Spring Grove, PA Aug. 7, 1998: In order to meet the challenges of the changing global markets in which it operates, the P. H. Glatfelter Company, headquartered in Spring Grove, Pennsylvania, today announced a new corporate organizational structure and plans to reduce the size of the workforce at its Ecusta operation in Pisgah Forest, North Carolina.

P. H. Glatfelter Company is a producer of printing and writing, tea bag, tobacco and other specialty papers. In addition to its North Carolina facility, the Company’s U. S. operations include facilities in Spring Grove, Pennsylvania, and Neenah, Wisconsin. International operations include facilities in Germany, France, the Philippines, Australia and Canada.

" We have recognized the need to retool our Corporate organizational structure to meet short-term business objectives as well as reposition our Company for future growth," said George H. Glatfelter II, President and Chief Executive Officer. Those short-term objectives include an aggressive emphasis on cash generation, continued support of the Company’s core product lines, new initiatives in support of expedited development of engineered papers and a strong approach to the integration of the newly acquired Schoeller & Hoesch subsidiary.

"Achieving these objectives is made more challenging due to the unfavorable market conditions currently existing for the Company’s products," Mr. Glatfelter added. "It is therefore essential to focus the new management team on these initiatives."

The plan to reduce the Ecusta Division’s workforce is the result of fundamental changes in the tobacco markets into which the Company sells its tobacco papers. The Company anticipates that market conditions for its tobacco papers will remain unfavorable for the foreseeable future. Accordingly, the Ecusta Division is being restructured with the intent to reduce the annual costs of salaried and hourly payroll and benefits. The first step in the Division’s cost reduction process for salaried employees will be to offer a voluntary early retirement enhancement program. The program, which is being announced to Division employees today, is being offered to active eligible salaried employees age 55 and older. The Company expects to generate annual salaried cost savings of approximately $3.5 million for a one-time expense of approximately $2.2 million. The cost savings and nature of workforce reductions for hourly employees will depend upon the outcome of negotiations that are scheduled with representatives of Local 1971 of the United Paperworkers’ International Union.

The Company’s organizational changes, which go into effect immediately, are as follows:

• Robert S. Lawrence, Vice President and General Manager of the Ecusta Division, will assume additional corporate responsibilities focused on the worldwide marketing of tobacco papers while continuing his oversight of the manufacturing and sales functions of the Ecusta Division. Mr. Lawrence, 58, will report to Mr. Glatfelter.

• Robert L. Miller, Vice President for Administration, has been promoted to Vice President - International Business. Mr. Miller, 52, will relocate to Germany and will focus on identifying and maximizing the synergies between Glatfelter’s Schoeller & Hoesch subsidiary, headquartered in Germany, and Glatfelter’s other operations. He will also report to Mr. Glatfelter.

• Edward J. Gillis, Vice President - Marketing, Glatfelter Division, has been promoted to Vice President - Business Development. Mr. Gillis, 51, will expedite the development and commercialization of new technical specialty products. In this capacity, Mr. Gillis will report to Mr. Glatfelter.

• Robert S. Wood, Secretary and Treasurer, has been promoted to Vice President - Administration and Secretary. Mr. Wood, 40, will assume responsibility for corporate environmental and public affairs, materials management, benefits and compensation, and aviation in addition to his corporate secretarial duties. He will report to Robert P. Newcomer, Executive Vice President and Chief Financial Officer.

• C. Matthew Smith, Corporate Controller, has been promoted to Vice President - Finance. Mr. Smith, 40, will be responsible for all corporate accounting, legal and treasury functions as well as for information systems. He will report to Mr. Newcomer.

• Leland R. Hall, Director of Operations, Glatfelter Division, has been promoted to Vice President and General Manager, Glatfelter Division. Mr. Hall, 60, will assume responsibility for all manufacturing and sales functions for the Glatfelter Division, which is comprised of the Company’s mills in Spring Grove and in Neenah, Wisconsin. He will report to Mr. Glatfelter.

• Robert L. Inners II, Spring Grove Mill Manager, has been promoted to Director of Operations, Glatfelter Division. Mr. Inners, 40, will be responsible for mill operations and quality management at the Spring Grove and Neenah mills. He will report to Mr. Hall.

• Dante C. Parrini, National Sales Manager, Glatfelter Division, has been promoted to National Sales and Marketing Manager, Glatfelter Division. Mr. Parrini, 33, will assume direct responsibility for the Sales, Marketing and Customer Service efforts for the core markets of printing and writing papers produced by the Glatfelter Division. He will report to Mr. Hall.

• Phillip M. Keener, Paper Division Superintendent, has been promoted to Spring Grove Mill Manager. Mr. Keener, 46, will be responsible for overall mill operations and will report to Mr. Inners.

  1999 The P.H. Glatfelter Company