AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
MAY 25, 1999
REGISTRATION NO. 333 - _____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3D
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
COMMONWEALTH BANKSHARES, INC.
(Exact Name of Registrant as Specified in Its Charter)
VIRGINIA
(State or other jurisdiction of incorporation or organization)
54-1460991
(I.R.S. Employer Identification No.)
(757) 446-6900
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JOHN H. GAYLE
COMMONWEALTH BANKSHARES, INC.
403 BOUSH STREET
NORFOLK, VA 23510
(757) 446-6900
(Name, address including zip code and telephone number, including area code,
of agent for service of process)
WITH A COPY TO:
JODY M. WAGNER, ESQ.
KAUFMAN & CANOLES
P. O. BOX 3037
NORFOLK, VA 23514-3037
(757) 624-3294
If the only securities being registered on this Form are being offered
pursuant to dividends or interest reinvestment plans, please check the following
box. X
---
<PAGE>
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. _______
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
- -------
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration settlement number of the earlier effective registration
statement for the same offering.
- -------
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.
- -------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================ ===================== ====================== ====================== =====================
PROPOSED
TITLE OF PROPOSED MAXIMUM
SECURITIES AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE(1) PRICE(1) FEE(1)
- ---------------------------- --------------------- ---------------------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
Common Stock,
$2.50 par 100,000 $14.25 $1,425,000 $396.15
</TABLE>
(1)Pursuant to rules 457(c) and 457(h), the registration fee was computed using
an average of the high low sales price on May 11, 1999.
- ------------------------
Exhibit Index can be found on page II-5.
<PAGE>
PROSPECTUS
COMMONWEALTH BANKSHARES, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
100,000 SHARES OF COMMON STOCK
The Dividend Reinvestment and Stock Purchase Plan of Commonwealth
Bankshares, Inc. ("CBI") provides holders of CBI's shares of common stock with a
simple and convenient method of investing cash dividends and optional cash
payments in additional shares of common stock without payment of any brokerage
commission, fee or service charge.
The proceeds of dividends reinvested in the Plan and optional cash
payments will be used to purchase original issue shares of common stock from CBI
or to purchase shares of common stock on the open market. The price of shares of
common stock purchased with reinvested dividends from CBI will be 95% of the
market price (see Question 15).
Participants in the Plan may:
o Automatically reinvest cash dividends on all of their shares.
o Automatically reinvest cash dividends on less than all of their
shares and continue to receive cash dividends on the remaining
shares.
o Invest by making optional cash payments at any time of not less
than $25 per payment nor more than $20,000 per quarter. Optional
cash payments will be invested on the dividend payment date or
shortly thereafter (see Question 11).
Beneficial owners, whose shares of common stock are registered in names
other than their own (for instance, in the name of a broker or bank nominee),
may participate in the Plan only if they have their shares transferred to their
own names or arrange for the holders of record (the broker or bank nominee) to
join the Plan with respect to shares the beneficial owner desires to enroll in
the Plan.
Holders of shares of common stock who do not choose to participate in
the Plan will continue to receive cash dividends, as declared, in the usual
manner.
IT IS SUGGESTED THAT THIS PROSPECTUS BE RETAINED FOR FUTURE REFERENCE.
CBI reserves the right to terminate the Plan at any time.
The Plan does not guarantee future dividends. Dividends will continue
to depend on CBI's earnings, financial requirements, and other factors.
- --------------------------------------------------------------------------------
These securities have not been approved or disapproved by the
Securities and Exchange Commission nor has the Commission passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offence.
- --------------------------------------------------------------------------------
The date of this prospectus is May 25, 1999.
<PAGE>
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
WHERE YOU CAN FIND MORE INFORMATION
CBI files reports, proxy statements and other information with the
Securities and Exchange Commission. You may read and copy any reports,
statements or other information that CBI files at the Commission's public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the Commission at 1-800-SEC-0330 for further information on the
public reference rooms. Information on CBI is also available to the public
through the Commission's website at "http://www.sec.gov." Reports, proxy
statements and other information about CBI are also available to the public from
commercial document retrieval services.
CBI has filed a Registration Statement on Form S-3D to register with
the Commission the shares of CBI common stock to be issued to CBI shareholders.
This document is a part of the Registration Statement and constitutes a
prospectus for the shares. As allowed by Commission rules, this document does
not contain all the information that shareholders can find in the Registration
Statement or the exhibits to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows CBI to "incorporate by reference" information
into this prospectus, which means that it can disclose important information to
you by referring you to another document filed separately with the Commission.
The information incorporated by reference is deemed to be a part of this
prospectus, and information that CBI files later with the Commission will
automatically update and supersede that information. This prospectus
incorporates by reference the documents set forth below that CBI previously
filed with the Commission. These documents contain important business
information about CBI and its financial condition.
CBI'S COMMISSION FILINGS (FILE NO. 01-17377) PERIOD
Annual Report on Form 10-KSB Year ended December 31, 1998
Quarterly Report on Form 10-QSB Quarter ended March 31, 1999
CBI also incorporates by reference additional documents that it may
file with the Commission from the date of this prospectus until it sells all of
the shares offered in this prospectus or deregisters all remaining unsold
shares. These include periodic reports, such as annual reports, quarterly
reports and current reports, as well as proxy statements.
<PAGE>
You may request a copy of these filings at no cost by writing or
telephoning CBI at the following address:
John H. Gayle, Chief Financial Officer
Commonwealth Bankshares, Inc.
403 Boush Street
Norfolk, Virginia 23510
Telephone: (757) 446-6900
THE COMPANY
CBI is a bank holding company organized under the laws of the
Commonwealth of Virginia. CBI serves as the parent holding company for Bank of
the Commonwealth, a Virginia state chartered bank. CBI's executive offices are
located at 403 Boush Street, Norfolk, Virginia 23510; phone - (757) 446-6900.
THE OFFERING; THE PLAN; USE OF PROCEEDS
CBI has registered 100,000 shares of common stock with the Securities
and Exchange Commission. The total number of shares reserved will be adjusted to
give effect to stock dividends, stock splits and similar events. The purpose of
the offering is to provide holders of record of CBI common stock with a simple
and convenient method of investing cash dividends and voluntary cash
contributions in additional shares of common stock through CBI's Dividend
Reinvestment and Stock Purchase Plan.
This prospectus gives detailed information concerning the Plan and
should be reviewed carefully.
The Plan may acquire shares for issuance through open market purchases,
or through negotiated transactions. Open market purchases will be made by a
person or entity independent of CBI to act as agent for Plan participants, and
the purchase price will exclude all fees, brokerage commissions and other
expenses. CBI will receive none of the proceeds from shares acquired by the Plan
for issuance unless such acquisitions involve the purchase of shares from CBI.
To the extent that any shares are purchased from CBI, such shares will consist
of authorized but unissued shares. The proceeds of such sales will be added to
the general funds of CBI and will be available for its general corporate
purposes, including investment in CBI's wholly-owned banking subsidiary, Bank of
the Commonwealth.
<PAGE>
DESCRIPTION OF THE DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
The Dividend Reinvestment and Stock Purchase Plan for holders of shares
of common stock of CBI is set forth in the following questions and answers:
For further information concerning the Plan, please address
correspondence to:
John H. Gayle, Chief Financial Officer
Commonwealth Bankshares, Inc.
403 Boush Street
Norfolk, Virginia 23510
Telephone: (757) 446-6900
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to provide holders of record of shares of
common stock of CBI with a simple and convenient way of investing cash dividends
and optional cash payments in shares of common stock without payment of any
brokerage commission, fee or service charge. When the shares of common stock are
purchased from CBI, the Plan has the added benefit of providing CBI with
additional funds for general corporate purposes.
ADVANTAGES
2. WHAT ARE THE ADVANTAGES OF THE PLAN?
By participating in the Plan:
o You may purchase shares of common stock (if purchased directly from CBI) at a
5% discount from their market price (see Question 15) by reinvesting cash
dividends on all or less than all of your shares of common stock.
o You may purchase additional shares of common stock without incurring a
brokerage commission, fee or service charge by making optional cash payments at
any time of not less than $25 nor more than $20,000 per calendar quarter.
o You pay no brokerage commission or service charge in connection with
investments under the Plan if your shares are registered in your name.
o You may fully invest dividends under the Plan because the Plan allows for
fractional shares to be purchased and credited to your account.
o Recordkeeping is simplified under the Plan by the provision of a statement of
account to each participant.
<PAGE>
o You are assured safekeeping of shares of common stock credited to your account
because certificates are not issued to you unless requested.
ADMINISTRATION
3. WHO ADMINISTERS THE PLAN?
Bank of the Commonwealth ("BOC"), administers the Plan for
participants, keeps records, sends statements of account after each purchase to
participants and performs other duties relating to the Plan. BOC purchases
shares of common stock from CBI or on the open market through a person or entity
independent of CBI to act as agent for the participants in the Plan and credits
the shares to the accounts of the individual participants.
ELIGIBILITY
4. WHO IS ELIGIBLE TO PARTICIPATE?
(a) Shareholders of record - All holders of record of shares of common
stock are eligible to participate in the Plan.
(b) Beneficial owners of shares of common stock - Beneficial owners,
whose shares of common stock are registered in names other than their own (for
instance, in the name of a broker or bank nominee), may participate in the Plan
only if they have their shares transferred to their own names or arrange for the
holders of record (the broker or bank nominee) to join the Plan with respect to
any shares the beneficial owner desires to enroll in the Plan.
5. HOW IS THE PLAN TO BE INTERPRETED?
Any question of interpretation arising under the Plan will be
determined by CBI and will be final.
PARTICIPATION
6. HOW DO HOLDERS OF SHARES OF CBI COMMON STOCK JOIN THE PLAN?
A holder of record of shares of CBI common stock may join the Plan at
any time by completing and signing an authorization card and returning it to
BOC. An authorization card and a postage-paid return envelope may be obtained at
any time by writing or:
Bank of the Commonwealth
Trust Department
403 Boush Street
Norfolk, VA 23510
(757) 446-6914
<PAGE>
When filling out the authorization card, you should be sure to include
your social security number or taxpayer identification number. If this
information is not included on the authorization card, it may result in CBI
withholding 31% of the payments due to you for the payment of taxes.
7. WHAT DOES THE AUTHORIZATION CARD PROVIDE?
If you check the appropriate box on the authorization card, you may
elect "Full Dividend Reinvestment" and BOC will apply all cash dividends on all
the shares of common stock then or subsequently registered in your name,
together with any optional cash payments, toward the purchase of shares of
common stock.
If you elect to reinvest dividends on only a portion of your shares of
common stock, you should check the "Partial Dividend Reinvestment" box on the
authorization card and BOC will reinvest cash dividends on only the number of
whole shares of common stock you specify on the authorization card, together
with any optional cash payments, toward the purchase of shares of common stock,
and will pay cash dividends on the rest of your shares.
If the "Optional Cash Payments" box on the authorization card is
checked, you will continue to receive cash dividends on shares of common stock
in the usual manner, but BOC will apply any optional cash payment received with
the authorization card or optional cash payment form (see Question 11) to the
purchase of shares of common stock under the Plan.
BOC will reinvest automatically any subsequent dividends on the shares
of common stock credited to your account under the Plan. The Plan, in other
words, operates so as to reinvest dividends on a cumulative basis on the shares
of common stock designated on your authorization card and on all shares of
common stock accumulated and held in your Plan account until you specify
otherwise by notice in writing delivered to BOC or withdraw from the Plan
altogether, or until the Plan is terminated. See Question 24 for the
consequences of sales of shares of common stock subject to the Plan.
8. WHAT ARE MY OPTIONS UNDER THE PLAN?
By marking the appropriate spaces on the authorization card, you may
choose among the following investment options:
o To reinvest cash dividends automatically on all shares of common stock at 95%
of the market value on the investment date if purchased from CBI or 100% of
market value without incurring a brokerage commission, fee or service charge if
purchased on the open market (see Question 16 for a description of how market
value is computed).
o To reinvest cash dividends automatically on less than all of the shares of
common stock (a specified number of full shares) at 95% of the market value, on
the investment date if purchased from CBI or 100% of market value without
incurring a brokerage commission, fee or service charge if purchased on the open
market and to continue to receive cash dividends on the remaining shares of
common stock.
<PAGE>
o To invest by making optional cash payments prior to a dividend payment date in
any amount not less than $25 per payment nor more than $20,000 per calendar
quarter, whether or not any dividends are being automatically reinvested, at
market value on the investment date without incurring a brokerage commission,
fee or service charge.
9. MAY I CHANGE OPTIONS UNDER THE PLAN?
Yes. You may change options under the Plan at any time by completing
and signing a new authorization card and returning it to BOC. The answer to
Question 6 tells how to obtain an authorization card and return envelope. Any
change concerning the reinvestment of dividends must be received by BOC no later
than ten calendar days prior to the dividend payment date for the dividend (see
Question 10) for the change to become effective with that dividend. If the new
authorization card is received less than ten calendar days prior the dividend
payment date, the change will become effective for the next dividend payment
date.
10. WHEN WILL INVESTMENT OF DIVIDENDS RESPECTING SHARES OF COMMON STOCK START?
If your authorization card is received by BOC at least ten calendar
days prior to the dividend payment date, reinvestment of your dividends will
commence on that dividend payment date. The dividend payment dates are expected
to be the last business day of the last month of each quarter. For example, the
first dividend payment date since commencement of the Plan will be June 30,
1999, the last business day of the second quarter of 1999. If your authorization
card is received less than ten calendar days prior to the dividend payment date,
reinvestment of your dividends (or designated portion thereof) will not start
until payment of the next following dividend.
OPTIONAL CASH PAYMENTS
11. HOW DOES THE CASH PAYMENT OPTION WORK?
Each participant in the Plan may invest in additional shares of common
stock by making optional cash payments prior to a dividend payment date.
Participants in the Plan have no obligation to make any optional cash payments.
Optional payments may be made at irregular intervals and the amount of each
optional payment may vary, but no optional payment may be less than $25 and the
total optional payments invested by an owner of shares of common stock may not
exceed $20,000 per calendar quarter.
An optional cash payment may be made by enclosing a check or money
order with the authorization card when enrolling and thereafter by forwarding a
check or money order to BOC along with an optional cash payment form which will
be provided by BOC. Checks and money orders must be in United States dollars and
should be made payable to "Bank of the Commonwealth." Optional cash payments
will be refunded to you if BOC receives your written request for a refund at
least two business days prior to the related dividend payment date.
If a broker, bank nominee or trustee holds shares of common stock in
the name of a major securities depository, they may only make optional cash
payment by using a broker and nominee form. A new broker and nominee form must
be delivered to BOC each time that the broker, bank nominee or trustee makes
optional cash payments on behalf of the beneficial owners. Broker and nominee
forms may be obtained from BOC by written or telephone request.
<PAGE>
Optional cash payments must be received by BOC no later that the five
calendar days prior to the dividend payment date. Optional cash payments
received less than five calendar days prior to the dividend payment date will
not be invested until the next following dividend payment date. No interest will
be paid on optional cash payments held by BOC pending the purchase of shares of
common stock. (See Questions 14 and 15). Accordingly, it is to your advantage to
make all optional cash payments as close as possible to five days before each
dividend payment date.
If any check submitted as an optional cash payment is returned unpaid,
BOC will consider the request for investment to be null and void. Additionally,
BOC will immediately remove any shares purchased upon credit of the check from
the participant's account. These Shares will be sold to satisfy any uncollected
amounts. If the proceeds from this sale do not satisfy the balance of
uncollected amounts, BOC will be entitled to sell additional shares from the
participant's account to satisfy the balance.
PURCHASES
12. WHAT IS THE SOURCE OF SHARES OF COMMON STOCK PURCHASED UNDER THE PLAN?
Shares of common stock purchased under the Plan come from authorized
but unissued shares of common stock of CBI or shares of common stock of CBI that
are traded on the open market.
13. WHEN WILL DIVIDENDS AND OPTIONAL CASH PAYMENTS BE INVESTED IN SHARES OF
COMMON STOCK?
Reinvestment of dividends will be made on the dividend payment date, or
in other words, the date when the dividend becomes payable if the shares are
purchased from CBI. If CBI elects not to sell shares of common stock under the
Plan, the shares will be purchased on the open market within 30 days of the
relevant dividend payment date. Participants will become owners of shares of
common stock purchased under the Plan as of the date of purchase. In order to
allow sufficient time for processing, optional cash payments must be received by
BOC at least five days prior to the dividend payment date in order to be
invested on the dividend payment date. Optional cash payments received less that
five days prior to the dividend payment date will be invested on the next
following dividend payment date.
14. WHAT IS THE DIVIDEND PAYMENT DATE?
The dividend payment date will be the date on which dividends are paid
by CBI. The CBI Board of Directors intends to pay dividends quarterly.
Generally, the dividend payment date will be on the last business day of each
quarter.
15. WHAT WILL BE THE PRICE OF SHARES PURCHASED UNDER THE PLAN?
If CBI Issues More Shares - The price of shares of common stock that
are purchased from CBI with reinvested cash dividends will be 95% of the average
closing price for the shares of common stock on the Nasdaq Bulletin Board or the
Nasdaq SmallCap Market if CBI's common stock is listed for trading on it
(collectively, "NASDAQ") for the ten trading dates immediately preceding the
dividend payment date. The price of shares of common stock that are purchased
from CBI with optional cash payments will be the average closing price for the
common stock on the NASDAQ for the ten trading days immediately preceding the
dividend payment date.
If CBI Purchases Shares on the Open Market - If CBI elects not to sell
shares of common stock under the Plan (see Question 12), BOC will purchase the
shares of common stock on the open market within thirty days of the relevant
dividend payment date. Because BOC is a subsidiary of CBI, BOC will utilize a
<PAGE>
separate person or entity independent of CBI to purchase the shares. Within the
30 days of the dividend payment date, the independent agent will be free to
determine the appropriate time and price to pay for shares of CBI common stock.
The price of shares of common stock that are purchased by the independent agent
will be the weighted average price paid by the independent agent for all shares
of common stock purchased by the independent agent with reinvested dividends and
optional cash payments for the relevant dividend payment date, 100% of which
will be your price per share. Because the independent agent can purchase the
shares of common stock at any time within the thirty days following the dividend
payment date, you should be aware that you will lose any advantage otherwise
available from choosing the timing of investments. You should also be aware that
none of CBI, BOC or the independent agent can assure that you will profit nor
protect you against a loss on shares purchased for you under the Plan.
16. HOW WILL THE NUMBER OF SHARES OF COMMON STOCK PURCHASED FOR ME BE
DETERMINED?
The number of shares of common stock that will be purchased for you on
any dividend payment date will depend on the amount of your dividend to be
invested, the amount of any optional cash payments and the applicable purchase
price of the shares of common stock that results from dividing the aggregate
amount of dividends and optional payments to be invested by the applicable
purchase price. Fractional shares will be credited to your account and will be
computed up to four decimal places. If you withdraw from the Plan or request all
shares to be transferred to your name, the fractional share will be paid to you
in cash.
COSTS
17. ARE THERE ANY COSTS TO ME FOR MY PURCHASES UNDER THE PLAN?
There are no brokerage or other fees for purchases of shares of common
stock under the Plan. All costs of administration of the Plan will be paid by
CBI. If your shares of common stock are registered in the name of a nominee or
broker, you may incur charges or fees from your broker or nominee in connection
with your purchases under the Plan.
If you request that BOC sell shares of common stock that have been
credited to your account under the Plan (see Question 23) you may have to pay
brokerage commissions and transfer taxes arising out of the sale.
DIVIDENDS
18. WILL DIVIDENDS BE PAID ON SHARES OF COMMON STOCK HELD IN MY PLAN ACCOUNT?
Yes. Cash dividends on shares of common stock credited to your account
are automatically reinvested in additional shares and credited to your account.
However, you will not be paid a dividend on shares of common stock purchased for
you under the Plan until the first dividend payment date for the dividend record
date that follows the date of purchase of those shares. Cash dividends on shares
of common stock not enrolled in the Plan will be paid to you as usual.
<PAGE>
REPORTS TO PARTICIPANTS
19. WHAT REPORTS WILL BE SENT TO ME IF I PARTICIPATE IN THE PLAN?
If you participate in the Plan, you will receive a quarterly statement
of your account. The statement of account will show any cash dividends received,
the number of shares of common stock purchased, the purchase price for the
shares of common stock purchased, the total number of shares you have enrolled
in the Plan in your name and a summary of your transactions for the calendar
year.
You will also receive a Form 1099 showing income reportable for Federal
income tax purposes following the final purchase in each calendar year (see
Question 31). These statements are your record of the cost of your purchases and
should be retained for income tax and other purposes. In addition, during the
year you will receive copies of the same communications sent to all other
holders of shares of common stock.
CERTIFICATES FOR SHARES
20. WILL I RECEIVE CERTIFICATES FOR SHARES OF COMMON STOCK PURCHASED UNDER THE
PLAN?
Shares of common stock purchased for your account will be registered in
the name of BOC's nominee and certificates for such shares will not be issued to
you until requested in writing. The total number of shares credited to your
account will be shown on each statement of account. This custodial service helps
to protect you against the risk of loss, theft or destruction of stock
certificates.
Certificates for any number of whole shares credited to your account
will be issued to you at any time upon written request to BOC. A request for
certificates to be issued on some or all of the shares of common stock credited
to your Plan account will not terminate your participation in the Plan. Cash
dividends with respect to shares represented by certificates issued to you will
continue to be automatically reinvested. Any remaining shares will continue to
be credited to your account.
If the written request to BOC is for certificates to be issued for all
shares credited to your account, any remaining fractional share will be paid in
cash and a certificate for fractions of shares will not be issued under any
circumstances.
21. IN WHOSE NAME WILL CERTIFICATES BE REGISTERED AND ISSUED?
When issued, certificates for shares of common stock will be registered
in the name in which your Plan account is maintained. For holders of record,
this generally will be the name or names in which your share certificates are
registered at the time you enroll in the Plan. Upon written request, shares will
be registered in any other name, upon the presentation to BOC of evidence of
compliance with all applicable transfer requirements (including the payment of
any applicable transfer taxes).
<PAGE>
SALE OR OTHER DISPOSITION OF SHARES
22. MAY I SELL SHARES OF COMMON STOCK IN MY PLAN ACCOUNT?
You must first request that certificates for shares credited to
your Plan account be issued to you (see Question 20) before you can sell such
shares. Alternatively, you may request that BOC sell whole shares of common
stock credited to your Plan account (see Question 23).
23. HOW MAY I SELL SHARES OF COMMON STOCK IN MY PLAN ACCOUNT?
You may request that certificate for shares credited to your Plan
account be issued to you and thereafter sell these shares. Alternatively you may
request in writing that BOC sell whole shares of common stock credited to your
Plan account.
If you request BOC to sell your shares, you must clearly indicate the
whole number of shares you desire BOC to sell on your behalf. Accordingly, BOC
will return to you any request that does not indicate a precise number, for
example a request asking BOC to sell "all" shares credited to your Plan account
will be returned. BOC will use its best efforts to sell the shares in the open
market within ten trading days after your request is received. You will receive
the proceeds of the sale less any brokerage commissions or transfer taxes. You
will not receive the proceeds for the sale of your shares until BOC has settled
the funds with the brokerage firm used in selling your shares. Generally, this
settlement of funds will take three days. You should be aware that you are not
permitted to direct the date or sale price at which BOC will sell your shares of
common stock. Accordingly, you are solely assuming the risk that the price of
the shares of common stock will decrease between the time you decide to sell
your shares and the time BOC completes the sale.
All information regarding BOC's sale of your shares will be reported to
the Internal Revenue Service.
24. WHAT HAPPENS IF I SELL OR TRANSFER SHARES OF COMMON STOCK REGISTERED IN MY
NAME?
If you dispose of all shares of common stock registered in your name,
the dividends on the shares credited to your Plan account will continue to be
reinvested until you notify BOC that you wish to withdraw from the Plan. In the
event of your death or incapacity, your personal representative may request in
writing that BOC withdraw the shares of common stock credited to your Plan
account. CBI may choose not to reinvest any additional dividends on a fractional
share in you Plan account, and instead you will receive a cash payment
representing your fractional share and a cash payment for the dividend. The cash
payment representing the fractional share will be based on the closing price of
the common stock on the NASDAQ Bulletin Board on the date CBI elects to make the
cash payment.
25. MAY SHARES OF COMMON STOCK IN MY PLAN ACCOUNT BE ASSIGNED OR PLEDGED?
No. You must first request that certificates for shares credited to
your Plan account be issued to you (see Question 20) before you can pledge such
shares. Any attempt to pledge your shares without first obtaining the
certificates, will be void.
<PAGE>
WITHDRAWAL FROM THE PLAN
26. MAY I STOP THE REINVESTMENT OF DIVIDENDS OF SHARES IN MY OWN NAME AND STILL
REMAIN IN THE PLAN?
Yes. You may terminate the reinvestment of dividends paid on the shares
of common stock for which you hold certificates and leave shares previously
purchased in your Plan account. Dividends on shares left in the Plan will
continue to be reinvested automatically for your account.
27. WHEN MAY I WITHDRAW FROM THE PLAN?
You may withdraw from the Plan at any time. If your request to withdraw
is received by BOC at least ten calendar days prior to the relevant dividend
payment date, your request will be processed prior to the reinvestment of
dividends on shares in your Plan account. If your request to withdraw is
received by BOC less than ten calendar days before the applicable dividend
payment date, the dividend will be reinvested for your account and your request
for withdrawal will be processed promptly thereafter. Neither CBI nor BOC will
be responsible for any losses incurred during this period.
After your request for withdrawal has become effective, all dividends
will be paid to you in cash unless and until you re-enroll in the Plan, which
you may do at any time.
28. HOW DO I WITHDRAW FROM THE PLAN?
In order to withdraw from the Plan, you must send a letter, stating
that you wish to withdraw, to Bank of Commonwealth, 403 Boush Street, Norfolk,
Virginia 23510. When you withdraw from the Plan, or upon termination of the Plan
by CBI, certificates for shares credited to your account under the Plan will be
issued to you. Any fractional share will be paid in cash.
OTHER INFORMATION
29. WHAT HAPPENS IF CBI ISSUES A STOCK DIVIDEND, DECLARES A STOCK SPLIT OR HAS A
RIGHTS OFFERING?
Any stock dividends or split shares distributed by CBI on shares of
common stock credited to your Plan account will be added to your account. Stock
dividends or split shares distributed on shares of common stock for which you
hold certificates will be mailed directly to you in the same manner as to
shareholders who are not participating in the Plan.
In a regular rights offering, as a holder of record you will receive
rights based upon the total number of shares of common stock owned; that is, the
total number of shares for which you hold certificates and the total number of
shares held in your Plan account.
<PAGE>
30. CAN I VOTE SHARES IN MY PLAN ACCOUNT AT MEETINGS OF SHAREHOLDERS?
Yes. You will receive a proxy for the total number of shares of common
stock held including both the shares for which you hold certificates and those
credited to your Plan account. The total number of shares of common stock held
may also be voted in person at a meeting.
If the proxy is not returned or if it is returned unsigned, none of
your shares of common stock will be voted unless you vote in person.
31. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN?
Under Internal Revenue Service rulings in connection with similar
plans, dividends reinvested will be treated as taxable notwithstanding that the
dividends are reinvested in stock. Under prior Internal Revenue Service rulings,
it was assumed the 5% discount was also taxable. Recent Internal Revenue Service
rulings suggest that the 5% is a reduction to the taxable basis for the shares
received. Additionally, the amount of any brokerage commissions, mark-ups and
other fees and expenses incurred by CBI when purchasing shares on the open
market on your behalf will also constitute a dividend to you for federal tax
purposes. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX CONSULTANT ON THE PROPER TAX
TREATMENT OF THE DISCOUNT.
Dividends paid to corporate shareholders, including amounts that are
considered dividends to corporate shareholders above, will not be eligible for
the corporate dividends-received deduction under the federal tax code.
Your tax basis in additional shares of common stock acquired under the
Plan with reinvested dividends will be equal to the fair market value of the
shares on the date of distribution plus any related expenses taxed to you but
paid by CBI. Your holding period for shares of common stock purchased under the
Plan will commence on the day after the date on which the shares were purchased
for your account.
As a participant in the Plan you will not realize any taxable income
when you receive certificates for whole shares credited to your account, either
upon your request for such certificates or upon withdrawal from or termination
of the Plan. However, you will recognize gain or loss (which, for most
participants, will be capital gain or loss) when whole shares acquired under the
Plan are sold or exchanged after your withdrawal from or the termination of the
Plan or when you receive cash payments representing fractional shares. If such
gain or loss is capital, it will be long-term capital gain or loss if the shares
sold are held for more than one year and will be short-term capital gain or loss
if the shares sold are held for one year or less.
If your dividends are subject to withholding of federal and/or state
income tax, the amount of the tax withholding will be subtracted from your
dividends prior to reinvestment.
32. WHAT ARE THE RESPONSIBILITIES OF CBI AND BOC UNDER THE PLAN?
In administering the Plan, neither CBI nor BOC, will accept liability
for any act done in good faith or for any good faith omission to act, including,
without limitation, any claim of liability arising out of failure to terminate a
participant's account upon the participant's death or adjudicated incompetency
<PAGE>
prior to receipt of notice in writing of such death or adjudicated incompetency,
the prices at which shares of common stock are purchased for participants, the
timing of purchases or fluctuations in the market value of the shares of common
stock.
NEITHER CBI NOR BOC CAN ASSURE YOU OF A PROFIT OR PROTECT YOU AGAINST A
LOSS ON SHARES PURCHASED UNDER THE PLAN.
33. HOW ARE INCOME TAX WITHHOLDING PROVISIONS APPLIED TO PARTICIPANTS?
Foreign participants are normally subject to withholding on dividends. In
the case of foreign participants who elect to have their dividends reinvested or
who elect to make optional cash payments and whose dividends are subject to
United States income tax withholding, an amount equal to the dividends payable
to such participants who elect to reinvest dividends, or the amount of the
optional cash payment made by a participant, less the amount of tax required to
be withheld, will be applied by BOC to the purchase of shares of common stock. A
Form 1042S, mailed to each foreign participant after the final purchase of the
calendar year, will show the amount of tax withheld in that year. Domestic
participants are not normally subject to withholding of tax on dividends, unless
subject to backup withholding. The Form 1099 mailed to domestic participants
will reflect the amount of tax withheld, if any, in that tax year.
34. MAY THE PLAN BE CHANGED OR DISCONTINUED?
CBI reserves the right to modify, suspend or terminate the Plan at any
time. All participants will receive notice of any such action. Any such
modification, suspension or termination will not, of course, affect previously
executed transactions. CBI also reserves the right to adopt, and from time to
time change, such administrative rules and regulations (not inconsistent in
substance with the basic provisions of the Plan then in effect) as it deems
desirable or appropriate for the administration of the Plan.
RESALE RESTRICTIONS
35. ARE THERE ANY RESTRICTIONS ON RESALE OF SHARES OF COMMON STOCK ACQUIRED
UNDER THE PLAN?
You are free to sell your shares of common stock acquired under the
Plan unless you are an "affiliate" of CBI. If you are an "affiliate" of CBI as
defined in Rule 405 promulgated by the Securities and Exchange Commission or
"SEC" under the Securities Act of 1933, you may not publicly reoffer shares
acquired under the Plan except pursuant to Rule 144 of the SEC or pursuant to an
effective registration statement filed with the SEC. Rule 405 defines an
"affiliate" as a person who directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
CBI. Directors and certain officers of CBI may be "affiliates" of CBI under this
definition.
Additionally, directors and certain officers of CBI participating in
the Plan are also subject to the reporting obligation imposed by Section 16(a)
of the Securities Exchange Act of 1934 or "Exchange Act". Although these
directors and officers are not subject to the short-swing profit recovery
provisions of Section 16(b) of the Exchange Act with regard to their purchases
of shares of common stock under the Plan with reinvested dividends, these
purchases must be disclosed on the annual reports filed pursuant to Section
16(a) of the Exchange Act.
<PAGE>
LIMITS ON PARTICIPATION
36. ARE THERE LIMITATIONS ON PARTICIPATION IN THE PLAN OTHER THAN THOSE
DESCRIBED ABOVE?
Yes. CBI reserves the right to limit participation in the Plan for any
reason, even if a shareholder is otherwise eligible to participate. You should
be aware that regulations adopted by the Board of Governors of the Federal
Reserve System pursuant to the Change in Bank Control Act of 1978 generally
require that persons who intend to acquire control in institutions such as CBI
give sixty days prior notice to the Board of Governors of the Federal Reserve
System. These regulations define control as the acquisition of voting control of
at least 10% of any class of CBI's common stock. Accordingly, you may not
acquire any shares pursuant to the Plan that would exceed this limit unless you
give appropriate notice to the Board of Governors of the Federal Reserve System.
The purpose of the Plan is to provide shareholders with a systematic
and convenient method of investing dividends and optional cash payments for
long-term investment. Use of the Plan for any other purpose is prohibited. CBI
reserves the right to return optional cash payments to subscribing shareholders
if, in CBI's opinion, the investment is not consistent with the purposes of the
Plan. Shareholders who establish multiple accounts to circumvent the $20,000 per
quarter limit on optional cash investments are subject to CBI's right to return
all optional cash payments.
Additionally, some shareholders may be residents of jurisdictions in
which CBI determines that it may not legally or economically offer its shares of
common stock under the Plan, and accordingly, these residents may be precluded
from participating in the Plan. You should be aware that CBI has no present
plans to limit participation in the Plan for any shareholder of record for
reasons other than set forth above. However, we reserve the right to limit
participation if we determine in our discretion that it would be in the best
interest of CBI.
LEGAL MATTERS
The validity of the shares of CBI common stock offered hereby is being
passed upon for CBI by Kaufman & Canoles, a Professional Corporation, Norfolk,
Virginia.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference from CBI's Annual Report on Form 10-KSB for the year ended December
31, 1998 have been audited by Poti, Walton & Associates, PC, independent
auditors, as stated in its report, which is incorporated herein by reference,
and has been so incorporated in reliance upon the report of such firm given upon
its authority as experts in accounting and auditing.
INDEMNIFICATION
The Virginia Stock Corporation Act empowers a corporation to indemnify
its directors, officers, employees and agents against certain expenses,
judgments, fines and amounts incurred in connection with service to the
corporation. CBI's articles of incorporation provides that to the fullest extent
permitted, and in the manner prescribed in the Virginia Stock Corporation Act
and in any other applicable law, CBI shall indemnify a director or officer of
CBI who is or was a party to any proceeding by reason of his or her service to
the corporation.
In addition, the Virginia Stock Corporation Act provides that in any
proceeding brought by or in the right of a corporation, or brought by or on
behalf of the shareholders of a corporation, the damages assessed against a
director or officer may be eliminated. CBI's articles of incorporation provide
that to the full extent that the Virginia Stock Corporation Act permits the
limitation or elimination of the liabilities of the directors or officers, a
director or officer of CBI shall not be liable to CBI or its shareholders for
monetary damages.
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling CBI
pursuant to the foregoing provisions, CBI has been informed that, in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Securities Act of 1933 and is therefore
unenforceable.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses in connection with the proposed
issuance and distribution of the Common Stock:
Registation Fee $ 396.15
Printing *$2,000.00
Accounting Fees *$ 500.00
Legal Fees *$6,000.00
Miscellaneous *$1,000.00
TOTAL (estimated) $9,896.15
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 13.1-692.1 of the Virginia Stock Corporation Act (the "Act") provides
that in any proceeding brought by or in the right of a corporation or brought by
or on behalf of shareholders of the corporation, the damages assessed against an
officer or director arising out of a single transaction, occurrence or course of
conduct shall not exceed the lesser of (1) the monetary amount, including the
elimination of liability, specified in the articles of incorporation or, if
approved by the shareholders, in the bylaws as a limitation on or elimination of
the liability of the officer or director, or (2) the greater of (i) $100,000 or
(ii) the amount of cash compensation received by the officer or director from
the corporation during the 12 months immediately preceding the act or omission
for which liability was imposed. The liability of an officer or director may not
be limited under this section of the Act if the officer or director engaged in
willful misconduct or a knowing violation of the criminal law or of any federal
or state securities law, including, without limitation, any claim of unlawful
insider trading or manipulation of the market for any security.
Section 13.1-697 of the Act authorizes a Virginia corporation to indemnify an
individual made a party to a proceeding because he is or was a director against
liability incurred in the proceeding. A Virginia corporation may not indemnify a
director under this section in connection with a proceeding by or in the right
of the corporation in which the director was adjudged liable to the corporation
or in connection with any other proceeding charging improper personal benefit to
him, whether or not involving action in his official capacity, in which he was
adjudged liable on the basis that personal benefit was improperly received by
him. Section 13.1-698 provides that, unless limited by its Articles of
Incorporation, a Virginia corporation must indemnify a director who entirely
prevails in the defense of any proceeding to which he was a party because he is
or was a director of the corporation against reasonable expenses incurred by him
in connection with the proceeding. Section 13.1-702 of the Act authorizes a
Virginia corporation to indemnify its officers, employees or agents to the same
extent as directors.
<PAGE>
CBI's Articles of Incorporation provide that to the full extent that the Act
permits the limitation or elimination of the liability of directors or officers,
a director or officer of CBI shall not be liable to CBI or its shareholders for
monetary damages. CBI's Articles of Incorporation also provide that to the full
extent permitted and in the manner prescribed by the Act and any other
applicable law, CBI shall indemnify a director or officer of CBI who is or was a
party to any proceeding by reason of the fact that he is or was such a director
or officer or is or was serving at the request of CBI as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise. Any aforesaid reference to directors,
officers, employees or agents includes former directors, officers, employees and
agents and their respective heirs, executors and administrators.
Officers and directors of CBI are covered by insurance that (with certain
exceptions and within certain limitations) indemnifies them against losses and
liabilities arising from an alleged "harmful act," including any alleged error
or misstatement or misleading statement or wrongful act or omission or neglect
or breach of duty.
ITEM 16. EXHIBITS
See Exhibit Index at page II-6.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement, to
(i) include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement;
and
(iii) include any additional or changed material information
on the plan of distribution.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933 (the "Act"), each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and
(3) to file a post-effective amendment to remove from registration any
of the securities being registered which remain unsold at the end of the
offering.
<PAGE>
(4) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Norfolk, Commonwealth of Virginia, on April 29, 1999.
COMMONWEALTH BANKSHARES, INC.
By: /s/ Edward J. Woodard, Jr.
--------------------------
Edward J. Woodard, Jr.
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person in so signing, also makes,
constitutes and appoints Edward J. Woodard, Jr., and Richard J. Tavss, and each
of them individually, his true and lawful attorney-in-fact in this place and
stead, to execute and cause to be filed with the Securities and Exchange
Commission any and all amendments to this Registration Statement.
SIGNATURES
/s/ Edward J. Woodard, Jr. April 29, 1999
- -----------------------------------------------------
Edward J. Woodard, Jr., Chairman of the
Board & Chief Executive Officer
/s/ John H. Gayle April 29, 1999
- -----------------------------------------------------
John H. Gayle, Executive Vice President,
Cashier and Chief Financial Officer
/s/ William P. Kellam April 29, 1999
- -----------------------------------------------------
William P. Kellam, Director
<PAGE>
/s/ Morton M. Zedd April 29, 1999
- -----------------------------------------------------
Morton M. Zedd, Director
/s/ William D. Payne, M.D. April 29, 1999
- -----------------------------------------------------
William D. Payne, M.D., Director
/s/ Morton Goldmeier April 29, 1999
- -----------------------------------------------------
Morton Goldmeier, Director
/s/ Richard J. Tavss April 29, 1999
- -----------------------------------------------------
Richard J. Tavss, Director
/s/ Herbert L. Perlin April 29, 1999
- -----------------------------------------------------
Herbert L. Perlin, Director
/s/ George H. Burton, Jr. April 29, 1999
- -----------------------------------------------------
George H. Burton, Jr., Director
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
**5 Opinion of Kaufman & Canoles, P.C. (including consent)
regarding legality of the common stock being
registered.
**23.1 Consent of Poti, Walton & Associates, P.C.
**23.2 Consent of Kaufman & Canoles (included in Opinion filed
as Exhibit 5).
**24 Power of Attorney relating to Commonwealth Bankshares,
Inc. (appears on the signature page hereto).
**99.1 Authorization card.
**99.2 Letter to shareholders.
** Filed herewith.
One Commercial Place
P.O. Box 3037
Writer's Direct Dial Norfolk, VA 23514
757 / 624-3000 757 / 624-3000
fax: 757 / 624-3169
@kaufcan.com
Chesapeake Newport News Virginia Beach
757 / 547-7177 757 / 873-6300 757 / 491-4000
EXHIBIT 5
May 24, 1999
Commonwealth Bankshares, Inc.
403 Boush Street
Norfolk, VA 23510
Registration Statement on Form S-3D
Registration No. 333-_______
Gentlemen:
We have acted as counsel for Commonwealth Bankshares, Inc., a Virginia
corporation (the "Company"), in connection with the preparation of the
above-described registration statement (the "Registration Statement"), filed
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended (the "Act"), to register up to 100,000 shares of common stock,
par value $2.50 per share, of the Company (the "Common Stock"), to be issued as
described in the Registration Statement. In this connection, we have reviewed
(a) the Registration Statement; (b) the Company's Articles of Incorporation and
Bylaws; (c) the Company's Dividend Reinvestment and Stock Purchase Plan (the
"Plan"); and (d) certain records of the Company's corporate proceedings as
reflected in its minute and stock books. In our examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the original of all documents submitted to
us as copies thereof.
In our opinion, the 100,000 shares of Common Stock to be issued by the
Company as described in the Registration Statement, when and to the extent
issued in accordance with the terms of the Plan contained in the Registration
Statement, will be legally issued, fully paid and non-assessable.
We hereby consent to use of this opinion as Exhibit 5 to the
Registration Statement and to all references to our firm in the Registration
Statement. In giving such consent, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act and the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Kaufman & Canoles
Kaufman & Canoles,
a Professional Corporation
www.kaufmanandcanoles.com
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement of Commonwealth Bankshares, Inc. Dividend Reinvestment and Stock
Purchase Plan on Form S-3D of our report dated January 15, 1999, appearing in
the Annual Report on Form 10-KSB for Commonwealth Bankshares, Inc. for the year
ended December 31, 1998, and to the reference to us under the heading "Experts"
in the Prospectus, which is a part of this Registration Statement.
/s/ Poti, Walton & Associates, PC
Richmond, Virginia
May 24, 1999
Exhibit 99.1
COMMONWEALTH BANKSHARES, INC.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
AUTHORIZATION CARD
To enroll in the Commonwealth Bankshares, Inc. Dividend Reinvestment
and Stock Purchase Plan (the "Plan"), please print or type the following
information and choose one of the investment options below. Sign where indicated
and return (along with any optional cash payments) to the Bank of the
Commonwealth in the self-addressed, stamped envelope provided. Please note that
the shares you wish to enroll must be registered in your name. If your shares
are registered with a broker or nominee, ask your broker or nominee how you can
participate in the Plan.
NAME
------------------------------------------------------------------------------
First Middle Initial Last
ADDRESS
------------------------------------------------------------------------------
Number Street
- --------------------------------------------------------------------------------
City State Zip Code
SOCIAL SECURITY NUMBER OR TAX IDENTIFICATION NUMBER
------------------------------
The undersigned hereby acknowledges receipt of the prospectus of
Commonwealth Bankshares, Inc. setting forth the description of the Plan and in
accordance with the terms and conditions set forth therein desires to
participate in the Plan as follows: (Check one option only. If no option is
checked, Full Dividend Reinvestment will be assumed.)
|_| Full Dividend Reinvestment - Reinvest any cash dividends that
may become payable to me on all shares of Common Stock, $2.50
par value ("Shares"), of Commonwealth Bankshares, Inc. now or
hereafter registered in my name, and any optional payments
that I choose to send.
|_| Partial Dividend Reinvestment - Reinvest any cash
dividends that may become payable to me on the
following number of Shares registered in my name and any
optional payments that I choose to send.
__________ Number of Shares
|_| Optional Cash Payments Only - Reinvest only optional cash
payments received from me (a check payable to "Bank of the
Commonwealth" with this Authorization Card is enclosed) and
continue to pay dividends in cash for all of my Shares other
than those in my Plan account.
I hereby appoint Bank of the Commonwealth, or any successor, as my
agent under the terms and conditions of the Plan as described in the prospectus
for the Plan. I understand that I may revoke this authorization and withdraw
from the Plan at any time by notifying the agent in writing of my desire to
terminate my participation. (If Shares are registered in a joint account, both
shareholders must sign below.)
------------------------------------------
Signature
------------------------------------------
Date
------------------------------------------
Signature of Co-holder (if any)
------------------------------------------
Date
NOTE: IF YOU DO NOT WISH TO PARTICIPATE IN
THE PLAN, PLEASE DISREGARD THIS CARD. THIS
IS NOT A PROXY.
Exhibit 99.2
[COMMONWEALTH BANKSHARES, INC. LETTERHEAD]
Dear Shareholder:
The Board of Directors of Commonwealth Bankshares, Inc. declared a cash
dividend of 3 1/2 cents per share to shareholders of record on May 28, 1999 to
be paid June 30, 1999. Your Board of directors has decided to begin paying
quarterly dividends, beginning with this payment.
In connection with the commencement of cash dividends, we are pleased to
offer you the opportunity to participate in Commonwealth Bankshares, Inc.'s
Dividend Reinvestment and Stock Purchase Plan. The purpose of the Plan is to
provide you with a convenient and economical way to purchase shares of
Commonwealth Bankshares, Inc. common stock.
Shares purchased from the company with reinvested dividends will be issued
at a five percent (5%) discount from market value. You may participate with
respect to all or a portion of your shares of common stock. The Plan also
permits you to make optional cash payments of up to $20,000 per quarter for the
purchase of additional shares of common stock. These shares are issued at market
value, without incurring brokerage commissions.
The Plan is administered by our transfer agent, Bank of the Commonwealth.
The Plan was created as a convenience for our shareholders. Because your
participation is completely voluntary, you may join or withdraw at any time.
Participation in the Plan is available to both shareholders of record and
shareholders whose shares are held by a broker or nominee.
o If you are a record holder of the common stock of Commonwealth Bankshares,
Inc., and would like to participate in the Plan, please complete the enclosed
authorization card and send it to Bank of the Commonwealth. For your
convenience, a return envelope with prepaid postage is provided.
o If your shares are held by a broker or nominee, ask your broker or nominee
how you can participate in the Plan either through the registration of the
shares in your own name or otherwise.
Complete details of the Plan are provided in the enclosed prospectus in an
easy to understand question and answer format. We suggest that you read it
carefully and retain it for future reference.
E. J. WOODARD, JR., CLBB
Chairman of the Board, President and Chief
Executive Officer
