SCHEDULE 14A

                                 (Rule 14a-101)
                    INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION

          PROXY STATEMENT PURSUANT TO SECTION 14(a)14(A) OF THE SECURITIES
                     EXCHANGE ACT OF 1934 (AMENDMENT NO.(Amendment No.  )

  Filed by the registrant [X]

  Filed by a party other than the registrant [ ]

  Check the appropriate box:

  [ ]  Preliminary proxy statement. [ ] Confidential, for use of the Commission
                                        only (as permitted by Rule 14a-6(e)(2)).


  [X] Definitive proxy statement.

  [ ] Definitive additional materials.

  [ ] Soliciting material pursuant to Section 240.14a-12

                         THIRD WAVE TECHNOLOGIES, INC.under Rule 14a-12

                          Third Wave Technologies, Inc.
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                (Name of Registrant as Specified in Its Charter)

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     (Name of Person(s) Filing Proxy Statement if Other Than the Registrant)

Payment of filing fee (check the appropriate box):

  [X]  No fee required.

  [ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
       0-11.

       (1)  Title of each class of securities to which transaction applies:

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       (2)  Aggregate number of securities to which transaction applies:

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       (3)  Per unit price or other underlying value of transaction computed
            pursuant to Exchange Act Rule 0-11 (set forth the amount on which
            the filing fee is calculated and state how it was determined):

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       (4)  Proposed maximum aggregate value of transaction:

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       (5)  Total fee paid:

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       [ ] Fee paid previously with preliminary materials.
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       [ ] Check box if any part of the fee is offset as provided by Exchange
           Act Rule 0-11(a)(2) and identify the filing for which the offsetting
           fee was paid previously. Identify the previous filing by registration
           statement number, or the form or schedule and the date of its filing.

       (1)  Amount Previously Paid:

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       (2)  Form, Schedule or Registration Statement No.:

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       (3)  Filing Party:

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       (4)  Date Filed:

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                         THIRD WAVE TECHNOLOGIES, INC.
                             ---------------------

                      20022003 ANNUAL MEETING OF SHAREHOLDERS
                            TO BE HELD JUNE 5, 200210, 2003
                             ---------------------

To our Shareholders:

     NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Third
Wave Technologies, Inc., a Delaware corporation (the "Company"), will be held at
the offices of the Company, 502 South Rosa Road, Madison, Wisconsin 53719 on
June 5, 200210, 2003 at 9:00 a.m., local time, for the following purposes:

          (1) To elect three (3) directors each to serve for a term of three (3)
     years
     expiring upon the 20052006 annual meeting of shareholders or until their
     successors are elected and qualified;

          (2) To ratify the appointment of Ernst & Young LLP as the independent
     auditors of the Company for the year ending December 31, 2002;2003; and

          (3) To transact any other business which is properly presented and
     which would ordinarily be presented at an annual meeting of shareholders.the
     meeting.

     The foregoing items of business are more fully described in the proxy
statement accompanying this notice. Only shareholders of record at the close of
business on April 19, 200218, 2003 are entitled to notice of and to vote at this
meeting.

     All shareholders are invited to attend the meeting in person. However, to
assure your representation at the meeting, you are urged to sign and return the
enclosed proxy as promptly as possible in the postage prepaid envelope enclosed
for that purpose. Any shareholder attending the meeting may vote in person even
if a proxy is returned.

                                          By Order of the Board of Directors,

                                          /s/ LANCE FORS, PH.D

                                          Lance Fors, Ph.D.Ph.D
                                          Chairman of the Board and
                                          Chief Executive Officer
April 26, 200225, 2003


                         THIRD WAVE TECHNOLOGIES, INC.
                             ---------------------

                            PROXY STATEMENT FOR THE
                    20022003 ANNUAL MEETING OF THE SHAREHOLDERS
                                 JUNE 5, 200210, 2003
                             ---------------------

                 INFORMATION CONCERNING SOLICITATION AND VOTING

GENERAL

     The enclosed proxy is solicited on behalf of Third Wave Technologies, Inc.
(the "Company", "us", "we" or "our") for use at the annual meeting of
shareholders to be held on Wednesday,Tuesday, June 5, 200210, 2003 at 9:00 a.m., local time, or
at any adjournment or adjournments thereof, for the purposes set forth herein
and in the accompanying notice of annual meeting of shareholders. The annual
meeting will be held at the principal executive offices of the Company at 502
South Rosa Road, Madison, Wisconsin 53719. The telephone number at that location
is (608) 273-8933.

     These proxy solicitation materials are being mailed on or about April 26,
200225,
2003 to all shareholders entitled to vote at the meeting.

RECORD DATE

     Shareholders of record at the close of business on April 19, 2002,18, 2003, the
record date for the meeting, are entitled to notice of and to vote at the
meeting. At the record date, 39,396,35139,578,774 shares of the Company's common stock
were issued and outstanding.

REVOCABILITY OF PROXIES

     Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a duly
executed proxy bearing a later date, by attending the shareholder meeting and
voting in person or by delivering to the Secretary of the Company, at the
Company's principal executive offices, a written notice of revocation.

VOTING AND SOLICITATION

     Each shareholder is entitled to one vote for each share held as of the
record date for the meeting. Shareholders will not be entitled to cumulate their
votes in the election of directors.

     The cost of soliciting proxies will be borne by the Company. The Company
expects to reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation material to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and employees, without additional compensation, personally
or by telephone, telegram, facsimile or other means of communication. We have
engaged Georgeson & Co. to assist us in distributing materials, for a fee
estimated at $7,125,$5,000, plus reimbursement of out-of-pocket expenses.

QUORUM; ABSTENTIONS; BROKER NON-VOTES

     Votes cast by proxy or in person at the annual meeting will be tabulated by
the inspector of elections appointed for the meeting and will determine whether
a quorum is present.

     We need a majority of the shares of common stock issued and outstanding on
the record date present, in person or by proxy, to have a quorum to allow us to
hold the annual meeting. Shares that are voted "For", "Against" or "Abstain"
with respect to any matter are treated as being present at the meeting.
In the election of directors, you can withhold your vote for any nominee.
Withheld votes will be excluded entirely from the vote on the election of
directors and will have no effect on the outcome. On the ratification of the
appointment of Ernst & Young LLP, you can vote to "abstain". If you vote to
"abstain", your vote will have the effect of a vote against the ratification.

     If you hold shares through a broker, follow the voting instructions you
receive from your broker. If you do not submit voting instructions with respect
to a matter and your broker does not vote your shares on that matter (so-called
"broker non-votes"), your shares will not be counted in determining the outcome
of the vote on that matter.

     Any proxy whichthat is returned using the form of proxy enclosed and which is
not marked as to a particular item will be voted for the election of the three
nominees named in this proxy statement, for the ratification of the appointment
of the independent auditors, and as the proxy holders deem advisable on other
matters that may come before the meeting, as the case may be, with respect to
the items not marked.

DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS

     Proposals of shareholders that are intended to be presented by suchthose
shareholders at the Company's annual meeting to be held in 20032004 must be
submitted in writing to the Secretary of the Company at the Company's executive
offices and received by the Company no later than December 27, 200226, 2003 in order
that suchthose proposals may be considered for possible inclusion in the proxy
statement and form of proxy relating to that meeting.

     In addition, the by-laws of the Company provide that any shareholder
entitled to vote may nominate persons for election as directors or propose
business to be brought before a meeting, or both, only if the shareholder has
given timely notice in proper written form of suchthe shareholder's intent to make sucha
nomination or propose such business. To be timely, suchthe shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Company not less than 120 days in advance of the first anniversary date of
mailing of the Company's proxy statement released to shareholders in connection
with the previous year's annual meeting of shareholders, unless no annual
meeting was held in the previous year or the date of the annual meeting has been
changed by more than 30 days from the date contemplated at the time of the
previous year's proxy statement, in which case, to be timely such notice must be
so received a reasonable time before the solicitation is made. The by-laws
contain provisions regarding information that must be set forth in the
shareholder's notice in order for it to be in proper form.

                                 PROPOSAL NO. 1

                             ELECTION OF DIRECTORS

     The Company's board of directors currently consists of sevennine persons,
divided into three classes serving terms of three years. Shareholders elect one
class of directors at each annual meeting. Three directors are to be elected at
this annual meeting each to hold office until the 20052006 annual meeting of
shareholders or until a successor has been duly elected and qualified. The other
classes of directors will be elected at the Company's annual meetings of
shareholders to be held in 20032004 and 2004. The nominating committee of the
Company's board of directors is currently evaluating candidates to be appointed
to fill the vacancy in class of directors continuing in office until the 2003
annual meeting of shareholders, caused by the resignation of a director.

     In the event that2005.

     If any of the nominees for director at the annual meeting becomes
unavailable or declines to serve as a director at the time of the annual
meeting, the proxy holders will vote the proxies in their discretion for any
nominee who is designated by the current board of directors to fill the vacancy.
It isWe do not expected thatexpect any of the nominees willto be unavailable to serve.

     The names of the three nominees for election to the board of directors at
the annual meeting, their ages as of the record date for the meeting, and
certain information about them are set forth below. The names of 2
the current
directors with unexpired terms, their ages as of the record date, and certain
information about them are also stated below.

                                        2
NOMINEES FOR ELECTION AT THE ANNUAL MEETING FOR TERMS ENDING IN 2006

NAME AGE PRINCIPAL OCCUPATION - ---- --- ------------------------------------------- John Neis(1)(2)(3)........................ 47 Senior Partner, Venture Investors Management LLC Sam Eletr, Ph.D. ......................... 64 Retired; Former Chairman and CEO of Applied Biosystems. Gordon F. Brunner......................... 64 Partner, Living Longer Proactive Health; retired Senior Vice President, Chief Technology Officer, and member of the Board of Directors of Procter & Gamble Co.
DIRECTORS CONTINUING IN OFFICE - TERMS ENDING IN 2004
NAME AGE PRINCIPAL OCCUPATION - ---- --- -------------------- Lance Fors, Ph.D.......................... 45 Chairman of the Board, President and Chief Executive Officer, Third Wave Technologies, Inc. David A. Thompson(3)...................... 61 Retired; Former Senior Vice President & President, Diagnostic Division, Abbott Laboratories Kenneth R. McGuire........................ 61 Chief Executive Officer, Burbank Group of Companies
DIRECTORS CONTINUING IN OFFICE - TERMS ENDING IN 2005
NAME AGE PRINCIPAL OCCUPATION - ---- --- -------------------- Tom Daniel (1)Daniel(1)(2)(3)...................... 37....................... 38 Partner, Schroder Ventures G. Steven Burrill (2)..................... 57Burrill(2)...................... 58 Chief Executive Officer, Burrill & Company Lloyd M. Smith, Ph.D.(1)(3)............... 4748 Kellett Professor of Chemistry, University of Wisconsin and Member, Scientific Advisory Board, Third Wave Technologies, Inc.
DIRECTOR CONTINUING IN OFFICE - TERM EXPIRING IN 2003
NAME AGE PRINCIPAL OCCUPATION - ---- --- -------------------- John Neis (1)(2)(3)....................... 46 Senior Partner, Venture Investors Management LLC
DIRECTORS CONTINUING IN OFFICE - TERMS EXPIRING IN 2004
NAME AGE PRINCIPAL OCCUPATION - ---- --- -------------------- Lance Fors, Ph.D...................... 44 President and Chief Executive Officer, Third Wave Technologies, Inc. David A. Thompson(3).................. 60 Retired; Former Senior Vice President & President, Diagnostic Division, Abbott Laboratories Kenneth R. McGuire.................... 60 Chief Executive Officer, Burbank Group of Companies
- --------------- (1) Member of the compensation committee (2) Member of the audit committee (3) Member of the nominating committee There are no family relationships among any of the directors or executive officers of the Company. NOMINEES FOR ELECTION AT THE ANNUAL MEETING FOR TERMS EXPIRINGENDING IN 2005 Tom Daniel has served as one of our directors since October 1999. He is a partner with Schroder Ventures, a venture capital investment firm, where he has focused on life science investments in the United States and Europe since 1998. From 1995 to 1998, Mr. Daniel was an associate with Domain Associates, a venture capital firm focused on the life science. Mr. Daniel serves on the boards of directors of several private companies. Mr. Daniel received an M.B.A. from Harvard University and an M.A. from Oxford University. G. Steven Burrill has served as one of our directors since October 1998. Mr. Burrill is Chief Executive Officer of Burrill & Company, a Life Sciences Private Merchant Bank which he founded in 1994. Prior to founding Burrill & Company, Mr. Burrill was a partner of Ernst & Young from 1977 through 1993. Mr. Burrill is a director of AgraQuest, Crosscart, DepoMed, MetriGenix, Sulis Pharmaceuticals, Transgene, Targacept, and ValiGen. He is Chairman of the Boards of AniGenics and Paradigm Genetics. Mr. Burrill received a B.B.A. from the University of Wisconsin, Madison. Lloyd M. Smith, Ph.D. has served as one of our directors since our formation and also serves on our scientific advisory board. Dr. Smith is Kellett Professor of Chemistry at the University of Wisconsin, Madison. Dr. Smith was the primary inventor of automated DNA sequence analysis. Dr. Smith regularly consults and advises us in our research and development efforts. He serves on the scientific advisory boards of Curagen Corporation and HTS BioSystems, Inc. THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES SET FORTH ABOVE. 3 DIRECTORS WHOSE TERMS EXTEND BEYOND THE ANNUAL MEETING2006 John Neis has served as one of our directors since August 1994. Mr. Neis is Senior Partner of Venture Investors Management LLC, a firm that is the manager and general partner of Madison, Wisconsin-based venture capital management funds. He also serves on the Advisory Board of the Weinert Applied Ventures Program at the University of Wisconsin. Mr. Neis received a B.S. in finance from the University of Utah and an M.S. in business from the University of Wisconsin, and is a Chartered Financial Analyst. Gordon F. Brunner has served as one of our directors since January 2003. Mr. Brunner is currently a partner with Living Longer Proactive Health and was senior vice president, chief technology officer, head of worldwide research and development, and a member of the board of directors of Procter & Gamble Co. He has more than 40 years' experience leveraging innovative technology platforms to the pharmaceutical, over-the-counter and consumer markets. He earned a B.S. degree in biochemical engineering from the University of Wisconsin-Madison and an M.B.A. from Xavier University. 3 Sam Eletr, Ph.D., has served as one of our directors since June 2002. Dr. Eletr co-founded Applied Biosystems, Inc. and served as its Chairman and Chief Executive Officer. Prior to founding Applied Biosytems, Dr. Eletr managed the analytical and medical instruments group at Hewlett-Packard Co.'s corporate research laboratories. Dr. Eletr most recently co-founded and served as chairman and chief executive officer of Lynx Therapeutics Inc., a publicly traded genomics company. He earned an M.A. in physics and a Ph.D. in biophysical chemistry, both at the University of California-Berkeley. THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE NOMINEES SET FORTH ABOVE. DIRECTORS WHOSE TERMS EXTEND BEYOND THE ANNUAL MEETING Lance Fors, Ph.D., our founder and Chairman of the Board, has served as our President, Chief Executive Officer and one of our directors since our inception in 1993. Dr. Fors received his Ph.D. in molecular biology from the California Institute of Technology in 1990. Dr. Fors has over twenty years of research and development experience and is the inventor on four19 issued and pending patents with an additional 13 pending in the area of DNA and RNA sequence analysis. David A. Thompson has served as one of our directors since August 1997. Mr. Thompson retired from Abbott Laboratories in 1995 where he worked for over 30 years. He held several corporate officer positions with Abbott Laboratories including: Senior Vice President & President Diagnostic Division 1983-1995, Vice President Human Resources 1982-1983, Vice President Corporate Materials Management 1981-1982 and Vice President Operations 1974-1981. Mr. Thompson currently serves on the board of directors of Tripath, a diagnostic image company, and St. Jude Medical Inc., a medical device company. Kenneth R. McGuire has served as one of our directors since October 1998. In 1986, Mr. McGuire founded the first of the Burbank Group of Companies, manufacturers of commercial aircraft noise suppression equipment. He has served as Chief Executive Officer of the member companies of the Burbank Group since their respective inceptions. Mr. McGuire received a B.S. from the United States Naval Academy and a J.D. from Columbia University. Tom Daniel has served as one of our directors since October 1999. He is General Partner with Schroder Ventures Life Sciences, a venture capital investment firm, where he has focused on life science investments in the United States and Europe since 1998. From 1995 to 1998, Mr. Daniel was an associate with Domain Associates, a United States venture capital firm focused on the life sciences. Before Domain, Mr. Daniel worked for Charles River Ventures, a United States venture capital firm focused on biotechnology investments. Mr. Daniel is a director of Oxagen and Solexa and is responsible for investments in Cellzome, Sunesis and a number of other private and public companies. Mr. Daniel received an M.B.A. from Harvard Business School, was a member of a genetics research team at the University of North Carolina, Chapel Hill from 1983-1984, and has an M.A. in Biological Sciences from Oxford University. G. Steven Burrill has served as one of our directors since October 1998. Mr. Burrill is Chief Executive Officer of Burrill & Company, a Life Sciences Private Merchant Bank which he founded in 1994. Prior to founding Burrill & Company, Mr. Burrill was a partner of Ernst & Young from 1977 through 1993. Mr. Burrill is a director of DepoMed, Galapagos Genomics, and Targacept. He currently serves as Board Chairman for Paradigm Genetics and Pyxis Genomics. Mr. Burrill received a B.B.A. from the University of Wisconsin, Madison. Lloyd M. Smith, Ph.D. has served as one of our directors since our formation and also serves on our scientific advisory board. Dr. Smith is Kellett Professor of Chemistry and Director of the Genome Center at the University of Wisconsin, Madison. Dr. Smith was the primary inventor of automated DNA sequence analysis. Dr. Smith regularly consults and advises us in our research and development efforts. He is chair of the scientific advisory boards of ProCognia Ltd. and GenTel Corporation and a member of the scientific advisory board of Curagen Corporation. VOTE REQUIRED Directors are elected by a plurality of the votes cast. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees. Votes withheld from any director will have no effect on the outcome. 4 BOARD MEETINGS, COMMITTEES AND DIRECTORSDIRECTOR COMPENSATION The board of directors of the Company held a total of sevensix meetings during 20012002 and all directors, attended at least 75% of the total number of meetings of the board and committees of the board on which the director served during 2001.2002. The board of directors has a compensation committee, an audit committee and a nominating committee. From time to time, the board has created various ad hoc committees for special purposes. No such committee is currently functioning. The compensation committee consists of Messrs. Smith, Neis and Daniel. The compensation committee makes recommendations to the board of directors regarding our employee benefit plans and the compensation of officers. The compensation committee held a total of one meetingfour meetings during 2001.2002. The audit committee consists of Messrs. Neis, Burrill and Daniel. Each member is "independent" as such term is defined in the listing standards of the National Association of Securities Dealers. The audit committee makes recommendations to the board of directors regarding the selection of independent auditors, reviews the scope of audit and other services by our independent auditors, reviews the accounting principles and auditing practices and procedures to be used for our financial statements and reviews the results of those audits. Information regarding the functions performed by the audit committee and the number of meetings held during 2001,2002 is set forth in the "Report of the Audit Committee", included in this proxy statement. The nominating committee consists of Messrs. Daniel, Neis, Smith and Thompson. The nominating committee evaluates and recommends candidates for election or appointment to the Company's board of directors. The nominating committee was formed in April, 2002 and therefore did not hold anyheld four meetings in 2001.2002. The nominating committee will consider director candidates recommended by shareholders. 4 Recommendations may be sent to John Comerford, Vice President, General Counsel and Secretary, 502 South Rosa Road, Madison, Wisconsin 53719. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION None of the members of the compensation committee is currently, or has ever been at any time since our formation, an officer or employee of the Company or any of its subsidiaries. No member of the compensation committee serves as a member of the board of directors or compensation committee of any entity that has one of more officers serving as a member of our board of directors or compensation committee. DIRECTOR COMPENSATION Upon initial election, our non-employee directors receive a stock option grant of 30,000 options. The price of these options is determined by the fair market value of the company stock on the date of grant. Following the third year of initial election, our non-employee directors receive an annual grant of 10,000 options. Options vest at 25% per year on the anniversary date of the option grant and accelerate upon change of control consistent with the terms outlined in the company's stock option grant agreements. Our non-employee directors receive an annual retainer of $12,000, a board meeting fee of $1,500 for regularly scheduled board meetings physically attended, and a board committee meeting participation fee of $500 per meeting. Our directors are reimbursed for all director-related expenses incurred in connection with attending board and committee meetings but are not compensated for their services as board or committee members. We have in the past granted non-employee directors options to purchase our common stock pursuanta result of providing service to the terms of our stock plans, and our board continues to havecompany or at the discretion to grant options to new non-employee directors. Our non-employee directors will each annually receive automatic, nondiscretionary grants of options to purchase 5,000 shares of our common stock.company's request. PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF AUDITORS The board of directors has, based on the recommendationdetermination of the audit committee, appointed Ernst & Young LLP as the independent auditors of the Company for the current fiscal year ending December 31, 2002.2003. Ernst & Young LLP have audited the Company's financial statements since its inception. 5 FEES PAID OR DUE TO ERNST & YOUNG LLP Audit Fees. The aggregate fees for professional services rendered by Ernst & Young LLP in connection with their 20012002 annual audit and reviews of financial statements in our Quarterly Reports on Form 10-Q for 20012002 were approximately $162,000.$261,500. Financial Information Systems Design and Implementation Fees. The Company did not engage Ernst & Young LLP to undertake any financial information systems design and implementation work during 2001.2002. All Other Fees. The aggregate fees for all other services rendered by Ernst & Young LLP in 20012002 was approximately $57,000,$51,020, consisting of audit related services of approximately $20,000$15,145 and non-audit services of approximately $37,000.$35,875. Audit related services generally include fees for accounting consultations and registration statements. Representatives of Ernst & Young LLP are expected to be present at the annual meeting with the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions. If shareholders fail to ratify the selection, the audit committee and the board will reconsider whether or not to retain that firm. Even if the selection is ratified, the audit committee and the board in their discretion may direct the appointment of different independent auditors at any time during the year. THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2002.2003. VOTE REQUIRED The ratification of the appointment of Ernst & Young LLP requires the affirmative vote of a majority of the shares of common stock represented at the annual meeting and entitled to vote thereon. 56 EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table sets forth the compensation paid by us during 1999, 2000, 2001 and 20012002 to our chief executive officer and our next four most highly compensated other executive officers who received salary compensation of more than $100,000 during 20012002 (the "Named Executive Officers"). SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION --------------------------- ANNUAL COMPENSATION SECURITIES ----------------------------- UNDERLYING ALL OTHER NAME PRINCIPAL POSITION(S) YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATIONOPTIONS/SARS(#) COMPENSATION($) - ---- --------------------- ---- --------- ---------- ------------ --------------------------- --------------- Dr. Lance Fors......... President, Chief 2001 $357,512 $166,800 141,480 N/A2002 $398,239 $150,000 291,000 $ 2,826(2) Executive Officer, 2001 $384,790 $0 141,480 Chairman, Director 2000 $295,005 $68,850$317,513 $166,600 693,600 Director 1999 $255,000 $80,000 85,000 John J. Puisis(1)...... Senior Vice 2002 $253,380 $150,000 145,000 $20,705(2) President, Chief 2001 $ 60,93865,587 $2,111,864 275,000 $4,924(2) Chief$ 4,924(2) Financial Officer, Ian Edvalson........... Senior Vice President 2001 $232,500 $98,000 81,000 N/A of Business and 2000 $180,000 $22,500 120,000 Corporate Development 1999 $106,250 $20,000 96,000 Rocky Ganske........... Chief Operating Officer 2001 $232,500 $83,000 81,000 N/A 2000 $176,000 $21,300 135,600 1999 $131,000 $24,000 30,000 Dr. Bruce Neri......... Senior Vice 2002 $247,549 $75,000 145,000 President, Research 2001 $206,250 $98,000$221,987 $0 59,400 N/A Research & Development 2000 $180,000 $24,750$193,734 $68,750 62,400 1999 $154,500 $28,800 9,600Ivan Trifunovich(3).... Senior Vice 2002 $260,713 $0 100,000 President & 2001 $ 0 $0 210,000 General Manager, Genomics Business Unit John Comerford(4)...... Vice President, 2002 $209,879 $15,000 140,000 General Counsel & 2001 $200,461 0 81,000 Secretary 2000 $ 53,539 $21,678 39,600
- --------------- (1) Mr. Puisis joined us in September 2001. (2) Consists of relocation expenses paid by us. (3) Mr. Trifunovich joined us in December 2001. (4) Mr. Comerford joined us in September 2000. OPTION GRANTS IN 20012002 The following table sets forth information relating to stock options granted during 20012002 to the Named Executive Officers. In accordance with the rules of the Securities and Exchange Commission, also shown below is the potential realizable value over the term of the option (the period from the grant date to the expiration date) based on assumed rates of stock appreciation of 5% and 10%, compounded annually. These amounts are mandated by the Securities and Exchange Commission and do not represent our estimate of 7 future stock price. Actual gains, if any, on stock option exercises will depend on the future performance of our common stock.
INDIVIDUAL GRANTS ----------------------------------------------------- PERCENT OF POTENTIAL REALIZABLE VALUE AT NUMBER OF TOTAL ASSUMED ANNUAL RATES OF SECURITIES OPTIONS STOCK PRICE APPRECIATION FOR OPTION UNDERLYING GRANTED TO EXERCISE OPTION TERM OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ----------------------------- NAME GRANTED(#)(1) 2001(2)2002(2) SHARE($) DATE 5% ($) 10% ($) - ---- ------------- ------------ --------- ---------- ------------- ------------- Dr. Lance Fors....... 141,480 9.52 11.00291,000 12.61 2.13 6/12/2011 $ 540,870 $1,783,0802012 389,808 987,849 John J. Puisis....... 275,000 18.49 6.27 8/24/2011 $1,084,372 $2,748,010 Ian Edvalson......... 81,000 5.45 11.00145,000 6.28 2.13 6/12/2011 $ 309,658 $1,020,8482012 194,234 492,227 Dr. Bruce Neri....... 59,400 3.99 11.00145,000 6.28 2.13 6/12/2011 $ 227,083 $ 748,622 Rocky Ganske......... 81,000 5.45 11.002012 194,234 492,227 Ivan Trifunovich..... 100,000 4.33 2.13 6/12/2011 $ 309,658 $1,020,8482012 133,955 339,467 John Comerford....... 140,000 6.07 2.13 6/12/2012 187,536 475,254
- --------------- (1) For each of the Named Executive Officers, 25% of the options vest on each of the first four anniversaries of the date of grant (which was August 24, 2001 for Mr. Puisis and June 12, 2001 for each of the other Named Executive Officers). 6 date. (2) We granted options to purchase a total of 1,486,8902,307,950 shares of common stock during 2001.2002. AGGREGATE OPTION EXERCISES IN 20012002 AND FISCAL YEAR-END OPTION VALUES The following table sets forth information for the Named Executive Officers relating to option exercises in 20012002 and the number and value of securities underlying exercisable and unexercisable options held at December 31, 2001:2002:
NUMBER OF SECURITIES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT SHARES DECEMBER 31, 20012002 DECEMBER 31, 2001(2)2002(1) ACQUIRED ON VALUE --------------------------- --------------------------- NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ---- ----------- -------------- ----------- ------------- ----------- ------------- Dr. Lance Fors....... 0 0 406,500 578,580 $628,479 $ 78,597601,770 674,310 99,792 119,310 John J. Puisis....... 0Puisis.......... 0 0 275,000 0 $217,250 Ian Edvalson......... 0 0 120,000 177,000 $265,680 $ 88,560 Rocky Ganske......... 0 0 127,500 169,500 $371,385 $ 27,675145,000 59,450 Dr. Bruce Neri....... 0 0 151,800 99,600 $753,768 $ 8,856181,650 214,750 184,800 59,450 Ivan Trifunovich..... 0 0 52,500 257,500 41,000 John Comerford....... 0 0 48,750 211,850 57,400
- --------------- (1) Value realized reflects the fair market value of our common stock underlying the option on the date of exercise minus the aggregate exercise price of the option. (2) Value of unexercised in-the-money options are based on a value of $7.05$2.54 per share, the fair market value of our common stock on December 31, 2001.2002. Amounts reflected are based on the value of $7.05$2.54 per share, minus the per share exercise price, multiplied by the number of shares underlying the option. EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS The Company and Mr. PuisisWe have entered into an employment agreement with Mr. Puisis that provides for an initial base salary of $225,000 and a target annual bonus of no less than 22.5% of base salary. The agreement provided for thean initial option grant to Mr. Puisis listed under "Option Grants in 2001" and for the one-time sign-on bonus to Mr. Puisis (the "Sign-on Bonus") listed under "Summary Compensation Table" to partially compensate Mr. Puisis for certain moneys lost upon Mr. Puisis beginning employment with the Company.us. Mr. Puisis' employment may be terminated by either the Companyus or Mr. Puisis at any time, except that (i) if the Company terminateswe terminate Mr. Puisis for "cause" (as defined in the employment agreement) or Mr. Puisis voluntarily terminates his employment other than for "good reason" (as defined in the employment agreement) within the first twelve months, Mr. Puisis must repay to the Company $1,400,000 of the Sign-on Bonus and if any such termination occurs after the first twelve months but within the first twenty-four months, Mr. Puisis must repay to the Companyus $700,000 of the Sign-on Bonus and (ii) if the Company terminateswe terminate Mr. Puisis other than for "cause" or Mr. Puisis voluntarily terminates his employment for "good reason", Mr. Puisis would receive a lump sum severance payment equal to one year's base salary and a pro-rated portion of his target bonus and continued coverage for one year under the Company'sour health and other welfare benefit plans. The employment agreement with Mr. Puisis defines "good reason" to include (i) Dr. Fors voluntarily ceasing to be the CEO or Chairman of the Company's8 board of directors within eighteen months of the beginning of Mr. Puisis' employment and (ii) a resignation by Mr. Puisis following a "change of control" (as defined in the employment agreement), but not earlier than six months after the change in control. EQUITY COMPENSATION PLAN INFORMATION The following table summarizes the number of outstanding options granted to employees and directors, as well as the number of securities remaining available for future issuance, under our compensation plans as of December 31, 2002.
NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE NUMBER OF SECURITIES WEIGHTED AVERAGE UNDER EQUITY TO BE ISSUED UPON EXERCISE PRICE COMPENSATION PLANS EXERCISE OF OUT- OF OUTSTANDING (EXCLUDING SECURITIES STANDING OPTIONS, OPTION WARRANTS REFLECTED IN THE PLAN CATEGORY WARRANTS AND RIGHTS AND RIGHTS FIRST COLUMN) - ------------- -------------------- ---------------- --------------------- Equity compensation plans approved by security holders......................... 6,140,859 $5.35 2,801,587 Equity compensation plans not approved by security holders......................... 0 0 0 Total...................................... 6,140,859 $5.35 2,801,587 ========= ===== ==========
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The following report is provided to shareholders by the compensation committee of the board of directors: The compensation committee of the board of directors, which is composed of three non-employee directors, is responsible for the administration of the Company's compensation programs. These programs include base salary for executive officers and both annual and long-term incentive compensation programs. The Company's compensation programs are designed to provide a competitive level of total compensation and 7 include incentive and equity ownership opportunities linked to the Company's performance and shareholder return. Compensation Philosophy. The Company's overall executive compensation philosophy is based on a series of guiding principles derived from the Company's values, business strategy and management requirements. These principles are summarized as follows: - Provide competitive levels of total compensation which will enable the Company to attract and retain the best possible executive talent; - Motivate executives to achieve optimum performance for the Company; - Align the financial interest of executives and shareholders through equity-based plans; and - Provide a total compensation program that recognizes individual contributions as well as overall business results. Compensation Program. The compensation committee is responsible for reviewing and recommending to the board the compensation and benefits of all officers of the Company and establishes and reviews general policies relating to compensation and benefits of employees of the Company. The compensation committee is also responsible for the administration of the Company's 2000 Stock Plan. There are two major components to the Company's executive compensation: base salary and potential cash bonus, as well as potential long-term compensation in the form of stock options. The compensation committee considers the total current and potential long-term compensation of each executive officer in establishing each element of compensation. 1. Base Salary. In setting compensation levels for executive officers, the compensation committee reviews competitive information relating to compensation levels for comparable positions at biotechnology and 9 high technology companies. In addition, the compensation committee may, from time to time, hire compensation and benefit consultants to assist in developing and reviewing overall salary strategies. Individual executive officer base compensation may vary based on time in position, assessment of individual performance, salary relative to internal and external fairness and the critical nature of the position relative to the success of the Company. 2. Long-Term Incentives. The Company's 2000 Stock Plan provides for the issuance of stock options to officers and employees of the Company to purchase shares of the Company's common stock at an exercise price equal to the fair market value of such stock on the date of grant. Stock options are granted to the Company's executive officers and other employees both as a reward for past individual and corporate performance and as an incentive for future performance. The compensation committee believes that stock-based performance compensation arrangements are essential in aligning the interests of management and the shareholders in enhancing the value of the Company's equity. 3. Benefits. The Company provides benefits to the Named Executive Officers that are generally available to all employees of the Company. The amount of executive level benefits and perquisites, as determined in accordance with the rules of the Securities and Exchange Commission relating to executive compensation, did not exceed 10% of total salary and bonus for the calendar year 20012002 for any executive officer. Section 162(m) of the Internal Revenue Code Limitations on Executive Compensation. In 1993, Section 162(m) was added toof the United States Internal Revenue Code. Section 162(m)Code may limit the Company's ability to deduct for United States federal income tax purposes compensation in excess of $1,000,000 paid to the Company's chief executive officer and its four other highest paid executive officers in any one fiscal year. No executive officer of the Company received any such compensation in excess of this limit during fiscal 2001, except for Mr. Puisis, as a result of the one-time Sign-on Bonus.2002. The total compensation of Dr. Fors, the Company's Chief Executive Officer, is consistent with the Company's overall executive compensation philosophy as described above, and the compensation of Dr. Fors was based on the factors described above. 8 It is the opinion of the compensation committee that the aforementioned compensation policies and structures provide the necessary discipline to properly align the Company's corporate economic performance and the interest of the Company's shareholders with progressive, balanced and competitive executive total compensation practices in an equitable manner. The foregoing report shall not be "soliciting material" or to be "filed" with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under this Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates it by reference into such filing. Respectfully submitted, The compensation committee of the board of directors Lloyd Smith, Ph.D. Tom Daniel John Neis EXECUTIVE OFFICERS OF THE COMPANY The executive officers of the Company as of April 19, 200225, 2003 are set forth below: Lance Fors, Ph.D. (44)(45), our founder and Chairman of the Board, has served as our President, Chief Executive Officer and one of our directors since our inception in 1993. Dr. Fors received his Ph.D. in molecular biology from the California Institute of Technology in 1990. Dr. Fors has over twenty years of 10 research and development experience and is the inventor on four19 issued and pending patents with an additional 13 pending in the area of DNA and RNA sequence analysis. John J. Puisis (42)(43) has served as our Senior Vice President, Chief Financial Officer since September 2001. In January 2003, Mr. Puisis was also assigned the title and duties of Chief Operating Officer. From 1996 until he joined the Company, Mr. Puisis held senior management positions at the Spencer Stuart and Egon Zehnder executive recruitment firms, specializing in recruiting for the biotechnology and pharmaceutical industries. From 1989 to 1996, Mr. Puisis held key financial executive positions at DEKALB Genetics and Kraft Foods. Prior to 1989, Mr. Puisis held various positions at several large public accounting firms. Mr. Puisis earned an M.B.A. from Northwestern University and a B.A. in accounting from Northern Illinois University. He is a certified public accountant. Rocky E. Ganske (43) joined us in October 1996 as Vice President of Operations and was promoted to Chief Operating Officer in July 2000. From 1980 until joining us, Mr. Ganske held various management positions in quality engineering, quality assurance and regulatory compliance at Becton, Dickinson and Company. Mr. Ganske received an Associates Applied Science Degree in electronics technologies from the Utah Technical College. Bruce Neri, Ph.D. (55)(56) joined us in July 1996 as Vice President of Research and Development and was promoted to Senior Vice President of Research and Development in July 1997. From 1991 until joining us, Dr. Neri was Vice President of DNA probe development at Becton, Dickinson and Company. Prior to 1991, Dr. Neri directed Research and Development at Gene-Trak Systems, Angenics, Inc., Instrumentation Laboratories and Abbott Laboratories. Dr. Neri is the inventor on sixten United States patents, with an additional six19 pending in the area of human in-vitro diagnostic products.products, and over 60 publications. Dr. Neri received a B.A. in chemistry from Cornell College and a Ph.D. in analytical chemistry from the University of Arizona. Ian B. Edvalson (35) joined us in April 1999 as Vice President of Corporate Strategy and General Counsel and was promoted to Senior Vice President of Corporate and Business Development in July 2000. From 1994 until joining us, Mr. Edvalson was a senior biotechnology licensing attorney at Wilson Sonsini Goodrich & Rosati. Mr. Edvalson received a B.S. in microbiology, a B.A. in Korean and a J.D. from the University of Chicago. Ivan D. Trifunovich, Ph.D. (39) joined us as Senior Vice President and General Manager of our Genomics business unit in February 2002.December 2001. From 1999 until joining us, Dr. Trifunovich was, successively, Vice President 9 of e-Business and Vice President of Research Strategy and Operations at Pharmacia Corp. Prior to 1999, Dr. Trifunovich was a Director of New Product Marketing at Johnson & Johnson, Inc. From 1992 to 1997, Dr. Trifunovich held various positions at Bristol-Meyers Squibb, Inc. Dr. Trifunovich earned his Ph.D. at UCLA and his M.B.A. at the University of Pennsylvania's Wharton School of Business. He is the holder of ten U.S. patents. John Comerford (39)(40) joined us in September 2000 as Vice President, General Counsel and Secretary. From 1998 until joining us, Mr. Comerford was Corporate General Counsel and Secretary at Lunar Corporation, a publicly-traded medical device company. From 1990 to 1997, Mr. Comerford was Associate Resident Counsel at National Presto Industries, Inc. Prior to 1990, Mr. Comerford was a Staff Attorney at Fort Howard Corporation. Mr. Comerford received a J.D. from Marquette University and a B.A. in business administration from St. Norbert College. REPORT OF THE AUDIT COMMITTEE The audit committee oversees the Company's financial reporting process on behalf of the board of directors. The audit committee is governed by a written charter approved by the board of directors. Management has the primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the audit committee reviewed the audited financial statements in the Company's Annual Report on Form 10-K, the unaudited financial statements in Quarterly Reports on Form 10-Q, and financial result press releases with management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The audit committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States, their judgments as to the quality, not just the acceptability, of the Company's accounting principles and such other matters as are required to be discussed with the audit committee under auditing standards generally accepted in the United States. In addition, the audit committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 and the audit committee has discussed with the independent auditors the auditors' independence from management 11 and the Company including the matters in the written disclosures required by the Independence Standards Board Standard No. 1 and considered the compatibility of non-audit services with the auditors' independence. The audit committee discussed with the Company's independent auditors the overall scope and plans for their audit. The audit committee meets with the independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company's internal controls, and the overall quality of the Company's financial reporting. The audit committee held fivesix meetings in 2001.2002. In reliance on the reviews and discussions referred to above, the audit committee recommended to the board of directors (and the board has approved) that the audited financial statements be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2001.2002. The audit committee and the board have also recommended the selection of the Company's independent auditors. The foregoing report shall not be "soliciting material" or to be "filed" with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under this Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates it by reference into such filing. Respectfully submitted, The audit committee of the board of directors John Neis G. Steven Burrill Tom Daniel 10 PRINCIPAL SHAREHOLDERSSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT The following table shows information known to us with respect to the beneficial ownership of our common stock as of April 19, 2002 by18, 2003 by: - each person (or group of affiliated persons) who owns beneficially 5% or more of our common stock; - each of our directors; - each of the Named Executive Officers; and - all of our directors and executive officers as a group. Except as indicated in the footnotes to this table and subject to community property laws where applicable, the persons named in the table have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them. Beneficial ownership and percentage ownership are determined in accordance with the rules of the Securities and Exchange Commission. Addresses for those individuals for which an address is not otherwise indicated is: c/o Third Wave Technologies, Inc., 502 South Rosa Road, Madison, Wisconsin 53719. 12
SHARES BENEFICIALLY OWNED --------------------------------------------------------------------------------------- SHARES SUBJECT TO BENEFICIAL OWNER TOTAL NUMBER OPTIONS PERCENTPERCENTAGE - ---------------- ------------ ----------------- ----------------- 5% SHAREHOLDERS: State of Wisconsin Investment Board(1)................... 3,957,900................ 5,523,000 0 10.0% Mazama Capital Management, Inc.(2)....................... 2,273,70013.96% Bank of America Corporation(2)........................ 3,419,450 0 5.8%8.64% NAMED EXECUTIVE OFFICERS AND DIRECTORS: Lance Fors, Ph.D.(3)..................................... 2,653,520 406,500 6.7%.................................. 2,507,816 601,770 6.24% John Puisis.............................................. 1,200 0 * Rocky Ganske............................................. 129,853 127,500Puisis........................................... 293,698 275,000 * Bruce Neri, Ph.D......................................... 168,383 151,800Ph.D...................................... 202,188 181,650 * Ian Edvalson............................................. 137,420 135,000Ivan Trifunovich...................................... 52,500 52,500 * John Comerford........................................ 69,824 48,750 * Lloyd M. Smith, Ph.D.(4)................................. 1,982,400 8,400 5.0%.............................. 2,043,600 16,800 5.16% John Neis(5)............................................. 1,828,725 8,400 4.6%.......................................... 1,837,125 16,800 4.64% David A. Thompson(6)..................................... 49,200 49,200Thompson..................................... 58,800 58,800 * Tom Daniel(7)............................................ 1,329,841 8,400 3.4%Daniel(6)......................................... 1,338,426 16,800 3.38% G. Steven Burrill(8)..................................... 1,039,263 8,400 2.6%Burrill(7).................................. 1,047,663 16,800 2.65% Kenneth R. McGuire....................................... 4,425,850 8,400 11.2%McGuire(2)................................. 3,119,850 16,800 7.88% Gordon F. Brunner..................................... 6,000 0 * Sam Eletr............................................. 0 0 * All directors and executive officers as a group (13 persons)............................................... 13,763,903 931,200 34.2%............................................ 12,577,490 1,302,470 30.77%
- --------------- * indicates less than 1% (1) Based on information provided in the Schedule 13G filed by the State of Wisconsin Investment Board ("SWIB") with the Securities and Exchange Commission on April 4, 2002.February 14, 2003. The address of SWIB is P.O. Box 7842, Madison, Wisconsin 53707. (2) Based on information provided in the Schedule 13G filed by Mazama Capital Management,Bank of America Corporation ("BAC"), NB Holdings Corporation ("NBH"), Bank of America NA ("BA"), BANA #1 LLC ("BANA") and Bank of America Strategic Solutions, Inc. ("MCM"BASS") with the Securities and Exchange Commission on January 31, 2002, MCMFebruary 14, 2003. The Schedule 13G reports that BANA and BASS have shared voting and dispositive power with respect to 3,417,450 of those shares, BA has sole dispositionvote and dispositive power with respect to 2,000 of those shares, and BAC and NBH have shared voting and dispositive power with respect to all 2,273,7003,419,450 shares. The Schedule 13G reports that the shares reported in the Schedule are owned by Mr. McGuire and sole voting power with respecthave been pledged by Mr. McGuire to 1,962,800 of those shares.BA to secure certain obligations under a loan agreement. The address of MCMBAC is One S.W. Columbia, Suite 1860, Portland, Oregon 97258.100 N. Tryon Street, Charlotte, NC 28255. (3) Includes 1,974,0001,900,800 shares of common stock held in a voting trust for the benefit of Dr. Fors' family members. Dr. Fors and his wife, Charlotte H. Selover, are co-trustees of this voting trust. (4) Includes 244,800148,800 shares of common stock held in a voting trust for the benefit of Dr. Smith's family members. Dr. Smith is the sole trustee of the saidthis voting trust. (5) Includes 1,196,550369,787 shares held by Venture Investors of Wisconsin and 445,200Wisconsin; 269,400 shares held by Venture Investors Early Stage II Limited Partnership andPartnership; 170,400 shares held by Venture Investors Early Stage 11 Fund III Limited Partnership. The address of Venture Investors of Wisconsin, Inc. is 505 South Rosa Road, Madison, Wisconsin 53719. (6) Mr. Thompson's address is 40 South Wynstone Drive, North Barrington, IL 60010. (7) Includes 798,202774,312 shares owned by Schroder Ventures International Life Sciences Fund II LPI, 464,400LPI; 329,524 shares held by Schroder Ventures International Life Sciences Fund II LPII, 24,000LPII; 88,630 shares held by Schroder Ventures International Life Sciences Fund II LPIII, 6,000LPIII; 22,282 shares held by Schroder Ventures Co-Investment Scheme, 3,600International Life Sciences Fund Group Co-Investments Scheme; 11,842 shares held by Schroder Ventures International Life Sciences Fund II Strategic Partners LP,LP; and 25,200 shares held by Schroder Ventures Investments Limited. Mr. Daniel is a manager of a company that provides consulting services to Schroder Ventures funds. Mr. Daniel disclaims beneficial ownership of the shares held by the 13 various Schroder Venture funds. The address of Schroder Ventures International Life Sciences Fund II, LPI, Schroder Ventures International Life Sciences Fund II LPII, and Schroder Ventures International Life Sciences Fund II LPIII is 787 Seventh875 Third Avenue, 34th22nd Floor, New York, NY 10019.10022-6225. The address of Schroder Ventures Co-Investment Scheme is 22 Church Street, Hamilton Bermuda, HM11.HM 11, Bermuda. The address of Schroder Ventures Investments Limited is P.O. Box 255, Barfield House, St. Julian's Avenue, St. Peter Port, Guernsey GY1 4ND Channel Islands, United Kingdom. The address of any other entities affiliated with Tom Daniel is 20 Southhampton Street, London UK WC2E 7QG. (8)(7) Includes 1,020,863 shares held by the Burrill Agbio Capital Fund, LP. Mr. Burrill is general partner of Burrill Agbio Capital Fund, LP and disclaims beneficial ownership of these shares except to the extent of his pecuniary interest in these shares. COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and any persons who beneficially own more than ten percent of our common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock. To our knowledge, based solely on review of the copies of such reports sent to us and written representations that no other reports were required, we believe that during the year ended December 31, 2001,2002, our directors, officers and ten percent shareholders complied with their Section 16(a) filing requirements, except that eachthe initial statement of Mr. Preston Tsao (who has resigned as a director of the Company) and Mr. Neisbeneficial ownership for Dr. Eletr was filed one late report relating to one transaction. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In October 1998, the Company and Burrill Agbio Capital Fund, L.P., a venture capital fund managed by Mr. Burrill, a director of the Company, formed Third Wave Agbio, Inc. ("Agbio"). The Company received shares of common stock of Agbio which represented 50 percent of the total outstanding shares of Agbio, and the Company granted to Agbio an exclusive worldwide license in the field of agriculture to all of the Company's technology. In December 1999 the Company entered into an agreement with Agbio under which the Company develops agricultural applications of its Invader operating system for the field of agriculture. Under this agreement the Company also provided administrative and management services to Agbio and during 2001 the Company billed Agbio $552,000 for research and development activities and administrative and managerial services which the Company believes to be the fair market value of those services. On December 14, 2001, the Company purchased the remaining 50% of Agbio from Burrill Agbio Capital Fund, L.P. and R. Glen Donald for an aggregate of 925,000 shares of the Company's common stock valued at $6.53 per share on the date of issuance. In addition, 25,391 options to purchase the Company's common stock were issued to replace existing Agbio options.late. SHAREHOLDER RETURN PERFORMANCE GRAPH The following graph compares the percentage change in the cumulative return on our common stock against the NASDAQ Stock Market U.S. Index (the "NASDAQ Index") and a peer group composed of the companies listed below (the "Peer Group"). The graph assumes a $100 investment on February 9, 2001 (the date of our initial public offering) in each of our common stock, the NASDAQ Index and the Peer Group and 12 assumes that all dividends, if paid, were reinvested. This table does not forecast future performance of our common stock. PERFORMANCE GRAPH(PERFORMANCE GRAPH)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 2/09/9/01 3/31/01 6/30/01 9/30/01 12/31/01 3/31/02 6/30/02 9/30/02 12/31/02 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Third Wave Technologies, Inc TWTI 100.00 63.64 93.91 57.45 66.82 30.45 20.36 12.27 24.45 NASDAQ 100.00 74.48 87.44 60.66 78.93 74.68 59.22 47.43 54.05 Peer Group 100.00 53.57 65.66 37.12 62.5453.61 65.69 37.14 62.56 39.95 28.58 18.98 19.17
14 The Peer Group consists of the following companies: Applera Corporation, Orchid Biosciences, Inc., Sequenom, Inc., Affymetrix, Inc. and Nanogen, Inc. The foregoing graph and accompanying material shall not be "soliciting material" or to be "filed" with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under this Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates it by reference into such filing. OTHER MATTERS The Company knowsWe know of no other matters to be submitted to the shareholders at the meeting. If any other matters properly come before the shareholders at the meeting, it is the intention of the persons named in the enclosed form of proxy to vote the shares they represent as the board of directors may recommend. By Order of the Board of Directors, /s/ LANCE FORS, PH.D. Lance Fors, Ph.D. Chairman of the Board and Chief Executive Officer Dated: April 26, 2002 1325, 2003 15 THIRD WAVE TECHNOLOGIES, INC. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THIRD WAVE TECHNOLOGIES, INC. PROXY FOR ANNUAL MEETING OF SHAREHOLDERS IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2 BELOW. The undersigned shareholder of Third Wave Technologies, Inc., a Delaware corporation (the "Company"), hereby acknowledges receipt of the Proxy Statement of the Company dated April 26, 2002 and hereby appoints Lance Fors and John Comerford, and each of them, proxies and attorneys in fact, with full power to each of substitution, on behalf and in the name of the undersigned, to represent the undersigned at the Annual Meeting of Shareholders of the Company to be held at the offices of the Company at 9:00 a.m. on Wednesday, June 5, 2002 and any adjournment or adjournments thereof, and to vote all shares of common stock of the Company whichTHIRD WAVE TECHNOLOGIES, INC. THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THIRD WAVE TECHNOLOGIES, INC. PROXY FOR ANNUAL MEETING OF SHAREHOLDERS IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2 BELOW. The undersigned shareholder of Third Wave Technologies, Inc., a Delaware corporation (the "Company"), hereby acknowledges receipt of the Proxy Statement of the Company dated April 25, 2003 and hereby appoints Lance Fors and John Comerford, and each of them, proxies and attorneys in fact, with full power to each of substitution, on behalf and in the name of the undersigned, to represent the undersigned at the Annual Meeting of Shareholders of the Company to be held at the offices of the Company at 9:00 a.m. on Tuesday, June 10, 2003 and any adjournment or adjournments thereof, and to vote all shares of common stock of the Company that the undersigned would be entitled to vote if the undersigned were present, as follows: 1. The election of the following persons as directors of the Company to serve until their successors shall be duly elected and qualified:
NAME OF NOMINEE FOR AGAINST - ---------------------------------------------------------------------------------------------------------------------- Tom Daniel------------------------- ------------------------- ------------------------ Gordon F. Brunner [ ] [ ] G. Steven BurrillSam H. Eletr [ ] [ ] Lloyd M. Smith, Ph.D. [ ]John Neis [ ] For, except vote withheld from the following nominee(s): 2. To ratify the appointment of Ernst & Young LLP as independent auditors of the Company for the fiscal year ending December 31, 2002.[ ]
For, except vote withheld from the following nominee(s): 2. To ratify the appointment of Ernst & Young LLP as independent auditors of the Company for the fiscal year ending December 31, 2003. [ ] For [ ] Against [ ] Abstain 3. In their discretion, upon any such other matters which may properly come before the meeting or any adjournments thereof. [ ] Grant Authority [ ] Withhold Authority THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFIC INDICATION ABOVE. IN THE ABSENCE OF SUCH INDICATION, THIS PROXY 20 THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFIC INDICATION ABOVE. IN THE ABSENCE OF SUCH INDICATION, THIS PROXY WILL BE VOTED FOR MANAGEMENT'S SLATE OF DIRECTORS AND FOR ALL OTHER ITEMS SET FORTH ABOVE AND, IN THE DISCRETION OF THE PROXYHOLDERS, ON ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF. DATED: Signature of Shareholder DATED: , 2002 ------------------------------ -------------------------- Signature of Shareholder -------------------------- PLEASE PRINT NAME(S) - ------------------------------------ I plan to attend the meeting: [ ] Yes [ ] No Taxpayer Identification No. (or Social Security Number): --------------WILL BE VOTED FOR MANAGEMENT'S SLATE OF DIRECTORS AND FOR ALL OTHER ITEMS SET FORTH ABOVE AND, IN THE DISCRETION OF THE PROXYHOLDERS, ON ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF. DATED: -------------------------, 2003 - -------------------------------- Signature of Shareholder - -------------------------------- PLEASE PRINT NAME(S) - -------------------------------- I plan to attend the meeting: [ ] Yes [ ] No Taxpayer Identification No. (or Social Security Number): ---------------------- Sign exactly as your name(s) appear(s) on the stock certificate(s). A corporation is requested to sign its name by its President or other authorized officer, with the office held designated. Executors, administrators, trustees, etc., are requested to so indicate when signing. If a stock is registered in two names, both should sign. SHAREHOLDERS SHOULD SIGN THIS PROXY PROMPTLY AND RETURN IT IN THE ENCLOSED ENVELOPE. PLEASE RETURN ALL PAGES OF THIS PROXY