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                                                                EXHIBIT 10(q)(2)

                                 FIRST 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. 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.  The first sentence of Section 1.6 is hereby amended to read
as follows:

                  "1.6 Beneficiary. The person, trust, estate or other entity
                designated by the Participant to receive benefits which may be
                payable on account of the death of a Participant under Article
                8; provided, however, that in the case of a married Participant,
                the Participant's spouse shall be the Beneficiary unless the
                Participant's spouse waives his or her rights as the
                Beneficiary, the Participant is legally separated or has been
                abandoned and the Participant has a court order to such effect,
                or the Participant's current spouse cannot be located."

                3.  Section 1.16 is hereby amended to read as follows:

                "1.16 Direct Rollover. Direct transfer of all or a portion of
                the Participant's Vested Interest, as designated by an eligible
                distributee, to an eligible retirement plan in accordance with
                the requirements under Section 401(a)(31) of the Code and
                Section 8.10."

                4.  Section 1.17 is hereby amended to read as follows:

                  "1.17 Earnings. The total compensation paid by the Company to
                the Employee for services rendered while a Participant that
                constitutes wages as defined in Section 3401(a) of the Code and
                all other payments made by the Company to an Employee for
                services rendered while a Participant for which the Company is
                required to furnish the Employee a written statement under
                Sections 6041(d), 6051(a)(3) and 6052 of the Code without regard
                to any rules under Section 3401(a) of the Code that limit the
                remuneration included in wages based on the nature or location
                of the employment or service performed. Notwithstanding the
                forgoing to the contrary, Earnings (i) shall include elective
                contributions made by the Company on behalf of an Employee that
                are not includable in income under Section 125, Section
                402(e)(3), or Section 402(h) of the Code; and (ii) shall be
                reduced by reimbursements or other expense
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                allowances, fringe benefits (cash and non-cash), moving
                expenses, deferred compensation and welfare benefits.

                  Notwithstanding the foregoing to the contrary, effective
                January 1, 1989, the annual Earnings of any Employee in excess
                of Two Hundred Thousand Dollars ($200,000.00) (or such higher
                amount as the Secretary of the Treasury may prescribe) shall not
                be taken into account under the Plan, and, effective January 1,
                1994, the annual Earnings of any Employee in excess of One
                Hundred Fifty Thousand Dollars ($150,000.00) (or such higher
                amount as the Secretary may prescribe) shall not be taken into
                account under the Plan. In the event Earnings are determined
                based on a period of time which contains fewer than twelve (12)
                calendar months, the annual Earnings limit shall be an amount
                equal to the annual Earnings limit for the calendar year in
                which the period begins multiplied by a fraction, the numerator
                of which is the number of full calendar months and the
                denominator of which is twelve (12). For purposes of the annual
                Earnings limit, any Earnings paid to an Employee who is the
                spouse or a lineal descendant (who has not attained age nineteen
                (19) by the close of the Plan Year) of an Employee who is a five
                percent owner (as defined in Section 416(i)(1) of the Code) or
                one of the ten (10) Highly Compensated Employees paid the
                highest earnings (as defined in Section 4.4) for the Plan Year
                shall be treated as paid to or on behalf of such five percent
                owner or Highly Compensated Employee. If Earnings for a prior
                Plan Year are taken into account for any Plan Year, such
                Earnings shall be subject to the annual Earnings limit in effect
                for such prior Plan Year."

                5.  Paragraphs (2) through (4) of Section 1.25(b) are hereby 
amended to read as follows:

                  "(2)     Solely for purposes of this Section, the Company
                           shall include all Affiliates, and Earnings shall have
                           the meaning given such term under Section 1.17, but
                           without regard to the annual Earnings limit.

                  (3)      For purposes of Paragraph (a)(3) of this Section, the
                           top-paid group shall consist of the top twenty
                           percent of Employees for a Plan Year when ranked on
                           the basis of Earnings. In determining the number of
                           Employees to be included in the top twenty percent
                           and the number of officers to be taken into account
                           under Paragraph (a)(4), Employees described in
                           Section 414(q)(8) of the Code and the regulations
                           promulgated thereunder shall be excluded.

                  (4)      If an Employee is a family member of an Employee who
                           owns more than five percent of the Company or of a
                           Highly Compensated Employee who is one of the top ten
                           Employees when ranked on the basis of Earnings for
                           the current Plan Year, such Employee shall not

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                           be treated as a separate Employee, and any Earnings
                           paid to him and any contributions on his behalf shall
                           be treated as paid to (or contributed on behalf of)
                           such five percent owner or Highly Compensated
                           Employee, as the case may be. For purposes of this
                           Paragraph (b)(4), "family member" shall mean a
                           spouse, lineal ascendant, lineal descendant and the
                           spouses of such lineal ascendants and descendants."

                6.  Section 1.33 is hereby amended to read as follows:

                  "1.33  Plan Administrator.  A committee of not less than four 
                individuals appointed by the Board."

                7.  Section 3.2 is hereby amended to read as follows:

                  3.2  Annual Limitation on Salary Deferrals.

                  (a)      Effective January 1, 1989, the Salary Deferrals that
                           may be allocated to a Participant's Salary Deferral
                           Contribution Account for any calendar year shall not
                           exceed Seven Thousand Six Hundred Twenty- Seven
                           Dollars ($7,627.00), reduced by the amount of any
                           employer contributions for such year on behalf of
                           such Participant pursuant to an election to defer
                           compensation under any qualified cash or deferred
                           arrangement within the meaning of Section 401(k) of
                           the Code, any simplified employee pension cash or
                           deferred arrangement within the meaning of Section
                           402(h)(1)(B) of the Code, any eligible deferred
                           compensation plan under Section 457 of the Code, any
                           plan within the meaning of Section 501(c)(18) of the
                           Code and a salary reduction agreement for the
                           purchase of an annuity contract under Section 403(b)
                           of the Code. For purposes of this Section, any Salary
                           Deferrals returned to a Participant pursuant to
                           Section 4.4 shall be disregarded. The dollar
                           limitation of this Section shall be automatically
                           adjusted to reflect any cost of living adjustment
                           made under Section 402(g)(5) of the Code.

                  (b)      In the event that the limitation of Paragraph (a) is
                           exceeded with respect to any Participant, not later
                           than April 15 of the following calendar year, the
                           Plan Administrator shall distribute the excess
                           deferral (plus any income and minus any loss
                           allocable thereto), provided that the Plan
                           Administrator has received the notice pre- scribed in
                           Paragraph (c). Excess deferrals shall be adjusted for
                           any income or loss up to the date of distribution.
                           The income or loss allocable to excess deferrals
                           shall be determined by the same manner in which
                           income or loss is allocated to the Participants'
                           Aggregate Accounts under Article 4 of the Plan.

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                           The amount of excess deferral with respect to a
                           Participant for any calendar year shall be reduced by
                           the amount of any contributions previously
                           distributed to such Participant under Section 3.7 for
                           the Plan Year beginning with or within the calendar
                           year.

                  (c)      It shall be the responsibility of the Participant to
                           notify the Plan Administrator of any excess deferral
                           for a calendar year. Such notice shall be in writing;
                           shall specify the amount of the excess deferral;
                           shall state that if the excess deferral is not
                           distributed, such excess shall be includable in the
                           Participant's gross income under Section 402(g) of
                           the Code; and shall be submitted to the Plan
                           Administrator not later than March 1 of the following
                           calendar year. A Participant shall be deemed to have
                           notified the Plan Administrator of an excess deferral
                           to the extent such Participant has an excess deferral
                           for a calendar year, taking into account only Salary
                           Deferrals under the Plan and any other plans of the
                           Company or its Affiliates subject to Section 402(g)
                           of the Code."

                8.  Section 3.3 is hereby amended to read as follows:

                  "3.3 Company Matching Contributions. For each Plan Year, the
                Company shall contribute and allocate to each Participant's
                Company Matching Contribution Account an amount equal to fifty
                percent of such Participant's Salary Deferrals under Section 3.1
                not in excess of six percent of Earnings; provided, however, no
                Company Matching Contribution may be made with respect to any
                excess deferral under Section 3.2, or any Excess Salary Deferral
                under Section 3.6 or any Salary Deferral which is returned to
                the Participant pursuant to Section 4.4. The Company shall
                contribute Company Matching Contributions for a Plan Year to the
                Trust not later than the date the Company is required to file
                its federal corporate income tax return (with extensions) with
                respect to the year in which such Plan Year ends."

                9.  Section 3.4 is hereby amended to read as follows:

                  "3.4 Company Discretionary Contributions. Within twelve months
                after the end of the Plan Year, the Company, as instructed by
                the Plan Administrator, may make a qualified nonelective
                contribution (as defined in Section 401(m)(4)(C) of the Code) on
                behalf of Non-Highly Compensated Employees in an amount which
                enables the Plan to satisfy the requirements set forth in
                Section 3.6 or 3.8."

                10.  Section 3.6 is hereby amended to read as follows:

                  "3.6  Limitations on Actual Deferral Percentage.  In the event
                a Participant

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                who is a Highly Compensated Employee participates in two or more
                cash or deferred arrangements (under Section 401(k) of the Code)
                that have different plan years, for purposes of this Section,
                all such arrangements ending with or within the same calendar
                year shall be treated as a single arrangement. For purposes of
                this Section, this Plan and any other Code Section 401(k) plan
                maintained by the Company or any of its Affiliates shall be
                treated as a single plan if such plans are treated as one plan
                for purposes of Section 401(a)(4) or Section 410(b) of the Code
                or if a Highly Compensated Employee participates in such other
                plan. Plans may be aggregated to satisfy Section 401(k) of the
                Code only if such plans have the same Plan Year.

                  (a)      The Actual Deferral Percentage for Participants who
                           are Highly Compensated Employees for any Plan Year
                           commencing after December 31, 1986, shall not exceed
                           the greater of:

                           (i)      the Actual Deferral Percentage for all other
                                    Participants multiplied by 1.25; or

                           (ii)     the lesser of the Actual Deferral Percentage
                                    for all other Participants multiplied by 2,
                                    or the Actual Deferral Percentage for such
                                    Participants plus two percent (2%).

                  (b)      The sum of the Actual Deferral Percentage for
                           Participants who are Highly Compensated Employees and
                           the Average Contribution Percentage for Participants
                           who are Highly Compensated Employees shall not exceed
                           the greater of:

                           (i)      the sum of (1) the greater of the Actual
                                    Deferral Percentage for all other
                                    Participants multiplied by 1.25 or the
                                    Average Contribution Percentage for all
                                    other Participants multiplied by 1.25, and
                                    (2) the lesser of the Actual Deferral
                                    Percentage for all other Participants plus 2
                                    or the Average Contribution Percentage for
                                    all other Participants plus 2, provided that
                                    in no event shall such percentage plus 2
                                    exceed such percentage multiplied by 2.

                           (ii)     the sum of (1) the lesser of the Actual
                                    Deferral Percentage for all other
                                    Participants multiplied by 1.25 or the
                                    Average Contribution Percentage for all
                                    other Participants multiplied by 1.25, and
                                    (2) the greater of the Actual Deferral
                                    Percentage for all other Participants plus 2
                                    or the Average Contribution Percentage for
                                    all other Participants plus 2, provided that
                                    in no event shall such percentage plus 2
                                    exceed such percentage multiplied by 2.

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                  Paragraph (b) of this Section shall not apply if the
                respective Actual Deferral Percentage and Average Contribution
                Percentage of the Highly Compensated Employees does not exceed
                the respective Actual Deferral Percentage and Average
                Contribution Percentage of all other Participants multiplied by
                1.25.

                  For purposes of this Section, Salary Deferrals and Company
                Matching Contributions must be made before the last day of the
                twelve (12) month period immediately following the Plan Year to
                which such contributions relate. If a Participant who is a
                Highly Compensated Employee is subject to the family aggregation
                provisions of Section 1.25, the individual deferral percentage
                for such Participant shall be determined in accordance with the
                applicable regulations under Section 401(k) of the Code. For
                purposes of this Section, any Salary Deferrals returned to a
                Participant pursuant to Section 4.4 shall be disregarded.

                  The Company shall maintain records sufficient to demonstrate
                compliance with this Section and the amount of any Company
                Matching Contributions used to satisfy this Section. The
                determination and treatment of the contributions on behalf of
                any Participant that are taken into account for purposes of this
                Section shall satisfy such other requirements as may be
                prescribed by the Secretary of the Treasury."

                11.  Section 3.7 is hereby amended to read as follows:

                  "3.7 Restrictions and Adjustments. The Plan Administrator may
                restrict the deferral percentages elected by Participants if the
                Plan Administrator determines such restriction is necessary to
                comply with Section 3.2, Section 3.6, Section 3.11 or Section
                4.4.

                  In the event that the Actual Deferral Percentage of the
                Participants who are Highly Compensated Employees for any Plan
                Year exceeds the limitations prescribed in Paragraph 3.6(a), the
                Plan Administrator shall, within two and one-half (2 1/2) months
                after the end of such year, distribute the Excess Salary
                Deferrals (plus any income and minus any loss allocable thereto)
                to such Participants on the basis of the respective portions of
                the Excess Salary Deferrals attributable to each such
                Participant and shall designate such distribution as a
                distribution of Excess Salary Deferrals (plus any income and
                minus any loss allocable thereto). Excess Salary Deferrals shall
                be allocated to Participants who are subject to the family
                aggregation rules of Section 414(q)(6) of the Code in the manner
                prescribed by regulations.

                  The amount of any Excess Salary Deferrals of a Participant who
                is a Highly Compensated Employee shall be determined by reducing
                contributions on behalf of all such Participants in the order of
                their respective individual

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                deferral percentages, beginning with the highest such
                percentage. The amount of Excess Salary Deferrals with respect
                to a Participant who is a Highly Compensated Employee for any
                Plan Year shall be reduced by the amount of excess deferrals
                previously distributed to such Participant under Section 3.2 for
                the calendar year ending with or within the Plan Year; provided,
                however, that notwithstanding the distribution of an excess
                deferral in accordance with Section 3.2 to a Participant who is
                a Highly Compensated Employee, such distributed amount shall be
                taken into account under Section 3.6.

                  Excess Salary Deferrals shall be adjusted for any income or
                loss up to the date of distribution. The income or loss
                allocable to Excess Salary Deferrals shall be determined by the
                same manner in which income or loss is allocated to
                Participants' Aggregate Accounts under Article 4 of the Plan.

                  In the event that the sum of the Actual Deferral Percentage
                for Participants who are Highly Compensated Employees and the
                Average Contribution Percentage for Participants who are Highly
                Compensated Employees for any Plan Year exceeds the limitations
                prescribed in Paragraph 3.6(b), the Plan Administrator shall,
                within two and one-half (2 1/2) months after the end of such
                year reduce the Average Contribution Percentage for Participants
                who are Highly Compensated Employees in the manner prescribed in
                subsections (g) through (j) of Section 3.8.

                  Notwithstanding the foregoing provisions of this Section to
                the contrary, in lieu of distributing Excess Salary Deferrals
                (plus any income and minus any loss allocable thereto) or
                reducing the Average Contribution Percentage for Participants
                who are Highly Compensated Employees in the manner prescribed in
                subsections (g) through (j) of Section 3.8 in order to comply
                with Paragraph 3.6(b) for any Plan Year, the Company may make
                qualified nonelective contributions to the Plan as provided in
                Section 3.4."

                12.  Section 3.8 is hereby amended to read as follows:

                  "3.8  Special Rules for Company Matching Contributions.

                  (a)      The Average Contribution Percentage for Participants
                           who are Highly Compensated Employees for any Plan
                           Year commencing after December 31, 1986, shall not
                           exceed the greater of:

                           (i)      the Average Contribution Percentage for all
                                    other Participants multiplied by 1.25; or

                           (ii)     the lesser of the Average Contribution
                                    Percentage for all other Participants
                                    multiplied by 2, or the Average Contribution

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                                    Percentage for such Participants plus two
                                    percent (2%).

                  (b)      For purposes of this Section, if two or more
                           qualified plans maintained by the Company or any of
                           its Affiliates are treated as one plan to meet the
                           requirements of Section 401(a)(4), Section 410(b) or
                           Section 401(m) of the Code, such plans shall be
                           treated as a single plan. If a Participant who is a
                           Highly Compensated Employee participates in any other
                           qualified plan maintained by the Company to which
                           Company Matching Contributions or Employee
                           contributions are made, all such contributions for
                           Plan Years ending with or within the same calendar
                           year shall be aggregated for purposes of this
                           Section. If a Participant who is a Highly Compensated
                           Employee participates in two or more cash or deferred
                           arrangements that have different plan years, all cash
                           or deferred arrangements ending with or within the
                           same calendar year shall be treated as a single
                           arrangement. For Plan Years beginning after December
                           31, 1989, plans may be aggregated in order to satisfy
                           Section 401(m) of the Code only if they have the same
                           plan year.

                  (c)      If an Employee is a family member within the meaning
                           of Section 1.25 of a five percent owner (as defined
                           in Section 416(i)(1) of the Code) or of one of the
                           ten (10) Highly Compensated Employees receiving the
                           greatest compensation from the Company during the
                           Plan Year, then the individual contribution
                           percentage attributable to such Employee shall be
                           treated as if it were attributable to the five
                           percent owner or Highly Compensated Employee. An
                           Employee who is a family member with respect to a
                           five percent owner or one of the ten (10) Highly
                           Compensated Employees receiving the greatest
                           compensation from the Company shall not be considered
                           a separate Employee for purposes of determining the
                           Average Contribution Percentage for Participants who
                           are Highly Compensated Employees and the Average
                           Contribution Percentage for all other Participants.

                  (d)      To the extent Salary Deferrals are taken into account
                           under this Section, any Salary Deferrals returned to
                           a Participant pursuant to Section 4.4 shall be
                           disregarded.

                  (e)      Notwithstanding Section 7.3 to the contrary, any
                           Company Matching Contribution which is attributable
                           to an excess deferral under Section 3.2 or an Excess
                           Salary Deferral shall be forfeited and shall be
                           disregarded for purposes of Paragraph (a) of this
                           Section. Forfeitures shall be used to reduce future
                           Company Matching Contributions.

                  (f)      For purposes of this Section, Company Matching
                           Contributions shall

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                           be treated as made for a Plan Year if such
                           contributions are made no later than the end of the
                           twelve (12) month period beginning on the day after
                           the close of the Plan Year. The Company shall
                           maintain records sufficient to demonstrate
                           satisfaction of this Section and the amount of any
                           Salary Deferrals taken into account under this
                           Section. The determination and treatment of the
                           individual contribution percentage of any Participant
                           shall satisfy such other requirements as may be
                           prescribed by the Secretary of the Treasury.

                  (g)      In the event that the Average Contribution Percentage
                           of the Partici- pants who are Highly Compensated
                           Employees for any Plan Year exceeds the limitation of
                           Paragraph 3.8 (a) above, the Plan Administra- tor
                           shall, within two and one-half (2 1/2) months after
                           the end of such year, distribute the Excess Aggregate
                           Contributions to the extent nonforfeitable (plus any
                           income and minus any loss allocable thereto) to such
                           Participants on the basis of the respective portions
                           of the Excess Aggregate Contributions attributable to
                           each such Participant and shall designate such
                           distribution as a distribution of Excess Aggregate
                           Contributions (plus any income and minus any loss
                           allocable thereto). To the extent the Excess
                           Aggregate Contributions are forfeitable, they shall
                           be forfeited in accordance with the provisions of
                           Section 7.3; provided, however, that forfeitures of
                           Excess Aggregate Contributions may not be allocated
                           to the Aggregate Accounts of Participants whose
                           Company Matching Contributions are reduced pursuant
                           to this paragraph 3.8(g).

                                    Notwithstanding the foregoing provisions of
                           this Section to the contrary, in lieu of distributing
                           Excess Aggregate Contributions to the extent
                           nonforfeitable (plus any income and minus any loss
                           allocable thereto) to Participants who are Highly
                           Compensated Employees or forfeiting Excess Aggregate
                           Contributions (to the extent forfeitable) in order to
                           comply with Paragraph 3.8(a) above for any Plan Year,
                           the Company may make qualified nonelective
                           contributions as provided in Section 3.4.

                  (h)      Excess Aggregate Contributions shall be allocated to
                           Participants who are subject to the family
                           aggregation rules of Section 414(q)(6) of the Code in
                           the manner prescribed by regulations.

                  (i)      Excess Aggregate Contributions shall be adjusted for
                           any income or loss up to the date of distribution.
                           The income or loss allocable to Excess Aggregate
                           Contributions shall be determined by the same manner
                           in which income or loss is allocated to Participants'
                           Aggregate Accounts under Article 4.

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                  (j)      The amount of Excess Aggregate Contributions of any
                           Participant who is a Highly Compensated Employee
                           shall be determined by reducing contributions on
                           behalf of all such Participants in the order of their
                           respective contribution percentages, beginning with
                           the highest such percentage. The determination of the
                           amount of Excess Aggregate Contributions with respect
                           to the Plan shall be made after first determining the
                           amount of excess deferrals under Section 3.2 and
                           second determining the amount of Excess Salary
                           Deferrals under Section 3.6."

                13. Section 3.9 is hereby deleted, and Sections 3.10 and 3.11
are hereby redesignated as Sections 3.9 and 3.10 respectively.

                14.  Section 3.9(b), as herein redesignated, is hereby amended 
by adding the following sentence at the end thereof:

                "The portion of any contribution returned to the Company in
                accordance with this Section that represents Salary Deferrals
                shall be paid promptly to the Participants on whose behalf such
                deferrals were made."

                15.  Section 3.10, as herein redesignated, is hereby amended to 
read as follows:

                  "Rollover Contributions. An Employee who has received an
                eligible rollover distribution (as defined in Section 402(c)(4)
                of the Code) from an employee's trust described in Section
                401(a) of the Code which is exempt from tax under Section 501(a)
                of the Code may transfer all or any portion of such distribution
                to the Trust, provided the transfer is made to the Trust not
                later than the sixtieth (60th) day following the day on which he
                received such distribution and the amount transferred is $1,000
                or more. In addition, an Employee who receives a distribution
                from an individual retirement account (within the meaning of
                Section 408(a) of the Code) which is attributable solely to a
                rollover contribution (as defined in Section 402(c)(5) of the
                Code) from an employee's trust described in Section 401(a) of
                the Code which is exempt from tax under Section 501(a) of the
                Code may transfer the entire amount distributed to the Trust,
                provided the transfer is made to the Trust not later than the
                sixtieth (60th) day following the day on which he received such
                distribution and the amount transferred is $1,000 or more.
                Notwithstanding the foregoing to the contrary, an Employee who
                has received an eligible rollover distribution (as hereinabove
                defined), solely by reason of the death of his spouse, or a
                distribution from an individual retirement account (as
                hereinabove defined), which account is attributable solely to a
                rollover contribution (as hereinabove defined) from an
                employee's trust described in Section 401(a) of the Code which
                is exempt from tax under Section 501(a) of the Code of amounts
                received by reason of the death of his spouse, may not transfer
                any

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                portion of such distribution to the Trust.

                  A rollover contribution shall be credited to a Rollover
                Contributions Account on behalf of the contributing Employee,
                and such Employee shall have a fully vested and nonforfeitable
                interest in his Rollover Contributions Account.

                  An Employee who has made a rollover contribution in accordance
                with this Section who has not otherwise become a Participant
                shall become a Participant coincident with such rollover
                contribution, provided that such Participant shall not have a
                right to defer Earnings or to share in any Company Matching
                Contributions until he has otherwise satisfied the eligibility
                requirements imposed by Article 2."

                16.  Article III is hereby amended by adding the following 
Section 3.11 at the end thereof:

                  "3.11 Maximum Contributions. In no event shall the
                contributions made by the Company for any Plan Year exceed the
                maximum amount which the Company is permitted to deduct for
                federal income tax purposes or cause the Annual Addition (as
                defined in Section 4.4) for any Participant to exceed the amount
                permitted under the Plan."

                17.  Paragraph (a)(4) of Section 4.4 is hereby amended to read
as follows:

                  "(4)     `Maximum Annual Additions' of a Participant for any
                           Limitation Year shall mean the lesser of (A) $30,000
                           (or, if greater,1/4of the dollar limitation as then
                           in effect under Section 415(b)(1)(A) of the Code for
                           such Limitation Year) or (B) twenty-five percent of
                           such Participant's earnings during such year except
                           the limitation in this Clause (B) shall not apply to
                           any contribution for medical benefits (within the
                           meaning of Section 419A(f)(2) of the Code) after a
                           Participant's termination of employment with the
                           Company or an Affiliate which is otherwise treated as
                           an Annual Addition or to any amount otherwise treated
                           as an Annual Addition under Section 415(l)(1) of the
                           Code.

                           For purposes of Clause (B) and except as hereinafter
                           provided, `earnings' shall mean, with respect to a
                           Plan Year, the total compensation paid by the Company
                           to an Employee for services rendered while an
                           Employee that constitutes wages as defined in Section
                           3401(a) of the Code and all other payments by the
                           Company to an Employee for services rendered while an
                           Employee for which the Company is required to furnish
                           the Employee a written statement under Sections
                           6041(d), 6051(a)(3) and 6052 of the Code without
                           regard to any rules under Section 3401(a) of the Code
                           that limit the remuneration

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                           included in wages based on the nature or location of
                           the employment or services performed. For Limitation
                           Years beginning after Decem- ber 31, 1991, for
                           purposes of applying the limitations of this Section
                           4.4, `earnings' for a Limitation Year shall mean the
                           compensation actually paid or includable in gross
                           income during such Limitation Year. Notwithstanding
                           the preceding sentence, `earnings' with respect to a
                           Participant who is permanently and totally disabled
                           (within the meaning of Section 22(e)(3) of the Code)
                           shall mean the earnings such Participant would have
                           received for the Limitation Year if he or she had
                           been paid at the rate of earnings paid immediately
                           before becoming permanently and totally disabled;
                           provided such imputed earnings may be taken into
                           account only if the Participant is not a Highly
                           Compensated Employee and contributions made on behalf
                           of such Participant are not forfeitable when made."

                18.  Section 4.4(b) is hereby amended to read as follows:

                  "(b)     Notwithstanding any other provision in the Plan
                           regarding the allocation of contributions, under no
                           circumstances shall the Annual Additions credited to
                           a Participant's Aggregate Account for any Limitation
                           Year exceed the Maximum Annual Additions for such
                           Participant for such year. If, as a result of a
                           reasonable error in estimating a Participant's
                           Earnings or because of other limited facts and
                           circumstances, the Annual Additions which would be
                           credited to a Participant's Aggregate Account for a
                           Limitation Year would nonetheless exceed the Maximum
                           Annual Additions for such Partici- pant for such
                           year, the excess Annual Additions which, but for this
                           Section, would have been allocated to such
                           Participant's Aggregate Account shall be disposed of
                           as follows:

                           (1)      Any such excess Annual Additions in the form
                                    of Salary Deferrals, shall, to the extent
                                    such amounts would have otherwise been
                                    allocated to such Participant's Salary
                                    Deferral Contribution Account, be returned
                                    to the Participant;

                           (2)      Any such excess Annual Additions in the form
                                    of Company Matching Contributions remaining
                                    in the Plan after the application of
                                    Paragraph (b)(1) above, shall, to the extent
                                    such amounts would have otherwise been
                                    allocated to such Participant's Company
                                    Matching Contribution Account, be allocated
                                    instead to a suspense account and shall be
                                    held therein until used to reduce future
                                    Company Matching Contributions in the same
                                    manner as a Forfeiture; and

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<PAGE>   13
                           (3)      Any such excess Annual Additions in the form
                                    of Company Discretionary Contributions
                                    remaining in the Plan after the application
                                    of Paragraphs (b)(1) and (2) above, shall be
                                    allocated instead to a suspense account and
                                    shall be held therein until allocated to
                                    such Participant's Salary Deferral
                                    Contribution Account in future Limitation
                                    Years before any Salary Deferral
                                    contributions or Company Discretionary
                                    Contributions are made to the Plan on behalf
                                    of such Participant."

                19.  Section 6.2(c)(1) is hereby amended to read as follows:

                  "(1)     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;"

                20.  Section 6.2(c)(4) is hereby amended to read as follows:

                  "(4)     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); or"

                21.  Section 6.3(c) is hereby deleted, and Section 6.3(d) is 
hereby redesignated as Section 6.3(c).

                22.  The last sentence of Section 8.3(a) is hereby amended to 
read as follows:

                "For purposes of this Paragraph, if the value of the
                Participant's vested interest in his Company Matching
                Contribution Account upon terminating employment is zero, such
                Participant shall be deemed to have received an immediate
                distribution of such interest."

                23.  Section 8.3(b) is hereby amended to read as follows:

                  "(b)     If a Participant terminates employment prior to
                           Normal Retirement Age for any reason other than on
                           account of Disability or death and his Vested
                           Interest at any time has exceeded $3,500, such
                           Participant shall be entitled to receive his Vested
                           Interest in one or more of the forms of benefit
                           provided under Section 8.5(a). A Participant electing
                           to receive a distribution shall forfeit the unvested
                           portion of his Aggregate Account."

                                       13
<PAGE>   14
                24.  Article 8 is hereby amended by adding the following new 
Section 8.10 at the end thereof:

                  "8.10  Direct Rollovers.

                  (a)      Effective January 1, 1993, a Participant who is
                           entitled to receive an eligible rollover distribution
                           may elect to have such distribution (or a portion
                           thereof not less than Five Hundred Dollars ($500.00))
                           made directly to an eligible retirement plan ("direct
                           rollover election").

                                    An alternate payee who is entitled to
                           receive an eligible rollover distribution pursuant to
                           a qualified domestic relations order under Section
                           8.9 and who is the spouse or a former spouse of a
                           Participant may make a direct rollover election as if
                           such alternate payee were the Participant.

                                    A surviving spouse who is entitled to
                           receive an eligible rollover distribution by reason
                           of the Participant's death may make a direct rollover
                           election; provided that such election is restricted
                           to an eligible retirement plan that is an individual
                           retirement account described in Section 408(a) of the
                           Code or an individual retirement annuity described in
                           Section 408(b) of the Code.

                  (b)      No earlier than ninety (90) days and no later than
                           thirty (30) days before an eligible rollover
                           distribution is to be made, the Plan Administrator
                           shall provide the Participant, alternate payee, or
                           surviving spouse, as the case may be, with a written
                           explanation of:

                                    (i)     the rules under which he may make a
                                            direct rollover election;

                                    (ii)    the legal requirement that federal
                                            income tax be withheld from the
                                            distribution if he does not elect a
                                            direct rollover;

                                    (iii)   the rules under which the amount
                                            that he actually receives will not
                                            be subject to federal income tax if
                                            such amount is transferred ("rolled
                                            over") within sixty (60) days after
                                            being received pursuant to Section
                                            402(c) of the Code;

                                    (iv)    the rules, if applicable, for
                                            receiving special income tax
                                            averaging, or capital gain
                                            treatment, under Section 402(d) of
                                            the Code; and

                                       14
<PAGE>   15
                                    (v)       the Plan provisions under which a
                                              direct rollover election with
                                              respect to one payment in a series
                                              of periodic payments will apply to
                                              all subsequent payments until such
                                              election is changed.

                           Notwithstanding the foregoing to the contrary, if an
                           eligible rollover distribution is one of a series of
                           periodic payments, the explanation required by this
                           Paragraph (b) shall be provided annually as long as
                           such payments continue.

                  (c)      A direct rollover election shall be made in such
                           manner and at such time as the Plan Administrator
                           shall prescribe, and shall include:

                                    (i)     the name of the eligible retirement
                                            plan;

                                    (ii)    a statement that such plan is an
                                            eligible retirement plan; and

                                    (iii)   any other information necessary to
                                            permit a direct rollover by the
                                            means selected by the Plan
                                            Administrator.

                                    An election to make a direct rollover with
                           respect to one payment in a series of periodic
                           payments shall apply to all subsequent payments in
                           the series until such election is changed; such
                           change with respect to subsequent payments may be
                           made at any time.

                  (d)      Notwithstanding Paragraph (b) to the contrary, if an
                           individual, after receiving the written explanation
                           required by subsection (b) affirmatively elects to
                           make or not make a direct rollover, an eligible
                           rollover distribution may be made less than thirty
                           (30) days after the date such written explanation was
                           given, provided the Plan Administrator has informed
                           such individual, in writing, of his right to a period
                           of at least thirty (30) days to make such election.

                  (e)      As used in this Section, the following terms shall
                           have the following
                           meanings:

                                    (i)       `Eligible Retirement Plan' shall 
                                               mean

                                              (A)    an individual retirement
                                                     account, described in
                                                     Section 408(a) of the Code;

                                              (B)    an individual retirement
                                                     annuity described in

                                       15
<PAGE>   16
                                                     Section 408(b) of the Code
                                                     (other than an endowment
                                                     contract);

                                              (C)    a trust described in
                                                     Section 401(a) of the Code
                                                     which is exempt from tax
                                                     under Section 501(a) of the
                                                     Code and which is part of a
                                                     defined contribution plan
                                                     described in Section 414(i)
                                                     of the Code that permits
                                                     rollover contributions; or

                                              (D)    an annuity plan described
                                                     in Section 403(a) of the
                                                     Code.

                                    (ii)      `Eligible Rollover Distribution'
                                              shall mean a distribution from the
                                              Plan of Two Hundred Dollars
                                              ($200.00) or more, excluding the
                                              following:

                                              (A)    a distribution that is one
                                                     of a series of periodic
                                                     payments (not less
                                                     frequently than annually)
                                                     made for a specified period
                                                     of ten (10) years or
                                                     longer, for the
                                                     distributee's life
                                                     expectancy (or the joint
                                                     life expectancy of the
                                                     distributee and his
                                                     designated Beneficiary), or
                                                     for the distributee's life
                                                     (or the joint lives of the
                                                     distributee and his
                                                     designated Beneficiary);

                                              (B)    a required distribution
                                                     pursuant to Section
                                                     401(a)(9) of the Code;

                                              (C)    a return of Salary
                                                     Deferrals pursuant to
                                                     Section 4.4;

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

         25.  Section 9.1 is hereby amended to read as follows:

                  "9.1 Plan Administrator. The general administration of the
         Plan shall be vested in the Plan Administrator, who shall be a named
         fiduciary for purposes of Section 402(a)(1) of ERISA. In performing its
         duties hereunder, the Plan Administrator shall have the fullest
         discretion permitted by law and shall have all powers granted by the
         provisions of the Plan except those specifically granted or allocated
         to the Board, the Trustee and investment manager."

         26.  Section 9.2(i) of the Plan is hereby amended to read as follows:

                                       16
<PAGE>   17
                  "(i)  To select any investment managers;"

         27.  Section 9.3 is hereby amended to read as follows:

                  "9.3 Delegation of Ministerial Duties. The Plan Administrator
         may delegate to any of its members or to any Employee or Employees,
         severally or jointly, the authority to perform any ministerial act in
         connection with the administration of the Plan."

         28.  Section 12.1(a) is hereby amended to read as follows:

                  "(a)     No amendment may be made which would vary the Plan's
                           exclusive purpose of providing benefits to
                           Participants, and their beneficiaries, and defraying
                           reasonable expenses of administering the Plan or
                           which would permit the diversion of any part of the
                           Trust Fund from that exclusive purpose. No amendment
                           shall, except to the extent permit- ted under Section
                           412(c)(8) of the Code, decrease a Participant's
                           Aggregate Account balance or, except to the extent
                           permitted by regulations, eliminate an optional form
                           of benefit. In addition, no amendment shall have the
                           effect of decreasing a Participant's Vested Interest
                           determined without regard to such amendment as of the
                           later of the date such amendment is adopted or the
                           date it becomes effective."

         29.  Section 12.1 is hereby amended by adding the following new 
paragraph at the end thereof:

                  "(d)     If the vesting schedule in effect under the Plan is
                           amended, each Participant who has completed at least
                           three (3) Years of Service may elect to have the
                           vested percentage of such portion of his Aggregate
                           Account determined without regard to such amendment.
                           The Plan Administrator shall promptly give each such
                           Participant written notice of the adoption of any
                           such amendment and the availability of the election
                           to have the vested percentage of such portion of his
                           Aggregate Account determined without regard to such
                           amendment. An election by a Participant shall be in
                           writing and shall be effective if filed with the Plan
                           Administrator at any time during the period beginning
                           with the date such amendment is adopted and ending on
                           the later of (i) the date which is 60 days after the
                           day such amendment is adopted, (ii) the date which is
                           60 days after the day such amendment becomes
                           effective, or (iii) the date which is 60 days after
                           the day the Participant receives written notice of
                           such amendment. An election once made shall be
                           irrevocable. For purposes of this Section, a
                           Participant shall be considered to have completed 3
                           Years of Service if the Participant has

                                       17
<PAGE>   18
                           completed 3 Years of Service prior to the expiration
                           of the period in which an election could be made."

         30.  Except as otherwise provided herein, this Amendment shall be 
effective January 1, 1989.

         IN WITNESS WHEREOF, Peoples Heritage Financial Group, Inc. has caused
this Amendment to be executed by its duly authorized officer on this 23rd day of
May 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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