Document:

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                                                                    Exhibit 10.1

                           CHANGE IN CONTROL AGREEMENT

     This AGREEMENT is made effective as of October 12, 2007 by and between
FIRST FEDERAL OF NORTHERN MICHIGAN, a federally chartered stock savings bank
(the "Bank"), and Martin A. Thomson ("Executive"). Any reference to "Company"
herein shall mean First Federal of Northern Michigan Bancorp, Inc., or any
successor thereto.

     WHEREAS, the Bank and Executive entered into the Change in Control
Agreement (the "Agreement") on the 1st day of April, 2005, pursuant to which
Executive was employed as President and Chief Executive Officer of the Bank, in
order to recognize the substantial contribution Executive has made to the Bank
and to protect his position therewith for the period provided in the Agreement;
and

     WHEREAS, Section 409A of the Internal Revenue Code, ("Code"), effective
January 1, 2005, requires deferred compensation arrangements, including those
set forth in severance agreements, to comply with its provisions and
restrictions and limitations on payments of deferred compensation; and

     WHEREAS, Code Section 409A and the final regulations issued thereunder in
April 2007 necessitate changes to said Agreement; and

     WHEREAS, Executive has agreed to such changes; and

     WHEREAS, the Board of Directors, the Bank, and Executive believe it is in
the best interests of the Bank to amend and restate the Agreement in order to
incorporate the changes required by the new tax laws; and

     WHEREAS, the parties hereto desire to set forth the terms of the revised
Agreement.

     NOW, THEREFORE, in consideration of the contribution of Executive, and upon
the other terms and conditions hereinafter provided, the parties hereto agree as
follows:

1.   TERM OF AGREEMENT

     The "term" of this Agreement shall be thirty-six (36) full calendar months
from the effective date of this Agreement set forth above, and shall include any
extension or renewal made pursuant to Section 1 of this Agreement. At least
sixty (60) days prior to each anniversary date of this Agreement, the Board will
conduct a performance evaluation and review of Executive for purposes of
determining whether to renew or extend this Agreement, and the results thereof
shall be included in the minutes of the Board's meeting. In the event that the
Board determines to renew or extend the Agreement, this Agreement shall renew or
extend for an additional twelve (12) months from the anniversary date, such that
the remaining term of this Agreement shall be thirty-six (36) months from the
anniversary date. In the event the Board determines not to renew or extend this
Agreement, the Board shall provide a notice of non-renewal to Executive at least
thirty (30) days prior to the anniversary date of this Agreement. In the event
the Board does not renew or extend the Agreement, the remaining term of this
Agreement shall be twenty-four (24) months from the anniversary date of this
Agreement. If

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Executive is also a director then he shall abstain from any and all voting with
respect to the renewal or extension of the term of this Agreement.

2.   PAYMENTS TO EXECUTIVE UPON CHANGE IN CONTROL AND TERMINATION

     This Agreement provides for certain payments and benefits to Executive only
in the event of a Change in Control followed by a termination of Executive's
services as described in this Agreement.

     (a) Upon the occurrence of a "Change in Control" of the Bank or the Company
followed at any time during the term of this Agreement by the Involuntary
Termination of Executive's employment, other than Termination for Cause, death
or Disability of Executive, the Bank shall be obligated to pay or provide
Executive or in the following event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be:

          (i)  Severance pay, a sum equal to two times the sum of (a) the
               highest rate of base salary, and (b) highest rate of bonus
               awarded to Executive during the prior three years. If Executive
               has been employed by the Bank for less than one year, then the
               severance pay shall be a sum equal to twenty-four (24) times the
               highest monthly salary, and two times the highest rate of bonus
               awarded to Executive. Such payment shall be payable in a lump-sum
               form within sixty (60) days of the Date of Termination.

          (ii) Life insurance and non-taxable medical and dental coverage (at
               the expense of the Bank) substantially identical to the coverage
               maintained by the Bank for Executive prior to his termination,
               for a period of twenty-four (24) months after the date of
               termination.

          (iii) Within sixty (60) days (or within such shorter period to the
               extent that information can be reasonably obtained) following the
               Date of Termination, a lump-sum payment in an amount equal to the
               excess, if any, of: (a) the present value of the benefits to
               which Executive would be entitled under the Bank's defined
               benefit pension plan (and any other defined benefit plan
               maintained by the Bank) if Executive had the additional years of
               service that Executive would have had if Executive had continued
               working for the Bank for a twenty-four (24) month period
               following his termination earning the base salary paid at the
               time of termination of employment for the remaining unexpired
               term of this Agreement, determined as if each such plan had
               continued in effect without change in accordance with its terms
               as of the day prior to Executive's actual date of termination and
               as if such benefits were payable beginning on the first day of
               the month coincident with or next following Executive's actual
               date of Executive's termination, over (b) the present value of
               the benefits to which Executive is actually entitled under the
               Bank's defined benefit pension plan (and any other defined
               benefit plan maintained by the Bank) as of the date of
               Executive's termination, where

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               such present values are to be determined using a discount rate of
               6% and the mortality tables prescribed under Code Section 72.

          (iv) Notwithstanding the foregoing, in the event Executive is a
               "Specified Employee" (within the meaning of Treasury Regulation
               Section 1.409A-1(i)) no payment shall be made to Executive under
               this Section prior to the first day of the seventh month
               following the termination of Executive's employment in excess of
               the "permitted amount" under Code Section 409A. For these
               purposes, the "permitted amount" shall be an amount that does not
               exceed two times the lesser of: (A) the sum of Executive's
               annualized compensation based upon the annual rate of pay for
               services provided to the Bank for the calendar year preceding the
               year in which Executive has terminated employment with the Bank,
               or (B) the maximum amount that may be taken into account under a
               tax-qualified plan pursuant to Code Section 401(a)(17) for the
               calendar year in which Executive has terminated employment with
               the Bank. The payment of the "permitted amount" shall be made
               within sixty (60) days following the termination of Executive's
               employment.

     (b) Upon the occurrence of a Change in Control, Executive will have such
rights as specified in any other employee benefit plan with respect to options,
stock awards or other stock incentives and such other rights as may have been
granted to Executive under such plans.

     (c) Any payments to Executive under this Section 2 shall be reduced by
applicable withholding taxes.

     (d) Notwithstanding the preceding paragraphs of this Section 2, in no event
shall the aggregate payments or benefits to be made or afforded to Executive
under said paragraphs (the "Termination Benefits") constitute an "excess
parachute payment" under Section 280G of the Code or any successor thereto, and
in order to avoid such a result, Termination Benefits will be reduced, if
necessary, to an amount (the "Non-Triggering Amount"), the value of which is one
dollar ($1.00) less than an amount equal to three (3) times Executive's "base
amount", as determined in accordance with said Section 280G. In addition, in no
event shall the aggregate Termination Benefits to be made or approved to
Executive ever exceed three (3) times the "average annual compensation," as such
term is defined in OTS Regulatory Handbook Section 310 (Oversight by the Board
of Directors). The allocation of the reduction of any aggregate payments or
benefits under this Section 2 shall be determined by Executive, provided,
however, that if it is determined that such election by Executive shall be in
violation of Code Section 409A, the allocation of the required reduction shall
be pro-rata.

     (e) Executive shall not have the right to receive Termination Benefits
pursuant to Section 2 hereof in the event of Executive's Termination for Cause
or termination of employment due to Executive's death or Disability.

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3.   DEFINED TERMS

     The following capitalized terms used in this Agreement are defined as set
forth below:

     (a) CHANGE IN CONTROL. A "Change in Control" of the Bank or the Company
shall mean a change in control of a nature that: (i) would be required to be
reported in response to Item 5.01 of the current report on Form 8-K, as in
effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"); or (ii) results in a Change in
Control of the Bank or the Company within the meaning of the Home Owners' Loan
Act, as amended, and applicable rules and regulations promulgated thereunder
(collectively, the "HOLA") as in effect at the time of the Change in Control; or
(iii) without limitation such a Change in Control shall be deemed to have
occurred at such time as (a) any "person" (as the term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 25% or more of the combined voting power of the
Company's outstanding securities, except for any securities purchased by the
Bank's employee stock ownership plan or trust; or (b) individuals who constitute
the Board on the date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election was approved by a vote of
at least three-quarters of the directors comprising the Incumbent Board, or
whose nomination for election by the Company's stockholders was approved by the
same Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this clause (b), considered as though he were a member of the
Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Bank or the Company or similar
transaction in which the Bank or Company is not the surviving institution occurs
or is effected; or (d) a proxy statement soliciting proxies from stockholders of
the Company is distributed, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or similar transaction with one or more business
organizations as a result of which the outstanding shares of the class of
securities then subject to the plan are to be exchanged for or converted into
cash or property or securities not issued by the Company; or (e) a tender offer
is made for 25% or more of the voting securities of the Company and the
shareholders owning beneficially or of record 25% or more of the outstanding
securities of the Company have tendered or offered to sell their shares pursuant
to such tender offer and such tendered shares have been accepted by the tender
offeror.

     (b) INVOLUNTARY TERMINATION. "Involuntary Termination" of Executive shall
mean either (i) Executive's termination by the Bank, the Company or any
successor(s) thereto during the term of this Agreement and following a Change in
Control for any reason other than a Termination for Cause, Disability or death,
or (ii) Executive's resignation from employment following a Change in Control as
a result of the Company's (or any successor to the Company) failure to renew or
extend this Agreement for an additional twelve (12) months on the first
anniversary date of this Agreement immediately following a Change in Control, or
(iii) Executive's resignation of employment during the term of this Agreement
and following a Change in Control as a result of: any demotion, loss of title,
office, significant change in Executive's functions, duties or responsibilities,
which change would cause Executive's position to become one of lesser
importance, responsibility or scope from the position held immediately

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prior to the Change in Control, reduction in Executive's annual compensation or
benefits, relocation of Executive's principal place of employment by more than
25 miles from its location immediately prior to the Change in Control, or
material breach of this Agreement by the Bank, the Company or its successor(s)
following a Change in Control. Upon the occurrence of any events described in
clauses (ii) or (iii) above, Executive shall have the right to elect to
terminate his employment under this Agreement by providing a Notice of
Termination within a period not to exceed ninety (90) days after the initial
event giving rise to said right to elect. Upon receiving such notice, the Bank
shall have at least thirty (30) days to remedy any condition set forth in clause
(ii) or (iii), provided, however, that the Bank shall be entitled to waive such
period and make an immediate payment hereunder. For purposes of this Section
3(b), "Involuntary Termination" shall be construed to require "Separation from
Service" as defined in Code Section 409A and the Treasury Regulations
promulgated thereunder, provided, however, that the Bank and Executive
reasonably anticipate that the level of bona-fide services Executive would
perform after termination would permanently decrease to a level that is less
than 50% of the average level of bona fide services performed (whether as an
employee or an independent contractor) over the immediately preceding 12-month
period.

     (c) TERMINATION FOR CAUSE. "Termination for Cause" shall mean termination
because of Executive's intentional failure to perform stated duties, personal
dishonesty, incompetence, willful misconduct, any breach of fiduciary duty
involving personal profit, willful violation of any law, rule, regulation (other
than traffic violations or similar offenses) or final cease and desist order, or
any material breach of any material provision of this Agreement. In determining
incompetence, the acts or omissions shall be measured against standards
generally prevailing in the savings institution industry. Notwithstanding the
foregoing, Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of the members
of the Board at a meeting of the Board called and held for that purpose (after
reasonable notice to Executive and an opportunity for him, together with
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board, Executive was guilty of conduct justifying Termination for Cause
and specifying the particulars thereof in detail. Executive shall not have the
right to receive compensation or other benefits for any period after Termination
for Cause.

     (d) DISABILITY. "Disability" shall mean Executive's inability to perform
duties normally associated with his position on a full-time basis for a period a
six consecutive months by reason of illness or other physical or mental
disability. The Bank or the Company may require a physician's written
confirmation that Executive cannot perform his duties because of Executive's
Disability.

4.   NOTICE OF TERMINATION

     (a) Any termination by the Bank or by Executive shall be communicated by
Notice of Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated. Any
termination by Executive as a result of an Involuntary Termination under Section

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3(b)(ii) or (iii) hereof shall be communicated by Notice of Termination to the
Company within ninety (90) days of the event giving rise to the Involuntary
Termination.

     (b) "Date of Termination" shall mean (A) if Executive's employment is
terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that Executive shall not have returned to the performance of
Executive's duties on a full-time basis during such thirty (30) day period), (B)
any termination of by Executive as a result of an Involuntary Termination as set
forth in Section 3(b)(ii) or (iii), thirty (30) days after a Notice of
Termination is given unless the Bank waives its right to cure and agrees to the
Involuntary Termination, and (C) if Executive's employment is terminated for any
other reason, the date specified in the Notice of Termination (which, in the
case of a Termination for Cause, shall be immediate). In no event shall the Date
of Termination exceed thirty (30) days from the date Notice of Termination is
given.

5.   SOURCE OF PAYMENTS

     It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the Bank. The
Company, however, guarantees payment and provision of all amounts and benefits
due hereunder to Executive and, if such amounts and benefits due from the Bank
are not timely paid or provided by the Bank, such amounts and benefits shall be
paid or provided by the Company.

6.   EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS

     This Agreement contains the entire understanding between the parties hereto
and supersedes any prior agreement between the Bank and Executive, except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.

7.   NO ATTACHMENT

     (a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

     (b) This Agreement shall be binding upon, and inure to the benefit of,
Executive, the Bank and their respective successors and assigns.

8.   MODIFICATION AND WAIVER

     (a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.

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     (b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.

9.   REQUIRED PROVISIONS

     (a) The Bank may terminate Executive's employment at any time. Any
termination of Executive, however, shall be subject to the terms and conditions
of this Agreement. Executive shall not have the right to receive compensation or
other benefits for any period after Termination for Cause as defined herein.

     (b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) (12 USC Section 1818(e)(3)) or 8(g) (12 USC Section 1818(g)) of
the Federal Deposit Insurance Act (the "FDI Act"), the Bank's obligations under
this Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Bank
may in its discretion (i) pay Executive all or part of the compensation withheld
while their contract obligations were suspended and (ii) reinstate (in whole or
in part) any of the obligations which were suspended.

     (c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e) (12 USC Section 1818(e)) or 8(g) (12 USC Section 1818(g)) of the
FDI Act, all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the contracting parties
shall not be affected.

     (d) If the Bank is in default, as defined in Section 3(x) (12 USC Section
1813(x)(1)) of the FDI Act, all obligations of the Bank under this contract
shall terminate as of the date of default, but this paragraph shall not affect
any vested rights of the contracting parties.

     (e) All obligations of the Bank under this contract shall be terminated,
except to the extent determined that continuation of the contract is necessary
for the continued operation of the 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 the Bank under the authority contained in Section
13(c) (12 USC Section 1823(c)) of the FDI Act; or (ii) when the Bank is
determined by the FDIC 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.

     (f) Notwithstanding anything herein contained to the contrary, any payments
to Executive by the Bank, whether pursuant to this Agreement or otherwise, are
subject to and conditioned upon their compliance with Section 18(k) of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations
promulgated thereunder in 12 C.F.R. Part 359.

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10.  SEVERABILITY

     If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision, and part thereof, shall, to the full extent consistent
with law, continue in full force and effect.

11.  HEADINGS FOR REFERENCE ONLY

     The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

12.  GOVERNING LAW

     The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Michigan, unless
superseded or preempted by Federal law as now or hereafter in effect.

     Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a single
arbitrator selected by the Bank and Executive and sitting in a location selected
by Executive within fifty (50) miles from the location of the Bank, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.

13.  PAYMENT OF LEGAL FEES

     All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank if Executive is successful on the merits pursuant to a
legal judgment, arbitration or settlement, and that such payment or
reimbursement shall occur no later than two and one-half months after the
dispute is settled or resolved in Executive's favor.

14.  SUCCESSOR TO THE BANK

     The Bank shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank, expressly and
unconditionally to assume and agree to perform the Bank's obligations under this
Agreement, in the same manner and to the same extent that the Bank would be
required to perform if no such succession or assignment had taken place.

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15.  SIGNATURES

     IN WITNESS WHEREOF, the Bank and the Company have caused this Agreement to
be executed by their duly authorized officer or director, and Executive has
executed this Agreement, on the day and date first above written.

ATTEST:                                 FIRST FEDERAL OF NORTHERN MICHIGAN

/s/ Sharon R. Kirby                     By: /s/ James C. Rapin
-------------------------------------       ------------------------------------
Sharon R. Kirby                         Name: James C. Rapin
Office Services Manager                 Title: Chairman

ATTEST:                                 FIRST FEDERAL OF NORTHERN MICHIGAN
                                        BANCORP, INC.

/s/ Sharon R. Kirby                     By: /s/ James C. Rapin
-------------------                         ------------------------------------
Sharon R. Kirby                         Name: James C. Rapin
Office Services Manager                 Title: Chairman

WITNESS:                                EXECUTIVE

/s/ Sharon R. Kirby                     By: /s/ Martin A. Thomson
---------------------------                 ------------------------------------
Sharon R. Kirby                         Name: Martin A. Thomson
Office Services Manager                 Title: CEO

                                       9<PAGE>

                                                                    Exhibit 10.2

                           CHANGE IN CONTROL AGREEMENT

     This AGREEMENT is made effective as of October 12, 2007, by and between
FIRST FEDERAL OF NORTHERN MICHIGAN, a federally chartered stock savings bank
(the "Bank"), and Michael W. Mahler ("Executive"). Any reference to "Company"
herein shall mean First Federal of Northern Michigan Bancorp, Inc., or any
successor thereto.

     WHEREAS, the Bank and Executive entered into the Change in Control
Agreement (the "Agreement") on the 1st day of April, 2005, pursuant to which
Executive was employed as Executive Vice President for the Bank, in order to
recognize the substantial contribution Executive has made to the Bank and to
protect his position therewith for the period provided in the Agreement; and

     WHEREAS, Section 409A of the Internal Revenue Code, ("Code"), effective
January 1, 2005, requires deferred compensation arrangements, including those
set forth in severance agreements, to comply with its provisions and
restrictions and limitations on payments of deferred compensation; and

     WHEREAS, Code Section 409A and the final regulations issued thereunder in
April 2007 necessitate changes to said Agreement; and

     WHEREAS, Executive has agreed to such changes; and

     WHEREAS, the Board of Directors, the Bank, and Executive believe it is in
the best interests of the Bank to amend and restate the Agreement in order to
incorporate the changes required by the new tax laws; and

     WHEREAS, the parties hereto desire to set forth the terms of the revised
Agreement.

     NOW, THEREFORE, in consideration of the contribution of Executive, and upon
the other terms and conditions hereinafter provided, the parties hereto agree as
follows:

1.   TERM OF AGREEMENT

     The "term" of this Agreement shall be thirty-six (36) full calendar months
from the effective date of this Agreement set forth above, and shall include any
extension or renewal made pursuant to Section 1 of this Agreement. At least
sixty (60) days prior to each anniversary date of this Agreement, the Board will
conduct a performance evaluation and review of Executive for purposes of
determining whether to renew or extend this Agreement, and the results thereof
shall be included in the minutes of the Board's meeting. In the event that the
Board determines to renew or extend the Agreement, this Agreement shall renew or
extend for an additional twelve (12) months from the anniversary date, such that
the remaining term of this Agreement shall be thirty-six (36) months from the
anniversary date. In the event the Board determines not to renew or extend this
Agreement, the Board shall provide a notice of non-renewal to Executive at least
thirty (30) days prior to the anniversary date of this Agreement. In the event
the Board does not renew or extend the Agreement, the remaining term of this
Agreement shall be twenty-four (24) months from the anniversary date of this
Agreement. If

<PAGE>

Executive is also a director then he shall abstain from any and all voting with
respect to the renewal or extension of the term of this Agreement.

2.   PAYMENTS TO EXECUTIVE UPON CHANGE IN CONTROL AND TERMINATION

     This Agreement provides for certain payments and benefits to Executive only
in the event of a Change in Control followed by a termination of Executive's
services as described in this Agreement.

     (a) Upon the occurrence of a "Change in Control" of the Bank or the Company
followed at any time during the term of this Agreement by the Involuntary
Termination of Executive's employment, other than Termination for Cause, death
or Disability of Executive, the Bank shall be obligated to pay or provide
Executive or in the following event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be:

          (i)  Severance pay, a sum equal to two times the sum of (a) the
               highest rate of base salary, and (b) highest rate of bonus
               awarded to Executive during the prior three years. If Executive
               has been employed by the Bank for less than one year, then the
               severance pay shall be a sum equal to twenty-four (24) times the
               highest monthly salary, and two times the highest rate of bonus
               awarded to Executive. Such payment shall be payable in a lump-sum
               within sixty (60) days of the Date of Termination.

          (ii) Life insurance and non-taxable medical and dental coverage (at
               the expense of the Bank) substantially identical to the coverage
               maintained by the Bank for Executive prior to his termination,
               for a period of twenty-four (24) months after the date of
               termination.

          (iii) Within sixty (60) days (or within such shorter period to the
               extent that information can be reasonably obtained) following the
               Date of Termination, a lump-sum payment in an amount equal to the
               excess, if any, of: (a) the present value of the benefits to
               which Executive would be entitled under the Bank's defined
               benefit pension plan (and any other defined benefit plan
               maintained by the Bank) if Executive had the additional years of
               service that Executive would have had if Executive had continued
               working for the Bank for a twenty-four (24) month period
               following his termination earning the base salary paid at the
               time of termination of employment for the remaining unexpired
               term of this Agreement, determined as if each such plan had
               continued in effect without change in accordance with its terms
               as of the day prior to Executive's actual date of termination and
               as if such benefits were payable beginning on the first day of
               the month coincident with or next following Executive's actual
               date of Executive's termination, over (b) the present value of
               the benefits to which Executive is actually entitled under the
               Bank's defined benefit pension plan (and any other defined
               benefit plan maintained by the Bank) as of the date of
               Executive's termination, where

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               such present values are to be determined using a discount rate of
               6% and the mortality tables prescribed under Code Section 72.

          (iv) Notwithstanding the foregoing, in the event Executive is a
               "Specified Employee" (within the meaning of Treasury Regulation
               Section 1.409A-1(i)) no payment shall be made to Executive under
               this Section prior to the first day of the seventh month
               following the termination of Executive's employment in excess of
               the "permitted amount" under Code Section 409A. For these
               purposes, the "permitted amount" shall be an amount that does not
               exceed two times the lesser of: (A) the sum of Executive's
               annualized compensation based upon the annual rate of pay for
               services provided to the Bank for the calendar year preceding the
               year in which Executive has terminated employment with the Bank,
               or (B) the maximum amount that may be taken into account under a
               tax-qualified plan pursuant to Code Section 401(a)(17) for the
               calendar year in which Executive has terminated employment with
               the Bank. The payment of the "permitted amount" shall be made
               within sixty (60) days following the termination of Executive's
               employment.

     (b) Upon the occurrence of a Change in Control, Executive will have such
rights as specified in any other employee benefit plan with respect to options,
stock awards or other stock incentives and such other rights as may have been
granted to Executive under such plans.

     (c) Any payments to Executive under this Section 2 shall be reduced by
applicable withholding taxes.

     (d) Notwithstanding the preceding paragraphs of this Section 2, in no event
shall the aggregate payments or benefits to be made or afforded to Executive
under said paragraphs (the "Termination Benefits") constitute an "excess
parachute payment" under Section 280G of the Code or any successor thereto, and
in order to avoid such a result, Termination Benefits will be reduced, if
necessary, to an amount (the "Non-Triggering Amount"), the value of which is one
dollar ($1.00) less than an amount equal to three (3) times Executive's "base
amount", as determined in accordance with said Section 280G. In addition, in no
event shall the aggregate Termination Benefits to be made or approved to
Executive ever exceed three (3) times the "average annual compensation," as such
term is defined in OTS Regulatory Handbook Section 310 (Oversight by the Board
of Directors). The allocation of the reduction of any aggregate payments or
benefits under this Section 2 shall be determined by Executive, provided,
however, that if it is determined that such election by Executive shall be in
violation of Code Section 409A, the allocation of the required reduction shall
be pro-rata.

     (e) Executive shall not have the right to receive Termination Benefits
pursuant to Section 2 hereof in the event of Executive's Termination for Cause
or termination of employment due to Executive's death or Disability.

                                       3

<PAGE>

3.   DEFINED TERMS

     The following capitalized terms used in this Agreement are defined as set
forth below:

     (a) CHANGE IN CONTROL. A "Change in Control" of the Bank or the Company
shall mean a change in control of a nature that: (i) would be required to be
reported in response to Item 5.01 of the current report on Form 8-K, as in
effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"); or (ii) results in a Change in
Control of the Bank or the Company within the meaning of the Home Owners' Loan
Act, as amended, and applicable rules and regulations promulgated thereunder
(collectively, the "HOLA") as in effect at the time of the Change in Control; or
(iii) without limitation such a Change in Control shall be deemed to have
occurred at such time as (a) any "person" (as the term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 25% or more of the combined voting power of the
Company's outstanding securities, except for any securities purchased by the
Bank's employee stock ownership plan or trust; or (b) individuals who constitute
the Board on the date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election was approved by a vote of
at least three-quarters of the directors comprising the Incumbent Board, or
whose nomination for election by the Company's stockholders was approved by the
same Nominating Committee serving under an Incumbent Board, shall be, for
purposes of this clause (b), considered as though he were a member of the
Incumbent Board; or (c) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Bank or the Company or similar
transaction in which the Bank or Company is not the surviving institution occurs
or is effected; or (d) a proxy statement soliciting proxies from stockholders of
the Company is distributed, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or similar transaction with one or more business
organizations as a result of which the outstanding shares of the class of
securities then subject to the plan are to be exchanged for or converted into
cash or property or securities not issued by the Company; or (e) a tender offer
is made for 25% or more of the voting securities of the Company and the
shareholders owning beneficially or of record 25% or more of the outstanding
securities of the Company have tendered or offered to sell their shares pursuant
to such tender offer and such tendered shares have been accepted by the tender
offeror.

     (b) INVOLUNTARY TERMINATION. "Involuntary Termination" of Executive shall
mean either (i) Executive's termination by the Bank, the Company or any
successor(s) thereto during the term of this Agreement and following a Change in
Control for any reason other than a Termination for Cause, Disability or death,
or (ii) Executive's resignation from employment following a Change in Control as
a result of the Company's (or any successor to the Company) failure to renew or
extend this Agreement for an additional twelve (12) months on the first
anniversary date of this Agreement immediately following a Change in Control, or
(iii) Executive's resignation of employment during the term of this Agreement
and following a Change in Control as a result of: any demotion, loss of title,
office, significant change in Executive's functions, duties or responsibilities,
which change would cause Executive's position to become one of lesser
importance, responsibility or scope from the position held immediately

                                       4

<PAGE>

prior to the Change in Control, reduction in Executive's annual compensation or
benefits, relocation of Executive's principal place of employment by more than
25 miles from its location immediately prior to the Change in Control, or
material breach of this Agreement by the Bank, the Company or its successor(s)
following a Change in Control. Upon the occurrence of any events described in
clauses (ii) or (iii) above, Executive shall have the right to elect to
terminate his employment under this Agreement by providing a Notice of
Termination within a period not to exceed ninety (90) days after the initial
event giving rise to said right to elect. Upon receiving such notice, the Bank
shall have at least thirty (30) days to remedy any condition set forth in clause
(ii) or (iii), provided, however, that the Bank shall be entitled to waive such
period and make an immediate payment hereunder. For purposes of this Section
3(b), "Involuntary Termination" shall be construed to require "Separation from
Service" as defined in Code Section 409A and the Treasury Regulations
promulgated thereunder, provided, however, that the Bank and Executive
reasonably anticipate that the level of bona-fide services Executive would
perform after termination would permanently decrease to a level that is less
than 50% of the average level of bona fide services performed (whether as an
employee or an independent contractor) over the immediately preceding 12-month
period.

     (c) TERMINATION FOR CAUSE. "Termination for Cause" shall mean termination
because of Executive's intentional failure to perform stated duties, personal
dishonesty, incompetence, willful misconduct, any breach of fiduciary duty
involving personal profit, willful violation of any law, rule, regulation (other
than traffic violations or similar offenses) or final cease and desist order, or
any material breach of any material provision of this Agreement. In determining
incompetence, the acts or omissions shall be measured against standards
generally prevailing in the savings institution industry. Notwithstanding the
foregoing, Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a copy of a resolution
duly adopted by the affirmative vote of not less than a majority of the members
of the Board at a meeting of the Board called and held for that purpose (after
reasonable notice to Executive and an opportunity for him, together with
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board, Executive was guilty of conduct justifying Termination for Cause
and specifying the particulars thereof in detail. Executive shall not have the
right to receive compensation or other benefits for any period after Termination
for Cause.

     (d) DISABILITY. "Disability" shall mean Executive's inability to perform
duties normally associated with his position on a full-time basis for a period a
six consecutive months by reason of illness or other physical or mental
disability. The Bank or the Company may require a physician's written
confirmation that Executive cannot perform his duties because of Executive's
Disability.

4.   NOTICE OF TERMINATION

     (a) Any termination by the Bank or by Executive shall be communicated by
Notice of Termination to the other party hereto. For purposes of this Agreement,
a "Notice of Termination" shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated. Any
termination by Executive as a result of an Involuntary Termination under Section

                                       5

<PAGE>

3(b)(ii) or (iii) hereof shall be communicated by Notice of Termination to the
Company within ninety (90) days of the event giving rise to the Involuntary
Termination.

     (b) "Date of Termination" shall mean (A) if Executive's employment is
terminated for Disability, thirty (30) days after a Notice of Termination is
given (provided that Executive shall not have returned to the performance of
Executive's duties on a full-time basis during such thirty (30) day period), (B)
any termination of by Executive as a result of an Involuntary Termination as set
forth in Section 3(b)(ii) or (iii), thirty (30) days after a Notice of
Termination is given unless the Bank waives its right to cure and agrees to the
Involuntary Termination, and (C) if Executive's employment is terminated for any
other reason, the date specified in the Notice of Termination (which, in the
case of a Termination for Cause, shall be immediate). In no event shall the Date
of Termination exceed thirty (30) days from the date Notice of Termination is
given.

5.   SOURCE OF PAYMENTS

     It is intended by the parties hereto that all payments provided in this
Agreement shall be paid in cash or check from the general funds of the Bank. The
Company, however, guarantees payment and provision of all amounts and benefits
due hereunder to Executive and, if such amounts and benefits due from the Bank
are not timely paid or provided by the Bank, such amounts and benefits shall be
paid or provided by the Company.

6.   EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFIT PLANS

     This Agreement contains the entire understanding between the parties hereto
and supersedes any prior agreement between the Bank and Executive, except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to Executive of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that Executive is subject to receiving
fewer benefits than those available to him without reference to this Agreement.

7.   NO ATTACHMENT

     (a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

     (b) This Agreement shall be binding upon, and inure to the benefit of,
Executive, the Bank and their respective successors and assigns.

8.   MODIFICATION AND WAIVER

     (a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.

                                       6

<PAGE>

     (b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.

9.   REQUIRED PROVISIONS

     (a) The Bank may terminate Executive's employment at any time. Any
termination of Executive, however, shall be subject to the terms and conditions
of this Agreement. Executive shall not have the right to receive compensation or
other benefits for any period after Termination for Cause as defined herein.

     (b) If Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section 8(e)(3) (12 USC Section 1818(e)(3)) or 8(g) (12 USC Section 1818(g)) of
the Federal Deposit Insurance Act (the "FDI Act"), the Bank's obligations under
this Agreement shall be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the Bank
may in its discretion (i) pay Executive all or part of the compensation withheld
while their contract obligations were suspended and (ii) reinstate (in whole or
in part) any of the obligations which were suspended.

     (c) If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e) (12 USC Section 1818(e)) or 8(g) (12 USC Section 1818(g)) of the
FDI Act, all obligations of the Bank under this Agreement shall terminate as of
the effective date of the order, but vested rights of the contracting parties
shall not be affected.

     (d) If the Bank is in default, as defined in Section 3(x) (12 USC Section
1813(x)(1)) of the FDI Act, all obligations of the Bank under this contract
shall terminate as of the date of default, but this paragraph shall not affect
any vested rights of the contracting parties.

     (e) All obligations of the Bank under this contract shall be terminated,
except to the extent determined that continuation of the contract is necessary
for the continued operation of the 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 the Bank under the authority contained in Section
13(c) (12 USC Section 1823(c)) of the FDI Act; or (ii) when the Bank is
determined by the FDIC 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.

     (f) Notwithstanding anything herein contained to the contrary, any payments
to Executive by the Bank, whether pursuant to this Agreement or otherwise, are
subject to and conditioned upon their compliance with Section 18(k) of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations
promulgated thereunder in 12 C.F.R. Part 359.

                                       7

<PAGE>

10.  SEVERABILITY

     If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision, and part thereof, shall, to the full extent consistent
with law, continue in full force and effect.

11.  HEADINGS FOR REFERENCE ONLY

     The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

12.  GOVERNING LAW

     The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Michigan, unless
superseded or preempted by Federal law as now or hereafter in effect.

     Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a single
arbitrator selected by the Bank and Executive and sitting in a location selected
by Executive within fifty (50) miles from the location of the Bank, in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.

13.  PAYMENT OF LEGAL FEES

     All reasonable legal fees paid or incurred by Executive pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the Bank if Executive is successful on the merits pursuant to a
legal judgment, arbitration or settlement, and that such payment or
reimbursement shall occur no later than two and one-half months after the
dispute is settled or resolved in Executive's favor.

14.  SUCCESSOR TO THE BANK

     The Bank shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank, expressly and
unconditionally to assume and agree to perform the Bank's obligations under this
Agreement, in the same manner and to the same extent that the Bank would be
required to perform if no such succession or assignment had taken place.

                                       8

<PAGE>

15.  SIGNATURES

     IN WITNESS WHEREOF, the Bank and the Company have caused this Agreement to
be executed by their duly authorized officer or director, and Executive has
executed this Agreement, on the day and date first above written.

ATTEST:                                 FIRST FEDERAL OF NORTHERN MICHIGAN

/s/ Sharon R. Kirby                     By: /s/ James C. Rapin
-------------------------------------       ------------------------------------
Sharon R. Kirby                         Name: James C. Rapin
Office Services Manager                 Title: Chairman

ATTEST:                                 FIRST FEDERAL OF NORTHERN MICHIGAN
                                        BANCORP, INC.

/s/ Sharon R. Kirby                     By: /s/ James C. Rapin
-------------------------------------       ------------------------------------
Sharon R. Kirby                         Name: James C. Rapin
Office Services Manager                 Title: Chairman

WITNESS:                                EXECUTIVE

/s/ Sharon R. Kirby                     By: /s/ Michael W. Mahler
-------------------------------------       ------------------------------------
Sharon R. Kirby                         Name: Michael W. Mahler
Office Services Manager                 Title: President

                                       9

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