11	Stock-Based Compensation

In accordance with the provisions of the Hudson Valley Holding Corp. 2010 Omnibus Incentive Plan, the Company may grant eligible employees, including directors, consultants and advisors, incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance awards and other types of awards. The 2010 Plan provides for the issuance of up to 1,331,000 shares of the Company’s common stock. Prior to the 2010 Plan, the Company had stock option plans that provided for the granting of options to directors, officers, eligible employees, and certain advisors at an exercise price not less than the market value of the stock on the date of grant subject to various eligibility and vesting requirements. There will be no further grants under any plans adopted prior to the 2010 plan.

Compensation costs relating to stock-based payment transactions are recognized in the financial statements with measurement based upon the fair value of the equity or liability instruments issued. Stock-based payments are expensed over their respective vesting periods.

The following table summarizes stock based compensation activity for 2013:


Prior Option Plans (1):	Shares			Weighted Average Grant or Exercise Price		Aggregate Intrinsic Value (2) (In thousands)		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2012		428,111		$	20.21
Granted		—			—
Exercised		(60,732	)		17.16
Cancelled or Expired		(71,752	)		16.99

Outstanding at December 31, 2013		295,627			21.62	$	263		1.5

Exercisable at December 31, 2013		295,627			21.62		263		1.5

Non-vested at December 31, 2013		—			—


2010 Omnibus Incentive Plan:
Non-vested at December 31, 2012		202,005		$	16.25
Granted at fair value		155,853			16.29
Restriction released		(103,291	)		16.17
Cancelled		(3,293	)		17.22

Non-vested at December 31, 2013		251,274			16.30

Available for grant at December 31, 2012		1,121,322
Restricted stock awards		(155,853	)	$	16.29
Unissued or cancelled		3,293			17.22

Available for future grant		968,762

(1)	Prior Option Plans did not include restricted stock awards.

(2)

The aggregate intrinsic value of a stock option in the table above represents the total pretax intrinsic value (the amount by which the current market value of the underlying stock exceeds the exercise price of the option) that would have been received by the option holders had all option holders exercised their options on December 31, 2013. This amount changes based on changes in the market value of the Company’s stock.

The following table summarizes the range of exercise prices of the Company’s stock options outstanding and exercisable at December 31, 2013:


							Weighted Average
	Exercise Price				Number of Options		Remaining Life (Years)		Exercise Price
	$	17.94	$	18.21		50,204		0.7	$	18.20
		18.21		23.77		175,483		1.4		20.91
		23.77		36.29		69,940		2.3		25.87

Total Options Outstanding		17.94		36.29		295,627		1.5		21.62
Exercisable		17.94		36.29		295,627		1.5		21.62
Not Exercisable		—		—		—		—		—

The fair value (present value of the estimated future benefit to the option holder) of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. There were no non-vested options at December 31, 2013 and 292 non-vested options with a weighted average exercise price of $36.13 outstanding at December 31, 2012. There were no forfeitures of non-vested options during 2013. There were no stock options granted in the years ended December 31, 2013 and 2012.

There was no compensation expense related to the Company’s stock option plans included in net income for the year ended December 31, 2013. Compensation (benefit) expense of ($63) and $125 related to the Company’s stock option plans was included in net income for the years ended December 31, 2012 and 2011, respectively. The benefit in 2012 resulted from forfeiture reversals in excess of expense amortization. The total tax benefit related thereto was $0 and $5, respectively. There was no remaining unrecognized compensation expense related to stock options at December 31, 2013. Cash received from option exercises was $1,042, $547 and $1,223 for the years ended December 31, 2013, 2012 and 2011, respectively.

Compensation expense of $1,918 and $457 related to the Company’s restricted stock awards was included in net income and the related tax benefit was $794 and $189 for the years ended December 31, 2013 and 2012, respectively. There were no restricted stock awards prior to 2012. Unrecognized compensation expense related to restricted stock awards totaled $3,168 and $3,284 at December 31, 2013 and 2012, respectively. This expense is expected to be recognized over a remaining weighted average period of 2.3 years.