EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT is entered into effective as of this 9th day
of August, 2002, by and among John L. Anhorn (the "EXECUTIVE"), PremierWest
Bancorp, an Oregon corporation, and PremierWest Bank, an Oregon-chartered bank
and wholly owned subsidiary of PremierWest Bancorp. PremierWest Bancorp and
PremierWest Bank are hereinafter sometimes referred to together or individually
as "PREMIERWEST."

         WHEREAS, the Executive is the President and Chief Executive Officer of
PremierWest, possessing unique skills, knowledge, and experience relating to
PremierWest's business, and the Executive has made and is expected to continue
to make major contributions to the profitability, growth and financial strength
of PremierWest and affiliates,

         WHEREAS, PremierWest recognizes that, as is the case for most
companies, the possibility of a Change in Control (as defined herein) exists,

         WHEREAS, PremierWest desires to assure itself of the continuity of
management and desires to establish minimum severance benefits for certain of
its officers and other key employees, including the Executive, if a Change in
Control occurs,

         WHEREAS, PremierWest wishes to ensure that officers and other key
employees are not practically disabled from discharging their duties if a
proposed or actual transaction involving a Change in Control arises,

         WHEREAS, PremierWest desires to provide additional inducement for the
Executive to remain in the employ of PremierWest as President and Chief
Executive Officer,

         WHEREAS, PremierWest and the Executive desire to set forth in this
Employment Agreement the terms and conditions of the Executive's employment,

         WHEREAS, the Executive and PremierWest Bank are parties to an
employment agreement dated April 2, 1998, but the Executive and PremierWest
intend that this Employment Agreement supersede and replace all provisions of
the previous employment agreement other than the provisions governing the terms
and conditions of stock options granted to the Executive, and

         WHEREAS, none of the conditions or events included in the definition of
the term "golden parachute payment" that is set forth in Section 18(k)(4)(A)(ii)
of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in
Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR
359.1(f)(l)(ii)] exists or, to the best knowledge of PremierWest, is
contemplated insofar as PremierWest or any affiliates are concerned.

         NOW THEREFORE, in consideration of these premises, 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.

                                   ARTICLE 1.
                                   EMPLOYMENT

1.1 EMPLOYMENT. PremierWest Bancorp and PremierWest Bank hereby employ the
Executive to serve as President and Chief Executive Officer according to the
terms and conditions of this Employment Agreement and for the period stated in
Article 3. The Executive hereby accepts employment according to the terms and
conditions of this Employment Agreement and for the period stated in Article 3.

1.2 SERVICE ON THE BOARD OF DIRECTORS(a) . (a) Board of Directors of PremierWest
Bancorp. The Executive is currently serving as a director of PremierWest
Bancorp. PremierWest Bancorp shall nominate the Executive for election as a
director at such times as necessary so that the Executive will, if elected by
stockholders,

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remain a director of PremierWest Bancorp throughout the term of this Employment
Agreement. The Executive hereby consents to serve as a director of PremierWest
Bancorp, and the Executive hereby consents to being named as a director of
PremierWest Bancorp in documents filed by PremierWest Bancorp with the
Securities and Exchange Commission. The Executive shall be deemed to have
resigned as a director of PremierWest Bancorp effective immediately after
termination of the Executive's employment under Article 5 of this Employment
Agreement, regardless of whether the Executive submits a formal, written
resignation as director.

(b) Board of Directors of PremierWest Bank. The Executive is currently serving
as a director of PremierWest Bank. The board of directors of PremierWest Bancorp
and the board of directors of PremierWest Bank shall undertake every lawful
effort to ensure that the Executive continues throughout the term of his
employment to be elected or reelected as a director of PremierWest Bank. The
Executive shall be deemed to have resigned as a director of PremierWest Bank
effective immediately after termination of the Executive's employment under
Article 5 of this Employment Agreement, regardless of whether the Executive
submits a formal, written resignation as director.

                                   ARTICLE 2.
                                     DUTIES

         As President and Chief Executive Officer of PremierWest Bancorp, the
Executive shall serve under the direction of PremierWest Bancorp's board of
directors and in accordance with PremierWest Bancorp's Articles of Incorporation
and Bylaws, as each may be amended or restated from time to time. As President
and Chief Executive Officer of PremierWest Bank, the Executive shall serve under
the direction of PremierWest Bank's board of directors and in accordance with
PremierWest Bank's Articles of Incorporation and Bylaws, as each may be amended
or restated from time to time. The Executive shall report directly to the board
of directors. He shall serve PremierWest faithfully, diligently, competently,
and to the best of his ability, and he shall exclusively devote his full time,
energy, and attention to the business of PremierWest and to the promotion of
PremierWest's interests throughout the term of this Employment Agreement.
Without the written consent of PremierWest Bancorp's board of directors, the
Executive shall not render services to or for any person, firm, corporation, or
other entity or organization in exchange for compensation, regardless of the
form in which such compensation is paid and regardless of whether it is paid
directly or indirectly to the Executive. Nothing in this Article 2 shall prevent
the Executive from managing his personal investments and affairs, provided that
doing so does not interfere with the proper performance of his duties and
responsibilities as President and Chief Executive Officer.

                                   ARTICLE 3.
                               TERM OF EMPLOYMENT

         The initial term of this Employment Agreement shall be for a period of
two years, commencing August 9, 2002. On the first anniversary of the August 9,
2002 effective date of this Employment Agreement and on each anniversary
thereafter, this Employment Agreement shall be extended automatically for one
additional year unless PremierWest's board of directors determines that the term
shall not be extended.

         If the board of directors determines not to extend the term, it shall
promptly notify the Executive in writing. If the board decides not to extend the
term of this Employment Agreement, this Employment Agreement shall nevertheless
remain in force until its term expires. The board's decision not to extend the
term of this Employment Agreement shall not - by itself- give the Executive any
rights under this Employment Agreement to claim an adverse change in his
position, compensation, or circumstances or otherwise to claim entitlement to
severance or termination benefits under Articles 6 or 7 of this Employment
Agreement. References herein to the term of this Employment Agreement shall
refer to the initial term, as the same may be extended. Unless sooner
terminated, the Executive's employment shall terminate when he reaches age 65.

                                   ARTICLE 4.
                         COMPENSATION AND OTHER BENEFITS

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         4.1 BASE SALARY. In consideration of the Executive's performance of his
obligations under this Employment Agreement, PremierWest Bancorp shall pay or
cause to be paid to the Executive a salary at the annual rate of not less than
$185,400, payable in semi-monthly installments. The Executive's salary shall be
subject to annual review by the Compensation Committee of PremierWest's board of
directors or by such other board committee as has jurisdiction over executive
compensation. Taking into account the committee's recommendation, the board of
directors may adjust the Executive's salary, but the salary shall not be
reduced. The Executive's salary, as the same may be adjusted from time to time
as a result of annual review by the committee and board action, is referred to
in this Employment Agreement as the "BASE SALARY."

         4.2 BENEFIT PLANS AND PERQUISITES. The Executive shall be entitled
throughout the term of this Employment Agreement to participate in any and all
officer or employee compensation, bonus, incentive, and benefit plans in effect
from time to time, including without limitation plans providing pension,
medical, dental, disability, and group life benefits, and 401(k) retirement
plans, and to receive any and all other fringe benefits provided from time to
time, provided that the Executive satisfies the eligibility requirements for any
such plans or benefits. Without limiting the generality of the foregoing -

         (a) Participation in Stock Plans.(1) (1) The Executive shall be
eligible to participate in PremierWest Bancorp's stock option plans and other
stock-based compensation, incentive, bonus, or purchase plans existing on the
date of this Employment Agreement or adopted during the term of this Employment
Agreement for the benefit of officers or employees.

                  (2) The stock options granted to the Executive under the April
2, 1998 agreement entered into by the Executive and PremierWest Bank as
successor to Bank of Southern Oregon are not affected in any way by this
Employment Agreement, and the Executive may continue to hold and exercise and
exercise all rights of ownership in any such stock options according to their
terms. However, PremierWest and the Executive acknowledge and agree that
PremierWest and the Executive are prevented from treating the entirety of the
stock options granted under the April 2, 1998 "Agreement" as incentive stock
options because of Internal Revenue Code of 1986 and Internal Revenue Service
rules concerning incentive stock options, including a $100,000 limit on the
aggregate fair market value of stock with respect to which incentive stock
options become exercisable for the first time in any calendar year. PremierWest
and the Executive acknowledge and agree that the portion of the stock option
grant exceeding Internal Revenue Service limits for incentive stock options
shall be treated as nonqualified stock options under the Internal Revenue Code,
even though the original intention in 1998 when the stock option was granted
might have been that the entire stock option grant would be a qualified
incentive stock option grant.

         (b) Disability Policy. PremierWest shall maintain or cause to be
maintained the disability policy currently in force for the Executive (policy
number 00C7583940, effective October 1, 1998, Standard Insurance Company) or a
replacement disability policy providing equal or greater disability benefits.

         (c) Automobile. PremierWest will purchase a vehicle for use by the
Executive during the term of his employment. The vehicle will have a maximum
cost determined by the Chairman of the Board or a Vice Chairman of the Board.
PremierWest will pay all expenses associated with the maintenance, repair, and
operation of the vehicle, including insurance coverage. The Executive shall
maintain records of his use of the vehicle with sufficient detail to allow
PremierWest to determine the Executive's personal versus business use of the
vehicle. The Executive's year end W-2 will include the value of the personal use
of the vehicle as required by IRS regulations. Because the value of the
Executive's personal use of the vehicle will be treated as taxable income to
him, PremierWest shall annually make a cash payment to the Executive in an
amount sufficient to offset fully all taxes payable by the Executive that are
attributable to his personal use of the vehicle, and the cash payment shall be
grossed up to compensate the Executive for taxes payable on the cash payment
itself. Upon the Executive's termination for reasons other than Cause,
PremierWest shall transfer all right, title, and interest in and to the vehicle
to the Executive.

         (d) Reimbursement of Business Expenses. The Executive shall be entitled
to reimbursement for all reasonable business expenses incurred in performing his
obligations under this Employment Agreement, including but not limited to all
reasonable business travel and entertainment expenses incurred while acting at
the request of or

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in the service of PremierWest, provided such expenses are incurred and accounted
for in accordance with the policies and procedures established from time to time
by PremierWest Bancorp or PremierWest Bank.

         (e) Club Dues. During the term of this Employment Agreement,
PremierWest Bank shall pay the Executive's monthly dues at the Rogue Valley
Country Club.

         4.3 OTHER FRINGE BENEFITS. The Executive shall be entitled to employee
benefits offered to PremierWest Bank employees, including sick leave and
personal time, according to the terms and conditions of PremierWest Bank's
personnel policies. The terms and conditions of such benefits shall be as
established from time to time by the board of directors of PremierWest Bank. The
Executive shall be entitled to not less than four weeks of paid vacation per
year according to the terms and conditions of PremierWest Bank's personnel
policies. Anything in PremierWest Bank's personnel policies to the contrary
notwithstanding however, up to two weeks of the Executive's four weeks of paid
vacation may be carried over from one year to the next if unused by the end of
the year, but the Executive shall not be entitled under any circumstance to
payment for unused vacation.

                                   ARTICLE 5.
                            TERMINATION OF EMPLOYMENT

         5.1 TERMINATION BY PREMIERWEST(a) . (a) Death, Disability, or
Retirement. The Executive's employment shall terminate automatically on the date
of the Executive's death or on the date of the Executive's retirement. By
delivery of 30 days' advance written notice to the Executive, PremierWest also
may terminate the Executive's employment if the Executive is determined to be
disabled, as defined in paragraph (e) below. If the Executive is terminated
because of disability by either of PremierWest Bancorp or PremierWest Bank, he
shall be deemed also to have been terminated because of disability by the other.

         (b) Termination Without Cause.With 90 days' advance written notice to
the Executive, PremierWest may terminate the Executive's employment without
Cause. If the Executive is terminated without Cause by either of PremierWest
Bancorp or PremierWest Bank, he shall be deemed also to have been terminated
without Cause by the other.

         (c) Termination with Cause. Effective on the date on which termination
notice is given to the Executive and without the requirement of advance notice
to the Executive, PremierWest may terminate the Executive's employment with
Cause. If the Executive is terminated for Cause by either of PremierWest Bancorp
or PremierWest Bank, he shall be deemed also to have been terminated for Cause
by the other.

         The Executive shall not be deemed to have been terminated for Cause
under this Employment Agreement unless and until there is delivered to the
Executive a copy of a resolution duly adopted at a meeting of the board of
directors called and held for such purpose, which resolution shall (1) contain
findings that, in the good faith opinion of the board, the Executive has
committed an act constituting Cause, and (2) specify the particulars thereof in
detail. The resolution of the board of directors shall be deemed to have been
duly adopted if and only if it is adopted by the affirmative vote of at least
75% of the directors of PremierWest Bancorp then in office or 75% of the
directors of PremierWest Bank then in office. Notice of that meeting and the
proposed termination for Cause shall be given to the Executive a reasonable
amount of time before the board's meeting. The Executive and his counsel (if the
Executive chooses to have counsel present) shall have a reasonable opportunity
to be heard by the board at the meeting. Nothing in this Employment Agreement
limits the Executive's or his beneficiaries' right to contest the validity or
propriety of the board's determination of Cause.

         (d) Definition of Cause. For purposes of this Employment Agreement,
"CAUSE" means any of the following -

                  (1) an intentional act of fraud, embezzlement, or theft by the
         Executive in the course of his employment with PremierWest Bancorp or
         PremierWest Bank. For purposes of this Employment Agreement, no act or
         failure to act on the part of the Executive shall be deemed to have
         been intentional if it was due primarily to an error in judgment or
         negligence. An act or failure to act on the Executive's part shall be
         considered intentional if it is not in good faith and

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         if it is without a reasonable belief that the action or failure to act
         is in the best interests of PremierWest,

                  (2) intentional wrongful damage by the Executive to the
         business or property of PremierWest Bancorp or PremierWest Bank, which
         in the sole judgment of PremierWest Bancorp or PremierWest Bank causes
         material harm to PremierWest Bancorp or PremierWest Bank,

                  (3) a breach by the Executive of this Employment Agreement
         that, in the sole judgment of PremierWest Bancorp or PremierWest Bank,
         is a material breach of this Agreement,

                  (4) gross negligence or insubordination by the Executive in
         the performance of his duties as an officer of PremierWest Bancorp or
         PremierWest Bank,

                  (5) a breach by the Executive of his fiduciary duties to
         PremierWest Bancorp and its stockholders or misconduct involving
         dishonesty, in either case whether in his capacity as an officer or as
         a director of PremierWest Bancorp or PremierWest Bank,

                  (6) conviction of the Executive for a felony or conviction of
         a misdemeanor involving moral turpitude,

                  (7) intentional violation of any law or significant policy of
         PremierWest Bancorp or PremierWest Bank committed in connection with
         the Executive's employment, which, in PremierWest Bancorp's or
         PremierWest Bank's sole judgment, has an adverse effect on PremierWest
         Bancorp or PremierWest Bank, or

                  (8) removal of the Executive from office or permanent
         prohibition of the Executive from participating in the conduct of
         PremierWest Bank's affairs by an order issued under section 8(e)(4) or
         (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or
         (g)(1).

                  (e) Definition of Disability. For purposes of this Employment
         Agreement, the Executive shall be deemed to be "DISABLED" if an
         independent physician selected by PremierWest and reasonably acceptable
         to the Executive or his legal representative determines that, because
         of illness or accident, the Executive is unable to perform his duties
         and will be unable to perform his duties for a period of 90 consecutive
         days. The Executive shall not be deemed to be disabled, however, if he
         returns to work on a full-time basis within 30 days after PremierWest
         gives him notice of termination due to disability. PremierWest may
         require the Executive to submit to such physical or mental evaluations
         and tests as PremierWest's board of directors deems appropriate.

         5.2 TERMINATION BY THE EXECUTIVE. The Executive may terminate his
employment with 90 days' advance written notice to PremierWest Bancorp, whether
with or without Good Reason. If the Executive terminates for Good Reason, the
termination will take effect at the conclusion of the 90-day period unless the
event or circumstance constituting Good Reason is cured by PremierWest or unless
the notice of termination for Good Reason is revoked by the Executive within the
90-day period. For purposes of this Agreement, "GOOD REASON" means any of the
following events occur -

         (a) Reduction in Base Salary: involuntary reduction of the Executive's
Base Salary,

         (b) Reduced Participation in Bonus, Incentive, Compensation, and Other
Plans: involuntary reduction of the Executive's bonus, incentive, and other
compensation award opportunities under PremierWest Bancorp's benefit plans and
PremierWest Bank's benefit plans, unless in the case of either company a
company-wide reduction of all officers' award opportunities occurs
simultaneously,

         (c) Participation in Benefit Plans: involuntary discontinuance of the
Executive's participation in any officer or employee benefit plan maintained by
PremierWest Bancorp or by PremierWest Bank, unless the plan is discontinued by
reason of law or loss of tax deductibility to PremierWest with respect to
contributions to the plan, or

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is discontinued as a matter of PremierWest Bancorp policy or PremierWest Bank
policy applied equally to all participants in the plan,

         (d) Reduction in Responsibilities or Status:

                  (1) assignment to the Executive of duties or responsibilities
         that are materially inconsistent with the Executive's position as
         PremierWest Bancorp's principal executive officer or that represent a
         reduction of his authority,

                  (2) any other action by PremierWest Bancorp or its successor
         or by PremierWest Bank that results in a material reduction or material
         adverse change in the Executive's position, authority, duties or
         responsibilities,

                  (3) failure to appoint or reappoint the Executive as President
         and Chief Executive Officer of PremierWest Bancorp,

                  (4) failure to nominate the Executive as a director of
         PremierWest Bancorp, or

                  (5) failure to elect or reelect the Executive or cause the
         Executive to be elected or reelected to the board of directors of
         PremierWest Bank in accordance with Section 1.2(b) of this Employment
         Agreement without the Executive's written consent,

         (e) Failure to Obtain Assumption Agreement: failure to obtain an
assumption of PremierWest's obligations under this Employment Agreement by any
successor to PremierWest Bancorp, regardless of whether such entity becomes a
successor to PremierWest Bancorp as a result of a merger, consolidation, sale of
assets, or other form of reorganization,

         (f) Termination without Compliance with this Employment Agreement:
termination by PremierWest of Executive's employment effected in a manner that
does not satisfy the requirements of this Employment Agreement,

         (g) Material Breach: a material breach of this Employment Agreement by
PremierWest that is not corrected within a reasonable time, or

         (h) Relocation of the Executive: relocation of PremierWest Bancorp's
principal executive offices, or requiring the Executive to change his principal
work location, to any location that is more than 15 miles from the location of
PremierWest Bancorp's principal executive offices on the date of this Employment
Agreement.

         5.3 NOTICE. Any purported termination by PremierWest or by the
Executive shall be communicated by written notice of termination to the other.
The notice must state the specific termination provision of this Employment
Agreement relied upon. The notice must also state the date on which termination
shall become effective, which shall be a date not earlier than the date of the
termination notice. If termination is for Cause or with Good Reason, the notice
must state in reasonable detail the facts and circumstances forming the basis
for termination of the Executive's employment.

                                   ARTICLE 6.
                   COMPENSATION AND BENEFITS AFTER TERMINATION

         6.1 DEATH OF THE EXECUTIVE. If the Executive's employment terminates
because of his death, any bonus earned by the Executive or accrued by
PremierWest for his benefit but not paid at the time of the Executive's death
and any compensation earned but not paid at the time of death shall be paid to
the Executive's estate. PremierWest Bancorp shall also provide or cause to be
provided to the Executive or his estate such other benefits as may be available
under PremierWest Bancorp's or PremierWest Bank's benefit plans and policies.
The Executive's beneficiaries may also be entitled to death benefits under
Section 6.6(a) of this Employment Agreement or benefits under the Salary
Continuation Agreement referred to in Section 6.7 of this Employment Agreement.

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         6.2 TERMINATION OF THE EXECUTIVE BY PREMIERWEST BECAUSE OF DISABILITY.
If the Executive's employment terminates because of his disability, the
Executive shall be entitled to receive the Base Salary earned through the date
on which termination became effective, any unpaid bonus or incentive
compensation due to the Executive for the calendar year preceding the calendar
year in which the termination became effective, any payments the Executive is
eligible to receive under any disability insurance program in which the
Executive participates, and such other benefits as may be available to the
Executive through PremierWest Bancorp's or PremierWest Bank's benefit plans and
policies. The Executive may also be entitled to benefits under the Salary
Continuation Agreement referred to in Section 6.7 of this Employment Agreement.

         6.3 TERMINATION OF THE EXECUTIVE BY PREMIERWEST WITH CAUSE. If the
Executive's employment terminates with Cause, the Executive shall be entitled to
receive the Base Salary earned through the date on which termination became
effective. The Executive may also be entitled to benefits under the Salary
Continuation Agreement referred to in Section 6.7 of this Employment Agreement
and severance compensation under the circumstances described in Section 6.5(a),
but not life insurance and medical benefits described in Section 6.6.

         6.4 TERMINATION BY THE EXECUTIVE WITHOUT GOOD REASON. If the Executive
terminates employment with PremierWest other than for Good Reason before
attaining age 65, the Executive shall be entitled to his Base Salary earned
through the date on which his termination becomes effective. But if the
Executive terminates employment without Good Reason during the 90-day period
beginning on the date that is 12 months after a Change in Control, his severance
compensation shall be governed by Article 7, not by this Section 6.4. The
Executive may also be entitled to benefits under the Salary Continuation
Agreement referred to in Section 6.7 of this Employment Agreement and severance
compensation under the circumstances described in Section 6.5(a), but not death
benefits and medical benefits described in Section 6.6.

         6.5 SEVERANCE COMPENSATION(a) . (a) Continuation of Salary if the
Separation Agreement is Entered Into. Subject to Section 6.8 of this Employment
Agreement, the Executive shall continue to receive his Base Salary for 24 months
from the date of termination, but he shall not be entitled to continued
participation in PremierWest's or subsidiary's 401(k) retirement plan(s) or any
stock plans, -

                  (1) (a) if PremierWest terminates the Executive's employment
         without Cause or if the Executive terminates employment with Good
         Reason, and (b) at the Executive's election under Section 6.8(b) of
         this Employment Agreement, PremierWest and the Executive enter into a
         Separation Agreement in substantially the form attached to this
         Employment Agreement as Appendix A. If the Executive instead elects not
         to enter into the Separation Agreement, the Executive shall not be
         entitled to any severance compensation but instead shall be entitled
         solely to his Base Salary earned through the date on which his
         termination becomes effective, or

                  (2) (a) if PremierWest terminates the Executive's employment
         with Cause or if the Executive terminates employment without Good
         Reason, and (b) at PremierWest's election under Section 6.8(a),
         PremierWest and the Executive enter into a Separation Agreement in
         substantially the form attached to this Employment Agreement as
         Appendix A. If PremierWest instead elects not to enter into the
         Separation Agreement, in the case of termination of the Executive's
         employment by PremierWest with Cause or termination of the Executive's
         employment by the Executive without Good Reason the Executive shall not
         be entitled to any severance compensation. In either case, the
         Executive shall instead be entitled solely to his Base Salary earned
         through the date on which his termination becomes effective.

The parties hereto acknowledge and agree that the severance compensation that
may be payable to the Executive under this Section 6.5(a) shall not be payable
if compensation and benefits are payable or shall have been previously paid to
the Executive under Section 7.1 of this Employment Agreement. That is, the
parties intend that the Executive shall not be entitled to duplicative severance
compensation under this section and under Section 7.1.

         (b) Death and Medical Insurance and Supplemental Retirement Benefits.
If PremierWest terminates the Executive's employment without Cause or if the
Executive terminates employment with Good Reason and severance compensation
becomes payable under Section 6.5(a), the Executive shall also be entitled to
the death benefits and

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medical benefits specified in Section 6.6 on the same basis those benefits would
be due to the Executive if his employment had terminated at age 65. The
Executive may also be entitled to benefits under the Salary Continuation
Agreement referred to in Section 6.7 of this Employment Agreement.

         6.6 DEATH AND MEDICAL INSURANCE BENEFITS(a) .(a) Life Insurance.
PremierWest shall pay or cause to be paid all premiums as and when due on an
insurance policy on the Executive's life. PremierWest shall cause the policy or
any replacement or substitute whole life policy on the Executive's life to be
maintained throughout the term of this Employment Agreement and after
termination of the Executive's employment. The Executive's beneficiaries shall
be entitled to a death benefit of (1) $250,000 if the Executive dies while
employed by PremierWest or (2) $150,000 if the Executive dies after his
employment with PremierWest terminates. PremierWest and the Executive are
negotiating and shall enter into a Executive Survivor Income Agreement to
memorialize the terms of the agreement set forth in this Section 6.6(a). The
parties hereto acknowledge and agree that the obligation stated in this Section
6.6(a) shall be satisfied according to the terms of the Executive Survivor
Income Agreement, as the Executive Survivor Income Agreement may be amended in
accordance with its terms. The pre- and post-retirement death benefit identified
in this Section 6.6(a) and which is the subject of the Executive Survivor Income
Agreement shall operate separately and independent from the Salary Continuation
Agreement Addendum A Executive Survivor Income Agreement entered into in
accordance with Section 6.7 of this Employment Agreement.

         Anything herein to the contrary notwithstanding however, the
Executive's beneficiaries shall not be entitled to any death benefits and
PremierWest shall not be required to maintain insurance on the Executive's life
if (1) the Executive's employment terminated with Cause, (2) the Executive
terminated employment without Good Reason before attaining age 65 (except as
provided in Section 7.1(b)), or (3) the Executive's employment terminated
because of disability, unless in any such case the Executive Survivor Income
Agreement explicitly provides otherwise.

         (b) Retiree Health Care Coverage. The Executive shall be entitled to
retiree health care coverage for himself and his spouse for 15 years after
termination of the Executive's employment, as follows: (1) until the Executive
attains age 65, the retiree health care coverage shall be substantially
identical to the coverage maintained on the date of termination of the
Executive's employment, and (2) after attaining age 65, PremierWest will pay or
reimburse the Executive for the costs of Medicare Part B medical insurance
coverage. Anything herein to the contrary notwithstanding however, the Executive
shall not be entitled to retiree health care coverage if the Executive's
employment terminated with Cause or if the Executive terminated employment
without Good Reason before attaining age 65 (except as provided in Section
7.1(b)). If the Executive dies before age 65 or within 15 years after
termination of employment, the Executive's spouse shall continue to receive
retiree health care coverage on the same terms and conditions that the Executive
would have; provided, however, such spousal coverage will expire no later than
15 years after termination of the Executive's employment.

         6.7 SUPPLEMENTAL RETIREMENT PLAN. PremierWest agrees to maintain a
supplemental retirement plan for the Executive. The annual benefit shall
continue for up to 15 years. The parties hereto acknowledge and agree that the
obligation stated in this paragraph shall be satisfied according to the terms of
a Salary Continuation Agreement by and between PremierWest Bank and the
Executive dated as of the date of this Employment Agreement, as the Salary
Continuation Agreement may be amended after the date hereof. Unless the Salary
Continuation Agreement explicitly provides otherwise, whether benefits are
properly payable to the Executive under the Salary Continuation Agreement shall
be determined solely by reference to that agreement, and shall not depend on
whether the Executive's termination is a termination without Cause, with Good
Reason, without Good Reason, or termination because of death or disability or a
termination before or after age 65 under this Employment Agreement.

         6.8 SEPARATION AGREEMENT.  (a) PremierWest's Election. At
PremierWest's election if the Executive's employment is terminated by
PremierWest with Cause or if the Executive's employment is terminated by the
Executive without Good Reason, PremierWest and the Executive shall enter into a
Separation Agreement in substantially the form attached hereto as Appendix A
upon termination of the Executive's employment, which agreement shall set forth
covenants and obligations on the Executive's part concerning competition with
PremierWest, disclosure of confidential information, solicitation of customers
and employees, and other matters. If PremierWest exercises this election, it
shall pay to the Executive the severance compensation specified in Section
6.5(a) of this Employment Agreement, subject to (1) the Executive's execution of
and compliance with the terms and

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conditions of the Separation Agreement and (2) expiration of the 21-day period
for acceptance of the Separation Agreement and the seven-day period for
revocation of acceptance of the Separation Agreement set forth in Section 8(b)
of the Separation Agreement, without an effective revocation by the Executive.
The "Restriction Period," as that term is defined in the Separation Agreement,
shall be two years if PremierWest elects under this Section 6.8(a) to enter into
the Separation Agreement.

         (b) Executive's Election. At the Executive's election if the
Executive's employment is terminated by PremierWest without Cause or if the
Executive's employment is terminated by the Executive with Good Reason,
PremierWest and the Executive shall enter into a Separation Agreement in
substantially the form attached hereto as Appendix A upon termination of the
Executive's employment. If the Executive exercises this election, PremierWest
shall pay to the Executive the severance compensation specified in Section
6.5(a), subject to (1) the Executive's execution of and compliance with the
terms and conditions of the Separation Agreement and (2) expiration of the
21-day period for acceptance of the Separation Agreement and the seven-day
period for revocation of acceptance of the Separation Agreement set forth in
Section 8(b) of the Separation Agreement, without an effective revocation by the
Executive. The "Restriction Period," as that term is defined in the Separation
Agreement, shall be one year if the Executive elects under this Section 6.8(b)
to enter into the Separation Agreement.

                                   ARTICLE 7.
                           CHANGE IN CONTROL BENEFITS

         7.1 CHANGE IN CONTROL TERMINATION BENEFITS(a) . (a) Termination of
Executive Within One Year After a Change in Control. If a Change in Control
occurs during the term of this Employment Agreement and if either of the
following occurs, the Executive shall, subject to Section 6.8, be entitled to
the lump sum payment specified in paragraph (c) below -

                  (1) Termination by PremierWest Bancorp or PremierWest Bank:
         within 12 months after a Change in Control the Executive's employment
         is involuntarily terminated without Cause and the Executive elects
         under Section 6.8(b) to enter into the Separation Agreement, or

                  (2) Termination by the Executive for Good Reason: within 12
         months after a Change in Control the Executive terminates his
         employment with Good Reason (as defined in Section 5.2) and the
         Executive elects under Section 6.8(b) to enter into the Separation
         Agreement.

         If the Executive is removed from office or if his employment terminates
after discussions with a third party regarding a Change in Control commence, and
if those discussions ultimately conclude with a Change in Control, then for
purposes of this Employment Agreement the removal of the Executive or
termination of his employment shall be deemed to have occurred after the Change
in Control.

         (b) Termination by the Executive During a 90-day Period 12 Months after
a Change in Control. The Executive shall also be entitled to the lump sum
payment specified in paragraph (c) below if (1) he terminates employment with or
without Good Reason during the 90-day period beginning on the date that is 12
months after a Change in Control and (2) PremierWest elects under Section 6.8(a)
to enter into the Separation Agreement.

         (c) Lump Sum Payment: Subject to Section 6.8 of this Employment
Agreement, PremierWest Bancorp shall make or cause to be made a lump-sum payment
to the Executive in an amount in cash equal to two times the Executive's annual
compensation. For this purpose, annual compensation means (1) the Executive's
Base Salary at the time of the Change in Control or at the time Executive's
employment terminates, whichever is greater, plus (2) any bonuses or incentive
compensation earned for the calendar year ended immediately before the year in
which termination of employment occurs or the year in which the Change in
Control occurs, whichever is greater, in either case regardless of when the
bonus(es) or incentive compensation earned for the preceding calendar year is
paid and regardless of whether all or part of the bonus or incentive
compensation is subject to elective deferral. The amount payable to the
Executive hereunder shall not be reduced to account for the time value of money
or discounted to present value. The payment required under this paragraph (c) is
payable no later than five business days after expiration of any period within
which the Executive may revoke his acceptance under section 8 of the Separation

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<PAGE>
Agreement referred to in Section 6.8 of this Employment Agreement, but no
payment shall be required under this paragraph (c) if the Executive shall have
properly revoked his acceptance.

         (d) Benefit Plans: In addition to life and medical insurance benefits
under Section 6.6 of this Employment Agreement and any benefits to which the
Executive may be entitled under the Salary Continuation Agreement referred to in
Section 6.7 of this Employment Agreement, if the Executive's employment is
terminated by PremierWest without Cause within 12 months after a Change in
Control or if the Executive terminates his employment with Good Reason within 12
months after a Change in Control, PremierWest shall (1) cause the Executive to
become fully vested in any qualified and non-qualified plans, programs, or
arrangements in which the Executive participated if the plan, program, or
arrangement does not address the effect of a change in control, and (2)
contribute or cause to be contributed to the Executive's 401(k) plan account the
matching and profit-sharing contributions, if any, that would have been made had
the Executive's employment not terminated before the end of the plan year.

         7.2 DEFINITION OF CHANGE IN CONTROL. For purposes of this Agreement,
"CHANGE IN CONTROL" means any of the following events occur--

         (a) Merger. PremierWest Bancorp merges into or consolidates with
another corporation, or merges another corporation into PremierWest Bancorp, and
as a result less than 50% of the combined voting power of the resulting
corporation immediately after the merger or consolidation is held by persons who
were the holders of PremierWest Bancorp's voting securities immediately before
the merger or consolidation. For purposes of this Agreement, the term "person"
means an individual, corporation, partnership, trust, association, joint
venture, pool, syndicate, sole proprietorship, unincorporated organization or
other entity,

         (b) Acquisition of Significant Share Ownership. (1) a report on
Schedule 13D or another form or schedule (other than Schedule 13G) is filed or
is required to be filed under sections 13(d) or 14(d) of the Securities Exchange
Act of 1934, if the schedule discloses that the filing person or persons acting
in concert has or have become the beneficial owner of 25% or more of a class of
PremierWest Bancorp's voting securities, or (2) a person or persons acting in
concert has or have become the beneficial owner of 10% or more of a class of
PremierWest Bancorp's voting securities and the person or the person's or
group's nominee becomes the Chairman of the Board of PremierWest Bancorp, but
this paragraph (b) shall not apply to beneficial ownership of voting shares of
PremierWest Bancorp held in a fiduciary capacity by an entity in which
PremierWest Bancorp directly or indirectly beneficially owns 50% or more of the
outstanding voting securities,

         (c) Change in Board Composition. during any period of two consecutive
years, individuals who constitute PremierWest Bancorp's board of directors at
the beginning of the two-year period cease for any reason to constitute at least
a majority thereof; provided, however, that -- for purposes of this paragraph
(c) -- each director who is first elected by the board (or first nominated by
the board for election by stockholders) by a vote of at least two-thirds (2/3)
of the directors who were directors at the beginning of the period shall be
deemed to have been a director at the beginning of the two-year period, or

         (d) Sale of Assets. PremierWest Bancorp sells to a third party all or
substantially all of PremierWest Bancorp's assets. For this purpose, sale of all
or substantially all of PremierWest Bancorp's assets includes sale of
PremierWest Bank.

         7.3 NO MULTIPLE SEVERANCE PAYMENTS. If the Executive receives payment
under Section 7.1(c) he shall not be entitled to any additional severance
benefits under Section 6.5(a) of this Employment Agreement.

         7.4 POTENTIAL TRANSACTION BONUS. If a Change in Control occurs during
the term of this Employment Agreement, the Executive may be entitled to a bonus
under this Section 7.4. The bonus, if any, payable under this Section 7.4 is
separate from and shall not be reduced by any severance compensation payable to
the Executive under Section 7.1. The bonus payable under this Section 7.4 is an
amount in cash equal to 30% of the Executive's Base Salary at the time of the
Change in Control, and the bonus shall be payable to the Executive at the time
of the Change in Control. The bonus under this Section 7.4 shall be payable to
the Executive if but only if the Change in

                                       10
<PAGE>
Control provides that shareholders of PremierWest Bancorp receive as
consideration for each share of PremierWest Bancorp common stock --

         (a)      cash equal to or greater than 2.5 times the book value per
                  share of PremierWest Bancorp common stock,

         (b)      securities whose fair market value at the time of closing of
                  the Change in Control equals or exceeds 2.5 times the book
                  value per share of PremierWest Bancorp common stock, or

         (c)      a combination of cash and securities whose value, calculated
                  as provided in paragraphs (a) and (b) immediately above,
                  equals or exceeds 2.5 times the book value per share of
                  PremierWest Bancorp common stock.

         For purposes of this Section 7.4, book value shall be based on
shareholders' equity and shares outstanding reflected in PremierWest Bancorp's
consolidated balance sheet as of the end of the quarter preceding the date of
announcement of the Change in Control.

         7.5 ADJUSTED GROSS-UP FOR TAXES. (a) Additional Payment to Account
for Excise Taxes. If the Executive receives the lump sum payment under Section
7.1(c) of this Employment Agreement and acceleration of benefits under any other
benefit, compensation, or incentive plan or arrangement with PremierWest
(collectively, the "Total Benefits"), and if any part of the Total Benefits is
subject to the Excise Tax under section 280G and section 4999 of the Internal
Revenue Code (the "Excise Tax"), PremierWest shall pay to the Executive the
following additional amounts, consisting of (1) a payment equal to the Excise
Tax payable by the Executive under section 4999 on the Total Benefits (the
"Excise Tax Payment") and (2) the "Gross-Up Payment," calculated as provided
hereinafter. Together, the additional amounts described in clauses (1) and (2)
are referred to in this Employment Agreement as the "Adjusted Gross-Up Payment
Amount." The Adjusted Gross-Up Payment Amount shall be calculated by first
determining the full gross-up amount needed to provide the Excise Tax Payment
net of all income, payroll, and excise taxes. The difference between the full
gross-up amount (which includes the Excise Tax Payment) and the Excise Tax
Payment shall then be multiplied by 80% to determine the Gross-Up Payment.
Appendix B is an illustration of how this modified gross-up for taxes shall be
calculated. Payment of the Adjusted Gross-Up Payment Amount shall be made in
addition to the amount set forth in Section 7.1.

         Calculating the Excise Tax. For purposes of determining whether any of
the Total Benefits will be subject to the Excise Tax and for purposes of
determining the amount of the Excise Tax,

                  (1)      Determination of "Parachute Payments" Subject to the
                           Excise Tax: any other payments or benefits received
                           or to be received by the Executive in connection with
                           a Change in Control or the Executive's termination of
                           employment (whether under the terms of this
                           Employment Agreement or any other agreement or any
                           other benefit plan or arrangement with PremierWest,
                           any person whose actions result in a Change in
                           Control, or any person affiliated with PremierWest or
                           such person) shall be treated as "parachute payments"
                           within the meaning of section 280G(b)(2) of the
                           Internal Revenue Code, and all "excess parachute
                           payments" within the meaning of section 280G(b)(1)
                           shall be treated as subject to the Excise Tax, unless
                           in the opinion of the certified public accounting
                           firm that is retained by PremierWest as of the date
                           immediately before the Change in Control (the
                           "Accounting Firm") such other payments or benefits do
                           not constitute (in whole or in part) parachute
                           payments, or such excess parachute payments represent
                           (in whole or in part) reasonable compensation for
                           services actually rendered within the meaning of
                           section 280G(b)(4) of the Internal Revenue Code in
                           excess (as defined in section 280G(b)(3) of the
                           Internal Revenue Code), or are otherwise not subject
                           to the Excise Tax,

                  (2)      Calculation of Benefits Subject to Excise Tax: the
                           amount of the Total Benefits that shall be treated as
                           subject to the Excise Tax shall be equal to the
                           lesser of (a) the total amount of the Total Benefits
                           reduced by the amount of such Total Benefits that in
                           the opinion of

                                       11
<PAGE>
                           the Accounting Firm are not parachute payments, or
                           (b) the amount of excess parachute payments within
                           the meaning of section 280G(b)(1) (after applying
                           clause (1), above), and

                  (3)      Value of Noncash Benefits and Deferred Payments: the
                           value of any noncash benefits or any deferred payment
                           or benefit shall be determined by the Accounting Firm
                           in accordance with the principles of sections
                           280G(d)(3) and (4) of the Internal Revenue Code.

         Assumed Marginal Income Tax Rate. For purposes of determining the
amount of the Adjusted Gross-Up Payment Amount, the Executive shall be deemed to
pay federal income taxes at the highest marginal rate of federal income taxation
in the calendar years in which the Adjusted Gross-Up Payment Amount is to be
made and state and local income taxes at the highest marginal rate of taxation
in the state and locality of the Executive's residence on the date of
termination of employment, net of the reduction in federal income taxes that can
be obtained from deduction of such state and local taxes (calculated by assuming
that any reduction under section 68 of the Internal Revenue Code in the amount
of itemized deductions allowable to the Executive applies first to reduce the
amount of such state and local income taxes that would otherwise be deductible
by the Executive, and applicable federal FICA and Medicare withholding taxes).

         Return of Reduced Excise Tax Payment or Payment of Additional Excise
Tax. If the Excise Tax is later determined to be less than the amount taken into
account hereunder when the Executive's employment terminated, the Executive
shall repay to PremierWest -- when the amount of the reduction in Excise Tax is
finally determined -- the portion of the Adjusted Gross-Up Payment Amount
attributable to the reduction (plus that portion of the Adjusted Gross-Up
Payment Amount attributable to the Excise Tax, federal, state and local income
taxes and FICA and Medicare withholding taxes imposed on the Adjusted Gross-Up
Payment Amount being repaid by the Executive to the extent that the repayment
results in a reduction in Excise Tax, FICA and Medicare withholding taxes and/or
a federal, state or local income tax deduction).

         If the Excise Tax is later determined to be more than the amount taken
into account hereunder when the Executive's employment terminated (due, for
example, to a payment whose existence or amount cannot be determined at the time
of the Adjusted Gross-Up Payment Amount), PremierWest shall make an additional
Adjusted Gross-Up Payment Amount to the Executive for that excess (plus any
interest, penalties or additions payable by the Executive for the excess) when
the amount of the excess is finally determined.

         (b) Responsibilities of the Accounting Firm and PremierWest.
Determinations Shall Be Made by the Accounting Firm. Subject to the provisions
of Section 7.5(a), all determinations required to be made under this Section
7.5(b) -- including whether and when an Adjusted Gross-Up Payment Amount is
required, the amount of the Adjusted Gross-Up Payment Amount and the assumptions
to be used to arrive at the determination (collectively, the "Determination") --
shall be made by the Accounting Firm, which shall provide detailed supporting
calculations both to PremierWest and the Executive within 15 business days after
receipt of notice from PremierWest or the Executive that there has been an
Adjusted Gross-Up Payment Amount, or such earlier time as is requested by
PremierWest.

         Fees and Expenses of the Accounting Firm and Agreement with the
Accounting Firm. All fees and expenses of the Accounting Firm shall be borne
solely by PremierWest. PremierWest shall enter into any agreement requested by
the Accounting Firm in connection with the performance of its services
hereunder.

         Accounting Firm's Opinion. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, the Accounting Firm shall furnish the
Executive with a written opinion to that effect, and to the effect that failure
to report Excise Tax, if any, on the Executive's applicable federal income tax
return will not result in the imposition of a negligence or similar penalty.

         Accounting Firm's Determination Is Binding; Underpayment and
Overpayment. The Determination by the Accounting Firm shall be binding on
PremierWest and the Executive. Because of the uncertainty in determining

                                       12
<PAGE>
whether any of the Total Benefits will be subject to the Excise Tax at the time
of the Determination, it is possible that an Adjusted Gross-Up Payment Amount
that should have been made will not have been made by PremierWest
("Underpayment"), or that an Adjusted Gross-Up Payment Amount will be made that
should not have been made by PremierWest ("Overpayment"). If, after a
Determination by the Accounting Firm, the Executive is required to make a
payment of additional Excise Tax, the Accounting Firm shall determine the amount
of the Underpayment that has occurred. The Underpayment (together with interest
at the rate provided in section 1274(d)(2)(B) of the Internal Revenue Code)
shall be paid promptly by PremierWest to or for the benefit of the Executive. If
the Adjusted Gross-Up Payment Amount exceeds the amount necessary to reimburse
the Executive for his Excise Tax according to Section 7.5(a), the Accounting
Firm shall determine the amount of the Overpayment that has been made. The
Overpayment (together with interest at the rate provided in section
1274(d)(2)(B) of the Internal Revenue Code) shall be paid promptly by the
Executive to or for the benefit of PremierWest. Provided that his expenses are
reimbursed by PremierWest, the Executive shall cooperate with any reasonable
requests by PremierWest in any contests or disputes with the Internal Revenue
Service relating to the Excise Tax.

         Accounting Firm Conflict of Interest. If the Accounting Firm is serving
as accountant or auditor for the individual, entity, or group effecting the
Change in Control, the Executive may appoint another nationally recognized
public accounting firm to make the Determinations required hereunder (in which
case the term "Accounting Firm" as used in this Agreement shall be deemed to
refer to the accounting firm appointed by the Executive under this paragraph).

                                   ARTICLE 8.
                        CONFIDENTIALITY AND CREATIVE WORK

         8.1 NON-DISCLOSURE. The Executive covenants and agrees that he will not
reveal to any person, firm, or corporation any confidential information of any
nature concerning PremierWest or its business, or anything connected therewith.
As used in this Article 8, the term "CONFIDENTIAL INFORMATION" means all of
PremierWest Bancorp's and its affiliates' confidential and proprietary
information and trade secrets in existence on the date hereof or existing at any
time during the term of this Employment Agreement, including but not limited to
--

         (a)      the whole or any portion or phase of any business plans,
                  financial information, purchasing data, supplier data,
                  accounting data, or other financial information,

         (b)      the whole or any portion or phase of any research and
                  development information, design procedures, algorithms or
                  processes, or other technical information,

         (c)      the whole or any portion or phase of any marketing or sales
                  information, sales records, customer lists, prices, sales
                  projections, or other sales information, and

         (d)      trade secrets, as defined from time to time by the laws of the
                  State of Oregon.

Notwithstanding the foregoing, confidential information excludes information
that -- as of the date hereof or at any time after the date hereof -- is
published or disseminated without obligation of confidence or that becomes a
part of the public domain (1) by or through action of PremierWest, or (2)
otherwise than by or at the direction of the Executive. This Section 8.1 does
not prohibit disclosure required by an order of a court having jurisdiction or a
subpoena from an appropriate governmental agency or disclosure made by the
Executive in the ordinary course of business and within the scope of his
authority.

         8.2 RETURN OF MATERIALS. The Executive agrees to deliver or return to
PremierWest upon termination, upon expiration of this Employment Agreement, or
as soon thereafter as possible, all written information and any other similar
items furnished by PremierWest or prepared by the Executive in connection with
his services hereunder. The Executive will retain no copies thereof after
termination of this Employment Agreement or termination of the Executive's
employment with PremierWest.



                                       13
<PAGE>
         8.3 INJUNCTIVE RELIEF. The Executive acknowledges that it is impossible
to measure in money the damages that will accrue to PremierWest if the Executive
fails to observe the obligations imposed on him by this Article 8. Accordingly,
if PremierWest institutes an action to enforce the provisions hereof, the
Executive hereby waives the claim or defense that an adequate remedy at law is
available to PremierWest, and the Executive agrees not to urge in any such
action the claim or defense that an adequate remedy at law exists.

         8.4 AFFILIATES' CONFIDENTIAL INFORMATION IS COVERED; CONFIDENTIALITY
OBLIGATION SURVIVES TERMINATION. For purposes of this Article 8, the term
"AFFILIATE" of PremierWest Bancorp includes PremierWest Bank and any entity that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with PremierWest Bank. The rights and
obligations set forth in this Article 8 shall survive termination of this
Employment Agreement.

         8.5 CREATIVE WORK. The Executive agrees that all creative work and work
product, including but not limited to all technology, business management tools,
processes, software, patents, trademarks, and copyrights developed by the
Executive during the term of this Employment Agreement, regardless of when or
where such work or work product was produced, constitutes work made for hire,
all rights of which are owned by PremierWest. The Executive hereby assigns to
PremierWest Bancorp and to PremierWest Bank all rights, title, and interest,
whether by way of copyrights, trade secret, trademark, patent, or otherwise, in
all such work or work product, regardless of whether the same is subject to
protection by patent, trademark, or copyright laws.

                                   ARTICLE 9.
                                  MISCELLANEOUS

         9.1 SUCCESSORS AND ASSIGNS(a) . (a) This Employment Agreement Is
Binding on PremierWest's Successors. This Employment Agreement shall be binding
upon PremierWest Bancorp and any successor to PremierWest Bancorp, including any
persons acquiring directly or indirectly all or substantially all of the
business or assets of PremierWest Bancorp by purchase, merger, consolidation,
reorganization, or otherwise. Any such successor shall thereafter be deemed to
be "PremierWest Bancorp" for purposes of this Employment Agreement. But this
Employment Agreement and PremierWest's obligations under this Employment
Agreement are not otherwise assignable, transferable, or delegable by
PremierWest. By agreement in form and substance satisfactory to the Executive,
PremierWest Bancorp shall require any successor to all or substantially all of
the business or assets of PremierWest Bancorp expressly to assume and agree to
perform this Employment Agreement in the same manner and to the same extent
PremierWest would be required to perform if no such succession had occurred.

         (b) This Employment Agreement Is Enforceable by the Executive and His
Heirs. This Employment Agreement will inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees and legatees.

         (c) This Employment Agreement Is Personal in Nature and Is Not
Assignable. This Employment Agreement is personal in nature. Without written
consent of the other parties, no party shall assign, transfer or delegate this
Employment Agreement or any rights or obligations under this Employment
Agreement, except as expressly provided herein. Without limiting the generality
or effect of the foregoing, the Executive's right to receive payments hereunder
is not assignable or transferable, whether by pledge, creation of a security
interest, or otherwise, except for a transfer by the Executive's will or by the
laws of descent and distribution. If the Executive attempts an assignment or
transfer that is contrary to this Section 9.1, PremierWest shall have no
liability to pay any amount to the assignee or transferee.

         9.2 GOVERNING LAW, JURISDICTION AND FORUM. This Employment Agreement
shall be construed under and governed by the internal laws of the State of
Oregon, without giving effect to any conflict of laws provision or rule (whether
of the State of Oregon or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Oregon. By
entering into this Employment Agreement, the Executive acknowledges that he is
subject to the jurisdiction of both the federal and state courts in the State of
Oregon. Any actions or proceedings instituted under this Employment Agreement
shall be brought and tried solely in courts

                                       14
<PAGE>
located in the County of Jackson, State of Oregon, or in the federal court
having jurisdiction in Medford, Oregon. The Executive expressly waives his
rights to have any such actions or proceedings brought or tried elsewhere.

         9.3 ENTIRE AGREEMENT. This Employment Agreement sets forth the entire
agreement of the parties concerning the employment of the Executive by
PremierWest, and any oral or written statements, representations, agreements, or
understandings made or entered into prior to or contemporaneously with the
execution of this Employment Agreement, are hereby rescinded, revoked, and
rendered null and void by the parties. The Salary Continuation Agreement and the
Executive Survivor Income Agreement and the parties' rights and obligations
thereunder shall remain in full force and effect according to the terms thereof,
as the same may be amended and restated after the date of this Employment
Agreement. Benefits payable under this Employment Agreement shall not be reduced
by any benefits payable under the Salary Continuation Agreement, and benefits
payable under the Salary Continuation Agreement shall not be reduced by any
benefits payable under this Employment Agreement.

         Without limiting the generality of the foregoing, the parties hereto
acknowledge and agree that this Employment Agreement supersedes in its entirety
the "Agreement" entered into by the Executive and PremierWest Bank as successor
to Bank of Southern Oregon dated April 2, 1998, as amended or supplemented. The
April 2, 1998 "Agreement" shall hereafter be void and of no force or effect;
provided, however, that the Executive's interests in and to stock options
granted by the terms of that previous "Agreement" are not affected in any way by
this Employment Agreement, and the Executive may continue to hold and exercise
and exercise all rights of ownership in any such stock options according to
their terms. However, PremierWest and the Executive acknowledge and agree that
PremierWest and the Executive are prevented from treating the entirety of the
stock options granted under the April 2, 1998 "Agreement" as incentive stock
options because of Internal Revenue Code of 1986 and Internal Revenue Service
rules concerning incentive stock options, including a $100,000 limit on the
aggregate fair market value of stock with respect to which incentive stock
options become exercisable for the first time in any calendar year. PremierWest
and the Executive acknowledge and agree that the portion of the stock option
grant exceeding Internal Revenue Service limits for incentive stock options
shall be treated as nonqualified stock options under the Internal Revenue Code,
even though the original intention in 1998 when the stock option was granted
might have been that the entire stock option grant would be a qualified
incentive stock option grant.

         9.4 NOTICES. Any notice under this Employment Agreement shall be deemed
to have been effectively made or given if in writing and personally delivered,
delivered by mail properly addressed in a sealed envelope, postage prepaid by
certified or registered mail, delivered by a reputable overnight delivery
service, or sent by facsimile. Unless otherwise changed by notice, notice shall
be properly addressed to the Executive if addressed to the address of the
Executive on the books and records of PremierWest Bancorp at the time of the
delivery of such notice, and properly addressed to PremierWest if addressed to
PremierWest Bancorp, Inc., 503 Airport Road, Medford, Oregon 97504, Attention:
Corporate Secretary.

         9.5 SEVERABILITY. In the case of conflict between any provision of this
Employment Agreement and any statute, regulation or judicial precedent, the
latter shall prevail, but the affected provisions of this Employment Agreement
shall be curtailed and limited solely to the extent necessary to bring them
within the requirements of law. If any provision of this Employment Agreement is
held by a court of competent jurisdiction to be indefinite, invalid, void or
voidable, or otherwise unenforceable, the balance of this Employment Agreement
shall continue in full force and effect unless such construction would clearly
be contrary to the intentions of the parties or would result in an injustice.

         9.6 CAPTIONS AND COUNTERPARTS. The captions in this Employment
Agreement are solely for convenience. The captions in no way define, limit, or
describe the scope or intent of this Employment Agreement. This Employment
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original but all of which together shall constitute one and the same
instrument.

         9.7 NO DUTY TO MITIGATE. PremierWest hereby acknowledges that it will
be difficult and could be impossible (a) for the Executive to find reasonably
comparable employment after his employment terminates, and (b) to measure the
amount of damages the Executive may suffer as a result of termination.
Additionally, PremierWest acknowledges that its general severance pay plans do
not provide for mitigation, offset, or reduction of any


                                       15
<PAGE>
severance payment received thereunder. Accordingly, PremierWest further
acknowledges that the payment of severance and termination benefits under this
Employment Agreement is reasonable and shall be liquidated damages. The
Executive shall not be required to mitigate the amount of any payment provided
for in this Employment Agreement by seeking other employment. Moreover, the
amount of any payment provided for in this Employment Agreement shall not be
reduced by any compensation earned or benefits provided as the result of
employment of the Executive or as a result of the Executive being self-employed
after termination of his employment.

         9.8 AMENDMENT AND WAIVER. This Employment Agreement may not be amended,
released, discharged, abandoned, changed, or modified in any manner, except by
an instrument in writing signed by each of the parties hereto. The failure of
any party hereto to enforce at any time any of the provisions of this Employment
Agreement shall in no way be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Employment Agreement or any part
thereof or the right of any party thereafter to enforce each and every such
provision. No waiver or any breach of this Employment Agreement shall be held to
be a waiver of any other or subsequent breach.

         9.9 LEGAL FEES. If any arbitration, legal action or other proceeding is
brought for the enforcement of this Employment Agreement or any agreement or
instrument delivered under or in connection with this Employment Agreement, or
because of an alleged dispute, breach, default, or misrepresentation in
connection with any of the provisions of this Employment Agreement, the
successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.

         9.10 CONSULTATION WITH COUNSEL AND INTERPRETATION OF THIS EMPLOYMENT
AGREEMENT. The Executive acknowledges and agrees that he has had the assistance
of counsel of his choosing in the negotiation of this Employment Agreement, or
he has chosen not to have the assistance of his own counsel. Both parties hereto
having participated in the negotiation and drafting of this Employment
Agreement, they hereby agree that there shall not be strict interpretation
against either party in connection with any review of this Employment Agreement
in which interpretation thereof is an issue.

         IN WITNESS WHEREOF, the parties have caused this Employment Agreement
to be duly executed as of the day and year first written above.

WITNESSES                                    PREMIERWEST BANCORP

----------------------------                 By:    ----------------------------

----------------------------                 Its:   ----------------------------


WITNESSES                                    PREMIERWEST BANK

----------------------------                 By:    ----------------------------

----------------------------                 Its:   ----------------------------


WITNESSES                                    EXECUTIVE

----------------------------
                                             ----------------------------
----------------------------                 John L. Anhorn






                                       16
<PAGE>



County of Jackson        )
                         ) ss:
State of Oregon          )

Before me this _____ day of ___________, 2002, personally appeared the above
named _____________________ and John L. Anhorn, who acknowledged that they did
sign the foregoing instrument and that the same was their free act and deed.




                                           --------------------------------
(Notary Seal)                              Notary Public

                                           My Commission Expires:









































                                       17
<PAGE>
                         EMPLOYMENT AGREEMENT APPENDIX A

                              SEPARATION AGREEMENT


         This SEPARATION AGREEMENT (this "Agreement") is entered into as of this
_____ day of __________, 20__, by and among PremierWest Bancorp, an Oregon
corporation, PremierWest Bank, an Oregon-chartered bank and
____________________________ wholly owned subsidiary of PremierWest Bancorp (the
"Bank"), and ___________________________. (the "Executive"). PremierWest
Bancorp, the Bank, and their subsidiaries and affiliates, including any entity
or organization controlling, controlled by, or under common control with
PremierWest Bancorp or the Bank, are hereinafter sometimes referred to
collectively or individually as the "Corporation."

         WHEREAS, the Executive, PremierWest Bancorp, and the Bank entered into
an Employment Agreement dated as of August 9, 2002 (as the same may be amended,
the "Employment Agreement") providing that the Corporation will pay specified
severance benefits to the Executive after termination of his employment under
certain circumstances specified in the Employment Agreement,

         WHEREAS, the Executive's employment will terminate on __________, 20__.

         WHEREAS, by its terms the Employment Agreement provides that no
severance benefits shall be payable to the Executive unless the Executive enters
into an agreement not to compete with the Corporation,

         WHEREAS, the Executive has consulted with counsel of the Executive's
choice concerning this Agreement, or the Executive has chosen not to consult
with counsel, and the Executive, and as applicable the Executive's counsel, have
had the opportunity to discuss with the Corporation the terms and conditions of
this Agreement, and

         WHEREAS, the Executive and the Corporation desire to set forth in this
Separation Agreement the terms and conditions of the Executive's agreement not
to compete with the Corporation.

         NOW THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Corporation and the Executive hereby agree as follows.

         1. NONCOMPETITION. For [one year (under Section 6.8(b) of the
Employment Agreement) / two years (under Section 6.8(a) of the Employment
Agreement)] after the date on which the Executive's termination of employment
becomes effective (the "Restriction Period"), the Executive shall not become
associated with any entity, whether as an owner, principal, partner, director,
trustee, employee, agent, consultant, or stockholder (except as a holder of 1 %
or less of the outstanding voting stock of a company) that is engaged or
proposes to engage in any business that is in competition with the business of
the Corporation in any geographic area in which the Corporation operates an
office employing at least one person or solicits deposit or loan customers (a
"Competitor").

         2. NONSOLICITATION. During the Restriction Period, the Executive shall
not encourage or solicit or assist any other person or firm in encouraging or
soliciting any person who, during the two year period preceding the Executive's
termination of employment, is or was engaged in a business relationship with the
Corporation to terminate the person's relationship with the Corporation or to
engage in a business relationship with a Competitor. During the Restriction
Period, the Executive shall not, except with advance written consent of the
Corporation, induce any employee of the Corporation to terminate employment with
such entity, and shall not, either individually or as owner, principal, partner,
director, trustee, agent, employee, consultant or otherwise, employ, offer
employment, or cause employment to be offered to any person who is or was
employed by the Corporation unless such person shall have ceased to be employed
by such entity for a period of at least six months.

         3. NONDISCLOSURE. The Executive covenants and agrees that he will not
reveal to any person, firm, or corporation any confidential information of any
nature concerning the Corporation or concerning the business of any of them. As
used in this Agreement, the term "confidential information" means all of the
Corporation's confidential and proprietary information and trade secrets in
existence on the date hereof or existing at any time during the term of this
Agreement, including but not limited to -
<PAGE>
                  (a) the whole or any portion or phase of any business plans,
         financial information, purchasing data, supplier data, accounting data,
         or other financial information,

                  (b) the whole or any portion or phase of any research and
         development information, design procedures, algorithms or processes, or
         other technical information,

                  (c) the whole or any portion or phase of any marketing or
         sales information, sales records, customer lists, prices, sales
         projections, or other sales information, and

                  (d) trade secrets, as defined from time to time by the laws of
         the State of Oregon.

Notwithstanding the foregoing, confidential information excludes information
that - as of the date hereof or at any time after the date hereof- is published
or disseminated without obligation of confidence or that becomes a part of the
public domain (1) by or through action of the Corporation, or (2) otherwise than
by or at the direction of the Executive. This Section 3 does not prohibit
disclosure required by an order of a court having jurisdiction or a subpoena
from an appropriate governmental agency or disclosure made by the Executive in
the ordinary course of business and within the scope of his authority.

         4. RETURN OF MATERIALS. The Executive agrees to deliver or return to
the Bank upon termination of employment or as soon thereafter as possible all
written information and any other similar items furnished by the Corporation or
prepared by the Executive in connection with his service to the Corporation. The
Executive will retain no copies thereof after termination of employment.

         5. CREATIVE WORK. The Executive agrees that all creative work and work
product, including but not limited to all technology, business management tools,
processes, software, patents, trademarks, and copyrights developed by the
Executive during the term of his employment with the Corporation, regardless of
when or where such work or work product was produced, constitutes work made for
hire, all rights of which are owned by the Corporation. The Executive hereby
assigns to PremierWest Bancorp and to the Bank all rights, title, and interest,
whether by way of copyrights, trade secret, trademark, patent, or otherwise, in
all such work or work product, regardless of whether the same is subject to
protection by patent, trademark, or copyright laws.

         6. REASONABLENESS OF THE RESTRICTION PERIOD; EQUITABLE RELIEF. The
Executive acknowledges and agrees that the Restriction Period and the matters
and territories covered thereby are fair and reasonable and are the result of
negotiation between PremierWest Bancorp and the Bank, on one hand, and the
Executive (and the Executive's counsel, if the Executive has sought the benefit
of counsel) on the other. The Executive further acknowledges and agrees that the
covenants and obligations in this Agreement relate to special, unique, and
extraordinary matters and that a violation of any of the terms of the covenants
and obligations will cause irreparable injury to the Corporation, for which
adequate remedies are not available at law. Therefore, the Executive agrees that
the Corporation shall be entitled to an injunction, restraining order, or such
other equitable relief as a court of competent jurisdiction may deem necessary
or appropriate to restrain the Executive from committing any violation of the
covenants and obligations set forth in this Agreement. These injunctive remedies
are cumulative and are in addition to any other rights and remedies the
Corporation may have at law or in equity. If the Corporation institutes an
action to enforce the provisions hereof, the Executive hereby waives the claim
or defense that an adequate remedy at law is available, and the Executive agrees
not to urge in any such action the claim or defense that an adequate remedy at
law exists.

         7. AGREEMENT TO COOPERATE WITH THE CORPORATION THROUGH THE DATE OF
TERMINATION. The Executive agrees to cooperate as directed by the Corporation
with the Corporation and its customers through __________________, 20__, the
date on which termination of the Executive's employment becomes effective. If
the Executive fails to cooperate to the Corporation's satisfaction as reasonably
determined by the Corporation, the Executive shall be deemed to have voluntarily
resigned and no severance or termination benefits shall be owing or payable to
the Executive under the Employment Agreement, but the other provisions of this
Agreement shall remain in full force and effect.



                                      A-2
<PAGE>
         8. RELEASE. (a) Release and Covenant Not to Sue. As additional
consideration for receipt of the severance and termination benefits specified in
the Employment Agreement, the Executive, on his or her own behalf and on behalf
of the Executive's heirs, executors, successors, and assigns hereby releases the
Corporation, its directors, officers, executives, managers, and employees from
any and all debts, claims, demands, rights, actions, causes of action, suits, or
damages whatsoever and of every kind and nature, whether known or unknown,
contingent or otherwise (collectively the "Claims"), against the Corporation and
the others released herein, relating to or arising out of the Executive's
termination, except to the extent such Claims cannot under applicable law be
released. The Executive also covenants not to sue or file or cause to be filed
any complaint with any federal, state, or local agency or in any court against
the Corporation or the others released herein regarding any matter related to
the Executive's termination of employment with the Corporation, including but
not limited to any Claims under the Age Discrimination in Employment Act or any
similar federal, state or local law, except to the extent such Claims cannot
under applicable law be released. The release of liability set forth herein does
not extend to rights or claims that may arise from events occurring after
execution of this Agreement, including but not limited to claims for the
enforcement of this Agreement, or to the Executive's exercise of rights under
the Consolidated Omnibus Budget Reconciliation Act of 1986 to continued
insurance, if applicable.

         (b) Acceptance and Revocation Period. The Executive shall have a period
of 21 days from the date of delivery of this Agreement to accept section 8(a) of
this Agreement. The Executive shall have a period of seven days after his
execution of this Agreement during which the Executive may revoke his acceptance
of section 8(a) of this Agreement by providing written notice of revocation to
PremierWest Bancorp. Any such acceptance or revocation must be addressed to the
Chairman, PremierWest Bancorp, 503 Airport Road, Medford, Oregon 97504 or such
other address as the Executive may be directed in writing by PremierWest Bancorp
to provide such acceptance or revocation. To be effective, the acceptance or
revocation must be received no later than 5:00 p.m. Pacific Time within the
applicable time period. The 21-day acceptance period may be waived by the
Executive, but the seven-day revocation period may not be waived. If the
Executive's acceptance of Section 8(a) of this Agreement is not affirmatively
revoked in writing by the Executive during the seven-day revocation period, it
shall be deemed to have been accepted and not revoked. Section 8(a) of this
Agreement shall not be effective or enforceable until the seven-day revocation
period has expired. If the Executive properly executes his right to revoke
acceptance of Section 8(a), the remainder of this Agreement shall nevertheless
remain in full force and effect.

         9. NO ADMISSION OF WRONGDOING. The Executive acknowledges and agrees
that nothing in this Agreement constitutes or shall be construed as an admission
of liability or wrongdoing on the part of the Corporation or the others released
herein.

         10. SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the Corporation and its successors and assigns.

         11. SEVERABILITY. The provisions of this Agreement shall be deemed
severable. The invalidity or unenforceability of any provision shall not affect
the validity or enforceability of the other provisions of this Agreement. Any
provision held to be invalid or unenforceable shall be reformed to the extent
(and only to the extent) necessary to make it valid and enforceable.

         12. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by and construed in accordance
with the substantive laws of the State of Oregon, without giving effect to the
principles of conflict of laws of such State.

         13. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.

         14. THIS AGREEMENT IS NOT EXCLUSIVE. This Agreement does not supersede
any other agreement to which the Executive may be party with the Corporation
relating to noncompetition, nondisclosure, or the other matters referred to in
this Agreement, whether those noncompetition, nondisclosure, or other provisions
are contained in an

                                      A-3
<PAGE>
employment agreement, a severance agreement, a salary continuation agreement, or
any other agreement. This Agreement is in addition to any such other
agreement(s). In case of conflict between this Agreement, on one hand, and any
such other agreement(s), on the other, the Corporation shall have sole and
exclusive authority to determine whether this Agreement or such other
agreement(s) shall govern in the particular case and whether to enforce its
rights under this Agreement, under such other agreement(s), or under both.

         15. DEFINED TERMS. Terms used but not defined in this Agreement shall
have the meanings given to them in the Employment Agreement.

         IN WITNESS WHEREOF, the Executive, PremierWest Bancorp, and the Bank
have executed this Separation Agreement effective as of the day and year first
set forth above.

                                                  PREMIERWEST BANCORP

                                                  By:  _______________________

                                                  Its: _______________________

                                                  PREMIERWEST BANK

                                                  By:  _______________________

                                                  Its: _______________________

                                                  EXECUTIVE:

                By signing below, I hereby agree to and accept all provisions of
         this Separation Agreement, specifically including but not limited to
         the release and covenant not to sue that is set forth in Section 8(a)
         of this Separation Agreement. I understand that I have seven days after
         the date of my execution of this Separation Agreement to revoke my
         acceptance of the release and covenant not to sue contained in Section
         8(a) of the Separation Agreement, and that if I do not revoke my
         acceptance by 5:00 p.m. Pacific Time on that date the release and
         covenant not to sue will become effective. I understand that if I do
         revoke my acceptance of the release and covenant not to sue, I might as
         a result be forfeiting any rights I may have under my employment
         agreement or a severance agreement to severance and termination
         benefits

                                                  ____________________________

                                                  Date signed: ___________20__.


                                      A-4
<PAGE>
                         EMPLOYMENT AGREEMENT APPENDIX B
                               PREMIERWEST BANCORP

ILLUSTRATION OF SECTION 280G AND SECTION 4999 CALCULATION AND MODIFIED 80%
GROSS-UP FOR TAXES
<TABLE>
<CAPTION>
                                                                                                ADJUSTED 80% GROSS-UP
                                                                            TOTAL PARACHUTE     PAYMENT DUE EXECUTIVE
                                                       TOTAL VALUE OF      PAYMENTS WITH FULL     UNDER EMPLOYMENT
                                                          CHANGE-            SS.280G GROSS-UP           AGREEMENT
                                                      IN-CONTROL PAYMENTS
                                                    ---------------------
<S>                                                 <C>                    <C>                  <C>
BASE AMOUNT                                         $        197,063

TOTAL PARACHUTE PAYMENTS:
    Nonqualified benefits arising
        under SERP                                           694,411
        under stock options                                  168,386
        under employment agreement                               ---
                                                    ---------------------

    Total parachute payments, before gross-up                862,797

Threshold amount (3 times base amount - $1.00)               591,190
                                                    ---------------------

Parachute payments in excess of threshold amount    $        271,607
                                                    ---------------------

EXCISE TAX ON PARACHUTE PAYMENT:
    Total parachute payments                                               $
                                                                                   862,797
    Minus base amount                                                              197,063
                                                                          ---------------------

Parachute payment subject to Excise Tax                                            665,734
Multiplied by excise tax rate                                                         x 20 %
                                                                          ---------------------
Initial Excise Tax on parachute payment                                            133,147
                                                                          ---------------------

GROSS-UP FOR TAXES, IF APPLICABLE:
    Federal income tax rate                                                        39.6000 %
     Excise Tax rate                                                               20.0000 %
     Oregon state income tax rate                                                   9.0000 %
     Local income tax rate                                                          0.0000 %
     FICA rate                                                                      1.4500 %
    Phase-out of itemized deductions                                                1.1880 %
    Federal tax benefit of state and local income tax                              (3.5600)%
                                                                          ---------------------

Gross-up marginal tax rate                                                         67.6700 %

100% minus gross-up marginal rate                                                  32.3300 %
                                                                          ---------------------

Full payment to gross up for taxes                                        $      411,837
                                                                          =====================

ADJUSTED GROSS-UP PAYMENT AMOUNT:
    Full 100% gross-up amount                                                                   $    411,837
    Minus Excise Tax payment                                                                         133,147
                                                                                             ----------------------
                                                                                                     278,690
    Multiplied by 80%                                                                                   x 80%
                                                                                             ----------------------
                                                                                                     222,952
    Plus Excise Tax payment                                                                          133,147
                                                                                             ----------------------
        Adjusted Gross-Up Payment Amount                                                        $    356,099
                                                                                             ======================
</TABLE>

                                      B-1