Exhibit 10.12.1

AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT is entered into as of the 30th day of December, 2008, by and
between C&F FINANCIAL CORPORATION, a Virginia corporation (the “Company”), and
BRYAN MCKERNON (the “Executive”).

RECITALS

I. The Company and the Executive previously entered into an Employment Agreement
dated as of December 19, 2006 (the “Agreement”); and

II. The Company and the Executive desire to amend the Agreement to comply with
the requirements of Section 409A of the Internal Revenue Code and applicable
guidance issued thereunder (“Code Section 409A”).

NOW, THEREFORE, it is hereby agreed as follows:

1. Section 2 of the Agreement is amended to read as follows:

2. Compensation; Bonus. McKernon shall be paid monthly salary payments, based on
an annual salary of no less than $195,000.00.

In addition, C&F will pay to McKernon a bonus equal to a percentage of
            (calculated according to Generally Accepted Accounting Principles)
            realized by C&F, according to the following schedule:

 

 

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The bonus will be computed at the end of each month and will be paid prior to
the end of the next month, except as limited by the next paragraph. The bonus
computation will be based upon 80% of the annualized year-to-date results and
will be adjusted at year-end based upon final results in order that the total
bonus will be equal to the appropriate percentage of year end             . Any
amount due based on the adjustment after the end of any calendar year will be
paid no later than 60 days after the end of such calendar year.

2. Section 4(B) is amended to read as follows:

4. Further Termination of Agreement

B. C & F shall have the right, at any time and at its sole option, to buy out
McKernon’s interest in this Agreement and terminate his employment, thereafter
having no further obligation to McKernon except as may be set out in this
Agreement, based upon the following chart:

 

 

     

 

     

 

  

 

     

 

     

 

  

 

     

 

     

 

  

 

     

 

     

 

  

For purposes of this paragraph, NIBT shall be defined as Net Income Before
Taxes, as defined in paragraph 2 of this Agreement) for the 12 months
immediately preceding the buy out. Such buyout payments shall be paid in a lump
sum within 30 days of McKernon’s termination of employment.

Should this Agreement be terminated under the provisions of this paragraph, C&F
may purchase a “non-competition” commitment from McKernon, on a month-to-month
basis for up to 12 months, based upon the following monthly purchase price:
(i) If McKernon is gainfully employed at the time of a monthly payment, a
monthly amount equal to one-half of his monthly base salary at C&F at the time
of termination; or (ii) if McKernon is not gainfully employed at the time of a
monthly payment, a monthly amount equal to his full monthly base salary at C&F
at the time of termination. Under the non-competition commitment, McKernon shall
be prohibited from communicating with, soliciting or hiring any employee of C&F.

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3. Section 9(E) is hereby added to the Agreement as follows:

9. General Provisions.

E. Code Section 409A Provisions.

(a) The intent of the parties is that payments and benefits under this Agreement
comply with Code Section 409A or comply with an exemption from the application
of Code Section 409A and, accordingly, all provisions of this Agreement shall be
construed in a manner consistent with the requirements for avoiding taxes or
penalties under Code Section 409A.

(b) Neither McKernon nor C&F shall take any action to accelerate or delay the
payment of any monies and/or provision of any benefits in any matter which would
not be in compliance with Code Section 409A (including any transition or
grandfather rules thereunder) to the extent Code Section 409A applies to such
payment or benefit.

(c) A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the form or timing of
payment of any amounts or benefits upon or following a termination of employment
unless such termination is also a “separation from service” (within the meaning
of Code Section 409A) and, for purposes of any such provision of this Agreement
under which (and to the extent) deferred compensation subject to Code
Section 409A is paid, references to a “termination” or “termination of
employment” or like references shall mean separation from service. If McKernon
is deemed on the date of separation from service with the Company to be a
“specified employee”, within the meaning of that term under Code
Section 409A(a)(2)(B) and using the identification methodology selected by the
Company from time to time, or if none, the default methodology, then with regard
to any payment or benefit that is required to be delayed in compliance with Code
Section 409A(a)(2)(B), such payment or benefit shall not be made or provided
prior to the earlier of (i) the expiration of the six- month period measured
from the date of McKernon’s separation from service or (ii) the date of
McKernon’s death. On the first day of the seventh month following the date of
McKernon’s separation from service or, if earlier, on the date of McKernon’s
death, all payments delayed pursuant to this Section 9.E. (whether they would
have otherwise been payable in a single sum or in installments in the absence of
such delay) shall be paid or reimbursed to Fox in a lump sum (without interest),
and any remaining payments and benefits due under this Agreement shall be paid
or provided in accordance with the normal payment dates specified for them
herein.

(d) With regard to any provision herein that provides for reimbursement of
expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the
right to reimbursement or in-kind benefits is not subject to liquidation or
exchange for another benefit, and (ii) the amount of expenses eligible for
reimbursement, or in- kind benefits, provided during any taxable year shall not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year, provided that the foregoing clause
(ii) shall not be violated with regard to expenses reimbursed under any
arrangement covered by Section 105(b) of the Internal Revenue Code solely
because such expenses are subject to a limit related to the period the
arrangement is in effect. All reimbursements shall be reimbursed in accordance
with C&F’s reimbursement policies but in no event later than the calendar year
following the calendar year in which the related expense is incurred.

(e) If under this Agreement, an amount is to be paid in two or more
installments, for purposes of Code Section 409A, each installment shall be
treated as a separate payment.

(f) When, if ever, a payment under this Agreement specifies a payment period
with reference to a number of days (e.g., “payment shall be made within ten
(10) days following the date of termination”), the actual date of payment within
the specified period shall be within the sole discretion of C&F.

(g) Notwithstanding any of the provisions of this Agreement, C&F shall not be
liable to McKernon if any payment or benefit which is to be provided pursuant to
this Agreement and which is considered deferred compensation subject to Code
Section 409A otherwise fails to comply with, or be exempt from, the requirements
of Code Section 409A.

 

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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

 

/s/ Bryan McKernon

Bryan McKernon C&F FINANCIAL CORPORATION By:  

/s/ Larry G. Dillon

  Larry G. Dillon   Chairman, Board of Directors

 

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