NOTE 13. STOCK OPTIONS

The MVB Financial Corp. Incentive Stock Plan (‘the Plan”) provides for the issuance of stock options to selected employees. Under the provisions of the plan, the option price per share shall not be less than the fair market value of the common stock on the date of the grant. For options granted in 2005 the vesting period has been accelerated to fully vest at December 31, 2005. These options also expire 10 years from the date of the grant. Options granted in 2006, 2010, 2011, 2012 and 2013 vest in 5 years and expire 10 years from the date of the grant, with the exception of 22,000 shares granted in 2010 that vest in 3 years and expire 10 years from the date of the grant. As of December 31, 2014, the Plan had $2.2 million shares authorized and $887,895 shares remaining available for issuance.

Total compensation expense recorded on stock options during 2014 and 2013 was $321 and $196, respectively. Proceeds from stock options exercised were $63 and $323 during 2014 and 2013 respectively

The following summarizes MVB’s stock options as of and for the year ended December 31, 2014, and the changes for the year then ended:


		Weighted-
	Number	Average
	of	Exercise
	Shares	Price

Outstanding at beginning of year	1,091,410	$	11.20
Granted	288,495		15.99
Exercised	(6,400)		9.90
Forfeited/expired	(17,600)		11.66

Outstanding at end of year	1,355,905	$	12.2

Exercisable at end of year	543,870	$	9.6

Weighted-average fair value of options granted during 2014		$	3.05
Weighted-average fair value of options granted during 2013		$	1.71

The intrinsic value of options exercised during 2014 and 2013 was $37 and 413

The fair value for the options was estimated at the date of grant using a Black-Scholes option-pricing model with average risk-free interest rates of 2.65% and 2.08% for 2014 and 2013 and a weighted average expected life of the options of 7 years for both 2014 and 2013. The expected volatility of MVB’s stock price used for 2014 options was 10.23%, while for the 2013 options it was 6.70%. The expected dividend yield used was 50% for both 2014 and 2013.

The following summarizes information related to the total outstanding and exercisable options at December 31, 2014:

Options Outstanding

Options Exercisable

Weighted-

Average

Total

Exercise

Intrinsic

Remaining

Total

Exercise

Intrinsic

Remaining

Options

Price

Value

Life

Options

Price

Value

Life

1,355,905

12.2

3,771,104

6.73

543,870

9.6

2,949,958

4.24