Exhibit 10.3

December             , 2008

[name]

[title]

StellarOne Corporation

590 Peter Jefferson Parkway, Suite 250

Charlottesville, Virginia 22911

Dear [name]:

StellarOne Corporation (the “Company”) anticipates entering into a Securities
Purchase Agreement (the “Participation Agreement”), with the United States
Department of the Treasury (“Treasury”) that provides for the Company’s
participation in the Treasury’s TARP Capital Purchase Program (the “CPP”). If
the Company does not participate or ceases at any time to participate in the
CPP, this letter shall be of no further force and effect.

For the Company to participate in the CPP and as a condition to the closing of
the investment contemplated by the Participation Agreement, the Company is
required to establish specified standards for incentive compensation to its
senior executive officers and to make changes to its compensation arrangements.
The requirements of this letter agreement shall apply to you only for so long as
both (1) you are a Senior Executive Officer of the Company, and (2) any debt or
equity securities issued by the Company under the CPP are by held by Treasury
(the “CPP Covered Period”). To comply with these requirements, and in
consideration of the benefits that you will receive as a result of the Company’s
participation in the CPP, you agree as follows:

(1) No Golden Parachute Payments. The Company is prohibiting any Golden
Parachute Payment to you during any CPP Covered Period. To the extent any event
occurs during the CPP Covered Period that would otherwise trigger a Golden
Parachute Payment, you will be entitled to the lesser of (i) your rights under
the Benefit Plans (as defined below) and (ii) the maximum amount allowed under
Section 111(b)(2)(C) of EESA.

(2) Recovery of Bonus and Incentive Compensation. Any bonus and incentive
compensation paid to you during a CPP Covered Period is subject to recovery or
“clawback” by the Company if the payments were based on materially inaccurate
financial statements or any other materially inaccurate performance metric
criteria.

(3) Compensation Program Amendments. Each of the Company’s compensation, bonus,
incentive and other benefit plans, arrangements and agreements (including golden
parachute, severance and employment agreements) (collectively,

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“Benefit Plans”) with respect to you is hereby amended to the extent necessary
to give effect to provisions (1) and (2). This provision also applies to any
Benefit Plans with respect to you that are entered into after the date of this
letter agreement and during the CCP Covered Period.

In addition, the Company is required to review its Benefit Plans to ensure that
they do not encourage senior executive officers to take unnecessary and
excessive risks that threaten the value of the Company. To the extent any such
review requires revisions to any Benefit Plan with respect to you, you and the
Company agree to negotiate such changes promptly and in good faith.

(4) Definitions and Interpretation. This letter shall be interpreted as follows:

 

  •  

“Senior executive officer” means the Company’s “senior executive officers” as
defined in subsection 111(b)(3) of EESA.

 

  •  

“Golden parachute payment” is used with the same meaning as in
Section 111(b)(2)(C) of EESA.

 

  •  

“EESA” means the Emergency Economic Stabilization Act of 2008 as implemented by
guidance or regulation issued by the Department of the Treasury and as published
in the Federal Register on October 20, 2008, as in effect on the date hereof.

 

  •  

The term “Company” includes any entities treated as a single employer with the
Company under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date). You are
also delivering a waiver pursuant to the Participation Agreement, and, as
between the Company and you, the term “employer” in that waiver will be deemed
to mean the Company as used in this letter.

 

  •  

The term “CPP Covered Period” shall be limited by, and interpreted in a manner
consistent with, 31 C.F.R. § 30.11 (as in effect on the Closing Date).

 

  •  

Provisions (1) and (2) of this letter are intended to, and will be interpreted,
administered and construed to, comply with Section 111 of EESA (and, to the
maximum extent consistent with the preceding, to permit operation of the Benefit
Plans in accordance with their terms before giving effect to this letter).

(5) Miscellaneous. To the extent not subject to federal law, this letter will be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia. This letter may be executed in two or more counterparts, each of which
will be deemed to be an original. A signature transmitted by facsimile will be
deemed an original signature.

 

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The Company appreciates the concessions you are making and looks forward to your
continued leadership during these financially turbulent times.

 

Yours sincerely, STELLARONE CORPORATION By:     Name:   Title:  

Intending to be legally bound,

I agree with and accept the foregoing

terms on the date set forth below.

 

  [name] [title] StellarOne Corporation

Date: December             , 2008

 

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