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                                                                EXHIBIT 10(q)(3)

                                SECOND AMENDMENT

                                     TO THE

                     PEOPLES HERITAGE FINANCIAL GROUP, INC.
                              THRIFT INCENTIVE PLAN

         The Peoples Heritage Financial Group, Inc. Thrift Incentive Plan (the
"Plan") was last amended and restated effective generally January 1, 1989, and
further amended by a First Amendment effective as of the same date. The Plan is
hereby further amended in the following respects:

         1. The terms used in this Amendment shall have the meanings set forth
in the Plan unless the context indicates otherwise.

         2. Section 1.3(c) is hereby amended to read as follows, effective as of
            the adoption date of this Second Amendment:

                  (c)      In lieu of a joint and survivor annuity under
                           Paragraph (b)(1), a married Participant may elect to
                           receive a single life annuity, a ten year certain and
                           continuous life annuity or a 50% joint and survivor
                           annuity with another individual as joint annuitant if
                           the Participant's spouse consents to such election.
                           Such election may be made, with spousal consent,
                           during the ninety-day period ending on the first day
                           of the first period for which an amount is paid as an
                           Annuity ("annuity starting date"), provided, however,
                           that (1) if the written explanation required by
                           Section 417(a)(3) of the Code has not been furnished
                           to the Participant at least thirty days before the
                           annuity starting date, the election period will be
                           extended, if necessary, to include the thirty-day
                           period following the date on which such information
                           is furnished to the Participant, and (2) if the
                           Participant requests additional information described
                           in Treasury Regulation Section
                           1.401(a)-11(c)(3)(iii), the election period shall be
                           extended, if necessary, to include the thirty-day
                           period following the day on which such additional
                           information is personally delivered or mailed to the
                           Participant.

                           Notwithstanding the foregoing to the contrary, if a
                           Participant, after receiving the written explanation
                           required by Section 417(a)(3) of the Code,
                           affirmatively elects a form of distribution, with
                           spousal consent, an Annuity may commence no less than
                           seven days after the date such written explanation
                           was given, provided the Plan Administrator has
                           informed such Participant, in writing, of his right
                           to a period of at least thirty days to make such
                           election.
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                           For purposes of this Paragraph (c):

                           (1)      any consent by the Participant's spouse to
                                    waive rights to survivor benefits under a
                                    joint and survivor annuity must be in
                                    writing, must acknowledge the effect of such
                                    waiver and must be witnessed by a notary
                                    public;

                           (2)      subject to the spousal consent requirement
                                    above, the Participant may change an
                                    election under this Paragraph (c) at any
                                    time and any number of times before the
                                    annuity starting date, in the form and the
                                    manner required by the Plan Administrator
                                    from time to time; and

                           (3)      the Participant's spouse may not revoke
                                    consent to a specific waiver of a joint and
                                    survivor form of benefit.

         3.       Section 1.43 is hereby amended to read as follows:

                  1.43 Valuation Date. For any Plan Year, the last day of each
         Calendar Quarter and such additional dates as the Plan Administrator
         may designate.

         4. Section 1.45 is hereby amended by adding the following new paragraph
(d) at the end thereof, effective October 1, 1995:

                  (d)      All Years of Service with Mid Maine Savings Bank, FSB
                           prior to the date on which such bank was acquired by
                           the Company, and all Years of Service with North
                           Conway Bank prior to the date on which such bank was
                           acquired by the Company, shall be recognized for
                           participation and vesting purposes under this Plan.

         5. Article 2 is hereby amended by adding a new Section 2.4 to read as
follows:

                  "2.4 Special Participation Rules. Effective August 1, 1994,
         each Employee who was previously employed by Mid Maine Savings Bank,
         FSB, immediately prior to the date on which such bank was acquired by
         the Company, shall be eligible to participate in the Plan as of the
         later of August 1, 1994, or the first day of the Calendar Quarter
         coincident with or next following completion of a Year of Service,
         provided that a Participation Agreement has been filed with the Plan
         Administrator by the fifteenth day of the month immediately preceding
         such Calendar Quarter. Effective July 1, 1995, each Employee who was
         previously employed by North Conway Bank, immediately prior to the date
         on which such bank was acquired by the Company, shall be eligible to
         participate in the Plan as of the later of July 1, 1995, or the first
         day of the Calendar Quarter coincident with or next following
         completion of a Year of Service, provided that a Participation
         Agreement has been filed with the

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         Plan Administrator by the fifteenth day of the month immediately
         preceding such Calendar Quarter. For purposes of determining whether an
         Employee described in this Section has completed a Year of Service, his
         service with Mid Maine Savings Bank or North Conway Bank shall be taken
         into account."

         6.       Section 5.1 is hereby amended to read as follows, effective 
October 1, 1995:

                  5.1 Investment Funds. The Trustee shall establish a Company
         Stock Fund and one or more other Investment Funds as the Plan
         Administrator shall from time to time direct. Each Investment Fund,
         other than the Company Stock Fund, shall be invested, as the Plan
         Administrator shall direct:

                           (a)      at the discretion of the Trustee in
                                    accordance with such investment guidelines
                                    and objectives as may be established by the
                                    Plan Administrator for such Investment Fund;

                           (b)      at the discretion of a duly appointed
                                    Investment Manager in accordance with such
                                    investment guidelines and objectives as may
                                    be established by the Plan Administrator; or

                           (c)      in such investments as the Plan
                                    Administrator may specify for such
                                    Investment Fund.

                  The Plan Administrator may from time to time change its
         direction with respect to any Investment Fund and may, at any time,
         eliminate any Investment Fund. Whenever an Investment Fund is
         eliminated, the Trustee shall promptly liquidate the assets of such
         Investment Fund and reinvest the proceeds thereof in accordance with
         the direction of the Plan Administrator.

                  The Trustee shall transfer to each Investment Fund such
         portion of the assets of the Trust as the Plan Administrator may from
         time to time direct in accordance with the terms of the Plan. All
         interest, dividends and other income received with respect to, and any
         proceeds realized from the sale or other disposition of, assets held in
         any Investment Fund shall be credited to and reinvested in such
         Investment Fund, and all expenses properly attributable to any
         Investment Fund shall be paid therefrom unless paid by the Company.

         7.       Section 5.2 is hereby amended to read as follows, effective 
October 1, 1995:

                  5.2 Investment of Contributions.

                           (a)      Each Participant may direct that
                                    contributions made on his behalf shall be
                                    invested in any one or more of the
                                    Investment Funds. An investment direction
                                    shall be made by such written,

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                                    telephonic or electronic means as shall be 
                                    prescribed by the Plan Administrator.

                                    A Participant's investment direction, if
                                    received by the Plan Administrator prior to
                                    the date he commences participation, shall
                                    be effective as of said date. If a
                                    Participant does not make an investment
                                    direction or an investment direction is not
                                    received by the Plan Administrator before
                                    the Participant commences participation, the
                                    contributions on behalf of such Participant
                                    shall be invested in the fund which presents
                                    the least risk of loss as determined by the
                                    Plan Administrator. An investment direction
                                    received by the Plan Administrator after the
                                    date a Participant commences participation
                                    shall be effective as soon as practicable
                                    following receipt by the Plan Administrator
                                    (or by the person or persons specified by
                                    the Plan Administrator).

                           (b)      A Participant may modify an investment
                                    direction to have future contributions on
                                    his behalf invested in the Investment Funds
                                    in proportions other than those previously
                                    elected, by such written, telephonic or
                                    electronic means as shall be prescribed by
                                    the Plan Administrator. A modification shall
                                    be effective as soon as practicable
                                    following receipt by the Plan Administrator
                                    (or by the person or persons specified by
                                    the Plan Administrator).

                           (c)      A Participant may elect to reinvest all or a
                                    portion of the balance credited to one or
                                    more of his accounts in any one or more of
                                    the Investment Funds, by such written,
                                    telephonic or electronic means as shall be
                                    prescribed by the Plan Administrator. An
                                    election to reinvest shall be effective as
                                    soon as practicable after receipt by the
                                    Plan Administrator (or by the person or
                                    persons specified by the Plan
                                    Administrator).

         Notwithstanding the foregoing, an Insider shall be subject to the
         provisions of Section 5.8 whenever he shall transfer any amount
         credited to one or more of his accounts from the Company Stock Fund to
         another Investment Fund or from another Investment Fund to the Company
         Stock Fund or change his previously elected investment options with
         respect to future contributions or make any other investment election
         under the Plan.

         8.       Section 6.2 is hereby amended to read as follows:

                  6.2      Hardship Withdrawals.  The Plan Administrator may 
        direct the Trustee

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         to make a hardship withdrawal distribution to a Participant from the
         accounts designated by the Participant, excluding investment earnings
         allocated to the Participant's Salary Deferral Account after December
         31, 1988, subject to the following:

                           (a)      Each request for a hardship withdrawal shall
                                    be made by such written, telephonic or
                                    electronic means as may be prescribed by the
                                    Plan Administrator. The request shall
                                    specify the reason for such withdrawal and
                                    shall include such other information and
                                    documentation as the Plan Administrator may
                                    request.

                           (b)      A hardship withdrawal may be made only in
                                    cash and may not exceed the Participant's
                                    Vested Interest in his accounts, excluding
                                    investment earnings allocated to the
                                    Participant's Salary Deferral Account after
                                    December 31, 1988.

                           (c)      A hardship withdrawal shall be permitted
                                    only if the distribution is on account of an
                                    immediate and heavy financial need of the
                                    Participant and is necessary to satisfy such
                                    financial need.

                                    (1)       A financial need may qualify as
                                              immediate and heavy without regard
                                              to whether such need was
                                              foreseeable or voluntarily
                                              incurred by the Participant. The
                                              following shall be deemed
                                              immediate and heavy financial
                                              needs:

                                              (A)    Payment of medical expenses
                                                     described in Section 213(d)
                                                     of the Code previously
                                                     incurred by the
                                                     Participant, his spouse or
                                                     dependent (within the
                                                     meaning of Section 152 of
                                                     the Code) or payment
                                                     necessary for such persons
                                                     to obtain medical care as
                                                     described in Section 213(d)
                                                     of the Code;

                                              (B)    Costs directly related to
                                                     the purchase (excluding
                                                     mortgage payments) of a
                                                     principal residence of the
                                                     Participant;

                                              (C)    Payment of tuition, related
                                                     educational fees and room
                                                     and board expenses for the
                                                     next 12 months of
                                                     post-secondary education
                                                     for the Participant, his
                                                     spouse or dependent (within
                                                     the meaning of Section 152
                                                     of the Code);

                                              (D)    Payment to prevent eviction
                                                     of the Participant

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                                                     from his principal
                                                     residence or foreclosure on
                                                     the mortgage of the
                                                     Participant's principal
                                                     residence; and

                                              (E)    Any other financial need
                                                     deemed to be immediate and
                                                     heavy by the Commissioner
                                                     of Internal Revenue as set
                                                     forth in a Treasury
                                                     regulation, revenue ruling,
                                                     notice, or other document
                                                     of general applicability.

                                              The above list of deemed immediate
                                              and heavy financial needs shall
                                              not be exclusive, and other needs
                                              may qualify as immediate and heavy
                                              financial needs.

                                    (2)       A distribution shall be treated as
                                              necessary to satisfy an immediate
                                              and heavy financial need of the
                                              Participant only to the extent (A)
                                              the amount of such distribution
                                              does not exceed the amount
                                              required to relieve the financial
                                              need (including the amount of any
                                              federal, state or local income
                                              taxes or penalties reasonably
                                              anticipated to result from the
                                              distribution) and (B) the amount
                                              of such distribution is not
                                              reasonably available to the
                                              Participant from other resources.
                                              The Plan Administrator may
                                              reasonably rely (unless the Plan
                                              Administrator has actual knowledge
                                              to the contrary) on the
                                              Participant's written
                                              representations that the need
                                              cannot be relieved through
                                              reimbursement or compensation by
                                              insurance or otherwise; by
                                              reasonable liquidation of the
                                              Participant's assets; by cessation
                                              of Salary Deferral Contributions
                                              under the Plan; or by other
                                              distributions or nontaxable (at
                                              the time of the loan) loans from
                                              plans maintained by any present or
                                              former employer of the Participant
                                              or from commercial lenders. A
                                              Participant's resources shall be
                                              deemed to include those assets of
                                              his spouse and minor children that
                                              are reasonably available to the
                                              Participant.

                                    (3)       The amount of an immediate and
                                              heavy financial need may include
                                              any amounts necessary to pay any
                                              federal, state or local income
                                              taxes or penalties reasonably
                                              anticipated to result from the
                                              distribution.

                           (d)      A request for a hardship distribution shall
                                    be treated as a claim for benefits under
                                    Section 9.5. A hardship withdrawal shall be

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                                    made as soon as practicable following
                                    approval of the request by the Plan
                                    Administrator.

                           (e)      The Plan Administrator may from time to time
                                    establish rules governing withdrawals. Such
                                    rules shall be applied on a uniform and
                                    nondiscriminatory basis.

         9.       Section 8.5(b) is hereby amended to read as follows, effective
as of the adoption date of this Second Amendment:

                  (b)      Any distribution to a Participant who has a Vested
                           Interest that exceeds $3,500, or that exceeded $3,500
                           at the time of any prior distribution, shall require
                           such Participant's written consent if such
                           distribution commences prior to Normal Retirement
                           Age. With regard to such consent:

                           (1)      The Participant shall receive the written
                                    notice described in Treasury Regulation
                                    1.411(a)-11(c)(2)(i), including notice of
                                    his right to defer payment of benefits under
                                    this Article, no less than thirty days and
                                    no more than ninety days before the date on
                                    which such distribution is paid or commences
                                    to be paid. If a Participant declines or
                                    fails to consent, it shall be deemed to be
                                    an election to defer payment of such
                                    benefits. However, any election to defer
                                    payment shall not apply with respect to
                                    distributions which are required under
                                    Section 8.5(c).

                           (2)      Notwithstanding the foregoing to the
                                    contrary, if a Participant, after receiving
                                    written notice under Paragraph (b)(1),
                                    affirmatively elects a distribution, then
                                    the distribution may be paid or may commence
                                    to be paid less than thirty days after the
                                    date such written explanation was given,
                                    provided the Plan Administrator has informed
                                    such Participant, in writing, of his right
                                    to a period of at least thirty days to
                                    consider whether to consent to the
                                    distribution.

         10.      Section 8.10(e)(ii) is hereby amended by modifying
subparagraph (D) to read as follows and adding the following new subparagraphs
(E), (F), and (G) at the end thereof, effective October 19, 1995:

                  (D)      a corrective distribution pursuant to Section 3.2, 
                           3.7, or 3.8;

                  (E)      the portion of any distribution that is not
                           includable in gross income (determined without regard
                           to the exclusion for net unrealized appreciation
                           described in Section 402(e)(4) of the Code);

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                  (F)      a loan pursuant to Section 6.3 that is treated as a
                           deemed distribution pursuant to Section 72(p) of the
                           Code; or

                  (G)      any similar item designated by the Commissioner of
                           Internal Revenue as set forth in a Treasury
                           regulation, revenue ruling, notice, or other document
                           of general applicability.

         11.      Except as otherwise provided herein, this Amendment shall be 
effective January 1, 1995.

                               * * * * * * * * * *

         IN WITNESS WHEREOF, Peoples Heritage Financial Group, Inc. has caused
this Second Amendment to be executed by its duly authorized officer on this 24th
day of October 1995.

                             PEOPLES HERITAGE FINANCIAL GROUP, INC.

                             By        /s/ Carol L. Mitchell
                                       ------------------------------------
                                       Name: Carol L. Mitchell
                                       Title: Senior Vice President and 
                                              General Counsel

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