8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): December 24, 2009 (December 18, 2009)

Psychiatric Solutions, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction
of Incorporation) 0-20488
(Commission File Number) 23-2491707
(IRS Employer
Identification No.)

6640 Carothers Parkway, Suite 500, Franklin, Tennessee 37067
(Address of Principal Executive Offices)

(615) 312-5700
(Registrant’s Telephone Number, including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

     On December 18, 2009, the Compensation Committee of the Board of Directors of Psychiatric Solutions, Inc. (the “Company”) approved salary increases for the named executive officers of the Company. Effective January 1, 2010, the annual base salary for the following executive officers shall be as follows:

Name	Title	2010 Base Salary
Joey A. Jacobs	Chairman, Chief Executive Officer and President	$	1,545,000
Ronald M. Fincher	Chief Operating Officer		585,000
Jack E. Polson	Executive Vice President, Chief Accounting Officer		500,000
Brent Turner	Executive Vice President, Finance and Administration		500,000
Christopher L. Howard	Executive Vice President, General Counsel and Secretary		500,000

     In addition, on December 18, 2009, the Compensation Committee approved and adopted the Amended 2009 Long-Term Equity Compensation Plan (the “Amended 2009 Plan”) and the 2010 Long-Term Equity Compensation Plan (the “2010 Plan”).

     The Amended 2009 Plan replaces the 2009 Long-Term Equity Compensation Plan adopted by the Compensation Committee on March 2, 2009 and revises the criteria for which equity awards will be made by the Compensation Committee. The Amended 2009 Plan provides that the Company’s executive officers and certain key employees shall be eligible to participate in the Amended 2009 Plan. The Compensation Committee has the discretion to grant to eligible employees equity awards to purchase up to 1.5% of the Company’s aggregate issued and outstanding shares of Common Stock if the Company’s adjusted earnings per share (“EPS”) for 2009 is $2.11 or greater. The Amended 2009 Plan also provides for an additional equity award to eligible employees based on the amount that the Company’s 2009 adjusted EPS exceeds its 2008 adjusted EPS. If the Company’s 2009 adjusted EPS exceeds its 2008 adjusted EPS by not less than 14% but not more than 20%, the Company will grant additional equity awards of not more than 1% of the Company’s aggregate outstanding shares of Common Stock. If the Company’s adjusted EPS exceeds its 2008 adjusted EPS by not less than 20% but not more than 30%, the Company will grant additional equity awards of 1% to 1.5% of the Company’s aggregate outstanding shares of Common Stock. If the Company’s adjusted EPS exceeds its 2008 adjusted EPS by more than 30%, the Company will grant additional equity awards equal to 1.5% of the Company’s aggregate outstanding shares of Common Stock. The Compensation Committee retained the discretion to grant equity awards to eligible employees if the applicable criteria is not met. Equity awards shall vest in equal annual installments over four years. In the event that equity awards are to be granted under the Amended 2009 Plan, the Compensation Committee shall meet with the Company’s Chief Executive Officer on or before March 31, 2010 to determine the allocation of the equity awards to the eligible employees. The foregoing description of the Amended 2009 Plan is qualified in its entirety by reference to the Amended 2009 Plan, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

     The 2010 Plan provides that the Company’s executive officers and certain key employees shall be eligible to participate in the 2010 Plan. The Compensation Committee has the discretion to grant to eligible employees stock options to purchase up to 1.5% of the Company’s aggregate issued and outstanding shares of Common Stock. The stock options shall vest in equal annual installments over four years. In addition, the Compensation Committee may grant to eligible employees a number of shares of restricted Common Stock not to exceed 1.5% of the Company’s aggregate outstanding shares of Common

Stock; provided that each share of restricted Common Stock granted under the 2010 Plan shall be counted as 2.5 shares of Common Stock for the purpose of the number of shares eligible to be granted to participants. The shares of restricted Common Stock shall vest in equal annual installments over four years; provided, however, if the Company’s adjusted EPS for 2010 does not exceed the Company’s budgeted EPS for 2010, then all shares of restricted Common Stock shall be forfeited. In the event that equity awards are to be granted under the 2010 Plan, the Compensation Committee shall meet with the Company’s Chief Executive Officer on or before March 31, 2011 to determine the allocation of the equity awards to the eligible employees. The foregoing description of the 2010 Plan is qualified in its entirety by reference to the 2010 Plan, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits.

10.1 Psychiatric Solutions, Inc. Amended 2009 Long-Term Equity Compensation Plan

10.2 Psychiatric Solutions, Inc. 2010 Long-Term Equity Compensation Plan

SIGNATURES

     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.

	PSYCHIATRIC SOLUTIONS, INC.
Date: December 24, 2009	By:	/s/ Christopher L. Howard
		Christopher L. Howard
		Executive Vice President, General Counsel and Secretary

INDEX TO EXHIBITS

Exhibit Number	Description of Exhibits
10.1	Psychiatric Solutions, Inc. Amended 2009 Long-Term Equity Compensation Plan
10.2	Psychiatric Solutions, Inc. 2010 Long-Term Equity Compensation Plan

EX-10.1

Exhibit 10.1

PSYCHIATRIC SOLUTIONS, INC.
AMENDED 2009 LONG-TERM EQUITY COMPENSATION PLAN

     The Amended 2009 Long-Term Equity Compensation Plan (the “Amended Plan”) of Psychiatric Solutions, Inc. (the “Company”) will be administered by the Compensation Committee of the Board of Directors (the “Committee”). The Company’s executive officers and certain key employees (together, the “Eligible Employees”) will be eligible to participate in the Amended Plan.

1. Equity Awards .

(a)

If the Company’s adjusted EPS for the 2009 fiscal year (the “Current Year EPS”) is $2.11 or greater, the Company will grant stock options to the Eligible Employees to purchase that number of shares of Common Stock which is equal to 1.5% of the Company’s aggregate total of issued and outstanding shares of Common Stock as of the grant date. If Current Year EPS is less than $2.11, the Committee may still grant stock options, the exact number to be determined in the sole discretion of the Committee.

(b)

In addition to any stock options to be granted pursuant to Section 1(a) above:

(i)	If the Company’s Current Year EPS exceeds the Company’s adjusted EPS for the prior fiscal year (the “Prior Year EPS”) by not less than 14%, and not more than 20%, the Company will grant stock options to the Eligible Employees to purchase that number of shares of Common Stock which is equal to not more than 1% of the Company’s aggregate total of issued and outstanding shares of Common Stock as of the grant date, the exact number to be determined in the sole discretion of the Committee.
(ii)	If the Company’s Current Year EPS exceeds the Company’s Prior Year EPS by not less than 20%, and not more than 30%, the Company will grant stock options to the Eligible Employees to purchase that number of shares of Common Stock which is equal to not less than 1%, and not more than 1.5%, of the Company’s aggregate total of issued and outstanding shares of Common Stock as of the grant date, the exact number to be determined in the sole discretion of the Committee.
(iii)	If the Company’s Current Year EPS exceeds the Company’s Prior Year EPS by more than 30%, the Company will grant stock options to the Eligible Employees to purchase that number of shares of Common Stock which is equal to 1.5% of the Company’s aggregate total of issued and outstanding shares of Common Stock as of the grant date.

(c) At the Committee’s discretion, the Company may issue restricted stock awards in combination with or in lieu of stock options.

2. Allocation of Equity Awards . In the event equity awards are made under the Amended Plan, the Committee shall meet with the Company’s Chief Executive Officer on or before March 31, 2010 to determine the allocation of the equity awards to the Eligible Employees.

3. Vesting and Terms of Equity Awards . Any equity awards granted pursuant to the Amended Plan shall be issued under the Company’s Equity Incentive Plan and subject to all of the terms and conditions of the Company’s Equity Incentive Plan and the Company’s Executive Performance Incentive Plan. Any stock options shall vest and become exercisable over four years, with 25% vesting on each anniversary of the date of grant over the next four years. Any restricted stock awards shall vest over four years, with 25% vesting on each anniversary of the date of grant over the next four years.

EX-10.2

Exhibit 10.2

PSYCHIATRIC SOLUTIONS, INC.

2010 LONG-TERM EQUITY COMPENSATION PLAN

     The 2010 Long-Term Equity Compensation Plan (the “Plan”) of Psychiatric Solutions, Inc. (the “Company”) will be administered by the Compensation Committee of the Board of Directors (the “Committee”). The Company’s executive officers and certain key employees (together, the “Eligible Employees”) will be eligible to participate in the Plan.

1. Equity Awards.

(a)

The Committee, in its sole discretion, may grant stock options to the Eligible Employees to purchase a number of shares of Common Stock not to exceed 1.5% of the Company’s aggregate total of issued and outstanding shares of Common Stock as of the grant date, the exact number to be determined in the sole discretion of the Committee. The stock options shall vest and become exercisable over four years, with 25% vesting on each anniversary of the date of grant over the next four years.

(b)

The Committee, in its sole discretion, may also grant to the Eligible Employees a number of shares of restricted Common Stock not to exceed 1.5% of the Company’s aggregate total of issued and outstanding shares of Common Stock as of the grant date, the exact number to be determined in the sole discretion of the Committee; provided that each share of restricted Common Stock granted under the 2010 Plan shall be counted as 2.5 shares of Common Stock for the purpose of the number of shares eligible to be granted to participants. Any restricted stock awards shall vest over four years, with 25% vesting on each anniversary date of the date of grant over the next four years provided the Company’s adjusted EPS for its 2010 fiscal year (the “Current Year EPS”) exceeds the Company’s budgeted EPS for its 2010 fiscal year. If the Company’s Current Year EPS does not exceed the Company’s budgeted EPS for its 2010 fiscal year, all restricted stock awards granted under the Plan shall be forfeited. The Committee shall certify whether the performance criteria was met prior to March 31, 2011.

2. Allocation of Equity Awards. The Committee shall meet with the Company’s Chief Executive Officer on or before March 31, 2010 to determine the allocation of the equity awards to the Eligible Employees.

3. Vesting and Terms of Equity Awards. Any equity awards granted pursuant to the Plan shall be issued under the Company’s Equity Incentive Plan and subject to all of the terms and conditions of the Company’s Equity Incentive Plan and the Company’s Executive Performance Incentive Plan.