Document:

EX-10.56

    
      
        

          

          

          SEVERANCE
            COMPENSATION

          AND

          RESTRICTIVE
            COVENANT AGREEMENT

          

          

          THIS
            SEVERANCE COMPENSATION AND RESTRICTIVE COVENANT AGREEMENT
            (the
“Agreement”) is dated as of April 26, 2006 between MATRIA
            HEALTHCARE, INC.,
            a
            Delaware corporation (the “Company”), and THORNTON
            A. KUNTZ, JR. (the
            “Executive”).

          

          

          WHEREAS,
            the
            severance benefits payable by the Company to the Executive as provided
            herein
            are in part intended to ensure that the 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.
            The
            term of this Agreement began on April 26, 2006 and shall terminate, except
            to
            the extent that any obligation of the Company hereunder remains unpaid
            as of
            such time, upon 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 2(b)) or Retirement (as defined in
            Section 2(c)), by the Company for Cause (as defined in Section 2(d)), or by
            the Executive other than for Good Reasons (as defined in Section
            2(e)).

          

          2. Termination
            of Employment During the Term.

          

          (a) General.
            The
            Executive shall be entitled to the compensation and benefits provided
            in
            Section 3 upon the 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 2(f) is thereafter given to the
            Executive
            by the Company.

          

          (c) Retirement.
            The
            term “Retirement” as used in this Agreement shall mean termination of the
            Executive’s employment by the Company based on the Executive’s having attained
            age 65 or such later retirement age as shall have been established pursuant
            to a
            written agreement between the Company and the Executive.

          

          (d) Cause.
            The
            term “Cause” for purposes of this Agreement shall mean (i) the Executive’s
            failure, neglect or refusal, as determined by the reasonable judgment
            of the
            Company, to perform the duties of his position, unless the Executive
            shall have
            cured such failure, neglect or refusal within 30 days of receipt of written
            notice from the Company of such failure, neglect or refusal and has not
            at any
            time thereafter repeated such failure or failed to sustain such cure;
            (ii) any
            intentional act by the Executive that has the effect of injuring the
            reputation
            or business of the Company or any of its affiliates in any material respect;
            (iii) the Executive’s continued or repeated absence from the Company, unless
            such absence is (x) approved or excused by the Chief Executive Officer
            of the
            Company or (y) is the result of illness, Disability or incapacity; (iv)
            the
            Executive’s use of illegal drugs or repeated drunkenness; (v) the Executive’s
            arrest and/or conviction for the commission of a felony; or (vi) the
            commission
            by the Executive of an act of fraud, deceit, material misrepresentation
            or
            embezzlement against the Company or any of its affiliates. 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 (i) a reduction of the
            Executive’s base salary; (ii) any failure of the Company to continue the
            Executive’s participation in its applicable Management Incentive Plan or any
            reduction in the Executive’s bonus amount as expressed as a percentage of the
            Executive’s base salary; (iii) failure of the Company to continue the
            Executive’s participation in any benefit programs except those programs or
            arrangements that may be discontinued for all other similarly situated
            executives of the Company; or (iv) a relocation of the Company’s principal
            executive offices to a location more than 50 miles outside of Marietta,
            Georgia
            or the relocation of the Executive’s office to any place other than the
            Company’s principal executive offices.

          

          (f) Notice
            of Termination.
            Any
            termination of the Executive’s employment by the Company for a reason specified
            in Section 2(b), 2(c) or 2(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 2(b), 2(c) or 2(d) and which sets forth in reasonable detail
            the
            facts and circumstances claimed to provide a basis for termination of
            the
            Executive’s employment under the provision so indicated. For purposes of this
            Agreement, no termination of the Executive’s employment by the Company shall
            constitute a termination for Disability, Retirement or Cause unless such
            termination is preceded by a Notice of Termination.

          

          (g) Date
            of Termination.
            For
            purposes of this Agreement, “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.

          

          3. Compensation
            and Benefits upon Termination of Employment.

          

          (a) If
            the
            Company shall terminate the Executive’s employment other than pursuant to
            Section 2(b), 2(c) or 2(d) and Section 2(f), or if the Executive shall
            terminate his or her employment for Good Reason, then, provided the Executive
            shall have executed the Company’s standard general release (which release shall
            not obligate the Executive to release any benefits payable in connection
            with
            any supplemental executive retirement plan or other retiree benefits),
            the
            Company shall pay to the Executive, as severance compensation and in
            consideration of the Executive’s adherence to the terms of Section 4 hereof and
            execution of the aforesaid general release, the following:

          

          (i) On
            the
            Date of Termination, the Company shall become liable to the Executive
            for an
            amount equal to one times the Executive’s annual base compensation, targeted
            base bonus and annual car allowance, which amount shall be payable over
            the one
            year following the Date of Termination on the regular payroll
            dates.

          

          (ii) For
            a
            period of one year 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 insurance or death benefit plan, or other present or future
            similar
            group employee benefit plan or program of the Company for which he was
            eligible
            at the Date of Termination, to the same extent as if the Executive had
            continued
            to be an employee of the Company during such period.

          

          (iii) 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 nonqualified 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.
            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-month anniversary of the Executive’s separation from service
            (within
            the meaning of Section
            409A(a)(2)(A)(i) of the Code). The amounts provided for in this Agreement
            that
            constitute nonqualified deferred compensation shall be paid as soon as
            the
            six-month deferral period ends. In the event that benefits are required
            to be
            deferred, any such benefit may be provided during such six-month 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 six month 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.

          

          (b) The
            parties hereto agree that the payments provided in Section 3(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 4 hereof.

          

          (c) The
            payments provided in Section 3(a) above shall be in lieu of any other
            severance compensation otherwise payable to Executive under any other
            agreement
            between Executive and the Company (other than the Change in Control Severance
            Compensation and Restrictive Covenant Agreement of even date (the “CIC”)) 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. In circumstances
            in
            which the Executive is entitled to severance benefits under the CIC,
            the
            Company’s obligations under this Agreement shall be null and void.

          

          4. Protective
            Covenants.

          

          (a) Definitions.

          

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

          

          (i)
            “Competing
            Business”
shall
            mean a business (other than the Company) that, directly or through a
            controlled
            subsidiary or through an affiliate, (a) provides 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) provides obstetrical home care; and/or (c) provides on-line
            programs
            targeting weight loss, nutrition and diet, fitness, smoking cessation
            or stress
            management; and/or (d) provides informatics services (collectively, “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 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 provision of Competing Services,
            unless
            more than thirty-five percent (35%) of the gross revenues of the Competing
            Business are derived from 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 one
            year after the Date of Termination.

          

          (iv)
            “Customers”
shall
            mean actual customers, clients or referral sources to or on behalf of
            which the
            Company provides Competing Services (A) during the one year prior to
            the date of
            this Agreement and (B) during the Covenant Period.

          

          (v)
            “Restricted
            Territory”
shall
            mean the 48 contiguous states of the continental United States.

          

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

          

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

          

          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 of the
            Executive’s adhering to the terms set forth in Section 4 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.

          

          6. 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:

          

          Thornton
            A. Kuntz, Jr.

          4238
            Highborne Drive

          Marietta,
            GA 30066

          

          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.

          

          7. 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
            Delaware.

          

          8. 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.

          

          9. 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 nonqualified 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 and the Executive shall cooperate to modify
            this
            Agreement as necessary to comply with the requirements of Section 409A
            of the
            Code. 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 or interest
            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.

          

          10. 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.

          

          11. 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.

          

          12. 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
            Chief
            Executive Officer

          

          

          THORNTON
            A. KUNTZ, JR.

          

           

          ExecutiveChange-in-Control Severance Compensation and Restrictive Covenant Agreement
      between Matria and Thornton A. Kuntz, Jr. dated April 26, 2006

    
      
        

          CHANGE
            IN CONTROL

          SEVERANCE
            COMPENSATION

          AND

          RESTRICTIVE
            COVENANT AGREEMENT

          

          

          THIS
            SEVERANCE COMPENSATION AND RESTRICTIVE COVENANT AGREEMENT
            (the
“Agreement”) is dated as of April 26, 2006 between MATRIA
            HEALTHCARE, INC.,
            a
            Delaware corporation (the “Company”), and THORNTON
            A. KUNTZ, JR. (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 disruptive 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 the Executive as provided
            herein
            are in part intended to ensure that the 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 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:

          

          (a)  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.

          

          (b) 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.

          

          (c) 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.

          

          (d) 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.

          

          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.

          

          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.

          

          (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.

          

          (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;

          

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

          

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

          

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

          

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

          

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

          

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

          

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

          

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

          

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

          

          (g) Date
            of Termination.
“Date
            of Termination” shall mean (a) if
            the Executive’s employment is terminated by the Company for Disability, 30 days
            after a Notice of Termination is given to the Executive (provided that
            the
            Executive shall not have returned to the performance of the Executive’s duties
            on a full-time basis during such 30-day period) or (b) if
            the Executive’s employment is terminated by the Company or the Executive for any
            other reason, the date on which the Executive’s termination is effective;
            provided that, if within 30 days after any Notice of Termination is given
            to the
            Executive by the Company the Executive notifies the Company that a dispute
            exists concerning the termination, the Date of Termination shall be the
            date the
            dispute is finally determined whether by mutual agreement by the parties
            or upon
            final judgment, order or decree of a court of competent jurisdiction
            (the time
            for appeal therefrom having expired and no appeal having been perfected).
            For
            purposes of this Agreement, the Executive’s employment by the Company shall be
            deemed terminated upon the date the Executive incurs a “separation from service”
within the meaning of Section
            409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (“Code”), and
            the regulations issued thereunder.

          

          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:

          

          (i) 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, targeted
            base bonus and annual car allowance 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.

          

          (ii) 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. Also during such two-year period,
            the
            Company will extend full insurance coverage for the Executive’s primary
            automobile in favor of the Executive, as an additional named
            insured.

          

          (iii) 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 nonqualified 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.
            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). The amounts provided for in this Agreement
            that
            constitute nonqualified deferred compensation shall be paid as soon as
            the six
            month deferral period ends. In the event that benefits are required to
            be
            deferred, any such benefit may be provided during such six month 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 six month 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.

          

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

          

          (c) The
            payments provided in Section 4(a) above shall be in lieu of any other
            severance compensation otherwise payable to Executive under 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. For the avoidance of doubt, if more than one
            Change in
            Control occurs during the term hereof, the term of this Agreement shall
            be
            measured from the latest such Change in Control to occur and the amount
            of
            compensation payable under Section 4(a)(1) shall be based upon the highest
            annual base salary, targeted base bonus and car allowance payable to
            Executive
            on the date of any such Change in Control, but Executive shall not be
            entitled
            to receive severance compensation under Section 4(a) more than
            once.

          

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

          

          5. Protective
            Covenants.

          

          (a) Definitions.

          

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

          

          (i)
            “Competing
            Business”
shall
            mean a business (other than the Company) that, directly or through a
            controlled
            subsidiary or through an affiliate, (a) provides 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) provides obstetrical home care; and/or (c) provides on-line
            programs
            targeting weight loss, nutrition and diet, fitness, smoking cessation
            or stress
            management; and/or (d) provides informatics services (collectively, “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 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 provision of Competing Services,
            unless
            more than thirty-five percent (35%) of the gross revenues of the Competing
            Business are derived from 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 or referral sources to or on behalf of
            which the
            Company provides Competing Services (A) during the two years prior to
            the date
            of this Agreement and (B) during the Covenant Period.

          

          (v)
            “Restricted
            Territory”
shall
            mean the 48 continuous states of the continental United States.

          

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

          

          (c) Limitation
            on Soliciting Customers.
            In
            consideration of the Company’s entering into this Agreement, the Executive
            agrees that during the Covenant Period, the Executive will not, without
            the
            prior written consent of the Company, alone or in conjunction with any
            other
            party, solicit, divert or appropriate or attempt to solicit, divert or
            appropriate on behalf of a Competing Business with which Executive has
            a
            Competitive Position any Customer located in the Restricted Territory
            (or any
            other Customer with which the Executive had any direct contact on behalf
            of the
            Company) for the purpose of providing the Customer or having the Customer
            provided with a Competing 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 or any subsidiary 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 or any subsidiary of 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 (“Successor or Assign”), 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 (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. If at any time during the term of this Agreement
            the
            Executive is employed by any corporation a majority of the voting securities
            of
            which is then owned by the Company, “Company” as used in Sections 3, 4, 12
            and 14 hereof shall in addition include such employer. In such event,
            the
            Company agrees that it shall pay or shall cause such employer to pay
            any amounts
            owed to the Executive pursuant to Section 4 hereof.

          

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

          

          8. Notice.
            For
            purposes of this Agreement, notices and all other communications provided
            for in
            this Agreement shall be in writing and shall be deemed to have been duly
            given
            when delivered 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:

          

          Thornton
            A. Kuntz, Jr.

          4238
            Highborne Drive

          Marietta,
            GA 30066

          

          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
            Delaware. This Agreement supersedes that certain Change in Control Severance
            Compensation and Restrictive Covenant Agreement between the parties dated
            February 19, 2002.

          

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

          

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

          

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

          

          13. 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 nonqualified 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 and the Executive shall cooperate to modify
            this
            Agreement as necessary to comply with the requirements of Section 409A
            of the
            Code. 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 or interest
            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. 

          

          14. 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.

          

          15. 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.

          

          16. 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
            Chief
            Executive Officer

          

          

          THORNTON
            A. KUNTZ, JR.

          

           

          Executive

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