Exhibit 10.13

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”).

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 rece