Exhibit 99.1
THE PEOPLES HOLDING
COMPANY
PLAN OF ASSUMPTION
HERITAGE FINANCIAL HOLDING
CORPORATION
INCENTIVE STOCK COMPENSATION
PLAN
THIS PLAN OF
ASSUMPTION (the
“Plan”) was adopted by the Board of Directors of The
Peoples Holding Company (the “Company”) pursuant to
that certain Agreement and Plan of Merger between the Company, The
Peoples Bank & Trust Company, Heritage Financial Holding
Corporation (“Heritage”) and Heritage Bank, such
agreement dated July 15, 2004, and effective as of January 1, 2005,
under which the Company has agreed to assume the rights and
obligations of the Heritage Financial Holding Corporation Incentive
Stock Compensation Plan, which plan was first effective as of
February 13, 2001, and was a predecessor to a similar plan
maintained by Heritage Bank (the “Predecessor Plan”).
The Plan was amended by the Board of Directors of the Company on
February 15, 2005 to increase the number of shares authorized for
issuance to 372,500.
1. Administration:
This Plan shall be administered by
the Compensation Committee of the Board of Directors of the Company
(the “Committee”), who shall possess the power and
authority granted under Article I of the Predecessor Plan, subject
to the limitations set forth herein.
Without the requirement of
additional action, the Committee shall be deemed to have delegated
the following administrative duties to the appropriate officers or
employees of the Company: (a) the preparation and issuance of
documents evidencing the Assumed Options (as defined below), and
(b) the authority to receive notice of exercise of such Assumed
Options, to issue shares of Common Stock (as defined below) in
connection therewith, and to withhold such taxes as may be
necessary or appropriate in connection therewith. The Committee
may, from time to time, delegate to the appropriate officers of the
Company and its affiliates such additional administrative duties as
they may deem necessary or appropriate.
2. Shares Reserved For Issuance:
2.1 Number and Type of Shares. Subject to
adjustment as provided in Section 2.2 hereof, the maximum number of
shares of the Company’s $5.00 par value common stock (the
“Common Stock”) that may be issued hereunder in
connection with the exercise of the Assumed Options shall not
exceed 294,700 shares. Common Stock issued hereunder may be
authorized and unissued shares or issued shares held as treasury
shares or shares acquired on the open market or through private
purchase.
2.2 Adjustment. In the event of a merger,
consolidation or reorganization of the Company, there shall be
substituted for each share of Common Stock then subject to this
Plan
the number and kind of shares of stock or other
securities to which the holders of Common Stock are entitled in
such transaction. In the event of any recapitalization, stock
dividend, stock split, combination of shares or other change in the
number of shares of Common Stock then outstanding for which the
Company does not receive consideration, the number of shares of
Common Stock then subject to the Plan shall be adjusted in
proportion to the change in outstanding shares of Common Stock. In
the event of any such event, the purchase price of any Assumed
Option and the shares of Common Stock issuable pursuant to any
Assumed Option shall be adjusted to the extent necessary to prevent
the dilution or enlargement of such option.
3. Assumed Options:
3.1 Number.
Options granted under this Plan
shall be those outstanding as of January 1, 2005, under the
Predecessor Plan, consisting of 453,500 options to acquire the
common stock of Heritage that were intended to satisfy the
requirements of Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”), and 1,020,000 options to
acquire the common stock of Heritage that were not intended to
comply with the re
