exv10wxiy






CHANGE IN CONTROL

EMPLOYMENT AGREEMENT




 




     AGREEMENT by and between P.H. Glatfelter Company (the “Company”), and
George H. Glatfelter II (the “Employee”), dated as of the 3rd day of December, 2008 [This
Agreement replaces the Change in Control Employment Agreement between the parties dated as of March
7, 2008.]



     The Board of Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company and its shareholders to ensure that the Company and its subsidiaries will
have the continued dedication of the Employee, notwithstanding the possibility, threat, or
occurrence of a Change in Control (as defined below) of the Company. The Board believes it is
imperative to diminish the inevitable distraction of the Employee by virtue of the personal
uncertainties and risks created by a threatened or pending Change in Control, to encourage the
Employee’s full attention and dedication to the Company currently and in the event of any
threatened or pending Change in Control, and to provide the Employee with compensation arrangements
upon a Change in Control that provide the Employee with individual financial security and which are
competitive with those of other comparably situated companies and, in order to accomplish these
objectives, the Board has authorized the Company to enter into this Agreement.



     NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:




     1. Effective Date.



          (a) The “Effective Date” shall be the first date during the “Change in Control Period” (as
defined in Section 1(b)) on which a Change in Control occurs. Anything in



 









 







this Agreement to the contrary notwithstanding, if the Employee’s employment with the Company
is terminated prior to the date on which a Change in Control occurs, and it is reasonably
demonstrated that such termination (i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with or
anticipation of a Change in Control, then for all purposes of this Agreement the “Effective Date”
shall mean the date immediately prior to the date of such termination.



          (b) The “Change in Control Period” is the period commencing on the date hereof and ending on
the second December 31 immediately following such date; provided, however, that
commencing on the first December 31 immediately following the date hereof, and on each annual
anniversary of such December 31 (such December 31 and each annual anniversary thereof is
hereinafter referred to as the “Renewal Date”), the Change in Control Period shall be automatically
extended so as to terminate two years from such Renewal Date, unless at least 60 days prior to the
Renewal Date the Company shall give notice that the Change in Control Period shall not be so
extended.



          (c) Neither the Employee nor the Company shall have any obligations under this Agreement in
the event that (i) prior to the Effective Date, the Change in Control Period expires as set forth
in paragraph (b) without renewal, or (ii) the Employee’s employment with the Company is terminated
for any reason prior to the Effective Date. In such event, the obligations of the Employee and
Company shall be limited to such obligations as exist under Company policy or agreement, applicable
law, and/or the terms of Company’s benefit plans, without regard to this Agreement.



     2. Change in Control. For the purpose of this Agreement, a “Change in Control” shall
mean:



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          (a) Any person, entity or “group” (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), excluding, for this purpose, the
Company, its subsidiaries, any employee benefit plan of the Company or its subsidiaries, and any
purchaser or group of purchasers who are descendants of, or entities controlled by descendants of,
P.H. Glatfelter which acquires beneficial ownership of voting securities of the Company) (a “Third
Party”) becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of
the combined voting power of the Company’s then outstanding voting securities entitled to vote
generally in the election of directors, other than in connection with an acquisition from the
Company; or



          (b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Directors”)
cease in any twelve (12) month period for any reason to constitute at least a majority of the
Board, provided that any person becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s shareholders, was approved by a vote of at least a
majority of the Incumbent Directors who are directors at the time of such vote shall be, for
purposes of this Agreement, an Incumbent Director, but, excluding for this purpose, any such person
whose initial election as a member of the Board occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Third Party other than the Board; or



          (c) Consummation of (i) a reorganization, merger or consolidation, in each case, with respect
to which persons who were the shareholders of the Company immediately prior to such reorganization,
merger or consolidation (other than the acquiror) do



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not, immediately thereafter, beneficially own more than 50% of the combined voting power of
the reorganized, merged or consolidated company’s then outstanding voting securities entitled to
vote generally in the election of directors, or (ii) a liquidation or dissolution of the Company or
the sale of all or substantially all of the assets of the Company (whether such assets are held
directly or indirectly) to a Third Party.



     3. Employment Period. The Company hereby agrees to continue the Employee in its
employ, and the Employee hereby agrees to remain in the employ of the Company, for the period
commencing on the Effective Date and ending on the second anniversary of such date (the “Employment
Period”).



     4. Terms of Employment.



          (a) Position and Duties.



               (i) During the Employment Period,



                    (A) the Employee’s position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during the 90-day period
immediately preceding the Effective Date and



                    (B) the Employee’s services shall be performed at the location where the Employee was employed
immediately preceding the Effective Date or any office or location less than forty (40) miles from
such location.



               (ii) During the Employment Period, excluding any periods of vacation and sick leave to which
the Employee is entitled, the Employee agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Employee



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hereunder, to use the Employee’s reasonable best efforts to perform faithfully and efficiently
such responsibilities. During the Employment Period it shall not be a violation of this Agreement
for the Employee to



                    (A) serve on corporate, civic or charitable boards or committees,



                    (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, and



                    (C) manage personal investments,


so long as such activities do not significantly interfere with the performance of the Employee’s
responsibilities as an employee of the Company in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities have been conducted by the
Employee prior to the Effective Date, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Employee’s responsibilities to the
Company.




               (iii) During the Employment Period, the Employee shall be subject to, and shall comply with,
the Company’s policies regarding sexual harassment, insider trading, confidentiality,
non-disclosure, non-competition, non-disparagement, substance abuse, and conflicts of interest and
any other written policy of the Company, the violation of which could result in termination of
employment.



          (b) Compensation.



               (i) Base Salary. During the Employment Period, the Employee shall receive a base
salary (“Base Salary”) at a monthly rate at least equal to the



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highest monthly base salary paid or payable to the Employee by the Company during the
twelve-month period immediately preceding the month in which the Effective Date occurs. During the
Employment Period, the Base Salary shall be reviewed at least annually and shall be increased at
any time and from time to time as shall be substantially consistent with increases in base salary
awarded in the ordinary course of business to other key employees of the Company and its
subsidiaries in the same salary grade (or, if there are no salary grades, to other key employees of
the Company and its subsidiaries in comparable positions). Any increase in Base Salary shall not
serve to limit or reduce any other obligation to the Employee under this Agreement. Base Salary
shall not be reduced after any such increase.



               (ii) Annual Bonus. In addition to Base Salary, the Employee shall be awarded, for
each fiscal year ending during the Employment Period, an annual bonus (an “Annual Bonus”), either
pursuant to the Company’s Management Incentive Plan or otherwise, in cash at least equal to the
average Annual Bonus paid to the Employee for each of the three fiscal years immediately preceding
the Effective Date (or for such fewer number of such years as the Employee has been employed by the
Company, with the bonus for any partial year in such period being annualized), but not less than
the target bonus for the Employee under the Company’s Management Incentive Plan for the fiscal year
during which the Effective Date occurs, provided that the Employee is employed as of the last day
of the fiscal year in respect of which such Annual Bonus is paid.



               (iii) Incentive, Savings and Retirement Plans. In addition to Base Salary and Annual
Bonus payable as hereinabove provided, the Employee shall be entitled to participate during the
Employment Period in all incentive, savings and retirement plans, practices, policies and programs
applicable to other key employees of the Company and its



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subsidiaries (including the 2005 Long-Term Incentive Plan or any successor thereto). Such
plans, practices, policies and programs, in the aggregate, shall provide the Employee with
compensation, benefits and reward opportunities at least as favorable as the most favorable of such
compensation, benefits and reward opportunities provided by the Company to the Employee under such
plans, practices, policies and programs as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the Employee, as provided at any
time thereafter with respect to other key employees of the Company and its subsidiaries in the same
salary grade (or, if there are no salary grades, to other key employees of the Company and its
subsidiaries in comparable positions).



               (iv) Welfare Benefit Plans. During the Employment Period, the Employee and/or the
Employee’s covered dependents, as the case may be, shall be eligible for participation in and shall
receive all benefits under welfare benefit plans, practices, policies and programs provided by the
Company and its subsidiaries (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and travel accident
insurance plans and programs), at least as favorable as the most favorable of such plans,
practices, policies and programs of the Company and its subsidiaries in effect at any time during
the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee
and/or the Employee’s covered dependents, as applicable, as in effect at any time thereafter with
respect to other key employees of the Company and its subsidiaries in the same salary grade (or, if
there are no salary grades, to other key employees of the Company and its subsidiaries in
comparable positions).



               (v) Expenses. During the Employment Period, the Employee shall be entitled to receive
prompt reimbursement for all reasonable business expenses incurred



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by the Employee in accordance with the most favorable policies, practices and procedures of
the Company and its subsidiaries in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Employee, as in effect at any time
thereafter with respect to other key employees of the Company and its subsidiaries in the same
salary grade (or, if there are no salary grades, to other key employees of the Company and its
subsidiaries in comparable positions). Notwithstanding anything to the contrary in the preceding
sentence, the amount of expenses eligible for reimbursement during a calendar year may not affect
the expenses eligible for reimbursement in any other calendar year and all reimbursements must be
made on or before the last day of the calendar year following the calendar year in which the
expense was incurred.



               (vi) Fringe Benefits. During the Employment Period, the Employee shall be entitled to
fringe benefits in accordance with the most favorable plans, practices, programs and policies of
the Company and its subsidiaries in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Employee, as in effect at any time
thereafter with respect to other key employees of the Company and its subsidiaries in the same
salary grade (or, if there are no salary grades, to other key employees of the Company and its
subsidiaries in comparable positions).



               (vii) Vacation. During the Employment Period, the Employee shall be entitled to paid
holidays and vacation in accordance with the most favorable plans, policies, programs and practices
of the Company and its subsidiaries as in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Employee, as in effect at any time
thereafter with respect to other key employees of the



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Company and its subsidiaries in the same salary grade (or, if there are no salary grades, to
other key employees of the Company and its subsidiaries in comparable positions).



     5. Termination.



          (a) Death or Disability. This Agreement shall terminate automatically upon the
Employee’s death. If the Company determines in good faith that the Disability of the Employee has
occurred (pursuant to the definition of “Disability” set forth below), it may give to the Employee
written notice of its intention to terminate, or its intention to cause its subsidiary to
terminate, the Employee’s employment. In such event, the Employee’s employment with the Company
shall terminate effective on the 30th day after receipt of such notice by the Employee (the
“Disability Effective Date”), provided that, within 30 days after such receipt, the Employee shall
not have returned to full-time performance of the Employee’s duties. For purposes of this
Agreement, a “Disability” shall occur if the Employee, by reason of any medically determinable
physical or mental impairment, is determined to be disabled and eligible for benefits under the
terms of the Company’s long-term disability plan or policy applicable to the Employee. Such
determination of Disability shall be made by the plan administrator or insurer with respect to such
Company long-term disability plan or policy.



          (b) Cause. The Company may terminate the Employee’s employment pursuant to this
Agreement for “Cause.” For purposes of this Agreement, “Cause” means (i) an act or acts of
personal dishonesty taken by the Employee and intended to result in substantial personal enrichment
of the Employee at the expense of the Company, (ii) repeated violations by the Employee of the
Employee’s obligations under Section 4(a) of this Agreement or illegal conduct or gross misconduct
by the Employee which is materially injurious to the Company and which violations, conduct or
misconduct are demonstrably willful and deliberate on the



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Employee’s part and which are not remedied within thirty (30) days after receipt of written
notice from the Company, (iii) violation by the Employee of any of the Company’s policies,
including, but not limited to, policies regarding sexual harassment, insider trading,
confidentiality, non-disclosure, non-competition, non-disparagement, substance abuse and conflicts
of interest and any other written policy of the Company, which violation could result in the
termination of the Employee’s employment; or (iv) the conviction of the Employee of a felony which
is materially injurious to the Company or a plea by the Employee of guilty or no contest to a
charge of a felony which is materially injurious to the Company.



          (c) Good Reason. The Employee’s employment pursuant to this Agreement may be
terminated by the Employee for Good Reason. For purposes of this Agreement, “Good Reason” means



               (i) a material diminution in the Employee’s authority, duties or responsibilities, including
without limitation a material diminution in the authority, duties or responsibilities of the
supervisor to whom the Employee is expected to report;



               (ii) a material diminution in Employee’s Base Salary or other failure to comply with any of
the other provisions of Section 4(b) of this Agreement that represents a material diminution in the
Employee’s authority, duties or responsibilities or which represent a material breach by the
Company of the terms of employment described in this Agreement;



               (iii) a material change in the geographic location at which Employee must perform services;
provided however, that a requirement that Employee’s services be performed at a location less than
forty (40) miles from the location where the Employee was



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employed immediately preceding the Effective Date shall not be considered a material change;
or



               (iv) any other action or inaction that constitute a material breach by the Company of this
Agreement, including without limitations any failure by the Company to comply with and satisfy
Section 11(c) of this Agreement;
provided that within ninety (90) days after the occurrence of any of the events listed in clauses
(i), (ii), (iii), or (iv) above the Employee delivers written notice to the Company of his
intention to terminate for Good Reason specifying in reasonable detail the facts and circumstances
claimed to give rise to the Employee’s right to terminate his employment for Good Reason and the
Company shall not have cured such facts and circumstances within thirty (30) days after delivery of
such notice by the Employee to the Company (unless the Company shall have waived its right to cure
by written notice to the Employee), and provided further that within thirty (30) days after the
expiration of such thirty (30) day period or the date of receipt of such waiver notice, if earlier,
the Employee delivers a Notice of Termination to the Company under Section 5(d) based on the same
Good Reason specified in the notice of intent to terminate delivered to the Company under this
Section 5(c).



          (d) Notice of Termination. Any termination by the Company for Cause or by the
Employee for Good Reason shall be communicated by Notice of Termination to the other party hereto
given in accordance with Section 14(b) of this Agreement. For purposes of this Agreement, a
“Notice of Termination” means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee’s employment under the
provision so indicated and (iii) if the Date of Termination (as defined



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below) is other than the date of receipt of such notice, specifies the termination date (which
date shall not be prior to the date of receipt of such notice). The failure by the Employee to set
forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good
Reason shall not waive any right of the Employee hereunder or preclude the Employee from asserting
such fact or circumstance in enforcing his rights hereunder.



          (e) Date of Termination. “Date of Termination” means the date of receipt of the
Notice of Termination or any later date specified therein as permitted by Section 5(d), as the case
may be; provided, however, that (i) if the Employee’s employment is terminated by
the Company or a subsidiary of the Company other than for Cause, death or Disability, the Date of
Termination shall be the date on which the Employee receives notice from the Company or such
subsidiary of such termination and (ii) if the Employee’s employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of death of the Employee or the
Disability Effective Date, as the case may be.



     6. Obligations of the Company upon Termination.



          (a) Death. If the Employee’s employment is terminated during the Employment Period by
reason of the Employee’s death, this Agreement shall terminate without further obligations to the
Employee’s legal representatives under this Agreement, other than (i) those obligations accrued or
earned and vested (if applicable) by the Employee as of the Date of Termination, including, for
this purpose (i) the Employee’s full Base Salary through the Date of Termination at the rate in
effect on the Date of Termination and (ii) accrued vacation pay not yet paid by the Company (such
amounts are collectively hereinafter referred to as “Accrued Obligations”). All such Accrued
Obligations shall be paid to the Employee’s estate or beneficiary, as applicable, in a lump sum in
cash within 30 days after the Date of Termination.



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          (b) Disability. If the Employee’s employment is terminated during the Employment
Period by reason of the Employee’s Disability, this Agreement shall terminate without further
obligations to the Employee, other than Accrued Obligations and such obligations as may exist under
the terms of the Company’s long term disability plan or policy applicable to the Employee. All
such Accrued Obligations shall be paid to the Employee in a lump sum in cash within 30 days after
the Date of Termination.



          (c) Termination for Cause; Termination by Employee Other than for Good Reason. If,
during the Employment Period, the Employee’s employment is terminated for Cause or the Employee
terminates employment other than for Good Reason, this Agreement shall terminate without further
obligations to the Employee, other than Accrued Obligations. All such Accrued Obligations shall be
paid to the Employee in a lump sum in cash within 30 days after the Date of Termination.



          (d) Termination for Good Reason; Termination by the Company Other than for Cause,
Disability or Death. If, during the Employment Period, the Company terminates the Employee’s
employment other than for Cause, Disability, or Death, or if the Employee terminates his employment
for Good Reason:



               (i) the Company shall pay to the Employee the Accrued Obligations;



               (ii) the Company shall pay as a severance benefit to the Employee in a lump sum in cash (less
applicable withholdings) the aggregate of the following amounts:



                    (A) the product of the average Annual Bonus paid to the Employee for each of the three full
fiscal years immediately preceding the Date of Termination



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(or for such fewer number of such years as the Employee has been employed by the Company, with
the bonus for any partial year in such period being annualized), but not less than the greater of
the target bonus for the Employee for the fiscal year during which the Effective Date occurs and
the target bonus for the Employee for the fiscal year during which the Date of Termination occurs,
and a fraction, the numerator of which is the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is 365; and



                    (B) two (2) times [three (3) times for Mr. Glatfelter] the sum of (1) the Employee’s annual
Base Salary at the highest rate in effect at any time during the period beginning 90 days before
the Effective Date through the Date of Termination and (2) the average Annual Bonus paid to the
Employee for each of the three full fiscal years immediately preceding the Date of Termination (or
for such fewer number of such years as the Employee has been employed by the Company, with the
bonus for any partial year in such period being annualized), but not less than the greater of the
target bonus for the Employee for the fiscal year during which the Effective Date occurs and the
target bonus for the Employee for the fiscal year during which the Date of Termination occurs.



               Payment of the lump sum amount described in this clause (ii) shall be made within 30 days
after the Date of Termination. Such payment is predicated on such amount not being a “deferral of
compensation” subject to Section 409A of the Internal Revenue Code (hereinafter, “Section 409A”) by
reason of the exceptions in Treasury Regulation Sections 1.409A-1(b)(4) (“short term deferrals”)
and/or (b)(9) (“separation pay plan”). In the event that the Company should determine in good
faith that payment of the amount described in this clause (ii) does not so qualify for one of the
above-described exceptions and hence is deferred compensation subject to Section 409A, and provided
that the Employee is a “specified



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employee” within the meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code
(“Code”), payment shall be made within 30 days following the date which is six (6) months following
the Employee’s separation from service following a Notice of Termination. In the event that
payment is delayed for six months pursuant to the preceding sentence, then not later than 30 days
following the Date of Termination, the Company shall establish a grantor trust that qualifies as a
grantor trust or trust fund within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Code (a “Rabbi Trust”) and deposit in the Rabbi Trust an amount equal to the lump
sum payable to the Employee, plus interest for the six-month delay period at the applicable Federal
rate on the Employee’s separation from service. The Employee shall remain during such time a
general unsecured creditor of the Company and amounts held in the Rabbi Trust shall remain subject
to the claims of the Company’s creditors in the event of the Company’s insolvency.



               (iii) for a period of two (2) years after the Date of Termination [three (3) years for Mr.
Glatfelter], or such longer period as any plan, program, practice or policy may provide, the
Company shall continue group medical, prescription, dental, disability, salary continuance, group
life, accidental death and dismemberment and travel accident insurance benefits (each, a
“Welfare Benefit” and, together “Welfare Benefits”) to the Employee and/or the Employee’s covered
dependents, as applicable, at levels substantially equal to those which would have been provided to
them in accordance with the Company’s plans, programs, practices and policies with respect to such
benefits if the Employee’s employment had not been terminated, in accordance with the most
favorable plans, practices, programs or policies of the Company and its subsidiaries in effect
during the 90-day period immediately preceding the Date of Termination or, if more favorable to the
Employee, as in effect at any time thereafter with respect to other key



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employees in the same salary grade (or, if there are no salary grades, to other key employees
of the Company and its subsidiaries in comparable positions) and their dependents. To the extent
that a Welfare Benefit which is not a bona fide disability pay plan or death benefit plan (within
the meaning of Section 409A and the regulations thereunder) is taxable to the Employee, the
following rules shall apply to the provision of such benefits pursuant to this paragraph: (1) the
benefits provided during any calendar year shall not affect the benefits provided in any other
calendar year; and (2) if the Employee is a “specified employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code, the Employee shall pay the cost of such benefit for the first six
months following the Date of Termination and shall be reimbursed by the Company for such costs,
with interest at the applicable federal rate, within thirty days of the end of such six month
period, provided that the amount of such expenses eligible for reimbursement in any calendar year
shall not affect the expenses eligible for reimbursement in any other calendar year. For purposes
of eligibility for post-retirement benefits pursuant to such plans, practices, programs and
policies and for purposes of health benefit continuation coverage pursuant to Section 601 et seq of
ERISA (“COBRA”), the Employee shall be considered to have remained employed until the end of the
Employment Period and to have retired on the last day of such period.



               (iv) in the event that the Employee has not, as of the Date of Termination, earned sufficient
vesting service to have earned (A) a nonforfeitable interest in his matching contribution account
under the P.H. Glatfelter Company 401(k) Retirement Savings Plan (the “401(k) Plan”), and (B) a
nonforfeitable interest in his accrued benefit under the terms of the P.H. Glatfelter Company
Retirement Plan for Salaried Employees (the “Retirement Plan”) (or any successors to those plans),
the Company shall pay to the Employee a lump sum in cash (less applicable withholdings) in an
amount equal to the sum of:



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                    (A) the Employee’s unvested matching contribution account under the 401(k) Plan, valued as of
the Date of Termination; and



                    (B) the actuarial present value of the Employee’s unvested normal retirement pension under the
Retirement Plan, based on the Employee’s accrued benefit under the terms of the Retirement Plan as
determined by the Company’s actuary utilizing actuarial equivalency factors for determining single
sum amounts under the terms of the Retirement Plan.



     Payment of the lump sum amount described in this clause (iv) shall be made within 30 days
after the Date of Termination. Such payment is predicated on such amount not being a “deferral of
compensation” subject to Section 409A by reason of the exceptions in Treasury Regulation Sections
1.409A-1(b)(4) (“short term deferrals”) and/or (b)(9) (“separation pay plan”). In the event that
the Company determines in good faith that payment of the amount described in this clause (iv) does
not so qualify for one of the above-described exceptions and hence is deferred compensation subject
to Section 409A, and provided that the Employee is a “specified employee” within the meaning of
Section 409A(a)(2)(B)(i) of the Code, payment shall be made within 30 days following the date which
is six (6) months following the Employee’s separation from service following a Notice of
Termination (or, if earlier, the Employee’s death).



     In the event that the Employee should return to employment with the Company and acquire a
vested, nonforfeitable interest in any of the plans with respect to which the payment in this
clause (iv) is determined, the Employee shall return an amount equal to the payment made under this
subsection, within 30 days of demand by the Company.



               (v) If the Employee is, as of the Date of Termination, a participant in the Restoration
Pension (the “Restoration Pension”) or the Final Average



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Compensation Pension (“FAC Pension”) under the terms of the P.H. Glatfelter Company
Supplemental Early Retirement Plan (the “SERP”), the Employee will become fully vested in his
accrued benefit under the terms of the Restoration Pension or FAC Pension, as applicable, and the
Employee’s vested benefit thereunder shall be paid to the Employee in accordance with the terms of
the SERP subject to the applicable requirements of Section 409A and the regulations thereunder. In
addition, the Company shall be obligated to contribute funds, to the extent it has not already done
so, to the Trust serving as a funding vehicle for the SERP (the P.H. Glatfelter Company
Nonqualified Plans Master Trust), in sufficient amount to pay the Employee’s accrued benefit under
the Restoration Pension or the FAC Pension, as appropriate, within five days of the Date of
Termination.



               (vi) If the Employee is, as of the Date of Termination, a participant in the P.H. Glatfelter
Company Supplemental Management Pension Plan (the “SMPP”) with at least five years of vesting
service (as measured for purposes of the Retirement Plan), then the Company shall be obligated to
contribute funds, to the extent it has not already done so, to the Trust serving as a funding
vehicle for that plan (the P.H. Glatfelter Company Nonqualified Plans Master Trust) as
follows:



                    (A) If the Employee is a participant in the MIP Adjustment Supplement under the SMPP, the
Company shall fund the Trust with sufficient assets to pay the Employee’s accrued benefit under the
MIP Adjustment Supplement within five days of the Date of Termination.



                    (B) If the Employee is eligible to receive the Early Retirement Supplement under the SMPP, the
Company shall fund the Trust with sufficient assets to pay the Employee’s accrued benefit under the
Early Retirement Supplement, within five days



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following the later to occur of (1) the Date of Termination or (2) the benefit commencement
date with respect to the Employee’s Early Retirement Supplement.



               (vii) Amounts contributed to the P.H. Glatfelter Nonqualified Plans Master Trust pursuant to
paragraphs 6(d)(iv) or (v) above shall in no event be invested in assets located outside the United
States or otherwise violate the requirements of Section 409A(b).



               (viii) If the Employee has previously deferred compensation under a plan or arrangement not
described above which has not yet been paid by the Company, the Employee’s right to payment of such
compensation shall be considered vested and nonforfeitable as of the Date of Termination. Such
deferred compensation shall be paid to the Employee in accordance with the terms of the deferred
compensation plan or arrangement subject to the applicable requirements of Section 409A.



               (ix) Notwithstanding the foregoing, the Company shall have no obligation under this Section
6(d) unless the Employee executes and delivers to the Company a valid general release agreement in
a form reasonably acceptable to the Company in which the Employee releases the Company from any and
all possible liability, including, without limitation, any and all liability based on the
Employee’s employment or the termination of his employment; provided, however, that nothing in such
release shall include any release of the Company’s indemnification obligations to or for the
benefit of the Employee.



               (x) Notwithstanding the foregoing, any benefit or payment that is due upon termination of
Employee’s employment under this Agreement and that represents a “deferral of compensation” within
the meaning of Section 409A shall only be paid or provided to Employee upon a “separation from
service” as defined in Section 409A. For purposes of this



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Agreement, amounts payable under this Agreement shall be deemed not to be a “deferral of
compensation” subject to Section 409A to the extent provided in the exceptions in Treasury
Regulation Sections 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,”
including the exception under subparagraph (iii)) and other applicable provisions of Treasury
Regulation Section 1.409A-1 through A-6 (or any successor to any of the foregoing provisions). To
the extent that any provision of this Agreement would, if enforced as written, cause adverse tax
consequences to either party under Section 409A, the parties shall work together in good faith to
seek to avoid, or minimize, such consequences. 



     7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Employee’s continuing or future participation in any benefit, bonus, incentive or other plans,
programs, policies or practices provided by the Company or its subsidiaries and for which the
Employee may qualify, nor shall anything herein limit or otherwise affect such rights as the
Employee may have under any stock option, restricted stock, restricted stock unit, performance
share or other agreements with the Company or any of its subsidiaries. Amounts which are vested
benefits or which the Employee is otherwise entitled to receive under any plan, policy, practice or
program of the Company or any of its subsidiaries at or subsequent to the Date of Termination shall
be payable in accordance with such plan, policy, practice or program.



     8. Full Settlement. The Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may
have against the Employee or others. In no event shall the Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to the Employee
under any of the provisions of this Agreement.



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     9. Certain Additional Payments by the Company.



          (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit of the Employee
(whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or
any interest or penalties with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the
Employee shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by the Employee of all taxes (including any interest or penalties imposed
with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the
Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payment.



          (b) Subject to the provisions of Section 9(c), all determinations required to be made under
this Section 9, including whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by a firm of independent accountants selected by the Audit Committee of the
Board, which firm may, if consistent with applicable securities laws, be the firm of independent
accountants engaged to audit the Company’s financial statements (the “Accounting Firm”) which shall
provide detailed supporting calculations both to the Company and the Employee within 15 business
days after the Date of Termination or such earlier time as is requested by the Company. The
initial Gross-Up Payment, if any, as determined pursuant to this Section 9(b), shall be paid to the
Employee within five days of the receipt of the Accounting Firm’s determination. If the Accounting
Firm determines that no Excise Tax is payable by the Employee, it shall furnish the Employee with
an opinion that he has



21









 







substantial authority not to report any Excise Tax on his federal income tax return. Any
determination by the Accounting Firm shall be binding upon the Company and the Employee. As a
result of the uncertainty in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that a Gross-Up Payment which will
not have been made by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company exhausts its remedies
pursuant to Section 9(c) and the Employee thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment shall be paid by the Company to or for the benefit of the Employee promptly
thereafter, but in no event later than the end of the calendar year following the calendar year in
which the Employee pays the Excise Tax to which the Gross-Up Payment relates.



          (c) The Employee shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than ten business days after
the Employee knows of such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Employee shall not pay such claim prior to
the expiration of the thirty-day period following the date on which it gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Employee in writing prior to the expiration of such
period that it desires to contest such claim, the Employee shall:



22









 





               (i) give the Company any information reasonably requested by the Company relating to such
claim,



               (ii) take such action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,



               (iii) cooperate with the Company in good faith in order effectively to contest such claim,




               (iv) permit the Company to participate in any proceedings relating to such claim;


provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest during the lifetime of
the Employee (the “Contest Expenses”) and shall indemnify and hold the Employee harmless, on an
after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect
thereto, imposed as a result of such representation and payment of costs and expenses (“Tax
Expenses”). The Company’s obligation for the Contest Expenses shall be subject to the following
restrictions: (1) the Contest Expenses borne and paid by the Company in one calendar year shall not
affect the Contest Expenses borne and paid by the Company in another calendar year and (2) the
Company’s obligation to bear and pay the Contest Expenses is not subject to liquidation or exchange
for another benefit. The Company’s reimbursement to the Employee of the Tax Expenses shall be
subject to the following restrictions: such reimbursement must be made by the end of the calendar
year following the calendar year in which the Employee pays the taxes to which the reimbursement
relates.




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Without limitation on the foregoing provisions of this Section 9(c), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, if in compliance with applicable securities
laws, either direct the Employee to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Employee agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company directs the Employee
to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the
Employee, on an interest-free basis, and shall indemnify and hold the Employee harmless, on an
after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect
thereto, imposed with respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Employee with respect to which such contested amount
is claimed to be due is limited solely to such contested amount. Any tax reimbursement payment
made by the Company to the Employee with respect to the preceding sentence will be made by the
Company to the Employee no later than the end of the second calendar year following the calendar
year in which the Employee pays the taxes to which the reimbursement relates. Furthermore, the
Company’s control of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Employee shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.




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          (d) If, after the receipt by the Employee of an amount advanced by the Company pursuant to
Section 9(c), the Employee becomes entitled to receive any refund with respect to such claim, the
Employee shall (subject to the Company’s complying with the requirements of Section 9(c)) promptly
pay to the Company the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Employee of an amount advanced by
the Company pursuant to Section 9(c), a determination is made that the Employee shall not be
entitled to any refund with respect to such claim and the Company does not notify the Employee in
writing of its intent to contest such denial of refund prior to the expiration of thirty days after
such determination, then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.



     10. Confidential Information. The Employee shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or data relating to the
Company or any of its subsidiaries, and their respective businesses, which shall have been obtained
by the Employee during the Employee’s employment by the Company or any of its subsidiaries and
which shall not be or become public knowledge (other than by acts by the Employee or his
representatives in violation of this Agreement). After termination of the Employee’s employment
with the Company, the Employee shall not, without the prior written consent of the Company,
communicate or divulge any such information, knowledge or data to anyone other than the Company and
those designated by it. In no event shall an asserted violation of the provisions of this Section
10 constitute a basis for deferring or withholding any amounts otherwise payable to the Employee
under this Agreement.



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     11. Successors.



          (a) This Agreement is personal to the Employee and without the prior written consent of the
Company shall not be assignable by the Employee otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by the Employee’s
legal representatives.



          (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.



          (c) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company (whether such assets are held directly or indirectly) to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the Company would be required
to perform it if no such succession had taken place. As used in this Agreement, “Company” shall
mean the Company as hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.



     12. Arbitration.



          (a) Any controversy or claim arising out of or relating to this Agreement, or any breach
hereof, shall be settled in accordance with the terms of this Section 12. All claims by the
Employee for benefits under this Agreement shall first be directed to and determined by the Board
and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement
shall be delivered to the Employee in writing within thirty (30) days and shall set forth the
specific reasons for the denial and the specific provisions of this Agreement relied upon. The
Board shall afford a reasonable opportunity to the Employee for a review of the



26









 







decision denying a claim and shall further allow the Employee to appeal to the Board a
decision of the Board within thirty (30) days after notification by the Board that the Employee’s
claim has been denied. Any further dispute, controversy or claim arising out of or relating to
this Agreement, or the interpretation or alleged breach hereof, shall be settled by arbitration in
accordance with Employment Dispute Resolution Rules of the American Arbitration Association (or
such other rules as may be agreed upon by the Employee and the Company). The place of the
arbitration shall be Philadelphia, Pennsylvania and judgment upon the award rendered by the
arbitrator(s) may be entered by any court having jurisdiction thereof. Such an award shall be
binding and conclusive upon the parties hereto.



          (b) Judgment may be entered on the arbitrator’s award in any court having jurisdiction;
provided, however, that the Employee shall be entitled to seek specific performance of his or her
right to be paid until the Date of Termination during pendency of any dispute arising out of this
Agreement.



     13. Legal Expenses. The Company agrees to reimburse the Employee, to the full extent
permitted by law, for all costs and expenses (including without limitation reasonable attorneys’
fees) which the Employee may reasonably incur as a result of any contest of the validity or
enforceability of, or the Company’s liability under, any provision of this Agreement, plus in each
case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code;
provided, however, that such payment shall be made only if the Employee prevails on
at least one material issue provided, further, (1) that the amount of such expenses
eligible for reimbursement in any calendar year shall not affect the expenses eligible for
reimbursement in any other calendar year and (2) all such reimbursements must be made on or before
the last day of the calendar year following the calendar year in which the expense was incurred.



27









 





     14. Miscellaneous.



          (a) This Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania without reference to principles of conflict of laws. The captions of
this Agreement are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.



          (b) Any notices required or permitted to be given hereunder shall be sufficient if in writing,
and if delivered by hand, or sent by registered or certified mail, return receipt requested, or
overnight delivery using a national courier service, or by facsimile or electronic transmission,
with confirmation as to receipt, to the Company at the address set forth below and to the Employee
at the address set forth in the personnel records of the Company, or such other address as either
party may from time to time designate in writing to the other, and shall be deemed given as of the
date of the delivery or mailing:


P.H. Glatfelter Company

96 South George Street

York, PA 17401

Attention: General Counsel



or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.




          (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.



          (d) The Company may withhold from any amounts payable under this Agreement such Federal, state
or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.



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          (e) The Employee’s failure to insist upon strict compliance with any provision hereof shall
not be deemed to be a waiver of such provision or any other provision hereof.



          (f) No material provisions of this Agreement may be waived or discharged, unless such waiver
or discharge is in writing signed by the party who is making the waiver or discharge.



          (g) This Agreement shall be binding upon and enforceable by the Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributes, devisees and legatees
and shall be binding upon and enforceable by the Company’s successors.



          (h) This Agreement contains the entire understanding of the Company and the Employee with
respect to the subject matter hereof and supersedes (i) all prior change in control employment
agreements and (ii) all other agreements or understandings between the Company and the Employee
relating to the subject matter hereof, but only during the two-year period commencing on the
Effective Date, if the Employee remains employed by the Company at the end of such two-year period.



29









 





     IN WITNESS WHEREOF, the Employee has hereunto set his hand and, pursuant to the authorization
from its Board of Directors, the Company has caused these presents to be executed in its name and
on its behalf, all as of the day and year first above written.



	 	 	 	 	 
	 	 	 
	 	   	     /s/ George H. Glatfelter II   
 	 
	 	 	 	 
	 	 	 	 
	 
	 	P.H. GLATFELTER COMPANY

 	 
	 	By:  	/s/ William T. Yanavitch      
 	 
	 	 	William T. Yanavitch 	 
	 	 	V.P. Human Resources & Administration 	 
	 




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