While not the strongest member of the O's fantastic 2012 bullpen, Ayala had a successful year that definitely makes it worth his $1M option. It's a low enough amount that if he stinks in 2013, he'll be easy to party ways with. Ayala had his troubles with inherited runners, allowing 44% to score, but when he started an inning clean he usually got the job done.
I'm also a fan of keeping Ayala in the bullpen as he was acknowledged to be the leader of the bullpen hijinks which included a race to catch home run balls in hats and the practice of huddling up for a cheer when the Orioles scored a run.
As for Reynolds, it was widely speculated this his option would be declined, and rightly so. The option was for $11M (with a $0.5M buyout), which is $3.5M more than he made last year and, in my own opinion, too much to pay for a player like Reynolds.
This doesn't mean that the Wrapper's days with the Orioles are over. The Orioles have a few options. Reynolds isn't eligible for free agency in 2013, so the Orioles could offer him arbitration and see if he accepts. I'm not an expert in arbitration #s, but if Reynolds gets a 20% pay increase that'd put him at $9M, and with the $0.5M buyout on his option, that saves the Orioles $1.5M.
Another option is for the Orioles to non-tender him and try to re-sign him to a cheaper contract, but once they do that they'll be in competition with any other team that wants him.
I don't think losing Reynolds would be a big loss, personally. The only consideration is that with a team trying to fill at least one other infield hole, left field, and add a starting pitcher in the off season, getting Reynolds under contract would be one less need to address from scratch before the 2013 season starts.