CHANGE IN CONTROL
SEVERANCE COMPENSATION
AND
RESTRICTIVE COVENANT AGREEMENT
THIS SEVERANCE COMPENSATION AND RESTRICTIVE COVENANT AGREEMENT
("Agreement") is dated as of October 4, 2000 between MATRIA HEALTHCARE, INC., a
Delaware corporation (the "Company"), and PARKER H. PETIT (the "Executive").
WHEREAS, the Company, has determined that it is appropriate to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including the Executive, to their assigned duties without
distraction in potentially disturbing circumstances arising from the possibility
of a Change in Control (as hereinafter defined) of the Company; and
WHEREAS, the severance benefits payable by the Company to Executive as
provided herein are in part intended to ensure that Executive receives
reasonable compensation given the specific circumstances of Executive's
employment history with the Company;
NOW, THEREFORE, in consideration of their respective obligations to one
another set forth in this Agreement, and other good and valuable consideration,
the receipt, sufficiency and adequacy of which the parties hereby acknowledge,
the parties to this Agreement, intending to be legally bound, hereby agree as
follows:
1. Term. This Agreement shall terminate, except to the extent that any
obligation of the Company hereunder remains unpaid as of such time, upon the
earliest of (i) October 4, 2003 if a Change in Control of the Company has not
occurred between the date hereof and October 4, 2003; (ii) the Date of
Termination (as hereinafter defined) of the Executive's employment with the
Company as a result of the Executive's death, Disability (as defined in Section
3(b)) or Retirement (as defined in Section 3(c)), by the Company for Cause (as
defined in Section 3(d)) or by the Executive other than for Good Reason (as
defined in Section 3(e)); or (iii) three years from the date of a Change in
Control if the Executive's employment with the Company has not terminated as of
such time.
2. Change in Control. For purposes of this Agreement, "Change in
Control" shall mean changes in the ownership of a corporation, changes in the
effective control of a corporation, changes in ownership of a substantial
portion of a corporation's assets and a disposition of a substantial portion of
a corporation's assets, all as defined below:
(a) A change in the ownership of a corporation occurs on the date that
any one person, or more than one person acting as a group, acquires ownership of
stock of that corporation which, together with stock held by such person or
group, represents more than 50% of the total fair market value or total voting
power of the stock of such corporation. An increase in the percentage of stock
owned by any one person, or persons acting as a group, as a result of a
transaction in which the corporation acquires its stock in exchange for property
will be treated as an acquisition of stock.
(b) A change in the effective control of a corporation occurs on the
date that either: any one person, or more than one person acting as a group
becomes the beneficial owner of stock of the corporation possessing 25% or more
of the total voting power of the stock of such corporation; or a majority of
members of the corporation's board of directors is replaced during any 24 month
period by directors whose appointment or election is not endorsed by at least
two-thirds (2/3) of the members of the corporation's board of directors who were
directors prior to the date of the appointment or election of the first of such
new directors.
(c) A change in the ownership of a substantial portion of a
corporation's assets occurs on the date that any one person, or more than one
person acting as a group, acquires (or has acquired during the 12 month period
ending on the date of the most recent acquisition by such person or persons)
assets from the corporation that have a total fair market value equal to or more
than one-half (1/2) of the total fair market value of all of the assets of the
corporation immediately prior to such acquisition or acquisitions. The transfer
of assets by a corporation is not treated as a change in the ownership of such
assets if the assets are transferred: to a shareholder of the corporation
(immediately before the asset transfer) in exchange for such shareholder's
capital stock of the corporation having a fair market value approximately equal
to the fair market value of such assets; or to an entity, 50% or more of the
total value or voting power of which is owned, directly or indirectly, by the
corporation.
(d) A disposition of a substantial portion of a corporation's assets
occurs on the date that the corporation transfers assets by sale, lease,
exchange, distribution to shareholders, assignment to creditors, foreclosure or
otherwise, in a transaction or transactions not in the ordinary course of the
corporation's business (or has made such transfers during the 12 month period
ending on the date of the most recent transfer of assets) that have a total fair
market value equal to or more than one-half (1/2) of the total fair market value
of all of the assets of the corporation as of the date immediately prior to the
first such transfer or transfers. The transfer of assets by a corporation is not
treated as a disposition of a substantial portion of the corporation's assets if
the assets are transferred to an entity, 50% or more of the total value or
voting power of which is owned, directly or indirectly, by the corporation.
For purposes of the provision of this Agreement defining "Change in Control,"
(i) references to the Company in this Agreement include the Delaware corporation
known as Matria Healthcare, Inc. as of the date of execution of this Agreement,
and any corporation which is the legal successor to such corporation by virtue
of merger or share exchange; and (ii) the terms "person," "acting as a group"
and "ownership" shall have the meanings prescribed in Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, as amended, and Rule 13d-3
promulgated thereunder; provided, however, that in any merger, consolidation or
share exchange in which less than 50% of the outstanding voting securities of
the Company or its successor corporation are held by the former shareholders of
the Company, the shareholders of the other parties to the transaction shall be
deemed to have acted as a group that acquired ownership of more than 50% of the
outstanding voting securities of the Company, resulting in a change in ownership
under Section 2(a) above.
3. Termination Following Change in Control.
(a) If the Executive is still an employee of the Company at
the time of a Change in Control, the Executive shall be entitled to the
compensation and benefits provided in Section 4 upon the subsequent termination
of the Executive's employment with the Company by the Executive or by the
Company during the term of this Agreement, unless such termination is as a
result of (i) the Executive's death; (ii) the Executive's Disability; (iii) the
Executive's Retirement; (iv) the Executive's termination by the Company for
Cause; or (v) the Executive's decision to terminate employment other than for
Good Reason.
(b) Disability. The term "Disability" as used in this
Agreement shall mean termination of the Executive's employment by the Company as
a result of the Executive's incapacity due to physical or mental illness,
provided that the Executive shall have been absent from his duties with the
Company on a full-time basis for six consecutive months and such absence shall
have continued unabated for 30 days after Notice of Termination as described in
Section 3(f) is thereafter given to the Executive by the Company.
(c) Retirement. The term "Retirement" as used in this
Agreement shall mean termination of the Executive's employment by the Company
based on the Executive's having attained age 65 or such later retirement age as
shall have been established pursuant to a written agreement between the Company
and the Executive. Termination of Executive's employment at a time when
Executive is eligible to receive benefits under the Company's Retirement Benefit
Award or the Company's Protective Umbrella for Lifelong Security of Employees
Program shall not constitute Retirement unless Executive shall have attained
such age.
(d) Cause. The term "Cause" for purposes of this Agreement
shall mean the Company's termination of the Executive's employment on the basis
of criminal or civil fraud on the part of the Executive involving a material
amount of funds of the Company. Notwithstanding the foregoing, the Executive
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Company's Board of Directors at a meeting of the Board called and held
for such purpose (after reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive's counsel, to be heard before the
Board) finding that in the good faith opinion of the Board the Executive was
guilty of conduct set forth in the first sentence of this Section 3(d) and
specifying the particulars thereof in detail. For purposes of this Agreement
only, the preparation and filing of fictitious, false or misleading claims in
connection with any federal, state or other third party medical reimbursement
program, or any other violation of any rule or regulation in respect of any
federal, state or other third party medical reimbursement program by the Company
or any subsidiary of the Company shall not be deemed to constitute "criminal
fraud" or "civil fraud".
(e) Good Reason. For purposes of this Agreement, "Good Reason" shall mean
any of the following actions taken by the Company without the Executive's
express written consent:
(i) The assignment to the Executive by the Company of duties inconsistent
with, or a material adverse alteration of the powers and functions associated
with, the Executive's position, duties, responsibilities and status with the
Company prior to a Change in Control, or an adverse change in the Executive's
titles or offices as in effect prior to a Change in Control, or any removal of
the Executive from or any failure to re-elect the Executive to any of such
positions, except in connection with the termination of his employment for
Disability, Retirement or Cause or as a result of the Executive's death or by
the Executive other than for Good Reason;
(ii) A reduction in the Executive's base salary as in effect on the date
hereof or as the same may be increased from time to time during the term of this
Agreement or the Company's failure to increase (within 12 months of the
Executive's last increase in base salary) the Executive's base salary after a
Change in Control in an amount which at least equals, on a percentage basis, the
average annual percentage increase in base salary for all corporate officers of
the Company effected in the preceding 36 months;
(iii) Any failure by the Company to continue in effect any benefit plan,
program or arrangement (including, without limitation, any profit sharing plan,
group annuity contract, group life insurance supplement, or medical, dental,
accident and disability plans) in which the Executive was eligible to
participate at the time of a Change in Control (hereinafter referred to as
"Benefit Plans"), or the taking of any action by the Company which would
adversely affect the Executive's participation in or materially reduce the
Executive's benefits under any such Benefit Plan, unless a comparable substitute
Benefit Plan shall be made available to the Executive, or deprive the Executive
of any fringe benefit enjoyed by the Executive at the time of a Change in
Control;
(iv) Any failure by the Company to continue in effect any incentive plan or
arrangement (including, without limitation, any bonus or contingent bonus
arrangements and credits and the right to receive performance awards and similar
incentive compensation benefits) in which the Executive is participating at the
time of a Change in Control (or any other plans or arrangements providing him
with substantially similar benefits) (hereinafter referred to as "Incentive
Plans") or the taking of any action by the Company which would adversely affect
the Executive's participation in any such Incentive Plan or reduce the
Executive's benefits under any such Incentive Plan, expressed as a percentage of
his base salary, by more than five percentage points in any fiscal year as
compared to the immediately preceding fiscal year, or any action to reduce
Executive's bonuses under any Incentive Plan by more than 20% of the average
annual bonus previously paid to Executive with respect to the preceding three
fiscal years;
(v) Any failure by the Company to continue in effect any plan or
arrangement to receive securities of the Company (including, without limitation,
the Company's 1997 Stock Incentive Plan, Employee Stock Purchase Plan and any
other plan or arrangement to receive and exercise stock options, stock
appreciation rights, restricted stock or grants thereof) in which the Executive
is participating or has the right to participate in prior to a Change in Control
(or plans or arrangements providing him with substantially similar benefits)
(hereinafter referred to as "Securities Plans") or the taking of any action by
the Company which would adversely affect the Executive's participation in or
materially reduce the Executive's benefits under any such Securities Plan,
unless a comparable substitute Securities Plan shall be made available to the
Executive;
(vi) A relocation of the Company's principal executive offices to a
location more than ten (10) miles outside of Marietta, Georgia, or the
Executive's relocation to any place other than the Company's principal executive
offices, except for required travel by the Executive on the Company's business
to an extent substantially consistent with the Executive's business travel
obligations immediately prior to a Change in Control;
(vii) Any failure by the Company to provide the Executive with the number
of paid vacation days (or compensation therefor at termination of employment)
accrued to the Executive through the Date of Termination;
(viii) Any material breach by the Company of any provision of this
Agreement;
(ix) Any failure by the Company to obtain the assumption of this Agreement
by any successor or assign of the Company effected in accordance with the
provisions of Section 7(a) hereof;
(x) Any purported termination of the Executive's employment which is not
effected pursuant to a Notice of Termination satisfying the requirements of
Section 3(f), and for purposes of this Agreement, no such purported termination
shall be effective; or
(xi) Any proposal or request by the Company after the Effective Date to
require that the Executive enter into a non-competition agreement with the
Company where the terms of such agreement as to its scope or duration are
greater than the terms set forth in Section 5 hereof .
(f) Notice of Termination. Any termination of the Executive's
employment by the Company for a reason specified in Section 3(b), 3(c) or 3(d)
shall be communicated to the Executive by a Notice of Termination prior to the
effective date of the termination. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which shall indicate whether such
termination is for the reason set forth in Section 3(b), 3(c) or 3(d) and which
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated. For purposes of this Agreement, no termination of the Executive's
employment by the Company shall constitute a termination for Disability,
Retirement or Cause unless such termination is preceded by a Notice of
Termination.
(g) Date of Termination. "Date of Termination" shall mean (a)
if the Executive's employment is terminated by the Company for Disability, 30
days after a Notice of Termination is given to the Executive (provided that the
Executive shall not have returned to the performance of the Executive's duties
on a full-time basis during such 30-day period) or (b) if the Executive's
employment is terminated by the Company or the Executive for any other reason,
the date on which the Executive's termination is effective; provided that, if
within 30 days after any Notice of Termination is given to the Executive by the
Company the Executive notifies the Company that a dispute exists concerning the
termination, the Date of Termination shall be the date the dispute is finally
determined whether by mutual agreement by the parties or upon final judgment,
order or decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected).
4. Compensation and Benefits upon Termination of Employment.
(a) If the Company shall terminate the Executive's employment
after a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d) and
Section 3(f), or if the Executive shall terminate his employment for Good
Reason, then the Company shall pay to the Executive, as severance compensation
and in consideration of the Executive's adherence to the terms of Section 5
hereof, the following:
(1) On the Date of Termination, the Company shall become liable to the
Executive for an amount equal to one and one-half (1 1/2) times the Executive's
annual base compensation and targeted base bonus on the date of the Change in
Control, which amount shall be paid to the Executive in cash on or before the
fifth day following the Date of Termination.
(2) For a period of 18 months following the Date of Termination, the
Executive and anyone entitled to claim under or through the Executive shall be
entitled to all benefits under the group hospitalization plan, health care plan,
dental care plan, life or other insurance or death benefit plan, or other
present or future similar group employee benefit plan or program of the Company
for which key executives are eligible at the date of a Change in Control, to the
same extent as if the Executive had continued to be an employee of the Company
during such period and such benefits shall, to the extent not fully paid under
any such plan or program, be paid by the Company.
(3) For a period of 18 months after the Date of Termination, the Company
shall allow the Executive to utilize for his business and personal use any
Company leased automobile previously furnished to him or an equivalent type and
style of automobile and shall reimburse the Executive for the maintenance and
repair costs of such automobile and extend full insurance coverage relating to
such automobile in favor of the Executive, as additional named insured, during
such three-year period. In addition, the Executive shall be entitled, at the
Executive's sole discretion, to exercise any option to acquire such automobile
pursuant to the terms which may be provided in the lease agreement for the
automobile in question.
(b) The parties hereto agree that the payments provided in
Section 4(a) hereof are reasonable compensation in light of the Executive's
services rendered to the Company and in consideration of the Executive's
adherence to the terms of Section 5 hereof. Neither party shall contest the
payment of such benefits as constituting an "excess parachute payment" within
the meaning of Section 280G(b)(1) of the Code. In the event that the Executive
becomes entitled to the compensation and benefits described in Section 4(a)
hereof (the "Compensation Payments") and the Company has determined, based upon
the advise of tax counsel selected by the Company's independent auditors and
acceptable to the Executive, that, as a result of such Compensation Payments and
any other benefits or payments required to be taken into account under Code
Section 280G(b)(2) ("Parachute Payments"), any of such Parachute Payments must
be reported by the Company as "excess parachute payments" and are therefore not
deductible by the Company, the Company shall pay to the Executive at the time
specified in Section 4(a) above an additional amount (the "Gross-Up Payment")
such that the net amount retained by the Executive, after deduction of any of
the tax imposed on the Executive by Section 4999 of the Code (the "Excise Tax")
and any Federal, state and local income tax and Excise Tax upon the Gross-Up
Payment, shall be equal to the Parachute Payments determined prior to the
application of this paragraph. The value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Company's independent
auditors. For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay Federal income taxes at the highest marginal
rate of Federal income taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the highest marginal
rates of taxation in the state and locality of the Executive's residence on the
Date of Termination, net of the maximum reduction in Federal income taxes which
could be obtained from deduction of such state and local taxes. In the event
that the Excise Tax payable by the Executive is subsequently determined to be
less than the amount, if any, taken into account hereunder at the time of
termination of the Executive's employment, the Executive shall repay to the
Company at the time that the amount of such reduction in Excise Tax is finally
determined the portion of the Gross-Up Payment attributable to such reduction
plus interest on the amount of such repayment at the rate provided for in
Section 1274(b)(2)(B) of the Code ("Repayment Amount"). In the event that the
Excise Tax payable by the Executive is determined to exceed the amount, if any,
taken into account hereunder at the time of the termination of the Executive's
employment (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such excess (plus any interest
and penalty payable with respect to such excess) immediately prior to the time
that the amount of such excess is required to be paid by Executive ("Additional
Gross-up"), such that the net amount retained by the Executive, after deduction
of any Excise Tax on the Parachute Payments and any Federal, state and local
income tax and Excise Tax upon the Additional Gross-Up Payment, shall be equal
to the Parachute Payments determined prior to the application of this paragraph.
The obligation to pay any Repayment Amount or Additional Gross-up shall remain
in effect under this Agreement for the entire period during which the Executive
remains liable for the Excise Tax, including the period during which any
applicable statute of limitation remains open.
(c) The payments provided in Section 4(a) above shall be in
lieu of any other severance compensation otherwise payable to Executive under
the Company's established severance compensation policies and, unless the
Executive elects, that certain Severance Compensation and Restrictive Covenant
Agreement of even date between the Executive and the Company; provided, however,
that nothing in this Agreement shall affect or impair Executive's vested rights
under any other employee benefit plan or policy of the Company.
(d) Unless the Company determines that any Parachute Payments
made hereunder must be reported as "excess parachute payments" in accordance
with the third sentence of Section 4(b) above, neither party shall file any
return taking the position that the payment of such benefits constitutes an
"excess parachute payment" within the meaning of Section 280G(b)(1) of the Code.
If the Internal Revenue Service proposes an assessment of Excise Tax against the
Executive in excess of the amount, if any, taken into account at the time
specified in Section 4(a), then, if the Company notifies Executive in writing
that the Company elects to contest such assessment at its expense, unless the
Executive waives the right to an Additional Gross-Up Payment, the Executive (i)
shall in good faith cooperate with the Company in contesting such proposed
assessment; and (ii) such Executive shall not settle such contest without the
written consent of the Company. Any such contest shall be controlled by the
Company, provided, however, that the Executive may participate in such contest.
5. Protective Covenants.
(a) Definitions.
This Subsection sets forth the definition of certain
capitalized terms used in Subsections (a) through (f) of this Section 4.
(i) "Competing Business" shall mean a business (other than the Company)
that, directly or through a controlled subsidiary or through an affiliate, (a)
develops, markets and/or sells computerized patient record software for
obstetricians and/or gynecologists, diabetes supplies, products for uterine
contraction monitoring in the home and/or products that would be used in lieu of
or in competition with uterine contraction monitoring products ("Competing
Products"), and/or (b) provides obstetrical home care services, including,
without limitation, programs for monitoring patients who are at risk of pre-term
delivery, programs for managing patients suffering from obstetrical hypertension
or diabetes, infusion therapy services involving drugs to control pre-term
labor, nursing services and maternity management services for both low and high
risk pregnancies, diabetes or respiratory disease management services,
including, without limitation, patient education, risk screening and
stratification, case management and clinical services, or cardiac event
monitoring services ("Competing Services"). Notwithstanding the foregoing, no
business shall be deemed a "Competing Business" unless, within at least one of
the business's three most recently concluded fiscal years, that business, or a
division of that business, derived more than 20% of its gross revenues or more
than $2,000,000 in gross revenues from the development, marketing or sale of
Competing Products and/or the provision of Competing Services.
(ii) "Competitive Position" shall mean: (A) the Executive's direct or
indirect equity ownership (excluding ownership of less than 1% of the
outstanding common stock of any publicly held corporation) or control of any
portion of any Competing Business; or (B) any employment, consulting,
partnership, advisory, directorship, agency, promotional or independent
contractor arrangement between the Executive and any Competing Business where
the Executive performs services for the Competing Business substantially similar
to those the Executive performed for the Company, provided, however, that the
Executive shall not be deemed to have a Competitive Position solely because of
the Executive's services for a Competing Business that are not directly related
to the sale of Competing Products or the provision of Competing Services, unless
more than 35% of the gross revenues of the Competing Business are derived from
the sale of Competing Products and/or the provision of Competing Services.
(iii) "Covenant Period" shall mean the period of time from the date of this
Agreement to the date that is two years after the Date of Termination.
(iv) "Customers" shall mean actual customers, clients, referral sources or
managed care organizations or actively sought prospective customers, clients,
referral sources or managed care organizations of the Company (A) during the one
year prior to the date of this Agreement and (B) during the Covenant Period.
(v) "Restricted Territory" shall mean the United States.
(b) Limitation on Competition. In consideration of the
Company's entering into this Agreement, the Executive agrees that during the
Covenant Period, the Executive will not, without the prior written consent of
the Company, anywhere within the Restricted Territory, either directly or
indirectly, alone or in conjunction with any other party, accept, enter into or
take any action in conjunction with or in furtherance of a Competitive Position
(other than action to reject an unsolicited offer of a Competitive Position).
(c) Limitation on Soliciting Customers. In consideration of
the Company's entering into this Agreement, the Executive agrees that during the
Covenant Period, the Executive will not, without the prior written consent of
the Company, alone or in conjunction with any other party, solicit, divert or
appropriate or attempt to solicit, divert or appropriate on behalf of a
Competing Business with which Executive has a Competitive Position any Customer
located in the Restricted Territory (or any other Customer with which the
Executive had any direct contact on behalf of the Company) for the purpose of
providing the Customer or having the Customer provided with a Competing Product
or Competing Service.
(d) Limitation on Soliciting Personnel or Other Parties. In
consideration of the Company's entering into this Agreement, the Executive
hereby agrees that he will not, without the prior written consent of the
Company, alone or in conjunction with any other party, solicit or attempt to
solicit any employee, consultant, contractor, independent broker or other
personnel of the Company to terminate, alter or lessen that party's affiliation
with the Company or to violate the terms of any agreement or understanding
between such employee, consultant, contractor or other person and the Company.
(e) Acknowledgement. The parties acknowledge and agree that
the Protective Covenants are reasonable as to time, scope and territory given
the Company's need to protect its trade secrets and confidential business
information and given the substantial payments and benefits to which the
Executive may be entitled pursuant to this Agreement.
(f) Remedies. The parties acknowledge that any breach or
threatened breach of a Protective Covenant by the Executive is reasonably likely
to result in irreparable injury to the Company, and therefore, in addition to
all remedies provided at law or in equity, the Executive agrees that the Company
shall be entitled to a temporary restraining order and a permanent injunction to
prevent a breach or contemplated breach of the Protective Covenant. If the
Company seeks an injunction, the Executive waives any requirement that the
Company post a bond or any other security.
6. No Obligation to Mitigate Damages; No Effect on Other Contractual
Rights.
(a) All compensation and benefits provided to the Executive
under this Agreement are in consideration of the Executive's services rendered
to the Company and of the Executive's adhering to the terms set forth in Section
5 hereof and the Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the Date of Termination, or
otherwise.
(b) The provisions of this Agreement, and any payment provided
for hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish the Executive's existing rights, or rights which would accrue solely as
a result of the passage of time, under any Benefit Plan, Incentive Plan or
Securities Plan, employment agreement or other contract, plan or arrangement.
7. Successor to the Company.
(a) The Company will require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly, absolutely and
unconditionally to assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no
such succession or assignment had taken place. Any failure of the Company to
obtain such agreement prior to the effectiveness of any such succession or
assignment shall be a material breach of this Agreement and shall entitle the
Executive to terminate the Executive's employment for Good Reason. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor or assign to its business and/or assets as aforesaid, including
without limitation, the Surviving Company in the Merger. If at any time during
the term of this Agreement the Executive is employed by any corporation a
majority of the voting securities of which is then owned by the Company,
"Company" as used in Sections 3, 4, 12 and 14 hereof shall in addition include
such employer. In such event, the Company agrees that it shall pay or shall
cause such employer to pay any amounts owed to the Executive pursuant to Section
4 hereof.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts are still payable to him hereunder, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or the designee
or, if there be no such designee, to the Executive's estate.
8. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt required, postage prepaid, as follows:
If to Company:
Matria Healthcare, Inc.
1850 Parkway Place, 12th Floor
Marietta, Georgia 30067
Attention: General Counsel
If to Executive:
Parker H. Petit
1650 Cox Road
Roswell, Georgia 30075
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
9. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. Neither this Agreement nor the
Merger shall diminish or waive in any way the rights of Executive under the
Prior Agreement, which as amended by this Agreement, shall continue to be
applicable to Executive's employment by the Surviving Company after the Merger.
No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. This Agreement shall be governed by
and construed in accordance with the laws of the State of Georgia.
10. Validity. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
12. Legal Fees and Expenses. The Company shall pay all legal fees,
expenses and damages which the Executive may incur as a result of the
Executive's instituting legal action to enforce his rights hereunder, or in the
event the Company contests the validity, enforceability or the Executive's
interpretation of, or determinations under, this Agreement. If the Executive is
the prevailing party or recovers any damages in such legal action, the Executive
shall be entitled to receive in addition thereto pre-judgment and post-judgment
interest on the amount of such damages.
13. Severability; Modification. All provisions of this Agreement are
severable from one another, and the unenforceability or invalidity of any
provision of this Agreement shall not affect the validity or enforceability of
the remaining provisions of this Agreement, but such remaining provisions shall
be interpreted and construed in such a manner as to carry out fully the
intention of the parties. Should any judicial body interpreting this Agreement
deem any provision of this Agreement to be unreasonably broad in time,
territory, scope or otherwise, it is the intent and desire of the parties that
such judicial body, to the greatest extent possible, reduce the breadth of such
provision to the maximum legally allowable parameters rather than deeming such
provision totally unenforceable or invalid.
14. Confidentiality. The Executive acknowledges that he has previously
entered into, and continues to be bound by the terms of, a Confidentiality
Agreement with the Company.
15. Agreement Not an Employment Contract. This Agreement shall not be
deemed to constitute or be deemed ancillary to an employment contract between
the Company and the Executive, and nothing herein shall be deemed to give the
Executive the right to continue in the employ of the Company or to eliminate the
right of the Company to discharge the Executive at any time.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.
MATRIA HEALTHCARE, INC.
By:________________________________
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Executive