AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is made as of February 21, 2002 (the "Effective Date"),
between FLAG Financial Corporation, a Georgia corporation ("FLAG"); FLAG Bank, a
bank subsidiary of FLAG (the "Bank") (collectively, the "Employer"); and J.
Daniel Speight, Jr., a resident of the State of Georgia (the "Employee").

                                    RECITALS:

         The Employer employs the Employee, respectively, as the Chief Executive
Officer of FLAG and as President and Chief Executive Officer of the Bank under
the terms of that certain Employment Agreement dated January 1, 2001 (the
"Employment Agreement").

         The Employer and the Employee desire to amend and restate the
Employment Agreement on the terms and conditions set forth herein.

         In consideration of the above premises and the mutual agreements
hereinafter set forth, the parties hereby agree as follows:

1.  Definitions.  Whenever used in this  Agreement,  the  following  terms and
their variant forms shall have the meaning set forth below:

         1.1 "Agreement" shall mean this Agreement and any exhibits incorporated
herein together with any amendments hereto made in the manner described in this
Agreement.

         1.2 "Affiliate" shall mean any business entity which controls FLAG or
is controlled by or is under common control with FLAG.

         1.3 "Area" shall mean the geographic area within the boundaries of
Dooly, Troup and Upson Counties, Georgia. It is the express intent of the
parties that the Area as defined herein is in the area where the Employee
performs services on behalf of the Employer under this Agreement as of the
Effective Date.

         1.4 "Average Monthly Compensation" shall mean the quotient determined
(a) by dividing the sum of the Employee's then current Base Salary (as defined
in Section 4.1 hereof) and the greater of the most recently paid Incentive
Compensation (as defined in Section 4.2(a) hereof) or the average of Incentive
Compensation paid over the three most recent years (b) by twelve.

         1.5 "Bank" shall mean FLAG Bank or its successor(s).

         1.6 "Business of the Employer" shall mean the business conducted by the
Employer, which is the business of banking, including the solicitation of time
and demand deposits and the making of residential, consumer, commercial and
corporate loans.
<PAGE>

         1.7 "Cause" shall mean:

         1.7.1 With respect to termination by the Employer:

                           (a) A material breach of the terms of this Agreement
                  by the Employee, including, without limitation, failure by the
                  Employee to perform the Employee's duties and responsibilities
                  in the manner and to the extent required under this Agreement,
                  which breach remains uncured after the expiration of thirty
                  (30) days following the delivery of written notice of such
                  breach to the Employee by the Employer;

                           (b) Conduct by the Employee that (i) constitutes
                  fraud, dishonesty, gross malfeasance of duty or conduct
                  grossly inappropriate to the Employee's office and (ii) is
                  demonstrably likely to lead to material injury to the Employer
                  or resulted or was intended to result in direct or indirect
                  gain to or personal enrichment of the Employee; provided,
                  however, that such conduct shall not constitute "Cause" unless
                  there shall have been delivered to the Employee a written
                  notice setting forth with specificity the reasons that the
                  Employer believes the Employee's conduct meets the standard
                  set forth in this Section 1.7.1(b), the Employee shall have
                  been provided with an opportunity to be heard in person by the
                  Board of Directors of FLAG (with the assistance of counsel, if
                  desired) and, in the event of any such hearing, the decision
                  of the Employer is confirmed by a vote of the membership of
                  the Board of Directors of FLAG as provided in Section 3.2.1;

                           (c) Conduct resulting in the conviction of the
                  Employee of a felony; or

                           (d) Conduct by the Employee that results in the
                  permanent removal of the Employee from his position as an
                  officer or employee of FLAG or the Bank pursuant to a written
                  order by any regulatory agency with authority or jurisdiction
                  over FLAG or the Bank, as the case may be.

                  1.7.2    With respect to termination by the Employee:

                           (a) a material diminution in the powers,
                  responsibilities, duties or total compensation of the Employee
                  hereunder by the Employer, which condition remains uncured
                  after the expiration of thirty (30) days following the
                  delivery of written notice of such condition to the Employer
                  by the Employee;

                           (b) the failure of the Board of Directors of FLAG to
                  maintain the Employee's appointment to the office of its
                  President; the failure of the Board of Directors of the Bank
                  to maintain the Employee's appointment to the office of its
                  Chairman; or the failure of the shareholders of FLAG to elect
                  Employee as a director of FLAG or the Bank to elect Employee
                  as a director of the Bank; or

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<PAGE>

                           (c) a material breach of the terms of this Agreement
                  by the Employer, which breach remains uncured after the
                  expiration of thirty (30) days following the delivery of
                  written notice of such breach to the Employer by the Employee.

         1.8 "Change in Control" means any one of the following events occurring
after the Effective Date:

                  (a) the acquisition by any person or persons acting in concert
         of the then outstanding voting securities of FLAG, 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 FLAG or such other transaction as may be described
         under 12 C.F.R. Section 225.41(c) or any successor thereto;

                  (b) within any twelve-month period (beginning on or after the
         Effective Date) the persons who were directors of FLAG immediately
         before the beginning of such twelve-month period (the "Incumbent
         Directors") shall cease to constitute at least a majority of such board
         of directors; provided that any director who was not a director as of
         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 to be an Incumbent Director;

                  (c) the approval by the stockholders of FLAG of a
         reorganization, merger or consolidation, with respect to which persons
         who were the stockholders of FLAG 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

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

         1.9 "Confidential Information" means data and information relating to
the Business of the Employer (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 the Employee's relationship to the
Employer and which has value to the Employer and is not generally known to its
competitors. Without limiting the foregoing, Confidential Information shall
include:

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

                  (b) the names, addresses and banking requirements of the
         customers of the Bank and the nature and amount of business done with
         such customers;


                                       3
<PAGE>

                  (c) the names and addresses of employees and other business
         contacts of the Bank;

                  (d) the particular names, methods and procedures utilized by
         FLAG and the Bank in the conduct and advertising of their business;

                  (e) application, 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 FLAG and
         the Bank; and

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

Confidential Information shall not include any data or information that has been
voluntarily disclosed to the public by the Employer (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.

         1.10     "Employer Information" means Confidential Information and
Trade Secrets.

         1.11 "Permanent Disability" shall mean 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 Bank or, if no such coverage is then being provided, the inability of the
Employee to perform the material aspects of the Employee's duties under this
Agreement 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
Employer.

         1.12 "Term" shall mean that period of time commencing on the Effective
Date and running until (a) the close of business on the last business day
immediately preceding the third (3rd) anniversary of the thirtieth (30th) day
following the date any notice of non-renewal of this Agreement is received or
(b) any earlier termination of employment of the Employee under this Agreement
as provided for in Section 3.

         1.13 "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 (a) 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 (b) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.


                                       4
<PAGE>

2.  Duties.
-----------

         2.1 The Employee is employed as the President of FLAG and the Chairman
of the Bank, subject to the direction of the Chief Executive Officer and the
Board of Directors of FLAG and the Bank, respectively, or their designee(s). The
Employee shall perform and discharge well and faithfully the authority, duties
and responsibilities which may be assigned to the Employee from time to time by
the Board of Directors of the Employer in connection with the conduct of the
Business of the Employer; provided, however, that, in making its assignments,
the Board of Directors of the Employer shall assign only such authority, duties
and responsibilities assigned to the Employee from time to time as are, in the
aggregate, consistent with the duties and responsibilities as would be
customarily assigned to a person occupying the positions held by the Employee
pursuant to the terms of this Agreement, including, but not limited to, those
set forth on Exhibit A attached hereto.

         2.2 In addition to the duties and responsibilities specifically
assigned to the Employee pursuant to Section 2.1 hereof, the Employee shall:

                  (a) devote substantially all of the Employee's time, energy
         and skill during regular business hours to the performance of the
         duties of the Employee's employment (reasonable vacations and
         reasonable absences due to illness excepted) and faithfully and
         industriously perform such duties;

                  (b) diligently follow and implement all management policies
         and decisions communicated to the Employee by the Chief Executive
         Officer and the Board of Directors of the Employer which are consistent
         with this Agreement; and

                  (c) timely prepare and forward to the Board of Directors of
         the Employer all reports and accounting as may be requested of the
         Employee.

         2.3 The Employee shall devote the Employee's entire business time,
attention and energies to the Business of the Employer and shall not during the
term of this Agreement be engaged (whether or not during normal business hours)
in any other business or professional activity, whether or not such activity is
pursued for gain, profit or other pecuniary advantage; but this shall not be
construed as preventing the Employee from

                  (a) investing the Employee's personal assets in businesses
         which (subject to clause (b) below) are not in competition with the
         Business of the Employer and which will not require any services on the
         part of the Employee in their operation or affairs and in which the
         Employee's participation is solely that of an investor,

                  (b) purchasing securities or other interests in any entity
         provided that such purchase shall not result in the Employee's
         collectively owning beneficially at any time five percent (5%) or more
         of the equity securities of any business in competition with the
         Business of the Employer; and

                                        5
<PAGE>


                  (c) participating in civic and professional affairs and
         organizations and conferences, preparing or publishing papers or books
         or teaching so long as the Board of Directors of FLAG approves of such
         activities prior to the Employee's engaging in them.

         Notwithstanding anything to the contrary in this Section 2.3, the
Employee may serve on the boards of directors of Regan Holding Corporation,
Nuestra Tarjeta and Intercept Switch, Inc.

3.  Term and Termination.
    --------------------

         3.1 Term. This Agreement shall remain in effect for the Term. While
this Agreement remains in effect, it shall automatically renew each day after
the Effective Date such that the Term remains a three-year term from day-to-day
thereafter unless any party gives written notice to the others of its or his
intent that the automatic renewals shall cease. In the event such notice of
non-renewal is properly given, this Agreement and the Term shall expire on the
third (3rd) anniversary of the thirtieth (30th) day following the date such
written notice is received.

         3.2      Termination.  During the Term, the  employment of the Employee
 under this Agreement may be terminated  only as follows:

                  3.2.1    By the Employer:

                           (a) For Cause, following approval of such action by
                  at least seventy-five (75%) of the membership of the Board of
                  Directors of FLAG and only after providing Employee with at
                  least thirty (30) days' written notice, in which event the
                  Employer shall have no further obligation to the Employee
                  except for the payment of any amounts earned and unpaid as of
                  the effective date of termination; or

                           (b) Without Cause at any time, provided that the
                  Employer shall give the Employee sixty (60) days' prior
                  written notice of its intent to terminate, in which event the
                  Employer shall be required to meet its obligations to the
                  Employee under Section 3.3 below.

                  3.2.2    By the Employee:

                           (a) For Cause, with no prior notice except as
                  provided in Section 1.7.2, in which event the Employer shall
                  be required to meet its obligations to the Employee under
                  Section 3.3 below; or

                           (b) Without Cause, provided that the Employee shall
                  give the Employer sixty (60) days' prior written notice of the
                  Employee's intent to terminate, in which event the Employer
                  shall have no further obligation to the Employee except for
                  payment of any amounts earned and unpaid as of the effective
                  date of the termination.

                                        6
<PAGE>

                  3.2.3 By the Employee within the period commencing three (3)
         months prior to and ending twelve (12) months after a Change in Control
         of the Employer (the "Election Period"), provided that the Employee
         shall give thirty (30) days' written notice prior to the end of the
         Election Period to the Employer of the Employee's intention to
         terminate this Agreement, in which event the Employer shall be required
         to meet its obligations to the Employee under Section 3.3 below.

                  3.2.4 At any time upon mutual, written agreement of the
         parties, in which event the Employer shall have no further obligation
         to the Employee except for the payment of any amounts earned and unpaid
         as of the effective date of the termination.

                  3.2.5 Notwithstanding anything in this Agreement to the
         contrary, the Term shall expire automatically upon the Employee's death
         or Permanent Disability, in which event the Employer shall have no
         further obligation to the Employee except for the payment of any
         amounts earned and unpaid as of the effective date of termination and,
         if the reason for termination is the Employee's Permanent Disability,
         the Employer shall pay to the Employee as liquidated damages an amount
         equal to Average Monthly Compensation for each full month following
         such termination until the earlier of the month prior to the month for
         which the Employee's long-term disability benefits become payable or
         six (6) full months commencing with the month following the month in
         which the date of termination occurs.

         3.3 Termination Payments. In the event the Employee's employment is
terminated under this Agreement prior to the expiration of the Term pursuant
Section 3.2.1(b), Section 3.2.2(a) or Section 3.2.3, the Employer shall pay to
the Employee as severance pay and liquidated damages a lump sum amount equal to
the product of (a) Average Monthly Compensation multiplied by (b) the number of
months (including partial months) from the effective date of the termination
through the then unexpired portion of the Term or, if greater, twelve. In
addition, from the effective date of the termination through the then unexpired
portion of the Term (or, if greater, for a period of twelve months following the
effective date of the termination (the "Severance Period"), the Employer shall
pay an amount equal to what would be the Employee's cost of COBRA health
continuation coverage for the Employee and eligible dependents for the greater
of the Severance Period or the period during which the Employee and those
eligible dependents are entitled to COBRA health continuation coverage from the
Employer. In the event the Employee's employment is terminated pursuant to
Section 3.2.3, in addition to the termination payments described in this
paragraph, the Employer shall continue to provide the Employee with the benefit
described in Section 4.9 hereof for the Severance Period.

         Notwithstanding any other provision of this Agreement to the contrary,
if the aggregate of the payments provided for in this Agreement and the other
payments and benefits which the Employee has the right to receive from the
Employer (the "Total Payments") would constitute a "parachute payment," as
defined in Section 280G(b)(2) of the Internal Revenue Code, as amended (the
"Code"), the Employee shall receive the Total Payments unless the (a) after-tax
amount that would be retained by the Employee (after taking into account all
federal, state and local income taxes payable by the Employee and the amount of
any excise taxes payable by the Employee under Section 4999 of the Code that
would be payable by the Employee (the "Excise Taxes")) if the Employee were to
receive the Total Payments has a lesser aggregate value than (b) the after-tax
amount that would be retained by the Employee (after taking into account all
federal, state and local income taxes payable by the Employee) if the Employee
were to receive the Total Payments reduced to the largest amount as would result
in no portion of the Total Payments being subject to Excise Taxes (the "Reduced

                                       7
<PAGE>

Payments"), in which case the Employee shall be entitled only to the Reduced
Payments. If the Employee is to receive the Reduced Payments, the Employee shall
be entitled to determine which of the Total Payments, and the relative portions
of each, are to be reduced.

4. Compensation. The Employee shall receive the following salary and benefits
during the Term:

         4.1 Base Salary. The Employee shall be compensated at a base rate of
Two Hundred Fifty Thousand Dollars ($250,000) per year, which may be increased
from time to time in accordance with the immediately succeeding sentence ("Base
Salary"). The Employee's salary shall be reviewed by the Board of Directors of
the Employer annually, and the Employee shall be entitled to receive annually an
increase in such amount, if any, as may be determined by the Board of Directors
of the Employer based upon the performance of the Employer and its compliance
with regulatory standards. Such salary shall be payable in accordance with the
Employer's normal payroll practices.

                  4.2      Incentive Compensation.
                           ----------------------

                  (a) The Employee shall be eligible for an annual bonus in an
         amount up to fifty percent (50%) of the Employee's Base Salary pursuant
         to any bonus, incentive or other executive compensation programs as are
         made available to senior management of FLAG and the Bank from time to
         time (the "Incentive Compensation").

                  (b) As of the Effective Date, the Employee shall be entitled
         to receive a one-time bonus payment equal to $350,000 which shall be
         payable to the Employee in a lump-sum cash payment on the Effective
         Date or as soon as practicable thereafter.

         4.3 Stock Options. FLAG may grant to the Employee stock options from
time to time commensurate with the Employee's position. Any such options shall
be reflected by a separate written award.

         4.4 Benefits. The Employee shall be entitled to such benefits as may be
available from time to time for senior executives of the Employer similarly
situated to the Employee. All such benefits shall be awarded and administered in
accordance with the Employer's standard policies and practices. Such benefits
may include, by way of example only, profit sharing plans, retirement or
investment funds, dental, health and life insurance benefits and such other
benefits as the Employer deems appropriate.

         4.5 Disability Insurance. The Employer shall provide the Employee with
amounts, as additional compensation, as and when necessary, to allow the
Employee to pay the premiums that become due under the personal disability
insurance policy currently owned by the Employee.


                                       8
<PAGE>

         4.6 Deferred Compensation and Split Dollar Program. The Employee shall
be entitled to participate in the deferred compensation program as proposed by
Roger Hauge of Benmark to the Compensation Committee of the Board of Directors
of FLAG. Such program shall have the objective of providing benefits to Employee
that are no less favorable than originally intended by the split dollar
agreement currently in effect between the Employer and Employee and the parties
agree to such modifications to such split dollar agreement as may be necessary
or desirable in connection with, or subsequent to, the implementation of the
deferred compensation program.

         4.7 Automobile. On the Effective Date or as soon as practicable
thereafter, the Employer shall transfer to the Employee title to the automobile
currently made available to the Employee for his use. The Employee acknowledges
that the value of the automobile at the time of transfer will constitute imputed
income to the Employee.

         4.8 Condominium. The Employee shall be entitled to purchase from FLAG,
pursuant to the existing agreement between the Employee and the Employer, its
right, title and interest in and to the real property known as 401 Fairway
Villa, Sea Palms, St. Simons, Georgia, together with any and all improvements
and fixtures and appurtenant undivided interests in any common areas (the
"Property"). The purchase price for the Property will be equal to the book value
of the Property as reflected on the books and records of FLAG on February 20,
2002.

         4.9 Apartment. During the Term, the Employer will pay the rent and
utility expenses associated with a two-bedroom apartment in the Buckhead area of
Atlanta, Georgia for the Employee. The rental expenses paid by the Employer for
such apartment shall not exceed $2,500 per month.

         4.10 Dividends. In the event that FLAG reduces or eliminates dividends
on its outstanding shares of common stock during any fiscal quarter falling
completely within the Term, the Employer shall pay to the Employee an amount
equal to $9,000 less the amount of any dividends actually received by the
Employee for each such fiscal quarter. In the event that the Employee reduces
his ownership of shares of FLAG common stock that the Employee owns as of the
Effective Date through a sale or other disposition of shares, any quarterly
payment to the Employee pursuant to this Section shall be reduced. The reduced
payment shall be an amount equal to the product of $9,000 multiplied by a
fraction, the numerator of which is the number of shares owned by the Employee
as of the last day of the fiscal quarter for which payment is due, and the
denominator of which is the number of shares owned by the Employee as of the
Effective Date.

         4.11 Business Expenses. The Employer shall reimburse the Employee for
reasonable business (including travel) expenses incurred by the Employee in
performance of the Employee's duties hereunder; provided, however, that the
Employee shall, as a condition of reimbursement, submit verification of the
nature and amount of such expenses in accordance with reimbursement policies

                                       9
<PAGE>

from time to time adopted by the Employer and in sufficient detail to comply
with rules and regulations promulgated by the Internal Revenue Service.

         4.12 Professional Associations. The Employee shall be entitled to
attend such courses, conferences and seminars of his selection at the Employer's
expense, provided that the Employer shall only be required to cover reasonable
expenses associated with the Employee's attendance at such courses, conferences
and seminars that are incurred consistent with the Employer's budget operating
plan and policies then in effect.

         4.13 Worksite Location. The Employee shall maintain an office in the
Employer's Atlanta, Georgia and Vienna, Georgia locations. The Employee shall be
required to be present in the Atlanta location on a regular basis (except for
time spent on business-related travel). In the event the Employee is required to
relinquish his office on the premises of the Employer's Vienna location, the
Employer shall transfer to the Employee at no cost ownership of the furniture
currently used in his office on the premises of the Vienna location.

         4.14 Vacation. On a non-cumulative basis the Employee shall be entitled
to a minimum of four (4) weeks of vacation annually, during which the Employee's
compensation shall be paid in full.

         4.15 Withholding. The Employer may deduct from each payment of
compensation hereunder all amounts required to be deducted and withheld in
accordance with applicable federal and state income tax, FICA and other
withholding requirements.

5.  Employer Information.
    --------------------

         5.1 Ownership of Information. All Employer Information received or
developed by the Employee while employed by the Employer will remain the sole
and exclusive property of the Employer.

         5.2 Obligations of the Employee. The Employee agrees (a) to hold
Employer Information in strictest confidence, and (b) not to use, duplicate,
reproduce, distribute, disclose or otherwise disseminate Employer Information or
any physical embodiments thereof and may in no event take any action causing or
fail to take any action necessary in order to prevent any Employer Information
from losing its character or ceasing to qualify as Confidential Information or a
Trade Secret. In the event that the Employee is required by law to disclose any
Employer Information, the Employee will not make such disclosure unless (and
then only to the extent that) the Employee has been advised by independent legal
counsel that such disclosure is required by law and then only after prior
written notice is given to the Employer when the Employee becomes aware that
such disclosure has been requested and is required by law. This Section 5 shall
survive for a period of twelve (12) months following termination of this
Agreement with respect to Confidential Information, and shall survive
termination of this Agreement for so long as is permitted by the then-current
Georgia Trade Secrets Act of 1990, O.C.G.A. ss.ss. 10-1-760-10-1-767, with
respect to Trade Secrets.


                                       10
<PAGE>

         5.3 Delivery upon Request or Termination. Upon request by the Employer,
and in any event upon termination of the Employee's employment with the
Employer, the Employee will promptly deliver to the Employer all property
belonging to FLAG or the Bank, including without limitation all Employer
Information then in the Employee's possession or control.

6. Non-Competition. The Employee agrees that during his employment by the
Employer hereunder and, in the event of his termination other than by the
Employer without Cause pursuant to Section 3.2.1(b), by the Employee for Cause
pursuant to Section 3.2.2(a), or by the Employee pursuant to Section 3.2.3, for
a period of twelve (12) months thereafter, the Employee will not (except on
behalf of or with the prior written consent of the Employer), within the Area,
either directly or indirectly, on his own behalf or in the service or on behalf
of others, as an executive employee or in any other capacity which involves
duties and responsibilities similar to those undertaken for the Employer, engage
in any business which is the same as or essentially the same as the Business of
the Employer.

7. Non-Solicitation of Customers. The Employee agrees that during the Employee's
employment by the Employer hereunder and, in the event of Employee's termination
other than by the Employer without Cause pursuant to Section 3.2.1(b), by the
Employee for Cause pursuant to Section 3.2.2(a), or by the Employee pursuant to
Section 3.2.3, for a period of twelve (12) months thereafter, the Employee will
not (except on behalf of or with the prior written consent of the Employer), 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 Bank's customers, 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 Bank.

8. Non-Solicitation of Employees. The Employee agrees that during the Employee's
employment by the Employer hereunder and, in the event of the Employee's
termination other than by the Employer without Cause pursuant to Section
3.2.1(b), by the Employee for Cause pursuant to Section 3.2.3(a), or by the
Employee pursuant to Section 3.2.3, for a period of twelve (12) months
thereafter, 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 FLAG or
its Affiliates, whether or not such employee is a full-time employee or a
temporary employee of FLAG or its Affiliates and whether or not such employment
is pursuant to written agreement and whether or not such employment is for a
determined period or is at will.

9. Remedies. The Employee agrees that the covenants contained in Sections 5
through 8 hereof are of the essence of this Agreement; that each of the
covenants is reasonable and necessary to protect the business, interests and
properties of the Employer; and that irreparable loss and damage will be
suffered by the Employer should he breach any of the covenants. Therefore, the
Employee agrees and consents that, in addition to all the remedies provided by
law or in equity, the Employer shall be entitled to a temporary restraining
order and temporary and permanent injunctions to prevent a breach or
contemplated breach of any of the covenants. The Employer and the Employee agree
that all remedies available to the Employer or the Employee, as applicable,

                                       11
<PAGE>

shall be cumulative. In addition, in the event the Employee fails to comply with
any of the covenants contained in Section 5 hereof and such failure shall not be
cured to the reasonable satisfaction of the Employer within thirty (30) days
after receipt of written notice thereof from the Employer, the Employer shall
thereupon be relieved of liability for all obligations then remaining under
Section 3.3 hereof.

10. Severability. The parties agree that each of the provisions included in this
Agreement is separate, distinct and severable from the other provisions of this
Agreement and that the invalidity or unenforceability of any Agreement provision
shall not affect the validity or enforceability of any other provision of this
Agreement. Further, if any provision of this Agreement is ruled invalid or
unenforceable by a court of competent jurisdiction because of a conflict between
the provision and any applicable law or public policy, the provision shall be
redrawn to make the provision consistent with and valid and enforceable under
the law or public policy.

11. No Set-Off by the Employee. The existence of any claim, demand, action or
cause of action by the Employee against FLAG, or any Affiliate of FLAG, whether
predicated upon this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Employer of any of its rights hereunder.

12. Notice. All notices and other communications required or permitted under
this Agreement shall be in writing and, if mailed by prepaid first-class mail or
certified mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after
the postmarked date thereof. In addition, notices hereunder may be delivered by
hand, facsimile transmission or overnight courier, in which event the notice
shall be deemed effective when delivered or transmitted. All notices and other
communications under this Agreement shall be given to the parties hereto at the
following addresses:

                  (a)      If to the Employer, to the Employer at:

                           FLAG Financial Corporation
                           Attention: Joe Evans
                           Suite 550
                           3475 Piedmont Road, NE
                           Atlanta, Georgia  30305

                  (b)      If to the Employee, to the Employee at:

                           J. Daniel Speight, Jr.
                           1855 Liberty Church Road
                           Pinehurst, Georgia  31070

13. Assignment. Neither party hereto may assign or delegate this Agreement or
any of its rights and obligations hereunder without the written consent of the
other party hereto; provided, however, that this Agreement shall be assumed by
and shall be binding upon any successor to the Employer.


                                       12
<PAGE>

14. Waiver. A waiver by the Employer of any breach of this Agreement by the
Employee shall not be effective unless in writing, and no waiver shall operate
or be construed as a waiver of the same or another breach on a subsequent
occasion.

15. Arbitration. Except for any claim for injunctive relief, any controversy or
claim arising out of or relating to this contract, or the breach thereof, shall
be settled by binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. The Employer 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 Employer and the
Employee agree to share equally the fees and expenses associated with the
arbitration proceedings.

16. Attorneys' Fees. With respect to arbitration of disputes and if litigation
ensues between the parties concerning the enforcement of an arbitration award,
each party shall pay its own fees, costs and expenses; provided, however, the
Employer shall advance to the Employee reasonable fees, costs and expenses
incurred by the Employee in preparing for and in initiating or defending against
any proceeding or suit brought to enforce rights or obligations set forth in
this Agreement. Such advances shall be made within thirty (30) days after
receiving copies of invoices presented by the Employee for such fees, costs and
expenses. The Employee shall have the obligation to reimburse the Employer
within sixty (60) days following the final disposition of the matter (including
appeals) to the full extent of the aggregate advances unless the panel of
arbitrators or court, as the case may be, has ruled in favor of the Employee on
the merits of the substantive issues in dispute.

17. Applicable Law. This Agreement shall be construed and enforced under and in
accordance with the laws of the State of Georgia. The parties agree that the
Superior Court of Fulton County, Georgia, shall have jurisdiction of any case or
controversy arising under or in connection with this Agreement and shall be a
proper forum in which to adjudicate such case or controversy. The parties
consent to the jurisdiction of such courts.

18. Interpretation. Words importing any gender includes all genders. Words
importing the singular form shall include the plural, and vice versa. The terms
"herein," "hereunder," "hereby, "hereto, "hereof" and any similar terms refer to
this Agreement. Any captions, titles or headings preceding the text of any
article, section or subsection herein are solely for convenience of reference
and shall not constitute part of this Agreement or affect its meaning,
construction or effect.

19. Entire Agreement. This Agreement embodies the entire and final agreement of
the parties on the subject matter stated in the Agreement. No amendment or
modification of this Agreement shall be valid or binding upon the Employer or
the Employee unless made in writing and signed by both parties. All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated; provided, however, that this Agreement shall
not alter, limit or otherwise impair the Employee's rights under his existing
defined contribution index retirement plan implemented by Citizens Bank, the

                                       13
<PAGE>

Employee's personal disability policy or under any tax-qualified retirement plan
in which the Employee is or may become a participant.

20. Rights of Third Parties. Nothing herein expressed is intended to or shall be
construed to confer upon or give to any person, firm or other entity, other than
the parties hereto and their permitted assigns, any rights or remedies under or
by reason of this Agreement.

21. Survival. The obligations of the Employer pursuant to Sections 3.2.5 and 3.3
and the obligations of the Employee pursuant to Sections 5, 6, 7, 8 and 9 shall
survive the termination of the employment of the Employee hereunder for the
period designated under each of those respective sections.

         IN WITNESS WHEREOF, the parties hereto have hereunto executed this
Agreement in accordance with the provisions hereof.

                                            FLAG FINANCIAL CORPORATION

                                            /s/ Joseph W. Evans
                                            ---------------------------

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

                                            Date:     February 21, 2002
                                                      -----------------
ATTEST:

/s/ Charles O. Hinely
---------------------

Date:    February 21, 2002
         -----------------

                                            FLAG BANK

                                             /s/ J. Thomas Wiley, Jr.
                                            ---------------------------

                                            Print Name:  J. Thomas Wiley, Jr.
                                                         -------------------

                                            Date:     February 21, 2002
                                                      -----------------
ATTEST:

/s/ Charles O. Hinely
  ---------------------

Date:    February 21, 2002
         -----------------

                                                     /s/ J. Daniel Speight, Jr.
                                                     --------------------------
                                                     J. Daniel Speight, Jr.


                                       14
<PAGE>



                                    Exhibit A

                             Duties of the Employee

     o    Foster a corporate culture that promotes ethical practices, encourages
          individual integrity, fulfills social responsibility, and is conducive
          to attracting, retaining and motivating a diverse group of top-quality
          employees at all levels.

     o    Work with the Board of Directors of the Employer to develop a
          long-term strategy for the Employer that creates shareholder value.

     o    Use best efforts to achieve the Employer's financial and operating
          goals and objectives.

     o    Perform such duties as are required by laws and regulations.

     o    Report to the Chief Executive Officer and the Executive Committee of
          the Board of Directors of the Employer.

     o    Serve on the Loan Committee of the Board of Directors of FLAG and the
          Bank.

     o    Assist with strategic planning and merger and acquisition activities.

     o    Identify non-traditional opportunities on behalf of the Employer.

     o    Maintain relations with other banks and peers.