Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION

6. 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, stock appreciation rights, non-qualified stock options, performance share awards, incentive stock options and performance units.

Restricted Stock Units (“RSUs”) and Performance Share Awards (“PSAs”) Awards of RSUs and PSAs 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 first issued in March 2011 and cliff vest three years from the grant date 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 and PSA activity during the first nine months of the indicated periods:

Units	2012			2011
Beginning balance		788,088			579,801
Granted		207,728			245,454
Forfeited		(29,825	)		(12,539	)
Shares delivered		(95,430	)		(14,490	)
Ending balance		870,561			798,226

The amount granted in 2012 and 2011 includes PSAs of 161,083 units and 96,410 units, respectively, exclusive of reinvested dividends. The following table sets forth aggregate RSU and PSA compensation expense for the periods indicated:

	September 30
In thousands	2012		2011
Three months ended	$	680	$	534
Nine months ended		1,959		1,541

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 SOSARS for the first nine months of the indicated period:

	2012					2011
SOSARS	Shares			Wtd Avg Exercise Price		Shares			Wtd Avg Exercise Price
Outstanding at Jan. 1,		2,298,288		$	12.35		2,061,877		$	12.28
Granted		364,114			15.23		345,290			12.56
Exercised		(500,074	)		12.06		—			—
Canceled / forfeited		(12,000	)		14.96		(102,970	)		12.55
Outstanding at Sept. 30,		2,150,328		$	12.94		2,304,197		$	12.31
SOSAR Grants
Weighted average grant date fair value per share	$	4.94				$	4.09
Aggregate grant date fair value (in thousands)	$	1,797				$	1,412
Black-Scholes assumptions
Dividend yield		2.31	%				2.87	%
Risk free rate of return		1.02	%				2.55	%
Volatility		41.48	%				41.91	%
Expected life		6 yrs					6 yrs

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

	September 30
In thousands	2012		2011
Three months ended	$	369	$	357
Nine months ended		1,095		1,237