Document:

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:  ____________________________

                                       6EXHIBIT 10.5

                                PREMIERWEST BANK
                          SALARY CONTINUATION AGREEMENT

         THIS SALARY CONTINUATION AGREEMENT is entered into as of this _______
day of ________________, 2002, by and between PremierWest Bank, an Oregon-
chartered, FDIC-insured bank with its main office in Medford, Oregon (the
"Bank"), and John L. Anhorn, President and Chief Executive Officer of the Bank
(the "Executive").

         WHEREAS, the Executive, has contributed substantially to the success of
the Bank and its parent corporation, PremierWest Bancorp ("Bancorp"), and the
Bank desires that the Executive continue in its employ,

         WHEREAS, to encourage the Executive to remain an employee of the Bank,
the Bank is willing to provide salary continuation benefits to the Executive,
payable out of the Bank's general assets,

         WHEREAS, none of the conditions or events included in the definition of
the term "golden parachute payment" contained 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)(1)(ii)]
exists or, to the best knowledge of the Bank, is contemplated insofar as the
Bank is concerned.

         NOW THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                                   ARTICLE 1
                                   DEFINITIONS

         Whenever used in this Agreement, the following terms shall have the
meanings specified:

         1.1 "ACCRUAL BALANCE" means the amount required to be accrued by the
Bank under generally accepted accounting principles to account for benefits that
may become payable to the Executive under this Agreement.

         1.2 "BASE ANNUAL SALARY" means the current base annual salary of the
Executive at the earliest of (1) the date of the Executive's death; (2) the date
of the Executive's Disability; (3) the date the Executive's employment with the
Bancorp or the Bank terminates within 12 months after a Change in Control; or
(4) the Executive's Normal Retirement Date. Current Base Annual Salary shall be
defined by reference to compensation of the type that would be required to be
reported by Securities and Exchange Commission Rule 228.402(b) (17 C.F.R.
228.402(b)), specifically column (c) of that rule's Summary Compensation Table
(or any successor provision). Salary compensation amounts deferred at the
election of the Executive are included in Base Annual Salary.

         1.3 "CHANGE IN CONTROL" means if any one of the following events
occurs:

                  (a) MERGER. Bancorp merges into or consolidates with another
         corporation, or merges another corporation into 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 Bancorp's voting securities immediately
         before the merger or consolidation,

                  (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 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 Bancorp's
         voting securities and the person or the person's or group's nominee
         becomes the Chairman of the Board of Bancorp, but this paragraph (b)
         shall not apply to beneficial ownership of voting shares of Bancorp
         held in a fiduciary capacity by an entity in which Bancorp directly or
         indirectly beneficially owns 50% or more of the outstanding voting
         securities,
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                  (c) CHANGE IN BOARD COMPOSITION. during any period of two
         consecutive years, individuals who constitute 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. Bancorp sells to a third party all or
         substantially all of Bancorp's assets. For this purpose, sale of all or
         substantially all of Bancorp's assets includes sale of the shares or
         assets of the Bank.

         1.4 "DISABILITY" means the Executive suffers a sickness, accident or
injury which has been determined by the carrier of any individual or group
disability insurance policy covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally and
permanently disabled. The Executive must submit proof to the Bank of the
carrier's or Social Security Administration's determination upon the request of
the Bank.

         1.5 "EARLY TERMINATION" means the Executive's Termination of Employment
with the Bank before Normal Retirement Age for reasons other than death,
Disability, Termination under Article 5 of this Agreement, involuntary
termination within 12 months after a Change in Control, and voluntary
termination with Good Reason within 12 months after a Change in Control.

         1.6 "EARLY TERMINATION DATE" means the month, day and year in which
Early Termination occurs.

         1.7 "EFFECTIVE DATE" means ERROR! BOOKMARK NOT DEFINED..

         1.8 "GOOD REASON" for purposes of this Agreement means "Good Reason" as
that term is defined in any employment or severance agreement to which the
Executive is or may hereafter be a party. If the term "Good Reason" is not
defined in an employment agreement or severance agreement, it means:

                  (a) a material reduction in Executive's title or
         responsibilities,

                  (b) a reduction in base salary as in effect on the date of a
         Change in Control,

                  (c) relocation of the Bank's principal executive offices, or
         requiring the Executive to change his or her principal work location,
         to any location that is more than 15 miles from the location of the
         Bank's principal executive offices on the date of this Agreement,

                  (d) the adverse and substantial alteration in the nature and
         quality of the office space within which the Executive performs his or
         her duties, including the size and location thereof, as well as the
         secretarial and administrative support provided to the Executive,

                  (e) the failure by the Bank to continue to provide the
         Executive with compensation and benefits substantially similar to those
         provided to the Executive under any of the employee benefit plans in
         which the Executive becomes a participant, or the taking of any action
         by the Bank which would directly or indirectly materially reduce any of
         such benefits or deprive the Executive of any material fringe benefit
         to which the Executive was entitled at the time of the Change in
         Control, or

                  (f) the failure of the Bank to obtain a satisfactory agreement
         from any successor or assign of the Bank to assume and agree to perform
         this Agreement, as contemplated in Section 7.5 hereof.

         1.9 "NORMAL RETIREMENT AGE" means the Executive's 65th birthday.

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         1.10 "NORMAL RETIREMENT DATE" means the later of the Normal Retirement
Age or the Executive's Termination of Employment with the Bank.

         1.11 "PERSON" means an individual, corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or other entity.

         1.12 "PLAN YEAR" means a twelve-month period commencing on January 1,
and ending on the last day of December of each year. The initial Plan Year shall
commence on the Effective Date of this Agreement.

         1.13 "TERMINATION OF EMPLOYMENT" with the Bank means that the Executive
shall have ceased to be employed by the Bank for any reason whatsoever,
excepting a leave of absence approved by the Bank. For purposes of this
Agreement, if there is a dispute over the employment status of the Executive or
the date of termination of the Executive's employment, the Bank shall have the
sole and absolute right to decide the dispute, unless a Change in Control shall
have occurred.

                                   ARTICLE 2
                                LIFETIME BENEFITS

         2.1 NORMAL RETIREMENT BENEFIT. Upon the Executive's Termination of
Employment on or after the Normal Retirement Age for reasons other than death,
the Bank shall pay to the Executive the benefit described in this Section 2.1
instead of any other benefit under this Agreement.

         2.1.1    AMOUNT OF BENEFIT. The annual benefit under this Section 2.1
                  is $78,949. In its sole discretion, the Bank's board of
                  directors may increase the annual benefit under this Section
                  2.1.1, but any increase shall require recalculation of
                  Schedule A.

         2.1.2    PAYMENT OF BENEFIT. Beginning with the month after the
                  Executive's Normal Retirement Date, the Bank shall pay the
                  annual benefit to the Executive in 12 equal monthly
                  installments on the first day of each month. The annual
                  benefit shall be paid to the Executive for 15 years.

         2.2 EARLY TERMINATION BENEFIT. For Early Termination, the Bank shall
pay to the Executive the benefit described in this Section 2.2 instead of any
other benefit under this Agreement.

         2.2.1    AMOUNT OF BENEFIT. The benefit under this Section 2.2 is the
                  Early Termination Annual Benefit amount set forth in Schedule
                  A for the Plan Year ending immediately before the Early
                  Termination Date (except that during the first Plan Year the
                  benefit is the amount set forth for Plan Year 1). If the
                  Executive is entitled to an Early Termination Annual Benefit
                  amount as set forth in the attached Schedule A, interest will
                  be credited on the Accrual Balance at an annual rate of 7.0%,
                  compounded monthly, during the period between Termination of
                  Employment and the Normal Retirement Date. In its sole
                  discretion, the Bank's board of directors may increase the
                  annual benefit under this Section 2.2.1, but any increase
                  shall require recalculation of Schedule A.

         2.2.2    PAYMENT OF BENEFIT. Beginning with the month after the Normal
                  Retirement Age, the Bank shall pay the annual benefit to the
                  Executive in 12 equal monthly installments on the first day of
                  each month. The annual benefit shall be paid to the Executive
                  for 15 years.

         2.3 DISABILITY BENEFIT. If the Executive terminates employment because
of Disability before the Normal Retirement Age, the Bank shall pay to the
Executive the benefit described in this Section 2.3 instead of any other benefit
under this Agreement.

         2.3.1    AMOUNT OF BENEFIT. The benefit under this Section 2.3 is the
                  Disability Annual Benefit amount set forth in Schedule A for
                  the Plan Year ending immediately before the date on which
                  Termination of Employment occurs (except that during the first
                  Plan Year the benefit is the amount set forth

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                  for Plan Year 1). In its sole discretion, the Bank's Board of
                  Directors may increase the annual benefit under this Section
                  2.3.1, but any increase shall require recalculation of
                  Schedule A.

         2.3.2    PAYMENT OF BENEFIT. Beginning with the month after Normal
                  Retirement Age, the Bank shall pay the Disability Annual
                  Benefit amount to the Executive in 12 equal monthly
                  installments on the first day of each month. The annual
                  benefit shall be paid to the Executive for 15 years.

         2.4 CHANGE-IN-CONTROL BENEFIT. If the Executive's employment with the
Bank terminates involuntarily within 12 months after a Change in Control, or if
the Executive terminates employment voluntarily for Good Reason within 12 months
after a Change in Control, the Bank shall pay to the Executive the benefit
described in this Section 2.4 instead of any other benefit under this Agreement.
However, no benefits shall be payable under this Agreement if the Executive's
employment is terminated under Article 5 of this Agreement.

         2.4.1    AMOUNT OF BENEFIT. The benefit under this Section 2.4 is
                  determined by vesting the Executive in the Normal Retirement
                  Age Accrual Balance ($769,395) required by Section 2.1,
                  without reduction for the time value of money or other
                  discount. In its sole discretion, the Bank's board of
                  directors may increase the benefit under this Section 2.4.1,
                  but any increase shall require recalculation of Schedule A.

         2.4.2    PAYMENT OF BENEFIT: The Bank shall pay the Change-in-Control
                  benefit under Section 2.4 of this Agreement to the Executive
                  in one lump sum within three days after the Executive's
                  Termination of Employment.

         2.5 PETITION FOR PAYMENT OF VESTED NORMAL RETIREMENT BENEFIT, VESTED
EARLY TERMINATION BENEFIT OR VESTED DISABILITY BENEFIT. If the Executive is
entitled to the normal retirement benefit provided by Section 2.1, the Early
Termination benefit provided by Section 2.2, or the Disability benefit provided
by Section 2.3, the Executive may petition the board of directors to have the
Accrual Balance amount corresponding to that particular benefit paid to the
Executive in a single lump sum after (1) deduction of any normal retirement
benefits, Early Termination benefits or Disability benefits already paid and (2)
addition of interest at the rate of 7.0% on the Accrual Balance not yet paid for
the period from Termination of Employment to payment of the lump sum amount. The
board of directors shall have sole and absolute discretion about whether to pay
the remaining Accrual Balance in a lump sum. If payment of the remaining Accrual
Balance is paid in a single lump sum, the Bank shall have no further obligations
under this Agreement.

         2.6 CHANGE-IN-CONTROL PAYOUT OF VESTED NORMAL RETIREMENT BENEFIT,
VESTED EARLY TERMINATION BENEFIT OR VESTED DISABILITY BENEFIT BEING PAID TO THE
EXECUTIVE AT THE TIME OF A CHANGE IN CONTROL. If a Change in Control occurs at
any time during the entire 15-year salary continuation benefit payment period
and if at the time of that Change in Control the Executive is receiving the
benefit provided by Section 2.1.2, Section 2.2.2, or Section 2.3.2, the Bank
shall pay the remaining salary continuation benefits to the Executive, the
Executive's beneficiaries, or the Executive's estate in a lump sum within three
days after the Change in Control. The lump-sum payment due to the Executive,
beneficiaries, or estate as a result of a Change in Control shall be an amount
equal to the Accrual Balance amount corresponding to that particular benefit
then being paid to the Executive, beneficiaries, or estate under Section 2.1.2,
Section 2.2.2, or Section 2.3.2 after (1) deduction of any normal retirement
benefits, Early Termination benefits, or Disability benefits already paid and
(2) addition of interest at the rate of 7.0% on the Accrual Balance not yet paid
for the period from Termination of Employment to payment of the lump sum amount.

         2.7 CONTRADICTION IN TERMS OF AGREEMENT AND SCHEDULE A. If there is a
contradiction in the terms of this Agreement and the Schedule A attached hereto
concerning the benefits due under Section 2.2, 2.3, or 2.4 hereof, then the
actual amount of benefits prescribed by this Agreement shall control.

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                                   ARTICLE 3
                                 DEATH BENEFITS

         3.1 DEATH DURING ACTIVE SERVICE. Except as provided in Section 5.1, if
the Executive dies in active service to the Bank before Normal Retirement Age,
instead of any benefit payable under this Agreement the Bank shall pay to the
Executive's beneficiary(ies) the benefit described in the Executive Survivor
Income Agreement attached to this Agreement as Addendum A.

         3.2 DEATH DURING BENEFIT PERIOD. If the Executive dies after benefit
payments under Article 2 of this Agreement have commenced but before receiving
all such payments, the Bank shall pay the remaining benefits to the Executive's
beneficiary(ies) at the same time and in the same amounts they would have been
paid to the Executive had the Executive survived.

         3.3 DEATH AFTER TERMINATION OF EMPLOYMENT BUT BEFORE BENEFIT PAYMENTS
COMMENCE. If the Executive is entitled to benefit payments under Article 2 but
dies before payments commence, the benefits shall be payable to the Executive's
beneficiary(ies), but payments shall commence on the first day of the month
after the date of the Executive's death. Payments shall be made in the same
amounts they would have been paid to the Executive had the Executive survived.

         3.4 PETITION FOR BENEFIT PAYMENTS. If the Executive dies before
receiving any or all benefit payments to which he or she is entitled under
Section 2.1, Section 2.2, or Section 2.3, the Executive's beneficiary(ies) or
estate may petition the Board of Directors to have the Accrual Balance
corresponding to that particular benefit paid to the Executive's
beneficiary(ies) or estate in a single lump sum after (1) deduction of any
normal retirement benefits, Early Termination benefits, or Disability benefits
already paid and (2) addition of interest at the rate of 7.0% on the Accrual
Balance not yet paid for the period from the Executive's Termination of
Employment to payment of the lump sum amount. The board of directors shall have
sole and absolute discretion about whether to pay the remaining Accrual Balance
in a lump sum. If payment of the remaining Accrual Balance is paid in a single
lump sum, the Bank shall have no further obligations under this Agreement.

         3.5 CHANGE-IN-CONTROL PAYOUT OF VESTED NORMAL RETIREMENT BENEFIT,
VESTED EARLY TERMINATION BENEFIT OR VESTED DISABILITY BENEFIT BEING PAID TO THE
EXECUTIVE'S ESTATE OR BENEFICIARIES AT THE TIME OF A CHANGE IN CONTROL. If a
Change in Control occurs at any time during the entire 15-year salary
continuation benefit payment period and if at the time of that Change in Control
the Executive's estate or beneficiaries is receiving the benefit provided by
Section 2.1.2, Section 2.2.2, or Section 2.3.2, the Bank shall pay the remaining
salary continuation benefits to the Executive's beneficiaries or estate in a
lump sum within three days after the Change in Control. The lump-sum payment due
to the Executive's beneficiaries or estate as a result of a Change in Control
shall be an amount equal to the Accrual Balance amount corresponding to that
particular benefit then being paid to the Executive's estate or beneficiaries
under Section 2.1.2, Section 2.2.2, or Section 2.3.2 after (1) deduction of any
normal retirement benefits, Early Termination benefits, or Disability benefits
already paid and (2) addition of interest at the rate of 7.0% on the Accrual
Balance not yet paid for the period from Termination of Employment to payment of
the lump sum amount.

                                   ARTICLE 4
                                  BENEFICIARIES

         4.1 BENEFICIARY DESIGNATIONS. The Executive shall designate a
beneficiary or beneficiaries by filing a written designation with the Bank. The
Executive may revoke or modify the designation at any time by filing a new
designation. However, designations will be effective only if signed by the
Executive and accepted by the Bank during the Executive's lifetime. The
Executive's beneficiary designation shall be deemed automatically revoked if the
beneficiary predeceases the Executive, or if the Executive names a spouse as
beneficiary and the marriage is subsequently dissolved. If the Executive dies
without a valid beneficiary designation, all payments shall be made to the
Executive's estate.

                                       5
<PAGE>
         4.2 FACILITY OF PAYMENT. If a benefit is payable to a minor, to a
person declared incapacitated, or to a person incapable of handling the
disposition of his or her property, the Bank may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incapacitated person or incapable person. The Bank may require such proof
of incapacity, minority or guardianship as the Bank deems appropriate before
distribution of the benefit. Distribution shall completely discharge the Bank
from all liability for such benefit.

                                   ARTICLE 5
                               GENERAL LIMITATIONS

         5.1 SUICIDE OR MISSTATEMENT. The Bank shall not pay any benefit under
this Agreement if the Executive commits suicide within three years after the
date of this Agreement. Additionally, the Bank shall not pay any benefit under
this Agreement if the Executive has made any material misstatement of fact on
any application or resume provided to the Bank, or on any application for any
benefits provided by the Bank to the Executive.

         5.2 REMOVAL. If the Executive is removed from office or permanently
prohibited from participating in the conduct of the 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), all obligations of the Bank under this Agreement
shall terminate as of the effective date of the order.

         5.3 INSOLVENCY. If the Commissioner of the Oregon Department of Banking
appoints the Federal Deposit Insurance Corporation as receiver for the Bank
under Oregon Revised Statutes section 711.405, all obligations under this
Agreement shall terminate as of the date of the Bank's declared insolvency.

                                   ARTICLE 6
                          CLAIMS AND REVIEW PROCEDURES

         6.1 CLAIMS PROCEDURE. A person or beneficiary ("claimant") who has not
received benefits under the Agreement that he or she believes should be paid
shall make a claim for such benefits as follows:

         6.1.1    INITIATION - WRITTEN CLAIM. The claimant initiates a claim by
                  submitting to the Bank a written claim for the benefits.

         6.1.2    TIMING OF BANK RESPONSE. The Bank shall respond to such
                  claimant within 90 days after receiving the claim. If the Bank
                  determines that special circumstances require additional time
                  for processing the claim, the Bank can extend the response
                  period by an additional 90 days by notifying the claimant in
                  writing, prior to the end of the initial 90-day period, that
                  an additional period is required. The notice of extension must
                  set forth the special circumstances and the date by which the
                  Bank expects to render its decision.

         6.1.3    NOTICE OF DECISION. If the Bank denies part or all of the
                  claim, the Bank shall notify the claimant in writing of such
                  denial. The Bank shall write the notification in a manner
                  calculated to be understood by the claimant. The notification
                  shall set forth:

                  6.1.3.1  The specific reasons for the denial,

                  6.1.3.2  A reference to the specific provisions of the
                           Agreement on which the denial is based,

                  6.1.3.3  A description of any additional information or
                           material necessary for the claimant to perfect the
                           claim and an explanation of why it is needed,

                  6.1.3.4  An explanation of the Agreement's review procedures
                           and the time limits applicable to such procedures,
                           and

                                       6
<PAGE>
                  6.1.3.5  A statement of the claimant's right to bring a civil
                           action under ERISA (Employees Retirement Income
                           Security Act) Section 502(a) following an adverse
                           benefit determination on review.

         6.2 REVIEW PROCEDURE. If the Bank denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Bank of
the denial, as follows:

         6.2.1    INITIATION - WRITTEN REQUEST. To initiate the review, the
                  claimant, within 60 days after receiving the Bank's notice of
                  denial, must file with the Bank a written request for review.

         6.2.2    ADDITIONAL SUBMISSIONS - INFORMATION ACCESS. The claimant
                  shall then have the opportunity to submit written comments,
                  documents, records and other information relating to the
                  claim. The Bank shall also provide the claimant, upon request
                  and free of charge, reasonable access to, and copies of, all
                  documents, records and other information relevant (as defined
                  in applicable ERISA regulations) to the claimant's claim for
                  benefits.

         6.2.3    CONSIDERATIONS ON REVIEW. In considering the review, the Bank
                  shall take into account all materials and information the
                  claimant submits relating to the claim, without regard to
                  whether such information was submitted or considered in the
                  initial benefit determination.

         6.2.4    TIMING OF BANK RESPONSE. The Bank shall respond in writing to
                  such claimant within 60 days after receiving the request for
                  review. If the Bank determines that special circumstances
                  require additional time for processing the claim, the Bank can
                  extend the response period by an additional 60 days by
                  notifying the claimant in writing, prior to the end of the
                  initial 60-day period, that an additional period is required.
                  The notice of extension must set forth the special
                  circumstances and the date by which the Bank expects to render
                  its decision.

         6.2.5    NOTICE OF DECISION. The Bank shall notify the claimant in
                  writing of its decision on review. The Bank shall write the
                  notification in a manner calculated to be understood by the
                  claimant. The notification shall set forth:

                  6.2.5.1  The specific reasons for the denial,

                  6.2.5.2  A reference to the specific provisions of the
                           Agreement on which the denial is based,

                  6.2.5.3  A statement that the claimant is entitled to receive,
                           upon request and free of charge, reasonable access
                           to, and copies of, all documents, records and other
                           information relevant (as defined in applicable ERISA
                           regulations) to the claimant's claim for benefits,
                           and

                  6.2.5.4  A statement of the claimant's right to bring a civil
                           action under ERISA Section 502(a).

                                   ARTICLE 7
                                  MISCELLANEOUS

         7.1 AMENDMENTS AND TERMINATION. This Agreement may be amended or
terminated only by a written agreement signed by the Bank and the Executive.

         7.2 BINDING EFFECT. This Agreement shall bind the Executive and the
Bank, and their beneficiaries, survivors, executors, successors, administrators
and transferees.

         7.3 NO GUARANTEE OF EMPLOYMENT. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Bank, nor does it interfere with the Bank's right to discharge
the Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.

                                       7
<PAGE>
         7.4 NON-TRANSFERABILITY. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached, or encumbered in any manner.

         7.5 SUCCESSORS; BINDING AGREEMENT. By an assumption agreement in form
and substance satisfactory to the Executive, the Bank will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Bank to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank would be required to perform this Agreement if no such
succession had occurred. The Bank's failure to obtain such an assumption
agreement before the succession becomes effective shall be considered a breach
of this Agreement and shall entitle the Executive to the Change-in-Control
benefit provided in Section 2.4.

         7.6 TAX WITHHOLDING. The Bank shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.

         7.7 APPLICABLE LAW. Except to the extent preempted by the laws of the
United States of America, the validity, interpretation, construction, and
performance of this Agreement shall be governed by and construed in accordance
with the laws of the State of Oregon, without giving effect to the principles of
conflict of laws of such state.

         7.8 UNFUNDED ARRANGEMENT. The Executive and the Executive's
beneficiary(ies) are general unsecured creditors of the Bank for the payment of
benefits under this Agreement. The benefits represent the mere promise by the
Bank to pay such benefits. The rights to benefits are not subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Executive's life
is a general asset of the Bank to which the Executive and beneficiary(ies) have
no preferred or secured claim.

         7.9 ADMINISTRATION. The Bank shall have the powers that are necessary
to administer this Agreement, including but not limited to the power to:

                  (a) interpret the provisions of the Agreement,

                  (b) establish and revise the method of accounting for the
                  Agreement,

                  (c) maintain a record of benefit payments, and

                  (d) establish rules and prescribe forms necessary or desirable
                  to administer the Agreement.

         7.10 NAMED FIDUCIARY. The Bank shall be the named fiduciary and plan
administrator under this Agreement. The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the plan,
including the employment of advisors and the delegation of ministerial duties to
qualified individuals.

         7.11 SEVERABILITY. If for any reason any provision of this Agreement is
held invalid, such invalidity shall not affect any other provision of this
Agreement, and each such other provision shall continue in full force and effect
to the full extent consistent with law. If any provision of this Agreement is
held invalid in part, such invalidity shall in no way affect the remainder of
the provision, and the remainder of such provision, together with all other
provisions of this Agreement shall continue in full force and effect to the full
extent consistent with law.

         7.12 HEADINGS. The headings of sections herein are included solely for
convenience of reference and shall not affect the meaning or interpretation of
any provision of this Agreement.

         7.13 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed, certified or registered mail,

                                       8
<PAGE>
return receipt requested, with postage prepaid, to the following addresses or to
such other address as either party may designate by like notice.

                  (a) If to the Bank, to: Board of Directors PremierWest Bank
                      P.O. Box 40 Medford, Oregon 97501-0003

                  (b) If to the Executive, to:
                      John L. Anhorn
                      ___________________________

                                            ___________________________

and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.

         7.14 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Bank and the Executive concerning the subject matter hereof. No
rights are granted to the Executive under this Agreement other than those
specifically set forth herein.

         IN WITNESS WHEREOF, the Executive and a duly authorized Bank officer
have signed this Agreement as of the day and year first written above.

EXECUTIVE                                  THE BANK:
                                           PREMIERWEST BANK

____________________________               By:  ___________________________

John L. Anhorn
                                           Its: ___________________________

                                       9
<PAGE>

                             BENEFICIARY DESIGNATION

                                 PREMIERWESTBANK
                          SALARY CONTINUATION AGREEMENT

         I designate the following as beneficiary of any death benefits under
this Salary Continuation Agreement:

Primary:
          ----------------------------------------------------------------------

Contingent:
             -------------------------------------------------------------------

NOTE:  TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE(S)
       AND THE EXACT NAME AND DATE OF THE TRUST AGREEMENT.
               -----

         I understand that I may change these beneficiary designations by filing
a new written designation with the Bank. I further understand that the
designations will be automatically revoked if the beneficiary predeceases me, or
if I have named my spouse as beneficiary and our marriage is subsequently
dissolved.

Signature:  ________________________________

Date:       ________________________________

Accepted by the Bank this _____day of _________________, 2002.

By:         ________________________________

Title:      ________________________________

                                       10
<PAGE>
<TABLE>
<CAPTION>
                                   SCHEDULE A
                                PREMIERWEST BANK
                          SALARY CONTINUATION AGREEMENT

                                 JOHN L. ANHORN

         PLAN YEAR                            EARLY TERMINATION   DISABILITY ANNUAL
          ENDING   EXECUTIVE'S                 ANNUAL BENEFIT    BENEFIT PAYABLE AT  CHANGE-IN-CONTROL
  PLAN   DECEMBER  AGE AT PLAN    ACCRUAL      PAYABLE AT NORMAL      NORMAL        BENEFIT PAYABLE IN A
  YEAR      31,     YEAR END    BALANCE (1)   RETIREMENT AGE (2)  RETIREMENT AGE       LUMP SUM
------------------------------------------------------------------------------------------------------
<S>        <C>         <C>     <C>                <C>               <C>              <C>
   1       2002        60      $      20,251      $      33,372     $     33,372     $      769,395

   2       2003        61      $     150,931      $      40,491     $     40,491     $      769,395

   3       2004        62      $     298,448      $      48,127     $     48,127     $      769,395

   4       2005        63      $     464,432      $      56,308     $     56,308     $      769,395

   5       2006        64      $     650,658      $      65,068     $     65,068     $      769,395

   6       2007        65      $     756,355      $      78,949     $     78,949           $769,395 (3)

   7       2008        66      $     723,630

   8       2009        67      $     688,788

   9       2010        68      $     651,689

   10      2011        69      $     612,189

   11      2012        70      $     570,131

   12      2013        71      $     525,351

   13      2014        72      $     477,671

   14      2015        73      $     426,905

   15      2016        74      $     372,852

   16      2017        75      $     315,300

   17      2018        76      $     254,022

   18      2019        77      $     188,776

   19      2020        78      $     119,307

   20      2021        79      $      45,339

   21      2022        80      $           0
</TABLE>

(1) The accrual balance reflects payment at the beginning of each month during
retirement.
(2) Benefit is based on present value of the current payment stream of the
vested accrual balance using a standard discount rate (7.00%).
(3) Projected retirement occurs in July 2007 when the executive turns age 65.
The accrual balance at the end of July 2007 will be $769,395.

                                       11

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