INTEGRA LIFESCIENCES HOLDINGS CORP
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>c26177_ex10-2.txt
<TEXT>


                              EMPLOYMENT AGREEMENT

         This employment agreement (this "Agreement") is made as of the 10th day
of September, 2002 by and between Integra LifeSciences Holdings Corporation, a
Delaware Corporation (the "Company") and John B. Henneman, III ("Executive").

                                   Background

         Executive is currently the Chief Administrative Officer of Company.
Company desires to continue to employ Executive, and Executive desires to remain
in the employ of Company, on the terms and conditions contained in this
Agreement. Executive will be substantially involved with Company's operations
and management and will learn trade secrets and other confidential information
relating to Company and its customers; accordingly, the noncompetition covenant
and other restrictive covenants contained in Section 14 of this Agreement
constitute essential elements hereof.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and intended to be legally bound hereby, the parties
hereto agree as follows:

                                      Terms

         1. Definitions. The following words and phrases shall have the meanings
set forth below for the purposes of this Agreement (unless the context clearly
indicates otherwise):

                (a) "Base Salary" shall have the meaning set forth in Section 5.

                (b) "Board" shall mean the Board of Direcetors of Company, or
                    any successor thereto.

                (c) "Cause," as determined by the Board in good faith,
                     shall mean Executive has --

                        (1) failed to perform his stated duties in all material
                            respects, which failure continues for 15 days after
                            his receipt of written notice of the failure;

                        (2) intentionally and materially breached any provision
                            of this Agreement and not cured such breach (if
                            curable) within 15 days of his receipt of written
                            notice of the breach;

                        (3) demonstrated his personal dishonesty in connection
                            with his employment by Company;
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                        (4) engaged in willful misconduct in connection with his
                            employment with the Company;

                        (5) engaged in a breach of fiduciary duty in connection
                            with his employment with the Company; or

                        (6) willfully violated any law, rule or regulation, or
                            final cease-and-desist order (other than traffic
                            violations or similar offenses) or engaged in other
                            serious misconduct of such a nature that his
                            continued employment may reasonably be expected to
                            cause the Company substantial economic or
                            reputational injury.

                (d)  A "Change in Control" of Company shall be deemed to
                           have occurred:

                        (1) if the  "beneficial  ownership"  (as  defined in
                            Rule  13d-3  under the Securities  Exchange  Act
                            of 1934) of  securities  representing  more than
                            fifty percent  (50%) of the combined  voting power
                            of Company  Voting  Securities (as herein  defined)
                            is acquired by any  individual,  entity or group
                            (a  "Person"), other than Company,  any trustee or
                            other fiduciary holding securities under any
                            employee  benefit plan of Company or an affiliate
                            thereof,  or any  corporation
                            owned,  directly or indirectly, by the stockholders
                            of Company in substantially the same  proportions
                            as their ownership of stock of Company (for
                            purposes of this Agreement,  "Company  Voting
                            Securities"  shall mean the then  outstanding
                            voting  securities  of Company  entitled to vote
                            generally in the election of directors); provided,
                            however,  that any acquisition from Company or any
                            acquisition pursuant to a transaction which
                            complies with clauses (i), (ii) and (iii) of
                            paragraph (3) of this  definition  shall not be a
                            Change in Control under this paragraph (1); or

                        (2) if individuals who, as of the date hereof,
                            constitute the Board (the "Incumbent Board") cease
                            for any reason to constitute at least a majority of
                            the Board; provided, however, that any individual
                            becoming a director subsequent to the date hereof
                            whose election, or nomination for election by
                            Company's stockholders, was approved by a vote of
                            at least a majority of the directors then
                            comprising the Incumbent Board shall be considered
                            as though such individual were a member of the
                            Incumbent Board, but excluding, for this purpose,
                            any such individual whose initial assumption of
                            office occurs as a result of an actual or
                            threatened election contest with respect to the
                            election or removal of directors
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                            or other actual or threatened solicitation of
                            proxies or consents by or on behalf of a Person
                            other than the Board; or

                        (3) upon consummation by Company of a reorganization,
                            merger or consolidation or sale or other
                            disposition of all or substantially all of the
                            assets of Company or the acquisition of assets or
                            stock of any entity (a "Business Combination"), in
                            each case, unless immediately following such
                            Business Combination: (i) Company Voting Securities
                            outstanding immediately prior to such Business
                            Combination (or if such Company Voting Securities
                            were converted pursuant to such Business
                            Combination, the shares into which such Company
                            Voting Securities were converted) (x) represent,
                            directly or indirectly,  more than 50% of the
                            combined voting power of the then outstanding
                            voting securities entitled to vote generally in the
                            election of directors of the corporation resulting
                            from such Business Combination (the "Surviving
                            Corporation"), or, if applicable, a corporation
                            which as a result of such transaction owns Company
                            or all or  substantially  all of Company's assets
                            either directly or through one or  more
                            subsidiaries   (the  "Parent   Corporation")  and
                            (y)  are  held  in substantially the same
                            proportions after such Business  Combination as
                            they were immediately  prior to such Business
                            Combination;(ii) no Person (excluding any employee
                            benefit  plan  (or  related  trust)  of  Company
                            or such corporation resulting  from such Business
                            Combination)  beneficially  owns,  directly  or
                            indirectly,  50% or more of the combined  voting
                            power of the then  outstanding voting securities
                            eligible to elect directors of the Parent
                            Corporation (or, if there is no Parent
                            Corporation, the Surviving Corporation) except to
                            the extent that such ownership of Company  existed
                            prior to the Business Combination; and (iii) at
                            least a majority of the members of the board of
                            directors of the Parent Corporation (or, if there
                            is no Parent Corporation, the Surviving Corporation)
                            were members of the Incumbent  Board at the time of
                            the execution of the initial agreement, or the
                            action of the Board, providing for such Business
                            Combination; or
                        (4) upon approval by the stockholders of Company of a
                            complete liquidation or dissolution of Company.

                (e)  "Code" shall mean the Internal Revenue Code of 1986,
                       as amended.

                (f)  "Company" shall mean Integra LifeSciences Holdings
                     Corporation and any corporation, partnership or other
                     entity owned directly or indirectly, in whole or in
                     part, by Integra LifeSciences Holdings Corporation.

                (g)  "Disability" shall mean Executive's inability to
                     perform his duties hereunder by reason of any
                     medically determinable physical or mental impairment
                     which is expected to result in death or which has
                     lasted or is expected to last for a continuous period
                     of not fewer than six months.

                (h)  "Good Reason" shall mean:


                        (1) a material breach of this Agreement by Company
                            which is not cured by Company within 15 days
                            of its receipt of written notice of the breach;

                        (2) the relocation by the Company of the Executive's
                            office location to a location more than thirty (30)
                            miles from Princeton, New Jersey;

                        (3) without Executive's express written consent, the
                            Company reduces Executive's Base Salary or the
                            aggregate fringe benefits provided to Executive
                            (except to the extent permitted by Section 5 or
                            Section 6, respectively) or substantially alters the
                            Executive's authority and/or title as set forth in
                            Section 2 hereof in a manner reasonably construed to
                            constitute a demotion, provided, Executive resigns
                            within 90 days after the change objected to; or

                        (4) without Executive's express written consent,
                            Executive fails at any point during the one-year
                            period following a Change in Control to hold the
                            title and authority (as set forth in Section 2
                            hereof) with the Parent Corporation (or if there is
                            no Parent Corporation, the Surviving Corporation)
                            that Executive held with the Company immediately
                            prior to the Change of Control, provided Executive
                            resigns within one year of the Change in Control;

                        (5) Company fails to obtain the assumption of this
                            Agreement by any successor to Company.

                (i)        "Principal Executive Office" shall mean Company's
                           principal office for executives, presently located at
                           311 Enterprise Drive, Plainsboro, New Jersey 08536.

                (j)         "Retirement" shall mean the termination of
                           Executive's employment with Company in accordance
                           with the retirement policies, including early
                           retirement policies, generally applicable to
                           Company's salaried employees.
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                (k)        "Termination Date" shall mean the date specified in
                           the Termination Notice.

                (l)        "Termination Notice" shall mean a dated notice which:
                           (i) indicates the specific termination provision in
                           this Agreement relied upon (if any); (ii) sets forth
                           in reasonable detail the facts and circumstances
                           claimed to provide a basis for the termination of
                           Executive's employment under such provision; (iii)
                           specifies a Termination Date; and (iv) is given in
                           the manner specified in Section 15(h).

         2. Employment. Company hereby employs Executive as Chief Administrative
Officer, responsible for the business development department, the law
department, the regulatory affairs and quality assurance department, and the
human resources department of the Company, and Executive hereby agrees to accept
such employment and agrees to render services to Company in such capacity (or in
such other capacity in the future as the Board may reasonably deem equivalent to
such position) on the terms and conditions set forth in this Agreement.
Executive's primary place of employment shall be at the Principal Executive
Office and Executive shall report to the Chief Executive Officer.

         3. Term.

                (a)        Term and Renewal of Agreement. Unless earlier
                           terminated by Executive or Company as provided in
                           Section 10 hereof, the term of Executive's employment
                           under this Agreement shall commence on the date of
                           this Agreement and terminate on December 31, 2003.
                           Subject to subsection 3(b), this Agreement shall be
                           deemed automatically, without further action, to
                           extend for an additional year on December 31, 2003
                           and each anniversary thereof.

                (b)        Annual Review. Prior to December 31, 2003 and each
                           anniversary thereof, the Board shall consider
                           extending the term of this Agreement. The term shall
                           continue to extend in the manner set forth in
                           subsection 3(a) unless either the Board does not
                           approve the extension and provides written notice to
                           Executive of such event, or Executive gives written
                           notice to Company of Executive's election not to
                           extend the term. In either case, the written notice
                           shall be given not fewer than 30 days prior to any
                           such renewal date. References herein to the term of
                           this Agreement shall refer both to the initial term
                           and successive terms.

        4. Duties. Executive shall:

                (a)        faithfully and diligently do and perform all such
                           acts and duties, and furnish such services as are
                           assigned to Executive as of the
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                           date this Agreement is signed, and (subject to
                           Section 2) such additional acts, duties and services
                           as the Board may assign in the future; and

                (b)        devote his full professional time, energy, skill and
                           best efforts to the performance of his duties
                           hereunder, in a manner that will faithfully and
                           diligently further the business and interests of
                           Company, and shall not be employed by or participate
                           or engage in or in any manner be a part of the
                           management or operations of any business enterprise
                           other than Company without the prior consent of the
                           Chief Executive Officer or the Board, which consent
                           may be granted or withheld in his or its sole
                           discretion; provided, however, that notwithstanding
                           the foregoing, Executive may serve on civic or
                           charitable boards or committees so long as such
                           service does not materially interfere with
                           Executive's obligations pursuant to this Agreement.

         5. Compensation. Company shall compensate Executive for his services at
a minimum base salary of $270,000 per year ("Base Salary"), payable in periodic
installments in accordance with Company's regular payroll practices in effect
from time to time. Executive's Base Salary shall be subject to annual reviews,
but may not be decreased without Executive's express written consent (unless the
decrease is pursuant to a general compensation reduction applicable to all, or
substantially all, executive officers of Company). Bonus payments may be made as
determined appropriate by the Board in its sole discretion.

         6. Benefit Plans. Executive shall be entitled to participate in and
receive benefits under any employee benefit plan or stock-based plan of Company,
and shall be eligible for any other plans and benefits covering executives of
Company, to the extent commensurate with his then duties and responsibilities
fixed by the Board. Company shall not make any change in such plans or benefits
that would adversely affect Executive's rights thereunder, unless such change
affects all, or substantially all, executive officers of the Company.

         7. Vacation. Executive shall be entitled to paid annual vacation in
accordance with the policies established from time to time by the Board, which
shall in no event be fewer than three weeks per annum.

         8. Business Expenses. Company shall reimburse Executive or otherwise
pay for all reasonable expenses incurred by Executive in furtherance of or in
connection with the business of Company, including, but not limited to,
automobile and traveling expenses and all reasonable entertainment expenses,
subject to such reasonable documentation and other limitations as may be
established by the Company.
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         9. Disability. In the event Executive incurs a Disability, Executive's
obligation to perform services under this Agreement will terminate, and the
Board may terminate this Agreement upon written notice to Executive.

        10. Termination.

                (a)        Termination without Salary Continuation. In the event
                           (i) Executive terminates his employment hereunder
                           other than for Good Reason, or (ii) Executive's
                           employment is terminated by Company due to his
                           Retirement, or death, or for Cause, Executive shall
                           have no right to compensation or other benefits
                           pursuant to this Agreement for any period after his
                           last day of active employment.

                (b)        Termination with Salary Continuation (No Change in
                           Control). Except as provided in subsection 10(c) in
                           the event of a Change in Control, in the event (i)
                           Executive's employment is terminated by Company for a
                           reason other than Retirement, death or Cause, or (ii)
                           Executive terminates his employment for Good Reason,
                           or (iii) Company shall fail to extend this Agreement
                           pursuant to the provisions of Section 3, then Company
                           shall:

                        (1) pay Executive a severance amount equal to
                            Executive's Base Salary (determined without regard
                            to any reduction in violation of Section 5) as of
                            his last day of active employment; the severance
                            amount shall be paid in a single sum on the first
                            business day of the month following the Termination
                            Date; and

                        (2) maintain and provide to Executive, at no cost to
                            Executive, for a period ending at the earliest of
                            (i) the first anniversary of the Termination Date;
                            (ii) the date of Executive's full-time employment
                            by another employer; or (iii) Executive's death,
                            continued participation in all group insurance, life
                            insurance, health and accident, disability, and
                            other employee benefit plans in which Executive
                            would have been entitled to participate had his
                            employment with Company continued throughout such
                            period, provided that such participation is not
                            prohibited by the terms of the plan or by Company
                            for legal reasons.

                (c)        Termination with Salary Continuation (Change in
                           Control). Notwithstanding anything to the contrary
                           set forth in subsection 10(b), in the event within
                           twelve months of a Change in Control: (i) Executive
                           terminates his employment for Good Reason, or (ii)
                           Executive's employment is terminated by Company for a
                           reason other than Retirement, death or Cause, or
                           (iii) Company shall fail
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                           to extend this Agreement pursuant to Section 3, then
                           Company shall:

                       (1) pay Executive a severance amount equal to 2.99 times
                           Executive's Base Salary (determined without regard to
                           any reduction in violation of Section 5) as of his
                           last day of active employment; the severance amount
                           shall be paid in a single sum on the first business
                           day of the month following the Termination Date;

                       (2) maintain and provide to Executive, at no cost to
                           Executive, for a period ending at the earliest of (i)
                           the fifth anniversary of the date of this Agreement;
                           or (ii) Executive's death, continued participation in
                           all group insurance, life insurance, health and
                           accident, disability, and other employee benefit
                           plans in which Executive would have been entitled to
                           participate had his employment with Company continued
                           throughout such period, provided that such
                           participation is not prohibited by the terms of the
                           plan or by Company for legal reasons; and

                       (3) pay to Executive all reasonable legal fees and
                           expenses incurred by Executive as a result of such
                           termination of employment (including all fees and
                           expenses, if any, incurred by Executive in contesting
                           or disputing any such termination or in seeking to
                           obtain to enforce any right or benefit provided to
                           Executive by this Agreement whether by arbitration or
                           otherwise).

                (d)        Termination Notice. Except in the event of
                           Executive's death, a termination under this Agreement
                           shall be effected by means of a Termination Notice.

         11. Withholding. Company shall have the right to withhold from all
payments made pursuant to this Agreement any federal, state, or local taxes and
such other amounts as may be required by law to be withheld from such payments.

         12. Assignability. Company may assign this Agreement and its rights and
obligations hereunder in whole, but not in part, to any entity to which Company
may transfer all or substantially all of its assets, if in any such case said
entity shall expressly in writing assume all obligations of Company hereunder as
fully as if it had been originally made a party hereto. Company may not
otherwise assign this Agreement or its rights and obligations hereunder. This
Agreement is personal to Executive and his rights and duties hereunder shall not
be assigned except as expressly agreed to in writing by Company.
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         13. Death of Executive. Any amounts due Executive under this Agreement
(not including any Base Salary not yet earned by Executive) unpaid as of the
date of Executive's death shall be paid in a single sum as soon as practicable
after Executive's death to Executive's surviving spouse, or if none, to the duly
appointed personal representative of his estate.

         14. Restrictive Covenants.

                (a)      Covenant Not to Compete.  During the term of this
                         Agreement and for a period of one (1) year following
                         the Termination Date, Executive shall not directly or
                         indirectly: (i) engage, anywhere within the
                         geographical areas in which Company is conducting
                         business  operations or providing services as of the
                         date of Executive's termination of employment, in the
                         development,  manufacturing or selling of medical
                         devices for use by  neurosurgeons,  or any other
                         business the revenues of which constituted at least
                         30% of Company's  revenues during the six (6) month
                         period prior to the  Termination  Date (the
                         "Business"); (ii) be or become a stockholder, partner,
                         owner, officer, director or employee or agent of,
                         or a  consultant  to or give  financial  or other
                         assistance  to, any person or entity engaged in the
                         Business; (iii) seek in competition with the business
                         of the Company to procure  orders from or do business
                         with any customer of Company; (iv) solicit or contact
                         with a view to the engagement or employment by any
                         person  or entity of any  person  who is an employee
                         of Company; (v) seek to contract with or engage (in
                         such a way as to adversely  affect or interfere with
                         the  business of Company) any person or entity who has
                         been  contracted  with or engaged to manufacture,
                         assemble, supply or deliver products, goods, materials
                         or services to Company; or (vi) engage in or
                         participate in any effort or act to induce any of the
                         customers, associates, consultants, or employees of
                         Company to take any action which might be
                         disadvantageous to Company; provided, however, that
                         nothing herein shall prohibit Executive and
                         his affiliates  from owning, as passive investors,
                         in the aggregate not more than 5% of the outstanding
                         publicly traded stock of any corporation so engaged.

                (b)      Confidentiality.  Executive acknowledges a duty of
                         confidentiality owed to Company and shall not, at any
                         time during or after his employment by Company, retain
                         in writing, use, divulge, furnish, or make accessible
                         to anyone, without the express authorization of the
                         Board, any trade secret, private or confidential
                         information or knowledge of Company obtained or
                         acquired by him while so employed.  All computer
                         software,  business cards,  telephone lists, customer
                         lists, price lists, contract forms, catalogs, Company
<page>
                         books, records, files and know-how acquired while an
                         employee of Company are acknowledged to be the property
                         of Company and shall not be duplicated, removed from
                         Company's possession or premises or made use of other
                         than in pursuit of Company's business or as may
                         otherwise be required by law or any legal process, or
                         as is necessary in connection with any adversarial
                         proceeding against Company and, upon termination of
                         employment for any reason, Executive shall deliver to
                         Company all copies thereof which are then in his
                         possession or under his control. No information shall
                         be treated as "confidential information" if it is
                         generally available public knowledge at the time of
                         disclosure or use by Executive.

                (c)      Inventions and Improvements. Executive shall promptly
                         communicate to Company all ideas,  discoveries and
                         inventions which are or may be useful to Company or
                         its business.  Executive acknowledges that all such
                         ideas, discoveries, inventions, and improvements which
                         heretofore have been or are hereafter made, conceived,
                         or reduced to practice by him at any time during his
                         employment with Company  heretofore or hereafter
                         gained by him at any time during his employment with
                         Company are the  property of Company,  and  Executive
                         hereby  irrevocably assigns all such ideas,
                         discoveries,  inventions and improvements to Company
                         for its sole use and benefit, without additional
                         compensation.  The provisions of this Section 14(c)
                         shall apply whether such ideas,  discoveries,
                         inventions, or improvements were or are conceived,
                         made or gained by him alone or with others, whether
                         during or after usual working hours,  whether on or
                         off the job, whether applicable to matters directly or
                         indirectly  related to  Company's  business interests
                         (including  potential business  interests),  and
                         whether or not within the specific realm of his duties.
                         Executive shall, upon request of Company, but at no
                         expense to Executive,  at any time  during or after
                         his employment with Company, sign all instruments
                         and documents reasonably requested by Company and
                         otherwise cooperate with Company to protect its right
                         to such ideas, discoveries, inventions, or improvements
                         including applying for, obtaining and enforcing
                         patents and copyrights thereon in such countries as
                         Company  shall determine.

                (d)      Breach of Covenant. Executive expressly acknowledges
                         that damages alone will be an inadequate remedy for
                         any breach or violation of any of the provisions of
                         this Section 14 and that Company, in addition to all
                         other remedies, shall be entitled as a matter of
                         right to equitable relief, including injunctions and
                         specific performance, in any court of competent
                         jurisdiction. If any of the provisions of this
                         Section 14 are held to be in any
<page>
                         respect unenforceable, then they shall be deemed to
                         extend only over the maximum period of time, geographic
                         area, or range of activities as to which they may be
                         enforceable.

        15.  Miscellaneous.

                (a)      Amendment. No provision of this Agreement may be
                         amended unless such amendment is signed by Executive
                         and such officer as may be specifically designated by
                         the Board to sign on Company's behalf.

                (b)      Nature of Obligations. Nothing contained herein shall
                         create or require Company to create a trust of any
                         kind to fund any benefits which may be payable
                         hereunder, and to the extent that Executive acquires
                         a right to receive benefits from Company hereunder,
                         such right shall be no greater than the right of any
                         unsecured general creditor of the Company.

                (c)      Prior Employment. Executive represents and warrants
                         that his acceptance of employment with Company has
                         not breached, and the performance of his duties
                         hereunder will not breach, any duty owed by him to
                         any prior employer or other person.

                (d)      Headings. The Section headings contained in this
                         Agreement are for reference purposes only and shall
                         not affect in any way the meaning or interpretation
                         or this Agreement. In the event of a conflict between
                         a heading and the content of a Section, the content
                         of the Section shall control.

                (e)      Gender and Number. Whenever used in this Agreement, a
                         masculine pronoun is deemed to include the feminine
                         and a neuter pronoun is deemed to include both the
                         masculine and the feminine, unless the context
                         clearly indicates otherwise. The singular form,
                         whenever used herein, shall mean or include the
                         plural form where applicable.

                (f)      Severability. If any provision of this Agreement or
                         the application thereof to any person or circumstance
                         shall be invalid or unenforceable under any
                         applicable law, such event shall not affect or render
                         invalid or unenforceable any other provision of this
                         Agreement and shall not affect the application of any
                         provision to other persons or circumstances.

                (g)      Binding Effect. This Agreement shall be binding upon
                         and inure to the benefit of the parties hereto and
                         their respective successors, permitted assigns,
                         heirs, executors and administrators.
<page>
                (h)      Notice. For purposes of this Agreement, notices and
                         all other communications provided for in this
                         Agreement shall be in writing and shall be deemed to
                         have been duly given if hand-delivered, sent by
                         documented overnight delivery service or by certified
                         or registered mail, return receipt requested, postage
                         prepaid, addressed to the respective addresses set
                         forth below:

                           To the Company:

                                    Integra LifeSciences Holdings Corporation
                                    311 Enterprise Drive
                                    Plainsboro, New Jersey 08536
                                    Attn:  President

                           With a copy to:

                                    The Company's General Counsel

                           To the Executive:

                                    John B. Henneman, III
                                    78 Shady Brook Lane
                                    Princeton, NJ 08540

                (i)        Entire Agreement. This Agreement sets forth the
                           entire understanding of the parties and supersedes
                           all prior agreements, arrangements and
                           communications, whether oral or written, pertaining
                           to the subject matter hereof.

                (j)        Governing Law. The validity, interpretation,
                           construction and performance of this Agreement shall
                           be governed by the laws of the United States where
                           applicable and otherwise by the laws of the State of
                           New Jersey.

                  IN WITNESS WHEREOF, this Agreement has been executed as of the
date first above written.


INTEGRA LIFESCIENCES HOLDINGS                        EXECUTIVE
         CORPORATION


By:_/s/ Stuart M. Essig______________               /s/John B. Henneman, III
Its:  President and Chief Executive Officer


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</DOCUMENT>
