It is the policy of Matria Healthcare, Inc., (“Matria”) that no director, officer or employee, or related person, who has material non-public information relating to Matria may buy or sell securities of Matria or engage in any other action to take advantage of, or pass on to others, that information. Also, it is against Matria policy for any individual in our company who may have material or unpublished knowledge about any supplier, customer or other company with which Matria does business or is contemplating a business relationship or transaction to purchase or sell the securities of those companies.

POLICY SCOPE

This policy applies to Matria Healthcare, Inc., and its wholly owned subsidiaries, but does not necessarily apply to other entities in which a partial ownership interest exists unless otherwise agreed to by Matria.

PROCEDURE

In the course of the performance of their duties for Matria or its subsidiaries, officers, directors and employees frequently come into possession of confidential and highly sensitive information concerning Matria, its customers, suppliers or other companies with which Matria has contractual relationships or may be negotiating transactions. Much of this information has a potential for affecting the market price of securities issued by the companies involved
Federal securities laws, in particular Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, prohibit officers, directors and employees of a company from improperly trading in a company’s securities on the basis of material non-public information, and impose potentially onerous civil and criminal penalties on persons who commit such insider trading. Civil penalties for such violations can equal up to three times the profit gained or losses avoided, and private parties who traded contemporaneously with improper insider trading may seek significant damages in litigation. Criminal penalties for illegal insider trading include fines of up to $5,000,000 and imprisonment of up to 25 years for natural persons, and fines of up to $25,000,000 for others.

Substantial liability may also be imposed on a company in certain circumstances for illegal insider trading by its officers, directors and employees. For example, any person who, at the time of an insider trading violation, “directly or indirectly controlled the person who committed such violation” (i.e., an employer), may be liable for civil penalties if the controlling person both (i) knew or recklessly disregarded the fact that the employee was likely to engage in a violation and (ii) failed to take appropriate steps to prevent that violation before it occurred. Moreover, in recent years, the SEC and government prosecutors have been vigorously enforcing the insider trading laws against both individuals and institutions.
Given all of these factors, Matria has adopted this Insider Trading Policy to provide specific guidance concerning the propriety of various transactions, and to impose specific procedures and restrictions designed to maintain a high level of confidentiality with respect to material nonpublic information acquired by or through Matria and to help prevent insider trading violations by directors, officers and employees. In every instance, the Insider Trading Policy should be interpreted broadly to prevent any situation capable of impugning Matria’s, its officers’, directors’ or employees’ integrity.

Explanation of the Law
The federal securities laws and regulations generally prohibit the purchase or sale of a security at a time when the person trading in that security is aware of material non-public information concerning the issuer of the security, or the market for the security, which has not yet become a matter of general public knowledge and which has been obtained or is being used in breach of a duty to maintain the information in confidence. Communication of non-public information to a third party, under circumstances where improper trading can be anticipated, is also prohibited and can lead to civil and criminal liability.

“Material non-public information” includes information that is not available to the public at large to which a reasonable investor would attach importance in deciding whether to buy, sell or retain the security or which could be expected to affect the market price of a security. Common examples of information that will frequently be regarded as material are:
1. annual or quarterly financial results;
2. impending bankruptcy or financial liquidity problems;
3. projections by a corporation’s officers of future earnings or losses or significant changes in such projections;
4. news of a pending or proposed merger or acquisition, or a tender offer or exchange offer;
5. news of a pending or proposed significant sale of assets or the disposition of a subsidiary;
6. changes in dividend policies or the declaration of a stock split or the offering of additional securities;
7. changes in management; significant new products or discoveries, significant litigation or regulatory events; or
8. the gain or loss of a substantial customer or supplier.
It should be noted that either positive or adverse information may be material. It is not possible to identify every type of information that could be material, or every context in which otherwise ordinary information might become material. It is also important to recognize that material nonpublic information need not relate only to Matria and that Matria may receive material nonpublic information from a number of sources. For example, material nonpublic information may relate to a former, current or prospective customer of, or supplier or consultant to Matria or the market for their securities (regardless of whether a prospect eventually achieves customer or supplier status). Also, material nonpublic information may relate to a company, or the market for the securities of a company, with which Matria is in discussions related to a merger, acquisition or divestiture. Matria’s directors, officers and employees should treat material nonpublic information about Matria’s customers, vendors, suppliers or other business partners with the same care required with respect to information related directly to Matria.

If an individual has any concern that information within his or her possession might be material, he or she should discuss such information with Matria’s General Counsel before trading Company securities.

Matria generally keeps the public informed by filing periodic reports with the Commission, and through the distribution of prospectuses, proxy statements and annual reports to shareholders. In addition, Matria from time to time makes announcements to the public, at appropriate times, regarding material developments concerning its operations. Typically, such announcements are made by press release, in order to ensure the availability of such information to all members of the investing community on an equal basis. Information should be considered nonpublic until it has been distributed to the general public as described above and a reasonable time has passed. As a general rule, information may be treated as public two business days after it has been broadly distributed through appropriate channels to the general public.
Applicability of Policy
This Insider Trading Policy applies to all members of Matria’s Board of Directors, all officers of Matria and all employees of Matria and its subsidiaries who receive or have access to material nonpublic information regarding Matria or, through their association with Matria, regarding other companies. Such persons, members of their immediately families, and members of their households are sometimes referred to within this Insider Trading Policy as “Insiders.” This Insider Trading Policy also applies to any person who receives any such material nonpublic information from any Insider and any person (such as a member of an Insider’s immediately family or household) or entity (such as a trust, the investment decisions of which are controlled by an Insider) to whom an Insider’s knowledge of such material nonpublic information might be imputed.

Any person who possesses material nonpublic information regarding Matria is an Insider for so long as the information is not publicly known (i.e., has not been fully disclosed to the public). Any employee can be an Insider from time to time and would at those times be subject to this Policy.
Restrictions on Disclosure of Material Nonpublic Information
Insiders of Matria may not, directly or indirectly, disclose to any person (except as required in furtherance of their corporate duties on a need-to-know basis) any material nonpublic information (about Matria or any other company) that they receive, or of which they become aware, in the course of their duties for Matria.
Any or all of the following procedures may be appropriate in order to protect the confidentiality of material nonpublic information:

No discussion of confidential matters in places where they might be overheard (e.g., cellular phones, airplanes, restaurants, elevators, taxis, etc.) or otherwise be widely disseminated (e.g., internet chat rooms);
Marking sensitive documents “Confidential” and using sealed envelopes marked “Confidential”;
Locking up or shredding confidential documents;
Restrictions on the copying of sensitive documents;
Obtaining confidentiality agreements from outsiders;
Special instructions to receptionists, switchboards, etc., regarding outside inquiries;
Use of code names for sensitive projects; and
Use of passwords to restrict computer access.

Restrictions on Trading
In order to ensure the continued confidence of investors and others, and to avoid any appearance of impropriety, the Company has adopted the following trading requirements and restrictions:

All transactions by directors and executive officers of Matria, division presidents, Matria’s controller and assistant controller, any other officer who is a direct report to Matria’s President and Chief Executive Officer and certain key employees of Matria designated by the Board of Directors or the General Counsel, and any other person or entity whose transactions may be attributed to such individuals (e.g., members of their immediate families and households), involving Company securities must be approved in advance by Matria’s General Counsel or, in her absence, Matria’s Chief Financial Officer. In order to obtain approval of such transaction, Matria’s General Counsel must be notified (either verbally or in writing) of the transaction a reasonable time before the transaction is to occur (e.g., two business days prior to the transaction date). The consummation of such transaction must be effected within two business days of receipt of approval and be immediately reported to Matria’s General Counsel.
As a general matter, the safest time to trade in Company securities is during the ten-day period beginning two business days after the public announcement of Matria’s annual and quarterly results of operations. During the period beginning three weeks prior to the end of each fiscal quarter and ending two business days after the public announcement of Matria’s annual or quarterly results of operations, transactions by Insiders in Company securities involve a high degree of risk of improper insider trading. Matria’s General Counsel will take these factors into account in determining whether to approve transactions in Company securities.
Any Insider of Matria who is in possession of material nonpublic information about Matria or the market for its securities is prohibited, while such information is nonpublic, from directly or indirectly purchasing, selling or pledging, or recommending to others that they trade in, the securities of Matria (including any right, warrant or option to purchase or sell such securities). After such information is publicly disclosed through appropriate channels (e.g., press release, filing with the Commission), a reasonable time should be allowed to elapse (at least two business days) before trading to allow for public dissemination and evaluation of the information.
Any Insider of Matria who is in possession of material nonpublic information obtained in the course of his or her duties for Matria about any other company (including customers or suppliers of Matria) or the market for its securities is prohibited, while such information is nonpublic, from directly or indirectly purchasing, selling or pledging, or recommending to others that they trade in, the securities of such company (including any right, warrant or option to purchase or sell such securities). This rule applies without regard to whether such other company is associated with Matria. After such information is publicly disclosed through appropriate channels (e.g., press release, filing with the Commission), a reasonable time should be allowed to elapse (at lease two business days) before trading to allow for public dissemination and evaluation of the information.
The restrictions of paragraphs (1), (3) and (4) shall not apply to any transaction made pursuant to a written plan or arrangement established in accordance with the provisions of Exchange Act Rule 10b5-1, but only if such plan or arrangement has been submitted to and has received the prior approval of the General Counsel. This exception would apply to contracts or plans that specify the price, amount and date of trades, provide a written formula, algorithm or computer program for determining the price, amount and date of trades or do not permit the Insider to exercise influence over how, when or whether to effect trades, provided that any person who does exercise such influence must not be aware of material non-public information regarding the issuer of the securities when doing so. Any modifications or amendments to a written plan or arrangement that has been approved by Matria’s General Counsel must receive approval of the General Counsel before any further transactions may be affected pursuant to the written arrangement. No such plan or arrangement may be established or modified during the period beginning three weeks prior to the end of each fiscal quarter and ending two business days after the public announcement of Matria’s annually or quarterly results of operations or at any other time when there is material information regarding Matria (or other applicable issuer) that has not been publicly disclosed.

The Ultimate Responsibility Rests On The Individual
Individuals are personally responsible for ensuring their compliance with the provisions and intent of these policies. These policies are not intended to result in the imposition of, or create, civil or criminal liability that would not exist if Matria had not adopted them.
If anyone has a question concerning the propriety of a proposed transaction, or about the policy generally, they are encouraged to contact Matria’s General Counsel. However, Matria cannot and does not assume any legal responsibility in this regard