AMENDMENT 2008-2 TO SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Exhibit 10.7

AMENDMENT 2008-2

      THIS AMENDMENT , dated as of August 6, 2008, between Integra LifeSciences Holdings Corporation, a Delaware corporation (the “ Company ”) and Stuart M. Essig (“ Executive ”).

RECITALS

      WHEREAS , the Company and Executive previously entered into the Second Amended and Restated Employment Agreement, dated as of July 27, 2004, (the “ Employment Agreement ”), that sets forth the terms and conditions of Executive’s employment with the Company, including, but not limited to, severance benefits that will be payable to Executive if he experiences a covered termination and the grant of certain equity-based awards to Executive;

      WHEREAS , as of December 19, 2006, Company and Executive entered into Amendment 2006-1 to the Employment Agreement (“ Amendment 2006-1 ”) to provide certain severance benefits to Executive in the event Executive’s employment is terminated by Company for a covered termination in connection with a Change in Control (as defined in the Employment Agreement);

      WHEREAS , as of March 6, 2008, Company and Executive entered into Amendment 2008-1 to the Employment Agreement (“ Amendment 2008-1 ”) to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations issued thereunder;

      WHEREAS , the Company and Executive desire to amend the Employment Agreement to extend the term of Executive’s employment and to modify the provisions of the Employment Agreement relating to the grant of equity-based awards to Executive; and

      WHEREAS , Section 8.6 of the Employment Agreement provides that the Employment Agreement may be amended pursuant to a written agreement between the Company and Executive.

      NOW, THEREFORE , the Company and Executive hereby agree that, effective as of August 6, 2008, the Employment Agreement, Amendment 2006-1 and Amendment 2008-1 shall be amended as follows:

     1. Section 2.1 of the Employment Agreement is hereby amended and restated in its entirety to read as follows:

     “2.1 Term . The term of Executive’s employment hereunder commenced on July 27, 2004 (the “ Commencement Date ”) and shall continue until December 31, 2011, as further extended or unless sooner terminated in accordance with the other provisions hereof (the “ Term ”). Except as hereinafter provided, on December 31, 2011 and on each subsequent one-year anniversary thereof, the Term shall be automatically extended for one year unless either party shall have given to the other party written notice of termination of this Agreement at least six months prior to such anniversary. If written notice of termination is given as provided above,

Executive’s employment under this Agreement shall terminate on the last day of the then-current Term.”

     2. Section 3.2(b)(i) of the Employment Agreement is hereby amended and restated in its entirety to read as follows:

     “(i) (A) The parties hereby acknowledge and agree that the Company has granted to Executive the 2003 Plan Option, as defined in the Second Amended and Restated Employment Agreement between the Company and Executive, dated as of July 27, 2004, as in effect prior to this Amendment 2008-2, and the annual stock option grants contemplated thereby (together with the 2003 Plan Option, the “ Additional Company Stock Options ”). For purposes of clarification, the term “ Prior Options ,” as used herein, shall not include the Additional Company Stock Options or the Special 2008 Stock Option (as defined below).

          (B) On the first day following August 6, 2008 on which trading in the Common Stock is permitted by the Company’s trading window, the Company shall grant Executive a non-qualified stock option under the Company’s 2003 Equity Incentive Plan (the “ 2003 Plan ”) to purchase 125,000 shares of Common Stock at an exercise price equal to the fair market value of the Common Stock on the grant date (the “ Special 2008 Stock Option ” and, together with the Prior Options and the Additional Company Stock Options, the “ Stock Options ”). The Special 2008 Stock Option shall have a ten-year term and shall be granted on the other terms and conditions set forth in the Stock Option Grant and Agreement attached as Exhibit A hereto (the “ Special 2008 Stock Option Agreement ”). In the event of any inconsistency between the terms of this Agreement and the Special 2008 Stock Option Agreement, the Special 2008 Stock Option Agreement shall govern.”

     3. Section 3.2(b)(ii) of the Employment Agreement is hereby amended and restated in its entirety to read as follows:

     “(ii) The Company hereby represents and warrants to Executive that (A) the 2003 Plan has and will have sufficient shares available to effect the grant and exercise of the Special 2008 Stock Option and the stock options previously granted to Executive pursuant to this Agreement under the 2003 Plan (such options, together with the Special 2008 Stock Option, the “ 2003 Plan Stock Options ”) , and the 2003 Plan has been approved by the Company’s stockholders, (B) the Special 2008 Stock Option and the other 2003 Plan Stock Options have been properly authorized and approved by the Board and/or its Compensation Committee, (C) the issuance of the Company Stock underlying the Special 2008 Stock Option and the other 2003 Plan Stock Options have been or will be registered on Form S-8 and (D) stockholder approval is not required to grant the Special 2008 Stock Option.”

     4. The reference to “Section 3.3” in Section 3.2(b)(iv) of the Employment Agreement is hereby amended to read “Section 3.2(c)(i)(A).”

     5. The section heading of Section 3.2(c) of the Employment Agreement is hereby amended to read “ Restricted Units; Annual Awards .”

     6. Section 3.2(c)(i) of the Employment Agreement, as amended by Amendment 2008-1, is hereby amended and restated in its entirety to read as follows:

     “(i) (A) 2004 Restricted Units. The Company issued to Executive on the Commencement Date a fully-vested equity-based signing award bonus in the form of contract stock for 750,000 shares of the Company’s common stock (the “ 2004 Restricted Units ”) pursuant to the 2003 Plan and the terms and conditions set forth in the Contract Stock/Restricted Units Agreement, dated as of July 27, 2004 (the “ 2004 Restricted Units Agreement ”). The 2004 Restricted Units Agreement has subsequently been amended. In the event of any inconsistency between the terms of this Agreement and the 2004 Restricted Units Agreement, as amended, the 2004 Restricted Units Agreement, as amended, shall govern. The shares underlying the 2004 Restricted Units (the “ 2004 Unit Shares ”) shall be delivered to Executive in accordance with the terms of the 2004 Restricted Units Agreement, as amended. For purposes of clarification, the term “ Prior Restricted Units ,” as used herein, shall not include the 2004 Restricted Units, or the Special 2008 Restricted Units or the Annual Awards (each as defined below).

     (B)  Special 2008 Restricted Units. On August 6, 2008, the Company shall grant to Executive a fully-vested equity-based signing award bonus in the form of contract stock for 375,000 shares of the Company’s common stock (the “ Special 2008 Restricted Units ”) pursuant to the 2003 Plan and the terms and conditions set forth in the Contract Stock/Restricted Units Agreement attached as Exhibit D hereto (the “ Special 2008 Restricted Units Agreement ”). The shares underlying the Special 2008 Restricted Units (the “ Special 2008 Restricted Unit Shares ”) shall be delivered to Executive in accordance with the terms of the Special 2008 Restricted Units Agreement.

     (C)  Annual Award. During the period of the Term following August 6, 2008, provided that Executive is an employee of the Company at the time of grant, the Company shall annually grant to Executive in December of each year (commencing with a grant expected to be made in December 2008) an award (the “ Annual Award ”) in the form of either (i) contract stock for between 75,000 and 100,000 (inclusive) shares of the Company’s common stock (the “ Annual Restricted Units ”) pursuant to the 2003 Plan and the terms and conditions set forth in a Contract Stock/Restricted Units Agreement substantially in the form attached as Exhibit E hereto (the “ Annual Restricted Units Agreement ”), or (ii) performance stock for between 75,000 and 100,000 (inclusive) shares of the Company’s common stock (the “ Annual Performance Stock ”) pursuant to the 2003 Plan and the terms and conditions set forth in a Performance Stock Agreement substantially in the form attached as Exhibit F hereto (the “ Annual Performance Stock Agreement ”). The form of the Annual Award ( i.e., whether the Annual Award is Annual Restricted Units or Annual Performance Stock) will be determined by the Compensation Committee of the Board in its absolute discretion. The shares underlying the Annual Awards (the “ Annual Award Shares ”) shall vest and be delivered to Executive in accordance with the terms of the Annual Restricted Units Agreement and/or the Annual Performance Stock Agreement, as applicable (in any case, the “ Annual Award Agreement ”). For purposes of this Agreement, (a) the Prior Restricted Units, the 2004 Restricted Units, the Special 2008 Restricted Units and the Annual Awards shall be referred to herein as the “ Restricted Units ,” and (b) the 2004 Restricted Units Agreement, the Special 2008 Restricted Units Agreement and the Annual Award Agreements shall be referred to herein as the “ Restricted Units Agreements .”

     In the event of any inconsistency between the terms of this Agreement and any Annual Award Agreement or the Special 2008 Restricted Units Agreement, the Annual Award Agreement and the Special 2008 Restricted Units Agreement, respectively, shall govern.”

     7. The Employment Agreement is hereby amended such that references therein to the following defined terms shall be modified as follows:

     (a) References to “Additional Restricted Units” shall be replaced with references to “2004 Restricted Units”;

     (b) References to “Restricted Units Agreement” shall be replaced with references to “2004 Restricted Units Agreement”; and

     (c) References to “Additional Unit Shares” shall be replaced with references to “2004 Unit Shares.”

     8. Section 3.2(c)(ii) of the Employment Agreement is hereby amended and restated in its entirety to read as follows:

     “(ii) The shares underlying the Prior Restricted Units (the “ Prior Restricted Unit Shares ” and, collectively with the 2004 Unit Shares, the Special 2008 Restricted Unit Shares and the Annual Award Shares, the “ Restricted Unit Shares ”) shall be delivered to Executive on the dates specified in the Initial Employment Agreement or Amended and Restated Employment Agreement and the award agreements that were exhibits thereto, as applicable, if Executive is still employed by the Company on the dates specified in such respective agreements and, except as provided in the following sentence, this Agreement shall not be deemed to modify the Prior Restricted Units or Prior Restricted Unit Shares in any respect. Notwithstanding anything contained herein, Executive’s right to defer delivery of Prior Restricted Unit Shares on six months’ advance notice shall be deemed modified to be 12 months’ advance notice.”

     9. Section 3.2(c)(iii) of the Employment Agreement is hereby amended and restated in its entirety to read as follows:

     “(iii) The Company hereby represents and warrants to Executive that (i) stockholder approval is not required to grant the Special 2008 Restricted Units, or to distribute to Executive the Special 2008 Restricted Unit Shares, (ii) the 2003 Plan has and will have sufficient shares available to effect the distribution of the 2004 Unit Shares and the Special 2008 Restricted Unit Shares, (iii) the 2004 Restricted Units and the Special 2008 Restricted Units have been properly authorized and approved by the Board and/or its Compensation Committee and (iv) the Company will use commercially reasonable best efforts to cause the issuance of the 2004 Unit Shares and the Special 2008 Restricted Unit Shares to be registered on Form S-8.”

     10. The final sentence of Section 4.1 of the Employment Agreement, as amended by Amendment 2008-1, is hereby amended and restated in its entirety to read as follows:

     “All 2004 Unit Shares, Special 2008 Restricted Unit Shares and Annual Award Shares shall be delivered to Executive as provided in his Restricted Units Agreements, respectively.”

     11. In Section 4.2 of the Employment Agreement, as amended by Amendment 2008-1, both references to “December 31, 2009” are hereby amended to read “December 31, 2011.” In addition, the final sentence of Section 4.2 of the Employment Agreement, as amended by Amendment 2008-1, is hereby amended and restated in its entirety to read as follows:

     “All 2004 Unit Shares, Special 2008 Restricted Unit Shares and Annual Award Shares shall be delivered to Executive as provided in his Restricted Units Agreements, respectively.”

     12. In Section 4.3 of the Employment Agreement, as amended by Amendment 2008-1, both references to “December 31, 2009” are hereby amended to read “December 31, 2011.” In addition, the second and third sentences of Section 4.3 of the Employment Agreement, as amended by Amendment 2008-1, are hereby amended and restated in their entirety to read as follows:

     “If Executive’s employment hereunder is terminated for Cause in accordance with this Section 4.3 prior to December 31, 2011, (i) the portion of the Stock Options that is vested on the Date of Termination shall be exercisable until their original respective expiration dates, (ii) the non-vested portions of the Stock Options shall terminate on the Date of Termination and (iii) and the 2004 Unit Shares, Special 2008 Restricted Unit Shares and Annual Award Shares shall be delivered to Executive as provided in his Restricted Units Agreements, respectively. In addition, if the Executive’s employment is terminated for Cause in accordance with this Section 4.3, the Prior Restricted Unit Shares shall be distributed to Executive in accordance with the terms of the Initial Employment Agreement or Amended and Restated Employment Agreement and the award agreements that were exhibits thereto, as applicable.”

     13. Clause (D) of the first full sentence of Section 4.4(a) of the Employment Agreement, as amended by Amendment 2006-1 and Amendment 2008-1, is hereby amended and restated in its entirety to read as follows:

     "(D) all 2004 Unit Shares, Special 2008 Restricted Unit Shares and Annual Award Shares shall be delivered to Executive as provided in his Restricted Units Agreements, respectively.”

     14. The reference to clause “(x)” of the definition of Good Reason in the first paragraph of Section 4.4(b) of the Employment Agreement is hereby amended to refer to clause “(ix)” instead.

     15. The second sentence of Section 4.5 of the Employment Agreement, as amended by Amendment 2006-1, is hereby amended and restated in its entirety to read as follows:

     “In the event that Executive’s employment with the Company terminates upon expiration of the Term because the Company provides Executive with notice of termination pursuant to Section 2.1, then, in addition to the foregoing, each Stock Option outstanding as of such date, other than the Special 2008 Stock Option, shall fully vest (to the extent not already vested) and shall remain exercisable until the expiration date of such Stock Option (e.g., 10 years after the grant date or such lesser time as is specified in the Stock Option grant). The treatment of the Special 2008 Stock Option in the event of a failure to extend this Agreement shall be as set forth in the Special 2008 Stock Option Agreement.”

     16. Section 5.1 of the Employment Agreement, as amended by Amendment 2008-1, is hereby amended in its entirety to read as follows:

     “5.1 Triggering Events . Unless Executive has been terminated for Cause in accordance with Section 4.3 hereof or has voluntarily left his employment with the Company (other than for Good Reason or due to Disability), in each case prior to December 31, 2011, upon the occurrence of a Change in Control, each Stock Option shall vest (to the extent not already vested) and be exercisable through its original expiration date and all 2004 Unit Shares, Special 2008 Restricted Unit Shares and Annual Award Shares shall be distributed to Executive as provided in his Restricted Units Agreements, respectively. In the event that the delivery of the 2004 Unit Shares, Special 2008 Restricted Unit Shares or Annual Award Shares are not made on the Change in Control as provided in the Restricted Units Agreements, respectively, and cash is paid as consideration for the Company’s common stock in the Change in Control, then the Company, or its successor in the Change in Control, shall deposit in an irrevocable rabbi trust with a reputable financial institution acceptable to Executive the cash equivalent of the 2004 Unit Shares, Special 2008 Restricted Unit Shares and Annual Award Shares, and such cash equivalent and any interest or earnings thereon shall be delivered to Executive as set forth in the Restricted Units Agreements, respectively.”

     17. In all respects not modified by this Amendment 2008-2, the Employment Agreement, Amendment 2006-1 and Amendment 2008-1 are hereby ratified and confirmed.

[ Signature page follows ]

      IN WITNESS WHEREOF , Company and Executive agree to the terms of the foregoing Amendment 2008-2, effective as of the date set forth above.

EXHIBIT A

[Stock Option Grant and Agreement]

INTEGRA LIFESCIENCES HOLDINGS CORPORATION
STOCK OPTION GRANT AND AGREEMENT
Pursuant to
2003 EQUITY INCENTIVE PLAN

     STOCK OPTION GRANT AND AGREEMENT made as of the ___ day of ___, 2008 (the “ Grant Date ”), between INTEGRA LIFESCIENCES HOLDINGS CORPORATION, a Delaware corporation (the “ Company ”), and STUART M. ESSIG, an employee of the Company (the “ Employee ”).

     WHEREAS, the Employee and the Company previously entered into that certain Second Amended and Restated Employment Agreement dated as of July 27, 2004, as amended by Amendment 2006-1 to the Second Amended and Restated Employment Agreement and Amendment 2008-1 to the Second Amended and Restated Employment Agreement;

     WHEREAS, as of August 6, 2008, the Company and Executive have entered into an Amendment 2008-2 to the Second Amended and Restated Employment Agreement (such Second Amended and Restated Employment Agreement, as so amended being hereinafter called the “ Employment Agreement ”), pursuant to which Executive will continue to serve as President and Chief Executive Officer of the Company, on the terms and conditions set forth and described therein;

     WHEREAS, pursuant to the Employment Agreement, the Company has agreed to grant to Executive a non-qualified stock option to purchase an aggregate of 125,000 (one hundred twenty-five thousand) shares of common stock of the Company, par value $.01 per share (“ Common Stock ”), on the terms set forth herein; and

     WHEREAS, the grant of the stock option hereunder is being made under the Integra LifeSciences Holdings Corporation 2003 Equity Incentive Plan (the “ 2003 Plan ”), a copy of which is attached hereto and the terms and conditions of which are incorporated herein by reference;

     NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration the legal sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

     1.  Grant of Option . Pursuant to Section 3.2(b)(i)(B) of the Employment Agreement, the Company hereby grants to the Employee a non-qualified stock option (the “ Option ”) to purchase all or any part of an aggregate of 125,000 shares of Common Stock.

     2.  Purchase Price . The purchase price per share of the shares of Common Stock covered by the Option shall be $[FAIR MARKET VALUE ON THE DATE OF GRANT]. It is the

determination of the Company’s Compensation Committee (the “ Committee ”) that on the Grant Date the purchase price per share was not less than the greater of one hundred percent (100%) of the fair market value of the Common Stock, or the par value thereof.

     3.  Term . Unless earlier terminated pursuant to any provision of this Stock Option Grant and Agreement, this Option shall expire on [TENTH ANNIVERSARY OF DATE OF GRANT] (the “ Expiration Date ”). Notwithstanding anything herein to the contrary, this Option shall not be exercisable after the Expiration Date.

     4.  Exercise of Option . The Committee, using its authority and discretion under Sections 3(b) and 7.1 of the 2003 Plan to set the terms of Options granted under the 2003 Plan, has determined that this Option, subject to law and regulation, shall vest and become exercisable in such installments and on such dates, as follows:

     This Option shall vest and become exercisable with respect to 31,250 shares on the first anniversary of the Grant Date. Thereafter, this Option shall vest and become exercisable with respect to 1/36th of the remaining shares on the first business day of each following month. Except as provided in Section 8(i) hereof, this Option, to the extent not theretofore expired or terminated, shall vest and become exercisable in its entirety, and shall remain exercisable until the Expiration Date, (i) upon the occurrence of a “Change in Control” (as defined in the Employment Agreement), or (ii) upon the receipt of a bona fide two-tier tender offer with respect to the outstanding shares of Common Stock. This Option shall be subject to accelerated vesting as set forth in Sections 8(ii) and 8(iii) hereof.

     Notwithstanding anything contained herein, no portion of the Option which has not become vested and exercisable as of the Employee’s termination of employment or in connection with Employee’s termination of employment shall thereafter become vested or exercisable.

     Once the Option becomes exercisable in accordance with the foregoing, it shall remain exercisable, subject to the provisions contained in this Stock Option Grant and Agreement, until the expiration of the term of this Option as set forth in Paragraph 3 or until other termination of the Option as set forth in this Stock Option Grant and Agreement.

     5.  Method of Exercising Option . Subject to the terms and conditions of this Stock Option Grant and Agreement, the Option may be exercised in whole or in part by written notice to the Company, at its principal office, which is currently located at 311 Enterprise Drive, Plainsboro, New Jersey 08536. Such notice shall state the election to exercise the Option, and the number of shares with respect to which it is being exercised, shall be signed by the person or persons so exercising the Option; shall, unless the Company otherwise notifies the Employee, be accompanied by the investment certificate referred to in Section 6; and shall be accompanied by payment of the full Option price of such shares.

     The Option price shall be paid to the Company in: (i) cash; (ii) cash equivalent; (iii) Common Stock of the Company, in accordance with Section 7.1(f)(ii) of the 2003 Plan (as in effect on the date of this Stock Option Grant and Agreement); (iv) any combination of (i)-(iii); or (v) by delivering a properly executed notice of exercise of the Option in accordance with Section 7.1(f)(iii) of the 2003 Plan (as in effect on the date of this Stock Option Grant and Agreement).

Upon receipt of such notice and payment, the Company, as promptly as practicable, shall deliver or cause to be delivered a certificate or certificates representing the shares with respect to which the Option is so exercised. Such certificate(s) shall be registered in the name of the person or persons so exercising the Option (or, if the Option is exercised by the Employee and if the Employee so requests in the notice exercising the Option, shall be registered in the name of the Employee and the Employee’s spouse, jointly, with right of survivorship) and shall be delivered as provided above to or upon the written order of the person or persons exercising the Option. In the event the Option is exercised by any person or persons after the legal disability or death of the Employee, such notice shall be accompanied by appropriate proof of the right of such person or persons to exercise the Option. All shares that are purchased upon the exercise of the Option as provided herein shall be fully paid and not assessable by the Company.

     6.  Shares to be Purchased for Investment . Unless the Company has theretofore notified the Employee that a registration statement covering the shares to be acquired upon the exercise of the Option has become effective under the Securities Act of 1933 and the Company has not thereafter notified the Employee that such registration statement is no longer effective, it shall be a condition to any exercise of this Option that the shares acquired upon such exercise be acquired for investment and not with a view to distribution, and the person effecting such exercise shall submit to the Company a certificate of such investment intent, together with such other evidence supporting the same as the Company may request. Notwithstanding the foregoing, upon the written request of Employee, the Company shall provide the Employee with a shelf registration pursuant to a registration statement subject to the terms set forth in Exhibit B to the Employment Agreement. The Company shall be entitled to delay the transferability of the shares issued upon any such exercise to the extent necessary to avoid a risk of violation of the Securities Act of 1933 (or of any rules or regulations promulgated thereunder) or of any state laws or regulations. Such restrictions may, at the option of the Company, be noted or set forth in full on the share certificates. If any law or regulation requires the Company to take any additional action regarding the Common Stock before the Company issues certificates for the Common Stock subject to this Option or before such Common Stock may be transferred by the Employee, the Company shall use its commercially reasonable best efforts to resolve such problem. The Company may choose an alternative method of delivering the shares.

     7.  Transferability . This Option is not assignable or transferable, in whole or in part, by the Employee other than by will or by the laws of descent and distribution, and during the lifetime of the Employee the Option shall be exercisable only by the Employee or by his/her guardian or legal representative.

     8.  Termination of Employment . If the Employee’s employment with the Company and all Related Corporations, as defined in the 2003 Plan, is terminated for any reason other than death or disability prior to the Expiration Date of this Option as set forth in Paragraph 3, this Option shall vest and become exercisable in the following manner:

          (i) Termination for Cause or Voluntary Termination Without Good Reason . If the Employee is terminated for “Cause” as defined in Section 4.3 of the Employment Agreement, or if the Employee voluntarily leaves his employment with the Company (other than for “Good Reason” as defined in Section 4.4 of the Employment Agreement, or “Disability” as defined in Section 4.2 of the Employment Agreement) prior to the later of (i) December 31, 2011, or (ii) in the event that Employee and the Company enter into (including by way of an automatic

extension) a new, amended or renewed employment agreement on or prior to December 31, 2011, the last day of the term of such new, amended or renewed employment agreement (the “ Extended Expiration Date ”), then the portion of this Option that is vested on the date of termination shall be exercisable until the Expiration Da