Document:

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                                                                Exhibit 10(o)(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, 1996, and
subsequently amended by a First Amendment effective as of the dates set forth
therein. The Plan is hereby further amended as set forth herein, effective
January 1, 1997. The terms used in this Amendment shall have the meanings set
forth in the Plan unless the context indicates otherwise.

1.       Section 1.4 shall be amended by adding the following sentences at the
end thereof:

         "For purposes of this Section, 'Earnings' shall mean earnings as
         defined in Section 4.4(a)(iv) and, for Plan Years beginning before
         January 1, 1998, may, at the election of the Plan Administrator,
         include amounts excludable from gross income under Sections 125,
         402(e)(3) and 402(h)(1)(B) of the Code. For Plan Years beginning on or
         after January 1, 1998, the Plan Administrator may elect not to include
         such amounts."

2.       Section 1.5 shall be amended by adding the following sentences at the
end thereof:

         "For purposes of this Section, 'Earnings' shall mean earnings as
         defined in Section 4.4(a)(iv) and, for Plan Years beginning before
         January 1, 1998, may, at the election of the Plan Administrator,
         include amounts excludable from gross income under Sections 125,
         402(e)(3) and 402(h)(1)(B) of the Code. For Plan Years beginning on or
         after January 1, 1998, the Plan Administrator may elect not to include
         such amounts."

3.       Section 1.24 shall be amended to read in its entirety as follows:

                  "1.24 'Forfeiture.' The portion of the Company Matching
         Contribution Account that is forfeited on account of one or more of the
         following events: (a) distribution of a Participant's entire Vested
         Interest in his or her Company Matching Contribution Account under
         Article VIII, (b) the occurrence of the last day of the Plan Year
         coincident with or next following five (5) consecutive Breaks in
         Service, or (c) a reduction of Company Matching Contributions under
         Section 3.7(c). Subject to Section 7.2(c), Forfeitures shall be applied
         to reduce future Company Matching Contributions."

4.       The second paragraph of Section 1.17 shall be amended to read in its
entirety as follows:

                  "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

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         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). Effective for Plan Years beginning before January
         1, 1997, 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.       Section 1.20 shall be amended by adding the following sentences at the
end thereof:

                  "The determination whether an individual is a director or
         independent contractor under clauses (a) and (b) shall be based upon
         the classification by the Employer (without regard to the
         classification of such individual by a third party). Effective upon the
         acquisition of Morse, Payson & Noyes by the Company, individuals
         employed by Morse, Payson & Noyes shall not be Employees under the
         Plan."

6.       Section 1.25 shall be amended to read in its entirety as follows:

                  "1.25. 'Highly Compensated Employee' means, effective January
         1, 1997 (and, on and after such date, for purposes of determining
         whether an employee was a Highly Compensated Employee for the Plan Year
         beginning January 1, 1996), any employee of the Employer or any
         Affiliate who (a) at any time during the Plan Year or the preceding
         Plan Year owns (or is considered to own within the meaning of Section
         318 of the Code, as modified by Section 416(i)(1)(A)(iii) of the Code)
         more than five percent (5%) of the outstanding stock of the Company or
         stock possessing more than five percent (5%) of the total combined
         voting power of all stock of the Company; or (b) for the preceding Plan
         Year received compensation (as defined hereinafter in this Section)
         from the Employer or any Affiliate in excess of eighty thousand dollars
         ($80,000) (or such higher amount as the Secretary of the Treasury may
         prescribe) and was in the group consisting of the top twenty percent
         (20%) of the employees of the Employer and all Affiliates when ranked
         on the basis of compensation paid during the Plan Year. A former
         employee of the Employer or an Affiliate shall be treated as a "highly
         compensated employee" if that employee was a "highly compensated
         employee" when the employee separated from Service or that employee was
         a "highly compensated employee" at any time after attaining age
         fifty-five (55). For purposes of this Section, the term "compensation"
         means Compensation as defined Section 3.10(g)(ii). The determination of
         who is a Highly Compensated Employee, including the number and identity
         of employees in the group consisting of the top twenty percent (20%) of
         employees described above, shall be made in accordance with Section
         414(q) of the Code and the regulations thereunder."

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7.       Section 1.49(a)(ii) shall be amended by the addition of the following
sentence at the end thereof:

                  "Notwithstanding the foregoing to the contrary, in the case of
         a Employee who commences participation in the Plan on or after January
         1, 1998, the computation period for vesting purposes shall be the Plan
         Year."

8.       Section 1.49 shall be amended by the addition of the following
Paragraphs (e), (f) and (g) at the end thereof:

                  "(e) Effective July 1, 1996, all Years of Service with Bank of
         New Hampshire Corporation or Bank of New Hampshire prior to the date on
         which such bank was acquired by the Company shall be recognized for
         participation and vesting purposes under this Plan.

                  "(f) Effective January 1, 1997, all Years of Service with
         Family Bancorp or Family Mutual Savings Bank, FSB, prior to the date on
         which such bank was acquired by the Company shall be recognized for
         participation and vesting purposes under this Plan.

                  "(g) Effective October 1, 1997, all Years of Service with
         Atlantic Bancorp or Atlantic Bank, N.A., prior to the date on which
         such bank was acquired by the Company shall be recognized for
         participation and vesting purposes under this Plan."

9.       Section 2.4 shall be amended by the addition of the following
Paragraphs (c), (d), (e) and (f) at the end thereof:

                  "(c) Each Employee who was previously employed by Bank of New
         Hampshire Corporation or Bank of New Hampshire, 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, 1996, 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. For
         purposes of determining whether an Employee described in this Section
         has completed a Year of Service, his or her service with Bank of New
         Hampshire Corporation or Bank of New Hampshire shall be taken into
         account.

                  "(d) Each Employee who was previously employed by Family
         Bancorp or Family Mutual 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 January 1, 1997, 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. For
         purposes of determining whether an Employee described in this Section
         has completed a Year of Service, his or her service with Family Bancorp
         or Family Mutual Savings Bank, FSB, shall be taken into account.

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                  "(e) Each Employee who was previously employed by Atlantic
         Bancorp or Atlantic Bank, N.A., 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 late of October 1, 1997, 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. For purposes of determining whether an
         Employee described in this Section has completed a Year of Service, his
         or her service with Atlantic Bancorp or Atlantic Bank, N.A., shall be
         taken into account."

10.      Section 3.6 shall be amended to read in its entirety as follows:

                  "3.6 LIMITATIONS ON ACTUAL DEFERRAL PERCENTAGE. In the event a
         Participant 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, 1996, shall not exceed the greater of:

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

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

                           "(b) The sum of the Actual Deferral Percentage for
         Participants who are Highly Compensated Employees and the Contribution
         Percentage for Participants who are Highly Compensated Employees for
         any Plan Year commencing after December 31, 1996, shall not exceed the
         greater of:

                                    "(i) the sum of (A) the greater of the
                  Actual Deferral Percentage for all other Participants for the
                  preceding Plan Year multiplied by 1.25 or the Contribution
                  Percentage for all other Participants for the preceding Plan
                  Year multiplied by 1.25, and (2) the lesser of the Actual
                  Deferral Percentage for all other Participants for the
                  preceding Plan Year plus 2 or the Contribution Percentage for
                  all other Participants for the preceding Plan Year plus 2,
                  provided

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                  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 for the
                  preceding Plan Year multiplied by 1.25 or the Contribution
                  Percentage for all other Participants for the preceding Plan
                  Year multiplied by 1.25, and (2) the greater of the Actual
                  Deferral Percentage for all other Participants for the
                  preceding Plan Year plus 2 or the Contribution Percentage for
                  all other Participants for the preceding Plan Year plus 2,
                  provided that in no event shall such percentage plus 2 exceed
                  such percentage multiplied by 2.

                  "Paragraph (b) of this Section shall not apply if the
         respective Actual Deferral Percentage and Average Contribution
         Percentage of the Highly Compensated Employees for any Plan Year
         commencing after December 31, 1996, does not exceed the respective
         Actual Deferral Percentage and Average Contribution Percentage of all
         other Participants for the preceding Plan Year multiplied by 1.25.

                  "Notwithstanding the foregoing provisions of this Section to
         the contrary, with respect to the Plan Year commencing January 1, 1997,
         the Plan Administrator may elect, pursuant to IRS Notice 97-2, to apply
         Paragraphs (a) and (b) of this Section by substituting the phrase "such
         Plan Year" for the phrase "the preceding Plan Year" in said Paragraphs
         and in the sentence immediately following Paragraph (b).

                  "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. 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 3.8 shall be amended to read in its entirety as follows:

                  "3.8     SPECIAL RULES FOR COMPANY MATCHING CONTRIBUTIONS.

                           "(a) The Contribution Percentage for Participants who
         are Highly Compensated Employees for any Plan Year commencing after
         December 31, 1996, shall not exceed the greater of:

                                    "(i) the Contribution Percentage for all
                  other Participants for the preceding Plan Year multiplied by
                  1.25; or

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                                    "(ii) the lesser of the Contribution
                  Percentage for all other Participants for the preceding Plan
                  Year multiplied by 2, or the Contribution Percentage for such
                  Participants for the preceding Plan Year plus two percent
                  (2%).

                  "Notwithstanding the foregoing provisions to the contrary,
         with respect to the Plan Year beginning January 1, 1997, the Plan
         Administrator may elect, pursuant to IRS Notice 97-2, to apply this
         Paragraph (a) by substituting the phrase "such Plan Year" for the
         phrase "the preceding Plan Year."

                           "(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) 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.

                           "(d) 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.

                           "(e) For purposes of this Section, Company Matching
         Contributions shall 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.

                           "(f) In the event that the Average Contribution
         Percentage of the Participants who are Highly Compensated Employees for
         any Plan Year exceeds the limitation of Paragraph 3.8 (a) above, the
         Plan Administrator shall, within two and one

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         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.

                           "(g) 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 IV.

                           "(h) 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 amounts, beginning with the highest
         such amount. 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."

12.      Section 3.10 shall be amended by deleting the phrase "and the amount
transferred is One Thousand Dollars ($1,000) or more" wherever such phrase
appears in Section 3.10.

13.      Section 4.4(a)(iv) shall be amended by adding at the end thereof the
following paragraph:

                  "For Limitation Years beginning after December 31, 1997, for
         purposes of applying the limitations of this Section 4.4, 'earnings'
         for a Limitation Year shall also include any elective deferrals within
         the meaning of Section 402(g)(3) of the Code and any amount that is
         contributed or deferred by the Employer or an Affiliate at the election
         of an Employee and which is not includable in the gross income of the
         Employee by reason of Section 125 of the Code."

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14.      Section 6.1 shall be amended to read in its entirety as follows:

                  "6.1 IN-SERVICE WITHDRAWALS. A Participant may withdraw all or
         any part of his or her Vested Interest attributable to Salary Deferrals
         and Rollover Contributions after attaining 59 1/2 years of age and,
         effective January 1, 1998, may withdraw all or any part of his or her
         Vested Interest in his or her Aggregate Account after attaining Normal
         Retirement Age. The Plan Administrator shall establish reasonable
         procedures for handling withdrawal requests under this section."

15.      Effective January 1, 1998, Section 6.3 shall be amended to read in its
entirety as follows:

         "6.3 LOANS. The Plan Administrator may, upon the request of a
Participant or Beneficiary who is a "party in interest" as defined in Section
3(14) of ERISA, direct the Trustee to make a loan to such Participant or
Beneficiary from the Participant's Salary Deferral Contribution Account, Company
Matching Contribution Account, and Rollover Contribution Account, if any,
subject to the following:

                  "(a) The amount of each loan shall be determined with
reference to the fair market value of the Participant's Aggregate Account as of
the most recent Valuation Date for which valuation data has been received by the
Plan Administrator.

                  "(b) Any loan made on or after January 1, 1987, when added to
the balance of all other outstanding loans with respect to a Participant's
Aggregate Account, shall not exceed the lesser of:

                                    "(i) Fifty Thousand Dollars ($50,000),
                  reduced by the excess, if any, of:

                                            "(A) the Participant's highest
                           outstanding loan balance under the Plan for the one
                           (1) year period ending on the day before such loan is
                           made, over

                                            "(B) the Participant's loan balance
                           under the Plan on the day such loan is made, or

                                    "(ii) Fifty percent (50%) of the sum of the
                  Participant's Salary Deferral Contribution Account, the
                  nonforfeitable portion of his or her Company Matching
                  Contribution Account, and his or her Rollover Contribution
                  Account.

"The total unpaid balance of all loans (including accrued but unpaid interest)
made with respect to a Participant's Aggregate Account under the Plan and all
other qualified plans maintained by his or her Employer shall not exceed the
maximum amount permitted under Section 72(p) of the Code.

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                  "(c) Effective January 1, 1998, no loan shall be made in an
amount less than One Thousand Dollars ($1,000), nor shall a loan be made if a
Participant has any other loan outstanding with respect to his or her Aggregate
Account under the Plan.

                  "(d) Each loan shall be evidenced by a promissory note bearing
a reasonable rate of interest as determined by the Plan Administrator, taking
into consideration interest rates currently being charged by commercial lenders
for loans made under similar circumstances, and shall be adequately secured in
such manner as the Plan Administrator may determine. Collateral for a loan may
consist of an assignment of not more than fifty percent (50%) of a Participant's
Vested Interest in his or her Aggregate Account, provided such collateral
adequately secures repayment of the loan. In the event of a default on a loan,
the Plan Administrator shall, after giving the Participant or Beneficiary
written notice of the default and an opportunity to cure the default, in
accordance with the terms and conditions of such loan, foreclose upon the
collateral to the extent necessary to satisfy the Participant's obligation. If
the collateral for such loan is the Participant's interest in his or her
Aggregate Account, such foreclosure may not occur prior to the Participant's
termination of employment.

                  "(e) Each loan shall be made for such term and, subject to (d)
above, upon such terms and conditions as the Plan Administrator shall determine;
provided that substantially level amortization, with payments not less
frequently than quarterly, shall be required over the term of any loan; and
further provided that the term shall not exceed five (5) years unless the loan
is used to acquire a principal residence for the Participant, in which case the
term shall not exceed fifteen (15) years.

                  "(f) Each loan to a Participant or Beneficiary shall be
treated and accounted for as an investment of such Participant's Aggregate
Account, and loans shall be charged against the Investment Funds in which the
Participant's Aggregate Account is invested as of the date such loan is made.
Amounts of principal and interest paid on any loan shall be transferred to the
Investment Funds in accordance with the Participant's investment direction in
effect at the time of payment.

                  "(g) No loan shall be made to any owner-employee or
shareholder-employee. For purposes of this subsection (g), an "owner-employee"
means a self-employed individual who is a sole proprietor or who is a partner in
an Employer who owns more than ten percent (10%) of either the capital or
profits interest in such Employer, and a "shareholder-employee" means an
employee or officer of an electing small business corporation (S corporation)
who owns (or is considered as owning within the meaning of Section 318(a)(1) of
the Code), on any day during the taxable year of such corporation, more than
five percent (5%) of the outstanding stock of the corporation.

                  "(h) No distribution (other than a deemed distribution under
Section 72(p) of the Code) shall be made to any Participant or Former
Participant or to a Beneficiary of any Participant until all unpaid loans with
respect to the Participant's Aggregate Account, including accrued interest
thereon, have been paid in full. In the event a Participant or Beneficiary
becomes entitled to a distribution of his or her Aggregate Account under the
Plan, and at the

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time of such distribution there remain outstanding any unpaid loans with respect
to his or her Aggregate Account, then

                                    "(i) such unpaid loan shall be treated as
                  due and payable immediately as of the date distribution is
                  made or commences;

                                    "(ii) the Aggregate Account of the
                  Participant or Beneficiary shall be reduced prior to any such
                  distribution by the amount of the principal and accrued
                  interest outstanding on such loan;

                                    "(iii) the loan shall be deemed to be paid
                  in full as of the date the distribution is made or commences;
                  and

                                    "(iv) such Participant or Beneficiary shall
                  be treated as receiving or commencing to receive a
                  distribution of his or her entire Aggregate Account.

                  "(i) The Plan Administrator shall suspend the obligation to
repay any loan made to a Participant pursuant to this Section 6.3 for any period
during which such Participant is performing service in the uniformed services
(within the meaning of the Uniformed Services Employment and Reemployment Rights
Act), and such suspension shall not be taken into account for purposes of
Sections 72(p), 401(a), or 4975(d)(1) of the Code.

                  "(j) The Plan Administrator shall follow a uniform and
nondiscriminatory policy in making loans to assure that loans are available to
all Participants and Beneficiaries who are "parties in interest" on a reasonably
equivalent basis as required under 29 C.F.R. Section 2550.408b-1 and to further
assure that the Plan meets the requirements of Section 401(a)(4) of the Code.

                  "(k) The Plan Administrator shall establish, in writing,
administrative procedures to carry out the provisions of this Section 6.3. A
request for a loan shall be made by such written, telephonic or electronic means
as may be prescribed by the Plan Administrator.

                           "(l) The provisions of this Section shall be
         applicable to loans granted or renewed under the Plan on or after
         January 1, 1998, and loans granted or renewed prior to such date shall
         be governed by the provisions of the Plan as in effect on the date of
         such grant or renewal; provided that, with respect to a Predecessor
         Plan Account, the provisions of this Section shall be applicable to
         loans granted or renewed after the Plan Affiliation Date, if later."

16.      Section 8.3(a) and (b) shall be amended to read in their entirety as
follows:

                  "8.3     BENEFIT ON TERMINATION OF EMPLOYMENT.

                           "(a) If a Participant terminates his or her
         employment prior to Normal Retirement Age for any reason other than on
         account of Disability or death, and his or her Vested Interest has
         never exceeded the applicable cash-out amount, such Participant shall

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         receive a single lump sum payment in cash equal to his or her Vested
         Interest as soon as administratively feasible after the Valuation Date
         following such termination of employment. The remaining nonvested
         portion of such Participant's Aggregate Account shall be immediately
         forfeited. For purposes of this Paragraph, if the value of the
         Participant's vested interest in his or her Company Matching
         Contribution Account upon terminating employment is zero, such
         Participant shall be deemed to have received an immediate distribution
         of such interest.

                           "(b) If a Participant terminates employment prior to
         Normal Retirement Age for any reason other than on account of
         Disability or death and his or her Vested Interest at any time has
         exceeded the applicable cash-out amount, such Participant shall be
         entitled to receive his or her 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 nonvested portion of his or
         her Aggregate Account.

         "For purposes of Paragraphs (a) and (b), the 'applicable cash-out
         amount' means three thousand five hundred dollars ($3,500) before
         January 1, 1998, and five thousand dollars ($5,000) (or such higher
         amount as may be permitted by Code Section 417(e)(1) on or after
         January 1, 1998."

17.      The first sentence of Section 8.5(b) shall be amended to read in its
entirety as follows:

                  "(b) Any distribution to a Participant who has a Vested
         Interest that exceeds the applicable cash-out amount (within the
         meaning of Section 8.3), or that exceeded the applicable cash-out
         amount at the time of any prior distribution, shall require such
         Participant's written consent if such distribution commences prior to
         Normal Retirement Age."

18.      Section 8.5(c)(i) shall be amended to read in its entirety as follows:

                  "(i) A Participant's benefits shall be distributed commencing
         not later than the required beginning date or shall be distributed,
         beginning not later than the required beginning date, over a period not
         extending beyond the life expectancy of such Participant or the life
         expectancy of the Participant and the joint annuitant of the
         Participant. For purposes of this Paragraph (c), the required beginning
         date is the date prescribed by Section 401(a)(9) with respect to the
         Participant."

19.      Section 14.2 shall be amended to read in its entirety as follows:

                           "14.2 PREDECESSOR PLANS. The plans identified on
                  Appendix A to the Plan shall be Predecessor Plans as of their
                  respective Plan Affiliation Dates stated therein."

20.      Article XIV shall be amended by the  addition of new Sections  14.5 and
14.6 at the end thereof, reading in their entirety as follows:

                                       11
<PAGE>   12

                  "14.5 DISTRIBUTION OF PREDECESSOR PLAN ACCOUNTS.
         Notwithstanding any other provision of the Plan to the contrary, with
         respect to his or her Predecessor Plan Account only, and in lieu of the
         methods of distribution described in Sections 6.1, 6.2 and Article
         VIII, a Predecessor Plan Participant may elect an optional form of
         payment made available under the applicable Predecessor Plan as in
         effect immediately prior to the Plan Affiliation Date. For purposes of
         this Section, an "optional form of payment" is a distribution form with
         respect to a Predecessor Plan Account, including all features relating
         to such form that are protected under Section 411(d)(6) of the Code and
         Treasury Regulation Section 1.411(d)-4.

                  "14.6 PREDECESSOR PLAN ACCOUNTS SUBJECT TO SURVIVOR ANNUITY
         REQUIREMENTS. The Plan shall be a "transferee plan" (within the meaning
         of Treasury Regulation Section 1.401(a)-20) with respect to each
         Predecessor Plan Account attributable to the SBERA 401(k) Plan As
         Adopted by Family Mutual Savings Bank, and each other Predecessor Plan
         Account that may be held under this Plan as a result of a merger,
         spinoff, or other transaction having the effect of a transfer that is
         subject to the survivor annuity requirements of Sections 401(a)(11) and
         417 of the Code. Notwithstanding any other provision of the Plan to the
         contrary, if the Plan is a transferee plan with respect to any portion
         of a Participant's Aggregate Account, then his or her entire Aggregate
         Account shall be subject to such survivor annuity requirements and,
         with respect to such requirements, shall be administered in accordance
         with the applicable Predecessor Plan as in effect on the date
         immediately preceding the Plan Affiliation Date. Each such Aggregate
         Account shall be accounted for in the manner described in Treasury
         Regulation Section 1.401(a)-20, Q&A-5(b)."

21.      Section 16.2 shall be amended to read in its entirety as follows:

                  "16.2    NON-ASSIGNABILITY OF THE RIGHT TO RECEIVE BENEFITS.

                           "(a) Except with respect to the creation, assignment,
         or recognition of a right to a benefit payable with respect to a
         Participant pursuant to a Qualified Domestic Relations Order under
         Section 8.9, and subject to Paragraph (b), no benefit payable under the
         Plan to any person shall be subject in any manner to anticipation,
         alienation, sale, transfer, assignment, pledge, encumbrance, or charge,
         and any attempt to anticipate, alienate, sell, transfer, assign,
         pledge, encumber, or charge the same shall be void. No such benefit
         shall be in any manner liable for, or subject to, the debts, contracts,
         liabilities, engagements, or torts of any person nor shall it be
         subject to attachment or legal process for or against any person, and
         the same shall not be recognized under the Plan, except to the extent
         as may be provided pursuant to a Qualified Domestic Relations Order or
         an order or requirement to pay described in Paragraph (b), or otherwise
         required by law.

                           "(b) Effective August 5, 1997, Paragraph (a) shall
         not apply to any offset of a Participant's Aggregate Account balance
         against an amount that the Participant is ordered or required to pay to
         the Plan, and the Plan shall not be treated as failing to

                                       12
<PAGE>   13

         meet the requirements of Code Sections 401(a)(13) or 409(d) solely by
         reason of such an offset, provided:

                                    "(i) the order or requirement to pay arises
                  (A) under a judgment of conviction for a crime involving the
                  Plan; (B) under a civil judgment (including a consent order or
                  decree) entered by a court in an action brought in connection
                  with a violation (or alleged violation) of Part 4 of Subtitle
                  B of Title I of ERISA; or (C) pursuant to a settlement
                  agreement between the Secretary of Labor and the Participant,
                  or a settlement agreement between the Pension Benefit Guaranty
                  Corporation and the Participant, in connection with a
                  violation (or alleged violation) of Part 4 of Subtitle B of
                  Title I of ERISA by a fiduciary or any other person;

                                    "(ii) the judgment, order, decree or
                  settlement agreement expressly provides for the offset of all
                  or a part of the amount ordered or required to be paid to the
                  Plan against the Participant's Aggregate Account balance; and

                                    "(iii) in the event that the survivor
                  annuity requirements of Code Section 401(a)(11) apply with
                  respect to distribution of the Participant's Aggregate
                  Account, if the Participant has a spouse at the time at which
                  the offset is to be made, the requirements of Code Section
                  401(a)(13)(C)(iii) are satisfied."

22.      Article XVI shall be amended by the addition of new Section 16.10 at
the end thereof, reading in its entirety as follows:

                  "16.10 USERRA REQUIREMENTS. Notwithstanding any provision of
         this Plan to the contrary, contributions, benefits and service credit
         with respect to qualified military service will be provided in
         accordance with Section 414(u) of the Code."

23.      Appendix A shall be amended to read in its entirety in the manner
appended to this Second Amendment.

                              * * * * * * * * * * *

         IN WITNESS WHEREOF, to record the adoption of this Second Amendment as
of the effective date stated herein, Peoples Heritage Financial Group, Inc. has
caused this instrument to be executed by its duly authorized officer this 18th
day of December, 1997.

                                          PEOPLES HERITAGE FINANCIAL GROUP, INC.

                                          By /s/ Carol Mitchell
                                             -----------------------------------
                                             Its Senior Vice President

                                       13
<PAGE>   14

                     PEOPLES HERITAGE FINANCIAL GROUP, INC.
                              THRIFT INCENTIVE PLAN
                                   APPENDIX A

         Each of the following Schedules sets forth certain benefits, rights,
and features under Predecessor Plans that remain in effect solely with respect
to a Participant's Predecessor Plan Account in accordance with Article XIV of
the Plan, and, to the extent applicable with respect to any Predecessor Plan
Participant, for purposes of Section 14.6 of the Plan.

<TABLE>
<CAPTION>
SCHEDULE                                    PREDECESSOR PLAN                          PLAN AFFILIATION DATE
--------                                    ----------------                          ---------------------
<C>                 <C>                                                               <C>
1                   Mid Maine Savings Bank, FSB 401(k) Savings Plan                   January 1, 1996
2                   Bank of New Hampshire Corporation Tax Deferred Savings &          July 1, 1996
                    Investment Plan
3                   SBERA 401(k) Plan As Adopted By Family Mutual Savings Bank        April 1, 1997
4                   Atlantic Bank 401(k) Profit Sharing Plan                          December 1, 1997
</TABLE>

                                 SCHEDULE NO. 1

                                 RELATING TO THE
                 MID MAINE SAVINGS BANK, FSB 401(K) SAVINGS PLAN

         The Mid Maine Savings Bank, FSB 401(k) Savings Plan (the "Mid Maine
Plan") was merged into the Plan effective January 1, 1996. The provisions of the
Mid Maine Plan remaining in effect under Article XIV of this Plan with respect
to the Predecessor Plan Account of a participant in the Mid Maine Plan on
December 31, 1995, shall be as set forth in the Mid Maine Plan as in effect on
such date, which is incorporated by reference herein.

                                 SCHEDULE NO. 2
                RELATING TO THE BANK OF NEW HAMPSHIRE CORPORATION
                     TAX DEFERRED SAVINGS & INVESTMENT PLAN

         The Bank of New Hampshire Corporation Tax Deferred Savings & Investment
Plan (the "Bank of New Hampshire Plan") was merged into the Plan effective July
1, 1996. The provisions of the Bank of New Hampshire Plan remaining in effect
under Article XIV of this Plan with respect to the Predecessor Plan Account of a
participant in the Bank of New Hampshire Plan on June 30, 1996, shall be as set
forth in the Bank of New Hampshire Plan as in effect on such date, which is
incorporated by reference herein.

                                 SCHEDULE NO. 3
                        RELATING TO THE SBERA 401(K) PLAN
                    AS ADOPTED BY FAMILY MUTUAL SAVINGS BANK

                                       14
<PAGE>   15

         The SBERA 401(k) Plan as Adopted By Family Mutual Savings Bank (the
"Family Bank Plan") was merged into the Plan effective April 1, 1997. The
provisions of the Family Bank Plan remaining in effect under Article XIV of this
Plan with respect to the Predecessor Plan Account of a participant in the Family
Bank Plan on March 31, 1997, shall be as set forth in the Family Bank Plan as in
effect on such date, which is incorporated by reference herein.

                                 SCHEDULE NO. 4
            RELATING TO THE ATLANTIC BANK 401(K) PROFIT SHARING PLAN

         The Atlantic Bank 401(k) Profit Sharing Plan (the "Atlantic Bank Plan")
shall be merged into the Plan effective December 1, 1997. The provisions of the
Atlantic Bank Plan remaining in effect under this Plan with respect to the
Predecessor Plan Account of a participant in the Atlantic Bank Plan on November
30, 1997, shall be as set forth in the Atlantic Bank Plan as in effect on such
date, which is incorporated by reference herein.

                                       15<PAGE>   1
                                                                Exhibit 10(o)(4)

                             THIRD 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, 1996, and
subsequently amended by a First Amendment effective as of the dates set forth
therein and a Second Amendment effective January 1, 1997. The terms used in this
Third Amendment shall have the meanings set forth in the Plan unless the context
indicates otherwise.

1.       Section 1.49 shall be amended by the addition of the following
Paragraph (h) at the end thereof:

                  "(h) Effective July 1, 1998, all Years of Service credited to
         an Employee under the CFX Corporation Employees' Savings & Profit
         Sharing Plan (the "CFX Plan") or the Concord Savings Bank 401(k) Plan
         (the "Concord Plan") as of the date on which CFX Corporation and its
         subsidiaries were acquired by the Company shall be recognized for
         participation and vesting purposes under this Plan."

2.       Section 2.4 shall be amended by the addition of the following Paragraph
(g) at the end thereof:

                  "(g) (i) Each Employee who was previously employed by CFX
         Corporation or any of its subsidiaries (collectively, "CFX"),
         immediately prior to the date on which CFX was acquired by the Company,
         shall be eligible to participate in the Plan as of the later of July 1,
         1998, or the first day of the Calendar Quarter coincident with or next
         following completion of a Year of Service, provided that either (A) a
         Participation Agreement has been filed with the Plan Administrator by
         the fifteenth day of the month immediately preceding such Calendar
         Quarter or (B) clause (ii) or (iii) applies to the Employee. For
         purposes of determining whether an Employee described in this Section
         has completed a Year of Service, his or her service credited under the
         CFX Plan or the Concord Plan shall be taken into account.

                           "(ii) Notwithstanding clause (i) to the contrary, if
         an Employee described in clause (i) is both employed by any former CFX
         subsidiary except Safety Fund National Bank on June 30, 1998, and a
         participant receiving elective deferrals under the CFX Plan or the
         Concord Plan on such date, then his or her deferral election in effect
         under the applicable plan on such date shall constitute his or her
         initial Participation Agreement under this Plan, provided that any
         terms of such deferral election that are not consistent with the
         provisions of this Plan shall be of no effect hereunder, and provided
         further that the Employee may file a new Participation Agreement in
         accordance with clause (i).

                  "(iii) Notwithstanding clause (i) to the contrary, if an
Employee described in clause (i) is both employed by Safety Fund National Bank
on May 22, 1998, and a participant receiving elective deferrals under the CFX
Plan on such date, then such Employee shall be eligible to participate in this
Plan as of May 22, 1998, and his or her deferral election in effect under the
CFX Plan on such date shall constitute his or her initial Participation
Agreement under

<PAGE>   2

this Plan, provided that any terms of such deferral election that are not
consistent with the provisions of this Plan shall be of no effect hereunder."

         IN WITNESS WHEREOF, to record the adoption of this Third Amendment as
of the effective date stated herein, Peoples Heritage Financial Group, Inc. has
caused this instrument to be executed by its duly authorized officer this 22nd
day of May, 1998.

                                          PEOPLES HERITAGE FINANCIAL GROUP, INC.

                                          By /s/ Carol Mitchell
                                          --------------------------------------
                                          Its Executive Vice President

                                       2

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