Document:

EXHIBIT 4.1

                              DATA I/O CORPORATION
                        1982 EMPLOYEE STOCK PURCHASE PLAN
                      AMENDED AND RESTATED FEBRUARY 8, 2001

     1.1 Purpose

     This 1982  Employee  Stock  Purchase  Plan (the  "Plan") is  intended as an
incentive and to encourage stock ownership by all eligible employees of Data I/O
Corporation  (the  "Company") and  participating  subsidiaries  so that they may
share  in  the  fortunes  of  the  Company  by  acquiring  or  increasing  their
proprietary  interest in the Company. The Plan is designed to encourage eligible
employees  to remain in the employ of the Company.  It is intended  that options
issued  pursuant to this Plan shall  constitute  options  issued  pursuant to an
"employee  stock  purchase  plan"  within the meaning of Section 423 of the 1986
Internal Revenue Code as amended (the "Code").

     1.2 Eligible Employees

     All regular, full-time employees of the Company or any of its participating
subsidiaries  shall be eligible to receive  options  under this Plan to purchase
the Company's common stock, no par value (the "Common Stock") (except  employees
in countries whose laws make  participating  impractical).  For purposes of this
Plan, the term employee shall include all employees of the Company or any of its
participating  subsidiaries  other than persons  whose  customary  employment is
twenty  (20)  hours or less per week or not more than five (5)  months per year.
Persons who are employees on the August 1 next following the date that this Plan
is approved by the stockholders of the Company shall receive their options as of
such August 1. Persons who become  eligible to participate in the Plan after the
date on which the initial options are granted hereunder shall be granted options
on the next date on which options are granted to all eligible  employees.  In no
event may an employee  participate  in this Plan if such  employee,  immediately
after the option is granted,  owns stock possessing five percent (5%) or more of
the total combined  voting power or value of all classes of stock of the Company
or of its parent  corporation  or subsidiary  corporation,  as the terms "parent
corporation" and "subsidiary corporation" are defined in Section 425 (e) and (f)
of the Code. For purposes of determining  stock  ownership under this paragraph,
the rules of Section 425(d) of the Code shall apply and stock which the employee
may purchase  under  outstanding  options shall be treated as stock owned by the
employee.

     1.3 Stock Subject to the Plan

     The  stock  subject  to the  options  shall  be  shares  of  the  Company's
authorized but unissued Common Stock or shares of Common Stock reacquired by the
Company  including shares purchased in the open market.  The aggregate number of
shares  which may be issued  pursuant to the Plan is one million  eight  hundred
fifty thousand  (1,850,000),  subject to increase or decrease by reason of stock
split-ups,  reclassifications,  stock  dividends,  changes  in par value and the
like.

     1.4 Payment Periods and Stock Options

     The period during which payroll  deductions will accumulate  under the Plan
shall be six (6) months (the  "Payment  Period") and there shall be two (2) such
Payment  Periods in each calendar year,  commencing  August 1 and February 1 and
terminating on January 31 and July 31 of each year,  respectively.  Each Payment
Period includes only regular pay days falling within it.

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     On the first business day of each Payment Period, the Company will grant to
each  eligible  employee  who is then a  participant  in the Plan an  option  to
purchase on the last day of such Payment Period at the option price  hereinafter
provided such number of full shares of the Common Stock of the Company, reserved
for the purpose of the Plan, as his or her accumulated payroll deductions on the
last day of such Payment Period will pay for at such option price;  provided and
on condition  that such employee  remains  eligible to  participate  in the Plan
throughout such Payment Period; and provided further, that the maximum number of
shares  granted to any eligible  employee  hereunder in any Payment Period shall
not  exceed  two (2) times the  number  of full  shares of Common  Stock as such
employee's  accumulated  payroll  deductions  would pay for on the exercise date
assuming an exercise price equal to eighty-five percent (85%) of the fair market
value of the Company's Common Stock on the first day of such Payment Period. The
option  price for each  Payment  Period  shall be the lesser of (i) eighty  five
percent  (85%) of the fair market  value of the  Company's  Common  Stock on the
first business day of the Payment  Period;  or (ii) eighty five percent (85%) of
the fair market value of the Company's  Common Stock on the last business day of
the Payment  Period,  in either case  rounded up to avoid  fractions  other than
1/32,  1/16,  1/8,1/4,  1/2 and 3/4 (the  "Option  Price").  In the  event of an
increase or decrease in the number of outstanding  shares of Common Stock of the
Company through stock split-ups, reclassifications,  stock dividends, changes in
par value and the like, an appropriate adjustment shall be made in the number of
shares  and  Option  Price per share  provided  for under the Plan,  either by a
proportionate  increase in the number of shares and a proportionate  decrease in
the Option  Price per share,  or by a  proportionate  decrease  in the number of
shares and a  proportionate  increase in the Option  Price per share,  as may be
required to enable an eligible employee who is then a participant in the Plan as
to whom an  option  is  exercised  on the last day of any then  current  Payment
Period  to  acquire  such  number  of full  shares  as his  accumulated  payroll
deductions on such date will pay for at the adjusted Option Price.

     For  purposes  of this Plan the term "fair  market  value" on any given day
means: (i) if the Common Stock is listed on a national securities exchange,  the
average of the high and low prices of the  Common  Stock of the  Company on such
exchange or such other  national  securities  exchange as shall be designated by
the  Board  of  Directors;  or  (ii)  if  the  Common  Stock  is  traded  in the
over-the-counter  securities  market, the last sale price of the Common Stock as
quoted by NASDAQ National Market System or, if the Common Stock is not quoted in
the National Market System, the mean between the closing bid and asked prices of
the Common Stock as quoted by NASDAQ.

     For  purposes of this Plan the term  "business  day" as used herein means a
day on which there is trading on any  national  securities  exchange as shall be
designated by the Board of Directors pursuant to the preceding paragraph.

     No employee  shall be granted an option which  permits his or her rights to
purchase Common Stock under the Plan and any similar plans of the Company or any
parent or subsidiary  corporations to accrue at a rate which exceeds twenty five
thousand dollars ($25,000) of fair market value of such stock (determined at the
time such  option is  granted)  for each  calendar  year  which  such  option is
outstanding at any time. The purpose of the limitation in the preceding sentence
is to comply with Section 423(b)(8) of the Code.

     1.5 Exercise of Option

     Each eligible employee who continues to be a participant in the Plan on the
last business day of a Payment  Period shall be deemed to have  exercised his or
her option on such date and shall be deemed to have  purchased  from the Company
such number of full shares of Common Stock  reserved for the purpose of the Plan
as his or her accumulated  payroll  deductions on such date will pay for at such
Option Price.  If a participant is not an employee on the last business day of a
Payment Period,  such  participant  shall not be entitled to exercise his or her
option.

<PAGE>

     1.6 Unused Payroll Deductions

     Only full shares of Common Stock may be purchased. Any balance remaining in
an employee's account after a purchase will be reported to the employee and will
be carried forward to the next Payment Period.

     1.7 Authorization for Entering Plan

     An employee may enter the Plan by filling out,  signing and  delivering  to
the Corporate Secretary's office an authorization (the "Authorization"):

     (a) specifying the exact payroll deduction;

     (b)  authorizing the purchase of stock in each Payment Period in accordance
with the terms of the Plan; and

     (c) specifying  the exact name in which stock  purchased is to be issued as
provided under 1.11 hereof.

     Such Authorization must be received by the Corporate  Secretary's office at
least ten (10) days before the beginning  date of such next  succeeding  Payment
Period.

     Unless an employee  files a new  Authorization  or withdraws from the Plan,
his deductions and purchases  under the  Authorization  on file will continue so
long as the Plan remains in effect.

     All payroll  deductions  made for an  employee  shall be  deposited  in the
Company's general corporate account and shall not bear interest. An employee may
not make any  separate  cash payment into such account and may reduce the amount
of the deduction  once during the Payment  Period (see Section 1.9). The Company
will maintain complete records showing the amount of payroll  deductions of each
employee.

     1.8 Maximum Amount of Payroll Deductions

     An employee may authorize payroll  deductions in any whole dollar amount up
to but not more than ten percent (10%) of his or her regular base pay, provided,
however,  that the minimum  deduction in respect of any payroll  period shall be
five dollars ($5.00) (or such lesser amount as the Committee shall establish).

     The base pay of each  Participant  for each  payroll  period is the regular
straight  time  compensation  earned  during  such  payroll  period,  before any
deductions or  withholdings,  but excluding  overtime,  bonuses,  amount paid as
reimbursement of expenses and other additional compensation.

     1.9 Change in Payroll Deductions

     Deductions  may  be  decreased  only  once  in  a  Payment  Period.  A  new
Authorization will be required and must be received in the Corporate Secretary's
office no later than six (6) days prior to the individual's pay date.

     1.10 Withdrawal from the Plan

     An employee may withdraw  from the Plan,  in whole but not in part,  at any
time prior to the last  business  day of each  Payment  Period by  delivering  a
Withdrawal  Notice  to the  Corporate  Secretary's  office,  in which  event the
Company will refund the entire balance of his or her deductions not  theretofore
used to purchase stock under the Plan within thirty (30) days following  receipt
of the Withdrawal Notice.

     An employee  who  withdraws  from the Plan will be treated like an employee
who has never  entered  the  Plan.  To  re-enter,  an  employee  must file a new
Authorization  at least  ten (10) days  before  the  beginning  date of the next
Payment Period which cannot,  however,  become effective before the beginning of
the next Payment Period following withdrawal.

<PAGE>

     1.11 Issuance of Stock

     Certificates for stock issued to  participants,  or to a broker for benefit
of  participants,  will be delivered as soon as  practicable  after each Payment
Period.

     Stock  purchased  under  the Plan  will be  issued  only in the name of the
employee, or if the Authorization so specifies,  in the name of the employee and
another person of legal age as joint tenants with rights of survivorship.

     In order to obtain  the tax  treatment  provided  by the Code for  employee
stock  purchase  plans within the meaning of Section 423 of the Code, the shares
of stock  received  after the end of each Payment  Period may not be sold by the
employee  until  after a date  which is the later of two (2) years from the date
that the option to  purchase  such  shares is granted  (pursuant  to Section 1.4
hereof)  and one (1) year from the date that the shares are  transferred  to the
employee.  Sale or other  disposition of such shares prior to such date may give
rise to federal  income tax and  Federal  Insurance  Contribution  Act  ("FICA")
withholding obligations on the part of the Company. Accordingly, if certificates
representing  shares are issued to employees  upon  exercise of options  granted
hereunder,  they will bear a legend  restricting  transfer  prior to such  date,
unless the employee shall have reimbursed the Company for any federal income tax
and FICA withholding obligations arising out of the transaction.

     1.12 No Transfer or Assignment of Employee's Rights

     An employee's rights under the Plan are the employee's alone and may not be
transferred  or  assigned  to, or availed of by,  any other  person.  Any option
granted to an employee may be exercised only by such employee.

     1.13 Termination of Employee's Rights

     An employee's  rights under the Plan will terminate when he ceases to be an
employee because of resignation,  retirement,  lay-off,  discharge, or change of
status. A Withdrawal  Notice will be considered as having been received from the
employee on the day his or her employment ceases, and all payroll deductions not
used will be refunded.

     If an  employee's  employment  shall be  terminated  by  reason of death or
disability prior to the end of the current Payment Period,  the employee (his or
her designated  beneficiary,  in the event of his death,  or if none, his or her
legal  representative) shall have the right, within ninety (90) days thereafter,
to elect to have the  balance in his or her account  either  refunded in cash or
applied at the end of the current  Payment  Period toward the purchase of Common
Stock.

     1.14 Termination and Amendments to Plan

     The Plan may be terminated at any time by the Company's Board of Directors.
It will  terminate  in any case when all or  substantially  all of the  unissued
shares of Common Stock reserved for the purpose of the Plan have been purchased.
If at any time  shares of stock  reserved  for the  purposes  of the Plan remain
available for purchase but not in sufficient number to satisfy all then unfilled
purchase   requirements,   the  available  shares  shall  be  apportioned  among
participants in proportion to their options and the Plan shall  terminate.  Upon
such  termination or any other  termination of the Plan, all payroll  deductions
not used to purchase stock will be refunded.

     The Board of Directors  also reserves the right to amend the Plan from time
to time, in any respect, provided, however, that no amendment shall be effective
without prior approval of the  stockholders,  which would (a) except as provided
in Paragraphs  1.3 and 1.4,  increase the number of shares of Common Stock to be
offered above or (b) change the class of employees  eligible to receive  options
under the Plan.

<PAGE>

     1.15 Limitations on Sale of Stock Purchased Under the Plan

     The Plan is intended to provide  Common  Stock for  investment  and not for
resale.  The Company  does not,  however,  intend to restrict or  influence  any
employee in the conduct of his own affairs.  An employee  may,  therefore,  sell
stock purchased under the Plan at any time, provided,  however,  that because of
certain  Federal  tax  requirements,  each  employee  will agree by signing  the
Authorization  to promptly give the Company notice of any such stock disposed of
within one (1) year after the date of the last day of the Payment  Period during
which the stock was purchased indicating the number of such shares disposed. The
employee assumes the risk of any market fluctuations in the price of such stock.

     1.16 Company's Payment of Expenses Related to the Plan

     The Company will bear all costs of administering and carrying out the Plan.

     1.17 Participating Subsidiaries

     The term  "participating  subsidiaries"  shall mean any  subsidiary  of the
Company  which is  designated  by the Board of Directors to  participate  in the
Plan.  The Board of  Directors  shall  have the  power to make such  designation
before or after the Plan is approved by the stockholders.

     1.18 Administration of the Plan

     The Plan shall be  administered  by a committee  appointed  by the Board of
Directors of the Company (the  "Committee").  The Committee shall consist of not
less than three (3) members of the Company's  Board of  Directors.  The Board of
Directors  may from time to time  remove  members  from,  or add members to, the
Committee.  Vacancies on the Committee,  however caused,  shall be filled by the
Board of Directors.  The Committee  shall select one of its members as Chairman,
and shall hold meetings at such times and places as it may determine.  Acts by a
majority  of the  Committee,  or acts  reduced  to or  approved  in writing by a
majority  of the  members  of the  Committee,  shall  be the  valid  acts of the
Committee.  No member of the Committee  shall be eligible to  participate in the
Plan while serving as a member of the Committee.

     The  interpretation  and construction by the Committee of any provisions of
the Plan or of any  option  granted  under it  shall be final  unless  otherwise
determined by the Board of Directors.  The Committee may from time to time adopt
such rules and  regulations  for carrying  out the Plan as it may deem best.  No
member of the Board of Directors or the Committee shall be liable for any action
or  determination  made in good  faith  with  respect  to the Plan or any option
granted under it.

     1.19 Optionees Not Stockholders

     Until such time as the applicable Common Stock is actually purchased by and
issued to an employee  pursuant to the Plan,  no employee  shall be considered a
shareholder  or have  shareholder  rights  merely by reason of  tendering to the
Company an Authorization  and,  therefore,  instituting  payroll  deductions and
related actions.

     1.20 Application of Funds

     The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan will be used for general corporate purposes.

<PAGE>

     1.21 Governmental Regulation

     The Company's obligation to sell and deliver shares of the Company's Common
Stock under this Plan is subject to the approval of any  governmental  authority
required in connection with the  authorization,  issuance or sale of such Common
Stock.

     1.22 Withholding of Additional Federal Income Tax

     In  accordance  with Section  3402(a) of the Code and the  regulations  and
rulings  promulgated  thereunder,  the Company will  withhold  from the wages of
participating  employees,  in all  payroll  periods  following  and in the  same
calendar  year as the date on  which  compensation  is  deemed  received  by the
employee,  additional income taxes in respect of amounts deemed  compensation to
be included as includible gross income reported by the employee.

     1.23 Approval of Stockholders

     The Plan shall not take effect until  approved by the holders of a majority
of the  outstanding  shares of Common Stock of the Company,  which approval must
occur within the period  beginning  twelve (12) months  before and ending twelve
(12) months after the date the Plan is adopted by the Board of Directors.<PAGE>

                                                                     EXHIBIT 4.1

                            BANK OF THE COMMONWEALTH

                               DIRECTORS' DEFERRED

                               COMPENSATION PLAN

                            Effective January 1, 2002

<PAGE>

                            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

                                       i

<PAGE>

     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

<PAGE>

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

                                       iii

<PAGE>

                            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

<PAGE>

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.

                                       2

<PAGE>

                                    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

<PAGE>

     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

<PAGE>

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

<PAGE>

     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

<PAGE>

     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

<PAGE>

                                   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.

                                       8

<PAGE>

                                   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.

                                       9

<PAGE>

                                   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

<PAGE>

                                    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

<PAGE>

          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

<PAGE>

          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

<PAGE>

     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

<PAGE>

          (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

<PAGE>

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

                                       16

<PAGE>

                                   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

<PAGE>

     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

<PAGE>

                                   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

<PAGE>

                                  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
----                           -------------                  ----------------

                                       28

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