<PAGE>

                                                                 EXHIBIT 10.13

                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT ("Employment Agreement") is executed as of
the Execution Date (as defined in Section 1 below) but made effective as of
January 1, 2006 (except as provided in Section 3(a)), between RES-CARE, INC., a
Kentucky corporation (the "Company"), and DAVID W. MILES (the "Employee").

         RECITALS:

         WHEREAS, the Company and Employee previously entered into that certain
Employment Agreement effective February 1, 2005, as amended (the "Prior
Agreement");

         WHEREAS, the initial term of the Prior Agreement is scheduled to expire
on December 31, 2007;

         WHEREAS, the Employee has been appointed as the Chief Financial Officer
of the Company;

         WHEREAS, in connection with such appointment, the Company wishes to
offer the Employee a new long-term employment agreement which will supersede the
Prior Agreement; and

         WHEREAS, the Company and the Employee have reached agreement on the
terms and conditions of such agreement.

         AGREEMENT:

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:

         1. EMPLOYMENT AND TERM. The Company hereby employs the Employee, and
the Employee accepts such employment, upon the terms and conditions herein set
forth for an initial term commencing effective January 1, 2006 (the
"Commencement Date"), and ending on December 31, 2008, subject to earlier
termination only in accordance with the express provisions of this Employment
Agreement ("Initial Term"). At the option of the Company and with the consent of
the Employee, this Employment Agreement may be extended for successive periods
of one (1) year each (the "Additional Term(s)") on the same terms and
conditions. The Company's option to extend this Employment Agreement for any
Additional Term shall be exercisable by written notice to Employee no later than
thirty (30) days prior to the end of the Initial Term or any then effective
Additional Term. The Initial Term and any effective Additional Terms shall be
collectively referred to as the "Term." For purposes of this Employment
Agreement, the term "Execution Date" shall mean the later of (i) the date this
Employment Agreement is signed by the Employee and (ii) the date this Employment
Agreement is signed on behalf of the Company.

<PAGE>

         2.       DUTIES.

                  (a) Employment as Executive Vice President and Chief Financial
         Officer. During the Term, the Employee shall serve as the Executive
         Vice President and Chief Financial Officer of the Company and its
         subsidiaries. During the Term, subject to the supervision and control
         of the Chairman, President and Chief Executive Officer of the Company
         (the "Chairman"), or his designee, the Employee shall have the
         responsibility for and oversight of the corporate financial functions
         of the Company and its subsidiaries, including the following: (i)
         treasury and cash management; (ii) fixed asset management; (iii)
         reimbursement; (iv) tax; (v) audit; (vi) financial reporting to the
         Securities and Exchange Commission; (vii) risk management; (viii)
         accounts payable and consolidation of financial statements; (ix)
         budgeting and assistance with strategic planning; and (x) information
         technology. The Employee shall perform such additional duties as may be
         prescribed from time to time by the Chairman or his designee,
         including, without limitation, serving as an officer or director of the
         Company and/or one or more subsidiaries or affiliates of the Company,
         if elected to such positions, without any additional salary or other
         compensation. The Employee shall serve as a member of the Resource
         Center's Leadership Team.

                  (b) Time and Effort. The Employee shall devote his best
         efforts on a full-time basis and all of his business time, energies and
         talents exclusively to the business of the Company and to no other
         business during the Term of this Employment Agreement; provided,
         however, that subject to the restrictions in Section 7 hereof, the
         Employee may (i) invest his personal assets in such form or manner as
         will not require his services in the operation of the affairs of the
         entities in which such investments are made and (ii) subject to
         satisfactory performance of the duties described in Section 2(a)
         hereof, devote such time as may be reasonably required for him to
         continue to maintain his current level of participation in various
         civic and charitable activities.

                  (c) Employee Certification of Eligibility. Not less frequently
         than annually and upon the termination of the Employee's employment
         hereunder for any reason other than Employee's death, the Employee
         shall execute and deliver to the Chairman and/or any other authorized
         officer designated by the Company a certificate (ResCare Annual
         Employment Re-Certification Eligibility Form) confirming, to the best
         of the Employee's knowledge, that the Employee remains eligible for
         employment with the Company. This same certificate will certify that
         the Employee has complied with applicable laws, regulations and Company
         policies regarding the provision of services to clients and billings to
         its paying agencies, Company policies on training, Drug and
         Alcohol-Free Program, Prohibition of Harassment, Affirmative Action
         Equal Employment Opportunity and Violence in the Workplace. This
         statement shall state that the Employee is not aware of any such
         violation by other employees, independent contractors, vendors, or
         other individuals performing services for the Company and its
         subsidiaries that they did not report as appropriate.


                                       2
<PAGE>

         3.       COMPENSATION AND BENEFITS.

                  (a) Base Salary. The Company shall pay to the Employee during
         the Term an annual salary (the "Base Salary"), which initially shall be
         $235,000. The Base Salary shall be due and payable in substantially
         equal bi-weekly installments or in such other installments as may be
         necessary to comport with the Company's normal pay periods for all
         employees. The Company and the Employee agree that the increase in
         Employee's Base Salary to $235,000 shall be effective November 1, 2005,
         the date Employee was appointed Chief Financial Officer of the Company.
         Promptly after execution of this Employment Agreement, the Company
         shall issue to Employee a supplemental payment, net of applicable
         withholding, to reflect such retroactive increase in Employee's Base
         Salary. Employee acknowledges that such increase in his Base Salary for
         the period prior to the Commencement Date shall not be taken into
         account in calculating any earned and unpaid Incentive Bonus (as
         defined in the Prior Agreement) for the calendar year 2005.

                  Provided that this Employment Agreement or Employee's
         employment hereunder shall not have been terminated for any reason, the
         Base Salary shall be increased, effective as of the first day of each
         January, commencing January 1, 2007 by the percentage by which the
         Consumer Price Index for all Urban Consumers (CPI-U), All-Items,
         1982-1984=100, as published by the Bureau of Labor Statistics (the
         "CPI") established for the month of December immediately preceding the
         date on which the adjustment is to be made exceeds the CPI published
         for the month of December of the immediately preceding year. If the
         Bureau of Labor Statistics suspends or terminates its publication of
         the CPI, the parties agree that a reasonably comparable price index
         shall be substituted for the CPI.

                  (b) Incentive Plan. During the Term, the Employee shall be
         eligible for incentive compensation in accordance with the following
         incentive plan (the "Incentive Plan"). Shortly after the beginning of
         each calendar year, the Company's Board of Directors will establish a
         target of the earnings before taxes, interest, depreciation and
         amortization of the Company and its subsidiaries on a consolidated
         basis, determined in accordance with generally accepted accounting
         principles consistently applied ("EBITDA"), for such calendar year (the
         "Annual EBITDA Target"). In no event shall Employee earn any amount
         under the Incentive Plan for any calendar year during the Term unless
         the actual EBITDA for such calendar year equals or exceeds ninety
         percent (90%) of the Annual EBITDA Target for such calendar year. The
         respective thresholds referred to in the immediately preceding sentence
         shall hereinafter be referred to as the "Annual EBITDA Threshold." For
         all purposes of this Employment Agreement, in determining the actual
         EBITDA of the Company and its subsidiaries for each calendar year,
         there shall be added (x) any extraordinary non-cash or nonrecurring
         non-cash charges or losses incurred by the Company and its subsidiaries
         other than in the ordinary course of business, including but not
         limited to losses or expenses resulting from redemptions or repayments
         of indebtedness, or modifications or amendments of the Company's credit
         facility, and (y) other appropriate additions as determined by the
         Board of Directors or the Executive Compensation Committee of the Board
         of Directors (the

                                       3
<PAGE>


         "Compensation Committee"). The amount payable under the Incentive Plan
         to Employee for each full calendar year during the Term shall equal the
         Base Salary actually paid to the Employee for such calendar year
         multiplied by the sum of the Department Performance Percentage and the
         Company Performance Percentage (as determined below) for such calendar
         year. The maximum percentages for the Department Performance Percentage
         (the "Department Maximum Performance Percentage") and the Company
         Performance Percentage (the "Company Maximum Performance Percentage")
         for the calendar year 2006 are each fifty percent (50%). For each
         calendar year commencing after 2006, not later than March 15 of such
         calendar year, the Department Maximum Performance Percentage shall be
         established by the Compensation Committee within a range of forty
         percent (40%) and sixty percent (60%) and the Company Maximum
         Performance Percentage shall be established by the Compensation
         Committee within a range of forty percent (40%) and sixty percent
         (60%); provided that the sum of such percentages shall equal one
         hundred percent (100%) each calendar year. If the Compensation
         Committee shall not timely establish either or both of the Department
         Maximum Performance Percentage or the Company Maximum Performance
         Percentage for any calendar year, the respective percentages that were
         applicable for the prior calendar year shall apply for such calendar
         year. The sum of the Department Performance Percentage and the Company
         Performance Percentage for each calendar year shall be referred to
         herein as the "Incentive Percentage." For each calendar year the
         maximum Incentive Percentage shall be one hundred percent (100%).

                           (i) The Department Performance Percentage for each
                  calendar year during the Term shall be equal to the sum of a
                  specified number of percentages that are each determined based
                  upon the Company functions for which Employee is responsible
                  satisfying certain performance criteria in categories
                  established by the Compensation Committee on an annual basis.
                  For each calendar year, the relative weight of the performance
                  criteria as well as the performance criteria may change for
                  each calendar year and shall be established by the
                  Compensation Committee at the same time as its establishment
                  of the Company Maximum Performance Percentage. The manner in
                  which the percentage for each such category shall be
                  determined for each calendar year shall be established by the
                  Compensation Committee at the same time as its establishment
                  of the Company Maximum Performance Percentage. Notwithstanding
                  anything in this Employment Agreement to the contrary, the
                  Department Performance Percentage shall be zero unless the
                  actual EBITDA for the respective calendar year equals or
                  exceeds the Annual EBITDA Threshold for such calendar year.

                           (ii) The Company Performance Percentage shall be
                  determined for each calendar year during the Term based upon
                  the Company and its subsidiaries having met or exceeded the
                  Annual EBITDA Threshold for such calendar year.
                  Notwithstanding anything in this Employment Agreement to the
                  contrary, the Company Performance Percentage shall be zero
                  unless the actual EBITDA for the respective calendar year
                  equals or exceeds the Annual EBITDA Threshold for such
                  calendar year. The Company Performance Percentage for each
                  calendar year shall be equal to the Company Maximum
                  Performance Percentage for such


                                       4
<PAGE>

         calendar year multiplied by the EBITDA Factor (as determined below).
         The excess of the Annual EBITDA Target over the Annual EBITDA Threshold
         shall be referred to as the "Incentive Range." The EBITDA Factor for
         each calendar year shall be equal to: (A) the amount by which the
         actual EBITDA for the calendar year exceeds the Annual EBITDA Threshold
         for such calendar year (but not more than the Incentive Range for such
         calendar year), divided by (B) the Incentive Range for such calendar
         year.

         After any target or percentage described in this paragraph (b) has been
         established by the Company's Board of Directors or Compensation
         Committee, as applicable, for any calendar year, such target or
         percentage shall not be increased or decreased for such calendar year
         for purposes of this paragraph (b) or for purposes of paragraph (c) of
         this Section 4. Any annual incentive earned by the Employee under the
         Incentive Plan for any calendar year during the Term shall be paid by
         the Company in cash to the Employee not later than the later of (x)
         ninety (90) days after the end of the applicable calendar year or (y)
         the date of delivery to the Company of the audited financial statements
         of the Company and its subsidiaries for such calendar year. Any amounts
         earned by the Employee under the Incentive Plan shall be hereinafter
         referred to as the "Incentive Bonus."

                  (c)      Restricted Stock Awards.

                           (i) The restricted shares of common stock of the
                  Company awarded under this paragraph (c) (collectively, the
                  "Restricted Shares") shall be awarded pursuant to and, to the
                  extent not expressly inconsistent herewith, governed by the
                  Company stock option and incentive compensation plan as in
                  effect as the effective date of the respective award (the
                  "Stock Plan"). The number of Restricted Shares shall be
                  adjusted in accordance with the terms of the Stock Plan for
                  stock splits, stock dividends, recapitalizations and the like.
                  Until and only to the extent the Restricted Shares shall vest
                  as provided herein, all stock certificates evidencing the
                  Restricted Shares owned by Employee shall be held by the
                  Company for the benefit of Employee. As and to the extent any
                  Restricted Shares shall vest as provided herein, the Company
                  will promptly deliver certificates representing such vested
                  shares to Employee.

                           (ii) Effective on each of the Execution Date, and,
                  provided Employee shall continue to be employed hereunder, on
                  the last day of each December during the Term, commencing with
                  December 31, 2006 (each such date being herein referred to as
                  an "Award Date"), the Company shall award to Employee that
                  number of shares of common stock of the Company as is equal to
                  $100,000 divided by the Award Price (as defined below), with
                  any fractional share resulting therefrom being rounded up to
                  one whole share if 0.5 or more and eliminated if less than
                  0.5. The restricted shares awarded as provided in the
                  preceding sentence shall be collectively referred to as the
                  "Annual Restricted Shares." The Award Price shall be equal to
                  the closing sale price of Company common stock as reported on
                  the Nasdaq National Market on the respective Award Date (or if
                  the


                                       5
<PAGE>

                  respective Award Date is not a trading date for the Company
                  common stock, on the immediately preceding trading date). The
                  Annual Restricted Shares shall be subject to vesting as
                  provided below. Solely for purposes of determining the
                  respective dates of vesting as provided in subparagraphs (A)
                  and (B) below, the Annual Restricted Shares awarded effective
                  as of the Execution Date shall be deemed to have been awarded
                  on December 31, 2005. An amount equal to two-thirds (2/3) of
                  the Annual Restricted Shares shall be referred to as the
                  "Annual Performance Restricted Shares" and an amount equal to
                  one-third (1/3) of the Annual Restricted Shares shall be
                  referred to as the "Annual Fixed Restricted Shares."

                                    (A) Provided Employee shall continue to be
                           employed hereunder and provided the respective
                           Trailing EBITDA Test has been satisfied, one-third
                           (1/3) of the Annual Performance Restricted Shares
                           shall vest on March 15 immediately after the third
                           (3rd) anniversary of the award of such Annual
                           Performance Restricted Shares, an additional
                           one-third (1/3) of the Annual Performance Restricted
                           Shares shall vest on March 15 immediately after the
                           fourth (4th) anniversary of the award of such Annual
                           Performance Restricted Shares, and the final
                           one-third (1/3) of the Annual Performance Restricted
                           Shares shall vest on March 15 immediately after the
                           fifth (5th) anniversary of the award of such Annual
                           Performance Restricted Shares. For purposes of this
                           subparagraph (A) the "Trailing EBITDA Test" shall
                           mean that the sum of the actual EBITDA for the three
                           (3) calendar years immediately preceding the date
                           upon which such vesting is tested equals or exceeds
                           the Trailing EBITDA Threshold (as defined below). The
                           "Trailing EBITDA Threshold" shall mean an amount
                           equal to ninety percent (90%) of the sum of the
                           Annual EBITDA Targets for the three (3) calendar
                           years immediately preceding the date upon which such
                           vesting is tested.

                                    (B) Provided Employee shall continue to be
                           employed hereunder, one-third (1/3) of the Annual
                           Fixed Restricted Shares shall vest on the third (3rd)
                           anniversary of the award of such Annual Fixed
                           Restricted Shares, an additional one-third (1/3) of
                           the Annual Fixed Restricted Shares shall vest on the
                           fourth (4th) anniversary of the award of such Annual
                           Fixed Restricted Shares, and the final one-third
                           (1/3) of the Annual Fixed Restricted Shares shall
                           vest on the fifth (5th) anniversary of the award of
                           such Annual Fixed Restricted Shares.

                           (iii) Notwithstanding any provision in this paragraph
                  (c) to the contrary, all of the Restricted Shares that have
                  not been previously vested shall immediately vest if Employee
                  shall continue to be employed hereunder and (A) Employee shall
                  die, (B) Employee shall be subject to a "permanent disability"
                  as described in Section 4(b) hereof, or (C) a Change of
                  Control (as defined below) has occurred with respect to the
                  Company. A "Change of Control" for purposes of


                                       6
<PAGE>

                  this subparagraph (iii) shall have the same meaning as that
                  term is given in the Stock Plan.

                  (d) Participation in Benefit Plans. During the Term, Employee
         shall be entitled to participate in all employee benefit plans and
         programs (including but not limited to paid time off policies,
         retirement and profit sharing plans, health insurance, etc.) provided
         by the Company under which the Employee is eligible in accordance with
         the terms of such plans and programs. The Company reserves the right to
         amend, modify or terminate in their entirety any of such programs and
         plans.

                  (e) Out-of-Pocket Expenses. The Company shall promptly pay the
         ordinary, necessary and reasonable expenses incurred by the Employee in
         the performance of the Employee's duties hereunder (or if such expenses
         are paid directly by the Employee shall promptly reimburse him for such
         payment), consistent with the reimbursement policies adopted by the
         Company from time to time and subject to the prior written approval by
         the Chairman.

                  (f) Withholding of Taxes; Income Tax Treatment. If, upon the
         payment of any compensation or benefit to the Employee under this
         Employment Agreement (including, without limitation, in connection with
         the award of any Restricted Shares or payment of any bonus or benefit),
         the Company determines in its discretion that it is required to
         withhold or provide for the payment in any manner of taxes, including
         but not limited to, federal income or social security taxes, state
         income taxes or local income taxes, the Employee agrees that the
         Company may satisfy such requirement by:

                           (i) withholding an amount necessary to satisfy such
                  withholding requirement from the Employee's compensation or
                  benefit; or

                           (ii) conditioning the payment or transfer of such
                  compensation or benefit upon the Employee's payment to the
                  Company of an amount sufficient to satisfy such withholding
                  requirement.

         The Employee agrees that he will treat all of the amounts payable
         pursuant to this Employment Agreement as compensation for income tax
         purposes.

         4. TERMINATION. The Employee's employment hereunder may be terminated
under this Employment Agreement as follows, subject to the Employee's rights
pursuant to Section 5 hereof:

                  (a) Death. The Employee's employment hereunder shall terminate
         upon his death.

                  (b) Disability. The Employee's employment shall terminate
         hereunder at the earlier of (i) immediately upon the Company's
         determination (conveyed by a Notice of Termination (as defined in
         paragraph (f) of this Section 4)) that the Employee is permanently
         disabled, and (ii) the Employee's absence from his duties hereunder for
         180


                                       7
<PAGE>

         days. "Permanent disability" for purposes of this Employment Agreement
         shall mean the onset of a physical or mental disability which prevents
         the Employee from performing the essential functions of the Employee's
         duties hereunder, which is expected to continue for 180 days or more,
         subject to any reasonable accommodation required by state and/or
         federal disability anti-discrimination laws, including, but not limited
         to, the Americans With Disabilities Act of 1990, as amended.

                  (c) Cause. The Company may terminate the Employee's employment
         hereunder for Cause. For purposes of this Employment Agreement, the
         Company shall have "Cause" to terminate the Employee's employment
         because of the Employee's personal dishonesty, intentional misconduct,
         breach of fiduciary duty involving personal profit, conviction of, or
         plea of nolo contendere to, any law, rule or regulation (other than
         traffic violations or similar offenses) or breach of any provision of
         this Employment Agreement.

                  (d) Without Cause. The Company may terminate the Employee's
         employment under this Employment Agreement at any time without Cause
         (as defined in paragraph (c) of this Section 4) by delivery of a Notice
         of Termination specifying a date of termination at least thirty (30)
         days following delivery of such notice.

                  (e) Voluntary Termination. By not less than thirty (30) days
         prior written notice to the Chairman, Employee may voluntarily
         terminate his employment hereunder.

                  (f) Notice of Termination. Any termination of the Employee's
         employment by the Company during the Term pursuant to paragraphs (b),
         (c) or (d) of this Section 4 shall be communicated by a Notice of
         Termination from the Company to the Employee. Any termination of the
         Employee's employment by the Employee during the Term pursuant to
         paragraph (e) of this Section 4 shall be communicated by a Notice of
         Termination from Employee to the Company. For purposes of this
         Employment Agreement, a "Notice of Termination" shall mean a written
         notice which shall indicate the specific termination provision in this
         Employment Agreement relied upon and in the case of any termination for
         Cause shall set forth in reasonable detail the facts and circumstances
         claimed to provide a basis for termination of the Employee's
         employment.

                  (g) Date of Termination. The "Date of Termination" shall, for
         purposes of this Employment Agreement, mean: (i) if the Employee's
         employment is terminated by his death, the date of his death; (ii) if
         the Employee's employment is terminated on account of disability
         pursuant to Section 4(b) above, thirty (30) days after Notice of
         Termination is given (provided that the Employee shall not, during such
         30-day period, have returned to the performance of his duties on a
         full-time basis), (iii) if the Employee's employment is terminated by
         the Company for Cause pursuant to Section 4(c) above, the date
         specified in the Notice of Termination, (iv) if the Employee's
         employment is terminated by the Company without Cause, pursuant to
         Section 4(d) above, the date specified in the Notice of Termination,
         (v) if the Employee's employment is terminated voluntarily pursuant to
         Section 4(e) above, the date specified in the Notice


                                       8
<PAGE>

         of Termination, and (vi) if the Employee's employment is terminated
         by reason of an election by either party not to extend the Term, the
         last day of the then effective Term.

         5. COMPENSATION UPON TERMINATION OR DURING DISABILITY.

                  (a) Death. If the Employee's employment shall be terminated by
         reason of his death during the Term, the Employee shall continue to
         receive installments of his then current Base Salary until the date of
         his death and shall receive any earned but unpaid Incentive Bonus for
         any calendar year ending prior to the date of his death.

                  (b) Disability. If the Employee's employment shall be
         terminated by reason of his disability during the Term, the Employee
         shall continue to receive installments of his then current Base Salary
         while actively at work and until the earlier of (i) the date of
         termination in accordance with Section 4(b) of this Employment
         Agreement or (ii) the date that short or long-term disability payments
         to the Employee commence under any plan or program then provided and
         funded by the Company. If the Employee's installments of Base Salary
         cease by reason of clause (ii) of the preceding sentence but the
         benefits payable under any such disability plan or program do not
         provide 100% replacement of the Employee's installments of Base Salary
         during such period, the Employee shall be paid at regular payroll
         intervals until the provisions of clause (i) of the preceding sentence
         becomes effective, an amount equal to the difference between the
         periodic installments of his then current Base Salary that would have
         otherwise been payable and the disability benefit paid from such
         disability plan or program. In the event of any such termination, the
         Employee shall also receive any earned but unpaid Incentive Bonus for
         any calendar year prior to the Date of Termination. Upon termination
         due to death prior to a termination as specified in the preceding
         provisions of this paragraph (b), the payment provisions of this
         paragraph (b) shall no longer apply and Section 5(a) above shall apply.

                  (c) Cause. If the Employee's employment shall be terminated
         for Cause, the Employee shall continue to receive installments of his
         then current Base Salary only through the Date of Termination and the
         Employee shall not be entitled to receive any Incentive Bonus (other
         than any earned but unpaid Incentive Bonus for any prior calendar
         year), and shall not be eligible for any severance payment of any
         nature.

                  (d) Without Cause. If the Employee's employment is terminated
         without Cause, the Employee shall continue to receive installments of
         his then current Base Salary until the Date of Termination and for
         twelve (12) months thereafter and the Employee shall also be entitled
         to receive any earned but unpaid Incentive Bonus for any calendar year
         ending prior to the Date of Termination.

                  (e) Expiration of Term. If the Employee's employment shall be
         terminated by reason of expiration of the Term by reason of Employee's
         election not to extend the Term, the Employee shall continue to receive
         installments of his then current Base Salary until the Date of
         Termination and shall also be entitled to receive any earned but unpaid
         Incentive Bonus for the last calendar year of the Term. If the
         Employee's employment



                                       9
<PAGE>

         shall be terminated by reason of expiration of the Term by reason of
         the Company's election not to extend the Term, the Employee shall
         continue to receive installments of his then current Base Salary until
         the Date of Termination and for twelve (12) months thereafter and shall
         also be entitled to receive any earned but unpaid Incentive Bonus for
         last calendar year of the Term.

                  (f) Voluntary Termination. If the Employee's employment shall
         be terminated pursuant to Section 4(e) hereof, the Employee shall
         continue to receive installments of his then current Base Salary until
         the Date of Termination and the Employee shall not be entitled to
         receive any then unpaid Incentive Bonus (other than any earned but
         unpaid Incentive Bonus for any calendar year ending prior to the date
         Employee gives Notice of Termination), and shall not be entitled to any
         severance payment of any nature.

                  (g) No Further Obligations after Payment. After all payments,
         if any, have been made to the Employee pursuant to the applicable
         provisions of paragraphs (a) through (f) of this Section 5, the Company
         shall have no further obligations to the Employee under this Employment
         Agreement other than the provision of any employee benefit plan
         required to be continued under applicable law or by its terms.

         6. DUTIES UPON TERMINATION. Upon the termination of Employee's
employment hereunder for any reason whatsoever (including but not limited to the
failure of the parties hereto to agree to the extension of this Employment
Agreement pursuant to Section 1 hereof), Employee shall promptly (a) comply with
his obligation to deliver an executed exit interview document as provided in
accordance with Company policy, and (b) return to the Company any property of
the Company or its subsidiaries then in Employee's possession or control,
including without limitation, any Confidential Information (as defined in
Section 7(d)(iii) hereof) and whether or not constituting Confidential
Information, any technical data, performance information and reports, sales or
marketing plans, documents or other records, and any manuals, drawings, tape
recordings, computer programs, discs, and any other physical representations of
any other information relating to the Company, its subsidiaries or affiliates or
to the Business (as defined in Section 7(d)(iv) hereof) of the Company. Employee
hereby acknowledges that any and all of such documents, items, physical
representations and information are and shall remain at all times the exclusive
property of the Company.

         7. RESTRICTIVE COVENANTS.

                  (a) Acknowledgments. Employee acknowledges that (i) his
         services hereunder are of a special, unique and extraordinary character
         and that his position with the Company places him in a position of
         confidence and trust with the operations of the Company, its
         subsidiaries and affiliates (collectively, the "Res-Care Companies")
         and allows him access to Confidential Information, (ii) the Company has
         provided Employee with a unique opportunity as Executive Vice President
         and Chief Financial Officer, (iii) the nature and periods of the
         restrictions imposed by the covenants contained in this Section 7 are
         fair, reasonable and necessary to protect and preserve for the Company
         the benefits of Employee's employment hereunder, (iv) the Res-Care
         Companies would


                                       10
<PAGE>

         sustain great and irreparable loss and damage if Employee were to
         breach any of such covenants, (v) the Res-Care Companies conduct and
         are aggressively pursuing the conduct of their business actively in and
         throughout the entire Territory (as defined in paragraph (d)(ii) of
         this Section 7), and (vi) the Territory is reasonably sized because the
         current Business of the Res-Care Companies is conducted throughout such
         geographical area, the Res-Care Companies are aggressively pursuing
         expansion and new operations throughout such geographic area and the
         Res-Care Companies require the entire Territory for profitable
         operations.

                  (b) Confidentiality and Non-disparagement Covenants. Having
         acknowledged the foregoing, Employee covenants that without limitation
         as to time, (i) commencing on the Commencement Date, he will not
         directly or indirectly disclose or use or otherwise exploit for his own
         benefit, or the benefit of any other Person (as defined in paragraph
         (d)(v) of this Section 7), except as may be necessary in the
         performance of his duties hereunder, any Confidential Information, and
         (ii) commencing on the Date of Termination, he will not disparage or
         comment negatively about any of the Res-Care Companies, or their
         respective officers, directors, employees, policies or practices, and
         he will not discourage anyone from doing business with any of the
         Res-Care Companies and will not encourage anyone to withdraw their
         employment with any of the Res-Care Companies.

                  (c) Covenants. Having acknowledged the statements in Section
         7(a) hereof, Employee covenants and agrees with the Res-Care Companies
         that he will not, directly or indirectly, from the Commencement Date
         until the Date of Termination, and for a period of twelve (12) months
         thereafter, directly or indirectly (i) offer employment to, hire,
         solicit, divert or appropriate to himself or any other Person, any
         business or services (similar in nature to the Business) of any Person
         who was an employee or an agent of any of the Res-Care Companies at any
         time during the last twelve (12) months of Employee's employment
         hereunder; or (ii) own, manage, operate, join, control, assist,
         participate in or be connected with, directly or indirectly, as an
         officer, director, shareholder, partner, proprietor, employee, agent,
         consultant, independent contractor or otherwise, any Person which is,
         at the time, directly or indirectly, engaged in the Business of the
         Res-Care Companies within the Territory. The Employee further agrees
         that from the Commencement Date until the Date of Termination, he will
         not undertake any planning for or organization of any business activity
         that would be competitive with the Business. Notwithstanding the
         foregoing, Employee agrees that if this Employment Agreement shall be
         terminated by reason of expiration of the Term (irrespective of which
         party elected not to extend the Term), the covenants in this paragraph
         (c) shall survive the expiration thereof until twelve (12) months after
         the last day of employment of Employee by any Res-Care Company.

                  (d) Definitions. For purposes of this Employment Agreement:

                           (i) For purposes of this Section 7, "termination of
                  Employee's employment" shall include any termination pursuant
                  to paragraphs (b), (c) and (d) of Section 4 hereof, the
                  termination of such Employee's employment by reason of


                                       11
<PAGE>

                  the failure of the parties hereto to agree to the extension of
                  this Agreement pursuant to Section 1 hereof or the voluntary
                  termination of Employee's employment hereunder.

                           (ii) The "Territory" shall mean the forty-eight (48)
                  contiguous states of the United States, the United States
                  Virgin Islands, Puerto Rico and all of the Provinces of
                  Canada.

                           (iii) "Confidential Information" shall mean any
                  business information relating to the Res-Care Companies or to
                  the Business (whether or not constituting a trade secret),
                  which has been or is treated by any of the Res-Care Companies
                  as proprietary and confidential and which is not generally
                  known or ascertainable through proper means. Without limiting
                  the generality of the foregoing, so long as such information
                  is not generally known or ascertainable by proper means and is
                  treated by the Res-Care Companies as proprietary and
                  confidential, Confidential Information shall include the
                  following information regarding any of the Res-Care Companies:

                                    (1)     any patent, patent application,
                                            copyright, trademark, trade name,
                                            service mark, service name,
                                            "know-how" or trade secrets;

                                    (2)     customer lists and information
                                            relating to (i) any client of any of
                                            the Res-Care Companies or (ii) any
                                            client of the operations of any
                                            other Person for which operations
                                            any of the Res-Care Companies
                                            provides management services;

                                    (3)     supplier lists, pricing policies,
                                            consulting contracts and competitive
                                            bid information;

                                    (4)     records, compliance and/or
                                            operational methods and Company
                                            policies and procedures, including
                                            manuals and forms;

                                    (5)     marketing data, plans and
                                            strategies;

                                    (6)     business acquisition, development,
                                            expansion or capital investment plan
                                            or activities;

                                    (7)     software and any other confidential
                                            technical programs;

                                    (8)     personnel information, employee
                                            payroll and benefits data;

                                    (9)     accounts receivable and accounts
                                            payable;


                                       12
<PAGE>

                                    (10)    other financial information,
                                            including financial statements,
                                            budgets, projections, earnings and
                                            any unpublished financial
                                            information; and

                                    (11)    correspondence and communications
                                            with outside parties.

                           (iv) The "Business" of the Res-Care Companies shall
                  mean the business of providing training or job placement
                  services as provided in the Company's Employment and Training
                  Services Group, youth treatment or services, home care or
                  periodic services to the elderly, services to persons with
                  mental retardation and other developmental disabilities,
                  including but not limited to persons who have been dually
                  diagnosed, services to persons with acquired brain injuries,
                  or providing management and/or consulting services to third
                  parties relating to any of the foregoing.

                           (v) The term "Person" shall mean an individual, a
                  partnership, an association, a corporation, a trust, an
                  unincorporated organization, or any other business entity or
                  enterprise.

                  (e) Injunctive Relief, Invalidity of any Provision. Employee
         acknowledges that his breach of any covenant contained in this Section
         7 will result in irreparable injury to the Res-Care Companies and that
         the remedy at law of such parties for such a breach will be inadequate.
         Accordingly, Employee agrees and consents that each of the Res-Care
         Companies in addition to all other remedies available to them at law
         and in equity, shall be entitled to seek both preliminary and permanent
         injunctions to prevent and/or halt a breach or threatened breach by
         Employee of any covenant contained in this Section 7. If any provision
         of this Section 7 is invalid in part or in whole, it shall be deemed to
         have been amended, whether as to time, area covered, or otherwise, as
         and to the extent required for its validity under applicable law and,
         as so amended, shall be enforceable. The parties further agree to
         execute all documents necessary to evidence such amendment.

                  (f) Advice to Future Employers. If Employee, in the future,
         seeks or is offered employment by any other Person, he shall provide a
         copy of this Section 7 to the prospective employer prior to accepting
         employment with that prospective employer.

         8. ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Employment Agreement
constitutes the entire agreement between the parties pertaining to the subject
matter contained in it and supersedes all prior and contemporaneous agreements,
representations, and understandings of the parties, including but not limited to
the Prior Agreement. Notwithstanding the foregoing, the termination of the Prior
Agreement shall not affect Employee's rights to any unpaid Incentive Bonus (as
defined in the Prior Agreement) that may have been earned by Employee for the
calendar year 2005 (without regard to the increase in Base Salary provided in
Section 3(a) hereof) or any vesting of any stock options previously granted to
Employee. No supplement, modification, or amendment of this Employment Agreement
shall be binding unless executed in writing by all parties hereto (other than as
provided in the next to last sentence of Section 7(e)


                                       13
<PAGE>

hereof). No waiver of any of the provisions of this Employment Agreement will be
deemed, or will constitute, a waiver of any other provision, whether or not
similar, nor will any waiver constitute a continuing waiver. No waiver will be
binding unless executed in writing by the party making the waiver.

         9. SUCCESSORS AND ASSIGNS; ASSIGNMENT. This Employment Agreement shall
be binding on, and inure to the benefit of, the parties hereto and their
respective heirs, executors, legal representatives, successors and assigns;
provided, however, that this Employment Agreement is intended to be personal to
the Employee and the rights and obligations of the Employee hereunder may not be
assigned or transferred by him.

         10. NOTICES. All notices, requests, demands and other communications
required or permitted to be given or made under this Employment Agreement, or
any other agreement executed in connection therewith, shall be in writing and
shall be deemed to have been given on the date of delivery personally or upon
deposit in the United States mail postage prepaid by registered or certified
mail, return receipt requested, to the appropriate party or parties at the
following addresses (or at such other address as shall hereafter be designated
by any party to the other parties by notice given in accordance with this
Section):

                  To the Company:
                  --------------
                  Res-Care, Inc.
                  10140 Linn Station Road
                  Louisville, Kentucky 40223
                  Attn:    Ronald G. Geary,
                           Chairman, President and Chief Executive Officer

                  To the Employee:
                  ---------------
                  David W. Miles
                  17208 Polo Fields Lane
                  Louisville, Kentucky 40245

         11. EXECUTION IN COUNTERPARTS. This Employment Agreement may be
executed in multiple counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same document.

         12. FURTHER ASSURANCES. The parties each hereby agree to execute and
deliver all of the agreements, documents and instruments required to be executed
and delivered by them in this Employment Agreement and to execute and deliver
such additional instruments and documents and to take such additional actions as
may reasonably be required from time to time in order to effectuate the
transactions contemplated by this Employment Agreement.

         13. SEVERABILITY OF PROVISIONS. The invalidity or unenforceability of
any particular provision of this Employment Agreement shall not affect the other
provisions hereof and this


                                       14
<PAGE>

Employment Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.

         14. GOVERNING LAW; JURISDICTION; VENUE. This Employment Agreement is
executed and delivered in, and shall be governed by, enforced and interpreted in
accordance with the laws of, the Commonwealth of Kentucky. The parties hereto
agree that the federal or state courts located in Kentucky shall have the
exclusive jurisdiction with regard to any litigation relating to this Employment
Agreement and that venue shall be proper only in Jefferson County, Kentucky, the
location of the principal office of the Company.

         15. TENSE; CAPTIONS. In construing this Employment Agreement, whenever
appropriate, the singular tense shall also be deemed to mean the plural, and
vice versa, and the captions contained in this Employment Agreement shall be
ignored.

         16. SURVIVAL. The provisions of Sections 5, 6 and 7 hereof shall
survive the termination, for any reason, of this Employment Agreement, in
accordance with their terms.


    [Remainder of page intentionally blank - signatures begin on next page.]


                                       15
<PAGE>



         IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement on the dates set forth below.

                                         RES-CARE, INC.


Date:    March 6, 2006                   By: /s/ Ronald G. Geary
      -----------------------                ----------------------------------
                                             Ronald G. Geary
                                             Chairman, President and Chief
                                             Executive Officer




Date:    March 6, 2006                    /s/ David W. Miles
      -----------------------             -------------------------------------
                                          David W. Miles



                                       16