THIRD WAVE TECHNOLOGIES INC /WI
EXHIBIT 10.17
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>5
<FILENAME>c83528exv10w17.txt
<DESCRIPTION>EXHIBIT 10.17
<TEXT>
<PAGE>
Exhibit 10.17

                              EMPLOYMENT AGREEMENT

This Agreement is made by and between Third Wave Technologies, a Delaware
Corporation (the "Company" or "TWT"), and John Puisis (the "Executive").

1. Duties and Scope of Employment.

(a) Position; Duties. During the Employment Term (as defined in paragraph 2),
the Company will employ Executive as Senior Vice President, Chief Financial
Officer of the Company. Executive will serve as an Officer of the Company in
such capacity, and will report directly to Lance Fors the Company's Chief
Executive Officer (the "CEO").

(b) Obligations. During the Employment Term, Executive will devote substantially
all of his business efforts and time to the Company. Executive agrees, during
the Employment Term, not to actively engage in any other employment, occupation
or consulting activity for any direct or indirect remuneration without the prior
approval of the CEO; provided, however, that Executive may (i) serve on the
board of directors or advisors of other for profit companies (subject to the
reasonable approval of the CEO) and boards of trade associations or charitable
organizations; (ii) engage in charitable activities and community affairs; or
(iii) manage Executive's personal investments and affairs, as long as such
activities do not materially interfere with Executive's duties and
responsibilities with the Company. Service on the board of directors of
PeopleFlow Inc. is hereby approved.

2. Employment Term. The Company hereby agrees to employ Executive and Executive
hereby accepts employment, in accordance with the terms and conditions of this
Agreement, commencing on Monday, September 24, 2001 (the "Employment
Commencement Date"). The period of Executive's employment under this Agreement
will be referred to as the "Employment Term." Subject to the Company's
obligation to provide severance benefits as may be specified in this Agreement,
Executive and the Company acknowledge that this employment relationship may be
terminated at any time and for any or no cause or reason, at the option of
either the Company or Executive.

3. Cash Compensation. During the Employment Term, the Company will pay
Executive the following as cash compensation for services to the Company:

<PAGE>

(a) Base Salary. As of the Employment Commencement Date, Executive's annualized
base salary will be $225,000 and will be subject to annual review pursuant to
the Company's normal review policy for other similarly situated senior
executives of the Company; as in effect from time to time, "Base Salary."

(b) Variable Compensation. Executive will be eligible for incentive compensation
commensurate with that of the other senior executive officers of the Company,
but in any event will have a target annual bonus of no less than 22.5 percent of
Base Salary.

4. Equity Compensation. During the Employment Term, Executive will be eligible
to participate in the Company's equity compensation plan, in accordance with the
terms of such plan and any applicable grants (except as provided herein), at a
level commensurate with Executive's position as determined by the Compensation
Committee in good faith to be appropriate based on the Company's equity
compensation policy. Executive will receive an initial grant of 275,000 stock
options to purchase shares of the Company's common stock pursuant to the
Company's long-term incentive plan upon commencement of employment. The price of
the stock option grant will be not greater than the Fair Market Value per share
on the date of grant and will have a term of ten years. The options shall vest
in equal installments over the four-year period commencing with the Employment
Commencement Date.

5. Employee Benefits and Fringes. During the Employment Term, Executive will be
entitled to participate in all employee welfare and benefit plans and programs
and fringes provided by the Company to its senior executives in accordance with
the terms of those plans or programs as they may be modified from time to time.

6. Sign-on Bonus. To partially cover Executive for bonuses earned but lost at
his present employer, Executive shall receive a sign-on bonus of $1,200,000
payable on October 25, 2001, however should Employment Commencement Date be
delayed, then the sign-on bonus shall be paid within 30 days of commencement of
Executive's employment. In addition, the Company will pay all taxes due on such
bonus payment (including taxes due on such and successive tax payments) so that
the net after tax payment to Executive equals $1,200,000. Company will pay these
tax obligations in the form of a tax payment to the IRS or Executive on or
before January 15, 2002 for taxes due including gross ups. The

<PAGE>

amount of taxes due and related gross ups is expected to be approximately
$900,000. Executive agrees to cooperate with Company in computing and submitting
the tax.

7. Business Expenses.  Upon submission of appropriate documentation, the
Company will pay or reimburse Executive in accordance with its policies in
effect from time to time, for all reasonable business expenses that Executive
incurs in performing Executive's duties under and during the term of this
Agreement, including, but not limited to, travel, professional dues and
subscriptions.

8. Relocation. The company will reimburse Executive for all customary and
reasonable costs (e.g., sales agents commissions, moving costs, legal fees)
related to his relocation to Madison. The Executive will have the flexibility to
commute to Madison, Wisconsin from, and work on occasion at, Executive's current
home located in Northbrook, Illinois as long as Executive's duties performed to
the reasonable standards set by the Company's Chief Executive Officer. The
Company will also provide for temporary housing (if needed). To the extent not
tax deductible by Executive, such amounts shall be fully grossed up for taxes.
(Relocation and temporary housing expense reimbursement shall)not, prior to
gross up, exceed $60,000 in total.

9. Termination of Employment.

(a) Death or Disability. Executive's employment will terminate automatically
upon Executive's death. The Company may terminate Executive's employment for
Disability, while Executive is disabled, in the event Executive has been unable,
due to physical or mental incapacity, to perform Executive's material duties
under this Agreement for six consecutive months (or such longer period that may
be required by applicable law). In the event Executive's employment terminates
as a result of death or Disability, then:

(i) All vested and exercisable stock options may be exercised after Executive's
termination of employment in accordance with the terms and conditions of the
Stock Option Plan and applicable option grant documentation;

(ii) Except as otherwise provided herein or in any grant or program, Executive
will forfeit Executive's right to receive any salary, incentive compensation,
equity compensation, or other compensation that has not been fully earned at the
time Executive's employment terminates; provided, however, Executive will be
entitled to receive any benefits or amounts accrued but not yet paid as of the
date of termination, including but not limited to any earned bonus for any
completed fiscal year (the "Prior Year Bonus"), and a Pro Rata Bonus, as defined
in (c)(iii) below, for the year of his termination;

<PAGE>

(iii) Executive will receive any other amounts earned, accrued or owing to
Executive under the plans and programs of the Company.

(iv) Executive agrees to cooperate with and assist Company in obtaining and
renewing a death and or disability insurance policy on the Executive naming the
Company as the sole beneficiary.

(b) Involuntary Termination for Cause or Voluntary Termination Other Than for
Good Reason. If Executive is involuntarily terminated by the Company for Cause
or Executive voluntarily terminates his employment other than for Good Reason,
then:

(i) All unvested or unexercisable equity compensation will be cancelled upon
Executive's termination of employment;

(ii) Executive will forfeit Executive's right to receive any salary, incentive
compensation, equity compensation, or other compensation that has not been fully
earned at the time Executive's employment terminates; provided, however,
Executive will be entitled to receive any benefits or amounts accrued but not
yet paid as of the date of termination; and

(iii) Executive will receive any other amounts earned, accrued or owing to
Executive under the plans and programs of the Company.

(iv) Should Executive be involuntarily terminated by the Company for Cause or
Executive voluntarily terminates his employment other than for Good Reason
within the first twelve (12) months measured from the Commencement Date,
Executive shall repay the Company $1,400,000 of the sign-on bonus. Should such
termination take place within the period which is between twelve (12) to
twenty-four (24) months following the Commencement Date, Executive shall repay
to the Company $700,000 of the sign-on bonus.

(c) Involuntary Termination Other Than for Cause or Voluntary Termination for
Good Reason. If Executive is involuntarily terminated by the Company other than
for Cause or Executive voluntarily terminates his employment for Good Reason
within six months after learning of the event constituting Good Reason; then, as
liquidated damages and in lieu of any other damages or compensation under this
Agreement or otherwise, Executive will receive the payments or other benefits
described in this paragraph; provided (A) Executive does not enter into
Competition (as defined below) with the Company

<PAGE>

for a period of one year following the termination of Executive's employment and
(b) Executive executes, and does not revoke, a written waiver and release,
comprised of standard and customary terms which terms and final form of
agreement shall be negotiated and agreed to by Executive and Company within ten
calendar days after execution of this Agreement.

(i) Executive will receive a lump sum severance payment, payable within 60 days
after termination of Executive's employment, equal to one-year base salary.

(ii) Executive will be entitled to exercise, in accordance with their terms, any
remaining vested stock options that had been granted prior to Executive's
termination. Consistent with the terms of the Company's 2000 Stock Plan, such
exercise must be completed within three months of the date of termination.

(iii) Executive will receive a pro-rated portion of his target annual incentive
compensation award in or around March of the year following Executive's
termination based on the number of months (rounded to the next highest number
for a partial month) of the year elapsed prior to Executive's termination (the
"Pro Rata Bonus");

(iv) Executive and Executive's dependents will continue to receive (with the
same level of coverage) for one year all medical, dental, hospitalization,
accident, disability, life insurance and any other benefit plans of the Company
on the same terms as in effect immediately prior to Executive's termination
unless changed for senior executives generally; provided, however, that such
benefits will be offset to the extent that Executive or Executive's dependents
receive comparable benefits from another Employer of Executive (in such event,
Executive agrees to provide reasonable notice of the receipt of benefits from
another source); and, provided that in the event adverse tax consequences may
result if medical benefits are provided to Executive directly, the Company will
pay Executive the amount necessary to purchase the coverage, adjusted for taxes,
on an after-tax basis; and

(v) Executive will receive any other amounts earned, accrued or owing to
Executive under the plans and programs of the Company, including the Prior Year
Bonus, if not previously paid.

(vi) Executive will not be required to pay back to the Company the sign-on bonus
or any portion thereof.

<PAGE>

10. Cause; Good Reason.

(a) For purposes of this Agreement, "Cause" means:

Any continual and willful refusal by the Executive to perform the Executive's
essential duties under this Agreement which continues for more than (10)
business days after written notice from the Company;

(i) Any intentional act of fraud, embezzlement or theft by the Executive in
connection with the Executive's duties hereunder or in the course of the
Executive's employment hereunder, or any prior employment, or the Executive's
direct admission or conviction of a felony; or any crime involving gross
depravity, fraud, embezzlement, theft or misrepresentation;

(iii) Any gross negligence or willful misconduct of the Executive with regard to
the Company resulting in a material economic loss to the Company or its
subsidiaries (no action or inaction shall be deemed willful or grossly negligent
if Executive exercised his best professional judgement, in keeping with
reasonable professional standards of a chief financial officer, or if taken with
the advice of Company counsel);

(iv) Any material breach by the Executive of any one or more of the covenants
contained in Section 12 or 13 hereof resulting in a material economic loss to
the Company or its subsidiaries;

(v) Any willful and material violation of any statutory or common law duty of
loyalty to the Company or any of its subsidiaries resulting in a material
economic loss to the Company or its subsidiaries (no action or inaction shall be
deemed willful if Executive was exercising his best professional judgement, in
keeping with reasonable professional standards of a chief financial officer, or
if taken with the advice of Company counsel);

The exercise of the right of the Company to terminate this Agreement pursuant to
this Section 10 shall not abrogate the rights or remedies of the Company in
respect of the breach giving rise to such termination. Any termination by the
Company for Cause shall only be permitted if taken within 18 months of the CEO
becoming aware of the Cause event.

(b) For purposes of this Agreement, "Good Reason" means:

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(i) Executive's rate of annual Base Salary or the target amount of Executive's
annual cash incentive bonus is reduced; in a manner that is not applied
proportionately to all other senior executive officers of the Company, including
the Chief Executive Officer; provided that any such reduction shall not exceed
30 percent or twelve months in duration.

(ii) The Company fails to retain Executive as its Chief Financial Officer of the
Company, reporting directly to the CEO;

(iii) A successor to the Company fails to assume this Agreement, in writing,
delivered to the Executive;

(iv) Any sustained material diminution in Executive's duties, authority or
responsibilities or any assignment to Executive of duties inconsistent with his
position;

(v) Relocation of the Executive from the Company's executive offices or
relocation of the Company's executive offices by more than one hundred (100)
miles from its current location;

(vi) Any material breach by the Company of its obligations hereunder that are
not cured within 30 days of written notice thereof;

(vii) If within eighteen (18) months from the Commencement Date, Lance Fors
voluntarily ceases to be the CEO or Chairman of the Company's Board of
Directors;

(viii) A resignation by Executive following the occurrence of a Change in
Control (as defined in the the Indemnification Agreement attached hereto as
Exhibit A), but not earlier than six months after the occurrence of the Change
in Control. If the Executive is terminated without Cause during such six month
period, the benefits of Section 9 (c) shall apply. Notwithstanding anything to
the contrary herein, during such six month period, Executive shall be entitled
to resign for Good Reason under the other provisions of this Section 10 (b).

11. Directorships, Other Offices. In the event of termination of employment,
Executive will immediately, unless otherwise requested by the Company's Board of
Directors, resign from all directorships, trusteeships, other offices and
employment held at that time with the Company or any of its Affiliates.

<PAGE>

12. Confidentiality. Executive recognizes and acknowledges that by reason of
Executive's employment by and service to the Company, Executive will have access
to proprietary or confidential information, technical data, trade secrets or
know-how relating to the Company, which may include, but is not limited to,
market and product research and plans, markets, products, services, customer
lists and customers, advertising, software, developments, inventions, processes,
formulas, technology, designs, drawings, engineering, marketing and sales
techniques, strategies and programs, distribution methods and systems, sales and
profit figures, pricing and discount plans, financial and other business
information (hereafter, "Confidential Information"). Executive acknowledges that
such Confidential Information is a valuable and unique asset of the Company and
covenants that Executive will not, either during employment or after the
termination of employment, disclose any such Confidential Information to any
person for any reason whatsoever (except as Executive's duties as an employee of
the Company may require as determined in Executive's good faith judgment)
without the prior written authorization of the CEO, unless such information is
in the public domain through no fault of Executive or except as may be required
by law or in a judicial or administrative proceeding, in which case Executive
will promptly inform the Company in writing of such required disclosure, but in
any event at least ten business days prior to the disclosure. All written
Confidential Information (including, without limitation, in any computer or
other electronic format) which comes into Executive's possession during the
course of Executive's employment will remain the property of the Company. Unless
expressly authorized in writing by the CEO, Executive will not remove any
written Confidential Information from the Company's premises, except in
connection with the performance of Executive's duties for the Company and in a
manner consistent with the Company's policies regarding Confidential
Information. Upon termination of employment, Executive agrees immediately to
return to the Company all written Confidential Information in Executive's
possession.

For the purposes of this paragraph, the term "Company" will be deemed to include
the Company and its Affiliates. For purposes of this Agreement, "Affiliate" will
mean an "affiliate" as defined in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act. Confidential Information shall not include
(a) information that enters the public domain by other than Executive's wrongful
disclosure, (b) information possessed by Executive prior to the date of this
Agreement and (c) Executive's general knowledge and skill.

13. Non-Compete; Non-Solicit.

<PAGE>

(a) The amounts paid by the Company under this Agreement are partially in
consideration of Executive's undertakings under this paragraph as well as under
paragraph 12 above. Executive agrees that during the term of Executive's
employment with the Company and for a period of one year after Executive's
termination of employment for any reason, Executive will not, except with the
prior written consent of the CEO, directly or indirectly, engage in Competition.
For purposes of this Agreement, Competition means that Executive engages in
substantially the same work as he had been engaged in while employed by the
Company with another genomics and/or molecular diagnostics company.

(b) The foregoing restrictions will not be construed to prohibit Executive's
ownership of less than five percent of any class of securities of any
corporation which is engaged in any business having a class of securities
registered pursuant to the Securities Exchange Act of 1934 (the "Exchange Act")
or of an interest in a mutual fund, private equity fund or other pooled account,
provided that such ownership represents a passive investment and that Executive,
either directly or indirectly, manages or exercises control of any such
corporation, guarantee any of its financial obligations, otherwise take any part
in its business, other than exercising Executive's rights as a shareholder, or
seek to do any of the foregoing.

(c) Executive further covenants and agrees that during Executive's employment by
the Company and for the period of one year thereafter, Executive will not,
except with the prior written consent of the CEO, directly or indirectly,
solicit or hire, or encourage the solicitation or hiring of, any person who is
an employee of the Company for any position as an employee, independent
contractor, consultant or otherwise, provided that the foregoing shall not
prevent Executive from serving as a reference.

(d) For the purposes of this paragraph 13, the term "Company" will be deemed to
include the Company and its Affiliates.

(e) The provisions of this Section 13 regarding the restrictions on Executive
shall be conditioned on Company making the payments to Executive as contemplated
by Section 9 (c), above.

14. Remedies; Injunction.

(a) Executive acknowledges and agrees that the restrictions contained in
paragraphs 12 and 13 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
Executive breach any of the provisions of those paragraphs. Executive represents
and acknowledges that (i) Executive has been advised by the Company to consult
legal counsel with respect to this Agreement, and (ii) that Executive

<PAGE>

has had full opportunity, prior to execution of this Agreement, to review
thoroughly this Agreement with counsel.

(b) Executive further acknowledges and agrees that a breach of any of the
restrictions in paragraphs 12 and 13 cannot be adequately compensated by
monetary damages. Executive agrees that the Company will be entitled to a return
of all non-salary and bonus cash consideration set forth in this Agreement as
being conditioned on the covenants contained in paragraph 13 and that all
remaining stock options will be forfeited if Executive breaches the provisions
of that paragraph and that, in any event, the Company will be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as provable damages and an equitable accounting of all
earnings, profits and other benefits arising from any violation of paragraphs 12
or 13, which rights will be cumulative and in addition to any other rights or
remedies to which the Company may be entitled. In the event that any of the
provisions of paragraphs 12 or 13 should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable law in any
jurisdiction, it is the intention of the parties that the provision will be
amended to the extent of the maximum time, geographic, service, or other
limitations permitted by applicable law, that such amendment will apply only
within the jurisdiction of the court that made such adjudication and that the
provision otherwise be enforced to the maximum extent permitted by law.

(c) Executive irrevocably and unconditionally (i) agrees that any suit, action
or other legal proceeding arising out of paragraphs 12 or 13, including without
limitation, any action commenced by the Company for the preliminary and
permanent injunctive relief and other equitable relief, may be brought in the
United States District Court for the Western District of Wisconsin, or if such
court does not have jurisdiction or will not accept jurisdiction, in any court
of general jurisdiction in the State of Wisconsin, (ii) consents to the
objection which Executive may have to the laying of venue of any such suit,
action or proceeding in any such court, (iii) waives any objection which
Executive may have to the laying of venue of any such suit, action or proceeding
in any such court.

(d) For the purposes of this paragraph 14, the term "Company" will be deemed to
include the Company and its Affiliates.

15. Intellectual Property. To the fullest extent permitted by applicable law,
all intellectual property (including patents, trademarks, and copyrights) which
are made, developed or acquired by Executive in the course of Executive's
employment with the Company will be and remain the absolute

<PAGE>

property of the Company, and Executive at Company expense shall assist the
Company in perfecting and defending its rights to such intellectual property

16. Indemnification. To the fullest extent permitted by applicable law, the
Company will, during and after termination of employment, indemnify Executive
(including providing advancement of expenses) for any judgments, fines, amounts
paid in settlement and reasonable expenses, including attorneys' fees, incurred
by Executive in connection with the defense of any lawsuit or other claim or
investigation to which Executive is made, or threatened to be made, a party or
witness by reason of being or having been an officer, director or employee of
the Company or any of its subsidiaries or affiliates or a fiduciary of any of
their benefit plans. The Company shall also enter into an agreement of
indemnification with the Executive in the form annexed hereto as Exhibit A. In
addition both during and after termination of employment, Executive will be
covered under any directors and officers' liability insurance policy for his
acts (or non-acts) as an officer or director of the Company or any of its
subsidiaries or affiliates to the extent the Company provides such coverage for
its senior executive officers.

17. Arbitration. Unless other arrangements are agreed to by Executive and the
Company, any disputes arising under or in connection with this Agreement, other
than a dispute in which the primary relief sought is an equitable remedy such as
an injunction, will be resolved by binding arbitration to be conducted pursuant
to the Employment Dispute Arbitration Rules of the American Arbitration
Association. Costs of the arbitration, including (but not by way of limitation)
reasonable attorney's fees of both parties, will be borne by the party which
does not prevail in the proceedings. In the event that each party prevails as to
certain aspects of the proceedings, the arbitrator(s) or the court will
determine an appropriate allocation of costs between the parties. In no event,
however, shall Executive be obligated for the Company's attorney's fees unless
his position is found to be frivolous or taken in bad faith.

18. Gross-Up Payment. The Executive shall have the benefit of Exhibit B.

19. No Set-off, No Mitigation Required. Except as otherwise provided in Section
14 hereof, the obligation of the Company to make any payments provided for
hereunder and otherwise to perform its obligations hereunder will not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company may have against Executive or others. In no event
will Executive be obligated to seek other employment or take other action by way
of mitigation of the amounts payable to Executive under any of the provisions of
this Agreement, and such amounts will not

<PAGE>

be reduced (except as otherwise specifically provided herein) whether or not
Executive obtain other employment.

20. Payment of Legal Fees. The Company will pay Executive's reasonable legal and
financial consulting fees and costs associated with entering into this Agreement
up to a maximum of $6,000.

21. Governing Law. This Agreement shall be governed and construed by the laws of
the State of Wisconsin without regard to conflict of law provisions.

22. Assignments; Transfers; Effect of Merger.

(a) No rights or obligations of the Company under this Agreement may be assigned
or transferred by the Company except that such rights or obligations may be
assigned or transferred pursuant to a merger or consolidation, or pursuant to
the sale or transfer of all or substantially all of the assets of the Company,
provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company.

(b) This Agreement will not be terminated by any merger, consolidation or
transfer of assets of the Company referred to above. In the event of any such
merger, consolidation or transfer of assets, the provisions of this Agreement
will be binding upon the surviving or resulting corporation or the person or
entity to which such assets are transferred.

(c) The Company agrees that concurrently with any merger, consolidation or
transfer of assets referred to above, it will cause any successor or transferee
unconditionally to assume, either contractually or as a matter of law, all of
the obligations of the Company hereunder in a writing promptly delivered to the
Executive.

(d) This Agreement will inure to the benefit of, and be enforceable by or
against, Executive or Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, designees and legatees. None of
Executive's rights or obligations under this Agreement may be assigned or
transferred by Executive other than Executive's rights to compensation and
benefits, which may be transferred only by will or operation of law. If
Executive should die while any amounts or benefits have been accrued by
Executive but not yet paid as of the date of Executive's death and which would
be payable to Executive hereunder had Executive continued to live, all such
amounts and benefits unless otherwise provided herein will be paid or provided
in accordance with the terms of this Agreement to

<PAGE>

such person or persons appointed in writing by Executive to receive such amounts
or, if no such person is so appointed, to Executive's estate.

23. Modification. No provisions of this Agreement may be waived, modified or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by both Executive and a duly authorized Company officer. No waiver by any
party hereto at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.

24. Representations. The Executive represents and warrants to the Company that
(a) the execution, delivery and performance of this Agreement by the Executive
does not and will not conflict with, breach, violate or cause a default under
any contract, agreement, instrument, order, judgment or decree to which the
Executive is a party or by which the Executive is bound, and (b) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of the Executive, enforceable in accordance
with its terms.

25. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto in respect of the subject matter contained
herein.

Executive                               Third Wave. Technologies, Inc-

/s/ John Puisis                         /s/ Lance Fors
-----------------------------           -------------------------
By: John Puisis                         By: Lance Fors

                                        Title: Chief Executive Officer
Date: 9-19-01                           Date:  9-19-01

<PAGE>

                                   EXHIBIT B

                               Parachute Gross-Up

      (a) In the event that the Executive shall become entitled to payments
and/or benefits provided by this Agreement or any other amounts in the "nature
of compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person (whose actions
result in a change of ownership or effective control covered by
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")
or any person affiliated with the Company or such person) as a result of such
change in ownership or effective control (collectively the "Company Payments"),
and if such Company Payments will be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Code (and any similar tax that may hereafter be
imposed by any taxing authority) the Company shall pay to the Executive at the
time specified in subsection (d) below an additional amount (the "Gross-up
Payment") such that the net amount retained by the Executive, after deduction of
any Excise Tax (including interest and penalties, if any) on the Company
Payments and any U.S. federal, state, and local income or payroll tax upon the
Gross-up Payment provided for by this paragraph (a), shall be equal to the
Company Payments. For the avoidance of doubt, it is understood that the
foregoing formula contemplates a Gross-Up Payment on the original and all
successive Gross-Up Payments.

      (b) For purposes of determining whether any of the Company Payments and
Gross-up Payments (collectively the "Total Payments") will be subject to the
Excise Tax and the amount of such Excise Tax, (x) the Total Payments shall be
treated as "parachute payments" within the meaning of Section 280G(b)(2) of the
Code, and all "parachute payments" in excess of the "base amount" (as defined
under Code Section 280G(b)(3) of the Code) shall be treated as subject to the
Excise Tax, unless and except to the extent that, in the opinion of the
Company's independent certified public accountants appointed prior to any change
in ownership (as defined under Code Section 280G(b)(2)) or tax counsel selected
by such accountants (the "Accountants") such Total Payments (in whole or in
part) either do not constitute "parachute payments," represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the "base amount" or are otherwise not
subject to the Excise Tax, and (y) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Accountants in accordance
with the principles of Section 280G of the Code.

      (c) For purposes of determining the amount of the Gross-up Payment, the
Executive shall be deemed to pay U.S. federal income taxes at the highest
marginal rate of U.S. federal income


                                                                              15
<PAGE>

taxation in the calendar year in which the Gross-up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Executive's residence (or the states and localities in
which the payments are subject to tax, if different) for the calendar year in
which the Company Payment is to be made, net of the maximum reduction in U.S.
federal income taxes which could be obtained from deduction of such state and
local taxes if paid in such year. In the event that the Excise Tax is
subsequently determined by the Accountants to be less than the amount taken into
account hereunder at the time the Gross-up Payment is made, the Executive shall
repay to the Company, at the time that the amount of such reduction in Excise
Tax is finally determined, the portion of the prior Gross-up Payment
attributable to such reduction (plus the portion of the Gross-up Payment
attributable to the Excise Tax and U.S. federal, state and local income tax
imposed on the portion of the Gross-up Payment being repaid by the Executive if
such repayment results in a reduction in Excise Tax or a U.S. federal, state and
local income tax deduction), plus interest on the amount of such repayment at
the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the
foregoing, in the event any portion of the Gross-up Payment to be refunded to
the Company has been paid to any U.S. federal, state and local tax authority,
repayment thereof (and related amounts) shall not be required until actual
refund or credit of such portion has been made to the Executive, and interest
payable to the Company shall not exceed the interest received or credited to the
Executive by such tax authority for the period it held such portion. The
Employee and the Company shall mutually agree upon the course of action to be
pursued (and the method of allocating the expense thereof) if the Executive's
claim for refund or credit is denied.

      In the event that the Excise Tax is later determined by the Accountant or
the Internal Revenue Service to exceed the amount taken into account hereunder
at the time the Gross-up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-up
Payment), the Company shall make an additional Gross-up Payment in respect of
such excess (plus any interest or penalties payable with respect to such excess)
at the time that the amount of such excess is finally determined.

      (d) The Gross-up Payment or portion thereof provided for in subsection (c)
above shall be paid not later than the thirtieth (30th) day following an event
occurring which subjects the Executive to the Excise Tax; provided, however,
that if the amount of such Gross-up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to the Executive on such
day an estimate, as determined in good faith by the Accountant, of the minimum
amount of such payments and shall pay the remainder of such payments (together
with interest at the rate provided in Section 1274(b)(2)(B) of the Code),
subject to further payments pursuant to subsection (c) hereof, as soon as the
amount thereof can reasonably be determined, but in no event later than the
ninetieth day after the


                                                                              16
<PAGE>

occurrence of the event subjecting the Employee to the Excise Tax. In the event
that the amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by the Company
to the Employee, payable on the fifth day after demand by the Company (together
with interest at the rate provided in Section 1274(b)(2)(B) of the Code).

      (e) In the event of any controversy with the Internal Revenue Service (or
other taxing authority) with regard to the Excise Tax, the Executive shall
permit the Company to control issues related to the Excise Tax (at its expense),
provided that such issues do not potentially materially adversely affect the
Executive, but the Employee shall control any other issues. In the event the
issues are interrelated, the Employee and the Company shall in good faith
cooperate so as not to jeopardize resolution of either issue, but if the parties
cannot agree the Employee shall make the final determination with regard to the
issues. In the event of any conference with any taxing authority as to the
Excise Tax or associated income taxes, the Employee shall permit the
representative of the Company to accompany the Employee, and the Employee and
the Executive's representative shall cooperate with the Company and its
representative. Any determination by the accountant shall not be binding in the
face of any inconsistent determination by a taxing authority.

      (f) The Company shall be responsible for all charges of the Accountant.

      (g) The Company and the Employee shall promptly deliver to each other
copies of any written communications, and summaries of any verbal
communications, with any taxing authority regarding the Excise Tax covered by
this Exhibit B.

<PAGE>
                                 EXHIBIT 10.17
                       AMENDMENT TO EMPLOYMENT AGREEMENT

      The purpose of this Amendment ("Amendment") to the Employment Agreement by
and between John Puisis (the "Executive") and Third Wave Technologies, Inc.
("TWT") dated September 24, 2001 ("Employment Agreement") is to document the
Compensation Committee of TWT's Board of Directors ("Compensation Committee")
approved modifications to the Employment Agreement as it concerns Executive's
Stock Option Grant Agreement terms.

                                 DRAFT RECITALS

A.    TWT's Compensation Committee has met and agreed to amend Executive's
      Employment Agreement and Stock Option Grant Agreements dated September 24,
      2001; June 12, 2002; and January 1, 2003 (hereinafter referred to as the
      "Option Grant Agreements") to extend the exercise period for stock options
      beyond the date of termination of Executive should Executive be terminated
      without Cause; and

B.    The TWT Compensation Committee has also agreed to amend the Employment
      Agreement and Option Grant Agreements to provide for accelerated vesting
      of all options in the event of termination of Executive's employment
      without Cause, resignation for Good Reason or in the event which TWT's
      current CEO is terminated, resigns or in any way fails to continue as CEO
      and the CEO position is not offered to Executive; and

C.    TWT and Executive wish to modify certain terms of the Employment Agreement
      to confirm the actions of the TWT Compensation Committee identified above.

      NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged by
each party, the following amendments of the Employment Agreement are hereby
agreed to, effective July 17, 2003.

1.    Paragraph 9(c)(ii) shall be deleted in its entirety and replaced with the
      following:

      "(ii) In the event Executive is terminated without Cause or should the
            Executive resign employment for Good Reason or in the event Lance
            Fors is no longer the CEO of TWT and the CEO position is not offered
            to Executive and further conditioned upon Executive's resignation
            not becoming effective until the six-month anniversary date of the
            announcement of the Fors termination (the "CEO Turnover Event") the
            vesting of stock options issued in the Stock Option Agreements
            (700,000 options in total) shall be accelerated and shall be
            considered fully vested upon such termination without Cause,
            resignation for Good Reason, or the CEO Turnover Event. Executive
            will be entitled to exercise, in the event of termination of the
            Executive without Cause, resignation for Good Reason, or the CEO
            Turnover Event, any remaining vested stock options granted prior to
            Executive's termination. In the event of termination without Cause,
            resignation for Good Reason or the CEO Turnover Event, the exercise
            period for those vested stock options shall not be limited to three
            (3) months but shall be extended throughout the option
            term/expiration date as identified in the Option Grant Agreements."

2.    All other terms and conditions of the Employment Agreement shall remain
      unchanged and are hereby ratified and confirmed.

3.    The Compensation Committee authorizes TWT management to make all necessary
      amendments to Option Grant Agreements previously issued to Executive in
      order to be consistent with this Amendment.

4.    Should any terms and conditions of any other agreements between Executive,
      TWT and/or the Compensation Committee conflict with the terms of this
      Amendment, the terms and conditions of this Amendment shall control.

THIRD WAVE TECHNOLOGIES, INC.


<TABLE>
<S>                                                  <C>
/s/ Lance Fors                                       /s/ John Neis
-------------------------                            ---------------------------
Lance Fors                                           John Neis
Chairman and Chief Executive Officer                 Chairman, Third Wave Technologies, Inc.
                                                     Compensation Committee of the Board of Directors

/s/ John Puisis
-------------------------
John Puisis
</TABLE>

</TEXT>
</DOCUMENT>
