Document:

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                                                                    Exhibit 10.1

                         THIRD WAVE TECHNOLOGIES, INC.
                          INCENTIVE STOCK OPTION PLAN
_______________________________________________________________________________

     1.   Purpose. The purpose of the Third Wave Technologies, Inc. Incentive
Stock Option Plan (the "Plan") is to encourage certain employees of Third Wave
Technologies, Inc. (the "Corporation") to acquire or increase their stock
ownership in the Corporation, to provide an incentive to such employees to
promote the financial success of the Corporation, and to enable the Corporation
to attract and retain personnel necessary for continued growth and
profitability.

     2.   Effective Date and Term of Plan. The Plan shall become effective on
the date adopted by the Board of Directors of the Corporation ("Board of
Directors") and shall continue for a period of ten years unless sooner
terminated as provided in Paragraph 17.

     3.   Approval of Shareholders. The Plan is subject to the approval of
holders of a majority of all of the outstanding voting shares of the
Corporation. If it is not so approved on or before one year after the date of
adoption of the Plan by the Board of Directors, the Plan shall not come into
effect and any options granted pursuant to the Plan shall be deemed cancelled.
No option may be exercised prior to approval of the Plan by the shareholders.

     4.   Stock Subject to Plan. Only Common Stock, with $1.00 par value per
share, of the Corporation ("Common Stock") may be issued pursuant to options
granted under this Plan. The maximum number of shares of Common Stock that may
be issued pursuant to the exercise of options granted under the Plan
("Options") is One Thousand (1,000) shares, subject to any adjustments provided
in Paragraph 16. If any Options expire or terminate for any reason without
having been exercised in full, the unpurchased shares subject thereto shall
again be available for further grants under the Plan.

     5.    Administration. The Plan shall be administered by the committee
described in Paragraph 6 (the "Committee"). Subject to the express provisions
of the Plan, the Committee shall have complete authority in its discretion, to
determine those employees ("Participants") to whom Options shall be granted,
the option price, the option periods and the number of shares to be subject to
each Option. Subject to the express provisions of the Plan, the Committee shall
also have the authority in its discretion to prescribe the time or times at
which Options may be exercised, the limitations upon the exercise of Options
(including limitations effective upon the death, disability or termination of
employment of any Participant) and the restrictions, if any, to be imposed upon
the transferability of shares acquired upon exercise of Options. In making such
determinations, the Committee may take into account the nature of the services
rendered by the respective Participants,
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their present and potential contributions to the success of the Corporation and
such other factors as the Committee in its discretion shall deem relevant.
Subject to the express provisions of the Plan, the Committee shall also have
complete authority to interpret the Plan, to prescribe, amend and rescind rules
and regulations relating to the Plan, to determine the terms and provisions of
the respective option agreements (which need not be identical), to determine
whether the shares delivered upon exercise of Options will be treasury shares or
will be authorized but previously unissued shares and to make all other
determinations necessary or advisable for the administration of the Plan. The
Committee's determinations on the matters referred to in this paragraph shall be
conclusive.

     6. Committee. The Committee shall consist of not less than three members of
the Board of Directors who are not eligible and have not at any time within one
year prior to appointment to the Committee been eligible to receive options
under the Plan or any other plan of the Corporation entitling participants
therein to acquire stock or stock options of the Corporation. The Committee
shall be appointed from time to time by the Board of Directors, which may from
time to time appoint members of the Committee in substitution for members
previously appointed and may fill vacancies, however caused, in the Committee. A
majority of its members shall constitute a quorum. All determinations of the
Committee shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by all of the members shall be fully
as effective as if it had been made by a majority vote at a meeting duly called
and held. The Committee may hold meetings by use of conference telephone or
similar communications equipment by which all persons participating in the
meeting can hear each other.

     7. Eligibility. An Option may be granted under the Plan to any employee of
the Corporation, and of its present and future subsidiaries, as defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended
("Subsidiaries"). The foregoing notwithstanding, members of the Committee shall
not, while serving as members of the Committee, be eligible to receive Options.

     8. Option Price. The option price per share will be determined by the
Committee at the time each Option is granted, but shall not be less than 100% of
the fair market value, as determined by the Committee, of a share of Common
Stock on the date of grant. If such Option is granted to a person who owns,
directly or indirectly, stock possessing more than 10% of the total combined
voting power of all classes of stock of the Corporation on the date of the
grant, the option price per share shall not be less than 110% of its fair market
value.

     9. Option Periods. The term of each Option will be for such period not
exceeding ten years from the date of grant, as the Committee shall determine;
provided, however, that if such Option is granted to a person who owns, directly
or indirectly, stock possessing more than 10% of the total combined voting power
of all classes of stock of the Corporation on the date of the grant, the term of
such Option shall not exceed five

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years from the date of grant. An Option shall be considered granted on the date
the Committee acts to grant the Option or such later date as the Committee
shall specify. Each Option shall be subject to earlier termination as described
under Paragraphs 13 and 17.

     10.  Exercise of Options. Each Option may be exercised at any time during
the option period for such Option (subject to the restrictions in this
paragraph, in Paragraph 13 and in the agreements referred to in Paragraph 14) by
written notice delivered to an officer of the Corporation, stating the number of
shares with respect to which the Option is being exercised.

     11.  Payment for Option. Within five (5) business days following the date
of exercise, the Participant shall make full payment of the option price (i) in
cash; (ii) with the consent of the Committee, by tendering previously acquired
shares of Common Stock (valued at their fair market value, as determined by the
Committee, as of the date of exercise); or (iii) any combination of (i) or (ii).
Shares of Common Stock tendered shall be duly endorsed in blank or accompanied
by stock powers duly endorsed in blank. Upon receipt of the payment of the
entire option price for the shares so purchased, certificates for such shares
shall be delivered to the Participant. The transferability of such shares shall
be subject to the restrictions contained in the Shareholder Agreement dated as
of July 29, 1994, and the Participant agrees to execute such documents as may be
required by the Corporation to become an "Agreeing Shareholder" as such term is
defined in the Shareholder Agreement.

     12.  Maximum Per Participant. The aggregate fair market value, as
determined by the Committee, of the stock for which options held by a
Participant are exercisable for the first time under the Plan or other options
granted to the Participant under any plan of the Corporation or any Subsidiary
during any calendar year shall not exceed $100,000. For purposes of this
paragraph, the fair market value of stock subject to an Option or other
Incentive Stock Option shall be determined as of the date the Option or other
Incentive Stock Option, as the case may be, is granted.

     13.  Termination of Employment. Except as hereinafter provided, no Option
may be exercised later than three months after a Participant terminates his
employment with the Corporation or its Subsidiaries, as the case may be. If
termination of employment results from the deliberate, willful or gross
misconduct of a Participant, then the Option may not be exercised and all of
the Participant's rights in the Option shall be forfeited upon termination. If
termination of employment results from the disability of a Participant within
the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended, any Option may be exercised at any time within twelve months after
such termination of employment, but in no event beyond the option period. If
termination of employment results from the death of a Participant, the personal
representative of the Participant's estate, or a person who by bequest,
inheritance, or otherwise by reason of the Participant's death, acquired the
right to exercise the Option, may exercise any Option

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at any time within three years after the death of such Participant, but in no
event beyond the option period. The Committee may impose additional restrictions
upon the exercise of Options after termination of employment, including
prohibition of such exercise.

     14.  Agreements. Options granted pursuant to the Plan shall be evidenced by
stock option agreements in such form as the Committee shall from time to time
adopt.

     15.  Nontransferability of Options. Options under the Plan are not
transferable by a Participant other than by will or the laws of descent or
distribution, and may be exercised during the lifetime of a Participant only by
such Participant.

     16.  Adjustment of Number of Shares. In the event of any change in the
outstanding Common Stock of the Corporation by reason of stock dividends,
recapitalizations, reorganizations, mergers, consolidations, split-ups,
combinations or exchanges of shares and the like, the Committee shall,
consistent with such change, appropriately adjust the number and kind of shares
which thereafter may be optioned and sold under the Plan, the number and kind of
shares under option in outstanding stock option agreements and the purchase
price per share thereof. The determination of the Committee as to any such
adjustment shall be final and conclusive. No adjustment or substitution provided
for in this paragraph shall require the Corporation in any stock option
agreement to sell a fractional share and the total substitution or adjustment
with respect to each stock option agreement shall be limited accordingly.

     17.  Amendment, Suspension or Termination. The Board of Directors, without
further approval of the shareholders, may from time to time amend, suspend or
terminate the Plan in such respects as the Board may deem advisable, provided,
however, that no amendment shall become effective without prior approval of the
shareholders which would (i) increase the aggregate number of shares which may
be issued pursuant to Options granted under the Plan, except as permitted under
Paragraph 16; (ii) permit the granting of options to anyone other than an
employee of the Corporation or a Subsidiary or to a member of the Committee;
(iii) decrease the minimum option prices; (iv) increase the maximum option
periods; (v) increase the maximum per Participant set in Paragraph 12; or (vi)
extend the term of the Plan. No amendment shall, without the Participant's
consent, alter or impair any of the rights or obligations under any Option
theretofore granted to the Participant.

     Dated this 26th day of June, 1995.

                                      THIRD WAVE TECHNOLOGIES, INC.

                                      BY: /s/ [SIGNATURE ILLEGIBLE]
                                     -------------------------------
                                      ATTEST: /s/ JAMES E. WAHLBURG, Secretary

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                                                                    EXHIBIT 10.2

                         THIRD WAVE TECHNOLOGIES, INC.
                        1997 INCENTIVE STOCK OPTION PLAN

--------------------------------------------------------------------------------

1.   Purpose. The purpose of the Third Wave Technologies, Inc. 1997 Incentive
     Stock Option Plan (the "Plan") is to encourage certain employees of Third
     Wave Technologies, Inc. (the "Corporation") to acquire or increase their
     stock ownership in the Corporation, and to enable to Corporation to
     attract and retain personnel necessary for continued growth and
     profitability.

2.   Effective Date and Term of Plan. The Plan shall become effective on the
     date adopted by the Board of Directors of the Corporation ("Board of
     Directors") and shall continue for a period of ten years unless sooner
     terminated as provided in Paragraph 17.

3.   Approval of Shareholders. The Plan is subject to the approval of holders
     of a majority of all of the outstanding voting shares of the Corporation.
     If it is not so approved on or before one year after the date of adoption
     of the Plan by the Board of Directors, the Plan shall not come into effect
     and any options granted pursuant to the Plan shall be deemed canceled. No
     option may be exercised prior to approval of the Plan by the shareholders.

4.   Stock Subject to Plan. Only Common Stock, with $1.00 par value per share,
     of the Corporation ("Common Stock") may be issued pursuant to options
     granted under this Plan. The maximum number of shares of Common Stock that
     may be issued pursuant to the exercise of options granted under the Plan
     ("Options") is Three Hundred Fifty-Seven (357) shares, subject to any
     adjustments provided in Paragraph 16. If any Options expire or terminate
     for any reason without having been exercised in full, the unpurchased
     shares subject thereto shall again be available for further grants under
     the Plan.

5.   Administration. The Plan shall be administered by the committee described
     in Paragraph 6 (the "Committee"). Subject to the express provisions of the
     Plan, the Committee shall have complete authority in its discretion, to
     determine those employees ("Participants") to whom Options shall be
     granted, the option price, the option periods and the number of shares to
     be subject to each Option. Subject to the express provisions of the Plan,
     the Committee shall also have the authority in its discretion to prescribe
     the time or times at which Options may be exercised, the limitations upon
     the exercise of Options (including limitations effective upon death,
     disability or termination of employment of any Participant) and the
     restrictions, if any, to be imposed upon the transferability of shares
     acquired upon exercise of Options. In making such determinations, the
     Committee may take into account the nature of the services rendered by the
     respective Participants, their present and potential contributions to the
     success of the Corporation and such other factors as the Committee in its
     discretion shall deem relevant. Subject to the express provisions of the
     Plan, the Committee shall also have complete authority to interpret the
     Plan, to prescribe, amend and rescind rules and regulations relating to
     the Plan, to determine the terms and provisions of the respective option
     agreements (which need not be identical), to determine whether the shares
     delivered upon exercise of Options will be treasury shares or will be
     authorized but previously unissued share and to make all other
     determinations necessary or advisable for the administration of the Plan.
     The Committee's determinations on the matters referred to in this
     paragraph shall be conclusive.

<PAGE>   2
6.   Committee. The Committee shall consist of not less than three members of
     the Board of Directors who are not eligible, and have not at any time
     within one year prior to appointment to the Committee been eligible to
     receive options under the Plan or any other plan of the Corporation
     entitling participants therein to acquire stock or stock options of the
     Corporation. The Committee shall be appointed from time to time by the
     Board of Directors, which may from time to time appoint members of the
     Committee in substitution for members previously appointed and may fill
     vacancies, however caused, in the Committee. A majority of its members
     shall constitute a quorum. All determinations of the Committee shall be
     made by a majority of its members. Any decision or determination reduced
     to writing and signed by all of the members shall be fully as effective as
     if it had been made by a majority vote at a meeting duly called and held.
     The Committee may hold meetings by use of conference telephone or similar
     communications equipment by which all persons participating in the meeting
     can hear each other.

7.   Eligibility. An Option may be granted under the Plan to any employee of
     the Corporation, and of its present and future subsidiaries, as defined in
     Section 424(f) of the Internal Revenue Code of 1986, as amended
     ("Subsidiaries"). The foregoing nonwithstanding, members of the Committee
     shall not, while serving as members of the Committee, be eligible to
     receive Options.

8.   Option Price. The option price per share will be determined by the
     Committee at the time each Option is granted, but shall not be less than
     100% of the fair market value, as determined by the Committee, of a share
     of Common Stock on the date of grant. If such Option is granted to a
     person who owns, directly or indirectly, stock possessing more than 10% of
     the total combined voting power of all classes of stock of the Corporation
     on the date of the grant, the option price per share shall not be less
     than 110% of its fair market value.

9.   Option Periods. The term of each Option will be for such period not
     exceeding ten years from the date of grant, as the Committee shall
     determine; provided, however, that if such Option is granted to a person
     who owns, directly or indirectly, stock possessing more than 10% of the
     total combined voting power of all classes of stock of the Corporation on
     the date of the grant, the term of such Option shall not exceed five years
     from the date of grant. An Option shall be considered granted on the date
     the Committee acts to grant the Option or such later date as the Committee
     shall specify. Each Option shall be subject to earlier termination as
     described under Paragraphs 13 and 17.

10.  Exercise of Options. Each Option may be exercised at any time during the
     option period for such Option (subject to the restrictions in this
     paragraph, in Paragraph 13 and in the agreements referred to in Paragraph
     14) by written notice delivered to an officer of the Corporation, stating
     the number of shares with respect to which the Option is being exercised.

11.  Payment for Option. Within five (5) business days following the date of
     exercise, the Participant shall make full payment of the option price (i)
     in cash; (ii) with the consent of the Committee, by tendering previously
     acquired shares of Common Stock (valued at their fair market value, as
     determined by the Committee, as of the date of exercise): or (iii) any
     combination of (i) and (ii). Shares of Common Stock tendered shall be duly
     endorsed in blank or accompanied by stock powers duly endorsed in blank.
     Upon receipt of the payment of the entire option price for the shares so
     purchased, certificates for such shares shall be delivered to the
     Participant. The transferability of such shares shall be subject to the

                                      -2-

<PAGE>   3
     restrictions contained in the Shareholder Agreement dated as of July 29,
     1994, and the Participant agrees to execute such documents as may be
     required by the Corporation to become an "Agreeing Shareholder" as such
     term is defined in the Shareholder Agreement.

12.  Maximum Per Participant. The aggregate fair market value, as determined by
     the Committee, of the stock for which options held by a Participant are
     exercisable for the first time under the Plan or other options granted to
     the Participant under any plan of the Corporation or any Subsidiary during
     any calendar year shall not exceed $100,000. For purposes of this
     paragraph, the fair market value of stock subject to an Option or other
     Incentive Stock Option, as the case may be, is granted.

13.  Termination of Employment. Except as hereinafter provided, no Option may be
     exercised later than three months after a Participant terminates his
     employment with the Corporation or its Subsidiaries, as the case may be. If
     termination of employment results from the deliberate, willful or gross
     misconduct of a Participant, then the Option may not be exercised and all
     of the Participant's rights in the Option shall be forfeited upon
     termination. If termination of employment results from the disability of a
     Participant within the meaning of Section 22(e)(3) of the Internal Revenue
     Code of 1986, as amended, any Option may be exercised at any time within
     twelve months after such termination of employment, but in no event beyond
     the option period. If termination of employment results from the death of a
     Participant, the personal representative of the Participant's estates, or a
     person who by bequest, inheritance, or otherwise by reason of the
     Participant's death, acquired the right to exercise the Option, may
     exercise any Option at any time within three years after the death of such
     Participant, but in no event beyond the option period. The Committee may
     impose additional restrictions upon the exercise of Options after
     termination of employment, including prohibition of such exercise.

14.  Agreements. Options granted pursuant to the Plan shall be evidenced by
     stock option agreements in such form as the Committee shall from time to
     time adopt.

15.  Nontransferability of Options. Options under the Plan are not transferable
     by a Participant other than by will or the laws of descent or distribution,
     and may be exercised during the lifetime of a Participant only by such
     Participant.

16.  Adjustment of Number of Shares. In the event of any change in the
     outstanding Common Stock of the Corporation by reason of stock dividends,
     recapitalizations, reorganizations, mergers, consolidations, split-ups,
     combinations or exchanges of shares and the like, the Committee shall,
     consistent with such change, appropriately adjust the number and kind of
     shares which thereafter may be optioned and sold under the Plan, the number
     and kind of shares under option in outstanding stock option agreements and
     the purchase price per share thereof. The determination of the Committee as
     to any such adjustment shall be final and conclusive. No adjustment or
     substitution provided for in this paragraph shall require the Corporation
     in any stock option agreement to sell a fractional share and the total
     substitution or adjustment with respect to each stock option agreement
     shall be limited accordingly.

17.  Amendment, Suspension or Termination. The Board of Directors, without
     further approval of the shareholders, may from time to time amend, suspend
     or terminate the Plan in such respects as the Board may deem advisable;
     provided, however, that no amendment shall become effective without prior
     approval of the shareholders which would (i) increase the

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<PAGE>   4
     aggregate number of shares which may be issued pursuant to Options granted
     under the Plan, except as permitted under Paragraph 16; (ii) permit the
     granting of options to anyone other than an employee of the Corporation or
     a Subsidiary or to a member of the Committee; (iii) decrease the minimum
     option prices; (iv) increase the maximum option periods; (v) increase the
     maximum per Participant set in Paragraph 12; or (vi) extent the term of the
     Plan. No amendment shall, without the Participant's consent, alter or
     impair any of the rights or obligations under any Option theretofore
     granted to the Participant.

Dated this _____ day of ______________, 1997.

THIRD WAVE TECHNOLOGIES, INC.

By:_____________________________

Attest:_________________________

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