PremierWest Bancorp, and its affiliate, PremierWest Bank, (collectively “PremierWest”) have entered into an employment agreement with Mr. William M. Yarbenet, its current Executive Vice President & Chief Credit Officer. The initial term of Mr. Yarbenet’s employment agreement expires December 31, 2010. The employment agreement is automatically extended at year end for another year unless PremierWest elects not to renew Mr. Yarbenet’s employment agreement for the coming year. Pursuant to the terms of his employment agreement (a copy is attached as Exhibit 10.1) Mr. Yarbenet shall receive a base annual salary of $180,000. Mr. Yarbenet will receive a restricted stock award for 5,000 shares of PremierWest stock which will vest over 7 years. Mr. Yarbenet will receive benefits similar to the other named executive officers and will be eligible to participate in the company executive insurance programs, benefit plans and deferred compensation plan. The attached employment agreement contains a more detailed explanation of the specific benefits and the terms and conditions of Mr. Yarbenet's employment.

Item 9.01 Financial Statements and Exhibits.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.