Stock-Based Compensation

9 Months Ended

Sep. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

8.	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. In May 2013, our shareholders approved an increase of 1,030,000 in the number shares authorized to be issued under the LTIP.

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

Restricted Stock Units (“RSU”) and Performance Share Awards (“PSAs”) Awards of RSUs and PSAs are made under our LTIP. The vesting of RSUs is based solely on the passage of time, generally on a graded scale over a three, four, and five-year period. PSAs are issued annually and cliff vest on December 31 of the third year following the grant 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 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 the first nine months of 2013 and 2012:


Units	2013			2012

Balance January 1,		847,679			788,088
Granted		210,856			207,728
Forfeited		(40,991	)		(29,825	)
Shares delivered		(113,230	)		(95,430	)

Balance September 30,		904,314			870,561

The amount granted in 2013 and 2012 includes PSAs of 181,670 and 161,083, respectively, exclusive of reinvested dividends. The following table sets forth aggregate RSU and PSA compensation expense for the periods indicated:


	September 30
Dollars in thousands	2013		2012

Three months ended	$	892	$	680
Nine months ended	$	2,216		1,959

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.


	2013					2012
SOSARS	Shares			Wtd Avg Exercise Price		Shares			Wtd Avg Exercise Price
Outstanding at January 1,		2,121,454		$	12.93		2,298,288		$	12.35
Granted		361,923			18.36		364,114			15.23
Exercised		(435,562	)		12.63		(500,074	)		12.06
Canceled / forfeited		(73,901	)		16.25		(12,000	)		14.96

Outstanding at September 30,		1,973,914		$	13.87		2,150,328		$	12.94

SOSAR Grants
Weighted average grant date fair value per share	$	5.64				$	4.94
Aggregate grant date fair value (in thousands)	$	2,042				$	1,797
Black-Scholes assumptions
Dividend yield		2.18	%				2.31	%
Risk free rate of return		0.99	%				1.02	%
Volatility		39.62	%				41.48	%
Expected life		6 yrs					6 yrs

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


	September 30
In thousands	2013		2012

Three months ended	$	398	$	369
Nine months ended		1,198		1,095

- 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.

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