Exhibit 10.34

COMPENSATION MODIFICATION AGREEMENT

THIS COMPENSATION MODIFICATION AGREEMENT is made this 31st day of December 2010,
by and between PremierWest Bancorp (“Bancorp”) and PremierWest Bank (“Bank” and
together with Bancorp, the “Corporation”), and                             , an
employee of the Corporation (“Executive”).

RECITALS

WHEREAS, the Corporation and the Executive desire to amend the compensation and
benefit arrangements (the “Agreements”) set forth below for the purposes of
voluntarily correcting certain inadvertent failures to comply with the
documentation requirements applicable under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) and regulations promulgated thereunder
(collectively, “409A”), as contemplated by Internal Revenue Service Notices
2008-113, 2010-6 and 2010- 80 and to amend the Agreements to clarify the effect
of provisions required under 409A:

[Deferred Compensation Agreement, as amended]

[Employment Agreement, as amended]

[Supplemental Executive Retirement Agreement, as amended]

AGREEMENT

NOW, THEREFORE, to ensure that the Corporation and Executive are in compliance
with 409A, the Corporation and the Executive hereby agree as follows:

1. GENERAL MODIFICATION OF AGREEMENTS; INTERPRETATION AND COMPLIANCE WITH 409A.
The Corporation and Executive agree that, notwithstanding any understanding to
the contrary, all Agreements with respect to Executive shall be deemed modified
to comply in all respects with 409A and intend that the Agreements meet the
requirements of 409A and are intended to comply with the deferral, payout and
other limitations and restrictions imposed under 409A. The provisions in this
Compensation Modification Agreement and the Agreements, as amended, shall be
interpreted and applied in a manner that is consistent with 409A.
Notwithstanding any other provision of the Agreements to the contrary, the
Agreements shall be interpreted, operated and administered in a manner
consistent with such intentions. Without limiting the generality of the
foregoing and notwithstanding any other provision of the Agreements to the
contrary, with respect to any payments and benefits under the Agreements,
references in the Agreements to “Separation from Service,” “Termination of
Employment” or any other reference to the termination of an Executive’s
employment or service are intended to mean the Executive’s “separation from
service” within the meaning of Code section 409A(a)(2)(A)(i). The Corporation
does not make any representations that amounts payable under the Agreements
shall be exempt from 409A and makes no undertaking to preclude 409A from
applying to the Agreements or amounts payable thereunder.

2. COVERED AGREEMENTS, PLANS AND POLICIES. Executive acknowledges that all
Agreements applicable to Executive are subject to the modifications and
amendments provided for in this Compensation Modification Agreement and that the
changes are designed to benefit the Executive without enhancing compensation
under the Agreements.

3. AMENDMENTS.

3.1 “Change in Control” Definition. The term “Change in Control” or “Change of
Control” as defined in the Agreements is amended to mean the first of the
following to occur: (1)

 

1

--------------------------------------------------------------------------------

a ‘change in the ownership,’ (2) a ‘change in the effective control,’ or (3) a
‘change in the ownership of a substantial portion of the assets’ (as those terms
are defined in Treas. Reg. 1.409A-3(i)(5) of the Bank or Bancorp. A Change in
Control as defined above includes the following:

 

  (i) the date any one person, or more than one person acting as a group (as
determined under Treas. Reg. 1.409A-3(i)(5)(v)(B)), acquires ownership of stock
of the Bank (or Bancorp) that, together with stock held by such person or group,
constitutes more than 50% of the total fair market value or total voting power
of the stock of the Bank (or Bancorp);

 

  (ii) the date on which the Bank (or Bancorp) merges or consolidates with
another entity and as a result less than 50% of the total fair market value or
total voting power of the stock of the resulting entity immediately after the
merger or consolidation is held by any one person, or more than one person
acting as a group (as determined under Treas. Reg. 1.409A-3(i)(5)(v)(B)), who
were the holders of the Bank’s (or Bancorp’s) voting securities immediately
before the merger or consolidation;

 

  (iii) the date any one person, or more than one person acting as a group (as
determined under Treas. Reg. 1.409A-3(i)(5)(v)(B)), acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of stock of Bancorp possessing 30% or more of
the total voting power of the stock of Bancorp;

 

  (iv) the date a majority of members of Bancorp’s board of directors is
replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of Bancorp’s board of directors
before the date of the appointment or election; and

 

  (v) the date any one person, or more than one person acting as a group (as
determined under Treas. Reg. 1.409A-3(i)(5)(v)(B)), acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets from the Bank (or Bancorp) that have a total
gross fair market value (the value of the assets of Bank or Bancorp, or the
value of the assets being disposed of, determined without regard to any
liabilities associated with such assets) equal to or more than 40% of the total
gross fair market value of all of the assets of the Bank (or Bancorp)
immediately before such acquisition or acquisitions. However, a Change in
Control does not occur to the extent that ownership of assets is transferred to:
(A) a Bancorp shareholder (immediately before the asset transfer) in exchange
for or with respect to his or her Bancorp stock; (B) an entity, 50% or more of
the total value or voting power of which is owned directly or indirectly by
Bancorp; (C) a person, or more than one person acting as a group, that owns
directly or indirectly 50% or more of the total value or voting power of
Bancorp; or (D) an entity, at least 50% of the total value or voting power of
which is owned directly or indirectly by a person described in (C).

3.2 “Disability” Definition. The term “Disability” as defined in the Agreements
is amended to mean the Executive either (i) is unable to engage in substantial,
gainful activity by reason of any medically-determinable physical or mental
impairment which can reasonably be expected to

 

2

--------------------------------------------------------------------------------

result in death, or can be expected to last for a continuous period of at least
twelve (12) months or (ii) is, by reason of any medically determinable physical
or mental impairment that can be expected to result in death or can be expected
to last for a continuous period of not less than twelve (12) months, receiving
income replacement benefits for a period of not less than three (3) months under
an accident and health plan covering employees of the Executive’s employer.

3.3 “Good Reason” Definition. The definition of “Good Reason” is amended to
provide that the separation from service following the occurrence of a condition
providing the Executive “Good Reason” to terminate employment must occur within
180 days following the initial existence of the condition and that the Executive
must provide notice within 30 days of such condition arising and give Bancorp or
Bank 60 days to remedy the condition.

3.4 Specified Employee Six Month Delay. The following is added to the
Agreements:

409A DELAY IN COMMENCEMENT OF PAYMENTS. Notwithstanding any provision to the
contrary, if, at the time of Executive’s termination, he or she is a Specified
Employee, then to the extent necessary to avoid subjecting the Executive to the
imposition of any additional income tax under Code section 409A(a), amounts that
would otherwise be payable hereunder during the six-month period immediately
following Executive’s Separation from Service shall not be paid to the Executive
during such period, but shall instead be accumulated and paid to the Executive
(or, in the event of the Executive’s death, the Executive’s estate) in a lump
sum on the first business day after the earlier of the date that is six
(6) months and one (1) day following the Executive’s Separation from Service or
the Executive’s death; provided, further, that any amount payable hereunder that
is subject to the foregoing restrictions on Specified Employees may not be paid
before the later of (a) the date that is eighteen months following the effective
date of the Compensation Modification Agreement dated December 31, 2010, or
(b) the date provided in the previous sentence, with suspended payments
accumulated and paid in a lump sum on the first business day after the date that
is six (or eighteen, if applicable) months and one (1) day following the
Executive’s Separation from Service.

In the event one or more of the Agreements included provisions for a six month
delay in payments prior to the December 31, 2010 effective date of this
Compensation Modification Agreement, the above provision is not intended to add
an additional six month delay or to require an eighteen month delay as such
provisions were originally included for purposes of 409A.

“Specified Employee” means an individual who, as of the date of his or her
Separation from Service, meets the requirements to be a “key employee” as
defined in Code Section 416(i)(1)(A)(i), (ii) or (iii) (applied in accordance
with the regulations thereunder and without regard to Section 416(i)(5)) at any
time during the 12-month period ending on the Specified Employee Identification
Date. For purposes of this determination, the Specified Employee Identification
Date is each December 31 and the Specified Employee Effective Date is the
April 1 following such Identification Date. If the individual is a key employee
as of a Specified Employee Identification Date, the individual is treated as a
“key employee” for purposes of this section for the entire 12-month period
beginning on the Specified Employee Effective Date. The terms “Identification
Date” and “Effective Date” for purposes of this paragraph have the meanings
specified in Treas. Reg. 1.409A-1(i)(3) and (4).

 

3

--------------------------------------------------------------------------------

“Separation from Service” means the date on which an Executive dies, retires or
otherwise has a termination of employment with Bancorp. Whether a termination of
employment has occurred is determined based on whether the facts and
circumstances indicate that the Bancorp and the Executive reasonably anticipated
that no further services would be performed after a certain date or that the
level of bona fide services the Executive would perform after such date (as an
employee or independent contractor) would permanently decrease to no more than
twenty percent (20%) of the average level of bona fide services performed over
the immediately preceding thirty-six (36) month period (or the full period in
which the Executive provided services to Bancorp if the Executive has been
providing services for less than thirty-six (36) months). An Executive will not
be deemed to have experienced a Separation from Service if such Executive is on
military leave, sick leave, or other bona fide leave of absence, to the extent
such leave does not exceed a period of six (6) months or, if longer, such longer
period of time during which a right to re-employment is protected by either
statute or contract. If the period of leave exceeds six (6) months and the
individual does not retain a right to re-employment under an applicable statute
or by contract, the employment relationship is deemed to terminate on the first
date immediately following such 6-month period. For purposes of determining if
there has been a Separation from Service, Bancorp is defined to include all
members of a controlled group of corporations or other business entities within
the meaning of Code Sections 414(b) and (c) that includes Bancorp, as modified
by this Section. An Executive shall be considered to be in the employ of Bancorp
and its related affiliates and subsidiaries as long as he remains an employee of
Bancorp, any subsidiary corporation of Bancorp, or any corporation to which
substantially all of the assets and business of Bancorp are transferred. For
this purpose, a subsidiary corporation of Bancorp is any corporation (other than
the Bancorp) in an unbroken chain of corporations beginning with Bancorp if, as
of the date such determination is to be made, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing greater
than 50 percent of the total combined voting power of all classes of stock in
one of the other corporations in such chain.

3.5 Changing the Time or Form of Distribution. In the event one or more of the
Agreements permits the Executive to change the time or form of any distribution
under such Agreement, the following is added:

The time and form of payment elected cannot be changed by the Executive except
as provided in this section. Executive may change his or her form of
distribution or the timing of a scheduled distribution, provided that: (a) for a
scheduled distribution, his or her change is filed with the Bank no later than
the last day of the plan year that ends at least 12 months before the payment
commencement date; (b) his or her change cannot take effect earlier than twelve
months after the change is requested; and (c) except where related to death or
disability, the payment under the newly elected form of payment cannot be made
sooner than five years after the payment commencement date for the form of
payment that the Executive has elected to change. The payment commencement date
for a series of installment payments is treated as the date on which the first
of such installment payments would be made under the terms of this agreement.
Where the payment commencement date is stated as a period of time (e.g., a
90-day period following a distribution event), the payment commencement date for
purposes of this section is the first day of such period.

3.6 Release of Claims Requirement. If an Agreement requires the Executive to
deliver a release of claims, separation agreement, noncompetition agreement or
non-solicitation agreement

 

4

--------------------------------------------------------------------------------

as a condition precedent to receipt of distributions, the Agreement is modified
to provide that if the distribution due to the Executive or (Executive’s
beneficiary) is a lump sum payment, such payment will be made on the 90th day
following the payment triggering event if the Corporation has received the
release and any required revocation period set forth in such release has expired
without Executive having revoked the release prior to the 90th day following the
payment event, and if the distribution due to Executive (or Executive’s
beneficiary) is a stream of payments, the first payment will be made on the 90th
day following the payment triggering event if the Corporation has received
release and any required revocation period set forth in such release has expired
without Executive having revoked the release prior to the 90th day following the
payment triggering event, subject to any 409A required delay of payment. To the
extent the release has not been timely executed and the revocation period
expired by the 90th day following the payment triggering event, Executive shall
forfeit the distributions in their entirety.

4. MODIFICATION. No provisions of this Compensation Modification Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing, signed by the Executive and the Corporation.

5. GOVERNING LAW. The validity, interpretation, construction and performance of
this Agreement shall be governed by federal law, to the extent applicable, and
otherwise by the laws of the State of Oregon.

6. VALIDITY; EFFECT ON OTHER PROVISIONS. The invalidity or unenforceability of
any provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect. Any provision in this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating or affecting
the remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. All other terms and
provisions of the Agreements remain in full force and effect

7. COUNTERPARTS; SIGNATURE. This letter may be executed in two or more
counterparts, each of which shall be deemed an original. A signature transmitted
by facsimile shall be deemed an original signature.

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

 

 

[Employee Name]

[Employee Title]

 

PREMIERWEST BANCORP     PREMIERWEST BANK By:  

 

    By:  

 

Name:   Tom Anderson     Name:   Tom Anderson Title:   Executive Vice President
    Title:   Executive Vice President   Chief Administrative Officer       Chief
Administrative Officer

 

5