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

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By: Samuel L. Shanaman     Title: Chairman
 
       

  Date:   September 27, 2004

     

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      AGREED TO AND ACCEPTED:
 
    /s/ Patrick T. Ryan

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Patrick T. Ryan
 
   
Date:
  September 27, 2004

 

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