CHANGE IN CONTROL
                             SEVERANCE COMPENSATION
                                       AND
                         RESTRICTIVE COVENANT AGREEMENT

         THIS  SEVERANCE   COMPENSATION  AND  RESTRICTIVE   COVENANT   AGREEMENT
("Agreement") is dated as of October 4, 2000 between MATRIA HEALTHCARE,  INC., a
Delaware corporation (the "Company"), and PARKER H. PETIT (the "Executive").

         WHEREAS,  the  Company,  has  determined  that  it  is  appropriate  to
reinforce and encourage the continued attention and dedication of members of the
Company's management,  including the Executive, to their assigned duties without
distraction in potentially disturbing circumstances arising from the possibility
of a Change in Control (as hereinafter defined) of the Company; and

         WHEREAS,  the severance benefits payable by the Company to Executive as
provided  herein  are  in  part  intended  to  ensure  that  Executive  receives
reasonable   compensation  given  the  specific   circumstances  of  Executive's
employment history with the Company;

         NOW, THEREFORE, in consideration of their respective obligations to one
another set forth in this Agreement,  and other good and valuable consideration,
the receipt,  sufficiency and adequacy of which the parties hereby  acknowledge,
the parties to this  Agreement,  intending to be legally bound,  hereby agree as
follows:

         1. Term. This Agreement shall terminate,  except to the extent that any
obligation of the Company  hereunder  remains  unpaid as of such time,  upon the
earliest  of (i)  October 4, 2003 if a Change in Control of the  Company has not
occurred  between  the  date  hereof  and  October  4,  2003;  (ii)  the Date of
Termination  (as  hereinafter  defined) of the  Executive's  employment with the
Company as a result of the Executive's death,  Disability (as defined in Section
3(b)) or Retirement (as defined in Section  3(c)),  by the Company for Cause (as
defined  in Section  3(d)) or by the  Executive  other than for Good  Reason (as
defined  in Section  3(e));  or (iii)  three  years from the date of a Change in
Control if the Executive's  employment with the Company has not terminated as of
such time.

         2.  Change in  Control.  For  purposes  of this  Agreement,  "Change in
Control"  shall mean changes in the ownership of a  corporation,  changes in the
effective  control of a  corporation,  changes  in  ownership  of a  substantial
portion of a corporation's  assets and a disposition of a substantial portion of
a corporation's assets, all as defined below:

         (a) A change in the ownership of a corporation  occurs on the date that
any one person, or more than one person acting as a group, acquires ownership of
stock of that  corporation  which,  together  with stock held by such  person or
group,  represents  more than 50% of the total fair market value or total voting
power of the stock of such  corporation.  An increase in the percentage of stock
owned  by any one  person,  or  persons  acting  as a group,  as a  result  of a
transaction in which the corporation acquires its stock in exchange for property
will be treated as an acquisition of stock.


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         (b) A change in the effective  control of a  corporation  occurs on the
date that  either:  any one  person,  or more than one person  acting as a group
becomes the beneficial owner of stock of the corporation  possessing 25% or more
of the total  voting  power of the stock of such  corporation;  or a majority of
members of the corporation's  board of directors is replaced during any 24 month
period by directors  whose  appointment  or election is not endorsed by at least
two-thirds (2/3) of the members of the corporation's board of directors who were
directors  prior to the date of the appointment or election of the first of such
new directors.

         (c)  A  change  in  the  ownership  of  a  substantial   portion  of  a
corporation's  assets  occurs on the date that any one person,  or more than one
person acting as a group,  acquires (or has acquired  during the 12 month period
ending on the date of the most  recent  acquisition  by such  person or persons)
assets from the corporation that have a total fair market value equal to or more
than  one-half  (1/2) of the total fair market value of all of the assets of the
corporation immediately prior to such acquisition or acquisitions.  The transfer
of assets by a  corporation  is not treated as a change in the ownership of such
assets if the  assets  are  transferred:  to a  shareholder  of the  corporation
(immediately  before the asset  transfer)  in  exchange  for such  shareholder's
capital stock of the corporation having a fair market value  approximately equal
to the fair market  value of such  assets;  or to an entity,  50% or more of the
total value or voting power of which is owned,  directly or  indirectly,  by the
corporation.

         (d) A disposition of a substantial  portion of a  corporation's  assets
occurs  on the date  that  the  corporation  transfers  assets  by sale,  lease,
exchange, distribution to shareholders,  assignment to creditors, foreclosure or
otherwise,  in a transaction or  transactions  not in the ordinary course of the
corporation's  business (or has made such  transfers  during the 12 month period
ending on the date of the most recent transfer of assets) that have a total fair
market value equal to or more than one-half (1/2) of the total fair market value
of all of the assets of the corporation as of the date immediately  prior to the
first such transfer or transfers. The transfer of assets by a corporation is not
treated as a disposition of a substantial portion of the corporation's assets if
the  assets are  transferred  to an  entity,  50% or more of the total  value or
voting power of which is owned, directly or indirectly, by the corporation.

For purposes of the provision of this  Agreement  defining  "Change in Control,"
(i) references to the Company in this Agreement include the Delaware corporation
known as Matria Healthcare,  Inc. as of the date of execution of this Agreement,
and any corporation  which is the legal successor to such  corporation by virtue
of merger or share exchange;  and (ii) the terms  "person,"  "acting as a group"
and  "ownership"  shall have the  meanings  prescribed  in Sections  3(a)(9) and
13(d)(3) of the  Securities  Exchange  Act of 1934,  as amended,  and Rule 13d-3
promulgated thereunder;  provided, however, that in any merger, consolidation or
share exchange in which less than 50% of the  outstanding  voting  securities of
the Company or its successor  corporation are held by the former shareholders of
the Company,  the shareholders of the other parties to the transaction  shall be
deemed to have acted as a group that acquired  ownership of more than 50% of the
outstanding voting securities of the Company, resulting in a change in ownership
under Section 2(a) above.


<PAGE>


         3.       Termination Following Change in Control.

                  (a) If the  Executive  is still an  employee of the Company at
the time of a  Change  in  Control,  the  Executive  shall  be  entitled  to the
compensation and benefits provided in Section 4 upon the subsequent  termination
of the  Executive's  employment  with the  Company  by the  Executive  or by the
Company  during the term of this  Agreement,  unless  such  termination  is as a
result of (i) the Executive's death; (ii) the Executive's Disability;  (iii) the
Executive's  Retirement;  (iv) the  Executive's  termination  by the Company for
Cause; or (v) the Executive's  decision to terminate  employment  other than for
Good Reason.

                  (b)  Disability.   The  term  "Disability"  as  used  in  this
Agreement shall mean termination of the Executive's employment by the Company as
a result of the  Executive's  incapacity  due to  physical  or  mental  illness,
provided  that the  Executive  shall have been  absent  from his duties with the
Company on a full-time basis for six  consecutive  months and such absence shall
have continued  unabated for 30 days after Notice of Termination as described in
Section 3(f) is thereafter given to the Executive by the Company.

                  (c)  Retirement.   The  term  "Retirement"  as  used  in  this
Agreement shall mean  termination of the  Executive's  employment by the Company
based on the Executive's  having attained age 65 or such later retirement age as
shall have been established  pursuant to a written agreement between the Company
and  the  Executive.  Termination  of  Executive's  employment  at a  time  when
Executive is eligible to receive benefits under the Company's Retirement Benefit
Award or the Company's  Protective  Umbrella for Lifelong  Security of Employees
Program shall not constitute  Retirement  unless  Executive  shall have attained
such age.

                  (d) Cause.  The term  "Cause" for  purposes of this  Agreement
shall mean the Company's termination of the Executive's  employment on the basis
of  criminal or civil  fraud on the part of the  Executive  involving a material
amount of funds of the Company.  Notwithstanding  the  foregoing,  the Executive
shall not be deemed to have been  terminated  for Cause  unless and until  there
shall have been  delivered to the Executive a copy of a resolution  duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the  Company's  Board of  Directors at a meeting of the Board called and held
for such purpose  (after  reasonable  notice to the Executive and an opportunity
for the Executive, together with the Executive's counsel, to be heard before the
Board)  finding that in the good faith  opinion of the Board the  Executive  was
guilty of  conduct  set forth in the first  sentence  of this  Section  3(d) and
specifying  the  particulars  thereof in detail.  For purposes of this Agreement
only, the  preparation and filing of fictitious,  false or misleading  claims in
connection  with any federal,  state or other third party medical  reimbursement
program,  or any other  violation  of any rule or  regulation  in respect of any
federal, state or other third party medical reimbursement program by the Company
or any  subsidiary of the Company  shall not be deemed to  constitute  "criminal
fraud" or "civil fraud".

     (e) Good Reason.  For purposes of this Agreement,  "Good Reason" shall mean
any of the  following  actions  taken by the  Company  without  the  Executive's
express written consent:



<PAGE>


     (i) The  assignment to the Executive by the Company of duties  inconsistent
with, or a material  adverse  alteration of the powers and functions  associated
with, the Executive's  position,  duties,  responsibilities  and status with the
Company prior to a Change in Control,  or an adverse  change in the  Executive's
titles or offices as in effect  prior to a Change in Control,  or any removal of
the  Executive  from or any failure to  re-elect  the  Executive  to any of such
positions,  except in connection  with the  termination  of his  employment  for
Disability,  Retirement or Cause or as a result of the  Executive's  death or by
the Executive other than for Good Reason;

     (ii) A reduction  in the  Executive's  base salary as in effect on the date
hereof or as the same may be increased from time to time during the term of this
Agreement  or the  Company's  failure  to  increase  (within  12  months  of the
Executive's  last increase in base salary) the  Executive's  base salary after a
Change in Control in an amount which at least equals, on a percentage basis, the
average annual percentage  increase in base salary for all corporate officers of
the Company effected in the preceding 36 months;

     (iii) Any failure by the  Company to  continue in effect any benefit  plan,
program or arrangement (including,  without limitation, any profit sharing plan,
group annuity contract,  group life insurance  supplement,  or medical,  dental,
accident  and  disability   plans)  in  which  the  Executive  was  eligible  to
participate  at the time of a Change  in  Control  (hereinafter  referred  to as
"Benefit  Plans"),  or the  taking of any  action  by the  Company  which  would
adversely  affect the  Executive's  participation  in or  materially  reduce the
Executive's benefits under any such Benefit Plan, unless a comparable substitute
Benefit Plan shall be made available to the Executive,  or deprive the Executive
of any  fringe  benefit  enjoyed  by the  Executive  at the time of a Change  in
Control;

     (iv) Any failure by the Company to continue in effect any incentive plan or
arrangement  (including,  without  limitation,  any  bonus or  contingent  bonus
arrangements and credits and the right to receive performance awards and similar
incentive  compensation benefits) in which the Executive is participating at the
time of a Change in Control (or any other plans or  arrangements  providing  him
with  substantially  similar  benefits)  (hereinafter  referred to as "Incentive
Plans") or the taking of any action by the Company which would adversely  affect
the  Executive's  participation  in  any  such  Incentive  Plan  or  reduce  the
Executive's benefits under any such Incentive Plan, expressed as a percentage of
his base  salary,  by more than five  percentage  points in any  fiscal  year as
compared  to the  immediately  preceding  fiscal  year,  or any action to reduce
Executive's  bonuses  under any  Incentive  Plan by more than 20% of the average
annual bonus  previously  paid to Executive with respect to the preceding  three
fiscal years;

     (v)  Any  failure  by the  Company  to  continue  in  effect  any  plan  or
arrangement to receive securities of the Company (including, without limitation,
the Company's 1997 Stock  Incentive  Plan,  Employee Stock Purchase Plan and any
other  plan  or  arrangement  to  receive  and  exercise  stock  options,  stock
appreciation rights,  restricted stock or grants thereof) in which the Executive
is participating or has the right to participate in prior to a Change in Control
(or plans or arrangements  providing him with  substantially  similar  benefits)
(hereinafter  referred to as "Securities  Plans") or the taking of any action by
the Company which would  adversely  affect the Executive's  participation  in or
materially  reduce the  Executive's  benefits  under any such  Securities  Plan,
unless a comparable  substitute  Securities  Plan shall be made available to the
Executive;

     (vi) A  relocation  of  the  Company's  principal  executive  offices  to a
location  more  than  ten  (10)  miles  outside  of  Marietta,  Georgia,  or the
Executive's relocation to any place other than the Company's principal executive
offices,  except for required travel by the Executive on the Company's  business
to an extent  substantially  consistent  with the  Executive's  business  travel
obligations immediately prior to a Change in Control;

     (vii) Any failure by the Company to provide the  Executive  with the number
of paid vacation days (or  compensation  therefor at  termination of employment)
accrued to the Executive through the Date of Termination;

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

     (ix) Any failure by the Company to obtain the  assumption of this Agreement
by any  successor  or assign of the  Company  effected  in  accordance  with the
provisions of Section 7(a) hereof;

     (x) Any purported  termination of the Executive's  employment  which is not
effected  pursuant to a Notice of  Termination  satisfying the  requirements  of
Section 3(f), and for purposes of this Agreement,  no such purported termination
shall be effective; or

     (xi) Any  proposal or request by the Company  after the  Effective  Date to
require  that the  Executive  enter into a  non-competition  agreement  with the
Company  where  the terms of such  agreement  as to its  scope or  duration  are
greater than the terms set forth in Section 5 hereof .

                  (f) Notice of Termination.  Any termination of the Executive's
employment by the Company for a reason  specified in Section 3(b),  3(c) or 3(d)
shall be communicated  to the Executive by a Notice of Termination  prior to the
effective date of the termination.  For purposes of this Agreement, a "Notice of
Termination"  shall mean a written  notice  which shall  indicate  whether  such
termination is for the reason set forth in Section 3(b),  3(c) or 3(d) and which
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for  termination  of the  Executive's  employment  under the  provision so
indicated.  For purposes of this  Agreement,  no termination of the  Executive's
employment  by the  Company  shall  constitute  a  termination  for  Disability,
Retirement  or  Cause  unless  such  termination  is  preceded  by a  Notice  of
Termination.

                  (g) Date of Termination.  "Date of Termination" shall mean (a)
if the Executive's  employment is terminated by the Company for  Disability,  30
days after a Notice of Termination is given to the Executive  (provided that the
Executive shall not have returned to the  performance of the Executive's  duties
on a  full-time  basis  during  such  30-day  period) or (b) if the  Executive's
employment  is  terminated by the Company or the Executive for any other reason,
the date on which the  Executive's  termination is effective;  provided that, if
within 30 days after any Notice of  Termination is given to the Executive by the
Company the Executive  notifies the Company that a dispute exists concerning the
termination,  the Date of  Termination  shall be the date the dispute is finally
determined  whether by mutual  agreement by the parties or upon final  judgment,
order or  decree  of a court of  competent  jurisdiction  (the  time for  appeal
therefrom having expired and no appeal having been perfected).

         4.       Compensation and Benefits upon Termination of Employment.

                  (a) If the Company shall terminate the Executive's  employment
after a Change in Control other than pursuant to Section 3(b),  3(c) or 3(d) and
Section 3(f),  or if the  Executive  shall  terminate  his  employment  for Good
Reason, then the Company shall pay to the Executive,  as severance  compensation
and in  consideration  of the  Executive's  adherence  to the terms of Section 5
hereof, the following:

     (1) On the Date of  Termination,  the Company  shall  become  liable to the
Executive for an amount equal to one and one-half (1 1/2) times the  Executive's
annual base  compensation  and targeted  base bonus on the date of the Change in
Control,  which amount  shall be paid to the  Executive in cash on or before the
fifth day following the Date of Termination.

     (2) For a  period  of 18  months  following  the Date of  Termination,  the
Executive and anyone  entitled to claim under or through the Executive  shall be
entitled to all benefits under the group hospitalization plan, health care plan,
dental  care plan,  life or other  insurance  or death  benefit  plan,  or other
present or future similar group employee  benefit plan or program of the Company
for which key executives are eligible at the date of a Change in Control, to the
same extent as if the  Executive  had continued to be an employee of the Company
during such period and such benefits  shall,  to the extent not fully paid under
any such plan or program, be paid by the Company.

     (3) For a period of 18 months  after the Date of  Termination,  the Company
shall allow the  Executive  to utilize for his  business  and  personal  use any
Company leased automobile  previously furnished to him or an equivalent type and
style of automobile and shall  reimburse the Executive for the  maintenance  and
repair costs of such automobile and extend full insurance  coverage  relating to
such automobile in favor of the Executive,  as additional named insured,  during
such three-year  period.  In addition,  the Executive shall be entitled,  at the
Executive's sole  discretion,  to exercise any option to acquire such automobile
pursuant  to the terms  which may be  provided  in the lease  agreement  for the
automobile in question.

                  (b) The parties  hereto  agree that the  payments  provided in
Section  4(a) hereof are  reasonable  compensation  in light of the  Executive's
services  rendered  to the  Company  and  in  consideration  of the  Executive's
adherence  to the terms of Section 5 hereof.  Neither  party  shall  contest the
payment of such benefits as  constituting an "excess  parachute  payment" within
the meaning of Section  280G(b)(1)  of the Code. In the event that the Executive
becomes  entitled to the  compensation  and  benefits  described in Section 4(a)
hereof (the "Compensation Payments") and the Company has determined,  based upon
the advise of tax counsel  selected by the  Company's  independent  auditors and
acceptable to the Executive, that, as a result of such Compensation Payments and
any other  benefits or payments  required  to be taken into  account  under Code
Section 280G(b)(2) ("Parachute  Payments"),  any of such Parachute Payments must
be reported by the Company as "excess parachute  payments" and are therefore not
deductible  by the Company,  the Company  shall pay to the Executive at the time
specified in Section 4(a) above an additional  amount (the  "Gross-Up  Payment")
such that the net amount  retained by the Executive,  after  deduction of any of
the tax imposed on the  Executive by Section 4999 of the Code (the "Excise Tax")
and any  Federal,  state and local  income tax and Excise Tax upon the  Gross-Up
Payment,  shall be  equal  to the  Parachute  Payments  determined  prior to the
application  of this  paragraph.  The  value  of any  non-cash  benefits  or any
deferred  payment or benefit shall be  determined  by the Company's  independent
auditors.  For purposes of determining the amount of the Gross-Up  Payment,  the
Executive  shall be deemed to pay Federal  income taxes at the highest  marginal
rate of Federal  income  taxation  in the  calendar  year in which the  Gross-Up
Payment is to be made and state and local income  taxes at the highest  marginal
rates of taxation in the state and locality of the Executive's  residence on the
Date of Termination,  net of the maximum reduction in Federal income taxes which
could be obtained  from  deduction of such state and local  taxes.  In the event
that the Excise Tax payable by the  Executive is  subsequently  determined to be
less than the  amount,  if any,  taken  into  account  hereunder  at the time of
termination  of the  Executive's  employment,  the Executive  shall repay to the
Company at the time that the amount of such  reduction  in Excise Tax is finally
determined the portion of the Gross-Up  Payment  attributable  to such reduction
plus  interest  on the  amount of such  repayment  at the rate  provided  for in
Section  1274(b)(2)(B) of the Code ("Repayment  Amount").  In the event that the
Excise Tax payable by the Executive is determined to exceed the amount,  if any,
taken into account  hereunder at the time of the  termination of the Executive's
employment  (including by reason of any payment the existence or amount of which
cannot be  determined  at the time of the Gross-Up  Payment),  the Company shall
make an additional Gross-Up Payment in respect of such excess (plus any interest
and penalty payable with respect to such excess)  immediately  prior to the time
that the amount of such excess is required to be paid by Executive  ("Additional
Gross-up"),  such that the net amount retained by the Executive, after deduction
of any Excise Tax on the  Parachute  Payments and any  Federal,  state and local
income tax and Excise Tax upon the Additional  Gross-Up Payment,  shall be equal
to the Parachute Payments determined prior to the application of this paragraph.
The obligation to pay any Repayment  Amount or Additional  Gross-up shall remain
in effect under this  Agreement for the entire period during which the Executive
remains  liable for the  Excise  Tax,  including  the  period  during  which any
applicable statute of limitation remains open.

                  (c) The  payments  provided in Section  4(a) above shall be in
lieu of any other severance  compensation  otherwise  payable to Executive under
the  Company's  established  severance  compensation  policies  and,  unless the
Executive elects, that certain Severance  Compensation and Restrictive  Covenant
Agreement of even date between the Executive and the Company; provided, however,
that nothing in this Agreement shall affect or impair  Executive's vested rights
under any other employee benefit plan or policy of the Company.

                  (d) Unless the Company  determines that any Parachute Payments
made  hereunder  must be reported as "excess  parachute  payments" in accordance
with the third  sentence  of Section  4(b) above,  neither  party shall file any
return  taking the position  that the payment of such  benefits  constitutes  an
"excess parachute payment" within the meaning of Section 280G(b)(1) of the Code.
If the Internal Revenue Service proposes an assessment of Excise Tax against the
Executive  in excess of the  amount,  if any,  taken  into  account  at the time
specified in Section 4(a),  then, if the Company  notifies  Executive in writing
that the Company  elects to contest such  assessment at its expense,  unless the
Executive waives the right to an Additional Gross-Up Payment,  the Executive (i)
shall in good faith  cooperate  with the  Company in  contesting  such  proposed
assessment;  and (ii) such Executive  shall not settle such contest  without the
written  consent of the Company.  Any such contest  shall be  controlled  by the
Company, provided, however, that the Executive may participate in such contest.

         5.       Protective Covenants.


                  (a)      Definitions.


                  This   Subsection   sets  forth  the   definition  of  certain
capitalized terms used in Subsections (a) through (f) of this Section 4.

     (i)  "Competing  Business"  shall mean a business  (other than the Company)
that, directly or through a controlled  subsidiary or through an affiliate,  (a)
develops,   markets  and/or  sells  computerized  patient  record  software  for
obstetricians  and/or  gynecologists,  diabetes  supplies,  products for uterine
contraction monitoring in the home and/or products that would be used in lieu of
or in  competition  with uterine  contraction  monitoring  products  ("Competing
Products"),  and/or (b)  provides  obstetrical  home care  services,  including,
without limitation, programs for monitoring patients who are at risk of pre-term
delivery, programs for managing patients suffering from obstetrical hypertension
or diabetes,  infusion  therapy  services  involving  drugs to control  pre-term
labor,  nursing services and maternity management services for both low and high
risk  pregnancies,   diabetes  or  respiratory   disease  management   services,
including,   without   limitation,   patient   education,   risk  screening  and
stratification,   case  management  and  clinical  services,  or  cardiac  event
monitoring services ("Competing  Services").  Notwithstanding the foregoing,  no
business shall be deemed a "Competing  Business" unless,  within at least one of
the business's three most recently  concluded fiscal years, that business,  or a
division of that  business,  derived more than 20% of its gross revenues or more
than  $2,000,000 in gross  revenues from the  development,  marketing or sale of
Competing Products and/or the provision of Competing Services.

     (ii)  "Competitive  Position"  shall mean:  (A) the  Executive's  direct or
indirect  equity  ownership   (excluding  ownership  of  less  than  1%  of  the
outstanding  common stock of any publicly  held  corporation)  or control of any
portion  of  any  Competing  Business;   or  (B)  any  employment,   consulting,
partnership,   advisory,   directorship,   agency,  promotional  or  independent
contractor  arrangement  between the Executive and any Competing  Business where
the Executive performs services for the Competing Business substantially similar
to those the Executive performed for the Company,  provided,  however,  that the
Executive  shall not be deemed to have a Competitive  Position solely because of
the Executive's  services for a Competing Business that are not directly related
to the sale of Competing Products or the provision of Competing Services, unless
more than 35% of the gross  revenues of the Competing  Business are derived from
the sale of Competing Products and/or the provision of Competing Services.

     (iii) "Covenant Period" shall mean the period of time from the date of this
Agreement to the date that is two years after the Date of Termination.



<PAGE>


     (iv) "Customers" shall mean actual customers,  clients, referral sources or
managed care  organizations or actively sought prospective  customers,  clients,
referral sources or managed care organizations of the Company (A) during the one
year prior to the date of this Agreement and (B) during the Covenant Period.

     (v)    "Restricted    Territory"    shall   mean   the    United    States.

                  (b)  Limitation  on  Competition.   In  consideration  of  the
Company's  entering into this  Agreement,  the Executive  agrees that during the
Covenant  Period,  the Executive will not,  without the prior written consent of
the  Company,  anywhere  within the  Restricted  Territory,  either  directly or
indirectly,  alone or in conjunction with any other party, accept, enter into or
take any action in conjunction with or in furtherance of a Competitive  Position
(other than action to reject an unsolicited offer of a Competitive Position).

                  (c) Limitation on Soliciting  Customers.  In  consideration of
the Company's entering into this Agreement, the Executive agrees that during the
Covenant  Period,  the Executive will not,  without the prior written consent of
the Company,  alone or in conjunction with any other party,  solicit,  divert or
appropriate  or  attempt  to  solicit,  divert  or  appropriate  on  behalf of a
Competing Business with which Executive has a Competitive  Position any Customer
located  in the  Restricted  Territory  (or any other  Customer  with  which the
Executive  had any direct  contact on behalf of the  Company) for the purpose of
providing the Customer or having the Customer  provided with a Competing Product
or Competing Service.

                  (d) Limitation on Soliciting  Personnel or Other  Parties.  In
consideration  of the  Company's  entering  into this  Agreement,  the Executive
hereby  agrees  that he will not,  without  the  prior  written  consent  of the
Company,  alone or in  conjunction  with any other party,  solicit or attempt to
solicit  any  employee,  consultant,  contractor,  independent  broker  or other
personnel of the Company to terminate,  alter or lessen that party's affiliation
with the  Company  or to violate  the terms of any  agreement  or  understanding
between such employee, consultant, contractor or other person and the Company.

                  (e)  Acknowledgement.  The parties  acknowledge and agree that
the Protective  Covenants are reasonable as to time,  scope and territory  given
the  Company's  need to protect  its trade  secrets  and  confidential  business
information  and  given  the  substantial  payments  and  benefits  to which the
Executive may be entitled pursuant to this Agreement.

                  (f)  Remedies.  The  parties  acknowledge  that any  breach or
threatened breach of a Protective Covenant by the Executive is reasonably likely
to result in irreparable  injury to the Company,  and therefore,  in addition to
all remedies provided at law or in equity, the Executive agrees that the Company
shall be entitled to a temporary restraining order and a permanent injunction to
prevent  a breach or  contemplated  breach of the  Protective  Covenant.  If the
Company seeks an  injunction,  the  Executive  waives any  requirement  that the
Company post a bond or any other security.

     6. No  Obligation  to  Mitigate  Damages;  No Effect  on Other  Contractual
Rights.

                  (a) All  compensation  and benefits  provided to the Executive
under this Agreement are in consideration of the Executive's  services  rendered
to the Company and of the Executive's adhering to the terms set forth in Section
5 hereof and the  Executive  shall not be required  to  mitigate  damages or the
amount of any  payment  provided  for under  this  Agreement  by  seeking  other
employment or otherwise,  nor shall the amount of any payment provided for under
this  Agreement be reduced by any  compensation  earned by the  Executive as the
result of  employment  by another  employer  after the Date of  Termination,  or
otherwise.

                  (b) The provisions of this Agreement, and any payment provided
for hereunder,  shall not reduce any amounts  otherwise  payable,  or in any way
diminish the Executive's existing rights, or rights which would accrue solely as
a result of the  passage of time,  under any  Benefit  Plan,  Incentive  Plan or
Securities Plan, employment agreement or other contract, plan or arrangement.

         7.       Successor to the Company.

                  (a) The Company will require any successor or assign  (whether
direct or indirect, by purchase,  merger,  consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company,  by agreement in
form and substance  satisfactory  to the  Executive,  expressly,  absolutely and
unconditionally to 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.  Any failure of the Company to
obtain such  agreement  prior to the  effectiveness  of any such  succession  or
assignment  shall be a material  breach of this  Agreement and shall entitle the
Executive to terminate the  Executive's  employment for Good Reason.  As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor  or assign to its  business  and/or  assets  as  aforesaid,  including
without  limitation,  the Surviving Company in the Merger. If at any time during
the term of this  Agreement  the  Executive  is  employed by any  corporation  a
majority  of the  voting  securities  of  which is then  owned  by the  Company,
"Company" as used in Sections 3, 4, 12 and 14 hereof  shall in addition  include
such  employer.  In such event,  the  Company  agrees that it shall pay or shall
cause such employer to pay any amounts owed to the Executive pursuant to Section
4 hereof.

                  (b)  This  Agreement  shall  inure  to the  benefit  of and be
enforceable by the Executive's  personal and legal  representatives,  executors,
administrators,  successors, heirs, distributees,  devisees and legatees. If the
Executive  should die while any amounts are still payable to him hereunder,  all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or the designee
or, if there be no such designee, to the Executive's estate.

         8.  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  when  delivered  or  mailed by United  States
registered mail, return receipt required, postage prepaid, as follows:

                           If to Company:
                                    Matria Healthcare, Inc.
                                    1850 Parkway Place, 12th Floor
                                    Marietta, Georgia  30067
                                    Attention:  General Counsel

                           If to Executive:
                                    Parker H. Petit
                                    1650 Cox Road
                                    Roswell, Georgia  30075

or such other address as either party may have furnished to the other in writing
in  accordance  herewith,  except  that  notices of change of  address  shall be
effective only upon receipt.

         9.  Miscellaneous.  No  provisions  of this  Agreement may be modified,
waived or discharged unless such waiver,  modification or discharge is agreed to
in writing  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 or at any prior or subsequent  time.  Neither this Agreement nor the
Merger  shall  diminish  or waive in any way the rights of  Executive  under the
Prior  Agreement,  which as  amended by this  Agreement,  shall  continue  to be
applicable to Executive's  employment by the Surviving Company after the Merger.
No agreements or representations,  oral or otherwise,  express or implied,  with
respect to the subject  matter  hereof have been made by either  party which are
not set forth expressly in this  Agreement.  This Agreement shall be governed by
and construed in accordance with the laws of the State of Georgia.

     10. Validity.  The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

     11.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of which shall be deemed to be an original  but all of which
together shall constitute one and the same instrument.

         12.  Legal Fees and  Expenses.  The  Company  shall pay all legal fees,
expenses  and  damages  which  the  Executive  may  incur  as a  result  of  the
Executive's  instituting legal action to enforce his rights hereunder, or in the
event the Company  contests  the  validity,  enforceability  or the  Executive's
interpretation of, or determinations under, this Agreement.  If the Executive is
the prevailing party or recovers any damages in such legal action, the Executive
shall be entitled to receive in addition thereto  pre-judgment and post-judgment
interest on the amount of such damages.


<PAGE>


         13.  Severability;  Modification.  All provisions of this Agreement are
severable  from one  another,  and the  unenforceability  or  invalidity  of any
provision of this Agreement shall not affect the validity or  enforceability  of
the remaining provisions of this Agreement,  but such remaining provisions shall
be  interpreted  and  construed  in such a manner  as to  carry  out  fully  the
intention of the parties.  Should any judicial body  interpreting this Agreement
deem  any  provision  of  this  Agreement  to be  unreasonably  broad  in  time,
territory,  scope or otherwise,  it is the intent and desire of the parties that
such judicial body, to the greatest extent possible,  reduce the breadth of such
provision to the maximum legally  allowable  parameters rather than deeming such
provision totally unenforceable or invalid.

     14.  Confidentiality.  The Executive  acknowledges  that he has  previously
entered  into,  and  continues  to be bound by the terms  of, a  Confidentiality
Agreement with the Company.

         15. Agreement Not an Employment  Contract.  This Agreement shall not be
deemed to constitute or be deemed  ancillary to an employment  contract  between
the Company and the  Executive,  and nothing  herein shall be deemed to give the
Executive the right to continue in the employ of the Company or to eliminate the
right of the Company to discharge the Executive at any time.

         IN WITNESS  WHEREOF,  the parties have  executed  this  Agreement to be
effective as of the date first above written.

                                            MATRIA HEALTHCARE, INC.



                                            By:________________________________




                                            -----------------------------------
                                            Executive