P. H. GLATFELTER COMPANY
2005 MANAGEMENT INCENTIVE PLAN

1. Purpose of the Plan

The purpose of the Management Incentive Plan (hereinafter called the “Plan”) is
to advance the interests of the P. H. Glatfelter Company and its shareholders by
providing incentives to key employees with significant responsibility for the
success and growth of the Company. The Plan is designed to: (i) promote the
attainment of the Company’s significant business objectives; (ii) encourage and
reward management teamwork across the entire Company; and (iii) assist in the
attraction and retention of employees vital to the Company’s long-term success.

2. Definitions

For the purpose of the Plan, the following definitions shall apply:

(a) “Board” means the Board of Directors of the Company.

(b) “Code” means the Internal Revenue Code of 1986, as amended, including any
successor law thereto.

(c) “Committee” means the Compensation Committee of the Board, or such other
committee as is appointed or designated by the Board to administer the Plan, in
each case which shall be comprised solely of two or more “outside Directors” (as
defined under Section 162(m) of the Code and the regulations promulgated
thereunder).

(d) “Company” means P. H. Glatfelter Company and any subsidiary entity or
affiliate thereof.

(e) “Participant” means any person who has satisfied the eligibility
requirements set forth in Paragraph 4 and who has been selected to participate
in the Plan by the Committee.

(f) “Performance Goal” means, in relation to any Performance Period, the level
of performance that must be achieved with respect to a Performance Measure.

(g) “Performance Measures” means any one or more of the following performance
criteria, either individually, alternatively or in any combination, and subject
to such modifications as specified by the Committee, applied to either the
Company as a whole or to a business unit or subsidiary entity thereof, either
individually, alternatively or in any combination, and measured over a period of
time including any portion of a year, annually or cumulatively over a period of
years, on an absolute basis or relative to a pre-established target, to previous
years’ results or to a designated comparison group, in each case as specified by
the Committee: cash flow; cash flow from operations; earnings (including
earnings before interest, taxes, depreciation, and amortization or some
variation thereof); earnings per share, diluted or basic; earnings per share
from continuing operations; net asset turnover; inventory turnover; capital
expenditures; debt; debt reduction; working capital; return on investment;
return on sales; net or gross sales; market share; economic value added; cost of
capital; change in assets; expense reduction levels; productivity; delivery
performance; safety record; stock price; return on equity; total stockholder
return; return on capital; return on assets or net assets; revenue; income or
net income; operating income or net operating income; operating profit or net
operating profit; gross margin, operating margin or profit margin; and
completion of acquisitions, business expansion, product diversification and
other non-financial operating and management performance objectives. To the
extent consistent with Section 162(m) of the Code, the Committee may determine
that certain adjustments shall apply, in whole or in part, in such manner as
specified by the Committee, to exclude the effect of any of the following events
that occur during a Performance Period: the impairment of tangible or intangible
assets; litigation or claim judgments or settlements; the effect of changes in
tax law, accounting principles or other such laws or provisions affecting
reported results; accruals for reorganization and restructuring programs,
including but not limited to reductions in force and early retirement
incentives; currency fluctuations; and any extraordinary, unusual, infrequent or
non-recurring items, including, but not limited to, such items described in
management’s discussion and analysis of financial condition and results of
operations or the financial statements and notes thereto appearing in the
Company’s annual report to shareowners for the applicable year.

(h) “Performance Period” means, in relation to any award, the calendar year or
other period of 12 months or less for which a Participant’s performance is being
calculated, with each such period constituting a separate Performance Period.

(i) “Total and Permanent Disability” means: (1) if the Participant is insured
under a long-term disability insurance policy or plan which is paid for by the
Company, the Participant is totally disabled under the terms of that policy or
plan; or (2) if no such policy or plan exists, the Participant shall be
considered to be totally disabled as determined by the Committee.

(j) “Retirement” means retirement of an employee: (1) as defined under any
retirement plan of the Company which is qualified under Section 401 of the Code;
or (2) as determined by the Committee.

3. Administration of the Plan

(a) The management of the Plan shall be vested in the Committee; provided,
however, that all acts and authority of the Committee pursuant to this Plan
shall be subject to the provisions of the Committee’s Charter, as amended from
time to time, and such other authority as may be delegated to the Committee by
the Board. The Committee may, with respect to Participants who are not subject
to Section 162(m) of the Code, delegate such of its powers and authority under
the Plan to the Company’s officers as it deems necessary or appropriate. In the
event of such delegation, all references to the Committee in this Plan shall be
deemed references to such officers as it relates to those aspects of the Plan
that have been delegated.

(b) Subject to the terms of the Plan, the Committee shall, among other things,
have full authority and discretion to determine eligibility for participation in
the Plan, make awards under the Plan, establish the terms and conditions of such
awards (including the Performance Goal(s) and Performance Measure(s) to be
utilized) and determine whether the Performance Goals applicable to any
Performance Measures for any awards have been achieved. The Committee’s
determinations under the Plan need not be uniform among all Participants, or
classes or categories of Participants, and may be applied to such Participants,
or classes or categories of Participants, as the Committee, in its sole and
absolute discretion, considers necessary, appropriate or desirable. The
Committee is authorized to interpret the Plan, to adopt administrative rules,
regulations, and guidelines for the Plan, and may correct any defect, supply any
omission or reconcile any inconsistency or conflict in the Plan or in any award.
All determinations by the Committee shall be final, conclusive and binding on
the Company, the Participant and any and all interested parties.

(c) Subject to the provisions of the Plan, the Committee will have the authority
and discretion to determine the extent to which awards under the Plan will be
structured to conform to the requirements applicable to performance-based
compensation as described in Section 162(m) of the Code, and to take such
action, establish such procedures, and impose such restrictions at the time such
awards are granted as the Committee determines to be necessary or appropriate to
conform to such requirements. Notwithstanding any provision of the Plan to the
contrary, if an award under this Plan is intended to qualify as
performance-based compensation under Section 162(m) of the Code and the
regulations issued thereunder and a provision of this Plan would prevent such
award from so qualifying, such provision shall be administered, interpreted and
construed to carry out such intention (or disregarded to the extent such
provision cannot be so administered, interpreted or construed).

(d) Notwithstanding any provision of the Plan to the contrary, if any benefit
provided under this Plan is subject to the provisions of Section 409A of the
Code and the regulations issued thereunder, the provisions of the Plan shall be
administered, interpreted and construed in a manner necessary to comply with
Section 409A and the regulations issued thereunder (or disregarded to the extent
such provision cannot be so administered, interpreted, or construed.)

4. Participation in the Plan

Participation in the Plan is limited to officers and key employees of the
Company who have significant responsibility for corporate, business segment or
facility-based operations and who are selected by the Committee for
participation in the Plan. Nothing herein contained shall be construed as giving
any employee the right to participate in the Plan.

5. Incentive Compensation Awards

(a) The Committee may, in its discretion, from time to time make awards to
persons eligible for participation in the Plan pursuant to which the Participant
will earn cash compensation. The amount of a Participant’s award may be based on
a percentage of such Participant’s salary or such other methods as may be
established by the Committee. Each award shall be communicated to the
Participant, and shall specify, among other things, the terms and conditions of
the award and the Performance Goals to be achieved. In no event may an award
paid under the Plan to any Participant for any Performance Period exceed USD
$1,250,000.

(b) With respect to awards that are intended to be performance-based
compensation under Section 162(m) of the Code, each award shall be conditioned
upon the Company’s achievement of one or more Performance Goal(s) with respect
to the Performance Measure(s) established by the Committee. No later than ninety
(90) days after the beginning of the applicable Performance Period, the
Committee shall establish in writing the Performance Goals, Performance Measures
and the method(s) for computing the amount of compensation which will be payable
under the Plan to each Participant if the Performance Goals established by the
Committee are attained; provided however, that for a Performance Period of less
than one year, the Committee shall take any such actions prior to the lapse of
25% of the Performance Period. In addition to establishing minimum Performance
Goals below which no compensation shall be payable pursuant to an award, the
Committee, in its discretion, may create a performance schedule under which an
amount less than or more than the target award may be paid so long as the
Performance Goals have been achieved.

(c) The Committee, in its sole discretion, may also establish such additional
restrictions or conditions that must be satisfied as a condition precedent to
the payment of all or a portion of any awards. Such additional restrictions or
conditions need not be performance-based and may include, among other things,
the receipt by a Participant of a specified annual performance rating, the
continued employment by the Participant and/or the achievement of specified
performance goals by the Company, business unit or Participant. Furthermore and
notwithstanding any provision of this Plan to the contrary, the Committee, in
its sole discretion, may reduce the amount of any award to a Participant if it
concludes that such reduction is necessary or appropriate based upon: (i) an
evaluation of such Participant’s performance; (ii) comparisons with compensation
received by other similarly situated individuals working within the Company’s
industry; (iii) the Company’s financial results and conditions; or (iv) such
other factors or conditions that the Committee deems relevant. Notwithstanding
any provision of this Plan to the contrary, the Committee shall not use its
discretionary authority to increase any award that is intended to be
performance-based compensation under Section 162(m) of the Code.

6. Payment of Individual Incentive Awards

(a) Awards shall be paid as promptly as practicable (but in no event later than
21/2 months after the close of the fiscal year) after the Company’s certified
public accountants have completed their examination of the Company’s year-end
consolidated financial statements and the Committee has certified in writing the
extent to which the applicable Performance Goals and any other material terms
have been achieved. For purposes of this provision, and for so long as the Code
permits, the approved minutes of the Committee meeting in which the
certification is made shall be treated as written certification.

(b) Unless otherwise determined by the Committee, Participants who have
terminated employment with the Company prior to the end of a Performance Period
for any reason other than death, Retirement or Total and Permanent Disability,
shall forfeit any and all rights to payment under any awards then outstanding
under the terms of the Plan and shall not be entitled to any cash payment for
such period. Unless otherwise determined by the Committee, if a Participant’s
employment with the Company should terminate during a Performance Period by
reason of death, Retirement or Total and Permanent Disability, the Participant’s
award shall be prorated to reflect the period of service prior to his/her death,
Retirement or Total and Permanent Disability, and shall be paid either to the
Participant or, as appropriate, the Participant’s estate, subject to the
Committee’s certification that the applicable Performance Goals and Performance
Measures have been met.

(c) The Committee shall determine whether, to what extent, and under what
circumstances amounts payable with respect to an award under the Plan shall be
deferred either automatically, or at the election of the holder thereof, or by
the Committee.

7. Amendment or Termination of the Plan

While the Company intends that the Plan shall continue in force from year to
year, the Company reserves the right by action of its Board of Directors, or the
Committee, to amend, modify or terminate the Plan, at any time; provided,
however, that no such modification, amendment or termination shall, without the
consent of the Participant, materially adversely affect the rights of such
Participant to any payment that has been determined by the Committee to be due
and owing to the Participant under the Plan but not yet paid.

Notwithstanding the foregoing or any provision of the Plan to the contrary, the
Committee may at any time (without the consent of the Participant) modify, amend
or terminate any or all of the provisions of this Plan to the extent necessary
to conform the provisions of the Plan with Section 409A of the Code regardless
of whether such modification, amendment, or termination of the Plan shall
adversely affect the rights of a Participant under the Plan.

8. Rights Not Transferable

A Participant’s rights under the Plan may not be assigned, pledged, or otherwise
transferred except, in the event of a Participant’s death, to the Participant’s
designated beneficiary, or in the absence of such a designation, by will or by
the laws of descent and distribution.

9. Funding

The Plan is not funded and all awards payable hereunder shall be paid from the
general assets of the Company. No provision contained in this Plan and no action
taken pursuant to the provisions of this Plan shall create a trust of any kind
or require the Company to maintain or set aside any specific funds to pay
benefits hereunder. To the extent a Participant acquires a right to receive
payments from the Company under the Plan, such right shall be no greater than
the right of any unsecured general creditor of the Company.

10. Withholdings

The Company shall have the right to withhold from any awards payable under the
Plan or other wages payable to a Participant such amounts sufficient to satisfy
federal, state and local tax withholding obligations arising from or in
connection with the Participant’s participation in the Plan and such other
deductions as may be authorized by the Participant or as required by applicable
law.

11. No Employment or Service Rights

Nothing contained in the Plan shall confer upon any Participant any right with
respect to continued employment with the Company (or any of its affiliates) nor
shall the Plan interfere in any way with the right of the Company (or any of its
affiliates) to at any time reassign the Participant to a different job, change
the compensation of the Participant or terminate the Participant’s employment
for any reason.

12. Other Compensation Plans

Nothing contained in this Plan shall prevent the Corporation from adopting other
or additional compensation arrangements for employees of the Corporation.

13. Governing Law

The Plan shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, without giving effect to its conflict of law
provisions.

14. Effective Date

The Plan shall become effective immediately upon the approval and adoption
thereof by the Board; provided, however, that no award intended to qualify as
performance-based compensation within the meaning of Section 162(m) of the Code
shall be payable prior to approval of the Plan’s material terms by the Company’s
shareholders.