STOCK OPTIONS

The MVB Financial Corp. Incentive Stock Plan (the "Plan") provides for the issuance of stock options to selected employees and directors. 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. During 2017, the companies shareholders amended the Plan to increase the total number of shares of stock available for grant of awards by 1.0 million. As of December 31, 2017, the Plan had 3.2 million shares authorized and 1,173,575 shares remaining available for issuance.These options also 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 grant, and 125,000 shares granted in 2017 that vest in 4 years and expire in 10 years, all options granted vest in 5 years and expire 10 years from the date of the grant.

Total compensation expense recorded on stock options during 2017, 2016 and 2015 was $813 thousand, $568 thousand and $413 thousand, respectively. Proceeds from stock options exercised were $(10) thousand, $32 thousand and $(448) thousand during 2017, 2016 and 2015 respectively. During 2017, 2016 and 2015, certain options were exercised in cashless transactions. Shares were forfeited related to exercise price and tax withholdings and the Company paid tax authorities amounts due resulting in a net cash outflow.

The following summarizes MVB’s stock options as of and for the year ended December 31, 2017, and the changes for the year then ended:



	2017				2016
	Number of Shares		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
Outstanding at beginning of year	1,499,795		$	13.11	1,190,295		$	13.15
Granted	321,750		15.12		432,000		12.72
Exercised	(49,400	)	12.24		(55,000	)	9.02
Forfeited/expired	(94,500	)	8.41		(67,500	)	14.59

Outstanding at end of year	1,677,645		$	13.46	1,499,795		$	13.11

Exercisable at end of year	910,647		$	13.00	768,598		$	12.75

Weighted-average fair value of options granted during 2017			$	4.05
Weighted-average fair value of options granted during 2016			$	2.98
Weighted-average fair value of options granted during 2015			$	2.72

The intrinsic value of options exercised during 2017, 2016 and 2015 was $8 thousand, $108 thousand and $1.6 million, respectively.

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 2.29%, 1.31% and 2.16% for 2017, 2016 and 2015, respectively, and a weighted average expected life of the options of 7 years for all three years. The expected volatility of MVB’s stock price used for 2017 options was 22.76%, while for the 2016 options it was 19.07% and 2015 options it was 13.90%. The expected dividend yield used was 0.60% for 2017, 0.43% for 2016 and 0.51% for 2015.

The following summarizes information related to the total outstanding and exercisable options at December 31, 2017:



Options Outstanding					Options Exercisable
Total Options	Weighted-Average Exercise Price		Intrinsic Value	Weighted-Average Remaining Life	Total Options	Weighted-Average Exercise Price		Intrinsic Value	Weighted-Average Remaining Life
1,677,645	$	13.46	11,145,745	6.63	910,647	$	13.00	6,465,272	5.28