Exhibit 10.18

FORM (FOR U.S. EMPLOYEES) OF
LYDALL, INC.
PERFORMANCE SHARE AWARD AGREEMENT
(Three-Year Period)

THIS PERFORMANCE SHARE AWARD AGREEMENT (this “Agreement”) is made between
Lydall, Inc., a Delaware corporation (“Lydall”), and the recipient (the
“Recipient”) with respect to an Award under Lydall’s 2012 Stock Incentive Plan
(the “Plan”) pursuant to the award letter (the “Award Letter”), dated
[_________], from Lydall to the Recipient. All capitalized terms used but not
defined in this Agreement shall have the same meanings that have been ascribed
to them in the Plan, unless the context clearly requires otherwise.
1.Grant of Performance Shares. On the Date of Grant (as defined in the Award
Letter), the Recipient has been granted the number of shares of Restricted Stock
as set forth in the Award Letter (the “Performance Shares”). The Performance
Shares are subject to the terms and conditions set forth in the Award Letter,
this Agreement and the Plan. By accepting this Agreement, Recipient understands
that the Performance Shares will be forfeited unless both (a) the Performance
Objectives (as defined below) are met and (b) the Recipient remains in
employment by the Company through the date of the Certification (as defined
below).
2.Acceptance of Award. The Recipient shall have no rights with respect to the
Performance Shares unless the Recipient accepts this Agreement no later than the
close of business on the date that is sixty (60) days after the Date of Grant.
Such acceptance shall be effected by accessing the website of Lydall’s
administrative agent (the “Administrative Agent”), referenced in the Award
Letter and completing the required on-line grant acknowledgment process.
3.Ownership of Performance Shares; No Rights to Dividends on Performance Shares
That Do Not Vest. As soon as practicable after the acceptance of the Award by
the Recipient, Lydall will cause the Performance Shares to be issued in book
entry form in the name of the Recipient, whereupon they will be held for the
benefit of the Recipient by the Administrative Agent until the Performance
Shares vest or are forfeited in accordance with the terms and conditions of the
Plan and this Agreement. Upon such issue, the Recipient shall be the holder of
record of the Performance Shares granted hereunder and will have, subject to the
terms and conditions of the Plan and this Agreement, voting rights of a
stockholder with respect to such Shares. Lydall shall retain custody of all
Unvested Dividends made or declared with respect to the Performance Shares,
subject to the same restrictions, terms and conditions as are applicable to the
Performance Shares, until such time, if ever, as the Performance Shares shall
vest.
4.Performance Condition.
(a)Period. The Performance Period for the Performance Shares is defined in the
Award Letter.
(b)Performance Objectives. The actual number of Shares eligible for vesting will
depend upon satisfaction of the Performance Objectives as defined below. To the
extent this Award is intended to be a Section 162(m) Award, this Award shall be
subject to Section 9(h) of the Plan. The “Performance Objectives” shall be the
EPS (as defined below) for the last full fiscal year of the Performance Period
compared to the target for such fiscal year (the “Target”), the threshold for
such fiscal year (the “Threshold”) and the maximum for such fiscal year (the

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“Maximum”), each as established by the Plan Administrator, as stated in the
Award Letter and calculated as set forth in the following table:

EPS Achievement 
“Vesting Percentage”
of Performance Shares
Below Threshold
None
Threshold
50%
Target
100%
Maximum
150%

For purposes of the foregoing, “EPS” means the diluted net income per share of
Common Stock of Lydall for the last year of the Performance Period, as set forth
in the audited financial statements of Lydall, as may be adjusted by the Plan
Administrator pursuant to the terms of the Plan. Any adjustments with respect to
Section 162(m) Awards shall be subject to compliance with Section 162(m).

The Vesting Percentage of the Performance Shares where performance achievement
is between Threshold and Target will be scaled on a linear basis from 50% to
100%, and the Vesting Percentage of the Performance Shares where performance
achievement is between Target and Maximum will be scaled on a linear basis from
100% to 150%.

EPS will be rounded to the nearest whole cent, and the number of Performance
Shares determined by the Vesting Percentage will be rounded to the nearest whole
share. All other calculations will be rounded to two decimal places. In the
event that, in determining the EPS for the last full fiscal year of the
Performance Period, the Plan Administrator adjusts the diluted net income per
share of Common Stock from that set forth in the audited financial statements of
Lydall, the Certification may include a brief statement setting forth the amount
of the adjustment and the reasons therefor. Any adjustments with respect to
Section 162(m) Awards shall be subject to compliance with Section 162(m).

(c)Determination of Level of Performance Objectives Achieved. As soon as
practicable following the completion of the Performance Period and the
preparation of Lydall’s audited financial statements for the applicable period,
the Plan Administrator shall (a) determine the satisfaction of the Performance
Objectives and (b) certify in writing, in accordance with the requirements of
Section 162(m) to the extent applicable, the extent to which the Performance
Objectives have been achieved, if at all, and the Vesting Percentage as defined
in 4(b) resulting therefrom (such certification being hereinafter referred to as
the “Certification”).
(d)Delivery of Vested Shares. Following the Certification, the Recipient shall
be entitled to receive that number of Shares calculated by multiplying the
number of Performance Shares set forth in the Award Letter by the Vesting
Percentage set forth in the Certification, together with any Unvested Dividends
relating thereto, provided the Recipient has settled all applicable tax
withholding obligations arising from the vesting of the Award, as set forth in
Section 6 below. All such vested Shares to which the Recipient is entitled,
together with any Unvested Dividends, if any, relating thereto and any
additional Performance Shares, if any, to which the Recipient is entitled by
virtue of the Vesting Percentage being in excess of 100%, shall be released or
delivered, as applicable, to the Recipient as soon as reasonably practical after
the date of the Certification. Delivery of Shares will be made electronically
via book entry to an account in the name of the Recipient maintained with
Lydall’s transfer agent or Administrative Agent. In connection therewith,

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the Recipient agrees to execute any documents reasonably requested by Lydall or
the Administrative Agent.
5.Forfeiture; Transfer Restrictions.
(a)    All Performance Shares that do not vest pursuant to Section 4, as well as
any Unvested Dividends relating to the Performance Shares that do not vest,
shall be forfeited, effective as of the date of the Certification.
(b)    If the Recipient’s employment with the Company terminates for any reason
whatsoever prior to the date on which the Certification is made, then, effective
upon the date of such termination, all of the Performance Shares, as well as any
Unvested Dividends relating thereto, shall be forfeited.
(c)    Neither the Performance Shares, nor the Recipient’s interest in any of
the Performance Shares or Unvested Dividends, may be encumbered, sold, assigned,
transferred, pledged or otherwise disposed of at any time prior to the date of
the Certification. In the event any such action is taken, all of the Performance
Shares evidenced by this Agreement, as well as any Unvested Dividends relating
thereto, shall thereupon automatically be forfeited, effective as of the date of
such event.
(d)    All forfeited Shares shall be delivered promptly to Lydall by the
Administrative Agent, and Lydall shall direct the transfer agent and registrar
of the Common Stock to make appropriate entries upon its or their records.
(e)    The Plan Administrator shall make all determinations as to whether an
event has occurred resulting in the forfeiture of Performance Shares and any
related Unvested Dividends, and all such determinations of the Plan
Administrator shall be final and conclusive.
(f)    The Performance Shares shall be subject to the forfeiture and recoupment
provisions of Section 10(a) of the Plan.
6.Taxation.
(a)The Recipient recognizes and agrees that there may be certain tax issues that
affect the Recipient arising from the grant and/or vesting of the Performance
Shares and that the Recipient is solely responsible for payment of all federal,
state and local taxes resulting therefrom. The Company expressly provides no tax
advice to the Recipient and recommends that the Recipient seek personal tax
advice. In general, the Recipient will have taxable income in any year during
which Performance Shares vest, in an amount equal to the number of Shares that
vest multiplied by the fair market value of the Common Stock on the vesting
date. This amount will be included in Recipient’s taxable income reported on
Form W-2 for that year.
(b)Any applicable income and employment tax withholding obligations associated
with the vesting of the Performance Shares must be satisfied in accordance with
the Plan and sub-section (c) below, prior to the delivery of vested Shares to
the Recipient.
(c)Unless otherwise determined by the Plan Administrator, Recipient’s tax
withholding liability will be satisfied through “net withholding” whereby the
number of vested Shares actually delivered to the Recipient is reduced by a
number of Shares with a fair market value of the Common Stock on the vesting
date equal to the Company’s minimum statutory withholding tax liability outlined
in (b) above.

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(d)Section 83(b) of the Code permits the Recipient to recognize income in the
year in which the Performance Shares are granted, rather than in the subsequent
year in which they vest. This election must be filed with the Internal Revenue
Service within 30 days of the Date of Grant. The Recipient is encouraged to
discuss this alternative with his or her own tax advisor. In the event that the
Recipient desires to make an election under Section 83(b) of the Code, the
Recipient first shall make appropriate arrangements with the Company for the
payment of all applicable withholding taxes associated with such election.
7.No Employment Rights. Nothing in this Agreement shall be deemed to: (a) confer
or be deemed to confer upon the Recipient any right to continue in the employ of
the Company or in any way affect the right of the Company to dismiss or
otherwise terminate the Recipient’s employment at any time for any reason with
or without cause, (b) impose upon the Company any liability for any forfeiture
of Performance Shares which may result if the Recipient’s employment is
terminated, or (c) affect the Company’s right to terminate or modify any
contractual relationship with a Recipient who is not an employee of the Company.
8.Changes in Capitalization. Neither this Agreement nor the grant of the
Performance Shares shall affect in any way the right or power of Lydall or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in Lydall’s capital structure or its business,
or any merger or consolidation of Lydall or any Lydall Affiliate, or any issue
of bonds, debentures, preferred or prior preference stocks ahead of or affecting
the Common Stock or the rights thereof, or the dissolution or liquidation of
Lydall or any Lydall Affiliate, or any sale or transfer of all or any part of
Lydall’s assets or business, or any other corporate act or proceedings, whether
of a similar character or otherwise.
9.Change in Control. Upon a Change in Control Event or other Reorganization
Event, the Performance Shares shall be subject to the terms of the Plan.
10.Plan Terms and Plan Administrator Authority. This Agreement and the rights of
the Recipient hereunder are subject to all of the terms and conditions of the
Plan, as it may be amended from time to time, as well as to such rules and
regulations as the Plan Administrator may adopt for the administration of the
Plan. It is expressly understood that the Plan Administrator is authorized to
administer, construe and make, in its sole and absolute discretion, all
determinations necessary or appropriate for the administration of the Plan and
this Agreement, all of which shall be binding upon the Recipient. This Agreement
shall be interpreted and applied in a manner consistent with the provisions of
the Plan, and in the event of any inconsistency between this Agreement and the
Plan, the terms of the Plan shall control.
11.Miscellaneous
(a)    Amendment; Modification; Waiver. No provision of this Agreement may be
amended, modified or waived unless authorized by the Plan Administrator, and no
amendment or modification of this Agreement may be made without Recipient’s
consent except as permitted by Section 9(e) of the Plan.
(b)    Notices. Except as otherwise provided herein, every notice or other
communication relating to this Agreement shall be in writing, and shall be
mailed or delivered to the party for whom it is intended at such address as may
from time to time be designated by such party in a notice mailed or delivered to
the other party as herein provided; provided, that, unless and until some other
address be so designated, all notices or communications to the Company shall be
mailed to or delivered to Lydall’s Vice President, General Counsel and
Secretary, with a copy to its Vice President of Human Resources, both at Lydall,
Inc., One Colonial Road, P. O. Box

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151, Manchester, Connecticut, 06045-0151, and all notices by the Company to the
Recipient may be given to the Recipient personally or may be mailed to him or
her at the last address designated for the Recipient on the employment records
of the Company. For purposes of this section, the term “mailed” includes
electronic delivery methods.
(c)    Appointment of Agent. By accepting the Performance Shares evidenced by
this Agreement, the Recipient hereby irrevocably nominates, constitutes and
appoints each of Lydall’s Vice President of Human Resources and the
Administrative Agent as his or her agent and attorney-in-fact to take any and
all actions and to execute any and all documents, in the name and on behalf of
the Recipient, for any purpose necessary or convenient for the administration of
the Plan and this Agreement. This power is intended as a power coupled with an
interest and shall survive the Recipient’s death. In addition, it is intended as
a durable power and shall survive the Recipient’s incapacity. Lydall has the
right to change the appointed transfer agent or Administrative Agent from time
to time.
(d)    Governing Law; Jurisdiction. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Delaware, excluding
choice-of-law principles of the law of such state that would require the
application of the laws of a jurisdiction other than the State of Delaware, and
the Recipient agrees to the exclusive jurisdiction of Connecticut courts.
(e)    Compliance with Laws. The issuance or delivery of Shares pursuant to this
Agreement shall be subject to, and shall comply with, any applicable
requirements of any federal and state securities laws, rules and regulations
(including, without limitation, the provisions of the Securities Act and the
Exchange Act, and any rules and regulations promulgated thereunder) and any
other law or regulation applicable thereto. Lydall shall not be obligated to
issue or deliver to Recipient any Shares pursuant to this Agreement if such
issuance or delivery would violate any such requirements.
(f)    Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity, legality or enforceability of the
remainder of this Agreement, it being intended that all rights and obligations
of the Company and the Recipient shall be enforceable to the fullest extent
permitted by law.
12.Statute of Limitations. The Recipient hereby agrees that there shall be a
one-year statute of limitations for the filing of any claim relating to this
Agreement or the terms or conditions of the Performance Shares. If such a claim
is filed more than one year subsequent to the earlier of the date on which the
vesting of the Performance Shares is scheduled to occur or termination of the
Recipient’s employment, it shall be precluded by this provision, whether or not
the claim has accrued at that time.
IN WITNESS WHEREOF, the undersigned officer of Lydall has executed this
Agreement.
LYDALL, INC.

By:    /s/ Dale G. Barnhart
Name: Dale G. Barnhart
Title: President and Chief Executive Officer

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