Document:

Exhibit 10.2

AMENDMENT

TO

EXECUTIVE DEFERRED COMPENSATION AGREEMENT

THIS
AMENDMENT TO EXECUTIVE DEFERRED COMPENSATION AGREEMENT (this “Amendment”) is
entered into as of the 17th day of June, 2008 by and between Peoples State Bank
of Wausau, Wisconsin (the “Bank”) and Peter W. Knitt (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 amend the Agreement with the consent of the
Executive under Section 9.1 thereof; and

WHEREAS,
the parties now desire to amend the Agreement pursuant to this Amendment to
utilize the transition rules promulgated under Section 409A of the Internal
Revenue Code of 1986, as amended.

NOW,
THEREFORE, the Agreement is hereby amended as follows, effective as of the date
set forth above, except that notwithstanding anything herein contained to the
contrary, this Amendment will not be effective to any extent if the Termination
of Employment occurs prior to January 1, 2009.

1.

Section
3.1.3.  The last sentence of Section 3.1.3 is deleted in its entirety
and is replaced by the following:

“Notwithstanding
the preceding, the rate of Interest credited under this Section 3.1.3 is subject
to adjustment from time to time in the sole discretion of the Board of Directors
of the Bank, except that after a Change of Control, as defined in the
Executive’s Amended and Restated Employment Agreement with the Bank, the rate of
Interest credited cannot in any circumstances be less than the mid-term
applicable federal rate, compounded semi-annually, as determined under Section
1274 of the Code, for the month in which the Change of Control occurs.”

2.

Section
4.1.  Section 4.1 (including Sections 4.1.1 and 4.1.2) is deleted in
its entirety and is replaced by the following:

“4.1

Distribution
of Benefit.  Upon Termination of Employment, the 
Bank shall pay to
the Executive his Deferral Account balance in the form elected 
by the
Executive on the Benefit Election Form.  The benefit shall commence on

the date of the first payroll of the Bank following the month in which the

Termination
of Employment occurs, provided, however that except in the case of
payments governed by Section 5.3, if the Executive is a Specified Employee, the
benefit under this Section 4.1 shall not commence until the date of the first
payroll of the Bank following the last day of the sixth (6th) month
following the month in which the Termination of Employment occurred.”

3.

Section
4.2.  Section 4.2 (including Sections 4.2.1 and 4.2.2) is deleted in
its entirety and is replaced by the following:

“4.2

Intentionally
Omitted.”

4.

Section
4.3.  Section 4.3 (including Sections 4.3.1 and 4.3.2) is deleted in
its entirety and is replaced by the following:

“4.3

Intentionally
Omitted.”

5.

Section
4.4.  Section 4.4 (including Sections 4.4.1 and 4.4.2) is deleted in
its entirety and is replaced by the following:

“4.4

Intentionally
Omitted.”

6.

Sections
9.3 and 9.4.  Sections 9.3 and 9.4 are hereby deleted in their
entirety.

7.

Full
Force and Effect.  Except as specifically amended hereby, the Agreement
shall remain in full force and effect.

IN
WITNESS WHEREOF, the parties below have executed this Amendment as of the date
first set forth above.

EXECUTIVE:

PEOPLES
STATE BANK:

/s/
Peter W.
Knitt                                           

By:

/s/
Patrick L.
Crooks                            

Peter
W. Knitt

Patrick
L. Crooks

As
its Chairman of the Board

-
2 -Exhibit 10.3

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, is entered into as of June 17, 2008,
by and between Peoples State Bank, Wausau, Wisconsin, a Wisconsin banking
corporation, (“the Bank”) and Scott M. Cattanach (“Mr. Cattanach”).

WITNESSETH:

WHEREAS,
the Bank and Mr. Cattanach initially entered into an employment agreement dated
April 10, 2003.

WHEREAS,
the Bank and Mr. Cattanach have entered into an Amendment No. 1 to the
employment agreement dated April 13, 2005, and an Amendment No. 2 to the
employment agreement dated February 22, 2007.

WHEREAS,
the Company and Mr. Cattanach now desire to amend and restate the employment
agreement in its entirety by setting forth the terms and conditions of their
agreements and understandings in this Amended and Restated Employment Agreement
(“Agreement”), which shall replace and supercede the initial employment
agreement and all such amendments effective as of the date first written
above.

NOW,
THEREFORE, in consideration of the premises, covenants and mutual agreements
contained herein, the Bank and Mr. Cattanach agree as follows:

1.

Employment.
 Subject to the earlier termination of this agreement pursuant to the terms
hereof, Mr. Cattanach is hereby employed as the Chief Financial Officer and
Treasurer of the Bank; provided, however, that, prior to a Change
of Control, Mr. Cattanach may be employed in such other capacity as the Board of
Directors of the Bank shall deem appropriate and in the best interests of the
Bank.  Mr. Cattanach agrees to serve in such capacity or capacities on the
terms and conditions hereinafter set forth.

2.

Term.
 The term of this agreement commenced on April 10, 2003 (the “Commencement
Date”) and shall end at midnight on the Expiration Date, except as otherwise

provided in paragraph 8(a) hereof.  The term “Expiration Date” shall
mean the first to occur of 
(a) the date of Mr. Cattanach’s death, or (b) the
later of (i) July 1, 2009, and (ii) 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.  For all purposes of
this Agreement other than as provided in
 paragraph 8(a) hereof, 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 hereunder.

3.

Extent
of Services.  Mr. Cattanach agrees to devote his full-time attention
and efforts (except during vacation periods, periods of illness and other
approved absences as provided for in paragraph 4(c)) to the duties of any office
held by him during the Term of Employment, provided, however, that
Mr. Cattanach’s devotion of a reasonable and de minimis portion of his attention
or efforts to the management of his personal affairs during normal business
hours shall not constitute a breach of the foregoing requirement.

4.

Compensation
and Reimbursement.

(a)

Salary.
 The Bank shall pay to Mr. Cattanach a salary based on an annual amount of
$141,000.  The Bank may increase Mr. Cattanach’s salary from the amount
specified herein during the Term of Employment, but may not decrease Mr.
Cattanach’s salary from any previously established amount.  Mr. Cattanach’s
salary shall be payable at such times and in such installments as are consistent
with the manner in which the salaries of other executive officers of the Bank
are paid.

(b)

Incentive
Compensation.  During the Term of Employment, Mr. Cattanach shall be
entitled to receive such additional compensation from the Bank as may be
provided for officers of commensurate position or rank under the terms of any
incentive program from time to time maintained and in effect at the Bank for
executive officers.

(c)

Other
Benefits.  During the Term of Employment, Mr. Cattanach shall be
entitled to receive all benefits and perquisites ordinarily provided to
executive officers of the Bank, including coverage under a director’s and
officer’s liability insurance policy, and Mr. Cattanach shall participate in all
employee benefit plans or fringe benefit programs now or hereafter established
or maintained by the Bank including, but not limited to, group insurance plans,
pension benefit plans, welfare benefit plans, pay practices, and vacation and
sick leave benefits.  Mr. Cattanach shall be entitled to participate in all
plans or programs maintained by the Bank on terms no less favorable than those
generally available to officers of the Bank and at a level of participation
commensurate with his office.

(d)

Expenses.
 The Bank shall pay or reimburse Mr. Cattanach, upon submission of receipts
by him, for all entertainment, travel, meal, hotel accommodation, and
miscellaneous expenses reasonably incurred by him in the interest of the Bank’s
business during the Term of Employment.

5.

Termination
of Employment.

(a)

Termination
by the Bank for Good Cause.  The Bank may terminate
Mr. Cattanach’s employment prior to the Expiration Date for good cause only
upon 
compliance with the requirements of this paragraph 5(a).  “Good
cause” for termination 
of Mr. Cattanach’s employment by the Bank shall
consist only of one or more of (i) the commission of an act or acts by Mr.
Cattanach which results in a payment to the Bank or to PSB Holdings, Inc, the
parent company of the Bank (“PSB”) of a claim filed by the 

2

Bank
or PSB under a blanket banker fidelity bond policy as from time to time and at
any time maintained; (ii) the willful and continuing failure to perform his
duties in accordance with standards or policies established, from time to time,
or at any time, by the Bank, after a written demand for substantial performance
is delivered to Mr. Cattanach by the Board which specifically identifies the
manner in which the Board believes that Mr. Cattanach has not substantially
performed his duties; (iii) the commission by Mr. Cattanach of any crime of
moral turpitude, of dishonesty, of breach of trust, of theft, of embezzlement,
of misapplication of funds, of unauthorized issuance of obligations or of false
entries; (iv) any intentional, reckless, or negligent act or omission to
act by Mr. Cattanach which results in the violation by Mr. Cattanach of any
policy established by the Bank which is designed to insure compliance with
applicable banking, securities, employment discrimination, or other laws which
causes or results in the Bank’s violation of such laws, except any act done by
Mr. Cattanach in good faith, as determined in the reasonable discretion of the
Board of Directors of the Bank, or which results in a violation of such policies
or law which is, in the reasonable sole discretion of such Board, immaterial;
(v) any intentional, reckless, or negligent act or omission to act by Mr.
Cattanach which results in a violation of an employment policy maintained by the
Bank which is applicable to all other employees (for example, employment
policies relating to the use of drugs or alcohol) and which, by the terms of
such policy, is grounds for termination of employment, or (vi) Mr. Cattanach’s
physical or mental disability, if such disability either results in Mr.
Cattanach receiving permanent disability payments pursuant to any group
disability insurance policy or prevents Mr. Cattanach from the normal
performance of his duties for a continuous period of at least six months.
 Upon the occurrence of any event constituting good cause for which the
Bank elects to terminate Mr. Cattanach’s employment prior to the Expiration
Date, the Bank shall provide written notice to Mr. Cattanach, which shall
state the good cause for termination, and Mr. Cattanach’s termination of
employment shall be effective as of the date specified in such notice.  In
the event of termination of Mr. Cattanach’s employment in accordance with the
conditions of this paragraph (a), on the effective date of Mr. Cattanach’s
termination of employment, the Term of Employment shall end, all of Mr.
Cattanach’s obligations pursuant to this agreement (except for those provided in
paragraphs 6 and 7) shall end and the Bank’s obligations to pay compensation or
provide benefits to Mr. Cattanach pursuant to paragraph 4 shall end.

(b)

Termination
by the Bank Other Than for Good Cause.  The Bank may terminate Mr.
Cattanach’s employment prior to the Expiration Date for any reason other

than good cause (as defined in paragraph 5(a)) upon providing written notice
to 
Mr. Cattanach specifying the effective date of Mr. Cattanach’s
termination of 
employment.  If the Bank terminates Mr. Cattanach’s
employment other than for good 
cause under paragraph 5(a), the Term of
Employment and all of Mr. Cattanach’s 
obligations pursuant to this agreement
(except for those provided in paragraphs 6 and 7) 
shall end on the effective
date of Mr. Cattanach’s termination of employment and the 
Bank shall
provide, for a period beginning on the effective date of Mr. Cattanach’s

termination of employment, as a severance benefit to Mr. Cattanach and as
liquidated 
damages for breach by the Bank of its otherwise applicable
obligations hereunder, (i) a 
monthly cash payment equal to the amount which
would, except for Mr. Cattanach’s termination of employment, have been paid to
Mr. Cattanach, if then living, as salary 

3

under
paragraph 4(a) for the remainder of the current or any extended term of this
agreement, but in no event shall such payments be for a period of less than 12
months, and (ii) until Mr. Cattanach becomes eligible for coverage under the
health insurance plan of another employer of Mr. Cattanach, coverage for Mr.
Cattanach, under the same terms then available to executive officers of the
Bank, under any group health insurance program in which Mr. Cattanach was a
participant on the effective date of Mr. Cattanach’s termination of
employment or under such successor plan or program as maintained after such date
for the benefit of the Bank’s employees but in no event longer than the period
for which payments are made pursuant to clause (i). Mr. Cattanach shall not, by
virtue of his severance benefit and liquidated damages rights, acquire any
right, title or interest in particular assets of the Bank, and such rights shall
be no greater than the right of any unsecured general creditor of the Bank.
 Despite any other provision of this agreement, Mr. Cattanach shall not be
entitled to any severance benefit or liquidated damages, and the Bank shall not
be obligated to pay any such benefit or damages, if Mr. Cattanach violates
the provisions of paragraph 6 or 7.

(c)

Termination
by Mr. Cattanach.  Mr. Cattanach may terminate his employment at any
time upon providing 30 days prior written notice to the Bank stating the
effective date of his termination.  In any such event, all obligations of
the Bank to Mr. Cattanach under this agreement and all obligations of Mr.
Cattanach to the Bank (except those provided for in paragraphs 6 and 7) shall
cease and the Term of Employment shall end on the effective date of Mr.
Cattanach’s termination of employment.

(d)

Section
409A Considerations.  This paragraph 5(d) shall apply in the event the
Bank determines, in good faith, that payment of severance benefits pursuant to
this paragraph or paragraph 8(d) are subject to the provisions of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”).  For
purposes of Mr. Cattanach’s entitlement to any severance benefit pursuant to
paragraph 5(b) or 8(b), 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 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
(a “Separation from Service”) within the meaning of Code Section 409A(a)(2)(A)
and the applicable regulations promulgated thereunder.  Notwithstanding any
other provision of this agreement to the contrary, in no event shall the
severance benefit to which Mr. Cattanach may become entitled under the terms of
paragraph 5(b) or 8(d) be paid to Mr. Cattanach until the date on which he has
incurred a Separation from Service; provided, however, that in the
event Mr. Cattanach was a Key Employee as of the date of his Separation from
Service, no severance benefit shall be paid to him earlier than the first day of
the seventh month after the date of such Separation from Service to the extent
required by Code Section 409A and the applicable regulations.  For purposes
of this agreement, the term “Key Employee” means each person who is a “key
employee” within the meaning of Code Section 416(i) and the applicable authority
under such Code section and Code Section 409A.  Any such delayed payments
shall bear interest at the short-term applicable federal rate compounded
semi-annually as in effect for the month in which Mr. Cattanach’s employment
terminates.

4

6.

Restrictive
Covenant.  Mr. Cattanach agrees, subject to the provisions of paragraph
8, that during the Term of Employment and during the one-year period which ends
on the first anniversary of the effective date of Mr. Cattanach’s termination of
employment:

(a)

he
will not, within a radius of 25 miles of the principal office of the Bank in
Wausau, Wisconsin, directly or indirectly, perform services similar to those
that Mr. Cattanach provided the Bank during the 12 months preceding the
effective date of Mr. Cattanach’s termination of employment for any depository
institution doing business as a bank, savings and loan association or any
holding company which owns such depository institution, or on behalf of any
other entity, which competes for the Bank’s retail or commercial loan business
(each a “Financial Institution”); and

(b)

he
will not, directly or indirectly, for himself or for any other person, induce or
attempt to induce any Restricted Customer of the Bank to cease doing business
with the Bank, or in any way interfere with the relationship between any
Restricted Customer of the Bank and the Bank.  The term “Restricted
Customer” shall mean any individual or entity (i) for whom/which the Bank
provided services; and (ii) for whom/which Mr. Cattanach provided services
on behalf of the Company, or about whom/which Mr. Cattanach acquired non-public
information in connection with Mr. Cattanach’s employment with the Bank during
the 12 months preceding the effective date of Mr. Cattanach’s termination of
employment.

For
purposes of this paragraph 6, the term “directly or indirectly” includes (a) any
sale through any medium; and (b) the direct or indirect ownership, management,
operation, control, service as a director for, or association or employment
with, any Financial Institution if such Financial Institution is engaged in the
activities prohibited to Mr. Cattanach by the provisions of this paragraph 6;
provided, however, that an aggregate beneficial ownership interest
of Mr. Cattanach of less than 5% of the equity interests in any Financial
Institution (or affiliate thereof) whose stock is registered pursuant to the
provision of the Securities Exchange Act of 1934 shall be deemed not to
constitute a violation of this provision.  Mr. Cattanach further agrees
that the restrictions set forth in this agreement are reasonably necessary to
protect the reasonable interests of the Bank.

7.

Confidential
Information.  Mr. Cattanach agrees that during the Term of

Employment, and for a two year period following the termination of his
employment, he will not reveal to any individual who is not then either
employed by, retained by, or on the Board of 
Directors of PSB, or any of its
subsidiaries, without the consent of PSB or the Bank, any 
confidential or
proprietary information of PSB or the Bank, the revealing of which would

adversely affect the business of PSB or the Bank, unless Mr. Cattanach
discloses such matters in response to a subpoena or to discovery proceedings
concerning a matter in litigation or based on 
advice of counsel acceptable
to the Bank that such disclosure is appropriate or necessary under applicable
law or regulation.

5

8.

Change
of Control.  In the event of a Change of Control, the following
provisions of this agreement shall apply notwithstanding any other terms or
conditions of this agreement:

(a)

Notwithstanding
anything contained in this Agreement to the contrary, upon a Change of Control,
the “Term of Employment” for purposes of this Agreement shall in all cases be 24
months starting on the date of the Change of Control, and the “Expiration Date”
shall mean the first to occur of (i) Mr. Cattanach’s death, (ii) his termination
pursuant to paragraph 5, (iii) his termination pursuant to paragraph 8(b), or
(iv) the expiration of the 24-month Term of Employment.  Notwithstanding
any other provision of this Agreement or any incentive compensation plan then in
effect, Mr. Cattanach shall be awarded, for each fiscal year ending during the
Term of Employment following the Change of Control, an annual bonus (the “Annual
Bonus”) in cash at least equal to his average annual bonus under any bonus plan
with respect to performance during each of the three full calendar years prior
to the effective date of the Change of Control (or such shorter period that Mr.
Cattanach was employed by the Bank), regardless of when such bonus was actually
paid (the “Recent Annual Bonus”) and each such Annual Bonus shall be paid in the
period beginning on January 1st and ending on March 15th
of the calendar year next following the fiscal year for which the Annual Bonus
is awarded.  Such bonus amount shall be reduced by any amount paid to Mr.
Cattanach under any other annual incentive compensation plan maintained after
the Change of Control.

(b)

Termination
of Employment by Mr. Cattanach for Good Reason.  Mr. Cattanach’s
employment may be terminated by Mr. Cattanach during the Term of Employment for
Good Reason if, (i) within 60 days of the date of occurrence of a triggering
event, Mr. Cattanach notifies the Bank in writing of his intention to treat such
event as Good Reason, (ii) within 30 days following receipt of such notice
provided for in (i), the Bank fails to cure the triggering event and (iii)
within 30 days following the expiration of the 30-day period described in (ii),
Mr. Cattanach voluntarily terminates his employment by giving written notice to
the Bank.

(c)

Good
Reason.  For purposes of this agreement, “Good Reason” shall mean the
occurrence of one or more of the following events subsequent to a Change of
Control, or prior to a Change of Control at the request of a person acquiring,
directly or indirectly, an interest in the Bank in a Change of Control
transaction (each of which shall be a “triggering event”):

(i)

the
assignment to Mr. Cattanach of any duties inconsistent in any respect with the
duties or responsibilities then held by Mr. Cattanach (except if his status,
title, or authority has been increased), or any other action by the Bank which
results in a diminution in such duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad faith
and which is remedied by the Bank promptly after receipt of notice thereto given
by Mr. Cattanach;

6

(ii)

any
failure by the Bank to comply with any of the provisions of paragraph 4 of this
agreement, other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Bank promptly after receipt
of notice thereof given by Mr. Cattanach, unless the Bank agrees to fully
compensate Mr. Cattanach for any such reduction;

(iii)

Mr.
Cattanach is required to locate his office more than 25 miles from the then
current location of the his principal office, excluding business travel
reasonably consistent with the amount of travel required of him prior to such
relocation;

(iv)

any
purported termination by the Bank of Mr. Cattanach’s employment otherwise than
as expressly permitted by this agreement;

(v)

any
failure of any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to assume and agree to perform this Agreement
(either expressly or by operation of law) in the same manner and to the same
extent that the Bank would be required to perform it if no such succession had
taken place; or

(vi)

the
Bank’s or PSB’s request that Mr. Cattanach perform an illegal, or wrongful act
in violation of the Bank’s code of conduct policies.

(d)

Severance
Benefit on Termination by Mr. Cattanach for Good Reason or by the Bank Without
Good Cause.  Upon termination of Mr. Cattanach’s employment by Mr.
Cattanach pursuant to paragraph 8(b) or by the Bank for a reason other than good
cause or Mr. Cattanach’s death, after a Change of Control or prior to a Change
of Control at the request of a person acquiring, directly or indirectly, an
interest in the Bank in a Change of Control transaction, all obligations of Mr.
Cattanach to the Bank (except those provided for in paragraph 7) shall cease and
the Term of Employment shall end (the “Date of Termination”) and:

(i)

subject
to paragraphs 5(d) and 8(f), the Bank shall pay to Mr. Cattanach in a lump sum
in cash within 30 days after the Date of Termination the aggregate of the
following amounts:

(A)

the
sum of (1) Mr. Cattanach’s base salary under paragraph 4(a) through the
Date of Termination and any accrued incentive compensation to the extent not
theretofore paid, and (2) the product of (a) an amount equal to any
incentive compensation earned by Mr. Cattanach for the most recently completed
fiscal year during the Term of Employment, if any, and (b) a fraction, the
numerator of which is the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is 365; and

(B)

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

7

(ii)

until
Mr. Cattanach becomes eligible for coverage under the health insurance plan of
another employer of Mr. Cattanach, coverage for Mr. Cattanach for a maximum
period of 36 months beginning on the Date of Termination, under the same terms
then available to executive officers of the Bank, under any group health
insurance program in which Mr. Cattanach was a participant on the effective date
of Mr. Cattanach’s termination of employment or under such successor plan or
program as maintained after such date for the benefit of the Bank’s employees;
and

(iii)

to
the extent not theretofore paid or provided, the Bank shall timely pay or
provide to Mr. Cattanach any other amounts or benefits required to be paid or
provided or which he is eligible to receive under any plan, program, policy or
practice or contract or agreement of the Bank and its affiliated companies.

(e)

Definition
of Change of Control.  For the purpose of this agreement, a “Change of
Control” shall be deemed to have occurred:

(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 or
the Bank representing 30% or more of the combined voting power of the Bank’s or
PSB’s then outstanding securities with respect to the election of the directors
of the Bank or 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 

8

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.

(f)

Limitation
on Benefits.

(i)

Notwithstanding
any other provision of this agreement, the present value of all amounts payable
pursuant to this paragraph 8 which would constitute “parachute payments” (as
such term is defined in Section 280G of the Internal Revenue Code of 1986 as
amended (the “Code”), and any regulations promulgated thereunder), together with
the present value of all other benefits payable by the Bank or PSB to Mr.
Cattanach under any other plans which would also constitute “parachute
payments,” shall in no event equal or exceed an amount (the “Testing Amount”)
equal to 3 times Mr. Cattanach’s “base amount” (as such term is defined in
Section 280G of the Code and any regulations promulgated thereunder), it being
the intention of the parties that no payment shall constitute an “excess
parachute payment” (as such term is defined in Section 280G of the Code and any
regulations promulgated thereunder).  In the event that the present value
of the payments provided for in this paragraph 8 together with the present value
of such other amounts, equals or exceeds the Testing Amount, then the amount of
the payments provided for in this paragraph 8 and under such plans shall be
reduced, beginning with the payments which are last in time, until the present
value of all such payments is less than the Testing Amount.  For purposes
of this paragraph 8, present value shall be determined in the manner provided in
Section 280G of the Code and the regulations promulgated thereunder.

(ii)

It
is the intention of the parties that the provisions of this paragraph 8 be
construed to reduce the amounts otherwise payable hereunder only to the extent
necessary to avoid the disallowance of the deduction by the Bank for any such
amounts or the imposition of an excise tax on Mr. Cattanach for any such
amounts, under federal income tax law as it currently exists or may hereafter be
amended.

(iii)

In
the event the provisions of this paragraph 8 require any reduction in the amount
to be paid to Mr. Cattanach under this paragraph 8, the Bank shall deliver to
Mr. Cattanach concurrently with such payment a statement setting forth the basis
for and computation of such reduction.

9.

Payment
Obligations Absolute.  Upon a Change of Control the obligations of the

Bank to pay the benefits provided for under this Agreement shall be absolute
and unconditional 
and shall not be affected by any circumstances, including,
without limitation, any set-off, 
counterclaim, recoupment, defense, or other
right which the Bank or any of its subsidiaries may 
have against Mr.
Cattanach; provided, however, that this paragraph 9 shall not
limit the rights of 
the Bank under any noncompetition agreement to which Mr.
Cattanach is a party.  In no event 
shall Mr. Cattanach be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to Mr. Cattanach under any of the provisions of this 

9

Agreement,
nor shall the amount of any payment hereunder be reduced by any compensation
earned by Mr. Cattanach as a result of employment by another employer.

10.

Miscellaneous.

(a)

Notices.
 Any notice required or permitted to be given under this agreement shall
not be deemed to have been given unless delivered in person or mailed, postage
prepaid by certified mail addressed, in the case of Mr. Cattanach, to his last
known residence as specified by him in a notice to the Bank, or, in the case of
the Bank to its principal office.

(b)

Benefits
and Obligations.  This agreement shall be binding upon, shall inure to
the benefit of the Bank and its successors or assigns, and, as provided for
herein, PSB, and shall be enforceable by the Bank and its respective successors
and assigns, and Mr. Cattanach, his heirs, assigns or legal representatives;
provided, however, that the obligations of Mr. Cattanach contained
herein may not be designated or assigned.

(c)

Entire
Agreement; Amendment.  This agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and may only be
amended by an agreement in writing signed by all of the parties hereto.

(d)

Waiver.
 The failure of any party hereto to insist, in any one or more instances,
upon performance of any of the terms and conditions of this agreement, shall not
be construed as a waiver or relinquishment of any right granted hereunder or of
the future performance of any such term, covenant or condition.

(e)

Severability.
 In the event that any portion of this agreement may be held to be invalid
or unenforceable for any reason, the parties hereto agree that said invalidity
or unenforceability, shall not effect the other portions of this agreement and
that the remaining covenants, terms and conditions or portions thereof shall
remain in full force and effect and any court of competent jurisdiction may so
modify the objectionable provision as to make it valid and enforceable.

(f)

Governing
Laws.  This agreement shall be governed by and construed in accordance
with the internal laws of the State of Wisconsin without reference to conflicts
of law principles.

(g)

Captions.
 The captions contained in this agreement are for the convenience of the
Bank and Mr. Cattanach and shall not be deemed or construed as in any way
limiting or extending the language of the provisions to which such captions
refer.

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

10

PEOPLES
STATE BANK

By:
 /s/ Patrick L.
Crooks                                  
Patrick
L. Crooks
As its Chairman of the Board 

/s/
Scott M.
Cattanach                                       

Scott
M. Cattanach

11

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