<PAGE>   1




                                                                    EXHIBIT 10.6

                                BIOMET, INC.
                      1998 QUALIFIED AND NON-QUALIFIED
                              STOCK OPTION PLAN

      1.   DEFINITIONS.   The following terms, when capitalized herein,
           shall have the meanings specified in this Section:

      (a)  "Board of Directors" or "Board" means the Board of Directors
           of Biomet, Inc.

      (b)  "Code" means the Internal Revenue Code of 1986, as amended
           and in effect from time to time.

      (c)  "Committee" means the committee appointed by the Board of
           Directors, pursuant to Section 3(a), to administer this Plan.

      (d)  "Common Shares" means the Common Shares of the Company.

      (e)  "Company" means Biomet, Inc., an Indiana corporation.

      (f)  "Director" means a member of the Board of Directors of the
           Company.

      (g)  "Distributor" means a Person engaged in the sale or
           distribution of products of the Company or a Subsidiary.

      (h)  "Employee" means an individual employed by the Company or any
           Subsidiary.  A Director of the Company shall not be deemed to be
           employed by the Company solely as a result of his or her position as
           a Director.

      (i)  "Employer" means, collectively, or where the context is appropriate,
           individually, the Company and/or any of its Subsidiaries.

      (j)  "Expiration Date" means June 30, 2008, the last date on which Options
           may be granted pursuant to this Plan.

      (k)  "Fair Market Value" means the closing price of the Common Shares as
           reported by the Nasdaq Stock Market or by any national securities
           exchange on which Common Shares may be traded.

      (l)  "Notice of Option" means a written communication by the Company or a
           Subsidiary to an Optionee confirming the grant of an Option pursuant
           to this Plan.

      (m)  "Non-Employee Director" means a Director of the Company who is a
           "non-employee director" within the meaning of Rule 16b-3.

      (n)  "Option" means a right to purchase Common Shares granted pursuant to
           this Plan.  Options may be either "Qualified Options," which are
           defined as Options intended to meet the



<PAGE>   2


           requirements of Section 422 of the Code, or "Non-Qualified
           Options," which are defined as Options not intended to meet the
           requirements of Section 422 of the Code.

      (o)  "Optionee" means a Person to whom an Option is granted under this
           Plan.

      (p)  "Person" means an individual, partnership, joint venture,
           association, trust, corporation or other entity that is not a
           wholly-owned Subsidiary.

      (q)  "Plan" means this Biomet, Inc. 1998 Qualified and Non-Qualified Stock
           Option Plan.

      (r)  "Retirement" means, with respect to:

                (i)    an Employee, retirement from the Employer pursuant to the
                       early or normal retirement provisions of any applicable
                       retirement plan;

                (ii)   a Non-Employee Director, termination of service as a
                       Director; and

                (iii)  a non-Employee Distributor who is a natural person,
                       Separation from Service after the Distributor has
                       attained age 55 and has served the Company or any
                       Subsidiary for at least 10 years.

      (s)  "Rule 16b-3" means Rule 16b-3 of the Securities and Exchange
           Commission or any successor rule.

      (t)  "Separation from Service" or "Separates from Service" means with
           respect to:

                (i)    an Employee, any voluntary or involuntary termination of
                       the Employee's employment with the Employer for any
                       reason, including, but not limited to, death, disability
                       or Retirement; provided, however, the term shall not
                       include the transfer of an Employee's employment from the
                       Company to any Subsidiary, from a Subsidiary to the
                       Company or between Subsidiaries;

                (ii)   a Non-Employee Director, termination of service as a
                       Director; and

                (iii)  a non-Employee Distributor, any voluntary or involuntary
                       termination of the non-Employee Distributor's independent
                       contractor relationship with the Company or any
                       Subsidiary for any reason, including, but not limited to,
                       death, disability or Retirement, but shall not include
                       termination of the relationship by reason of a
                       non-Employee Distributor becoming an Employee.

      (u)  "Subsidiary" means a company (whether or not incorporated) 80% or
           more of the total combined voting power and 80% or more of the total
           value of which is owned directly or indirectly by the Company.

      (v)  "10% Shareholder" means an individual possessing more than 10% of the
           total combined voting power of all classes of shares of the Company
           or any Subsidiary.  An individual shall be considered as owning any
           shares owned, directly or indirectly, by or for his or her brothers
           or sisters (whether by whole or half blood), spouse, ancestors and
           lineal descendants.  Shares owned, directly or indirectly, by or for
           a corporation, partnership, estate or trust shall be considered as
           being owned proportionately by or for its shareholders, partners or
           beneficiaries.


<PAGE>   3



      (w)  "1934 Act" means the Securities Exchange Act of 1934, as amended.

      2.   PURPOSE.  This Plan is intended to advance the interests of
           the Company by providing to Non-Employee Directors, key Employees
           and certain Distributors an opportunity to acquire or increase a
           proprietary interest in the Company, and thereby to create in these
           Persons a stronger incentive to expend their maximum efforts for the
           growth and success of the Company and its Subsidiaries, and to
           encourage these Persons to remain in the employ or service of the
           Company or its Subsidiaries.

      3.   ADMINISTRATION.

      (a)  COMMITTEE.  This Plan shall be administered by a Committee appointed
           by the Board of Directors, consisting of two or more Directors, at
           least two of whom are at all times Non-Employee Directors.

      (b)  POWER AND AUTHORITY.  The Committee shall have the full power and
           authority to take all actions and make all determinations required or
           provided for under this Plan; to interpret and construe the
           provisions of this Plan or any Notice of Option, which interpretation
           or construction shall be final, conclusive and binding on the
           Company, the Employer and the Optionee; and to take any and all other
           actions and make any and all other determinations not inconsistent
           with the specific terms and provisions of this Plan which the
           Committee deems necessary or appropriate in the administration of
           this Plan.  The Committee may from time to time prescribe, amend and
           rescind rules and regulations applicable to this Plan.

      (c)  ACTIONS AND DETERMINATIONS.  A majority of the Committee shall
           constitute a quorum for purposes of any action or determination by
           the Committee.  Each member may be counted in determining the
           existence of a quorum at any meeting of the Committee.  All actions
           and determinations of the Committee shall be made by an affirmative
           vote of not less than a majority of its members, or by unanimous
           written consent.  Each member of the Committee shall be entitled to
           vote on any matters affecting the administration of this Plan or the
           grant of any Options pursuant to this Plan; however, no member shall
           act upon the granting of an Option to himself or herself except
           pursuant to action taken by unanimous written consent.

      (d)  RULE 16b-3 COMPLIANCE.  Notwithstanding the other provisions of this
           Section 3, each member of the Committee who is not, at the time any
           action is taken, a Non-Employee Director shall abstain or recuse
           himself or herself from any action to be taken with respect to the
           grant of Options to which the provisions of Rule 16b-3 are intended
           to apply, and the members of the Committee who are Non- Employee
           Directors shall have full power to act independently with respect
           thereto.

      4.   ELIGIBILITY.  The Persons eligible to receive grants of Options
           pursuant to this Plan, and the bases on which Options may be granted,
           are as follows:

      (a)  KEY EMPLOYEES.  Those individuals who are "key Employees," as
           determined from time to time by the Committee.  In determining the
           key Employees and the extent of their participation, the Committee
           shall take into account such factors as are deemed relevant by the
           Committee in its sole and absolute discretion in furtherance of the
           purposes of this Plan.  Options granted to key Employees may be
           designated as Qualified Options or Non-Qualified Options.



<PAGE>   4



      (b)  NON-EMPLOYEE DIRECTORS.  Effective as of the date of the mid-year
           meeting of the Board of Directors for calendar year 1999 ("Mid-1999
           Meeting"), each Non-Employee Director shall be granted an Option to
           purchase 5,000 Common Shares at a price and upon the other terms and
           conditions specified in this Plan.  Thereafter, on each three-year
           anniversary of the Mid-1999 Meeting, each Non-Employee Director shall
           be granted an Option to purchase 5,000 Common Shares at the price and
           upon the other terms and conditions specified in this Plan; provided,
           that the number of Options that may be granted to all Non-Employee
           Directors shall not exceed 10% of the Common Shares subject to this
           Plan.  A Non-Employee Director shall not be eligible to receive or
           exercise any Option if the exercise of that Option would result in
           that Non-Employee Director owning, directly or indirectly, Common
           Shares  possessing more than 10% of the total combined voting power
           of all classes of shares of the Company. Options granted to
           Non-Employee Directors shall be Non-Qualified Options.  No Option
           shall be granted to any Director serving on the Committee who is not
           a Non-Employee Director.

      (c)  DISTRIBUTORS.  Those Persons who are Distributors and who are
           determined by the Committee to be eligible to participate in this
           Plan.  In determining the Distributors eligible to participate and
           the extent of their participation, the Committee shall take into
           account such factors as are deemed relevant by the Committee in its
           sole and absolute discretion in furtherance of the purposes of this
           Plan. Options granted to Distributors shall be designated as
           Non-Qualified Options, unless the Distributor is an Employee, in
           which case the Options may be designated as Qualified Options or
           Non-Qualified Options.

           No Qualified Option shall be granted to any Employee (whether a
           key Employee or a Distributor) who, at the time the Option is
           granted, is a 10% Shareholder unless, at the time the Option is
           granted, the Option price is at least 110% of the Fair Market Value
           of the Common Shares as of the date of grant of the Option and the
           Option by its terms is not exercisable after the expiration of five
           years from the date of grant of the Option.

      5.   SHARES.  Options may be granted for the purchase of authorized but
           unissued, or reacquired, Common Shares.  The total number of Common
           Shares with respect to which Options may be granted shall not exceed
           in the aggregate 7,000,000 Common Shares, except as adjusted in
           accordance with the provisions set forth in Section 7(g).  In the
           event any outstanding Option expires or is terminated in whole or in
           part for any reason prior to the Expiration Date, any Common Shares
           as to which the Option was not exercised may again be subject to an
           Option granted under this Plan.  During the period that any Options
           granted under this Plan are outstanding, the Company shall reserve
           and keep available that number of Common Shares sufficient to satisfy
           all outstanding, unexercised Options.

      6.   MAXIMUM EXERCISE.  The aggregate Fair Market Value (determined at the
           time the Option(s) is granted) of the Common Shares with respect to
           which Qualified Options are exercisable for the first time by an
           Employee during any calendar year (under all option plans of the
           Company within the meaning of Code Section 422(d)) shall not exceed
           $100,000 (as may be adjusted from time to time by applicable law)
           (the "Cap").  In the event the Fair Market Value of Common Shares
           subject to a Qualified Option exceeds the Cap, the Option in excess
           of the Cap shall be deemed to be a Non-Qualified Option.  The
           character of all Options as Qualified or Non-Qualified under this
           Section 6 shall be determined with reference to the order in which
           Options were granted.

      7.   TERMS AND CONDITIONS OF OPTIONS.  Subject to the terms and conditions
           set forth in this Plan, the Committee may grant Options to eligible
           individuals upon such terms and



<PAGE>   5


           conditions as the Committee shall determine.  The date on
           which the Committee approves the grant of an Option shall be
           considered the date on which the Option is granted.  Options granted
           pursuant to this Plan shall be evidenced by a Notice of Option in
           such form, consistent with this Plan, as the Committee shall
           prescribe from time to time. The Notice of Option shall state
           whether the Option evidenced thereby is a Qualified Option or a
           Non-Qualified Option. Any provision of this Plan or of a Notice of
           Option with respect to a Qualified Option that is not consistent
           with the requirements of Code Section 422 shall be inoperative and
           the Plan or Notice of Option shall be deemed to incorporate any term
           necessary to conform it to Code Section 422.  The grant and exercise
           of  Options also shall comply with and be subject to the following
           terms and conditions:

          (a) MEDIUM AND TIME OF PAYMENT.

                (i)  In Gene1ral.  An Option may be exercised by delivery of
                     payment for the Common Shares subject to the Option
                     accompanied by a properly executed written notice of
                     exercise in a form prescribed by the Committee. The notice
                     of exercise shall specify the number of Common Shares with
                     respect to which the Option is being exercised.  The
                     Committee may prescribe in the Notice of Option a minimum
                     number of Common Shares with respect to which an Option may
                     be exercised.  Except as provided in Section 7(a)(ii),
                     payment in full of the purchase price of the Common Shares
                     for which an Option is exercised shall be made either (A)
                     in cash or in cash equivalents; (B) if the Optionee can do
                     so without violating Rule 16b-3 or Section 16(b) of the
                     1934 Act, through the tender to the Company of Common
                     Shares or the withholding of Common Shares subject to the
                     Option, which Common Shares shall be valued, for purposes
                     of determining the extent to which the purchase price has
                     been paid, at their Fair Market Value on the date of
                     exercise; or (C) by a combination of the methods prescribed
                     in (A) and (B); provided, however, that the Committee may
                     in its discretion impose and set forth in the Notice of
                     Option such limitations or prohibitions on the use of
                     Common Shares to exercise Options as it deems appropriate.
                     Any attempt to exercise an Option other than as set forth
                     in this Section 7(a) shall be invalid and of no force or
                     effect.

                (ii) Use of Brokers.  The Committee may provide, by inclusion of
                     appropriate language in a Notice of Option, that payment in
                     full of the purchase price need not accompany notice of
                     exercise provided the notice of exercise directs that the
                     certificate or certificates for the Common Shares for which
                     the Option is exercised shall be delivered to a licensed
                     broker acceptable to the Company as the agent for the
                     individual exercising the Option and, at the time such
                     certificate or certificates are delivered, the broker
                     tenders to the Company cash or cash equivalents acceptable
                     to the Company in an amount equal to the purchase price for
                     the Common Shares purchased plus the amount (if any) of
                     federal and other taxes that the Company may, in its sole
                     judgment, determine to be required to be withheld with
                     respect to the exercise of the Option.

                (iii) Issuance of Certificates.  Subject to Section 7(j),
                     promptly after the exercise of an Option and the payment in
                     full of the purchase price for the Common Shares, the
                     individual exercising the Option shall be entitled to the
                     issuance of a certificate or certificates evidencing
                     ownership of the Common Shares purchased.


<PAGE>   6



      (b)  NUMBER OF SHARES.  The Notice of Option shall state the total number
           of Common Shares which may be purchased pursuant to the grant of the
           Option.

      (c)  OPTION PRICE.  The purchase price of each Common Share subject to an
           Option shall be fixed by the Committee at an amount not less than the
           Fair Market Value of a Common Share as of the close of business on
           the date of grant of the Option.  The Notice of Option shall state
           the purchase price of the Common Shares subject to the Option.


      (d)  TERM OF OPTIONS.  Each Option granted under this Plan shall expire
           within the period prescribed in the Notice of Option relating to that
           Option, which shall not be more than five years from the date the
           Option is granted if the Optionee is a 10% Shareholder and not more
           than ten years from the date the Option is granted if the Optionee is
           not a 10% Shareholder.  The Notice of Option shall state the date of
           the grant of the Option.

      (e)  TIME OF EXERCISE.  The Committee may, in its discretion, provide in a
           Notice of Option that an Option granted under this Plan may not be
           exercised in whole or in part until the expiration of such period or
           periods of time, or the attainment of such objectives, as may be
           specified by the Committee; provided, however, that any limitation on
           the exercise of an Option may be rescinded, modified or waived by the
           Committee, in its sole discretion, at any time and from time to time
           after the date of grant of such Option so as to accelerate the time
           in which the Option may be exercised to the extent permitted under
           Code Section 424(h).  Except as specifically restricted by the
           provisions of this Section 7(e) or by the Committee, any Option may
           be exercised in whole or in part at any time and from time to time
           during the period commencing with the date of grant and ending upon
           the expiration or termination of the Option.

      (f)  SEPARATION FROM SERVICE.

                (i)  In General.  Except as otherwise provided herein, in the
                     event an Optionee Separates from Service, all Options
                     outstanding in the hands of the Optionee shall terminate
                     immediately as to any unexercised portion thereof; provided
                     however, that the Committee, in its discretion, subject to
                     the provisions of Section 7(d), may permit an Optionee who
                     has Separated from Service to exercise any unexercised
                     Options at any time within three months after the effective
                     date of the Optionee's Separation from Service with respect
                     to the Common Shares for which such Options could have been
                     exercised (i) on the effective date of the Separation from
                     Service, or (ii) during the three month period following
                     that effective date.  following that effective date.  If an
                     Optionee Separates from Service due to Retirement or
                     permanent and total disability (as defined in Code Section
                     22(e)(3)), the Optionee shall have the right, subject to
                     the provisions of Section 7(d), to exercise the Option with
                     respect to the Common Shares for which it could have been
                     exercised on the effective date of the Separation from
                     Service at any time within three months after a Separation
                     from Service due to Retirement or at any time within twelve
                     months after a Separation from Service due to permanent and
                     total disability.

                (ii) Death.  In the event of the death of an Optionee while the
                     Option remains exercisable under this Section 7(f) or other
                     provisions of this Plan, the Optionee's personal
                     representative shall have the right, subject to the
                     provisions of Section 7(d), to exercise the Option with
                     respect to the Common Shares for which it could have been
                     exercised on the date of death, at any time within twelve
                     months after the date of death.


<PAGE>   7


                (iii)  Determinations.  For purposes of this Plan, whether a
                       termination of employment or service due to permanent and
                       total disability, and whether an authorized leave of
                       absence or absence on military or government service,
                       shall be deemed to constitute Separation from Service
                       shall be determined by the Committee, which determination
                       shall be final, conclusive and binding.

      (g)  RECAPITALIZATION.  The aggregate number of Common Shares as
           to which Options may be granted under this Plan, the number of
           Common Shares covered by each outstanding Option, and the price per
           Common Share with respect to each outstanding Option, all shall be
           proportionately adjusted for any increase or decrease in the number
           of issued Common Shares resulting from a subdivision or
           consolidation of shares or any other capital adjustment, the payment
           of a share dividend or other increase or decrease in the Common
           Shares effected without receipt of consideration by the Company.  In
           the event that there shall be a capital reorganization or
           reclassification of the shares of the Company resulting in a
           substitution of other shares for the Common Shares, each outstanding
           Option shall be deemed to represent the right to acquire the number
           of substitute shares that would have been issued in exchange for the
           Common Shares then remaining under the Option if those Common Shares
           had been then issued and outstanding.

      (h)  CHANGE OF CONTROL, DISSOLUTION AND LIQUIDATION.

                (i)    Change of Control.  For purposes of this Plan, "change of
                       control event" shall be deemed to have occurred if:

                          (1)  The Committee determines in its sole discretion
                               that, by reason of an agreement of merger,
                               consolidation or other reorganization to which
                               the Company has become a party, the Company will
                               not be in control of the surviving or resulting
                               corporation;

                          (2)  The Company shall become a party to an agreement
                               providing for the sale by the Company of all or
                               substantially all of the Company's assets to any
                               Person;

                          (3)  The Committee determines in its sole discretion
                               that any Person has become or is anticipated to
                               become the beneficial owner, directly or
                               indirectly, of securities of the Company
                               representing 50% or more of the total combined
                               voting power of the Company's then outstanding
                               securities, the effect of which (as determined by
                               the Committee in its sole discretion) is the
                               acquisition of control of the Company; or

                          (4)  During any period of two consecutive years,
                               individuals who, at the beginning of such period,
                               constituted the Board of Directors cease, for any
                               reason, to constitute at least a majority
                               thereof, unless the election or nomination of
                               election for each new Director was approved by
                               the vote of at least two-thirds of the Directors
                               in office at the beginning of the period.



<PAGE>   8



                (ii)  Effect of a Change of Control Event. Upon the occurrence
                      of a change of control event, the Company shall provide
                      written notice thereof (the "Change of Control Notice") to
                      the Optionees.  The Company shall have the right, but not
                      the obligation, to terminate all outstanding Options as of
                      the date described in the Change in Control Notice by
                      including a statement to such effect in the Change of
                      Control Notice. Upon delivery of the Change of Control
                      Notice and regardless of whether the Company elects to
                      terminate the outstanding Options, the Optionees shall
                      have the right to immediately exercise all outstanding
                      Options in full notwithstanding the terms and conditions
                      set forth in this Plan or in any Notice of Option.

                (iii) Dissolution and Liquidation.  In the event the Company
                      adopts all necessary resolutions approving a plan to
                      dissolve or liquidate the Company, the Company shall
                      provide written notice thereof (the "Dissolution Notice")
                      to the Optionees.  Upon delivery of the Dissolution
                      Notice, and subject to Section 7(d), the Optionees shall
                      have the right to immediately exercise all outstanding
                      Options notwithstanding the terms and conditions set forth
                      in this Plan or in any Notice of Option.  All unexercised
                      Options outstanding immediately following the time
                      specified for exercise in the Dissolution Notice shall
                      terminate.

      (i)  ASSIGNABILITY.  No Option shall be assignable or transferable, except
           to the extent provided in Section 7(f) in the event of the death of
           an Optionee.  During the lifetime of an Optionee, the Option shall be
           exercisable only by the individual to whom the Option was granted
           (or, in the event of the legal incapacity or incompetency of the
           Optionee, the Optionee's legal guardian or legal representative on
           behalf of the Optionee).

      (j)  ISSUANCE OF SHARES AND COMPLIANCE WITH SECURITIES LAWS.

                (i)   Registration of Shares.   Options shall not be exercisable
                      unless the issuance of the Common Shares subject to the
                      Options is the subject of an effective registration
                      statement under the Securities Act of 1933, as amended, or
                      unless, in the opinion of counsel to the Company, the
                      issuance would be exempt from the registration
                      requirements of the Securities Act of 1933, as amended.

                (ii)  Compliance with Rule 16b-3.  This Plan is intended to
                      qualify for the exemption from the short-swing profits
                      liability imposed by Section 16(b) under the 1934 Act
                      provided by Rule 16b-3.  To the extent any provision of
                      this Plan or action by the Committee does not comply with
                      the requirements of Rule 16b-3, that provision or action
                      shall be deemed inoperative to the extent permitted by law
                      and deemed advisable by the Committee.

      (k)  RIGHTS AS A SHAREHOLDER.  An Optionee shall have no rights as
           a shareholder with respect to Common Shares subject to an Option
           until the date of issuance of a certificate or certificates to the
           Optionee and only after the Common Shares are fully paid.  No
           adjustment will be made for dividends or other rights for which the
           record date is prior to the date a certificate is issued.

      (l)  OTHER PROVISIONS.  A Notice of Option issued pursuant to this
           Plan may contain such other provisions as the Committee shall deem
           advisable, provided that those provisions are not inconsistent with
           the terms of this Plan and Code Section 422.


<PAGE>   9



      8.   TERM OF PLAN.  This Plan shall become effective upon the
           approval by the holders of a majority of the Common Shares
           represented at a duly convened shareholders' meeting; provided,
           however, that this Plan shall become effective only if approved by
           the shareholders prior to December 31, 1998.  Unless terminated
           earlier by the Board of Directors pursuant to Section 9, this Plan
           shall terminate on the Expiration Date.  No Option may be granted
           under this Plan after the Expiration Date.

      9.   AMENDMENT OF THE PLAN.  The Board of Directors may from
           time to time, alter, amend, suspend or terminate this Plan with
           respect to any Common Shares as to which Options have not been
           granted; provided, however, that the Board of Directors may not,
           without further approval by the holders of a majority of the Common
           Shares represented at a duly convened shareholders' meeting:

                          (1)  increase the maximum number of Common Shares as
                               to which Options may be granted under this Plan;

                          (2)  change the class of shares for which Options may
                               be granted under this Plan;

                          (3)  change the designation of the Employees or class
                               of Employees eligible to receive Options under
                               this Plan; or

                          (4)  change the provisions of Section 7(c) concerning
                               the Option price.

      10.  APPLICATION OF FUNDS.  The proceeds received by the Company
           from the sale of Common Shares pursuant to Options granted under
           this Plan will be used for general corporate purposes.

      11.  NO OBLIGATION TO EXERCISE OPTION.  The granting of an Option
           under this Plan shall impose no obligation upon the Optionee to
           exercise any such Option.

      12.  NO OBLIGATION TO CONTINUE EMPLOYMENT OR SERVICE.  Neither the
           adoption of this Plan nor the granting of an Option under this Plan
           shall impose any obligation on the Company to provide any specified
           amount of compensation to, or to continue the employment of or
           independent contractor relationship with, any Person.

      13.  APPLICABILITY OF AMENDMENTS.  Without the express written
           consent of the Company and the Optionee, no amendment, suspension or
           termination of this Plan shall alter, impair or otherwise affect any
           rights or obligations of the Company or an Optionee with respect to
           any Option previously granted to the Optionee.

      14.  WITHHOLDINGS.  The Committee shall have the right to require
           an Optionee to remit to the Company amounts sufficient to satisfy
           any federal, state or local income, employment or other tax
           withholding requirements at such times as the Company deems
           necessary or appropriate for compliance with law.  The Committee may
           provide in an Notice of Option that tax withholding requirements may
           be satisfied by an election of the Optionee to (i) tender to the
           Company of Common Shares, (ii) authorize the withholding of Common
           Shares subject to the Option if the Optionee can do so without
           violating Rule 16b-3 or Section 16(b) of the Securities Exchange Act
           of 1934, as amended, or (iii) any other arrangement satisfactory to
           the Committee with regard to such taxes; provided, however, that the
           Committee may in its discretion impose and set forth in the Notice of
           Option pertaining to an Option such limitations or prohibitions on 
           the use of Common Shares to exercise Options as it deems appropriate.