SEPARATION AGREEMENT AND GENERAL RELEASE

Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL RELEASE

This Agreement is entered into between Xxxxxxx X. Xxxx (“Xx. Xxxx”) and Labor Ready, Inc. (together with its subsidiaries, the “Company”) as of this 9^th day of October, 2001, in order to sever their employment relationship.  In consideration of the mutual promises below, the Company and Xx. Xxxx agree as follows:

1.              Termination of Employment.  Xx. Xxxx’x employment with the Company, and that certain Executive Employment Agreement between the Company and Xx. Xxxx dated May 16, 2000 (the “Employment Agreement”), were terminated effective as of September 20, 2001.

2.              Compensation.  Subject to Xx. Xxxx’x compliance with all of the terms and conditions of this Agreement and as a material inducement to Xx. Xxxx to enter into this Agreement, the Company shall pay Xx. Xxxx the sum of One Hundred Thousand Dollars ($100,000.00) on or before seven (7) days after mutual execution hereof.

3.              Continuation of Health Insurance.  Subject to Xx. Xxxx’x compliance with all of the terms and conditions of this Agreement and as a material inducement to Xx. Xxxx to enter into this Agreement, the Company shall continue to provide the health insurance coverage currently provided to Xx. Xxxx and his wife, until the earlier of (a) the date Xx. Xxxx secures employment with another employer, or (b) one (1) year after the date hereof.

4.              Termination of Stock Options.           The parties acknowledge that the following represent all stock options granted Xx. Xxxx by the Company to date, and that no such options have heretofore been exercised:

	Option Xxxxx			Xxxxx Date
	350,000 shares			May 16, 2000
	150,000 shares			August 1, 2000
	12,000 shares			February 21, 2001

All said options shall be deemed terminated and of no further force or effect as of the date hereof.

5.              Additional Terms and Conditions. Xx. Xxxx expressly agrees to all of the following terms and conditions:
			a)	Xx. Xxxx shall not issue or make any written or verbal statement to anyone which addresses the Company or his employment with the Company in a negative or derogatory manner.
			b)	Xx. Xxxx shall comply with all of the surviving covenants and provisions set forth in his Employment Contract.
			c)	Xx. Xxxx shall reasonably cooperate with the Company on an as-requested basis in any pending matters which in the Company’s reasonable judgment require Xx. Xxxx’x involvement.
6.              Waiver and Release by Xx. Xxxx.     Xx. Xxxx expressly acknowledges that the payment and benefits provided for hereinabove constitutes sufficient consideration for any and all compensation and benefits due Xx. Xxxx as well as Xx. Xxxx’x promises set forth herein and the settlement, waiver, release and discharge of any and all claims arising under the Employment Agreement, common law, any federal, state and local statue or regulation, or otherwise. Xx. Xxxx represents that he has not filed any complaint, charge or action against the Company, its officers, agents or employees with any local, state or federal agency or court arising from his employment relationship with the Company.  Xx. Xxxx represents that he will not seek damages, monetary or otherwise, or any other type of relief through any such complaint at any time in the future. Xx. Xxxx, for himself and his successors and assigns, waives, releases and forever discharges the Company, its officers, directors, agents and employees of and from any and all claims, causes of action, rights, demands, debts, damages and actions of whatever nature arising from or relating to Xx. Xxxx’x employment relationship with the Company, including the termination of such relationship and the Employment Agreement, and also including any cause of action pertaining to employment discrimination based on age, race, creed, color, religion, sex, national origin or disability.
7.              Opportunity to Review; Revocation.     Xx. Xxxx expressly acknowledges that the Company has encouraged and given him the opportunity to thoroughly discuss all aspects of this Agreement with his attorney or other advisor before signing and that he has thoroughly discussed or in the alternative has freely elected to waive any further opportunities to thoroughly discuss this Agreement with his attorney or other advisor.  Xx. Xxxx understands that he has fourteen (14) days to review this Agreement and determine whether or not to sign.  Signature prior to the expiration of 14 days waives the remaining consideration period.  Xx. Xxxx has seven (7) days from the date this Agreement is executed to revoke the waiver of any claim under the Age Discrimination in Employment Act.  If Xx. Xxxx does not revoke the Agreement within the seven-day period, the Agreement shall become fully effective and the payment terms referred to herein shall become effective.  If Xx. Xxxx does revoke this Agreement, the Company’s payment obligation under this Agreement shall be null and void.
8.              Knowing and Voluntary.     Xx. Xxxx expressly acknowledges that he understands all of the provisions of this Agreement, and that he is knowingly and voluntarily entering into this Agreement.
9.              Governing Law.     This Agreement is made and entered into in the State of Washington and shall in all respects be interpreted, enforced and governed under the laws of this state.

10.            Severability.     Should any provision of this Agreement be declared or be determined by any court of competent jurisdiction to be illegal, invalid, void or unenforceable, the legality, validity and enforceability of the remaining parts, terms or provisions shall not be affected thereby and any such illegal, unenforceable or invalid part, term or provision shall be deemed to be revised in the legal, enforceable and valid manner which most closely reflects the intention of the parties.

11.            Entire Agreement.     This Agreement, along with all of the ongoing covenants of the Employment Contract, set forth the entire agreement between the parties and supersede any and all prior agreements or understandings between these parties pertaining to the subject matter hereof.

LABOR READY, INC.

By:
	Xxxxxx X. Xxxxxxxxx, Xx		Xxxxxxx X. Xxxx
	President and Chief Executive Officer