Document:

Exhibit 10.1
                                PSB HOLDINGS, INC.

                      DIRECTORS DEFERRED COMPENSATION PLAN

                                PSB HOLDINGS, INC.
                      DIRECTORS DEFERRED COMPENSATION PLAN

      1.    ADOPTION OF PLAN.  PSB Holdings, Inc. ("PSB Holdings") hereby
adopts the PSB Holdings, Inc. Directors Deferred Compensation Plan (the "Plan")
effective as of March 18, 2003.

      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.
                                        -1-
      (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
<PAGE>
            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.
                                        -2-
      (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.
<PAGE>
      4.    DEFERRAL OF DIRECTORS FEES.

      (a)   Annual Election.  Each Director may elect (i) before March 31,
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.
                                        -3-
      (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, up to and including the Basic
Initial Payment Date (as defined in paragraph 6), if, but only if, the Return
on Equity for the immediately preceding fiscal year was not less than 12%,
interest at a rate equal to 50% of the Return on Equity for the immediately
preceding calendar year earned through December 31 shall be credited to each
Participant's Deferral Account based on the average balance in the Deferral
<PAGE>
Account as of the last day of each calendar quarter of such prior year;
provided, however, that:
                                        -4-
            (i)   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 (a) if, but only if, the
      Return on Equity for the immediately preceding fiscal year was not less
      than 12%, a rate equal to 50% of the Return on Equity for the immediately
      preceding calendar year multiplied by a percentage, the numerator of
      which is the number of days in the preceding year that the Director was a
      member of the Board and the denominator of which is 365, and (b) at a
      rate equal to 8% per annum multiplied by a percentage, the numerator of
      which is the number of days in the preceding year that the Director was
      not a member of the Board and the denominator of which is 365; and

            (ii)  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.

      (e)   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
                                        -5-
      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
<PAGE>
      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.
                                        -6-
      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.
<PAGE>
      (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.
                                        -7-Exhibit 10.2
                                EMPLOYMENT AGREEMENT

      THIS AGREEMENT, made April 10, 2003, by and between Peoples State Bank,
Wausau, Wisconsin, a Wisconsin banking corporation, ("the Bank") and Scott M.
Cattanach, of Wausau, Wisconsin ("Mr. Cattanach").

      WITNESSETH:

      WHEREAS, the Bank has employed Mr. Cattanach for many years and Mr.
Cattanach has performed his duties in a highly satisfactory manner; and

      WHEREAS, the Bank wished to continue to employ Mr. Cattanach and
Mr. Cattanach wishes to continue his employment by the Bank on the terms and
conditions hereinafter provided;

      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 effective as of
the date first written above (the "Commencement Date") as Vice President of the
Bank; provided, however, that 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 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) the
third anniversary of the Commencement Date and (2) the date to which the term
of this agreement has most recently been extended pursuant to the following
sentence.  On the third anniversary of the Commencement Date (and on the first
anniversary of each subsequent extension of the term of this agreement), the
term of this agreement shall automatically be extended for one year unless not
less than 90 days prior to the Expiration Date of the original or any extended
term, either party gives notice to the other that automatic extensions of the
term of this agreement (and, consequently, the Expiration Date) pursuant to
this sentence shall cease.  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.

      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
                                        -1-
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 $102,000.  The Bank may increase Mr. Cattanach's
<PAGE>
      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 vouchers 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. ("PSB") of a claim filed by the Bank or PSB under a
      blanket
                                        -2-
      banker fidelity bond policy as from time to time and at any time
      maintained; (ii) the wilful 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
<PAGE>
      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
                                        -3-
      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 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
<PAGE>
      obligated to pay any such benefit or damages, if Mr. Cattanach violates
      the provisions of paragraphs 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.

      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 as the principal financial officer or principal accounting
      officer of 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 customer of the Bank to
      cease doing business with the Bank, or in any way interfere with the
      relationship between any customer of the Bank and the Bank.
                                        -4-
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.

      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:
<PAGE>
            (a)   Upon a Change of Control, the "Term of Employment" for
      purposes of paragraph 2 shall mean the period equal in length to the Term
      of Employment then remaining on the date immediately prior to the Change
      of Control, but in no event for a period of less than 12 months, and the
      "Expiration Date" shall mean the first to occur of (i) Mr. Cattanach's
      death, or (ii) his termination pursuant to paragraph 5, or (iii) his
      termination pursuant to paragraph 8(b).  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 Employment Period following the Change in 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 in
      Control, regardless of when such bonus was actually paid (the "Recent
      Annual Bonus") and each such Annual Bonus shall be paid no later than the
      end of the third month of the fiscal year next following the fiscal year
      for which the Annual Bonus is awarded but such amount shall be offset by
      any amount accrued under any other 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
                                        -5-
      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 the public announcement of, or actual knowledge of the Bank
      or PSB of, any actual or proposed transaction which results, directly or
      indirectly, within 270 days of the date of such announcement or
      knowledge, in a Change of Control (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;

                  (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;
      <PAGE>
                  (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 all
            or substantially all of the business and/or assets of the Bank to
            assume expressly and agree to perform this agreement 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
                                        -6-
                  (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.  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 subsequent to the public announcement of, or the Bank's or PSB's
      actual knowledge of, any actual or proposed transaction which results,
      directly or indirectly, within 270 days of the date of such announcement
      or knowledge, in a Change of Control, 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 paragraph 7) shall cease and
      the Term of Employment shall end (the "Date of Termination") and:

                  (i)  subject to paragraph 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 the amount of base salary to
                  which Mr. Cattanach would have been entitled pursuant to
                  paragraph 4(a) had his termination of employment not
                  occurred, but in no event an amount less than 100% of Mr.
                  Cattanach's then current base salary;

                  (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
<PAGE>
            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.
                                        -7-
            (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 the 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.

      (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
                                        -8-
<PAGE>
            promulgated thereunder), together with the present value of all
            other benefits payable by the Bank to Mr. Cattanach under any other
            plans and the Bank 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
            made pursuant to this agreement 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,
            without taking into account this paragraph (f), 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 of this Agreement, the Bank shall deliver to Mr.
            Cattanach concurrently with such payment a statement signed by a
            partner or principal of its independent accounting firm setting
            forth the basis for and computation of such reduction and
            certifying that such computation is made in good faith.

      9.    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
                                        -9-
      Mr. Cattanach, his heirs, assigns or legal representatives; provided,
      however, that the obligations of Mr. Cattanach contained herein may not
      be delegated 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
<PAGE>
      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 or 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.

                                              PEOPLES STATE BANK

                                            By: DAVID A. SVACINA
                                                David A Svacina
                                                As its President

                                                SCOTT M. CATTANACH
                                                Scott M. Cattanach
                                        -10-

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