EXHIBIT 10.1

                          EMPLOYMENT AGREEMENT BETWEEN

              J. DANIEL SPEIGHT, JR. AND FLAG FINANCIAL CORPORATION



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                              EMPLOYMENT AGREEMENT

     THIS  AGREEMENT  is made as of the 1st day of April,  1998 (the  "Effective
Date"),  between  FLAG  Financial   Corporation,   a  Georgia  corporation  (the
"Employer"), and J. DANIEL SPEIGHT, Jr., a resident of the State of Georgia (the
"Employee").

                                    RECITALS:

         The Employer  desires to employ the Employee as the President and Chief
Executive  Officer of the Employer and as President and Chief Executive  Officer
of Citizens Bank and the Employee desires to accept such employment.

         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  the
Employer, is controlled by or is under common control with the Employer.

      1.3 "Area" shall mean the geographic  area within the boundaries of Crisp,
Troup,  Dooly, Macon and Telfair Counties,  Georgia. It is the express intent of
the  parties  that the Area as  defined  herein is the area  where the  Employee
performs or performed services on behalf of the Employer under this Agreement as
of, or within a  reasonable  time prior to, the  termination  of the  Employee's
employment hereunder.

      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
below) and most recently paid Incentive  Compensation  (as defined below) (b) by
twelve.

      1.5  "Bank"  shall  mean,  collectively,  First  Federal  Savings  Bank of
LaGrange and Citizens Bank, or their successors.

      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.

      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 Employees' 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;

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                  (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 the Bank 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 the
         Employer (with the assistance of counsel, if desired) and, in the event
         of any such  hearing,  the  decision of the  Employer is evidenced by a
         resolution  adopted  by  two-thirds  of the  members  of the  Board  of
         Directors of the Employer after the hearing;

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

                  (d)  Conduct by the  Employee  that  results in the  permanent
         removal from the  Employee's  position as an officer or employee of the
         Employer  pursuant  to a written  order by any  regulatory  agency with
         authority or jurisdiction over the Employer.

             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 the Employer to
         elect Employee as President and Chief Executive Officer of the Employer
         and of  Citizens  Bank,  or the  failure  of  the  shareholders  of the
         Employer to elect both Patti S. Davis and  Employee as directors of the
         Employer;

                  (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; or

                  (d) a  material  diminution  in the  powers,  responsibilities
         or duties of the Executive  Committee of the Board of Directors of 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. 

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

      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 law;

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

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

                  (d)   The particular  names,  methods and procedures  utilized
         by the Employer 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 the
         Employer 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 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 "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 the Employer,
         if, after the  transaction,  the  acquiring  person (or persons)  owns,
         controls or holds with power to vote twenty-five  percent (25%) or more
         of any  class  of  voting  securities  of the  Employer  or such  other
         transaction as may be described under 12 C.F.R. Section 225.41(b)(1) or
         any successor thereto;

                           (b) within any twelve-month  period  (beginning on or
         after  the  Effective  Date)  the  persons  who were  directors  of the
         Employer  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  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 (as such terms are used in Rule 14a-11 of  Regulation
         14A promulgated under the Securities  Exchange Act of 1934) relating to
         the election of directors shall be deemed to be an Incumbent Director;

                           (c) the approval by the  stockholders of the Employer
         of a  reorganization,  merger or  consolidation,  with respect to which
         persons who were the stockholders of the Employer  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 the Employer and its subsidiaries to
         any third party.

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      1.11  "Initial  Term"  shall mean that  period of time  commencing  on the
Effective  Date and  running  until  the day  immediately  preceding  the  third
anniversary of the Effective Date.

      1.12  "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 Employer 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  180  consecutive  days as  certified  by a
physician chosen by the Employee and reasonably acceptable to the Employer.

      1.13.  "Term" shall mean the term of this  Agreement  and shall consist of
the Initial Term; provided,  however,  that the Initial Term shall automatically
renew each day after the  Effective  Date so that the Term  remains a three-year
term until either party provides  written notice to the other of the intent that
the automatic  renewals shall cease, in which case, the Term shall expire on the
third anniversary of the date of the written notice so provided.

      1.14 "Trade  Secrets"  means  information  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.


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

      2.1  The  Employee  is  employed  initially  as the  President  and  Chief
Executive  Officer of the Employer and, subject to the direction of the Board of
Directors of the Employer or its designee,  consistent  with this  Agreement and
the  designation  of Employee as President and Chief  Executive  Officer,  shall
perform and discharge  well and  faithfully  the duties which may be assigned to
the Employee from time to time by the Employer in connection with the conduct of
its business.  The duties and  responsibilities of the Employee are 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 Board of Directors of the Employer which are consistent  with this Agreement
and the  designation of Employee as President and Chief Executive  Officer;  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

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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 (c)  participating  in civic and  professional  affairs and
organizations  and  conferences,  preparing  or  publishing  papers  or books or
teaching  so  long  as the  Board  approves  of  such  activities  prior  to the
Employee's  engaging in them.  Notwithstanding  anything to the  contrary in the
preceding  provisions of this Section 2.3, the Employee may continue to serve on
any board of directors that the Employee serves upon as of the Effective Date.

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

      3.1  Term.This  Agreement  shall  remain in effect for the Term or until a
termination of this Agreement  prior to the expiration of the Term in accordance
with the remaining provisions of this Section.

      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 75% of the  membership  of the Board of  Directors of
                  the Employer 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 payable 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 payable as of the effective date of the
                  termination.

                  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 payable as of the
         effective date of the termination.


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                  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  payable 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 full months  commencing with the month following the month in which
         the date of termination occurs.

      3.3 Termination Payments. In the event 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
continue to provide  the  Employee  the  benefits  described  in Section 4.6 and
Section 4.8 and 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.

     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
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  Fifteen  Thousand  Dollars  ($215,000)  per year ("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  Bank  and its  compliance  with
regulatory  standards.  Such  salary  shall be  payable in  accordance  with the
Employer's normal payroll practices.


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     4.2 Incentive  Compensation.  The Employee shall be entitled to participate
in such bonus,  incentive and other executive  compensation programs as are made
available to senior  management  of the Employer and Bank from time to time (the
"Incentive Compensation").

      4.3 Stock Options.  The Employer shall grant to the Employee stock options
commensurate  with the Employee's  position  taking into account options held by
the Employee as of the Effective  Date. 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  and Bank
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.

      4.6 Automobile. The Employer shall provide the Employee with an automobile
comparable  to  the  automobile  provided  to the  Employee  by  Middle  Georgia
Bankshares,  Inc.  immediately prior to the Effective Date, with such automobile
to be used by the Employee for business and personal  purposes.  The  automobile
shall be replaced  with a new,  comparable  automobile no less  frequently  than
every  twenty-four (24) months.  The Employer will pay expenses  associated with
the operation and maintenance of the automobile,  including taxes, insurance and
repairs.

      4.7 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
from time to time  adopted by the Employer  and in  sufficient  detail to comply
with rules and regulations promulgated by the Internal Revenue Service.

      4.8 Memberships.  The Employer shall reimburse the Employee for the annual
dues  associated  with membership in two country or eating clubs selected by the
Employee; provided, however, that the aggregate annual dues for such memberships
shall not exceed five percent (5%) of the Employee's Base Salary then in effect,
and for memberships in such  professional  associations  which are  commensurate
with the Employee's position;  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 from time to time adopted by
the  Employer  and in  sufficient  detail to comply  with rules and  regulations
promulgated by the Internal Revenue Service.

      4.9 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.

      4.10   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,  FICA and other withholding
requirements.

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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.

      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 the Employer, 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 a
principal,  partner,  officer,  director,  manager,  supervisor,  administrator,
consultant,  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),  within  the  Area,  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  Employer's  or 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 Employer and 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,  within the
Area,  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 Employer or its Affiliates,

                                       8
<PAGE>

whether or not such employee is a full-time  employee or a temporary employee of
the Employer 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,  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  the  Employer,  or any  Affiliate  of the  Employer,  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 it at:

                  101 North Greenwood St.
                  PO Box 3007
                  LaGrange, GA  30240-2699

                  Attn: Chairman of the Board
                        Flag Financial Corporation

                                       9
<PAGE>

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

                  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.

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.
-----------------

     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 Troup  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
Troup  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 the Citizens Bank Executive Indexed
Retirement Program,  under that certain Insurance Agreement between the Employee

                                       10
<PAGE>

and Citizens Bank, dated November 2, 1992 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.

                                       11
<PAGE>


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

                           FLAG FINANCIAL CORPORATION

                                          /s/Fred Durand III
                                          ------------------
                             Print Name:  Fred Durand III
                                          ------------------
                                          Date:  1 April 1998 
                                          ------------------
            

ATTEST:

/s/---------------------------

Date: 4-1-98
                                          /s/ J. Daniel Speight, Jr.
                                          --------------------------
                                          J. Daniel Speight, Jr.





                                       12
<PAGE>


                                    Exhibit A

                             Duties of the Employee

*      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.

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

*      Develop and  recommend to the Board of  Directors of the Employer  annual
       business  plans  and  budgets  that  support  the  Employer's   long-term
       strategy.

*      Manage the day-to-day business affairs of the Employer appropriately.

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

*      Improve the quality and value of the products  and  services  provided by
       each Employer.

*      Ensure that the Employer  maintains a satisfactory  competitive  position
       within its industry.

*      Develop  an  effective  management  team  and  an  active  plan  for  its
       development and succession.  Have  responsibility for hiring,  firing and
       transferring  members of Employer  management  team and other  employees.
       Have  responsibility  for making  recommendations  for the  promotion and
       compensation of members of Employer management team and other employees.

*      Implement,  administer,  interpret,  and  ensure  compliance  with  major
       corporate policies adopted by the Board of Directors.

*      Execute  contracts  on  behalf  of the  Employer  and  delegate  to other
       employees the right to execute contracts on behalf of the Employer.

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

*      Report to the Executive Committee of Board of Directors.

*      Ensure that the  Employer  achieves  maximum  profits  while  taking into
       account the best interests of the Employer's customers,  shareholders and
       employees.

*      Serve on all  committees  of the Board of Directors  other than the Audit
       Committee.

&      Develop, supervise and administer the Employer's policy.

*      Establish contact, coordinate and negotiate with the Employer's potential
       acquisition targets.

*      Ensure that all Banks uphold the Employer's image.

*      Manage general and active financial affairs of the Employer.