8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 14, 2008

Commonwealth Bankshares, Inc.

(Exact name of registrant as specified in its charter)

Virginia	01-17377	54-1460991
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

403 Boush Street, Norfolk, Virginia 23510

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number including area code: (757) 446-6900

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 1 – Registrant’s Business and Operations

Item 1.01 – Entry into a Material Definitive Agreement.

On April 11, 2008, Commonwealth Bankshares, Inc. amended its Deferred Supplemental Compensation Agreement with Cynthia A. Sabol, Executive Vice President and Chief Financial Officer, Simon Hounslow, Executive Vice President and Chief Lending Officer and Stephen G. Fields, Executive Vice President and Commercial Loan Officer. The Amended and Restated Deferred Supplemental Compensation Agreements are attached hereto as Exhibit 99.1, 99.2 and 99.3.

About Commonwealth Bankshares

Commonwealth Bankshares, Inc. is the parent of Bank of the Commonwealth which opened its first office in Norfolk, Virginia, in 1971, creating a community bank that was attuned to local issues and could respond to the needs of local citizens and businesses. Over the last three decades, the Company’s growth has mirrored that of the communities it serves. Today, Bank of the Commonwealth has seventeen bank branches strategically located throughout the Hampton Roads and Northeastern North Carolina regions and an extensive ATM network for added convenience. The Company continues to grow and develop new services, such as Online Banking and a Corporate Cash Management program and at the same time, maintain the longstanding commitment to personal service. Our slogan conveys our true corporate philosophy: “When you bank with us, you bank with your neighbors.” Bank of the Commonwealth offers insurance services through its subsidiary BOC Insurance Agencies of Hampton Roads, Inc., title services through its subsidiary Executive Title Center, mortgage funding services through its subsidiary, Bank of the Commonwealth Mortgage, and investment related services through its new subsidiary Commonwealth Financial Advisors, LLC.* Additional information about the company, its products and services, can be found on the Web at www.bankofthecommonwealth.com.

Contact: Edward J. Woodard, Jr., CLBB, Chairman of the Board, President and Chief Executive Officer, P.O. Box 1177, Norfolk, Virginia 23501, Phone: (757) 446-6904 or ewoodard@bocmail.net Web Site: http://bankofthecommonwealth.com

* Securities offered through Capitol Securities Management, Inc., member FINRA and SIPC. Not insured by FDIC or any Federal Government Agency. May Lose Value. Not a Deposit of or Guaranteed by the Bank or any Bank Affiliate. Commonwealth Financial Advisors, LLC is a wholly-owned subsidiary of Bank of the Commonwealth.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(D) Exhibits.

99.1	Amended and Restated Deferred Supplemental Compensation Agreement with Cynthia A. Sabol.
99.2	Third Amended and Restated Deferred Supplemental Compensation Agreement with Simon Hounslow.
99.3	Amended and Restated Deferred Supplemental Compensation Agreement with Stephen G. Fields.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Commonwealth Bankshares, Inc.
Date: April 14, 2008	By:	/s/ Cynthia A. Sabol, CPA
	Name:	Cynthia A. Sabol, CPA
	Title:	Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

AMENDED AND RESTATED

DEFERRED SUPPLEMENTAL COMPENSATION AGREEMENT

WITH CYNTHIA A. SABOL

This AGREEMENT made this 11^th day of April, 2008, between the Bank of the Commonwealth, a Virginia banking corporation, Norfolk, Virginia (hereinafter called “Bank”) and Cynthia A. Sabol (hereinafter called “Employee”).

WHEREAS, Employee is employed by the Bank; and

WHEREAS, said employment has been beneficial to the Bank; and

WHEREAS, in May 2004, the Bank and Employee entered into that certain Deferred Supplemental Compensation Agreement (the “First Agreement”), attached hereto, to encourage Employee to continue his employment with the Bank; and

WHEREAS, the Bank has determined that certain terms of the First Agreement, should be amended, that the First Agreement should also be amended to reflect the Bank’s desire to provide deferred supplemental compensation to Employee in addition to that provided for in the First Agreement, and, further, that the First Agreement should be restated to incorporate such amendments; and

WHEREAS, the Bank now desires to encourage Employee to continue his employment with the Bank, and reward him for his loyal and valuable service to the Bank.

Now, THEREFORE, it is agreed as follows:

1. Commencing on the first day of the second calendar month following the earlier of:

(i) Employee’s death, or

(ii) the later of:

(1) the date upon which Employee attains, or would have attained, the age of sixty-five (65) years, or

(2) the date on which the Employee retires,

Employee or the Beneficiary (as defined below), shall be entitled to payment from the Bank of One Million Five Hundred Thousand Dollars ($1,500,000) in one hundred eighty (180) equal consecutive monthly installments of Eight Thousand Three Hundred Thirty Three Dollars and 33/100 ($8,333.33) each, payable on the first day of each such month. Any payment described above shall be made on each such payment date to Employee, regardless of whether Employee is employed by Bank at the time he becomes eligible for such payments.

2. If Employee dies, any payment to which he is entitled under this Agreement shall be made to Employee’s beneficiary, as designated by him in writing and filed with the Cashier of the Bank, and if no such beneficiary is designated, then to Employee’s estate (in either case, the “Beneficiary”). Any payments described above that have not yet commenced prior to Employee’s death, shall commence being paid to the Beneficiary on the first day of the second calendar month following Employee’s death.

3. Employee agrees that, during the period of time he continues to receive payments hereunder and is no longer employed by the Bank, he will make himself available for such occasional reasonable consultation which the Bank may reasonably request.

4. During the period that Employee is eligible to receive payments as herein provided, Employee agrees to refrain from performing services of any kind, as an employee or otherwise, to or for any person, firm or corporation whose business the Board of Directors of the Bank shall in good faith determine to be competitive with the business of the Bank. Notice of such determination shall be mailed to Employee at his home address; and in the event that Employee thereafter performs services for such competitor of the Bank, all amounts then remaining unpaid under this Agreement shall be forfeited, and Employee agrees that the Bank shall have no further liability to him or to any person hereunder.

5. Neither Employee, the Beneficiary, nor any other person claiming through or under Employee shall have any right to transfer, assign, pledge or hypothecate in any manner, by operation of law or otherwise (other than by will or by the laws of descent and distribution), the right to receive payments hereunder, all of which payments and the rights thereto are expressly declared to be non-assignable; and in the event of any attempted assignment or other disposition, such attempted assignment or disposition shall be void, and the Bank shall have no further liability hereunder; provided, however, that this paragraph shall not restrict the right of Employee to designate a Beneficiary under the terms of this Agreement or the Beneficiary’s exercise of a power of appointment conferred upon Beneficiary by Employee’s beneficiary designation.

6. This Agreement is unfunded and the amounts payable hereunder are to be satisfied solely out of the general unrestricted assets of the Bank. The Employee’s right to payment hereunder is at all times a mere unsecured contractual obligation of the Bank. The Bank will not segregate any funds for, issue any notes evidencing, or provide any security for the payment of the amounts due hereunder. The Employee’s right to receive payments under this Agreement is not subject to attachment or legal process for the debts, contracts, liabilities, engagements, or torts of Employee or the Beneficiary. This Agreement does not give Employee any right, title, interest, lien, or claim against any specific asset of the Bank, Employee and the Beneficiary having only the rights of a general creditor of the Bank.

7. This Agreement shall be binding upon any successor of the Bank, including but not limited to any person, firm, corporation, or other business entity which at any time, whether by merger, purchase, or otherwise, acquire all or substantially all of the assets or business of the Bank.

8. This Agreement contains the entire Agreement between Employee and the Bank and supercedes any and all previous agreements, written or oral, among the parties related to the specific subject matter hereof. No amendment or modification of the terms of this Agreement shall be binding on the parties hereto unless reduced to writing and signed by Employee and the Bank.

IN WITNESS WHEREOF, the parties have executed this Agreement at Norfolk, Virginia, on the date first above written.

EMPLOYEE:	BANK OF THE COMMONWEALTH
/s/ Cynthia A. Sabol	By:	/s/ E. J. Woodard, Jr., CLBB
Cynthia A. Sabol		E. J. Woodard, Jr., CLBB
		Chairman of the Board, President and Chief Executive Officer

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EX-99.2

Exhibit 99.2

THIRD AMENDED AND RESTATED

DEFERRED SUPPLEMENTAL COMPENSATION AGREEMENT

WITH SIMON HOUNSLOW

This AGREEMENT made this 11^th day of April, 2008, between the Bank of the Commonwealth, a Virginia banking corporation, Norfolk, Virginia (hereinafter called “Bank”) and Simon Hounslow (hereinafter called “Employee”).

WHEREAS, Employee is employed by the Bank; and

WHEREAS, said employment has been beneficial to the Bank; and

WHEREAS, in May 2004, the Bank and Employee entered into that certain Deferred Supplemental Compensation Agreement (the “Second Agreement”), attached hereto, to encourage Employee to continue his employment with the Bank; and

WHEREAS, the Bank has determined that certain terms of the First and Second Agreement, should be amended, that the First and Second Agreement should also be amended to reflect the Bank’s desire to provide deferred supplemental compensation to Employee in addition to that provided for in the First and Second Agreement, and, further, that the First and Second Agreement should be restated to incorporate such amendments; and

WHEREAS, the Bank now desires to encourage Employee to continue his employment with the Bank, and reward him for his loyal and valuable service to the Bank.

Now, THEREFORE, it is agreed as follows:

1. Commencing on the first day of the second calendar month following the earlier of:

(i) Employee’s death, or

(ii) the later of:

(1) the date upon which Employee attains, or would have attained, the age of sixty-five (65) years, or

(2) the date on which the Employee retires,

Employee or the Beneficiary (as defined below), shall be entitled to payment from the Bank of Seven Hundred Fifty Thousand Dollars ($750,000) in one hundred eighty (180) equal consecutive monthly installments of Four Thousand One Hundred Sixty Seven Dollars ($4,167) each, payable on the first day of each such month. Any payment described above shall be made on each such payment date to Employee, regardless of whether Employee is employed by Bank at the time he becomes eligible for such payments.

2. If Employee dies, any payment to which he is entitled under this Agreement shall be made to Employee’s beneficiary, as designated by him in writing and filed with the Cashier of the Bank, and if no such beneficiary is designated, then to Employee’s estate (in either case, the “Beneficiary”). Any payments described above that have not yet commenced prior to Employee’s death, shall commence being paid to the Beneficiary on the first day of the second calendar month following Employee’s death.

3. Employee agrees that, during the period of time he continues to receive payments hereunder and is no longer employed by the Bank, he will make himself available for such occasional reasonable consultation which the Bank may reasonably request.

4. During the period that Employee is eligible to receive payments as herein provided, Employee agrees to refrain from performing services of any kind, as an employee or otherwise, to or for any person, firm or corporation whose business the Board of Directors of the Bank shall in good faith determine to be competitive with the business of the Bank. Notice of such determination shall be mailed to Employee at his home address; and in the event that Employee thereafter performs services for such competitor of the Bank, all amounts then remaining unpaid under this Agreement shall be forfeited, and Employee agrees that the Bank shall have no further liability to him or to any person hereunder.

5. Neither Employee, the Beneficiary, nor any other person claiming through or under Employee shall have any right to transfer, assign, pledge or hypothecate in any manner, by operation of law or otherwise (other than by will or by the laws of descent and distribution), the right to receive payments hereunder, all of which payments and the rights thereto are expressly declared to be non-assignable; and in the event of any attempted assignment or other disposition, such attempted assignment or disposition shall be void, and the Bank shall have no further liability hereunder; provided, however, that this paragraph shall not restrict the right of Employee to designate a Beneficiary under the terms of this Agreement or the Beneficiary’s exercise of a power of appointment conferred upon Beneficiary by Employee’s beneficiary designation.

6. This Agreement is unfunded and the amounts payable hereunder are to be satisfied solely out of the general unrestricted assets of the Bank. The Employee’s right to payment hereunder is at all times a mere unsecured contractual obligation of the Bank. The Bank will not segregate any funds for, issue any notes evidencing, or provide any security for the payment of the amounts due hereunder. The Employee’s right to receive payments under this Agreement is not subject to attachment or legal process for the debts, contracts, liabilities, engagements, or torts of Employee or the Beneficiary. This Agreement does not give Employee any right, title, interest, lien, or claim against any specific asset of the Bank, Employee and the Beneficiary having only the rights of a general creditor of the Bank.

7. This Agreement shall be binding upon any successor of the Bank, including but not limited to any person, firm, corporation, or other business entity which at any time, whether by merger, purchase, or otherwise, acquire all or substantially all of the assets or business of the Bank.

8. This Agreement contains the entire Agreement between Employee and the Bank and supercedes any and all previous agreements, written or oral, among the parties related to the specific subject matter hereof. No amendment or modification of the terms of this Agreement shall be binding on the parties hereto unless reduced to writing and signed by Employee and the Bank.

IN WITNESS WHEREOF, the parties have executed this Agreement at Norfolk, Virginia, on the date first above written.

EMPLOYEE:	BANK OF THE COMMONWEALTH
/s/ Simon Hounslow	By:	/s/ E. J. Woodard, Jr., CLBB
Simon Hounslow		E. J. Woodard, Jr., CLBB
		Chairman of the Board, President and Chief Executive Officer

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EX-99.3

Exhibit 99.3

AMENDED AND RESTATED

DEFERRED SUPPLEMENTAL COMPENSATION AGREEMENT

WITH STEPHEN G. FIELDS

This AGREEMENT made this 11^th day of April, 2008, between the Bank of the Commonwealth, a Virginia banking corporation, Norfolk, Virginia (hereinafter called “Bank”) and Stephen G. Fields (hereinafter called “Employee”).

WHEREAS, Employee is employed by the Bank; and

WHEREAS, said employment has been beneficial to the Bank; and

WHEREAS, in May 2004, the Bank and Employee entered into that certain Deferred Supplemental Compensation Agreement (the “First Agreement”), attached hereto, to encourage Employee to continue his employment with the Bank; and

WHEREAS, the Bank has determined that certain terms of the First Agreement, should be amended, that the First Agreement should also be amended to reflect the Bank’s desire to provide deferred supplemental compensation to Employee in addition to that provided for in the First Agreement, and, further, that the First Agreement should be restated to incorporate such amendments; and

WHEREAS, the Bank now desires to encourage Employee to continue his employment with the Bank, and reward him for his loyal and valuable service to the Bank.

Now, THEREFORE, it is agreed as follows:

1. Commencing on the first day of the second calendar month following the earlier of:

(i) Employee’s death, or

(ii) the later of:

(1) the date upon which Employee attains, or would have attained, the age of sixty-five (65) years, or

(2) the date on which the Employee retires,

Employee or the Beneficiary (as defined below), shall be entitled to payment from the Bank of Seven Hundred Fifty Thousand Dollars ($750,000) in one hundred eighty (180) equal consecutive monthly installments of Four Thousand One Hundred Sixty Seven Dollars ($4,167) each, payable on the first day of each such month. Any payment described above shall be made on each such payment date to Employee, regardless of whether Employee is employed by Bank at the time he becomes eligible for such payments.

2. If Employee dies, any payment to which he is entitled under this Agreement shall be made to Employee’s beneficiary, as designated by him in writing and filed with the Cashier of the Bank, and if no such beneficiary is designated, then to Employee’s estate (in either case, the “Beneficiary”). Any payments described above that have not yet commenced prior to Employee’s death, shall commence being paid to the Beneficiary on the first day of the second calendar month following Employee’s death.

3. Employee agrees that, during the period of time he continues to receive payments hereunder and is no longer employed by the Bank, he will make himself available for such occasional reasonable consultation which the Bank may reasonably request.

4. During the period that Employee is eligible to receive payments as herein provided, Employee agrees to refrain from performing services of any kind, as an employee or otherwise, to or for any person, firm or corporation whose business the Board of Directors of the Bank shall in good faith determine to be competitive with the business of the Bank. Notice of such determination shall be mailed to Employee at his home address; and in the event that Employee thereafter performs services for such competitor of the Bank, all amounts then remaining unpaid under this Agreement shall be forfeited, and Employee agrees that the Bank shall have no further liability to him or to any person hereunder.

5. Neither Employee, the Beneficiary, nor any other person claiming through or under Employee shall have any right to transfer, assign, pledge or hypothecate in any manner, by operation of law or otherwise (other than by will or by the laws of descent and distribution), the right to receive payments hereunder, all of which payments and the rights thereto are expressly declared to be non-assignable; and in the event of any attempted assignment or other disposition, such attempted assignment or disposition shall be void, and the Bank shall have no further liability hereunder; provided, however, that this paragraph shall not restrict the right of Employee to designate a Beneficiary under the terms of this Agreement or the Beneficiary’s exercise of a power of appointment conferred upon Beneficiary by Employee’s beneficiary designation.

6. This Agreement is unfunded and the amounts payable hereunder are to be satisfied solely out of the general unrestricted assets of the Bank. The Employee’s right to payment hereunder is at all times a mere unsecured contractual obligation of the Bank. The Bank will not segregate any funds for, issue any notes evidencing, or provide any security for the payment of the amounts due hereunder. The Employee’s right to receive payments under this Agreement is not subject to attachment or legal process for the debts, contracts, liabilities, engagements, or torts of Employee or the Beneficiary. This Agreement does not give Employee any right, title, interest, lien, or claim against any specific asset of the Bank, Employee and the Beneficiary having only the rights of a general creditor of the Bank.

7. This Agreement shall be binding upon any successor of the Bank, including but not limited to any person, firm, corporation, or other business entity which at any time, whether by merger, purchase, or otherwise, acquire all or substantially all of the assets or business of the Bank.

8. This Agreement contains the entire Agreement between Employee and the Bank and supercedes any and all previous agreements, written or oral, among the parties related to the specific subject matter hereof. No amendment or modification of the terms of this Agreement shall be binding on the parties hereto unless reduced to writing and signed by Employee and the Bank.

IN WITNESS WHEREOF, the parties have executed this Agreement at Norfolk, Virginia, on the date first above written.

EMPLOYEE:	BANK OF THE COMMONWEALTH
/s/ Stephen G. Fields	By:	/s/ E. J. Woodard, Jr., CLBB
Stephen G. Fields		E. J. Woodard, Jr., CLBB
		Chairman of the Board, President and Chief Executive Officer

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