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): February 27, 2008 (February 25, 2008)

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 February 25, 2008, the Compensation Committee of the Board of Directors of Psychiatric Solutions, Inc. (the “Company”) approved cash bonus plans for the named executive officers of the Company for the 2008 fiscal year. A description of the cash bonus plans is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

     In addition, on February 25, 2008, the Compensation Committee also adopted the 2008 Long-Term Equity Compensation Plan (the “2008 Plan”). The 2008 Plan provides that the Company’s executive officers and certain key employees shall be eligible to receive stock options and shares of restricted stock based upon the achievement of certain specified performance targets related to the Company’s adjusted earnings per share (“EPS”). No equity awards will be granted if the Company’s adjusted EPS for 2008 does not exceed the Company’s adjusted EPS for 2007 by at least 20%. In the event that equity awards are to be granted under the 2008 Plan, the Compensation Committee shall meet with the Company’s Chief Executive Officer on or before March 31, 2009 to determine the allocation of the equity awards to the eligible employees. The foregoing description of the 2008 Plan is qualified in its entirety by reference to the 2008 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	Summary of Psychiatric Solutions, Inc. 2008 Cash Bonus Plans
10.2	Psychiatric Solutions, Inc. 2008 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: February 27, 2008	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	Summary of Psychiatric Solutions, Inc. 2008 Cash Bonus Plans
10.2	Psychiatric Solutions, Inc. 2008 Long-Term Equity Compensation Plan

EX-10.1

Exhibit 10.1

2008 Cash Bonus Plans

     The Compensation Committee approved a bonus plan for each named executive officer of the Company to be effective for the 2008 fiscal year. Pursuant to the 2008 bonus plans, Joey A. Jacobs, Terrance R. Bridges, Brent Turner, Jack E. Polson and Christopher L. Howard may be awarded cash bonuses based upon the Company’s attainment of certain performance targets during 2008. The bonus plans provide that the bonus of Messrs. Jacobs, Turner, Polson and Howard for 2008 will be based 60% upon targets related to the comparison of the Company’s actual earnings before income from continuing operations before interest expense (net of interest income), income taxes, depreciation and amortization (“EBITDA”) to budgeted EBITDA for 2008; 20% upon targets related to adjusted earnings per share for 2008; and 20% upon other criteria selected by the Compensation Committee. The bonus for Mr. Bridges for 2008 will be based 70% upon targets related to the comparison of the Company’s actual EBITDA to budgeted EBITDA for 2008; 20% upon targets related to adjusted earnings per share for 2008; and 10% upon other criteria selected by the Compensation Committee. The maximum bonus award (as a percentage of base salary) that each executive officer can receive is as follows: Mr. Jacobs, 150%; and Messrs. Bridges, Turner, Polson and Howard, 100%.

     Following the end of the 2008 fiscal year, the Compensation Committee will determine whether and the extent to which the applicable 2008 performance targets discussed above were met. The Compensation Committee will then award each named executive officer a cash bonus based on the achievement of the applicable performance targets. No payments will be made for performance below specified threshold levels. Payments for performance between the minimum threshold and the target level required to receive the maximum bonus award will be determined based on a formula. Other than Mr. Jacobs, the named executive officers must be actively employed by the Company at the time the bonuses are paid in order to be eligible to receive a cash bonus. The awarding of cash bonuses is subject to the discretion of the Compensation Committee.

EX-10.2

Exhibit 10.2

PSYCHIATRIC SOLUTIONS, INC.

2008 LONG-TERM EQUITY COMPENSATION PLAN

     The 2008 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)	If the Company’s adjusted EPS for the current fiscal year (the “Current Year EPS”) does not exceed the Company’s adjusted EPS for the prior fiscal year (the “Prior Year EPS”) by at least 20%, no equity awards will be granted.
(b)	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 2%, and not more than 3%, 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.
(c)	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 3% of the Company’s aggregate total of issued and outstanding shares of Common Stock as of the grant date.
(d)	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 Plan, the Committee shall meet with the Company’s Chief Executive Officer on or before March 31 of the following fiscal year 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. 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.