Document:

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                                                                    EXHIBIT 10.5

                      CHANGE-IN-CONTROL SEVERANCE AGREEMENT

        THIS CHANGE-IN-CONTROL SEVERANCE AGREEMENT (the "Agreement") is made as
of February 25, 2003 by and between KINDRED HEALTHCARE OPERATING, INC., a
Delaware corporation, (the "Company") and Mark A. McCullough, (the "Employee").

        RECITALS:

        A.      The Employee is employed by the Company, a wholly owned
subsidiary of Kindred Healthcare, Inc. (the "Parent").

        B.      The Company recognizes that the Employee's contribution to the
Company's growth and success has been and continues to be significant.

        C.      The Company wishes to encourage the Employee to remain with and
devote full time and attention to the business affairs of the Company and wishes
to provide income protection to the Employee for a period of time in the event
of a Change in Control.

        NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

        AGREEMENT:

        1.      Definitions.

                a.      "Base Salary" shall mean the Employee's regular annual
rate of base pay in gross as of the date in question as elected under Paragraph
3(a).

                b.      "Cause" shall mean the Employee's (i) conviction of or
plea of nolo contendere to a crime involving moral turpitude; or (ii) willful
and material breach by Employee of his duties and responsibilities, which is
committed in bad faith or without reasonable belief that such breaching conduct
is in the best interests of the Company, but with respect to (ii) only if the
Board of Directors of Parent (the "Board") adopts a resolution by a vote of at
least 75% of its members so finding after giving the Employee and his attorney
an opportunity to be heard by the Board.

                c.      "Change in Control" The term "Change in Control" shall
mean any one of the following events occurring after the date of this Agreement:

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                (i)     An acquisition (other than directly from Parent) of any
voting securities of Parent (the "Voting Securities") by any "Person" (as
defined in Paragraph 1(f) hereof) immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13d-3 under the 1934 Act) of
20% or more of the combined voting power of Kindred Healthcare, Inc.'s then
outstanding Voting Securities; provided, however, that in determining whether a
Change in Control has occurred, Voting Securities which are acquired in an
acquisition by (i) Parent or any of its subsidiaries, (ii) an employee benefit
plan (or a trust forming a part thereof) maintained by Parent or any of its
subsidiaries or (iii) any Person in connection with an acquisition referred to
in the immediately preceding clauses (i) and (ii) shall not constitute an
acquisition which would cause a Change in Control.

                (ii)    The individuals who, as of February 25, 2003,
constituted the Board of Directors of Parent (the "Incumbent Board") cease for
any reason to constitute over 50% of the Board; provided, however, that if the
election, or nomination for election by Kindred Healthcare, Inc.'s stockholders,
of any new director was approved by a vote of over 50% of the Incumbent Board,
such new director shall, for purposes of this Section 1(c)(ii), be considered as
though such person were a member of the Incumbent Board; provided, further,
however, that no individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated under the
1934 Act) or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of Directors of Parent (a "Proxy
Contest"), including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest.

                (iii)   Consummation of a merger, consolidation or
reorganization involving Parent, unless each of the following events occurs in
connection with such merger, consolidation or reorganization:

                        (A)     the stockholders of Parent, immediately before
such merger, consolidation or reorganization, own, directly or indirectly
immediately following such merger, consolidation or reorganization, over 50% of
the combined voting power of all voting securities of the corporation resulting
from such merger or consolidation or reorganization (the "Surviving Company")
over which any Person has Beneficial Ownership in substantially the same
proportion as their ownership of the Voting Securities immediately before such
merger, consolidation or reorganization;

                        (B)     the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing
for such merger, consolidation or reorganization constitute over 50% of the
members of the board of directors of the Surviving Company; and

                        (C)     no Person (other than Parent, any of its
subsidiaries, any employee benefit plan (or any trust forming a part thereof)
maintained by Parent, the Surviving Company or any Person who, immediately prior
to such merger, consolidation or reorganization had

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Beneficial Ownership of 20% or more of the then outstanding Voting Securities)
has Beneficial Ownership of 20% or more of the combined voting power of the
Surviving Company's then outstanding voting securities.

                (iv)    Approval by Parent's stockholders of a complete
liquidation or dissolution of Parent.

                (v)     Approval by Parent's stockholders of an agreement for
the sale or other disposition of all or substantially all of the assets of
Parent to any Person (other than a transfer to a subsidiary of Parent).

                (vi)    Any other event that the Board shall determine
constitutes an effective Change in Control of Parent.

                (vii)   Notwithstanding the foregoing, a Change in Control shall
not be deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by Parent which,
by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person; provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of Voting Securities by Parent, and after such
share acquisition by Parent, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the percentage of the then
outstanding Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur.

                d.      "Change-in-Control Date" shall mean the date immediately
prior to the effectiveness of the Change in Control.

                e.      "Good Reason" The Employee shall have good reason to
terminate employment with the Company if (i) the Employee's title, duties,
responsibilities or authority is reduced or diminished from those in effect on
the Change-in-Control Date without the Employee's written consent; (ii) the
Employee's compensation is reduced; (iii) the Employee's benefits are reduced,
other than pursuant to a uniform reduction applicable to all managers of the
Company; or (iv) the Employee is asked to relocate his office to a place more
than 30 miles from his business office on the Change-in-Control Date.

                f.      "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Securities Exchange Act of 1934 and used in Sections
13(d) and 14(d) thereof, including a "group" as defined in Section 13(d).

                g.      "Target Bonus" shall mean the full amount of target
annual incentive bonus that would be payable to the Employee, assuming the
target performance criteria on which such annual incentive bonus were deemed to
be satisfied, in respect of services for the calendar year in which the date in
question occurs.

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                h.      "Termination of Employment" shall mean (i) the
termination of the Employee's employment by the Company other than such a
termination in connection with an offer of immediate reemployment by a successor
or assign of the Company or a purchaser of the Company or its assets under terms
and conditions which would not permit the Employee to terminate his employment
for Good Reason or otherwise during any Window Period; or (ii) the Employee's
termination of employment with the Company for Good Reason or during any Window
Period.

                i.      "Window Period" shall mean either of two 30-day periods
of time commencing 30 days after (i) a Change in Control and (ii) one year after
a Change in Control.

        2.      Term. The initial term of this Agreement shall be for a
three-year period commencing on February 25, 2003 (the "Effective Date") (the
"Term"). The Term shall be automatically extended by one additional day for each
day beyond the Effective Date that the Employee remains employed by the Company
until such time as the Company elects to cease such extension by giving written
notice of such election to the Employee. In such event, the Agreement shall
terminate on the third anniversary of the effective date of such election
notice. Notwithstanding the foregoing, this Agreement shall automatically
terminate if and when the Employee terminates his employment with the Company or
two years after the Change-in-Control Date, whichever first occurs.

        3.      Severance Benefits. If at any time following a Change in Control
and continuing for two years thereafter, the Company terminates the Employee
without Cause, or the Employee terminates employment with the Company either for
Good Reason or during any Window Period, then as compensation for services
previously rendered the Employee shall be entitled to the following benefits:

                a.      Cash Payment. The Employee shall be paid cash equal to
three times the greater of:

                        (i)     the sum of the Employee's Base Salary and Target
Bonus as of the Termination of Employment, or

                        (ii)    the sum of the Employee's Base Salary and Target
Bonus as of the Change-in-Control Date.

Payment shall be made in a single lump sum upon the Employee's effective date of
termination.

                b.    Continuation of Benefits.

                        (i)     For a period of three years following the
Termination of Employment, the Employee shall be treated as if he had continued
to be an employee for all purposes under Parent's Health Insurance Plan and
Dental Insurance Plan; or if the Employee is prohibited from participating in
such plan, the Company or Parent shall otherwise provide such benefits.
Following this continuation period, the Employee shall be entitled to receive
continuation

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coverage under Part 6 of Title I or ERISA ("COBRA Benefits") treating the end of
this period as a termination of the Employee's employment if allowed by law.

                        (ii)    For a period of three years following the
Termination of Employment, Parent shall maintain in force, at its expense, the
Employee's life insurance in effect under Parent's Voluntary Life Insurance
Benefit Plan as of the Change-in-Control Date or as of the date of Termination
of Employment, whichever coverage limits are greater.

                        (iii)   For a period of three years following the
Employee's Termination of Employment, the Company or Parent shall provide
short-term and long-term disability insurance benefits to Employee equivalent to
the coverage that the Employee would have had had he remained employed under the
disability insurance plans applicable to Employee on the date of Termination of
Employment, or, at the Employee's election, the plans applicable to Employee as
of the Change-in-Control Date. Should Employee become disabled during such
period, Employee shall be entitled to receive such benefits, and for such
duration, as the applicable plan provides.

                c.      Retirement Savings Plan. To the extent not already
vested pursuant to the terms of such plan, the Employee's interests under the
Parent's Retirement Savings Plan shall be automatically fully (i.e., 100%)
vested, without regard to otherwise applicable percentages for the vesting of
employer-matching contributions based upon the Employee's years of service with
the Company.

                d.      Plan Amendments. Parent shall adopt such amendments to
its employee benefit plans, if any, as are necessary to effectuate the
provisions of this Agreement.

                e.      Fringe Benefits. Following the Employee's Termination of
Employment, the Employee shall receive the computer that Employee is utilizing
as of the date of such Termination of Employment. In addition, for a period of
one year following Employee's Termination of Employment, Employee shall be
entitled to be reimbursed for any legal or accounting services utilized by
Employee to minimize any personal income tax obligations arising from the Change
in Control, in an amount not to exceed $5,000.

        4.      Golden Parachute Tax Reimbursement. Whether or not any payments
are made pursuant to Section 3 above, if a Change in Control occurs at any time
and the Employee reasonably determines that any payment or distribution by the
Company or any of its affiliates to or for the benefit of the Employee, whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement, including without limitation any restricted stock,
stock option, stock appreciation right or similar right, or the lapse or
termination of any restriction on or the vesting or exercisablility of any of
the foregoing (individually and collectively, the "Payment"), would be subject
to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended (the "Code") (or any successor provision thereto) by reason of being
considered "contingent on a change in ownership or control," within the meaning
of Section 280G of the Code (or any successor provision thereto), or any
interest or penalties

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with respect to such excise tax (such excise tax, together with any such
interest and penalties, being hereinafter collectively referred to as the
"Excise Tax"), then the Company or Parent shall pay to the Employee an
additional payment or payments (individually and collectively, the "Gross-Up
Payment"). The Gross-Up Payment shall be in an amount such that, after payment
by the Employee of all taxes required to be paid by the Employee with respect to
the receipt thereof under the terms of any federal, state or local government or
taxing authority (including any interest or penalties imposed with respect to
such taxes), including any Excise Tax imposed with respect to the Gross-Up
Payment, the Employee retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payment. The Gross-Up Payment shall be paid to the
Employee within 30 days of the Company's receipt of written notice from the
Employee that such Excise Tax has been paid or will be payable at any time in
the future.

        5.      No Mitigation Required or Setoff Permitted. In no event shall
Employee be obligated to seek other employment or take other action by way of
mitigation of the amounts payable to Employee under the terms of this Agreement,
and all such amounts shall not be reduced whether or not Employee obtains other
employment. Further, the Company's and Parent's obligations to make any payments
hereunder shall not be subject to or affected by any setoff, counterclaims or
defenses which the Company or Parent may have against Employee or others.

        6.      Waiver of Other Severance Benefits. The benefits payable
pursuant to this Agreement are in lieu of any other severance benefits which may
otherwise be payable by the Company or its affiliates to the Employee upon
termination of employment pursuant to a severance program of the Company or its
affiliates (including, without limitation, any benefits to which Employee might
otherwise be entitled under any other severance or change in control or similar
agreement previously entered into between Employee and the Company or any of its
affiliates).

        7.      Employment at Will. Notwithstanding anything to the contrary
contained herein, the Employee's employment with the Company is not for any
specified term and may be terminated by the Employee or by the Company at any
time, for any reason, with or without cause, without any liability, except with
respect to the payments provided hereunder or as required by law or any other
contract or employee benefit plan.

        8.      Disputes. Any dispute or controversy arising under, out of, or
in connection with this Agreement shall, at the election and upon written demand
of either party, be finally determined and settled by binding arbitration in the
City of Louisville, Kentucky, in accordance with the Labor Arbitration rules and
procedures of the American Arbitration Association, and judgment upon the award
may be entered in any court having jurisdiction thereof. The Company shall pay
all costs of the arbitration and all attorneys' and accountants' fees of the
Employee in connection therewith, including any litigation to enforce any
arbitration award.

        9.      Non-solicitation. During the Term and for a period of one year
thereafter (collectively, the "Non-solicitation Period"), Employee shall not
directly or indirectly, individually or on behalf of any person other than the
Company, aid or endeavor to solicit or induce any of the

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Company's or its affiliates' employees to leave their employment with the
Company or such affiliates in order to accept employment with Employee or any
other person, corporation, limited liability company, partnership, sole
proprietorship or other entity. If the restrictions set forth in this section
would otherwise be determined to be invalid or unenforceable by a court of
competent jurisdiction, the parties intend and agree that such court shall
exercise its discretion in reforming the provisions of this Agreement to the end
that the Employee will be subject to a non-solicitation covenant which is
reasonable under the circumstances and enforceable by the Company. It is agreed
that no adequate remedy at law exists for the parties for violation of this
section and that this section may be enforced by any equitable remedy, including
specific performance and injunction, without limiting the right of the Company
to proceed at law to obtain such relief as may be available to it. The running
of the Non-solicitation Period shall be tolled for any period of time during
which Employee is in violation of any covenant contained herein, for any reason
whatsoever.

        10.     Successors; Binding Agreement. This Agreement shall not be
terminated by the voluntary or involuntary dissolution of the Company or by any
merger or consolidation where the Company is not the surviving corporation, or
upon any transfer of all or substantially all of the Company's stock or assets.
In the event of such merger, consolidation or transfer, the provisions of this
Agreement shall be binding upon and shall inure to the benefit of the surviving
corporation or corporation to which such stock or assets of the Company shall be
transferred.

        11.     Notices. Any notice or other communication hereunder shall be in
writing and shall be effective upon receipt (or refusal of receipt) if delivered
personally, or sent by overnight courier if signature for the receiving party is
obtained, or sent by certified or registered mail, postage prepaid, to the other
party at the address set forth below:

                If to the Company:           Kindred Healthcare Operating, Inc.
                                             680 South Fourth Street
                                             Louisville, KY  40202
                                             Attention:  General Counsel

                If to Employee:              Mark A. McCullough
                                             680 South Fourth Street
                                             Louisville, KY 40202

                Either party may change its specified address by giving notice
in writing to the other.

        12.     Indemnification. The Company shall indemnify, defend and hold
the Employee harmless from and against any liability, damages, costs and
expenses (including attorneys' fees) in connection with any claim, cause of
action, investigation, litigation or proceeding involving him by reason of his
having been an officer, director, employee or agent of the Company, except to
the extent it is judicially determined that the Employee was guilty of gross
negligence or

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willful misconduct in connection with the matter giving rise to the claim for
indemnification. This indemnification shall be in addition to and shall not be
substituted for any other indemnification or similar agreement or arrangement
which may be in effect between the Employee and the Company or may otherwise
exist. The Company also agrees to maintain adequate directors and officers
liability insurance, if applicable, for the benefit of Employee for the term of
this Agreement and for five years thereafter.

        13.     ERISA. Many or all of the employee benefits addressed in
Paragraph 3(b) and (c) exist under plans which constitute employee welfare
benefit plans ("Welfare Plans") within the meaning of Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Any
payments pursuant to this Agreement which could cause any of such Plans not to
constitute a Welfare Plan shall be deemed instead to be made pursuant to a
separate "employee pension benefit plan" within the meaning of Section 3(2) of
ERISA or a "top hat" plan under Section 201(2) of ERISA as to which the
applicable portions of the document constituting the Welfare Plan shall be
deemed to be incorporated by reference. None of the benefits hereunder may be
assigned in any way.

        14.     Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision, which other provision shall remain in full force and
effect.

        15.     Interpretation. The headings used herein are for convenience
only and do not limit or expand the contents of this Agreement. Use of any male
gender pronoun shall be deemed to include the female gender also.

        16.     No Waiver. No waiver of a breach of any provision of this
Agreement shall be construed to be a waiver of any other breach of this
Agreement. No waiver of any provision of this Agreement shall be enforceable
unless it is in writing and signed by the party against whom it is sought to be
enforced.

        17.     Survival. Any provisions of this Agreement creating obligations
extending beyond the term of this Agreement shall survive the expiration or
termination of this Agreement, regardless of the reason for such termination.

        18.     Amendments. Any amendments to this Agreement shall be effective
only if in writing and signed by the parties hereto.

        19.     Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof.

        20.     Governing Law. This Agreement shall be interpreted in accordance
with and governed by the law of the State of Delaware.

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

        22.     Cancellation of Prior Agreement. The Employee hereby
acknowledges and agrees that this Agreement is intended to and does hereby
replace that certain change-in-control severance agreement, between the Company
(or its predecessor) and the Employee, and that such agreement is cancelled,
terminated and of no further force and effect.

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

                                  KINDRED HEALTHCARE OPERATING, INC.

                                  /s/ Edward L. Kuntz
                                  ----------------------------------------------
                                       By:  Edward L. Kuntz
                                            Chairman and Chief Executive Officer

                                       Solely for the purposes of
                                       Sections 3, 4, 5 and 12:

                                       KINDRED HEALTHCARE, INC.

                                       /s/ Edward L. Kuntz
                                       -----------------------------------------
                                       By:  Edward L. Kuntz
                                            Chairman and Chief Executive Officer

                                       /s/ Mark A. McCullough
                                       -----------------------------------------
                                       MARK A. McCULLOUGH

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                                                                    EXHIBIT 10.6

                              EMPLOYMENT AGREEMENT

                This EMPLOYMENT AGREEMENT is made as of the 25th day of February
2003 (the "Effective Date"), by and between Kindred Healthcare Operating, Inc.,
a Delaware corporation (the "Company"), and Joseph L. Landenwich (the
"Executive").

                              W I T N E S S E T H:

                WHEREAS, the Executive is employed by the Company, a
wholly-owned subsidiary of Kindred Healthcare, Inc. ("Parent"), and the parties
hereto desire to provide for the terms of Executive's employment by the Company;
and

                WHEREAS, the Company has determined that it is in the best
interests of the Company to enter into this Agreement.

                NOW, THEREFORE, in consideration of the premises and the
respective covenants and agreements contained herein, and intending to be
legally bound hereby, the Company and Executive agree as follows:

                1.      Employment. The Company hereby agrees to employ
Executive and Executive hereby agrees to be employed by the Company on the terms
and conditions herein set forth. The initial term of this Agreement shall be for
a one-year period commencing on the Effective Date. The term shall be
automatically extended by one additional day for each day beyond the Effective
Date that the Executive remains employed by the Company until such time as the
Company elects to cease such extension by giving written notice of such election
to the Executive (the "Term"). In such event, the Agreement shall terminate on
the first anniversary of the effective date of such election notice.

                2.      Duties. Executive is engaged by the Company as Vice
President of Corporate Legal Affairs and Corporate Secretary.

                3.      Extent of Services. Executive, subject to the direction
and control of the Board of Directors (the "Board"), shall have the power and
authority commensurate with his executive status and necessary to perform his
duties hereunder. During the Term, Executive shall devote his entire working
time, attention, labor, skill and energies to the business of the Company, and
shall not, without the consent of the Company, be actively engaged in any other
business activity, whether or not such business activity is pursued for gain,
profit or other pecuniary advantage.

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                4.      Compensation. As compensation for services hereunder
rendered, Executive shall receive during the Term:

                (a)     Executive's current base salary per year existing on the
        date hereof ("Base Salary") payable in equal installments in accordance
        with the Company's normal payroll procedures. Executive may receive
        increases in his Base Salary from time to time, as approved by the
        Board.

                (b)     In addition to Base Salary, Executive will be eligible
        to receive a bonus of his Base Salary and other incentive compensation
        as the Board may approve from time to time.

                5.      Benefits.

                (a)     Executive shall be entitled to participate in any and
        all pension benefit, welfare benefit (including, without limitation,
        medical, dental, disability and group life insurance coverages) and
        fringe benefit plans from time to time in effect for officers of the
        Company and its affiliates following the Company's standard waiting
        periods, if any.

                (b)     Executive shall be entitled to participate in such
        bonus, stock option, or other incentive compensation plans of the
        Company and its affiliates in effect from time to time for officers of
        the Company.

                (c)     Executive shall be entitled to paid time off each year
        consistent with the Company's policies. The Executive shall schedule the
        timing of such paid time off in a reasonable manner. The Executive also
        may be entitled to such other leave, with or without compensation, as
        shall be mutually agreed by the Company and Executive.

                (d)     Executive may incur reasonable expenses for promoting
        the Company's business, including expenses for entertainment, travel and
        similar items. The Company shall reimburse Executive for all such
        reasonable expenses in accordance with the Company's reimbursement
        policies and procedures.

                6.      Termination of Employment.

                (a)     Death or Disability. Executive's employment shall
        terminate automatically upon Executive's death during the Term. If the
        Company determines in good faith that the Disability of Executive has
        occurred during the Term (pursuant to the definition of Disability set
        forth below) it may give to Executive written notice of its intention to
        terminate Executive's employment. In such event, Executive's employment
        with the Company shall terminate effective on the 30th

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        day after receipt of such notice by Executive (the "Disability Effective
        Date"), provided that, within the 30 days after such receipt, Executive
        shall not have returned to full-time performance of Executive's duties.
        For purposes of this Agreement, "Disability" shall mean Executive's
        absence from his full-time duties hereunder for a period of 90 days.

                (b)     Cause. The Company may terminate Executive's employment
        during the Term for Cause. For purposes of this Agreement, "Cause" shall
        mean the Executive's (i) conviction of or plea of nolo contendere to a
        crime involving moral turpitude; or (ii) willful and material breach by
        Executive of his duties and responsibilities, which is committed in bad
        faith or without reasonable belief that such breaching conduct is in the
        best interests of the Company and its affiliates, but with respect to
        (ii) only if the Board adopts a resolution by a vote of at least 75% of
        its members so finding after giving the Executive and his attorney an
        opportunity to be heard by the Board. Any act, or failure to act, based
        upon authority given pursuant to a resolution duly adopted by the Board
        or based upon advice of counsel for the Company shall be conclusively
        presumed to be done, or omitted to be done, by Executive in good faith
        and in the best interests of the Company.

                (c)     Good Reason. Executive's employment may be terminated by
        Executive for Good Reason. "Good Reason" shall exist upon the
        occurrence, without Executive's express written consent, of any of the
        following events:

                    (i)     the Company shall assign to Executive duties of a
                substantially nonexecutive or nonmanagerial nature;

                    (ii)    an adverse change in Executive's status or position
                as an executive officer of the Company, including, without
                limitation, an adverse change in Executive's status or position
                as a result of a diminution in Executive's duties and
                responsibilities (other than any such change directly
                attributable to the fact that the Company is no longer publicly
                owned);

                    (iii)   the Company shall (A) materially reduce the Base
                Salary or bonus opportunity of Executive, or (B) materially
                reduce his benefits and perquisites (other than pursuant to a
                uniform reduction applicable to all similarly situated
                executives of the Company);

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                    (iv)    the Company shall require Executive to relocate
                Executive's principal business office more than 30 miles,
                provided that the Executive and the Company acknowledge that
                Executive's principal business office is 680 South Fourth
                Street, Louisville, Kentucky 40202; or

                    (v)     the failure of the Company to obtain the assumption
                of this Agreement as contemplated by Section 9(c).

        For purposes of this Agreement, "Good Reason" shall not exist until
        after Executive has given the Company notice of the applicable event
        within 90 days of such event and which is not remedied within 30 days
        after receipt of written notice from Executive specifically delineating
        such claimed event and setting forth Executive's intention to terminate
        employment if not remedied; provided, that if the specified event cannot
        reasonably be remedied within such 30-day period and the Company
        commences reasonable steps within such 30-day period to remedy such
        event and diligently continues such steps thereafter until a remedy is
        effected, such event shall not constitute "Good Reason" provided that
        such event is remedied within 60 days after receipt of such written
        notice.

                (d)     Notice of Termination. Any termination by the Company
        for Cause, or by Executive for Good Reason, shall be communicated by
        Notice of Termination given in accordance with this Agreement. 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) sets forth in reasonable detail the facts
        and circumstances claimed to provide a basis for termination of
        Executive's employment under the provision so indicated and (iii)
        specifies the intended termination date (which date, in the case of a
        termination for Good Reason, shall be not more than thirty days after
        the giving of such notice). The failure by Executive or the Company to
        set forth in the Notice of Termination any fact or circumstance which
        contributes to a showing of Good Reason or Cause shall not waive any
        right of Executive or the Company, respectively, hereunder or preclude
        Executive or the Company, respectively, from asserting such fact or
        circumstance in enforcing Executive's or the Company's rights hereunder.

                (e)     Date of Termination. "Date of Termination" means (i) if
        Executive's employment is terminated by the Company for Cause, or by
        Executive for Good Reason, the later of the date specified in the Notice
        of Termination or the date that is one day after the last day of any
        applicable cure period, (ii) if Executive's employment is terminated by
        the Company other than for Cause or Disability, or Executive resigns
        without Good Reason, the Date of Termination shall be the date on which
        the Company or Executive notified Executive or the Company,
        respectively, of such termination and (iii) if Executive's employment is
        terminated

                                        4

<PAGE>

        by reason of death or Disability, the Date of Termination shall be the
        date of death of Executive or the Disability Effective Date, as the case
        may be.

                7.      Obligations of the Company Upon Termination. Following
any termination of Executive's employment hereunder, the Company shall pay
Executive his Base Salary through the Date of Termination and any amounts owed
to Executive pursuant to the terms and conditions of the benefit plans and
programs of the Company at the time such payments are due. In addition, subject
to Executive's execution of a general release of claims in form satisfactory to
the Company, Executive shall be entitled to the following additional payments:

                (a)     Death or Disability. If, during the Term, Executive's
        employment shall terminate by reason of Executive's death or Disability,
        the Company shall pay to Executive (or his designated beneficiary or
        estate, as the case may be) the prorated portion of any Target Bonus (as
        defined below) Executive would have received for the year of termination
        of employment. Such amount shall be paid within 30 days of the date when
        such amounts would otherwise have been payable to the Executive if
        Executive's employment had not terminated.

                (b)     Good Reason; Other than for Cause. If, during the Term,
        the Company shall terminate Executive's employment other than for Cause
        (but not for Disability), or the Executive shall terminate his
        employment for Good Reason:

                        (1)     Within 14 days of Executive's Date of
                Termination, the Company shall pay to Executive (i) the prorated
                portion of the Target Bonus for Executive for the year in which
                the Date of Termination occurs, and (ii) an amount equal to 1.5
                times the sum of the Executive's Base Salary and Target Bonus as
                of the Date of Termination.

                For purposes of this Agreement: "Target Bonus" shall mean the
                full amount of the targeted annual incentive bonus that would be
                payable to the Executive, assuming the targeted performance
                criteria on which such annual incentive bonus is based were
                deemed to be satisfied, in respect of services for the calendar
                year in which the date in question occurs.

                        (2)     For a period of 18 months following the Date of
                Termination, the Executive shall be treated as if he had
                continued to be an Executive for all purposes under the Parent's
                Health Insurance Plan and Dental Insurance Plan; or if the
                Executive is prohibited from participating in such plan, the
                Company or Parent shall otherwise provide such benefits.
                Following this continuation period, the Executive shall be
                entitled to receive continuation coverage under Part 6 of Title
                I or ERISA ("COBRA

                                        5

<PAGE>

                Benefits") treating the end of this period as a termination of
                the Executive's employment if allowed by law.

                        (3)     For a period of 18 months following the Date of
                Termination, Parent shall maintain in force, at its expense, the
                Executive's life insurance in effect under the Parent's
                Voluntary Life Insurance Benefit Plan as of the Date of
                Termination.

                        (4)     For a period of 18 months following the Date of
                Termination, the Company or Parent shall provide short-term and
                long-term disability insurance benefits to Executive equivalent
                to the coverage that the Executive would have had he remained
                employed under the disability insurance plans applicable to
                Executive on the Date of Termination. Should Executive become
                disabled during such period, Executive shall be entitled to
                receive such benefits, and for such duration, as the applicable
                plan provides.

                        (5)     To the extent not already vested pursuant to the
                terms of such plan, the Executive's interests under the Parent's
                Retirement Savings Plan shall be automatically fully (i.e.,
                100%) vested, without regard to otherwise applicable percentages
                for the vesting of employer matching contributions based upon
                the Executive's years of service with the Company.

                        (6)     Parent may adopt such amendments to its
                executive benefit plans, if any, as are necessary to effectuate
                the provisions of this Agreement.

                        (7)     Executive shall be entitled to an additional 18
                months of vesting for purposes of all outstanding stock option
                awards and restricted stock awards and Executive will have an
                additional 18 months following the Date of Termination in which
                to exercise such stock options.

                        (8)     Following the Executive's Date of Termination,
                the Executive shall receive the computer which Executive is
                utilizing as of the Date of Termination.

                (c)     Cause; Other than for Good Reason. If Executive's
        employment shall be terminated for Cause or Executive terminates
        employment without Good Reason (and other than due to such Executive's
        death) during the Term, this Agreement shall terminate without further
        additional obligations to Executive under this Agreement.

                                        6

<PAGE>

                (d)     Death after Termination. In the event of the death of
        Executive during the period Executive is receiving payments pursuant to
        this Agreement, Executive's designated beneficiary shall be entitled to
        receive the balance of the payments; or in the event of no designated
        beneficiary, the remaining payments shall be made to Executive's estate.

                8.      Disputes. Any dispute or controversy arising under, out
of, or in connection with this Agreement shall, at the election and upon written
demand of either party, be finally determined and settled by binding arbitration
in the City of Louisville, Kentucky, in accordance with the Labor Arbitration
rules and procedures of the American Arbitration Association, and judgment upon
the award may be entered in any court having jurisdiction thereof. The Company
shall pay all costs of the arbitration and all reasonable attorneys' and
accountants' fees of the Executive in connection therewith, including any
litigation to enforce any arbitration award.

                9.      Successors.

                (a)     This Agreement is personal to Executive and without the
        prior written consent of the Company shall not be assignable by
        Executive otherwise than by will or the laws of descent and
        distribution. This Agreement shall inure to the benefit of and be
        enforceable by Executive's legal representatives.

                (b)     This Agreement shall inure to the benefit of and be
        binding upon the Company and its successors and assigns.

                (c)     The Company shall require any successor (whether direct
        or indirect, by purchase, merger, consolidation or otherwise) to all or
        substantially all of the business and/or assets of the Company, or any
        business of the Company for which Executive's services are principally
        performed, to assume expressly and agree to perform this Agreement in
        the same manner and to the same extent that the Company would be
        required to perform it if no such succession had taken place. As used
        this Agreement, "Company" shall mean the Company as hereinbefore defined
        and any successor to its business and/or assets as aforesaid which
        assumes and agrees to perform this Agreement by operation of law, or
        otherwise.

                10.     Other Severance Benefits. Executive hereby agrees that
in consideration for the payments to be received under this Agreement, Executive
waives any and all rights to any payments or benefits under any severance plans
or arrangements of the Company or their respective affiliates that specifically
provide for severance payments, other than the Change in Control Severance
Agreement between the Company and Executive (the "Change in Control Severance
Agreement"); provided that any payments payable to Executive hereunder shall be
offset by any payments payable under the Change in Control Severance Agreement.

                                        7

<PAGE>

                11.     Withholding. All payments to be made to Executive
hereunder will be subject to all applicable required withholding of taxes.

                12.     No Mitigation. Executive shall have no duty to mitigate
his damages by seeking other employment and, should Executive actually receive
compensation from any such other employment, the payments required hereunder
shall not be reduced or offset by any such compensation. Further, the Company's
and Parent's obligations to make any payments hereunder shall not be subject to
or affected by any setoff, counterclaims or defenses which the Company or Parent
may have against Executive or others.

                13.     Non-solicitation. During the Term and for a period of
one year thereafter (collectively, the "Non-solicitation Period"), Executive
shall not directly or indirectly, individually or on behalf of any person other
than the Company, aid or endeavor to solicit or induce any of the Company's or
its affiliates' employees to leave their employment with the Company or such
affiliates in order to accept employment with Executive or any other person,
corporation, limited liability company, partnership, sole proprietorship or
other entity. If the restrictions set forth in this section would otherwise be
determined to be invalid or unenforceable by a court of competent jurisdiction,
the parties intend and agree that such court shall exercise its discretion in
reforming the provisions of this Agreement to the end that the Executive will be
subject to a non-solicitation covenant which is reasonable under the
circumstances and enforceable by the Company. It is agreed that no adequate
remedy at law exists for the parties for violation of this section and that this
section may be enforced by any equitable remedy, including specific performance
and injunction, without limiting the right of the Company to proceed at law to
obtain such relief as may be available to it. The running of the
Non-solicitation Period shall be tolled for any period of time during which
Executive is in violation of any covenant contained herein, for any reason
whatsoever.

                14.     Notices. Any notice required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or sent by telephone facsimile transmission, personal or
overnight couriers, or registered mail with confirmation or receipt, addressed
as follows:

                If to Executive:
                Joseph L. Landenwich
                680 South Fourth Street
                Louisville, KY 40202

                                        8

<PAGE>

                If to Company:
                Kindred Healthcare Operating, Inc.
                680 South Fourth Street
                Louisville, KY  40202
                Attn:  General Counsel

                15.     Waiver of Breach and Severability. The waiver by either
party of a breach of any provision of this Agreement by the other party shall
not operate or be construed as a waiver of any subsequent breach by either
party. In the event any provision of this Agreement is found to be invalid or
unenforceable, it may be severed from the Agreement and the remaining provisions
of the Agreement shall continue to be binding and effective.

                16.     Entire Agreement; Amendment. This instrument contains
the entire agreement of the parties with respect to the subject matter hereof
and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations and warranties between them, whether written or
oral with respect to the subject matter hereof. No provisions of this Agreement
may be modified, waived or discharged unless such modification, waiver or
discharge is agreed to in writing signed by Executive and such officer of the
Company specifically designated by the Board.

                17.     Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware.

                18.     Headings. The headings in this Agreement are for
convenience only and shall not be used to interpret or construe its provisions.

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

                20.     Cancellation of Prior Agreement. The Executive hereby
acknowledges and agrees that this Agreement is intended to and does hereby
replace that certain employment agreement, between the Company (or its
predecessor) and the Employee, and that such agreement is cancelled, terminated
and of no further force and effect.

                                        9

<PAGE>

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

                                     KINDRED HEALTHCARE OPERATING, INC.

                                     By: /s/ Edward L. Kuntz
                                         --------------------------------
                                         Edward L. Kuntz
                                         Chairman and Chief Executive Officer

                                     Solely for the purpose
                                     of Section 7

                                     KINDRED HEALTHCARE, INC.

                                     By: /s/ Edward L. Kuntz
                                         --------------------------------
                                         Edward L. Kuntz
                                         Chairman and Chief Executive Officer

                                     /s/ Joseph L. Landenwich
                                     ------------------------------------
                                     JOSEPH L. LANDENWICH

                                       10

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