Exhibit 10.4
                           FLAG FINANCIAL CORPORATION
                           CHANGE IN CONTROL AGREEMENT


     THIS  AGREEMENT  (the  "Agreement")  is  made  as  of January 13, 2003 (the
"Effective  Date")  by  and between STEPHEN W. DOUGHTY (the "Employee") and FLAG
FINANCIAL  CORPORATION,  a  Georgia  corporation  (the  "Company").

     WHEREAS,  the  Employee  is  currently  employed  by  the  Company;  and

     WHEREAS,  the  Company  desires  to  continue to employ the Employee and to
enter  into  an  agreement  to provide benefits to the Employee upon a Change in
Control  (as  defined  below)  of  the  Company.

     NOW,  THEREFORE, in consideration of the mutual covenants herein contained,
the  parties  agree  as  follows:

     1.     DEFINITIONS.  For  purposes  of  this Agreement, the following terms
            -----------
and  conditions  shall  have  the  meanings  set  forth  in  this  Section  1:

          (a)     "Area"  means  the  geographic  area  within the boundaries of
                   ----
     Fulton  County,  Georgia.  It is the express intent of the parties that the
     Area  as defined herein is the area where the Employee performs services on
     behalf  of  the  Company  and  its  affiliates  as  of  the Effective Date.

          (b)     "Board  of  Directors"  means  the  Board  of Directors of the
                   --------------------
     Company.

          (c)     "Business  of the Company" means the business conducted by the
                   ------------------------
     Company  and its affiliates which is the business of banking, including the
     solicitation  of  time  and  demand deposits and the making of residential,
     consumer,  commercial  and  corporate  loans.

          (d)     "Cause"  means  the occurrence of any of the following events:
                   -----
     (i)  conduct  by  the  Employee  that  constitutes fraud, dishonesty, gross
     malfeasance  of  duty  or  conduct grossly inappropriate for the Employee's
     position  with  the  Company;  (ii)  conduct  by  the  Employee  that  is
     demonstrably  likely  to lead to material injury to the Company or resulted
     or  was  intended  to  result  in  direct  or  indirect gain to or personal
     enrichment  of  the  Employee; (iii) conduct resulting in the conviction of
     the  Employee of a felony; and (iv) conduct by the Employee that results in
     the permanent removal of the Employee from his position as an officer or an
     employee  of the Company or any of its affiliates pursuant to written order
     by  any  regulatory agency with authority and jurisdiction over the Company
     or  its  affiliates,  as  the  case  may  be.

          (e)     "Change  in  Control"  means  the  occurrence  of  any  of the
                   -------------------
     following  events  on  or  after  the  Effective  Date:


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               (i)     the  acquisition  by  any  person  or  persons  acting in
          concert  of the then outstanding voting securities of the Company, if,
          after  the  transaction,  the  acquiring  person  (or  persons)  owns,
          controls  or  holds  with  power to vote more than twenty-five percent
          (25%)  of  any  class  of  voting  securities  of  the  Company;

               (ii)     within  any  twelve-month  period (beginning on or after
          the  Effective Date) the persons who constitute the Board of Directors
          immediately  before  such  twelve-month  period  (the  "Incumbent
          Directors")  cease for any reason to constitute at least a majority of
          the  Board of Directors; provided, however, that any person becoming a
          director  subsequent  to  the  Effective Date shall be deemed to be an
          Incumbent  Director  if  that  director  was  elected to such board of
          directors  by, or on the recommendation of or with the approval of, at
          least  two-thirds  (2/3)  of  the  directors  who  then  qualified  as
          Incumbent  Directors;  and  provided  further  that  no director whose
          initial  assumption  of  office  is  in  connection  with an actual or
          threatened  election  contest  relating  to  the election of directors
          shall  be  deemed  an  Incumbent  Director;

               (iii)     the  approval  by  the stockholders of the Company of a
          reorganization, merger or consolidation, with respect to which persons
          who  were  the  stockholders  of the Company immediately prior to such
          reorganization,  merger  or  consolidation  do  not,  immediately
          thereafter,  own  more than fifty percent (50%) of the combined voting
          power  entitled  to  vote  in  the  election  of  directors  of  the
          reorganized,  merged or consolidated company's then outstanding voting
          securities;  or

               (iv)     the sale, transfer or assignment of all or substantially
          all  of  the  assets  of the Company and its subsidiaries to any third
          party.

     A Change in Control with respect to which the Employee is offered, no later
than  the effective date of the Change in Control, a position with the surviving
company  which  is  commensurate  in status and compensation with the Employee's
position  with the Company immediately prior to the effective date of the Change
in  Control  shall be referred to in this Agreement as a "Satisfactory Change in
Control."  A  Change  in  Control  with  respect  to  which  the Employee is not
offered,  by  the  effective  date of the Change in Control, a position with the
surviving  company  which  is  commensurate  in status and compensation with the
Employee's  position with the Company immediately prior to the effective date of
the  Change  in  Control  shall  be  referred  to  in  this  Agreement  as  an
"Unsatisfactory  Change  in  Control."

          (f)     "Confidential Information" means data and information relating
                   ------------------------
     to  the  business  of  the  Company (which does not rise to the status of a
     Trade  Secret)  which  is or has been disclosed to the Employee or of which
     the  Employee  became aware as a consequence of or through its relationship
     to  the  Company  and  which  has value to the Company and is not generally
     known  to  its  competitors.  Without  limiting the foregoing, Confidential
     Information  shall  include  the  following:

               (i)  all items of information that could be classified as a trade
          secret  pursuant  to  Georgia  law;


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               (ii)  the  names,  addresses  and  banking  requirements  of  the
          customers  of  the  Company and its bank affiliates and the nature and
          amount  of  business  done  with  such  customers;

               (iii)  the  names  and  addresses of employees and other business
          contacts  of  the  Company  and  its  affiliates;

               (iv) the particular names, methods and procedures utilized by the
          Company  and  its  affiliates  in the conduct and advertising of their
          business;

               (v)  the  applications, operating system, communication and other
          computer  software  and  derivatives  thereof,  including,  without
          limitation,  sources  and  object  codes,  flow charts, coding sheets,
          routines,  subrouting  and  related  documentation  and manuals of the
          Company  and  its  affiliates;  and

               (vi)  marketing  techniques,  purchasing  information,  pricing
          policies,  loan  policies,  quoting procedures, financial information,
          customer  data  and  other  materials  or  information relating to the
          Company's  and  its  affiliates'  manner  of  doing  business.

     Confidential Information shall not include any data or information that has
     been  voluntarily disclosed to the public by the Company (except where such
     public  disclosure  has been made by the Employee without authorization) or
     that  has  been  independently  developed  and disclosed by others, or that
     otherwise  enters  the  public  domain  through  lawful  means.

          (g) "Disability" means a condition for which benefits would be payable
               ----------
     under  any long-term disability coverage (without regard to the application
     of any elimination period requirement) then provided to the Employee by the
     Company  or,  if  no such coverage is then being provided, the inability of
     the  Employee  to  perform the material aspects of the Employee's duties of
     employment  for  a  period of at least one hundred eighty (180) consecutive
     days  as  certified  by  a  physician chosen by the Employee and reasonably
     acceptable  to  the  Company.

          (h)  "Fair  Market  Value"  with  regard  to  a  date  means:
                -------------------

               (i) the price at which the Company's common stock shall have been
          sold  on  that  date  or  the  last trading date prior to that date as
          reported  by  the  national securities exchange on which the shares of
          the Company's common stock are then actively traded or, if applicable,
          as  reported  by  the  NASDAQ  Stock  Market;

               (ii)  if  such  market  information is not published on a regular
          basis, the price of the Company's common stock in the over-the-counter


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          market  on  that  date  or the last business day prior to that date as
          reported  by  the  NASDAQ  Stock  Market  or, if not so reported, by a
          generally  accepted  reporting  service;  or

               (iii)  if  the  Company's common stock is not publicly traded, as
          determined  in  good  faith  by  the  Board  of  Directors  with  due
          consideration being given to (A) the most recent independent appraisal
          of  the Company, if such appraisal is not more than twelve (12) months
          old  and  (B)  the  valuation  methodology used in any such appraisal.

               For  purposes  of Paragraphs (i), (ii), or (iii) above, the Board
          of  Directors may use the closing price as of the applicable date, the
          average  of the high and low prices as of the applicable date or for a
          period  certain  ending on such date, the price determined at the time
          the transaction is processed, the tender offer price for shares of the
          Company's  common  stock,  or  any  other  method  which  the Board of
          Directors  determines  is  reasonably  indicative  of  the fair market
          value.

          (i)  "Good Reason" means the occurrence of any of the following events
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     which occur three (3) months before or twelve (12) months after a Change in
     Control  and  which is not corrected by the Company within thirty (30) days
     after  the  Employee's  written  notice  to  the Company of the same: (i) a
     material diminution in the powers, responsibilities, duties, base salary or
     bonus  opportunity  of  the  Employee  by the Company; (ii) a change by the
     Company  of the location of the Employee's place of employment to more than
     fifty  (50)  miles from its present location; (iii) removal of the Employee
     from  the Board of Directors (or the board of directors of any successor to
     the  Company) without Cause; (iv) the failure of the Board of Directors (or
     the  board  of  directors  of any successor to the Company) to nominate the
     Employee  for  re-election to such board of directors or the failure of the
     shareholders  of  the Company (or any successor to the Company) to re-elect
     the  Employee  to  such board of directors; or (v) a material breach by the
     Company  of  any  employment  agreement  by and between the Company and the
     Employee,  if  any,  then  in  effect.

          (j)  "Trade  Secrets"  means  information,  without  regard  to  form,
                --------------
     including,  but  not  limited to, technical or nontechnical data, formulas,
     patterns,  compilations,  programs, devices, methods, techniques, drawings,
     processes,  financial  data,  financial  plans,  product  plans or lists of
     actual  or  potential  customers  or  suppliers  which (i) derives economic
     value,  actual  or  potential,  from  not being generally known to, and not
     being  readily  ascertainable  by  proper  means  by, other persons who can
     obtain  economic  value from its disclosure or use, and (ii) is the subject
     of  efforts  that  are  reasonable  under the circumstances to maintain its
     secrecy.

     2.     TERM.  The  term  of  this  Agreement  (the  "Term")  shall  become
            ----
effective  as of the Effective Date and shall remain in effect until the earlier
of  (a)  twelve (12) months following a Change in Control or (b) the third (3rd)
anniversary  of the Effective Date.  While this Agreement remains in effect, the
Term,  as defined by Section 2(b) above shall automatically renew each day after
the  Effective Date such that the Term remains a three-year term from day-to-day
thereafter  unless  either party gives written notice to the other of its or his


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intent  that  the automatic renewals shall cease or the Term expires pursuant to
Section  2(a)  hereof.  In  the  event  notice  of non-renewal is properly given
pursuant  to Section 2(b) hereof, the Agreement and the Term shall expire on the
third  (3rd)  anniversary  of  the  thirtieth (30th) day following the date such
written  notice  is received, unless the Term expires earlier in accordance with
Section  2(a).

     3.     CHANGE  IN  CONTROL  BENEFITS.
            -----------------------------

          (a)  If,  within  three (3) months before or within twelve (12) months
     following an Unsatisfactory Change in Control, the Employee's employment is
     involuntarily  terminated by the Company without Cause or terminated by the
     Employee  for  Good  Reason  no  later  than  three  (3)  months  after the
     occurrence  of the most recent event constituting Good Reason (but no later
     than  twelve  (12)  months following the Unsatisfactory Change in Control),
     the  Company  shall  pay  to the Employee, in a lump sum payment, an amount
     equal  to  three (3) times the sum of (i) the Employee's annual base salary
     in  effect  at  the  time of termination of employment and (ii) the largest
     annual  bonus  amount  paid  to  the Employee within the three (3) calendar
     years preceding the calendar year in which occurs the Unsatisfactory Change
     in Control. In addition to the payment described in the preceding sentence,
     the  Company shall pay to the Employee an amount equal to what would be the
     Employee's  cost  of COBRA health continuation coverage for himself and his
     eligible  dependents  from the Company for the period in which the Employee
     would  be  eligible  to receive COBRA health continuation coverage from the
     Company.  A  termination  of  the Employee's employment due to his death or
     Disability  will  not  be  deemed  to  be  an  involuntary  termination  of
     employment  by  the  Company without Cause or a termination by the Employee
     for  Good Reason. Any payment due and owing under this Subsection (a) shall
     be  payable  as soon as practicable following the Employee's termination of
     employment.

          (b)  If no benefits are payable to the Employee pursuant to Subsection
     (a),  the Employee may be eligible for benefits pursuant to this Subsection
     (b).  In the event of a Satisfactory Change in Control the Employee will be
     eligible  for  the  following  benefits:

               (i) If, within thirty (30) days following the Satisfactory Change
          in  Control,  the  Fair  Market  Value  of  the Company's common stock
          increases  by  at  least  twenty-five percent (25%) as compared to its
          Fair  Market  Value determined as of the day immediately preceding the
          date  on  which the first public dissemination of the transaction that
          will  result  in the Satisfactory Change in Control, the Company shall
          pay to the Employee, in a lump sum payment, an amount equal to the sum
          of  (A)  the  Employee's  annual  base salary in effect at the time of
          termination of employment and (B) the largest annual bonus amount paid
          to  the  Employee  within  the  three (3) calendar years preceding the
          calendar  year in which occurs the Satisfactory Change in Control. Any
          payment  due  and  owing under this Subsection (b)(i) shall be payable
          within sixty (60) days following the date such payment becomes due and
          owing;  and

               (ii)  If,  within  twelve  (12)  months  following a Satisfactory
          Change  in  Control in which the Executive accepts employment with the


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          surviving  corporation,  the  Employee  terminates  employment for any
          reason  (other  than due to death or Disability) with no less than six
          (6) months written notice, the Company shall pay to the Employee, in a
          lump  sum payment, an amount equal to two (2) times the sum of (A) the
          Employee's  annual base salary in effect at the time of termination of
          employment  and  (B)  the  largest  annual  bonus  amount  paid to the
          Employee  within  the  three (3) calendar years preceding the calendar
          year  in which occurs the Satisfactory Change in Control. In the event
          the  Executive  is entitled to the payment described in Subsection (i)
          above,  any  payment  under this Subsection (ii) shall be equal to one
          (1)  times  the sum of (A) and (B) described above. In addition to the
          payment  described  in  this Subsection (ii), the Company shall pay to
          the  Employee  an amount equal to what would be the Employee's cost of
          COBRA  health  continuation  coverage  for  himself  and  his eligible
          dependents  from  the  Company  for  lesser of the period in which the
          Employee  would  be  eligible  to  receive  COBRA  health continuation
          coverage  from  the  Company  or  twelve (12) months. Any payment made
          pursuant  to  this  Subsection  (b)(ii)  shall  be  payable as soon as
          practicable  following  the  Employee's  termination  of  employment.

               (iii)  In  the event of a Satisfactory Change in Control in which
          the  Executive  does  not  accept  employment  with  the  surviving
          corporation,  the  Company  shall  pay  to the Employee, in a lump sum
          payment,  an  amount  equal  to  two  (2)  times  the  sum  of (A) the
          Employee's  annual base salary in effect at the time of termination of
          employment  and  (B)  the  largest  annual  bonus  amount  paid to the
          Employee  within  the  three (3) calendar years preceding the calendar
          year  in which occurs the Satisfactory Change in Control. In the event
          the  Executive  is entitled to the payment described in Subsection (i)
          above,  any  payment under this Subsection (iii) shall be equal to one
          (1)  times  the sum of (A) and (B) described above. In addition to the
          payment  described  in this Subsection (iii), the Company shall pay to
          the  Employee  an amount equal to what would be the Employee's cost of
          COBRA  health  continuation  coverage  for  himself  and  his eligible
          dependents  from  the  Company  for  lesser of the period in which the
          Employee  would  be  eligible  to  receive  COBRA  health continuation
          coverage  from  the  Company.  Any  payment  made  pursuant  to  this
          Subsection  (b)(iii) shall be payable as soon as practicable following
          the  Employee's  termination  of  employment.

The  payments  described  in this Section 3 shall be collectively referred to in
this  Agreement  as  "Change  in  Control  Benefits".

     (c)     The  Company  shall  be entitled to withhold appropriate employment
and  income taxes from the Change in Control Benefits, if required by applicable
law.

     (d)     In no event shall the payment(s) described in this Section 3 exceed
the  amount  permitted  by Section 280G of the Internal Revenue Code, as amended
(the  "Code").  Therefore,  if the aggregate present value (determined as of the
date  of the Change in Control in accordance with the provisions of Section 280G
of the Code) of both the payments under this Agreement and all other payments to
the  Employee  in the nature of compensation which are contingent on a change in


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ownership  or  effective  control  of  the  Company  or  in  the  ownership of a
substantial  portion  of  the  assets of the Company (the "Aggregate Severance")
would  result  in  a  "parachute  payment," as defined under Section 280G of the
Code,  then the Aggregate Severance shall not be greater than an amount equal to
2.99  multiplied  by  Employee's  "base  amount" for the "base period," as those
terms  are  defined under Section 280G.  In the event the Aggregate Severance is
required  to  be  reduced  pursuant  to  this  Section  3, the Employee shall be
entitled  to  determine  which  portions  of  the  Aggregate Severance are to be
reduced  so  that  the  Aggregate Severance satisfies the limit set forth in the
preceding  sentence.

     4.     TERMINATION.  This Agreement shall terminate upon the earlier of (a)
            -----------
the  expiration  of  the  Term;  or  (b)  full  payment of any Change in Control
Benefits  that  becomes  due  in  accordance  with  Section  3.

     5.     CONFIDENTIALITY.
            ---------------

          (a)  All  Confidential  Information and Trade Secrets and all physical
     embodiments thereof received or developed by the Employee while employed by
     the  Company  are  confidential  to  and  are  and will remain the sole and
     exclusive  property  of  the  Company.  Except  to  the extent necessary to
     perform  the  duties assigned to him by the Company, the Employee will hold
     such  Confidential  Information  and  Trade  Secrets in trust and strictest
     confidence,  and will not use, reproduce, distribute, disclose or otherwise
     disseminate  the Confidential Information and Trade Secrets or any physical
     embodiments  thereof and may in no event take any action causing or fail to
     take  the  action  necessary  to  prevent, any Confidential Information and
     Trade  Secrets  disclosed  to  or  developed  by  the  Employee to lose its
     character or cease to qualify as Confidential Information or Trade Secrets.

          (b)  The  covenants  of  confidentiality  set  forth herein will apply
     during  the  term  of  the  Employee's  employment  to  any  Confidential
     Information  and Trade Secrets disclosed by the Company or developed by the
     Employee  prior  to or after the date hereof. The covenants restricting the
     use  of  Confidential  Information  will  continue and be maintained by the
     Employee  for  a period of twelve (12) months following termination of this
     Agreement. The covenants restricting the use of Trade Secrets will continue
     and  be  maintained by the Employee following termination of this Agreement
     for  so  long as permitted by the then-current Georgia Trade Secrets Act of
     1990,  O.C.G.A.  Sec.  10-1-760,  et.  seq.

     6.     NONCOMPETITION.  In  the  event  that  the  Employee  is entitled to
            --------------
receive the Change in Control Benefits under this Agreement, the Employee agrees
that, for twelve (12) months following the Employee's termination of employment,
the  Employee will not (except on behalf of or with the prior written consent of
the  Company), within the Area, either directly or indirectly, on his own behalf
or  in  the  service  or  on  behalf  of  others, as an employee or in any other
capacity  which involves duties and responsibilities similar to those undertaken
for  the Company, engage in any business which is the same as or essentially the
same  as  the  Business  of  the  Company.


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     7.     NONSOLICITATION.  In  the  event  that  the  Employee is entitled to
            ---------------
receive the Change in Control Benefits under this Agreement, the Employee agrees
that, for twelve (12) months following the Employee's termination of employment:

          (a)  the  Employee  will  not  (except  on behalf of or with the prior
     written  consent  of  the  Company), on the Employee's own behalf or in the
     service  or  on behalf of others, solicit, divert or appropriate or attempt
     to  solicit,  divert  or  appropriate, directly or by assisting others, any
     business  from  any  of  the  customers  of  the Company or its affiliates,
     including actively sought prospective customers, with whom the Employee has
     or  had  material  contact  during the last two (2) years of the Employee's
     employment,  for  purposes  of  providing  products  or  services  that are
     competitive  with  those  provided  by  the Company and its affiliates; and

          (b)  the  Employee  will  not  on  the Employee's own behalf or in the
     service or on behalf of others, solicit, recruit or hire away or attempt to
     solicit,  recruit  or  hire  away,  directly  or  by  assisting others, any
     employee  of the Company or its affiliates, whether or not such employee is
     a  full-time  employee  or  a  temporary  employee  of  the  Company or its
     affiliates  and  whether  or  not  such employment is pursuant to a written
     agreement  and whether or not such employment is for a determined period or
     is  at  will.

     8.     REMEDIES.  The  Employee  agrees  that,  in addition to all remedies
            --------
provided  by  law  or  in  equity,  the  Company  shall  be entitled to specific
performance of this Agreement and to both temporary and permanent injunctions to
prevent  a  breach  or  contemplated  breach by the Employee of the covenants in
Sections  5,  6 and 7 hereof.  If the Employee breaches his obligations pursuant
to  Sections 5, 6 or 7 hereof, the Employee will forfeit any amounts owed to the
Employee  under  Section  3  hereof  which  have  not been paid to the Employee.

     9.     NO  MITIGATION.  No  amounts  or  benefits  payable  to the Employee
            --------------
hereunder  shall be subject to mitigation or reduction by income or benefits the
Employee  receives  from  other  sources.

     10.     CONTINUED  EMPLOYMENT.  Nothing  herein  shall  entitle Employee to
             ---------------------
continued  employment  with  the  Company or to continued tenure in any specific
office  or  position.  The  Employee's  employment  with  the  Company  shall be
terminable  at  the  will  of  the  Company,  with  or  without  Cause.

     11.     ASSIGNMENT.  The  rights  and obligations of the Company under this
             ----------
Agreement  shall  inure  to the benefit of the Company's successors and assigns.
This  Agreement  may  be  assigned  by the Company to any legal successor of the
Company  or  to an entity which purchases all or substantially all of the assets
of the Company.  In the event the Company assigns this Agreement as permitted by
this  Agreement and the Employee remains employed by the assignee, the "Company"
as defined herein will refer to the assignee and the Employee will not be deemed
to have terminated employment hereunder until the Employee terminates employment
from  the  assignee.


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<PAGE>
12.     ARBITRATION.  Any  controversy  or  claim  arising out of or relating to
        -----------
this  Agreement,  or  the  breach  thereof, shall be adjudicated through binding
arbitration  before  a  single  arbitrator  in  accordance  with  the Commercial
Arbitration  Rules of the American Arbitration Association.  The Company and the
Employee  agree  that  they  will  seek  to enforce any arbitration award in the
Superior Court of Fulton County.  The decision of the arbitration panel shall be
final  and  binding upon the parties and judgment upon the award rendered by the
arbitration  panel may be entered by any court having jurisdiction.  The Company
and  the  Employee  agree to share equally the fees and expenses associated with
the  arbitration  proceedings.

13.     ATTORNEYS'  FEES.  With  respect  to  arbitration  of  disputes  and  if
        ----------------
litigation  ensues  between  the  parties  concerning  the  enforcement  of  an
arbitration award and the Employee prevails in the dispute, the Company will pay
and  be  financially  responsible for all costs, expenses, reasonable attorneys'
fees  and reasonable expenses incurred by the Employee (or the Employee's estate
in  the  event  of  his  death)  in  connection  with  the  dispute.

     14.     NOTICE.  All  notices,  consents,  waivers and other communications
             ------
required  or permitted by this Agreement shall be in writing and shall be deemed
given  to  a  party  when (a) delivered to the appropriate address by hand or by
nationally  recognized  overnight  courier  service (costs prepaid); (b) sent by
facsimile  with  confirmation  of transmission by the transmitting equipment; or
(c)  received  or  rejected  by the addressee, if sent by certified mail, return
receipt  requested, in each case to the following addresses or facsimile numbers
and  marked  to  the attention of the person (by name or title) designated below
(or  to  such other address, facsimile number or person as a party may designate
by  written  notice  to  the  other  parties):

If to the Company, to the Company at:     FLAG  Financial  Corporation
                                          Attention:  Joe  Evans
                                          Suite  550
                                          3475  Piedmont  Road,  NE
                                          Atlanta,  Georgia  30305
                                          Facsimile  Number:  404-760-7710

If to the Employee, to the Employee at:   9050 Old Southwick Pass
                                          Alpharetta, Georgia  30022

     15.     HEADINGS.  Sections  or  other  headings  contained  herein are for
             --------
reference  purposes  only  and  shall  not  affect  in  any  way  the meaning or
interpretation  of  this  Agreement.

     16.  ENTIRE  AGREEMENT.  This  Agreement  contains the entire understanding
          -----------------
of  the  parties  with  respect  to  the  subject  matter  hereof.

     17.  SEVERABILITY.  In the event that one or more of the provisions of this
          ------------
Agreement  shall  be or become invalid, illegal or unenforceable in any respect,
the  validity, legality and enforceability of the remaining provisions contained
herein  shall  not  be  affected  thereby.


                                      - 9 -
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     18.     GOVERNING  LAW.  To  the full extent controllable by stipulation of
             --------------
the parties, this Agreement shall be interpreted and enforced under Georgia law.

     19.     AMENDMENT.  This  Agreement  may  not  be  modified,  amended,
             ---------
supplemented or terminated except by a written agreement between the Company and
the  Employee.


     IN  WITNESS  WHEREOF, each of the parties has executed this Agreement as of
the  date  and  year  first  above  written.


                                           THE  COMPANY:

                                           FLAG FINANCIAL CORPORATION

                                           By:      /s/  Joseph W. Evans
                                                    --------------------

                                           Print Name:  Joseph W. Evans
                                                        ---------------

                                           Title:  Chairman and CEO
                                                   ----------------

                                           EMPLOYEE:

                                            /s/  Stephen W. Doughty
                                           -------------------------
                                           STEPHEN  W.  DOUGHTY


                                      - 10 -
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