EXHIBIT 10.17

                           THIRD AMENDED AND RESTATED
                          XOMED SURGICAL PRODUCTS, INC.

                             1996 STOCK OPTION PLAN

                                      * * *

                                    ARTICLE I

                                     PURPOSE

     This Third Amended and Restated 1996 Stock Option Plan (the "Plan") is
intended as an incentive and to encourage stock ownership by officers and
certain other key employees of Xomed Surgical Products, Inc. (the "Company") and
its subsidiaries in order to increase their proprietary interest in the
Company's success and to encourage them to remain in the employ of the Company.

     The word "Company", when used in the Plan with reference to employment,
shall include subsidiaries of the Company. The word "subsidiary", when used in
the Plan, shall mean any subsidiary of the Company within the meaning of Section
424(f) of the Internal Revenue Code of 1986, as amended (the "Code").

     It is intended that certain options granted under this Plan will qualify as
"incentive stock options" under Section 422 of the Code.

                                   ARTICLE II

                                 ADMINISTRATION

     The Plan shall be administered by a Compensation Committee (the
"Committee") appointed by the Board of Directors of the Company (the "Board").
Subject to the provisions of the Plan, the Committee shall have sole authority,
in its absolute discretion: (a) to determine which of the eligible employees of
the Company and its subsidiaries shall be granted options; (b) to authorize the
granting of both incentive stock options and non-qualified options; (c) to
determine the times when options shall be granted and the number of shares to be
optioned; (d) to determine the option price of the shares subject to each
option, which price shall be not less than the minimum specified in ARTICLE V;
(e) to determine the time or times when each option becomes exercisable, the
duration of the exercise period and any other restrictions on the exercise of
options issued hereunder; (f) to accelerate the exercisability of any
outstanding options; (g) to prescribe the form or forms of the option agreements
under the Plan (which forms shall be consistent with the terms of the Plan but
need not be identical); (h) to adopt, amend and rescind such rules and
regulations as, in its opinion, may be advisable

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in the administration of the Plan; and (i) to construe and interpret the Plan,
the rules and regulations and the option agreements under the Plan and to make
all other determinations deemed necessary or advisable for the administration of
the Plan. All decisions, determinations and interpretations of the Committee
shall be final and binding on all optionees.

                                   ARTICLE III

                                      STOCK

     The stock to be optioned under the Plan shall be shares of authorized but
unissued Common Stock of the Company, $.01 par value, or previously issued
shares of Common Stock reacquired by the Company (the "Stock"). Under the Plan,
the total number of shares of Stock which may be purchased pursuant to options
granted hereunder shall not exceed, in the aggregate, 1,078,000 shares, except
as such number of shares shall be adjusted in accordance with the provisions of
ARTICLE X hereof. The maximum number of shares of Stock with respect to which
options may be granted to any single optionee during any calendar year shall not
exceed 60,000, except as such number of shares shall be adjusted in accordance
with the provisions of ARTICLE X.

     The number of shares of Stock available for grant of options under the Plan
shall be decreased by the sum of the number of shares with respect to which
options have been issued and are then outstanding and the number of shares
issued upon exercise of options. In the event that any outstanding option under
the Plan for any reason expires, is terminated, or is cancelled prior to the end
of the period during which options may be granted, the shares of Stock called
for by the unexercised portion of such option may again be subject to an option
under the Plan.

                                   ARTICLE IV

                           ELIGIBILITY OF PARTICIPANTS

     Subject to ARTICLE VII, officers and other key employees of the Company or
of its subsidiaries shall be eligible to receive options under the Plan. In
addition, options which are not incentive stock options may be granted to
directors, consultants, or other key persons who the Committee determines shall
receive options under the Plan.

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<PAGE>

                                    ARTICLE V

                                  OPTION PRICE

     In the case of each incentive stock option granted under the Plan, the
option price shall be not less than the fair market value of the Stock at the
time the incentive stock option was granted. In the case of options other than
incentive stock options, the option price shall not be less than 50% of the fair
market value of the stock at the time the option was granted. The fair market
value shall be deemed for all purposes of the Plan to be the mean between the
highest and lowest sale prices reported as having occurred on any Exchange with
which the Company's Common Stock may be listed and traded on the date the option
is granted, or, if there is no such sale on that date, then on the last
preceding date on which such a sale was reported. If the Company's Common Stock
is not listed on any Exchange but the Common Stock is quoted in the National
Market System of the National Association of Securities Dealers Automated
Quotation System on a last sale basis then the fair market value of the Stock
shall be deemed to be the mean between the high and low price reported on the
date the option is granted, or, if there is no such sale on that date, then on
the last preceding date on which a sale was reported. If the Common Stock is not
quoted in the National Market System of the National Association of Securities
Dealers Automated Quotation System on a last sale basis, then the fair market
value of the Stock shall mean the amount determined by the Board to be the fair
market value based upon a good faith attempt to value the Stock accurately and
computed in accordance with applicable regulations of the Internal Revenue
Service. In no event shall the option price be less than the par value per share
of Stock on the date an option is granted.

                                   ARTICLE VI

                          EXERCISE AND TERMS OF OPTIONS

     The Committee shall determine the dates after which options may be
exercised, in whole or in part. If an option is exercisable in installments,
installments or portions thereof which are exercisable and not exercised shall
remain exercisable.

     Any other provision of the Plan to the contrary notwithstanding and subject
to ARTICLE VII, no option shall be exercised after the date ten years from the
date of grant of such option (the "Termination Date").

     Except as otherwise provided by the Committee at the time an option is
granted or by any amendment to an outstanding option:

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     (i) If prior to the Termination Date, an optionee shall cease to be
employed by the Company or any subsidiary thereof by reason of a disability
within the meaning of Section 105(d)(4) of the Code, the option may remain
exercisable for a period not extending beyond one year after the date of
cessation of employment to the extent it was exercisable at the time of
cessation of employment.

     (ii) In the event of the death of an optionee prior to the Termination Date
and while employed by the Company or a subsidiary thereof or while entitled to
exercise an option pursuant to the preceding paragraph, the optionee's options
may remain exercisable at any time prior to the Termination Date but in no event
later than one year from the date of death, by the person or person to whom the
optionee's rights under the option pass by will or the applicable laws of
descent and distribution to the extent that the optionee was entitled to
exercise it on the date of death.

     (iii) If an optionee voluntarily terminates employment with the Company for
reasons other than death, disability, or retirement on or after the normal
retirement age set forth in the Company's policies (a "Voluntary Termination"),
or if an optionee's employment with the Company is terminated for Cause, as
hereinafter defined, unless otherwise provided by the Committee, all options
previously granted to such optionee which have not been exercised prior to such
termination shall lapse and be cancelled. If at the time of a Voluntary
Termination the Company was entitled to terminate the optionee's employment for
Cause, as hereinafter defined, all shares of Stock received pursuant to options
exercised after the Company was so entitled shall be purchased by the Company
for the exercise price of such shares paid by the optionee. If the Company
terminates an optionee's employment without Cause, as hereinafter defined,
unless otherwise provided by the Committee, all options previously granted to
such optionee which were exercisable immediately prior to such termination shall
continue to be exercisable for period not extending beyond three months after
the date of such termination.

     For purposes of the Plan, the Company shall have "Cause" to terminate an
optionee's employment if the Company has cause to terminate the optionee's
employment under any existing employment agreement between the optionee and the
Company or, in the absence of an employment agreement between the optionee and
the Company, upon (A) the determination by the Board that the optionee has
ceased to perform his duties to the Company (other than as a result of his
incapacity due to physical or mental illness or injury), which failure amounts
to an intentional and extended neglect of his duties to the Company, (B) the
Board's determination that the optionee has engaged or is about to engage in
conduct materially injurious to the Company, or (C) the optionee having been
convicted of a felony.

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<PAGE>

                                   ARTICLE VII

                        SPECIAL PROVISIONS APPLICABLE TO
                          INCENTIVE STOCK OPTIONS ONLY

     The aggregate fair market value (determined as of the time the option is
granted) of the Stock with respect to which any incentive stock options may be
exercisable for the first time by the optionee in any calendar year (under this
Plan or any other stock option plan of the Company or any parent or subsidiary
thereof) shall not exceed $100,000. To the extent that such aggregate fair
market value exceeds $100,000 such options or portions thereof shall be
non-qualified stock options.

     No incentive stock option may be granted to an individual who, at the time
the option is granted, owns directly, or indirectly within the meaning of
Section 424(d) of the Code, stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or of any parent or
subsidiary thereof, unless such option (i) has an option price of at least 110
percent of the fair market value of the Stock on the date of the grant of such
option; and (ii) such option cannot be exercised more than five years after the
date it is granted.

                                  ARTICLE VIII

                               PAYMENT FOR SHARES

     Payment for shares of Stock purchased under an option granted hereunder
shall be made in full upon exercise of the option, by certified or bank
cashier's check payable to the order of the Company, by the surrender or
delivery to the Company of shares of its Common Stock which have been held by
the optionee for at least six months, or by any other means acceptable to the
Company and designated by the Committee. The Stock purchased shall thereupon be
promptly delivered; provided, however, that the Company may, in its discretion,
require that an optionee pay to the Company, at the time of exercise, such
amount as the Company deems necessary to satisfy its obligation to withhold
Federal, state or local income or other taxes incurred by reason of the exercise
or the transfer of shares thereupon.

                                   ARTICLE IX

                      NON-TRANSFERABILITY OF OPTION RIGHTS

     No option shall be transferable except by will or the laws of descent and
distribution. During the lifetime of the optionee, the option shall be
exercisable only by him.

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                                    ARTICLE X

                  ADJUSTMENT FOR RECAPITALIZATION, MERGER, ETC.

     The aggregate number of shares of Stock which may be issued pursuant to
options granted hereunder, the maximum number of shares which may be granted to
any single optionee during any calendar year, the number of shares of Stock
covered by each outstanding option and the price per share thereof in each such
option shall be appropriately adjusted for any increase or decrease in the
number of outstanding shares of stock resulting from a stock split or other
subdivision or consolidation of shares of Stock or for other capital adjustments
or payments of stock dividends or distributions or other increases or decreases
in the outstanding shares of Stock without receipt of consideration by the
Company.

     In the event of any change in the outstanding shares of Stock by reason of
any recapitalization, merger, consolidation, spin-off, combination or exchange
of shares or other corporate change, or any distributions to common shareholders
other than cash dividends, the Committee shall make such substitution or
adjustment, if any, as it deems to be equitable, as to the number or kind of
shares of Stock or other securities issued or reserved for issuance pursuant to
the Plan, and the number or kind of shares of Stock or other securities covered
by outstanding options, and the option price thereof. In instances where another
corporation or other business entity is being acquired by the Company, and the
Company has assumed outstanding employee option grants and/or the obligation to
make future or potential grants under a prior existing plan of the acquired
entity, similar adjustments are permitted at the discretion of the Committee.
The Committee shall notify optionees of any intended sale of all or
substantially all of the Company's assets within a reasonable time prior to such
sale.

     The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined by the Committee in its sole discretion. Any such
adjustment may provide for the elimination of any fractional share which might
otherwise become subject to an option.

                                   ARTICLE XI

                        NO OBLIGATION TO EXERCISE OPTION

     Granting of an option shall impose no obligation on the recipient to
exercise such option.

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                                   ARTICLE XII

                                 USE OF PROCEEDS

     The proceeds received from the sale of Stock pursuant to the Plan shall be
used for general corporate purposes.

                                  ARTICLE XIII

                             RIGHTS AS A STOCKHOLDER

     An optionee or a transferee of an option shall have no rights as a
stockholder with respect to any share covered by his option until he shall have
become the holder of record of such share, and he shall not be entitled to any
dividends or distributions or other rights in respect of such share for which
the record date is prior to the date on which he shall have become the holder of
record thereof.

                                   ARTICLE XIV

                                EMPLOYMENT RIGHTS

     Nothing in the Plan or in any option granted hereunder shall confer on any
optionee any right to continue in the employ of the Company or any of its
subsidiaries, or to interfere in any way with the right of the Company or any of
its subsidiaries to terminate the optionee's employment at any time.

                                   ARTICLE XV

                             COMPLIANCE WITH THE LAW

     The Company is relieved from any liability for the non-issuance or
non-transfer or any delay in issuance or transfer of any shares of Stock subject
to options under the Plan which results from the inability of the Company to
obtain or in any delay in obtaining from any regulatory body having jurisdiction
all requisite authority to issue or transfer shares of Stock of the Company
either upon exercise of the options under the Plan or shares of Stock issued as
a result of such exercise if counsel for the Company deems such authority
necessary for lawful issuance or transfer of any such shares. Appropriate
legends may be placed on the stock certificates evidencing shares issued upon
exercise of options to reflect such transfer restrictions.

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<PAGE>

                                   ARTICLE XVI

                             CANCELLATION OF OPTIONS

     The Committee, in its discretion, may, with the consent of any optionee,
cancel any outstanding option hereunder.

                                  ARTICLE XVII

                             EXPIRATION DATE OF PLAN

     No option shall be granted hereunder after April 15, 2004.

                                  ARTICLE XVIII

                       AMENDMENT OR DISCONTINUANCE OF PLAN

     The Board may, without the consent of the Company's stockholders or
optionees under the Plan, at any time terminate the Plan entirely and at any
time or from time to time amend or modify the Plan, provided that no such action
shall adversely affect options theretofore granted hereunder without the
optionee's consent, and provided further that no such action by the Board,
without approval of the stockholders, may (a) increase the total number of
shares of Stock which may be purchased pursuant to options granted under the
Plan, except as contemplated in ARTICLE X or (b) decrease the minimum option
price.

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<PAGE>

                                                                       EXHIBIT A

                                     FORM OF

                                    INCENTIVE

                             STOCK OPTION AGREEMENT
                                    UNDER THE

                          XOMED SURGICAL PRODUCTS, INC.
                             1996 STOCK OPTION PLAN

     THIS AGREEMENT, made the ___ day of ______, 199_, by and between XOMED
SURGICAL PRODUCTS, INC., a Delaware corporation (the "Company") and ____________
(the "Optionee").

                              W I T N E S S E T H:

     WHEREAS, the Optionee is now employed by the Company in a key capacity, and
the Company desires to have him remain in such employment and to afford him the
opportunity to acquire, or enlarge, his stock ownership in the Company so that
he may have a direct proprietary interest in the Company's success;

     NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:

     1. GRANT OF OPTION. Subject to the terms and conditions set forth herein
and in the Company's 1996 Stock Option Plan (the "Plan"), the Company hereby
grants to the Optionee, during the period commencing on the date of this
Agreement and ending ten years from the date hereof (the "Termination Date"),
the right and option (the "Option") to purchase from the Company, at a price of
$________ per share, up to, but not exceeding in the aggregate, _________ shares
of the Company's Class A Common Stock, par value $.01 per share (the "Stock").
The Option granted hereunder shall be an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").

     2. LIMITATIONS ON EXERCISE OF OPTION. (a) Subject to the terms and
conditions set forth herein, the Optionee may purchase 25% of the shares of
Stock covered by this Option on and after the first anniversary of the date
hereof, and may purchase an additional 25% of the shares of Stock covered by
this Option on and after each of the second, third and fourth anniversaries of
the date hereof.

         (b) Any provision of paragraph 2(a) hereof to the contrary
notwithstanding, but subject to any other terms and conditions set forth herein,
if immediately after any merger, consolidation, sale of the Company's Stock,
sale of all or substantially all of the Company's assets, or other similar event
(a "Sale Event"), the persons or entities who, immediately prior to such Sale
Event, owned 100% of the Company's Stock, no longer continue to own either (i)
at least 50% of the Company's Stock,

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<PAGE>

or (ii) stock of any successor company (including any company purchasing all or
substantially all of the Company's assets) representing at least 50% of the
voting power of such successor company's outstanding stock, the Optionee shall
be entitled to purchase 100% of the shares of Stock covered by this Option.

     3. TERMINATION OF EMPLOYMENT. (a) If, prior to the Termination Date, the
Optionee shall cease to be employed by the Company by reason of a disability
within the meaning of Section 105(d)(4) of the Code, the Option shall remain
exercisable for a period of one year from the date of cessation of employment to
the extent it was exercisable at the time of cessation of employment.

         (b) If prior to the Termination Date, the Optionee shall cease to be
employed by the Company by reason of death or the Optionee shall die while
entitled to exercise the Option pursuant to paragraph 3(a), the executor or
administrator of the estate of the Optionee or the person or persons to whom the
Option shall have been validly transferred by the executor or administrator
pursuant to will or the laws of descent and distribution shall have the right,
within one year from the date of the Optionee's death, to exercise the Option to
the extent that the Option was exercisable at the date of death, subject to any
other limitation contained herein on the exercise of the Option in effect on the
date of exercise.

         (c) If the Optionee voluntarily terminates employment with the Company
for reasons other than death, disability, or retirement on or after the normal
retirement age set forth in the Company's policies (a "Voluntary Termination"),
or if the Optionee's employment with the Company is terminated for Cause, as
hereinafter defined, unless otherwise provided by the Stock Option Committee
(the "Committee"), this Option, to the extent not exercised prior to such
termination, shall lapse and be cancelled. If at the time of a Voluntary
Termination the Company was entitled to terminate the Optionee's employment for
Cause, as hereinafter defined, all shares of Stock received pursuant to an
exercise of this Option after the Company was so entitled shall be purchased by
the Company for the exercise price of such shares paid by the Optionee. If the
Company terminates the Optionee's employment without Cause, as hereinafter
defined, this Option, to the extent exercisable immediately prior to such
termination, shall continue to be exercisable for a period not extending beyond
three months after the date of such termination.

         (d) Any provision of paragraphs 3(a), 3(b) or 3(c) hereof to the
contrary notwithstanding, this Option may not be exercised beyond the
Termination Date.

         (e) For purposes of this Agreement, the Company shall have "Cause" to
terminate the Optionee's employment if the Company has cause to terminate the
Optionee's employment under any existing employment agreement between the
Optionee and the

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<PAGE>

Company or, in the absence of an employment agreement between the Optionee and
the Company, upon (A) the determination by the Company's Board of Directors (the
"Board") that the Optionee has ceased to perform his duties to the Company
(other than as a result of his incapacity due to physical or mental illness or
injury), which failure amounts to an intentional and extended neglect of his
duties to the Company, (B) the Board's determination that the Optionee has
engaged or is about to engage in conduct materially injurious to the Company, or
(C) the Optionee having been convicted of a felony.

         (f) Except as otherwise specifically provided in paragraph 3(e) hereof,
whether employment has been or could have been terminated for the purposes of
this Agreement, and the reasons therefor, shall be determined by the Committee,
whose determination shall be final, binding and conclusive.

         (g) After the expiration of any exercise period described in either of
paragraphs 3(a), 3(b) or 3(c) hereof, this Option shall terminate together with
all of the Optionee's rights hereunder, to the extent not previously exercised.

     4. METHOD OF EXERCISING OPTION. The Optionee may exercise the Option by
delivering to the Company a written notice stating the number of shares that the
Optionee has elected to purchase at that time from the Company and full payment
of the purchase price of the shares then to be purchased. Payment of the
purchase price of the shares may be made (a) by certified or bank cashier's
check payable to the order of the Company or (b) by surrender or delivery to the
Company of shares of its Common Stock which have been held by the Optionee for
at least six months at the time of exercise or (c) by such other means as shall
be designated by the Committee.

     5. ISSUANCE OF SHARES. As promptly as practical after receipt of such
written notification and full payment of such purchase price, the Company shall
issue or transfer to the Optionee the number of shares with respect to which the
Option has been so exercised, and shall deliver to the Optionee a certificate or
certificates therefor, registered in the Optionee's name.

     6. COMPANY; OPTIONEE. (a) The term "Company" as used in this Agreement with
reference to employment shall include subsidiaries of the Company. The term
"subsidiary" as used in this Agreement shall mean any subsidiary of the Company
as defined in Section 424(f) of the Code.

         (b) Whenever the word "Optionee" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the executors, the administrators, or the person or persons to whom
the Option may be transferred by will or by the laws of descent

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and distribution, the word "Optionee" shall be deemed to include such person or
persons.

     7. NON-TRANSFERABILITY. The Option is not transferable by the Optionee
otherwise than by will or the laws of descent and distribution and is
exercisable during the Optionee's lifetime only by him. No assignment or
transfer of the Option, or of the rights represented thereby, whether voluntary
or involuntary, by operation of law or otherwise (except by will or the laws of
descent and distribution), shall vest in the assignee or transferee any interest
or right herein whatsoever, but immediately upon such assignment or transfer the
Option shall terminate and become of no further effect.

     8. RIGHTS AS STOCKHOLDER. The Optionee or a transferee of the Option shall
have no rights as a stockholder with respect to any share covered by the Option
until he shall have become the holder of record of such share, and no adjustment
shall be made for dividends or distributions or other rights in respect of such
share for which the record date is prior to the date upon which he shall become
the holder of record thereof.

     9. RECAPITALIZATIONS, REORGANIZATIONS, ETC. (a) The existence of the Option
shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of stock
or of options, warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks ahead of or affecting the Stock or the
rights thereof or convertible into or exchangeable for Stock, or the dissolution
or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

         (b) The shares with respect to which the Option is granted are shares
of Stock of the Company as presently constituted, but if, and whenever, prior to
the delivery by the Company of all of the shares of the Stock with respect to
which the Option is granted, the Company shall effect a subdivision or
consolidation of shares of the Stock outstanding, without receiving compensation
therefor in money, services or property, the number and price of shares
remaining under the Option shall be appropriately adjusted. Such adjustment
shall be made by the Committee, whose determination as to what adjustment shall
be made, and the extent thereof, shall be final, binding and conclusive. Any
such adjustment may provide for the elimination of any fractional share which
might otherwise become subject to the Option.

         (c) In the event of any change in the outstanding shares of Stock by
reason of any recapitalization, merger, consolidation, spin-off, combination or
exchange of shares or

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<PAGE>

other corporate change, or any distributions to common shareholders other than
cash dividends, the Committee shall make such substitution or adjustment, if
any, as it deems to be equitable, as to the number or kind or shares of Stock or
other securities covered by this Option and the option price thereof. The
Committee shall notify the Optionee of any intended sale of all or substantially
all of the Company's assets within a reasonable time prior to such sale.

         (d) Except as hereinbefore expressly provided, the issue by the Company
of shares of stock of any class, or securities convertible into or exchangeable
for shares of stock of any class, for cash or property, or for labor or
services, either upon direct sale or upon the exercise of options, rights or
warrants to subscribe therefor, or to purchase the same, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to the Option.

     10. COMPLIANCE WITH LAW. Notwithstanding any of the provisions hereof, the
Optionee hereby agrees that he will not exercise the Option, and that the
Company will not be obligated to issue or transfer any shares to the Optionee
hereunder, if the exercise hereof or the issuance or transfer of such shares
shall constitute a violation by the Optionee or the Company of any provisions of
any law or regulation of any governmental authority. Any determination in this
connection by the Committee shall be final, binding and conclusive. The Company
shall in no event be obliged to register any securities pursuant to the
Securities Act of 1933 (as now in effect or as hereafter amended) or to take any
other affirmative action in order to cause the exercise of the Option or the
issuance or transfer of shares pursuant thereto to comply with any law or
regulation of any governmental authority.

     11. NOTICE. Every notice or other communication relating to this Agreement
shall be in writing, and shall be mailed to or delivered to the party for whom
it is intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided; provided that,
unless and until some other address be so designated, all notices or
communications by the Optionee to the Company shall be mailed or delivered to
the Company at its office at 6743 South Point Drive North, Jacksonville, Florida
32216, and all notices or communications by the Company to the Optionee may be
given to the Optionee personally or may be mailed to him at the address shown
below his signature to this Agreement.

     12. DISPOSITION OF STOCK. The Optionee agrees to notify the Company in
writing, within 30 days of any disposition (whether by sale, exchange, gift or
otherwise) of shares of Stock purchased under this Option, within two years from
the date of

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<PAGE>

the granting of the Option or within one year of the transfer of such shares of
Stock to the Optionee.

     13. Notwithstanding anything to the contrary herein, to the degree that the
aggregate fair market value of the Option which becomes exercisable for the
first time in any calendar year (determined as of the time the Option is
granted) of the Stock (when aggregated with stock underlying other incentive
stock options under the Plan and all other stock option plans of the Company or
any parent or subsidiary thereof, which incentive stock options first become
exercisable in the same calendar year) exceeds $100,000, such portion shall not
be treated as an incentive stock option but rather shall be treated as a
non-qualified stock option.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                  XOMED SURGICAL PRODUCTS, INC.

                                  By:__________________________
                                     [Name:]
                                     [Title:]

                                     OPTIONEE

                                  By:__________________________
                                     [Name:]
                                     [Address:]

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<PAGE>

                                                                       EXHIBIT B

                                     FORM OF
                                  NON-QUALIFIED

                             STOCK OPTION AGREEMENT
                                  FOR DIRECTORS

                                    UNDER THE
                          XOMED SURGICAL PRODUCTS, INC.

                             1996 STOCK OPTION PLAN

     THIS AGREEMENT, made this _____ day of _________, 199_, by and between
XOMED SURGICAL PRODUCTS, INC., a Delaware corporation (the "Company") and
____________________ (the "Optionee").

                              W I T N E S S E T H:

     WHEREAS, the Optionee has agreed to serve as a director of the Company, and
the Company, to induce the Optionee to become and remain a director, desires to
afford him the opportunity to acquire, or enlarge, his stock ownership in the
Company so that he may have a direct proprietary interest in the Company's
success;

     NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:

     1. GRANT OF OPTION. Subject to the terms and conditions set forth herein
and in the Company's 1996 Stock Option Plan (the "Plan"), the Company hereby
grants to the Optionee, during the period commencing on the date of this
Agreement and ending ten years from the date hereof (the "Termination Date"),
the right and option (the "Option") to purchase from the Company, at a price of
$____ per share, up to, but not exceeding in the aggregate, _____ shares of the
Company's Common Stock, par value $.01 per share (the "Stock").

     2. LIMITATIONS ON EXERCISE OF OPTION. (a) Subject to the terms and
conditions set forth herein, the Optionee may purchase 25% of the shares of
Stock covered by this Option on and after the first anniversary of the date
hereof, and may purchase an additional 25% of the shares of Stock covered by
this Option on and after each of the second, third and fourth anniversaries of
the date hereof.

         (b) Any provision of paragraph 2(a) hereof to the contrary
notwithstanding, but subject to any other terms and conditions set forth herein,
if immediately after any merger, consolidation, sale of the Company's Stock,
sale of all or substantially all of the Company's assets, or other similar event
(a "Sale Event"), the persons or entities who, immediately prior to such Sale
Event, owned 100% of the Company's Stock,

                                       1

<PAGE>

no longer continue to own either (i) at least 50% of the Company's Stock, or
(ii) stock of any successor company (including any company purchasing all or
substantially all of the Company's assets) representing at least 50% of the
voting power of such successor company's outstanding stock, the Optionee shall
be entitled to purchase 100% of the shares of Stock covered by this Option.

     3. TERMINATION OF AFFILIATION. (a) If prior to the Termination Date, the
Optionee shall cease to be a director of the Company by reason of a disability
within the meaning of Section 105(d)(4) of the Internal Revenue Code of 1986, as
amended (the "Code"), the Option shall remain exercisable for a period of one
year from the date of cessation of his duties as a director of the Company to
the extent it was exercisable at the time of cessation of his duties as a
director of the Company.

         (b) If prior to the Termination Date, the Optionee shall cease to be a
director of the Company by reason of death or the Optionee shall die while
entitled to exercise the Option pursuant to paragraph 3(a), the executor or
administrator of the estate of the Optionee or the person or persons to whom the
Option shall have been validly transferred by the executor or administrator
pursuant to will or the laws of descent and distribution shall have the right,
within one year from the date of the Optionee's death, to exercise the Option to
the extent that the Option was exercisable at the date of death, subject to any
other limitation contained herein on the exercise of the Option in effect on the
date of exercise.

         (c) If the Optionee shall cease to be a director of the Company for any
reason other than death or disability, unless otherwise provided by the Stock
Option Committee (the "Committee"), this Option, to the extent not exercised
prior to such cessation, shall continue to be exercisable for a period not
extending beyond three months after the date of such cessation.

         (d) Any provision of paragraphs 3(a), 3(b) or 3(c) hereof to the
contrary notwithstanding, this Option may not be exercised beyond the
Termination Date.

         (e) After the expiration of any exercise period described in either of
paragraphs 3(a), 3(b) or 3(c) hereof, this Option shall terminate together with
all of the Optionee's rights hereunder, to the extent not previously exercised.

     4. METHOD OF EXERCISING OPTION. (a) The Optionee may exercise the Option by
delivering to the Company a written notice stating the number of shares that the
Optionee has elected to purchase at that time from the Company and full payment
of the purchase price of the shares then to be purchased. Payment of the
purchase price of the shares may be made (a) by certified or bank cashier's
check payable to the order of the Company, (b) by surrender or delivery to the
Company of shares of its Common Stock which have been held by the Optionee for
at least six

                                       2

<PAGE>

months at the time of exercise or (c) by such other means as shall be designated
by the Committee.

         (b) At the time of exercise, the Optionee shall pay to the Company such
amount as the Company deems necessary to satisfy its obligation to withhold
Federal, state or local income or other taxes incurred by reason of the exercise
or the transfer of shares thereupon.

     5. ISSUANCE OF SHARES. As promptly as practical after receipt of such
written notification and full payment of such purchase price and any required
income tax withholding amount, the Company shall issue or transfer to the
Optionee the number of shares with respect to which the Option has been so
exercised, and shall deliver to the Optionee a certificate or certificates
therefor, registered in the Optionee's name.

     6. COMPANY; OPTIONEE. (a) The term "Company" as used in this Agreement with
reference to directorship shall include subsidiaries of the Company. The term
"subsidiary" as used in this Agreement shall mean any subsidiary of the Company
as defined in Section 424(f) of the Code.

         (b) Whenever the word "Optionee" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the executors, the administrators, or the person or persons to whom
the Option may be transferred by will or by the laws of descent and
distribution, the word "Optionee" shall be deemed to include such person or
persons.

     7. NON-TRANSFERABILITY. The Option is not transferable by the Optionee
otherwise than by will or the laws of descent and distribution and is
exercisable during the Optionee's lifetime only by him. No assignment or
transfer of the Option, or of the rights represented thereby, whether voluntary
or involuntary, by operation of law or otherwise (except by will or the laws of
descent and distribution), shall vest in the assignee or transferee any interest
or right herein whatsoever, but immediately upon such assignment or transfer the
Option shall terminate and become of no further effect.

     8. RIGHTS AS STOCKHOLDER. The Optionee or a transferee of the Option shall
have no rights as a stockholder with respect to any share covered by the Option
until he shall have become the holder of record of such share, and no adjustment
shall be made for dividends or distributions or other rights in respect of such
share for which the record date is prior to the date upon which he shall become
the holder or record thereof.

     9. RECAPITALIZATIONS, REORGANIZATIONS, ETC. (a) The existence of the Option
shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other

                                       3

<PAGE>

changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of stock or of options, warrants or
rights to purchase stock or of bonds, debentures, preferred or prior preference
stocks ahead of or affecting the Stock or the rights thereof or convertible into
or exchangeable for Stock, or the dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

         (b) The shares with respect to which the Option is granted are shares
of Stock of the Company as presently constituted, but if, and whenever, prior to
the delivery by the Company of all of the shares of the Stock with respect to
which the Option is granted, the Company shall effect a subdivision or
consolidation of shares of the Stock outstanding, without receiving compensation
therefor in money, services or property, the number and price of shares
remaining under the Option shall be appropriately adjusted. Such adjustment
shall be made by the Committee, whose determination as to what adjustment shall
be made, and the extent thereof, shall be final, binding and conclusive. Any
such adjustment may provide for the elimination of any fractional share which
might otherwise become subject to the Option.

         (c) In the event of any change in the outstanding shares of Stock by
reason of any recapitalization, merger, consolidation, spin-off, combination or
exchange of shares or other corporate change, or any distributions to common
shareholders other than cash dividends, the Committee shall make such
substitution or adjustment, if any, as it deems to be equitable, as to the
number or kind or shares of Stock or other securities covered by this Option and
the option price thereof. The Committee shall notify the Optionee of any
intended sale of all or substantially all of the Company's assets within a
reasonable time prior to such sale.

         (d) Except as hereinbefore expressly provided, the issue by the Company
of shares of stock of any class, or securities convertible into or exchangeable
for shares of stock of any class, for cash or property, or for labor or
services, either upon direct sale or upon the exercise of options, rights or
warrants to subscribe therefore, or to purchase the same, or upon conversion of
shares or obligation of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to the Option.

     10. COMPLIANCE WITH LAW. Notwithstanding any of the provisions hereof, the
Optionee hereby agrees that he will not exercise the Option, and that the
Company will not be obligated to issue or transfer any shares to the Optionee
hereunder, if the exercise hereof or the issuance or transfer of such shares
shall

                                       4

<PAGE>

constitute a violation by the Optionee or the Company of any provisions of any
law or regulation of any governmental authority. Any determination in this
connection by the Committee shall be final, binding and conclusive. The Company
shall in no event be obliged to register any securities pursuant to the
Securities Act of 1933 (as now in effect or as hereafter amended) or to take any
other affirmative action in order to cause the exercise of the Option or the
issuance or transfer of shares pursuant thereto to comply with any law or
regulation of any governmental authority.

     11. NOTICE. Every notice or other communication relating to this Agreement
shall be in writing, and shall be mailed to or delivered to the party for whom
it is intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided; provided that,
unless and until some other address be so designated, all notices or
communications by the Optionee to the Company shall be mailed or delivered to
the Company at its office at 6743 South Point Drive North, Jacksonville, Florida
32216, and all notices or communications by the Company to the Optionee may be
given to the Optionee personally or may be mailed to him at the address shown
below his signature to this Agreement.

                                       5

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.

                                   XOMED SURGICAL PRODUCTS, INC.

                                   By:___________________________
                                      [Name:]
                                      [Title:]

                                   OPTIONEE

                                   By:___________________________
                                      [Name:]
                                      [Address:]

                                        6

<PAGE>

                                                                       EXHIBIT C

                                     FORM OF
                      NON-QUALIFIED STOCK OPTION AGREEMENT

                                    UNDER THE
                          XOMED SURGICAL PRODUCTS, INC.

                             1996 STOCK OPTION PLAN

     THIS AGREEMENT, made the ___ day of ______, 199_, by and between XOMED
SURGICAL PRODUCTS, INC., a Delaware corporation (the "Company") and ____________
(the "Optionee").

                              W I T N E S S E T H:

     WHEREAS, the Optionee is now employed by the Company in a key capacity, and
the Company desires to have him remain in such employment and to afford him the
opportunity to acquire, or enlarge, his stock ownership in the Company so that
he may have a direct proprietary interest in the Company's success;

     NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:

     1. GRANT OF OPTION. Subject to the terms and conditions set forth herein
and in the Company's 1996 Stock Option Plan (the "Plan"), the Company hereby
grants to the Optionee, during the period commencing on the date of this
Agreement and ending ten years from the date hereof (the "Termination Date"),
the right and option (the "Option") to purchase from the Company, at a price of
$________ per share, up to, but not exceeding in the aggregate, _________ shares
of the Company's Class A Common Stock, par value $.01 per share (the "Stock

     2. LIMITATIONS ON EXERCISE OF OPTION. (a) Subject to the terms and
conditions set forth herein, the Optionee may purchase 25% of the shares of
Stock covered by this Option on and after the first anniversary of the date
hereof, and may purchase an additional 25% of the shares of Stock covered by
this Option on and after each of the second, third and fourth anniversaries of
the date hereof.

         (b) Any provision of paragraph 2(a) hereof to the contrary
notwithstanding, but subject to any other terms and conditions set forth herein,
if immediately after any merger, consolidation, sale of the Company's Stock,
sale of all or substantially all of the Company's assets, or other similar event
(a "Sale Event"), the persons or entities who, immediately prior to such Sale
Event, owned 100% of the Company's Stock, no longer continue to own either (i)
at least 50% of the Company's Stock, or (ii) stock of any successor company
(including any company purchasing all or substantially all of the Company's
assets) representing at least 50% of the voting power of such successor

                                       1

<PAGE>

company's outstanding stock, the Optionee shall be entitled to purchase 100% of
the shares of Stock covered by this Option.

     3. TERMINATION OF EMPLOYMENT. (a) If, prior to the Termination Date, the
Optionee shall cease to be employed by the Company by reason of a disability
within the meaning of Section 105(d)(4) of the Code, the Option shall remain
exercisable for a period of one year from the date of cessation of employment to
the extent it was exercisable at the time of cessation of employment.

         (b) If prior to the Termination Date, the Optionee shall cease to be
employed by the Company by reason of death or the Optionee shall die while
entitled to exercise the Option pursuant to paragraph 3(a), the executor or
administrator of the estate of the Optionee or the person or persons to whom the
Option shall have been validly transferred by the executor or administrator
pursuant to will or the laws of descent and distribution shall have the right,
within one year from the date of the Optionee's death, to exercise the Option to
the extent that the Option was exercisable at the date of death, subject to any
other limitation contained herein on the exercise of the Option in effect on the
date of exercise.

         (c) If the Optionee voluntarily terminates employment with the Company
for reasons other than death, disability, or retirement on or after the normal
retirement age set forth in the Company's policies (a "Voluntary Termination"),
or if the Optionee's employment with the Company is terminated for Cause, as
hereinafter defined, unless otherwise provided by the Stock Option Committee
(the "Committee"), this Option, to the extent not exercised prior to such
termination, shall lapse and be cancelled. If at the time of a Voluntary
Termination the Company was entitled to terminate the Optionee's employment for
Cause, as hereinafter defined, all shares of Stock received pursuant to an
exercise of this Option after the Company was so entitled shall be purchased by
the Company for the exercise price of such shares paid by the Optionee. If the
Company terminates the Optionee's employment without Cause, as hereinafter
defined, this Option, to the extent exercisable immediately prior to such
termination, shall continue to be exercisable for a period not extending beyond
three months after the date of such termination.

         (d) Any provision of paragraphs 3(a), 3(b) or 3(c) hereof to the
contrary notwithstanding, this Option may not be exercised beyond the
Termination Date.

         (e) For purposes of this Agreement, the Company shall have "Cause" to
terminate the Optionee's employment if the Company has cause to terminate the
Optionee's employment under any existing employment agreement between the
Optionee and the Company or, in the absence of an employment agreement between
the Optionee and the Company, upon (A) the determination by the Company's Board
of Directors (the "Board") that the Optionee has


                                       2


<PAGE>

ceased to perform his duties to the Company (other than as a result of his
incapacity due to physical or mental illness or injury), which failure amounts
to an intentional and extended neglect of his duties to the Company, (B) the
Board's determination that the Optionee has engaged or is about to engage in
conduct materially injurious to the Company, or (C) the Optionee having been
convicted of a felony.

         (f) Except as otherwise specifically provided in paragraph 3(e) hereof,
whether employment has been or could have been terminated for the purposes of
this Agreement, and the reasons therefor, shall be determined by the Committee,
whose determination shall be final, binding and conclusive.

         (g) After the expiration of any exercise period described in either of
paragraphs 3(a), 3(b) or 3(c) hereof, this Option shall terminate together with
all of the Optionee's rights hereunder, to the extent not previously exercised.

     4. METHOD OF EXERCISING OPTION. The Optionee may exercise the Option by
delivering to the Company a written notice stating the number of shares that the
Optionee has elected to purchase at that time from the Company and full payment
of the purchase price of the shares then to be purchased. Payment of the
purchase price of the shares may be made (a) by certified or bank cashier's
check payable to the order of the Company or (b) by surrender or delivery to the
Company of shares of its Common Stock which have been held by the Optionee for
at least six months at the time of exercise or (c) by such other means as shall
be designated by the Committee.

     5. ISSUANCE OF SHARES. As promptly as practical after receipt of such
written notification and full payment of such purchase price, the Company shall
issue or transfer to the Optionee the number of shares with respect to which the
Option has been so exercised, and shall deliver to the Optionee a certificate or
certificates therefor, registered in the Optionee's name.

     6. COMPANY; OPTIONEE. (a) The term "Company" as used in this Agreement with
reference to employment shall include subsidiaries of the Company. The term
"subsidiary" as used in this Agreement shall mean any subsidiary of the Company
as defined in Section 424(f) of the Internal Revenue Code of 1986, as amended.

         (b) Whenever the word "Optionee" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the executors, the administrators, or the person or persons to whom
the Option may be transferred by will or by the laws of descent and
distribution, the word "Optionee" shall be deemed to include such person or
persons.


                                       3

<PAGE>


     7. NON-TRANSFERABILITY. The Option is not transferable by the Optionee
otherwise than by will or the laws of descent and distribution and is
exercisable during the Optionee's lifetime only by him. No assignment or
transfer of the Option, or of the rights represented thereby, whether voluntary
or involuntary, by operation of law or otherwise (except by will or the laws of
descent and distribution), shall vest in the assignee or transferee any interest
or right herein whatsoever, but immediately upon such assignment or transfer the
Option shall terminate and become of no further effect.

     8. RIGHTS AS STOCKHOLDER. The Optionee or a transferee of the Option shall
have no rights as a stockholder with respect to any share covered by the Option
until he shall have become the holder of record of such share, and no adjustment
shall be made for dividends or distributions or other rights in respect of such
share for which the record date is prior to the date upon which he shall become
the holder of record thereof.

     9. RECAPITALIZATIONS, REORGANIZATIONS, ETC. (a) The existence of the Option
shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of stock
or of options, warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks ahead of or affecting the Stock or the
rights thereof or convertible into or exchangeable for Stock, or the dissolution
or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

         (b) The shares with respect to which the Option is granted are shares
of Stock of the Company as presently constituted, but if, and whenever, prior to
the delivery by the Company of all of the shares of the Stock with respect to
which the Option is granted, the Company shall effect a subdivision or
consolidation of shares of the Stock outstanding, without receiving compensation
therefor in money, services or property, the number and price of shares
remaining under the Option shall be appropriately adjusted. Such adjustment
shall be made by the Committee, whose determination as to what adjustment shall
be made, and the extent thereof, shall be final, binding and conclusive. Any
such adjustment may provide for the elimination of any fractional share which
might otherwise become subject to the Option.

         (c) In the event of any change in the outstanding shares of Stock by
reason of any recapitalization, merger, consolidation, spin-off, combination or
exchange of shares or other corporate change, or any distributions to common
shareholders other than cash dividends, the Committee shall make such
substitution or adjustment, if any, as it deems to be


                                       4

<PAGE>


equitable, as to the number or kind or shares of Stock or other securities
covered by this Option and the option price thereof. The Committee shall notify
the Optionee of any intended sale of all or substantially all of the Company's
assets within a reasonable time prior to such sale.

         (d) Except as hereinbefore expressly provided, the issue by the Company
of shares of stock of any class, or securities convertible into or exchangeable
for shares of stock of any class, for cash or property, or for labor or
services, either upon direct sale or upon the exercise of options, rights or
warrants to subscribe therefor, or to purchase the same, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Stock subject to the Option.

     10. COMPLIANCE WITH LAW. Notwithstanding any of the provisions hereof, the
Optionee hereby agrees that he will not exercise the Option, and that the
Company will not be obligated to issue or transfer any shares to the Optionee
hereunder, if the exercise hereof or the issuance or transfer of such shares
shall constitute a violation by the Optionee or the Company of any provisions of
any law or regulation of any governmental authority. Any determination in this
connection by the Committee shall be final, binding and conclusive. The Company
shall in no event be obliged to register any securities pursuant to the
Securities Act of 1933 (as now in effect or as hereafter amended) or to take any
other affirmative action in order to cause the exercise of the Option or the
issuance or transfer of shares pursuant thereto to comply with any law or
regulation of any governmental authority.

     11. NOTICE. Every notice or other communication relating to this Agreement
shall be in writing, and shall be mailed to or delivered to the party for whom
it is intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided; provided that,
unless and until some other address be so designated, all notices or
communications by the Optionee to the Company shall be mailed or delivered to
the Company at its office at 6743 South Point Drive North, Jacksonville, Florida
32216, and all notices or communications by the Company to the Optionee may be
given to the Optionee personally or may be mailed to him at the address shown
below his signature to this Agreement.


                                       5

<PAGE>


     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                       XOMED SURGICAL PRODUCTS, INC.

                                       By:__________________________
                                          [Name:]
                                          [Title:]

                                       OPTIONEE

                                       By:__________________________
                                          [Name:]
                                          [Address:]