EX-10.(A)
WILLIAM J. RYAN SEVERANCE AGREEMENT
 
                                                                EXHIBIT 10(a)
                               AMENDED & RESTATED
                       WILLIAM J. RYAN SEVERANCE AGREEMENT
         This AGREEMENT, made and entered into as of the 1st day of January,
1995, by and among PEOPLES HERITAGE FINANCIAL GROUP, INC. (the "Company") and
WILLIAM J. RYAN (the "Executive");
                              W I T N E S S E T H:
         WHEREAS, the Executive is employed by the Company in a key executive
capacity and possesses intimate knowledge of the business and affairs of the
Company; and
         WHEREAS, the Company desires to ensure, insofar as possible, that it
will continue to have the benefit of the Executive's services and to protect its
confidential information and goodwill; and
         WHEREAS, the Company recognizes that circumstances may arise in which a
change in the control of the Company occurs, thereby causing uncertainty of
employment without regard to the Executive's competence or past contributions;
and
         WHEREAS, the Company and the Executive wish to provide reasonable
security to the Executive against changes in the Executive's relationship with
the Company in the event of such change in control;
         NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
 1.      Definitions
         (a)      Accrued Benefit means:
                  (i)      All salary earned or accrued through the date the
                           Executive's employment is terminated;
                  (ii)     reimbursement for any and all monies advanced in
                           connection with the Executive's employment for
                           reasonable and necessary expenses incurred by the
                           Executive through the date the Executive's employment
                           is terminated;
                  (iii)    any and all other compensation previously earned and
                           deferred at the election of the Executive or pursuant
                           to any deferred compensation plans then in effect
                           together with any interest or desired earnings
                           thereon;
                  (iv)     annual bonus, if any, accrued for a Year prior to the
                           Year in which employment terminates, but not yet paid
                           to the Executive, under any bonus or incentive
                           compensation plan or plans in which the Executive is
                           a participant;
                  (v)      a pro rata portion of the maximum bonus payable to
                           the Executive for the Year in which employment
                           terminates under any bonus or incentive compensation
                           plan or plans in which the Executive is a
                           participant, determined as if the Executive had
                           remained in employment for the full Year and prorated
                           based upon weeks, partial weeks, of employment during
                           that Year;
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                  (vi)     all other payments and benefits to which the
                           Executive may be entitled under the terms of any
                           applicable compensation arrangement or benefit plan
                           or program of the Company.
         (b)      Act means the Securities Exchange Act of 1934, as amended.
         (c)      Affiliate of any specified persons means any other person
that, directly or indirectly, through one or more intermediaries, controls, or
is controlled by, or is under direct or indirect common control with such
specified person. For the purposes of this definition, "control" means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
         (d)      Annual Compensation.  Annual compensation shall mean the sum 
of:
                  (i)      the Executive's annual salary at the rate in effect
                           on the date of a termination of employment as
                           described in Section 3 or in Section 7(d) (or, in the
                           event of a termination for Good Reason under Section
                           l (k) (i) (A) below, the annual salary as in effect
                           immediately before the actions giving rise to Good
                           Reason); plus
                  (ii)     the greatest of the bonuses either paid or accrued in
                           either the Year of the Change in Control or the
                           immediately preceding Year.
         (e) Base Amount means an amount equal to the Executive's Annualized
Includable Compensation for the Base Period as defined in Section 28OG (d) (1)
and (2) of the Code (as hereinafter defined).
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         (f) Cause means (i) the executive's conviction of, or plea of nolo
contendere to, a felony; or (ii) willful and intentional misconduct, willful
neglect, or gross negligence, in the performance of the Executive's duties,
which has caused a demonstrable and serious injury to the Company, monetary or
otherwise.
         The Executive shall be given written notice that the Company intends to
terminate his employment for Cause. Such written notice shall specify the
particular acts, or failures to act, on the basis of which the decision to so
terminate employment was made.
         In the case of a termination for Cause as described in Clause (ii),
above, the Executive shall be given the opportunity within 30 days of the
receipt of such notice to meet with the Board to defend such acts, or failures
to act, prior to termination. The Company may suspend the Executive's title and
authority pending such meeting, and such suspension shall not constitute "Good
Reason," as defined in subsection (k) below.
         (g) Change in Control of the Company shall mean a Change in Control of
a nature that would be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A promulgated under the Act or any successor
thereto, provided that without limiting the foregoing, a Change in Control of
the Company also shall be deemed to have occurred if:
                  (i)      any "person" (as defined under Section 3 (a) (9) of
                           the Act) or "group" of persons (as provided under
                           Rule 13d-3 of the Act) is or becomes the "beneficial
                           owner" (as defined in Rule 13d-3 or otherwise under
                           the Act), directly or indirectly (including as
                           provided in Rule 13d-3 (d) (1) of the Act), of
                           capital stock of the Company the holders of which are
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                           entitled to vote for the election of directors
                           ("voting stock") representing that percentage of the
                           Company's then outstanding voting stock (giving
                           effect to the deemed ownership of securities by such
                           person or group, as provided in Rule 13d-3 (d) (1) of
                           the Act, but not giving effect to any such deemed
                           ownership of securities by another person or group)
                           equal to or greater than thirty-five percent (35%) of
                           all such voting stock;
                  (ii)     individuals who constitute the Board on the date
                           hereof (the "Incumbent Board") cease for any reason
                           to constitute at least a majority thereof. Any person
                           becoming a director subsequent to such date whose
                           election, or nomination for election, is, at any
                           time, approved by a vote of at least a majority of
                           the directors comprising the Incumbent Board shall be
                           considered as though he were a member of the
                           Incumbent Board;
                  (iii)    The Company combines with another person or entity,
                           whether through a merger, asset sale, reorganization
                           or otherwise, and (A) any person or group of persons
                           holds at any time after such combination, voting
                           stock equal to or greater than thirty-five percent
                           (35%) determined by reference to the voting
                           securities of the surviving entity, or (B) the
                           Company's directors, as of the date immediately
                           before such combination, constitute less than a
                           majority of the Board of Directors of the combined
                           entity.
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         (h) Code means the Internal Revenue Code of 1986, including any
amendments thereto.
         (i) Effective Date means the date this Agreement is executed by the
parties.
         (j) Employment Period means a period commencing on the date of a Change
in Control of the Company and ending on the earlier of (i) the last day of the
twenty-fourth month following the month in which the Change in Control occurs,
or (ii) the Executive's Normal Retirement Date.
         (k) Good Reason means:
                  (i)      any breach of this Agreement by the Company,
                           including without limitation (A) any reduction during
                           the employment period in the amount of the
                           Executive's base salary or aggregate benefits as in
                           effect from time to time, (B) failure to provide the
                           Executive with the same fringe benefits that were
                           provided to the Executive immediately prior to a
                           Change in Control of the Company, or with a package
                           of fringe benefits (including paid vacations) that,
                           though one or more of such benefits may vary from
                           those in effect immediately prior to such a Change in
                           Control, is substantially comparable in all material
                           respects to such fringe benefits taken as a whole, or
                           (C) any other breach by the Company of its
                           obligations contained in Section 6 below;
                  (ii)     without the Executive's express written consent, the
                           assignment to the Executive of any duties which are
                           materially inconsistent with the Executive's
                           positions, duties, responsibilities and status
                           immediately
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                           prior to the Change in Control of the Company, a
                           material change in the Executive's reporting
                           responsibilities, titles or offices as an employee
                           and as in effect immediately prior to the Change in
                           Control, or a significant reduction, in the
                           Executive's title, duties or responsibilities, or in
                           the level of his support services;
                  (iii)    the relocation of the Executive's principal place of
                           employment, without the Executive's written consent,
                           to a location outside the same metropolitan area in
                           which the Executive was employed at the time of such
                           Change in Control, or the imposition of any
                           requirement that the Executive spend more than ninety
                           business days per year at a location other than such
                           principal place of employment;
                  (iv)     any purported termination of the Executive's
                           employment for Cause, Disability or Retirement which
                           is not effected pursuant to a Notice of Termination
                           satisfying the requirements of paragraph (m) below;
                           or
                  (v)      a change in the ownership of the Company (either
                           accompanying or following the Change in Control),
                           such that the Executive's duties, reporting
                           responsibilities, or authority is no longer
                           consistent with those of an executive of an
                           independent company.
          Upon the occurrence of any of the events described in (i), (ii),
(iii), (iv) or (v) above, the Executive shall give the Company written notice
that such event constitutes Good Reason, and the Company shall thereafter have
thirty (30) days in which to cure. If the Company has not cured in that time,
the event shall constitute Good Reason.
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         (1) Normal Retirement Date means Normal Retirement Date as defined in
the Peoples Heritage Financial Group, Inc. Retirement Plan.
                  (m) Notice of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision relied upon in this Agreement and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.
         (n) Person or Group means a "Person" or "group," as defined in Section
i (g) (i) hereof.
         (o) Year means a calendar year unless otherwise specifically provided.
         2. Term of Agreement. This Agreement shall begin on the date first set
forth above and shall continue until the third anniversary of such date,
provided that, on such third anniversary, and each succeeding anniversary, the
term shall be renewed for an additional period of one year unless either party
has given written notice that the term is not so renewed, which notice must be
delivered to the other party at least one year prior to the date of any such
renewal, and further provided that if a Change in Control of the Company occurs
during such term, the term shall in all events continue through the last day of
the Employment Period. This Agreement is also subject to earlier termination as
provided in Section 3 below. All rights and obligations hereunder shall survive
to the extent necessary to the intended enforcement thereof.
         3. Termination of Employment Prior to a Change in Control,.
                  (a) The Company and the Executive shall each retain the right
to terminate
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the employment of the Executive at any time prior to a Change in Control of the
Company. In the event the Executive's employment is terminated prior to a Change
in Control of the Company, this Agreement shall, except as provided in
Subsection (b) below, be terminated and of no further force and effect, and any
and all rights and obligations of the parties hereunder shall cease.
                  (b) If the Executive's employment is terminated by the Company
prior to the occurrence of a Change in Control of the Company, and if it can be
shown that the Executive's termination (i) was at the direction or request of a
third party that had taken steps reasonably calculated to effect the Change in
Control of the Company thereafter, or (ii) otherwise occurred in connection
with, or in anticipation of, the Change in Control of the Company, the Executive
shall have the rights described in Section 7(d) below, as if a Change in Control
of the Company had occurred on the date immediately preceding such termination.
         4. Employment Following a Change in Control. If a Change in Control of
the Company occurs when the Executive is employed by the Company, the Company
will continue thereafter to employ the Executive, and the Executive will remain
in the employ of the Company, during the Employment Period, in accordance with
the terms and provisions of this Agreement.
         5. Duties. During the Employment Period, the Executive shall serve in
such capacities and positions as may be assigned by the Company consistent with
the Executive's capacities and positions on the Effective Date and shall devote
the Executive's best efforts and all of the Executive's business time, attention
and skill to the business and affairs of the
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Company, as such business and affairs now exist and as they may hereafter be 
conducted.
         6. Compensation. During the Employment Period, the Executive shall be
compensated by the Company as follows:
                  (a) the Executive shall receive, at such intervals and in
accordance with such standard policies as in effect on the date of the Change in
Control of the Company, an annual salary not less than the Executive's annual
salary as in effect on the date of the Change in Control of the Company, subject
to adjustment as hereinafter provided;
                  (b) the Executive shall be included in all plans providing
incentive compensation to executives, including but not limited to bonus,
deferred compensation, annual or other incentive compensation, supplemental
pension, stock ownership, stock option, stock appreciation, stock bonus and
similar or comparable plans as any such plans are extended by the Company from
time to time to senior corporate officers, key employees and other employees of
comparable status;
                  (c) the Executive shall be reimbursed, at such intervals and
in accordance with such standard policies as may be in effect on the date of the
Change in Control of the Company, for any and all monies advanced in connection
with the Executive's employment for reasonable and necessary expenses incurred
by the Executive on behalf of the Company, including travel expenses;
                  (d) the Executive shall be included, to the extent eligible
thereunder, in any and all plans providing but not limited to, group life
insurance, hospitalization, disability, medical, dental, pension, profit sharing
and stock bonus plans, and shall be provided any and all other benefits and
perquisites made available to other employees of comparable status
                                       10
and position at the expense of the Company on a comparable basis;
                  (e) the Executive shall receive annually not less than the
amount of paid vacation and not fewer than the number of paid holidays received
annually immediately prior to the Change in Control of the Company or available
annually to other employees of comparable status and position with the Company;
and
                  (f) During the Employment Period the Board of Directors of the
Company, or an appropriate committee thereof, will consider and appraise, at
least annually, the contributions of the Executive to the Company's operating
efficiency, growth, production and profits and, in accordance with past
practice, due consideration shall be given to the upward adjustment of the
Executive's compensation rate, at least annually, commensurate with increases
generally given to other senior corporate officers and key employees and as the
scope of the Executive's duties expands.
         7. Termination of Employment. Any termination by the Company or the
Executive of the Executive's employment during the Employment Period shall be
communicated by written Notice of Termination to the Executive if such notice is
delivered by the Company and to the Company if such notice is delivered by the
Executive. The Notice of Termination shall comply with the requirements of
Section 17 below.
                  (a) Termination for Disability. If during the Employment
Period, the Executive's employment is terminated on account of the Executive's
disability, as determined under the Company's long-term disability plan (as in
effect on the date of a Change in Control of the Company), the Executive shall
receive any Accrued Benefits, and shall remain eligible for all benefits as
provided pursuant to the terms of any long-term
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disability programs of the Company in effect at the time of such termination.
                  (b) Termination on the Executive's Death. If, during the
Employment Period, the Executive's employment is terminated on account of the
Executive's death, the Executive's estate or his designated beneficiary (or
beneficiaries), as applicable, shall receive all the Executive's Accrued
Benefits.
                  (c) Voluntary Termination or Termination for Cause. If, during
the Employment Period, (i) the Executive shall terminate employment with the
Company other than for Good Reason, or (ii) the Executive's employment is
terminated for Cause, the Executive shall receive from the Company his Accrued
Benefits.
                  (d) Termination by the Company Without Cause or by the
Executive for Good Reason. If, during the Employment Period, the Executive's
employment with the Company is terminated by the Company other than for Cause,
or by the Executive for Good Reason, then:
                           (i)      the Executive shall be entitled to receive
                                    from the Company his Accrued Benefit, except
                                    that, for this purpose, Accrued Benefit
                                    shall not include any entitlement to
                                    severance under any Company severance policy
                                    generally applicable to the Company's
                                    salaried employees;
                           (ii)     the Executive shall receive from the
                                    Company, no less than ten days following
                                    termination of his employment, a lump sum
                                    payment (the "Termination Payment") equal to
                                    three times the Executive's Annual
                                    Compensation;
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                           (iii)    all rights under any equity or long-term
                                    incentive plan shall be fully vested;
                           (iv)     rights, if any, to supplemental pension
                                    shall be fully vested; and
                           (v)      the Executive shall continue to be covered
                                    at the expense of the Company by the same or
                                    equivalent hospital, medical, dental,
                                    accident, disability and life insurance
                                    coverage as in effect for the Executive
                                    immediately prior to termination of his
                                    employment, until the earlier of (A)
                                    thirty-six months following termination of
                                    employment, or (B) the date the Executive
                                    has commenced new employment and has thereby
                                    become eligible for comparable benefits.
         8. Certain Supplemental Payments by the Company.
                  (a) In the event the Executive's employment is terminated
pursuant to Section 7(d) above, and if in connection therewith it is determined
that (A) part or all of the compensation and benefits to be paid to the
Executive constitute "parachute payments" under Section 28OG of the Code, and
(B) the payment thereof will cause the Executive to incur excise tax under
Section 4999 of the Code, the Company, on or before the date for payment of such
excise tax, shall pay the Executive, in lump sum, an amount (the "Gross-Up
Amount") such that, after payment of all federal, state and local income tax and
any additional excise tax under Section 4999 of the Code in respect of the
Gross-Up Amount payment, the Executive will be fully reimbursed for the amount
of such excise tax.
                  (b) The determination of the Parachute Amount, the Base Amount
and the
                                       13
Gross-Up Amount, as well as any other calculations necessary to implement this
Section 8 shall be made by a nationally recognized accounting or benefits
consulting firm selected by the Executive and reasonably satisfactory to the
Company and which has not performed services, other than minor indirect or
incidental services, for either the Company or the Executive for three years
prior to the date the Consultant is retained for this purpose. The Consultant's
fee shall be paid by the Company.
                  (c) As promptly as practicable following such determination
and the elections hereunder, the Company shall pay to or distribute to or for
the benefit of the Executive such amounts as are then due to the Executive under
this Agreement and shall promptly pay to or distribute for the benefit of the
Executive in the future such amounts as become due to the Executive under this
Agreement.
                  (d) As a result of the uncertainty in the application of
Section 28OG of the Code at the time of an initial determination hereunder, it
is possible that payments will not have been made by the Company which should
have been made under clause (a) of this Section 8 ("Underpayment"). In the event
that there is a final determination by the Internal Revenue Service, or a final
determination by a court of competent jurisdiction, that an Underpayment has
been made and the Executive thereafter is required to make any payment of an
excise tax, income tax, any interest or penalty, the accounting or benefits
consulting firm selected under clause (b) above shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Executive.
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         9. Further Obligations of the Executive. During and following the
Executive's employment by the Company, the Executive shall hold in confidence
and not directly or indirectly disclose or use or copy or make lists of any
confidential information or proprietary data of the Company, except to the
extent authorized in writing by the Board of Directors of the Company or
required by any court or administrative agency, other than to an employee of the
Company or a person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by the Executive of duties as an executive of
the Company. Confidential information shall not include any information known
generally to the public or any information of a type not otherwise considered
confidential by persons engaged in the same business or a business similar to
that of the Company. All records, files, documents and materials or copies
thereof, relating to the Company's business which the Executive shall prepare,
or use, or come into contact with, shall be and remain the sole property of the
Company and shall be promptly returned to the Company upon termination of
employment with the Company.
         10. Expenses and Interest. If, after a Change in Control of the
Company, a good faith dispute arises with respect to the enforcement of the
Executive's rights under this Agreement, or if any legal or arbitration
proceeding shall be brought in good faith to enforce or interpret any provision
contained herein, or to recover damages for breach hereof, the Executive shall
recover from the Company any reasonable attorney's fees and necessary costs and
disbursements incurred as a result of such dispute, and prejudgment interest on
any money judgment or arbitration award obtained by the Executive calculated at
the rate of interest announced by Peoples Heritage Bank, or the successor
thereto, from
                                       15
time to time as its prime rate from the date that payments to him should have
been made under this Agreement.
         11. Payment Obligations Absolute. The Company's obligation during and
after the Employment Period to pay the Executive the compensation and to make
the arrangements provided herein shall be absolute and unconditional and shall
not be affected by any circumstances, including, without limitation, any set
off, counterclaim, recoupment, defense or other right which the Company may have
against him or anyone else. All amounts payable by the Company hereunder shall
be paid without notice or demand. Each and every payment made hereunder by the
Company shall be final and the Company will not seek to recover all or any part
of such payment from the Executive or from whomsoever may be entitled thereto,
for any reason whatever except as provided in Section 8(d) above.
         12.      Successors.
                  (a)       (i)     If the Company sells, assigns, or transfers
                                    all or substantially all of its business and
                                    assets to any Person, excluding Affiliates
                                    of the Company, or if the Company merges
                                    into or consolidates or otherwise combines
                                    with any Person which is a continuing or
                                    successor entity, then the Company shall
                                    assign all of its rights, title and interest
                                    in this Agreement as of the date of such
                                    event to the Person which is either the
                                    acquiring or successor Company, and such
                                    Person shall assume in writing and perform
                                    from and after the date of such written
                                    assignment all of the terms, conditions and
                                    provisions imposed by this Agreement
                                       16
                                    upon the Company. Failure of the Company to
                                    obtain such written assignment shall be a
                                    breach of this Agreement. In case of such
                                    assignment by the Company and of written
                                    assumption and agreement by such Person, all
                                    further rights as well as all other
                                    obligations of the Company under this
                                    Agreement thenceforth shall cease and
                                    terminate and thereafter the expression "the
                                    Company" wherever used herein shall be
                                    deemed to mean such Person or Persons.
                           (ii)     This Agreement and all rights of the
                                    Executive shall inure to the benefit of and
                                    be enforceable by the Executive's personal
                                    or legal representatives, estates,
                                    executors, administrators, heirs and
                                    beneficiaries. All amounts payable to the
                                    Executive hereunder shall be paid, in the
                                    event of the Executive's death, to the
                                    Executive's estate, heirs and
                                    representatives. This Agreement shall inure
                                    to the benefit of, be binding upon and be
                                    enforceable by, any successor, surviving or
                                    resulting Company or other entity to which
                                    all or substantially all of the Company's
                                    business and assets shall be transferred.
                                    This Agreement shall not be terminated by
                                    the voluntary or involuntary dissolution of
                                    the Company. 
         13 Enforcement. The provisions of this Agreement shall be regarded as
divisible, and if any such provisions or any part hereof are declared invalid or
unenforceable
                                       17
by a court of competent jurisdiction, the validity and enforceability of the
remainder of such provisions or parts hereof and the applicability thereof shall
not be affected thereby.
         14. Amendment. This Agreement may not be amended or modified at any
time except by a written instrument executed by the Company and the Executive if
such amendment or modification occurs before any Change in Control, or by the
Executive and the Company after any Change in Control.
         15. Withholding. The Company shall be entitled to withhold from amounts
to be paid to the Executive hereunder any federal, state or local withholding or
other taxes, or charge which it is from time to time required to withhold. The
Company shall be entitled to rely on an opinion of counsel if any question as to
the amount or requirement of any such withholding shall arise.
         16. Governing law: Arbitration. This Agreement and the rights and
obligations hereunder shall be governed by and construed in accordance with the
laws of the State of Maine. Any dispute arising out of this Agreement shall be
determined by arbitration in the State of Maine under the rules of the American
Arbitration Association then in effect and judgment upon any award pursuant to
such arbitration may be enforced in any court having jurisdiction thereof.
         17. Notice. Notices given pursuant to this Agreement shall be in
writing and shall be deemed given when received and, if mailed, shall be mailed
by United States registered or certified mail, return receipt requested,
addressee only postage prepaid, to the Company at:
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                           Peoples Heritage Financial Group, Inc.
                           P.O. Box 9540
                           One Portland Square
                           Portland, ME 04112
                           Attn: Clerk
or if to the Executive, at the address set forth below the Executive's signature
line of this Agreement, or to such other address as the party to be notified
shall have given to the other.
         18. No Waiver. No waiver by any party at any time of any breach by
another party of, or compliance with, any condition or provision of this
Agreement to be performed by another party shall be deemed a waiver of similar
or dissimilar provisions or conditions at any time.
         19. Headings. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first written above.
                             PEOPLES HERITAGE FINANCIAL GROUP, INC.
                             By: /s/ William J. Ryan
                                ------------------------------------
                             Attest: /s/ Carol L. Mitchell
                                    --------------------------------
                                    Secretary
                            /s/ William J. Ryan
                            ----------------------------------------
                            Executive
                            Address: 6 Hemlock Dr.
                                     Cumberland Center, ME 04021