EXHIBIT 10.4

                                                                  EXECUTION COPY

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

     This Amended and Restated Agreement (the "Agreement") made as of the 1st
day of May, 1993, amended as of August 30, 1993, and amended and restated as of
May 8, 1996, between FIRST STATE CORPORATION, a bank holding company
(hereinafter referred to as the "Corporation") and its wholly owned bank
subsidiary, FIRST STATE BANK AND TRUST COMPANY (hereinafter referred to as the
"Bank"), both organized and existing under the laws of the State of Georgia with
their principal offices and places of business being located in Albany, Georgia,
and JAMES L. FLATT (hereinafter referred to as "Executive").

                              W I T N E S S E T H:

     WHEREAS, the Executive has been serving as Executive Vice President of the
Bank since February 22, 1993 and is now serving as Senior Vice President of the
Corporation and as Executive Vice President and Chief Operating Officer of the
Bank; and

     WHEREAS, the Bank desires to retain the Executive and the Executive desires
to continue his employment relationship with the Bank; and

     WHEREAS, the Corporation and the Bank entered into an employment agreement
reflecting certain terms of Executive's employment relationship with the Bank as
of May 1, 1993, as amended thereafter (the "1993 Agreement"); and

     WHEREAS, the parties desire to amend and restate the 1993 Agreement;

     NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein set forth, the parties hereto agree as follows:
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     (1) Employment. The Executive hereby agrees to serve as Senior Vice
President of the Corporation and as Executive Vice President and Chief Operating
Officer of the Bank, or in such other executive position of similar or greater
responsibilities with the Corporation and the Bank (or an affiliated
corporation) as he may be designated to hold, for the term of this Agreement,
subject to the terms set forth herein and the provisions of the Bylaws of the
Corporation and the Bank. During his employment hereunder, the Executive shall
devote his efforts and attention, substantially on a fulltime basis, to the
performance of the duties required of him as an executive of the Corporation and
the Bank.

     (2) Term.

          (a) This Agreement and the Executive's employment hereunder shall be
effective as of May 1, 1993, and shall continue for a sixty (60) month term
ending on April 30, 1998. This Agreement shall automatically be renewed for
successive twelve (12) month terms at the end of the initial term unless either
party gives written notice to the other of its intent to terminate this
Agreement with such written notice to be given not less than ninety (90) days
prior to the commencement of any such twelve (12) month renewal term. In the
event such notice to terminate is properly given, this Agreement shall terminate
at the end of the initial sixty (60) month term or at the end of the twelve (12)
month renewal term then in effect.

          (b) The Executive's employment hereunder may be terminated by either
party prior to the end of the initial term hereof (including any renewal term)
upon ninety (90) days prior written notice to the other party, provided that, in
the event of such termination, the Corporation and the Bank shall be obligated
to make the payments and provide the benefits, if any, described in Section (4)
below.


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     (3) Compensation. As compensation for his services during the term of this
Agreement, the Executive shall receive the amounts and benefits set forth in
subsections (a), (b), (c), (d) and (e) below:

          (a) An annual salary effective May 1, 1993, of $89,400 prorated for
any partial year of employment, subject to annual review for increases in light
of the size and performance of the Corporation and the Bank at such time as the
Corporation and the Bank conduct salary reviews for their officers generally.
The Executive's salary shall be payable bimonthly or in accordance with the
Corporation's and the Bank's regular payroll practices in effect from time to
time for officers of his level;

          (b) Participation on an annual basis in the "Senior Management
Incentive Compensation Plan" (the "SMICP"), or such other successor annual
incentive compensation program as may be maintained from time to time for the
benefit, generally, of the senior management employees of the Corporation and
the Bank (the SMICP and such other successor annual incentive compensation
program(s) being hereinafter collectively referred to as the "Incentive
Compensation Program"). Any incentive compensation award which may become
payable to the Executive under the Incentive Compensation Program shall depend
upon attainment of financial performance goals for the Corporation and the Bank
and shall be expressed as a percentage of the Executive's annual base salary
then in effect and, for any annual period, the percentage may vary depending
upon the degree to which the financial performance goals are attained. The
financial performance goals and the base salary percentage(s) which serve as a
measure of the incentive compensation award for each annual period shall be
established in advance of that annual period by the Compensation Committee of
the Board of


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Directors of the Corporation. Any incentive compensation award which becomes
payable under the Incentive Compensation Program shall be payable in accordance
with the terms thereof.

          (c) Participation in all of the employee benefit plans maintained now
or in the future by the Corporation and the Bank for the purpose of providing
retirement benefits, deferred compensation, health care coverage, life insurance
coverage and disability coverage as well as similar pension or welfare benefits
to its employees. These employee benefit plans include, but are not limited to,
the defined benefit pension plan, the defined contribution profit sharing plan,
the defined contribution employee/thrift and savings plan (a section 401(k) and
(m) plan), the defined contribution money purchase pension plan, group health
and accident insurance, group term life insurance and any other employee
pension, welfare or incentive benefit plans as they may now exist or exist in
the future.

          (d) Continued participation in the Incentive Compensation Program for
senior executives of the Corporation and the Bank, which now exists or which may
exist in the future.

          (e) Reimbursement of the dues and costs of club memberships and
automobile expenses. In addition, the Corporation and the Bank will continue to
provide the Executive with an automobile of similar grade and quality as is now
being provided to the Executive.

     (4) Termination Payments. Upon termination of the Executive's employment
prior to the end of the sixty (60) month term of this Agreement (including any
renewal term), the Corporation or the Bank shall pay to the Executive in cash,
within three (3) business days after the termination of the Executive's
employment, any amount payable pursuant to subsections (a) or (b) below and
shall for the period, or at the time specified, provide the other benefits, if
any, described in subsection (d):


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          (a) The payment due to Executive under this subsection (a) shall be
two and ninety-nine/one hundredths (2.99) times the Executive's "Average Annual
Compensation," as defined in subsection (d) below (the "Severance Amount"), if:
the Executive's employment is terminated by the Corporation or the Bank, other
than for "Good Cause," as defined in subsection (d) below, within three (3)
years after any "Change in Control," as defined in subsection (d) below, or at
the request of, or pursuant to, an agreement with a third party who has taken
steps reasonably calculated to effect a Change in Control, or otherwise in
connection with or in anticipation of a Change in Control. However, 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 Internal Revenue Code of
1986, as amended (the "Code"), and the rules and regulations thereunder) of both
the Severance Amount and all other payments to Executive in the nature of
compensation which are contingent on a change in ownership or effective control
of the Corporation or Bank or in the ownership of a substantial portion of the
assets of the Corporation or the Bank (the "Aggregate Severance") would result
in a parachute payment (as determined under Code Section 280G) then the
Aggregate Severance shall not be greater than an amount equal to two and
ninety-nine/one hundredths (2.99) multiplied by Executive's base amount (as
determined under Code Section 280G) for the base period (as determined under
Code Section 280G). In the event the Aggregate Severance is required to be
reduced pursuant to this subsection (a), Executive shall be entitled to
determine which portions of the Aggregate Severance are to be reduced so that
the Aggregate Severance satisfies the limit in the preceding sentence (the
"Adjusted Aggregate Severance").


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          (b) If the Executive's termination of employment is not described in
subsection (a) above, the payment due to Executive under this subsection (b)
shall be equal to any unpaid salary due to the Executive through the date of
termination.

          (c) In addition to the payments provided to the Executive under (a) or
(b) above, any amounts of incentive compensation deferred pursuant to subsection
(b) of section (3) above (under the Incentive Compensation Program) shall be
paid to the Executive at the same time as such other payment, together with
interest due thereon to the date of payment. If the Executive's termination of
employment is described in subsection (a) above, the health and accident
coverage and the life insurance coverage provided to the Executive at his date
of termination shall be continued at the same level and in the same manner as if
his employment had not terminated (subject to the customary changes in such
coverages if the Executive reaches age sixty-five (65) or similar events),
beginning on the date of such termination and ending on the date thirty-six (36)
months from the date of termination; and any additional coverages the Executive
had at termination, including dependent coverage, will also be continued for
such period on the same terms. Any costs the Executive was paying for such
coverages at the time of termination shall continue to be paid by the Executive.
If the terms of any benefit plan referred to in this subsection do not permit
continued participation by the Executive, as contemplated by this subsection,
then the Corporation or the Bank will reimburse the Executive for the cost of
insurance coverages for the Executive and dependents of the Executive that are
substantially equivalent to the health and accident and life insurance coverages
provided to the employees of the Corporation or the Bank and their eligible
dependents during the thirty-six (36) month period described herein.
Reimbursement for the cost of coverage of a dependent of the Executive shall


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<PAGE>

be reimbursable only if the dependent would be deemed a dependent eligible for
coverage under the substantially equivalent benefit plan then maintained by the
Corporation or the Bank had the Executive continued in the employ of the
Corporation and the Bank. However, the obligation of the Corporation and the
Bank to provide the health and accident coverage and the life insurance coverage
described in this Section 4(c) shall abate and be considered satisfied to the
extent the Executive receives employer provided coverage under an accident and
health plan or a life insurance plan maintained by a subsequent employer. The
Executive agrees to provide the Bank with the information necessary to enable
the Bank to comply with the provisions of this subsection (c).

          (d) For purposes of this Agreement, the following definitions shall
apply:

               (i) "Change in Control" shall mean the occurrence of (A), (B) or
     (C) below:

                    (A) The acquisition by any person, entity or "group", within
                    the meaning of Section 13(d)(3) or Section 14(d)(2) of the
                    Securities Exchange Act of 1934 (the "Exchange Act")
                    (excluding, for this purpose, any employee benefit plan
                    maintained by the Corporation or the Bank, or by any
                    subsidiary of either, which acquires beneficial ownership of
                    voting securities of the Corporation or the Bank) of
                    beneficial ownership (within the meaning of Rule 13d-3
                    promulgated under the Exchange Act) of more than fifty
                    percent (50%) of either the then outstanding shares of
                    Common Stock or the combined voting power of the
                    Corporation's or the Bank's then


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<PAGE>

                    outstanding voting securities entitled to vote generally in
                    the election of directors. 

                    (B) (i) The acquisition by any person, entity or "group",
                    within the meaning of Section 13(d)(3) or Section 14(d)(2)
                    of the Exchange Act (excluding, for this purpose, any
                    employee benefit plan of the Corporation or the Bank, or any
                    subsidiary of either, which acquires beneficial ownership of
                    voting securities of the Corporation or the Bank) of
                    beneficial ownership (within the meaning of Rule 13d-3
                    promulgated under the Exchange Act) of thirty percent (30%)
                    or more of either the then outstanding shares of Common
                    Stock or the combined voting power of the Corporation's or
                    the Bank's then outstanding voting securities entitled to
                    vote generally in the election of directors; and

                         (ii) The failure for any reason of individuals who
                    constitute the Incumbent Board to continue to constitute at
                    least two-thirds (2/3rds) of the Board within any thirteen
                    (13) month period. 

                    (C) Approval by the stockholders of the Corporation or the
                    Bank of (i) a reorganization, merger or consolidation, with
                    respect to which persons who were the stockholders of the
                    Corporation or the Bank immediately prior to such
                    reorganization, merger or consolidation do not, immediately
                    thereafter, own more than fifty


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<PAGE>

                    percent (50%) of the combined voting power entitled to vote
                    generally in the election of directors of the reorganized,
                    merged or consolidated company's then outstanding voting
                    securities, or (ii) a liquidation or dissolution of the
                    Corporation or the Bank or the sale of all or substantially
                    all of the assets of the Corporation or the Bank.

               (ii) "Average Annual Compensation" shall be the average of the
     Executive's annual compensation received from the Corporation and the Bank
     and includable in the Executive's gross income for federal income tax
     purposes during the base period. However, the term "Average Annual
     Compensation" shall also include amounts not included in gross income for
     federal income tax purposes by virtue of Code Sections 125, 402(a)(8) and
     402(h)(1)(B). Also, for purposes of this Agreement, the term "Average
     Annual Compensation" shall specifically include any amounts paid and
     includable in the Executive's gross income during the base period under the
     Incentive Compensation Program or under any other incentive or bonus
     arrangement maintained by the Corporation or the Bank. For purposes of this
     subsection (ii), the base period for determining "Average Annual
     Compensation" shall be the Executive's most recent five (5) consecutive
     taxable years ending before the date of the Change in Control. However, if
     the Executive was not employed by the Corporation or the Bank for the
     entire five (5) year period described in the preceding sentence, then the
     base period shall be the portion of such five (5) year period during which
     the Executive was employed by the Corporation or the Bank.


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               (iii) "Good Cause" shall mean and be limited to (A) an act or
     acts of personal dishonesty taken by the Executive and intended to result
     in substantial personal enrichment of the Executive at the expense of the
     Corporation or the Bank, (B) repeated violations by the Executive of the
     Executive's obligations under Section (1) of this Agreement which are
     demonstrably willful and deliberate on the Executive's part and which are
     not remedied in a reasonable period of time (which shall not be less than
     thirty (30) days nor more than sixty (60) days) after receipt of written
     notice from the Corporation or the Bank, (C) serious and substantial
     improper conduct by the Executive which is clearly inconsistent with the
     Executive's position of trust and authority with the Corporation or the
     Bank and which detrimentally affects the reputation and good standing of
     the Corporation or the Bank in the community, or (D) the conviction of the
     Executive of a felony.

               (iv) The "Board" shall mean the Board of Directors of the
     Corporation and the Bank.

               (v) The "Incumbent Board" shall mean the members of the Board as
     of January 1, 1996, and any person becoming a member of the Board after
     such date whose election, or nomination for election, was approved by a
     vote of at least two-thirds (2/3rds) of the directors then comprising the
     Incumbent Board (other than an election or nomination of an individual
     whose initial assumption of office is in connection with an actual or
     threatened election contest relating to the election of the directors of
     the Corporation or the Bank, as such terms are used in Rule 14a-11 of
     Regulation 14A promulgated under the Exchange Act.)


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          (e) If, after the exhaustion of all administrative and judicial
appeals as the Corporation determines in its sole discretion to pursue, the
Internal Revenue Service determines that Code Section 280G prohibits the
Corporation or the Bank from deducting all of the Aggregate Severance or
Adjusted Aggregate Severance, as applicable, paid to the Executive and reported
on its federal income tax return, the Executive shall have an obligation to pay
the Corporation or the Bank upon demand an amount equal to the sum of (i) the
excess of the amount of the Aggregate Severance or Adjusted Aggregate Severance,
as applicable, over the maximum amount that could have been paid to Executive
without any portion of such payments not being deductible by reason of Code
Section 280G; and (ii) interest on the amount set forth in this subsection at
the rate provided in Code Section 1274(b)(2)(B) from the date of Executive's
receipt of the amount set forth in this subsection until the date of repayment.

     (5) Nondisclosure; Confidentiality. The Executive agrees that if his
employment terminates during the term of this Agreement, he will not for one (1)
year after such termination, directly or indirectly disclose or give to others
any confidential fact or information not generally available to the public
concerning the Corporation's or the Bank's financial operations and businesses,
including but not limited to the provision of financial data processing services
to banks, thrift institutions, credit unions and mortgage servicers, and the
providing of merchant credit card authorization, settlement and related
services, data imaging, micrographic, and electronic data management services to
others generally. Such financial information, financial systems, financing
arrangements, trade secret or confidential business information includes
business plans, financial information, financial systems, financing
arrangements, and any other secret or confidential work, knowledge, "know-how,"
trade secret or confidential information


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<PAGE>

including confidential information relating to customer accounts, customer
needs, organization, strategy, research and development, design, drawings,
specifications, techniques, processes, procedures, "know-how," marketing
techniques and materials, marketing and development plans, fee lists, fee
policies or any other confidential information relating to customers.

     (6) Damages and Injunctive Relief. The Executive agrees that the breach of
any of his obligations under Section (5) of this Agreement: (a) may cause injury
to the Corporation and the Bank and that the Corporation and the Bank are
entitled to seek and obtain compensation and damages; and (b) may cause
irreparable injury to the Corporation and the Bank and that, accordingly the
Corporation and the Bank may seek and obtain injunctive relief against the
breach or threatened breach of those provisions in addition to other remedies at
law or in equity which may be available; provided, however, that no such claim
by the Corporation or the Bank shall permit the Corporation or the Bank to
offset, reduce, suspend or withhold any of the payments or benefits provided
under Section (4) or to seek an injunction providing for such offset, reduction,
suspension or withholding.

     (7) Assignment; Successors.

          (a) The rights and benefits of the Executive under this Agreement are
personal to him and shall not be assignable, except with the prior written
consent of the Corporation or the Bank.

          (b) This Agreement shall not be assignable by the Corporation or the
Bank provided that, with the consent of the Executive, the Corporation may
assign this Agreement to another corporation wholly-owned by it, either directly
or through one or more other


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corporations, or to any corporate successor of the Corporation or the Bank or
any such other corporation.

          (c) Notwithstanding the foregoing, any business entity succeeding to
substantially all of the business of the Corporation or the Bank by purchase,
merger, consolidation, sale of assets or otherwise shall be bound by and shall
adopt and assume this Agreement and the Corporation and the Bank shall obtain
the express assumption of this Agreement by such successor.

     (8) Notices. Any notices or other communications under this Agreement shall
be in writing, signed by the party making the same, and shall be delivered
personally or sent by certified or registered mail, postage prepaid, addressed
as follows:

     If to the Executive:      James L. Flatt
                               First State Corporation
                               333 Broad Avenue
                               Albany, Georgia 31703

          Copy to:             ________________________
                               ________________________
                               ________________________
                               ________________________
                               ________________________

     If to the Corporation or
     the Bank:                 Morgan G. Murphy
                               First State Corporation
                               333 Broad Avenue
                               Albany, Georgia 31703

          Copy to:

                               Perry, Walters & Lippitt
                               409 N. Jackson Street
                               Albany, Georgia 31701


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or to such other address or agent as may hereafter be designated by either party
hereto. All such notices shall be deemed given on the date personally delivered
or mailed.

     (9) Full Settlement and Legal Expenses. The Corporation's and the Bank's
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Corporation or the Bank may have against the Executive or others. In no event
shall the Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive under any of
the provisions of this Agreement. The Corporation or the Bank agree to pay, to
the full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by the Corporation or the Bank or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive with respect to the amount of any payment pursuant to Section (4) of
this Agreement), plus in each case interest at the applicable Federal rate
provided for in Code Section 7872(f)(2).

     (10) Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Georgia.

     (11) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid, but if any one
or more of the provisions contained in this Agreement shall be invalid, illegal
or unenforceable in any respect for any


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reason, the validity, legality and enforceability of any such provisions in
every other respect and of the remaining provisions of this Agreement shall not
be in any way impaired.

     (12) Entire Agreement. This Agreement contains the entire agreements of the
parties hereto with respect to the subject matter contained herein. There are no
restrictions, promises, covenants, or undertakings between the Corporation or
the Bank and the Executive other than those expressly set forth herein or
contained in the Corporation's or the Bank's employee welfare or pension benefit
plans or incentive compensation plans covering the Executive. This Agreement may
not be amended or modified except by a writing executed by the parties.

     (13) Arbitration. Any controversy or claim arising out of or relating to
the parties' rights and obligations under this Agreement shall be settled by
arbitration in accordance with the Commercial Arbitration Rules (the "Rules") of
the American Arbitration Association (the "AAA"). Arbitration shall be initiated
by a party by giving notice in the manner set forth herein to the other party or
parties of its intention to arbitrate, which notice shall contain a statement
setting forth the nature of the dispute, the amount claimed, if any, and the
remedy sought. The initiating party shall then file a copy or copies of the
notice as set forth under the Rules. Any arbitration hearing shall be held in
Albany, Georgia. The Corporation or the Bank and the Executive shall agree upon
and appoint three (3) arbitrators in accordance with the Commercial Arbitration
Rules of the AAA within twenty (20) days of the effective date of notice of
arbitration; provided, however, that if the parties fail to make such
designation within twenty (20) days, the AAA shall appoint the arbitrators. The
determinations of the arbitrators will be final and binding upon the parties to
the arbitration, and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction, or application may be made to any


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such court for a judicial acceptance of the award and an order of enforcement,
as the case may be. The arbitrators shall apply the laws of the State of Georgia
as to both substantive and procedural questions.

                       [Signatures Appear on Next page]


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     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.

                                       FIRST STATE CORPORATION

                                       By: /s/ Morgan G. Murphy
                                           -------------------------------

                                       Attest: /s/ Douglas E. Wren
                                               ---------------------------


                                       FIRST STATE BANK AND TRUST COMPANY

                                       By: /s/ Morgran G. Murphy
                                           -------------------------------

                                       Attest: /s/ Douglas E. Wren
                                               ---------------------------


/s/ Louise B. Murphy
-----------------------------
Witness


/s/ Elisabeth S. Driskell
-----------------------------
Witness

                                       /s/ James L. Flatt
                                       -----------------------------------
                                       JAMES L. FLATT

/s/ Jenny A. Sledge
-----------------------------
Witness


/s/ Josephine M. Donovan
-----------------------------
Witness


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