Stock-Based Compensation

9 Months Ended

Sep. 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 (“PSA”) 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 our 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 nine months of the indicated periods:

Units	2011			2010
Beginning balance		579,801			564,037
Granted		245,454			202,589
Forfeited		(12,539	)		(19,953	)
Restriction lapsed/shares delivered		(14,490	)		(31,323	)
Ending balance		798,226			715,350

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

	September 30
In thousands	2011		2010
Three months ended	$	534	$	436
Nine months ended		1,541		1,274

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
SOSARS	Shares			Wtd Avg Exercise Price		Shares			Wtd Avg Exercise Price
Outstanding at Jan. 1,		2,061,877		$	12.28		1,762,020		$	11.84
Granted		345,290			12.56		455,050			13.81
Exercised		—					—			—
Canceled/forfeited		(102,970	)		12.55		(64,420	)		11.71
Outstanding at Sept. 30,		2,304,197		$	12.31		2,152,650		$	13.04
SOSAR Grants
Weighted average grant date fair value per share	$	4.09				$	4.67
Aggregate grant date fair value (in thousands)	$	1,412				$	2,117
Black-Scholes Assumptions
Dividend yield		2.87	%				2.60	%
Risk free rate of return		2.55	%				2.51	%
Volatility		41.91	%				42.32	%
Expected life		6 yrs					6 yrs

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

	September 30
In thousands	2011		2010
Three months ended	$	357	$	486
Nine months ended		1,237		1,671