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                                                                    EXHIBIT 10.3

                         THIRD WAVE TECHNOLOGIES, INC.
                      1997 NONQUALIFIED STOCK OPTION PLAN

     1. PURPOSE. The purpose of the THIRD WAVE TECHNOLOGIES, INC., NONQUALIFIED
STOCK OPTION PLAN (the "Plan") is to encourage certain employees, and certain
members of, and advisors to, the Board of Directors of the Corporation of
Third Wave Technologies, Inc. (the "Corporation") to acquire to increase their
stock ownership in the Corporation, to provide and incentive to such
individuals to promote the financial success of the Corporation, and to enable
the Corporation to attract and retain the personnel necessary for continued
growth and profitability.

     2. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective as of
January 1, 1997, and shall continue in effect for an indefinite period
thereafter subject to termination as provided in Paragraph 16.

     3. 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 Hundred Fifty (150) shares of the Corporation's common
stock, subject to any adjustments provided in Paragraph 15. 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.

     4. ADMINISTRATION. The Plan shall be administered by the committee
described in Paragraph 5 (the "Committee"). Subject to the express provisions of
the Plan, the Committee shall have complete authority in its discretion to
determine those employees, directors, and advisors ("Participants") to whom
Options shall be granted, the Option Price, the Option Periods and the number of
shares 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 described in Paragraph 13 (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 determination on the matters referred to in this Paragraph shall
be conclusive.

     5. 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 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

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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.

     6. ELIGIBILITY. Options may be granted under the Plan to those employees,
directors and advisors designated as eligible to participate by the Committee.
Such designations shall be subject to the approval of the Board of Directors.
The Committee shall inform each individual so designated of his or her
eligibility to participate in the Plan. Participation in the Plan shall be
entirely voluntary. Members of the Committee shall not, while serving as
members of the Committee, be eligible to receive Options.

     7. STOCK OPTIONS. The number of shares subject to any Options granted
under this Plan shall be established by the Committee. The Committee shall
notify each Participant of the number of shares subject to the Option granted
to the Participant.

     8. OPTION PRICE. The Option Price per share shall be determined by the
Committee at the time each Option is granted. The Committee shall notify each
Participant of the Option Price per share of the stock subject to the Option
granted to the Participant.

     9. OPTION PERIODS. The term of each Option shall be for a period
determined by the Committee (the "Option Period"). An Option shall be
considered granted on the date the Committee acts to grant the Option, or such
other date as the Committee shall specify. The Committee shall inform each
Participant of the Option Period applicable to the Option granted to the
Participant. Each Option shall be subject to earlier termination as described
under Paragraph 16.

     10. EXERCISE OF OPTIONS. Each Option may be exercised at any time during
the option period for such Option (subject to the restrictions in Paragraph 12,
and in the Option Agreements referred to in Paragraph 13) by written notice
delivered to an officer of the Corporation, stating the number of shares with
respect to which the Option is being exercised. In no event shall the
Corporation be required to transfer fractional shares to a Participant.

     11. PAYMENT FOR SHARES. Within five (5) business days following the date
of exercise, the Participant shall make full payment of the Option Price
either: (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. Such
certificates shall bear a legend on the reverse side reflecting the transfer
restrictions described in Paragraph 12.

     12. TRANSFER RESTRICTIONS. Shares of common stock purchased under the Plan
are governed by, and may not be sold or otherwise disposed of except in
compliance with (i) the Corporation's Bylaws and (ii) the registration
requirements of the Securities Act of 1933 and any applicable state securities
laws (unless such transaction is, in the opinion of counsel for the
Corporation, exempt from registration under such Act and laws). 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.

     13. OPTION AGREEMENTS. Options granted pursuant to the Plan shall be
evidenced by stock option agreements ("Option Agreements") between the
Corporation and The Participant to whom the Option is granted, in such form as
the Committee shall from time to time adopt.

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     14. TERMINATION OF OPTION. Except as hereinafter provided, no Option may
be exercised later than three months after a Participant terminates his or her
employment, or services with the Corporation or its Subsidiaries, as the case
may be. If such termination 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
such termination 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 such
termination results from 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 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 or services with the Corporation, including
prohibition of such exercise.

     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
the Participant.

     16.  ADJUSTMENT OF NUMBER OF SHARES. In the event of any change in the
number or kind of shares of 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 Option
Agreements, and the purchase price per share thereof. The determination of the
Committee as 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 Option Agreement shall be
limited accordingly.

     17.  AMENDMENT, SUSPENSION, OR TERMINATION. The Board of Directors may
from time to time amend, suspend or terminate the Plan in such respects as the
Board may deem advisable. No amendment shall, without the Participant's
consent, alter or impair any amendment, suspension, or termination.

     18.  APPLICABLE LAW. The Plan shall, to the extent not inconsistent with
applicable federal law, be construed under the laws of the State of Wisconsin.

     Dated as of this 1st day of January, 1997.

                                        THIRD WAVE TECHNOLOGIES, INC.

                                        BY:
                                           -------------------------------------

                                        ATTEST:
                                               ---------------------------------

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                                                                    Exhibit 10.4

                         THIRD WAVE TECHNOLOGIES, INC.
                        1998 INCENTIVE STOCK OPTION PLAN

1.   Purpose. The purpose of the Third Wave Technologies, Inc. 1998 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 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 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 (350) 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.

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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
     of 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 Participants 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

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        restrictions contained in the Shareholder Agreement dated as of July 29,
        1994, or as otherwise may be required by the Board of Directors from
        time to time, 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 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, recapitalization, reorganization, 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 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

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        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 period; (v) increase the maximum option prices; (vi) extent the
        terms 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 May, 1998.

THIRD WAVE TECHNOLOGIES, INC.

By: /s/ [Signature illegible]
  -----------------------------------

Attest: /s/ [Signature illegible]
       ------------------------------

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