MANAGEMENT CONTINUITY AGREEMENT



         THIS AGREEMENT (this "Agreement") is made and entered into as of the

16th day of May, 2003 (the "Effective Date"), by and among PSB Group, Inc., a

bank holding company organized under the laws of the State of Michigan, Peoples

State Bank, a banking association chartered under the laws of the State of

Michigan with its main office located in Madison Heights, Michigan (the "Bank")

and Donald Phillippi ("Executive").



         SECTION 1. EMPLOYMENT. The Bank currently employs Executive on an at

will basis. The current terms and conditions of the Executive's Employment are

set forth below in this Section 1. Except in the event of a Change of Control of

the Holding Company, Executive shall be an at will employee of the Bank and may

terminate his employment at any time and the Bank shall retain the same right.



                  (a)      POSITIONS. Executive serves Bank as Senior Vice

President Retail/Marketing as of the Effective Date.



                  (b)      DUTIES. Executive's duties, authority and

responsibilities as Senior Vice President Retail/Marketing of the Bank include

all duties, authority and responsibilities customarily held by such officer of

comparable banks, subject always to the charter and bylaw provisions and the

policies of the Bank and the directions of its Board of Directors (the "Board").



                  (c)      CARE AND LOYALTY. Executive will devote his best

efforts and full business time, energy, skills and attention to the business and

affairs of the Bank, and will faithfully and loyally discharge his duties to the

Bank.



         SECTION 2. COMPENSATION. The Bank shall compensate Executive for his

services as follows during the term of this Agreement:



                  (a)      BASE COMPENSATION. Executive will receive an annual

base salary of $89,000 during 2003. The Board will review Executive's base

salary annually during the term of this Agreement to determine whether it should

be maintained at its existing level, increased or decreased. In no event shall

the Executive's annual base salary following a Change of Control be decreased.



                  (b)      DISCRETIONARY PERFORMANCE BONUS. The Bank will

consider Executive for a bonus at the end of each year based on performance

criteria established by the Board and/or Executive's senior officers and any

other factors deemed by the Board to be appropriate. Bonuses will be awarded, if

at all, in the sole discretion of the Board, and nothing in this Agreement will

require the payment of a bonus in any given year.



                  (c)      OTHER BENEFITS. Executive will be entitled to

participate in all plans and benefits that are now or later made available by

the Bank or the Holding Company to its officers of equal or junior ranking

generally.



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                  (d)      WITHHOLDING. Executive acknowledges that the Bank may

withhold any applicable federal, state or local withholding or other taxes from

payments that become due to him.



         SECTION 3. TERM AND TERMINATION.



                  (a)      TERM AND AUTOMATIC RENEWAL. The term of this

Agreement will be one year commencing as of the Effective Date. This Agreement

will automatically renew for one additional year on each anniversary of the

Effective Date unless this Agreement and Executive's employment hereunder are

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