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                                                                   EXHIBIT 10.27


CONFIDENTIAL

                          Employee Retention Agreement
           Resulting from a Change in Control or Division Divestiture


        AGREEMENT made as of December 14, 1998, by and between Smith & Nephew,
Inc. (the "Company") and Kent Bachman (the "Executive").

        WHEREAS, the Company recognizes that the possibility of an occurrence of
a Change in Control or the Divestiture of the BASS Division of the Company can
result in significant distractions of the Company's key management personnel
because of the uncertainties inherent in such a situation; as well as
uncertainty in the business and potentially the employee's position in the
future creates uncertainty for the employee's continued employment and the
employee's position;

        WHEREAS, the Executive possesses certain skills unique to the Company's
business;

        WHEREAS, the Company has determined that it is in the best interest of
the Company to retain the services of the Executive and to ensure his continued
dedication and efforts without undue concern for his personal security; and

        WHEREAS, in order to induce the Executive to remain in the employ of the
Company, particularly in the event of a Change in Control or Division
Divestiture, the Company desires to enter into this Agreement with the Executive
to provide the Executive with certain benefits in the event his employment is
terminated as a result of, or in connection with, a Change in Control or the
Divestment of a Division, and to provide the Executive with certain other
benefits whether or not the Executive's employment is terminated.

        NOW, THEREFORE, it is agreed as follows:

        1.   Term. This Agreement shall commence as of December 31, 1998, and
             shall continue in effect until December 31, 1999, when it shall
             terminate, unless extended by written mutual agreement signed by
             the Company and the Executive; provided, however, that in the event
             that a Change in Control or Division Divestiture occurs on or
             before December 31, 1999, the term of this Agreement shall not
             expire prior to the expiration of twelve (12) months after the
             occurrence of the Change in Control or the Divestiture of the BASS
             Division.

        2.   Definitions:

        2.1  Cause. For purposes of this Agreement, "Cause" shall mean the
             misappropriation of corporate funds or other acts of dishonesty,
             activities materially harmful to the Company's business or
             reputation, willful refusal to perform or substantial disregard of
             Executive's assigned duties, or any violation of any legal
             obligation to the Company.


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        2.2  Change in Control/Division Divestiture. For purposes of this
             Agreement, "Change in Control" of BASS shall be deemed to have
             occurred if as a result of a tender offer, merger consolidation,
             sale of assets, acquisition of shares or contested election, or any
             combination of the foregoing transactions, (i) any person shall
             become the owner, beneficially or of record, of more than 30% of
             the aggregate voting power of the Company, other than a member of
             the Smith & Nephew Group of companies, (ii) substantially all of
             the assets of the Company shall be sold to another corporation;
             provided that the other corporation is not a member of the Smith &
             Nephew Group of companies or (iii) the persons who were directors
             of the Company immediately before the transaction shall cease to
             constitute a majority of the Board of Directors of the Company or
             any successor to the Company.

        2.3  Disability. For purposes of this Agreement, "Disability" shall mean
             a physical or mental condition which impairs the Executive's
             ability to substantially perform his duties under this Agreement
             for a period of one hundred eighty (180) consecutive days as
             determined by a company appointed health care provider.

        2.4  Good Reason. For purposes of this Agreement, "Good Reason" shall
             mean the occurrence after a Change in Control or a Division
             Divestiture of any of the events or conditions described in
             Subsections (1) through (8) hereof:

             (1)  a change in the Executive's title, position or
                  responsibilities (including reporting responsibilities) which
                  represents an adverse change from his present position or
                  responsibilities in effect immediately prior to the Change in
                  Control or the Divestiture of BASS; the assignment to the
                  Executive of any duties or responsibilities which are
                  inconsistent with his present position or responsibilities in
                  effect immediately prior to the Change in Control or
                  Divestiture of BASS; or

             (2)  a material reduction in the Executive's compensation or any
                  failure to pay the Executive any compensation or benefits to
                  which he is entitled within thirty (30) days of the date due;

             (3)  the Company requiring the Executive to be based at any place
                  outside a 50-mile radius from his current location except for
                  reasonably required travel on the Company's business which is
                  not substantially greater than such current travel
                  requirements.

             (4)  the failure by the Company to continue in effect (without a
                  material reduction in benefit level, and/or reward
                  opportunities) any compensation or employee benefit plan in
                  which the Executive is participating, unless a substitute or
                  replacement plan has been implemented which provides
                  substantially identical compensation or benefits to the
                  Executive or unless the compensation and benefit plans are the
                  same as those offered by the company to those in similar
                  executive positions;

             (5)  the insolvency or the filing of a petition for bankruptcy by
                  the Company;


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             (6)  any material breach by the Company of any provision of this
                  Agreement;

             (7)  any purported termination of the Executive's employment for
                  Cause by the Company which does not comply with the terms of
                  Section 2.1; or

             (8)  the failure of the Company to obtain an agreement from any
                  successor or assign of the Company to assume and agree to
                  perform this Agreement, as contemplated in Section 7 hereof.

        3.   Position and Duties. The Executive shall continue to have such
             responsibilities and authority as may be given to him from time to
             time by either the Chief Executive, President of the Company, or
             the Company's Board of Directors. The Executive shall devote
             substantially all his working time and efforts to the business of
             the Company.

        4.   Compensation and Benefits.

             a.   Salary. During the period of the Executive's employment
                  hereunder, the Company shall pay to the Executive his current
                  salary with the same frequency and on the same basis that the
                  Company normally makes salary payments to other Executive
                  personnel. This salary may be increased from time to time in
                  accordance with normal business practices of the Company. If
                  such increases take place, the Company shall not thereafter
                  decrease the Executive's salary without the Executive's
                  consent during the term of this Agreement.

             b.   Benefits. The Executive shall participate in all other
                  compensation and benefit plans which are offered by the
                  Company to employees in similar executive positions, in
                  accordance with the terms of the plans.

             c.   Retention Bonus. Promptly following the Divestiture of the
                  BASS Division or a Change in Control, the Executive shall
                  receive a special retention taxable bonus equal to
                  [salarytrms] base salary for full on-going commitment of the
                  Executive during the divestiture process and if he remains in
                  his position through the completion of the Divestiture or
                  Change in Control as determined by the Company.

                  If the Division is not sold by December 31, 1999, and the
                  Divestiture process has ceased, the Executive will be eligible
                  to receive a taxable Retention Bonus equal to 50% of the
                  Retention Bonus, as outlined in paragraph one of Section 4c.

        5.   Severance and Benefits.

        5.1  If within one year of a Change in Control or a Divestiture of BASS,
             the Executive is terminated by the purchasers for reasons other
             than Cause or if the executive resigns for Good Reason, then the
             Executive will be entitled to one year's base salary plus one
             year's taxable bonus (calculated as maximum normal bonus, excluding
             retention bonus), payable by the purchaser. "Severance Payments."


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        6.   Termination Date. "Termination Date" shall mean in the case of the
             Executive's death, his date of death, and in all other cases, the
             date specified in the Notice of Termination subject to the
             following:

             a.   If the Executive's employment is terminated by the Company for
                  Cause, the date specified in the notice of Termination shall
                  be the date of the action.

             b.   If the Executive's employment is terminated for Good Reason,
                  the date specified in the Notice of Termination shall be at
                  least thirty (30) days, except by mutual agreement.

             c.   If the Executive Voluntarily terminates the employment
                  following the payment of the Retention Bonus and/or Severance
                  Payments without Good Reason, he agrees to provide thirty (30)
                  calendar days notice.

        7.   Successors; Binding Agreement.

             a.   This Agreement shall be binding upon and shall inure to the
                  benefit of the Company, its successors and assigns, and the
                  Company shall require any successor or assign to expressly
                  assume and agree to perform this Agreement in the same manner
                  and to the same extent that the Company would be required to
                  perform it if no such succession or assignment had taken
                  place.

             b.   Neither this Agreement nor any right or interest hereunder
                  shall be assignable or transferable by the Executive, his
                  beneficiaries or legal representatives, except for
                  compensation due the Executive as a result of his death which
                  may pass by will or by the laws of descent and distribution.
                  This Agreement shall inure to the benefit of and be
                  enforceable by the Executive's legal personal representative
                  (executors, administrators, heirs, devisees, and/or legatees).

        8.   Notice. For purposes of this Agreement, notices and other
             communications provided for in the Agreement (including the Notice
             of Termination) shall be in writing and shall be deemed to have
             been duly given when personally delivered or sent by certified
             mail, return receipt requested, addressed to the respective
             addresses last given by each party to the other. All notices and
             communications shall be deemed to have been received on the date of
             personal delivery thereof or on the third business day after the
             mailing thereof, except that notice of change of address shall be
             effective only upon receipt by a designated representative of Smith
             & Nephew, Inc.

        9.   Non-exclusivity of Rights. Nothing in this Agreement shall prevent
             or limit the Executive's continuing or future participation in any
             benefit, bonus, incentive or other plan or program provided by the
             Company and for which the Executive may qualify, nor shall anything
             herein limit or reduce such rights as the Executive may have under
             any other agreements with the Company. Provided, however, that to
             the extent that the Executive receives benefits under this
             Agreement because of a Division Divestiture, he or she is not
             entitled to severance pay under any other severance plan, policy or
             arrangement of the Company. Amounts which are vested benefits or
             which the Executive is


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             otherwise entitled to receive under any plan or program of the
             Company shall be payable in accordance with such plan or program,
             except as explicitly modified by this Agreement.

        10.  Miscellaneous. No provision of this Agreement may be modified,
             waived or discharged unless such waiver, modification or discharge
             is agreed to in writing and signed by the Executive and the
             Company. No waiver by either party hereto at any time of any breach
             by the other party hereto of, or compliance with, any condition or
             provision of this Agreement to be performed by such other party
             shall be deemed a waiver of similar or dissimilar provisions or
             conditions at the same time or at any prior or subsequent time. No
             agreement or representations, oral or otherwise, express or
             implied, with respect to the subject matter hereof have been made
             by either party which are not expressly set forth in this
             Agreement.

        11.  Governing Law. This Agreement shall be governed by and construed
             and enforced in accordance with the laws of the State of California
             without giving effect to the conflicts of law principles thereof.

        12.  Severability. The provisions of this Agreement shall be deemed
             severable and the invalidity or unenforceability of any provision
             shall not effect the validity or enforceability of the other
             provisions hereof.

        13.  Reduction of Payments by the Company. Anything in this Agreement to
             the contrary notwithstanding, in the event it shall be determined
             that any payment or distribution by the Company or its affiliated
             companies to or for the benefit of the Executive (whether paid or
             payable or distributed or distributable pursuant to the terms of
             this Agreement or otherwise, but determined without regard to any
             adjustment required under this Section 13 (in the aggregate, the
             "Total Payments") would be subject to the excise tax imposed by
             Section 4999 of the Internal Revenue Code of 1986, as amended (the
             "Excise Tax"), and if it is determined that (A) the amount
             remaining, after the Total Payments are reduced by an amount equal
             to all applicable federal and state taxes (computed at the highest
             applicable marginal rate), including the Excise Tax, is less than
             (B) the amount remaining, after taking into account all applicable
             federal and state taxes (computed at the highest applicable
             marginal rate), after payment or distribution to or for the benefit
             of the Executive of the maximum amount that may be paid or
             distributed to or for the benefit of the Executive without
             resulting in the imposition of the Excise Tax, then the payments
             due hereunder shall be reduced so that the Total Payments are One
             Dollar ($1) less than such maximum amount.


                                        SMITH & NEPHEW, INC.

                                        By:
                                            ------------------------------------
                                            (Signature)
                                            (Title)

                                            ------------------------------------
                                            (Signature)




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