18. STOCK COMPENSATION PLANS

The Company uses the modified perspective method for accounting for stock-based compensation and recognized $82,000 of pretax compensation expense for the year 2013, $38,000 in 2012 and $15,000 in 2011.

During 2011, the Company's Board of Directors adopted, and its shareholders approved, the AmeriServ Financial, Inc. 2011 Stock Incentive Plan (the Plan) authorizing the grant of options or restricted stock covering 800,000 shares of common stock. This Plan replaced the expired 2001 Stock Option Plan. Under the Plan, options or restricted stock can be granted (the Grant Date) to directors, officers, and employees that provide services to the Company and its affiliates, as selected by the compensation committee of the Board of Directors. The option price at which a granted stock option may be exercised was not less than 100% of the fair market value per share of common stock on the Grant Date. The maximum term of any option granted under the Plan cannot exceed 10 years. Generally, options vest over a three year period and become exercisable in equal installments over the vesting period. At times, options with a one year vesting period may also be issued.

A summary of the status of the Company's Stock Incentive Plan at December 31, 2013, 2012, and 2011, and changes during the years then ended is presented in the table and narrative following:


	YEAR ENDED DECEMBER 31
	2013				2012					2011
	SHARES		WEIGHTED AVERAGE EXERCISE PRICE		SHARES			WEIGHTED AVERAGE EXERCISE PRICE		SHARES			WEIGHTED AVERAGE EXERCISE PRICE
Outstanding at beginning of year		398,371	$	2.43		313,612		$	3.02		257,287		$	3.18
Granted		102,445		3.19		164,241			2.73		58,575			2.25
Exercised		(3,467)		1.81		(1,500	)		1.70		(750	)		1.70
Forfeited		(10,000)		4.25		(77,982	)		5.47		(1,500	)		1.70
Outstanding at end of year		487,349		2.55		398,371			2.43		313,612			3.02
Exercisable at end of year		257,253		2.25		167,624			2.29		179,874			3.81
Weighted average fair value of options granted in current year			$	0.83				$	0.80				$	0.51

A total of 257,253 of the 487,349 options outstanding at December 31, 2013, are exercisable and have exercise prices between $1.53 and $5.75, with a weighted average exercise price of $2.25 and a weighted average remaining contractual life of 6.41 years. All of these options are exercisable. The remaining 230,096 options that are not yet exercisable have exercise prices between $1.92 and $3.23, with a weighted average exercise price of $2.90 and a weighted average remaining contractual life of 8.80 years. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used for grants in 2013, 2012, and 2011.


	YEAR ENDED DECEMBER 31
BLACK-SCHOLES ASSUMPTION RANGES	2013		2012		2011
Risk-free interest rate		1.82 - 2.03%		1.66 - 2.28%		2.19 - 3.62%
Expected lives in years		10		10		10
Expected volatility		30.06 - 32.32%		33.26 - 35.77%		35.03 - 35.25%
Expected dividend rate		1.30%		0%		0%

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References+ Details