Document:

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                                                                    EXHIBIT 10.7
                              RELEASE AND AGREEMENT

         This Release and Agreement ("Release") is made by and between LINDA
GANIM, (hereinafter "employee") and PREMIERWEST BANCORP, an Oregon-chartered
corporation (hereinafter "employer").

         WHEREAS, the parties desire to define and resolve all outstanding
matters with respect to employee's employment and termination of employment with
employer,

         NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties agree as follows:

         1. Employee shall receive from employer the sum of Eight Thousand Five
Hundred Dollars ($8500.00) per month for a period of one month effective upon
the date in 2000 that the acquisition of United Bancorp by PREMIERWEST BANCORP
becomes effective under the terms of the Agreement and Plan of Merger and Share
Exchange. Said monthly consideration shall be paid semimonthly in accordance
with employer's customary payroll practices and deductions shall be made by
employer as required by law. Employee shall retain the 1995 Lexus LS400 that has
been provided to her for her use by Douglas National Bank and said vehicle shall
become the property of employee, subject to her obligation to pay any taxes that
might result from her acquisition of the vehicle.

         2. For a period of thirty days beginning upon the date in 2000 that the
acquisition of United Bancorp by PREMIERWEST BANCORP becomes effective under the
terms of the Agreement and Plan of Merger and Share Exchange, employee shall be
employed by employer as its controller and shall perform such specific duties
and shall exercise such specific authority as may be assigned to employee by
employer. This thirty day period may be extended up to an additional sixty days
by mutual agreement of the parties, in which case employee's monthly salary
shall continue as set forth in paragraph 1 above. Employee shall serve as an
employee at will and employee shall not after the aforementioned thirty day
period and any extension thereof be deemed an employee of employer for any
purpose whatsoever. Employee shall be entitled to any employment benefits in
addition to her salary that are available to other employees for the period
during which she is considered an employee.

         3. For a period of twelve months commencing on the date that employee's
employment is terminated, employee shall receive from employer the sum of Eight
Thousand Five Hundred Dollars ($8,500.00) per month. Said monthly consideration
shall be paid semimonthly in accordance with employer's customary payroll
practices and deductions shall be made by employer as required by law.

         4. Employee agrees not to lodge, file or bring any suit, charge,
complaint, or any other form of action or claim against employer or its
successors in interest and predecessors in interest, including but not limited
to United Bancorp, an Oregon corporation, and Douglas National Bank, a national
bank and wholly owned subsidiary of United Bancorp, relating in any way
whatsoever to any matters released herein. Employee agrees not to request, or to
indirectly cause, any governmental agency or other person to commence any
investigation or bring any action against employer or its successors in interest
and predecessors in interest, including but not limited to United Bancorp, an
Oregon corporation, and Douglas National Bank, a national bank and wholly owned
subsidiary of United Bancorp, and employee waives any remedy or recovery in any
action which may be brought on her behalf by any government agency or other
person.

         5. Employee agrees that by signing this Release, she gives up any and
all rights that she may have to file a claim or complaint of any kind in any
forum and that this Release includes any and all claims that exist or that
employee may not know or suspect to exist in her favor at the time of execution
of this Release.

         6. This Release is not and shall not in any way be construed as an
admission by employer of any acts against employee that are wrongful in any
manner whatsoever or that employer has violated any federal, state, or local
law.

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         7. Employee expressly acknowledges that this Release is intended to
include in its effect, without limitation, all claims that have arisen and/or of
which employee knows or does not know, should have known, had reason to know, or
suspect to exist in her favor at the time of execution and that this Release
contemplates the extinguishment of any such claim or claims. Employer and
Employee both agree that Employee's release herein does not in any way abrogate
or limit Employee's rights of indemnification as provided for under Douglas
National Bank's Articles of Incorporation or any directors and officer's
liability insurance currently in effect.

         8. Employee hereby agrees to indemnify and hold employer harmless from
and against any and all loss, cost, damage, or expense, including, without
limitation, attorney fees, incurred by employer arising out of any breach of
this Release by employee or the fact that any representation made herein by
employee was false when made.

         9. Employee acknowledges that her employment and the termination of her
employment with employer has not and will not cause physical or emotional injury
resulting in a need for medical treatment and has not and will not result in any
disability and has not and will not give rise to any diagnosable psychological
condition or trauma.

         10. Except for required disclosures to the SEC, Employee covenants and
agrees that the terms and fact of this Release are completely confidential and
that such confidentiality is an essential term of this Release. Except for
required disclosures to the SEC, Employee further covenants and agrees that this
commitment of confidentiality extends to any and all persons and entities with
the exception of her tax advisor insofar as necessary to determine the tax
consequences, if any, of this Release.

         11. Employee agrees that she will not challenge or dispute the validity
of this Release or any portion thereof without first tendering back to employer
the full amount of the consideration paid hereunder. If the validity of this
Release or any part thereof is challenged by employee, any such dispute shall be
conclusively resolved by mandatory and binding arbitration.

         12. Except for required disclosures to the SEC, Employer and employee
agree that this confidentiality provision is a material provision of this
Release and that the inclusion of this provision was an inducement for the
parties to enter into this Release. Employee agrees that all agreements and
covenants made herein are of the essence of this Release and that the breach of
any such covenant or agreement is a beach of the entire Release. In the case of
any such breach, employer shall be entitled to an injunction of any further
breach issued by any court of competent jurisdiction and to recover from
employee the full amount of the above-stated monetary consideration for this
Release, including interest at the legal rate from the date of execution hereof
and all expenses, whether or not legal action is commenced, including attorney
fees, costs, and disbursements at trial and on appeal, as incurred by employer
to obtain and enforce an injunction or to enforce the terms of this Release or
to recover damages hereunder.

         13. Both during and after termination of employment, employee agrees,
that in addition to any other limitation contained in this Release, regardless
of the circumstances of the termination of employment, she will not communicate
to any person, firm, corporation, limited liability company, or other entity,
any information relating to customer lists, prices, secrets, advertising, loans,
accounts, or any confidential knowledge, information or secrets that employee
may from time to time acquire with respect to the business of employer and/or
its predecessors, or any of its affiliates or subsidiaries. Employee agrees that
upon termination of her employment, she will not retain originals or copies of
any of the business records, information or documents of employer and/or its
predecessors, in any form whatsoever, including but not limited to information
on computer disks and hard drives. All records, files, lists, including computer
generated lists, drawings, documents, equipment, and similar items relating to
employer's business which employee has prepared or received from employer are
and shall remain employer's sole and exclusive property. Employee shall promptly
return to employer all property of employer in her possession, whether in
original or copy form. Employee shall not copy or cause to be copied, or print
out or cause to be printed out, any software, documents or other materials
originating with or belonging to employer. Employee shall not retain in her
possession any such software, documents, or other materials.

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         14. Employee agrees that both during and after her employment, she
shall, at the request of employer, render all assistance and perform all lawful
acts that employer considers necessary or advisable in connection with any
litigation involving employer or any director, officer, employee, shareholder,
agent, representative, consultant, client, or vendor of employer.

         15. For a period of one (1) year after termination of her employment,
employee agrees that the following restrictions and limitations shall apply to
her:

                  A. Employee will not, on behalf of herself or on behalf of any
other person, firm, corporation, limited liability company or any other entity,
call on any of the customers of employer in Douglas County, Oregon, for the
purpose of soliciting services and/or providing to any of the customers any
banking services or other products or services provided by employer, nor will
she, in any way, directly or indirectly, for herself or on behalf of any other
person, firm, corporation, limited liability company or other entity, solicit,
divert or take away any customer of employer, its affiliates or subsidiaries.
For the purposes of this Release, the phrase "call on" includes, but is not
limited to, contacting a customer in person, by telephone, by facsimile
transmission, by letter, by electronic transmission, or by any other means
calculated to make contact with such customer of employer.

                  B. Employee will not, on behalf of herself or on behalf of any
other person, firm, corporation, limited liability company or any other entity,
solicit for hire any of the employees of employer or any of its affiliates or
subsidiaries.

                  C. Employee will not work in banking or in the financial
industry in Douglas County, Oregon. Furthermore, employee will not provide to
any entity of which she is an employee, partner, director, officer or member any
banking or financial information concerning Douglas County, Oregon. Employee
acknowledges that the covenants set forth in this Release do not impose
unreasonable restrictions or work a hardship on employee, are essential to the
willingness of employer to enter into this Release and to employ employee, are
necessary and fundamental to the protection of the business conducted by
employer, and are reasonable as to scope, duration, and territory.
Notwithstanding the above, if employee goes to work for or consults with another
entity which is in competition with BANK OF SOUTHERN OREGON and PREMIERWEST
BANCORP in Douglas County, Oregon, then BANK OF SOUTHERN OREGON and PREMIERWEST
BANCORP will not be required to make any further payments hereunder unless
EMPLOYEE's competitive work or consultation is not primarily located in Douglas
County and does not result in the disclosure or utilization of any information
relating to customer lists, prices, secrets, advertising, loans, accounts, or
any other confidential information, knowledge or secrets that EMPLOYEE acquired
from BANK OF SOUTHERN OREGON and PREMIERWEST BANCORP or any of its affiliates or
subsidiaries. If employer materially and substantially breaches its obligation
to make payments to employee as required hereunder, employee's non-competition
obligation shall cease.

         16. Employee further declares and represents that no promise,
inducement, or agreement not herein expressed has been made to her and that this
Release contains the entire agreement between the parties hereto and that the
terms of this Release are contractual and not a mere recital.

         17. Employee declares and represents that she has carefully read and
fully understands all of the provisions and effects of this Release and has
thoroughly discussed all aspects of this Release with her present attorneys,
that she is voluntarily entering into this Release, and that neither employer
nor its agents, representatives, or attorneys have made any representations
concerning the terms and effects of this Release other than those contained
herein. This Release sets forth the entire agreement between the parties and
fully supersedes any and all prior agreements or understandings between them
pertaining to the subject matter hereof.

         18. This Release is made and entered into in the State of Oregon and
shall in all respects be interpreted, enforced, and governed under the laws of
that state.

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         19. Employee has the right to continue her current health coverage for
up to eighteen (18) months following termination of her employment under the
terms of the Consolidated Omnibus Budget Reconciliation Act ("COBRA"). If
employee chooses to continue coverage through COBRA, employee will pay the
monthly premiums for the full term of COBRA coverage.

         20. The parties agree that the language of all parts of this Release
shall in all cases be construed as a whole, according to its fair meaning, and
not strictly for or against either party.

         21. Should any provision of this Release be declared or be determined
by any court to be illegal or invalid, the validity of the remaining parts,
terms, or provisions shall not be affected thereby and said illegal or invalid
part, term or provision shall be deemed not to be part of this Release.

         22. The failure of either party to this Release to insist upon the
performance of any of the terms and conditions of this Release, or the waiver of
any breach of any of the terms and conditions of this Release, shall not be
construed as thereafter waiving any such terms and conditions, but the same
shall continue and remain in full force and effect as if no such forbearance or
waiver had occurred.

         In witness whereof, the parties, intending to be legally bound hereby,
have executed this Release and Agreement.

____________________________             Date: ___________________
Employee

____________________________             Date: ___________________
Employer<PAGE>   1

                                                                    EXHIBIT 10.8
                                    AGREEMENT
                                    ---------

         THIS AGREEMENT is made and entered into this _____ day of________,
2000, by and between BANK OF SOUTHERN OREGON, an Oregon-chartered bank and
corporation (soon to be known as PREMIERWEST BANK), hereinafter referred to as
BANK OF SOUTHERN OREGON, and Rosemarie Baucom, hereinafter referred to as
"EMPLOYEE";

                              W I T N E S S E T H:
                              --------------------
R E C I T A L S :
-----------------

         1. PREMIERWEST BANCORP and BANK OF SOUTHERN OREGON are parties to an
Agreement and Plan of Merger and Share Exchange with United Bancorp, an Oregon
corporation, and Douglas National Bank, a national bank and wholly owned
subsidiary of United Bancorp, which agreement is dated as of October 7, 1999,
and amended as of December 14, 1999. Under the Agreement and Plan of Share
Exchange. (i) BANK OF SOUTHERN OREGON will become a wholly owned subsidiary of
PREMIERWEST BANCORP and shareholders of BANK OF SOUTHERN OREGON will instead be
and become shareholders of PREMIERWEST BANCORP; (ii) BANK OF SOUTHERN OREGON
will change its name to "PremierWest Bank" effective upon completion of the
holding company reorganization and the other transactions contemplated by the
Agreement and Plan of Merger and Share Exchange; (iii) United Bancorp will merge
with and into PREMIERWEST BANCORP; and (iv) Douglas National Bank will merge
with and into BANK OF SOUTHERN OREGON.

         2. EMPLOYEE has the necessary expertise and experience and is willing
to serve as Vice President/Regional Sales and Service Manager of the BANK OF
SOUTHERN OREGON.

         For the reasons recited above and in consideration of the following
mutual promises and covenants, the parties hereby agree as follows:

                                   SECTION ONE
                                   EMPLOYMENT

         BANK of SOUTHERN OREGON hereby employs EMPLOYEE to act as Vice
President/Regional Sales and Service Manager of BANK OF SOUTHERN OREGON.
EMPLOYEE hereby accepts such employment upon the terms and conditions
hereinafter set forth. This Agreement supersedes and extinguishes any rights
that EMPLOYEE has or may have under the change of control retention agreement
between EMPLOYEE and United Bancorp and Douglas National Bank.

                                   SECTION TWO
                               TERMS OF EMPLOYMENT

         The term of employment shall begin on the date in the year 2000 that
the acquisition of United Bancorp by PREMIERWEST BANCORP becomes effective under
the terms of the Agreement and Plan of Merger and Share Exchange and shall
extend for six (6) months thereafter unless sooner terminated as provided for
herein. This Agreement shall not be effective if the acquisition of United
Bancorp by PREMIERWEST BANCORP does not become effective under the Agreement and
Plan of Merger and Share Exchange during the year 2000.

                                  SECTION THREE
                                  COMPENSATION

         For all the services to be rendered by EMPLOYEE to BANK OF SOUTHERN
OREGON, in any capacity, including those services provided as Vice
President/Regional Sales and Service Manager or any other duties assigned to
EMPLOYEE by the directors of BANK OF SOUTHERN OREGON agrees to pay EMPLOYEE a
salary of $5,000

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per month during the term of this Agreement. This shall be referred to as the
"basic salary". Such basic salary shall be paid to EMPLOYEE in semimonthly
installments of $2,500 on the 15th of each month and on the last day of each
month. The first such semimonthly installment of $2,500 shall be paid on the
15th of the first month in the year 2000 that the term of this Agreement
commences and the same bi-monthly installments of $2,500 shall be paid
thereafter during the term of this Agreement. EMPLOYEE's initial salary payment
shall be prorated.

                                  SECTION FOUR
                                     DUTIES

         EMPLOYEE accepts employment with BANK OF SOUTHERN OREGON on the terms
and conditions set forth in this Agreement, and agrees to devote her full time
employment to the performance of her duties under this Agreement. Such duties
include, but are not limited to: 1) customer service in northern region; 2)
sales in northern region; 3) assistance in the implementation of sales and
customer service throughout BANK OF SOUTHERN OREGON's banking network. EMPLOYEE
shall perform such specific duties and shall exercise such specific authority as
may be assigned to EMPLOYEE from time to time by the Board of Directors of BANK
OF SOUTHERN OREGON. In performing such duties, EMPLOYEE shall be subject to the
direction and control of the Executive Management of BANK OF SOUTHERN OREGON.
EMPLOYEE further agrees that in all aspects of such employment EMPLOYEE shall
comply with all applicable laws and regulations and with the policies of BANK OF
SOUTHERN OREGON from time to time established and shall perform her duties
faithfully, intelligently and honestly to the best of her ability and in the
best interest of BANK OF SOUTHERN OREGON.

                                  SECTION FIVE
                               ADDITIONAL BENEFITS

         In addition to the basic salary set forth above Bank agrees to provide
EMPLOYEE with the following benefits:

         A. EMPLOYEE will receive fringe benefits offered to BANK OF SOUTHERN
OREGON employees. These include health insurance coverage, participation in
incentive compensation and 401(k) plans, sick leave benefits and paid vacation
benefits (four weeks per year). The terms and conditions of such benefits shall
be as established from time to time by the board of directors of BANK OF
SOUTHERN OREGON.

         B. In accordance with its policies and procedures established from time
to time by its board of directors, BANK OF SOUTHERN OREGON will reimburse
EMPLOYEE for reasonable business expenses and will allow EMPLOYEE continued use
of bank vehicles as long as EMPLOYEE is employed.

                                   SECTION SIX
                                   TERMINATION

1) EMPLOYEE acknowledges that she is an "at will" employee and that she may be
dismissed at any time, with or without cause, for any reason whatsoever.
EMPLOYEE may terminate this Agreement, at any time, for any reason whatsoever,
upon written notice to BANK OF SOUTHERN OREGON. For the purposes of this
Agreement, termination of EMPLOYEE's employment by BANK OF SOUTHERN OREGON for
cause shall include, but is not limited to, the following:

         A. EMPLOYEE fails or refuses to comply with the policies, standards,
and regulations of BANK OF SOUTHERN OREGON as established by the Board of
Directors from time to time.

         B. EMPLOYEE commits an act of material insubordination, fraud,
dishonesty, material misconduct, gross negligence, gross neglect of his duties,
continued and repeated insobriety, or conviction of any crime constituting a
felony;

<PAGE>   3

         C. Conduct which is seriously prejudicial to BANK OF SOUTHERN OREGON
including, but not limited to, neglect of duty or breach of this Agreement.

         D. EMPLOYEE suffers a permanent disability. For the purposes of this
Agreement "permanent disability" shall be defined as EMPLOYEE's inability due to
physical or mental illness, or other cause, to perform the essential job
functions and duties of EMPLOYEE under this Agreement for a period of 90 days.
Permanent disability shall be determined by a licensed physician hired by BANK
OF SOUTHERN OREGON. EMPLOYEE hereby agrees in advance to an examination by a
licensed physician selected by BANK OF SOUTHERN OREGON if so required to
determine whether or not EMPLOYEE suffers a permanent disability.

         E. The death of EMPLOYEE. In the event of the death of EMPLOYEE, BANK
OF SOUTHERN OREGON shall pay to EMPLOYEE's estate the salary which would be
otherwise payable to EMPLOYEE through the end of the month in the month in which
EMPLOYEE's death occurs.

         F. A violation of the State of Oregon or Federal Banking Rules and
Regulations of such a nature as to disqualify EMPLOYEE from her duties as set
forth herein.

2) In the event EMPLOYEE is terminated from employment by BANK OF SOUTHERN
OREGON for cause, or in the event EMPLOYEE quits the employment of BANK OF
SOUTHERN OREGON without cause, then EMPLOYEE will not be entitled to any
severance pay or other benefits following the date of termination.

         For the purposes of this Agreement, termination by EMPLOYEE for cause
shall include, but is not limited to, the following:

         A. EMPLOYEE suffering a permanent disability as defined above.

         B. EMPLOYEE is required by the Board of Directors of Bank to perform
any illegal or fraudulent act.

         C. A breach by BANK OF SOUTHERN OREGON of the provisions of this
Agreement.

3) In the event (1) EMPLOYEE's employment is not renewed at the expiration of
this agreement; (2) EMPLOYEE is terminated by Bank without cause; or (3)
EMPLOYEE quits with or without cause; then EMPLOYEE shall be entitled to the
following benefits:

         A. The payment of $3125 per month for the 24 months following the date
of termination. Said payments shall be paid semimonthly in accordance with BANK
OF SOUTHERN OREGON customary payroll practices and deductions shall be made by
BANK OF SOUTHERN OREGON as required by law. In the event EMPLOYEE dies before
receiving all severance payments due, if any, such remaining payments will be
paid to EMPLOYEE's estate or heirs at law as the case may be.

         B. In the event of a sale or change of control of the BANK OF SOUTHERN
OREGON, the guaranteed payment will be reduced by the amounts received by
EMPLOYEE through non-competition payments and/or other benefits and payments
made by the succeeding or acquiring entity. EMPLOYEE will be entitled to any
additional compensation received by EMPLOYEE after credit to BANK OF SOUTHERN
OREGON for guaranteed payments.

         C. Payment of these benefits is contingent upon EMPLOYEE signing a
complete release of liability to BANK OF SOUTHERN OREGON for termination of her
employment and all claims arising through the date of termination of her
employment, said release to be in the form attached hereto as Exhibit "A".
Notwithstanding the above, if EMPLOYEE goes to work for or consults with another
entity which is in competition with BANK OF SOUTHERN OREGON, then BANK OF
SOUTHERN OREGON will not be required to make any further payments hereunder.

<PAGE>   4

                                  SECTION SEVEN
                                     NOTICES

         Written notice shall be deemed to have been received by the respective
parties when mailed by both first class and certified mail, return receipt
requested to the following addresses:

BANK OF SOUTHERN OREGON
P.O. Box 40
Medford, OR  97501

EMPLOYEE

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

         These addresses will remain in effect until the respective party has
notified the other in writing of a change of address.

                                  SECTION EIGHT
                                  RESTRICTIONS

         In the event EMPLOYEE's employment is terminated for any reason or no
reason at all or if EMPLOYEE's employment is not extended upon the expiration of
the term of this Agreement, for a period of two (2) year after such termination
or expiration of this agreement, EMPLOYEE agrees that the following restrictions
and limitations shall apply to her:

         A. EMPLOYEE will not, on behalf of herself or on behalf of any other
person, firm, corporation, limited liability company or any other entity, call
on any of the customers of BANK OF SOUTHERN OREGON in any county where BANK OF
SOUTHERN OREGON maintains an office or branch, or of any of its affiliates or
subsidiaries for the purpose of soliciting services and/or providing to any of
the customers any banking services or other products or services provided by
BANK OF SOUTHERN OREGON, nor will she, in any way, directly or indirectly, for
herself or on behalf of any other person, firm, corporation, limited liability
company or other entity, solicit, divert or take away any customer of BANK OF
SOUTHERN OREGON, its affiliates or subsidiaries. For the purposes of this
Agreement the phrase "call on" includes, but is not limited to, contacting a
customer in person, by telephone, by facsimile transmission, by letter, by
electronic transmission or by any other means calculated to make contact with
such customer of BANK OF SOUTHERN OREGON.

         B. EMPLOYEE will not, on behalf of herself or on behalf of any other
person, firm, corporation, limited liability company or any other entity,
solicit or hire any of the employees of BANK OF SOUTHERN OREGON or any of its
affiliates or subsidiaries.

         C. EMPLOYEE will not, directly or indirectly (1) be employed with; (2)
be a partner, officer, member, or director of; or (3) own any interest in; any
banking business or in any other business that competes with a business
conducted by BANK OF SOUTHERN OREGON within Jackson and Douglas Counties of the
State of Oregon.

         EMPLOYEE acknowledges that the covenants set forth in this section do
not impose unreasonable restrictions or work a hardship on EMPLOYEE, are
essential to the willingness of BANK OF SOUTHERN OREGON to employ EMPLOYEE, are
necessary and fundamental to the protection of the business conducted by BANK OF
SOUTHERN OREGON, and are reasonable as to scope, duration, and territory.

                                  SECTION NINE
                            CONFIDENTIAL INFORMATION

<PAGE>   5

         Except for required disclosures to SEC, both during and after
termination of employment, EMPLOYEE agrees, that in addition to any other
limitation contained in this Agreement, regardless of the circumstances of the
termination of employment, she will not communicate to any person, firm,
corporation, limited liability company or other entity, any other information
relating to customer lists, prices, secrets, advertising, loans, accounts, nor
any confidential knowledge, information or secrets that EMPLOYEE may from time
to time acquire with respect to the business of BANK OF SOUTHERN OREGON, or any
of its affiliates or subsidiaries. EMPLOYEE agrees upon termination of his
employment that she will not retain originals or copies of any of the business
records, information or documents of BANK OF SOUTHERN OREGON, in any form
whatsoever, including but not limited to information on computer disks and hard
drives.

         Notwithstanding the above, disclosure is authorized only when done in
the course and scope of EMPLOYEE's employment or as required by law.

                                   SECTION TEN
                                INJUNCTIVE RELIEF

         EMPLOYEE hereby acknowledges that the services to be rendered under
this Agreement are of unique, special and extraordinary character that would be
difficult or impossible for BANK OF SOUTHERN OREGON to replace, and by reason of
such difficulty, EMPLOYEE hereby agrees that for violation of any of the
provisions of this Agreement, BANK OF SOUTHERN OREGON shall, in addition to any
of the rights or remedies available under this Agreement, at law or otherwise,
be entitled to an injunction to be issued by a court of competent jurisdiction
enjoining and restraining EMPLOYEE from committing any violation of this
Agreement and EMPLOYEE hereby consents to the issuance of such injunction.

                                 SECTION ELEVEN
                    COMMUNICATIONS TO BANK OF SOUTHERN OREGON

         A. From the time this Agreement commences until the termination of this
Agreement, EMPLOYEE shall communicate and channel to BANK OF SOUTHERN OREGON all
knowledge, business, and customer contacts and any other matters of information
that could concern or be in any way beneficial to the business of BANK OF
SOUTHERN OREGON, whether acquired by EMPLOYEE before or during the term of this
Agreement; provided, however, that nothing under this Agreement shall be
construed as requiring such communications where the information is lawfully
protected from disclosure as a trade secret of a third party.

         B. Any such information communicated to BANK OF SOUTHERN OREGON as
stated above shall be and remain the property of BANK OF SOUTHERN OREGON, in
spite of the subsequent termination of this Agreement.

                                 SECTION TWELVE
                                 BINDING EFFECT

         This Agreement shall be binding upon the parties hereto, their heirs,
assigns, personal representatives and successors in interest. This Agreement may
be assigned to and assumed by any successor in interest of BANK OF SOUTHERN
OREGON upon its approval.

                                SECTION THIRTEEN
                                  GOVERNING LAW

         The parties agree that this Agreement shall be governed by, construed
and enforced in accordance with the laws of the State of Oregon. The parties
agree that exclusive venue and jurisdiction shall lie in Jackson County, Oregon.

<PAGE>   6

                                SECTION FOURTEEN
                                  CREATIVE WORK

         EMPLOYEE agrees that all creative work and work product including, but
not limited to, all technology, business management tools, processes, software,
patents, trademarks, copyrights developed by EMPLOYEE during the term of this
Agreement, irrespective of when or where such work or work product was produced,
constitutes work made for hire, all rights of which are owned by BANK OF
SOUTHERN OREGON. In any event, I assign to BANK OF SOUTHERN OREGON or its
designated successor or assignee, all rights, title and interest, whether by way
of copyright, trade secret, trademark, patent or otherwise, in all such work
and/or work product, whether or not the same is subject to protection by patent,
trademark, or copyright laws.

                                 SECTION FIFTEEN
                                ENTIRE AGREEMENT

         This Agreement, the policies and procedures including personnel
policies adopted by BANK OF SOUTHERN OREGON's Board of Directors, shall
constitute the entire agreement between the parties and any prior understanding
or representation of any kind preceding the date of this Agreement shall not be
binding upon either party except to the extent incorporated in this Agreement.
Notwithstanding the above, the Board of Directors of BANK OF SOUTHERN OREGON
shall have the right to unilaterally modify, amend and/or revise its policies
and procedures including its personnel policies.

                                 SECTION SIXTEEN
                            MODIFICATION OF AGREEMENT

         Any modification of this Agreement or additional obligation assumed by
either party in connection with this Agreement shall be binding only if
evidenced in writing signed by each party or any authorized representative of
each party.

                                SECTION SEVENTEEN
                                    NO WAIVER

         The failure of either party to this Agreement to insist upon the
performance of any of the terms and conditions of this Agreement, or the waiver
of any breach of any of the terms and conditions of this Agreement, shall not be
construed as thereafter waiving any such terms and conditions, but the same
shall continue and remain in full force and effect as if no such forbearance or
waiver had occurred.

                                SECTION EIGHTEEN
                                  ATTORNEY FEES

         Any dispute concerning the interpretation or enforcement of this
Agreement shall be resolved by mandatory and binding arbitration in which the
Oregon Rules of Civil Procedure will govern discovery. The prevailing party
shall be awarded its reasonable attorney fees.

                                SECTION NINETEEN
                                TIME OF EXECUTION

         EMPLOYEE acknowledges that this Agreement has been executed prior to
the time that EMPLOYEE actually commenced working as Vice President Regional
Sales and Service Manager of BANK OF SOUTHERN OREGON.

                                 SECTION TWENTY
                                 REPRESENTATIONS

<PAGE>   7

         After _________ __, 2000, EMPLOYEE represents and warrants to BANK OF
SOUTHERN OREGON that there are no employment contracts or other contractual
obligations to which EMPLOYEE is subject which prevents EMPLOYEE from entering
into this Agreement or from fully performing EMPLOYEE's duties under this
Agreement.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.

                                             BANK OF SOUTHERN OREGON

                                             By______________________________
                                             Its:____________________________

                                             EMPLOYEE

                                             ---------------------------------
                                             Rosemarie Baucom

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