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                                                                   EXHIBIT 10.58

                              EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT, dated as of September 1, 1999, by and among
ACCREDO HEALTH, INCORPORATED, a Delaware corporation (the "Company"), and KYLE
J. CALLAHAN (the "Executive").

                              W I T N E S S E T H:

         WHEREAS, the Company desires to employ the Executive for the period
provided in this Agreement, and the Executive is willing to accept such
employment with the Company on a full-time basis, all in accordance with the
terms and conditions set forth below;

         NOW, THEREFORE, for and in consideration of the premises hereof and the
mutual covenants contained herein, the parties hereto hereby covenant and agree
as follows:

         1.       EMPLOYMENT.

                  (a)      The Company hereby employs the Executive, and the
                           Executive hereby accepts such employment with the
                           Company, for the period set forth in Section 2
                           hereof, all upon the terms and conditions hereinafter
                           set forth.

                  (b)      The Executive affirms and represents that he is under
                           no other obligation to any former employer or other
                           party which is in any way inconsistent with, or which
                           imposes any restriction upon, the Executive's
                           acceptance of employment hereunder with the Company,
                           the employment of the Executive by the Company, or
                           the Executive's undertakings under this Agreement.

         2. TERM OF EMPLOYMENT. Unless earlier terminated as hereinafter
provided, the term of the Executive's employment under this Agreement shall
initially be for a period beginning on the date hereof and ending August 31,
2002; PROVIDED that on September 1, 2002 and on each September 1 thereafter, the
term of the Executive's employment hereunder shall automatically be extended for
an additional one-year period unless, prior to such September 1, 2002, the
Company shall have given the Executive, or the Executive shall have given the
Company, written notice that the Employment Term shall not be so extended. The
period commencing on the date hereof and ending on the earlier of (i) the
termination of Executive's employment hereunder, and (ii) the later of August
31, 2002 or the expiration of all one-year extensions described in the preceding
sentence, is referred to herein as the Employment Term.

                  If the Executive continues in the full-time employ of the
Company after the end of the Employment Term (it being expressly understood and
agreed that the Company does not now, nor hereafter shall have, any obligation
to continue the Executive in its employ whether or not on a full-time basis,
after said Employment Term ends), then, unless otherwise expressly agreed to by
the Executive and the Company in writing, the Executive's continued employment
by the Company after the Employment Term shall, notwithstanding anything to the
contrary expressed or implied herein, be terminable by the Company at will, with
or without cause and with or without notice, but shall in all other respects be
subject to the terms and conditions of this Agreement.

         3. DUTIES. The Executive shall be employed as Vice President of the
Company and President of Hemophilia Health Services, Inc. ("HHS"), shall,
subject to the direction of the Board of Directors of the Company (the "Board"),
faithfully and competently perform such duties as inhere in such position and
shall also perform and discharge such other executive employment duties and
responsibilities consistent with his position as Vice President of the Company




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and President of HHS as the Board of Directors of the Company may from time to
time reasonably prescribe, including serving as Vice President of the Company
and President of HHS of one or more of the Company's subsidiaries or affiliates.
The Executive's primary workplace will be located in Nashville, Tennessee.
Except as set out herein or as may otherwise be approved in advance by the
Board, and except during vacation periods and reasonable periods of absence due
to sickness, personal injury or other disability, personal affairs or non-profit
public service activities, the Executive shall devote his full time during
normal business hours throughout the Employment Term to the services required of
him hereunder. The Executive shall render his business services exclusively to
the Companies (as defined in Section 6(a)) during the Employment Term and shall
use his best efforts, judgment and energy to improve and advance the business
and interest of the Companies in a manner consistent with the duties of his
position.

         4.       SALARY AND BONUS.

                  (a)      SALARY. As compensation for the performance by the
                           Executive of the services to be performed by the
                           Executive hereunder during the Employment Term, the
                           Company shall pay the Executive a base salary at the
                           annual rate of One Hundred Eighty-Two Thousand Eight
                           Hundred Thirty-Four ($182,834.00) Dollars (said
                           amount being hereinafter referred to as "Salary").
                           Any Salary payable hereunder shall be paid in regular
                           intervals (but in no event less frequently than
                           monthly) in accordance with the Company's payroll
                           practices from time to time in effect. The Salary
                           payable to the Executive pursuant to this Section
                           4(a) shall be increased annually, as of September 1,
                           2000 and each September 1 thereafter for the
                           twelve-month period then commencing, by an amount
                           equal to (i) the annual percentage increase in the
                           Consumer Price Index for Urban Consumers, All Items,
                           Memphis, Tennessee Area, for the most recent
                           twelve-month period for which such figures are then
                           available as reported in the Monthly Labor Review
                           published by the Bureau of Labor Statistics of the U.
                           S. Department of Labor or (ii) such higher amount as
                           may be determined from time to time by the Board in
                           its sole discretion.

                  (b)      BONUS. The Executive will be entitled to receive
                           bonus compensation from the Company in respect of
                           each fiscal year (or portion thereof) occurring
                           during the Employment Term beginning with the year
                           which starts on July 1, 1999 provided that Executive
                           is employed by Company on the last day of said fiscal
                           year. The amount of such bonus compensation is based
                           on the extent to which the Company's planned earnings
                           per share established by the Board for the
                           corresponding period (the "Plan EPS") has been
                           achieved, as set out on Exhibit A. Exhibit A may be
                           amended each fiscal year to reflect the Plan EPS
                           established by the Board for the then current fiscal
                           year. Exhibit A will be replaced with the revised
                           Exhibit A approved by the Board when and as amended
                           without the necessity of said amendment being
                           executed by the parties hereto.

                  (c)      WITHHOLDING, ETC. The payment of any Salary and bonus
                           hereunder shall be subject to applicable withholding
                           and payroll taxes, and such other deductions as may
                           be required by law or the Company's employee benefit
                           plans.


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         5.       OTHER BENEFITS.  During the Employment Term, the Executive
shall:

                           (i)      be eligible to participate in employee
                                    fringe benefits and pension and/or profit
                                    sharing plans that may be provided by the
                                    Company for its senior executive employees
                                    in accordance with the provisions of any
                                    such plans, as the same may be in effect
                                    from time to time;

                           (ii)     be eligible to participate in any medical
                                    and health plans or other employee welfare
                                    benefit plans that may be provided by the
                                    Company for its senior executive employees
                                    in accordance with the provisions of any
                                    such plans, as the same may be in effect
                                    from time to time;

                           (iii)    be entitled to twenty-five paid vacation
                                    days in each calendar year beginning January
                                    1, 2000, as well as all paid holidays given
                                    by the Company to its senior executive
                                    officers;

                           (iv)     be entitled to personal time off, sick
                                    leave, sick pay and disability benefits in
                                    accordance with any Company policy that may
                                    be applicable to senior executive employees
                                    from time to time; and

                           (v)      be entitled to reimbursement for all
                                    reasonable and necessary out-of-pocket
                                    business expenses incurred by the Executive
                                    in the performance of his duties hereunder
                                    in accordance with the Company's policies
                                    applicable thereto.

                   For purposes of determining eligibility, vesting and benefit
         accrual under each of the benefit plans and arrangements referred to in
         this Section 5, the Executive shall be credited with service for all
         years and partial years of service with HHS, or any of its affiliates
         prior to the date hereof.

         6. CONFIDENTIAL INFORMATION. The Executive hereby covenants, agrees and
acknowledges as follows:

                  (a)      The Executive has and will have access to and will
                           participate in the development of or be acquainted
                           with confidential or proprietary information and
                           trade secrets related to the business of the Company
                           and any other present or future subsidiaries or
                           affiliates of the Company (collectively, with the
                           Company, the "Companies"), including but not limited
                           to (i) customer and physician lists; patient
                           histories, patient identities and related records and
                           compilations of information; the identify, lists or
                           descriptions of any new customers or physicians,
                           referral sources or organizations; financial
                           statements; cost reports or other financial




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                           information; contract proposals or bidding
                           information; business plans; training and operations
                           methods and manuals; personnel records; software
                           programs; reports and correspondence; premium
                           structures; and management systems, policies or
                           procedures, including related forms and manuals; (ii)
                           information pertaining to future developments such as
                           future marketing or acquisition plans or ideas, and
                           potential new business locations and new suppliers
                           and (iii) all other tangible and intangible property,
                           which are used in the business and operations of the
                           Companies but not made public. The information and
                           trade secrets relating to the business of the
                           Companies and described hereinabove in this paragraph
                           (a) are hereinafter referred to collectively as the
                           "Confidential Information", provided that the term
                           Confidential Information shall not include any
                           information (x) that is or become generally publicly
                           available (other than as a result of violation of
                           this Agreement by the Executive) or (y) that the
                           Executive receives on a nonconfidential basis from a
                           source (other than the Companies or their
                           representatives) that is not known by him to be bound
                           by an obligation of secrecy or confidentiality to any
                           of the Companies.

                  (b)      The Executive shall not disclose, use or make known
                           for his or another's benefit any Confidential
                           Information or use such Confidential Information in
                           any way except as is in the best interests of the
                           Companies in the performance of the Executive's
                           duties under this Agreement. The Executive may
                           disclose Confidential Information when required by a
                           third party and applicable law or judicial process,
                           but only after providing (I) notice to the Company of
                           any third party's request for such information, which
                           notice shall include the Executive's intent with
                           respect to such request, and (ii) sufficient
                           opportunity for the Company to challenge or limit the
                           scope of the disclosure on behalf of the Companies,
                           the Executive or both.

                  (c)      The Executive acknowledges and agrees that a remedy
                           at law for any breach or threatened breach of the
                           provisions of this Section 6 would be inadequate and,
                           therefore, agrees that the Companies shall be
                           entitled to injunctive relief in addition to any
                           other available rights and remedies in case of any
                           such breach or threatened breach; PROVIDED, HOWEVER,
                           that nothing contained herein shall be construed as
                           prohibiting the Companies from pursuing any other
                           rights and remedies available for any such breach or
                           threatened breach.

                  (d)      The Executive agrees that upon termination of his
                           employment with the Company for any reason, the
                           Executive shall forthwith return to the Company all
                           Confidential Information in whatever form maintained
                           (including, without limitation, computer discs and
                           other electronic media).

                  (e)      The obligations of the Executive under this Section 6
                           shall, except as otherwise provided herein, survive
                           the termination of the Employment Term and the
                           expiration or termination of this Agreement.

                  (f)      Without limiting the generality of Section 10 hereof,
                           the Executive hereby expressly agrees that the
                           foregoing provisions of this Section 6 shall be
                           binding upon the Executive's heirs, successors and
                           legal representatives.

         7.       TERMINATION.

                  (a)      The Executive's employment hereunder shall be
                           terminated upon the occurrence of any of the
                           following:

                           (i)      death of the Executive;

                           (ii)     The Executive's inability to perform his
                                    duties on account of disability or
                                    incapacity for a period of one hundred eight
                                    (180) or more days, whether or not
                                    consecutive, within any period of twelve
                                    (12) consecutive months;



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                           (iii)    the Company giving written notice, at any
                                    time, to the Executive that the Executive's
                                    employment is being terminated "for cause"
                                    (as defined below);

                           (iv)     the Company giving written notice, at any
                                    time, to the Executive that the Executive's
                                    employment is being terminated other than
                                    pursuant to clause (i), (ii) or (iii) above;
                                    or

                           (v)      the Executive giving written notice, at any
                                    time, to the Company that the Executive is
                                    terminating his employment for "good reason"
                                    (as defined below).

                  The following actions, failures and events by or affecting the
Executive shall constitute "cause" for termination within the meaning of clause
(iii) above: (A) an indictment for or conviction of the Executive of, or the
entering of a plea of nolo contendere by the Executive with respect to, having
committed a felony, (B) acts of fraud or criminal conduct by the Executive that
are detrimental to the financial condition or business reputation of one or more
of the Companies, (C) acts or omissions by the Executive that the Executive knew
were likely to damage the business of one or more of the Companies, (D) willful
failure by the Executive to perform, or willful disregard by the Executive of,
his obligations hereunder or otherwise relating to his employment, or (E)
willful failure by the Executive to obey the reasonable and lawful policies or
orders of the Board that are consistent with the provisions of this Agreement.
For purposes of this Agreement, the Executive shall not be deemed to have been
terminated for cause unless and until there shall have been delivered to the
Executive a copy of a resolution, duly adopted by the Board, stating that, in
the good faith opinion of the Board, the Executive is guilty of an action or
omission that constitutes cause and specifying the particulars thereof in
reasonable detail. Before adopting any such resolution, the Board shall offer
the Executive, upon reasonable written notice (which need not exceed two days),
an opportunity for him together with his counsel, to be heard by the Board.

                  The following circumstances shall constitute "good reason" for
termination within the meaning of clause (v) above: (I) the assignment to the
Executive of duties that are materially inconsistent with the Executive's
position or with his authority, duties or responsibilities as contemplated by
Section 3 of this Agreement, or any other action by the Company or their
successors which results in a material diminution or material adverse change in
the Executive's title, position, authority, duties or responsibilities, (II) any
material breach by the Company or their successors of any provision of this
Agreement, (III) a relocation of the Executive's primary workplace without his
written consent to any location other than the one described in Section 3
hereof, or (IV) the Company fails to continue in effect any cash or stock-based
incentive or bonus plan, retirement plan, welfare benefit plan or other benefit
plan, unless the aggregate value of all such compensation, retirement and
benefit plans provided to the Executive after the changes is not less than the
aggregate value of the plans as of the date before such plans are changed.

                  (b)      In the event that (A) the Executive's employment is
                           terminated pursuant to clause (iv) or (v) of Section
                           7(a) above, whether during the Employment Term or
                           during any continuation of employment pursuant to
                           Section 2 above, or (B) Executive shall resign his
                           employment within twelve (12) months following a
                           Change in Control, the Company shall pay to the
                           Executive, as severance pay or liquidated damages or
                           both, bi-monthly payments at the rate PER ANNUM of




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                           his Salary at the time of such termination or
                           resignation for a period from the date of such
                           termination to the first anniversary of such
                           termination or resignation. The Executive shall
                           continue to participate in the medical, dental, life,
                           accident and disability benefit plans and
                           arrangements of the Company as provided in Section 5
                           and on the same basis and at the same cost to
                           Executive as on the date of termination until the
                           earlier of (x) the first anniversary of such
                           termination or resignation, or (y) the date the
                           Executive becomes covered by a plan that provides
                           coverage or benefits at least equal to the Company's
                           plan. In addition, to the extent that Executive is
                           not then 100% vested in any employer matching
                           contribution and earnings thereon allocated to his
                           account in the Company's 401(k) Plan, and said
                           non-vested amount is forfeited, the Company will pay
                           Executive a lump sum amount on the date of such
                           forfeiture equal to the non-vested forfeited amount.

                  (c)      For purposes of this Agreement, "Change in Control"
                           means and includes each of the following:

                                    (1) The acquisition by any individual,
                           entity or group (within the meaning of Section
                           13(d)(3) or 14(d)(2) of the 1934 Act) (a "Person") of
                           beneficial ownership (within the meaning of Rule
                           13d-3 promulgated under the 1934 Act) of 50% or more
                           of the combined voting power of the then outstanding
                           voting securities of the Company entitled to vote
                           generally in the election of directors (the
                           "Outstanding Corporation Voting Securities");
                           provided, however, that for purposes of this
                           subsection (1), the following acquisitions shall not
                           constitute a Change of Control: (i) any acquisition
                           directly from 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), (ii) and (iii) of
                           subsection (3) of this definition; or

                                    (2) Individuals who, as of the date of this
                           Agreement, constitute the Board (the "Incumbent
                           Board") cease for any reason to constitute at least a
                           majority of the Board; provided, however, that any
                           individual becoming a director subsequent to the
                           Effective Date whose election, or nomination for
                           election by the Company's stockholders, was approved
                           by a vote of at least a majority of the directors
                           then comprising the Incumbent Board shall be
                           considered as though such individual were a member of
                           the Incumbent Board, but excluding, for this purpose,
                           any such individual whose initial assumption of
                           office occurs 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

                                    (3) Consummation of a reorganization, merger
                           or consolidation or sale or other disposition of all
                           or substantially all of the assets of the Company (a
                           "Business Combination"), in each case, unless,
                           following such Business Combination, (i) all or
                           substantially all of the individuals and entities who
                           were the beneficial owners of the Outstanding
                           Corporation Voting Securities immediately prior to
                           such Business Combination beneficially own, directly
                           or indirectly, more than 50% of the combined voting
                           power of the then outstanding voting securities
                           entitled to vote generally in the election of



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                           directors of the Company resulting from such Business
                           Combination (including, without limitation, a
                           corporation which as a result of such transaction
                           owns the Company or all or substantially all of the
                           Company's assets either directly or through one or
                           more subsidiaries) in substantially the same
                           proportions as their ownership, immediately prior to
                           such Business Combination of the Outstanding
                           Corporation Voting Securities, and (ii) no Person
                           (excluding any corporation resulting from such
                           Business Combination or any employee benefit plan (or
                           related trust) of the Company or such corporation
                           resulting from such Business Combination)
                           beneficially owns, directly or indirectly, 50% or
                           more of the combined voting power of the then
                           outstanding voting securities of such corporation
                           except to the extent that such ownership existed
                           prior to the Business Combination, and (iii) at least
                           a majority of the members of the board of directors
                           of the corporation resulting from such Business
                           Combination were members of the Incumbent Board at
                           the time of the execution of the initial agreement,
                           or of the action of the Board, providing for such
                           Business Combination; or

                                    (4) Approval by the stockholders of the
                           Company of a complete liquidation or dissolution of
                           the Company.

                  (d)      Notwithstanding anything to the contrary expressed or
                           implied herein, except as required by applicable law
                           and except as set forth in Section 7(b) above, the
                           Company (and its affiliates) shall not be obligated
                           to make any payments to the Executive or on his
                           behalf of whatever kind or nature by reason of the
                           Executive's cessation of employment (including,
                           without limitation, by reason of termination of the
                           Executive's employment by the Company for "cause"),
                           other than (i) such amounts, if any, of his Salary as
                           shall have accrued and remained unpaid as of the date
                           of said cessation, (ii) such other amounts, if any,
                           which may be then otherwise payable to the Executive
                           pursuant to clause (v) of Section 5 above, and (iii)
                           any amounts owed or obligations to the Executive
                           pursuant to the terms of any option or other
                           stock-based award granted to him by the Company.

                  (e)      No interest shall accrue on or be paid with respect
                           to any portion of any payments timely made hereunder.

         8.       NON-ASSIGNABILITY.

                  (a)      Neither this Agreement nor any right or interest
                           hereunder shall be assignable by the Executive or his
                           beneficiaries or legal representatives without the
                           Company's prior written consent; PROVIDED, HOWEVER,
                           that nothing in this Section 8(a) shall preclude the
                           Executive from designating a beneficiary to receive
                           any benefit payable hereunder upon his death or
                           incapacity. Neither this Agreement nor any right or
                           interest hereunder shall be assignable by the
                           Company; PROVIDED, HOWEVER, that notwithstanding the
                           foregoing, this Agreement and the Company's rights
                           and interests hereunder may be assigned by the
                           Company pursuant to a merger or consolidation in
                           which the Company is not the continuing entity, or
                           the sale or liquidation of all or substantially all
                           of the assets of the Company, provided that (i) the
                           assignee or transferee is the successor to all or
                           substantially all of the assets of the Company and
                           (ii) such assignee or transferee assumes the
                           liabilities, obligations and duties of the Company,
                           as contained in this Agreement, either contractually
                           or as a matter of law.




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                  (b)      Except as required by law, no right to receive
                           payments under this Agreement shall be subject to
                           anticipation, commutation, alienation, sale,
                           assignment, encumbrance, charge, pledge, or
                           hypothecation or to exclusion, attachment, levy or
                           similar process or to assignment by operation of law,
                           and any attempt, voluntary or involuntary, to effect
                           any such action shall be null, void and of no effect.

         9.       RESTRICTIVE COVENANTS

                  (a)      COMPETITION. During the Employment Term, during any
                           continuation of employment pursuant to Section 2
                           above and during the twelve (12) month period
                           following termination of the Executive's employment
                           with the Company for any reason, provided that
                           payments, if any, required pursuant to Section 7(b)
                           hereof are made in full and in a timely fashion, the
                           Executive will not directly or indirectly (as a
                           director, officer, executive employee, manager,
                           consultant, independent contractor, advisory or
                           otherwise) engage in competition with, or own any
                           interest in, perform any services for, participate in
                           or be connected with any business or organization
                           which engages in competition with any of the
                           Companies within the meaning of Section 9(d),
                           PROVIDED, HOWEVER, that the provisions of this
                           Section (a) shall not be deemed to prohibit the
                           Executive's ownership of not more than two percent
                           (2%) of the total shares of all classes of stock
                           outstanding of any publicly held company, or
                           ownership, whether through direct or indirect
                           stockholding or otherwise, of one percent (1%) or
                           more of any other business.

                  (b)      NON-SOLICITATION. During the Employment Term, during
                           any continuation of employment pursuant to Section 2
                           above and during the twelve (12) month period
                           following termination of the Executive's employment
                           with the Company for any reason, provided that
                           payments, if any, required pursuant to Section 7(b)
                           hereof are made in full and in a timely fashion, the
                           Executive will not knowingly directly or indirectly
                           induce or attempt to induce any employee of any of
                           the Companies to leave the employ of any of the
                           Companies or of their subsidiaries or affiliates, or
                           in any way interfere with the relationship between
                           any of the Companies and any employee thereof.

                  (c)      NON-INTERFERENCE. During the twelve (12) month period
                           following termination of the Executive's employment
                           with the Company for any reason, provided that
                           payments, if any, required pursuant to Section 7(b)
                           hereof are made in full and in a timely fashion, the
                           Executive will not directly or indirectly hire,
                           engage, send any work to, place orders with, or in
                           any manner be associated with any business entity
                           which, during the period of twelve months preceding
                           or following such termination of employment, was
                           among the five largest suppliers of the Company by
                           dollar volume.

                  (d)      CERTAIN DEFINITIONS. For purposes of this Section 9,
                           a person or entity (including without limitation, the
                           Executive) shall be deemed to be a competitor of one
                           or more of the Companies, or a person or entity
                           (including, without limitation, the Executive) shall
                           be deemed to be engaging in competition with one or
                           more of the Companies, if, at the time of
                           determination, such person or entity (A) engages in
                           any business engaged in or proposed to be engaged in





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                           by any of the Companies, or (B) in any way conducts,
                           operates, carries out or engages in the business of
                           managing any entity engaged in any business described
                           in clause (A), in each case, in any state of the
                           United States of America, excluding, however, during
                           any period following the termination of the
                           Executive's employment with the Company, (x) any
                           business or any state in which none of the Companies
                           was engaged or had proposed to be engaged at the time
                           of termination of the Executive's employment with the
                           Company, and (y) after termination of the Executive's
                           employment, any business which was not, prior to such
                           termination, directly or indirectly supervised by the
                           Executive.

                  (e)      CERTAIN REPRESENTATIONS OF THE EXECUTIVE. In
                           connection with the foregoing provisions of this
                           Section 9, the Executive represents that his
                           experience, capabilities and circumstances are such
                           that such provisions will not prevent him from
                           earning a livelihood. The Executive further agrees
                           that the limitations set forth in this Section 9
                           (including, without limitation, time and territorial
                           limitations) are reasonable and properly required for
                           the adequate protection of the current and future
                           businesses of the Companies. It is understood and
                           agreed that the covenants made by the Executive in
                           this Section 9 shall survive the expiration or
                           termination of this Agreement.

                  (f)      INJUNCTIVE RELIEF. The Executive acknowledges and
                           agrees that a remedy at law for any breach or
                           threatened breach of the provisions of Section 9
                           hereof would be inadequate and, therefore, agrees
                           that the Company and any of its subsidiaries or
                           affiliates shall be entitled to injunctive relief in
                           addition to any other available rights and remedies
                           in cases of any such breach or threatened breach;
                           PROVIDED, HOWEVER, that nothing contained herein
                           shall be construed as prohibiting the Company or any
                           of its affiliates from pursuing any other rights and
                           remedies available for any such breach or threatened
                           breach.

         10. INDEMNITY. To the maximum extent permitted by applicable law and
the charter and by-laws of the Company, the Company shall indemnify the
Executive and hold him harmless; for any acts or decisions made by him in good
faith while performing services for the Company or any of its subsidiaries or
affiliates. Company will use reasonable best efforts to maintain, and after
termination to continue, coverage for Executive under director's and officer's
liability coverage to the same extent as other current or former officers and
directors of the Company and its subsidiaries or affiliates. The Company will,
to the extent provided by its charter and by-laws and applicable law, advance or
pay all expenses, including attorney's fees actually and necessarily incurred by
the Executive in connection with the defense of any action, suit or proceeding
arising out of Executive's service for the Company and in connection with any
appeal thereon, including the cost of court settlements.

         11. NO MITIGATION. In the event of Executive's resignation or
termination of the Executive's employment under Section 7, the Executive shall
be under no obligation to seek other employment and there shall be no offset
against any amounts due the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that the Executive may
obtain.

         12. BINDING EFFECT. Without limiting or diminishing the effect of
Section 8 hereof, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, successors, legal
representatives and assigns.

         13. NOTICES. All notices which are required or may be given pursuant to
the terms of this Agreement shall be in writing and shall be sufficient in all
respects if given in writing and (i) delivered personally, (ii) mailed by
certified or registered mail, return receipt requested and postage prepaid,
(iii) sent via a nationally recognized overnight courier or (iv) sent via




                                       9
<PAGE>   10

facsimile confirmed in writing to the recipient, if to the Company at the
Company's principal place of business, and if to the Executive, at his home
address most recently filed with the Company, or to such other address or
addresses as either party shall have designated in writing to the other party
hereto.

         14. ENFORCEMENT. Any dispute arising under this Agreement shall, at the
election of either party, be resolved by final and binding arbitration to be
held in Memphis, Tennessee in accordance with the rules and procedures of the
American Arbitration Association. Judgment upon the award entered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.

         15. LAW GOVERNING. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.

         16. SEVERABILITY. The Executive agrees that in the event that any court
of competent jurisdiction shall finally hold that any provision of Section 6 or
9 hereof is void or constitutes an unreasonable restriction against the
Executive, the provisions of such Section 6 or 9 shall not be rendered void but
shall apply with respect to such extent as such court may judicially determine
constitutes a reasonable restriction under the circumstances. If any part of
this Agreement other than Section 6 or 9 is held by a court or competent
jurisdiction to be invalid, illegal or incapable of being enforced in whole or
in part by reason of any rule of law or public policy, such part shall be deemed
to be severed from the remainder of this Agreement for the purpose only of the
particular legal proceedings in question and all other covenants and provisions
of this Agreement shall in every other respect continue in full force and effect
and no covenant or provision shall be deemed dependent upon any other covenant
or provision.

         17. WAIVER. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.

         18. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes the
entire and final expression of the agreement of the parties with respect to the
subject matter hereof and supersedes all prior agreements, oral and written,
between the parties hereto with respect to the subject matter hereof. This
Agreement may be modified or amended only by an instrument in writing signed by
both parties hereto.

         19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.



                                       10
<PAGE>   11




         IN WITNESS WHEREOF, the Company and the Executive have duly executed
and delivered this Agreement as of the date and year first above written.

                                        ACCREDO HEALTH, INCORPORATED

                                        By: /s/ David D. Stevens
                                            ---------------------------------
                                              David D. Stevens
                                              Chief Executive Officer

                                             /s/ Kyle J. Callahan
                                             ---------------------------------
                                             KYLE J. CALLAHAN




                                       11
<PAGE>   12
                                   EXHIBIT A
                         FISCAL YEAR 2000 BONUS TARGETS


Budget $0.54 per diluted share


                                                              MAXIMUM INCENTIVE
DILUTED EPS(1)                                                 BONUS POTENTIAL
--------------                                                ------------------
                                                             50%             75%
                                                            ----           -----

$0.51                                                         5%            7.5%
$0.52                                                        10%           15.0%
$0.53                                                        20%           30.0%
$0.54 TARGET                                                 30%           45.0%
$0.55                                                        35%           52.5%
$0.57                                                        40%           60.0%
$0.59                                                        45%           67.5%
$0.61                                                        50%           75.0%


The 50% column applies to Joel Kimbrough, Thomas W. Bell, Jr., Kyle Callahan and
John R. Grow.

The 75% column applies to David D. Stevens.







----------------------
(1)  All EPS calculations have been adjusted for 3 for 2 stock split on
February 21, 2000.