York, PA, Aug. 20, 2001 – P. H. Glatfelter Company today announced that it will fund a $2 million endowment for environmental improvements for Codorus Creek. This initiative is part of a settlement the Company reached with the Pennsylvania Public Interest Research Group, Inc. (PennPIRG), other environmental organizations and the Pennsylvania Department of Environmental Protection (DEP).

The Codorus Watershed Endowment will support environmental research, restoration, preservation, protection, recreation and education relating to the Codorus Creek watershed and its ecosystem. The endowment will be managed by the York Foundation, a charitable endowment organization based in York. The York Foundation's mission is to enhance the quality of life for all of York County's citizens today and well into the future.

The Codorus Creek Watershed Endowment will have an Advisory Board comprised of representatives selected by the Pennsylvania Public Interest Research Group, Inc., the Codorus Monitoring Network, the American Canoe Association and P. H. Glatfelter Company.

"Our support of this environmental endowment exemplifies our commitment to enhance the quality of the Codorus Creek Watershed for all of the citizens of York County," said George Glatfelter II, Chairman and Chief Executive Officer of P. H. Glatfelter Company. "In addition to providing the seed money to establish this endowment, the Glatfelter Company committed $32 million in early 1999 to significantly reduce the impact of the Spring Grove Mill on the Codorus Creek. Wastewater color will be reduced by at least 50 percent when the New Century Project is completed in 2004. Projects funded by the Codorus Creek Watershed Endowment will address other impacts in the watershed and lead to further improvements in the creek," Mr. Glatfelter said.

The settlement resolves a lawsuit filed by the environmental organizations in U. S. District Court in 1999 that challenged the Company on the correct color standard to be applied to effluent discharged into the creek from Glatfelter’s Spring Grove, Pa. paper manufacturing facility. The settlement is subject to review and approval by the U. S. Department of Justice, the U. S. Environmental Protection Agency and the U. S. District Court.

"Environmental responsibility is one of our core values and our support of continuous environmental improvement is unwavering," Mr. Glatfelter said. "While we do not agree with the premise of this lawsuit or that we violated our permit, it is nonetheless time to move on. As we do so, we will continue to listen to the concerns of the communities in which we operate. Just as we are transforming our other business practices to compete in the future, we will continue to improve our environmental operations," Mr. Glatfelter added.

"This settlement shows how parties of differing views can come together to achieve a reasonable and positive conclusion," Mr. Glatfelter said. "This is also a win for the community because these financial resources will stay in York County and will only be used for improving the quality of this valuable water resource. While we may have previously differed on the means to the end, we have always shared the goal to improve the creek. Today we are working together to achieve that common goal," he said.

"Our waterways are precious, and we take the health and cleanliness of the Codorus Creek very seriously," said Tom Foust, a party to the settlement. "P. H. Glatfelter Company is an important and longstanding enterprise in the York community. Its resolution of this matter is more than just an agreement to cooperatively resolve old issues, but its commitment to support the real work ahead of achieving a cleaner Codorus Creek for the citizens of York County," Mr. Foust said.

The New Century Project, first announced in April 1999, involves the investment of $32 million in environmental infrastructure improvements at the Spring Grove facility. This project will significantly reduce the color of the effluent coming from the Spring Grove mill by April of 2004. The New Century Project was announced the same day the Company announced ISO 14001 certification for its environmental management system and its commitment to environmental excellence. The New Century Project, launched under the Environmental Protection Agency’s Voluntary Advanced Technology Incentive Program, will enable the plant to surpass federal environmental standards for pulp and paper mills. Over the last eight years, P. H. Glatfelter Company has spent more than $170,000,000 to reduce pollution from its manufacturing operations.

P. H. Glatfelter Company also has been involved in efforts to improve local water quality as a member of the Codorus Creek Watershed Association. The association was recently awarded a $100,000 grant under the Department of Environmental Protection’s Growing Greener Campaign to help fund projects resulting in measurable and visible improvements to water quality, aquatic habitats and recreational opportunities along the creek.

In partnership with York County, P. H. Glatfelter Company provided a portion of the funding for a preliminary water quality assessment on which the Growing Greener application was based. The Company will continue to fund these activities, as well as in-kind services to remove debris in and around the Creek adjacent to the Spring Grove mill. This support has been independent of the legal dispute with PennPIRG and will remain independent of activities outlined in the settlement agreement.