6.STOCK-BASED COMPENSATION

The P. H. Glatfelter Amended and Restated Long Term Incentive Plan (the “LTIP”) provides for the issuance 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.

Pursuant to terms of the LTIP, we have issued to eligible participants restricted stock units, performance share awards and stock only stock appreciation rights.

Restricted Stock Units (“RSU”) and Performance Share Awards (“PSAs”) Awards of RSUs and PSAs are made under our LTIP. On May 4, 2017, our shareholders approved a 1,840,000 share increase in the shares available to be awarded under the LTIP. The RSUs vest on the passage of time, generally on a graded scale over a three, four, and five-year period, or in certain instances the RSUs were issued with five year cliff vesting. PSAs are issued to members of management and vesting is based on achievement of cumulative financial performance targets covering a two year period followed by an additional one-year service period. The performance measures include a minimum, target and maximum performance level providing the grantees an opportunity to receive more or less shares than targeted depending on actual financial performance. For both RSUs and PSAs, the grant date fair value of the awards, which is equal to the closing price per common share on the date of the award, 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 currently held in treasury.

The following table summarizes RSU and PSA activity during periods indicated:

Units	2017			2016
Balance at January 1,		679,038			674,523
Granted		364,748			295,654
Forfeited		(91,449	)		(143,209	)
Shares delivered		(24,052	)		(149,475	)
Balance at June 30,		928,285			677,493

The amount granted in 2017 and 2016 includes PSAs of 163,274 and 199,693, respectively, exclusive of reinvested dividends.

The following table sets forth aggregate RSU and PSA compensation expense for the periods indicated:

	June 30
In thousands	2017		2016
Three months ended	$	1,049	$	935
Six months ended		2,088		1,402

Stock Only Stock Appreciation Rights (“SOSARs”) Under terms of the SOSAR, a recipient receives 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 exercise 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 for the six months ended June 30;

	2017					2016
SOSARS	Shares			Wtd Avg Exercise Price		Shares			Wtd Avg Exercise Price
Outstanding at January 1,		2,736,616		$	17.64		2,199,742		$	17.82
Granted		—			—		743,925		17.54
Exercised		(33,050	)		14.65		(53,190	)		9.91
Canceled / forfeited		(17,630	)		18.46		(108,945	)		21.81
Outstanding at June 30,		2,685,936		$	17.67		2,781,532		$	17.74

SOSAR Grants

Weighted average grant date fair value per share	$	-				$	4.07
Aggregate grant date fair value (in thousands)	$	-				$	3,013
Black-Scholes assumptions
Dividend yield		-					2.85	%
Risk free rate of return		-					1.34	%
Volatility		-					31.97	%
Expected life	-					6 yrs

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

	June 30
In thousands	2017		2016
Three months ended	$	259	$	669
Six months ended		868		1,401