Document:

ex102.htm

    EXHIBIT
10.2

     

     

    

      FOURTH
AMENDMENT OF LEASE AGREEMENT

      

      THIS
FOURTH AMENDMENT OF LEASE (“Fourth Amendment”) is made on, 2006, between NM
Owner LLC, a Delaware limited liability company (“Landlord”), whose address is
One Independent Drive, #1850, Jacksonville, Florida 32202-5019 and Matria
Healthcare, Inc. a Delaware corporation (“Tenant”), whose address is 2161
Newmarket Parkway, Suite 233, Marietta, Georgia 30067.

      

      RECITALS

      

      This
Fourth Amendment is based upon the following recitals:

      

      A.           Trizec
Realty, Inc. (“Trizec”) and Tenant entered into a Lease dated September 4, 2002
(“Lease”), for the premises known as Suite 233 containing 46,611 rentable square
feet (“Premises”), in the building located at 2161 Newmarket Parkway
(“Building”), Marietta, Georgia 30067.

      

      B.           Trizec
and Tenant amended the Lease by First Amendment of Lease dated May 9, 2003 to
expand the premises by 9,877 rentable square feet (“First Expansion Space”); and
Second Amendment of Lease dated February 3, 2004 to further expand the Premises
by 2,383 rentable square feet (“Second Expansion Space”); and Third Amendment of
Lease dated March 30, 2004 to again expand the Premises by 12,992 rentable
square feet (“Third Expansion Space”) [Lease and Amendments collectively “Lease
as amended”].

      

      C.           Landlord
is the successor to Trizec as Landlord under the Lease.

      

      

      D.           Landlord
and Tenant desire to amend the Lease to further expand the Premises and
otherwise amend the Lease accordingly.

      

      

      THEREFORE, in consideration of the
mutual covenants and agreements stated in the Lease and below, and for other
sufficient consideration received and acknowledged by each party, Landlord and
Tenant agree to amend the Lease as follows:

      

      1.           RECITALS;
CAPITALIZED TERMS.  All Recitals are fully
incorporated.  Except for those terms expressly defined in this Fourth
Amendment, all initially capitalized terms will have the meanings ascribed to
them in the Lease.

      

      

      2.           ADDRESS
– NOTICES

      

      (A)           Landlord’s
General Address and address for notices as set forth in Section 1.1(k) of the
Lease shall be deleted and the following inserted in lieu thereof:

      

      NM Owner LLC

      c/o Eola
Capital LLC

      One Independent Drive,
#1850

      Jacksonville, Florida
32202-5019

      

      with a copy to:

      

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      NM Owner LLC

      c/o Eola Capital LLC

      1979 Lakeside Parkway, Suite
330

      Tucker, Georgia 30084

      Attn:  Regional Vice
President

      

      (B)           Landlord’s
Billing Address as set forth in Section 1.1(l) of the Lease shall be deleted and
the following inserted in lieu thereof:

      

      NM Owner LLC

      c/o Eola Capital LLC

      One Independent Drive,
#1850

      Jacksonville, Florida
32202-5019

      

      

      3.           PREMISES
EXPANSION.  Effective as of the “Fourth Expansion Space Commencement
Date” defined below, the Premises shall be expanded to include that area known
as Suite 162 containing 4,463 rentable square feet in the Building as shown on
Exhibit A attached hereto and by this reference made a part hereof (“Fourth
Expansion Space”).  Therefore the Premises shall encompass a total of
76,326 rentable square feet.

      

      4.           FOURTH
EXPANSION SPACE LEASE TERM.  The Lease Term as it pertains to the
Fourth Expansion Space shall commence January 1, 2007 (“Fourth Expansion Space
Commencement Date”), and shall expire on April 30, 2011.

      

      5.           BASE
RENT and ADDITIONAL RENT.  Effective during the Fourth Expansion Space
Lease Term, Base Rent and Additional Rent for the Fourth Expansion Space shall
be increased as follows:

      

      (A)           The
Base Rent due for the Fourth Expansion Space shall be payable in equal monthly
installments on the first day of each month as follows:

      

      

      
        	
                 

                Lease Period

              	 	
                Annual Base Rent Per Rentable Square
      Foot

              	 	 	
                
                

                Annual Base Rent

              	 	 	
                
                

                Monthly Base Rent

              	 
	 
      	 	 	 	 	 	 	 	 	 
	
                01/01/07-03/31/07

              	 	$	11.00	 	 	 	0	 	 	 	0	 
	
                04/01/07-12/31/07

              	 	$	11.00	 	 	$	49,092.96	 	 	$	4.091.08	 
	
                01/01/08-12/31/08

              	 	$	11.33	 	 	$	50,565.72	 	 	$	4,213.81	 
	
                01/01/09-12/31/09

              	 	$	11.67	 	 	$	52,082.64	 	 	$	4,430.22	 
	
                01/01/10-12/31/10

              	 	$	12.02	 	 	$	53,645.16	 	 	$	4,470.43	 
	
                01/01/11-14/30/11

              	 	$	12.38	 	 	$	55,254.48	 	 	$	4,604.54	 

      

      

      

      (B)           Tenant
shall continue to pay as Additional Rent its pro-rata share (“as modified below,
effective as of the Fourth Expansion Space Commencement Date”) of Tax and
Insurance Escalation expenses as described in Section 4.2 of the Lease as
amended, to the extent such share exceeds such expenses for the calendar year
ending December 31, 2004.

      

      (C)           Common
Area Maintenance Expense for the Fourth Expansion Space shall be payable by
Tenant at the rate of $1.10 per square foot of Premises per year and shall be
payable in equal monthly payments along with Tenant’s Base Rent during the
Fourth Expansion Space Lease Term, which amount shall be increased by 3% on a
compounded basis annually.  Tenant also shall continue to pay for all
its own utilities and services pursuant to Paragraph 7 of the
Lease.

      

      (D)           The
“Tenants Share” shall be increased to 69.04% (.6904)

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

      6.           DELIVERY
OF AND IMPROVEMENTS TO THE PREMISES.  Landlord shall perform the
“Landlord’s Work” described on the Work Letter attached hereto as Exhibit B to
this Fourth Amendment and made a part hereof, all according to the terms and
conditions of said Worker Letter.

      

      7.           BROKERS.  Landlord
and Tenant represent and warrant that no broker or agent negotiated or was
instrumental in negotiating or consummating this Lease except Eola Capital LLC
and The Eidson Group LLC (“Brokers”).  Neither party knows of any
other real estate broker or agent who is or might be entitled to a commission or
compensation in connection with this Lease.  Landlord will pay all
fees, commissions or other compensation payable to the
Brokers.  Pursuant to Georgia Real Estate Commission Regulation
520-1-06, Eola Capital LLC discloses the following concerning this lease
transaction:  (1) Eola Capital LLC represents Landlord and not Tenant;
(2) The Eidson Group LLC represents Tenant and not Landlord; and (3) both Eola
Capital LLC and The Eidson Group LLC shall receive their compensation from the
Landlord.  Tenant and Landlord will indemnify and hold each other
harmless from all damages paid or incurred by the other resulting from any
claims asserted against either party by brokers or agents claiming through the
other party.  Landlord’s obligation under this Section will survive
the expiration or early termination of the Term.

       

      8.           CONFLICTING
PROVISIONS.  If any provisions of this Fourth Amendment conflict with
any of those in the Lease, then the provisions of this Fourth Amendment shall
govern.

      

      9.           REMAINING
LEASE PROVISIONS.  Except as stated in this Fourth Amendment, all
other viable and applicable provisions of the Lease shall remain unchanged and
continue in full force and effect throughout the Lease Term.

      

      10.           BINDING
EFFECT.  Landlord and Tenant ratify and confirm the Lease and agree
that this Fourth Amendment shall bind and inure to the benefit of the parties,
and their respective successors, assigns and representatives as of the date
first stated.

       

      

       

      

       

      

       

      

       

      
        
          
          

        

        
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      AFFIRMING
THE ABOVE, the parties have executed this FOURTH AMENDMENT OF LEASE AGREEMENT on
the date first stated.

      

      

      

      WITNESSES                                                          LANDLORD:

      

      ATL 2161 N LLC, a Delaware limited liability
company

      

      By:   ___________________________________

      

      Name:  _________________________________

      

      Its:  ____________________________________

      

      

      

      

      

      TENANT:

      

      Matria Healthcare, Inc., a Delaware
corporation

      

      By:  ___________________________________

      

      Name:    ________________________________

      

      Its:  ___________________________________

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      

      

      Exhibit
“A”

      

      

      

       

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      

      Exhibit
“B”

      
        Work
Letter

      

      
        

        This Lease Addendum Number One (the
“Work Letter”) sets forth the rights and obligations of Landlord and Tenant with
respect to space planning, engineering, final workshop drawings, and the
construction and installation of any improvements to the Premises to be
completed before the Commencement Date ("Tenant Improvements").  This
Work Letter contemplates that the performance of this work will proceed in four
stages in accordance with the following schedule:  (i) preparation of
a space plan; (ii) final design and engineering and preparation of final plans
and working drawings; (iii) preparation by the Contractor (as hereinafter
defined) of an estimate of the additional cost of the initial Tenant
Improvements; (iv) submission and approval of plans by appropriate governmental
authorities and construction and installation of the Tenant Improvements by the
Commencement Date.

      

      
        

      

      
        In consideration of the mutual
covenants hereinafter contained, Landlord and Tenant do mutually agree to the
following:

      

      

      1.      Allowance.  Landlord
agrees to provide an allowance of up to $10.04 per rentable square foot,
($44,808.52) to design, engineer, install, supply and otherwise to construct the
Tenant Improvements in the Premises that will become a part of the Building (the
"Allowance").  Tenant is fully responsible for the payment of all
costs in connection with the Tenant Improvements in excess of the
Allowance.

      

      2.      Space
Planning, Design and Working Drawings.  Tenant shall select
architects, designers or planners and engineers (“Architect”), who will do the
following at Tenant’s expense (which expense may be deducted from the
Allowance):

      

      a. Attend a
reasonable number of meetings with Tenant and Landlord's agent to define
Tenant’s requirements.  The Architect shall provide one complete space
plan. Tenant shall approve such space plan, in writing, within ten (10) days
after receipt of the space plan.

      

      b. Complete
construction drawings for Tenant's partition layout, reflected ceiling grid,
telephone and electrical outlets, keying, and finish schedule.

      

      c. Complete
building standard mechanical plans where necessary (for installation of air
conditioning system and duct work, and heating and electrical facilities) for
the work to be done in the Premises.

      

      d. All plans
and working drawings for the construction and completion of the Premises (the
“Plans”) shall be subject to Landlord's prior written approval.  Any
changes or modifications Tenant desires to make to the Plans shall also be
subject to Landlord's prior approval.  Landlord agrees that it will
not unreasonably withhold its approval of the Plans, or of any changes or
modifications thereof; provided, however, Landlord shall have sole and absolute
discretion to approve or disapprove any improvements that will be visible to the
exterior of the Premises, or which may affect the structural integrity of the
Building.  Any approval of the Plans by Landlord shall not constitute
approval of any Excused Delays caused by Tenant and shall not be deemed a waiver
of any rights or remedies that may arise as a result of such Excused
Delays.  Landlord may condition its approval of the Plans
if:  (i) the Plans require design elements or materials that would
cause Landlord to deliver the Premises to Tenant after the scheduled
Commencement Date, or (ii) the estimated cost for any improvements under the
Plan is more than the Allowance.

      

      3.      Tenant Plan Delivery
Date.

      

      a.      Tenant
acknowledges that the Architect, designer, or Planner is acting on behalf of the
Tenant and that Tenant (not Landlord) is responsible for the timely completion
of the Plans.

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      

      b.      Tenant
covenants and agrees to deliver to Landlord the final Plans for the Tenant
Improvements in order to allow Landlord to review such Plans, and discuss with
Tenant any changes therein which Landlord believes to be necessary or desirable,
to enable the Contractor to prepare an estimate of the cost of the Tenant
Improvements, to obtain required permits, and to substantially complete the
Tenant Improvements.

      

      4.      Work and
Materials at Tenant's Expense.  Tenant and Landlord shall
mutually select a licensed general contractor or contractors (the “Contractor”)
to construct and install the Tenant Improvements in accordance with the Plans
(the “Work”) at Tenant’s expense (which expense may be deducted from the
Allowance). Landlord shall coordinate and facilitate all communications between
Tenant and the Contractor.

      

      a. Prior to
commencing Work, Landlord shall submit to Tenant in writing the cost of the
Work, which shall include (i) the Contractor’s cost for completing the Work
(including the Contractor's general conditions, overhead and profit) and (ii) a
construction supervision fee of five percent (5%) to be paid
to Landlord manage and oversee the work to be done on Tenant's
behalf.  Tenant shall have five (5) business days to review and
approve the cost of the Work.  Landlord shall not authorize the
Contractor to proceed with the work until the cost is mutually agreed upon and
approved in writing and delivered to Landlord.

      

      b. Any
changes in the approved cost of the Work shall be by written change order signed
by the Tenant.  Tenant agrees to process change orders in a timely
fashion.  Tenant acknowledges that the following items may result in
change orders:

      

      i. Municipal
or other governmental inspectors require changes to the Premises such as
additional exit lights, fire damper or whatever other changes they may
require.  In such event, Landlord will notify the Tenant of the
required changes, but the cost of such changes and any delay associated with
such changes shall be the responsibility of the Tenant.

      

      ii. Tenant
makes changes to the Plans or requests additional work. Tenant will be notified
of the cost and any delays that would result from the change by a change order
signed by Tenant before the changes are implemented.  Any delays
caused by such changes shall not delay the Commencement Date of the
Lease.

      

      iii. Any
errors or omissions in the Plans or specifications which require changes.
Landlord will notify the Tenant of the required changes, but the cost of such
changes and any delay associated with such changes shall be the responsibility
of the Tenant, and shall not delay the commencement date of the
Lease.

      

      iv. Materials
are not readily available, require quick ship charges, or require
substitution.

      

      v. The up
fit schedule requires Express Review to get permits, which will increase the
costs of the permitting process.

      

      c. All work
performed in connection with the construction of the Premises shall be performed
in a good and workmanlike manner and in accordance with all applicable laws and
regulations and with the final approved Plans.

      

      5.      Signage
and Keys.  Landlord shall provide the following in accordance
with building standards at Tenant’s Expense (which expense may be deducted from
the Allowance): (i) door and directory signage; (ii) suite and Building keys or
entry cards.

      

      
        
           

        

        
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      6.      Tenant
Improvement Expenses in Excess of the Allowance.  Tenant agrees
to pay to Landlord, promptly upon being billed therefore, all costs and expenses
in excess of the Allowance incurred in connection with the Tenant
Improvements.  If unpaid within thirty (30) days after receipt of
invoice, then the outstanding balance shall accrue at the rate of one percent
(1%) per month until paid in full.

      

      7.      Repairs
and Corrections.  Tenant and Landlord shall select a Contractor
who will provide Tenant a one-year warranty from the date of delivery of the
Premises, transferable to Tenant, for defective workmanship and
materials.  All manufacturers’ and builders’ warranties with respect
to the Work shall be issued to or transferred to Tenant, without recourse to the
Landlord. Tenant shall repair or correct any defective work or materials
installed by Tenant or any contractor other than the Contractor selected by
Landlord and Tenant, or any work or materials that prove defective as a result
of any act or omission of Tenant or any of its employees, agents, invitees,
licensees, subtenants, customers, clients, or guests.

      

      8.      Inspection
of Premises; Possession by Tenant.  Prior to taking possession
of the Premises, Tenant and Landlord shall inspect the Premises and Tenant shall
give Landlord notice of any defects or incomplete work (“Punch list”). Tenant’s
possession of the Premises constitutes acknowledgment by Tenant that the
Premises are in good condition and that all work and materials provided by
Landlord are satisfactory as of such date of occupancy, except as to (i) any
defects or incomplete work set forth in the Punch list, (ii) latent defects, and
(iii) any equipment that is used seasonally if Tenant takes possession of the
Premises during a season when such equipment is not in use.

      

      9.      Access
During Construction.  During construction of the Tenant
Improvements and with prior approval of Landlord, Tenant shall be permitted
reasonable access to the Premises for the purposes of taking measurements,
making plans, installing trade fixtures, installation of voice/ data cabling and
doing such other work as may be appropriate or desirable to enable Tenant to
assume possession of and operate in the Premises; provided, however, that such
access does not interfere with or delay construction work on the Premises and
does not include moving furniture or similar items into the Premises. Prior to
any such entry, Tenant shall comply with all insurance provisions of the Lease.
All waiver and indemnity provisions of the Lease shall apply upon Tenant’s entry
of the Premises.

      

      
        
           

        

        
          8ex103.htm

    EXHIBIT
10.3

     

    

      SEVERANCE, RELEASE AND
RESTRICTIVE COVENANT AGREEMENT

      

      THIS SEVERANCE, RELEASE AND
RESTRICTIVE COVENANT AGREEMENT (the “Agreement”) is dated as of February
26th, 2008 (“Effective Date”) between MATRIA HEALTHCARE, INC., a
Delaware corporation (the “Company”), and RICHARD M. HASSETT, M.D. (the
“Executive”).

      

      WHEREAS, the Company
terminated Executive’s employment as President and COO of Company on January 29,
2008 (“Date of Termination”), and

      

      WHEREAS, Executive has
resigned his position on the Board of Directors of Company, and

      

      WHEREAS, The Company has
offered, and the Executive has agreed, to enter into a Consulting Agreement (the
“Consulting Agreement”) at the same time as this Agreement providing Executive
with compensation for consulting services after the Date of Termination through
November 30, 2008, and

      

      WHEREAS, the Company and the
Executive previously entered into a Severance Compensation and Restrictive
Covenant Agreement on April 26, 2006 (the “2006 Severance Agreement”), providing
for payment of one year of severance and other benefits in the event that the
Company terminated the Executive without Cause, and

      

      WHEREAS, the Company and the
Executive also entered into a Change in Control Severance Compensation and
Restrictive Covenant Agreement on April 26, 2006 (the “2006 Change in Control
Agreement”), providing for payment of two (2) years of severance and other
benefits in the event that the Company terminated executive without Cause after
a Change in Control as defined in the 2006 Change in Control Agreement,
and

      

      WHEREAS, a Change in Control
has not yet occurred as defined in the 2006 Change in Control Agreement and
Executive is not presently eligible for the compensation and benefits provided
for in that 2006 Change in Control Agreement, and

      

      WHEREAS, the parties desire to
enter into this Agreement with the intention of replacing and superseding the
2006 Severance Agreement and the 2006 Change in Control Agreement, which would
have provided enhanced compensation and benefits to Executive in the event that
a Change in Control had occurred while Executive remained employed by
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.  

              	
                Compensation and
      Benefits Payable To
Executive:

              

      

       

       

      
 

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

         

               (a)           Subject
to the provisions of Section 1(b) below, and only for so long as Executive
refrains from violating Section 4(c) (Non-Competition), the Company shall pay to
the Executive, as severance compensation and in consideration of the Executive’s
adherence to the terms of this Agreement, the following:

      

      
        	
                i.  

              	
                Continuation
      of Executive’s base salary, annual target bonus and car allowance in the
      aggregate amount of $26,012.31 per pay period, payable in 26 bi-weekly
      installments, with the first payment to begin as soon as administratively
      practical following the Date of Termination, subject to Company’s normal
      payroll practices and procedures and subject to ordinary and lawful
      deductions.

              

      

      

      (ii)(A)

      

      
        	
                 
      

              	
                (x)

              	
                For
      a period of one (1) year following the Date of Termination, the Executive
      and anyone entitled to claim under or through the Executive shall be
      entitled to elect to continue participation under any of the Company’s
      medical, dental, employee assistance, health care reimbursement and/or
      dependent care reimbursement plans and programs (“COBRA-Eligible
      Benefits”) in which the Executive was a participant as of the Date of
      Termination to the same extent as if Executive had continued as an
      employee during such time;

              

      

      

      
        	
                 
      

              	
                (y)

              	
                At
      the end of the period referred to in Section 1(a)(ii)(A)(x) above, so long
      as the Executive would otherwise be eligible for COBRA-Eligible Benefits
      but for the fact that more than Eighteen (18) months had elapsed since the
      Date of Termination, the Executive may elect to continue participation in
      the COBRA-Eligible Benefits for up to an additional 18-month period by
      paying the full COBRA Benefits premium for such period in accordance with
      the provisions of the Consolidated Omnibus Budget Reconciliation Act of
      1985 (“COBRA”).

              

      

      

      
        	
                 
      

              	
                (B)

              	
                For
      a period of one (1) year following the Date of Termination, the Executive
      shall be entitled to elect to continue participation in Basic Life
      AD&D, ADD-Life, and Supplemental AD&D plans and programs to the
      same extent as if Executive had continued as an Employee during such time
      and shall be entitled to retain the Blackberry issued by the
      Company.  At the end of such period, the Company shall cooperate
      with the Executive in transferring the telephone number of the Blackberry
      to the Executive.

              

      

      

      
        	
                 
      

              	
                (C)

              	
                Executive
      may choose at any time to discontinue benefit coverages by
  

              

      

       

       

      
        
          
          

        

        
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                      notifying the
Company’s Human Resources Department.

      (b) Notwithstanding
any other provision of this Agreement, it is intended that any payment or
benefit provided pursuant to or in connection with this Agreement that is
considered to be deferred compensation subject to Section 409A of the Code shall
be provided and paid in a manner, and at such time and in such form, as complies
with the applicable requirements of Section 409A of the Code.  For
purposes of Section 409A of the Code, the Company will treat Executive in the
same manner as it treats similarly situated executives.  If and to the
extent required by Section 409A of the Code, no payment or benefit shall be made
or provided to a “specified employee” (as defined below) prior to the six (6)
month anniversary of the Executive’s separation from service (within the meaning
of Section 409A(a)(2)(A)(i) of the Code), or, if earlier, Executive’s
death.  The amounts provided for in this Agreement that constitute
deferred compensation shall be paid as soon as the six month deferral period
ends, of, if earlier, Executive’s death.  In the event that benefits
are required to be deferred, any such benefit may be provided during such
deferral period at the Executive’s expense, with the Executive having a right to
reimbursement from the Company for the amount of any premiums or expenses paid
by the Executive once the deferral period ends.  For this purpose, a
specified employee shall mean an individual who is a key employee (as defined in
Section 416(i) of the Code without regard to Section 416(i)(5) of the
Code) of the Company at any time during the 12-month period ending on each
December 31 (the “identification date”).  If the Executive is a key
employee as of an identification date, the Executive shall be treated as a
specified employee for the 12-month period beginning on the April 1 following
the identification date.  Notwithstanding the foregoing, the Executive
shall not be treated as a specified employee unless any stock of the Company or
a corporation or business affiliated with it pursuant to Sections 414(b) or (c)
of the Code is publicly traded on an established securities market or
otherwise.  For purposes of this Agreement, the Executive will incur a
“separation from service” on the Date of Termination.

      

      (c) The
parties hereto agree that the payments provided in Sections 1(a) and 2(a)
hereof are reasonable compensation in light of the Executive’s services rendered
to the Company and in consideration of the Executive’s obligations under this
Agreement, including without limitation Sections 3 and 4
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 1(a)
and 2(a) hereof (the “Compensation Payments”) and the Company has determined,
based upon the advice 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 times specified in Sections 1(a) and 2(a) hereof 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-

       

      
        
          
          

        

        
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        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.

      

      

      (d) The
payments provided in Sections 1(a) and 2(a) hereof shall be in lieu of any
other severance compensation otherwise payable to Executive under any other
agreement between Executive and the Company (including, without limitation, the
2006 Severance Agreement and the 2006 Change in Control Agreement) or the
Company’s established severance compensation policies; 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.

      

      (e) 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 1(a) 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 Sections 1(a)
and 2(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.

       

       

      
 

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      
        	
                2.  

              	
                Option for Additional
      Compensation and Benefits Upon Subsequent Change in
      Control;

              

      

      

          (a)           Executive
shall be eligible for additional compensation (“Additional Compensation”)
consisting of an additional 26 bi-weekly payments following the 26 bi-weekly
payments provided for in Section 1(a) of this Agreement and the extension for an
additional period of one (1) year of the COBRA Eligible Benefits pursuant to
Section 1(a)(ii)(A)(x) and the other benefits described in Section 1(a)(ii)(B)
if, and only if,  the following conditions are met:

      

      i.           There
is a Change in Control (as defined below) on or before November 30, 2008,
and

      

      ii.           Executive
has not violated, and continues to refrain from violating, Section
4(c).

      

          (b)           To
the extent that these conditions for Additional Compensation have been met
initially, Company shall cease making payments of Additional Compensation upon
Executive violating Section 4(c) of this Agreement during the Restricted
Period.

      

          (c)           Change in
Control.  For purposes of this Agreement, “Change in Control”
shall mean changes in the ownership of the Company, changes in the effective
control of the Company, changes in ownership of a substantial portion of the
Company’s assets and a disposition of a substantial portion of the Company’s
assets, all as defined below:

      

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

      

          ii.           A
change in the effective control of the Company 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 Company possessing twenty-five percent (25%) or more of
the total voting power of the stock of the Company; or a majority of members of
the Company’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 Company’s board of directors who were directors
prior to the date of the appointment or election of the first of such new
directors.

       

       

      
 

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

        

          iii.           A
change in the ownership of a substantial portion of the Company’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 Company 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 Company immediately prior to such
acquisition or acquisitions.  The transfer of assets by the Company is
not treated as a change in the ownership of such assets if the assets are
transferred:  to a shareholder of the Company (immediately before the
asset transfer) in exchange for such shareholder’s capital stock of the Company
having a fair market value approximately equal to the fair market value of such
assets; or to an entity, fifty percent (50%) or more of the total value or
voting power of which is owned, directly or indirectly, by the
Company.

      

          iv.           A
disposition of a substantial portion of the Company’s assets occurs on the date
that the Company 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 Company’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 Company as of the date immediately prior to the first such transfer or
transfers.  The transfer of assets by the Company is not treated as a
disposition of a substantial portion of the Company’s assets if the assets are
transferred to an entity, fifty percent (50%) or more of the total value or
voting power of which is owned, directly or indirectly, by the
Company.

      

          v.           For
purposes of the provision of this Agreement defining “Change in Control,” (i)
references to the Company herein include the Delaware corporation known as
Matria Healthcare, Inc. as of the date of execution of this Agreement, and any
corporation that is the Successor or Assign (as defined in Section 7(a)) to such
corporation; 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 fifty percent (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 fifty percent (50%) of the outstanding voting securities of the
Company, resulting in a change in ownership under Section 2(a)
above.

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

            3.           General
Release.

      

      (a)           In
consideration for the undertakings and promises of Company set forth in this
Agreement, Executive unconditionally releases, discharges, and holds harmless
Company, its corporate affiliates, officers, directors, shareholders, employees,
agents, insurers and attorneys as individuals; and the successors and assigns of
each (collectively referred to as “Releasees”), from each and every claim, cause
of action, right, liability or demand of any kind and nature, and from any
claims which may be derived therefrom (collectively referred to as “Claims”),
whether presently known to Executive or not, that Executive had, has, or might
claim to have against Releasees at the time Employee executes this Agreement,
including but not limited to any and all claims:

      

      
        	
                 
      

              	
                i.

              	
                arising
      from Executive’s employment, pay, bonuses, vacation or any other employee
      benefit, and other terms and conditions of employment or employment
      practices of Company;

              

      

      

      
        	
                 
      

              	
                ii.

              	
                relating
      to the termination of Executive’s employment with Company or the
      surrounding circumstances thereof;

              

      

      

      
        	
                 
      

              	
                iii.

              	
                relating
      to payment of any court costs or attorney’s fees for
      Executive;

              

      

      

      
        	
                 
      

              	
                iv.

              	
                based
      on discrimination or harassment on the basis of race, color, religion,
      sex, national origin, handicap, disability, age or any other category
      protected by law under Title VII of the Civil Rights Act of 1964, the
      Civil Rights Act of 1991, Executive Order 11246, the Age Discrimination in
      Employment Act, the Older Workers Benefits Protection Act, the Equal Pay
      Act, the Americans With Disabilities Act, the Rehabilitation Act of 1973,
      the Consolidated Omnibus Budget Reconciliation Act of 1985, (as any of
      these laws may have been amended) or any other similar labor, employment
      or anti-discrimination law under state, federal or local law;
      or

              

      

      

      
        	
                 
      

              	
                v.

              	
                based
      on any contract, tort, whistleblower, personal injury, or wrongful
      discharge theory.

              

      

      

      (b)           Nothing
in this Agreement shall: (i) alter or reduce any vested, accrued benefits (if
any) Executive may have to any pension benefits to which Executive may be
entitled under any retirement or 401(k) plan established by Company; or (ii)
affect Executive’s right (if any) to elect and pay for continuation of
Executive’s health insurance coverage under the Health Benefit Plan pursuant to
COBRA.

      

      (c)           Executive
acknowledges and agrees that executive would not be eligible for the
compensation to be paid under Sections 1 and 2 of this Agreement absent his
undertakings and obligations contained herein.

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
 

      (d)           To
Company’s knowledge, Company does not currently have any Claim against
Executive.

      

      4.           Restrictive
Covenants.

      

      (a)           Definitions.  For
purposes of this Agreement, the following terms shall have the following
respective meanings:

      

      
        	
                 
      

              	
                i.

              	
                “Business of
      Company” means the business of providing: (a) disease management
      programs for diabetes, congestive heart failure, coronary artery disease,
      chronic obstructive pulmonary disease, cancer, pregnancy, depression,
      chronic pain or hepatitis C; and/or (b) obstetrical home care; and/or (c)
      on-line programs targeting weight loss, nutrition and diet, fitness,
      smoking cessation or stress management; and/or (d) informatics
      services.

              

      

      

      
        	
                 
      

              	
                ii.

              	
                 “Confidential
      Information” means information about the Company and its employees,
      customers and/or suppliers which is not generally known outside of Company
      nor publicly available, which Executive learns of in connection with
      Executive’s employment with Company, and which would be useful to
      competitors of Company or otherwise damaging to the
      Company.  Confidential Information may include, but is not
      limited to: (i) business and employment policies, marketing methods and
      the targets of those methods, finances, business plans, promotional
      materials and price lists; (ii) the terms upon which Company obtains
      products from its suppliers and sells them to customers; (iii ) the
      nature, origin, composition and development of Company’s products; (iv)
      information about patients served by
Company.

              

      

      

      
        	
                 
      

              	
                iii.

              	
                “Material
      Contact” means contact in person, by telephone or by paper or
      electronic correspondence in furtherance of the Business of
      Company.

              

      

      

      
        	
                 
      

              	
                iv.

              	
                “Restricted Territory”
      means the forty-eight (48) contiguous states of the continental United
      States of America.

              

      

      

      
        	
                 
      

              	
                v.

              	
                “Restricted
      Period” means the period of one (1) year following the Date of
      Termination; provided, however, that if there is a Change in Control on or
      before November 30, 2008, the Restricted Period shall mean the period of
      two years following the Date of
Termination.

              

      

      

      (b)           Confidentiality.  Executive agrees
that for a period of five (5) years following the Date of Termination, Executive
will not, directly or indirectly, use, copy, disclose, distribute or otherwise
make use of any Confidential Information of Company other than in the
furtherance of Executive’s duties as a consultant for
Company.  Executive further agrees that if Executive is questioned
about information subject to this agreement by anyone not authorized to receive
such information, Executive will promptly notify Executive’s supervisor(s) or an
officer of Company.  Nothing contained herein shall limit Company’s
rights under statutory or common law, which 

       

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

         

        may
provide for longer restrictions on use or disclosure.

      

      

      (c)           Non-Competition.  Executive
agrees that during the Restricted Period, Executive will not perform within the
Restricted Territory any services which are the same as or similar to those
he performed for Company, by himself or on behalf of any other person or entity,
in competition with the Business of Company.

      

      (d)           Non-Solicitation of
Customers and Suppliers.  Executive agrees
that during the Restricted Period, Executive will not directly or indirectly
solicit or attempt to solicit any business in competition with the Business of
Company from any of Company’s customers or suppliers (including any actively
sought prospective customer or supplier) with whom Executive had Material
Contact during the last two (2) years of Executive’s employment with
Company.

      

      (e)           Non-Recruitment of
Employees.  Executive agrees
that during the Restricted Period, Executive will not directly or indirectly
solicit or attempt to solicit any employee of Company with whom Executive had
Material Contact during the last two (2) years of Executive’s employment, to
terminate or resign such employee’s employment with Company.

      

      (f)           Return of Property and
Information. Except as otherwise set forth in the Consulting
Agreement or in Section 1(a)(ii)(B) above, Executive agrees to return all of the
Company's property and information within seven (7) days following the Effective
Date of this Agreement.  Such property includes, but is not limited
to, the original and any copy (regardless of the manner in which it is recorded)
of all information provided by the Company to employee or which Executive has
developed or collected in the scope of Executive’s employment, as well as all
Company-issued equipment, supplies, accessories, vehicles, keys, instruments,
tools, devices, computers, cellphones, pagers, materials, documents, plans,
records, notebooks, drawings, or papers.  Upon request by Company,
Executive shall certify in writing that all copies of information subject to
this agreement located on Executive’s computers or other electronic storage
devices have been permanently deleted.  Provided, however, Executive
may retain copies of documents relating to the Company’s employee benefit plans
applicable to Executive and income records to the extent necessary for Executive
to prepare Executive’s individual tax returns.

      

      (g)           Nondisparagement. At
all times following the Date of Termination, Executive shall refrain from
engaging in disparaging speech or conduct to any person or entity (including,
without limitation past, present or prospective clients or partners of Company)
regarding Company or any of the Releasees.  Provided, however, that
this provision shall not apply to Executive’s truthful testimony under oath
compelled by subpoena in any judicial or administrative proceeding.

      

      (h)           Acknowledgments.  Executive
hereby acknowledges and agrees that the covenants contained in this Section are
reasonable as to time, scope and territory given Company’s need to protect its
business, personnel, Trade Secrets and Confidential
Information.  Executive acknowledges and represents that Executive has
substantial experience and knowledge 

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

         

        such that
Executive can readily obtain subsequent employment which does not violate this
Agreement.

      

      

      (i)           Remedies.  Executive
acknowledges and agrees that any breach of any of the covenants contained in
Sections 4(b), (d), (e) or (f) by Executive, will cause irreparable damage to
Company, the exact amount of which will be difficult to determine, and that the
remedies at law for any such breach will be inadequate.  Accordingly,
Executive agrees that, in addition to any other remedy that may be available at
law, in equity, or hereunder, Company shall be entitled to specific performance
and injunctive relief with respect to any of the aforementioned covenants,
without posting bond or other security to enforce or prevent any violation of
such covenants.  Should Executive violate Section 4(c) during the
Restricted Period, Company shall not be entitled to injunctive relief or
specific performance, but may cease making payments which would otherwise be
required by Sections 1 or 2 of this Agreement.

      

      5.           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 the
obligations of Executive undertaken herein.  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.

      

      6.           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 (“Successor or Assign”), 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.  As
used in this Agreement (except for purposes of defining “Change in Control” in
Section 2), “Company” shall mean the Company as hereinbefore defined and any
Successor or Assign to the Company.

      (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.

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      
 

      7.           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 by overnight courier service (e.g., Federal Express) or mailed by
United States certified mail, return receipt required, postage prepaid, as
follows:

      

      If to Company:

      

      Matria
Healthcare, Inc.

      1850
Parkway Place, 12th Floor

      Marietta,
GA  30067

      Attention:  General
Counsel

      

      If to Executive:

      

      Richard
M. Hassett, M.D.

      3665
Randall Hall, NW

      Atlanta,
GA  30327

      

      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.

      

      8.           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 an authorized representative of 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.

      

      9.           Entire
Agreement.  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 replaces and supersedes all other oral or
written agreements addressing the subject matter contained herein, including,
without limitation, the 2006 Change in Control Agreement and the 2006 Severance
Agreement.  Provided, however, that the Consulting Agreement
referenced in the recitals of the Agreement shall survive according to its
terms.

      

      10.           Choice of Law and
Venue.  The parties agree that they will not file any action
arising out of or relating to this agreement other than in a state or federal
court sitting in the state of Delaware.  The parties consent to
personal jurisdiction and venue solely within these forums and waive all
otherwise possible objections thereto.  The prevailing party shall be
entitled to recover its costs and attorney’s fees in any such
proceeding.  The existence of any claim or cause of action by
Executive against Company, including any dispute relating to the termination of
this Agreement, shall not constitute a defense to enforcement the covenants
contained in Sections 4(b), (d), (e) and (f) by injunction.  Any
disputes regarding the enforceability, interpretation, 

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

         

        performance,
breach and rights of the parties under this Agreement shall be determined by the
laws of the State of Delaware, without regard to its conflicts of law
principles.

      

      

      11.           Severability.  If
any single covenant, provision, word, clause or phrase in this Agreement shall
be found overbroad, invalid or otherwise unenforceable, it shall be severed and
the remaining covenants and provisions enforced in accordance with the tenor of
the Agreement.  The covenants in Section 4 shall be presumed to be
enforceable, and any reading causing unenforceability shall yield to a
construction permitting enforcement.  In the event a court should
determine not to enforce a covenant as written due to overbreadth, the parties
specifically authorize such reviewing court to enforce said covenant to the
maximum extent reasonable, whether said revisions be in time, territory, scope
of prohibited activities, or other respects.

      

      12.           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.

      

      13.           Legal Fees and
Expenses.  Should either the Company or the Executive institute
legal action to enforce their respective rights hereunder, the prevailing party
shall be entitled to recover from the non-prevailing party its reasonable court
costs and attorney’s fees incurred in connection with such legal
action.  Such amounts shall be paid within thirty (30) days after any
final judgment or decision or settlement in favor of the prevailing
party.

      

      14.           Section 409A
Indemnification.  Notwithstanding any other provision of this
Agreement, it is intended that any payment or benefit which is provided pursuant
to or in connection with this Agreement which is considered to be deferred
compensation subject to Section 409A of the Code shall be provided and paid in a
manner, and at such time and in such form, as complies with the applicable
requirements of Section 409A of the Code.  The Company shall cooperate
with the Executive’s reasonable requests to modify this Agreement as necessary
to comply with the requirements of Section 409A of the Code; provided, however,
that the Company shall not be obligated to cooperate with the Executive to
modify this Agreement in any manner that would result in a material increase in
the cost of providing any payments or benefits hereunder or to cooperate with
any unreasonable requests to modify this Agreement.  In the event the
Company does not so cooperate, it shall indemnify and hold harmless the
Executive on an after-tax basis from any tax or interest penalty imposed under
Section 409A of the Code with respect to any payment or benefit provided
pursuant to this Agreement or any other plan or arrangement sponsored or
maintained by the Company to the extent such tax, interest or penalty is imposed
as a result of any failure of the Company to comply with Section 409A of the
Code with respect to such payment or benefit.  In that event, any such
indemnity shall be made at the time such tax, interest or penalty is due to be
remitted.  Notwithstanding the foregoing, the Company shall be under
no obligation to modify this Agreement to comply with the requirements of
Section 409A of the Code, except upon the reasonable request of the Executive as
provided herein.  If the Company cooperates with the Executive to
modify the Agreement as provided herein, the Company shall have no obligation to
indemnify and hold harmless the Executive from any tax, interest or penalty that
may be imposed under Section 409A if it is determined that this Agreement, as it
may be modified herein, does not comply with Section 409A of the
Code.

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      
 

      15.           Consideration of Agreement;
Right to Revoke.  Company hereby advises Executive that
Executive should consult with an attorney of his or her choosing to discuss the
meaning and effect of this Agreement prior to executing it.  Company
gives Executive a reasonable period of time, but in no event less than
twenty-one (21) days following presentation of this Agreement to Executive, to
consider and evaluate whether Executive desires to enter into this
Agreement.  Should Executive decide to revoke this Agreement after
signing, Executive must notify the Company of such decision in writing within
seven (7) days of signing this Agreement.  Such notice should be
directed to the person identified as the Company’s representative in Section 7
of this Agreement, and must be postmarked, hand delivered or sent by facsimile
within the 7-day deadline.  No payments required by this Agreement
shall be due until after the expiration of the revocation period and without
Executive having elected to revoke this Agreement.

      

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

      

      

      MATRIA HEALTHCARE, INC.

      

      

      By:           

      Thornton A. Kuntz, Jr.

      Its Senior Vice President
and

           Chief
Administrative Officer

      

      

      RICHARD M. HASSETT, M.D.

      

      

      Executive

      

      
        
           

        

        
          13

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