FIRST FEDERAL OF NORTHERN MICHIGAN BANCORP, INC.

                        2006 STOCK-BASED INCENTIVE PLAN

                           RESTRICTED STOCK AGREEMENT


     A. An AWARD for a total of ____________  shares of common stock,  par value
$0.01 per share,  of First  Federal of  Northern  Michigan  Bancorp,  Inc.  (the
"Company") is hereby granted to ___________________  (the "Recipient"),  subject
in all  respects to the terms and  provisions  of the First  Federal of Northern
Michigan Bancorp, Inc. 2006 Stock-Based  Incentive Plan (the "Plan"),  which has
been approved by the board of directors of the Company and the  stockholders  of
the  Company,  which is  incorporated  herein  by  reference.  The terms of this
Restricted  Stock Agreement are subject to the terms and conditions of the Plan,
except where otherwise indicated.

     B. The shares of common stock  awarded  hereunder  may be  certificated  or
issued  in  electronic  form,  in  the  sole  discretion  of  the  Company.   If
certificated,  the shares shall bear a legend restricting the transferability of
such common  stock  (hereinafter  referred to as the  "Restricted  Stock").  The
Restricted  Stock  awarded  to  the  Recipient  shall  not  be  sold,  assigned,
transferred,  pledged,  or  otherwise  encumbered  by the  Recipient,  except as
hereinafter  provided,  until such Restricted  Stock has vested (the "Restricted
Period").  Restricted Stock shall vest in five equal annual  installments,  with
the first  installment  vesting on May 17, 2007, and succeeding  installments on
each anniversary thereafter through May 17, 2011.

     C.  If  the  shares  are  certificated,   the  Recipient  shall  receive  a
certificate or  certificates  representing  the shares of Restricted  Stock that
have been awarded to him.  Upon  receipt of the  Restricted  Stock  certificates
representing  the shares  awarded  hereunder,  the  Recipient  shall execute and
return to the Company a stock power or powers  endorsed  in blank  covering  all
such shares of Restricted Stock.  Pursuant to the terms of the Plan, the Company
shall deposit the  certificate  or  certificates  representing  the  Recipient's
Restricted Stock Award,  together with the stock power(s),  with an escrow agent
specified  by the Company  (the  "Escrow  Agent").  Restricted  Stock  issued in
electronic  form  shall be held by the  transfer  agent  until any  restrictions
appurtenant thereto have lapsed and the shares are fully vested.

     D. The Recipient shall have the right to vote the shares awarded hereunder.
The Recipient will also receive dividends declared with respect to the shares.

     E. If the  Recipient  ceases to  maintain  employment  or service  with the
Company  or First  Federal  of  Northern  Michigan  for any  reason  other  than
Disability (as defined in the Plan), death, Retirement (as defined in the Plan),
or  following  a Change in  Control  (as  defined  in the  Plan),  all shares of
Restricted  Stock  awarded to such  Recipient  which  have not  vested  shall be
forfeited by such Recipient.  In the event the Recipient's employment or service
with the Company or an affiliate terminates due to Disability, death, Retirement
or  following  a Change  in  Control,  the  Restricted  Stock  allocated  to the
Recipient  which,  as of the date of  termination  has not yet vested,  shall be
deemed to vest as of the Recipient's  last day of employment or service with the
Company or an affiliate;  provided that Restricted  Stock awarded to an employee
who also serves as a director shall not be deemed to vest until both  employment
and service as a director have been terminated.

     F. At the time the Restricted Stock vests under the Plan, the Company shall
deliver to the  Recipient (or if the  Restricted  Stock is deemed to vest due to
the Recipient's death, to the Recipient's beneficiary) shares of common stock of
the Company  representing the amount earned,  absent any  restrictions  that may
have been imposed under the Plan. Delivery of such shares upon vesting will be


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made in  certificate or electronic  form at the election of the Recipient.  Upon
delivery of the shares of common  stock to the  Recipient or  beneficiary,  such
person shall execute and return to the Company an  Acknowledgment  of Receipt of
Earned Shares, in the form attached hereto.

     G. A copy of the Plan  governing  this  Restricted  Stock Award is attached
hereto.  The  Recipient  is  invited to review  all the  provisions  of the Plan
governing this Award.

     H. The  Recipient  acknowledges  receipt  of a copy of the Plan,  a copy of
which is annexed  hereto,  and represents that he is familiar with the terms and
provisions thereof.  The Recipient hereby accepts this Award, subject to all the
terms and  provisions  of the Plan.  The  Recipient  hereby  agrees to accept as
binding,  conclusive,  and  final,  all  decisions  and  interpretations  of the
Committee  upon any  questions  arising  under the Plan.  As a condition  to the
issuance  of  shares  of common  stock of the  Company  under  this  Award,  the
Recipient  authorizes  the Company to deduct from the settlement of an Award any
taxes required to be withheld by the Company under federal,  state, or local law
as a result of his receipt of this Award.

Dated:
       ---------------


ATTEST:                             FIRST FEDERAL OF NORTHERN MICHIGAN
                                    BANCORP, INC.



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WITNESS:                            RECIPIENT


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     This Restricted  Stock  Agreement must be executed in duplicate  originals,
with one  original  retained  by the Company  and one  original  retained by the
Recipient.


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                   ACKNOWLEDGMENT OF RECEIPT OF EARNED SHARES

     I hereby  acknowledge  the  delivery  to me by First  Federal  of  Northern
Michigan  Bancorp,  Inc.  (the  "Company")  on  _____________________,  of stock
certificates for  ____________shares of common stock of the Company earned by me
pursuant to the terms and  conditions of the First Federal of Northern  Michigan
Bancorp,  Inc.  Restricted  Stock  Agreement,  and the First Federal of Northern
Michigan  Bancorp,  Inc.  2006  Stock-Based  Incentive  Plan,  which shares were
transferred    to   me   on   the    Company's    stock    record    books    on
_______________________.


Dated:
       ---------------


                                                 -------------------------------
                                                 Recipient's name (Print)


                                                 -------------------------------
                                                 Recipient's signature