Stock-Based Compensation

6 Months Ended

Jun. 30, 2011

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION

7. STOCK-BASED COMPENSATION

     The P. H. Glatfelter Amended and Restated Long Term Incentive Plan (the “LTIP”) provides for the issuance of up to 5,500,000 shares of Glatfelter common stock to eligible participants in the form of restricted stock units, restricted stock awards, non-qualified stock options, performance shares, incentive stock options and performance units.

     Restricted Stock Units (“RSU”) and Performance Share Awards (“PSAs”) Awards of RSU and PSA are made under our LTIP. The RSUs vest based solely on the passage of time, generally on a graded scale over a three, four, and five-year period. PSAs were issued in March 2011 to members of senior management and cliff vest December 31, 2013, assuming the achievement of predetermined, three-year cumulative performance targets. The performance measures include a minimum, target and maximum performance level providing the grantees an opportunity to receive more or less shares than target depending on actual financial performance. For both RSUs and PSAs, the grant date fair value of the awards is used to determine the amount of expense to be recognized over the applicable service period. Settlement of RSUs and PSAs will be made in shares of our common stock. The following table summarizes RSU activity during the first six months of the indicated periods:

Units	2011			2010
Beginning balance		579,801			564,037
Granted		244,754			198,259
Forfeited		(12,539	)		(8,820	)
Restriction lapsed/shares delivered		(14,490	)		(31,323	)
Ending balance		797,526			722,153

     The 2011 grant includes 96,410 PSAs. The following table sets forth aggregate RSU and PSA compensation expense for the periods indicated:

	June 30
In thousands	2011		2010
Three months ended	$	541	$	432
Six months ended		1,007		837

     Stock Only Stock Appreciation Rights (SOSARs) Under terms of the SOSAR, the recipients receive the right to a payment in the form of shares of common stock equal to the difference, if any, in the fair market value of one share of common stock at the time of exercising the SOSAR and the strike price. The SOSARs vest ratably over a three year period and have a term of ten years.

The following table sets forth information related to outstanding SOSARS.

	2011					2010
				Wtd Avg						Wtd Avg
				Exercise						Exercise
SOSARS	Shares			Price			Shares			Price
Outstanding at Jan. 1,		2,061,877		$	12.28			1,762,020		$	11.84
Granted		345,290			12.56			423,450			13.95
Exercised		—						—
Canceled/forfeited		(102,970	)		12.55			(64,420	)		11.71
Outstanding at Jun 30,		2,304,197		$	12.31			2,121,050		$	12.27
SOSAR Grants
Weighted average grant date fair value per share	$	4.09					$	4.72
Aggregate grant date fair value (in thousands)	$	1,412					$	1,998
Black-Scholes Assumptions
Dividend yield		2.87	%					2.58	%
Risk free rate of return		2.55	%					2.54	%
Volatility		41.91	%					42.31	%
Expected life	6 yrs						6 yrs

     The following table sets forth SOSAR compensation expense for the periods indicated:

	June 30
In thousands	2011		2010
Three months ended	$	411	$	576
Six months ended		880		1,185