Document:

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                                                                   EXHIBIT 10.16

                                 RES-CARE, INC.
                             STOCK OPTION AGREEMENT

      This INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") is made and
entered into as of this ___ day of ____, _____, by and between RES-CARE, INC., a
Kentucky corporation (the "Company") and ________, an employee of the Company
("Optionee").

      RECITALS:

      WHEREAS, the Res-Care, Inc. 2000 Stock Option and Incentive Compensation
Plan (the "Plan") for certain officers and employees of the Company was adopted
on July 21, 2000, and amended and restated on September 28, 2000.

      WHEREAS, the Board of Directors (the "Board") and the Executive
Compensation Committee (the "Committee") has determined that it is in the best
interest of the Company and appropriate to the stated purposes of the Plan that
the Company grant to the Optionee an option to purchase shares of the Company's
common stock ("Shares") pursuant and subject to the terms, definitions, and
conditions of the Plan.

      NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth and other good and valuable consideration, the Company and
Optionee agree as follows:

      1. INCORPORATION OF PLAN. This Agreement is and shall be in all respects
subject to the terms and conditions of the Plan, a copy of which Optionee
acknowledges receiving at the time of the execution hereof. The rights of
Optionee and the obligations of the Company hereunder are subject to the terms
and conditions of the Plan, including, without limitation, those dealing with
the payment of federal, state and local taxes upon the exercise, in whole or in
part, of the Option. Any decision made, or action taken, by the Board or the
Committee of the Company arising out of or in connection with the interpretation
and administration of the Plan shall be final and conclusive. All defined terms
used herein which are defined in the Plan, shall have the meanings set forth in
the Plan, unless a different meaning is plainly required by the context.

      2. GRANT OF THE OPTION; EXERCISE PRICE. The Company hereby grants to
Optionee, subject to the terms and conditions of the Plan and of this Agreement,
as a matter of separate inducement and agreement in connection with Optionee's
employment by the Company the right and option to purchase (the "Option") all or
any part of an aggregate of _____ shares of Common Stock ("Option Shares")
subject to adjustment as provided in the Plan, at a purchase price of $______
per share (the "Exercise Price"). The Options are designated as Incentive Stock
Options except to the extent that they do not qualify under Section 422 of the
Code.

      3. EXERCISE OF THE OPTION. The Option may be exercised at any time, and
from time to time, during a five-year period commencing _________ to and
including ________________, ("Termination Date") on a cumulative basis in
accordance with the following schedule; provided, however that the Optionee
continues to be employed by the Company as of such dates:

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<TABLE>
<CAPTION>
Date On And After Which    % Of Total Shares Which
Option May Be Exercised       May be Purchased
-----------------------    -----------------------
<S>                        <C>
    ________________                25%
    ________________                25%
    ________________                25%
    ________________                25%
</TABLE>

            (a) CHANGE OF CONTROL. Notwithstanding any provisions limiting
exercisability in whole or in part, and unless the Board of Directors shall have
otherwise determined (within the limits specified in the last sentence of this
paragraph) to revoke or to limit, in its sole and conclusive discretion, the
acceleration provided for herein, in the event of a Change of Control, as
defined in the Plan, all Options granted under this Agreement, which have not
yet vested and have not been previously forfeited, shall immediately vest and be
exercisable.

                The Board may, at its discretion, revoke or limit the
acceleration contemplated by this paragraph any time before or within 20
business days after the effective date of such Change of Control.

            (b) PARTIAL EXERCISE. Subject to the limitations expressed herein,
the Option may be exercised with respect to all or a part of the Option Shares
that are currently exercisable; provided, however, that no partial exercise of
the Option shall result in the issuance of less than 100 Option Shares.

      4.    CONDITIONS TO EXERCISE OF THE OPTION.

            (a) EXERCISE OF THE OPTION. Subject to the provisions of Section
3(b), Optionee may exercise the Option by delivering written notice ("Notice")
of exercise to the Company in the form of Exhibit A hereto or other form
acceptable to the Company specifying the number of Option Shares to be
purchased, accompanied by payment in full of the Exercise Price in accordance
with Section 4(b).

            (b) DELIVERY OF SHARES ON EXERCISE. As soon as possible after
receipt of the Notice and payment of the Exercise Price, the Company shall
deliver to Optionee, without transfer or issuance tax or other incidental
expense to Optionee, at the office of the Company, or at such other place as may
be mutually acceptable, or, at the election of the Company, by certified mail
addressed to Optionee at Optionee's address shown in the employment records of
the Company, a certificate or certificates for the number of shares of Common
Stock set forth in the Notice and for which the Company has received payment in
the manner prescribed herein. The Company may postpone such delivery until it
receives satisfactory proof that the issuance or transfer of such shares will
not violate any of the provisions of the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, any rules or regulations of the
Securities and Exchange Commission promulgated thereunder or the requirements of
applicable state law relating to authorization, issuance or sale of securities
or applicable policies of the Company. If Optionee fails to accept delivery of
all or any part of the number of shares of Common Stock specified in such notice
upon tender of delivery thereof, Optionee's right to exercise the Option for
such undelivered shares may be terminated by the Company.

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      5. TRANSFER OF OPTION. During Optionee's lifetime, the Option shall be
exercisable only by Optionee or Optionee's duly appointed guardian or personal
representative; and neither the Option or any right hereunder shall be
transferable other than by will or the laws of descent and distribution except
as otherwise provided in the Plan. The Option may not be subject to execution or
other similar process. If Optionee attempts to alienate, assign, pledge,
hypothecate or otherwise dispose of the Option or any of Optionee's rights
hereunder, except as provided herein, or in the event of any levy or any
attachment, execution or similar process upon the rights or interests hereby
conferred, the Company may terminate the Option by notice to Optionee and it
shall thereupon become null and void.

      6. EXERCISE OF THE OPTION UPON TERMINATION OF EMPLOYMENT. In the event
Optionee shall cease to be employed by the Company, the Option shall expire at
the earlier of the expiration of the Termination Date or the following:

            (i)   one year after termination due to Optionee's death or
                  Disability;

            (ii)  three months after Termination of Employment for any reasons
                  other than those described in (i) above or Termination for
                  Cause; or

            (iii) coincident with the date of Termination for Cause.

      7. MISCELLANEOUS.

            (a) AGREEMENT DOES NOT GRANT EMPLOYMENT RIGHTS. The grant of the
Option shall not be construed as giving Optionee the right to be retained in
employment by the Company. Further, the Company expressly reserves the right, at
any time, to terminate Optionee's employment or to change Optionee's
compensation with or without cause, free from any liability or any claim under
the Plan, except as provided in this Agreement, in the Plan or an employment
agreement.

            (b) LIABILITY OF THE COMPANY. Neither the Company, its directors,
officers or employees shall be liable to Optionee or any other person if it is
determined for any reason by the Internal Revenue Service or any court having
jurisdiction that the Option does not qualify for tax treatment as an incentive
stock option under section 422 of the Code.

            (c) NO RIGHTS AS SHAREHOLDER. Optionee shall have no rights to
dividends (other than the adjustment rights described in Section 7 of this
Agreement) or other rights of a shareholder with respect to Option Shares unless
and until Optionee has given the Notice and paid in full for such Option Shares.

            (d) GOVERNING LAW; CONSTRUCTION. This Agreement shall be governed
by, and construed in accordance with, the laws of the Commonwealth of Kentucky,
and shall be construed in such fashion so that the Option qualifies as an
incentive stock option within the meaning of section 422 of the Code.

      8. TERM OF AGREEMENT. This Agreement shall terminate upon earlier of (i)
complete exercise or termination of the Option; (ii) mutual agreement of the
parties, or (iii) expiration of the Option Period.

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      IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

                                       RES-CARE, INC.

                                       By: _____________________________________
                                           Ronald G. Geary
                                           President and Chief Executive Officer

                                       OPTIONEE

                                       By: _____________________________________

                                       Printed Name:

                                      4<PAGE>

                                                                   EXHIBIT 10.17

                                 RES-CARE, INC.
                  NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT

      THIS STOCK OPTION AGREEMENT (this "Agreement") is made and entered into as
of this 1st day of July, _____, by and between RES-CARE, INC., a Kentucky
corporation (the "Company") and ______________, a non-employee director of the
Company ("Optionee").

      RECITALS:

      WHEREAS, the Res-Care, Inc. 2000 Non-Employee Directors Stock Ownership
Incentive Plan (the "Plan") for certain non-employee directors of the Company
(`Director or Directors") was adopted July 21, 2000;

      WHEREAS, pursuant to the Plan, Optionee is granted an option to purchase
shares of the common stock, no par value ("Common Stock"), of the Company under
the terms and conditions of the Plan;

      NOW, THEREFORE, in consideration of the premises, mutual covenants and
other good and valuable consideration, the Company and Optionee agree as
follows:

      1. GRANT OF THE OPTION; EXERCISE PRICE. The Company hereby grants to
Optionee, as a matter of separate inducement and agreement in connection with
Optionee's service as a Director of the Company, and not in lieu of any other
compensation for Optionee's services, the right and option to purchase (the
"Option") all or any part of an aggregate of 4,500 shares of Common Stock
("Option Shares") on the terms and conditions set forth herein and in the Plan,
subject to adjustment as provided in Section 7, at a purchase price of $____ per
share (the "Option Exercise Price"). Company and Optionee consider the Option
Price to be not less than Fair Market Value (as defined in the Plan) of the
Common Stock on the date hereof, the date on which the Option was granted to
Optionee ("Option Date").

      2. EXERCISE OF THE OPTION. The Option may be exercised at any time, and
from time to time, during a five-year period commencing July 1, ______, to and
including July 1, ______ (the "Termination Date"), on a cumulative basis, in
accordance with the following Schedule; provided, however, that the Optionee
continues to serve as a Director of the Company as of such dates:

<TABLE>
<CAPTION>
Date on and After Which    % of Total Option Shares
  Option is Exercised        Which May Be Purchased
-----------------------    ------------------------
<S>                        <C>
     July 1, ____                    25%
     July 1, ____                    50%
     July 1, ____                    75%
     July 1, ____                   100%
</TABLE>

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If Optionee ceases to be a Director of the Company as defined in the Plan for
any reason, Optionee shall have no rights with respect to that portion of the
Option which is not then exercisable pursuant to the Schedule and Optionee shall
automatically forfeit that portion of the Option that is not then exercisable.

      3. PARTIAL EXERCISE. Subject to the limitations expressed herein, the
Option may be exercised with respect to all or a part of the Option Shares that
are currently exercisable; provided, however, that no partial exercise of the
Option shall result in the issuance of fractional Option Shares.

      4. CONDITIONS TO EXERCISE OF THE OPTION.

          (a) EXERCISE OF THE OPTION. Subject to the provisions of Section 3,
Optionee may exercise the Option by delivering written notice ("Notice") of
exercise in substantially the form of Exhibit A or an equivalent to the
Secretary of the Company at the Company's principal executive office specifying
the number of Option Shares to be purchased, accompanied by payment in full of
the Exercise Price in accordance with Section 4(b).

          (b) PAYMENT OF EXERCISE PRICE. The Company shall accept as payment for
the Exercise Price either 1) cash, or 2) a check payable to the order of the
Company in the amount of the Exercise Price multiplied by the number of shares
for which the Option is being exercised, or 3) any other form of payment
established under the Plan.

          (c) DELIVERY OF SHARES ON EXERCISE. As soon as practicable after
receipt of the Notice and payment of the Exercise Price, the Company shall
deliver to Optionee, without transfer or issuance tax or other incidental
expense to Optionee, at the office of the Company, or at such other place as may
be mutually acceptable, or, at the election of the Company, by certified mail
addressed to Optionee at Optionee's address shown in the records of the Company,
a certificate or certificates for the number of shares of Common Stock set forth
in the Notice and for which the Company has received payment in the manner
prescribed herein. The Company may postpone such delivery until it receives
satisfactory proof that the issuance or transfer of such shares will not violate
any of the provisions of the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, any rules or regulations of the
Securities and Exchange Commission promulgated thereunder, or the requirements
of applicable state law relating to authorization, issuance or sale of
securities, or until there has been compliance with the provisions of such acts
or rules. If Optionee fails to accept delivery of all or any part of the number
of shares of Common Stock specified in such notice upon tender of delivery
thereof, Optionee's right to exercise the Option for such undelivered shares may
be terminated by the Company.

      5. OPTION NOT TRANSFERABLE EXCEPT IN EVENT OF DEATH. During Optionee's
lifetime, the Option shall be exercisable only by Optionee or a duly appointed
guardian or personal representative, and neither the Option nor any right
hereunder shall be transferable other than by will or the laws of descent and
distribution except as otherwise

                                       2
<PAGE>

provided in the Plan. The Option may not be subject to execution or other
similar process. If Optionee attempts to alienate, assign, pledge, hypothecate
or otherwise dispose of the Option or any of Optionee's rights hereunder, except
as provided herein, or in the event of any levy or any attachment, execution or
similar process upon the rights or interests hereby conferred, the Company may
terminate the Option by notice to Optionee and it shall thereupon become null
and void.

      6. EXERCISE OF THE OPTION UPON TERMINATION OF DIRECTOR RELATIONSHIP. In
the event Optionee shall cease to be a Director of the Company, the Option shall
expire at the earlier of the expiration of the Termination Date or the
following:

            (i) Ninety days after Optionee ceases to be a member of the Board
due to any reason other than Retirement, death or Disability;

            (ii) one year after Optionee's Retirement, determination of
Optionee's Disability or Optionee's death.

      7. ADJUSTMENT TO OPTION SHARES. The number and/or class of Option
Shares shall be subject to adjustment as provided in Article 4.2 of the Plan.

      8. AGREEMENT DOES NOT GRANT MEMBERSHIP RIGHTS. The grant of the
Option shall not be construed as giving Optionee the right to continued
membership on the Board, renomination by the Board or re-election by the
shareholders of the Company.

      9. MISCELLANEOUS.

          (a) NO RIGHTS AS SHAREHOLDER. Optionee shall have no rights to
dividends (other than the adjustment rights in Section 4.2 of the Plan) or other
rights of a shareholder with respect to Option Shares unless and until Optionee
has given the Notice and paid in full for such Option Shares.

          (b) WITHHOLDING. Upon exercise of the Option, the Optionee shall pay
any federal, state or local withholding taxes attributable to any exercise of
the Option prior to issuance of such shares, as provided in the Plan.

          (c) INCORPORATION OF PLAN. This Agreement is and shall be in all
respects subject to the terms and conditions of the Plan, a copy of which
Optionee acknowledges receiving prior to the execution hereof. The rights of
Optionee and the obligations of the Company hereunder are subject to compliance
with the terms and conditions of the Plan. Any decision made, or action taken,
by the Board arising out of or in connection with the interpretation and
administration of the Plan shall be final and conclusive.

          (d) CAPTIONS. The captions and section headings used herein are for
convenience only, shal10 l not be deemed part of this Agreement and shall not in
any way restrict or modify the context and substance of any section or paragraph
of this Agreement.

                                       3
<PAGE>

              (e) GOVERNING LAW; CONSTRUCTION. This Agreement shall be governed
by, and construed in accordance with, the laws of the Commonwealth of Kentucky.

              (f) DEFINED TERMS. All defined terms used herein which are defined
in the Plan, shall have the meanings set forth in the Plan, unless a different
meaning is plainly required by the context.

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

                                      RES-CARE, INC.
                                      (the "Company")

                                      __________________________________________
                                      Ronald G. Geary
                                      President and Chief Executive Officer

                                      ____________________
                                      ("Optionee")

                                      ____________________

                                       4
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                                   EXHIBIT "A"

Res-Care, Inc.
10140 Linn Station Road
Louisville, KY 40223

      RE: Exercise of Incentive Stock Option

      Pursuant to the 2000 Nonemployee Directors Stock Ownership Incentive Plan
of Res-Care, Inc. (the "Company"), and the Stock Option Agreement dated
___________________ between the Company and the undersigned, the undersigned
hereby elects to exercise the option granted thereunder to purchase an aggregate
of __________ shares of Common Stock of the Company (the "Option Shares"). As
payment of the exercise price for the Option Shares, enclosed herewith is a
check payable to Res-Care, Inc. in the amount of $______________. I understand
the holding periods that apply to a disposition of this stock and that I must
notify the Company if i dispose of this stock in a "Disqualifying Disposition"
as described in the Summary Description of the Incentive Plan.

                                                 _______________________________

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