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 RICHARD M. HASSETT, M.D. (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

(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

(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 benefit), 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 benefi