EXHIBIT 10.1

                           FARMERS AND MERCHANTS BANK

                       1998 NONQUALIFIED STOCK OPTION PLAN

         THIS INDENTURE made this ____ day of ____________, 1998, by FARMERS AND
MERCHANTS BANK, a Georgia Banking corporation  organized and operating under the
laws of the state of Georgia (the "Bank").

         1.  Purpose.  This stock option plan (the "Plan") is for the purpose of
providing additional  incentives and motivation towards superior performance and
by enabling the Bank to attract and retain the services of key  employees,  upon
whose  judgment,  talents and special  efforts,  the  successful  conduct of its
operation is largely  dependent.  Options granted under the Plan are intended to
be nonqualified options which do not meet the requirements of Section 422 of the
Internal Revenue Code of 1986 (the "Code"). 2. Administration. The Plan shall be
administered by a committee (the "Committee"),  which shall consist of not fewer
than  three  (3)  members  of the  Board of  Directors  of the Bank who shall be
appointed by the Board.

         The members of the  Committee  shall serve at the pleasure of the Board
of Directors,  which may fill vacancies,  however caused, in the Committee.  The
Committee  shall select one of its members as a chairman and shall hold meetings
at the times and in the places as it shall  deem  advisable.  A majority  of the
members of the Committee shall constitute a quorum for purposes of issuing stock
options;  and all actions of the  Committee  shall be taken by a majority of its
members.  Any action of the Committee evidenced by a written instrument,  signed
by all of its members,  shall be fully as effective as if it had been taken by a
vote of a  majority  of its  members  at a meeting  duly  called  and held.  The
Committee shall make rules and regulations for the conduct of its business as it
shall deem advisable.

         Subject to the express provisions of the Plan, the Committee shall have
complete  authority,  in its  discretion,  to  determine  the  officers  and key
employees of the Bank to whom,  the times when,  and the prices at which options
shall be  granted;  the option  periods,

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and the  number of  shares  of the  common  stock of the Bank  ("Shares")  to be
subject to each  Option.  With  respect to each Option  granted  hereunder,  the
agreement  evidencing the grant of the Option shall  specifically state that the
Option is a Nonqualified Stock Option,  however, if no such designation is made,
such option shall be a Nonqualified Stock Option.


         The Committee  shall have complete  authority to interpret the Plan, to
prescribe, amend, and rescind rules and regulations relating to it, to determine
the  terms  and  provisions  of the  respective  stock  option  agreements  with
optionees  (which  terms  need  not  be  identical),   and  to  make  all  other
determinations  necessary or advisable for the  administration  of the Plan. The
Committee's  determinations  on the matters referred to in this section shall be
conclusive.

         In addition to any other rights of  indemnification  that they may have
as directors of the Bank or as members of the  Committee,  the  directors of the
Bank and members of the Committee  shall be  indemnified by the Bank against the
reasonable expenses, including attorneys' fees actually and necessarily incurred
in  connection  with  the  defense  of any  action,  suit or  proceeding,  or in
connection with any appeal therein,  to which they or any of them may be a party
by reason of action taken or failure to act under or in connection with the Plan
or any Option  granted  thereunder,  and  against  all  amounts  paid by them in
settlement  thereof  (provided the settlement is approved by  independent  legal
counsel  selected by the Bank) or paid by them in  satisfaction of a judgment in
any  action,  suit or  proceeding,  except in relation to matters as to which it
shall be adjudged in the action, suit or proceeding that the Committee member is
liable for negligence or misconduct in the  performance of his duties;  provided
that within 60 days after  institution  of any  action,  suit or  proceeding,  a
Committee  member shall in writing  offer the Bank the  opportunity,  at its own
expense, to handle and defend the same.

         3. Eligibility.  Options shall be granted to only those persons who are
officers  or key  employees  of the Bank.  In  determining  the  persons to whom
Options  will be granted and the number of shares to be covered by each  Option,
the Committee shall take into account the duties of the respective  officers and
key employees,  their present and potential  contributions to the success of the
Bank, the anticipated  number of years of effective service  remaining,  and any

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other factors as they shall deem relevant in connection with  accomplishing  the
purposes of the Plan.  Subject to the limits set forth in this Plan,  an officer
or key  employee  who has been  granted an Option  may be granted an  additional
Option or Options if the Committee shall so determine,  so that any optionee may
hold more than one Option, but only on the terms and subject to the restrictions
set forth herein.

         4. Stock Subject to Option.  An aggregate of eighteen thousand (18,000)
Shares will be authorized and reserved for issuance upon the exercise of Options
granted  under the Plan.  The Shares may be in whole or in part, as the Board of
Directors of the Bank shall determine, authorized and unissued Shares, or issued
Shares which shall have been reacquired by the Bank. If any Option granted under
the Plan shall expire or terminate for any reason  without having been exercised
in  full,  Options  may be  granted  to other  employees  with  respect  to such
unpurchased Shares.

         The  aggregate  number of shares of the Bank's  Common Stock subject to
this Plan,  the maximum  number of shares as to which  options may be granted to
any one  optionee  hereunder,  and the  number of shares and the price per share
subject to outstanding options shall be appropriately  adjusted for any increase
or  decrease  in the number of shares of Common  Stock which the Bank has issued
resulting  from any stock split,  stock  dividend,  combination of shares or any
other  change,  or any exchange from other  securities or any  reclassification,
reorganization, redesignation, recapitalization, or otherwise.

         The grant of an Option  pursuant  to this Plan  shall not affect in any
way the  right  or power  of the  Bank to make  adjustments,  reclassifications,
reorganizations or changes of its capital or business structure,  or to merge or
consolidate, or to dissolve,  liquidate, sell or transfer all or any part of its
business or assets.

         5. Terms and Conditions of All Options. Each Option granted pursuant to
the Plan shall be  authorized by the Committee and shall be evidenced by a stock
option  agreement in the form and  containing  the terms and  conditions  as the
Committee  from time to time may  determine,  provided  that each  stock  option
agreement shall:


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                  (a)      state the number of Shares to which it pertains;


                  (b)      state the option price;


                  (c)      state the terms and conditions for payment;


                  (d)      state  the  term  of the  Option  and the  period  or
periods  during  the  term in  which  the  Option  or  portions  thereof  may be
exercised;


                  (e)      provide  that the Option is not  transferable  by the
optionee other than to the extent specifically  permitted by will or the laws of
descent and distribution, and is exercisable during the optionee's lifetime only
by the optionee;


                  (f)      provide  that,  if  the  optionee  ceases  to  be  an
employee or officer of the Bank, other than by reason of death,  retirement,  or
disability  with the consent of the Bank,  the Option shall  terminate as of the
date the optionee ceases to be an employee or officer of the Bank;


                  (g)      provide  that,  if  the  optionee  retires  with  the
consent of the Bank, the Option shall terminate  three months after  retirement,
except as  otherwise  provided in Section  5(i) hereof but in no event shall one
option be exercisable more than ten (10) years from the date it was granted;


                  (h)      provide that, if the optionee  terminates  employment
due to total disability with the consent of the Bank, the Option shall terminate
three  months  after  termination  due to such  disability,  except as otherwise
provided in Section 5(i) hereof but in no event shall one option be  exercisable
more than ten (10) years from the date it was granted;


                  (i)      provide that, if an optionee shall die while he is an
employee or officer of the Bank or within  three  months  after  retirement,  or
total  disability  with the consent of the Bank, the Option may be exercised (to
the  extent the  optionee  would  have been  entitled  to do so) by a legatee or
legatees of the optionee under his last will, or by his personal  representative

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or representatives,  at any time within one (1) year after death, retirement, or
disability  with  consent but in no event shall one option be  exercisable  more
than ten (10) years from the date it was granted.


         6. Option Price.  The price at which shares may be purchased under each
option is the book  value of the  stock,  as of the last day of the last  fiscal
year of the Bank,  ending  prior to the date that such  option was  granted,  as
shown on the balance  sheet  prepared and  certified by the firm of  accountants
then employed by the Bank subsequent to such fiscal year.

         7.  Exercise  of Option.  The right to purchase  shares  covered by any
option or options under this Plan shall be exercisable  only in accordance  with
the terms and  conditions of the grant to such optionee.  Options  granted under
the Plan will be exercisable in full upon the happening of the first to occur of
the following events:

                  (a)      a vote  of a  majority  of  the  Shares  of the  Bank
entitled to vote to sell all or substantially  all of the Stock or assets of the
Bank in one or a series of related transactions, or to merge the Bank where as a
result of such a merger the Bank is not the surviving corporation; or


                  (b)      December 31, 2002.


                  8.       Expiration or Termination of Option.

                  (a)      Each option and all rights and obligations thereunder
shall, subject to the provisions of paragraph (b) of this Section 8, expire on a
date to be determined by the Committee,  such date,  however,  in no event to be
later than ten (10) years from the date on which the option is granted.


                  (b)      In the event an optionee's  employment  with the Bank
shall terminate as the result of normal  retirement,  total  disability or early
retirement under the terms of a qualified  retirement or pension plan maintained
by the Bank and in which such optionee is a participant,  then an option granted
to such  optionee  shall be  exercisable  during the three (3) months after such

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optionee ceases to be an employee of the Bank.  Following the expiration of said
three (3) month period,  any option granted to such optionee shall terminate and
may no longer be  exercised.  If the  optionee  dies  while in the employ of the
Bank,  to the  extent  that  the  option  was  exercisable  at the  time  of the
optionee's  death,  such  option may,  within one (1) year after the  optionee's
death (or within such  shorter  period as may be  specified in the option by the
Committee),  be exercised by the person or persons to whom the optionee's rights
under the option  shall pass by will or by the  applicable  laws of descent  and
distribution;  provided,  however,  that an option may not be  exercised  to any
extent by anyone after the expiration of the option.  In the event an optionee's
employment with the Bank shall terminate as the result of any circumstance other
than  those  referred  to above in this  paragraph  (b) of  Section  8, then all
options  granted to such optionee under this Plan shall  terminate and no longer
be exercisable as of the date such optionee ceases to be an employee of the Bank
unless  otherwise  provided  by the  Committee  at the time of grant but,  in no
event, more than ninety (90) days after termination of employment.

         9. Withholding  Taxes. Prior to the Issuance of Shares upon exercise of
an Option,  the optionee shall pay or make adequate provision for any federal or
state withholding obligation of the Bank, if applicable.

         10. Term of Plan.  The effective date of the adoption of the Plan shall
be the date on which the Plan is  approved by the  shareholders  of the Bank and
the Plan shall  terminate  ten years  thereafter.  Accordingly,  Options  may be
granted  pursuant  to the Plan at any time on or after  the  effective  date and
prior to the expiration of ten years from such date.

         11. Right of the Bank to Terminate Employment. Nothing contained in the
Plan or in any  Option  granted  pursuant  to the  Plan  shall  confer  upon any
optionee  any  right  to be  continued  in the  employment  of the Bank or shall
interfere in any way with the right of the Bank to terminate  his  employment at
any time for any reason.

         12. Amendment and  Termination.  The Board of Directors at any time may
terminate  the Plan and, at any time,  may amend the Plan,  without  shareholder
approval, as deemed in the best interests of the Bank; provided, that a majority
of the shareholder  approval shall be required for any amendment which shall (i)
increase  the number of Shares  which may be

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issued pursuant to the Plan, (ii) modify the  requirements as to eligibility for
participation,  (iii)  increase the benefits  accruing to eligible  officers and
directors, (iv) remove the administration of the Plan from the Committee, or (v)
reduce the amount of any benefit or  adversely  change the terms and  conditions
thereof.

         13. Choice of Law. This Plan shall be governed by the laws of the state
of Georgia.

         14.  Approval  of  Shareholders.  The Plan  shall be  submitted  to the
shareholders  of the Bank for approval within 12 months before or after adoption
of the Plan by the Board of Directors of the Bank,  and the Plan is  conditioned
on such approval.

         IN WITNESS WHEREOF,  the Bank has caused this Plan to be executed as of
the date set forth above.

                                         FARMERS AND MERCHANTS BANK

                                         BY:  ________________________________

                                         TITLE:_______________________________

ATTEST:

BY:  _________________________
     Secretary

          [CORPORATE SEAL]