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                                                                    Exhibit 10.3


                          SPECIAL TERMINATION AGREEMENT

         THIS AGREEMENT is dated as of the 27th day of September, 2000 by and
among Abington Bancorp, Inc., a Massachusetts corporation (the "Company"), its
subsidiary, Abington Savings Bank, a Massachusetts savings bank with its main
office in Abington, Massachusetts (the "Bank"; the Company and Bank are
sometimes collectively referred to herein as the "Employers"), and Cynthia A.
Mulligan, an individual currently employed by the Bank in the capacity of Senior
Vice President - Consumer Banking (the "Executive").

         1. PURPOSE. In order to allow the Executive to consider the prospect of
a Change in Control (as defined in Section 2) in an objective manner and in
consideration of the services rendered and to be rendered by the Executive to
the Employers, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the Employers, the Employers are
willing to provide, subject to the terms of this Agreement, certain severance
benefits to protect the Executive from the consequences of a Terminating Event
(as defined in Section 3) occurring subsequent to a Change in Control.

         2. CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
occurred in any of the following events:

                  (i) if there has occurred a change in control which the
         Company would be required to report in response to Item 1 of Form 8-K
         promulgated under the Securities Exchange Act of 1934, as amended (the
         "1934 Act"), or, if such Form is no longer in effect in its present
         form, any Form or regulation promulgated by the Securities and Exchange
         Commission pursuant to the 1934 Act which is intended to serve similar
         purposes; or

                  (ii) when any "person" (as such term is used in Sections 13(d)
         and 14(d)(2) of the 1934 Act) becomes a "beneficial owner" (as such
         term is defined in Rule 13d-3 promulgated under the 1934 Act), directly
         or indirectly, of securities of the Company or the Bank representing
         twenty-five percent (25%) or more of the total number of votes that may
         be cast for the election of directors of the Company or the Bank; or

                  (iii) if during any period of two consecutive years (not
         including any period prior to the execution of this Agreement),
         individuals who are Continuing Directors (as herein defined) cease for
         any reason to constitute at least a majority of the Board of Directors
         of the Company. For this purpose, a "Continuing Director" shall mean
         (a) an individual who was a director of the Company at the beginning of
         such period or (b) any new director (other than a director designated
         by a person who has entered into any agreement with the Company to
         effect a transaction described in clause (i) or (ii) of this Section 2
         whose election by the Board or nomination for election by the Company's
         stockholders was approved by a vote of at least two-thirds (2/3) of the
         directors then still in office who either were directors at the
         beginning of such period or whose election or nomination for election
         was previously so approved; or

                  (iv) the stockholders of the Company approve a merger or
         consolidation of the Company with any other bank or corporation, other
         than (a) a merger or consolidation which would result


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         in the voting securities of the Company outstanding immediately prior
         thereto continuing to represent (either by remaining outstanding or by
         being converted into voting securities of the surviving entity) more
         than 80% of the combined voting power of the voting securities of the
         Company or such surviving entity outstanding immediately after such
         merger or consolidation, or (b) a merger or consolidation effected to
         implement a recapitalization of the Company (or similar transaction) in
         which no "person" (as defined above) acquires more than 30% of the
         combined voting power of the Company's then outstanding securities; or

                  (v) the stockholders of the Company approve a plan of complete
         liquidation of the Company or an agreement for the sale or disposition
         by the Company of all or substantially all of its assets.

         3. TERMINATING EVENT. A "Terminating Event" shall mean either of the
following:

         (a) termination by either of the Employers of the employment of the
Executive as Senior Vice President of the Bank for any reason other than (i)
death, (ii) deliberate dishonesty of the Executive with respect to the Company
or the Bank or any subsidiary or affiliate thereof, or (iii) conviction of the
Executive of a crime involving moral turpitude, or

         (b) resignation of the Executive from the employ of the Company or the
Bank, while the Executive is not receiving payments or benefits from the Company
or the Bank by reason of the Executive's disability, subsequent to the
occurrence of any of the following events:

                  (i) a significant change in the nature or scope of the
         Executive's responsibilities, authorities, powers, functions or duties
         from the responsibilities, authorities, powers, functions or duties
         exercised by the Executive at the Company or the Bank immediately prior
         to the Change in Control; or

                  (ii) a reasonable determination by the Executive that, as a
         result of a Change in Control, he is unable to exercise the
         responsibilities, authorities, powers, functions or duties exercised by
         the Executive at the Company or the Bank immediately prior to such
         Change in Control; or

                  (iii) a decrease in the total annual compensation payable by
         the Company or the Bank to the Executive other than as a result of a
         salary reduction similarly affecting the Executive and all other
         executive officers of the Company or the Bank on the basis of the
         Company's or the Bank's financial performance; or

                  (iv) the failure by the Company or the Bank to continue in
         effect any material compensation, incentive, bonus or benefit plan in
         which the Executive participates immediately prior to the Change in
         Control, unless an equitable arrangement (embodied in an ongoing
         substitute or alternative plan) has been made with respect to such
         plan, or the failure by the Company or the Bank to continue the
         Executive's participation therein (or in such substitute or alternative
         plan) on a basis not materially less favorable, both in terms of the
         amount of benefits provided and the level of the Executive's
         participation relative to other participants, than the basis when
         existed at the time of the Change of Control; or


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                  (v) the failure of the Company or the Bank to obtain a
         satisfactory agreement from any successor to assume and agree to
         perform this Agreement.

         4. SEVERANCE PAYMENT. In the event a Terminating Event occurs within
three (3) years after a Change in Control, the Employers shall pay to the
Executive an amount equal to (x) two times the "base amount" (as defined in
Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the
"Code")) applicable to the Executive, less (y) One Dollar ($1.00), payable in
one lump-sum payment on the date of termination. Notwithstanding the foregoing,
if a Change of Control takes place after the second anniversary of the date on
which the Executive's employment with the Bank commenced AND a Terminating Event
occurs within three (3) years after such Change in Control, the Employers shall
pay to the Executive an amount equal to (x) three times such "base amount"
applicable to the Executive, less (y) One Dollar ($1.00), payable in one
lump-sum payment on the date of termination.

         5.   LIMITATION ON BENEFITS.

         (a) It is the intention of the Executive and of the Employers that no
payments by the Employers to or for the benefit of the Executive under this
Agreement or any other agreement or plan pursuant to which he is entitled to
receive payments or benefits shall be non-deductible to the Employers by reason
of the operation of Section 280G of the Code relating to parachute payments.
Accordingly, and notwithstanding any other provision of this Agreement or any
such agreement or plan, if by reason of the operation of said Section 280G, any
such payments exceed the amount which can be deducted by the Employers, such
payments shall be reduced to the maximum amount which can be deducted by the
Employers. To the extent that payments exceeding such maximum deductible amount
have been made to or for the benefit of the Executive, such excess payments
shall be refunded to the Employers with interest thereon at the applicable
Federal Rate determined under Section 1274(d) of the Code, compounded annually,
or at such other rate as may be required in order that no such payments shall be
non-deductible to the Employers by reason of the operation of said Section 280G.
To the extent that there is more than one method of reducing the payments to
bring them within the limitations of said Section 280G, the Executive shall
determine which method shall be followed, provided that if the Executive fails
to make such determination within forty-five days after the Employers have sent
him written notice of the need for such reduction, the Employers may determine
the method of such reduction in their sole discretion.

         (b) If any dispute between the Employers and the Executive as to any of
the amounts to be determined under this Section 5 or the method of calculating
such amounts cannot be resolved by the Employers and the Executive, either party
after giving three days written notice to the other, may refer the dispute to a
partner in a Massachusetts office of a firm of independent certified public
accountants selected jointly by the Employers and the Executive. The
determination of such partner as to the amounts to be determined under Section
5(a) and the method of calculating such amounts shall be final and binding on
both the Employers and the Executive. The Employers shall bear the costs of any
such determination.

         (c) The Executive confirms that he is aware of the fact that the
Federal Deposit Insurance Corporation has the power to preclude the Bank from
making payments to the Executive under this Agreement under certain
circumstances. The Executive agrees that the Bank shall not be


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deemed to be in breach of this Agreement if it is precluded from making a
payment otherwise payable hereunder by reason of regulatory requirements binding
on the Bank.

         6. EMPLOYMENT STATUS. This Agreement is not an agreement for the
employment of the Executive and shall confer no rights on the Executive except
as herein expressly provided.

         7. TERM. This Agreement shall take effect on the date first written
above, and shall terminate upon the earlier of (a) the termination by the
Employers of the employment of the Executive because of death, deliberate
dishonesty of the Executive with respect to the Company or the Bank or any
subsidiary or affiliate thereof, or conviction of the Executive of a crime
involving moral turpitude, (b) the resignation or termination of employment with
the Company or the Bank by the Executive for any reason prior to a Change in
Control, or (c) the resignation from employment of the Executive after a Change
in Control for any reason other than the occurrence of any of the events
enumerated in Section 3(b) of this Agreement.

         8. WITHHOLDING. All payments made by the Employers under this Agreement
shall be paid net of, and after deduction of, any tax or other amounts required
to be withheld by the Employers under applicable law.

         9. ASSIGNMENT. Neither the Employers nor the Executive may make any
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other party. This Agreement
shall inure to the benefit of, and be binding upon, the Employers and the
Executive, and their respective heirs, legal representatives, successors and
permitted assigns. In the event of the Executive's death prior to the completion
by the Employers of all payments due him under this Agreement, the Employers
shall continue such payments to the Executive's beneficiary designated in
writing to the Employers prior to his death (or to his estate, if he fails to
make such designation).

         10. ENFORCEABILITY. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

         11. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of either party to
require the performance of any term or obligation of this Agreement, or the
waiver by either party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.

         12. NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by registered or certified mail, postage prepaid, to the
Executive at 76 Donna Drive, Hanover, MA 02339, or to such other address as the
Executive has filed in writing with the Employers or, in the case of the
Employers, at their main office, attention of the Clerk or the Secretary.


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         13. EFFECT ON OTHER AGREEMENTS. An election by the Executive to resign
after a Change in Control under the provisions of this Agreement shall not
constitute a breach by the Executive of any employment agreement between the
Employers and the Executive and shall not be deemed a voluntary termination of
employment by the Executive for the purpose of interpreting the provisions of
any of the Employer's benefit plans, programs or policies. Nothing in this
Agreement shall be construed to limit the rights of the Executive under any
employment agreement he may then have with the Employers.

         13. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Executive Committee of the Board of Directors of each of
the Employers.

         14. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the substantive laws of The Commonwealth of
Massachusetts without regard for its principles of conflicts of laws.

                                     * * * *

         IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Bank, by its duly authorized officer, and by the Executive, as
of the date first above written.

ATTEST:                                     ABINGTON BANCORP, INC.


/s/ Lewis J. Paragona                   By: /s/ KEVIN M. TIERNEY
-----------------------------               -----------------------------------
        Clerk
                                        Title: Vice President
                                               --------------------------------
[Seal]

WITNESS:

ATTEST:                                     ABINGTON SAVINGS BANK


/s/ Lewis J. Paragona                   By: /s/ Kevin M. Tierney
-----------------------------               -----------------------------------
        Clerk
                                        Title: Executive Vice President and COO
                                               --------------------------------
[Seal]

WITNESS:

                                        /s/ Cynthia A. Mulligan
-----------------------------           ---------------------------------------
                                        Cynthia A. Mulligan




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