Exhibit 10.2
LEGACY BANCORP, INC.
AND
LEGACY BANKS
CHANGE IN CONTROL AGREEMENT
FOR
KIMBERLY A. MATHEWS
     This Change in Control Agreement (the “Agreement”) is made effective as of
the 26th day of October, 2008 (the “Effective Date”), by and between Legacy
Bancorp, Inc., a Delaware corporation (the “Company”), Legacy Banks (the
“Bank”), a Massachusetts-chartered savings bank (the “Bank”) with its principal
administrative office at Pittsfield, Massachusetts, and Kimberly A. Mathews
(“Executive”). The Bank is a wholly-owned subsidiary of the Company.
     WHEREAS, the Company and the Bank recognize the substantial contributions
the Executive has made to the Company and the Bank and wishes to protect
Executive’s position with the Bank for the period provided in this Agreement.
     NOW, THEREFORE, in consideration of the contributions of Executive and upon
the other terms and conditions hereinafter provided, the parties hereto agree as
follows:
1. TERM OF AGREEMENT
     The term of this Agreement shall be the earlier of twelve (12) full
calendar months from the effective date of this Agreement set forth above (the
“Initial Term”), or until the employment relationship is terminated. Upon the
expiration of the Initial Term and so long as this Agreement remains in effect,
upon the expiration of each successive twelve-month period (each a “Renewal
Term”), this Agreement will be renewed automatically for a successive
twelve-month period, unless the Board of Directors of each of the Bank and the
Company (each a “Board,” provided that any reference to “Board” herein shall
refer to the Bank’s Board unless specifically noted otherwise) or the Executive
elects not to extend the term of this Agreement at the conclusion of the Initial
Term or any subsequent Renewal Term by giving written notice to the other party
prior to the last day of the Initial Term or any such Renewal Term as the case
may be (a “Non-Renewal Notice”). Notwithstanding anything to the contrary in
this Section 1, this Agreement shall remain in effect upon the public
announcement of an event that, if consummated, would result in a Change in
Control, as defined in Section 2 hereof, and for a period of twelve (12) months
after the closing or completion of the Change in Control.
2. CHANGE IN CONTROL DEFINED
     For purposes of this Agreement, a “Change in Control” means any of the
following events:
     (a) Merger: The Company merges into, or consolidates with, another
corporation, or merges another corporation into the Company, and as a result
less than a majority of the combined voting power of the resulting corporation
immediately after the merger or

 

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consolidation is held by persons who were stockholders of the Company
immediately before the merger or consolidation.
     (b) Acquisition of Significant Share Ownership: There is filed, or required
to be filed, a report on Schedule 13D or 13G or another form or schedule
required under Sections 13(d), 13(g) or 14(d) of the Securities Exchange Act of
1934, which schedule discloses that the filing person or persons acting in
concert has, or have become, the beneficial owner of 25% or more of a class of
the Company’s voting securities.
     (c) Change in Board Composition: During any period of two consecutive
years, individuals who constitute the Company’s Board at the beginning of the
two-year period cease for any reason to constitute at least a majority of the
Company’s Board; provided, however, that for purposes of this clause, each
director who is first elected by the board (or first nominated by the board for
election by the stockholders) by a vote of at least two-thirds (2/3) of the
directors who were directors at the beginning of the two-year period shall be
deemed to have also been a director at the beginning of such period; or
     (d) Sale of Assets: The Company sells to a third party all, or
substantially all, of its assets.
3. TERMINATION FOR GOOD REASON UPON A CHANGE IN CONTROL
     Upon the occurrence of a Change in Control, Executive shall have the right
during the remaining term of this Agreement to voluntarily terminate her
employment upon the occurrence of any of the following events, each of which
shall constitute “Good Reason,” unless such event has been consented to by
Executive: (a) a material change in Executive’s position to become one of lesser
responsibility, importance or scope from the position Executive held immediately
prior to the Change in Control; (b) a material reduction in Executive’s base
salary or benefits; (c) a relocation of Executive’s principal place of
employment by more than thirty (30) miles from its location immediately prior to
the Change in Control; or (d) any other action or inaction that constitutes a
material breach of this Agreement by the Company or the Bank.
     Notwithstanding the foregoing, termination for Good Reason shall not be
effective under this Section 3 unless Executive gives the Company and/or the
Bank prior written notice of the events giving rise to Executive’s right to
elect to terminate for Good Reason. Such prior written notice shall be given no
later than ninety (90) days after the date of the event giving rise to the right
to terminate for Good Reason, and the Company and/or the Bank shall have thirty
(30) days to remedy such condition before Executive terminates employment,
provided, however, that the Bank can waive said 30 day period.
4. TERMINATION FOR CAUSE
     Executive shall not have the right to receive termination benefits pursuant
to Section 5 hereof upon termination for Cause. As used herein, “Cause shall
mean termination because of Executive’s: (1) material act of dishonesty in
performing Executive’s duties on behalf of the Company and the Bank or a
material breach of the Bank’s Code of Conduct or Sexual and Other

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Non-Harassment Policy; (2) willful misconduct that in the judgment of the Board
or the Bank Chief Executive Officer will likely cause economic damage to the
Company and the Bank or injury to the business reputation of the Company and the
Bank; (3) incompetence, (4) breach of fiduciary duty involving personal profit;
(5) intentional failure to perform stated duties after written notice thereof
from the Board; or (6) willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) that reflect adversely on the
reputation of the Company and the Bank, any felony conviction, any violation of
law involving moral turpitude, or any violation of a final cease-and-desist
order.
     Notwithstanding the foregoing, prior to a Change in Control, Executive’s
termination for Cause will not become effective unless the Chief Executive
Officer of the Bank has delivered to Executive a copy of a Notice of
Termination, in accordance with Section 6 hereof. Following a Change in Control,
Executive shall not be deemed to have been Terminated for Cause unless and until
there shall have been delivered to him a Notice of Termination which shall
include a copy of a resolution duly adopted by the affirmative vote of not less
than a majority of the members of the Board at a meeting of the Board called and
held for that purpose (after reasonable notice to Executive and an opportunity
for him, together with counsel, to be heard before the Board), finding that in
the good faith opinion of the Board, Executive was guilty of conduct justifying
Termination for Cause and specifying the particulars thereof in detail.
5. SEVERANCE BENEFITS UPON TERMINATION AFTER CHANGE IN CONTROL
     (a) Upon the occurrence of a Change in Control, followed by (i) Executive’s
voluntary termination for Good Reason or (ii) involuntary termination of
Executive’s employment other than for Cause, the Bank shall pay Executive, or in
the event of Executive’s subsequent death, Executive’s beneficiary or
beneficiaries or estate, as the case may be, as severance pay, a cash lump sum
payment equal to one (1) times the sum of (i) her Base Salary and (ii) the
highest rate of bonus paid to Executive during the two (2) years prior to
termination, subject to applicable withholding taxes. In addition, the Bank will
continue to provide Executive with life insurance coverage, non-taxable medical
and dental coverage substantially comparable (and on substantially the same
terms and conditions) to the coverage maintained by the Bank for Executive prior
to Executive’s severance. Such coverage shall cease upon expiration of twelve
(12) months. The period for group health care continuation coverage rights under
the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) shall not
begin until the expiration of such twelve (12) month period.
     (b) Upon the occurrence of a Change in Control, Executive will have such
rights as specified in any other employee benefit plan with respect to options
and such other rights as may have been granted to Executive under such plans.
     (c) Any cash severance payments shall be made in a lump sum with the next
regularly scheduled payroll following Executive’s termination of employment.
Such payments shall not be reduced in the event Executive obtains other
employment following termination of employment with the Bank.

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     (d) Notwithstanding anything in this Agreement to the contrary, in no event
shall the aggregate payments or benefits to be made or afforded to Executive
under this Section 5 constitute an “excess parachute payment” under Code
Section 280G or any successor thereto, and in order to avoid such a result,
Executive’s benefits hereunder shall be reduced, if necessary, to an amount, the
value of which is one dollar ($1.00) less than an amount equal to three
(3) times Executive’s “base amount,” as determined in accordance with Code
Section 280G. The allocation of the reduction required hereby shall be
determined by Executive, provided, however, that if it is determined that such
election by Executive shall be in violation of Code Section 409A, the allocation
of the required reduction shall be pro-rata.
6. NOTICE OF TERMINATION
     Any purported termination by the Bank or Company or by Executive in
connection with or following a Change in Control shall be communicated by Notice
of Termination to the other party hereto. For purposes of this Agreement, a
“Notice of Termination” shall mean a written notice which shall indicate the
Date of Termination and, in the event of termination by Executive, the specific
termination provision in this Agreement relied upon. “Date of Termination” shall
mean the date specified in the Notice of Termination (which, in the case of a
termination for Cause, shall be immediate). In no event shall the Date of
Termination exceed thirty (30) days from the date Notice of Termination is
given.
     If within thirty (30) days after any Notice of Termination is given, the
party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected) and
provided further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute in connection with a Change in
Control, in the event the Executive is terminated for reasons other than
termination for Cause, the Bank will continue to pay Executive her full
compensation in effect when the notice giving rise to the dispute was given
(including but not limited to her annual salary) and continue him as a
participant in all compensation, benefit and insurance plans in which he was
participating when the notice of dispute was given, until the earlier to occur
of : (i) the expiration of the remaining term of this Agreement as determined as
of the Date of Termination and (ii) final resolution of the dispute in
accordance with this Agreement. Amounts paid under this Section are in addition
to all other amounts due under this Agreement and shall not be offset against or
reduce any other amounts due under this Agreement, except in the event that
Employer prevails in the dispute, in which case all amounts paid hereunder shall
be offset against any other amount due under this Agreement.
7. SOURCE OF PAYMENTS
     All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. The Company, however, guarantees
payment and provision of all amounts and benefits due hereunder to Executive
and, if such amounts and benefits due from the

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Bank are not timely paid or provided by the Bank, such amounts and benefits
shall be paid or provided by the Company.
8. REQUIRED REGULATORY PROVISIONS
     (a) Notwithstanding anything herein contained to the contrary, any payments
to Executive by the Bank, whether pursuant to this Agreement or otherwise, are
subject to and conditioned upon their compliance with Section 18(k) of the
Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations
promulgated thereunder in 12 C.F.R. Part 359.
     (b) Notwithstanding anything else in this Agreement, Executive’s employment
shall not be deemed to have been terminated unless and until the Executive has a
Separation from Service within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”). For purposes of this Agreement, a
“Separation from Service” shall have occurred if the Bank and Executive
reasonably anticipate that either no further services will be performed by the
Executive after the date of the termination (whether as an employee or as an
independent contractor) or the level of further services performed will not
exceed 49% of the average level of bona fide services in the thirty-six
(36) months immediately preceding the termination. For all purposes hereunder,
the definition of Separation from Service shall be interpreted consistent with
Treasury Regulation Section 1.409A-1(h)(ii).
9. NO ATTACHMENT
     Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null,
void, and of no effect.
10. ENTIRE AGREEMENT; MODIFICATION AND WAIVER
     (a) This Agreement contains the entire understanding between the parties
hereto and supersedes any prior agreement between the Bank and Executive or the
Company and Executive, except that this Agreement shall not affect or operate to
reduce any benefit or compensation inuring to Executive of a kind elsewhere
provided. No provision of this Agreement shall be interpreted to mean that
Executive is subject to receiving fewer benefits than those available to him
without reference to this Agreement. This Agreement is not a contract of
employment between Executive and the Bank or the Company.
     (b) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
     (c) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future or as to any act other than that
specifically waived.

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11. SEVERABILITY
     If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
12. HEADINGS FOR REFERENCE ONLY
     The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
13. GOVERNING LAW
     This Agreement shall be governed by the laws of the State of Delaware but
only to the extent not superseded by federal law.
14. ARBITRATION
     Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by binding arbitration, as an alternative
to civil litigation and without any trial by jury to resolve such claims,
conducted by a single arbitrator who is certified by the American Arbitration
Association and is mutually acceptable to the Bank and Executive sitting in a
location selected by the Bank within fifty (50) miles from the main office of
the Bank, in accordance with the rules of the American Arbitration Association’s
National Rules for the Resolution of Employment Disputes then in effect.
Judgment may be entered on the arbitrator’s award in any court having
jurisdiction.
15. PAYMENT OF LEGAL FEES
     To the extent that such payment(s) may be made without triggering penalty
under Code Section 409A, all reasonable legal fees paid or incurred by Executive
pursuant to any dispute or question of interpretation relating to this Agreement
shall be paid or reimbursed by the Bank or Company, provided (i) that the
dispute or interpretation has been settled by Executive and the Bank and Company
or resolved in Executive’s favor, (ii) Executive has provided prior written
notice to the Bank of her intention to retain counsel and the name of such
counsel, and (iii) such reimbursement shall occur no later than sixty (60) days
after the end of the year in which the dispute is settled or resolved in
Executive’s favor.
16. OBLIGATIONS OF BANK
     The termination of Executive’s employment, other than following a Change in
Control, shall not result in any obligation of the Bank or the Company under
this Agreement.

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17. SUCCESSORS AND ASSIGNS
     The Bank and the Company shall require any successor or assignee, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Bank and/or the Company,
expressly and unconditionally to assume and agree to perform the Bank’s or
Company’s obligations under this Agreement, in the same manner and to the same
extent that the Bank or Company would be required to perform if no such
succession or assignment had taken place.
[Signature Page Follows]

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SIGNATURES
     IN WITNESS WHEREOF, the Company and the Bank have each caused this
Agreement to be executed by its duly authorized officer, and Executive has
signed this Agreement, on the dates set forth below.

                  LEGACY BANKS    
 
           
 
Date
   By:        
 
     
 
J. Williar Dunlaevy, Chairman    
 
      For the Entire Board of Directors    
 
                LEGACY BANCORP, INC.    
 
           
 
Date
   By:        
 
     
 
J. Williar Dunlaevy, Chairman    
 
      For the Entire Board of Directors    
 
                EXECUTIVE    
 
           
 
  By:        
 
Date
     
 
Kimberly A. Mathews    

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