SCHEDULE 14A INFORMATION
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

COMMONWEALTH BANKSHARES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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NOTICE OF 2002 ANNUAL MEETING OF SHAREHOLDERS

To the shareholders of Commonwealth Bankshares, Inc,:

NOTICE is hereby given that the 2002 Annual Meeting of Shareholders of
Commonwealth Bankshares, Inc. (the "Corporation") will be held in the Radisson
Hotel Norfolk, 2/nd/ floor, "Hampton Roads" room at 700 Monticello Ave.,
Norfolk, VA on Tuesday, June 25, 2002 at 3:00 P.M. local time, for the following
purposes:

1. Election of three members of the Board of Directors of the Corporation
as Class 2 directors to serve until the 2005 Annual Meeting of
Shareholders.

2. The transaction of such other business as may properly come before the
meeting or any adjournment thereof.

Only shareholders of record at the close of business on May 1, 2002 are
entitled to notice of, and to vote at, such meeting or any adjournment thereof.

Your attention is directed to the Proxy Statement accompanying this notice
for a more complete statement regarding matters proposed to be acted upon at the
meeting.

To assure that your shares are represented at the meeting, please fill in,
date and sign the enclosed proxy and return it promptly in the enclosed
envelope, regardless of whether you expect to attend the meeting. The enclosed
envelope requires no postage if mailed in the United States. If for any reason
you desire to revoke your proxy, you may do so at any time before it is voted by
contacting the Chairman of the Board, President and Chief Executive Officer of
the Corporation, Edward J. Woodard, Jr., in person or in writing.

By Order of the Board of Directors

Edward J. Woodard, Jr., CLBB
Chairman of the Board, President and
Chief Executive Officer

Dated in Norfolk, Virginia and
mailed this 4/th/ day of June, 2002

COMMONWEALTH BANKSHARES, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 25, 2002

The solicitation of the enclosed 2002 proxy is made by and on behalf of the
Board of Directors of Commonwealth Bankshares, Inc. (the "Corporation") to be
used at the 2002 Annual Meeting of Shareholders to be held on June 25, 2002 at
3:00 p.m., or any adjournment thereof, at the Radisson Hotel Norfolk, 2/nd/
floor, "Hampton Roads" room, 700 Monticello Ave., Norfolk, VA. The approximate
mailing date of this Proxy Statement and the accompanying proxy is June 4, 2002.
The matters to be considered and acted upon are (i) the election of three Class
2 directors of the Corporation to serve until the 2005 Annual Meeting of
Shareholders and (ii) such other business as may properly come before the
meeting, or any adjournment thereof.

The Corporation is a one bank holding company organized under the laws of
the Commonwealth of Virginia. It's wholly-owned subsidiary, Bank of the
Commonwealth, is a Virginia state bank and member of the Federal Reserve. The
Bank operates nine branches in Hampton Roads, Virginia.

Person Making The Solicitation

The cost of the solicitation of proxies will be borne by the Corporation.
Solicitations will be made only by the mails, except that, if necessary,
officers and regular employees of the Bank or the Corporation may make
solicitations of proxies in person or by telephone. Banks, brokerage firms, and
other custodians, nominees and fiduciaries will be requested to forward the
proxy soliciting material to the beneficial owners of the stock held of record
by such persons, and the Corporation will, upon request, reimburse them for
their reasonable charges and expenses in this regard.

Revocability of Proxy

Anyone who gives a proxy may still vote in person, if he so desires, and
may revoke the proxy at any time prior to the voting of such proxy by contacting
the Chairman of the Board, President and Chief Executive Officer of the
Corporation, Edward J. Woodard, Jr., in person or in writing, or by filing a
duly executed proxy bearing a later date. All properly executed proxies
delivered pursuant to this solicitation will be voted at the meeting in
accordance with instructions contained therein, if any.

Voting Shares and Vote Required

Only shareholders of record at the close of business on May 1, 2002 will be
entitled to vote at the meeting, or any adjournment thereof. As of May 1, 2002
the Corporation had issued and outstanding 1,706,674 shares of Common Stock held
of record by approximately 780 of shareholders. Shareholders are entitled to one
vote for each share of Common Stock on all matters to come before the meeting.
In the election of directors, those nominees receiving the greatest number of
votes shall be deemed elected even though not receiving a majority of the shares
represented at the meeting in person or proxy. In accordance with Virginia law,
broker non-votes will be counted for purposes of determining the presence or
absence of a quorum, but will not be counted as a vote cast on any proposal.
Accordingly, broker non-votes will have no effect on the election of directors.
A majority of the shares of outstanding Common Stock must be represented at the
meeting in person or by proxy in order to constitute a quorum for the
transaction of business.

PROPOSAL I
ELECTION OF DIRECTORS

The Corporation's Articles of Incorporation provide for the Board of
Directors to be divided into three classes, as nearly equal in number as
possible. Each class serves for a term of three years, with one class being
elected each year. The Board of Directors currently consists of ten directors.

At the 2002 Annual Meeting, three directors comprising Class 2 will be
elected to serve until the 2005 Annual Meeting of Shareholders and until their
successors are elected and qualified. The Board recommends that the three
nominees named below be elected. Proxies received will be voted for the election
of such nominees, unless marked to the contrary. A shareholder who desires to
withhold voting of the proxy for one or all of the nominees may so indicate on
the proxy. All of the nominees are currently members of the Board. All of the
nominees have consented to be named and have indicated their intent to serve if
elected. However, in the event any nominee is not available for election, the
proxies will be voted for such person as shall be designated by the Board as a
replacement.

MANAGEMENT

The following table sets forth, as of May 1, 2002, certain information with
respect to each director including age, principal occupation, the year each
nominee or incumbent director first became a director, and each such person's
beneficial ownership of the Corporation's Common Stock. Unless otherwise
indicated, the business experience and principal occupation shown for each
nominee or incumbent director has extended five or more years. All of the
Corporation's directors and named executive officer receive mail at the
Corporation's offices.

Number and
Served as Principal Occupation Percent of
Director During Past Shares Beneficially
Name Age Since Five Years Owned (1)(2)
---- --- --------- -------------------------------- ------------

Nominees for Election Whose Terms Will Expire in 2005 (Class 2)

Herbert L. Perlin 61 1987 President of Perlin Benefit 45,386(3)
Resources Inc., a regional 2.63%
pension company located in
Virginia Beach, Virginia.

Kenneth J. Young 51 1999 President of Norfolk Tides, 7,780(4)
Norfolk, Virginia and Leisure & *
Recreation Consultants Inc.
Tampa, Florida.

Thomas W. Moss, Jr. 73 1999 Treasurer - City of Norfolk, 3,995(5)
Norfolk, Virginia. *

Number and
Served as Principal Occupation Percent of
Director During Past Shares Beneficially
Name Age Since Five Years Owned (1)(2)
---- --- --------- -------------------------------- ------------

Incumbent Directors Whose Terms Will Expire in 2003 (Class 3)

Lawrence C. Fentriss 47 2001 Co-founder of Baxter, 165,057(6)
Fentriss and Company 9.22%

William P. Kellam 87 1971 Retired President of Kellam- 35,687(7)
Eaton Insurance Agency, Inc. 2.07%
(real estate and insurance),
Virginia Beach, Virginia, a
position he held until 1986.

Edward J. Woodard, Jr. 59 1973 Chairman of the Board, President 48,695(8)
and Chief Executive Officer of 2.81%
the Corporation and the Bank.

Incumbent Whose Terms Will Expire in 2004 (Class 1)

E. Carlton Bowyer, Ph.D 68 2001 Investor, Retired 1,608
Superintendent - Virginia *
Beach Schools

Morton Goldmeier 78 1988 President of Hampton Roads 80,979(9)
Management Associates, Inc. 4.70%

William D. Payne, M.D. 66 1988 Retired surgeon from Drs. 22,801(10)
Payne, Ives & Holland, Inc. 1.32%
in 2001

Richard J. Tavss 62 1988 Senior counsel of Tavss, 124,817(11)
Fletcher, Maiden, & King, P.C. 7.24%
in Norfolk, Virginia.

All Directors and executive officers as Group (12 persons) 578,410
29.72%

* Percentage of ownership is less than 1% of the outstanding shares of
Common Stock of the Corporation.

(1) Beneficial ownership as reported in the above table has been
determined in accordance with Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended, and includes shares, where applicable, which an individual
has the right to acquire within 60 days through the exercise of stock
options.

(2) Based on 1,706,674 issued and outstanding shares of common stock as of
May 1, 2002.

(3) Includes (i) 18,000 shares which Mr. Perlin has the right to acquire
through the exercise of stock options, (ii) 18,929 shares registered
in the name of Herbert L. Perlin, Profit Sharing Trust, of which Mr.
Perlin is Acting Trustee, (iii) 4,085 shares owned jointly by Mr.
Perlin and his wife and (iv) 3,752 shares register in the name of the
Perlin Revocable Living Trust.

(4) Includes (i) 2,000 shares which Mr. Young has the right to acquire
through the exercise of stock options and (ii) 5,250 shares held in
Trust, representing the proceeds of a self directed individual
retirement account for the benefit of Kenneth J. Young.

(5) Includes (i) 2,000 shares which Mr. Moss has the right to acquire
through the exercise of stock options and (ii) 1,500 shares held in
Trust, representing the proceeds of a self directed individual
retirement account for the benefit of Thomas W. Moss, Jr.

(6) Includes (i) 75,000 shares which Mr. Fentriss has the right to acquire
through the conversion of convertible preferred securities, and (ii)
8,750 shares which Mr. Fentriss' wife has the right to acquire through
conversion of convertible preferred securities.

(7) Includes (i) 18,000 shares which Mr. Kellam has the right to acquire
through the exercise of stock options and (ii) 16,915 shares owned by
Mr. Kellam's wife for which Mr. Kellam disclaims beneficial ownership.

(8) Includes (i) 29,133 shares which Mr. Woodard has the right to acquire
through the exercise of stock options, (ii) 649 shares registered in
the name of E. J. Woodard, Jr., Custodian for Troy Brandon Woodard,
(iii) 1,541 shares registered in the name of E. J. Woodard, Jr. and
Sharon W. Woodard, Custodians of Troy Brandon Woodard, (iv) 2,022
shares held in trust, representing the proceeds of a self directed
Individual Retirement Account for the benefit of E. J. Woodard, Jr.
and (v) 8,949 shares owned jointly by Mr. Woodard and his wife.

(9) Includes (i) 18,000 shares which Mr. Goldmeier has the right to
acquire through the exercise of stock options and (ii) 14,006 shares
owned by Mr. Goldmeier's wife, for which Mr. Goldmeier disclaims
beneficial ownership.

(10) Includes (i) 18,000 shares which Dr. Payne has the right to acquire
through the exercise of stock options (ii) 3,033 registered in the
name of Payne Pension and Profit Sharing Plan, of which Dr. Payne is
acting trustee and (iii) 639 shares owned by Dr. Payne's wife for
which Dr. Payne disclaims beneficial ownership.

(11) Includes (i) 18,000 shares which Mr. Tavss has the right to acquire
through the exercise of stock options, (ii) 1,271 shares registered in
the name of Richard J. Tavss, Custodian for Bobbie J. Tavss, (iii) 387
shares registered in the name of Richard J. Tavss, Custodian for
Sander T. Schoolar, (iv) 383 shares registered in the name of Richard
J. Tavss, Custodian for Zachary Maiden and (v) 335 shares registered
in the name of Richard J. Tavss, Custodian for Taylor Tavss Schoolar
V.

Meetings and Committees of the Board of Directors

The Corporation's Board of Directors has primary responsibility for the
determination of corporate policies and the overall financial condition of the
Corporation. The Board appoints a chief executive and other officers who are
responsible for conducting business on a day-to-day basis under the Board's
guidance. In turn, the management of the Corporation provides the Board of
Directors with a regular and detailed flow of information relating to the
Corporation's overall condition and financial performance.

During 2001, the Board of Directors met twelve (12) times for regular
monthly meetings. All directors attended at least 75% of the total meetings of
the Board of Directors and the various committees on which they are members.

The Board of Directors has five standing committees: Executive Committee,
Audit Committee, Compensation Committee, Investment Committee and Nominating
Committee. At its first meeting after the annual meeting of shareholders, the
Board elects each Committee. Committee members serve for one year or until the
first meeting of the Board following the next annual meeting of shareholders.

Executive Committee

The Executive Committee consists of three members, selected in rotation
from the ten directors: E. J. Woodard, Jr., Chairman, E. Carlton Bowyer, Ph.D.,
William P. Kellam, Lawrence C. Fentriss, Morton Goldmeier, Richard J. Tavss,
William D. Payne, Thomas W. Moss, Jr., Kenneth J. Young and Herbert L. Perlin.
When the Board is not in session, the Executive Committee is authorized to
exercise all of the Board's power except for certain fundamental
responsibilities, such as approval of an amendment of the articles of
incorporation or a plan of merger or consolidation. The Executive Committee
meets to act on capital expenditures, to elect officers other than senior
officers and to review and consider certain matters and policies for
recommendation to the full Board. The Executive Committee met 31 times in 2001.

Audit Committee

The Audit Committee during 2001 was composed of five (5) directors: George
H. Burton, Jr., Chairman, William P. Kellam, Thomas W. Moss, Jr., Kenneth J.
Young and Morton Goldmeier. The functions of the Audit Committee are to (i)
recommend selection of independent certified public accountants, (ii) approve
the scope of the accountants' examination, (iii) review internal accounting
procedures, (iv) review reports of examination by the accountants and by
regulatory agencies having jurisdiction over the Corporation, (v) monitor
internal programs to ensure compliance with the law and avoidance of conflicts
of interest, and (vi) aid the Board in fulfilling its responsibilities for
financial reporting to the public. The Audit Committee met two (2) times during
2001. See, "Audit Committee Report" below.

Personnel/Compensation Committee

The Personnel/Compensation Committee during 2001 was composed of five (5)
directors: William D. Payne, M.D., Chairman, E. J. Woodard, Jr., Richard J.
Tavss, William P. Kellam, and Kenneth J. Young. The Personnel/Compensation
Committee recommends the compensation of officers to the Executive Committee and
the Board. The Personnel/Compensation Committee met four (4) times during 2001.
Mr. Woodard abstained from discussion regarding his salary and is not permitted
to participate in the consideration and recommendation by the Committee as to
his compensation.

Investment Committee

The Investment Committee during 2001 was composed of five (5) directors:
George H. Burton, Jr., Chairman, E. J. Woodard, Jr., Herbert L. Perlin, Morton
Goldmeier, and Thomas W. Moss, Jr. The Investment Committee administers the
investment policies of the Corporation. The Investment Committee met (2) times
during 2001.

Nominating Committee

The Nominating Committee of the Board during 2001 was composed of three (3)
directors: William P. Kellam, Chairman, E. J. Woodard, Jr., and Richard J.
Tavss. The basic function of this Committee is the recommendation of those
persons to be designated as Board nominees for election to the Board by the
shareholders of the Corporation at its Annual Meeting. The Nominating Committee
met one (1) time in 2001.

The Nominating Committee will consider suggestions from all sources,
including shareholders, regarding possible candidates for nomination and
election to the Board. Generally, candidates should be highly qualified by
business, professional or comparable experience, affirmatively desirous of
serving on the Board, and able to represent the interests of all shareholders.
Shareholders wishing to nominate a candidate should forward the candidate's name
and a description of the candidate's background and qualifications to the
Corporate Secretary, and should consult the Corporation's Bylaws as to timing,
form and context requirements with respect to such nominations.

Audit Committee Report

The Audit Committee of the Board of Directors is composed of five (5)
non-employee directors. Each of these directors is an "independent director" as
that term is defined under the NASDAQ Stock Market's listing standards. To be an
independent director under this definition, a director may not be an officer or
employee of the Corporation or have any other relationship with the Corporation
that interferes with the exercise of independent judgment. The Audit Committee
held two meetings during 2001. The responsibilities of the Audit Committee are
set forth in its Charter, which will be reviewed and amended periodically as
appropriate.

The Audit Committee reviews the Corporation's financial reporting process
on behalf of the Board of Directors. Management has the primary responsibility
of the financial statements and the reporting process, including the system of
internal controls. In this context, the Committee has met and held discussions
with management and the independent auditors. Management represented to the
Committee that the Corporation's financial statements were prepared in
accordance with generally accepted accounting principles, and the Committee has
reviewed and discussed the financial statements with management and the
independent auditors. The Committee discussed with the independent auditors
matters required to be discussed by Statement of Auditing Standards No. 61
(Communication with Audit Committees). In addition, the Committee has discussed
with the independent auditors the auditors' independence from the Corporation
and its management, including the matters in the written disclosures required by
the Independence Standards Board Standards No. 1 (Independence Discussions with
Audit Committees). The Committee discussed with the Corporation's internal and
independent auditors the overall scope and specific plans for their respective
audits.

The Audit Committee meets with the internal and independent auditors, with
and without management present, to discuss the results of their examinations,
the evaluations of the Corporation's internal controls, and the overall quality
of the Corporation's financial reporting. The meetings also are designed to
facilitate any private communications with the Committee desired by the internal
auditors or independent accountants. In reliance on the reviews and discussions
referred to above, the Committee recommended to the Board of Directors, and the
Board has approved, that the audited financial statements of the Corporation be
included in the Corporation's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 2001, for filing with the Securities and Exchange Commission.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth certain information with respect to
beneficial ownership of the Corporation's Common Stock as of May 1, 2002 by each
beneficial owner of more than 5% of the Corporation's Common Stock.

Name and Address Beneficial Ownership
of Holder Shares Percent
---------------- ------ -------
Porter Felleman, Inc. 94,744 5.56%
100 Park Avenue
Suite 2120
New York, NY 10017

Lawrence C. Fentriss* 165,057 9.67%
Baxter, Fentriss & Company
Suite 280
Richmond, VA 23236

Richard J. Tavss 124,817 7.24%
P.O. Box 3747
Norfolk, VA 23514

* Also a member of the Board of Directors of the Corporation.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Loans to Officers and Directors

Certain directors and officers of the Corporation and the Bank, members of
their immediate families, and corporations, partnerships and other entities with
which such persons are associated, are customers of the Bank. As such, some of
these persons engaged in transactions with the Bank in the ordinary course of
business during 2001, and will have additional transactions with the Bank in the
future. All loans extended and commitments to lend by the Bank to such persons
are made in the ordinary course of business upon substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with unaffiliated persons and do not involve more than
the normal risk of collectability or present other unfavorable features.

As of December 31, 2001, the amount of loans from the Bank to all officers
and directors of the Corporation and the Bank, and entities in which they are
associated, was approximately $2.6 million. This amount represented 19.1% of the
total equity capital of the Bank as of December 31, 2001.

Business Relationships and Transactions with Management

In the ordinary course of its business, the Corporation and the Bank
engaged in certain transactions with their officers and directors in which such
officers and directors have a significant interest. All such transactions have
been made on substantially the same terms as those prevailing at the time for
comparable transactions with unaffiliated parties. The Bank has from time to
time retained the Norfolk, Virginia law firm of Tavss, Fletcher, Maiden and
King, P.C., of which Mr. Tavss, a director of the Corporation and the Bank, is
senior counsel, to perform certain legal services for the Corporation and the
Bank.

In 1984, the Bank entered into a lease with Boush Bank Building Associates,
a limited partnership (the "Partnership"), to rent the headquarters building
(the "Headquarters") of the Corporation and the Bank, which is located at the
corners of Freemason and Boush Streets, Norfolk, Virginia. The general partner
of the Partnership is Boush Bank Building Corporation. The limited partners of
the Partnership, are Messrs. Woodard, and Kellam, who are directors of the
Corporation and the Bank and the estate of George H. Burton, Jr., a deceased
director. The lease requires the Bank to pay all taxes, maintenance and
insurance. The term of the lease is twenty-three years and eleven months, and
began on December 19, 1984. In connection with this property, the lessor has
secured financing in the form of a $1,600,000 industrial development revenue
bond from the Norfolk Redevelopment and Housing Authority payable in annual
installments, commencing on January 1, 1987, at amounts equal to 3% of the then
outstanding principal balance through the twenty-fifth year, when the unpaid
balance will become due. Interest on this bond is payable monthly, at 68.6% of
the prime rate of SunTrust Bank in Richmond, Virginia. Monthly rent paid by the
Bank is equal to interest on the above bond, plus any interest associated with
secondary financing provided the lessor by the Bank. The Bank has the right to
purchase, at its option, an undivided interest in the property at undepreciated
original cost, and is obligated to purchase in each January after December 31,
1986, an undivided interest in an amount equal to 90% of the legal amount
allowed by banking regulations for investments in fixed properties, unless the
Bank's return on average assets is less than seven-tenths of one percent. Under
this provision the Bank has purchased 54.4% of this property for a total of
$999,611. No purchases have been made after 1988. The terms of the lease are not
less favorable than could be obtained from a non-related party.

Additionally, in 1998, Bank of the Commonwealth entered into a lease with
respect to its branch at 1217 Cedar Road, Chesapeake, Virginia with Morton
Realty Associates, a Virginia general partnership, and Richard J. Tavss and
several other parties who share ownership and responsibility as landlord under
the lease. Morton Goldmeier is a partner in Morton Realty Associates, one of the
landlords under the lease, and is also a member of the Board of Directors of
Bank of the Commonwealth and Commonwealth Bankshares. Richard J. Tavss, also one
of the landlords under the lease, is also a member of the Board of Directors of
Bank of the Commonwealth and Commonwealth Bankshares. Annual lease payments
under the lease currently are $95,136. The Board of Directors of Commonwealth
Bankshares reviewed two independent appraisals with respect to this property
prior to entering into this lease. We believe the terms of this lease are no
less favorable than could be obtained from a non-related party in an arms-length
transaction.

EXECUTIVE COMPENSATION

Summary Executive Compensation Table

The following table sets forth the annual compensation paid or accrued by
the Corporation and its subsidiaries to Edward J. Woodard, Jr., CLBB, Chairman
of the Board, President and Chief Executive Officer of the Corporation and the
Bank for the past three fiscal years. Compensation for each other executive
officer of the Corporation or the Bank did not exceed $100,000 in 2001 and,
therefore, is not shown in the table.

Summary Compensation Table

Name and
Principal Position Annual Compensation
------------------ ---------------------
Director's All Other
Year Salary Bonus Fees Compensation(1)
---- ------ ----- ---- ---------------

Edward J. Woodard, Jr., 2001 $199,000 $ 0 $31,300 --
Chairman of the Board 2000 187,500 -0- 28,400 --
President and Chief 1999 182,500 18,500 23,600 --
Executive Officer

(1) Perquisites and other personal benefits did not exceed the lessor of
$50,000 or 10% of total salary and bonus as reported above.

Option Grants in Last Fiscal year

The following table sets forth information for the year ended December 31,
2001 regarding grants of stock options to Mr. Woodard.

Option Grants in Year Ended December 31, 2001

Potential Realizable
Value at Assumed
Annual Rates of
Percent of Total Stock Price
Number of Securities Options Granted to Appreciation for
Underlying Options Employees in Expiration Option Term
Name Granted Fiscal Year Exercise Price Date 5%($) 10%($)
---- -------------------- ------------------ -------------- ---------- ----------------

Edward J. Woodard, Jr. 5,000 35.1% $7.13 10/01/11 58,070 92,467

Option Exercises in Last Fiscal Year

Set forth in the table below is information concerning the exercise of
stock options during the fiscal year ended December 31, 2001 by each of the
named executive officers named in the Summary Compensation Table.

Aggregated Option Exercises in Year Ended December 31, 2001 and Fiscal Year
End Option Values

Number of
Securities Underlying Value of Unexercised
Unexercised Options In-The-Money Options
at December 31, 2001 (#) at December 31, 2001 ($)(1)
------------------------ ---------------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------

Edward J. Woodard, Jr. -0- -0- 29,133 -0- 23,771 -0-

(1) These values are based on a stock price of $7.00, the closing price of the
Corporation's common stock on the Nasdaq National Market on December 31,
2001.

Employment Agreements

Edward J. Woodard, Jr., Chairman of the Board, President and Chief
Executive Officer of Commonwealth Bankshares and Bank of the Commonwealth has
entered into an employment agreement with Bank of the Commonwealth. The
agreement provides for Mr. Woodard's employment until the earlier of December
31, 2004, his death or his physical or mental disability; provided, however, the
employment agreement allows for the termination of employment by either Bank of
the Commonwealth or Mr. Woodard in the event of a "change of control" of
Commonwealth Bankshares or Bank of the Commonwealth, or by Mr. Woodard for "good
reason." Mr. Woodard's employment agreement will be renewed automatically each
year unless either party elects not to renew the agreement.

Under the employment agreement, in the case of a termination by
Commonwealth Bankshares or Bank of the Commonwealth prior to a "change of
control," but not "for good cause," Mr. Woodard will be entitled to receive
twelve (12) equal monthly payments, which, in total, equal his annual base
salary, plus directors' fees. In the event of a termination of the employment
agreement by Mr. Woodard for "good reason," or by Commonwealth Bankshares or
Bank of the Commonwealth subsequent to a "change of control," but not "for good
cause," Mr. Woodard will be entitled to receive sixty (60) equal monthly
payments which, in total, equal approximately three times the present value of
his annual compensation at the time of termination.

Under the Agreement, a "change of control" will be deemed to have occurred
upon:

... any third party acquiring, or entering into a definitive agreement to
acquire, more than twenty-five percent (25%) of the stock of either
Commonwealth Bankshares or Bank of the Commonwealth;

... a change in the majority of the members of the board of directors of either
Commonwealth Bankshares or Bank of the Commonwealth during any one year
period; or

... Commonwealth Bankshares ceasing to be the owner of all of Bank of the
Commonwealth's common stock, except for any directors' qualifying shares.

The term "for good cause" includes a termination of Mr. Woodard for his
failure to perform the required services, gross or willful neglect of his duty
or a legal or intentional act demonstrating bad faith. The term "good reason" is
defined as any assignment to Mr. Woodard of duties or responsibilities
inconsistent with those in effect on the date of the agreement or a change of
control of either Commonwealth Bankshares or Bank of the Commonwealth.

Mr. Woodard has also entered into an amended and restated deferred
supplemental compensation agreement with Bank of the Commonwealth. Under the
supplemental agreement, upon Mr. Woodard attaining the age of 65, upon his
termination with Bank of the Commonwealth for any reason whatsoever or upon his
death, Mr. Woodard or his beneficiary shall be entitled to payment from the Bank
of: (i) two hundred fifty thousand dollars ($250,000) in one hundred twenty
(120) equal consecutive monthly installments of two thousand eighty-three and
33/100 dollars ($2,083.33) each, and (ii) seven hundred twenty thousand dollars
($720,000) in one hundred eighty (180) equal consecutive monthly installments of
four thousand dollars ($4,000) each, both such payments being payable on the
first day of each such month. Any payments described above shall be made on each
such payment date to employee, regardless of whether employee is employed by the
Bank at the time he becomes eligible for such payments. In addition to all
payments described above, upon employee's death, the Bank shall pay to the
beneficiary a lump sum

payment of two hundred fifty thousand and no/100 dollars ($250,000), payable on
the first day of the second calendar month immediately following the date of
death. Under the supplemental agreement, Mr. Woodard is obligated to make
himself available to Bank of the Commonwealth after his retirement, so long as
he receives payments under the supplemental agreement, for occasional
consultation which Bank of the Commonwealth may reasonably request. Any amounts
unpaid under the supplemental agreement may be forfeited, after notice to Mr.
Woodard, in the event that the board of directors of Bank of the Commonwealth
determines in good faith that Mr. Woodard is performing services of any kind for
a firm or other entity competitive with the business of Bank of the Commonwealth
during the period that he is receiving payments under the supplemental
agreement.

Stock Option and Employee Benefit Plans

1990 Stock Option Plan. On February 20, 1990, Commonwealth Bankshares'
board of directors approved a non-qualified stock option plan for the issuance
of 25,000 shares of Commonwealth Bankshares' common stock to eligible officers
and key employees of Commonwealth Bankshares and Bank of the Commonwealth at
prices not less than the market value of Commonwealth Bankshares' common stock
on the date of grant. On April 29, 1997, the shareholders approved an amendment
to this plan to increase the number of shares available for issuance under the
plan to 45,000 shares. This plan expired on February 20, 2000. However, the
terms of this plan continue to govern unexercised options awarded under the plan
that have not expired.

401(k) Profit Sharing Plan. In 1993, Bank of the Commonwealth adopted a
thrift and profit sharing plan qualified under Section 401(k) of the Internal
Revenue Code to replace Bank of the Commonwealth's former profit sharing plan.
Employees who have attained the age of 20 years and six months and completed six
months of service with Bank of the Commonwealth are eligible to participate in
the 401(k) plan. Eligible employees who elect to participate may contribute up
to 15% of their annual salary to the 401(k) plan. The Bank of the Commonwealth
may make a matching contribution, the amount of which, if any, will be
determined by Bank of the Commonwealth each year. Bank of the Commonwealth
contributed a matching contribution of $36,600 and a discretionary profit
sharing contribution of $23,400 to the 401(k) plan during 2001.

Non-Employee Director Stock Compensation Plan. On April 25, 1995
Commonwealth Bankshares' shareholders approved a non-employee director stock
compensation plan. This plan provided for the issuance of options to acquire
50,000 shares of Commonwealth Bankshares' common stock to eligible non-employee
directors at prices determined by the average of the five most recent trades of
the common stock on the over-the-counter market during the period immediately
preceding an option's grant date or such other value per share as was determined
by the employee directors. On April 29, 1997, shareholders approved an amendment
to this plan to increase shares available for issuance under this plan to 70,000
shares. This plan expired January 17, 2000. However, the terms of this plan
continue to govern unexercised options awarded under the plan that have not
expired.

1999 Stock Incentive Plan. On April 27, 1999, Commonwealth Bankshares'
shareholders approved the Commonwealth Bankshares, Inc. 1999 Stock Incentive
Plan. This plan provides for the issuance of up to the lesser of (i) fifteen
percent (15%) of Commonwealth Bankshares' issued and outstanding common stock
less the aggregate number of shares subject to issuance pursuant to options
granted, or available for grant, under the 1990 plan and non-employee director
plan described above, or (ii) 350,000 shares. Of the aggregate number of shares
of Commonwealth Bankshares' common stock that may be subject to award under this
plan, sixty percent (60%) are available for issuance to Commonwealth Bankshares'
non-employee directors, and forty percent (40%) are available for issuance to
Commonwealth Bankshares' employees. All

the employees of Commonwealth Bankshares and Bank of the Commonwealth, and all
other members of the board of directors of Commonwealth Bankshares, are eligible
to receive awards under this plan.

Bank of the Commonwealth Supplemental Executive Retirement Plan. Effective
February 1, 2002, Commonwealth Bankshares' board of directors approved an
executive deferred compensation plan in order to provide a select group of
management and highly compensated executives the opportunity to elect to defer
part or all of the compensation (including bonuses) payable to such executives
during any plan year. Under this plan, a participant may designate a fixed
dollar amount or a percentage to be deducted from his or her salary and/or bonus
and then indicated how the deferred amount is to be deemed invested as between a
fund that tracks the value of Commonwealth Bankshares' stock and a simple
interest bearing fund. The amount of deferred compensation in an executive's
account is held in a rabbi trust, but such amounts continue to be subject to the
claims of the Bank of the Commonwealth's general creditors until such time as
they are distributed to the executive. Distributions are generally available at
retirement age, death, or on account of disability. In addition, an executive
who separates from service for a reason other than because of retirement, death,
or disability, is entitled to receive distribution when he or she reaches age 65
(unless he or she dies or becomes disabled in the meantime, in which case
benefits will be payable pursuant to the plan terms regarding such
distribution). Distributions may also be made in certain situations following a
change in control. Distributions are generally made in the form of installment
payments, although a distribution in a lump sum is available in limited
situations.

Compensation of Directors

The fees paid to the Corporation's directors during 2001 were $900 for each
meeting of the Board attended. In addition, directors received $400 for
attending meetings of each of the standing committees. The Corporation maintains
a Director's Deferred Compensation Plan pursuant to which directors may defer
recognition of income on all or a portion of their meeting fees earned during
the fiscal year. The terms and conditions of the plan are very similar to the
terms and conditions of the bank of the Commonwealth's Supplemental Executive
Retirement Plan as described above. A total of $71,600 was deferred by directors
in 2001 pursuant to the Plan.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
TO ELECT THE THREE NOMINEES LISTED ABOVE AS CLASS 2 DIRECTORS OF THE
CORPORATION.

INDEPENDENT PUBLIC ACCOUNTANTS

The Corporation's Board of Directors approved the appointment of Poti,
Walton & Associates, PC, certified public accountants, as the Corporation's
independent public accountants for the year 2001. No firm has been selected by
the Board of Directors to act as the Corporation's independent public
accountants for 2002. A representative of Poti, Walton & Associates, PC is
expected to be present at the meeting. This representative will have an
opportunity to make a statement to the shareholders and will be available to
answer questions.

Poti, Walton & Associates, PC's main function is to audit the consolidated
financial statements of the Corporation and its subsidiaries and, in connection
with the audit, to review related filings with the Securities and Exchange
Commission and to conduct limited reviews of the unaudited financial statements
included in each of the Corporation's quarterly reports.

Audit Fees

The aggregate fees billed by Poti, Walton & Associates, PC (PWA) for the
fiscal year ended December 31, 2001 to audit the Corporation's annual financial
statements and to review its quarterly financial statements were $72,675.

All other fees

The aggregate fees billed by PWA for all non-audit services rendered during
the fiscal year ended December 31, 2001 were $12,650. Non-audit services
included assistance with the preparation of the corporate income tax returns and
other consulting services. The Audit Committee considered and determined that
the non-audit related services provided by PWA are compatible with maintaining
the independence of PWA as the Corporation's principle accountants.

SUBMISSION OF PROPOSALS 2003

The next Annual Meeting of Shareholders will be held on or about June
24, 2003. Any shareholder who wishes to submit a proposal for consideration at
that meeting, and who wishes to have such proposal included in the Corporation's
proxy statement, must comply with SEC Rule 14a-8 and must submit the proposal in
writing no later than February 25, 2003. The deadline for shareholders to notify
the Corporation of non-Rule 14a-8 matters that may be raised for consideration
at the next Annual Meeting is April 26, 2003, and such notices may not be
submitted prior to March 27, 2003. Additionally, any such shareholder proposals
or notifications must comply in all respects with the Corporation's Bylaws. All
such proposals or notifications shall be delivered to the Corporation's
executive offices at Boush and Freemason Streets, P.O. Box 1177, Norfolk,
Virginia 23501, Attn: Edward J. Woodard, Jr., Chairman, President and Chief
Executive Officer.

OTHER MATTERS

The Board of Directors does not intend to present, and knows of no one who
intends to present, to the meeting any matter for action by shareholders other
than as set forth herein. However, the enclosed proxy confers discretionary
authority with respect to transaction of any other business that may properly
come before the meeting, and it is the intention of the persons named in the
proxy to vote in accordance with their judgment on any such matter.

GENERAL

The Corporation's 2001 Annual Report to Shareholders accompanies this Proxy
Statement. The 2001 Annual Report to Shareholders does not form any part of the
material for the solicitation of proxy.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY.

By Order of the Board of Directors

Dated in Norfolk, Virginia and Edward J. Woodard, Jr., CLBB
mailed this 4/th/ day of June 2002 Chairman of the Board, President
and Chief Executive Officer

COMMONWEALTH BANKSHARES, INC.
403 Boush Street
P.O. Box 1177, Norfolk, Virginia 23501-1177
Phone (757) 446-6900

PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
June 25, 2002
This Proxy is Solicited On Behalf Of The Board of Directors

The undersigned hereby revokes all prior proxies and appoints Richard J.
Tavss and Morton Goldmeier, or any one of them, each with the power of
substitution, as Proxies to vote, as designated below, all the shares of Common
Stock of Commonwealth Bankshares, Inc. held by the undersigned on May 1, 2002 at
the Annual Meeting of Shareholders to be held on June 25, 2002, or any
adjournment thereof.

(1) Proposal I: Election of the three class 2 Directors set forth below to
serve until the 2005 Annual Meeting of Shareholders and until their
successors are elected and qualified:

Herbert L. Perlin

[_] FOR [_] AGAINST [_] ABSTAIN

Kenneth J. Young

[_] FOR [_] AGAINST [_] ABSTAIN

Thomas W. Moss, Jr.

[_] FOR [_] AGAINST [_] ABSTAIN

(2) In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.

This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted by the named Proxies FOR the three nominees listed in Proposal I and in
their discretion as to other business properly before the meeting.

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

DATED: ___________________, 2002

________________________________ _________________________________
Shareholder Signature Shareholder Signature