EMPLOYMENT AGREEMENT


     AGREEMENT made and entered into this 1st day of
September, 1997, but as of the Effective Date
hereinafter defined, by and between NORTH COUNTRY BANK
AND TRUST, a Michigan banking corporation ("Bank") and
Anthony Palumbo ("Employee");

                       RECITAL:

     The parties desire to set forth the terms of the
employment relationship between the Bank and the
Employee.

     NOW, THEREFORE, IT IS AGREED as follows:

     1.   Employment.  The Employee is employed to
render such executive services to Bank as may from time
to time be reasonably directed by Bank's President and
CEO and/or the Bank board of directors.  Among his
other duties, it is contemplated that he will serve as
the Vice President of Central Credit of Bank.

     2.   Compensation.  Bank agrees to pay the
Employee during the term of this Agreement a salary in
the sum of Sixty Five Thousand Dollars ($65,000) per
annum.  The salary provided herein shall be payable in
accordance with the periodic payment procedures for all
employees of Bank.  The Employee's salary shall be
reviewed by the board of directors of Bank not less
often than annually beginning as of September 1, 1997
and may be adjusted from time to time in such amounts
as the board in its discretion may determine.  The
Employee's salary shall be subject to the usual
withholding taxes required with respect to compensation
paid by a corporation to an employee.

     3.   Bonuses.  In addition to the salary provided
for in Section 2, the Employee shall be entitled to
participate in discretionary or performance goal
bonuses as may be from time to time authorized and
declared by the board of directors of Bank to its
executive employees.  However, the Employee shall not
be entitled to participate in or to receive all or any
portion of any such bonus unless he is employed by Bank
on the last day of the calendar year for which the
bonus is to be paid.

     4.   Retirement Employee Benefit Plans and Fringe
Benefits.  The Employee shall also be entitled to the
following:

          (a)  The Employee shall be entitled to
     participate in any plan of Bank relating to
     pension, thrift, deferred profit-sharing, group
     life insurance, medical coverage, education, or
     other retirement or employee benefits that Bank
     may have in effect or adopt for the benefit of its
     executive employees.

          (b)  The Employee shall be eligible to
     participate in any other fringe benefits which may
     be applicable to Bank's executive employees,
     including, but not limited to, the following:  use
     of a company automobile; membership in various
     social, business and trade organizations; a
     reasonable expense account; the payment of
     reasonable expenses

<PAGE>


     for attending annual and
     periodic meetings of trade associations; and any
     other benefits which are commensurate with the
     responsibilities and functions to be performed by
     the Employee under this Agreement.

     5.   Term.  The term of employment under this
Agreement shall be a period commencing on the Effective
Date hereof and ending at midnight on ________________.

     6.   Effective Date.  For purposes of this
Agreement, the "Effective Date" is ______________.

     7.   Standards and Policies.  The Employee shall
perform his duties under this Agreement in accordance
with reasonable standards and policies established from
time to time by the board of directors of Bank.

     8.   Paid Time Off.  At such reasonable times as
the board of directors of Bank shall in their
discretion permit, the Employee shall be entitled,
without loss of pay, to absent himself voluntarily from
the performance of his employment under this Agreement,
all such voluntary absences to count as paid time off,
provided that:

          (a)  The Employee shall be entitled to paid
     time off of not less than ______ (__) weeks per
     full calendar year of employment, with paid time
     off prorated for employment for any period of less
     than a full calendar year.

          (b)  The timing of paid time off shall be
     scheduled in a reasonable manner by Bank.  The
     Employee shall not be entitled to receive any
     additional compensation from Bank on account of
     his failure to take paid time off, nor shall he be
     entitled to accumulate paid time off from one
     calendar year to the next except that up to, but
     no more than, twenty (20) days of paid time off
     may be accumulated and carried forward.  Any
     accumulated paid time off not used by Employee
     prior to termination of his employment shall be
     forfeited, unless Bank terminates his employment
     without "cause" (as defined in Section 10) in
     which case he shall be compensated for any unused
     paid time off.

     9.   Confidentiality, Noncompetition, Etc.
Employee acknowledges that (i) the Bank business is
intensely competitive and that the Employee's
employment by Bank requires that the Employee have
access to and knowledge of confidential information of
Bank, including, but not limited to, the identity of
Bank's customers, the kinds of services provided by
Bank to customers and offered to be performed for
potential customers, the service needs of actual or
prospective customers, product and service pricing
information, computer software applications and other
programs, personnel information and other trade secrets
("Confidential Information"); (ii) the direct and
indirect disclosure of any such Confidential
Information to existing or potential competitors of
Bank would place Bank at a competitive disadvantage and
would cause damage, monetary or otherwise, to Bank's
business; and (iii) the engaging by the Employee in any
of the activities prohibited by this Section 9 may
constitute improper appropriation and/or use of such
information and trade secrets.  The Employee expressly
acknowledges the trade secret status of the
Confidential Information and that the Confidential
Information constitutes a protectable business interest
of Bank.  Accordingly, Bank and the Employee agree as
follows:

<PAGE>

          (a)  For purposes of this Section 9, Bank
     shall be construed to include Bank and its
     affiliates.

          (b)  During the term of this Agreement and at
     all times after the termination of the Employee's
     employment by expiration of the term or otherwise,
     the Employee shall not, directly or indirectly,
     whether individually, as a director, stockholder,
     owner, partner, employee, principal or agent of
     any business, or in any other capacity, make
     known, disclose, furnish, make available or
     utilize any of the Confidential Information, other
     than in the proper performance of the duties
     contemplated herein, or as required by a court of
     competent jurisdiction or other administrative or
     legislative body; provided that, prior to
     disclosing any of the Confidential Information to
     a court or other administrative or legislative
     body, Employee shall promptly notify Bank so that
     Bank may seek a protective order or other
     appropriate remedy.  Employee agrees to return all
     Confidential Information, including all
     photocopies, extracts and summaries thereof, and
     such information stored electronically on tapes,
     computer discs or in any other manner to Bank upon
     termination of his employment for any reason.

          (c)  Employee shall not, so long as he is
     employed by Bank, engage in "Competition" with
     Bank.  For purposes of this Agreement, Competition
     by Employee shall mean Employee's engaging in, or
     otherwise directly or indirectly being employed by
     or acting as a consultant or lender to, or being a
     director, officer, employee, principal, licensor,
     trustee, broker, agent, stockholder, member,
     owner, joint venturer or partner of, or permitting
     his name to be used in connection with the
     activities of any other business or organization
     anywhere which competes directly or indirectly,
     with business of Bank as the same shall be
     constituted at any time during his employment.

          (d)  For a period of two (2) years following
     the termination of the Employee's employment,
     whether upon expiration of the term or otherwise,
     the Employee shall not engage in Competition, as
     defined above, with Bank in any locality or region
     in which Bank had operations at the time of, or
     within six (6) months prior to the Employee's
     termination, or in which, during the six (6) month
     period prior to the Employee's termination, Bank
     had made substantial plans with the intention of
     establishing operations in such locality or
     region; provided that, it shall not be a violation
     of this subparagraph for the Employee to become
     the registered or beneficial owner of up to 5% of
     any class of the capital stock of a competing
     corporation registered under the Securities
     Exchange Act of 1934, as amended, provided that
     the Employee does not actively participate in the
     business of such corporation until such time as
     this covenant expires; provided further that this
     subparagraph shall not apply or have any effect if
     the Employee is terminated by Bank without "cause"
     (as defined in Section 10) and for reasons other
     than the Employee's Disability (as defined in
     Section 10).

          (e)  For a period of three (3) years after he
     ceases to be employed hereunder by Bank, whether
     upon expiration of the term or otherwise, the
     Employee agrees that he will not, directly or
     indirectly, for his benefit or for the benefit of
     any other person, firm or entity, do any of tile
     following:

<PAGE>

               (i)  Solicit from any customer doing
          business with Bank as of the Employee's
          termination, business of the same or of a
          similar nature to the business of Bank with
          such customer;

               (ii) Solicit from any known potential
          customer of Bank business of the same or of a
          similar nature to that which has been the
          subject of a known written or oral bid, offer
          or proposal by Bank, or of substantial
          preparation with a view to making such a bid,
          proposal or offer, within six (6) months
          prior to the Employee's termination;

               (iii)     Solicit the employment or
          services of, or hire any person who was known
          to be employed by or was a known consultant
          to Bank upon termination of the Employee's
          employment, or within six months prior
          thereto; or

               (iv) Otherwise interfere with the
          business or accounts of Bank including the
          making of any statements or comments of a
          defamatory or disparaging nature to third
          parties regarding Bank or its officers,
          directors, personnel or services.

          (f)  Employee acknowledges that Bank would
     not be adequately compensated by damages in an
     action at law as a result of a material breach of
     this Agreement and that a material breach or
     threatened breach by him of any of the provisions
     contained in this Section 9 would cause Bank
     irreparable injury.  Employee therefore agrees
     that Bank shall be entitled, in addition to any
     other right or remedy, to a temporary, preliminary
     and permanent injunction, without the necessity of
     proving the inadequacy of monetary damages or the
     posting of any bond or security, enjoining or
     restraining Employee from any such violation or
     threatened violations.

          (g)  Employee further acknowledges and agrees
     that due to the uniqueness of his services and
     confidential nature of the information he will
     possess, the covenants set forth herein are
     reasonable and necessary for the protection of the
     business and goodwill of Bank.

     10.  Termination of Employment.

          (a)  The Employee's employment under this
     Agreement may be terminated at any time by the
     board of directors of Bank with or without "cause"
     (as defined below).  The Employee shall have no
     right to receive severance pay or any other
     remuneration whatsoever under this Agreement for
     any period after his voluntary termination or
     termination for cause.  For purposes of this
     Agreement, for "cause" shall mean termination for
     only the following reasons:

               (i)  Personal dishonesty materially
          affecting Bank or any of its affiliates;

               (ii) Willful misconduct;

<PAGE>

               (iii)     Willful breach of a fiduciary
          duty involving personal profit;

               (iv) Intentional failure to perform
          stated duties;

               (v)  WHIM violation of any law, rule, or
          regulation relating to the operation of Bank
          or any of its affiliates;

               (vi) The order of any court or
          supervising agency with jurisdiction over the
          affairs of Bank or any of its affiliates; or

               (vii)     The Employee's violation of
          any material provision of this Agreement or
          any Bank policy.

          (b)  This Agreement may be terminated by the
     Employee at any time upon ninety (90) days'
     written notice to Bank or upon such shorter period
     as may be agreed upon between the Employee and the
     board of directors of Bank.  In the event of such
     termination, Bank shall be obligated only to
     continue to pay the Employee's salary and provide
     the other benefits provided by this Agreement up
     to the date of the termination.

          (c)  If the Employee's employment is
     terminated by Bank without cause, and for reasons
     other than the Employee's Disability (as defined
     below), then, in lieu of any and all damages or
     other compensation to which Employee might
     otherwise be entitled under this Agreement, Bank
     shall continue to pay to the Employee as severance
     pay, the full amount of the salary required by
     Section 2 of this Agreement, without reduction,
     discount or a duty to mitigate damages, until the
     end of the employment term specified in Section 5;
     subject, however, to Bank's right to discontinue
     such payments in the event of the Employee's
     breach of any of the provisions of Section 9 of
     this Agreement.

          (d)  If the Employee's employment is
     terminated by Bank because of the Employee's
     Disability (as defined below), he shall be
     entitled to receive whatever benefits may be
     provided by the Bank disability plan in effect at
     that time for executive officers but he shall have
     no right to receive severance payments or any
     other remuneration or other benefits under this
     Agreement of any kind subsequent to tile date of
     his termination because of his Disability.  For
     purposes of this Agreement, "Disability" shall
     mean an illness, injury or other incapacitating
     condition as a result of which the Employee is
     unable to perform the services required to be
     performed under this Agreement for (i) ninety (90)
     consecutive days during the term of this
     Agreement, or (ii) a period or periods aggregating
     more than ninety (90) days in any six (6)
     consecutive months.  In any such event, Bank may,
     in its discretion reasonably exercised, terminate
     this Agreement by giving notice to the Employee of
     termination for Disability.  The Employee agrees
     to submit to such medical examinations as may be
     necessary to determine whether a Disability
     exists, pursuant to such reasonable request made
     by Bank from time to time.

          (e)  In the event of the death of the
     Employee during the term of this Agreement, the
     Employee's estate shall be entitled to receive the
     salary due the

<PAGE>
     Employee through the last day of
     the calendar month in which his death shall have
     occurred plus such other benefits as shall have
     accrued under this Agreement.

          (f)  If the Employee is temporarily
     prohibited from participating in the conduct of
     Banks affairs at the request of or by the order of
     any court or supervising agency with jurisdiction
     over Bank, Bank's obligations under this Agreement
     shall not terminate and the Employee shall be
     placed on administrative leave with or without pay
     in the discretion of Bank's board of directors.
     If the charges in the proceeding out of which such
     request or order is issued mature into a permanent
     prohibition order, unless stayed by appropriate
     proceedings, Bank's obligations hereunder shall
     terminate as of the effective date of such
     permanent order.

          (g)  If the Employee is permanently
     prohibited from participating in the conduct of
     Bank's affairs by the final order of any court or
     supervising agency with jurisdiction over Bank,
     all obligations of Bank under this Agreement shall
     terminate, as of the effective date of the order,
     but vested rights of the parties shall not be
     affected

          (h)  All obligations under this Agreement may
     be terminated, except to the extent determined
     that continuation of the Agreement is necessary
     for the continued operation of Bank:

               (i)  By the Federal Deposit Insurance
          Corporation ("FDIC") at the time the FDIC
          enters into an agreement to provide
          assistance to or on behalf of Bank; and

               (ii) By the FDIC, or any other agency,
          at the time the FDIC or other agency approves
          a supervisory merger to resolve problems
          related to the operation of Bank or when Bank
          is determined by the FDIC or other agency to
          be in an unsafe or unsound condition.  Any
          rights of the parties that have already
          vested, however, shall not be affected by
          such action.

     11.  Affiliate Defined.  For purposes of this
Agreement, the term "affiliate" means any corporation
or other entity that controls, is controlled by or
under common control with Bank, and includes, without
limitation, First Manistique Corporation and each of
its subsidiaries, as well as any subsidiary of Bank.

     12.  No Assignments.  This Agreement is personal
to each of the parties hereto, and neither party may
assign or delegate any of the rights or obligations
hereunder without first obtaining the written consent
of the other party.

     13.  Other Contracts.  As of the Effective Date,
all other prior agreements regarding conditions of
employment, whether written or oral, are hereby
terminated and superseded by this Agreement.

     14.  Notices.  Any notices under this Agreement
shall be deemed given when in writing and delivered
personally or sent by certified mail, postage prepaid,
to the last known

<PAGE>

address of the party to whom notice
is given.  If sent by mail, notice shall be deemed
given on the second day after mailing.

     15.  Amendments.  No amendments or additions to
this Agreement shall be binding unless in writing and
signed by both parties.

     16.  Paragraph Headings.  The paragraph headings
used in this Agreement are included solely for
convenience and shall not affect or be used in
connection with the interpretation of this Agreement.

     17.  Severability.  The provisions of this
Agreement shall be deemed severable, and the invalidity
or unenforceability of any provision shall not affect
the validity or enforceability of the other provisions
hereof.  Moreover, if any one or more of the provisions
contained in this Agreement shall be held to be
excessively broad as to duration, activity or subject,
such provision shall be construed by limiting and
reducing them so as to be enforceable to the maximum
extent allowed by applicable law.

     18.  Arbitration.  Any dispute, controversy, or
claim arising under or in connection with this
Agreement shall be settled exclusively by arbitration,
conducted in Manistique, Michigan, before a panel of
three arbitrators, each of whom is a resident of
Schoolcraft County, in accordance with the rules of the
American Arbitration Association then in effect.
Judgment may be entered on the arbitrators award in any
court having jurisdiction.  Unless otherwise provided
in the Rules of the American Arbitration Association,
the arbitrators shall, in their award, allocate between
the parties the costs of arbitration, which shall
include reasonable attorneys fees and expenses of the
parties, as well as the arbitrators fees and expenses,
in such proportions as the arbitrators deem just.

     19.  Governing Law.  This Agreement shall be
governed by the laws of the United States of America
and the State of Michigan.

     IN WITNESS WHEREOF, the parties have executed
this Agreement on the day and year first above written.

Employer:                          Employee:

NORTH COUNTRY BANK AND TRUST
                                   /s/ Anthony Palumbo
                                  ------------------------
By: /s/  Sherry Littlejohn
   ---------------------------
   Its: President