8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 27, 2004

POLYMEDICA CORPORATION

(Exact name of registrant as specified in charter)

Massachusetts	0-19842	04-3033368
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

11 State Street, Woburn, Massachusetts 01801

(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (781) 933-2020

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registration under any of the following provisions (see General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4)c))

TABLE OF CONTENTS

	Item 1.01. Entry Into a Material Definitive Agreement.
	Item 1.02. Termination of a Material Definitive Agreement
	Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
	Item 8.01. Other Events.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURE
EXHIBIT INDEX
EX-10.1 EMPLOYMENT AGREEMENT DATED SEPTEMBER 27, 2004
EX-10.2 RETENTION AGREEMENT DATED SEPTEMBER 27, 2004
EX-99.1 PRESS RELEASE DATED SEPTEMBER 27, 2004

Item 1.01. Entry Into a Material Definitive Agreement.

On September 27, 2004, the registrant issued a press release announcing that Patrick T. Ryan had been hired as its President and Chief Executive Officer and would be appointed to its Board of Directors. Effective September 27, 2004, the registrant has entered into employment and retention agreements with Mr. Ryan, each of which are attached to this report on Form 8-K as Exhibits 10.1 and 10.2, respectively, and which are incorporated by reference into this report.

Item 1.02. Termination of a Material Definitive Agreement

As a result of the registrant’s hiring of Mr. Ryan and the resignation of Samuel L. Shanaman from the position of Chief Executive Officer, Mr. Shanaman’s employment agreement with the registrant, dated June 14, 2004 and which was filed with the registrant’s annual report on Form 10-K for the fiscal year ended March 31, 2004, terminated effective September 27, 2004. Mr. Shanaman will remain Chairman of the registrant’s Board of Directors and an employee of the registrant for transition purposes. Mr. Shanaman’s retention agreement with the registrant, dated June 14, 2004 and which was filed with the registrant’s annual report on Form 10-K for the fiscal year ended March 31, 2004, remains in effect.

Item 5.02. Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.

As described above, effective September 27, 2004, Mr. Ryan was appointed to the position of Chief Executive Officer and President of the registrant, and, effective September 28, 2004, Mr. Ryan was appointed as a Class III member of the registrant’s Board of Directors. Mr. Ryan has not been appointed to any committees of the registrant’s Board of Directors. Mr. Ryan’s employment and retention agreements are attached to this report on Form 8-K as Exhibits 10.1 and 10.2, respectively.

Mr. Shanaman resigned from the position of Chief Executive Officer of the registrant effective September 27, 2004 and will remain Chairman of the registrant’s Board of Directors. Mr. Shanaman will continue as an employee of the registrant to assist with transitional issues.

Effective September 27, 2004, Mr. Stephen C. Farrell was appointed to the position of Senior Vice President and Chief Operating Officer of the registrant. Mr. Farrell will also continue to serve as President of Liberty Healthcare Group, Inc., the registrant’s principal operating subsidiary. Previously, Mr. Farrell held the position of Senior Vice President of the registrant. Mr. Farrell’s employment and retention agreements, including all amendments thereto, have been filed by the registrant with its previous quarterly and annual reports on Forms 10-Q and 10-K, respectively, and as of the date hereof have not been amended in connection with the above-referenced appointment.

Patrick T. Ryan, 46, has been in the healthcare field since 1980 and has experience in operations, strategic development, service, sales and finance. From 2000 to 2004, Mr. Ryan served as Chairman and Chief Executive Officer of Physicians Dialysis, Inc., the nation’s sixth largest dialysis provider. From 1996 to 1998, Mr. Ryan served as the President and Chief Executive Officer of Principalcare, Inc., a physician practice management company specializing in women’s healthcare. Mr. Ryan is currently a board member of Respiratory Solutions, Inc., OnCure Medical Corp. and Navix Medical. Mr. Ryan holds a BA in Political Science and Sociology from the University of Rochester.

Stephen C. Farrell, 39, joined the registrant in 1999 as Treasurer and became Chief Financial Officer in 2001. In January 2004, Farrell was named president of Liberty Healthcare Group, Inc., the registrant’s principal operating subsidiary. Mr. Farrell is a Certified Public Accountant, a graduate of Harvard College,

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and holds an M.B.A. from the University of Virginia.

Item 8.01. Other Events.

On September 27, 2004, the registrant issued a press release, attached to this report as Exhibit 99.1, announcing that its facilities in Port St. Lucie, Florida had suffered damage from Hurricane Jeanne and which further estimated the direct and indirect recovery costs attributable to the storm and provided revised earnings guidance for the quarter ending September 30, 2004.

Item 9.01. Financial Statements and Exhibits.

(a)	Financial Statements of Businesses Acquired
	Not Applicable.
(b)	Pro Forma Financial Information
	Not Applicable.
(c)	Exhibits

10.1	Employment Agreement, dated September 27, 2004, between Patrick T. Ryan and PolyMedica Corporation.
10.2	Retention Agreement, dated September 27, 2004, between Patrick T. Ryan and PolyMedica Corporation.
99.1	Press Release dated September 27, 2004.

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 1, 2004	POLYMEDICA CORPORATION
	By:	/s/Fred H. Croninger, III
		Fred H. Croninger, III Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Employment Agreement, dated September 27, 2004, between Patrick T. Ryan and PolyMedica Corporation.
10.2	Retention Agreement, dated September 27, 2004, between Patrick T. Ryan and PolyMedica Corporation.
99.1	Press Release dated September 27, 2004.

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EX-10.1

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

PARTIES

     This Employment Agreement (this “Agreement”) is entered into between PolyMedica Corporation, a Massachusetts corporation having its principal place of business at 11 State Street, Woburn, Massachusetts 01801 (the “Company” (which term shall include the Company’s subsidiaries and affiliated entities)) and Patrick T. Ryan, an individual with an address at 686 Hale Street, Beverly Farms, MA 01915 (the “Executive”).

TERMS OF AGREEMENT

     In consideration of this Agreement and the employment of the Executive by the Company, the parties agree as follows:

     1. Employment.

          1.1 The Company hereby employs Executive, on a full-time basis, as President and Chief Executive Officer of the Company. Executive’s principal office will be located in eastern Massachusetts, unless Executive agrees to relocate to another location. Executive hereby accepts said employment. Executive shall use his best and most diligent efforts to promote the interests of the Company; shall discharge his duties in a highly competent manner; and shall devote his full business time and his best business judgment, skill and knowledge to the performance of his duties and responsibilities hereunder. Executive shall report directly to the Board of Directors (the “Board”) of the Company.

          1.2 Nothing contained herein shall preclude Executive from devoting incidental and insubstantial amounts of time to activities other than the business of the Company and which are not inconsistent with the best interests of the Company.

          1.3 Executive may serve on the Boards of Directors of other entities, provided that such service does not interfere with the performance of his duties on behalf of the Company under this Agreement and Executive obtains prior approval from the Company’s Board of Directors.

     2. Term of Employment. The Company agrees to employ the Executive for a twelve (12) month period commencing on the Employment Date (the “Employment Period”). Notwithstanding the foregoing, the Company shall have the right to terminate the Executive’s employment under this Agreement upon sixty (60) days’ written notice to Executive, subject to the Company’s obligation to pay severance benefits as provided in Section 3.7 and the Executive shall have the right to terminate his employment under this Agreement upon one-hundred and eighty (180) days’ written notice to the Company. If Executive shall remain in the employ of the Company beyond the Employment Period, in the absence of any other express agreement between the parties, this Agreement shall continue on a month-to-month basis (the “Extended Employment Period”).

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     3. Compensation and Benefits; Disability.

          3.1 Stock Option. On the Employment Date, the Company shall grant to Executive a stock option for 450,000 shares of the Company’s Common Stock, at the closing price of such stock on the date of grant as reported by the NASDAQ National Market. Such option shall “vest” and become exercisable as to 25% of the original number of shares subject to such option on the 1st anniversary of the grant date, with the remaining option shares becoming exercisable at the rate of 6.25% of the original number of shares subject to such option on each December 31st, March 31st, June 30th, and September 30th thereafter until such option is fully vested and shall have such other terms as are in the Company’s standard form of Stock Option Agreement.

          3.2 Salary.

               (a) During the Employment Period, the Company shall pay Executive an annualized base salary of $650,000 (“Base Salary”) payable in equal installments pursuant to the Company’s customary payroll policies in force at the time of payment (but in no event less frequently than monthly), less all required and authorized payroll deductions and state and federal withholdings. Executive’s Base Salary shall be reviewed annually.

          3.3 Bonus Payment. During the Employment Period, Executive may receive, in the sole discretion of the Compensation Committee, an annual bonus payment, if any, to be determined by the Compensation Committee.

          3.4 Executive Benefits. During the Employment Period, Executive shall be entitled to participate in all benefit programs that the Company establishes and makes available to its other executives and employees, if any, in accordance with the relevant plan documents and requirements, including but not limited to the following benefits:

               (a) Health Insurance. Health and dental insurance; and

               (b) Life Insurance. Life insurance on the life of Executive with an Executive-directed beneficiary in the amount of 150% of Executive’s Base Salary; and

               (c) Stock Based Compensation. Executive will be eligible to participate in the Company’s Employee Stock Purchase Plan as set forth in said plan and, for the period after April 1, 2005, be considered by the Compensation Committee for grants or awards of stock options or other stock-based compensation under the Company’s Stock Incentive Plan or similar plans from time to time in effect. All such grants or awards shall be governed by the governing Plan and shall be evidenced by the Company’s then standard form of stock option, restricted stock or other applicable agreement.

          3.5 Vacation. During the Employment Period, Executive may take six weeks of paid vacation during each year at such times as shall be consistent with the Company’s vacation policies and (in the Company’s judgment) with the Company’s vacation schedule for executives and other employees.

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          3.6 Disability. If during the Employment Period Executive shall become ill, disabled or otherwise incapacitated so as to be unable to perform the essential functions of his position with or without reasonable accommodation, as may be required by state or federal law, (a) for a period in excess of ninety (90) consecutive days or (b) for more than one hundred-twenty (120) days in any twelve (12) month period, then the Company shall have the right to terminate Executive’s Employment under this Agreement, in accordance with applicable laws, on thirty (30) days’ notice to Executive. A determination of disability shall be made by a physician satisfactory to both the Executive and the Company, provided that if the Executive and the Company do not agree on a physician, the Employee and the Company shall each select a physician and these two together shall select a third physician, whose determination shall be binding on all parties.

          3.7 Severance Pay. In the event that the Company terminates Executive’s Employment under this Agreement without cause (i.e. other than pursuant to Section 3.6 or Section 4 hereof) at any time (including during the Extended Employment Period) or does not renew or extend the Executive’s Employment under this Agreement without cause (i.e. other than consistent with Section 3.6 or Section 4 hereof), and subject to the Executive’s execution and non-revocation of a severance agreement and release drafted by and satisfactory to counsel for the Company, the Company shall continue to pay Executive at his then current Base Salary for the remainder of the Employment Period or for twenty-four (24) months, whichever is longer (the “Severance Period”). Neither party shall be entitled to any compensation or claim for good will or other loss suffered by reason of termination of this Agreement. Notwithstanding the foregoing, the Company’s obligations under this Section 3.7 shall cease immediately upon the payment by the Company to the Executive of the lump sum payment described in Section 4.2(a)(i) of the Executive Retention Agreement, dated as of the date hereof by and between the Company and the Executive.

          3.8 Benefits During Severance Period. Except as otherwise required by law, the Executive shall not be entitled to any employee benefits provided under Section 3.4 after termination of Executive’s employment whether or not severance pay is being provided, except that if severance pay is being provided (i) the Company shall continue in full force and effect, at its expense, the life insurance provided for in Section 3.4(b) for a period of twenty-four (24) months after termination of Executive’s employment hereunder or until Executive becomes employed, whichever first occurs, and (ii) the Company shall offer, at its expense, continued health and dental insurance as required under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or other law for a period of eighteen (18) months after termination of Executive’s employment hereunder or until Executive becomes employed, whichever first occurs. If Executive elects not to maintain health insurance pursuant to COBRA or other law, the Company is under no obligation to reimburse Executive for his otherwise elected coverage. Executive shall be obligated to give the Company prompt notice of his subsequent employment and at that time, the Company’s obligations pursuant to this Section 3.8, if any, shall cease.

     4. Discharge for Cause. The Company may discharge Executive and terminate his employment under this Agreement for cause without further liability to the Company. As used in this Section 4, “cause” shall mean any or all of the following:

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               (a) a good faith finding by the Board of Directors of any of the following: failure of the Executive to perform his assigned duties for the Company, dishonesty, gross negligence, misconduct, theft or embezzlement from the Company, the intentional provision of services to competitors of the Company or improper disclosure of proprietary information;

               (b) a good faith finding by the Board of Directors of a breach of any material provision of the Company’s Code of Conduct or other policies and procedures; provided that the breach is not cured within 10 days after a written demand for cure is received by the Executive from the Board of Directors of the Company which specifically identifies the manner in which the Board of Directors believes the Executive has breached a material provision of the Company’s Code of Conduct or other policies and procedures; or

               (c) indictment, conviction (or the entry of a pleading of guilty or nolo contendere by Executive) of a fraud or felony or any criminal offense involving dishonesty, breach of trust or moral turpitude during Executive’s employment;.

     In the event the Company exercises its right to terminate Executive’s employment under this Section 4, Executive shall not be entitled to receive any severance pay or other termination benefits.

     In the event that the Company terminates Executive’s employment without cause but the Board of Directors determines subsequently that the Company had the right to terminate his employment pursuant to this Section 4, the Company may terminate the payment of all amounts to Executive pursuant to Sections 3.7 and 3.8, Executive shall return all previous payments made to him pursuant to such Sections and any options held by him but not yet exercised shall cease to be exercisable.

     5. Termination Without Cause. The Company may terminate Executive’s Employment under this Agreement without cause without further liability to the Company except as set forth in Section 3.7 and 3.8.

     6. Expenses. Pursuant to the Company’s customary policies in force at the time of payment, Executive shall be promptly reimbursed for business related expenses.

     7. Agreement Not to Compete and Invention and Non-Disclosure Agreement. Executive acknowledges that he has executed contemporaneously with this Agreement a Non-Competition and Non-Solicitation Agreement and an Invention and Non-Disclosure Agreement with the Company (the “Additional Agreements”). Executive acknowledges that the Additional Agreements, once executed, will survive the termination of this Agreement.

     8. Arbitration. The Employee agrees that any dispute or controversy arising out of or relating in any way to the Employee’s employment with and/or termination from the Company (including, but not limited to, all claims, demands or actions under any federal, state or local statute or regulation regarding employment discrimination, and/or all claims, demands or actions concerning the interpretation, construction, performance or breach of this Agreement) shall be settled by arbitration held in Boston, Massachusetts in accordance with the Rules of the American Arbitration Association, before an arbitrator who shall have experience in the area of the matter in dispute. Each party shall bear its own costs and attorneys’ fees in connection with

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any arbitration pursuant to this paragraph; provided that Executive will be reimbursed for his attorneys’ fees if he prevails. Further provided, however, that this paragraph shall not apply to any dispute or controversy arising out of or relating in any way to the interpretation, construction, performance or breach of the Additional Agreements, and no such dispute or controversy shall be deemed to be arbitrable in the absence of the Company’s written agreement.

     9. Notices. Any notice or communication given by any party hereto to the other party or parties shall be in writing and personally delivered or mailed by certified mail, return receipt requested, postage prepaid, to the addresses provided above. All notices shall be deemed given when actually received. Any person entitled to receive notice (or a copy thereof) may designate in writing, by notice to the others, another address to which notices to such person shall thereafter be sent.

     10. Miscellaneous.

          10.1 Entire Agreement. This Agreement contains the entire understanding of the parties in respect of its subject matter and supersedes all prior agreements and understandings between the parties with respect to such subject matter; provided that nothing in this Agreement shall affect Executive’s or the Company’s obligations under the Additional Agreements.

          10.2 Amendment; Waiver. This Agreement may not be amended, supplemented, cancelled or discharged, except by written instrument executed by the party affected thereby. No failure to exercise, and no delay in exercising, any right, power or privilege hereunder shall operate as a waiver thereof. No waiver of any breach of any provision of this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision.

          10.3 Binding Effect; Assignment. The rights and obligations of this Agreement shall bind and inure to the benefit of any successor of the Company by reorganization, merger or consolidation, or any assignee of all or substantially all of the Company’s business and properties. Executive’s rights or obligations under this Agreement may not be assigned by Executive; except that Executive’s right to compensation to the earlier of date of death or termination of actual employment shall pass to Executive’s executor or administrator.

          10.4 Headings. The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

          10.5 Applicable Law. This Agreement shall be interpreted and construed by the laws of the Commonwealth of Massachusetts, without regard to conflict of laws provisions. Executive hereby irrevocably submits and acknowledges and recognizes the jurisdiction of the courts of the Commonwealth of Massachusetts, or if appropriate, a federal court located in Massachusetts (which courts, for purposes of this Agreement, are the only courts of competent jurisdiction), over any suit, action or other proceeding arising out of, under or in connection with this Agreement or the subject matter hereof.

          10.6 Other Agreements. Executive has provided the Company with a copy of any and all restrictive covenants and agreements that he is bound by with any previous employer or other party to refrain from using or disclosing any trade secret or confidential or proprietary

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information in the course of his employment with the Company, or to refrain from competing, directly or indirectly, with the business of such previous employer or any other party. Employee further represents that his performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by him in confidence or trust prior to his employment with the Company.

          10.7 Further Assurances. Each of the parties agrees to execute, acknowledge, deliver and perform, or cause to be executed, acknowledged, delivered or performed, at any time, or from time to time, as the case may be, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be necessary or proper to carry out the provisions or intent of this Agreement.

          10.8 Severability. If any one or more of the terms, provisions, covenants or restrictions of this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. If, moreover, any one or more of the provisions contained in this Agreement shall for any reason be determined by a court of competent jurisdiction to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting or reducing it so as to be enforceable to the extent compatible with then applicable law.

EXECUTION

     The parties hereof execute this Agreement as a sealed instrument, whereupon it becomes binding in accordance with its terms.

POLYMEDICA CORPORATION
/s/ Samuel L. Shanaman By: Samuel L. Shanaman
Title: Chairman
Date:	September 27, 2004

AGREED TO AND ACCEPTED:
/s/ Patrick T. Ryan Patrick T. Ryan
Date:	September 27, 2004

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EX-10.2

Exhibit 10.2

PolyMedica Corporation

Executive Retention Agreement

     THIS EXECUTIVE RETENTION AGREEMENT by and between PolyMedica Corporation, a Massachusetts corporation (the “Company”), and Patrick T. Ryan (the “Executive”) is made as of September 27, 2004 (the “Effective Date”).

     WHEREAS, the Company recognizes that, as is the case with many publicly-held corporations, the possibility of a change in control of the Company exists and that such possibility, and the uncertainty and questions which it may raise among key personnel, may result in the departure or distraction of key personnel to the detriment of the Company and its stockholders, and

     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that appropriate steps should be taken to reinforce and encourage the continued employment and dedication of the Company’s key personnel without distraction from the possibility of a change in control of the Company and related events and circumstances.

     NOW, THEREFORE, as an inducement for and in consideration of the Executive remaining in its employ, the Company agrees that the Executive shall receive the severance benefits set forth in this Agreement in the event the Executive’s employment with the Company is terminated under the circumstances described below subsequent to a Change in Control (as defined in Section 1.1).

     1. Key Definitions.

     As used herein, the following terms shall have the following respective meanings:

          1.1 “Change in Control” means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection):

               (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in excess of 50% of either (i) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of the Company, unless the Person

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exercising, converting or exchanging such security acquired such security directly from the Company or an underwriter or agent of the Company), (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this Section 1.1; or

               (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the Board (i) who was a member of the Board on the date of the execution of this Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or

               (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company in one or a series of transactions (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 20 % or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or

               (d) approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, other than in a bankruptcy proceeding.

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          1.2 “Change in Control Date” means the first date during the Term (as defined in Section 2) on which a Change in Control occurs. Anything in this Agreement to the contrary notwithstanding, if (a) a Change in Control occurs, (b) the Executive’s employment with the Company is terminated prior to the date on which the Change in Control occurs, and (c) it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with or in anticipation of a Change in Control, then for all purposes of this Agreement the “Change in Control Date” shall mean the date immediately prior to the date of such termination of employment.

          1.3 “Cause” means:

               (a) the Executive’s willful and continued failure to substantially perform his reasonable assigned duties as an officer of the Company (other than any such failure resulting from incapacity due to physical or mental illness or any failure after the Executive gives notice of termination for Good Reason), which failure is not cured within 30 days after a written demand for substantial performance is received by the Executive from the Board of Directors of the Company which specifically identifies the manner in which the Board of Directors believes the Executive has not substantially performed the Executive’s duties; or

               (b) the Executive’s willful engagement in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company.

     For purposes of this Section 1.3, no act or failure to act by the Executive shall be considered “willful” unless it is done, or omitted to be done, in bad faith and without reasonable belief that the Executive’s action or omission was in the best interests of the Company.

          1.4 “Good Reason” means the occurrence, without the Executive’s written consent, of any of the events or circumstances set forth in clauses (a) through (g) below. Notwithstanding the occurrence of any such event or circumstance, such occurrence shall not be deemed to constitute Good Reason if, prior to the Date of Termination specified in the Notice of Termination (each as defined in Section 3.2(a)) given by the Executive in respect thereof, such event or circumstance has been fully corrected and the Executive has been reasonably compensated for any losses or damages resulting therefrom (provided that such right of correction by the Company shall only apply to the first Notice of Termination for Good Reason given by the Executive).

               (a) the assignment to the Executive of duties inconsistent in any material respect with the Executive’s position (including status, offices, titles and reporting requirements), authority or responsibilities in effect immediately prior to the earliest to occur of (i) the Change in Control Date, (ii) the date of the execution by the Company of the initial written agreement or instrument providing for the Change in Control or (iii) the date of the adoption by the Board of Directors of a resolution providing for the Change in Control (with the earliest to occur of such dates referred to herein as the “Measurement Date”), or any other action or omission by the Company which results in a material diminution in such position, authority or responsibilities;

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               (b) a reduction in the Executive’s annual base salary as in effect on the Measurement Date or as the same was or may be increased thereafter from time to time;

               (c) the failure by the Company to (i) continue in effect any material compensation or benefit plan or program (including without limitation any life insurance, medical, health and accident or disability plan and any vacation or automobile program or policy) (a “Benefit Plan”) in which the Executive participates or which is applicable to the Executive immediately prior to the Measurement Date, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan or program, (ii) continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants, than the basis existing immediately prior to the Measurement Date or (iii) award cash bonuses to the Executive in amounts and in a manner substantially consistent with past practice in light of the Company’s financial performance;

               (d) a change by the Company in the location at which the Executive performs his principal duties for the Company to a new location that is both (i) outside a radius of 35 miles from the Executive’s principal residence immediately prior to the Measurement Date and (ii) more than 20 miles from the location at which the Executive performed his principal duties for the Company immediately prior to the Measurement Date; or a requirement by the Company that the Executive travel on Company business to a substantially greater extent than required immediately prior to the Measurement Date;

               (e) the failure of the Company to obtain the agreement from any successor to the Company to assume and agree to perform this Agreement, as required by Section 6.1;

               (f) a purported termination of the Executive’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Section 3.2(a); or

               (g) any failure of the Company to pay or provide to the Executive any portion of the Executive’s compensation or benefits due under any Benefit Plan within seven days of the date such compensation or benefits are due, or any material breach by the Company of this Agreement or any employment agreement with the Executive.

     The Executive’s right to terminate his employment for Good Reason shall not be affected by his incapacity due to physical or mental illness.

          1.5 “Disability” means the Executive’s absence from the full-time performance of the Executive’s duties with the Company for 180 consecutive calendar days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative.

     2. Term of Agreement. This Agreement, and all rights and obligations of the parties hereunder, shall take effect upon the Effective Date and shall expire upon the first to occur of (a) the expiration of the Term (as defined below) if a Change in Control has not occurred during the

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Term, (b) the date 24 months after the Change in Control Date, if the Executive is still employed by the Company as of such later date, or (c) the fulfillment by the Company of all of its obligations under Sections 4 and 5.2 if the Executive’s employment with the Company terminates within 24 months following the Change in Control Date. “Term” shall mean the period commencing as of the Effective Date and continuing through the second anniversary thereof; provided, however, that commencing on the date prior to the second anniversary of the Effective Date and each date prior to all subsequent anniversaries of the Effective Date hereafter, the Term shall be automatically extended for one additional year unless, not later than 90 days prior to the scheduled expiration of the Term (or any extension thereof), the Company shall have given the Executive written notice that the Term will not be extended.

     3. Employment Status; Termination Following Change in Control.

          3.1 Not an Employment Contract. The Executive acknowledges that this Agreement does not constitute a contract of employment or impose on the Company any obligation to retain the Executive as an employee and that this Agreement does not prevent the Executive from terminating employment at any time. If the Executive’s employment with the Company terminates for any reason and subsequently a Change in Control shall occur, the Executive shall not be entitled to any benefits hereunder except as otherwise provided pursuant to Section 1.2.

          3.2 Termination of Employment.

               (a) If the Change in Control Date occurs during the Term, any termination of the Executive’s employment by the Company or by the Executive within 24 months following the Change in Control Date shall be communicated by a written notice to the other party hereto (the “Notice of Termination”), given in accordance with Section 7. Any Notice of Termination shall: (i) indicate the specific termination provision (if any) of this Agreement relied upon by the party giving such notice, (ii) to the extent applicable, set 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 and (iii) specify the Date of Termination (as defined below). The effective date of an employment termination (the “Date of Termination”) shall be the close of business on the date specified in the Notice of Termination (which date may not be less than 15 days or more than 120 days after the date of delivery of such Notice of Termination), in the case of a termination other than one due to the Executive’s death, or the date of the Executive’s death, as the case may be. In the event the Company fails to satisfy the requirements of Section 3.2(a) regarding a Notice of Termination, the purported termination of the Executive’s employment pursuant to such Notice of Termination shall not be effective for purposes of this Agreement.

               (b) The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting any such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

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               (c) Any Notice of Termination for Cause given by the Company must be given within 90 days of the occurrence of the event(s) or circumstance(s) which constitute(s) Cause. Prior to any Notice of Termination for Cause being given (and prior to any termination for Cause being effective), the Executive shall be entitled to a hearing before the Board of Directors of the Company at which he may, at his election, be represented by counsel and at which he shall have a reasonable opportunity to be heard. Such hearing shall be held on not less than 15 days prior written notice to the Executive stating the Board of Directors’ intention to terminate the Executive for Cause and stating in detail the particular event(s) or circumstance(s) which the Board of Directors believes constitutes Cause for termination. Any such Notice of Termination for Cause must be approved by an affirmative vote of two-thirds of the members of the Board of Directors.

               (d) Any Notice of Termination for Good Reason given by the Executive must be given within 90 days of the occurrence of the events(s) or circumstance(s) which constitute(s) Good Reason.

     4. Benefits to Executive.

          4.1 Stock Acceleration. If the Change in Control Date occurs prior to April 1, 2005, then, effective upon the Change in Control Date, (a) the first 300,000 outstanding option shares to purchase Common Stock of the Company held by the Executive shall become immediately exercisable in full and will no longer be subject to a right of repurchase by the Company, (b) each outstanding restricted stock award shall be deemed to be fully vested and will no longer be subject to a right of repurchase by the Company. If the Change in control Date occurs on or after April 1, 2005, then, effective upon the Change in Control Date, (a) each outstanding option to purchase shares of Common Stock of the Company held by the Executive shall become immediately exercisable in full and will no longer be subject to a right of repurchase by the Company, (b) each outstanding restricted stock award shall be deemed to be fully vested and will no longer be subject to a right of repurchase by the Company.

          4.2 Compensation. If the Change in Control Date occurs during the Term and the Executive’s employment with the Company terminates within 24 months following the Change in Control Date, the Executive shall be entitled to the following benefits:

               (a) Termination Without Cause or for Good Reason. If the Executive’s employment with the Company is terminated by the Company (other than for Cause or Disability) or by the Executive for Good Reason within 24 months following the Change in Control Date, then the Executive shall be entitled to the following benefits:

                    (i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

                         (1) the sum of (A) the Executive’s base salary through the Date of Termination, (B) the product of (x) the annual bonus paid or payable (including any bonus or portion thereof which has been earned but deferred) for the most recently completed fiscal year and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (C) the amount

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of any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not previously paid (the sum of the amounts described in clauses (A), (B), and (C) shall be hereinafter referred to as the “Accrued Obligations”); and

                         (2) the amount equal to (A) 2.99 multiplied by (B) the sum of (x) the Executive’s highest annual base salary during the three-year period prior to the Change in Control Date and (y) the Executive’s average bonus payment over the three-year period prior to the Change in Control Date.

                    (ii) for 12 months after the Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue to provide benefits to the Executive and the Executive’s family at least equal to those which would have been provided to them if the Executive’s employment had not been terminated, in accordance with the applicable Benefit Plans in effect on the Measurement Date or, if more favorable to the Executive and his family, in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies; provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive a particular type of benefits (e.g., health insurance benefits) from such employer on terms at least as favorable to the Executive and his family as those being provided by the Company, then the Company shall no longer be required to provide those particular benefits to the Executive and his family;

                    (iii) to the extent not previously paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive following the Executive’s termination of employment under any plan, program, policy, practice, contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”); and

                    (iv) for purposes of determining eligibility (but not the time of commencement of benefits) of the Executive for retiree benefits to which the Executive is entitled, the Executive shall be considered to have remained employed by the Company until 12 months after the Date of Termination.

               (b) Resignation without Good Reason; Termination for Disability. If the Executive voluntarily terminates his employment with the Company within 24 months following the Change in Control Date, excluding a termination for Good Reason, or if the Executive’s employment with the Company is terminated by reason of the Executive’s Disability within 24 months following the Change in Control Date, then the Company shall (i) pay the Executive (or his estate, if applicable), in a lump sum in cash within 30 days after the Date of Termination, the Accrued Obligations and (ii) timely pay or provide to the Executive the Other Benefits.

               (c) Termination for Cause. If the Company terminates the Executive’s employment with the Company for Cause within 24 months following the Change in Control Date, then the Company shall (i) pay the Executive, in a lump sum in cash within 30 days after

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the Date of Termination, the sum of (A) the Executive’s annual base salary through the Date of Termination and (B) the amount of any compensation previously deferred by the Executive, in each case to the extent not previously paid, and (ii) timely pay or provide to the Executive the Other Benefits.

          4.3 Taxes.

               (a) Notwithstanding any other provision of this Agreement, in the event that the Company undergoes a Change in Ownership or Control (as defined below), the Company shall not be obligated to provide to the Executive a portion of any “Contingent Compensation Payments” (as defined below) that the Executive would otherwise be entitled to receive to the extent necessary to eliminate any “excess parachute payments” (as defined in Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended (the “Code”)) for the Executive. For purposes of this Section 4.3, the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated Payments” and the aggregate amount (determined in accordance with Proposed Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated Amount.”

               (b) For purposes of this Section 4.3, the following terms shall have the following respective meanings:

                    (i) “Change in Ownership or Control” shall mean a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company determined in accordance with Section 280G(b)(2) of the Code.

                    (ii) “Contingent Compensation Payment” shall mean any payment (or benefit) in the nature of compensation that is made or made available (under this Agreement or otherwise) to a “disqualified individual” (as defined in Section 280G(c) of the Code) and that is contingent (within the meaning of Section 280G(b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the Company.

               (c) Any payments or other benefits otherwise due to the Executive following a Change in Ownership or Control that could reasonably be characterized (as determined by the Company) as Contingent Compensation Payments shall not be made until the determination, pursuant to this Section 4.3(c), of which Contingent Compensation Payments shall be treated as Eliminated Payments. Within 30 days after each date on which the Executive first becomes entitled to receive (whether or not then due) a Contingent Compensation Payment relating to such Change in Ownership or Control, the Company shall determine and notify the Executive (with reasonable detail regarding the basis for its determinations) (i) which of such payments and benefits constitute Contingent Compensation Payments and (ii) the Eliminated Amount. Within 30 days after delivery of such notice to the Executive, the Executive shall notify the Company which Contingent Compensation Payments, or portions thereof (the aggregate amount of which, determined in accordance with Proposed Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision, shall be equal to the Eliminated Amount), shall be treated as Eliminated Payments. In the event that the Executive fails to notify the Company pursuant to the preceding sentence on or before the required date, the Contingent

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Compensation Payments (or portions thereof) that shall be treated as Eliminated Payments shall be determined by the Company in its absolute discretion. In no event shall the Company be liable to the Executive as a result of any factual or legal determination made by it pursuant to this subsection (c) or for any information supplied by it to the Executive or his advisors.

               (d) The provisions of this Section 4.3 are intended to apply to any and all payments or benefits available to the Executive under this Agreement or any other agreement or plan of the Company under which the Executive receives Contingent Compensation Payments.

          4.4 Mitigation. The Executive shall not be required to mitigate the amount of any payment or benefits provided for in this Section 4 by seeking other employment or otherwise. Further, except as provided in Section 4.2(a)(ii), the amount of any payment or benefits provided for in this Section 4 shall not be reduced by any compensation earned by the Executive as a result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company or otherwise.

          4.5 Outplacement Services. In the event the Executive is terminated by the Company (other than for Cause, Disability or Death), or the Executive terminates employment for Good Reason, within 24 months following the Change in Control Date, the Company shall provide outplacement services through one or more outside firms of the Executive’s choosing up to an aggregate amount to be negotiated by the Executive and the Company, with such services to extend until the earlier of (i) 12 months following the termination of Executive’s employment or (ii) the date the Executive secures full time employment.

     5. Disputes.

          5.1 Settlement of Disputes; Arbitration. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board of Directors of the Company and shall be in writing. Any denial by the Board of Directors of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board of Directors shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

          5.2 Expenses. The Company agrees to pay as incurred, to the full extent permitted by law, all legal, accounting and other fees and expenses which the Executive may reasonably incur as a result of any claim or contest (regardless of the outcome thereof) by the Company, the Executive or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive regarding the amount of any payment or benefits pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.

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     6. Successors.

          6.1 Successor to Company. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall be a breach of this Agreement and shall constitute Good Reason if the Executive elects to terminate employment, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, “Company” shall mean the Company as defined above and any successor to its business or assets as aforesaid which assumes and agrees to perform this Agreement, by operation of law or otherwise.

          6.2 Successor to Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amount would still be payable to the Executive or his family hereunder if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive’s estate.

     7. Notice. All notices, instructions and other communications given hereunder or in connection herewith shall be in writing. Any such notice, instruction or communication shall be sent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii) prepaid via a reputable nationwide overnight courier service, in each case addressed to the Company, at 11 State St., Woburn, MA 01801, and to the Executive at 686 Hale Street Beverly Farms, MA 01915 (or to such other address as either the Company or the Executive may have furnished to the other in writing in accordance herewith). Any such notice, instruction or communication shall be deemed to have been delivered five business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent via a reputable nationwide overnight courier service. Either party may give any notice, instruction or other communication hereunder using any other means, but no such notice, instruction or other communication shall be deemed to have been duly delivered unless and until it actually is received by the party for whom it is intended.

     8. Miscellaneous.

          8.1 Employment by Subsidiary. For purposes of this Agreement, the Executive’s employment with the Company shall not be deemed to have terminated solely as a result of the Executive continuing to be employed by a wholly-owned subsidiary of the Company.

          8.2 Severability. The invalidity or unenforceability of any provision 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.

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          8.3 Injunctive Relief. The Company and the Executive agree that any breach of this Agreement by the Company is likely to cause the Executive substantial and irrevocable damage and therefore, in the event of any such breach, in addition to such other remedies which may be available, the Executive shall have the right to specific performance and injunctive relief.

          8.4 Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without regard to conflicts of law principles.

          8.5 Waivers. No waiver by the Executive at any time of any breach of, or compliance with, any provision of this Agreement to be performed by the Company shall be deemed a waiver of that or any other provision at any subsequent time.

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

          8.7 Tax Withholding. Any payments provided for hereunder shall be paid net of any applicable tax withholding required under federal, state or local law.

          8.8 Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto in respect of the subject matter contained herein; and any prior agreement of the parties hereto in respect of the subject matter contained herein is hereby terminated and cancelled. Notwithstanding the foregoing, the effectiveness of the Employment Agreement, dated as of the date hereof, between the Company and the Executive (the “Prior Agreement”) shall be suspended during the 24 months following the Change in Control Date (the “Protected Period”), except as specifically set forth herein; provided that if the Executive’s employment is not terminated on or before the last day of the Protected Period, then the Prior Agreement shall be effective during the period, if any, from the end of the Protected Period through the end of the Employment Period (as defined in the Prior Agreement)

          8.9 Amendments. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Executive.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first set forth above.

POLYMEDICA CORPORATION
By:	/s/ Samuel L. Shanaman
	Title: Chairman
/s/ Patrick T. Ryan
Patrick T. Ryan

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EX-99.1

FOR IMMEDIATE RELEASE

POLYMEDICA’S FACILITIES IN PORT ST. LUCIE, FLORIDA IMPACTED BY HURRICANE JEANNE

WOBURN, MA, September 27, 2004 — PolyMedica Corporation (NNM: PLMD) today announced that its Liberty facilities in Port St. Lucie, Florida suffered damage from Hurricane Jeanne, which passed directly over Port St. Lucie over the weekend, following in the steps of Hurricane Frances. The Liberty Pharmacy facility lost a portion of its roof and has been exposed to the weather, and Liberty’s Diabetes and Respiratory facilities suffered some additional water damage. The Company hopes to return to normal operations by the end of the week, provided that phone services, postal services and power can be restored to the area. In the interim, the Company expects that only essential orders will be filled. Once again, the surrounding community sustained significant damage, and many of the Company’s employees are dealing with the compounding impact of Hurricane Frances and now Jeanne. The Company will focus its resources this week on helping employees and participating in the recovery effort within the community.

Chairman Samuel L. Shanaman said, “This has been an unprecedented period for much of Florida, and our thoughts go out to those who have been affected once again by this destructive storm. The community of Stuart and Port St. Lucie has borne the brunt of two direct hits from hurricanes within the last three weeks. Our management team is on site and focused on meeting the needs of our employees and the community. As an organization and a team, we will grow stronger as a result of these setbacks. I am humbled by the strength and determination of our employees.”

Shanaman went on to say, “While we have yet to assess the full impact of Hurricane Jeanne, it is clear that our operations in Florida will be severely curtailed through the end of the quarter, which is just a few days away at this point, and that this latest storm will impact our financial results for the quarter. Our preliminary estimates indicate that the direct and indirect costs of recovery could be as much as $5 million, or 12 cents a share, for the September quarter. Some of these costs will not be recoverable, but they represent an important investment in our community recovery effort.”

About PolyMedica (www.polymedica.com) PolyMedica is a rapidly growing national medical products company. The Company is best known through its Liberty brand name and innovative direct-to-consumer television advertising to seniors with diabetes. Building on its technology-based operating platform and compliance management focus, PolyMedica continues to expand its product offerings in chronic disease and other categories.

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to, rules and regulations promulgated under the Act, unanticipated changes in Medicare reimbursement, outcomes of government reviews, inquiries and investigations and related litigation, continued compliance with government regulations, fluctuations in customer demand, management of rapid growth, competition from other healthcare product vendors, timing and acceptance of new product introductions, general economic conditions, geopolitical events and regulatory changes, as well as other especially relevant risks detailed in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the period ended March 31, 2004 and its Quarterly Report on Form 10-Q for the period ended June 30, 2004. The information set forth herein should be read in light of such risks. The Company assumes no obligation to update the information contained in this press release.

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For additional information, contact:

Investors:	Media:
Fred (“Skip”) Croninger	Jim Barron / Alex Eule
PolyMedica Corporation	Citigate Sard Verbinnen
(781) 933-2020	(212) 687-8080