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):  December 17, 2013

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 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))

{W0752008.DOC/3}

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 December 17, 2013, the board of directors of Peoples State Bank (the “Bank”), the principal operating subsidiary of PSB Holdings, Inc. (“PSB”), approved amendments to its deferred compensation plans that apply to directors and certain management-level executives.

Executive Deferred Compensation Plan

For a number of years, the Bank has maintained a plan under which certain senior-management-level executives are permitted, under the terms of individual deferred compensation agreements, to elect to defer up to 20% of the executive’s annual base salary (and up to 70% of any bonus compensation paid to the executive), with a matching contribution made by the Bank in an amount equal to 20% of the amount deferred by the executive, up to a maximum of 3% of the executive’s base salary.  Matching contributions and interest accrued thereon is subject to a vesting schedule.  Deferred amounts and matching contributions are credited with interest (as further described below) and paid to the executive upon termination of employment.  During the period following an executive’s termination of service, the unpaid balance in the executive’s deferral account is credited with interest at a rate of 7% per annum.  Peter W. Knitt, who is the President and Chief Executive Officer of PSB, and Scott M. Cattanach, who is the Chief Financial Officer of PSB, both participate in the plan, along with certain other management-level executives.

Under the terms of the Executive Deferred Compensation Plan, interest has previously been credited on the executive’s deferred compensation account at a rate equal to 100% of the Bank’s return on equity, with a minimum annual interest rate of 5% and a maximum annual interest rate of 15%.  At its December 2013 meeting, the Bank’s board amended the Executive Deferred Compensation Plan to remove any ceiling or floor on the interest that is credited to the executive’s account.  This amendment to the Executive Deferred Compensation Plan will be effective for the plan year beginning January 1, 2014.

Directors’ Deferred Compensation Plan

PSB maintains a deferred compensation program, the 2005 Deferred Compensation Plan, under which directors may elect prior to each January 1 to defer some or all of the fees otherwise payable by PSB and the Bank during the subsequent year.  Amounts deferred become payable in cash in a form as elected by the director with options being a lump sum or in 60 or 120 monthly installments.  During the period following a director’s termination of service, the unpaid balance in a director’s deferral account is credited with interest at a rate of 8% per annum.

The 2005 Directors’ Deferred Compensation Plan has previously provided for interest to be credited at a rate equal to 100% of PSB’s return on equity, with a minimum annual interest

crediting rate of 5% and a maximum annual interest crediting rate of 15%.  Effective January 1, 2014, the amended provisions described above for the Bank’s Executive Deferred Compensation Plan (i.e., removing the floor and ceiling for the rate of interest that is credited to a director’s deferred compensation account) will also be effective for the 2005 Directors Deferred Compensation Plan.

PSB had, prior to adopting the 2005 Directors’ Deferred Compensation Plan, maintained a similar deferred compensation program for its directors (the Directors Deferred Compensation Plan).  This plan has not permitted deferrals since January 1, 2005; however, certain PSB directors still maintain deferred compensation account balances under this plan.  Effective January 1, 2014, this plan was also amended to remove the floor and ceiling for the rate of interest that is credited to a director’s deferred compensation account.

Section 8 – Other Events

Item 8.01

Other Events

On December 23, 2013, PSB issued a news release announcing that its board of directors had authorized the repurchase of up to 10,000 shares, or approximately 0.6% of the Company's outstanding common stock. Under the program, repurchases of stock will be made by the Company at a price not to exceed $30.00 per share until March 31, 2014.  The repurchase program is a continuation of similar quarterly repurchase plans undertaken by the Company during 2012 and2013, pursuant to which a total of 20,230 shares have been repurchased. The repurchase program does not obligate PSB to repurchase any dollar amount or number of shares of the company's outstanding common stock.  The repurchase program is expected to continue indefinitely; however, the PSB board of directors reviews the Company's repurchase program on a quarterly basis. A copy of the news release announcing the repurchase program is included as Exhibit 99.1 to this report and is incorporated herein by reference.

Section 9 – Financial Statements and Exhibits

Item 9.01

Financial Statements and Exhibits

Exhibit 10.1

Form of Notification of Change to Executive Deferred Compensation Agreement

Exhibit 10.2

2005 Directors Deferred Compensation Plan (as amended and restated effective January 1, 2014)

Exhibit 10.3

Directors Deferred Compensation Plan (as amended and restated effective January 1, 2014)

Exhibit 99.1

News Release

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:  December 23, 2013

By:  

SCOTT M. CATTANACH

Scott M. Cattanach

Treasurer

EXHIBIT INDEX

to

FORM 8-K

of

PSB HOLDINGS, INC.

dated December 17, 2013

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

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

Exhibit 10.1

Form of Notification of Change to Executive Deferred Compensation Agreement

Exhibit 10.2

2005 Directors Deferred Compensation Plan (as amended and restated effective January 1, 2014)

Exhibit 10.3

Directors Deferred Compensation Plan (as amended and restated effective January 1, 2014)

Exhibit 99.1

News Release

EX-10.1

Exhibit 10.1

NOTIFICATION OF CHANGE

TO

EXECUTIVE DEFERRED COMPENSATION AGREEMENT

THIS NOTIFICATION OF CHANGE TO EXECUTIVE DEFERRED COMPENSATION AGREEMENT (this “Notification”) is made as of the 31st day of December, 2013, to be effective for the Plan Year beginning January 1, 2014 and subsequent Plan Years, upon the discretion of the Board of Directors of Peoples State Bank pursuant to Section 3.1.3 of the Executive Deferred Compensation Agreement between Peoples State Bank of Wausau, Wisconsin (the “Bank”) and                (the “Executive”).  All terms used herein which are not otherwise defined have the same meaning as in the Peoples State Bank Executive Deferred Compensation Agreement with the Executive, as amended and restated effective December 31, 2007 (the “Agreement”).

WHEREAS, the Bank entered into the Agreement to encourage the Executive to remain an employee of the Bank; and

WHEREAS, the Bank reserved the right to change the amount or calculation of Interest on the Deferral Account balance under Section 3.1.3 thereof; and

WHEREAS, the Bank now desires to notify the Executive of this change to the Agreement.

NOW, THEREFORE, the calculation of interest on the Deferral Account balance is changed as follows, effective as of the date set forth above.

1.

Section 3.1.3.  The second sentence of Section 3.1.3, namely, “The minimum rate of Interest credited under the first sentence of this Section 3.1.3 shall be five percent (5%), and the maximum rate of Interest shall be fifteen percent (15%).” is deleted in its entirety.

2.

Full Force and Effect.  Except for changes as specifically noted herein, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties below acknowledge receipt of this Notification as of the date first set forth above.

EXECUTIVE:

PEOPLES STATE BANK:

_______________________________

By:

______________________________

Donna Staples

Senior Vice-President

Director of Human Resources

EX-10.2

Exhibit 10.2

PSB HOLDINGS, INC.

2005 DIRECTORS DEFERRED COMPENSATION PLAN

(as amended and restated effective January 1, 2014)

1.

Adoption of Plan and Restatement of Plan Document.  PSB Holdings, Inc. (“PSB Holdings”) has adopted the PSB Holdings, Inc. 2005 Directors Deferred Compensation Plan effective as of October 17, 2007 (the “Plan”), which has previously been amended effective December 15, 2009.  PSB Holdings hereby amends and restates the Plan as follows, which shall be effective on and after January 1, 2014.

2.

Purpose.  The purposes of the Plan are:

(a)

to provide, from and after January 1, 2005, an alternative method of compensating members (the “Directors”) of the boards of directors of PSB Holdings and the Bank and any other Subsidiary which has been designated by PSB Holdings to participate in the Plan, whether or not they otherwise receive compensation as employees, in order to aid PSB Holdings and its Subsidiaries in attracting and retaining as Directors persons whose abilities, experience, and judgment can contribute to the continued progress of PSB Holdings and its Subsidiaries and to provide a mechanism by which the interests of the Directors and the shareholders of PSB Holdings can be more closely aligned; and

(b)

to accept and hold all amounts deferred after December 31, 2004, under the Prior Plan.

3.

Definitions.  As used in this Plan, the following terms shall have the meaning set forth in this paragraph 3:

(a)

“Accounts” means, as of any date after December 31, 2004, such of a Participant’s Deferred Cash Account and Deferred Stock Account which have an undistributed balance.

(b)

“Bank” means Peoples State Bank, a Subsidiary of PSB Holdings, Inc.

(c)

“Beneficiary” means such person or persons, or organization or organizations, as the Participant from time to time may designate by a written designation filed with PSB Holdings during the Participant’s life.  Any amounts payable hereunder to a Participant’s Beneficiary shall be paid in such proportions and subject to such trusts, powers, and conditions as the Participant may provide in such designation.  Each such designation, unless otherwise expressly provided therein, may be revoked by the Participant by a written revocation filed with PSB Holdings during the Participant’s life.  If more than one such designation shall be filed by a Participant with PSB Holdings, the last designation so filed shall control over any revocable designation filed prior to such filing.  To the extent that any amounts payable under this Plan to a Participant’s Beneficiary are not effectively disposed of pursuant to the above provisions of this subparagraph 3(c), either because no designation was in effect at the Participant’s death or because a designation in effect at the Participant’s death failed to dispose of such amounts in their entirety, then for purposes of this Plan, the Participant’s “Beneficiary”

as to such undisposed of amounts shall be the Participant’s estate as provided for in subparagraph 6(c)(ii).

(d)

“Board” means the Board of Directors of PSB Holdings.

(e)

“Change in Control” means the happening of any of the following events:  

(i)

when any “person” as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act, excluding any employee benefit plan sponsored or maintained by PSB Holdings or any Subsidiary (including any trustee of such plan acting as trustee), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act, as amended from time to time), of securities of PSB Holdings representing 30% or more of the combined voting power of PSB Holdings’ then outstanding securities with respect to the election of the directors of PSB Holdings; or

(ii)

when, during any period of 24 consecutive months, the individuals who, at the beginning of such period, constitute the Board of Directors of PSB Holdings (the “Incumbent Directors”) cease for any reason other than death to constitute at least a majority thereof, provided, however, that a director who was not a director at the beginning of such 24-month period shall be deemed to have satisfied such 24-month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least a majority of the directors who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such 24-month period) or by prior operation of this provision; or

(iii)

the occurrence of a transaction requiring shareholder approval of the acquisition of the Bank by an entity other than PSB Holdings or a 50% or more owned Subsidiary or shareholder approval of the acquisition of PSB Holdings through purchase of assets, or by merger, consolidation or otherwise, except in the case of a transaction pursuant to which, immediately after the transaction, PSB Holdings’ shareholders immediately prior to the transaction own at least 60% of the combined voting power of the surviving entity’s then outstanding securities with respect to the election of the directors of such entity solely by reason of such transaction; or

(iv)

the liquidation or dissolution of the Bank or PSB Holdings.

(f)

“Code” means the Internal Revenue Code of 1986, as amended, and reference to any section of the Code shall be deemed to include any successor section or sections.  Any reference to a section of the Code shall also be deemed to incorporate any regulation promulgated thereunder.

(g)

“Controlled Group” means the Company and each other member of the controlled group to which the Company belongs pursuant to Section 409A of the Code and the regulations promulgated thereunder.

(h)

“Deferral Account” means the account established by PSB Holdings or a Subsidiary, as the case may be, pursuant to subparagraph 5(a) to record a Participant’s Directors Fees.

(i)

“Deferrals” means the amount of Directors Fees which a Director elects to defer pursuant to this Plan.

(j)

“Directors Fees” means all retainer, meeting fees, or other compensation to which a Director would otherwise become entitled for services to be rendered as a Director, but excluding any compensation to which such person is entitled to receive in his capacity, if any, as an employee of PSB Holdings or any Subsidiary.

(k)

“Participant” means a Director who has an undistributed balance in his or her Deferral Account.

(l)

“Prior Plan” means the PSB Holdings, Inc. Directors Deferred Compensation Plan as operated and maintained to defer, hold, and pay out Deferrals and accumulated earnings thereon with respect to Director Fees deferred prior to January 1, 2005.

(m)

“Return on Equity” for any calendar year means a percentage equal to the quotient determined by dividing (i) PSB Holdings’ net income for such year, by (ii) average stockholders’ equity of PSB Holdings, determined without regard to unrealized gains or losses on investment securities, on a consolidated basis for such year.

(n)

“Specified Employee” means any employee of the Company or any other member of the Controlled Group who is a “specified employee” as determined pursuant to Code Section 409A.  For purposes of this paragraph (k), the Specified Employee identification date shall be December 31, and the Specified Employee effective date shall be April 1.

(o)

“Subsidiary” means the Bank and each other subsidiary of PSB Holdings, including any subsidiary of the Bank.  

(p)

“Termination of Employment” shall mean, with respect to a Director who is an employee, termination of the Director’s employment with the Company and each other member of the Controlled Group.

(q)

“Termination of Service” shall mean, the later of the date of (i) the bona fide termination of a Participant’s service as a member of the Board and each other board of directors of any Subsidiary which has been designated a participating Subsidiary; and (ii) the Participant’s Termination of Employment.

4.

Deferral of Directors Fees.

(a)

Annual Election.  Each Director may elect before January 1 of any fiscal year of PSB Holdings which began subsequent to December 31, 2007, to defer the payment of all or any portion of the Directors Fees to which the Director would otherwise become entitled for services to be rendered during each fiscal year subsequent to the date on which such election is effective and on or before the last day of the month in which the director’s Termination of Service occurs.  An election by a Director to defer Director’s Fees pursuant to this subparagraph 4(a) shall be effective with respect to Director’s Fees earned during the first fiscal year beginning after the date such election is made and during each subsequent fiscal year until revoked or amended, provided, however, that any such revocation or amendment shall only be effective with respect to fiscal years beginning after the date written notice of such revocation or amendment is first received by PSB Holdings.  

(b)

New Director.  Despite any other provision of subparagraph 4(a), if a person first becomes a Director during a fiscal year, such Director may, within 30 days of his election or appointment, elect to become a Participant with respect to all or any portion of the Director’s Fees earned and payable (i) from and after the date on which he is elected a Director if an election is filed on or before the date of such election as a Director, or (ii) if no election is filed pursuant to clause (i), on the first day of the first month immediately following the month in such fiscal year in which such election is made if such election was made within 30 days of the date on which he was elected a Director, and on or before the last day of the month in which the director’s Termination of Service occurs.  An election by a Director to defer Directors Fees pursuant to this subparagraph 4(b) shall remain in effect until the last day of the fiscal year in which such election is made and during each subsequent fiscal year until revoked or amended, provided that any such revocation or amendment shall only be effective with respect to fiscal years beginning after the date written notice of such revocation or amendment is first received by PSB Holdings.

(c)

Payment of Fees.  Directors Fees which are deferred pursuant to this paragraph 4 shall be distributable in accordance with paragraph 6 and only after such Participant’s Termination of Service.  Any Directors Fees not subject to an election made in accordance with this paragraph 4 shall be paid in accordance with the Board’s policy as from time to time in effect.

5.

Accounting and Elections.

(a)

Accounts.  PSB Holdings and each participating Subsidiary shall establish a Deferral Account in the name of each Director who has elected to defer the payment of Directors Fees pursuant to paragraph 4.

(b)

Crediting Deferred Fees.  As of each date on which PSB Holdings or a Subsidiary would otherwise make a payment of Directors Fees, that portion of the Directors Fees

of each Participant who has a deferral election then in effect shall, to the extent deferred, be credited by PSB Holdings or the Subsidiary, as the case may be, to the Participant’s Deferral Account.

(c)

Crediting Interest.  As of each December 31 (each, a “Crediting Date”), up to and including the Basic Initial Payment Date (as defined in paragraph 6), interest shall be credited to each Participant’s Deferral Account based on the average balance in the Deferral Account as of the last day of each calendar quarter of the year ending on the Crediting Date at an annual interest rate equal to the following:

(i)

on each Crediting Date occurring on or before December 31, 2006, interest at a rate equal to 50% of the Return on Equity for the calendar year ending on the Crediting Date if, but only if, the Return on Equity for the fiscal year ending on the Crediting Date was not less than 12%;

(ii)

on the Crediting Date occurring on December 31, 2007, interest at a rate equal to 50% of the Return on Equity for the calendar year ending December 31, 2007;

(iii)

on each Crediting Date occurring on or after December 31, 2008, interest at a rate equal to 100% of the Return on Equity for the calendar year ending on the Crediting Date, but in no event shall such interest rate be less than 5% nor more than 15%;

(iv)

on each Crediting Date occurring on or after January 1, 2014, interest at a rate equal to 100% of the Return on Equity for the calendar year ending on the Crediting Date;

provided, however, that, notwithstanding the foregoing:

(x)

if the Participant has incurred a Termination of Service prior to December 31, the Participant’s Deferral Account shall, on the last day of the second month following the month in which his Termination of Service occurs, be credited with interest at a rate equal to 8% per annum multiplied by a percentage, the numerator of which is the number of days in the year of his Termination of Service that the Participant was a member of the Board and the denominator of which is 365; and

(y)

if the Participant has specified an Initial Payment Date other than the Participant’s Basic Initial Payment Date, then interest at the rate of 8% per annum shall be credited under this subparagraph 5(c) on the last day of each month following his Basic Initial Payment Date, through the last day of the month immediately following the Participant’s Initial Payment Date.

(d)

Annual Report.  Within 120 days of the end of each fiscal year in which this Plan is in effect, PSB Holdings shall furnish each Participant a statement of the year-end balance in such Participant’s Deferral Account.

6.

Distribution of Deferred Amounts.

(a)

Initial Payment Date.  The “Initial Payment Date” of a Participant shall be the later of (i) the first day of the third month following the month in which occurs the Participant’s Termination of Service (the “Basic Initial Payment Date”) and (ii) the date specified by the Participant as the Initial Payment Date (but not later than the first day of the third month following the month in which occurs the date on which such Participant would have attained his mandatory retirement age) in a written election filed with PSB Holdings; provided, however, that if the Participant is a Specified Employee on the date of  his Termination of Employment, the Initial Payment Date otherwise provided for in clause (i) and (ii) shall be adjusted to the first day of  the first calendar month in which occurs the first date which is six months subsequent to the Participant’s Termination of Employment, and, provided further, that any such election shall also be subject to the provisions of paragraph 6(e).

(b)

Ending Balance.  The “Ending Balance” of a Participant’s Deferral Account means the balance of the Deferral Account determined as of the Initial Payment Date.

(c)

Distribution.  On the Initial Payment Date, distribution of the Ending Balance shall be made in cash in accordance with the following:

(i)

Automatic Form of Payment.  In 60 monthly installments beginning on the Initial Payment Date in an amount equal to the amount necessary to amortize the repayment of a loan in an amount equal to the Ending Balance in 60 monthly payments at an interest rate of 8% per annum with payments being made on the first day of each monthly period.

(ii)

Death Benefit.  In the event that the Participant dies before receiving payment of the entire amount to which he is entitled under this Agreement, the unpaid balance shall be paid in a lump sum or in installments, as specified in the Participant’s most recent election in accordance with the provisions of subparagraph 6(c)(iv), to the Beneficiary of such Participant.  If a Beneficiary dies after the Participant’s death, but before receiving the entire payment of the Beneficiary’s portion of the amount to which the Participant was entitled under this Agreement, the portion of the unpaid balance which such Beneficiary would have received if he had not died shall be paid in a lump sum to such Beneficiary’s estate unless the Participant designated otherwise.

(iii)

Change in Control.  In the event a Participant incurs a Termination of Service in connection with a Change in Control, payment of the Ending Balance shall be made on the first July 1 following the Participant’s Termination of Service (or on the date of such termination if it occurs on July 1).

(iv)

Elective Forms of Distribution.  The Participant may elect, subject to the provisions of subparagraph 6(d), that payment of the Participant’s Ending Balance shall be made in one of the following forms:

(A)

in 120 monthly installments beginning on the Initial Payment Date in an amount equal to the amount necessary to amortize the repayment of a loan in an amount equal to the Ending Balance in 120 monthly payments at an interest rate of 8% per annum with payments being made on the first day of each monthly period; or

(B)

in a lump sum, payable on the Initial Payment Date.

(d)

Each Participant may make an election pursuant to paragraphs 6(a) or (c) prior to December 31, 2007.  Each person who becomes a Director subsequent to October 17, 2007, may file an election pursuant to paragraphs 6(a) or (c) at the same time he elects to participate in the Plan pursuant to paragraph 4(b).  Any election by a Director pursuant to paragraphs 6(a) or (c) subsequent to the periods provided for in the two immediately preceding sentences shall be effective only if (i) such election, by its terms, will be effective not less than 12 months after the date on which it is received by PSB Holdings, (ii) such election is made not less than 12 months prior to the date on which distribution of his Deferral Account was otherwise scheduled to begin, (iii) such election defers the distribution of such Deferral Account to a date which is not less than five years subsequent to the date on which distribution of his Deferral Account was otherwise scheduled to begin, and (iv) such election does not result in the acceleration of the distribution of the Director’s Deferral Account.  All such elections shall be subject to the automatic distribution provisions of subparagraph 6(c)(iii), which shall govern the distribution of benefits in the event of Termination of Service which occurs because of death or in connection with a Change of Control.

(e)

Notwithstanding any other provision of the Plan or any election made or permitted to be made hereunder, no election as to the timing or form, or both, of the distribution of a Participant’s Deferral Account, and no other distribution otherwise provided for by this Plan, shall be effective or made, as the case may be, if such timing or distribution would cause the Plan to fail to meet the requirements of Code Section 409A and cause the Participant to be subject to the interest and additional tax imposed pursuant to Code Section 409A(a)(1)(B), and any such election or such other provision shall be modified in the operation of the Plan so that the timing or form, or both, as the case may be, corresponds as closely as possible to such election or other provision, but will then comply with the requirements of Code Section 409A so as to preclude the application of Code Section 409A(a)(1)(B).

(f)

Modification of Payments.  After a Participant’s Termination of Service occurs, neither such Participant nor his Beneficiary shall have any right to modify in any way the schedule for the distribution of amounts credited to such Participant under this Plan as specified in the last election filed by the Participant.

7.

Form for Elections.  The Secretary of PSB Holdings shall provide election forms for use by Directors in making an initial election to become a Participant and for making all other elections or designations permitted or required by the Plan.

8.

Miscellaneous.

(a)

No Assignment.  Amounts payable hereunder may not be voluntarily or involuntarily sold or assigned, and shall not be subject to any attachment, levy, or garnishment.

(b)

No Right of Election.  Participation in this Plan by any person shall not confer upon such person any right to be nominated for re election or re-elected to the Board or the board of directors of a Subsidiary.

(c)

Unsecured Claims.  Neither PSB Holdings nor any Subsidiary shall be obligated to reserve or otherwise set aside funds for the payment of its obligations hereunder, and the rights of any Participant under the Plan shall be an unsecured claim against the general assets of PSB Holdings or the Subsidiary which has established such Participant’s Deferral Account and in no event shall there be joint liability for the payment of a Deferral Account established by another participating entity.  All amounts due Participants or Beneficiaries under this Plan shall be paid out of the general assets of PSB Holdings.

(d)

Plan Administration.  The Board shall have all powers necessary to administer this Plan, including all powers of Plan interpretation, of determining eligibility and the effectiveness of elections, and of deciding all other matters relating to the Plan; provided, however, that no Participant shall take part in any discussion of, or vote with respect to, a matter of Plan administration which is personal to him and not of general applicability to all Participants.  All decisions of the Board shall be final as to any Participant under this Plan.  

(e)

Amendment and Termination.  The Board may amend this Plan in any and all respects at any time (including, specifically, but not limited to, the rate at which interest will be credited to any Deferral Account from and after the date of such amendment), or from time to time, or may terminate this Plan at any time, but any such amendment or termination shall be without prejudice to any Participant’s right to receive amounts previously credited to such Participant under this Plan, and provided further any amendment or termination of the Plan shall not cause any amount otherwise payable hereunder to be accelerated in violation of the requirements of Code Section 409.

EX-10.3

Exhibit 10.3

PSB HOLDINGS, INC.

DIRECTORS DEFERRED COMPENSATION PLAN

(as amended and restated effective January 1, 2014)

1.

Adoption of Plan and Restatement of Plan Document.  PSB Holdings, Inc. (“PSB Holdings”) has previously adopted the  PSB Holdings, Inc. Directors Deferred Compensation Plan (the “Plan”), as amended.  PSB Holdings hereby amends and restates the Plan as follows, which shall be effective on and after January 1, 2014.

2.

Purpose.  The purpose of the Plan is to provide an alternative method of compensating members (the “Directors”) of the board of directors of PSB Holdings, whether or not they otherwise receive compensation as employees, in order to aid PSB Holdings and its Subsidiaries in attracting and retaining as Directors persons whose abilities, experience, and judgment can contribute to the continued progress of PSB Holdings and its subsidiaries and to provide a mechanism by which the interests of the Directors and the shareholders of PSB Holdings can be more closely aligned.

3.

Definitions.  As used in this Plan, the following terms shall have the meaning set forth in this paragraph 3:

(a)

“Bank” means Peoples State Bank, a Subsidiary of PSB Holdings, Inc.

(b)

“Beneficiary” means such person or persons, or organization or organizations, as the Participant from time to time may designate by a written designation filed with PSB Holdings during the Participant’s life.  Any amounts payable hereunder to a Participant’s Beneficiary shall be paid in such proportions and subject to such trusts, powers, and conditions as the Participant may provide in such designation.  Each such designation, unless otherwise expressly provided therein, may be revoked by the Participant by a written revocation filed with PSB Holdings during the Participant’s life.  If more than one such designation shall be filed by a Participant with PSB Holdings, the last designation so filed shall control over any revocable designation filed prior to such filing.  To the extent that any amounts payable under this Plan to a Participant’s Beneficiary are not effectively disposed of pursuant to the above provisions of this subparagraph 3(b), either because no designation was in effect at the Participant’s death or because a designation in effect at the Participant’s death failed to dispose of such amounts in their entirety, then for purposes of this Plan, the Participant’s “Beneficiary” as to such undisposed of amounts shall be the Participant’s estate as provided for in subparagraph 6(c)(ii).

(c)

“Board” means the Board of Directors of PSB Holdings.

(d)

“Change in Control” means the happening of any of the following events:

(i)

when any “person” as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act, excluding

any employee benefit plan sponsored or maintained by PSB or any subsidiary of PSB (including any trustee of such plan acting as trustee), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act, as amended from time to time), of securities of PSB representing 30% or more of the combined voting power of PSB’s then outstanding securities with respect to the election of the directors of PSB; or

(ii)

when, during any period of 24 consecutive months, the individuals who, at the beginning of such period, constitute the Board of Directors of PSB (the “Incumbent Directors”) cease for any reason other than death to constitute at least a majority thereof, provided, however, that a director who was not a director at the beginning of such 24-month period shall be deemed to have satisfied such 24-month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least a majority of the directors who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such 24-month period) or by prior operation of this provision; or

(iii)

the occurrence of a transaction requiring stockholder approval of the acquisition of the Bank by an entity other than PSB or a 50% or more owned subsidiary of PSB or shareholder approval of the acquisition of PSB through purchase of assets, or by merger, consolidation or otherwise, except in the case of a transaction pursuant to which, immediately after the transaction, PSB’s shareholders immediately prior to the transaction own at least 60% of the combined voting power of the surviving entity’s then outstanding securities with respect to the election of the directors of such entity solely be reason of such transaction; or

(iv)

the liquidation or dissolution of the Bank or PSB.

(e)

“Deferral Account” means the account established pursuant to subparagraph 5(a) to record a Participant’s Directors Fees.

(f)

“Deferrals” means the amount of Directors Fees which a Director elects to defer pursuant to this Plan.

(g)

“Directors Fees” means all retainer, meeting fees, or other compensation to which a Director would otherwise become entitled for services to be rendered as a Director, but excluding any compensation to which such person is entitled to receive in his capacity, if any, as an employee of PSB Holdings or any Subsidiary.

(h)

“Participant” means a Director who has an undistributed balance in his or her Deferral Account.

(i)

“Return on Equity” for any calendar year means a percentage equal to the quotient determined by dividing (i) PSB’s net income for such year, by (ii) average stockholders’ equity of PSB Holdings, determined without regard to unrealized gains or losses on investment securities, on a consolidated basis for such year.

(j)

“Subsidiary” means the Bank and each other subsidiary of PSB Holdings, including any subsidiary of the Bank.  

(k)

“Termination of Service” means the bona fide termination of a Participant’s services as a member of the Board and each other board of directors of any Subsidiary which has been designated as a participating Subsidiary.

4.

Deferral of Directors Fees.

(a)

Annual Election.  Each Director may elect (i) before April 18, 2003, with respect to the year ended December 31, 2003, and (ii) before January 1 of any subsequent fiscal year of PSB Holdings, to defer the payment of all or any portion of the Directors Fees to which the Director would otherwise become entitled for services to be rendered during each fiscal year subsequent to the date on which such election is effective and on or before the last day of the month in which the director’s 70th birthday occurs.  An election by a Director to defer Director’s Fees pursuant to this subparagraph 4(a) shall be effective with respect to Director’s Fees earned during the first fiscal year beginning after the date such election is made and during each subsequent fiscal year until revoked or amended, provided, however, that any such revocation or amendment shall only be effective with respect to fiscal years beginning after the date written notice of such revocation or amendment is first received by PSB Holdings.  

(b)

New Director.  Despite any other provision of subparagraph 4(a), if a person first becomes a Director during a fiscal year, such Director may, within 30 days of his election or appointment, elect to become a Participant with respect to all or any portion of the Director’s Fees earned and payable (i) from and after the date on which he is elected a Director if an election is filed on or before the date of such election, or (ii) if no election is filed pursuant to clause (i), on the first day of the first month immediately following the month in such fiscal year in which such election is made, and on or before the last day of the month in which the director’s 70th birthday occurs.  An election by a Director to defer Directors Fees pursuant to this subparagraph 4(b) shall remain in effect until the last day of the fiscal year in which such election is made and during each subsequent fiscal year until revoked or amended, provided that any such revocation or amendment shall only be effective with respect to fiscal years beginning after the date written notice of such revocation or amendment is first received by PSB Holdings.

(c)

Payment of Fees.  Directors Fees which are deferred pursuant to this paragraph 4 shall be distributable in accordance with paragraph 6 and only after such Participant’s Termination of Service.  Any Directors Fees not subject to an election made in accordance with this paragraph 4 shall be paid in accordance with the Board’s policy as from time to time in effect.

5.

Accounting and Elections.

(a)

Accounts.  PSB Holdings shall establish a Deferral Account in the name of each Director who has elected to defer the payment of Directors Fees pursuant to paragraph 4.

(b)

Crediting Deferred Fees.  As of each date on which PSB Holdings would otherwise make a payment of Directors Fees, that portion of the Directors Fees of each Participant who has a deferral election then in effect shall, to the extent deferred, be credited by PSB Holdings to the Participant’s Deferral Account.

(c)

Crediting Interest.  On each March 1, (each, a “Crediting Date”), up to and including the Basic Initial Payment Date (as defined in paragraph 6), interest shall be credited to each Participant’s Deferral Account based on the average balance in the Deferral Account as of the last day of each calendar quarter of the year ending on the Crediting Date at an annual interest rate equal to the following:

(i)

on each Crediting Date occurring on or before March 1, 2007, interest at a rate equal to 50% of the Return on Equity for the calendar year ending on the December 31 immediately preceding such Crediting Date if, but only if, the Return on Equity for such calendar year was not less than 12%;

(ii)

on the Crediting Date occurring on March 1, 2008, interest at a rate equal to 50% of the Return on Equity for the calendar year ending December 31, 2007;

(iii)

on each Crediting Date occurring on or after March 1, 2009, interest at a rate equal to 100% of the Return on Equity for the calendar year ending on the December 31 immediately preceding such Crediting Date, but in no event shall such interest rate be less than 5% nor more than 15%; and

(iv)

on each Crediting Date occurring on or after March 1, 2015, interest at a rate equal to 100% of the Return on Equity for the calendar year ending on the December 31 immediately preceding such Crediting Date;

provided, however, that, notwithstanding the foregoing:

(x)

on March 1 of the year following the year in which the Director has incurred a Termination of Service prior to December 31, the interest to be credited hereunder shall be at a rate equal to 8% per annum; and

(y)

if the Director has specified an Initial Payment Date other than the Director’s Basic Initial Payment Date, then interest at the rate of 8% per annum shall be credited under this subparagraph 5(c) on each March 1 following such Basic Initial Payment Date.

(d)

Annual Report.  Within 120 days of the end of each fiscal year in which this Plan is in effect, PSB Holdings shall furnish each Participant a statement of the year-end balance in such Participant’s Deferral Account.

6.

Distribution of Deferred Amounts.

(a)

Initial Payment Date.  The “Initial Payment Date” of a Director shall be the later of (i) the March 1 following the last day of the calendar year in which occurs the Director’s Termination of Service (the “Basic Initial Payment Date”) and (ii) with respect to a Director who retires prior to the mandatory retirement age for Directors, the March 1 specified by the Director as the Initial Payment Date (but not later than the March 1 occurring on or immediately after, as the case may be, the date on which such Director would have attained his mandatory retirement age) in a written election filed with PSB Holdings not less than one year prior to his Termination of Service.

(b)

Ending Balance.  The “Ending Balance” of a Director’s Deferral Account means the balance of the Deferral Account determined as of the Initial Payment Date.

(c)

Distribution.  On the Initial Payment Date, distribution of the Ending Balance shall be made in cash in accordance with the following:

(i)

Automatic Form of Payment.  In 120 monthly installments beginning on   the Initial Payment Date in an amount equal to the amount necessary to amortize the repayment of a loan in an amount equal to the Ending Balance in 120 monthly payments at an interest rate of 8% per annum with payments being made on the first day of each monthly period.

(ii)

Death Benefit.  In the event that the Director dies before receiving payment of the entire amount to which he is entitled under this Agreement, the unpaid balance shall be paid in a lump sum or in installments, as specified in the Director’s most recent election in accordance with the provisions of subparagraph 6(c)(iv), to the Beneficiary of such Participant.  If a Beneficiary dies after the Director’s death, but before receiving the entire payment of the Beneficiary’s portion of the amount to which the Director was entitled under this Agreement, the portion of the unpaid balance which such Beneficiary would have received if he had not died shall be paid in a lump sum to such Beneficiary’s estate unless the Director designated otherwise.

(iii)

Change in Control.  In the event a Participant incurs a Termination of Service in connection with a Change in Control, payment of the Ending Balance shall be made on the first March 1 following the Participant’s Termination of Service (or on the date of such termination if it occurs on March 1).

(iv)

Elective Forms of Distribution.  The Director may elect, (A) before the first day of each calendar year, (B) subject to the provisions of subparagraph 6(c)(iii), and (C)

one year prior to his Termination of Service, that payment of the Director’s Ending Balance shall be made in one of the following forms:

(A)

in 60 monthly installments beginning on the Initial Payment Date in an amount equal to the amount necessary to amortize the repayment of a loan in an amount equal to the Ending Balance in 60 monthly payments at an interest rate of 8% per annum with payments being made on the first day of each monthly period; or

(B)

in a lump sum, payable on the Initial Payment Date.

(d)

Modification of Payments.  After a Participant’s Termination of Service occurs, neither such Participant or his Beneficiary shall have any right to modify in any way the schedule for the distribution of amounts credited to such Participant under this Plan as specified in the last election filed by the Participant.  However, upon a written request submitted to the Secretary of PSB Holdings by the person then entitled to receive payments under this Plan (who may be the Participant or a Beneficiary), the Board may in its sole discretion, accelerate the time for payment of any one or more installments remaining unpaid.

7.

Form for Elections.  The Secretary of PSB Holdings shall provide election forms for use by Directors in making an initial election to become a Participant and for making all other elections or designations permitted or required by the Plan.

8.

Miscellaneous.

(a)

No Assignment.  Amounts payable hereunder may not be voluntarily or involuntarily sold or assigned, and shall not be subject to any attachment, levy or garnishment.

(b)

No Right of Election.  Participation in this Plan by any person shall not confer upon such person any right to be nominated for re election or re-elected to the Board.

(c)

Unsecured Claims.  PSB Holdings shall not be obligated to reserve or otherwise set aside funds for the payment of its obligations hereunder, and the rights of any Participant under the Plan shall be an unsecured claim against the general assets of PSB Holdings.  All amounts due Participants or Beneficiaries under this Plan shall be paid out of the general assets of PSB Holdings.

(d)

Plan Administration.  The Board shall have all powers necessary to administer this Plan, including all powers of Plan interpretation, of determining eligibility, and the effectiveness of elections, and of deciding all other matters relating to the Plan; provided, however, that no Participant shall take part in any discussion of, or vote with respect to, a matter of Plan administration which is personal to him, and not of general applicability to all Participants.  All decisions of the Board shall be final as to any Participant under this Plan.  

(e)

Amendment and Termination.  The Board may amend this Plan in any and all respects at any time (including, specifically, but not limited to, the rate at which interest will be credited to any Deferral Account from and after the date of such amendment), or from time to time, or may terminate this Plan at any time, but any such amendment or termination shall be without prejudice to any Participant’s right to receive amounts previously credited to such Participant under this Plan.

EX-99.1

Exhibit 99.1

PSB HOLDINGS, INC. AUTHORIZES THE REPURCHASE OF UP TO 10,000 SHARES OF THE COMPANY’S COMMON STOCK DURING THE MARCH 2014 QUARTER

Wausau, WI. – December 23, 2013 – PSB Holdings, Inc. (OTCQB: PSBQ) announced that its Board of Directors has authorized the repurchase of up to 10,000 shares, or approximately 0.6%, of the Company’s outstanding common stock as available on the open market at prices up to $30.00 per share.  This repurchase plan is a continuation of similar quarterly plans which during the two years ended December 31, 2013 repurchased a total of 20,230 shares.

The stock repurchase program is carried out through open market purchases pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission.  The stock may be repurchased on an ongoing basis as well as in future quarterly periods and will be subject to the availability of stock, general market conditions, the trading price of the stock, alternative uses for capital, and the Company’s financial performance.  Any repurchased shares will be held as Treasury Stock and will be available for general corporate purposes.

About PSB Holdings, Inc.

PSB Holdings, Inc. is the parent company of Peoples State Bank. Peoples is a community bank with $700 million of total assets headquartered in Wausau, Wisconsin, operating eight full service retail and commercial banking locations serving north central Wisconsin in Marathon, Oneida, and Vilas counties. In addition to traditional retail and commercial banking products, Peoples provides retail investments and insurance annuities, retirement planning, commercial treasury management services, and long-term fixed rate residential mortgages.  PSB Holdings, Inc. is publicly owned and traded under the stock symbol PSBQ.  More information about PSB, its management, and its financial performance may be found at www.psbholdingsinc.com.  PSB’s common stock is available for purchase on the open market by contacting your investment advisor.

Forward - Looking Statements

This press release may contain forward-looking statements which are made pursuant to the safe harbor provisions of the Securities Reform Act of 1995.  These forward-looking statements involve certain risks and uncertainties.  Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include among others, the following  possibilities: (1) changes in the interest rate environment; (2) competitive pressure among financial services companies; (3) general economic conditions including an increase in non-performing loans that could result from an economic downturn; (4) changes in legislation or regulatory requirements; (5) increased risk associated with an increase in commercial real-estate and business loans and non-performing loans; and (6) other assumptions outlined under “Forward – Looking Statements” and elsewhere in Item 1A of PSB Holdings, Inc. Form 10-K for the year ended December 31, 2012.  PSB Holdings, Inc. assumes no obligation to update or supplement forward-looking statements that become untrue because of events subsequent to the date of this press release.