Document:

EX-10.1

	 	 	 
	 
	 	 
	 
	 	 
	The following table sets forth the
cash bonus paid to Bell’s President and
Chief Executive Officer for 2006:

	 
	 	 
	Name

	 	 Cash Bonus
	 
	 	 
	John A. Fellows

	 	   $112,500exv10w17

 

SEVERANCE AGREEMENT

This severance agreement (this “Agreement”) is made as of the 1st day of January 2007 by and between Integra
LifeSciences Holdings Corporation, a Delaware corporation, and Judith O’Grady (“Executive”).

Background

WHEREAS, this Agreement is intended to specify the financial arrangements that the Company will provide to
Executive upon Executive’s separation from employment with the Company in connection with or after a Change in Control,
as defined.

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 Compensation” shall mean a minimum base salary of $230,000
per year (“Base Salary”), payable in periodic installments in accordance with Company’s
regular payroll practices in effect from time to time, plus the cash portion of the bonus, if
any, that will be payable in the spring of 2007 to Executive pursuant to the Company’s bonus
plan for fiscal year 2006 (the “Bonus”). Executive’s Base Salary shall be subject to annual
reviews, and may increase pursuant to such reviews, in which case the increased Base Salary
shall become the “Base Salary.”

	 	(b)	 	“Board” shall mean the Board of Directors of Company, or any
successor thereto.

	 	(c)	 	“Cause,” as determined by the Board in good faith, shall mean
Executive has —

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

	 	(3)	 	demonstrated her personal dishonesty in connection with her
employment by Company;

	 	(4)	 	engaged in a breach of fiduciary duty in connection with her
employment with the Company;

	 	(5)	 	engaged in willful misconduct that is materially and demonstrably
injurious to the Company or any of its subsidiaries; or

	 	(6)	 	has been convicted or has entered a plea of guilty or
nolo contendere to a felony or to any other crime involving moral
turpitude which conviction or plea is materially and demonstrably injurious to the Company
or any of its subsidiaries.

	 	(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 during any period of at least 24 months 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 or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or

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	 	(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.

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	 	(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 her
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) during the one-year period following a Change in Control, the relocation by the
Company of the Executive’s office to a location more than forty (40) miles from Princeton, New
Jersey, or, where Executive’s office is located other than at the Company’s headquarters in
Plainsboro, New Jersey, to a location more than forty (40) miles from the location of
Executive’s office on the date hereof;

(3) Company fails to obtain the assumption of this Agreement by any successor to Company;
or

(4) during the one-year period following a Change in Control, the Company, without
Executive’s express written consent: (i) reduces Executive’s base salary, bonus opportunity
(if applicable) or the aggregate fringe benefits provided to Executive; or (ii) substantially
alters the Executive’s authority and/or title or otherwise diminishes the nature or status of
Executive’s responsibilities in a manner reasonably construed to constitute a demotion.

	 	(i)	 	“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.

	 	(j)	 	“Termination Date” shall mean the date specified in the
Termination Notice.

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	 	(k)	 	“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 16(i).

2. Term of Agreement. The term of this Agreement shall commence on the date hereof as first written above
and shall terminate on December 31, 2007, provided, that, notwithstanding any decision of the Company not to extend
this Agreement, this Agreement shall continue in effect for a period of 12 months beyond the date on which a Change in
Control occurs if a Change in Control shall have occurred during the term of this Agreement and while Executive is
employed by the Company.

3. Termination of Employment.

(a) Prior to a Change in Control. Executive’s rights upon termination of employment prior to a Change in
Control shall be governed by the Company’s standard employment termination policies and practices applicable to
Executive in effect at the time of termination or, if applicable, any written employment agreement between the Company
and Executive other than this Agreement in effect at the time of termination.

(b) After a Change in Control.

(i) From and after the date of a Change in Control during the term of this Agreement, the Company shall not
terminate Executive from employment with the Company except as provided in this Section 3(b) or as a result of
Executive’s Disability, Retirement or death.

(ii) From and after the date of a Change in Control during the term of this Agreement, the Company shall have the
right to terminate Executive from employment with the Company at any time during the term of this Agreement for Cause,
by written notice to Executive, specifying the particulars of the conduct of Executive forming the basis for such
termination.

(iii) From and after the date of a Change in Control during the term of this Agreement: (x) the Company shall have
the right to terminate Executive’s employment without Cause, at any time; and (y) Executive shall, upon the occurrence
of such a termination by the Company without Cause, or upon the voluntary termination of Executive’s employment by
Executive for Good Reason, be entitled to receive the benefits provided in Section 4 hereof. Executive shall evidence a
voluntary termination for Good Reason by written notice to the Company given within 60 days after the date of the
occurrence of any event that Executive knows or should reasonably have known constitutes Good Reason for voluntary
termination. Such notice need only identify Executive and set forth in reasonable detail the facts and circumstances claimed by Executive to constitute
Good Reason. Any notice give by Executive pursuant to this Section 3 shall be effective five business days after the
date it is given by Executive.

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4. Payments Upon Termination of Employment.

(a) Termination with Salary Continuation . As consideration for the restrictive covenants contained in
Section 5, in the event that within twelve months of a Change in Control (i) Executive terminates her employment for
Good Reason, or (ii) Executive’s employment is terminated by Company for a reason other than Retirement, Disability,
death or Cause, then Company shall:

(i) pay Executive a severance amount equal to 1.99 times Executive’s Base Compensation (determined without regard
to any reduction that would give rise to Good Reason) as of her 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

(ii) maintain and provide to Executive, at no cost to Executive, for a period ending at the earliest of (i) the
end of the twelfth month after the Termination Date and (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 her 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.

(iii) If any payment or benefit to Executive under this Agreement would be considered a “parachute payment” within
the meaning of Section 280G(b)(2) of the Code and, if, after reduction for any applicable federal excise tax imposed by
Section 4999 of the Code (the “Excise Tax”) and federal income tax imposed by the Code, Executive’s net proceeds of the
amounts payable and the benefits provided under this Agreement would be less than the amount of Executive’s net
proceeds resulting from the payment of the Reduced Amount described below, after reduction for federal income taxes,
then the amount payable and the benefits provided under this Agreement shall be limited to the Reduced Amount. The
“Reduced Amount” shall be the largest amount that could be received by Executive under this Agreement such that no
amount paid to Executive under this Agreement and any other agreement, contract or understanding heretofore or
hereafter entered into between Executive and the Company (the “Other Agreements”) and any formal or informal plan or
other arrangement heretofore or hereafter adopted by the Company for the direct or indirect provision of compensation
to Executive (including groups or classes of participants or beneficiaries of which Executive is a member), whether or
not such compensation is deferred, is in cash, or is in the form of a benefit to or for Executive (a “Benefit Plan”)
would be subject to the Excise Tax. In the event the amount payable to Executive shall be limited to the Reduced
Amount, then Executive shall have the right, in Executive’s sole discretion, to designate those payments or benefits
under this Agreement, any Other Agreements, and/or any Benefit Plans, that should be reduced or eliminated so as to avoid having the payment to Executive
under this Agreement be subject to the Excise Tax.

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(iv) Notwithstanding any other provision in this Agreement to the contrary, any payments that would constitute
deferred compensation for purposes of (and subject to) Section 409A of the Code shall be deferred for a period of six
months following Executive’s separation from service with the Company.

(b) Other Termination. In the event Executive’s employment terminates other than as set forth in Section
4(a), Executive’s rights upon termination shall be governed by the Company’s standard employment termination policies
and practices applicable to Executive in effect at the time of termination or, if applicable, any written employment
agreement between the Company and Executive other than this Agreement in effect at the time of termination.

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

5. Restrictive Covenants.

	 	(a)	 	Covenant Not to Compete. During the term of this Agreement and
for a period of one year following the Termination Date of Executive’s employment, Executive
shall not, without the express written consent of the Company, directly or indirectly:
(I) engage, anywhere within the geographical areas in which the Company is conducting business
operations or providing services as of the date of Executive’s termination of employment, in
the tissue engineering business (the use of implantable absorbable materials, with or without
a bioactive component, to attempt to elicit a specific cellular response in order to
regenerate tissue or to impede the growth of tissue or migration of cells) (the “Tissue
Engineering Business”), neurosurgery business (the use of surgical instruments, implants,
monitoring products or disposable products to treat the brain or central nervous system)
(“Neurosurgery Business”), instrument business (general surgical handheld instruments used for
general purposes in surgical procedures) (“Instrument Business”), reconstruction business
(bone fixation devices for foot and ankle reconstruction procedures) (“Reconstruction
Business”) or in any other line of business the revenues of which constituted at least 50% of
the Company’s revenues during the six (6) month period prior to the Termination Date (together
with the Tissue Engineering Business, Neurosurgery Business, Instrument Business and
Reconstruction Business, 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

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	 	 	 	Business 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 her affiliates from owning, as passive investors, in the aggregate
not more than 5% of the outstanding publicly traded stock of any corporation so engaged
and provided, further, however, that nothing set forth in this Section 5(a) shall
prohibit Executive from becoming an employee or agent of, or consultant to, any entity
that is engaged in the Business so long as Executive does not engage in any activities in
the Business in any capacity for said entity.

	 	(b)	 	Confidentiality. Executive acknowledges a duty of
confidentiality owed to Company and shall not, at any time during or after her 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 her while so employed. All computer software,
business cards, telephone lists, customer lists, price lists, contract forms, catalogs,
Company 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 her possession or
under her 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 her at any time during her employment with Company heretofore or hereafter gained by her at any time

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	 	 	 	during her 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 5(c)
shall apply whether such ideas, discoveries, inventions, or improvements were or are
conceived, made or gained by her 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 her duties. Executive shall,
upon request of Company, but at no expense to Executive, at any time during or after her
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 5 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 5 are held to be in
any 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.

	 	(e)	 	Survivability. Executive’s obligations under this Section 5
shall survive termination of this Agreement and/or termination of Executive’s employment
regardless of the manner of termination and shall be binding upon Executive’s heirs,
executors, administrators and legal representatives.

6. Condition to Payment. Executive’s receipt of the compensation benefits set forth herein are expressly
conditioned upon the individual’s execution of a general release satisfactory to the Company.

7. No Duty to Mitigate. Executive shall not be required to mitigate the amount of any payment or benefit
provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit
provided for herein be reduced by any compensation earned by other employment or otherwise.

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8. No Set-off. Following a Change in Control, the Company’s obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have
against the Executive or otherwise arising.

9. Limitation on Obligations of Company. Executive understands that this Agreement does not create an
obligation on the Company or any other person or entity to continue her employment or to exploit any Inventions.
Executive understands and acknowledges that her employment with the Company is for an unspecified duration and
constitutes “at-will” employment and that this employment relationship may be terminated at any time, with or without
cause, either at my or the Company’s option, with or without notice.

10. Executive Duties. Executive shall not terminate employment with the Company without giving 30 days’
prior notice to the Board, and during such 30-day period Executive will assist, as and to the extent reasonably
requested by the Company, in training the successor to Executive’s position with the Company. The provisions of this
Section 10 shall not apply to any termination (voluntary or involuntary) of the employment of Executive pursuant to
Section 4(a) hereof.

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 her rights and duties hereunder shall not be assigned except as
expressly agreed to in writing by Company.

13. Death of Executive. Any amounts due Executive under this Agreement (not including any Base
Compensation 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 her estate.

14. Legal Expenses. In the event of a termination pursuant to Section 4(a) hereof, the Company shall also
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).

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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)	 	ERISA. For purposes of the Executive Retirement Income Security
Act of 1974, this Agreement is intended to be a severance pay Executive welfare benefit plan,
and not an Executive pension plan, and shall be construed and administered with that
intention.

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

	 	(e)	 	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.

	 	(f)	 	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.

	 	(g)	 	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.

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	 	(h)	 	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.

	 	(i)	 	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 and CEO

With a copy to:

The Company’s General Counsel:

To the Executive:

 

Judith O’Grady

51 Sandalwood Drive

Marlboro, NJ 07746

	 	(j)	 	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.

	 	(k)	 	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.

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

	 	 	 
	INTEGRA LIFESCIENCES HOLDINGS CORPORATION

	 	EXECUTIVE
	 	 	 
	By: /s/ Stuart M. Essig

	 	/s/ Judith O’Grady
	Its: President and Chief Executive Officer

	 	Judith O’Grady

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