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                                                                   Exhibit 10(r)

                               SERVICE AGREEMENT


                                     between

    S & H Verwaltungsgesellschaft mbH, Hoerdener Strasse 3-7, 76593 Gernsbach
            represented by its sole shareholder, PHG Tea Leaves, Inc.

                  - hereinafter referred to as the "Company" -

                                       and

                  Mr. Martin Rapp, Simrockallee 8c, 53173 Bonn


Mr. Rapp will he appointed Vice President & General Manager of the Composite
Fibers Business Unit ("CFBU") of P.H. Glatfelter Company ("Glatfelter") and
managing director of the Company. In connection with such appointments the
Company and Mr. Rapp enter into the following service agreement


                                     ART. 1
                           DUTIES AND RESPONSIBILITIES

1.   This Agreement shall commence on 1 August 2006, subject to any agreement by
     the parties to determine an earlier commencement date. On the commencement
     date Mr. Rapp shall commence his activities as Vice President & General
     Manager of the CFBU of Glatfelter and as regular managing director of the
     Company. Notice to terminate must not be given prior to the commencement
     date.

2.   Mr. Rapp shall be responsible for the management of the Company, Schoeller
     & Hoesch GmbH & Co. KG (the "KG") and the CFBU with overall P&L
     responsibility for the CEBU. Mr. Rapp shall report to the Executive Vice
     President & Chief Operating Officer of Glatfelter. The shareholders'
     meeting shall be entitled at any time to determine Mr. Rapp's areas of
     responsibility and reporting line differently. Mr. Rapp's status as Vice
     President & General Manager of the CFBU of Glatfelter and as managing
     director of the Company shall remain unaffected thereby.

3.   Mr. Rapp shall represent the Company jointly with another managing director
     or an officer having commercial power of attorney (Prokurist). The Company
     may grant Mr. Rapp sole power of representation and may release him from
     the restrictions under sec. 181 Civil Code (Burgerliches Gesetzbuch).

4.   Mr. Rapp shall perform his duties and responsibilities with the care of a
     prudent businessman in accordance with the statutory provisions, the
     Articles of Association of the Company and the KG, any by-laws of the
     Company or the KG and any general or spe-



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     cific instructions by the Executive Vice President and Chief Operating
     Officer or the Chief Executive Officer of Glatfelter. During the term of
     this Agreement Mr. Rapp shall devote all of his efforts and his entire
     professional know-how and experience to the Company, the KG and the CFBU.


                                     ART. 2
                                      TERM

1.   This Agreement is entered into for an indefinite term. It may be ordinarily
     terminated with a notice period of six (6) months to the end of a calendar
     quarter.

2.   The right to give notice for cause shall remain unaffected.

3.   Notice to terminate must be given in writing. The original of the
     shareholder resolution on the termination shall accompany the notice.

4.   This Agreement ends, without notice to terminate being required, upon the
     end of the month in which Mr. Rapp reaches the age of 65 years, i.e. on 30
     September 2024.

5.   The Company shall be entitled at any time, in particular but without
     limitation if notice has been given, irrespective by whom and for which
     reason, to release Mr. Rapp from his duty to work with immediate effect
     provided that the Company shall continue to pay the agreed remuneration and
     subject to taking into account any vacation Mr. Rapp is entitled to.


                                     ART. 3
                                 SIDE ACTIVITIES

1.   Upon the request of the Executive Vice President and Chief Operating
     Officer of Glatfelter or the shareholders' meeting, Mr. Rapp, in addition
     to his position as Vice President & General Manager of the CFBU of
     Glatfelter, shall assume supervisory board and similar offices in
     affiliated companies as well as in industry or similar associations in
     which the Company or any of its affiliated companies is a member. Mr. Rapp
     shall be obliged to resign from such offices without undue delay as soon as
     this Agreement ends or the Executive Vice President and Chief Operating
     Officer or the Chief Executive Officer of Glatfelter so requests.

2.   Side activities other than those mentioned in para. 1, prior to their
     assumption, require the written consent of the Executive Vice President and
     Chief Operating Officer or the Chief Executive Officer of Glatfelter.
     Consent will be granted if the Company and the KG and Glatfelter overall do
     not have any legitimate interest in Mr. Rapp refraining from such side
     activity.



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3.   The above consent requirement applies also to shareholdings in other
     undertakings who are competitors, customers or suppliers of the Company if
     Mr. Rapp can exert direct influence on the business relationship between
     the Company and the relevant other undertaking due to his position or
     activities.

4.   Publications and lectures which affect the Company's, the KG's or
     Glatfelter's interests or allow any conclusions regarding the Company, the
     KG or Glatfelter require the prior written consent of the Executive Vice
     President and Chief Operating Officer of Glatfelter.


                                     ART. 4
                                   BASE SALARY

1.   Mr. Rapp shall receive an annual base salary in the amount of EUR238,095
     gross for all of his activities under and in connection with this Agreement
     The base salary shall be payable in twelve equal monthly installments of
     EUR19,841.25 gross each at the end of each month.

2.   The Compensation Committee of the Glatfelter Board will review Mr. Rapp's
     base salary annually. Mr. Rapp is eligible for a merit increase effective 1
     February 2007. Factors impacting the value of the merit increase include in
     particular but without limitation budget business conditions, the
     performance of the Company, the KG and Glatfelter overall as well as Mr.
     Rapp's personal performance.

3.   The base salary and the management bonus (Art. 6) shall each be payable pro
     rata temporis in the calendar year in which this Agreement commences or
     ends.

4.   Any activities under Art. 3 pan. 1 as well as any activities outside the
     usual working hours are compensated for by the base salary and the
     management bonus (Art 6). Should Mr. Rapp, due to activities under Art 3
     para. 1, be entitled to a compensation or expense allowance he shall
     forward such compensation or expense allowance to the Company.

5.   Mr. Rapp is obliged to keep strictly confidential the contents of this
     Agreement within the Company as well as externally.

6.   Mr. Rapp shall return to the Company any overpayments of any kind,
     including receivables from incorrect calculation of taxes, social security
     contributions and the like. The defense of loss of enrichment under sec.
     818 para. 3 Civil Code (Burgerliches Gesetzbuch) is excluded.




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                                     ART. 5
                                  SIGNING BONUS

     Mr. Rapp will receive a signing bonus in the amount of (EUR)40,000 gross
     which will become due 60 days after the effective commencement date.


                                     ART. 6
                                MANAGEMENT BONUS

1.   Mr. Rapp will participate in the management bonus incentive program. Mr.
     Rapp's annual target management bonus under this program shall be 45% of
     his base salary, i.e. EUR107,142. Mr. Rapp's maximum management bonus under
     this program will be 90% of his base salary. The amount of the management
     bonus shall be determined on the basis of achievement results as determined
     by the Glatfelter Board.

2.   For 2006 the Company guarantees Mr. Rapp a management bonus in the amount
     of EUR 107,142 which shall be due on or about 31 March 2007.


                                     ART. 7
                       GLATFELTER LONG TERM INCENTIVE PLAN

1.   Mr. Rapp will be eligible to participate in the normal Glatfelter long term
     incentive plan for senior executives with an annual equity value targeted
     at EUR80,000. The methods of delivery are established by the Glatfelter
     Board and currently include the use of restricted stock units and cash.
     Under this plan Mr. Rapp will be eligible each year for a new grant based
     on his performance and business conditions. Typically, grants are awarded
     in the first quarter of each plan year.

2.   Effective on commencement date, Glatfelter will provide to Mr. Rapp 5,300
     restricted stock units as an additional incentive. These units vest over a
     five-year period and have no associated performance criteria. Mr. Rapp will
     also receive quarterly dividends in the form of cash for these 5,300 units.

3.   This Art. 7 is for information purposes only. Any rights and obligations in
     relation to Mr. Rapp's participation in the Glatfelter long term incentive
     plan exist only between Mr. Rapp and PH Glatfelter Company and will be
     dealt with in a separate agreement between Mr. Rapp and PH Glatfelter
     Company.



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                                     ART. 8
                           CHANGE OF CONTROL AGREEMENT

     After one year of satisfactory service as determined by the Company Mr.
     Rapp will be entitled to a change of control agreement. Such agreement
     shall provide for two years of total compensation (base salary, management
     bonus and long term incentive) if Glatfelter were acquired by another firm.


                                     ART. 9
                                 OTHER BENEFITS

1.   The Company pays the statutory employer contributions for health insurance,
     nursing care insurance, pension insurance and unemployment insurance.
     Should Mr. Rapp have taken out private health insurance the Company pays
     50% of the premiums for such private health insurance but no more than the
     statutory employer contribution for health insurance.

2.   Mr. Rapp shall receive a car allowance of EUR833 gross per month. Any
     income tax payable on such car allowance shall be borne by Mr. Rapp.

3.   Mr. Rapp will participate in the Company's executive pension plan. Details
     will be set out in a separate pension agreement.

4.   The Company will take out for Mr. Rapp risk life insurance with EUR275,000
     death benefit and supplemental accident insurance with EUR100,000 death
     benefit and EUR275,000 disability benefit Mr. Rapp will name one or more
     beneficiaries for the death benefits to the Company. These benefits are
     subject to the terms and conditions of the relevant insurance contract. The
     insurance premiums will be paid by the Company.

5.   The Company will provide executive relocation assistance to Mr. Rapp and
     his family in connection with his move from Bonn to the greater Gernsbach
     area. Details will be set out in a separate relocation assistance
     agreement.


                                     ART. 10
                                    VACATION

1.   Mr. Rapp shall be entitled to an annual vacation of 30 days. Vacation shall
     be taken only following coordination with the Executive Vice President &
     Chief Operating Officer of Glatfelter.

2.   The Federal Vacation Act (Bundesurlaubsgesetz) shall apply in addition
     hereto.



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                                     ART. 11
                              PREVENTION FROM WORK

1.   In the event of illness or any other prevention from work Mr. Rapp shall
     inform the Executive Vice President & Chief Operating Officer of Glatfelter
     without undue delay thereof and its expected duration. Upon request, Mr.
     Rapp shall submit a medical certificate about the illness and its expected
     duration. For the duration of the illness or any other temporary prevention
     from work that is not due to Mr. Rapp's fault Mr. Rapp shall continue to
     receive the base salary under Art. 4 for a period of six months but not
     beyond the termination of this Agreement.

2.   Should the prevention from work continue for more than six months the
     management bonus under Art. 6 for the relevant business year shall be
     reduced by 1/12 for each following month.

3.   Any benefits Mr. Rapp receives from his health insurance provider(s) for
     the period of his prevention from work (with the exception of the first six
     weeks) shall reduce the net base salary (and thereby indirectly also the
     gross base salary) under para. 1 above. Mr. Rapp shall inform the Company
     of such benefits on his own initiative.

4.   Mr. Rapp herewith assigns to the Company any claims for damages against
     third parties that have caused his illness or other prevention from work to
     the extent that the Company continues salary payments under this Agreement.


                                     ART. 12
                                   INVENTIONS

     Rights resulting from inventions which Mr. Rapp, following the commencement
     of this Agreement, makes in the Company's areas of activity shall become
     the Company's unrestricted property. Mr. Rapp is obliged to perform all
     actions and to make all declarations which are necessary to achieve this.
     The Company shall be free in its discretion to exploit Mr. Rapp's
     inventions without Mr. Rapp being entitled to a compensation for such
     exploitation. In addition hereto the Employee Invention Act (Gesetz uber
     Arbeitnehmererfindungen) shall apply except for the provisions for inventor
     compensation.


                                     ART. 13
                     CONFIDENTIALITY AND RETURN OF PROPERTY

1.   Mr. Rapp shall keep confidential vis-a-vis third parties all Company, KG or
     CFBU matters which he becomes aware of within the framework of his
     activities in connection with this Agreement or otherwise. Third parties
     shall include other members of the Company's staff to the extent that they
     are not authorized due to their professional activities for the Company to
     receive such information. The obligation as to confidentiality extends in
     par-



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     ticular to business and operational secrets, confidential data and
     information, and product and Company-, KG- or CFBU-related know-how.

2.   The obligations under para. 1 above shall survive the termination of this
     Agreement.

3.   Upon the Company's request, at the latest upon the termination of this
     Agreement, Mr. Rapp shall return to the Company all property of the Company
     or the KG, all documents regarding Company or KG or CFBU matters and all
     other work materials received from the Company or the KG that are in his
     possession, in particular computers, software and other equipment. This
     obligation includes also documents which are addressed to Mr. Rapp
     personally but in his role as managing director or Vice President & General
     Manager and copies of documents which Mr. Rapp has sent personally but in
     his role as managing director or Vice President & General Manager to third
     parties. Any right of retention shall be excluded.


                                     ART. 14
                              RESTRICTIVE COVENANT

1.   Mr. Rapp shall be obliged during the term of this Agreement and for a
     period of one year following its termination not to become active for an
     undertaking which directly or indirectly competes with the Company in the
     product categories within the CFBU or that is affiliated with such
     competing undertaking. This covenant not to compete extends also to the
     establishment, the acquisition and the indirect or direct participation in
     a competing undertaking. It also applies in favor of the undertakings
     affiliated with the Company, in particular in favor of the KG.

2.   A post-contractual covenant not to compete shall not apply if Mr. Rapp
     leaves the Company due to having reached the age of 65 years or due to
     disability or if this Agreement, upon Mr. Rapp's departure, has been in
     force for less than two years since the effective commencement date.

3.   For the term of the post-contractual covenant not to compete Mr. Rapp
     shall receive compensation in the amount of 50% of his last base salary
     (Art. 4). The Company may waive the post-contractual covenant not to
     compete prior to the termination of this Agreement by written declaration
     with the effect that the obligation to pay compensation ends upon the
     expiry of a six months period since such declaration. Unless provided
     otherwise in this Agreement sections 74 ss. Commercial Code
     (Handelsgesetzbuch) shall apply to the post-contractual covenant not to
     compete.

4.   If Mr. Rapp breaches the covenant not to compete the Company shall be
     entitled to a contractual penalty of 1/12 of his last base salary (Art. 4)
     for each breach or for each month during which the breach continues. The
     right to claim further damage remains unaffected.


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                                     ART. 15
                                  MISCELLANEOUS

1.   Following the termination of this Agreement all mutual claims of the
     parties shall forfeit unless they are claimed in writing from the other
     party within a period of three months since the termination of this
     Agreement. If the other party rejects the claim or does not accept it
     within three weeks the relevant claim shall also forfeit unless it is
     claimed in court within a period of three months from the notification of
     the rejection or the expiry of the three weeks period (beginning upon the
     notification of the claim), as the case may be. This paragraph shall not
     apply to any claims in relation to the post-contractual restrictive
     covenant under Art. 14.

2.   Any side agreements and changes to this Agreement must be in writing in
     order to be valid. This also applies to the cancellation or amendment of
     this written form requirement. Oral side agreements to this Agreement do
     not exist.

3.   Should any provision hereof be or become invalid or impracticable the
     validity of the other provisions of this Agreement shall not be affected
     thereby. In such a case the invalid or impracticable provision shall be
     replaced with a valid and practicable provision which comes as close as
     possible to what the parties intended the invalid or impracticable
     provision to achieve commercially.

4.   This Agreement, upon its coming into force, replaces the Company's offer
     letter of 14 May 2006.

5.   This Agreement is subject to the laws of the Federal Republic of Germany.

6.   Any dispute arising from this Agreement, including its legal effect and
     interpretation, shall be decided without recourse to the ordinary courts by
     arbitration at the Company's headquarters. Details will be set out in a
     separate arbitration agreement.






York, PA      21/06/06                       /s/ John P. Jacunski
----------------------                       -----------------------------------
(place, date)                                S & H Verwaltungsgesellschaft mbH,
                                             represented by PHG Tea Leaves, Inc.



Bonn, 02/06/2006                             /s/ Martin Rapp
----------------------                       -----------------------------------
(place, date)                                Martin Rapp

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