As filed with the Securities and Exchange Commission on August 15, 2016
Registration No. 333-______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

MSB FINANCIAL CORP.
(Exact name of registrant as specified in its charter)

Maryland
 
34-1961437
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)

1902 Long Hill Road, Millington, New Jersey
07946
(Address of principal executive offices)
(Zip Code)

MSB Financial Corp.
2016 Equity Incentive Plan
(Full Title of the Plan)

Michael A. Shriner
President and Chief Executive Officer
1902 Long Hill Road
Millington, New Jersey 07946
(908) 647-4000
(Name, address and telephone number, including area code, of agent for service)

Copies to:
Richard Fisch, Esq.
Joan S. Guilfoyle, Esq.
Jones Walker LLP
1227 25 th Street, N.W.
Suite 200 West
Washington, D.C. 20037
(202) 434-4660

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 
Large accelerated filer ☐
 
Accelerated filer ☐
 
Non-accelerated filer ☐
(Do not check if a smaller reporting company)
 
Smaller reporting company ☒

CALCULATION OF REGISTRATION FEE

Title of Securities
to be Registered
 
Amount to be
Registered  (1)
 
Proposed Maximum
Offering Price Per Share   (3) (4)
 
Proposed Maximum
Aggregate Offering
Price  (3) (4)
 
Amount of
Registration Fee
Common Stock, $0.01 par value per share
 
             394,099 (2)
 
$13.13
 
$5,173,945
 
$521.02

(1) Includes an indeterminate number of shares which may be necessary to adjust the number of additional shares of Common Stock reserved for issuance pursuant to the MSB Financial Corp. 2016 Equity Incentive Plan (the "Plan") and being registered herein, as the result of a stock split, stock dividend, reclassification, recapitalization, or similar adjustment(s) of the Common Stock.
(2) Consists of up to 281,499 shares which may be issued upon the exercise of options granted under the Plan and 112,600 shares which may be issued under the plan in the form of restricted stock awards.
(3) In accordance with Rule 457 (h), the fee is based upon the $13.04 exercise price per share for the 210,448 options that have been granted under the plan and on the basis of the average of the high and low trading prices of the Common Stock on August 11, 2016 ($13.23) for the remaining 183,651 shares issuable under the Plan.
(4) Estimated solely for the purpose of calculating the registration fee.

This Registration Statement shall become effective automatically upon the date of filing, in accordance with Rule 462(a) under the Securities Act of 1933 .
PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Item 1 . Plan Information. *

Item 2 . Registrant Information and Employee Plan Annual Information. *

*The documents containing the information required by Part I of this Registration Statement will be sent or given to participants in the Plan as specified by Rule 428(b)(1) under the Securities Act of 1933, as amended (the "Securities Act") and the introductory note to Part I of Form S-8. Such documents are not filed with the Securities and Exchange Commission (the "Commission") either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424, in reliance on Rule 428.  These documents, and the documents incorporated by reference in the Registration Statement pursuant to Item 3 of Part II of this Form S-8, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.


PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3 . Incorporation of Documents by Reference.

MSB Financial Corp. (the "Company") is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and, accordingly, files periodic reports and other information with the Commission. Reports, proxy statements and other information concerning the Company filed with the Commission may be inspected and copies may be obtained (at prescribed rates) from the Commission's Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549.

The following documents filed by the Company are incorporated in this Registration Statement by reference (excluding any portion of these documents that has been furnished to and deemed not to be filed with the Commission):

(a)   The Company's Annual Report on Form 10-K for the year ended December 31, 2015;

(b)   The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016 which were filed with the Commission on May 16, 2016 and August 15, 2016, respectively;

(c)   The Company's Current Reports on Form 8-K filed with the Commission on January 28, 2016, February 12, 2016, April 22, 2016, April 26, 2016, April 29, 2016, June 6, 2016, June 22, 2016, July 29, 2016 and August 4, 2016; and

(d)   The description of the Company's securities contained in the Company's Current Report on Form 8-K, as filed with the Commission on July 16, 2015 and any amendment or report filed thereafter for the purposes of updating such description.

All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act (excluding any portion of these documents that has been furnished to and
 
deemed not to be filed with the Commission), prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents.  Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement.  Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

Item 4 . Description of Securities.

Not Applicable.

Item 5 . Interests of Named Experts and Counsel.

Not Applicable.

Item 6 . Indemnification of Directors and Officers.

Article Ninth of the Articles of Incorporation of MSB Financial Corp. (the "Corporation"), a Maryland corporation provides as follows:

NINTH: The Corporation shall indemnify (A) its directors and officers, whether serving the Corporation or at its request any other entity, to the fullest extent required or permitted by the general laws of the State of Maryland now or hereafter in force, including the advance of expenses under the procedures required, and (B) other employees and agents to such extent as shall be authorized by the Board of Directors or the Corporation's Bylaws and be permitted by law. The foregoing rights of indemnification shall not be exclusive of any rights to which those seeking indemnification may be entitled. The Board of Directors may take such action as is necessary to carry out these indemnification provisions and is expressly empowered to adopt, approve and amend from time to time such Bylaws, resolutions or contracts implementing such provisions or such further indemnification arrangements as may be permitted by law. No amendment of the Articles of Incorporation of the Corporation shall limit or eliminate the right to indemnification provided hereunder with respect to acts or omissions occurring prior to such amendment or repeal.

Item 7 . Exemption From Registration Claimed.

Not Applicable.

Item 8 . Exhibits.

For a list of all exhibits filed or included as part of this Registration Statement, see "Index to Exhibits" at the end of this Registration Statement.

Item 9 . Undertakings.

(a)   The undersigned registrant hereby undertakes:

(1)   To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
 
 

 
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement;

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however , that paragraphs (a)(1)(i) and (a)(1)(ii) do no apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

(2)           That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)           To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b)   The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c)   The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report, to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.

(d)   Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director,
 
 
officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES

The Registrant.   Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Millington, New Jersey, on the 15 th day of August, 2016.

 
MSB FINANCIAL CORP.
 
 
By:
 
/s/ Michael A. Shriner
   
Michael A. Shriner
   
President and Chief Executive Officer
(Duly Authorized Representative)

POWER OF ATTORNEY

We, the undersigned directors and officers of  MSB Financial Corp., do hereby severally constitute and appoint Michael A. Shriner as our true and lawful attorney and agent, to do any and all things and acts in our names in the capacities indicated below and to execute any and all instruments for us and in our names in the capacities indicated below which said Michael A. Shriner may deem necessary or advisable to enable MSB Financial Corp., to comply with the Securities Act of 1933, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission, in connection with the Registration Statement on Form S-8 relating to the registrant, including specifically, but not limited to, power and authority to sign, for any of us in our names in the capacities indicated below, the Registration Statement and any and all amendments (including post-effective amendments) thereto; and we hereby ratify and confirm all that said Michael A. Shriner shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated as of the date indicated.
 
/s/ Michael A. Shriner    /s/ Gary t. Jolliffe 
Michael A. Shriner
President, Chief Executive Officer and Director
(Principal Executive Officer)
 
Gary T. Jolliffe
Director
 
 
Date:
 
August 15, 2016
 
 
Date:
 
August 15, 2016
 
/s/ Donald J. Musso 
   
/s/ W. Scott Gallaway
Donald J. Musso
Director
 
W. Scott Gallaway
Director
 
Date:
 
August 15, 2016
 
 
Date:
 
August 15, 2016
 

/s/ Thomas G. McCain    /s/ Ferdinand J. Rossi 
Thomas G. McCain
Director
 
Ferdinand J. Rossi
Director
 
Date:
 
August 15, 2016
 
 
Date:
 
August 15, 2016
 
 
 
/s/ Raymond J. Vanaria 
Lawrence B. Seidman
Director
 
Raymond J. Vanaria
Director
 
Date:
 
 
 
Date:
 
August 15, 2016
         
 
/s/ Robert D. Vollers 
     
Robert D. Vollers
Director
 
     
Date:
August 15, 2016
     
         
 
/s/ John Kaufman 
     
John Kaufman
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
 
     
Date:     August 15, 2016
INDEX TO EXHIBITS

 
Exhibit
 
Description
   
3.1
Articles of Incorporation of MSB Financial Corp. (1)
   
3.2
Bylaws of MSB Financial Corp. (1)
   
4.0
Form of Common Stock Certificate (1)
   
5.1
Opinion as to legality
   
10.1
MSB Financial Corp. 2016 Equity Incentive Plan
   
23.1
Consent of Jones Walker, LLP (included in their opinion filed as Exhibit 5.1)
   
23.2
Consent of BDO USA, LLP
   
24.1
Power of Attorney (included as part of signature page)

(1)   Incorporated herein by reference to identically numbered exhibit to the Registration Statement on Form S-1 filed with the Commission on March 6, 2015 (File No. 333-202573).
 
 
Jones Walker, LLP
ATTORNEYS AT LAW
1227 25 th street, N.W.
Suite 200 West
Washington, D.C.  20037
(202) 434-4660
Facsimile: (202) 434-4661


August 15, 2016

Board of Directors
MSB Financial Corp.
1902 Long Hill Road
Millington, New Jersey 07946

RE:   Registration Statement on Form S-8 :
        MSB Financial Corp. 2016 Equity Incentive Plan

Ladies and Gentlemen:

We have acted as special counsel to MSB Financial Corp., a Maryland corporation (the "Company"), in connection with the preparation of the Registration Statement on Form S-8 to be filed with the Securities and Exchange Commission (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), relating to, among other things, the issuance of up to 394,099 shares of the Company's common stock, par value $0.01 per share (the "Common Stock") pursuant to options and restricted awards to be granted under the Company's 2016 Equity Incentive Plan (the "Plan") as more fully described in the Registration Statement.  You have requested the opinion of this firm with respect to certain legal aspects of the proposed offering.

We have examined such documents, records, and matters of law as we have deemed necessary for purposes of this opinion and based thereon, we are of the opinion that the Common Stock when issued in accordance with the terms of the Plan will be validly issued, fully paid, and nonassessable.

The foregoing opinion is limited to the Federal laws of the United States and the Maryland General Corporation Law and we are expressing no opinion as to the effect of the laws of any other jurisdiction.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement on Form S-8.  In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.

 
Sincerely,
   
   /s/ Jones Walker, LLP
   
 
JONES WALKER, LLP
 
 
 

MSB FINANCIAL CORP.
2016 EQUITY INCENTIVE PLAN



1.   PURPOSE OF PLAN.

The purpose of this MSB Financial Corp. 2016 Equity Incentive Plan is to promote the long-term financial success of MSB Financial Corp., and its Affiliates, by providing an additional tool to attract, retain and reward individuals who contribute to such success, and to further align the interests of the officers, employees and directors who contribute to the long-term success and growth of MSB Financial Corp., and its Affiliates, with the Company's stockholders.

2.   DEFINITIONS.

"Affiliate" means any "parent corporation" or "subsidiary corporation" of the Company, as such terms are defined in Sections 424(e) and 424(f) of the Code.  The term Affiliate shall include the Bank.

"Award" means a Restricted Stock Award and/or a Stock Option, as set forth at Section 6 of the Plan.

"Bank" means Millington Bank, and any successors thereto.

"Beneficiary" means the person or persons designated by the Participant to receive any benefits payable under the Plan in the event of such Participant's death.  Such person or persons shall be designated in writing by the Participant and addressed to the Company or the Committee on forms provided for this purpose by the Committee, and delivered to the Company or the Committee. Such Beneficiary designation may be changed from time to time by similar written notice to the Committee.  A Participant's last will and testament or any codicil thereto shall not constitute written designation of a Beneficiary.  In the absence of such written designation, the Beneficiary shall be the Participant's surviving spouse, if any, or if none, the Participant's estate.

"Board of Directors" or "Board" means the board of directors of the Company.

"Cause" or "Termination for Cause" means:  (i)  If the Participant is subject to a written employment agreement (or other similar written agreement) with the Company or an Affiliate that provides a definition of termination for "Cause," then, for purposes of this Plan, the term "Cause" shall have meaning set forth in such agreement, and (ii)  In the absence of such a definition, "Cause" means the personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profits, intentional failure to perform stated duties, willful violation of a material provision of any law, rule or regulation (other than traffic violations and similar offense), or a material violation of a final cease-and-desist order or any other action which results in a substantial financial loss to the Company or its Affiliates.

"Change in Control" shall, for purposes of the Plan, unless otherwise provided in an Award Agreement, be deemed to have occurred upon the earliest to occur of the following:

(a)   Merger .  The Company or the Bank merges into or consolidates with another entity, or merges another bank or corporation into the Company or the Bank, and as a result, less than a majority of the
 
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combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company or the Bank immediately before the merger or consolidation;

(b)   Acquisition of Significant Share Ownership. A person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of the Company's or the Bank's Voting Securities; provided, however, this clause (b) shall not apply to beneficial ownership of the Company's or the Bank's voting Shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding Voting Securities;

(c)   Change in Board Composition .  During any period of two consecutive years, individuals who constitute the Company's or the Bank's Board of Directors at the beginning of the two-year period cease for any reason to constitute at least a majority of the Company's or the Bank's Board of Directors; provided, however, that for purposes of this clause (c), 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 or the Bank sells to a third party all or substantially all of its assets.

Notwithstanding the foregoing, in the event that an Award constitutes Deferred Compensation (as defined in Section 9.5(d) hereof), and the settlement of, or distribution of benefits under, such Award is to be triggered solely by a Change in Control, then with respect to such Award, a Change in Control shall be defined as required under Code Section 409A, as in effect at the time of such transaction.

"Code" means the Internal Revenue Code of 1986, as amended, and related regulations promulgated thereunder.

"Committee" means the Board of Directors of the Company or the administrative committee appointed by such Board to administer the Plan.

"Common Stock" or "Shares" means shares of common stock, par value $0.01 per share, of the Company.

"Company" means MSB Financial Corp., a Maryland corporation, and any successor entity thereto.

"Director" means a person serving as a member of the Board of Directors of the Company or the Bank from time to time.

"Director Emeritus" means a person serving as a director emeritus, advisory director, consulting director or other similar position as may be appointed by the Board of Directors of the Company or the Bank from time to time.

"Disability" means (a) with respect to Incentive Stock Options, the "permanent and total disability" of the Employee as such term is defined at Section 22(e)(3) of the Code; and (b) with respect to other Awards, a condition of incapacity of a Participant which renders that person unable to engage in the performance of his or her duties by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.
 
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"Effective Date" shall mean the first date of approval of the Plan by the stockholders of the Company.

"Eligible Participant" means an Employee or Director who may receive an Award under the Plan.

"Employee" means any person employed by the Company or an Affiliate. Directors who are also employed by the Company or an Affiliate shall be considered Employees under the Plan.

"Exchange" means any national securities exchange on which the Common Stock may from time-to-time be listed or traded.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Exercise Price" means the price at which an individual may purchase a share of Common Stock pursuant to an Option.

"Fair Market Value" on any date, means (i) if the Common Stock is listed on an Exchange, the last reported sale price as of the closing on such Exchange or over such system on such date (and without regard to after-hours trading activity) or, in the absence of reported sales on such date, the last reported sale price on the  preceding date on which sales were reported, or (ii) if the Common Stock is not listed on a securities exchange, "Fair Market Value" shall mean a price determined by the Committee in good faith on the basis of objective criteria, and in accordance with Sections 409A and 422 of the Code, if applicable.

"Incentive Stock Option" means a Stock Option granted under the Plan, that is intended to meet the requirements of Section 422 of the Code.

"Non-Statutory Stock Option" means a Stock Option granted to an individual under the Plan that is not intended to be and is not identified as an Incentive Stock Option, or an Option granted under the Plan that is intended to be and is identified as an Incentive Stock Option, but that does not meet the requirements of Section 422 of the Code.

"Option" or "Stock Option" means an Incentive Stock Option or a Non-Statutory Stock Option, as applicable.

"Outside Director" means a member of the Board of Directors of the Company who is not also an Employee of the Company or an Affiliate.

"Parent" means the Company or any future corporation which would be a "parent corporation" of the Bank or the Company as defined in Sections 424(e) and (g) of the Code.

"Participant" means an individual who is granted an Award pursuant to the terms of the Plan; provide, however, upon the death of a Participant, the term "Participant" shall also refer to a Beneficiary designated in accordance with the Plan.

"Plan" means this MSB Financial Corp. 2016 Equity Incentive Plan.

"Restricted Stock Award" means an Award of Shares granted to a Participant pursuant to Section 6.5 of the Plan.

"Service" means continuous service as an Employee or Outside Director of the Company or an Affiliate, as the case may be, and shall include service as a Director Emeritus.  Service shall not be deemed
 
3
 
 
interrupted in the case of sick leave, military leave or any other absence approved by the Company or an Affiliate, in the case of transferees between payroll locations or between the Company, an Affilate or a successor entity.

"Termination of Service" means the first day occurring on or after a grant date on which the Participant ceases to be an Employee or Director (including a Director Emeritus) of the Company or any Affiliate, regardless of the reason for such cessation, subject to the following:
(a)   The Participant's cessation as an Employee shall not be deemed to occur by reason of the transfer of the Participant between the Company and an Affiliate or between two Affiliates.
(b)   The Participant's cessation as an Employee shall not be deemed to occur by reason of the Participant's being on a bona fide leave of absence from the Company or an Affiliate approved by the Company or Affiliate otherwise receiving the Participant's Services, provided such leave of absence does not exceed six months, or if longer, so long as the Employee retains a right to reemployment with the Company or Affiliate under an applicable statute or by contract. For these purposes, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Employee will return to perform Services for the Company or Affiliate. If the period of leave exceeds six months and the Employee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first day immediately following such six-month period. For purposes of this sub-section (b), to the extent applicable, an Employee's leave of absence shall be interpreted by the Committee in a manner consistent with Treasury Regulation Section 1.409A-1(h)(1).
(c)   If, as a result of a sale or other transaction, the Affiliate for whom Participant is employed (or to whom the Participant is providing Services) ceases to be an Affiliate, and the Participant is not, following the transaction, an Employee of the Company or an entity that is then an Affiliate, then the occurrence of such transaction shall be treated as the Participant's Termination of Service caused by the Participant being discharged by the entity for whom the Participant is employed or to whom the Participant is providing Services.
(d)   Except to the extent Section 409A of the Code may be applicable to an Award, and subject to the foregoing paragraphs of this sub-section, the Committee shall have discretion to determine if a Termination of Service has occurred and the date on which it occurred. In the event that any Award under the Plan constitutes Deferred Compensation (as defined in Section 9.5(d) hereof), the term Termination of Service shall be interpreted by the Committee in a manner consistent with the definition of "Separation from Service" as defined under Section 409A of the Code and under Treasury Regulation Section 1.409A-1(h)(ii). For purposes of this Plan, a "Separation from Service" shall have occurred if the Company, an Affiliate and the Participant reasonably anticipate that no further Services will be performed by the Participant after the date of the Termination of Service (whether as an employee or as an independent contractor) or the level of further Services performed will be less than 50% of the average level of bona fide Services in the 36 months immediately preceding the Termination of Service.
(e)   With respect to a Participant who is a Director, cessation as a Director will not be deemed to have occurred if the Participant continues as a Director Emeritus.  With respect to a Participant who is both an Employee and a Director, termination of employment as an Employee shall not constitute a Termination of Service for purposes of the Plan so long as the Participant continues to provide Service as an Outside Director or Director Emeritus.
"Trust" shall mean any grantor trust established by the Company for purposes of administration of the Plan.
 
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"Trustee" shall mean the trustee or trustees of any Trust established by the Company for purposes of administration of the Plan.  The Committee shall serve as the Trustee unless or until the Committee shall otherwise appoint a Trustee or successor trustee.

"Voting Securities" shall mean any securities which ordinarily possess the power to vote in the election of directors without the happening of any pre-condition or contingency.

3.   ADMINISTRATION.

(a) Committee.   The Plan shall be administered by the Board of Directors of the Company or a Committee appointed by such Board.  The Committee shall consist of two or more disinterested directors of the Company, who shall be appointed by the Board of Directors. A member of the Board of Directors shall be deemed to be disinterested only if he or she satisfies:  (i) such requirements as the Securities and Exchange Commission may establish for non-employee directors administering plans intended to qualify for exemption under Rule 16b-3 (or its successor) of the Exchange Act, and (ii) and to the extent deemed appropriate by the Board of Directors, such requirements as the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for exemption under Section 162(m)(4)(C) of the Code; provided, however, a failure to comply with the requirements of  subparagraphs (i) and (ii) shall not disqualify any actions taken by the Committee.  A disinterested director must be eligible to serve on the Company's Compensation Committee as required by any Exchange on which the Company lists its securities, if applicable.  A majority of the entire Committee shall constitute a quorum and the action of a majority of the members present at any meeting at which a quorum is present, as well as actions taken pursuant to the unanimous written consent of all of the members of the Committee without holding a meeting, shall be deemed to be actions of the Committee.  In no event may the Committee revoke outstanding Awards without the consent of the Participant.  All decisions, determinations and interpretations by the Committee shall be final, binding and conclusive on all persons affected thereby.

(b) Authority of Committee.   Subject to paragraph (a) of this Section 3, the Committee shall:

(i) select the individuals who are to receive grants of Awards under the Plan;
(ii) determine the type, number, vesting requirements, acceleration of vesting and other features and conditions of Awards made under the Plan;
(iii) interpret the Plan and Award Agreements (as defined below); and
(iv) make all other decisions and determinations that may be required or as the Committee deems necessary or advisable related to the operation of the Plan.

The Committee, in its discretion, shall have the authority to grant Stock Options that satisfy the requirements for deductibility for compensation in excess of $1 million in accordance with Section 162(m) of the Code as well as to grant Stock Options and Restricted Stock Awards that may not satisfy the requirements for deductibility for such compensation in excess of $1 million in accordance with Section 162(m) of the Code.

(c) Awards.   Each Award granted under the Plan shall be evidenced by a written agreement ( i.e. , an "Award Agreement").  Each Award Agreement shall constitute a binding contract between the Company or an Affiliate and the Participant, and every Participant, upon acceptance of an Award Agreement, shall be bound by the terms and restrictions of the Plan and the Award Agreement.  The terms of each Award Agreement shall be set in accordance with the Plan,
 
 
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but each Award Agreement may also include any additional provisions and restrictions determined by the Committee.  In particular, and at a minimum, the Committee shall set forth in each Award Agreement:
 
(i) the type of Award granted;
(ii)   the Exercise Price for any Option;
(iii)   the number of Shares or rights subject to the Award;
(iv) the expiration date of the Award;
(v) the manner, time and rate (cumulative or otherwise) of exercise or vesting of the Award; and
(vi) the restrictions, if any, placed on the Award, or upon Shares which may be issued upon the exercise or vesting of the Award.

The Chairman of the Committee and/or the President of the Company are hereby authorized to execute Award Agreements on behalf of the Company or an Affiliate and to cause them to be delivered to the Participants granted Awards under the Plan.

(d) Six-Month Holding Period.   Subject to vesting requirements, if applicable, except in the event of death or Disability of the Participant or a Change in Control of the Company, a minimum of six months must elapse between the date of the grant of an Award and the date of the sale of the Common Stock received through the exercise of such Option or the vesting of such Award.

4.   ELIGIBILITY.

Subject to the terms of the Plan, Employees and Directors, as the Committee shall determine from time to time, shall be eligible to receive Awards in accordance with the Plan.

5.   SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS.

5.1   Shares Available.   Subject to the provisions of Section 7, the Common Stock that may be delivered under this Plan shall be shares of the Company's authorized but unissued Common Stock, shares of Common Stock purchased in the open-market by the Company or any Trust established for purposes of administration of the Plan and any shares of Common Stock held as treasury shares.

5.2   Share Limits.   The maximum number of shares of Common Stock that may be delivered pursuant to Awards granted under this Plan (the "Share Limit") equals 394,099 Shares. The following limits also apply with respect to Awards granted under this Plan:

(a) The maximum number of shares of Common Stock that may be delivered pursuant to the exercise of Stock Options granted under this Plan is 281,499 Shares.

(b) The maximum number of shares of Common Stock that may be delivered pursuant to Restricted Stock Awards granted under this Plan is 112,600 Shares.

5.3   Awards Settled in Cash, Reissue of Awards and Shares.   To the extent that an Award is settled in cash or a form other than shares of Common Stock, or if shares of Common Stock are withheld from an Award for tax withholding purposes, then the Shares that would have been delivered had there been no such cash or other settlement shall be counted against the Shares available for issuance under this Plan. Shares that are subject to or underlie Awards which expire or for any reason are cancelled or terminated, are forfeited, fail
 
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to vest, or for any other reason are not paid or delivered under this Plan shall again be available for subsequent Awards under this Plan.

5.4   Reservation of Shares; No Fractional Shares; Minimum Issue.   The Company shall at all times reserve a number of shares of Common Stock sufficient to cover the Company's obligations and contingent obligations to deliver Shares with respect to Awards then outstanding under this Plan. No fractional Shares shall be delivered under this Plan. The Committee may pay cash in lieu of any fractional shares in settlements of Awards under this Plan. No fewer than 100 Shares may be purchased on exercise of any Stock Option unless the total number purchased or exercised constitutes the total number at the time available for purchase or exercise by the Participant.

6.   AWARDS.

6.1 Stock Options.

The Committee may, subject to the limitations of this Plan and the availability of shares of Common Stock reserved but not previously awarded under the Plan, grant Stock Options to Employees and Outside Directors, subject to terms and conditions as it may determine, to the extent that such terms and conditions are consistent with the following provisions:

(i) Exercise Price.   The Exercise Price of Stock Options shall not be less than one hundred percent (100%) of the Fair Market Value of the Common Stock on the date of grant.

(ii) Terms of Options.   In no event may an individual exercise an Option, in whole or in part, more than ten (10) years from the date of grant.

(iii) Non-Transferability.   Unless otherwise determined by the Committee, an individual may not transfer, assign, hypothecate, or dispose of an Option in any manner, other than by will or the laws of intestate succession.  The Committee may, however, in its sole discretion, permit the transfer or assignment of a Non-Statutory Stock Option, if it determines that the transfer or assignment is for valid estate planning purposes and is permitted under the Code and Rule 16b-3 of the Exchange Act.  For purposes of this Section 6.1, a transfer for valid estate planning purposes includes, but is not limited to, transfers:

(1) to a revocable inter vivos trust, as to which an individual is both settlor and trustee;

(2) for no consideration to:  (a) any member of the individual's Immediate Family; (b) a trust solely for the benefit of members of the individual's Immediate Family; (c) any partnership whose only partners are members of the individual's Immediate Family; or (d) any limited liability corporation or other corporate entity whose only members or equity owners are members of the individual's Immediate Family.

For purposes of this Section 6.1, "Immediate Family" includes, but is not necessarily limited to, a Participant's parents, grandparents, spouse, children, grandchildren, siblings (including half brothers and sisters), and individuals who are family members by adoption.  Nothing contained in this Section 6.1
 
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shall be construed to require the Committee to give its approval to any transfer or assignment of any Non-Statutory Stock Option or portion thereof, and approval to transfer or assign any Non-Statutory Stock Option or portion thereof does not mean that such approval will be given with respect to any other Non-Statutory Stock Option or portion thereof.  The transferee or assignee of any Non-Statutory Stock Option shall be subject to all of the terms and conditions applicable to such Non-Statutory Stock Option immediately prior to the transfer or assignment and shall be subject to any other conditions prescribed by the Committee with respect to such Non-Statutory Stock Option.
 
(iv) Special Rules for Incentive Stock Options.   Notwithstanding the foregoing provisions, the following rules shall further apply to grants of Incentive Stock Options:

(1) If an Employee owns or is treated as owning, for purposes of Section 422 of the Code, Common Stock representing more than ten percent (10%) of the total combined voting securities of the Company at the time the Committee grants the Incentive Stock Option (a "10% Owner"), the Exercise Price shall not be less than one hundred and ten percent (110%) of the Fair Market Value of the Common Stock on the date of grant.

(2) An Incentive Stock Option granted to a 10% Owner shall not be  exercisable more than five (5) years from the date of grant.

(3) To the extent the aggregate Fair Market Value of shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an Employee during any calendar year, under the Plan or any other stock option plan of the Company, exceeds $100,000, or such higher value as may be permitted under Section 422 of the Code, Incentive Stock Options in excess of the $100,000 limit shall be treated as Non-Statutory Stock Options.  Fair Market Value shall be determined as of the date of grant for each Incentive Stock Option.

(4) Each Award Agreement for an Incentive Stock Option shall require the individual to notify the Committee within ten (10) days of any disposition of shares of Common Stock under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions).

(5) Incentive Stock Options may only be awarded to an Employee of the Company or its Affiliates.
 
(v) Option Awards to Outside Directors.  Subject to the limitations of Section 6.4(a), the Committee may award Non-Statutory Stock Options to purchase shares of Common Stock to each Outside Director of the Company at an Exercise Price equal to the Fair Market Value of the Common Stock on such date of grant.  The Options will be first exercisable at the rate of 20% on the one year anniversary of the date of grant of such Award and 20% annually thereafter during periods of continuing Service as a Director or Director Emeritus.  Upon the death or Disability of the Director or Director Emeritus, such Option shall be deemed immediately 100%
 
 
 
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exercisable.  In the event of the Director's death, such Options may be exercised by the Beneficiary or the personal representative of his estate or person or persons to whom his rights under such Option shall have passed by will or by the laws of descent and distribution. The Exercise Price per share of such Options granted shall be equal to the Fair Market Value of the Common Stock at the time such Options are granted.  All outstanding Awards shall become immediately exercisable in the event of a Change in Control of the Bank or the Company. Unless otherwise inapplicable, or inconsistent with the provisions of this paragraph, the Options to be granted to Outside Directors hereunder shall be subject to all other provisions of this Plan.
 
6.2   Award Payouts.   Awards may be paid out in the form of cash, Common Stock, or combinations thereof as the Committee shall determine in its sole discretion, and with such restrictions as it may impose.

6.3   Consideration for Stock Options.   The Exercise Price for any Stock Option granted under this Plan may be paid by means of any lawful consideration as determined by the Committee, including, without limitation, one or a combination of the following methods:

(a) cash, check payable to the order of the Company, or electronic funds transfer;
(b)
the delivery of previously owned shares of Common Stock; or
(c)
subject to such procedures as the Committee may adopt, pursuant to a "cashless exercise" with a third party who provides financing for the purposes of (or who otherwise facilitates) the purchase or exercise of such Stock Option.

In no event shall any Shares newly-issued by the Company be issued for less than the minimum lawful consideration for such Shares or for consideration other than consideration permitted by applicable state law. In the event that the Committee allows a Participant to exercise an Option by delivering shares of Common Stock previously owned by such Participant, any such Shares delivered which were initially acquired by the Participant from the Company (upon exercise of a stock option or otherwise) must have been owned by the Participant for at least six months prior to such date of delivery. Shares of Common Stock used to satisfy the Exercise Price of an Option shall be valued at their Fair Market Value on the date of exercise. The Company will not be obligated to deliver any Shares upon the exercise of a Stock Option unless and until it receives full payment of the Exercise Price and any related withholding obligations under Section 9.5 have been satisfied, or until any other conditions applicable to exercise or purchase have been satisfied. No shares of Common Stock shall be issued until full payment has been received by the Company, and no Participant shall have any of the rights of a stockholder of the Company until shares of Common Stock are issued upon the exercise of such Stock Options. Unless expressly provided otherwise in the applicable Award Agreement, the Committee may at any time within its sole discretion eliminate or limit a Participant's ability to pay the purchase or Exercise Price of any Award by any method other than a cash payment to the Company.

6.4   Limitations on Awards.

(a) Stock Option Award Limitations.   In no event shall Shares awarded pursuant to Stock Options granted to Outside Directors in the aggregate under this Plan exceed more than 30% of the total number of Shares authorized for delivery under this Plan with respect to Stock Options as set forth at Section 5.2(a) or exceed more than 5% of such Shares (14,074 Shares) to any individual Outside Director.  In no event shall Shares awarded pursuant to Stock Options granted to any single Employee in the aggregate under the Plan exceed more than
 
 
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25% of the total number of Shares authorized for delivery under the Plan with respect to Stock Options as set forth at Section 5.2(a), and no single Employee may be awarded more than 25% of the total number of such Shares authorized for delivery under the Plan with respect to Stock Options (70,374 Shares) in any one calendar year.
 
(b)
Vesting of Awards.   Except as otherwise provided by the terms of the Plan or by action of the Committee at the time of the grant of an Award, Stock Options will be first earned and exercisable and Restricted Stock Awards will be earned and non-forfeitable at the rate of 20% of such Award on the one year anniversary of the date of grant and 20% annually thereafter during such periods of continued service as an Employee, Director or Director Emeritus.  Award vesting may accelerate in the event of the death or Disability of the Participant or in the event of a Change in Control by action or approval of the Committee.

(c)
Restricted Stock Award Limitations.   In no event shall Shares subject to Restricted Stock Awards granted to Outside Directors in the aggregate under this Plan exceed more than 30% of the total number of Shares authorized for delivery under this Plan with respect to Restricted Stock Awards as set forth at Section 5.2(b) or exceed more than 5% of such Shares (5,630 Shares) to any individual Outside Director.  In no event shall Shares awarded pursuant to Restricted Stock Awards granted to any single Employee in the aggregate under the Plan exceed more than 25% of the total number of Shares authorized for delivery under the Plan with respect to Restricted Stock Awards as set forth at Section 5.2(b), and no single Employee may be awarded more than 25% of the total number of such Shares authorized for delivery under the Plan with respect to Restricted Stock Awards (28,150 Shares) in any one calendar year.

6.5   Restricted Stock Awards.  The Committee may make grants of Restricted Stock Awards, which shall consist of the grant of some number of shares of Common Stock to an individual upon such terms and conditions as it may determine, to the extent such terms and conditions are consistent with the following provisions:

(a) Grants of Stock.   Restricted Stock Awards may only be granted in dominations of whole shares of Common Stock.
(b) Non-Transferability.   Except to the extent permitted by the Code, the rules promulgated under Section 16(b) of the Exchange Act or any successor statutes or rules:
(1) The recipient of a Restricted Stock Award grant shall not sell, transfer, assign, pledge, or otherwise encumber Shares subject to the grant until such Shares have become earned and non-forfeitable. For purposes of this Section 6.5, the separation of beneficial ownership and legal title through the use of any "swap" transaction is deemed to be a prohibited encumbrance.
(2)
Unless otherwise determined by the Committee, and except in the event of the Participant's death or pursuant to a qualified domestic relations order, a Restricted Stock Award grant is not transferable and may be earned only by the individual to whom it is granted during his or her lifetime. Upon the death of a Participant, a Restricted Stock Award shall be transferred to the Beneficiary.  The designation of a Beneficiary shall not constitute a transfer.
 
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(3)
If the recipient of a Restricted Stock Award is subject to the provisions of Section 16 of the Exchange Act, shares of Common Stock subject to the grant may not, without the written consent of the Committee (which consent may be given in the Award Agreement), be sold or otherwise disposed of within six (6) months following the date of grant.
(c)   Distribution of Shares ; Issuance of Certificates.   Not later than thirty days following the date that the Restricted Stock Award, or portion thereof, shall be deemed earned and non-forfeitable, the Committee shall distribute the Shares earned in accordance with such Restricted Stock Award, or portion thereof.  The Committee, in its sole discretion, may permit the issuance of shares of Common Stock to be issued pursuant to a Restricted Stock Award prior to the time that such Award shall be deemed earned and non-forfeitable, with such stock certificate evidencing such Shares registered in the name of the Participant to whom the Restricted Stock Award was granted; provided, however, that the Company may not cause a stock certificate to be issued unless it has received a general stock power in favor of the Company duly endorsed in blank with respect to such Shares. Further, each such stock certificate shall bear the following legend:

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS (INCLUDING FORFEITURE PROVISIONS AND RESTRICTIONS AGAINST TRANSFER) CONTAINED IN THE MSB FINANCIAL CORP. 2016 EQUITY INCENTIVE PLAN, AND THE RELATED AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER OF SUCH SHARES AND MSB FINANCIAL CORP. THE PLAN AND AWARD AGREEMENT ARE ON FILE IN THE OFFICE OF THE CORPORATE SECRETARY OF MSB FINANCIAL CORP.

This legend shall not be removed until such Restricted Stock Award, or portion thereof, shall be deemed earned and non-forfeitable by the Participant pursuant to the terms of the Plan and respective Award Agreement. Each certificate issued pursuant to this Section 6.5 shall be held by the Company or its Affiliates, unless the Committee determines otherwise.

(d) Treatment of Dividends.   A Restricted Stock Award shall include all dividends and other distributions declared and paid on all shares of Common Stock subject to a Restricted Stock Award from and after the date of grant of such Restricted Stock Award. Such dividends and other distributions shall be distributed to the holder of such Restricted Stock Award in accordance with the procedures approved by the Committee, but in no event later than 30 days following the date that the underlying Shares associated with the Restricted Stock Award shall be deemed earned and non-forfeitable; provided that in the event of the forfeiture of such Restricted Stock Award, all dividend rights associated with such Award prior to the date that such Award shall be deemed earned and non-forfeitable shall be forfeited.  Stock dividends issued with respect to a Restricted Stock Award shall be subject to the same terms and conditions that apply to the Shares represented by such underlying Restricted Stock Award.
 
(e) Voting Rights Associated with of Restricted Stock Awards.   Voting rights associated with any Restricted Stock Award shall not be exercised by the Participant until certificates of Common Stock representing such Award have been issued to such Participant, and such Restricted Stock Award shall be deemed earned and non-forefeitable. Any shares of Common Stock held by the Trust prior to issuance to a Participant shall be voted by the Trustee of such
 
 
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Trust as directed by the Committee. Any shares of Common Stock held by Company prior to such time that the Awards are earned and non-forfeitable shall be voted by the Committee in accordance with the general stock power held by the Company applicable to such Shares.
 
(f) Restricted Stock Awards to Outside Directors.   Subject to the limitations at Section 6.4(c), the Committee may grant a Restricted Stock Award consisting of shares of Common Stock to each Outside Director of the Company;   provided however, a Director first serving as such after January 1, 2013 shall not be eligible to receive a Restricted Stock Award.  Such Award shall be earned and non-forfeitable at the rate of one-fifth as of the one-year anniversary of such date of grant and an additional one-fifth following each of the next four successive years during such periods of Service as a Director or Director Emeritus.  Such Award shall be immediately 100% earned and non-forfeitable in the event of the death or Disability of such Director.  Such Award shall be immediately 100% earned and non-forfeitable upon a Change in Control of the Company or the Bank.

7.   EFFECT OF TERMINATION OF SERVICE ON AWARDS.

7.1   General.   The Committee shall establish the effect of a Termination of Service on the continuation of rights and benefits available under an Award, and, in so doing, may make distinctions based upon, inter alia , the recipient of such Award, the cause of termination and the type of the Award.  Notwithstanding the foregoing, the terms of Awards shall be consistent with the following, as applicable:

(a) Termination of Service.   In the event that any Participant's employment or or Service with the Company shall terminate for any reason, other than Disability or death, all of any such Participant's Stock Options, and all of any such Participant's rights to purchase or receive shares of Common Stock pursuant thereto, shall automatically terminate on (A) the earlier of (i) or (ii):  (i) the respective expiration dates of any such Stock Options, or (ii) the expiration of not more than three (3) months after the date of such termination of Service; or (B) at such later date as is determined by the Committee at the time of the grant of such Award based upon the Participant's continuing status as a Director or Director Emeritus of the Bank or the Company, and further that following a period of three months following termination of Service, such Award shall thereafter be deemed a Non-Statutory Stock Option, if such Option had previously been awarded as an Incentive Stock Option.  Notwithstanding anything herein to the contrary, except as otherwise detailed by the Committee at the time of grant of an Award, upon the termination of employment of a Participant who shall continue Service thereafter as a Director or Director Emeritus, all previously granted Awards shall continue to be earned and non-forfeitable annually in accordance with the schedule detailed at the time of such Award, and all Stock Options shall remain exercisable during such period of service as a Director or Director Emeritus or the expiration date of such Award, if earlier.

(b) Disability.   In the event that any Participant's Service with the Company shall terminate as the result of the Disability of such Participant, such Participant may exercise any Stock Options previously granted to the Participant pursuant to the Plan at any time prior to the earlier of (i) the respective expiration dates of any such Stock Options or (ii) the date which is one (1) year after the date of such termination of Service, but only if, and to the extent that, the Participant was entitled to exercise any such Stock Options at the date of such termination of Service.  Notwithstanding anything herein to the contrary, except as otherwise detailed by the Committee at the time of grant of an Award, upon the Disability of a Participant, all previously granted Awards shall become immediately earned and non-forfeitable, and all
 
 
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Stock Options shall remain exercisable for a period of one year following such date of Disability or the expiration date of such Award, if earlier.
 
(c) Death.   In the event of the death of a Participant, any Stock Options previously granted to such Participant may be exercised by the Participant's Beneficiary or the person or persons to whom the Participant's rights under any such Stock Options pass by will or by the laws of descent and distribution (including the Participant's estate during the period of administration) at any time prior to the earlier of (i) the respective expiration dates of any such Stock Options or (ii) the date which is two (2) years after the date of death of such Participant, but only if, and to the extent that, the Participant was entitled to exercise any such Stock Options at the date of death.  For purposes of this Section 7.1(c), any Stock Option held by a Participant shall be considered exercisable at the date of his death if the only unsatisfied condition precedent to the exercisability of such Stock Option at the date of death is the passage of a specified period of time.  At the discretion of the Committee, upon exercise of such Options, the Beneficiary may receive Shares or cash or a combination thereof.  If cash shall be paid in lieu of shares of Common Stock, such cash shall be equal to the difference between the Fair Market Value of such Shares and the exercise price of such Options on the exercise date. Notwithstanding anything herein to the contrary, except as otherwise detailed by the Committee at the time of grant of an Award, upon the death of a Participant, all previously granted Awards shall become immediately earned and non-forfeitable, and all Stock Options shall remain exercisable for a period of two years following such date of death or the expiration date of such Award, if earlier.

7.2   Events Not Deemed Terminations of Employment or Termination of Service.   Unless Company policy or the Committee provides otherwise, the employment relationship shall not be considered terminated in the case of (a) sick leave, (b) military leave, or (c) any other leave of absence authorized by the Company or the Committee; provided that, unless reemployment upon the expiration of such leave is guaranteed by contract or law, such leave is for a period of not more than six months. In the case of any Employee on an approved leave of absence, continued vesting of the Award while on leave may be suspended until the Employee returns to service, unless the Committee otherwise provides or applicable law otherwise requires. In no event shall an Award be exercised after the expiration of the term set forth in the Award Agreement.

7.3   Effect of Change of Affiliate Status.   For purposes of this Plan and any Award, if an entity ceases to be an Affiliate of the Company, a Termination of Service shall be deemed to have occurred with respect to each individual who does not continue as an Employee or Outside Director with another entity within the Company after giving effect to the Affiliate's change in status.

8. ADJUSTMENTS IN CAPITAL STRUCTURE; ACCELERATION UPON A CHANGE IN CONTROL.

8.1   Adjustments in Capital Structure.   Upon any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend) or reverse stock split ("stock split"); any merger, combination, consolidation, or other reorganization; any spin-off, split-up, or similar extraordinary dividend distribution with respect to the Common Stock (whether in the form of securities or property); any exchange of Common Stock or other securities of the Company, or any similar, unusual or extraordinary corporate transaction affecting the Common Stock; or a sale of all or substantially all the business or assets of the Company in its entirety; then the Committee shall proportionately adjust the Plan and the Awards thereunder in such manner,  to such extent and at such times, as is necessary to preserve the benefits or potential benefits of such Awards, including:
 
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(a) proportionately adjust any or all of: (1) the number and type of shares of Common Stock (or other securities) that thereafter may be made the subject of Awards (including the specific Share Limits, maximums and numbers of Shares set forth elsewhere in this Plan); (2) the number, amount and type of shares of Common Stock (or other securities or property) subject to any or all outstanding Awards; (3) the grant, purchase, or Exercise Price of any or all outstanding Awards; (4) the securities, cash or other property deliverable upon exercise or payment of any outstanding Awards; or (5) the performance standards applicable to any outstanding Awards; or

(b) make provision for a cash payment or for the assumption, substitution or exchange of any or all outstanding Awards, based upon the distribution or consideration payable to holders of the Common Stock.

8.2   The Committee may adopt such valuation methodologies for outstanding Awards as it deems reasonable in the event of a cash or property settlement and, in the case of Options, may base such settlement solely upon the excess, if any, of the per share amount payable upon or in respect of such event over the Exercise Price or base price of the Award. With respect to any Award of an Incentive Stock Option, the Committee may make an adjustment that causes the Option to cease to qualify as an Incentive Stock Option without the consent of the affected Participant.

8.3   Upon any of the events set forth in Section 8.1, the Committee may take such action prior to such event to the extent that the Committee deems the action necessary to permit the Participant to realize the benefits intended to be conveyed with respect to the Awards in the same manner as is or will be available to stockholders of the Company generally.  In the case of any stock dividend, stock split or reverse stock split, if no action is taken by the Committee, the proportionate adjustments contemplated by Section 8.1(a) above shall nevertheless be made.

8.4   Change in Control Acceleration of Awards.   Unless otherwise determined by the Committee, upon a Change in Control of the Company or the Bank, each Stock Option then outstanding shall immediately become fully earned and exercisable and remain exercisable for its remaining term, and all Restricted Stock Awards then outstanding shall be deemed 100% earned and non-forfeitable and be free of restrictions.

8.5   Acceleration of Vesting.   The Committee shall at all times have the power to accelerate the exercise date of Options and the date that Restricted Stock Awards shall be earned and non-forfeitable with respect to previously granted Awards; provided that such action is not contrary to regulations of the Board of Governors of the Federal Reserve or other appropriate banking regulatory agency then in effect.

9.   MISCELLANEOUS PROVISIONS.

9.1   Compliance with Laws.   This Plan, the granting and vesting of Awards under this Plan, the offer, issuance and delivery of shares of Common Stock, the acceptance of payment of money under this Plan or under Awards are subject to compliance with all applicable federal and state laws, rules and regulations (including, but not limited to, state and federal securities laws) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith.  The person acquiring any securities under this Plan will, if requested by the Company, provide such assurances and representations to the Company as may be deemed necessary or desirable to assure compliance with all applicable legal and accounting requirements.
 
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9.2   Claims.   No person shall have any claim or rights to an Award (or additional Awards, as the case may be) under this Plan, subject to any express contractual rights to the contrary (set forth in a document other than this Plan).

9.3   No Employment or Service Contract.   Nothing contained in this Plan (or in any other documents under this Plan or in any Award Agreement) shall confer upon any Participant any right to continue in the employ or other service of the Company, constitute any contract or agreement of employment or other service or affect an Employee's status as an employee-at-will, nor interfere in any way with the right of the Company to change a Participant's compensation or other benefits, or terminate his or her employment or other service, with or without cause.  Nothing in this Section 9.3, however, is intended to adversely affect any express independent right of such Participant under a separate employment or service contract other than an Award Agreement.

9.4   Plan Not Funded.   Awards payable under this Plan shall be payable in shares of Common Stock or from the general assets of the Company. No Participant, beneficiary or other person shall have any right, title or interest in any fund or in any specific asset (including shares of Common Stock, except as expressly provided otherwise) of the Company by reason of any Award hereunder. Neither the provisions of this Plan (or of any related documents), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company and any Participant, Beneficiary or other person. To the extent that a Participant, Beneficiary or other person acquires a right to receive payment pursuant to any Award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company.  Notwithstanding the foregoing, the Company may establish a Trust in accordance with Section 10 with respect to Awards made in accordance with Section 6.5 herein.

9.5   Tax Matters; Tax Withholding.

(a) Tax Withholding.   Upon any exercise, vesting, or payment of any Award, the Company shall have the right, within its sole discretion, to:

(i) require the Participant (or the Participant's personal representative or Beneficiary, as the case may be) to pay or provide for payment of at least the minimum amount of any taxes which the Company may be required to withhold with respect to such Award or payment; or

(ii) deduct from any amount otherwise payable in cash to the Participant (or the Participant's personal representative or Beneficiary, as the case may be) the minimum amount of any taxes which the Company may be required to withhold with respect to such cash payment, or

(iii) in any case where tax withholding is required in connection with the delivery of shares of Common Stock under this Plan, the Committee may, in its sole discretion, pursuant to such rules and subject to such conditions as the Committee may establish, reduce the number of Shares to be delivered to the Participant by the appropriate number of Shares, valued in a consistent manner at their Fair Market Value as necessary to satisfy the minimum applicable withholding obligation.  In no event shall the Shares withheld exceed the minimum whole number of Shares required for tax withholding under applicable law.
 
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(b)
Required Notification of Section 83(b) Election.   In the event a Participant makes an election under Section 83(b) of the Code in connection with an Award, the Participant shall notify the Company of such election within ten days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code or other applicable provision.

(c)
Requirement of Notification Upon Disqualifying Disposition Under Section 421(b) of the Code.   If any Participant shall make any disposition of shares of Common Stock delivered pursuant to the exercise of Incentive Stock Options under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions), such Participant shall notify the Company of such disposition within ten days thereof.

(d)
Section 409A Matters . If any Award would be considered "non-qualified deferred compensation" within the meaning of Section 409A of the Code ("Deferred Compensation"), the Committee reserves the absolute right (including the right to delegate such right) to unilaterally amend the Plan or the Award Agreement, without the consent of the Participant, to maintain exemption from, or to comply with, Section 409A of the Code.  Any amendment by the Committee to the Plan or an Award Agreement pursuant to this Section shall maintain, to the extent practicable, the original intent of the applicable provision without violating Section 409A of the Code. A Participant's acceptance of any Award under the Plan constitutes acknowledgement and consent to such rights of the Committee, without further consideration or action. Any discretionary authority retained by the Committee pursuant to the terms of this Plan or pursuant to an Award Agreement shall not be applicable to an Award which is determined to constitute Deferred Compensation, if such discretionary authority would contravene Section 409A of the Code. To the extent that any Award is determined to constitute Deferred Compensation (a "409A Award"), the Award shall be subject to such additional rules and requirements as specified by the Committee from time to time in order to comply with Section 409A of the Code. In this regard, if any amount under a 409A Award is payable upon a "separation from service" (within the meaning of Section 409A of the Code) to a Participant who is then considered a "specified employee" (within the meaning of Section 409A of the Code), then no such payment shall be made prior to the date that is the earlier of (i) the first day of the seventh month following the Participant's separation from service, or (ii) the Participant's death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A of the Code. Further, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A of the Code. To the extent that an Award is deemed to constitute a 409A Award, and the settlement of, or distribution of benefits thereunder of, such Award is to be triggered solely by a Change in Control, then with respect to such Award, a Change in Control shall be defined as required in conformity with the limitations under Section 409A of the Code, as in effect at the time of such Change in Control transaction.

9.6 Effective Date, Termination and Suspension, Amendments.

(a) Effective Date and Termination.   This Plan shall be effective as of the first date of approval of the Plan by the requisite vote of the stockholders of the Company.  ("Approval Date").  Unless earlier terminated by the Board, this Plan shall terminate at the close of business on the day immediately prior to the tenth (10th) anniversary of the Approval Date. After the termination of this Plan either upon such stated expiration date or its earlier termination by the Board, no additional Awards may be granted under this Plan, but previously granted Awards
 
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(and the authority of the Committee with respect thereto, including the authority to amend such Awards) shall remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of this Plan.
 
(b) Board and Committee Authorization; No Option Re-Pricing.
 
(i)
Amendments; No Re-Pricing .  Subject to applicable laws and regulations, the Board of Directors may, at any time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part; provided, however, except as contemplated in accordance with Section 8 of the Plan, and reductions of the Exercise Price approved by the Company's stockholders, neither the Committee nor the Board shall have the authority to make any adjustment or amendment that reduces or would have the effect of reducing the Exercise Price of a Stock Option previously granted under the Plan, whether through amendment, cancellation (including cancellation in exchange for a cash payment in excess of the Stock Option's in-the-money value) or replacement grants, or other means. Further, no amendment may (A) materially increase the benefits accruing to Participants under the Plan, (B) materially increase the aggregate number of securities which may be issued under the Plan, other than pursuant to Section 8, or (C) materially modify the requirements for participation in the Plan, unless the amendment under (A), (B) or (C) above is approved by a vote of the Company's stockholders. No Awards may be granted during any period that the Board of Directors suspends this Plan; and
 
(ii) Amendment to Conform to Law and Accounting Changes .  Notwithstanding any provision in this Plan or any Award Agreement to the contrary, the Committee may amend the Plan or any Award Agreement, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of (A) conforming the Plan or the Award Agreement to any present or future law relating to plans of this or similar nature (including, but not limited to, Section 409A of the Code), or (B) avoiding an accounting treatment resulting from an accounting pronouncement or interpretation thereof issued by the Securities and Exchange Commission or Financial Accounting Standards Board subsequent to the adoption of the Plan or the making of the Award affected thereby, which, in the sole discretion of the Committee, may materially and adversely affect the financial condition or results of operations of the Company. By accepting an Award under this Plan, each Participant agrees and consents to any amendment made pursuant to this Section 9.6(b) or Section 9.5(d) to any Award granted under the Plan without further consideration or action.
 
(c) Stockholder Approval. The Plan must be approved by a vote of the majority of the total votes eligible to be cast in person or by proxy by Company stockholders at a meeting of stockholders of the Company.  Thereafter, material amendments to the Plan, if any, shall be approved by a majority of the votes cast by stockholders of the Company at a meeting of stockholders held in the future not earlier than July 17, 2016 or such greater vote as may be required by law or requirements of any Exchange on which the Common Stock may be listed.

(d) Limitations on Amendments to Plan and Awards.   No amendment, suspension or termination of this Plan or change affecting any outstanding Award shall, without the written consent of the Participant, affect in any manner materially adverse to the Participant any rights or benefits of the Participant or obligations of the Company under any Award granted under this Plan prior to the effective date of such change. Changes, settlements and other actions
 
 
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contemplated by Section 8 shall not be deemed to constitute changes or amendments for purposes of this Section 9.6.
 
9.7 Governing Law; Compliance with Regulations; Construction; Severability.

(a) Construction.   This Plan, the Awards, all documents evidencing Awards and all other related documents shall be governed by, and construed in accordance with, the laws of the State of Maryland to the extent not preempted by Federal law.

(b) Compliance with Regulations.   It is intended that this Plan and the Awards issued hereunder comply with all applicable regulatory requirements, including but not limited to 12 CFR § 239.63(a) as it applies to management stock benefit plans implemented within 12 months following a mutual-to-stock conversion. Notwithstanding anything to the contrary in this Plan or in any Award Agreement, the Plan and the Awards will be administered and interpreted in a manner consistent with all applicable regulatory requirements, including but not limited to those set forth at Section 6.4 and the following:

(i) Options and Restricted Stock Awards may not begin to vest earlier than one (1) year after the date of shareholder approve the Plan, and may not vest more rapidly than 20% per year;

(ii) accelerated vesting of Options and Restricted Stock Awards will not be permitted except for death, Disability or upon a Change in Control;

(iii) executive officers or directors must exercise or forfeit their Options in the event the Company becomes critically undercapitalized, is subject to enforcement action by the Board of Governors of the Federal Reserve System, or receives a capital directive; and

(iv) the grant and settlement of Awards under this Plan shall be conditioned upon and subject to compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. 1828(k), and the rules and regulations promulgated thereunder.

(c) Severability.   If a court of competent jurisdiction holds any provision of the Plan as invalid and unenforceable, the remaining provisions of this Plan shall continue in effect.

(d) Section 16 of Exchange Act.   It is the intent of the Company that the Awards and transactions permitted by Awards be interpreted in a manner that, in the case of Participants who are or may be subject to Section 16 of the Exchange Act, qualify, to the maximum extent compatible with the express terms of the Award, for exemption from matching liability under Rule 16b-3 promulgated under the Exchange Act. Notwithstanding the foregoing, the Company shall have no liability to any Participant for Section 16 consequences of Awards or events affecting Awards if an Award or event does not so qualify.

(e) Compliance with Law.   Shares of Common Stock shall not be issued with respect to any Award granted under the Plan unless the issuance and delivery of such Shares shall comply with all relevant provisions of applicable law, including, without limitation, the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, any applicable state securities laws and the requirements of any Exchange upon which the Shares may then be listed.
 
 
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(f) Necessary Approvals.   The inability of the Company to obtain any necessary authorizations, approvals or letters of non-objection from any regulatory body or authority deemed by the Company's counsel to be necessary to the lawful issuance and sale of any shares of Common Stock issuable hereunder shall relieve the Company of any liability with respect to the non-issuance or sale of such Shares.

(g) Representations and Warranties of Participants.   As a condition to the exercise of any Option or the delivery of Shares in accordance with an Award, the Company may require the person exercising the Option or receiving delivery of the Shares to make such representations and warranties as may be necessary to assure the availability of an exemption from the registration requirements of federal or state securities law.

(h) Termination for Cause.   Notwithstanding anything herein to the contrary, upon the termination of employment or Service of a Participant by the Company or an Affiliate for Cause as determined by the Board of Directors or the Committee, all Awards held by such Participant which have not yet been delivered and deemed earned and non-forfeitable shall be forfeited by such Participant as of the date of such Termination of Service.

(i) Cash Payment in Lieu of Delivery of Shares.   Upon the exercise of an Option, the Committee, in its sole and absolute discretion, may make a cash payment to the Participant, in whole or in part, in lieu of the delivery of shares of Common Stock.  Such cash payment to be paid in lieu of delivery of Common Stock shall be equal to the difference between the Fair Market Value of the Common Stock on the date of the Option exercise and the exercise price per share of the Option.  Such cash payment shall be in exchange for the cancellation of such Option.  Such cash payment shall not be made in the event that such transaction would result in liability to the Participant or the Company under Section 16(b) of the Exchange Act and regulations promulgated thereunder, or subject the Participant to additional tax liabilities related to such cash payments pursuant to Section 409A of the Code.  The Committee may, in its sole discretion, determine that upon a Change in Control of the Company each outstanding Stock Option shall be cancelled in exchange for a cash payment equal to the difference between the Fair Market Value of the shares of Common Stock on the date of the Stock Option cancellation and the Exercise Price per share of the Stock Option.

(j) Forfeiture of Awards in Certain Circumstances.   In addition to any forfeiture or reimbursement conditions the Committee may impose upon an Award, a Participant may be required to forfeit an Award, or reimburse the Company for the value of a prior Award, by virtue of the requirement of Section 304 of the Sarbanes-Oxley Act of 2002 (or by virtue of any other applicable statutory or regulatory requirement), but only to the extent that such forfeiture or reimbursement is required by such statutory or regulatory provision. In addition, Awards granted in accordance with the Plan shall be subject to any clawback or recoupment policies adopted by the Board from time to time, even if adopted after the date of grant of such Awards.  Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash consideration, the Participant shall be repaid the amount of such cash consideration.

9.8   Captions.   Captions and headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof.
 
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9.9   Non-Exclusivity of Plan.   Nothing in this Plan shall limit or be deemed to limit the authority of the Board of Directors or the Committee to grant Awards or authorize any other compensation, with or without reference to the Common Stock, under any other plan or authority.

9.10   Limitation on Liability; Indemnification.   No Director, member of the Committee or the Trustee shall be liable for any determination made in good faith with respect to the Plan, the Trust or any Awards granted.  If a Director, member of the Committee or the Trustee is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by any reason of anything done or not done by him or her in such capacity under or with respect to the Plan, the Company shall indemnify such person against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in the best interests of the Company and its Affiliates and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

10.   TRUST ARRANGEMENT.

10.1   Activities of Trustee.   The Trustee shall receive, hold, administer, invest and make distributions and disbursements from the Trust in accordance with the provisions of the Plan and the applicable directions, rules, regulations, procedures and policies established by the Committee pursuant to the Plan.

10.2   Management of Trust.   It is the intention of this Plan that the Trustee shall have complete authority and discretion with respect to the management, control and investment of the Trust, and that the Trustee shall invest all assets of the Trust, except those attributable to cash dividends paid with respect to unearned and unawarded Restricted Stock Awards, in Common Stock to the fullest extent practicable, except to the extent that the Trustee determines that the holding of monies in cash or cash equivalents is necessary to meet the obligations of the Trust.  In performing their duties, the Trustee shall have the power to do all things and execute such instruments as may be deemed necessary or proper, including the following powers:

(a) To invest up to one hundred percent (100%) of all Trust assets in the Common Stock without regard to any law now or hereafter in force limiting investments for Trustee or other fiduciaries.  The investment authorized herein may constitute the only investment of the Trust, and in making such investment, the Trustee is authorized to purchase Common Stock from the Parent or from any other source, and such Common Stock so purchased may be outstanding, newly issued, or treasury shares.

(b) To invest any Trust assets not otherwise invested in accordance with (a) above in such deposit accounts, and certificates of deposit (including those issued by the Bank), obligations of the United States government or its agencies or such other investments as shall be considered the equivalent of cash.

(c) To sell, exchange or otherwise dispose of any property at any time held or acquired by the Trust.

(d) To cause stocks, bonds or other securities to be registered in the name of a nominee, without the addition of words indicating that such security is an asset of the Trust (but accurate records shall be maintained showing that such security is an asset of the Trust).

(e) To hold cash without interest in such amounts as may be in the opinion of the Trustee reasonable for the proper operation of the Plan and Trust.
 
 
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(f) To employ brokers, agents, custodians, consultants and accountants.

(g) To hire counsel to render advice with respect to their rights, duties and obligations hereunder, and such other legal services or representation as they may deem desirable.

(h) To hold funds and securities representing the amounts to be distributed to a Participant or his Beneficiary as a consequence of a dispute as to the disposition thereof, whether in a segregated account or held in common with other assets.

(i) As may be directed by the Committee or the Board from time to time, the Trustee shall pay to the Company any earnings of the Trust attributable to unawarded or forfeited Restricted Stock Awards.

Notwithstanding anything herein contained to the contrary, the Trustee shall not be required to make any inventory, appraisal or settlement or report to any court, or to secure any order of a court for the exercise of any power herein contained, or to maintain bond.

10.3   Records and Accounts.   The Trustee shall maintain accurate and detailed records and accounts of all transactions of the Trust, which shall be available at all reasonable times for inspection by any legally entitled person or entity to the extent required by applicable law, or any other person determined by the Committee.

10.4   Earnings.   All earnings, gains and losses with respect to Trust assets shall be allocated in accordance with a reasonable procedure adopted by the Committee, to bookkeeping accounts for Participants or to the general account of the Trust, depending on the nature and allocation of the assets generating such earnings, gains and losses.  In particular, any earnings on cash dividends received with respect to Restricted Stock Awards shall be allocated to accounts for Participants, except to the extent that such cash dividends are distributed to Participants, if such Shares are the subject of outstanding Restricted Stock Awards, or, otherwise held by the Trust or returned to the Company.

10.5   Expenses.   All costs and expenses incurred in the operation and administration of this Plan, including those incurred by the Trustee, shall be paid by the Company or, if not so paid, then paid from the cash assets of the Trust.

10.6   Indemnification.   Subject to the requirements and limitations of applicable laws and regulations, the Company shall indemnify, defend and hold the Trustee harmless against all claims, expenses and liabilities arising out of or related to the exercise of the Trustee's powers and the discharge of their duties hereunder, unless the same shall be due to their gross negligence or willful misconduct.

10.7   Term of Trust.   The Trust, if established, shall remain in effect until the earlier of (i) termination by the Committee, (ii) the distribution of all assets of the Trust, or (iii) 21 years from the Effective Date.  Termination of the Trust shall not effect any Restricted Stock Award previously granted, and such Restricted Stock Award shall remain valid and in effect until they have been earned and paid, or by their terms expire or are forfeited.

10.8   Tax Status of Trust.   It is intended that the Trust established hereby shall be treated as a grantor trust of the Company under the provisions of Section 671 et   seq . of the Code.

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Consent of Independent Registered Public Accounting Firm



MSB Financial Corp.
Millington, New Jersey

We hereby consent to the incorporation by reference into this Registration Statement on Form S-8 being filed with the Securities and Exchange Commission of our report dated March 18, 2016, relating to the consolidated financial statements of MSB Financial Corp. (the "Company") appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.


 /s/ BDO USA, LLP


Woodbridge, New Jersey
August 15, 2016