EXHIBIT 10.7

AMENDED & RESTATED

C&F FINANCIAL CORPORATION

1998 NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN

(as amended December 18, 2007)

ARTICLE I

DEFINITIONS

 

1.01. Affiliate and Associate shall have the respective meanings ascribed to
such terms in Rule12b-2 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”).

 

1.02. Agreement means a written agreement (including any amendment or supplement
thereto) between the Company and a Participant specifying the terms and
conditions of an Award granted to such Participant.

 

1.03. Award means an award of Options as provided for hereunder.

 

1.04. Bank means Citizens and Farmers Bank, or its successors.

 

1.05. Beneficial Owner shall have the meaning ascribed to such term in Rule
13d-3 under the Exchange Act.

 

1.06. Board means the Board of Directors of the Company.

 

1.07. Change in Control shall be deemed to have occurred if the conditions set
forth in any one of the following paragraphs shall have been satisfied:

(i) any Person (other than the Company, any Subsidiary, a trustee or other
fiduciary holding securities under any employee benefit plan of the Company, or
its Subsidiaries), who or which, together with all Affiliates and Associates of
such Person, is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company’s then outstanding securities; or

(ii) if, at any time after the Effective Date, the composition of the Board of
Directors of the Company shall change such that a majority of the Board of the
Company shall no longer consist of Continuing Directors; or

(iii) if at any time, (1) the Company shall consolidate with, or merge with, any
other Person and the Company shall not be the continuing or surviving
corporation, (2) any Person shall consolidate with or merge with the Company,
and the Company shall be the continuing or surviving corporation and, in
connection therewith, all or part of the outstanding Common Stock shall be
changed into or exchanged for stock or other securities of any other Person or
cash or any other property, (3) the Company shall be a party to a statutory
share exchange with any other Person after which the Company is a subsidiary of
any other Person, or (4) the Company shall sell or otherwise transfer 50% or
more of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any Person or Persons.

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1.08. Code means the Internal Revenue Code of 1986, as amended.

 

1.09. Common Stock means the common stock of the Company.

 

1.10. Company means C&F Financial Corporation, or its successors.

 

1.11. Continuing Director means an individual who was a member of the Board of
Directors of the Company on the Effective Date or whose subsequent nomination
for election or re-election to the Board of Directors of the Company was
recommended or approved by the affirmative vote of two-thirds of the Continuing
Directors then in office.

 

1.12. Date of Grant means September 1, 1998 and May 1 for each year thereafter
during the term of the Plan.

 

1.13. Fair Market Value means the closing price (or, if there are no trades on
the Date of Grant, then the next preceding date upon which a closing price is
available) of the Common Stock as reported on NASDAQ (or other applicable
listing service or exchange used by the Company) on the Option’s Date of Grant,
or if in the judgment of the Board of Directors there is insufficient recent
trading activity to warrant determination of the Fair Market Value solely on the
basis of such closing prices on the listing service or exchange, then the Fair
Market.

 

1.14. Option means a stock option granted pursuant to Article IV, and that
entitles the holder to purchase from the Company a stated number of shares of
Common Stock at the shares’ Fair Market Value.

 

1.15. Participant means a member of the Board of the Company or the Bank who is
not an employee of the Company or the Bank on the applicable Date of Grant;
provided, directors serving on both the Board of the Company and the Bank shall
be entitled to participate only as to one Award under the Plan per year.

 

1.16. Person shall have the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
“group” as defined in Section 13(d).

 

1.17. Plan means the C&F Financial Corporation 1998 Non-Employee Director Stock
Compensation Plan.

 

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1.18. Subsidiary shall mean a corporation at least 50% of the total combined
voting power of all classes of stock of which is owned by the Company, either
directly or through one or more of its Subsidiaries.

 

1.19 Committee shall mean the committee of the Board appointed to administer the
Plan pursuant to Article III herein, all of the members of which shall be
“non-employee directors” as defined in Rule 16b-3, as amended, under the
Exchange Act, or any similar or successor rule, and “outside directors” within
the meaning of Section 162(m)(4)(C)(i) of the Code, as amended. Unless otherwise
determined by the Board, the Committee shall consist of compensation committee
of the Board.

ARTICLE II

PURPOSE

The Plan is intended to promote a greater identity of interest between
Participants and the Company’s shareholders by increasing the Participants
proprietary interest in the Company through the receipt of Awards in the form of
Options.

ARTICLE III

ADMINISTRATION

The Plan shall be administered by the Committee which shall have all powers
necessary or desirable for such administration. The express grant in this Plan
of any specific power to the Committee shall not be construed as limiting any
power or authority of the Committee. In addition to any other powers and subject
to the provisions of the Plan, the Committee shall have the following specific
powers: (i) to determine the terms and conditions upon which the Awards may be
made and exercised; (ii) to determine all terms and provisions of each
Agreement, which need not be identical; (iii) to construe and interpret the
Agreements and the Plan; (iv) to establish, amend, or waive rules or regulations
for the Plan’s administration; (v) to accelerate the exercisability of any
Award; and (vi) to make all other determinations and take all other actions
necessary or advisable for the administration of the Plan. All expenses of
administering this Plan shall be borne by the Company.

 

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ARTICLE IV

GRANT OF OPTIONS

On each Date of Grant during the term of the Plan, each Participant
automatically will receive an Option for shares of Common Stock determined in
accordance with the following schedule:

 

Date of Grant

   Number of Shares
Subject to Option

September 1, 1998

   1,000

May 1, 1999

   1,000

May 1, 2000

   1,000

May 1, 2001

   1,000

May 1, 2002

   1,000

May 1, 2003

   1,000

May 1, 2004

   1,000

May 1, 2005

   1,000

May 1, 2006

   1,000

May 1, 2007

   1,000

May 1, 2008

   1,000

At the discretion of the Committee, the number of shares subject to the
automatic option may be increased up to 250 shares per year per participant, on
a cumulative basis (1,250 shares in 1999, 1,500 shares in 2000, etc.), during
the term of the Plan, subject to a maximum of 2,000 shares granted per year per
participant. Any deferred increase may be applied in a subsequent year (e.g., if
there is no increase in 1999, 1,750 shares may be granted in 2000). Such
increase shall be evidenced by an appropriate resolution adopted by a majority
of the members of the Board. All Options shall be evidenced by Agreements which
shall be subject to the applicable provisions of the Plan and to such other
provisions as the Committee may adopt.

ARTICLE V

STOCK SUBJECT TO OPTIONS

Upon the exercise of any Option, the Company may deliver to the Participant (or
the Participant’s broker if the Participant so directs) authorized but unissued
Common Stock. The maximum aggregate number of shares of Common Stock that may be
issued pursuant to the exercise of Options under this Plan is 150,000, subject
to adjustment as provided in Article IX. If an Option is terminated, in whole or
in part, for any reason other than its exercise, the number of shares of Common
Stock allocated to the Option or portion thereof may be reallocated to other
Options to be granted under this Plan.

 

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ARTICLE VI

OPTION PRICE

The price per share for Common Stock purchased on the exercise of an Option
shall be the share’s Fair Market Value.

ARTICLE VII

EXERCISE OF OPTIONS

 

7.01. Maximum Option Period. No Option shall be exercisable after the expiration
often years from its Date of Grant.

 

7.02. Nontransferability. Options granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution.
During the lifetime of the Participant to whom the Option is granted, the Option
may be exercised only by the Participant. No right or interest of a Participant
in any Option shall be liable for, or subject to, any lien, obligation, or
liability of such Participant.

ARTICLE VIII

METHOD OF EXERCISE OF OPTIONS

 

8.01. Exercisability of Options. Subject to the provisions of Section 8.04 and
Articles VII and X hereof, an Option becomes exercisable on April 30 in the
calendar year following its Date of Grant. However, an Option granted to a
Participant shall be immediately exercisable if the Participant’s membership on
the Board terminates as a result of the Participant’s retirement in accordance
with the Company’s, or any of its subsidiaries’, policies, death or permanent
and total disability (as such term is defined in Section 22(e)(3) of the Code)
or a Change in Control. An Option shall be forfeited if, as of the termination
of the Participant’s membership on the Board, the Option is not then exercisable
and such termination occurs for any reason other than the Participant’s
retirement in accordance with Company’s, or any of its subsidiaries’ policies,
death or disability (as defined above) or a Change in Control. Options that are
exercisable or that become exercisable upon the Participant’s termination of
membership on the Board will remain exercisable until the tenth anniversary of
the Option’s Date of Grant. An Option may be exercised with respect to any
number of whole shares less than the full number for which the Option could be
exercised. A partial exercise of an Option shall not affect the right to
exercise the Option from time to time in accordance with this Plan and the
applicable Agreement with respect to the shares remaining subject to the Option.

 

8.02.

Payment. Unless otherwise provided by the Agreement, payment of the Option price
shall be made in cash or a cash equivalent acceptable to the Board. In addition,
all or part of the Option price may be paid by surrendering shares of Common

 

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Stock to the Company. If Common Stock is used to pay all or part of the Option
price, the shares surrendered must have a fair market value that is not less
than such price or part thereof. For purposes of this paragraph 8.02 only, the
fair market value of the surrendered shares shall be based on the closing price
on the most recent date immediately prior to the date of exercise (or, if there
are no trades on such date, then the next preceding date upon which a closing
price is available) of the Common Stock as reported on NASDAQ (or other
applicable listing service or exchange used by the Company).

 

8.03. Shareholder Rights. No Participant shall have any rights as a shareholder
with respect to shares subject to his Option until the date of exercise of such
Option.

 

8.04. Change in Control. In the event of a Change in Control of the Company, the
Committee, as constituted before such Change in Control, in its sole discretion
may, as to any outstanding Award, either at the time the Award is made or any
time thereafter, take any one or more of the following actions: (i) provide for
the acceleration of any time periods relating to the exercise or realization of
any such Award so that such Award may be exercised or realized in full on or
before a date initially fixed; (ii) provide for the purchase or settlement of
any such Award by the Company, upon a Participant’s request, for an amount of
cash equal to the amount which could have been obtained upon the exercise of
such Award or realization of such Participant’s rights had such Award been
currently exercisable or payable; (iii) make such adjustment to any such Award
then outstanding as the Committee deems appropriate to reflect such Change in
Control; or (iv) cause any such Award then outstanding to be assumed, or new
rights substituted therefor, by the acquiring or surviving corporation in such
Change in Control.

ARTICLE IX

ADJUSTMENT UPON CHANGE IN COMMON STOCK

The number and class of shares subject to each outstanding Option, the Option
price, and the annual limits on and the aggregate number and class of shares for
which Awards thereafter may be made shall be proportionately, equitably, and
appropriately adjusted in such manner as the Committee shall determine in order
to retain the economic value or opportunity to reflect any stock dividend, stock
split, recapitalization, merger, consolidation, reorganization,
reclassification, combination, exchange of shares or similar event in which the
number or class of shares is changed without the receipt or payment of
consideration by the Company. Any determination made under this Article IX by
the Committee shall be final and conclusive.

The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares of obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, outstanding
Awards.

 

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ARTICLE X

COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES

No Option shall be exercisable, no Common Stock shall be issued, no certificates
for shares of Common Stock shall be delivered, and no payment shall be made
under this Plan except in compliance with all applicable federal and state laws
and regulations (including, without limitation, withholding tax requirements),
and applicable requirements of any exchange or other market having authority
over the trading of the Company’s shares.

ARTICLE XI

GENERAL PROVISIONS

 

11.01. Effect on Service. Neither the adoption of this Plan, its operation,
documents describing or referring to this Plan (or any part thereof) shall
confer on any Participant any right to continue service as a member of the
Board.

 

11.02. Unfunded Plan. The Plan, insofar as it provides for grants, shall be
unfunded and the Company shall not be required to segregate any assets that may
be represented at any time by grants under this Plan. Any liability of the
Company to any person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that are created pursuant to this Plan.
No such obligation of the Company shall be deemed to be secured by any pledge
of, or other encumbrance on, any property of the Company.

 

11.03. Rules of Construction. Headings are given to the articles and sections of
the Plan solely as a convenience to facilitate reference. The reference to any
statute, regulation, or provision of law shall be construed to refer to any
amendment to or successor of such provision of law.

ARTICLE XII

AMENDMENT

The Board may amend this Plan from time to time; provided that, if the Board
determines that shareholder approval is required and the Plan is submitted for
such approval and adopted, then no subsequent amendment may become effective
until shareholder approval is obtained if the amendment (i) materially increases
the aggregate number of shares of Common Stock that may be issued under the
Plan, except in accordance with the provisions of Article IX, (ii) materially
changes the class of individuals eligible to become Participants or
(iii) materially increases the benefits that may accrue to Participants under
the Plan, and provided further that the Board may not amend the Plan more than
once in any six month period unless such amendment is required to comply with
the Code. No amendment shall, without a Participant’s consent, adversely affect
any rights of such Participant under any Option outstanding at the time such
amendment is made.

 

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ARTICLE XIII

TERMINATION

The Board may terminate this Plan at any time. This Plan will terminate
automatically, without any action of the Board, if, on any Date of Grant, there
are insufficient shares available for the grant of Awards in accordance with the
terms of the Plan. The termination of this Plan shall not affect any rights of a
Participant under any Option outstanding at the time of such termination.

ARTICLE XIV

DURATION OF PLAN

No Award may be granted under this Plan after ten years from the date of the
first grant of an Option under the Plan. Options granted on or before such date
shall remain valid in accordance with their terms.

ARTICLE XV

EFFECTIVE DATE OF PLAN

This Plan was approved by the Board of Directors of the Company on August 18,
1998. The Effective Date of the Plan shall be September 1, 1998 and no Awards
may be granted prior to the Effective Date.

 

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