10.

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. As of December 31, 2014, there were 1,873,027 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		2014			2013			2012
Balance at January 1,		1,001,814			847,679			788,088
Granted		178,882			315,196			209,021
Forfeited		(47,379	)		(47,831	)		(52,800	)
Shares delivered		(244,375	)		(113,230	)		(96,630	)
Balance at December 31,		888,942			1,001,814			847,679

		2014			2013			2012
Compensation expense	$	2,652		$	2,882		$	2,576

The amount granted in 2014, 2013 and 2012 includes 101,743, 183,910 and 161,083 PSAs, respectively, exclusive of reinvested dividends. The performance period for the 2012 PSAs concluded on December 31, 2014 and, based on actual performance relative to target, approximately 60% of the award was issued to participants in 2015. The weighted average grant date fair value per unit for awards in 2014, 2013 and 2012 was $28.89, $22.34 and $15.49, respectively. As of December 31, 2014, unrecognized compensation expense for outstanding RSUs and PSAs totaled $4.0 million. The weighted average remaining period over which the expense will be recognized is 2.7 years.

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


	2014					2013					2012
SOSARS		Shares			Wtd Avg Exercise Price		Shares			Wtd Avg Exercise Price		Shares			Wtd Avg Exercise Price
Outstanding at January 1,		1,977,133		$	13.91		2,121,454		$	12.93		2,298,288		$	12.35
Granted		281,881			29.78		368,687			18.51		364,114			15.58
Exercised		(364,465	)		13.99		(435,562	)		12.63		(500,074	)		12.06
Canceled / forfeited		(29,842	)		19.36		(77,446	)		16.28		(40,874	)		14.31
Outstanding at December 31,		1,864,707		$	16.20		1,977,133		$	13.91		2,121,454		$	12.93
Exercisable at December 31,		1,285,998			12.94		1,330,816			12.58		1,469,537			12.30
Vested and expected to vest		1,754,295					1,863,244					2,055,599

SOSAR Grants
Weighted average grant date fair value per share	$	9.81				$	5.74				$	4.94
Aggregate grant date fair value (in thousands)	$	2,764				$	2,103				$	1,797
Black-Scholes assumptions
Dividend yield		1.48	%				2.16	%				2.31	%
Risk free rate of return		1.74	%				1.01	%				1.02	%
Volatility		37.59	%				39.58	%				41.48	%
Expected life		6 yrs					6 yrs					6 yrs
Compensation expense (in thousands)	$	2,086				$	1,591				$	1,448

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, 2014, the intrinsic value of SOSARs vested and expected to vest totaled $18.3 million. The remaining weighted average contractual life of outstanding SOSARs was 6.4 years as of December 31, 2014.