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                                                                     EXHIBIT 4.1


                            BANK OF THE COMMONWEALTH

                               DIRECTORS' DEFERRED

                               COMPENSATION PLAN

                            Effective January 1, 2002

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                            BANK OF THE COMMONWEALTH

                      DIRECTORS' DEFERRED COMPENSATION PLAN

                                TABLE OF CONTENTS
                                -----------------

                                                                            Page
                                                                            ----

PREAMBLE ......................................................................1

ARTICLE I .....................................................................3

  DEFINITIONS .................................................................3
     1.1      Account .........................................................3
     1.2      Administrator ...................................................3
     1.3      Bank ............................................................3
     1.4      Bank Stock ......................................................3
     1.5      Beneficiary .....................................................3
     1.6      Board ...........................................................3
     1.7      Cause ...........................................................4
     1.8      Change in Control ...............................................4
     1.9      Code ............................................................5
     1.10     Declared Investment Rate ........................................5
     1.11     Deferrals .......................................................5
     1.12     Designation Date ................................................5
     1.13     Disability ......................................................5
     1.14     Effective Date ..................................................6
     1.15     Election Form ...................................................6
     1.16     Fees ............................................................6
     1.17     Participant .....................................................6
     1.18     Plan ............................................................6
     1.19     Plan Year .......................................................6
     1.20     Retirement ......................................................6
     1.21     Retirement Benefit ..............................................6
     1.22     Survivor Benefit ................................................7
     1.23     Termination Benefit .............................................7
     1.24     Trust ...........................................................7
     1.25     Trustee .........................................................7
     1.26     Valuation Date ..................................................7

ARTICLE II ....................................................................8

  ELIGIBILITY .................................................................8

ARTICLE III ...................................................................9

  CONTRIBUTIONS TO ACCOUNTS ...................................................9
     3.1      Accounts ........................................................9

ARTICLE IV ...................................................................10

  PARTICIPANT ELECTIONS TO DEFER .............................................10


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     4.1      Election to Defer ..............................................10
                Deferral Election ............................................10

ARTICLE V ....................................................................11

  ADJUSTMENTS TO ACCOUNTS FOR DECLARED INVESTMENT RATES ......................11
     5.1      Adjustments to Accounts ........................................11
                Bank Stock ...................................................11
                Interest Bearing Fund ........................................12
                  Prior to January 1, 1992 ...................................12
                  January 1, 1992 and Thereafter .............................13
     5.2      Accounting for Distributions ...................................14
     5.3      Separate Accounts ..............................................14
     5.4      Deemed Investment Directions of Participants ...................14

ARTICLE VI ...................................................................17

  BENEFITS ...................................................................17
     6.1      Retirement Benefit .............................................17
     6.2      Disability .....................................................18
     6.3      Termination Benefit ............................................18
                Separations From Service As Director For Reasons
                  Other Than Death, Disability, Or Retirement ................18
                Vesting in Account ...........................................19
                  Forfeitures ................................................19
     6.4      Survivor Benefits ..............................................19
                Pre-Retirement ...............................................19
     6.5      Change in Control Provisions ...................................19
                Full Vesting .................................................19
                Immediate Payouts Upon Termination of Employment .............20
     6.6      Small Benefit ..................................................20
     6.7      Withholding:  Payroll Taxes ....................................20

ARTICLE VII ..................................................................21

  BENEFICIARY DESIGNATION ....................................................21
     7.1      Beneficiary Designation ........................................21

ARTICLE VIII .................................................................22

 CONTRIBUTIONS ...............................................................22

ARTICLE IX ...................................................................24

 ADMINISTRATION OF PLAN ......................................................24
     9.1      Plan Administrator .............................................24
     9.2      Examination of Records .........................................25
     9.3      Reliance on Reports and Certificates ...........................25
     9.4      Nondiscriminatory Exercise of Authority ........................25
     9.5      Indemnification of Administrator ...............................25

ARTICLE X ....................................................................26

  MISCELLANEOUS ..............................................................26
    10.1      Alienability and Assignment Prohibition ........................26
    10.2      Binding Obligation of Bank and Any Successor in Interest .......26
    10.3      Amendment or Termination .......................................26
    10.4      Claims Procedure ...............................................26
    10.5      Employment and Other Rights ....................................27


                                       ii

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    10.6      Governing Law ..................................................27



                                       iii

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                            BANK OF THE COMMONWEALTH

                      DIRECTORS' DEFERRED COMPENSATION PLAN

     THIS PLAN is made effective in the City of Norfolk, Virginia, this 1st day
of January, 2002, by BANK OF THE COMMONWEALTH (the "Bank").


                                    PREAMBLE
                                    --------

     The purpose of the Bank of the Commonwealth Directors' Deferred
Compensation Plan (the "Plan") is to provide a means whereby the Bank may afford
a measure of financial security to Directors of the Bank who have rendered and
continue to render valuable services to the Bank. The Plan is intended to
provide for future income needs of these Directors, so that their services may
be retained and their productive efforts encouraged.

     This Plan is an amendment, restatement, and consolidation of the Bank of
Commonwealth Non-Employee Director's Deferred Compensation Plan and Employee
Director's Deferred Compensation Plan, effective December 20, 1977, and December
27, 1978, respectively.

     This Plan will be maintained for the exclusive benefit of the Directors of
the Bank who participate herein and is intended by the parties to constitute an
unfunded "top hat" plan of deferred compensation for all purposes under the
Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal
Revenue Code of 1986, as amended, as well as the regulations thereunder.

     By separate agreement, the Bank has created an irrevocable trust (the
"Trust") to facilitate the payment of deferred compensation to the directors who
participate in the Plan. The Trust and

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any assets held by the Trust to assist the Bank in meeting its obligations under
this Plan will conform to the terms of the model trust described in Revenue
Procedure 92-64.


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                                    ARTICLE I
                                   DEFINITIONS
                                   -----------

     1.1 "Account" means the bookkeeping reserve account established on the
Bank's financial records to record the aggregate interest of a Participant in
this Plan. Within each Account, separate sub-accounts shall be maintained
pursuant to the terms of this Plan to the extent necessary for the
administration of the Plan for each different Plan Year, including sub-accounts
to record each Participant's Deferrals and Declared Investment Rate or method of
payment elections related thereto.

     1.2 "Administrator" means the person or committee as may be appointed from
time to time by the Board or if the Board so elects, the Board, to supervise the
administration of the Plan.

     1.3 "Bank" means Bank of the Commonwealth and any successor, which shall
maintain this Plan.

     1.4 "Bank Stock" means Common Stock of Commonwealth Bankshares, Inc., the
100% parent of the Bank.

     1.5 "Beneficiary" means the person or persons designated to receive any
amount in the event of the death of a Participant or former Participant in
accordance with Section 7.1.

     1.6 "Board" means the Board of Directors of the Bank.


                                       3

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     1.7 "Cause" means termination of a Participant's service as Director with
the Bank on account of: (a) the Participant's misappropriation or embezzlement
of any funds or property of the Bank; (b) the Participant's conviction of a
felony or a crime involving moral turpitude; or (c) proven dishonesty by the
Participant in the performance of services as a Director for the Bank.

     1.8 "Change in Control" means (i) the purchase or other acquisition by any
person, entity or group of persons, within the meaning of Section 13(d) or 14(d)
of the Securities Exchange Act of 1934 ("Act"), or any comparable successor
provisions, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Act) of 30 percent or more of the combined voting power of
the then outstanding voting securities issued by the Bank or any of its parent
corporations; (ii) the approval by the stockholders of the Bank or any of its
parent corporations of a reorganization, merger, or consolidation, in each case,
with respect to which persons who were stockholders of the Bank or any of its
parent corporations immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than 50 percent of the
combined voting power entitled to vote generally in the election of directors of
the then outstanding securities of the reorganized, merged or consolidated Bank
or parent corporation, as applicable, (iii) a liquidation or dissolution of the
Bank, (iv) the sale of fifty percent (50%) or more, of the Bank's assets, or (v)
a sale of any portion of the Bank's assets or operations which, on the basis of
the Bank's most recent audited financial statement, will result or is projected
to result in a fifty percent (50%) or more reduction in the Bank's gross
revenues for the current period, compared to the period covered by such audited
financial statement; (vi) any other corporate transaction, including a layoff or
reduction in force, which results in the involuntary termination of employment
of fifty percent (50%) or more of the Participants in this Plan; or (vii) a
majority of members of the Bank's board of


                                       4

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directors is replaced during any 12-month period by directors whose appointment
or election is not endorsed by a majority of the Bank's board of directors prior
to the date of the appointment or election.

     1.9 "Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereof, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.

     1.10 "Declared Investment Rate" means with respect to any Plan Year a rate
of return (positive or negative) that equals the notional gains or losses equal
to those generated as if the Account balance had been invested in one or more of
the deemed investments as may be made available by the Bank under this Plan.

     1.11 "Deferrals" means the amount of Fees voluntarily elected to be
deferred and credited to a Participant's Account under Article IV.

     1.12 "Designation Date" means January 1st, April 1st, July 1st and October
1st.

     1.13 "Disability" means any physical or mental impairment which, on the
basis of medical evidence satisfactory to the Board, renders the Participant
unable to continue the performance of his regular Director's duties with the
Bank and that such impairment will be permanent and continuous during the
remainder of the Participant's life.


                                       5

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     1.14 "Effective Date" means January 1, 2002, the date of the amended and
restated Plan.

     1.15 "Election Form" means the election form or forms that a Director files
with the Bank from time to time to participate in the Plan and make the various
Deferral, distribution and investment elections permitted under the Plan.

     1.16 "Fees" means the total amount of fees, as determined from time to time
by the Board, paid to a Director on or before December 31st of each Plan Year
for service on the Board and Committees thereof, including Deferrals elected by
the Participant under this Plan.

     1.17 "Participant" means a Director who has filed a completed and executed
Election Form with the Administrator and is participating in the Plan.

     1.18 "Plan" means this instrument and all amendments thereto.


     1.19 "Plan Year" means a 12-month period beginning on January 1st and
ending on the following December 31st of each year.


     1.20 "Retirement" means the termination of a Participant's service to the
Bank as a Director after his attainment of age sixty-five (65).

     1.21 "Retirement Benefit" means the sum total of benefits payable to a
Participant who is eligible for Retirement.


                                       6

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     1.22 "Survivor Benefit" means those Plan benefits that become payable upon
the death of a Participant pursuant to the provisions of Section 6.4.

     1.23 "Termination Benefit" means the lump sum amount payable to a
Participant who terminates service as a Director prior to death, Disability or
becoming eligible for Retirement under Section 6.3.

     1.24 "Trust" means the irrevocable trust agreement dated January 1, 2002,
established by the Bank as grantor and the Bank Trust Department as Trustee, or
any substitute or successor thereto.

     1.25 "Trustee" means the trustee named in the agreement establishing the
Trust and such successor and or additional trustees as may be named pursuant to
the terms of the agreement establishing the trust.

     1.26 "Valuation Date" means the last date of each calendar quarter, or,
March 31st, June 30th, September 30th, and December 31st.


                                       7

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                                   ARTICLE II
                                   ELIGIBILITY
                                   -----------

     All Directors shall be eligible to participate in the Plan. The Directors,
along with the effective date of their participation in the Plan shall be listed
on Exhibit I attached hereto.


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                                   ARTICLE III
                            CONTRIBUTIONS TO ACCOUNTS
                            -------------------------

     3.1 Accounts. The Bank shall create a special account on its books and
financial records (the "Account"), to which shall be credited each Participant's
Deferrals, as specified in Section 4.1 and as elected by the Participant on his
or her Election Form, together with earnings as specified in Article V. All
amounts credited to each Participant's Account are credited solely for purposes
of accounting and computations and shall remain the assets of the Bank subject
to the claims of the Bank's general creditors.


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                                   ARTICLE IV
                         PARTICIPANT ELECTIONS TO DEFER
                         ------------------------------

     4.1 Election to Defer. Any Director may enroll in the Deferral feature of
the Plan. The Deferral election may be made, effective as of the first day of a
Plan Year, by filing a completed and fully executed Election Form with the
Administrator during enrollment periods established by the Administrator, but in
no event later than December 31st preceding the year of the Deferral.
Notwithstanding the preceding sentence, a Director who, for the first time,
becomes eligible to participate in the Plan during a Plan Year, may file an
Election Form for the balance of such Plan Year, as long as such Election is
filed within thirty (30) days of the date on which he first became eligible. On
such Election Form, the Eligible Director shall irrevocably elect the amount of
his Fees to defer for such Plan Year ("Deferrals") and the time and method for
distribution of such Deferrals under Article VI.

          (a) Deferral Election. A Director may elect to defer a specific dollar
     amount or percentage of his Fees.


                                       10

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                                    ARTICLE V
              ADJUSTMENTS TO ACCOUNTS FOR DECLARED INVESTMENT RATES
              -----------------------------------------------------

     5.1 Adjustments to Accounts. Pursuant to Section 5.4, each Participant
shall have the right to direct the Bank as to how amounts in his or her Account,
including amounts accumulated prior to January 1, 2002, shall be deemed to be
invested as between the following two options: (1) Bank Stock Fund; or (2)
Interest Bearing Fund. The Trustee may follow such investment direction but
shall not be legally bound to do so. The Participant's Account will be credited
and debited, as applicable, with either the increase or decrease in the value of
Bank Stock, based on the increase or decrease in the per share value of Bank
Stock, for the relevant period, or the applicable credited interest rate earned
under the Interest Bearing Fund, as follows.

          (a) Bank Stock. The Bank shall establish and maintain a separate
     sub-account, a Bank Stock Account, for each Plan Year for each Participant
     who elects to have all or a portion of his of her Deferral amounts for such
     Plan Year invested in Bank Stock. A Participant's Bank Stock Account shall
     be credited as follows:

               (1) All Deferral amounts that are deemed, at the Participant's
          election, to be invested in Bank Stock shall be credited to the
          Participant's Bank Stock Account on the date when the Deferral amount
          would otherwise be paid to the Participant.

               (2) All Deferral amounts deemed to be invested in Bank Stock
          shall be credited to the Participant's Bank Stock Account in units or
          fractional units. Dividends paid on Bank Stock shall also be deemed
          invested in Bank Stock and shall be credited to the Participant's


                                       11

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          Bank Stock Account in units or fractional units on the date when the
          dividend would otherwise be paid to the Participant. The value of each
          unit shall be determined each Valuation Date and shall equal the fair
          market value of one share of Bank Stock on such Valuation Date. The
          value of each partial unit shall be determined each Valuation Date
          pro-rata with reference to the value of each unit as determined each
          Valuation Date. On each date that Deferral or dividend amounts are
          credited to the Participant's Bank Stock Account, the number of units
          to be credited shall be determined by dividing the amount of such
          Deferral or dividend amounts by the value of a unit as of the
          Valuation Date coinciding with or immediately preceding such crediting
          date.

               (3) If there is any change in the number or class of shares of
          Bank Stock through the declaration of a stock dividend or other
          extraordinary dividends, or recapitalization resulting in stock
          splits, or combinations or exchanges of such shares or in the event of
          similar transactions, the units in each Participant's Bank Stock
          Account shall be equitably adjusted to reflect any such change in the
          number or class of issued shares of Bank Stock or to reflect such
          similar transaction.

          (b) Interest Bearing Fund.


               (1) Prior to January 1, 1992. For Deferral amounts credited to
          the Account of a Participant prior to January 1, 1992 (including but
          not limited to the annual Director's fees for calendar year 1991), as
          of each Valuation Date, the Bank shall credit, to the respective
          sub-account of the Participant, the Pre-1992 Interest Bearing Account,
          an amount for interest earned, calculated at the highest rate of
          interest which the Bank has paid or accrued on any savings or time


                                       12

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          account during the calendar quarter ending on such Valuation Date.
          Said amount of interest earned shall be calculated utilizing a 360 day
          year and the aggregate Account balance of each Participant that is
          deemed to be invested in the Interest Bearing Fund, including all
          prior accruals of interest.

               (2) January 1, 1992 and Thereafter. As of each Valuation Date,
          the Bank shall credit, to the respective sub-account, the Post-1991
          Interest Bearing Account, of each Participant who elects any portion
          of his Account deemed to be invested in the Interest Bearing Fund, an
          amount for interest earned, calculated at a rate equal to the
          five-year U.S. Treasury Bill rate as such rate was in effect on the
          immediately preceding Valuation Date. Said amount of interest earned
          shall be calculated utilizing a 360 day year and the aggregate Account
          balance of each Participant that is deemed to be invested in the
          Interest Bearing Fund, including all prior accruals of interest.

          (c) Notwithstanding any other provision of the Plan that may be
     interpreted to the contrary, the investment options, including Bank Stock,
     are to be used for measurement purposes only, and a Participant's election
     of any such investment option, the allocation to his or her Account
     balances thereto, the calculation of additional amounts and the crediting
     or debiting of such amounts to a Participant's Account balances shall not
     be considered or construed in any manner as an actual investment of his or
     her Account balances in any such investment option. In the event that the
     Bank or the trustee of the Trust, in its own discretion, decides to invest
     funds in any or all of the investment options, no Participant shall have
     any rights in or to such investments themselves. Without limiting the
     foregoing, a Participant's Account balances shall at all times be a
     bookkeeping


                                       13

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     entry only and shall not represent any investment made on the Participant's
     behalf by the Bank or the Trust. The Participant shall at all times remain
     an unsecured creditor of the Bank.

     5.2 Accounting for Distributions. As of the date of any distribution
hereunder pursuant to Article VI, the distribution to a Participant or his or
her Beneficiary or Beneficiaries shall be charged to such Participant's Account.

     5.3 Separate Accounts. A separate account under the Plan shall be
established and maintained by the Bank on behalf of each Participant to record
his or her interest in the Plan, with sub-accounts to show separately the deemed
earnings and losses credited or debited to the deemed investments of the
Account.

     5.4 Deemed Investment Directions of Participants. Subject to such
limitations as may from time to time be required by law, imposed by the Bank, or
the Trustee, or contained elsewhere in the Plan, and subject to such operating
rules and procedures as may be imposed from time to time by the Bank or the
Trustee, prior to and effective for each Designation Date, each Participant may
communicate to the Bank a direction as to how his or her Account should be
deemed invested among the two deemed investments available hereunder. Such
direction shall designate the percentage (in any whole percent multiples) of
each portion of the Participant's Account that is requested to be deemed
invested in the deemed investments and shall be subject to the following rules:


                                       14

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          (a) Any initial or subsequent deemed investment direction shall be in
     writing, on a form supplied by and filed with the Bank, and shall be
     effective as of the next Designation Date that is at least ten (10)
     business days after such filing.

          (b) All amounts credited to a Participant's Account shall be deemed to
     be invested in accordance with the then effective deemed investment
     direction, and, as of the effective date of any new deemed investment
     direction, all or a portion of the Participant's Account at that date shall
     be reallocated among the designated deemed investment funds according to
     the percentages specified in the new deemed investment direction unless and
     until a subsequent deemed investment direction shall be filed and become
     effective. An election concerning deemed investment choices shall continue
     indefinitely as provided in the Participant's most recent Election Form or
     other form specified by the Bank.

          (c) If the Bank receives an initial deemed investment direction that
     it deems incomplete, unclear, or improper, the Participant's investment
     direction then in effect shall remain in effect (or, in the case of a
     deficiency in an initial deemed investment direction, the Participant shall
     be deemed to have filed a deemed investment direction to invest all of the
     account in the Interest Bearing Fund) until the next Designation Date,
     unless the Bank provides for, and permits the application of, corrective
     action prior thereto.

          (d) If the Bank possesses at any time directions as to the deemed
     investment of less than all of the Participant's Account, the Participant
     shall be deemed to have directed that the undesignated portion of the
     Account be deemed to be invested in the Interest Bearing Fund.


                                       15

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          (e) Each reference in this Section 5.4 to a Participant shall be
     deemed to include, where applicable, a reference to a Beneficiary.


                                       16

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                                   ARTICLE VI
                                    BENEFITS
                                    --------

     6.1 Retirement Benefit. A Participant is eligible for a Retirement Benefit
under this Plan when he has satisfied all the requirements for Retirement. The
Retirement Benefit will be based on the balance in the Participant's Account and
will be paid in ten (10) annual installments as described below.

     The amount to be paid with each installment shall be the balance in the
Participant's Account as of the "applicable valuation date," as defined below,
multiplied by a fraction, the numerator of which is one (1) and the denominator
of which is the number of installment payments remaining. For purposes of this
Section, the applicable valuation date for the first installment payment shall
be the date of the Participant's Retirement, and the applicable valuation date
for subsequent installment payments shall be the first day of each Plan Year
thereafter; provided, however, that in no event shall more than one installment
payment be made to a Participant in any one Plan Year. A Participant shall
receive the initial installment on the first day of the month next following the
Participant's Retirement, and each subsequent installment payment shall be made
within thirty (30) days of the applicable valuation date.

     If the Director should die on or after he has satisfied all the
requirements for Retirement and before all of the ten installment payments are
made, the unpaid balance will be paid to his designated Beneficiary in full as
soon as practicable after the first day of the calendar year following the year
in which the said Director dies.


                                       17

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     Following receipt of his complete Retirement Benefit, a Participant shall
be entitled to no further benefits under the Plan.

     6.2 Disability. If a Participant suffers a Disability before he reaches
Retirement, then the Bank shall make ten (10) annual installment payments to
such Participant in the same manner and to the same extent as provided in
Section 6.1 above. Such installments shall commence on the first day of the
month next following the Participant's Disability, and each subsequent
installment shall be paid within thirty (30) days of the applicable valuation
date as set forth in Section 6.1; provided, however, that in no event shall more
than one installment payment be made to a Participant in any one Plan Year.

     6.3 Termination Benefit.

          (a) Separations From Service As Director For Reasons Other Than Death,
     Disability, Or Retirement. If a Participant ceases to be a Director for any
     reason other than death, Disability, or Retirement, then the amount in such
     Participant's Account shall continue to accrue the Deemed Investment Rate
     as provided in Article V and no payments shall be made until such
     Participant attains the age of 65, at which time payments shall be made in
     the same manner and to the same extent as set forth in Section 6.1 above.
     Notwithstanding the foregoing, if prior to attaining the age of 65 such
     Participant should become Disabled, or if prior to attaining the age of 65
     such Participant should die, then payments shall be made in the same manner
     and to the same extent as set forth in Sections 6.2 (Disability Benefits)
     or 6.4 (Survivor Benefits), as applicable.


                                       18

<PAGE>

          (b) Vesting in Account. Subject only to Section 6.3(b)(i) below, a
     Participant shall always be one hundred percent (100%) fully vested in his
     Account and, no portion of such Account balance is subject to forfeiture.

               (i) Forfeitures. Notwithstanding anything hereinabove to the
          contrary, a Participant whose service as director with the Bank is
          terminated for Cause shall forfeit all amounts in his Account and all
          rights of such director, his designated Beneficiary, executors,
          administrators, or other persons, to receive payments thereof shall be
          forfeited. Such forfeited amounts shall revert to and become part of
          the Bank's general unrestricted assets.

     6.4 Survivor Benefits.

          (a) Pre-Retirement. If a Participant dies while serving as a Director
     of the Bank but before such Participant is otherwise eligible to receive
     Retirement Benefits, or after such Participant is eligible to receive
     Retirement Benefits but before receipt of all such benefits, a Survivor
     Benefit will be paid to his Beneficiary in a lump sum equal to the balance
     of his Account as soon as practicable after the first day of the Plan Year
     following the year in which such Participant died.

     6.5 Change in Control Provisions.


          (a) Full Vesting. Notwithstanding anything hereinabove to the
     contrary, in the event of any Change in Control of the Company, each
     Participant's Account shall immediately vest and become 100% nonforfeitable
     as of the date of the occurrence of a Change in Control.


                                       19

<PAGE>

          (b) Immediate Payouts Upon Termination of Employment. Each Participant
     who ceases to be a Director for any reason following a Change in Control or
     any series of two or more Changes in Control and each Participant who has
     previously terminated, retired or become Disabled and still maintains an
     Account hereunder, and each Beneficiary then receiving survivor benefits on
     account of the death of a Participant, shall receive his full Account
     balance in a lump sum within thirty (30) days after the later of the date
     of the Change in Control or the date on which the Participant ceases to be
     a Director, regardless of any previous election by the Participant to
     receive Retirement Benefits in installments.

     6.6 Small Benefit. Notwithstanding anything herein to the contrary, in the
event the total amount owed to a Participant or a Beneficiary after the
Participant ceases to serve as a Director is $10,000 or less, the Administrator
shall promptly distribute any such amount in a single lump sum payment.

     6.7 Withholding: Payroll Taxes. To the extent required by the law in effect
at the time payments are made, the Bank shall withhold from payments made
hereunder the minimum taxes required to be withheld by the federal or any state
or local government. As to any payroll tax that is due from a Participant for
Fees deferred under this Plan, the Bank shall collect such tax from funds paid
to such Participant with respect to other compensation not deferred under the
Plan unless said other compensation is insufficient to pay such payroll taxes
whereupon the shortfall shall serve to reduce the elected Deferral amount.


                                       20

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                                   ARTICLE VII
                             BENEFICIARY DESIGNATION
                             -----------------------

     7.1 Beneficiary Designation. Each Participant shall have the right, at any
time, to designate any person or persons as Beneficiary or Beneficiaries to whom
payment under this Plan shall be made in the event of Participant's death prior
to complete distribution to Participant of the Benefits due under the Plan. Each
Beneficiary designation shall become effective only when filed in writing with
the Administrator during the Participant's lifetime on a form prescribed by the
Administrator.

     The filing of a new Beneficiary designation form will cancel all
Beneficiary designations previously filed.

     If a Participant fails to designate a Beneficiary as provided above, or if
all designated Beneficiaries predecease the Participant or die prior to complete
distribution of the Participant's benefits, then the Administrator shall direct
the distribution of such benefits to the Participant's estate.


                                       21

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                                  ARTICLE VIII
                                  CONTRIBUTIONS
                                  -------------

     All Participants and Beneficiaries shall have the status of general
unsecured creditors of the Bank. The Plan constitutes a mere promise by the Bank
to pay the Participants' Accounts in the future, and nothing contained in this
Plan and no action taken pursuant to the provisions of this Plan shall create or
be construed to create a fiduciary relationship between the Bank and the
Director, his designated beneficiary or any other person. The Bank shall not
have any obligation to set aside, earmark or entrust any fund or money with
which to pay its obligations under this Plan. All Participants and Beneficiaries
shall be and remain general creditors of the Bank in the same manner as any
other creditor having a general claim for matured and unpaid compensation. The
Participant, his Beneficiary, or any other person claiming through the
Participant, shall only have the right to receive from the Bank the benefits
specified in this Plan. The Bank's obligation to pay the Participant the full
amount of his vested Account balance shall be offset by any amounts paid from
the Trust to the Participant or his Beneficiaries.

     Although the Bank reserves the absolute right at its sole discretion either
to set aside funds to assist in fulfilling the obligations undertaken by this
Plan or to refrain from so setting aside funds and to determine the extent,
nature, and method of so setting aside funds, it is the Bank's intent to make
contributions to the Trust of as much of the cumulative bookkeeping reserve
associated with the Plan, determined in accordance with generally accepted
accounting principles, as its operating cash flows permit. Nothing shall entitle
the Bank to any reversion of assets from the Trust, other than in accordance
with the terms and conditions of the Trust. At no time shall any Participant be
deemed to have any lien, right, title or interest in or to any specific Trust
investment or to any assets


                                       22

<PAGE>

of the Bank. At all times, either the Bank or the Trust shall be the owner of
any assets used to satisfy the Bank's obligations hereunder.


                                       23

<PAGE>

                                   ARTICLE IX
                             ADMINISTRATION OF PLAN
                             ----------------------

     9.1 Plan Administrator. The administration of the Plan shall be under the
supervision of the Administrator. The Administrator will have full power to
administer the Plan in all of its details, subject to applicable requirements of
law. For this purpose, the Administrator's powers will include, but will not be
limited to, the following authority, in addition to all other powers provided by
this Plan:

          (a) To make and enforce such rules and regulations as it deems
     necessary or proper for the efficient administration of the Plan, including
     the establishment of any claims procedures that may be required by
     applicable provisions of law;

          (b) To interpret the Plan, its interpretation thereof in good faith to
     be final and conclusive on all persons claiming benefits under the Plan;

          (c) To decide all questions concerning the Plan and the eligibility of
     any person to participate in the Plan;

          (d) To appoint such agents, counsel, accountants, consultants and
     other persons as may be required to assist in administering the Plan; and

          (e) To allocate and delegate its responsibilities under the Plan and
     to designate other persons to carry out any of its responsibilities under
     the Plan, any such allocation, delegation or designation to be in writing.


                                       24

<PAGE>

     9.2 Examination of Records. The Administrator will make available to each
Participant such of his or her records under the Plan as pertain to him or her,
for examination at reasonable times during normal business hours.

     9.3 Reliance on Reports and Certificates. In administering the Plan, the
Administrator will be entitled to the extent permitted by law to rely
conclusively upon any information furnished by any Bank, Participant,
Beneficiary, accountant, controller, attorney, actuary, consultant or other
advisor, and any agent of the foregoing, as the case may be.

     9.4 Nondiscriminatory Exercise of Authority. Whenever, in the
administration of the Plan, any discretionary action by the Administrator is
required, the Administrator shall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive substantially the
same treatment.

     9.5 Indemnification of Administrator. The Bank agrees to indemnify and to
defend to the fullest extent permitted by law any Employee serving as the
Administrator or as a member of a committee designated as Administrator
(including any Employee or former Employee who formerly served as Administrator
or as a member of such committee) against all liabilities, damages, costs and
expenses (including attorneys' fees and amounts paid in settlement of any claim
approved by the Bank) occasioned by any act or omission to act in connection
with the Plan, if such act or omission is in good faith.


                                       25

<PAGE>

                                    ARTICLE X
                                  MISCELLANEOUS
                                  -------------

     10.1 Alienability and Assignment Prohibition. A Participant's or
Beneficiary's right to benefit payments under the Plan shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of the Participant or the
Participant's Beneficiaries.

     10.2 Binding Obligation of Bank and Any Successor in Interest. The Bank
expressly agrees that it shall not merge or consolidate into or with another
corporation or sell substantially all of its assets to another corporation, firm
or person until such corporation, firm or person expressly agrees, in writing,
to assume and discharge the duties and obligations of the Bank under this Plan.

     10.3 Amendment or Termination. The Bank expects the Plan to be permanent
but, since future conditions affecting the Bank cannot be anticipated or
foreseen, the Bank must necessarily and does hereby reserve the right to amend,
modify or terminate the Plan at any time by action of the Board. No amendment or
termination of the Plan shall operate to decrease any Participant's Account
balance as of the date of such action.

     10.4 Claims Procedure. In the event any claim by a Participant or
Beneficiary is denied as to the amount and/or the method of payment under the
Plan, such Participant or Beneficiary shall be given prompt notice in writing of
such denial, which notice shall set forth the reason for the denial. The
Participant or Beneficiary may, by filing notice in writing with the Board
within sixty (60) days after the date of such notice of denial, request review
of such denial. The Board shall


                                       26

<PAGE>

review such denial, and shall state its decision, in writing, in a manner
calculated to be understood, to the Participant or Beneficiary concerned.

     10.5 Employment and Other Rights. This Plan creates no rights whatsoever in
any Participant to continue in the service of the Bank as a Director for any
length of time.

     10.6 Governing Law. To the extent not preempted by ERISA, this Plan shall
be construed, administered and enforced according to the laws of the
Commonwealth of Virginia.

     IN WITNESS WHEREOF, the Bank has caused this Plan to be executed on its
behalf by its duly authorized officer, on the day and year first above written.

     This Plan document is signed on ________________________________, 2001.


                                       BANK OF THE COMMONWEALTH

                                       By:
                                          --------------------------------------
                                       Title:
                                             -----------------------------------
ATTEST:

By:
   ------------------------------------
Title:
      ---------------------------------


                                       27

<PAGE>

                                    EXHIBIT I
                                    ---------

                            BANK OF THE COMMONWEALTH
                      DIRECTORS' DEFERRED COMPENSATION PLAN


                            Schedule of Participants
                            ------------------------

                                  Date of                     Opening Balance
Name                           Participation                  as of 01/01/2002
----                           -------------                  ----------------



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