Form of Supplemental Executive Retirement Plan Agreement between First Northern Bank of Dixon and Jeremiah Z. Smith, Senior Executive Vice President and Chief Operating Officer

1.1

Change-in-Control. "Change-in-Control" means the first to occur of any of the following events:

(c)

Change in Board Composition -During any period of two consecutive years, individuals who constitute First Northern Community Bancorp's Board of Directors at the beginning of the two-year period cease for any reason to constitute at least a majority of First Northern Community Bancorp's Board of Directors; provided, however, that - for purposes of this clause (c) - each director who is first elected by the board (or first nominated by the board for

1.2

Good Reason. "Good Reason" shall be defined as any of the following:

(a)

A material reduction in the Executive's title or responsibilities; or

(b)

A reduction in base salary as in effect on the date of Change in Control; or

(c)

The relocation of the Executive's principal executive office so that Executive's one-way commute distance from Executive's residence is increased by more than forty (40) miles; or

(d)

The adverse and substantial alternation in the nature and quality of the office space within which the Executive performs duties on behalf of the Company, including the size and location thereof, as well as the secretarial and administrative support provided to the Executive; or

(e)

The failure by the Company to continue to provide the Executive with compensation and benefits substantially similar to those provided under any of the employee benefit plans in which the Executive becomes a participant, or the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed at the time of Change in Control; or

(f)

The failure of the Company to obtain a satisfactory agreement from any successor or assign of the Company to assume and agree to perform this Agreement.

2.1

Amendments Following a Change in Control -If the Executive's employment with the Bank terminates within 24 months after any Change in Control or in the event the Executive terminates employment voluntarily for Good Reason within 24 months after any Change-in-Control, the following benefit shall be payable to the Executive in lieu of any other benefits payable under the Plan:

1.

A lump sum payment Actuarially Equivalent to the benefit determined under Section

2.

2.2

One Benefit Only. Despite anything to the contrary in the Plan or in this Participation Agreement, the Executive and Beneficiary are entitled to one benefit only, which shall be determined by the first event to occur that is dealt with by the Plan and this Participation Agreement. Subsequent occurrence of events dealt with by the Plan and this Participation Agreement shall not entitle the Executive or Beneficiary to other or additional benefits under the Plan or this Participation Agreement.

2.3

Amendment of Death Benefit.  If the Executive dies while actively employed and before the attainment of Normal Retirement Age, the benefit payable to the Executive's beneficiary shall be the greater of (1) and

(2)

below:

(I)

$10,000 per month paid each month for 120 months plus 6 months for each full year of Service over 10 years (limited to 180 months total). This benefit shall be limited in present value to the net amount at risk of all insurance policies owned by First Northern Bank as of the Executive's date of death on the life of the Executive and under which First Northern Bank is the sole beneficiary. This present value limitation shall be determined using a 5% discount rate.

3.1

Amendments and Termination. This Participation Agreement may be amended or terminated only by a written agreement signed by the Bank and the Executive. For the purpose of determining benefits for the Executive, any amendment or termination of the Plan shall be effective for the Executive only by a written agreement signed by the Company and the Executive. However, the Executive and Company agree that the Company, in its sole discretion, may amend the Plan and this Participation Agreement to reduce the impact on the Company's earnings of any changes made by the Financial Accounting Standards Board to pension accounting standards. The Company may change the manner of benefit accrual for the Executive if, in the opinion of the Company, the changes to the Plan and this Participation Agreement produce an expense recognition pattern closer to the pattern of expense recognition expected prior to the change in accounting standards. In no event will the benefit provided to the Executive at Normal Retirement Age be reduced.

3.2

Binding Effect. This Participation Agreement shall bind the Executive and the Company, and their beneficiaries, survivors, executors, successors, administrators and trustees.

3.3

Agreement To Insure. The Company may, in its sole discretion, decide to purchase a life insurance policy or policies on the life of the Executive in order to informally fund or otherwise offset the costs incurred by the Plan. The Executive agrees to complete all forms and undergo any insurance underwriting that the Company may request from time to time during the Executive's active employment. In addition, the Executive hereby acknowledges that the Executive, Beneficiaries, or the Executive's estate hold no claim to any part of the value of or rights provided by such policies.