EXHIBIT 10.4
                              EMPLOYMENT AGREEMENT


PARTIES: PREMIERWEST BANK (the "Bank")
                  P.O. Box 40
                  Medford, OR  97501

                  PREMIERWEST BANCORP  (the "Company")
                  P.O. Box 40
                  Medford, OR  97501

                  TOM ANDERSON  ("Executive")
                  225 Queens Branch Road.
                  Rogue River, Oregon  97537

DATE:    January 11, 2002


         WHEREAS, the Bank desires to employ Executive and Executive wishes to
be employed by the Bank, the parties agree as follows:

                                    AGREEMENT

1.       POSITION AND TERM

         1.1 Effective as of the date of arrival, which shall be on or about
         March 1, 2002 the Bank shall employ Executive, and Executive shall
         report for duty at the Bank as Senior Vice President and Chief
         Financial Officer of the Bank, and the Executive shall serve the Bank
         in such capacity, or in such other capacity as the Bank may, in its
         discretion, direct Executive to serve. Executive shall also serve as
         Senior Vice President and Chief Financial Officer of the Company, but
         shall receive no additional compensation for service in those
         capacities.

2.       EXTENT OF SERVICES

         2.1 Executive shall devote his full time and attention exclusively to
         the performance of the work and duties assigned to him for and on
         behalf of the Bank.

         2.2 Executive shall perform his duties with fidelity and to the best of
         his ability and shall, at all times during employment by the Bank and
         thereafter, respect the confidential nature of the information received
         by his in the course of performing his duties.

2.3      Nothing contained in this Section 2 shall prohibit the Executive from
         serving as a director of any other corporation not in direct
         competition with the Bank (subject to the Bank's approval which will
         not be unreasonably withheld), or from owning or controlling shares of
         stock in any other corporation, whether or not the capital stock
         thereof is publicly traded (including a corporation that is in direct
         competition with the Bank, the Company or any subsidiaries or
         affiliates thereof, if the stock of such competing corporation is
         publicly traded and the Executive does not beneficially own more than
         one percent (1%) of the outstanding shares of such stock).


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3.       COMPENSATION AND BENEFIT PLANS

         3.1 General. Executive shall be compensated as set forth in this
         Section 3. Compensation and benefits to be provided to Executive
         pursuant to this Agreement may be provided either by the Bank, the
         Company or other affiliate or successor or partly by any of them.

         3.2 Base Salary. Executive shall receive an initial annual salary
         ("Base Salary") of $100,000. The Base Salary shall be paid in
         increments equal to one-twelfth the Base Salary on the last day of each
         month.

         3.3 Increases in Base Salary. When the Bank reviews the compensation of
         other Bank officers in accordance with the Bank's regular practices,
         Executive's Base Salary shall be subject to adjustment in accord with
         the Bank's compensation policies and practices generally applicable to
         Bank officers. Executive's Base Salary following any such change shall
         be the new Base Salary for purposes of this Agreement. Without limiting
         the foregoing, Executive's Base Salary shall be increased, effective
         January 1, 2003, to $115,000, and effective January 1, 2004 to
         $125,000.

         3.4      Stock Options.

                  3.4.1 As of the first day of Executive's employment, Executive
                  shall be granted an option to purchase 15,000 shares of the
                  common stock of PremierWest Bancorp. pursuant to Company's
                  Stock Option Plan, the provisions of which shall govern the
                  terms and conditions of such option to the extent not
                  inconsistent with this Agreement. Executive shall execute a
                  form of Stock Option Agreement setting forth the terms and
                  conditions of such option, which agreement shall be effective
                  as of the first day of Executive's employment.

                  3.4.2 The option shall be exercisable at the Fair Market Value
                  of the stock, and vest over a seven (7) year period. The
                  option agreement shall also contain a provision for
                  accelerated vesting in the event of a change in control

                  3.4.3 The portions of the option that become exercisable shall
                  be cumulative, such that the option may be exercised to the
                  extent of all exercisable portions not previously exercised.



         3.5 Bank 401(k) Plan. Executive shall be entitled to participate in the
         Bank's 401(k) Plan in accord with plan terms on the same basis as other
         employees.

         3.6 Vacation. Executive shall be entitled to accrue up to four (4)
         weeks of vacation during each calendar year, and shall be entitled to a
         pro rated share of such vacation time for the period of his actual
         employment by the Bank in 2002. Vacation time shall be otherwise
         subject to the guidelines set forth in the Bank's employee handbook,
         including the guidelines governing vacation accruals during partial
         years of employment.


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         3.7 Automobile Allowance. Executive shall be entitled to receive a
         non-accountable monthly Automobile allowance of $300.00.

4.       TERMINATION OF EMPLOYMENT

         4.1 Executive's employment shall be "at will" and may be terminated by
         either the Bank or Executive at any time, with or without cause, upon
         two weeks written notice.

         4.2      For purposes of this agreement, "cause" shall mean

                  (a) Executive's death or disability, as "disability" is
                  defined in Section 6 hereof;

                  (b) Dishonesty, fraud, gross neglect or misconduct in
                  connection with the performance of Executive's duties pursuant
                  to this Agreement, or failure of Executive to perform his
                  duties in a manner consistent with the Bank's standards
                  respecting Executive's performance;

                  (c) Material breach of any fiduciary duty of Executive to the
                  Company or the Bank;

                  (d) Executive's removal from office pursuant to an order or
                  requirement of any state or federal regulatory agency having
                  jurisdiction over the Company or the Bank;

                  (e) Chronic drug or alcohol abuse; or

                  (f) Conviction of Executive, or entry by Executive of a plea
                  of guilty or nolo contendere, to a felony or other crime
                  involving moral turpitude.

         4.3 Upon termination of Executive's employment with cause, the Bank
         shall pay Executive his monthly base salary and any accrued but unpaid
         benefits through the effective date of such termination.

         4.4 Upon termination of Executive's employment without cause, the Bank
         shall pay Executive, in addition to any accrued but unpaid benefits
         through the effective date of such termination, six month's Base Salary
         payable in six monthly increments on the last day of each month
         beginning with the month following the month in which such termination
         occurs.

         4.5 Without diminishing its obligation to pay Executive through the
         effective date of termination under Section 4.3 or 4.4, the Bank may,
         at its option, relieve Executive of some or all of his continuing
         duties and responsibilities during the notice period.

         4.6 In the event that, within 120 days after termination of Executive's
         employment without cause, the Company or the Bank enters into a
         definitive agreement which would result in a change of control, the
         amount payable under Section 4.4 shall be twelve month's Base Salary
         payable in twelve monthly increments on the last day of each month
         beginning with the month following the month in which such termination
         occurs.

5.       CHANGE OF CONTROL

         5.1 For purposes of this Agreement, a "Change of Control" shall mean:


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                  (a) the acquisition by a person (which shall include an
                  individual or an entity), or group of persons acting in
                  concert, of beneficial ownership of 50 percent or more of the
                  outstanding common stock of the Bank or the Company; or

                  (b) the consummation of any merger, consolidation, or
                  reorganization, to which the Company or the Bank is a party,
                  that results in the shareholders of the Company immediately
                  preceding the transaction owning, after the transaction is
                  consummated, less than 50% of the outstanding voting shares of
                  the resulting corporation; or

         5.2 In the event that, following a Change of Control, the Bank or its
         successor, elects, without cause, not to employ Executive, or to
         terminate Executive's employment within one year following such Change
         of Control, the Bank or its successor shall pay Executive an amount
         equal to one year's Base Salary payable in twelve monthly increments on
         the last day of each month beginning with the month following the month
         in which such termination occurs.

         5.3 In the event the Executive is employed by the Bank or its successor
         and, within one year following a Change of Control, is assigned a
         position or duties not substantially equivalent to those of a Senior
         Vice President and Chief Financial Officer (or his then current
         position), or his Base Salary is reduced, or he is reassigned to an
         office more than 50 miles from Medford, Oregon, such an event or
         assignment shall constitute termination without cause pursuant to
         Section 5.2.


6.       DISABILITY

         6.1 For purposes of this Agreement, the term "disability" shall mean
         Executive's inability because of sickness or injury to perform the
         essential functions of duties assigned to him, with or without
         reasonable accommodation.

         6.2 The parties agree that Executive's availability to perform services
         required of his position on an ongoing basis is an essential function
         of his job. If, because of a disability, Executive becomes unable to
         perform his duties for an aggregate of six (6) months in any twelve
         (12) month period, or for any consecutive three (3) months in
         circumstances where Executive's medical prognosis is that he will be
         unable to resume performance of his duties within an additional three
         (3) months, then the Bank may thereafter terminate Executive's
         employment upon thirty (30) days' written notice to Executive.

7.       CONFIDENTIALITY

         The parties acknowledge that in the course of Executive's duties he
will have access to and become familiar with certain proprietary and
confidential information of the Bank and other information about the Bank not
known by its actual or potential competitors. Executive acknowledges that such
information constitutes valuable, special, and unique assets of the Bank's
business, even though such information may not be of a technical nature and may
not be protected under applicable trade secret or related laws. Executive agrees
that he will hold in a fiduciary capacity and will not use for himself and will
not reveal, communicate, or divulge during the period of his employment with the
Bank or at any time thereafter, and in any manner whatsoever, any such data and
confidential information of any kind, nature, or description concerning any
matters affecting or relating to the Bank's business, its customers, or its
services, to any person, firm, or company other than the Bank or persons, firms,
or companies designated by the Bank. Executive agrees that all memoranda, notes,
records, papers, customer files, and other documents, and all

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copies thereof relating to the Bank's operations or business, or matters related
to any of the Bank's customers, some of which may be prepared by Executive, and
all objects associated therewith in any way obtained by Executive, shall be
Bank's property.

8.       GENERAL PROVISIONS

         8.1. Modification. This Agreement may not be changed, modified,
         released, discharged, abandoned, or otherwise amended, in whole or in
         part, except by an instrument in writing, signed by Executive and an
         authorized officer of the Bank. Executive acknowledges and agrees that
         any subsequent change or changes in his duties or compensation will not
         affect the validity or scope of this Agreement.

         8.2. Arbitration. Any controversy, claim, dispute or difference arising
         out of the interpretation, construction or performance of this
         Agreement or Executive's employment with the Bank or the termination
         thereof, against the Bank, its parent, subsidiary, affiliated or
         related corporations, or its officers, managers, employees or agents,
         including, but not limited to, statutory claims under federal and state
         laws against discrimination such as Title VII of the Civil Rights Act
         of 1964, as amended, the Age Discrimination in Employment Act, the
         Americans With Disabilities Act, the Family and Medical Leave Act, the
         1966 Civil Rights Act, the Oregon Civil Rights Act, and common law
         claims for breach of contract, breach of covenant of good faith and
         fair dealing, wrongful termination, intentional interference with
         contractual relations, or intentional or negligent infliction of
         emotional distress shall be settled by arbitration in the State of
         Oregon under the rules and auspices of the employment dispute rules of
         the American Arbitration Association, and judgment upon the award
         entered in such arbitration may be entered in any court having
         jurisdiction thereof.

         8.3. Jurisdiction. This Agreement has been made in and shall be
         governed by the substantive laws of the State of Oregon, without regard
         to its choice of law rules.

         8.4. Successors and Assigns. All rights and duties of the Bank under
         this Agreement shall be binding on and inure to the benefit of its
         successors, assigns or any company which purchases or otherwise
         acquires it or all or substantially all of its operating assets by any
         method. This Agreement shall not be assignable by the Executive other
         than by will or the laws of descent and distribution. This Agreement
         shall inure to the benefit of and be enforceable by the Executive's
         estate or personal representative.

         8.5. Integration This Agreement contains the entire agreement of the
         parties relating to the subject matter and may not be amended except by
         an instrument in writing signed by the parties.

         8.6. Notices. All notices required or permitted under this Agreement
         shall be in writing and may be personally served or mailed by
         registered or certified U.S. mail, postage prepaid. Notices to the Bank
         shall be served on or mailed to the Bank's Executive Vice President,
         Chief Operating Officer at PremierWest Bank, P.O. Box 40, Medford,
         River, Oregon 97501, or to such other person or location as the Bank
         shall advise Executive in writing. Notices to Executive shall be served
         on or mailed to him at such address as Executive shall advise the Bank
         in writing.

         8.7. Severability. If any provision of this Agreement shall be found,
         in any action, suit or proceeding, to be invalid or ineffective, the
         validity and effect of the remaining provisions shall not be affected.

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         8.8. Waiver. No waiver of any right arising out of a breach of any
         covenant, term or condition of this Agreement shall be a waiver of any
         right arising out of any other or subsequent breach of the same or any
         other covenant, term or condition or a waiver of the covenant, term or
         condition itself.

         8.9. Performance by the Bank References to, and obligations of, the
         Bank in this Agreement shall include the Company, as applicable.

9.       EXECUTION

         The parties have executed this Agreement as of the date appearing in
the caption of this Agreement, to be effective upon the Effective Date stated in
Section 1 above.


         PREMIERWEST BANCORP


         By: _____________________________          ____________________________

                                                               Tom Anderson


         PREMIERWEST BANK


         By:  ____________________________































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