EMPLOYMENT AGREEMENT

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         THIS EMPLOYMENT AGREEMENT is entered into as of this 1st day of July,

2001, by and between NCS HEALTHCARE, INC., a Delaware corporation (the

"Company"), and WILLIAM B. BYRUM, an individual ("Executive").



         In consideration of and in reliance upon the covenants, obligations and

agreements herein contained, the Company and Executive hereby agree as follows:



         1. EMPLOYMENT. Subject to the terms of this Agreement, for a period of

twenty four (24) months commencing on the date hereof (the "Employment Period"),

the Company hereby agrees to employ Executive as Chief Operating Officer of the

Company, and Executive hereby accepts such employment. As such, Executive shall

report directly to the Chief Executive Officer (the "CEO") of the Company or,

with respect to restructuring matters, directly to the Company's Board of

Directors (the "Board") and shall perform such reasonable and appropriate duties

for the Company as may be assigned to him by the CEO or the Board. Throughout

the Employment Period, Executive shall devote his efforts diligently and

faithfully on a full-time basis to the business and welfare of the Company in

accordance with and in furtherance of the policies and directives of the

Company.



         2. COMPENSATION AND BENEFITS.



                  2.1 SALARY. The Company shall pay Executive a base salary

during his employment at the rate of Four Hundred Thousand Dollars ($400,000)

per year, less such deductions and withholdings as are required by law, payable

in accordance with the Company's standard payroll practices. Such annual base

salary shall be reviewed by the CEO and the Human Resources Committee of the

Board (the "Committee") at least annually during the Employment Period or within

such other period as is consistent with the Company's compensation review

program in existence from time to time. Increases in Executive's annual base

salary shall be made at the discretion of the Committee upon the recommendation

of the CEO. Base salary shall not be reduced after any such increase.



                  2.2 BONUS.



                           (a) RESTRUCTURING BONUS. For the Company's fiscal

year ending 2002, the Company shall pay Executive a restructuring bonus in the

minimum amount of One Hundred Fifty Thousand Dollars ($150,000) payable promptly

after the earlier of: (i) the close of such fiscal year provided that Executive

remains employed by the Company through the end of such fiscal year; and (ii)

the completion of a bank restructuring involving the Company (as determined by

the Committee) provided that Executive remains employed by the Company through

the date of such completion. For the subsequent fiscal year, Executive may

receive a restructuring and/or performance bonus in the amount determined at the

sole discretion of the Committee. Any bonus shall be subject to such deductions

and withholdings as are required by law.







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                           (b) RETENTION BONUS. The Company shall pay Executive

a retention bonus in the aggregate amount of Four Hundred Thousand Dollars

($400,000) payable in eight quarterly installments of Fifty Thousand Dollars

($50,000) each, commencing on September 30, 2001 and continuing on December 31,

2001, March 31, 2002, June 30, 2002, September 30, 2002, December 31, 2002,

March 31, 2003 and June 30, 2003, provided that, with respect to each such

installment, Executive remains employed by the Company through the end of the

quarter ending on the payment date, but subject to acceleration as described

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