Document:

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                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered into as
of July 1, 1999 by and between HORIZON PHARMACIES, INC, a Delaware corporation
(the "COMPANY"), and JOHN N. STOGNER (the "EMPLOYEE").

                                     RECITAL

         The Board of Directors of the Company (the "BOARD") has determined that
it is in the bestinterests of the Company and its stockholders to employ the
Employee on the terms and conditions set forth herein.

                                   AGREEMENTS

         NOW, THEREFORE, in consideration of the respective agreements and
covenants set forth herein and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:

1.                EMPLOYMENT PERIOD. Subject to the terms and provisions of this
         Agreement, the Company hereby agrees to employ the Employee, and the
         Employee hereby agrees to be employed by the Company, for a period (the
         "EMPLOYMENT PERIOD") commencing on July 1, 1999, and ending on the
         third anniversary of such date, unless earlier terminated in accordance
         with Section 3. Any new employment agreement shall only be effective
         after having been reduced to writing and executed by both parties
         hereto. In the event the Employee continues to perform services after
         the Employment Period, and pending execution of a new employment
         agreement, if any, such services shall constitute employment for an
         unspecified term, terminable at-will, with or without cause or reason,
         with or without advance notice, and with or without pay in lieu of
         advance notice.

2.                TERMS OF EMPLOYMENT.

         a.                POSITION AND DUTIES.

                  i.       During the term of the Employee's employment, the
                           Employee shall serve as Chief Financial Officer,
                           Treasurer and Director and, in so doing, shall
                           perform the normal duties associated with such
                           position and such other duties as may be assigned
                           from time to time by the Board, subject to the
                           general direction, approval and control of the Board.

                  ii.      During the term of the Employee's employment, and
                           excluding any periods of vacation and sick leave to
                           which the Employee is entitled, the

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                           Employee agrees to devote his full working time to
                           the business and affairs of the Company and to use
                           the Employee's best efforts to perform faithfully,
                           effectively and efficiently such responsibilities.

                  iii.              The Employee agrees to observe and comply
                           with the Company's policies, practices, and
                           procedures, as adopted or amended from time to time.

         b.                COMPENSATION.

                  i.                BASE SALARY. During the term of the
                           Employee's employment, the Employee shall receive an
                           annual base salary ("ANNUAL BASE SALARY"), which
                           shall be paid in accordance with the customary
                           payroll practices of the Company, in an amount equal
                           to $165,000. The Board, in its sole discretion, may
                           at any time adjust the amount of the Annual Base
                           Salary as it may deem appropriate, and the term
                           "ANNUAL BASE SALARY," as used in this Agreement,
                           shall refer to the Annual Base Salary as it may be so
                           adjusted.

                  ii.               INCENTIVE BONUS. Subject to the other terms
                           and conditions of this Agreement and as further
                           compensation for the performance of his services
                           hereunder, during the Employment Period, the Employee
                           shall be eligible to receive an annual incentive
                           bonus ("INCENTIVE BONUS") of up to forty percent
                           (40%) of the Employee's Annual Base Salary.

                           (1)               CRITERIA. Prior to the end of each
                                    fiscal year, the Board's Compensation
                                    Committee shall approve the criteria
                                    ("CRITERIA") upon which the Employee's
                                    Incentive Bonus for the following fiscal
                                    year will be based, except that the Criteria
                                    for fiscal year 1999 have been approved by
                                    the Board's Compensation Committee as of the
                                    date this Agreement is executed. The
                                    Criteria for fiscal year 1999 are described
                                    in EXHIBIT A, which is hereby incorporated
                                    as part of this Agreement. The Criteria for
                                    each subsequent fiscal year shall, after
                                    approved by the Board's Compensation
                                    Committee, be attached hereto as EXHIBIT A
                                    as a substitute for the previous year's
                                    Criteria, and shall become a part of this
                                    Agreement for such fiscal year.

                           (2)               TIME OF PAYMENT. The Incentive
                                    Bonus, if earned, shall be paid to the
                                    Employee upon completion of the Company's
                                    annual audit or earlier if the Compensation
                                    Committee of the Board determines that the
                                    Employee achieved one or more of the
                                    Criteria set forth in EXHIBIT A. The
                                    Employee understands and agrees that he is
                                    not guaranteed an Incentive Bonus and that
                                    the amount of the Incentive Bonus, if any,
                                    is dependant on the Compensation Committee
                                    of the

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                                    Board determining that the Employee achieved
                                    one or more of the Criteria set forth in
                                    EXHIBIT A.

                  iii.              STOCK OPTION PLANS. During the term of the
                           Employee's employment, the Employee shall be entitled
                           to participate in the Company's stock option plans as
                           adopted or amended from time to time ("STOCK OPTION
                           PLANS").

                  iv.               WELFARE BENEFIT PLANS. During the term of
                           the Employee's employment, the Employee and/or the
                           Employee's family, as the case may be, shall be
                           eligible for participation in and shall receive all
                           benefits under the welfare benefit plans, practices,
                           policies and programs applicable generally to other
                           employees of the Company (including, without
                           limitation, medical, prescription, dental,
                           disability, salary continuance, employee life, group
                           life, accidental death and travel accident insurance
                           plans and programs), as adopted or amended from time
                           to time ("WELFARE PLANS").

                  v.                PERQUISITES. During the term of the
                           Employee's employment, the Employee shall be entitled
                           to receive (in addition to the benefits described
                           above) such perquisites and fringe benefits
                           appertaining to his position in accordance with any
                           policies, practices, and procedures established by
                           the Board, as amended from time to time.

                  vi.               EXPENSES. During the term of the Employee's
                           employment, the Employee shall be entitled to receive
                           prompt reimbursement for all reasonable
                           business-related expenses incurred by the Employee in
                           accordance with the Company's policies, practices and
                           procedures, as adopted or amended from time to time.

                  vii.              VACATION. During the term of the Employee's
                           employment, the Employee shall be entitled to four
                           (4) weeks of paid vacation each calendar year. Any
                           vacation shall be taken at the reasonable and mutual
                           convenience of the Company and the Employee. Accrued
                           vacation not taken in any calendar year will not be
                           carried forward or used in any subsequent calendar
                           year and the Employee shall not be entitled to
                           receive pay in lieu of accrued but unused vacation in
                           any calendar year.

3.                TERMINATION OF EMPLOYMENT.

         a.                DEATH OR DISABILITY. The Employee's employment shall
                  terminate automatically upon the Employee's death during the
                  Employment Period. If the Disability of the Employee has
                  occurred during the Employment Period (pursuant to the
                  definition of Disability set forth below), the Company may
                  give to the Employee

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                  written notice in accordance with Section 10(c) of its
                  intention to terminate the Employee's employment. In such
                  event, the Employee's employment with the Company shall
                  terminate effective on the 30th day after receipt of such
                  notice by the Employee (the "DISABILITY EFFECTIVE DATE"),
                  provided that, within the 30 days after such receipt, the
                  Employee shall not have returned to perform, with or without
                  reasonable accommodation, the essential functions of his
                  position. For purposes of this Agreement, "DISABILITY" shall
                  mean the Employee's inability to perform, with or without
                  reasonable accommodation, the essential functions of his
                  position hereunder for a period of 180 consecutive days due to
                  mental or physical incapacity, as determined by mutual
                  agreement of a physician selected by the Company or its
                  insurers and a physician selected by the Employee; provided,
                  however, if the opinion of the Company's physician and the
                  Employee's physician conflict, the Company's physician and the
                  Employee's physician shall together agree upon a third
                  physician, whose opinion shall be binding.

         b.                CAUSE. The Company may terminate the Employee's
                  employment at any time during the Employment Period with or
                  without Cause. For purposes of this Agreement, "CAUSE" shall
                  mean (i) a breach by the Employee of the Employee's
                  obligations under Section 2(a) (other than as a result of
                  physical or mental incapacity) which constitutes
                  nonperformance by the Employee of his obligations and duties
                  thereunder, as determined by the Board (which may, in its sole
                  discretion, give the Employee notice of, and the opportunity
                  to remedy, such breach), (ii) commission by the Employee of an
                  act of fraud, embezzlement, misappropriation, willful
                  misconduct or breach of fiduciary duty against the Company or
                  other conduct harmful or potentially harmful to the Company's
                  best interest, as reasonably determined by a majority of the
                  members of the Board after a hearing by the Board following
                  ten (10) days' notice to the Employee of such hearing, (iii) a
                  material breach by the Employee of Sections 6, 7, 8 or 9, (iv)
                  the Employee's conviction, plea of no contest or NOLO
                  CONTENDERE, deferred adjudication or unadjudicated probation
                  for any felony or any crime involving moral turpitude, (v) the
                  failure of the Employee to carry out, or comply with, in any
                  material respect, any lawful directive of the Board consistent
                  with the terms of this Agreement (which the Board, in its sole
                  discretion, may give the Employee notice of, and an
                  opportunity to remedy), or (vi) the Employee's unlawful use
                  (including being under the influence) or possession of illegal
                  drugs. For purposes of the previous sentence, no act or
                  omission on the Employee's part shall be deemed "willful"
                  unless done, or omitted to be done, by the Employee not in
                  good faith and without reasonable belief that the Employee's
                  action or omission was in the best interest of the Company.
                  The Company may suspend the Employee's title and authority
                  pending the hearing provided for above. For purposes of this
                  Agreement, "WITHOUT CAUSE" shall mean a termination by the
                  Company of the Employee's employment during the Employment
                  Period at the Company's sole discretion for any reason other
                  than a termination based upon Cause, death or Disability.

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         c.                RESIGNATION. The Employee's employment may be
                  terminated during the Employment Period by the Employee. Such
                  termination ("RESIGNATION") shall not preclude the Company
                  from terminating the Employee's employment, in accordance with
                  the terms of this Agreement, prior to the Date of Termination
                  (as defined below) established by the Employee's Notice of
                  Termination (as defined below).

         d.                CHANGE OF CONTROL. If a Change of Control occurs
                  during the Employment Period and the Board determines in good
                  faith that it is in the Company's best interest to terminate
                  the Employee's employment with the Company, within one year of
                  such Change of Control the Company may terminate the
                  Employee's employment by giving the Employee written notice in
                  accordance with Section 10(c) of its intention to terminate
                  the Employee's employment. Any such termination by the Company
                  as contemplated in this Section 3(d) is referred to herein as
                  a termination "upon a Change of Control." For purposes of this
                  Agreement, "CHANGE OF CONTROL" means the occurrence of any of
                  the following: (i) any consolidation or merger of the Company
                  in which the Company is not the continuing or surviving
                  corporation or pursuant to which shares of the Company's
                  capital stock would convert into cash, securities or other
                  property, other than a merger of the Corporation in which the
                  holders of the Company's capital stock immediately prior to
                  the merger have the same proportionate ownership of capital
                  stock of the surviving corporation immediately after the
                  merger, (ii) any sale, lease, exchange or other transfer
                  (whether in one transaction or a series of related
                  transactions) of all or substantially all of the assets of the
                  Company, (iii) the stockholders of the Company approve any
                  plan or proposal for the liquidation or dissolution of the
                  Company, (iv) any person (as used in Section 13(d) and
                  14(d)(2) of the Securities and Exchange Act of 1934, as
                  amended (the "Exchange Act")) becomes the beneficial owner
                  (within the meaning of Rule 13D-3 under the Exchange Act) of
                  50% or more of the Company's outstanding capital stock, (v)
                  during any period of two (2) consecutive years, individuals
                  who at the beginning of that period constitute the entire
                  Board of the Company, cease for any reason to constitute a
                  majority of the Board unless the election or the nomination
                  for election by the Company's stockholders of each new
                  director received the approval of the Board by a vote of at
                  least two-thirds of the directors then and still in office and
                  who served as directors at the beginning of the period, or
                  (vi) the Company becomes a subsidiary of any other Company.

         e.                NOTICE OF TERMINATION. Any termination by the Company
                  for Cause, without Cause, because of the Employee's Disability
                  or upon a Change of Control as contemplated in Section 3(d),
                  or by the Employee's Resignation, shall be communicated by
                  Notice of Termination to the other party hereto given in
                  accordance with Section 10(c). For purposes of this Agreement,
                  a "NOTICE OF TERMINATION" means a written notice which (i)
                  indicates the specific termination provision in this Agreement
                  relied upon, (ii) to the extent applicable, sets forth in

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                  reasonable detail the facts and circumstances claimed to
                  provide a basis for termination of the Employee's employment
                  under the provision so indicated, and (iii) if the Date of
                  Termination (as defined below) is other than the date of
                  receipt of such notice, specifies the termination date (which
                  date shall not be more than 30 days after the giving of such
                  notice). The failure by the Company to set forth in the Notice
                  of Termination any fact or circumstance which contributes to a
                  showing of Cause shall not waive any right of the Company
                  hereunder or preclude the Company from asserting such fact or
                  circumstance in enforcing the Company's rights hereunder.

         f.                DATE OF TERMINATION. "DATE OF TERMINATION" means (i)
                  if the Employee's employment is terminated by the Company for
                  Cause, without Cause or upon a Change of Control as
                  contemplated in Section 3(d), or by the Employee's
                  Resignation, the date of receipt of the Notice of Termination
                  or any later date specified therein pursuant to Section 3(e),
                  as the case may be, or (ii) if the Employee's employment is
                  terminated by reason of death or Disability, the date of death
                  of the Employee or the Disability Effective Date, as the case
                  may be.

4.                OBLIGATIONS OF THE COMPANY UPON TERMINATION.

         a.                FOR CAUSE; RESIGNATION; OTHER THAN FOR DEATH OR
                  DISABILITY. If, during the Employment Period, the Company
                  shall terminate the Employee's employment for Cause or the
                  Employee resigns from his employment, and the termination of
                  the Employee's employment in any case is not due to his death
                  or Disability, the Employee shall forfeit all rights to any
                  Incentive Bonus otherwise due to him or to which he may be
                  entitled, and the Company shall have no further payment
                  obligations to the Employee or his legal representatives,
                  other than for the payment of, in a lump sum in cash within
                  thirty (30) days after the Date of Termination (or such
                  earlier date as required by applicable law), that portion of
                  the Employee's Annual Base Salary accrued through the Date of
                  Termination to the extent not theretofore paid.

         b.                DEATH; DISABILITY. If the Employee's employment is
                  terminated by reason of the Employee's death or disability
                  during the Employment Period, the Company shall have no
                  further payment obligations to the Employee or his legal
                  representatives, other than for payment of (i) in a lump sum
                  in cash within thirty (30) days after the Date of Termination
                  (or such earlier date as required by applicable law) that
                  portion of the Employee's Annual Base Salary accrued through
                  the Date of Termination to the extent not theretofore paid,
                  and (ii) in a lump sum in cash within thirty (30) days after
                  the Date of Termination (or such earlier date as required by
                  applicable law), the Incentive Bonus prorated from the first
                  day of the Company's then current fiscal year to the Date of
                  Termination ("Prorated Incentive Bonus").

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         c.                WITHOUT CAUSE. If the Employee's employment is
                  terminated before expiration of the Employment Period by the
                  Company without Cause, the Employee will be entitled to
                  receive (i) in a lump sum in cash within thirty (30) days
                  after the Date of Termination (or such earlier date as
                  required by applicable law) that portion of the Employee's
                  Annual Base Salary accrued through the Date of Termination to
                  the extent not theretofore paid, (ii) in a lump sum in cash
                  within thirty (30) days after the Date of Termination (or such
                  earlier date as required by applicable law), the Prorated
                  Incentive Bonus, and (iii) severance payments ("SEVERANCE
                  PAYMENTS"), in accordance with the customary payroll practices
                  of the Company, in an amount equal to that portion of his
                  Annual Base Salary in effect on the Date of Termination for
                  the lesser of (1) twelve (12) months, or (2) the number of
                  full or partial calendar months remaining after termination
                  and before the expiration of the Employment Period,
                  ("SEVERANCE PERIOD"), provided that such Severance Payments
                  shall be paid to the Employee only upon his execution and
                  non-revocation of a release and waiver of claims in the form
                  required by the Company.

         d.                CHANGE OF CONTROL. If the Employee's employment is
                  terminated upon a Change of Control as contemplated in Section
                  3(d), the Company shall have no further payment obligations to
                  the Employee or his legal representatives, other than for
                  payment of (i) in a lump sum in cash within thirty (30) days
                  after the Date of Termination (or such earlier date as
                  required by applicable law) that portion of the Employee's
                  Annual Base Salary accrued through the Date of Termination to
                  the extent not theretofore paid, (ii) in a lump sum in cash
                  within thirty (30) days after the Date of Termination (or such
                  earlier date as required by applicable law), the Prorated
                  Incentive Bonus, and (iii) Severance Payments, in accordance
                  with the customary payroll practices of the Company in an
                  amount equal to the Employee's Annual Base Salary for the
                  remainder of the Employment Period, provided that such
                  Severance Payments shall be paid to the Employee only upon his
                  execution and non-revocation of a release and waiver of claims
                  in the form required by the Company.

5.                FULL SETTLEMENT, MITIGATION. In no event shall the Employee be
         obligated to seek other employment or take any other action by way of
         mitigation of the amounts payable to the Employee under any of the
         provisions of this Agreement and such amounts shall not be reduced
         whether or not the Employee obtains other employment. Neither the
         Employee nor the Company shall be liable to the other party for any
         damages for breach of this Agreement in addition to the amounts payable
         under Section 4 arising out of the termination of the Employee's
         employment prior to the end of the Employment Period; provided,
         however, that the Company shall be entitled to seek damages from the
         Employee for any breach of Sections 6, 7, 8 or 9 by the Employee or for
         the Employee's criminal misconduct.

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6.                CONFIDENTIAL INFORMATION.

         a.                The Employee acknowledges that the Company has trade,
                  business and financial secrets and other confidential and
                  proprietary information (collectively, the "CONFIDENTIAL
                  INFORMATION"). Confidential information includes, but is not
                  limited to, sales materials, technical information, processes
                  and compilations of information, records, specifications and
                  information concerning customers or venders, customer lists,
                  and information regarding methods of doing business. As
                  defined herein, Confidential Information shall not include
                  information that is generally known to other persons or
                  entities who can obtain economic value from its disclosure or
                  use.

         b.                The Employee is aware of those policies implemented
                  by the Company to keep its Confidential Information secret.
                  The Employee acknowledges that the Confidential Information
                  has been developed or acquired by the Company through the
                  expenditure of substantial time, effort and money and provides
                  the Company with an advantage over competitors who do not know
                  or use such Confidential Information.

         c.                During and following the Employee's employment by the
                  Company, the Employee shall hold in confidence and not
                  directly or indirectly disclose or use or copy or make lists
                  of any Confidential Information except to the extent
                  authorized in writing by the Board or compelled by legal
                  process, other than to an employee of the Company or a person
                  to whom disclosure is reasonably necessary or appropriate in
                  connection with the performance by the Employee of his duties
                  as an employee of the Company. The Employee agrees to use
                  reasonable efforts to give the Company notice of any and all
                  attempts to compel disclosure of any Confidential Information,
                  in such a manner so as to provide the Company with written
                  notice at least five (5) days before disclosure or within one
                  (1) business day after the Employee is informed that such
                  disclosure is being or will be compelled, whichever is
                  earlier. Such written notice shall include a description of
                  the information to be disclosed, the court, government agency,
                  or other forum through which the disclosure is sought, and the
                  date by which the information is to be disclosed, and shall
                  contain a copy of the subpoena, order or other process used to
                  compel disclosure.

         d.                The Employee further agrees not to use any
                  Confidential Information for the benefit of any person or
                  entity other than the Company.

         e.                As used in this Section 6 "COMPANY" shall include
                  Horizon Pharmacies, Inc. and any of its affiliates.

7.                SURRENDER OF MATERIALS UPON TERMINATION. All records, files,
         documents and materials, or copies thereof, relating to the Company's
         and its affiliates' business which the Employee shall prepare, or use,
         or be provided with as a result of his employment with the

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         Company, shall be and remain the sole property of the Company or its
         affiliates, as the case may be, and shall be returned promptly by the
         Employee to the owner upon termination of the Employee's employment
         with the Company.

8.                SUCCESSORS. The Company may assign its rights under this
         Agreement to any successor to all or substantially all the assets of
         the Company, by merger or otherwise, and may assign or encumber this
         Agreement and its rights hereunder as security for indebtedness of the
         Company and its subsidiaries subject to the assignee agreeing to assume
         and perform all of the Company's obligations hereunder. The rights and
         obligations of the Employee under this Agreement may not be assigned or
         encumbered by the Employee, voluntarily or involuntarily, during his
         lifetime, and any such purported assignment shall be void. However, all
         rights of the Employee under this Agreement shall inure to the benefit
         of and be enforceable by the Employee's personal or legal
         representatives, estates, executors, administrators, heirs and
         beneficiaries. All amounts payable to the Employee hereunder shall be
         paid, in the event of the Employee's death, to the Employee's estate,
         heirs and representatives.

9.                NON-COMPETITION.

         a.                During his employment by the Company, including the
                  Employment Period, the Employee will have access to and become
                  acquainted with Confidential Information of the Company as
                  described in Section 6. Accordingly, in consideration for
                  having access to such Confidential Information, and in the
                  case of the Employee's termination without Cause or upon a
                  Change of Control as contemplated in Section 3(d) in
                  consideration for the Severance Payments, and in order to
                  protect its value to the Company, the Employee agrees that
                  during the Term of Non-Competition (as defined below) he will
                  not directly or indirectly disclose or use for any reason
                  whatsoever any Confidential Information obtained by reason of
                  his employment with the Company or any predecessor, except as
                  required to conduct the business of the Company. The
                  obligations of the Employee set forth in the preceding
                  sentence is in addition to, and not in lieu of, the
                  obligations of the Employee set forth in Section 6 of this
                  Agreement. The Term of Non-Competition (herein so called)
                  shall be for a term beginning on the date hereof and
                  continuing until (i) the first anniversary of the Date of
                  Termination if the Employee's employment is terminated by the
                  Company for Cause or due to Disability or by the Employee's
                  Resignation, or (ii) the end of the Severance Period if the
                  Employee's employment is terminated by the Company without
                  Cause or upon a Change of Control.

         b.                The Employee acknowledges and agrees that the nature
                  of the Confidential Information to which he will have access
                  during his employment by the Company would make it difficult,
                  if not impossible, for him to perform in a similar capacity
                  for a Competing Business (as defined below) without disclosing
                  or utilizing the

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                  Confidential Information. The Employee further acknowledges
                  and agrees that the Company's business is conducted throughout
                  the country in a highly competitive market. Accordingly, the
                  Employee agrees that, during the term of Non-Competition, the
                  Employee will not (other than for the benefit of the Company
                  pursuant to this Agreement) directly or indirectly,
                  individually or as an officer, director, employee,
                  shareholder, consultant, contractor, partner, joint venturer,
                  agent, equity owner or in any capacity whatsoever (i) engage
                  in the operation of retail pharmacies or in any other business
                  activity that the Company is conducting, or is intending to
                  conduct, on the Date of Termination (a "COMPETING BUSINESS"),
                  (ii) hire, attempt to hire, or contact or solicit with respect
                  to hiring any employee of the Company, or (iii) divert or take
                  away any customers of the Company.

         c.                During the term of Non-Competition, the Employee will
                  not use the Employee's access to, knowledge of, or application
                  of Confidential Information to perform any duty for any
                  Competing Business; it being understood and agreed to that
                  this Section 9(c) shall be in addition to and not be construed
                  as a limitation upon the covenants in Sections 6 and 9(b)
                  hereof.

         d.                The Employee acknowledges that the geographic
                  boundaries, scope of prohibited activities, and time duration
                  of the preceding paragraphs are reasonable in nature and are
                  no broader than are necessary to maintain the confidentiality
                  and the goodwill of the Company and the confidentiality of its
                  Confidential Information and to protect the other legitimate
                  business interests of the Company.

         e.                If any court determines that any portion of this
                  Section 9 is invalid or unenforceable, the remainder of this
                  Section 9 shall not thereby be affected and shall be given
                  full effect without regard to the invalid provisions. If any
                  court construes any of the provisions of this Section 9, or
                  any part thereof, to be unreasonable because of the duration
                  or scope of such provision, such court shall have the power to
                  reduce the duration or scope of such provision and to enforce
                  such provision as so reduced.

         f.                As used in this Section 9, "COMPANY" shall include
                  Horizon Pharmacies, Inc. and any of its affiliates.

         10.               MISCELLANEOUS.

         a.                CONSTRUCTION. This Agreement shall be deemed drafted
                  equally by both the parties. Its language shall be construed
                  as a whole and according to its fair meaning. Any presumption
                  or principle that the language is to be construed against any
                  party shall not apply. The headings in this Agreement are only
                  for convenience and are not intended to affect construction or
                  interpretation. Any references to paragraphs, subparagraphs,
                  sections or subsections are to those parts of this Agreement,
                  unless

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                  the context clearly indicates to the contrary. Also, unless
                  the context clearly indicates to the contrary, (i) the plural
                  includes the singular and the singular includes the plural,
                  (ii) "and" and "or" are each used both conjunctively and
                  disjunctively, (iii) "any," "all," "each," or "every" means
                  "any and all", and "each and every", (iv) "include" and
                  "including" are each "without limitation", (v) "herein,"
                  "hereof," "hereunder" and other similar compounds of the word
                  "here" refer to the entire Agreement and not to any particular
                  paragraph, subparagraph, section or subsection, and (vi) all
                  pronouns and any variations thereof shall be deemed to refer
                  to the masculine, feminine, neuter, singular or plural as the
                  identity of the entities or persons referred to may require.

         b.                DEFINITIONS. As used in this Agreement, "AFFILIATE"
                  means, with respect to a person, any other person controlling,
                  controlled by or under common control with the first person;
                  the term "CONTROL," and correlative terms, means the power,
                  whether by contract, equity ownership or otherwise, to direct
                  the policies or management of a person; and "PERSON" means an
                  individual, partnership, corporation, limited liability
                  company, trust or unincorporated organization, or a government
                  or agency or political subdivision thereof.

         c.                NOTICES. All notices and other communications
                  hereunder shall be in writing and shall be given by hand
                  delivery to the other party or by registered or certified
                  mail, return receipt requested, postage prepaid, addressed as
                  follows:

         If to the Employee:                 John N. Stogner

                                             ---------------------
                                             ---------------------
                                             ---------------------

         If to the Company:                  Horizon Pharmacies, Inc.
                                             531 W. Main Street
                                             Denison, Texas 75020
                                             Attn: Ricky D. McCord

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

         d.                ENFORCEMENT. If any provision of this Agreement is
                  held to be illegal, invalid or unenforceable under present or
                  future laws effective during the term of this Agreement, such
                  provision shall be fully severable; this Agreement shall be
                  construed and enforced as if such illegal, invalid or
                  unenforceable provision had never comprised a portion of this
                  Agreement; and the remaining provisions of this Agreement
                  shall remain in full force and effect and shall not be
                  affected by the illegal, invalid or unenforceable provision or
                  by its severance from this Agreement.

                                       11
<PAGE>

                  Furthermore, in lieu of such illegal, invalid or unenforceable
                  provision there shall be added automatically as part of this
                  Agreement a provision as similar in terms to such illegal,
                  invalid or unenforceable provision as may be possible and be
                  legal, valid and enforceable.

         e.                WITHHOLDING. The Company may withhold from any
                  amounts payable under this Agreement such Federal, state or
                  local taxes as shall be required to be withheld pursuant to
                  any applicable law or regulation.

         f.                ARBITRATION. The Company and the Employee agree to
                  the resolution by binding arbitration of all claims, demands,
                  causes of action, disputes, controversies or other matters in
                  question ("claims"), whether or not arising out of this
                  Agreement or the Employee's employment (or its termination),
                  whether sounding in contract, tort or otherwise and whether
                  provided by statute or common law, that the Company may have
                  against the Employee or that the Employee may have against the
                  Company or its parents, subsidiaries and affiliates, and each
                  of the foregoing entities' respective officers, directors,
                  employees or agents in their capacity as such or otherwise;
                  except that this agreement to arbitrate shall not limit the
                  Company's right to seek equitable relief, including injunctive
                  relief and specific performance, and damages in a court of
                  competent jurisdiction for an alleged breach of Sections 6, 7,
                  8 or 9 of this Agreement. Claims covered by this agreement to
                  arbitrate also include claims by the Employee for breach of
                  this Agreement, wrongful termination, discrimination (based on
                  age, race, sex, disability, national origin or any other
                  factor) and retaliation. In the event of any breach of this
                  Agreement by the Company, it is expressly agreed that
                  notwithstanding any other provision of this Agreement, the
                  only damages to which the Employee shall be entitled is lost
                  compensation and benefits in accordance with Section 2(b) or
                  4. The Company and the Employee agree that any arbitration
                  shall be in accordance with the Federal Arbitration Act
                  ("FAA") and, to the extent an issue is not addressed by the
                  FAA, with the then-current National Rules for the Resolution
                  of Employment Disputes of the American Arbitration Association
                  ("AAA") or such other rules of the AAA as applicable to the
                  claims being arbitrated. If a party refuses to honor its
                  obligations under this agreement to arbitrate, the other party
                  may compel arbitration in either federal or state court. The
                  arbitrator shall apply the substantive law of the State of
                  Texas (excluding Texas choice-of-law principles that might
                  call for the application of some other state's law), or
                  federal law, or both as applicable to the claims asserted. The
                  arbitrator shall have exclusive authority to resolve any
                  dispute relating to the interpretation, applicability,
                  enforceability or formation of this agreement to arbitrate,
                  including any claim that all or part of this Agreement is void
                  or voidable and any claim that an issue is not subject to
                  arbitration. The parties agree that venue for arbitration will
                  be in Denison, Texas, and that any arbitration commenced in
                  any other venue will be transferred to Denison, Texas, upon
                  the written request of any party to this Agreement. In the
                  event that an arbitration is actually conducted pursuant to
                  this Section 10(f), the party in whose favor the

                                       12
<PAGE>

                  arbitrator renders the award shall be entitled to have and
                  recover from the other party all costs and expenses incurred,
                  including reasonable attorneys' fees, expert witness fees, and
                  costs actually incurred. Any and all of the arbitrator's
                  orders, decisions and awards may be enforceable in, and
                  judgment upon any award rendered by the arbitrator may be
                  confirmed and entered by, any federal or state court having
                  jurisdiction. All proceedings conducted pursuant to this
                  agreement to arbitrate, including any order, decision or award
                  of the arbitrator, shall be kept confidential by all parties.
                  THE EMPLOYEE ACKNOWLEDGES THAT, BY SIGNING THIS AGREEMENT, THE
                  EMPLOYEE IS WAIVING ANY RIGHT THAT THE EMPLOYEE MAY HAVE TO A
                  JURY TRIAL OR A COURT TRIAL OF ANY EMPLOYMENT-RELATED CLAIM
                  ALLEGED BY THE EMPLOYEE.

         g.                NO WAIVER No waiver by either party at any time of
                  any breach by the other party of, or compliance with, any
                  condition or provision of this Agreement to be performed by
                  the other party shall be deemed a waiver of similar or
                  dissimilar provisions or conditions at any time.

         h.                EQUITABLE AND OTHER RELIEF. The Employee acknowledges
                  that money damages would be both incalculable and an
                  insufficient remedy for a breach of Sections 6, 7, 8 or 9 by
                  the Employee and that any such breach would cause the Company
                  irreparable harm. Accordingly, the Company, in addition to any
                  other remedies at law or in equity it may have, shall be
                  entitled, without the requirement of posting of bond or other
                  security, to equitable relief, including injunctive relief and
                  specific performance, in connection with a breach of Sections
                  6, 7, 8 or 9 by the Employee. In addition to the remedies the
                  Company may have at law or in equity, violation of Sections 6
                  or 9 herein will entitle the Company at its sole option to
                  discontinue the Severance Payments to the Employee, and to
                  seek repayment from the Employee of any Severance Payments
                  paid to him by the Company during the period of time the
                  Employee was in violation of Sections 6 or 9. No action taken
                  by the Company under this Section 10(h) shall affect the
                  enforceability of the release and waiver of claims executed by
                  the Employee pursuant to Sections 4(d) and (e).

         i.                COMPLETE AGREEMENT. The provisions of this Agreement
                  constitute the entire and complete understanding and agreement
                  between the parties with respect to the subject matter hereof,
                  and supersedes all prior and contemporaneous oral and written
                  agreements, representations and understandings of the parties,
                  which are hereby terminated. Other than expressly set forth
                  herein, the Employee and Company acknowledge and represent
                  that there are no other promises, terms, conditions or
                  representations (or written) regarding any matter relevant
                  hereto. This Agreement may be executed in two or more
                  counterparts.

         j.                SURVIVAL. Sections 6, 7, 8, 9 and 10 of this
                  Agreement shall survive the termination of this Agreement.

                                       13
<PAGE>

         k.                CHOICE OF LAW. This Agreement shall be governed by
                  and construed in accordance with the laws of the State of
                  Texas without reference to principles of conflict of laws of
                  Texas or any other jurisdiction, and, where applicable, the
                  laws of the United States.

         l.                AMENDMENT. This Agreement may not be amended or
                  modified at any time except by a written instrument approved
                  by the Board and executed by the Company and the Employee.

         m.                EMPLOYEE ACKNOWLEDGMENT. The Employee acknowledges
                  that he has read and understands this Agreement, is fully
                  aware of its legal effect, has not acted in reliance upon any
                  representatives or promises made by the Company other than
                  those contained in writing herein, and has entered into this
                  Agreement freely based on his own judgment.

         IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand
and, pursuant to the authorization from the Board, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.

                                    EMPLOYEE:

                                    /s/ John N. Stogner
                                    --------------------------------------------
                                    John N. Stogner

                                    HORIZON PHARMACIES, INC., a Delaware
                                    corporation.

                                          By:  /s/ Ricky D. McCord
                                             -----------------------------------
                                          Name: Ricky D. McCord
                                               ---------------------------------
                                          Title: President
                                                --------------------------------

                                       14

<PAGE>

                                    EXHIBIT A

         Employee's Incentive Bonus shall be payable upon the following
criteria:

                  -        If the Company achieves a net profit per its annual
                           business plan for fiscal year 1999, the Employee
                           shall receive, as an Incentive Bonus, an amount equal
                           to ten percent (10%) of his Annual Base Salary.

                  -        If the Company achieves the revenues projected in its
                           annual business plan for fiscal year 1999, the
                           Employee shall receive, as an Incentive Bonus, an
                           amount equal to ten percent (10%) of his Annual Base
                           Salary.

                  -        If the Company successfully completes the
                           installation of the PDX pharmacy computer system in
                           all pharmacies within twelve (12) months of the
                           Effective Date of this Agreement, the Employee shall
                           receive, as an Incentive Bonus, an amount equal to
                           ten percent (10%) of his Annual Base Salary.

                  -        If the Company develops a plan for the complete
                           integration of all systems, specifically its
                           Pharmacy, Point-of-Sale, Med Act and Great Plains
                           systems, the Employee shall receive, as an Incentive
                           Bonus, an amount equal to ten percent (10%) of his
                           Annual Base Salary.

                                       15<PAGE>

                             EMPLOYMENT AGREEMENT

       This Employment Agreement (this Agreement) is entered into effective the
7th day of March, 2000, by and between HORIZON Pharmacies, Inc., a Delaware
Corporation, with its principal place of business in Denison, Texas (Employer),
and Phillip Douglas Stone (Employee).

                             W I T N E S S E T H:

       WHEREAS, Employer desires to employ Employee as a C.O.O. at Employer's
location in Denison, Texas and Employee desires to accept such employment.

       NOW THEREFORE, for and in consideration of the above, the employment of
and the payment of salary, wages or other compensation to Employee by Employer,
and the mutual covenants, promises, undertakings and agreements set forth below,
Employee and Employer covenant and agree as follows:

       1.     DUTIES.  Beginning on the effective date of this Agreement,
Employee shall (i) perform in the above-described capacity; (ii) devote such
time, energy, ability, skills, services and attention to the timely, diligent
and professional performance of his duties as required by Employer and as may be
required to perform his assigned duties and fulfill the performance requirements
of Employer from time to time; (iii) perform such additional or different
duties, and accept the election or appointment to such other offices or
positions as required by Employer; and (iv) comply with all of Employers'
policies, procedures and rules.  The specific duties assigned to Employee may be
extended or curtailed from time to time at Employers' discretion.

       2.     COMPENSATION.  As compensation for his services hereunder,
Employee shall receive an annual salary in the amount of $165,000.00 per year,
payable on a bi-weekly basis; and $55,000.00 potential bonus which is 33 1/3% of
base salary separated into 4 categories of $13,750.00 each with the goals and
parameters to be mutually agreed upon by both parties.  Stock options to consist
of 10,000 options from an existing plan to be vested over 3 years.

       3.     BENEFITS.  During the term of this Agreement and subject to
applicable eligibility requirements, Employee shall be entitled to all
employment benefit plans of Employer, if any, now or hereafter in effect during
the term of this Agreement, including, without limitation, health insurance and
major medical coverage, on a no gain, no loss basis, paid holidays, 4 weeks
vacation and sick leave as provided to the employees of Employer.  Employee
shall be entitled to being moved from his present residence to a location in
North Texas at the employer's expense by a moving company that is mutually
agreed upon by both parties.  Employer agrees to pay one-half of Realtor's fees
(not to exceed 8%) or a maximum of $4,000.00.  Employee will also be awarded a
$1,000.00 per month housing allowance for the first six months of his
employment.

       4.     TERM AND TERMINATION.  The term of this Agreement shall be one
year commencing April 1, 2000 and ending on March 31, 2001 and shall be
renegotiated within 30 days prior to the expiration of the current agreement.
Prior to the end of the term, this Agreement may be terminated upon the
occurrence of (i) either the death or disability of Employee or (ii) Employer
has cause to

                                       1

<PAGE>

terminate this Agreement, and in any such event termination shall be
effective immediately upon giving of notice by Employer.  In the event
Employee desires to terminate this Agreement prior to the end of the term, he
may do so, provided, however, that notice of termination will be subject to a
ninety (90) day notice by the terminating party.

       5.     EXPENSES.  Employer agrees to reimburse Employee for all
reasonable, out-of-pocket business expenses, as determined by the Chief
Financial Officer of Employer or his designate, incurred by Employee in
connection with his duties performed on behalf of Employer, provided, however,
Employee has complied with Employer rules and procedures relative to such
disbursement.

       6.     CONFIDENTIALITY AND NON-COMPETITION AGREEMENT.  Employee and
Employer have entered into a separate Confidentiality Agreement of event date
herewith.

       7.     WAIVER, MODIFICATION AND INTEGRATION.  The waiver by either party
to this Agreement of a breach of any provision by the other party shall not
operate or be construed as a waiver of any subsequent breach by any party.  This
instrument contains the parties' entire agreement concerning the matters recited
herein, and supersedes all prior and contemporaneous representations,
understandings and agreements, either oral or in writing, between the parties
with respect to the subject matter of this Agreement.  Any and all such prior or
contemporaneous representations, understandings and agreements, both oral and
written, are hereby terminated.  This Agreement may not be modified, altered or
amended except by a written agreement signed by Employer and Employee.

       8.     GOVERNING LAW; JURISDICTION; PROCESS OF SERVICE.  It is the
party's intention that the laws of the States of Texas shall govern the validity
of this Agreement, the construction of its terms, and the interpretation of the
party's rights and duties under this Agreement.  Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of, this
Agreement will be brought against any of the parties in the courts of the State
of Texas and venue in Grayson County, Texas or, if it has or can acquire
jurisdiction, in any United States District Court in Texas and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein.  Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.

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

       10.    ATTORNEYS' FEES.  In any action in any court of competent
jurisdiction brought by either party to enforce any covenant or any of such
party's rights or remedies under this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees and all costs, expenses and disbursements
in connection with such action.

                                       2

<PAGE>

              Executed as of the dated indicated above.

EMPLOYER:                   HORIZON Pharmacies, Inc., a Delaware Corporation

                            By: /s/ Ricky D. McCord
                                --------------------------------------------
                                Its:  President
                                      --------------------------------------

EMPLOYEE:                   By:  /s/ Phillip Douglas Stone
                                 -------------------------------------------
                                 Phillip Douglas Stone, Individually

                                       3

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