EXHIBIT 10.14


                               WAIVER AND RELEASE
                               ------------------

     This Waiver and Release is made and executed by Nick A. Gerde in connection
with my separation from employment with Pacific Aerospace & Electronics, Inc.
and in consideration of my receiving severance benefits to which I would
otherwise not be entitled, consisting of the waiver of the covenant not to
compete contained in my employment agreement.

     I, Nick A. Gerde, hereby release Pacific Aerospace & Electronics, Inc. and
its subsidiaries, and their respective officers, directors, employees, agents,
insurers and related corporations (collectively "PA&E") from any and all
liability, damages or causes of action, whether known or unknown, relating to my
employment with PA&E, or the termination of that employment, or any other acts
or events involving PA&E, to the date of this Waiver and Release.  This Waiver
and Release includes, but is not limited to, any claims for additional
compensation in any form, damages, reemployment or reinstatement.  This Release
specifically includes, but is not limited to, all claims for relief or remedy
under any Washington state or federal laws, including but not limited to Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act, the Fair Labor Standards Act, the Americans
with Disabilities Act, and the civil rights, employment and wage and hour laws
of the State of Washington including, but not limited to, RCW 49.48, 49.52, and
49.60, and any applicable contract, tort, or common law theories.

     This Waiver and Release shall not affect vested rights, if any, which I may
have against insurers under medical insurance and long-term disability insurance
plans or under any retirement plan maintained by PA&E.

     Confidentiality is an essential element of this Waiver and Release.  I
agree to keep confidential the facts and terms of the severance benefits that I
have been offered and accepted.  I understand, however, that PA&E may have
certain obligations to disclose the terms of my severance benefits to its
lenders and pursuant to the federal securities laws.

     I have read this Waiver and Release and understand its effect.  I
acknowledge and understand that I am releasing legal rights that I may have
against my employer, including rights under the Age Discrimination in Employment
Act.  In accordance with the Older Workers' Benefit Protection Act (the "Act"),
I acknowledge that I have been advised in writing to consult with an attorney
prior to executing this Waiver and Release; and that as consideration for
executing this Waiver and Release, I have received additional benefits of value
to which I would not otherwise be entitled.

     In accordance with the Act, PA&E offered me additional severance benefits
in connection with the termination of my employment, and the offer provided me
with a period of 21 days from the date of receipt for consideration of the
offer.  I acknowledge that I received the

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offer on August 15, 2001, and that in the event I have not executed this Waiver
and Release by the expiration of the 21-day time period on September 5, 2001,
the offer will expire. I further acknowledge that I have a period of seven days
from the date immediately following the date of execution of this Waiver and
Release in which I may revoke this Waiver and Release by written notice to
Donald A. Wright, Pacific Aerospace & Electronics, Inc., 430 Olds Station Road,
Third Floor, Wenatchee, WA 98801. If I do not exercise my right to revoke this
Waiver and Release, this Waiver and Release will become effective on the date
immediately following the 7-day revocation period described above.

     Every provision of this Waiver and Release is intended to be severable.  In
the event a court or agency of competent jurisdiction determines that any term
or provision contained in this Waiver and Release is illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall not affect
the other terms and provisions of this Waiver and Release which shall continue
in full force and effect.

     This Waiver and Release will be null and void if the Company's payment
obligations under the termination letter dated August 15, 2001 are not fulfilled
for any reason.

     This Waiver and Release shall be construed in accordance with, and governed
by, the statutes and common law of the State of Washington.

     Dated: August 17, 2001.



                               /s/ Nick A. Gerde
                               -----------------
                               Nick A. Gerde

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