8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 22, 2007

PSB HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

WISCONSIN

0-26480

39-1804877

(State or other

(Commission File

(IRS Employer

jurisdiction of

Number)

Identification

incorporation)

Number)

1905 W. STEWART AVENUE

WAUSAU, WI 54401

(Address of principal executive offices, including Zip Code)

(715) 842-2191

Registrant’s telephone number, including area code

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:

£

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 23.425)

£

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

£

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

£

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

INFORMATION TO BE INCLUDED IN THE REPORT

Section 5 – Corporate Governance and Management

Item 5.02.

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

On February 22, 2007, the employment and change of control agreement of Scott M. Cattanach, Vice President, Secretary, and Treasurer of PSB Holdings, Inc. (“PSB”) was amended to provide for a term ending on June 30, 2009, followed by automatic extensions of one year until Mr. Cattanach’s 66^th birthday unless either party gives notice to the other at least 90 days prior to expiration of any term that the automatic renewals shall cease.  The agreement was also amended to provide that Mr. Cattanach is entitled to receive a change of control severance benefit of three-times his base salary (but in no event will any amount be paid if it is an “excess parachute payment” under Section 280G of the Internal Revenue Code).  A “change of control” is defined in the agreement as:

·

the acquisition of 30% or more of the PSB’s common stock by a person or group (excluding stock acquired by an employee benefit plan sponsored by PSB);

·

a change in the composition of the board of directors of PSB so that the incumbent directors on the effective date of the agreement or plan (or directors approved by the incumbent directors) no longer constitute a majority of the directors;

·

a transaction in which PSB’s shareholders will beneficially own less than 60% of the shares of the new combined entity; and

·

the liquidation or dissolution of PSB.

Section 9 – Financial Statements and Exhibits

Item 9.01

Financial Statements and Exhibits

Exhibit 10.1

Amendment No. 2 to Employment and Change of Control Agreement with Scott M. Cattanach dated February 22, 2007

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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.

PSB HOLDINGS, INC.

Date:  February 22, 2007

By:  SCOTT M. CATTANACH

Scott M. Cattanach

Treasurer

EXHIBIT INDEX

to

FORM 8-K

of

PSB HOLDINGS, INC.

dated February 22, 2007

Pursuant to Section 102(d) of Regulation S-T

(17 C.F.R. Section 232.102(d))

10.1

Amendment No. 2 to Employment and Change of Control Agreement with Scott M. Cattanach dated February 22, 2007

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EX-10.1

Exhibit 10.1

Amendment No. 2

to

Employment Agreement of Scott M. Cattanach

This agreement is entered into as of this 22nd day of February, 2007 and constitutes an amendment (“Amendment No. 2”) to that certain employment agreement dated April 10, 2003, and as first amended on April 13, 2005 (as so amended, the “Agreement”) by and between Peoples State Bank, Wausau, Wisconsin, a Wisconsin banking corporation (the “Bank”), and Scott M. Cattanach, of Wausau, Wisconsin (“Mr. Cattanach”).

WHEREAS, this Amendment No. 2 constitutes a notice that no further extensions of the term of the Agreement shall be made under the terms of the Agreement as now in effect; and

WHEREAS, the Bank and Mr. Cattanach wish to amend the Agreement in order to adjust the term of the Agreement; and

The parties agree as follows:

1.

Defined Terms.  Each term, when used in this Amendment No. 2, shall have the same meaning as such term in the Agreement.

2.

Term.  Paragraph 2 of the Agreement shall be amended to read as follows:

2.

Term.  The term of this agreement shall commence on the Commencement Date and shall end at midnight on the Expiration Date.  For purposes of this agreement, the term “Expiration Date” shall mean the first to occur of (a) the date of Mr. Cattanach’s death, or (b) the later of (1) July 1, 2009, and (2) the date to which the term of this agreement has most recently been extended pursuant to the following sentence.  On July 1, 2009, and each subsequent July 1, the term of this agreement shall automatically be extended for one calendar year; provided, however, that automatic extensions of the term of this agreement (and, consequently, the Expiration Date) pursuant to this sentence shall cease on the first to occur of (x) either the Bank or Mr. Cattanach giving to the other, not less than 90 days prior to the Expiration Date of the original or any extended term, a written notice that no, or no further, as the case may be, automatic extensions of the term of this agreement shall thereafter occur, but the giving of such a notice shall not affect any previous extensions, or (y) Mr. Cattanach’s 66th birthday.  The term “Term of Employment” shall mean the period beginning on the Commencement Date and ending on the earlier of the Expiration Date or the date on which Mr. Cattanach’s employment is terminated pursuant to paragraphs 5 or 8; provided, however, that for purposes of Mr. Cattanach’s entitlement to any severance benefit pursuant to such paragraphs, Mr. Cattanach shall be deemed to have incurred a termination of employment with the Bank only on such date on which his employment has been terminated by the Bank, each other

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member of the controlled group of corporations of which the Bank is a member, and each other entity under common control with the Bank, and has thereby incurred a separation from service within the meaning of Code Section 409A(a)(2)(A) (a “Separation from Service”).

3.

Change of Control Severance Benefit.  Paragraph 8(d)(i)(B) of the Agreement shall be amended to read as follows:

(B) the amount equal to 300% of Mr. Cattanach’s annual salary as most recently in effect pursuant to paragraph 4(a);

4.

Ratification of Employment Agreement.  Except as otherwise provided in paragraphs 2 and 3 of this Amendment No. 2, all terms of the Agreement are hereby ratified and confirmed and remain in full force and effect.

IN WITNESS WHEREOF, the Bank and Mr. Cattanach have caused this instrument to be executed as of the date first written above.

PEOPLES STATE BANK

By:  PATRICK L. CROOKS

Patrick L. Crooks

As its Chairman of the Board

SCOTT M. CATTANACH

Scott M. Cattanach

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