Document:

Exhibit 4.2.88
                                                                  --------------

                                 AMENDMENT NO. 3
                                 ---------------
                                       TO
                                       --
                          SECURITIES PURCHASE AGREEMENT
                          -----------------------------

     This Amendment No. 3 (this "Amendment"), dated as of November 9, 2005, to
the Securities Purchase Agreement, dated as of June 4, 2004 (the "Purchase
Agreement"), as amended, is by and among Salon Media Group, Inc., a Delaware
corporation (the "Company"), and the Purchasers who are signatories to the
Purchase Agreement. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Purchase Agreement.

                                    RECITALS
                                    --------

     WHEREAS, the Company has held Three Closings of the sale of Shares and
issuance of the Warrants and wishes to sell additional Shares and issue
additional Warrants on more flexible terms;

     WHEREAS, Section 9.4 of the Purchase Agreement provides that any term
thereof may be amended with the written consent of the Company and the holders
of at least a majority of the Common Stock issued or issuable upon conversion of
the Shares then outstanding; and

     WHEREAS, the Company and the undersigned Purchasers who hold at least a
majority of the Common Stock issued or issuable upon conversion of the Shares
currently outstanding are in favor of and consent to this Amendment.

     NOW, THEREFORE, the parties hereto hereby agree as follows:

     1.   Amendments.
          ----------

          The second and third sentences in Section 3.1 of the Purchase
Agreement are hereby amended and restated to read as follows:

          "Thereafter, at any time and from time to time prior to
          December 31, 2006, the Company may deliver notice to the
          Purchaser pursuant to the provisions hereof indicating its
          desire to have the Purchaser purchase shares of Series D-2
          Preferred Stock, Series D-3 Preferred Stock, Series D-4
          Preferred Stock and/or Series D-5 Preferred Stock and
          Warrants. The Purchaser shall then (on a date approved by
          the Company, in its sole discretion, in writing delivered to
          a Purchaser) purchase such Purchaser's desired number of
          shares of Series D-2 Preferred Stock, Series D-3 Preferred
          Stock, Series D-4 Preferred Stock and/or Series D-5
          Preferred Stock, as the case may be, offered for sale at any
          subsequent Closing."

<PAGE>

     2.   General.
          -------

          (a) This Amendment shall be governed in all respects by the laws of
the State of California.

          (b) This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument. This Amendment may be delivered by
facsimile transmission of the relevant signature pages hereof.

          (c) The Purchase Agreement, as amended by this Amendment, shall remain
in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by as of the date first written above.

                                         SALON MEDIA GROUP, INC.

                                         By: /s/ Elizabeth Hambrecht
                                             -----------------------
                                             Elizabeth Hambrecht
                                             President & Chief Executive Officer

[Counterpart Signature Page to Amendment No. 3 to Securities Purchase Agreement]

<PAGE>

                                         PURCHASER
                                         The Hambrecht 1980 Revocable Trust

                                         By: /s/ William R Hambrecht
                                             -----------------------

                                         Name: William R Hambrecht

                                         Title: Trustee

                                         Address: 539 Bryant Street, Suite 100
                                                  San Francisco, CA 94107

[Counterpart Signature Page to Amendment No. 3 to Securities Purchase Agreement]

<PAGE>

                                         PURCHASER
                                         HAMCO Capital Corporation

                                         By: /s/ William R Hambrecht
                                             -----------------------

                                         Name: William R Hambrecht
                                               -------------------

                                         Title: CEO

                                         Address: 539 Bryant Street, Suite 100
                                                  San Francisco, CA 94107

[Counterpart Signature Page to Amendment No. 3 to Securities Purchase Agreement]

<PAGE>

                                         PURCHASER

                                         By: /s/ John Warnock
                                             ----------------

                                         Name: John Warnock

                                         Title:
                                               -------------------------------

                                         Address:
                                                 -----------------------------

                                         -------------------------------------

[Counterpart Signature Page to Amendment No. 3 to Securities Purchase Agreement]EXHIBIT 10.1

November 7, 2005

Richard M. Hassett, M.D.
3665 Randall Hall
Atlanta, GA  30327

Dear Rick:

It is my pleasure to confirm our promotional offer to you for the position of
President and Chief Operating Officer of Matria Healthcare, Inc. ("Matria"),
effective today. In this position, you will report to me.

Your initial base salary will be $13,846.15 (gross before deductions) per
biweekly pay period. Future salary adjustments and assignment of job
responsibilities shall be based upon individual and Company performance. You
will be eligible for your first salary review in your new position on March 1,
2006. In accordance with Company policy, you will receive an automobile
allowance in the gross amount of $1,500.00 per month.

You will continue to be eligible to participate in the applicable annual Matria
Management Incentive Plan ("MIP") as in effect from time-to-time. Your annual
target bonus amount will increase from forty percent (40%) to fifty-five percent
(55%) of your base salary (as of each applicable calendar year end). Your
participation in the 2005 MIP at the new and former levels will be on a
pro-rated basis.

In connection with your promotion, Matria Healthcare, Inc.'s Stock Option
Committee has approved a grant to you of a stock option to purchase 50,000
shares of Matria Common Stock. Such stock options will vest over a three-year
period and otherwise will be subject to the standard terms and conditions of the
applicable stock option plan. This grant will be effective on the date you
assume your new position.

You will continue to accrue vacation benefits at the accrual rate of 1.66 days
per month (20 days per annum).

If your employment with the Company is terminated by the Company for reasons
other than "For Cause," you will be eligible for twelve (12) months of severance
pay to commence on the effective date of such termination of employment. As used
above, "For Cause" shall mean (A) your failure, neglect, or refusal, as
determined by the reasonable judgment of the Company, to perform the duties of
your position, which failure, neglect, or refusal has not been cured by you
within thirty (30) days of receipt of written notice from the Company of such
failure, neglect, or refusal and you have not at any time thereafter repeated
such failure or failed to sustain such cure; (B) any intentional act by you that
has the effect of injuring the reputation or business of the Company or any of
its affiliates in any material respect; (C) your continued or repeated absence
from the Company, unless such absence is (1) approved or excused by the chief
executive officer of Matria or (2) is the result of your illness, disability, or
incapacity (in which event (G) below shall control); (D) your use of illegal
drugs or repeated drunkenness; (E) your arrest and/or conviction for the
commission of a felony; (F) the commission by you of an act of fraud, deceit,
material misrepresentation or embezzlement against the Company, or any of its
affiliates; or (G) your disability, which shall mean your inability to perform
the essential functions of your position, with or without reasonable
accommodation by the Company, for an aggregate of one hundred twenty (120) days
(whether or not consecutive) during any 12-month period during the course of
your employment.

<PAGE>

Richard M. Hassett
November 7, 2005
Page 2 of 2

In lieu of any benefit to which you may become entitled under the preceding
paragraph, under certain circumstances, you will be entitled to the alternative
benefits described in the Change In Control Severance Compensation and
Restrictive Covenant Agreement attached as Exhibit A.

In your position, you will be allowed to attend Matria Board of Directors
meetings during the portions of such meetings where other members of Executive
Management are permitted to attend. At an appropriate time in the future,
consideration will be given toward your appointment to the Company's Board of
Directors.

In connection with your relocation from your former residence located in Boca
Raton, Florida, should you elect to leave the employ of the Company within
twelve (12) months following the completion of all relocation expenses
(excluding tax offset), you are bound by the repayment arrangements defined in
Section J, Repayment Agreement of Matria's Relocation Assistance Policy.

You will continue to be eligible to participate in the customary medical,
dental, life insurance and long-term disability benefits generally offered to
other employees in executive positions.

In the course of your employment, you may receive copies of Company policies and
procedures in effect from time to time and agree to abide by same, realizing
that changes can occur at any time and that such policies and procedures are not
to be construed as a contract of employment. You will also be reimbursed for
your reasonable business expenses in accordance with policy.

This offer is contingent upon your signing the Company's Confidentiality
Agreement and Non-Competition Agreement attached hereto as Exhibits B and C,
respectively. Please indicate your acceptance to the terms stated herein by
signing the acceptance below and returning this letter, along with an executed
original of the attached Agreements to me in the enclosed self-addressed
envelope. Please retain a copy of the fully executed Agreements for your
records. This offer supersedes the Letter Agreement dated October 27, 2004
between you and Diabetes Management Solutions, Inc.

Sincerely,

Parker H. Petit
Chairman of the Board and Chief Executive Officer

cc:      Thornton Kuntz

                                   ACCEPTANCE

         I have read and understand the foregoing which constitutes the entire
and exclusive agreement between the Company and the undersigned and supersedes
all prior or contemporaneous proposals, promises, understandings,
representations, conditions, oral or written, relating to the subject matter of
this agreement. I understand and agree that my employment is at-will and is
subject to the terms and conditions contained herein.

--------------------------------------------------------------------------------
Richard M. Hassett                                        Date

<PAGE>

                                    EXHIBIT A

                                CHANGE IN CONTROL
                             SEVERANCE COMPENSATION
                                       AND
                         RESTRICTIVE COVENANT AGREEMENT

         THIS SEVERANCE COMPENSATION AND RESTRICTIVE COVENANT AGREEMENT (the
"Agreement") is dated as of November 7, 2005 between MATRIA HEALTHCARE, INC., a
Delaware corporation (the "Company"), and RICHARD M. HASSETT, M.D. (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) 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)); and (ii) 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 corporations 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
               fifty percent (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.

         (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 twenty-five
percent (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.

<PAGE>

         (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, fifty percent (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, fifty percent (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 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.

         3.    Termination Following Change in Control.
               ---------------------------------------

               (a)   General. 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.

<PAGE>

               (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:

                     (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;

<PAGE>

                     (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 stock incentive and long-term incentive plans,
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.

<PAGE>

               (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 two times the Executive's annual
base compensation 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 two years 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 the shorter of a period of one year after the
Date of Termination or expiration of the lease term, Company shall allow the
Executive to utilize for his business and personal use any Company leased
automobile furnished to him immediately prior to the Change in Control 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 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. For the balance of the
period of one year after the Date of Termination (or for the entire one-year
period if Executive was not being furnished a leased automobile on the Date of
Termination), the Company shall pay the Executive a car allowance (at the rate
of $1,500 per month or at such higher rate as is in effect for Executive's
position immediately prior to a Change in Control or the Date of Termination)
and extend full insurance coverage for the Executive's primary automobile in
favor of the Executive, as additional named insured, during such period.

               (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.

<PAGE>

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
any other agreement between Executive and the Company 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.

               (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.

<PAGE>

         5.    Protective Covenants.
               --------------------

               (a)   Definitions.
                     -----------

               This Subsection sets forth the definition of certain capitalized
terms used in Subsections (a) through (f) of this Section 5.

                     (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 (other than at retail) lancets
or lancing devices for sampling blood ("Competing Products"), and/or (b)
provides obstetrical home care services, including, without limitation, programs
for monitoring patients who are at risk of preterm delivery, programs for
managing patients suffering from obstetrical hypertension or diabetes, infusion
therapy services involving drugs to control preterm labor, nursing services and
maternity management services for both low and high risk pregnancies, and/or (c)
provides disease management services for diabetes, congestive heart failure,
coronary artery disease, chronic obstructive pulmonary disease, asthma, cancer,
pregnancy, depression, chronic pain or hepatitis C, including, without
limitation, patient education, risk screening and stratification, case
management and clinical services, or on-line health and wellness 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 twenty percent (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 one percent (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 thirty-five percent (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.

                     (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).

<PAGE>

               (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.

<PAGE>

               (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:
                       Richard M. Hassett, M.D.
                       3665 Randall Hall
                       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.

         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. 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.

<PAGE>

         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.

         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 and Non-Solicitation 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:
                                           -------------------------------------
                                           Its Chairman of the Board

                                       -----------------------------------------
                                       Richard M. Hassett, M.D.
                                       Executive

<PAGE>

                                    EXHIBIT B

                 NON-SOLICITATION AND CONFIDENTIALITY AGREEMENT

          THIS AGREEMENT is made by and between Matria Healthcare, Inc., (the
"Company") and Richard M. Hassett, M.D. ("Employee"). In consideration of the
employment of the Employee and the salary and other remuneration and benefits
paid by the Company to the Employee while Employee is employed by the Company,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties, the parties agree:

1.   Definitions.
     -----------

     a.   "Business" means the business of providing disease management programs
          for diabetes, congestive heart failure, coronary artery disease,
          asthma, chronic obstructive pulmonary disease, cancer, pregnancy,
          depression, chronic pain, obesity and hepatitis C; providing
          obstetrical home care and maternity management services; providing
          health and wellness programs targeting weight loss, nutrition and
          diet, fitness, smoking cessation and stress management; and designing,
          manufacturing, assembling and/or distributing lancets and lancing
          devices.

     b.   "Customer of Company" means any customer to which the Company provides
          the disease management services, obstetrical services, on-line health
          and wellness programs and medical devices, described in subsection 1a.

     c.   "Material Contact" as used in Section 5 below means personal contact
          with a Customer of the Company in an effort to initiate, maintain or
          further a business relationship between Company and such Customer.
          "Material Contact" as used in Section 6 below means direct personal
          contact between Employee and another employee of the Company, its
          parent or other subsidiary of its parent in the performance of
          Employee's job duties on behalf of the Company.

     d.   "Confidential Information" means information about the Company, its
          parent and the other subsidiaries of its parent and their respective
          Employees, Customers and/or patients which is not generally known
          outside of the applicable entity, which Employee learns of in
          connection with Employee's employment with the Company, and which
          would be useful to competitors of the applicable entity. Confidential
          Information includes, but is not limited to: (1) business and
          employment policies, marketing methods and the targets of those
          methods, bids, proposals, financial data, Customer lists, business
          plans, promotional materials and pricing; (2) the terms upon which the
          applicable entity obtains services from its service providers or
          products from its vendors; (3) the nature, origin, composition and
          development of the Company's services; (4) the way in which the
          applicable entity provides services to patients; (5) information
          provided by third parties which the Company has a duty to protect from
          disclosure, such as patient information; (6) personnel information;
          (7) information regarding technology used by the applicable entity in
          the business; and (8) clinical outcomes.

     e.   "Trade Secrets" means Confidential Information which meets the
          additional requirements of the Uniform Trade Secrets Act or similar
          state law, as applicable.

2.   Employment. Employee agrees to faithfully perform the duties assigned to
     ----------
     Employee, and will not engage in any other employment or business activity
     while employed by Company which would interfere with Employee's full-time
     performance of Employee's duties for Company, or cause a conflict of
     interest. Employee covenants that Employee is not subject to any agreements
     with a prior employer restricting Employee's ability to work for Company.
     Employee further covenants that Employee does not possess any property or
     Confidential Information belonging to any prior employer for use on behalf
     of Company. Employee agrees to abide by all of the Company's policies and
     procedures, which may be amended from time to time.

3.   Duty of Confidentiality. Employee agrees that during employment with the
     -----------------------
     Company and for a period of three years following the end of that
     employment for any reason, Employee shall not directly or indirectly
     divulge or make use of any Confidential Information or Trade Secrets
     outside of employment with Company (so long as the information remains
     confidential) without prior written consent of the Company. Employee
     acknowledges that applicable law may impose longer duties of
     non-disclosure.

4.   Return of Property and Information. Employee agrees to return all of the
     ----------------------------------
     Company's property within seven days following the end of Employee's
     employment with the Company for any reason. 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 Employee has developed or collected in the scope of
     Employee's employment, as well as all Company-issued equipment, vehicles,
     keys, devices, computers, cell phones, pagers, materials, documents, plans,
     records, notebooks, drawings, or papers. To the extent Employee maintains
     information belonging to Company in electronic form on any computers or
     other electronic devices owned by Employee, Employee agrees to delete all
     such information fully and finally within seven (7) days following the end
     of employment with Company for any reason, and, if requested by Company, to
     confirm the fact of such deletion in writing.

<PAGE>

5.   Non-Solicitation Covenant. While employed by the Company and for a period
     -------------------------
     of twelve (12) months following the end of employment for any reason,
     Employee will not directly or indirectly solicit or attempt to solicit from
     any of the Customers with whom Employee had Material Contact during the
     last two years of Employee's employment with the Company any business in
     competition with the Business of the Company.

6.   Non-Recruitment of Company Employees. While employed by the Company, and
     ------------------------------------
     for a period of twelve (12) months following the end of employment for any
     reason, Employee will not directly or indirectly solicit or attempt to
     solicit any employee of the Company, its parent or other subsidiaries of
     its parent with whom Employee had Material Contact during the last two (2)
     years of Employee's employment with the Company for the purpose of
     encouraging, enticing, or causing said employee to terminate employment
     with the Company.

7.   Other Employment After Termination. Employee acknowledges and represents
     ----------------------------------
     that Employee has substantial experience and knowledge such that Employee
     can readily obtain subsequent employment which does not violate this
     Agreement.

8.   Choice of Law and Forum Selection. All provisions of this Agreement shall
     ---------------------------------
     be governed by and construed in accordance with the laws of the State of
     Georgia without reference to principles of conflict of laws. Any lawsuit,
     claim, or other legal proceeding arising out of or relating to this
     Agreement shall be brought exclusively in the federal or state courts
     located in the State of Georgia, and the Employee and the Company hereby
     submit to personal jurisdiction in the State of Georgia and to venue in
     such courts.

9.   Construction of Agreement. The covenants contained herein shall be presumed
     -------------------------
     to be enforceable, and any reading causing unenforceability shall yield to
     a construction permitting enforcement. If any single covenant or clause
     shall be found unenforceable, it shall be severed and the remaining
     covenants and clauses enforced in accordance with the tenor of the
     Agreement. In the event a court should determine not to enforce a covenant
     as written due to overbreadth, the parties specifically agree that said
     covenant shall be enforced to the extent reasonable, whether said revisions
     be in time, territory, or scope of prohibited activities.

10.  Successors. This Agreement shall be binding upon and inure to the benefit
     ----------
     of the Company and its successors and assigns and the Employee, Employee's
     heirs, executors and administrators.

11.  Entire Agreement and Modification. This Agreement represents the entire
     ---------------------------------
     understanding between Employee and the Company on the matters addressed
     herein and may not be modified, changed or altered by any promise or
     statement by the Company other than in writing signed by Employee and an
     authorized representative of Company. This Agreement supersedes and
     entirely replaces any other prior discussions, agreements, and
     understandings of every kind and nature, whether oral or in writing,
     between the parties with respect to the subject matters addressed herein.
     The waiver by the Company of a breach of any provision of this Agreement by
     any employee shall not be construed as a waiver of rights with respect to
     any subsequent breach by Employee.

12.  Injunctive Relief. Employee understands, acknowledges and agrees that in
     -----------------
     the event of a breach or threatened breach of any of the covenants and
     promises contained in this Agreement, the Company shall suffer irreparable
     injury for which there is no adequate remedy at law, and the Company will
     therefore be entitled to injunctive relief from the federal or state courts
     located in the State of Georgia enjoining said breach or threatened breach.
     The existence of any claim or cause of action by Employee against the
     Company, including any dispute relating to the termination of this
     Agreement, shall not constitute a defense to enforcement of the covenants
     and promises contained herein by injunction. Employee further acknowledged
     that the Company also shall have the right to seek a remedy at law as well
     as or in lieu of equitable relief in the event of any such breach.

     Employee has carefully read and understands the provisions of this
     Agreement, and understands that he or she has the right to seek independent
     advice prior to signing the Agreement. Nothing contained in this Agreement
     creates a contractual right to employment for a definite term, and either
     party may terminate the employment subject to this Agreement with or
     without cause at any time, and for any reason, including no reason.

Executed this_____________day of____________________________, ___________.
                 (day)                     (month)               (year)

                                             Matria Healthcare, Inc.
---------------------------------------
Richard M. Hassett, M.D.

                                                  ------------------------------
                                             By:  Thornton A. Kuntz, Jr.
---------------------------------------           Vice President, Administration
(Print Name)

<PAGE>

                                    EXHIBIT C

                            NON-COMPETITION AGREEMENT

         THIS AGREEMENT is made by and between Matria Healthcare, Inc., (the
"Company") and Richard M. Hassett, M.D. ("Employee"). In consideration of the
employment of the Employee and the salary and other remuneration and benefits
paid by the Company to the Employee while Employee is employed by the Company,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties, the parties agree:

                               1. NON-COMPETITION
                                  ---------------

(a)      The Employee agrees that the Company is engaged in the highly
         competitive business of providing disease management programs for
         diabetes, congestive heart failure, coronary heart disease, asthma,
         chronic obstructive pulmonary disease, cancer, pregnancy, depression,
         chronic pain, obesity and hepatitis C; providing obstetrical home care
         and maternity management services; providing health and wellness
         programs targeting weight loss, nutrition and diet, fitness, smoking
         cessation and stress management; and designing, manufacturing,
         assembling and/or distributing lancets and lancing devices (the
         "Business"). Employee is responsible for managing and supporting the
         Company's operations, sales and marketing, strategic intiatives and
         business development for the Business throughout the 48 contiguous
         states of the continental United States. The Employee agrees that, due
         to Employee's position, Employee's engaging in any business which is
         competitive with the Business will cause the Company great and
         irreparable harm.

(b)      The Employee agrees that Employee's work for the Company will bring
         Employee into close contact with many of the Company's customers, trade
         secrets and confidential and proprietary information. The Employee
         further agrees that the covenants in subsection 1(d) of this Agreement
         are reasonable and necessary to protect the Company's legitimate
         business interests in its customer relationships, trade secrets and
         proprietary and confidential information. The Employee agrees that the
         Employee would inevitably disclose the Company's confidential
         information and trade secrets if he were to violate subsection 1(d).

(c)      The Employee agrees that while employed by the Company, Employee will
         faithfully devote Employee's best efforts to advance the interests of
         the Company and will not directly or indirectly, on Employee's own
         behalf or another's behalf, engage in any manner in any business of the
         type described in subsection 1(a) other than as an employee of the
         Company.

(d)      The Employee agrees that, for one (1) year after the cessation of
         employment with the Company, the Employee will not, directly or
         indirectly, perform the same or substantially the same job duties
         described in subsection 1(a) on behalf of any business that competes
         with the Business of the Company. Subsection 1(d) is limited to the
         following geographic area: the 48 contiguous states of the continental
         United States.

                                2. SEVERABILITY
                                   ------------

     If any part or provision in this Agreement is determined to be in violation
     of any law, rule or regulation or otherwise unenforceable, such
     determination shall not affect the validity of any other part or provision
     of this Agreement, but such other parts or provisions shall remain in full
     force and effect. Each provision, paragraph, and subparagraph of this
     Agreement is severable from every other provision, paragraph and
     subparagraph and constitutes a separate and distinct covenant. If a court
     concludes that any provision, paragraph or subparagraph of this Agreement
     is overbroad or unenforceable for any reason, the court may modify that
     provision, paragraph or subparagraph to the minimum extent necessary and
     then enforce it as modified. The covenants in this Agreement are
     independent of any other rights or obligations between the parties, and any
     dispute between the parties as to any such right or obligations shall not
     delay, preclude or otherwise limit the enforcement of any rights or
     obligations in this Agreement.

<PAGE>

                                  3. SUCCESSORS
                                     ----------

     This Agreement shall be binding upon and inure to the benefit of the
     Company and its successors and assigns, and the Employee, Employee's heirs,
     executors and administrators.

                              4. INJUNCTIVE RELIEF
                                 -----------------

     The Employee understands, acknowledges and agrees that in the event of a
     breach or threatened breach of any of the covenants and promises contained
     in this Agreement, the Company shall suffer irreparable injury for which
     there is no adequate remedy at law, and the Company will therefore be
     entitled to injunctive relief from the courts enjoining said breach or
     threatened breach. The Employee further acknowledges that the Company also
     shall have the right to seek a remedy at law as well as or in lieu of
     equitable relief in the event of any such breach.

                              5. WAIVER OF BREACH
                                 ----------------

     The Company's waiver of a breach of any provision of this Agreement by the
     Employee does not waive any subsequent breach by the Employee, nor does the
     Company's failure to take action against any other employee for similar
     breaches operate as a waiver by the Company of a breach.

                      6. ENTIRE AGREEMENT AND MODIFICATION
                         ---------------------------------

     This Agreement represents the entire understanding between Employee and
     the Company on the matters addressed herein and may not be modified,
     changed or altered by any promise or statement by the Company other than in
     writing signed by Employee and an authorized representative of Company.
     This Agreement supersedes and entirely replaces any other all prior
     discussions, agreements, and understandings of every kind and nature,
     whether oral or in writing, between the parties with respect to the subject
     matters addressed herein. The waiver by the Company of a breach of any
     provision of this Agreement by any employee shall not be construed as a
     waiver of rights with respect to any subsequent breach by Employee.

                      7. CHOICE OF LAW AND FORUM SELECTION
                         ---------------------------------

     All provisions of this Agreement shall be governed by and construed in
     accordance with the laws of the State of Delaware without reference to
     principles of conflict of laws. Any lawsuit, claim, or other legal
     proceeding arising out of or relating to this Agreement shall be brought
     exclusively in the federal or state courts located in the State of
     Delaware, and the Employee and the Company hereby submit to personal
     jurisdiction in the State of Delaware and to venue in such courts.

                              8. FUTURE EMPLOYMENT
                                 -----------------

     For so long as the restricted periods in the covenants in this Agreement
     remain in effect, Employee shall provide any employers or prospective
     employers with a copy of this Agreement. For so long as the restricted
     periods in the covenants in this Agreement remain in effect, the Employee
     also expressly consents to the Company providing a copy of this Agreement
     to any of the Employee's future employers.

     The parties hereto have duly executed this Agreement on the date identified
     below.

     Employee has carefully read and understands the provisions of this
     Agreement and has sought independent legal advice at his own expense prior
     to signing this Agreement. Nothing contained in this Agreement creates a
     contractual right to continued employment for a definite term, and either
     Party may terminate the Employee's employment with the Company at any time
     and for any reason. Employee represents and warrants that Employee has
     entered into this Agreement voluntarily and after consulting with
     whomsoever Employee wished.

Executed this ___________day of _________________________, 20______.
                 (day)                 (month)               (year)

                                            Matria Healthcare, Inc.
-------------------------------
Richard M. Hassett, M.D.
                                                 -------------------------------
-------------------------------             By:  Thornton A. Kuntz, Jr.
(Print Name)                                     Vice President, Administration

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