Exhibit 10.3


 


CHANGE IN CONTROL AGREEMENT


 


This Change in Control
Agreement (the “Agreement”) is made effective as of the 1st day of March, 2021 (the “Effective
Date”), by and between Prosper Bank, a Pennsylvania-chartered stock savings bank (the “Bank”) and
Larry Witt (the “Executive”). Any reference to the “Company” shall mean PB Bankshares, Inc.,
the holding company of the Bank.


 


RECITALS


 


WHEREAS, the
Executive is currently employed as an executive officer of the Bank;


 


WHEREAS, the
Bank desires to assure itself of the Executive’s continued active participation in the business of the Bank; and


 


WHEREAS, to
induce the Executive to remain in the employ of the Bank and in consideration of the Executive’s agreeing to remain in the
employ of the Bank, the parties desire to specify the severance benefits due to the Executive in the event his employment with
the Bank terminates under specified circumstances.


 


NOW THEREFORE,
in consideration of the mutual agreements herein contained, and upon the other terms and conditions hereinafter provided, the parties
hereby agree as follows:


 


		1.	TERM OF AGREEMENT



 


(a)       
Term; Renewal of Term. The term of this Agreement will begin as of the Effective Date and will continue for
a period of two (2) years (the “Term”). Commencing on the first anniversary of the Effective Date and continuing
on each subsequent anniversary of the Effective Date (each anniversary referred to as a “Renewal Date”), the
Term will extend automatically for one additional year, so that the Term will be two (2) years from the applicable Renewal Date,
unless either the Bank or the Executive, by written notice to the other given at least thirty (30) days prior to the Renewal Date,
notifies the other of its intent not to extend the Term. In the event either party provides notice not to extend the Term, the
Term will become fixed and terminate as of the last day of the then current Term. For avoidance of doubt, any extension to the
Term will become the new “Term” for purposes of this Agreement.


 


(b)       
Change in Control. Notwithstanding the foregoing, in the event the Bank or the Company has entered into an
agreement to effect a transaction that would be considered a Change in Control, as defined under Section 2, the Term will extended
automatically so that it expires no sooner than two (2) years after the effective date of the Change in Control.


 


		2.	CERTAIN DEFINITIONS



 


(a)        Base
Salary. For purposes of this Agreement, the term “Base Salary” means the annual rate of base salary
paid to the Executive by the Bank.


 


(b)        Change
in Control. For purposes of this Agreement, the term “Change in Control” means: (i) a change in the
ownership of the Corporation; (ii) a change in the effective control of the Corporation; or (iii) a change in the ownership
of a substantial portion of the assets of the Corporation as defined in accordance with Code Section 409A. For purposes of
this Section 2(b), the term “Corporation” means the Bank, the Company or any of their successors, as
applicable.


 






     


     


    

 


		(i)	A change in the ownership of a Corporation occurs on the date
that any one person, or more than one person acting as a group (as defined in Treasury Regulation 1.409A-3(i)(5)(v)(B)), acquires
ownership of stock of the Corporation that, together with stock held by such person or group, constitutes more than fifty (50)
percent of the total fair market value or total voting power of the stock of the Corporation.



 


		(ii)	A change in the effective control of the Corporation occurs on
the date that either (A) any one person, or more than one person acting as a group (as defined in Treasury Regulation 1.409A-3(i)(5)(vi)(D))
acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the Corporation possessing thirty (30) percent or more of the total voting power of the stock of the Corporation,
or (B) a majority of the members of the board of directors is replaced during any twelve (12) month period by directors whose appointment
or election is not endorsed by a majority of the members of the board of directors prior to the date of the appointment or election,
provided that this subsection “(B)” is inapplicable where a majority stockholder of the Corporation is another corporation.



 


		(iii)	A change in a substantial portion of the Corporation’s
assets occurs on the date that any one person or more than one person acting as a group (as defined in Treasury Regulation 1.409A-3(i)(5)(vii)(C))
acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person
or persons) assets from the Corporation that have a total gross fair market value equal to or more than forty (40) percent of the
total gross fair market value of (A) all of the assets of the Corporation, or (B) the value of the assets being disposed of, either
of which is determined without regard to any liabilities associated with such assets. 



 


For
all purposes hereunder, the definition of Change in Control shall be construed to be consistent with the requirements of Treasury
Regulation 1.409A-3(i)(5), except to the extent that such regulations are superseded by subsequent guidance. 


 


Notwithstanding anything
herein to the contrary, a Change in Control will not be deemed to have occurred for purposes of this Agreement in connection with
the Bank’s mutual-to-stock conversion.


 


(c)        Code.
 “Code” means the Internal Revenue Code of 1986, as amended.


 


(d)        Good
Reason. The term “Good Reason” means a termination of employment by the Executive at or following a Change in
Control if, without the Executive’s express written consent, any of the following occurs:


 






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		(i)	a material reduction in the Executive’s Base Salary;




 


		(ii)	a material reduction in the Executive’s authority, duties or responsibilities from the position
and attributes associated with the Executive’s executive position with the Bank in effect as of the Effective Date or any
successor executive position, as mutually agreed to by the Bank and the Executive;



 
		(iii)	the Bank requires the Executive to relocate to any office or location resulting in an increase in the Executive’s daily
commute of thirty-five (35) miles or more; or


 


		(iv)	a material breach of this Agreement by the Bank;



 


provided, however, that prior to any termination
of employment for Good Reason, the Executive must first provide written notice to the Bank (or its successor) within ninety (90)
days following the initial existence of the condition, describing the existence of the condition, and the Bank will thereafter
have the right to remedy the condition within thirty (30) days of the date the Bank received the written notice from the Executive.
If the Bank remedies the condition within the thirty (30) day cure period, then no Good Reason shall be deemed to exist with respect
to that condition. If the Bank does not remedy the condition within the thirty (30) day cure period, then the Executive may deliver
a Notice of Termination for Good Reason to the Bank at any time within sixty (60) days following the expiration of the cure period.


 


(e)        Termination
for Cause and Cause. The terms “Termination for Cause” and “Cause” mean termination of the
Executive’s employment by the Bank because of, in the good faith determination of the Board of Directors, the
Executive’s:


 





		(i)	material act of dishonesty or fraud in performing the Executive’s duties on behalf of the
Bank;



 


		(ii)	willful misconduct that in the judgment of the Board of Directors will likely cause economic damage
to the Bank or injury to the business reputation of the Bank;



 


		(iii)	breach of fiduciary duty involving personal profit;



 


		(iv)	intentional failure to perform the Executive’s stated duties after written notice thereof
from the Board of Directors;



 




	 	(v)	willful violation of any law, rule or regulation (other than traffic
    violations or similar offenses which results only in a fine or other non-custodial penalty) that reflect adversely on the
    reputation of the Bank; any felony conviction, any violation of law involving moral turpitude, or any violation of a final
    cease-and-desist order; or any violation of the policies and procedures of the Bank as outlined in the Bank’s employee
    handbook or policies, which would result in the termination of employment of employees of the Bank, as from time to time
    amended and incorporated herein by reference; or


 


		(vi)	material breach of any provision of this Agreement.




 






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		3.	BENEFITS UPON TERMINATION



 


(a)       
If, at or subsequent to a Change in Control and during the term of this Agreement, the Bank (or its successor) terminates
the Executive’s employment other than for Cause, or if the Executive terminates his employment for Good Reason (collectively,
a “Qualifying Termination Event”), then the Bank will pay the Executive, or the Executive’s estate in
the event of the Executive’s subsequent death prior to receiving the payment due, the following:


 


		(i)	a cash lump sum payment in an amount equal to two (2) times the
sum of the Executive’s: (A) Base Salary (or the Executive’s Base Salary in effect immediately prior to the Change in
Control, if higher); and (B) the highest annual cash bonus earned by the Executive for the calendar year in which the change in
control occurs or for the three (3) most recently completed calendar years prior to the Change Control, payable within thirty (30)
days following the Executive’s Date of Termination; and



 


		(ii)	provided the Executive has elected continued health care coverage
in accordance with the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), twelve (12) consecutive monthly
cash payments (commencing within the first month following the Executive’s Date of Termination and continuing until the 12th
month following the Executive’s Date of Termination), each equal to the monthly COBRA premium in effect as of the Executive’s
Date of Termination for the level of coverage in effect for the Executive and the Executive’s dependents under the Bank’s
(or any successor’s) group health plan. 



 


		4.	NOTICE; EFFECTIVE DATE OF TERMINATION



 


Any purported
termination of employment by the Bank or by the Executive in connection with or following a Change in Control shall be
communicated by a Notice of Termination to the other party hereto in accordance with Section 15. For purposes of this
Agreement, a “Notice of Termination” means a written notice that indicates the Date of Termination and, in
the event of termination by the Executive, the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated. The “Date of Termination” means termination of the
Executive’s employment pursuant to this Agreement, which will be effective on the earliest of: (i) immediately upon
notice to the Executive of the Executive’s termination of employment for Cause; (ii) within thirty (30) days, as
specified by the Bank, after the Bank gives notice to the Executive of the Executive’s termination without Cause; or
(iii) thirty (30) days after the Executive gives written notice to the Bank of the Executive’s resignation from
employment for Good Reason, provided that the Bank may set an earlier termination date at any time prior to that date, in
which case the Executive’s resignation will be effective as of the date set by the Bank.


 






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		5.	SOURCE OF PAYMENTS



 


All payments provided
in this Agreement shall be timely paid in cash or check from the general funds of the Bank (or any successor of the Bank).


 


		6.	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.


 


		7.	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 the Executive, except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to
the Executive of a kind elsewhere provided. No provision of this Agreement shall be interpreted to mean that the Executive is subject
to receiving fewer benefits than those available to the Executive without reference to this Agreement.


 


(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 the 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 the term or condition for the future or as
to any act other than that specifically waived.


 


		8.	SEVERABILITY



 


If any
provision of this Agreement is determined to be void or unenforceable, then the remaining provisions of this Agreement will remain
in full force and effect.


 


		9.	GOVERNING LAW



 


This Agreement will
be governed by the laws of the Commonwealth of Pennsylvania but only to the extent not superseded by federal law.


 






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		10.	ARBITRATION



 


(a)        Any dispute or controversy arising under or in connection with this Agreement will 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, mutually
acceptable to the Bank and the Executive, sitting in a location selected by the Bank within 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.


 


(b)       
If the occurrence of a Qualifying Termination Event is disputed by the Bank, and if it is determined in arbitration that
the Executive is entitled to the compensation under Section 3 of this Agreement, the payment of the compensation by the Bank will
commence immediately following the date of resolution by arbitration, with interest due to the Executive on the cash amount that
was not paid pending arbitration (at the prime rate as published in The Wall Street Journal from time to time), and the
Executive will be entitled to reimbursement of legal fees and expenses incurred by the Executive in arbitration (upon provision
to the Bank of a detailed invoice with respect to such time and expenses).


 


		11.	OBLIGATIONS OF BANK



 


The termination of
the Executive’s employment, other than a Qualifying Termination Event, will not result in any obligation of the Bank (or
any affiliate of the Bank, including the Company) under this Agreement.


 


		12.	SUCCESSORS AND ASSIGNS



 


The
Bank 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, expressly and unconditionally to assume and agree to perform the Bank’s
obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such
succession or assignment had taken place.


 


	13.	TAX WITHHOLDING.




 


The Bank may withhold
from any amounts payable to the Executive hereunder all federal, state, local or other taxes that the Bank may reasonably determine
are required to be withheld pursuant to any applicable law or regulation (it being understood that the Executive is responsible
for payment of all taxes in respect of the payments and benefits provided herein).


 


		14.	APPLICABLE LAW



 


(a)       
In no event will the Bank (or any affiliate) be obligated to make any payment pursuant to this Agreement that is prohibited
by Section 18(k) of the Federal Deposit Insurance Act (codified at 12 U.S.C. sec. 1828(k)), 12 C.F.R. Part 359, or any other applicable
law.


 


(b)        Notwithstanding
anything in this Agreement to the contrary, to the extent that a payment or benefit described in this Agreement constitutes
 “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that the payment or
benefit is payable upon the Executive’s termination of employment, then the payments or benefits will be payable only
upon the Executive’s “Separation from Service.” For purposes of this Agreement, a “Separation from
Service” will have occurred if the Bank and the Executive reasonably anticipate that either no further services
will be performed by the Executive after the Date of Termination (whether as an employee or as an independent contractor) or
the level of further services performed is less than fifty (50) percent 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).


 






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(c)        Notwithstanding the foregoing, if the Executive is a “Specified Employee” (i.e., a “key employee”
of a publicly traded company within the meaning of Section 409A of the Code and the regulations issued thereunder) and any payment
under this Agreement is triggered due to the Executive’s Separation from Service, then solely to the extent necessary to
avoid penalties under Section 409A of the Code, no payment shall be made during the first six (6) months following the Executive’s
Separation from Service. Rather, any payment that would otherwise be paid to the Executive during that six-month period will be
accumulated and paid to the Executive in a lump sum on the first day of the seventh month following the Executive’s Separation
from Service. All subsequent payments shall be paid in the manner specified in this Agreement.


 


(d)        Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes Treasury Regulation Section
1.409A-2(b)(2).


 


	15.	 NOTICE




 


For the purposes of
this Agreement, notices and all other communications provided for in this Agreement will be in writing and will be deemed to have
been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed
to the respective addresses set forth below or if sent by facsimile or email, on the date it is actually received.


 


	 	To the Bank	
        Prosper Bank, Attn: Corporate Secretary

        185 East Lincoln Highway

        Coatesville, PA 19320

         

	 	To the Executive:	Most recent address on file with the Bank


 


		16.	COUNTERPARTS



 


This Agreement may
be executed in two (2) or more counterparts by original signature, facsimile or any generally accepted electronic means (including
transmission of a pdf containing executed signature pages), each of which shall be deemed an original, and all of which shall constitute
one and the same Agreement.


 


[Signature Page Follows]




 






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SIGNATURES


 


IN WITNESS WHEREOF,
the Bank has caused this Agreement to be executed by its duly authorized officer, and the Executive has signed this Agreement,
as of the Effective Date specified above.


 


 


	 	PROSPER BANK
	 	 
	 	 
	 	 
	 	By:	/s/ Janak M. Amin
	 	 	President and CEO
	 	 
	 	EXECUTIVE
	 	 
	 	 
	 	 
	 	/s/ Larry Witt
	 	Larry Witt
	 	 
	 	 


 






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