Edgar Filing: C & F FINANCIAL CORP

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

C & F FINANCIAL CORPORRATION
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Notes:
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SEC 1913 (3-99)

[LOGO]

C&F Financial Corporation
Eighth and Main Streets
P.O. Box 391
West Point, Virginia 23181

Dear Fellow Shareholders:

You are cordially invited to attend the 2002 Annual Meeting of
Shareholders of C&F Financial Corporation, the holding company for Citizens and
Farmers Bank. The meeting will be held on Tuesday, April 16, 2002, at 3:30 p.m.
at the Father van den Boogaard Center, 3510 King William Avenue, West Point,
Virginia. The accompanying Notice and Proxy Statement describe the matters to be
presented at the meeting. Enclosed is our Annual Report to Shareholders that
will be reviewed at the Annual Meeting.

Please complete, sign, date, and return the enclosed proxy card as
soon as possible. Whether or not you will be able to attend the Annual Meeting,
it is important that your shares be represented and your vote recorded. If you
decide to attend the Annual Meeting in person, you can revoke your proxy at any
time before it is voted at the Annual Meeting.

We appreciate your continuing loyalty and support of C&F Financial
Corporation.

Sincerely,

/s/ Larry G. Dillon

Larry G. Dillon
President & Chief Executive Officer

West Point, Virginia
March 15, 2002

C&F FINANCIAL CORPORATION
Eighth and Main Streets
P.O. Box 391
West Point, Virginia 23181

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NOTICE OF 2002 ANNUAL MEETING OF SHAREHOLDERS

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TO BE HELD APRIL 16, 2002

The 2002 Annual Meeting of Shareholders of C&F Financial Corporation
(the "Company") will be held at the Father van den Boogaard Center, 3510 King
William Avenue, West Point, Virginia, on Tuesday, April 16, 2002, at 3:30 p.m.
for the following purposes:

1. To elect three Class III directors to the Board of Directors of
the Company to serve until the 2005 Annual Meeting of
Shareholders, as described in the Proxy Statement accompanying
this notice.

2. To ratify the Board of Directors' appointment of Yount, Hyde &
Barbour, P.C., as the Company's independent public accountants
for 2002.

3. To transact such other business as may properly come before the
meeting or any adjournment thereof.

Shareholders of record at the close of business on February 26, 2002,
are entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.

By Order of the Board of Directors,

/s/ Gari B. Sullivan

Gari B. Sullivan
Secretary

March 15, 2002

IMPORTANT NOTICE

Please complete, sign, date, and return the enclosed proxy card in the
accompanying postage paid envelope so that your shares will be represented at
the meeting. Shareholders attending the meeting may personally vote on all
matters that are considered, in which event their signed proxies are revoked.

C&F FINANCIAL CORPORATION
Eighth and Main Streets
P.O. Box 391
West Point, Virginia 23181

PROXY STATEMENT
2002 ANNUAL MEETING OF SHAREHOLDERS
April 16, 2002

GENERAL

The following information is furnished in connection with the
solicitation by and on behalf of the Board of Directors of the enclosed proxy to
be used at the 2002 Annual Meeting of the Shareholders (the "Annual Meeting") of
C&F Financial Corporation (the "Company") to be held Tuesday, April 16, 2002, at
3:30 p.m. at the Father van den Boogaard Center, 3510 King William Avenue, West
Point, Virginia. The approximate mailing date of this Proxy Statement and
accompanying proxy is March 15, 2002.

Revocation and Voting of Proxies

Execution of a proxy will not affect a shareholder's right to attend
the Annual Meeting and to vote in person. Any shareholder who has executed and
returned a proxy may revoke it by attending the Annual Meeting and requesting to
vote in person. A shareholder may also revoke his proxy at any time before it is
exercised by filing a written notice with the Company or by submitting a proxy
bearing a later date. Proxies will extend to, and will be voted at, any properly
adjourned session of the Annual Meeting. If a shareholder specifies how the
proxy is to be voted with respect to any proposals for which a choice is
provided, the proxy will be voted in accordance with such specifications. If a
shareholder fails to specify with respect to such proposals, the proxy will be
voted FOR proposals 1, and 2, as set forth in the accompanying notice and
further described herein.

Voting Rights of Shareholders

Only those shareholders of record at the close of business on February
26, 2002, are entitled to notice of and to vote at the Annual Meeting, or any
adjournments thereof. The number of shares of common stock of the Company
outstanding and entitled to vote at the Annual Meeting is 3,529,726. The Company
has no other class of stock outstanding. A majority of the votes entitled to be
cast, represented in person or by proxy, will constitute a quorum for the
transaction of business. Each share of Company common stock entitles the record
holder thereof to one vote upon each matter to be voted upon at the Annual
Meeting.

With regard to the election of directors, votes may be cast in favor
or withheld. If a quorum is present, the nominees receiving a plurality of the
votes cast at the Annual Meeting will be elected directors; therefore, votes
withheld will have no effect. The ratification of Yount, Hyde & Barbour, P.C. as
the Company's independent public accountants requires an affirmative vote of a
majority of the shares cast on the matter. Thus, although abstentions and broker
non-votes (shares held by customers which may not be voted on certain matters
because the broker has not received specific instructions from the customers)
are counted for purposes of determining the presence or absence of a quorum for
the transaction of business, they are generally not counted for purposes of
determining whether such a proposal has been approved, and therefore have no
effect.

Solicitation of Proxies

The cost of solicitation of proxies will be borne by the Company.
Solicitations will be made only by the use of the mail, except that officers and
regular employees of the Company and Citizens and Farmers Bank (the "Bank") may
make solicitations of proxies by telephone, telegram, special letter, or by
special call, acting without compensation other than their regular compensation.
It is contemplated that brokerage houses and other nominees, custodians, and
fiduciaries will be requested to forward the proxy soliciting material to the
beneficial owners of the stock held of record by such persons, and the Company
will reimburse them for their charges and expenses in this connection.

Security Ownership of Certain Beneficial Owners and Management

The following table shows the share ownership as of February 26, 2002,
of the shareholders known to the Company to be the beneficial owners of more
than 5% of the Company's common stock, par value $1.00 per share, which is the
Company's only voting security outstanding.

Amount and Nature
Name and Address of Beneficial Percent
of Beneficial Owner Ownership/(1)/ of Class
------------------- --------- --------

SunTrust Banks, Inc. 244,828/(2)/ 6.9%
303 Peachtree Street, Suite 1500
Atlanta, Georgia 30308

_________________________

/(2)/ Based on Amendment No. 3 to a Schedule 13G filed with the Securities
and Exchange Commission on February 14, 2002 by SunTrust Banks, Inc.
and certain of its subsidiaries. According to this Amendment No. 3,
SunTrust Banks, Inc. and these subsidiaries have sole voting power with
respect to 244,828 of theses shares, sole investment power with respect
to 38,680 of these shares and shared investment power with respect to
206,148 of these shares. The 244,828 shares are held by one or more
subsidiaries of SunTrust Banks, Inc. in various fiduciary and agency
capacities. SunTrust Banks, Inc. and such subsidiaries disclaim any
beneficial interest in any of the shares reported.

The following table shows as of February 26, 2002, the beneficial
ownership of the Company's common stock for each director, director nominee,
certain executive officers and for all directors, director nominees, and
executive officers of the Company as a group.

Amount and Nature of
Name Beneficial Ownership/(1)/ Percent of Class
----- ------------------------- ----------------

J. P. Causey Jr. 36,938/(3)/ 1.0%
Barry R. Chernack 605 *
Larry G. Dillon 46,202/(2)/ 1.3%
James H. Hudson III 5,590/(3)/ *
Joshua H. Lawson 30,922/(3)/ *
William E. O'Connell Jr. 5,750/(3)/ *
Paul C. Robinson 6,192/(3)/ *
Thomas F. Cherry 5,700/(2)/ *
Gari B. Sullivan 3,237/(2)/ *
All Directors, Nominees and Executive
Officers as a group (9 persons) 141,136 4.0%

_____________________

* Represents less than 1% of the total outstanding shares of the Company's
common stock.

/(1)/ For purposes of this table, beneficial ownership has been determined in
accordance with the provisions of Rule 13d-3 of the Securities Exchange
Act of 1934 under which, in general, a person is deemed to be the
beneficial owner of a security if he or she has or shares the power to
vote or direct the voting of the security or the power to dispose of or
direct the disposition of the security, or if he or she has the right to
acquire beneficial ownership of the security within sixty days.
/(2)/ Includes 17,700 shares, 5,500 shares, and 1,500 shares for Mr. Dillon,
Mr. Cherry, and Mr. Sullivan, respectively, as to which they hold
presently exercisable options. A description of such options is set
forth below in greater detail in "Compensation Committee Report on
Executive Compensation."
/(3)/ Includes 3,750 shares that may be acquired upon the exercise of options.
A description of the plan under which these options were issued is set
forth below in "Director Compensation."

PROPOSAL ONE
ELECTION OF DIRECTORS

The Company's Board is divided into three classes (I, II, and III) of
directors. The term of office for Class III directors will expire at the Annual
Meeting. Three persons named below, each of whom currently serves as a director
of the Company, will be nominated to serve as Class III directors. If elected,
the Class III nominees will serve until the 2005 Annual Meeting of Shareholders.
The persons named in the proxy will vote for the election of the nominees named
below unless authority is withheld. The Company's Board believes that the
nominees will be available and able to serve as directors, but if any of these
persons should not be available or able to serve, the proxies may exercise
discretionary authority to vote for a substitute proposed by the Company's
Board.

Certain information concerning the nominees for election at the Annual
Meeting as Class III directors is set forth below, as well as certain
information about the other Class I and II directors, who will continue in
office until the 2003 and 2004 Annual Meeting of Shareholders, respectively.

Principal
Served Occupation During
Name (Age) Since/(1)/ Past Five Years
---------- ---------- ---------------

Class I Directors (Serving Until the 2003 Annual Meeting)

Larry G. Dillon (49) 1989 Chairman, President and
Chief Executive Officer of the
Company and the Bank

James H. Hudson III (53) 1997 Attorney-at-Law
Hudson & Bondurant, P.C.

Class II Directors (Serving Until the 2004 Annual Meeting)

Joshua H. Lawson (60) 1993 President, Thrift Insurance Corporation

Paul C. Robinson (44) 1994 President, Francisco, Robinson &
Associates, Inc.

Class III Directors (Nominees) (Serving Until the 2005 Annual Meeting)

J. P. Causey Jr. (58) 1984 Executive Vice President, Secretary &
General Counsel of Chesapeake
Corporation 2001 to present;
Senior Vice President prior to 2001

Barry R. Chernack (54) 2000 Retired January 2000 to present;
Managing Partner, Pricewaterhouse-
Coopers, LLP, Southern Virginia Practice
prior to January 2000

William E. O'Connell Jr. (64) 1994 Chessie Professor of Business,
The College of William and Mary

____________________

(1) Refers to the year in which the director was first elected to the Board of
Directors of the Bank.

The Board of Directors of the Bank consists of the seven members of
the Company's Board listed above, as well as, Audrey D. Holmes, Bryan E.
McKernon, Reginald H. Nelson IV, and Thomas B. Whitmore Jr.

The Board of Directors is not aware of any family relationship between
any director, executive officer or person nominated by the Company to become
director; nor is the Board of Directors aware of any involvement in legal
proceedings which are material to an evaluation of the ability or integrity of
any director or person nominated to become a director. Unless authority for the
nominees is withheld, the shares represented by the enclosed proxy card, if
executed and returned, will be voted FOR the election of the nominees proposed
by the Board of Directors.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE DIRECTORS NOMINATED TO SERVE
AS CLASS III DIRECTORS.

Board Committees and Attendance

During 2001, there were eight meetings of the Board of Directors of
the Company. Each director attended at least 75% of all meetings of the boards
and committees on which he or she served. The Board of Directors of the Company
has a Capital Plan Committee and an Audit Committee and the Board of Directors
of the Bank has an Executive Committee and a Compensation Committee. The Board
of Directors of the Company acts as the nominating committee for nominees to be
voted on for election as directors.

In its capacity as the nominating committee, the Board of Directors
will accept for consideration shareholder's nominations for directors if made in
writing. In accordance with the Company's bylaws, such a shareholder nomination
must include the nominee's written consent to the nomination, sufficient
background information with respect to the nominee, sufficient identification of
the nominating shareholder and a representation by shareholder of his or her
intention to appear at the Annual Meeting (in person or by proxy) to nominate
the individual specified in the notice. Nominations must be received by the
Company's Secretary at the Company's principal office in West Point, Virginia,
no later than February 13, 2003 in order to be considered for the next annual
election of directors.

Members of the Bank's Executive Committee are Messrs. Causey, Dillon,
Hudson, and O'Connell. The Executive Committee reviews various matters and
submits proposals or recommendations to the Board of Directors. The Executive
Committee met one time during 2001.

Members of the Bank's Compensation Committee are Messrs. Causey,
Chernack, Hudson, and Whitmore. The Compensation Committee recommends the level
of compensation of each officer of the Bank, the granting of stock options and
other employee remuneration plans to the Board of Directors. The Compensation
Committee met two times during 2001.

Members of the Company's Audit Committee are Messrs. Causey, Chernack,
Lawson, O'Connell, and Robinson. The Audit Committee reviews and approves
various audit functions including the year-end audit performed by the Company's
independent public accountants. The Audit Committee met four times during 2001.
See Report of the Audit Committee on page 10.

Directors' Compensation

Each of the directors of the Company is also a director of the Bank.
Non-employee members of the Board of Directors of the Bank receive an annual
retainer of $2,500, payable quarterly, with a base meeting fee of $300 per day
for Company or Bank meetings and a fee of $100 for each secondary meeting of the
Company, Bank, or any committees thereof held on the same day as a meeting for
which the base meeting fee is paid.

In addition to cash compensation, non-employee members of the Board of
Directors of the Bank participate in the Non-Employee Directors' Stock
Compensation Plan. Under this plan, directors are granted the option to purchase
the Company's common stock at a price equal to the fair market value of the
stock at the date of grant. Options are exercisable twelve months after the date
of grant and expire ten years from the date of grant. On May 1, 2001, all
non-employee members of the Board of Directors of the Bank were granted 1,500
options with an exercise price of $16.75 per share.

Interest of Management in Certain Transactions

As of December 31, 2001, the total maximum extensions of credit
(including used and unused lines of credit) to policy-making officers,
directors, and their associates amounted to $2,583,189, or 5.77%, of total
year-end capital. The maximum aggregate amount of such indebtedness outstanding
during 2001 was $1,174,198, or 2.62%, of total year-end capital. These loans
were made in the ordinary course of the Bank's business, on the same terms,
including interest rates and collateral, as those prevailing at the same time
for comparable transactions with others, and do not involve more than the normal
risks of collectibility or present other unfavorable features. The Bank expects
to have in the future similar banking transactions with officers, directors, and
their associates.

Executive Compensation

Summary of Cash and Certain Other Compensations. The following table
shows the cash compensation paid to Mr. Dillon, President and Chief Executive
Officer of the Company, Thomas F. Cherry, Senior Vice President and Chief
Financial Officer of the Company, and Gari B. Sullivan, Senior Vice President
and Secretary of the Company, during 2001, 2000, and 1999. During 2001, no other
executive officer of the Company received compensation in excess of $100,000.

SUMMARY COMPENSATION TABLE

Long-Term
Annual Compensation Compensation
--------------------------------------------------- ------------
All
Name and Other Annual Other
Principal Position Year Salary Bonus/(1)/ Compensation/(2)/ Options/(3)/ Compensation/(4)/
------------------ ---- ------ ----- ------------ ------- ------------

Larry G. Dillon 2001 $172,500 $60,000 - 3,500 $28,518
President/Chief 2000 167,500 50,000 - 3,500 27,533
Executive Officer 1999 152,500 50,000 - 3,500 22,736

Thomas F. Cherry 2001 104,000 25,000 - 2,500 22,725
Senior Vice 2000 100,000 20,000 - 2,500 21,773
President/CFO 1999 89,000 20,000 - 2,500 10,410

Gari B. Sullivan 2001 94,000 18,000 - 2,000 29,048
Senior Vice 2000 90,500 13,000 - 2,000 28,489
President/Secretary 1999 87,500 13,000 - 2,000 29,811

__________________

/(1)/ All bonuses were paid under the Management Incentive Bonus Plan.
/(2)/ The amount of compensation in the form of perquisites or other personal
benefits properly categorized in this column according to the disclosure
rules adopted by the Securities and Exchange Commission did not exceed
the lesser of either $50,000, or 10% of the total annual salary and
bonus reported in each of the three years reported for Mr. Dillon, Mr.
Cherry, and Mr. Sullivan, respectively.
/(3)/ Year 2001 options were granted at an exercise price of $19.05 per share;
year 2000 options were granted at an exercise price of $15.75 per share;
year 1999 options were granted at an exercise price of $17.00 per share.
/(4)/ $8,500, $7,680, and $8,000 were contributed for Mr. Dillon, $6,125,
$5,773, and $5,210 were contributed for Mr. Cherry, and $5,364, $4,980,
and $4,975 were contributed for Mr. Sullivan under the Bank's
Profit-Sharing Plan for 2001, 2000, and 1999, respectively. $6,218,
$6,218, and $6,736 were contributed for Mr. Dillon and $18,334, $18,334,
and $19,861 were contributed for Mr. Sullivan under the Bank's
Split-Dollar Insurance Program for 2001, 2000, and 1999, respectively.
$8,500, $8,000, and $8,000 were contributed for Mr. Dillon, $6,200,
$6,000, and $5,200 were contributed for Mr. Cherry, and $5,350, $5,175,
and $4,975 were contributed for Mr. Sullivan under the Bank's 401(k)
Plan for 2001, 2000, and 1999, respectively. $5,300 and $5,635 were
contributed for Mr. Dillon and $10,400 and $10,000 for Mr. Cherry, under
the Company's Executive Deferred Compensation Plan for 2001 and 2000,
respectively.

Stock Options and SAR. The following table shows all grants of options
to Messrs. Dillon, Cherry, and Sullivan in 2001:

Option/SAR Grants in Last Fiscal Year

Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term
-------------------------------------------------------------------- ---------------

% of Total
Options Granted Exercise or
Options to Employees in Base Price Expiration 5% 10%
Name Granted (#) (1) Fiscal Year ($/Sh) Date ($) ($)
---- --------------- ----------- ------ ---- --- ---

Larry G. Dillon 3,500 6.23% $19.05 12/17/11 $41,932 $106,263
Thomas F. Cherry 2,500 4.45% 19.05 12/17/11 29,951 75,902
Gari B. Sullivan 2,000 3.56% 19.05 12/17/11 23,961 60,722

__________________

/(1)/ Vesting is as follows: 100% on December 18, 2006.

Option/SAR Exercises and Holdings. The following table shows stock
options exercised by Messrs. Dillon, Cherry, and Sullivan in 2001.

Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End
Options/SAR Values

Value of Unexercised
Number of Unexercised In-the-Money
Options at Options at
Shares December 31, 2001 (#) December 31, 2001($)
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
---- ------------ ------------ ------------- -------------

Larry G. Dillon 2,000 $18,000 17,700/ $141,613/
10,500 28,700
Thomas F. Cherry -- -- 5,500/ 30,313/
7,500 20,500
Gari B. Sullivan 3,000 15,700 2,700/ 11,063/
6,000 16,400

Change in Control Agreements

The Company has entered into "change in control agreements" with Mr.
Dillon and Mr. Cherry. The agreement for Mr. Dillon provides certain payments
and benefits in the event of a termination of his employment by the Company
without "cause," or by Mr. Dillon for "good reason," during the period beginning
on the occurrence of a "change in control" (as defined in the agreement) of the
Company and ending sixty-one days after the second anniversary of the change in
control date. In such event, Mr. Dillon would be entitled (i) to receive in 12
consecutive quarterly installments, or in a lump sum, two and one-half times the
sum of his highest aggregate annual base salary during the 24 month period
preceding the change in control date and his highest aggregate annual bonus for
the three fiscal years preceding the change in control date; (ii) for a period
of three years following termination, to receive continuing health insurance,
life insurance, split-dollar insurance, and similar benefits under the Company's
welfare benefit plans and to have the three year period credited as service
towards completion of any service requirement for retiree coverage under the
Company's welfare benefit plans; and (iii) if Mr. Dillon requests within one
year after his termination to have the Company acquire his residence for its
appraised fair market value.

The agreement for Mr. Cherry provides certain payments and benefits in
the event of a termination of his employment by the Company without "cause," or
by Mr. Cherry for "good reason," during the period beginning on the occurrence
of a "change in control" (as defined in the agreement) of the Company and ending
sixty-one days after the first anniversary of the change in control date. In
such event, Mr. Cherry would be entitled (i) to receive in four consecutive
quarterly installments, or in a lump sum, the sum of his highest aggregate
annual base salary during the 24 month period preceding the change in control
date and his highest aggregate annual bonus for the three fiscal years preceding
the change in control date; and (ii) for a period of one year following
termination, to receive continuing health insurance, life insurance, and similar
benefits under the Company's welfare benefit plans and to have the one year
period credited as service towards completion of any service requirement for
retiree coverage under the Company's welfare benefit plans.

During the term of the agreements following a change in control, Mr.
Dillon or Mr. Cherry may voluntarily terminate his employment and become
entitled to these payments and benefits under certain circumstances. These
circumstances include, but are not limited to, a material adverse change in his
position, authority, or responsibilities, or a reduction in his rate of annual
base salary, benefits (including incentives, bonuses, stock compensation, and
retirement and welfare plan coverage), or other perquisites as in effect
immediately prior to the change in control date.

Payments and benefits provided under the agreements will be reduced,
if and to the extent necessary, so that Mr. Dillon and Mr. Cherry will not be
subject to a federal excise tax on, and the Company will not be denied an income
tax deduction on account of having made, excess parachute payments.

Employee Benefit Plans

The Bank has a Non-Contributory Defined Benefit Retirement Plan (the
"Retirement Plan") covering substantially all employees who have reached the age
of 21 and have been fully employed for at least one year. The Retirement Plan
provides participants with retirement benefits related to salary and years of
credited service. Employees become vested after five plan years of service, and
the normal retirement date is the plan anniversary date nearest the employee's
65th birthday. The Retirement Plan does not cover directors who are not active
employees. The amount expensed for the Retirement Plan during the year ended
December 31, 2001, was $177,672.

The following table shows the estimated annual retirement benefits
payable to employees in the average annual salary and years of service
classifications set forth below assuming retirement at the normal retirement age
of 65.

Consecutive Five-Year Years of Credited Service
Average Salary 15 20 25 30 35
--------------------- ------ ------ ------ ------ ------

$ 25,000 $ 4,688 $ 6,250 $ 7,813 $ 8,750 $ 9,688
40,000 7,815 10,420 13,025 14,630 16,235
55,000 12,315 16,420 20,525 23,255 25,985
75,000 18,315 24,420 30,525 34,755 38,985
100,000 25,815 34,420 43,025 49,130 55,235
125,000 33,315 44,420 55,525 63,505 71,485
150,000 40,815 54,420 68,025 77,880 87,735
170,000 46,815 62,420 78,025 89,380 100,735

Benefits under the Retirement Plan are based on a straight life
annuity assuming full benefit at age 65, no offsets, and covered compensation of
$35,400 for a person age 65 in 2000. Compensation is currently limited to
$170,000 by the Internal Revenue Code, but is anticipated to increase to
$200,000, effective October 1, 2002. The estimated annual benefit payable under
the Retirement Plan upon retirement is $90,511, $58,109, and $24,033 for Messrs.
Dillon, Cherry, and Sullivan, respectively, credited with 40 years of service
for Messrs. Dillon and Cherry and 15 years of service for Mr. Sullivan. Benefits
are estimated on the basis that they will continue to receive, until age 65,
covered salary in the same amount paid in 2001.

Compensation Committee Report on Executive Compensation

The Compensation Committee (the "Committee"), which is composed of
non-employee Directors of the Company and the Bank listed below, recommends to
the Board of Directors of the Bank (the "Bank Board") the annual salary levels
and any bonuses to be paid to the Bank's executive officers. The Committee also
makes recommendations to the Bank Board regarding the issuance of stock options
and other compensation related matters.

Currently, the individuals serving as Chief Executive Officer and
executive officers of the Company also serve in the same capacities,
respectively, for the Bank. These officers are presently compensated for
services rendered by them to the Bank, but not for services rendered by them to
the Company.

The primary objective of the Bank's executive compensation program is
to attract and retain highly skilled and motivated executive officers who will
manage the Bank in a manner that will promote its growth and profitability and
advance the interest of the Company's shareholders. As such, the compensation
program is designed to provide levels of compensation which are reflective of
both the individual's and the organization's performance in achieving the
organization's goals and objectives, both financial and non-financial, and in
helping to build value for the Company's shareholders. Based on its evaluation
of these factors, the Committee believes that the executive officers are
dedicated to achieving significant improvements in long-term financial
performance

and that the compensation plans the Committee has implemented and administered
have contributed to achieving this management focus.

The principal elements of the Bank's compensation program include base
annual salary, split-dollar insurance participation, short-term incentive
compensation under the Bank's Management Incentive Bonus Plan (detailed below),
long-term incentives through the grants of stock options under the Incentive
Plan (detailed below), and employer contributions under the amended Executive's
Deferred Compensation Plan (detailed below).

The Bank adopted a Management Incentive Bonus Plan (the "Bonus Plan")
effective January 1, 1987. The Bonus Plan is offered to selected members of
management. The bonus is derived from a pool of funds determined by the Bank's
total performance relative to (1) prescribed growth rates of assets and
deposits, (2) return on average assets, and (3) absolute level of net income.
Attainment, in whole or in part, of these goals dictates the amount set aside in
the pool of funds. Evaluation of attainment and approval of the pool amount is
done by the Bank Board. Payment of the bonus is based on individual performance
and paid in cash as a percentage of the respective individual's base salary.
Expense is accrued in the year of the specified performance.

The Company adopted the 1994 Incentive Stock Option Plan (the
"Incentive Plan") effective May 1, 1994. The Incentive Plan was amended by the
Company on February 15, 2000. The Incentive Plan makes available up to 500,000
shares of common stock for awards to key employees of the Company and its
subsidiaries in the form of stock options, stock appreciation rights, and
restricted stock. The purpose of the Incentive Plan is to promote the success of
the Company and its subsidiaries by providing incentives to key employees that
will promote the identification of their personal interests with the long term
financial success of the Company and with growth in shareholder value. The
Incentive Plan is designed to provide flexibility to the Company in its ability
to motivate, attract, and retain the services of key employees upon whose
judgment, interest, and special effort the successful conduct of its operation
is largely dependent.

In considering compensation for the Chief Executive Officer and the
other executive officers, the Committee relied on compensation surveys and an
evaluation of the officers' levels of responsibility and performance. In 2000,
the Committee used the following compensation surveys to assist in developing
its recommendation on compensation for 2001: the SNL Executive Compensation
Review; the Sheshunoff Bank Executive and Director Compensation Survey; and the
Virginia Bankers Association's Salary Survey of Virginia Banks. The Committee
believes that these are relevant and appropriate indicators of compensation paid
by the Bank's competitors. The Committee received an evaluation by the Chief
Executive Officer of the performance of the executive officers (other than the
Chief Executive Officer) during 2000. The Committee evaluated the performance of
the Chief Executive Officer based on the financial performance of the Company
and the Bank, achievements in implementing the Bank's long-term strategy, and
the personal observations of the Chief Executive Officer's performance by the
members of the Committee. No particular weight was given to any one aspect of
the performance of the Chief Executive Officer, but his performance in 2000 was
evaluated as outstanding, with the Company and the Bank achieving earnings in
excess of its peer group and significant progress being made on the Bank's
long-term strategy.

Based on the salary surveys and the performance evaluations, the
Committee generally set base annual salaries for the Chief Executive Officer and
the other executive officers in the median range of salaries contained in the
various surveys for comparable positions.

The Committee also reviews each executive officer's performance and
responsibility to assess the payment of short-term incentive compensation. The
Committee uses the compensation surveys and considers the performance of the
Bank relative to its peer group, taking into consideration profit growth, asset
growth, return on equity, and return on assets. No particular weight is given to
each of these elements. The cash bonuses were given based upon the role of such
officers in the growth and profitability of the Bank in 2001.

Each year, the Committee also considers the desirability of granting
long-term incentive awards under the Company's Incentive Plan. The Committee
believes that grants of options focus the Bank's senior management on building
profitability and shareholder value. The Committee notes in particular its view
that

stock option grants afford a desirable long-term compensation method because
they closely ally the interest of management with shareholder value. In fixing
the grants of stock options with the senior management group, other than the
Chief Executive Officer, the Committee reviewed with the Chief Executive Officer
recommended individual awards, taking into account the respective scope of
responsibility and contributions of each member of the senior management group.
The award to the Chief Executive Officer was fixed separately and was based,
among other things, on the review of competitive compensation data from selected
peer companies and information on his total compensation, as well as, the
Committee's perception of his past and expected future contributions to the
Company's achievement of its long-term goals.

For 2000 and ensuing years, the Committee determined that additional
retirement funding for select executives is appropriate and should be provided
by amending its non-qualified defined contribution plan known as the Executive's
Deferred Compensation Plan (which previously only provided for elective salary
and bonus deferrals). These employer contributions are in the form of additional
retirement contributions to make up for arbitrary limitations on covered
compensation imposed by the Internal Revenue Code with respect to the Bank's
Profit Sharing / 401(k) Plans and to enhance retirement benefits by providing
supplemental contributions from time to time on such basis as the Committee and
the Board determine.

Compensation Committee

J. P. Causey Jr. - Chairman
Barry R. Chernack
James H. Hudson III
Thomas B. Whitmore Jr.

Compensation Committee Interlocks and Insider Participation

During 2001 and up to the present time, there were transactions
between the Company's banking subsidiary and certain members of the Compensation
Committee or their associates, all consisting of extensions of credit by the
Bank in the ordinary course of business. Each transaction was made on
substantially the same terms, including interest rates, collateral and repayment
terms, as those prevailing at the time for comparable transactions with the
general public. In the opinion of management, none of the transactions involved
more than the normal risk of collectibility or present other unfavorable
features.

None of the members of the Compensation Committee has served as an
officer or employee of the Company or any of its affiliates. No director may
serve as a member of the Committee if he is eligible to participate in the
Incentive Plan or was at any time within one year prior to his appointment to
the Committee eligible to participate in the Incentive Plan.

Report of the Audit Committee

The Audit Committee of the Board of Directors of the Company (the
"Board"), which consists entirely of directors who meet the independence
requirements of Rule 4200(a)(15) of the National Association of Securities
Dealers listing standards, has furnished the following report:

The Audit Committee assists the Board in overseeing and monitoring the
integrity of the Company's financial reporting process, its compliance with
legal and regulatory requirements and the quality of its internal and external
audit processes. The role and responsibilities of the Audit Committee are set
forth in a written Charter adopted by the Board. The Audit Committee reviews and
reassesses the Charter annually and recommends any changes to the Board for
approval.

The Audit Committee is responsible for overseeing the Company's
overall financial reporting process. In fulfilling its oversight
responsibilities for the financial statements for fiscal year 2001, the Audit
Committee:

. Reviewed and discussed the audited financial statements for the
fiscal year ended December 31, 2001 with management and Yount, Hyde
& Barbour, P.C. ("YHB"), the Company's independent accountants;

. Discussed with YHB the matters required to be discussed by
Statement on Auditing Standards No. 61 relating to the conduct of
the audit; and

. Received written disclosures and the letter from YHB regarding its
independence as required by Independence Standards Board Standard
No. 1. The Audit Committee discussed with YHB their independence.

The Audit Committee also considered the status of pending litigation,
taxation matters and other areas of oversight relating to the financial
reporting and audit process that the Audit Committee determined appropriate.

In performing all of these functions, the Audit Committee acts only in
an oversight capacity. The Audit Committee does not complete its reviews prior
to the Company's public announcements of financial results. Also, in its
oversight role, the Audit Committee relies on the work and assurances of the
Company's management, which has the primary responsibility for financial
statements and reports, and of the independent auditors, who, in their report,
express an opinion on the conformity of the Company's annual financial
statements to generally accepted accounting principles.

Based on the Audit Committee's review of the audited financial
statements and discussions with management and YHB, the Audit Committee
recommended to the Board that the audited financial statements be included in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2001 for filing with the Securities and Exchange Commission.

Audit Committee

Barry R. Chernack, Chairman
J. P. Causey Jr
Joshua H. Lawson
William E. O'Connell Jr.
Paul C. Robinson

Principal Accounting Fees

Audit Fees. During 2001, the Company paid its principal accounting
firm, Yount, Hyde & Barbour, P.C., $55,500 in audit fees including reviews of
Form 10-Qs and Form 10-K. The Company paid Yount, Hyde & Barbour, P.C. an
additional $19,100 for other services. These primarily consist of fees for tax
matters, employee benefit financial statement audits and compliance attestation
services. The Audit Committee has reviewed such services and does not believe
they impair the independence of Yount Hyde & Barbour, P. C.

Financial Information System Design and Implementation Fees. The
Company paid no fees to Yount, Hyde & Barbour, P.C. for services regarding
financial information system design and implementation.

Performance Graph

The following graph compares the yearly cumulative total shareholder
return on the Company's common stock with (1) the yearly cumulative total
shareholder return on stocks included in the NASDAQ stock index and (2) the
yearly cumulative total shareholder return on stocks included in the Independent
Bank Index prepared by the Carson Medlin Company. The Independent Bank Index is
the compilation of the total return to shareholders over the past five years of
a group of twenty-three independent community banks located in the southeastern
states of Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee,
Virginia, and West Virginia.

There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
below.

C&F FINANCIAL CORPORATION
Five Year Performance Index

[GRAPH]

1996 1997 1997 1999 2000 2001
---- ---- ---- ---- ---- ----

C&F FINANCIAL CORPORATION 100 143 211 198 174 247
INDEPENDENT BANK INDEX 100 148 154 140 139 165
NASDAQ INDEX 100 122 173 321 193 153

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires
directors, executive officers, and 10% beneficial owners of the Company's common
stock to file reports concerning their ownership of common stock. The Company
believes that its officers and directors complied with all filing requirements
under Section 16(a) of the Securities Exchange Act of 1934 during 2001.

PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors, subject to ratification by the shareholders,
has appointed Yount, Hyde & Barbour, P.C. as independent public accountants for
the current fiscal year ending December 31, 2002.

A representative of Yount, Hyde & Barbour, P.C. will be present at the
Annual Meeting and will be given the opportunity to make a statement and respond
to appropriate questions from the shareholders. Unless marked to the contrary,
the shares represented by the enclosed proxy card, if executed and returned,
will be voted FOR the ratification of the appointment of Yount, Hyde & Barbour,
P.C. as the independent public accountants of the Company.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE APPOINTMENT
OF YOUNT, HYDE & BARBOUR, P.C. AS INDEPENDENT PUBLIC ACCOUNTANTS.

OTHER BUSINESS

As of the date of this Proxy Statement, management of the Company has
no knowledge of any matters to be presented for consideration at the Annual
Meeting other than those referred to above. If any other matters properly come
before the Annual Meeting, the persons named in the accompanying proxy intend to
vote such proxy, to the extent entitled, in accordance with their best judgment.

SHAREHOLDER PROPOSALS FOR 2003 ANNUAL MEETING

If any shareholder intends to present a proposal to be considered for
inclusion in the Company's proxy materials in connection with the 2003 Annual
Meeting, the proposal must be in proper form and must be received by the
Company's Secretary, at the Company's principal office in West Point, Virginia,
on or before November 15, 2002. In addition, if a shareholder intends to present
a proposal for action at the 2003 Annual Meeting, the shareholder must provide
the Company with notice thereof on or before January 29, 2003, by delivering
such notice to the Company's Secretary.

By Order of the Board of Directors,

/s/ Gari B. Sullivan

Gari B. Sullivan
Secretary

West Point, Virginia
March 15, 2002

A copy of the Company's Annual Report on Form 10-K Report (including exhibits)
as filed with the Securities and Exchange Commission for the year ended December
31, 2001, will be furnished without charge to shareholders upon written request
directed to the Company's Secretary as set forth on the first page of this Proxy
Statement.

C&F FINANCIAL CORPORATION
This Proxy is solicited on behalf of the Board of Directors

The undersigned hereby appoints Larry G. Dillon and James H. Hudson III,
jointly and severally as proxies, with full power to act alone, and with full
power of substitution to represent the undersigned, and to vote all shares of
the Company standing in the name of the undersigned as of February 26, 2002, at
the annual meeting of shareholders to be held Tuesday, April 16, 2002 - 3:30
p.m. at the Father van den Boogaard Center, 3510 King William Avenue, West
Point, Virginia, or any adjournments thereof, on each of the following matters.
This proxy, when properly executed, will be voted in the manner directed by the
undersigned shareholder. If no direction is made, this proxy will be voted FOR
each proposal and on other matters at the discretion of the proxy agents.

(Continued and to be signed on Reverse Side)

Please sign, date and mail your
proxy card back as soon as possible!

Annual Meeting of Shareholders
C&F FINANCIAL CORPORATION

April 16, 2002

. Please Detach and Mail in the Envelope Provided .

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Please mark your
A [X] votes as in this
example.

FOR
all nominees WITHHELD
(except as marked to from all
the contrary below). nominees.

1. To elect
Three Class III FOR AGAINST ABSTAIN
directors to [_] [_] Nominees: 2. Proposal to ratify the
serve until the J.P. Causey Jr. appointment of Yount,
2000 Annual Meeting of Shareholders, or Barry R. Chernack Hyde & Barbour, P.C. [_] [_] [_]
until their successors are elected and William E. O'Connell Jr. as independent public
qualified, as instructed below. accountants of the
(Instruction: To withhold authority to Company for 2002.
vote for any nominees(s), write that
nominee(s) name on the space provided below.)
3. The transaction of any other business as may
______________________________________________ properly come before the Annual Meeting or
any adjournment thereof. Management presently
knows of no other business to be represented
at the Annual Meeting.

Meeting Attendance
------------------
I plan to attend the annual meeting on Tuesday,
April 16th, 2002 at the location printed on the
back. I will also note the number of attendees.

Will Will not
Attend [_] Attend [_]
Meeting Meeting

Number of Attendees

_____________________________

Signature____________________________________________ ___________________________________________ Dated: ________________, 2002

NOTE: Please sign your name(s) exactly as shown imprinted hereon. When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, (trustee, or guardian, please give full title as such. If a corporation,
please sign full corporate name by President or other authorized officer. If a partnership, please sign in partnership name
by authorized person.
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