Change In Control Agreement

EXHIBIT 10.1


CHANGE IN CONTROL AGREEMENT


This AGREEMENT is made effective as of ______________ __, 2005 by and between FIRST FEDERAL OF NORTHERN MICHIGAN, a federally chartered stock savings bank (the "Bank"), and ___________________ ("Executive"). Any reference to "Company" herein shall mean First Federal of Northern Michigan Bancorp, Inc., or any successor thereto.


WHEREAS, the Bank recognizes the substantial contribution Executive has made to the Bank and wishes to provide Executive with certain protections and benefits in the event of a Change in Control of the Bank or the Company, as provided in this Agreement; and


WHEREAS, Executive has been elected to, and has agreed to serve in the position of _____________________ for the Bank, a position of substantial responsibility;


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. Commencing on the first anniversary date of this Agreement and continuing on each anniversary date thereafter, this Agreement shall renew for an additional twelve (12) months, such that the remaining term shall be thirty-six (36) months unless a written notice of non-renewal is provided to Executive at least thirty (30) days and not more than sixty (60) days prior to such anniversary date. In the event this Agreement is not renewed on an anniversary date, the remaining term of this Agreement shall be twenty-four (24) months. Prior to each notice period for non-renewal, the Board will conduct a performance evaluation and review of Executive for purposes of determining whether to extend this Agreement, and the results thereof shall be included in the minutes of the Board's meeting. If 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. Notwithstanding anything herein to the contrary, in the event of a Change in Control during the term of this Agreement, the term of this Agreement shall automatically become a period of thirty-six (36) months following the effective date of such Change in Control.


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 Voluntary Termination of Executive's employment or 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) as 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.


(ii) life, 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. Such
coverage and payments shall cease upon expiration of
twenty-four (24) months.


(iii) within sixty (60) days (or within such shorter period to
the extent that information can be reasonably be
obtained) following Executive's 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 his actual date of termination and
as if such benefits were payable beginning on the first
day of the month coincident with or next following his
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 his
termination, where such present values are to be
determined using a discount rate of 6% and the mortality
tables prescribed under Section 72 of the Internal
Revenue Code of 1986 ("Code");


(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) At the election of Executive, which election is to be made on an annual basis during the month of January, and which election is irrevocable for the year in which made and upon the occurrence of a Voluntary Termination or Involuntary Termination of Executive, any cash severance payments shall be made in a lump sum, or paid bi-weekly during the remaining term of this Agreement. In the event no such election is made, payment hereunder shall be in a lump sum.


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


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(e) 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.


(f) 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. 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 Cont ...