Document:

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                                                                   EXHIBIT 10.12

                              EMPLOYMENT AGREEMENT

                                    PARTIES

         On September 1, 2000, PolyMedica Corporation, a Massachusetts
corporation having its principal place of business at 11 State Street, Woburn,
Massachusetts 01801 (the "Company") and Arthur A. Siciliano, Ph.D., an
individual with an address at 1010 Gulf Winds Way, Nokomis, Florida 34275
("Employee"), entered into an Executive Employment Agreement. The Employment
Agreement was thereafter amended by the Company and Employee on April 1, 2001
and thereafter amended again on June 8, 2001, May 31, 2002, and July 15, 2002
(hereafter jointly referred to as the Amended Executive Employment Agreement").
The Company and Employee now both desire to plan for the retirement of Employee
and the transition of his duties upon his retirement. As such, the Company and
Employee hereby replace the Amended Executive Employment Agreement with this new
Employment Agreement (this "Agreement") that will become effective and supersede
the Amended Executive Employment Agreement on November 5, 2003.

                               TERMS OF AGREEMENT

         In consideration of this Agreement and the employment and/or continued
employment of the Employee by the Company, the parties agree as follows:

         1.       Employment. The Company hereby employs Employee to act as a
Senior Advisor of the Company and to perform such acts and duties and furnish
such services to the Company as the Company's Chief Executive Officer or Board
of Directors (the "Board") shall from time to time reasonably direct. Employee
hereby accepts said employment. Employee 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 best business judgment, skill and
knowledge to the performance of his duties and responsibilities hereunder.
Employee shall report directly to the Chief Executive Officer of the Company or
such officer of the Company as may be designated by the Chief Executive Officer
or the Board. It is expected that Employee shall discharge substantially all of
his duties from Florida. Nothing contained herein shall preclude Employee from
devoting time to activities other than the business of the Company which are not
inconsistent with the terms and conditions of this Agreement and the best
interests of the Company.

         2.       Term of Employment. The Company agrees to employ the Employee
through March 31, 2004 (the "Employment Period") subject to the provisions of
Section 4 of this Agreement. Employee agrees to execute and deliver to the
Company a letter of resignation as an employee of the Company on or before March
31, 2004, in the

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form appended hereto as Exhibit A. Such resignation is to be effective the close
of business on March 31, 2004, so long as the Company has discharged its
obligations under this Employment Agreement.

         3.       Compensation and Benefits; Death of Employee.

                  3.1.     Salary. During the Employment Period, the Company
shall pay Employee Thirty-four Thousand Seven Hundred and Fifty Dollars
($34,750.00) per month ("Base Salary") 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.

                  3.2.     Bonus Payment. Employee shall receive a guaranteed
bonus payment for his work during FY 2004 in the amount of Six Hundred Thousand
Dollars ($600,000.00) payable as follows: Three Hundred Thousand Dollars
($300,00.00) on the effective date of this Agreement; One Hundred Fifty Thousand
Dollars ($150,000.00) on or before December 31, 2003; and One Hundred Fifty
Thousand Dollars ($150,000.00) on or before April 1, 2004.

                  3.3.     Benefits. During the Employment Period, Employee
shall be entitled to participate in all benefit programs that the Company
establishes and makes available to its other 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.

                  (b)      Life Insurance. Life insurance on the life of
Employee in the amount of Six Hundred Twenty-Five Thousand and Five Hundred
Dollars ($625,500.00).

                  (c)      Stock Based Compensation. Employee will be eligible
to participate in the Company's Employee Stock Purchase Plan.

                  (d)      Automobile. The Company shall continue to provide
Employee with the automobile he is currently using until the earlier of the end
of the vehicle lease or March 31, 2004.

                  3.5.     Death of Employee. The salary and bonus described in
paragraphs 3.1 and 3.2 shall immediately become due if Employee dies before
March 31, 2004, and shall be paid to his estate.

                  3.6.     Change of Control. If at any time prior to March 31,
2004, there is a "Change of Control" as defined in the Executive Retention
Agreement dated September 1, 2000, between the Employee and the Company
("Executive Retention Agreement"), and if by operation of the Executive
Retention Agreement, Employee becomes entitled to compensation as set forth in
paragraph 4.2(a) thereof, then the Employee's employment with the Company

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shall be governed by the terms and conditions of the Executive Retention
Agreement, and Employee shall not be entitled to the compensation and benefits
provided for in this Section 3.

                  3.7      Severance Pay and Benefits. The parties have entered
into a Severance Agreement, a copy of which is appended hereto as Exhibit B. The
parties intend for the Severance Agreement to take effect at the conclusion of
the Employment Period so long as Employee executes and delivers, and does not
timely revoke, the General Release of Claims appended to the Severance Agreement
at Exhibit 1. Notwithstanding the foregoing, the Company's obligations under
this Section 3.7 shall cease immediately upon the payment to the Employee of the
lump-sum payment described in Section 4.2(a)(i) of the Executive Retention
Agreement.

                  3.8      Consulting Agreement. The Company desires that
Employee provide valuable services to the Company from time to time after his
employment with the Company ends, and Employee has agreed to provide such
services. The parties have therefore agreed that on April 5, 2004, they will
enter into the Consulting Agreement appended hereto as Exhibit C.

         4.       Discharge for Cause. The Company may discharge Employee 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:

                  (a) Indictment or conviction (or the entry of a pleading of
guilty or nolo contendere by Employee) of a fraud or felony or any criminal
offense involving dishonesty, breach of trust or moral turpitude during
Employee's employment. If Employee is indicted for an offense listed in the
preceding sentence which is alleged to have occurred during Employee's
employment, the Company shall have the right to withhold any further salary or
bonus payments to Employee otherwise required under this Agreement. However, if
Employee is not convicted or does not plead guilty or nolo contendere to such an
indictment, the Company shall forthwith pay him all salary and bonus so
withheld, together with interest at the rate of five percent (5%) per annum.

                  (b) Employee's breach of his Agreement Not to Compete and/or
his Confidentiality and Proprietary Information Agreement, each dated May 16,
1990 (or under any similar later agreements with the Company); provided,
however, that if the Company reasonably believes that Employee may have breached
either of such agreements, it shall so inform Employee in writing, providing the
factual basis for that belief, and give him twenty-one (21) days to cure his
alleged breach. If Employee contests the Company's assertion, or if he shall
seek to cure his alleged breach, no final determination shall be made except by
the Company's Board of Directors after Employee shall have had an opportunity
orally and in writing to present his position to the Board.

                  (c) In the event the Company exercises its right to terminate
Employee's employment under this Section 4, Employee shall not be entitled to
receive any salary or bonus not already paid to him and he shall not be entitled
to any compensation or benefits under the Executive Retention Agreement or the
Consulting Agreement;

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provided, however, that if the last sentence of Section 4(a) of this Agreement
shall apply, he shall be entitled to salary and bonus (with interest) as
described in that sentence and he shall be entitled to compensation and
benefits, if any, to which he otherwise would have been entitled under the
Executive Retention Agreement.

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

         6.       Announcement of Employee's Retirement. The Company and
Employee shall jointly draft a statement announcing Employee's retirement from
the Company effective April 1, 2004, which announcement shall be publicly
released at a mutually agreeable time and will describe Employee's role as a
Senior Advisor to the Company during the Employment Period.

         7.       Agreement Not to Compete. Employee acknowledges and reaffirms
his obligations under the Agreement Not to Compete and the Confidentiality and
Proprietary Information Agreement, which he executed on dated May 16, 1990 (or
under any similar later agreements) with the Company (the "Additional
Agreements"), which shall 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 Employment 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 any arbitration pursuant to this paragraph; 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 referenced at Paragraph 7 herein, and no
such dispute or controversy shall be deemed to be arbitrable in the absence of
the Corporation'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.      Attorneys' Fees. The Company agrees to reimburse Employee for
the attorneys' fees and expenses incurred by him in connection with the
preparation of this Agreement, including the exhibits hereto, up to a maximum of
Twenty Thousand Dollars ($20,000.00), within 30 days after presentation to the
Company of invoices

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reflecting such fees and expenses. The Company further agrees that any
reasonable attorneys' fees and expenses incurred by Employee in connection with
a dispute regarding this Agreement, or any agreements executed simultaneously
herewith, shall be reimbursed to the extent and only in proportion to the
claim(s) on which the Employee prevails in the dispute.

         11.      Miscellaneous.

                  11.1.    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 Employee's
or the Company's obligations under the Additional Agreements.

                  11.2     Amendment; Waiver. This Agreement may not be amended,
supplemented, cancelled or discharged, except by written instrument executed by
the parties. 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.

                  11.3.    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.
Employee's rights or obligations under this Agreement may not be assigned by
Employee, except that Employee's right to compensation to the earlier of date of
death or termination of actual employment shall pass to Employee's executor or
administrator.

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

                  11.5.    Applicable Law. This Agreement shall be interpreted
and construed according to the laws of the Commonwealth of Massachusetts,
without regard to conflict of laws provisions. Employee 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.

                  11.6     Other Agreements. Employee hereby represents that he
is not bound by the terms of any agreement with any previous employer or other
party to refrain from using or disclosing any trade secret or confidential or
proprietary 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

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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.

                  11.7.    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.

                  11.8.    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 executed this Agreement as a sealed instrument as of the
date first above written, whereupon it becomes binding in accordance with its
terms.

                                       POLYMEDICA CORPORATION

                                       By: /s/ Samuel L. Shanaman
                                           ----------------------------------
                                           Samuel L. Shanaman
                                           Title: Lead Director and Interim CEO

                                           Date: November 5, 2003

AGREED TO AND ACCEPTED:

/s/ Arthur A. Siciliano
-----------------------
Arthur A. Siciliano

November 5, 2003
-----------------
Date

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                                                                   EXHIBIT 10.13

                               SEVERANCE AGREEMENT

         This Agreement (the "Agreement") is entered into as of the 5th day of
November, 2003, by and among Arthur A. Siciliano, Ph.D. ("Employee"), PolyMedica
Corporation, a Massachusetts Corporation (the "Company"), and the Board of
Directors of the Company (the "Board of Directors").

BACKGROUND

         After many years of service and contribution to the growth of the
Company, Employee has decided to retire, and the Company has decided to accept
his retirement. This decision is taking place at a time when the Company is the
subject of government civil and criminal investigations and civil litigation, as
noted in section 3.1 of this Agreement. It is of great importance to both the
Board of Directors and the Employee that the retirement of the Employee not be
interpreted by others as the product of a finding of impropriety as to the
Employee. Such an interpretation would be inaccurate. The Company has neither
resolved, nor is it determined to attempt to resolve some or all of the
proceedings in which it is currently involved by offering to provide information
to third parties concerning the Employee. The existence of the proceedings was
not the basis for the decision by Employee to retire nor the basis for the
decision of the Board to accept that decision.

RECITALS

         WHEREAS Employee and the Company previously entered into an Employee
Retention Agreement dated as of September 1, 2000, as amended on November 5,
2003, and an Employment Agreement dated November 5, 2003 (collectively, all of
the foregoing agreements shall be referred to as the "Previous Agreements");

         WHEREAS Employee desires to resign from his employment on March 31,
2004 (the "Date of Separation"), and the Company recognizes Employee's valuable
service to the Company;

         WHEREAS Employee and the Company desire for this Agreement to supersede
all Previous Agreements as of April 1, 2004;

         WHEREAS Employee intends to execute and deliver a letter of resignation
in a form previously agreed to by Employee and the Company effective the close
of business on March 31, 2004; and

         NOW THEREFORE, in consideration of the mutual promises and forbearances
set forth in this Agreement, and other good and valuable consideration which
Employee and the Company hereby acknowledge, Employee and the Company agree as
follows:

         TERMS AND CONDITIONS

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         1.       BACKGROUND AND RECITALS. The foregoing Background and Recitals
are incorporated into and made a part of the Terms and Conditions of the
Agreement.

         2.       SEVERANCE BENEFITS.

                  2.1      SEVERANCE PAY.

                           (a) As of the Date of Separation, the Company shall
pay Employee salary continuation at his current base salary for eighteen (18)
months, less all state and federal taxes ("Severance"). The Severance shall be
paid in accordance with the Company's normal payroll procedures, but in no event
shall payment start earlier than the first regular payroll after the end of the
Revocation Period for the General Release of Claims executed by Employee (see
Exhibit 1). This Severance Pay shall immediately become due if Employee dies
prior to the end of said eighteen (18) month period and shall be paid to his
estate.

                           (b) The Company shall pay to Employee any accrued
unpaid salary in the next regular payroll following the Date of Separation.

                  2.2      HEALTH INSURANCE. For a period of 18 months after the
Date of Separation, or until the Employee becomes employed and covered by health
insurance meeting the requirements of the Omnibus Budget Reconciliation Act of
1989 and the Health Insurance Portability and Accountability Act, whichever
occurs first, the Company shall offer Employee continued health and dental
insurance as required under the Consolidated Omnibus Budget Reconciliation Act
of 1985 ("COBRA"), or other law, and shall reimburse Employee for the full cost
of that coverage. If Employee elects not to maintain health insurance pursuant
to COBRA or other law, the Company is under no obligation to reimburse Employee
for his otherwise elected coverage. Employee shall be obligated to give the
Company prompt notice of his subsequent employment, and at that time the
Company's obligations under this Section 2.2, if any, shall cease if and when
Employee is eligible for family group health insurance coverage with no
pre-existing condition exclusion.

                  2.3      EQUIPMENT. Employee shall be entitled to permanent
ownership of the computer and fax machine he currently uses in his home office.

                  2.4      LIFE INSURANCE. For a period of 18 months after the
Date of Separation or until Employee becomes employed , whichever occurs first,
the Company shall continue in full force and effect, at its expense, life
insurance on the life of the Employee with an Employee-directed beneficiary in
the amount of Six Hundred Twenty-Five Thousand and Five Hundred Dollars
($625,500.00). Employee shall be obligated to give the Company prompt notice of
his subsequent employment, and at that time the Company's obligations under this
Section 2.4, if any, shall cease.

                  2.5      NOTICE. Employee shall be obligated to provide the
Company prompt notice of his subsequent employment.

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                  2.6      401(K) PLANS.

                           (a) Employee is a participant in the Company's
non-qualified 401(k) shadow plan/social security equalization plan/pension
plan/deferred salary and bonus plan (the "SERP") and has a fully vested account
balance in the SERP . As soon as practicable and in no event later than June 30,
2004, the Company shall cause: (1) the full amount in Employee's SERP account
(less applicable tax withholdings) to be paid to him in a lump sum; and (2) to
be delivered to Employee a schedule of all activity (e.g. contributions and
investments) in his account from November 1, 2003, through the effective date of
such payment.

                           (b) After the Date of Separation, Employee shall be
entitled to roll over any and all existing 401(k) retirement account(s),
including discretionary amounts contributed by the Company, pursuant to the
applicable benefit plan provisions.

         3.       INDEMNIFICATION AND NO ADVERSE ACTION.

                  3.1      The Company acknowledges Employee's rights as an
Indemnitee under the Articles of Organization (the "Articles") of the Company.
Without limitation of the foregoing, the Company acknowledges that it has
received proper notice, in accordance with Section 3 of Article 6F of the
Articles, of Employee's claim that he has a right to be indemnified with respect
to the following matters:

                  -        In re: PolyMedica Corp. Shareholder Derivative
                           Litig., Civ. A. No. 01-3446, Superior Court of
                           Middlesex County, Commonwealth of Massachusetts

                  -        In re: PolyMedica Corp. Sec. Litig., Civ. A. No. 00
                           12426 REK, United States District Court, District of
                           Massachusetts

                  -        Stanley Sved, et al. v. PolyMedica Corp., et al.,
                           Civ. A. No. 03-11270-RCL, United States District
                           Court for the District of Massachusetts

                  -        Alfred Gourdji, et al. v. PolyMedica Corp., et al.,
                           Civ. A. No. 03-11393-RCL, United States District
                           Court for the District of Massachusetts

                  -        Jack H. L. Thompson, et al. v. PolyMedica Corp., et
                           al., Civ. A. No. 03-11604-RCL, United States District
                           Court for the District of Massachusetts;

                  -        Achille, et al. v. Steve J. Lee, et al., Civ. A. No.
                           03-2262, Superior Court of Middlesex County,
                           Commonwealth of Massachusetts

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                  -        The investigations currently being conducted by the
                           United States Attorney's for the Southern District of
                           Florida and the Southern District of Illinois

         The Company further acknowledges that, pursuant to such Section 3, the
Company has authorized Employee to employ Kirkpatrick & Lockhart LLP as his
counsel with respect to the civil matters set forth above, and Neal R. Sonnett
with respect to the criminal matters set forth above. This acknowledgement shall
not limit in any way the right of the Employee to employ his own counsel with
respect to other indemnified claims, as provided in such Section 3.

                  3.2      The Company acknowledges that, pursuant to Section 4
of Article 6F and subject to the last sentence of this Section 3.2, it is
obligated, subject to the terms and conditions of such Section 4, to pay the
reasonable expenses of the Employee incurred in connection with the matters
listed in Section 3.1 above. The Company hereby agrees that the Employee may
instruct his attorneys to forward their invoices for fees and expenses that are
considered expenses under such Section 4 directly to the Company and the Company
shall pay such fees and expenses within 30 days.

         Employee, in order to comply with the provisions of such Section 4 and
with Massachusetts law, hereby undertakes to repay all amounts so advanced in
the event that it shall ultimately be determined that the Employee is not
entitled to be indemnified by the Company in accordance with the Articles.

                  3.3      The Company currently maintains Directors and
Officers liability insurance, the policies for which will be made available to
the Employee and his authorized representatives promptly following any request
therefore. The Company shall use commercially reasonable efforts to keep such
policies in effect as to the Employee after the date hereof.

         4.       NON-DISPARAGEMENT.

                  4.1      The Company, the Senior Executives and Directors
agree not to take any action or make any statement which is false, disparages,
criticizes, or is derogatory with respect to, Employee regardless of whether
such statements would be actionable under statutory or common law liability
theories.

                  4.2      The Employee understands and agrees that he shall not
make any false, disparaging or derogatory statements to any media outlet,
industry group, financial institution, investor, current or former employee,
consultant, client or customer of the Company or any other third party,
regarding the Company or any of its directors, officers, employees, attorneys,
agents or representatives or about the Company's business affairs or financial
condition. The Employee further agrees not to make any statement of any kind to
any media outlet other than what has been mutually agreed upon as a press
release with the Company.

                  4.3      The parties recognize that the Company may provide
information to a Governmental Entity (as defined below) or plaintiffs, as the
case may be, on a voluntary basis. Nothing in this agreement shall be construed

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to limit or impede such voluntary cooperation or anyone acting on behalf of the
Company from providing any information, including but not limited to documents,
witnesses, and/or information obtained from any witness, on a voluntary basis.
Nor shall it be construed to limit or impede anyone acting on behalf of the
Company from responding to any legal process. For purposes of this agreement the
term "Governmental Entity" shall mean any court, arbitrational tribunal,
administrative agency or commission or other governmental or regulatory
authority, agency or instrumentality, any entity charged by a Governmental
Entity with the administration of a government program, or any stock market or
stock exchange on which shares of the Company's stock are traded.

                  4.4      The parties agree that Sections 4.1, 4.2 and 4.3 may
be specifically enforced by Employee or the Company, as applicable, it being
agreed that money damages are not an adequate remedy for breach of Sections 4.1,
4.2 or 4.3.

         5.       COOPERATION.

                  5.1      The Employee agrees to cooperate fully with the
Company in the defense or prosecution of any claims or actions or investigations
which already have been brought, including, but not limited to, the matters
listed above in paragraph 3.1, any inquiries by the United States Securities &
Exchange Commission, any grand jury investigation or other investigation
currently being conducted by the United States Attorney's Office for the
Southern District of Florida, or the Southern District of Illinois, or any
claims or actions which may be brought in the future against, or on behalf of or
involving the Company wherein the Employee is indemnified by the Company,
whether before or by a state or federal court or by any local, state or federal
government agency. The Employee's full cooperation in connection with such
claims or actions shall include, but not be limited to, his being available to
meet with counsel to prepare its claims or defenses, to prepare for trial or
discovery or an administrative hearing and to act as a witness when requested by
the Company at reasonable times designated by the Company. Employee agrees to
appear voluntarily before any grand jury proceeding relating to any of the
matters set forth in Section 4 above, unless (a) Employee is a subject or target
of said grand jury and (b) Employee has not been granted formal immunity. By
agreeing to cooperate Employee does not waive any of his constitutional rights
or attorney-client or attorney work product privileges and any assertion of such
rights or privileges shall not be considered a violation of this Agreement. The
Employee agrees that he will notify the Company promptly and in writing in the
event that he is served with a subpoena or other such request for information or
documents from a third party concerning the Company.

                  5.2      The Company agrees that the Company and its lawyers
will cooperate with Employee by providing him and his lawyers with reasonable
access to copies of all business records of the Company, to which the Employee
would have been entitled to access in the ordinary course of business during the
period in which Employee was employed by the Company, that are necessary to the
Employee's defense of the proceedings described in Section 3.1 above or any
other indemnified activity for so long as such proceedings continue.

         6.       NON-DISCLOSURE AND NON-COMPETITION. The Employee acknowledges
and reaffirms his obligations with respect to intellectual property and
non-competition, as stated more fully in the Confidentiality and

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Proprietary Information Agreement dated May 16, 1990, or under any similar later
agreements with the Company (the "Confidentiality Agreement") and the Agreement
Not To Compete dated May 16, 1990, or under any similar later agreements with
the Company (the "Non-Compete Agreement"), each of which remains in full force
and effect; provided however, that the Company agrees that if Employee wishes to
engage in activities or render services prohibited by the Non-Compete Agreement,
Employee may request, in a letter to the General Counsel of the Company
describing generally the services he wishes to render and identifying the entity
for whom he seeks to provide such services, a release from the Agreement Not To
Compete. The decision whether or not to release Employee from his obligations
under the Agreement Not to Compete shall be in the Company's discretion which
decision will be reviewable in the discretion of a single arbitration at the
Employee's request pursuant to the commercial arbitration rules of the American
Arbitration Association in Massachusetts.

         7.       RETURN OF COMPANY PROPERTY. On the Date of Separation, the
Employee agrees to return all Company property in good working order which has
been provided to Employee including, but not limited to, keys, files, records
(and copies thereof), equipment (including, but not limited to, computer
hardware, software and printers, cellular phones, pagers, etc.), Company
identification and any other Company-owned property which is in his possession
or control and to advise the Company of any password protected identification
that he has placed on or used in connection with any document or file on the
Company's computer system and any necessary actions required to facilitate the
Company's access to all documents on the computer system; provided however, that
Employee may retain the computer and fax he currently uses in his home office as
set forth in Section 2.3 of this Agreement. Further, Employee agrees to leave
intact all electronic Company documents, including those he developed or helped
develop during his employment and to cancel all accounts for his benefit, if
any, in the Company's name, including but not limited to, credit cards,
telephone charge cards, cellular phone and/or pager accounts and computer
accounts and to delete all Company files or records on any personal computer on
which he stored such information.

         8.       CONFIDENTIALITY. To the extent permitted by law, the Employee
understands and agrees that the contents of the negotiations and discussions
resulting in this Agreement shall be maintained as confidential by the Employee,
his attorneys, agents and representatives, and none of the above shall be
disclosed except to the extent required by federal or state law or as otherwise
agreed to in writing by the authorized agent of each party.

         9.       RELEASES.

                  9.1      The Employee agrees to execute and deliver to the
Company the General Release of Claims attached hereto as Exhibit 1 on the Date
of Separation. The Employee acknowledges that he has been advised by the Company
to consult with an attorney of his own choosing prior to signing the General
Release of Claims and that he may revoke the General Release of Claims for a
period of seven (7) days from the date of execution and that the General Release
of Claims shall not be effective or enforceable until the expiration of the
seven (7)-day Revocation Period.

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                  9.2      The Company agrees to execute and deliver to the
Employee the Release attached hereto as Exhibit 2 on the Date of Separation. If
the Company fails so to execute and deliver to the Employee such Release, then
Employee's General Release of Claims shall be null and void, but Employee
nevertheless shall be deemed to have satisfied his obligation to execute and
deliver such release as a condition of receiving severance under Section 3.7 of
the Employment Agreement.

                  9.3      Nothing contained in the releases set forth in
Sections 9.1 and 9.2 above shall be deemed to defeat the right, if any, of any
issuer or underwriter of directors' and officers' liability insurance for
PolyMedica and its directors and officers to recover monies on a theory of
subrogation, indemnification or contribution.

         10.      VOLUNTARY ASSENT. The Employee affirms that no other promises
or agreements of any kind have been made to or with him by any person or entity
whatsoever to cause him to sign this Agreement, and that he fully understands
the meaning and intent of this Agreement. The Employee states and represents
that he has had an opportunity to fully discuss and review the terms of this
Agreement with an attorney. The Employee further states and represents that he
has carefully read this Agreement, understands the contents herein, freely and
voluntarily assents to all of the terms and conditions hereof, and signs his
name of his own free act.

         11.      NATURE OF AGREEMENT. The parties understand and agree that
this Agreement does not constitute an admission of liability or wrongdoing on
the part of the Company or the Employee.

         12.      STOCK CERTIFICATES AND TRADES.

                  12.1     The Company shall reissue, as soon as practicable but
in no event later than five (5) business days after the Date of Separation, in
Employee's or his designee's name and without legends, all legended stock
certificates representing shares of the Company's common stock beneficially
owned by Employee. In connection with such reissuance(s), the Company shall
obtain at its expense any legal opinion it deems necessary or advisable.

                  12.2     The Company agrees to prepare and file with the
Securities and Exchange Commission on a timely basis all reports required to be
filed by Employee pursuant to Section 16 of Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder; provided that
Employee reports to the Company all of his transactions in the Company's
securities triggering the filing of such a report no later than the initiation
of such a transaction. Employee acknowledges that he is responsible for promptly
and accurately reporting any transactions to the Company and that the Company is
not responsible for any liability arising from its filing of such reports at the
request of Employee.

         13.      MISCELLANEOUS.

                  13.1     ENTIRE AGREEMENT. This Agreement contains the entire
understanding of Employee and the Company in respect of its subject matter and
supersedes all prior oral or written agreements or understandings between
Employee and the Company with respect to such subject matter; provided however,
that the Previous

                                       7
<PAGE>

Agreements shall remain in effect through the Separation Date and that the
Non-Compete Agreement and the Confidentiality Agreement shall remain in effect
as set forth in Section 6 above.

                  13.2     AMENDMENT; WAIVER. This Agreement may not be amended,
supplemented, cancelled or discharged, except by written instrument executed by
all parties. 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.

                  13.3     BINDING EFFECT; ASSIGNMENT. The rights and
obligations of this Agreement shall bind any successor of the Company by
reorganization, merger, acquisition or consolidation, or any assignee of all or
substantially all of the Company's business and properties. The Company will
require any successor to all or substantially all of the business and/or assets
of the company (whether direct or indirect, by purchase, merger, consolidation,
asset or stock acquisition or otherwise) to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. As
used in this Agreement, "the Company" shall mean the Company as hereinbefore
defined and any successor to all or substantially all of its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law or otherwise. The Company agrees to require any such successor
to acknowledge its obligation pursuant to this Agreement in a binding written
agreement approved by Employee prior to such transaction.

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

                  13.5     APPLICABLE LAW. This Agreement shall be interpreted
and construed by the laws of the Commonwealth of Massachusetts, without regard
to conflict of laws provisions. Employee 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.

                  13.6     FURTHER ASSURANCES. The Company and Employee agree 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 documents, 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.

                  13.7     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

                                       8
<PAGE>

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 executed this Agreement as a sealed instrument as of the
date first written above.

                                              POLYMEDICA CORPORATION

                                              /s/ Samuel L. Shanaman
                                              ----------------------
                                              Samuel L. Shanaman
                                              Lead Director and Interim CEO

                                              For purposes of Section 4.1:

AGREED TO AND ACCEPTED:                       BOARD OF DIRECTORS

/s/ Arthur A. Siciliano, Ph.D.                /s/ Samuel L. Shanaman
------------------------------                ----------------------
Arthur A. Siciliano, Ph.D.                    Samuel L. Shanaman
                                              Lead Director, on behalf of the
                                              Board of Directors

                                       9
<PAGE>

                                                                       Exhibit 1

                            GENERAL RELEASE OF CLAIMS

I, Arthur A. Siciliano, hereby fully, forever, irrevocably and unconditionally
release, remise and discharge PolyMedica Corporation, its officers, directors,
stockholders, corporate affiliates, subsidiaries, parent companies and each of
their agents and employees (each in their individual and corporate capacities)
(hereinafter, the "Released Parties") from any and all claims, charges,
complaints, demands, actions, causes of action, suits, rights, debts, sums of
money, costs, accounts, reckonings, covenants, contracts, agreements, promises,
doings, omissions, damages, executions, obligations, liabilities, and expenses
(including attorneys' fees and costs), of every kind and nature which you ever
had or now have against the Released Parties arising out of my employment with
and/or separation from the Company, including, but not limited to, all
employment discrimination claims under Title VII of the Civil Rights Act of 1964
29 U.S.C. Section 621 et seq., the Americans With Disability Act of 1990, 42
U.S.C. Section 12101 et seq., the Family and Medical Leave Act, 29 U.S.C.
Section 2601 et seq., 1973, 29 U.S.C. Section 701 et seq., the Rehabilitation
Act of 1973, 29 U.S.C. Section 701 et seq., and the Massachusetts Fair
Employment Practices Act, M.G.L. c.151B, Section 1 et seq., all as amended; all
claims arising out of the Fair Credit Reporting Act, 15 U.S.C. Section 1681 et
seq., the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C.
Section 1001 et seq., the Massachusetts Civil Rights Act of M.G.L. c.12 Sections
11H and 11I, the Massachusetts Equal Rights Act, M.G.L. c.93, Section 102 and
M.G.L. c.214, Section 1C, the Massachusetts Labor and Industries Act, M.G.L.
c.149, Section 1 et seq., and the Massachusetts Privacy Act, M.G.L. c.214,
Section 1B, all as amended; all common law claims including, but not limited to,
actions in tort, defamation and breach of contract; all claims to any non-vested
ownership interest in the Company, contractual or otherwise, including but not
limited to claims to stock or stock options; and any claim or damage arising out
of my employment with or separation from the Company (including a claim for
retaliation) under any common law theory or any federal, state or local statute
or ordinance not expressly referenced above; provided, however, that nothing in
this General Release of Claims prevents me from filing, cooperating with, or
participating in any proceeding before the EEOC or a state Fair Employment
Practices Agency (except that I acknowledge that I may not be able to recover
any monetary benefits in connection with any such claim, charge or proceedings)
and, provided further, that the foregoing General Release of Claims shall not
apply to the Employment Agreement entered into between the Company and me on
November 5, 2003, or the Non-Compete Agreement or the Confidentiality Agreement
executed by me.

I acknowledge that I have been given at least twenty-one (21) days to consider
this General Release of Claims, and that the Company advised me to consult with
an attorney of my own choosing prior to signing this General Release of Claims.
I understand that I may revoke this General Release of Claims for a period of
seven (7) days from today and that this General Release of claims shall not be
effective or enforceable until the expiration of the seven (7) day Revocation
Period.

November 5, 2003                              /s/ Arthur A. Siciliano Ph.D.
----------------                              -----------------------------
Date                                              Arthur A. Siciliano Ph.D.

                                       10
<PAGE>

                                                                       Exhibit 2

                            GENERAL RELEASE OF CLAIMS

         PolyMedica Corporation ("the Company") hereby fully, forever,
irrevocably and unconditionally releases, remises and discharges Arthur A.
Siciliano (the "Employee") from any and all claims, charges, complaints,
demands, actions, causes of action, suits, rights, debts, sums of money, costs,
accounts, reckonings, covenants, contracts, agreements, promises, doings,
omissions, damages, executions, obligations, liabilities, and expenses
(including attorneys' fees and costs), of every kind and nature, whether known
or unknown, which it ever had or now has against the Employee, his agents and
attorneys, arising out of his employment with or separation from the Company
including, but not limited to, all statutory or common law claims, breaches of
duty, actions in tort, defamation and breach of contract, any claim concerning
any of the Previous Agreements or any amendments thereof entered into between
the Employee and the Company, and any claim or damage arising out of the
Employee's employment with or separation from the Company, provided the
foregoing release shall not apply to the Employment Agreement entered into
between the Company and the Employee on November 5, 2003, or the Non-Compete
Agreement or the Confidentiality Agreement executed by the Employee.

         Nothing contained in this release shall be deemed to defeat the right,
if any, of any issuer or underwriter of Directors' and Officers' liability
insurance for PolyMedica Corporation and its directors and officers to recover
monies on a theory of subrogation, indemnification or contribution.

November 5, 2003                            /s/ Samuel L. Shanaman
------------------                          ----------------------
Date                                        Samuel L. Shanaman
                                            Lead Director and Interim CEO
                                            PolyMedica Corporation

                                       11

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