9.	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.

As of December 31, 2013, there were 2,179,443 shares of common stock available for future issuance under the LTIP.

Since the approval 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 (“RSUs”) and Performance Share Awards (“PSAs”) Awards of RSUs and PSAs are made under our LTIP. The vesting of RSUs is generally based on the passage of time, generally on a graded scale over a three, four, and five-year period. Beginning in March of 2011, PSAs were issued annually to members of senior management and each respective grant cliff vests each December 31, 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 past three years:


Units		2013			2012			2011
Balance January 1,		847,679			788,088			579,801
Granted		315,196			209,021			251,031
Forfeited		(47,831	)		(52,800	)		(28,254	)
Shares delivered		(113,230	)		(96,630	)		(14,490	)
Balance December 31,		1,001,814			847,679			788,088

Dollars in thousands		2013			2012			2011
Compensation expense	$	2,882		$	2,576		$	2,069

The amount granted in 2013, 2012 and 2011 includes 183,910, 161,083 and 98,187 PSAs, respectively, exclusive of reinvested dividends. The performance period for the 2011 PSAs concluded on December 31, 2013 and, based on actual performance relative to target, approximately 78% of the award were issued to participants in 2014. The weighted average grant date fair value per unit for awards in 2013, 2012 and 2011 was $22.34, $15.49, and $12.47, respectively. As of December 31, 2013, unrecognized compensation expense for outstanding RSUs and PSAs totaled $7.1 million. The weighted average remaining period over which the expense will be recognized is 2.9 years.

Stock Only Stock Appreciation Rights The following table sets forth information related to outstanding SOSARS:


	2013					2012					2011
SOSARS		Shares			Wtd Avg Exercise Price		Shares			Wtd Avg Exercise Price		Shares			Wtd Avg Exercise Price
Outstanding at January 1,		2,121,454		$	12.93		2,298,288		$	12.35		2,061,877		$	12.28
Granted		368,687			18.51		364,114			15.58		345,290			12.56
Exercised		(435,562	)		12.63		(500,074	)		12.06		–			–
Canceled / forfeited		(77,446	)		16.28		(40,874	)		14.31		(108,879	)		11.82
Outstanding at December 31,		1,977,133			13.91		2,121,454			12.93		2,298,288			12.35
Exercisable at December 31,		1,330,816			12.58		1,469,537			12.30		1,554,852			12.45
Vested and expected to vest		1,863,244					2,055,599					2,076,341

SOSAR Grants
Weighted average grant date fair value per share	$	5.74				$	4.94				$	4.09
Aggregate grant date fair value (in thousands)	$	2,103				$	1,797				$	1,412
Black-Scholes assumptions
Dividend yield		2.16	%				2.31	%				2.87	%
Risk free rate of return		1.01	%				1.02	%				2.55	%
Volatility		39.58	%				41.48	%				41.91	%
Expected life		6 yrs					6 yrs					6 yrs
Compensation expense (in thousands)	$	1,591				$	1,448				$	1,564

Under terms of the SOSAR, the recipients received the right to receive 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. As of December 31, 2013, the intrinsic value of SOSARs vested and expected to vest totaled $25.8 million. The remaining weighted average contractual life of outstanding SOSARs was 6.5 years as of December 31, 2013.

Our LTIP also permits the issuance of nonqualified stock options; however, we have not issued any options since 2004. As of December 31, 2013, 10,000 stock options were outstanding with a weighted average exercise price of $11.29 per share. All options expire on the earlier of termination or, in some instances, a defined period subsequent to termination of employment, or ten years from the date of grant. The exercise price represents the quoted market price of Glatfelter common stock on the date of grant, or the average quoted market prices of Glatfelter common stock on the first day before and after the date of grant for which quoted market price information was available if such information was not available on the date of grant. As of December 31, 2013, the intrinsic value of outstanding stock options totaled $0.2 million.