Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

             This Executive Employment Agreement is made and entered into by and
between Labor Ready, Inc., a Washington corporation, including its subsidiaries
("Company"), and Timothy J. Adams ("Executive"), effective as of May 28, 2001.

 

RECITALS

             WHEREAS, Executive has been serving as Director of Legal Services
for the Company;

             WHEREAS, Company believes that Executive's experience, knowledge of
corporate affairs, reputation and abilities are of great value to Company's
future growth and profits; and

             WHEREAS, Company wishes to continue to employ Executive and
Executive is willing to continue to be employed by Company; and

             WHEREAS, the Company’s Board of Directors has elected Executive to
the offices of Executive Vice President and General Counsel;

             NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the Company and Executive agree as follows:

             1.          Employment.  The Company agrees to and hereby does
employ Executive, and Executive hereby agrees to continue in the employment of
the Company, subject to the supervision and direction of the Chief Executive
Officer and the Board of Directors.  Executive’s employment shall be for a
period commencing on May 28, 2001 and ending on May 27, 2006, unless such period
is extended by written agreement of the parties or is sooner terminated pursuant
to the provisions of Paragraphs 4, 11 or 12.

             2.          Duties of Executive.  Executive agrees to devote the
necessary time, attention, skill and efforts to the performance of his duties as
Executive Vice President and General Counsel of the Company and such other
duties as may be assigned by the Board of Directors in its discretion.

             3.          Compensation.

                           (a)         Executive's initial salary shall be at
the rate of Two Hundred Twenty Thousand and No/100 Dollars ($220,000) per year,
payable biweekly, from May 28, 2001, until changed by the Board of Directors as
provided herein.

                           (b)        Company, acting through its Board of
Directors, may (but shall not be required to) increase, but may not decrease,
Executive's compensation and award to Executive such bonuses as the board may
see fit, in its sole and unrestricted discretion, commensurate with Executive's
performance and the overall performance of the Company.  Executives compensation
shall be reviewed annually by the Compensation Committee of the Board of
Directors.

             4.          Failure to Pay Executive.  The failure of Company to
pay Executive his salary as provided in Paragraph 3 may, in Executive's sole
discretion, be deemed a breach of this Agreement and, unless such breach is
cured within fifteen days after written notice to Company, this Agreement shall
terminate.  Executive’s claims against Company arising out of the nonpayment
shall survive termination of this Agreement.

             5.          Options to Purchase Common Stock.  Executive is granted
unvested options to purchase 250,000 shares of the Company’s common stock.  The
terms and conditions of the options are set forth in Exhibits A and B.

             6.          Reimbursement for Expenses.  Company shall reimburse
Executive for reasonable out-of-pocket expenses that Executive shall incur in
connection with his services for Company contemplated by this Agreement, on
presentation by Executive of appropriate vouchers and receipts for such expenses
to Company.  At times it may be in the best interests of the Company for
Executive's spouse to accompany him on such business travel.  On such occasions
Company shall reimburse Executive for reasonable out-of-pocket expenses incurred
for his spouse.  Such occasions shall be determined by guidelines established by
the Chief Executive Officer or the Board of Directors, or in the absence of such
guidelines, by Executive's sound discretion.

             7.          Vacation.  Executive shall be entitled each year during
the term of this Agreement to a vacation of twenty (20) business days, no two of
which need be consecutive, during which time his compensation shall be paid in
full.  The length of annual vacation time shall increase by one day for every
year of service to the Company after 2001 to a maximum of 25 business days per
year.

             8.          Change in Ownership or Control.  In the event of a
change in the ownership of Company, effective control of Company, or the
ownership of a substantial portion of Company's assets, all unvested stock
options shall immediately vest.

             9.          Liability Insurance and Indemnification.  The Company
shall procure and maintain throughout the term of this Agreement a policy or
policies of liability insurance for the protection and benefit of directors and
officers of the Company.  Such insurance shall have a combined limit of not less
than $10,000,000.00 and may have a deductible of not more than $100,000.00.  To
the fullest extent permitted by law, Company shall indemnify and hold harmless
Executive for any and all lost, cost, damage and expense including attorneys’
fees and court costs incurred or sustained by Executive, arising out of the
proper discharge by Executive of his duties hereunder in good faith.

             10.        Other Benefits.  Executive shall be entitled to all
benefits offered generally to employees of Company.  Nothing in this Agreement
shall be construed as limiting or restricting any benefit to Executive under any
pension, profit-sharing or similar retirement plan, or under any group life or
group health or accident or other plan of the Company, for the benefit of its
employees generally or a group of them, now or hereafter in existence.

             11.        Termination by Company.  Company may terminate this
Agreement under either of the following circumstances:

  (a) Company may terminate this Agreement and Executive’s employment for cause
(as defined hereinbelow) at any time upon written notice to Executive. The
notice of termination must specify those actions or inactions upon which the
termination is based. Cause shall exist if any of the following occurs:        
(i) Executive is convicted or indicted of a crime involving dishonesty, fraud or
moral turpitude;         (ii) Company believes in good faith that Executive has
engaged in fraud, embezzlement, theft or other dishonest acts;         (iii)
Executive violates Company’s Drug Free Workplace Policy;         (iv) Executive
commits any willful act or omission with an intent to negatively impact Company;
        (v) Executive refuses to attempt in good faith to perform his normal
duties to the best of his ability, within ten (10) days after written notice
from Company;         (vi) Executive is guilty of insubordination which
materially hinders the maximization of productivity between Executive and his
superiors; or         (vii) Executive breaches this Agreement in any other
material respect and does not cure such breach within ten (10) days after
written notice from Company.         (b) In the event that Executive shall,
during the term of his employment hereunder, fail to perform his duties as the
result of illness or other incapacity and such illness or other incapacity shall
continue for a period of more than six months, the Company shall have the right,
by written notice either personally delivered or sent by certified mail, to
terminate Executive's employment hereunder as of a date (not less than 30 days
after the date of the sending of such notice) to be specified in such notice.

 

             12.        Termination by Executive.  If Company shall cease
conducting its business, take any action looking toward its dissolution or
liquidation, make an assignment for the benefit of its creditors, admit in
writing its inability to pay its debts as they become due, file a voluntary
petition or be the subject of an involuntary petition in bankruptcy, or be the
subject of any state or federal insolvency proceeding of any kind, then
Executive may, in his sole discretion, by written notice to Company, terminate
his employment and Company hereby consents to the release of Executive under
such circumstances and agrees that if Company ceases to operate or to exist as a
result of such event, the non-competition and other provisions of Paragraph 16
of this Agreement shall terminate.  In addition, Executive shall have the right
to terminate this Agreement upon giving three (3) months written notice to
Company.

             13.        Communications to Company.  Executive shall communicate
and channel to Company all knowledge, business, and customer contacts and any
other matters of information that could concern or be in any way beneficial to
the business of Company, whether acquired by Executive before or during the term
of this Agreement; provided, however, that nothing under this Agreement shall be
construed as requiring such communications where the information is lawfully
protected from disclosure as a trade secret of a third party.

             14.        Binding Effect.  This Agreement shall be binding on and
shall inure to the benefit of any successor or successors of employer and the
personal representatives of Executive.

             15.        Confidential Information.

                           (a)         As the result of his duties, Executive
will necessarily have access to some or all of the confidential information
pertaining to Company's business.  It is agreed that "Confidential Information"
of Company includes:

                           (1)         The ideas, methods, techniques, formats,
specifications, procedures, designs, systems, processes, data and software
products which are unique to Company;

                           (2)         All customer, marketing, pricing and
financial information pertaining to the business of Company;

                           (3)         All operations, sales and training
manuals;

                           (4)         All other information now in existence or
later developed which is similar to the foregoing; and

                           (5)         All information which is marked as
confidential or explained to be confidential or which, by its nature, is
confidential.

                           (b)        Executive understands that he will
necessarily have access to some or all of the Confidential Information. 
Executive recognizes the importance of protecting the confidentiality and
secrecy of the Confidential Information and, therefore, agrees to use his best
efforts to protect the Confidential Information from unauthorized disclosure to
other persons.  Executive understands that protecting the Confidential
Information from unauthorized disclosure is critically important to the success
and competitive advantage of Company and that the unauthorized disclosure of the
Confidential Information would greatly damage Company.

                           (c)         Executive agrees not to disclose any
Confidential Information to others or use any Confidential Information for his
own benefit.  Executive further agrees that upon request of the Chief Executive
Officer of Company, he shall immediately return all Confidential Information,
including any copies of Confidential Information in his possession.

             16.        Covenants Against Competition.  It is understood and
agreed that the nature of the methods employed in Company's business is such
that Executive will be placed in a close business and personal relationship with
the customers of Company. Thus, during the term of this Executive Employment
Agreement and for a period of two (2) years immediately following the
termination of Executive's employment, for any reason whatsoever, so long as
Company continues to carry on the same business, said Executive shall not, for
any reason whatsoever, directly or indirectly, for himself or on behalf of, or
in conjunction with, any other person, persons, company, partnership,
corporation or business entity:

                           (a)         Call upon, divert, influence or solicit
or attempt to call, divert, influence or solicit any customer or customers of
Company;

                           (b)        Divulge the names and addresses or any
information concerning any customer of Company;

                           (c)         Solicit, induce or otherwise influence or
attempt to solicit, induce or otherwise influence any employee of the Company to
leave his or her employment;

                          (d)        Own, manage, operate, control, be employed
by, participate in or be connected in any manner with the ownership, management,
operation or control of the same, similar, or related line of business as that
carried on by Company within a radius of twenty-five (25) miles from any then
existing or proposed office of Company; and

             The time period covered by the covenants contained herein shall not
include any period(s) of violation of any covenant or any period(s) of time
required for litigation to enforce any covenant.  If the provisions set forth
are determined to be too broad to be enforceable at law, then the area and/or
length of time shall be reduced to such area and time and that shall be
enforceable.

             17.        Enforcement of Covenants.

                           (a)         The covenants set forth herein on the
part of Executive shall be construed as an agreement independent of any other
provision in this Executive Employment Agreement and the existence of any claim
or cause of action of Executive against Company, whether predicated on this
Executive Employment Agreement or otherwise, shall not constitute a defense to
the enforcement by Company of the covenants contained herein.

                           (b)        Executive acknowledges that irreparable
damage will result to Company in the event of the breach of any covenant
contained herein and Executive agrees that in the event of any such breach,
Company shall be entitled, in addition to any and all other legal or equitable
remedies and damages, to a temporary and/or permanent injunction to restrain the
violation thereof by Executive and all of the persons acting for or with
Executive.

             18.        Law to Govern Contract.  It is agreed that this
Agreement shall be governed by, construed and enforced in accordance with the
laws of the State of Washington.

             19.        Arbitration.  Company and Executive agree with each
other that any claim of Executive or Company arising out of or relating to this
Agreement or the breach of this Agreement or Executive’s employment by Company,
including, without limitation, any claim for compensation due, wrongful
termination and any claim alleging discrimination or harassment in any form
shall be resolved by binding arbitration, except for claims in which injunctive
relief is sought and obtained.  The arbitration shall be administered by the
American Arbitration Association under its Employment Arbitration Rules at the
American Arbitration Association Office nearest the place of employment.  The
award entered by the arbitrator shall be final and binding in all respects and
judgment thereon may be entered in any Court having jurisdiction.

             20.        Entire Agreement.  This Agreement shall constitute the
entire agreement between the parties and any prior understanding or
representation of any kind preceding the date of this Agreement shall not be
binding upon either party except to the extent incorporated in this Agreement.

             21.        Modification of Agreement.  Any modification of this
Agreement or additional obligation assumed by either party in connection with
this Agreement shall be binding only if evidenced in writing signed by each
party or an authorized representative of each party.

             22.        No Waiver.  The failure of either party to this
Agreement to insist upon the performance of any of the terms and conditions of
this Agreement, or the waiver of any breach of any of the terms and conditions
of this Agreement, shall not be construed as thereafter waiving any such terms
and conditions, but the same shall continue and remain in full force and effect
as if no such forbearance or waiver had occurred.

             23.        Attorneys’ Fees.  In the event that any action is filed
in relation to this Agreement, the unsuccessful party in the action shall pay to
the successful party, in addition to all other required sums, a reasonable sum
for the successful party's attorneys' fees.

             24.        Notices.  Any notice provided for or concerning this
Agreement shall be in writing and shall be deemed sufficiently given when
personally delivered or when sent by certified or registered, return receipt
requested mail if sent to the respective address of each party as set forth
below, or such other address as each party shall designate by notice.

             25.        Survival of Certain Terms.  The terms and conditions set
forth in Paragraphs 15 through 19 of this Agreement shall survive termination of
the remainder of this Agreement.

 

 

             IN WITNESS WHEREOF, each party to this Agreement has caused it to
be executed on the date indicated below.

                  EXECUTIVE:       COMPANY:                             Labor
Ready, Inc.,             a Washington corporation                            
By:      

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    Timothy J. Adams       Richard L. King               President and CEO      
            Date:       Date:    

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EXHIBIT A

Stock Option Grant

GRANT DATE:                          May 28, 2001

GRANT PRICE:                          Closing price on the Grant Date

TOTAL NUMBER OF SHARES:          150,000

VESTING SCHEDULE:             Options for the specified number of shares shall
vest on the
                                                     following dates:

DATE   NUMBER OF SHARES  

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  May 28, 2002   37,500   May 28, 2003   37,500   May 28, 2004   37,500   May
28, 2005   37,500  

TERMS AND CONDITIONS OF THE STOCK OPTION GRANT:

             1.          Except as otherwise provided herein, all unexercised
options shall expire five (5) years from the Grant Date or upon the termination
date, whichever is earlier, if the Executive Employment Agreement is terminated
for cause.  If the Executive Employment Agreement is terminated by Executive
without cause, then all options shall terminate ninety days after termination of
employment.  If the Executive Employment Agreement is terminated for any other
reason, then all options shall immediately vest and the exercise date shall be
extended to a date which is five years after the date of termination.

             2.          The options are categorized as non-qualified stock
options.  A non-qualified stock option requires payment of income taxes on the
difference between the option price and the market value on the date of
exercise.  Executive shall be responsible for any income tax consequences and
expense associated with the grant or exercise of the options, and is responsible
for consulting his individual tax advisor.

             3.          Payment for shares purchased through the exercise of
options may be made either in cash or its equivalent or by tendering previously
acquired shares at market value, or both.

             The closing price on May 28, 2001 was $3.74.

EXHIBIT B

Stock Option Grant

GRANT DATE:                          May 28, 2001

GRANT PRICE:                          Closing price on the Grant Date

TOTAL NUMBER OF SHARES:          100,000

VESTING SCHEDULE:             Options for the specified number of shares shall
vest on the
                                                     following dates:

DATE   NUMBER OF SHARES  

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  November 28, 2005   100,000  

TERMS AND CONDITIONS OF THE STOCK OPTION GRANT:

             1.          Except as otherwise provided herein, all unexercised
options shall expire five (5) years from the Grant Date or upon the termination
date, whichever is earlier, if the Executive Employment Agreement is terminated
for cause.  If the Executive Employment Agreement is terminated by Executive
without cause, then all options shall terminate ninety days after termination of
employment.  If the Executive Employment Agreement is terminated for any other
reason, then all options shall immediately vest and the exercise date shall be
extended to a date which is five years after the date of termination.

             2.          The options are categorized as non-qualified stock
options.  A non-qualified stock option requires payment of income taxes on the
difference between the option price and the market value on the date of
exercise.  Executive shall be responsible for any income tax consequences and
expense associated with the grant or exercise of the options, and is responsible
for consulting his individual tax advisor.

             3.          Payment for shares purchased through the exercise of
options may be made either in cash or its equivalent or by tendering previously
acquired shares at market value, or both.

             The closing price on May 28, 2001 was $3.74.