, any
Company personnel documents, handbooks, policies, incentive or bonus plans or programs, and
any prior customs or practices of the Company; provided, however, that this Paragraph 4(A)
does not apply to any prior confidentiality, non-competition or other restrictive covenant
obligations that you owe to the Company (including, but not limited to, such obligations set
forth in Section 12 [Confidentiality], 13 [Non-Compete; Non-Solicit] and 15 [Intellectual
Property]) which shall survive and remain in full force and effect following the Separation
Date;

          (B)       This agreement and its interpretation shall be governed and construed in accordance
with the laws of the State of Wisconsin and shall be binding upon the parties hereto and
their respective successors and assigns;

          (C)       In the event that you breach any provision of this agreement, you agree that the
Company may suspend all additional payments under this agreement, recover any damages
suffered as a result of such breach and recover from you any reasonable attorneys’ fees or
costs it

 

 

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  incurs as a result of your breach. In addition, you agree that the Company may seek
injunctive or other equitable relief as a result of a breach by you of any provisions of
this agreement.

     This agreement is intended to resolve all outstanding issues between you and the Company in a
comprehensive manner.

     Should you have any questions, please feel free to contact me.

	 	 	 	 	 
	 	Very truly yours,

THIRD WAVE TECHNOLOGIES, INC.

 	 
	 	By:  	/s/ Kevin T. Conroy
 	 
	 	 	Kevin T. Conroy 	 
	 	 	 	 
	 

I agree with and accept the terms contained in

this agreement and agree to be bound by them.

Dated this 20th day of December, 2005.

	 	 	 	 	 
	 	 	 
	 	     /s/ John J. Puisis
 	 
	 	John J. Puisusexv10w19

 

Exhibit 10.19

Third Wave Technologies, Inc. Long Term Incentive Plan No. 2

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, 2006, 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).

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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 four 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 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.

     (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, the performance period shall be the
three-year period beginning on January 1, 2005 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.

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     (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 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 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); 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 percent of the performance goals, rather the
performance goals shall be measured by the Matrix in Exhibit

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A as reconfigured to take into account a shortened period within which to achieve such targets
by reducing the TWT Stock Price Column and 2007 Clinical Revenue Targets on a straight-line method
based on the percentage of the performance period that has occurred. For example, if 1/2 of the
performance period has expired, then the Stock Price and Clinical Revenue targets shall be revised
based on 1/2 of the expected growth. The Company shall credit the maximum award to a book account
established for the Participant as soon as practicable after the Change of Control.

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 the performance
period, Participants who are employed by the Company on the day of such termination 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 the performance period that has commenced but not then ended, and if such
effective commencement date is established as a date later than the

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commencement of the performance period, any award for the 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 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 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 Plan 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 the 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 the performance period as
follows: (A) 50 percent of the maximum award payout shall be deemed vested and shall be paid upon
the effective date of the Change in Control, and (B) 50 percent of the maximum award payout shall
be deemed vested and shall be paid on the earlier of (x) six months after the effective date of the
Change in Control or (y) 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.

     Notwithstanding (B) above, distribution to a Participant who is (I) a Key Employee and (II) incurs
a 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 by
the Participant for Good Reason prior to the applicable date under (x) or (y) above, shall be
postponed to a date that is not less than 6 months following the Participant’s 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 without Cause 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 a separation from service within
the meaning of section 409A of the Code) for any reason other than termination by the Company
without Cause or resignation by the Participant for Good Reason prior to the applicable date under
(x) or (y) above, any unvested award shall be forfeited to the Company as of the Participant’s
separation date.

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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;

          (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.

For purposes of the Plan, the term “Key Employee” shall mean (i) officers of the Company having
annual 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 issues
under 409A of the Code.

     (e) Notwithstanding (a) above, if a Participant earns an award as described in Section 5 for
the 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) 50 percent 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) 50
percent of the award payout shall be deemed vested and shall be paid on the earlier of (x) six
months after the effective date of the Change in Control, or (y) 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.

Notwithstanding (B) above, distribution to a Participant who is (I) a Key Employee and (II)
incurs a separation from service (within the meaning of section 409A of the Code) on account of
termination by the Company without Cause or resignation by the Participant for Good Reason

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prior to the applicable date under (x) or (y) above, shall be postponed to a date that is not
less than 6 months following the Participant’s 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 without Cause 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 a separation from service within the meaning of section 409A of
the Code) for any reason other than termination by the Company without Cause or resignation by the
Participant for Good Reason prior to the applicable date under (x) or (y) above, any unvested award
shall be forfeited 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 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
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

-7-

 

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
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

-8-

 

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.

-9-

 

Exhibit A

Third
Wave Long Term Incentive Matrix — 2 (1/1/05 — 12/31/07)

Payout as a Percent of Target (Target = 4x target bonus for Tier 1; 3x target bonus for Tier
2)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TWT Stock Price

	 
	 	 	 	 	 	 	>=$9	 	 	 	25	%	 	 	35	%	 	 	40	%	 	 	45	%	 	 	50	%	 	 	62.5	%	 	 	75	%	 	 	87.5	%	 	 	100	%
	 
	 	 	 	 	 	$	7-8.99	 	 	 	12.5	%	 	 	20	%	 	 	25	%	 	 	32.5	%	 	 	40	%	 	 	50	%	 	 	62.5	%	 	 	75	%	 	 	87.5	%
	 
	 	 	 	 	 	$	5-6.99	 	 	 	0	%	 	 	5	%	 	 	10	%	 	 	17.5	%	 	 	25	%	 	 	37.5	%	 	 	50	%	 	 	62.5	%	 	 	75	%
	 
	 	 	 	 	 	$	3-4.99	 	 	 	0	%	 	 	0	%	 	 	5	%	 	 	10	%	 	 	17.5	%	 	 	25	%	 	 	35	%	 	 	45	%	 	 	55	%
	2007 Clinical Revenue ($M)
	 	 	 	 	 	 	<$19	 	 	$	21	 	 	$	23	 	 	$	25	 	 	$	27	 	 	$	29	 	 	$	31	 	 	$	33	 	 	$	35	 
	CAGR
	 	 	 	 	 	 	<8.2	%	 	 	11.9	%	 	 	15.3	%	 	 	18.6	%	 	 	21.6	%	 	 	24.6	%	 	 	27.4	%	 	 	30.1	%	 	 	32.6	%

3 Year Compounded Annual Growth Rate (CAGR)

For Clinical Molecular Diagnostics Revenue

Third
Wave Long Term Incentive Matrix — 2 (1/1/05 — 12/31/07)

Payout as a Percent of Target (Target = 4x target bonus for Tier 1; 3x target bonus for Tier
2)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3 Year Quartile Ranking

Total Shareholder Return vs.

Peer Group
	 
	 	 	 	 	 	1st	 	 	25	%	 	 	35	%	 	 	40	%	 	 	45	%	 	 	50	%	 	 	62.5	%	 	 	75	%	 	 	87.5	%	 	 	100	%
	 
	 	 	 	 	 	Quartile	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	2nd	 	 	12.5	%	 	 	20	%	 	 	25	%	 	 	32.5	%	 	 	40	%	 	 	50	%	 	 	62.5	%	 	 	75	%	 	 	87.5	%
	 
	 	 	 	 	 	Quartile	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	3rd	 	 	0	%	 	 	5	%	 	 	10	%	 	 	17.5	%	 	 	25	%	 	 	37.5	%	 	 	50	%	 	 	62.5	%	 	 	75	%
	 
	 	 	 	 	 	Quartile	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	4th	 	 	0	%	 	 	0	%	 	 	5	%	 	 	10	%	 	 	17.5	%	 	 	25	%	 	 	35	%	 	 	45	%	 	 	55	%
	 
	 	 	 	 	 	Quartile	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2007 Clinical Revenue ($M)
	 	 	 	 	 	 	<$19	 	 	$	21	 	 	$	23	 	 	$	25	 	 	$	27	 	 	$	29	 	 	$	31	 	 	$	33	 	 	$	35	 
	CAGR 
	 	 	 	 	 	 	<8.2	%	 	 	11.9	%	 	 	15.3	%	 	 	18.6	%	 	 	21.6	%	 	 	24.6	%	 	 	27.4	%	 	 	30.1	%	 	 	32.6	%

3 Year Compounded Annual Growth Rate (CAGR)

For Clinical Molecular Diagnostics Revenue

-1-

 

	§	 	CAGR for three-year period calculated on 2004 clinical revenue of $15M.
	 
	§	 	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-

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