Employment Agreement and Indemnification Agreement with Thomas P. Smith



 Exhibit 10.2 
 EMPLOYMENT AGREEMENT 
 THIS AGREEMENT is made and entered into as by and between LYDALL, INC., a
Delaware corporation (the “Company”), and Thomas P. Smith (the “Executive”). 
 W I T N E S S E T H 
 WHEREAS, the Company and the Executive (the “Parties”) have agreed to enter into this agreement (the “Agreement) relating to the
employment of the Executive by the Company and/or one of its subsidiaries; 
 NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the Parties, intending to be legally bound, agree as follows: 
  

	 	1.	Term of Employment; Termination of Prior Agreement. 

 1.1 The Company and/or one of its subsidiaries agrees to continue to employ the Executive, and the Executive agrees to remain in the employment of the Company and/or one of its subsidiaries, in accordance with the terms and provisions of
this Agreement. 
 1.2 The Employment Period under this Agreement shall be the period commencing as of the date of this Agreement and, ending
on the date of termination of the Executive’s employment pursuant to Section 5, 6 or 7 below, whichever is applicable. 
 1.3
Immediately upon the commencement of the Executive’s employment pursuant to the terms of this Agreement, that certain Agreement by and between the Executive and the Company dated as of January 21, 2005 shall terminate and shall be of no
further force or effect. 
 2. Duties. It is the intention of the Parties that during the term of the Executive’s employment
under this Agreement, the Executive will serve as Vice President, Chief Financial Officer and Treasurer of the Company or in such other senior management position as the Company shall determine. During the Employment Period, the Executive will
devote his full business time and attention and best efforts to the affairs of the Company and its subsidiaries and his duties. The Executive will have such duties as are appropriate to his position, and will have such authority as required to
enable the Executive to perform these duties. Consistent with the foregoing, the Executive shall comply with all reasonable instructions of the Board of Directors of the Company (the “Board”) or a committee thereof. 







 3. Compensation and Benefits. 
 3.1 Salary. During the Employment Period, the Company will pay the Executive a base salary at an initial annual rate of two hundred and forty
thousand Dollars ($240,000). The Company may, in its sole and absolute discretion, increase the Executive’s base salary in light of the Executive’s performance, inflation, changes in the cost of living and other factors deemed relevant by
the Company. The Executive’s base salary may not be decreased during the term of this Agreement, other than in connection with an across-the-board decrease affecting substantially all members of senior management of the Company on substantially
the same proportional basis. The Chief Executive Officer of the Company shall meet with the Executive annually to review the Executive’s performance, objectives and compensation, including salary and bonus compensation, and the Chief Executive
Officer shall then meet with the Compensation Committee of the Board to discuss the same. If the Compensation Committee determines that any adjustments thereto are appropriate, such committee shall make a recommendation to the full Board and the
Board shall make such adjustments, if any, as the Board deems appropriate and consistent with this Agreement. The Executive’s base salary will be paid in accordance with the standard practices for other members of senior management of the
Company. 
 3.2 Bonuses. 
 (a) Annual Bonus. During the Employment Period, the Executive will be eligible to receive annually or otherwise such bonus awards, if any, as shall be determined by the Board in its sole and absolute discretion after receiving the
recommendation of the Compensation Committee. 
 (b) Performance Bonus. If the Executive is employed by the Company on
October 26, 2006, the Company will pay to the Executive a performance bonus equal to three (3) months’ base pay on the six-month anniversary of such date (the “Anniversary Date”), provided that (i) the Company does not
terminate the Executive’s employment for Cause, the Executive does not terminate his employment with the Company (other than for Good Reason) or the Executive’s employment is not terminated due to his death or Disability prior to the
Anniversary Date and (ii) the Executive maintains a satisfactory level of performance through the Anniversary Date as determined by the Compensation Committee in its sole discretion after receiving input from the CEO. 
 3.3 Benefit Programs. During the Employment Period, the Executive will be entitled to participate on substantially the same terms as other members
of senior management of the Company in all employee benefit plans and programs of the Company (other than any severance plan, program or policy), subject to any restrictions or eligibility requirements under such plans and programs, from time to
time in effect for the benefit of senior management of the Company, including, but not limited to, retirement plans, profit sharing plans, stock incentive and annual bonus plans, group life insurance, hospitalization and surgical and major medical
coverages (excluding the Lydall, Inc. Executive Medical Plan), short-term and long-term disability. 
  

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 3.4 Vacations and Holidays. During the Employment Period, the Executive will be entitled to
vacation leave of three (3) weeks per year at full pay or such greater vacation benefits as may be provided for by the Company’s vacation policies applicable to senior management. The Executive will be entitled to such holidays as are
established by the Company for all employees. 
 3.5 Automobile. During the Employment Period, the Company will provide the Executive
with an automobile in accordance with Company policy. 
 4. Business Expenses. The Executive will be entitled to prompt reimbursement
for all reasonable, documented and necessary expenses incurred by the Executive in performing his services hereunder in accordance with the policies of the Company, provided that the Executive properly accounts therefor in accordance with the
policies and procedures established by the Company. 
 5. Termination of Employment by the Company. 
 5.1 Termination by the Company Other Than For Disability or Cause. The Company may terminate the Executive’s employment at any time other
than (i) by reason of the Executive’s Disability (as defined in Section 5.2) or (ii) for Cause (as defined in Section 5.3), by giving the Executive a written notice of termination at least 30 days before the date of
termination (or such lesser notice period as the Executive may agree to). In the event of such a termination of employment pursuant to this Section 5.1, the Executive shall be entitled to receive (i) the benefits described in
Section 8 if such termination of employment does not occur within 18 months following a “Change of Control” (as defined in Section 10), or (ii) the benefits described in Section 9 if such termination of employment
occurs within 18 months following a Change of Control. 
 5.2 Termination Due to Disability. If the Executive incurs a Disability, as
defined below, the Company may terminate the Executive’s employment by giving the Executive written notice of termination at least 30 days before the date of such termination (or such lesser notice period as the Executive may agree to). In the
event of such termination of the Executive’s employment because of Disability, the Executive shall be entitled to receive (i) his base salary pursuant to Section 3.1 through the date which is twelve months following the date of such
termination of employment, reduced by any amounts paid to the Executive under any disability program maintained by the Company, such base salary, as reduced, to be paid in accordance with the standard payroll practices of the Company; (ii) a
prorata bonus for the calendar year of termination, calculated as the product of (x) the annual performance-based bonus that would have been payable to the Executive for the calendar year of termination (determined as of the end of such
calendar year) and (y) a fraction, the numerator of which is the number of days in the current calendar year through the date of termination and the denominator of which is 365 (366 if a leap year), to be paid at the normal time for payment of
such bonus in the calendar year following the calendar year to which the bonus relates; (iii) any other compensation and benefits to the extent actually earned by the Executive under any other benefit plan or program of the Company as of the
date of such termination of employment, such compensation and benefits to be paid at the normal time for payment of such compensation and benefits to the extent not previously paid, and (iv) any 

  

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reimbursement amounts owing under Section 4. In addition, if the Executive elects to continue coverage under the Company’s health plan pursuant to
the Consolidated Omnibus Budget Reconciliation Act (“COBRA’), then for the period beginning on the date of the Executive’s termination of employment and ending on the earlier of (i) the date which is 12 months after the date of
such termination of employment or (ii) the date the Executive becomes eligible for health insurance benefits under the group health plan of another employer, the Company will pay the same percentage of the Executive’s premium for COBRA
coverage for the Executive and, if applicable, his spouse and dependent children, as the Company paid at the applicable time for coverage under such plan for actively employed members of senior management generally. For the period beginning on the
date of the Executive’s termination of employment and ending on the earlier of (i) the date which is 12 months after the date of such termination of employment or (ii) the date on which the Executive becomes eligible for life
insurance benefits from another employer, the Company will continue to provide the life insurance benefits that the Company would have provided to the Executive if the Executive had continued in employment with the Company for such period, but only
if the Executive timely pays the portion of the premium for such coverage that members of senior management of the Company generally are required to pay for such coverage, if any. The Executive shall notify the Company promptly if he, while eligible
for benefits under this Section 5.2, becomes eligible to receive health and/or life insurance benefits from another employer. In the event that the Executive’s participation in the Company’s group life insurance plan is barred, the
Company shall arrange to provide the Executive with comparable life insurance coverage to the extent available at a cost not to exceed 125% of the cost of the group life insurance coverage offered to the Executive through the Company’s group
life insurance plan; provided that the Executive shall pay the same proportionate share of the premium for such coverage that members of senior management of the Company generally are required to pay for group life insurance coverage under the
Company’s group life insurance plan, if any. 
 For purposes of this Agreement, the Executive shall be considered to have incurred a
Disability if and only if the Executive is by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months (i) unable to
engage in any substantial gainful activity, or (ii) receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Company. 
 5.3 Termination for Cause. The Company may terminate the Executive’s employment immediately for Cause for any of the following reasons:
(i) an act or acts of dishonesty or fraud by the Executive relating to the performance of his services to the Company; (ii) a breach by the Executive of his duties or responsibilities under this Agreement resulting in significant
demonstrable injury to the Company or any of its subsidiaries; (iii) the Executive’s conviction of a felony or any crime involving moral turpitude; (iv) the Executive’s material failure (for reasons other than death or
Disability) to perform his duties under this Agreement or insubordination (defined as refusal to execute or carry out directions from the Board or its duly appointed designees) where the Executive has been given written notice of the acts or
omissions constituting such failure or insubordination and the Executive has failed to cure such conduct, where susceptible to cure, within ten days following such notice; or (v) a breach by the Executive of any provision of any material policy
of the Company or of his 

  

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obligations under the confidentiality, non-competition and invention ownership agreement executed by the Executive and attached hereto as Exhibit A (the
“Confidentiality Agreement”). The Company shall exercise its right to terminate the Executive’s employment for Cause by giving the Executive written notice of termination specifying in reasonable detail the circumstances constituting
such Cause. In the event of such termination of the Executive’s employment for Cause, the Executive shall be entitled to receive only (i) his base salary pursuant to Section 3.1 earned through the date of such termination of
employment plus his base salary for the period of any vacation time earned but not taken for the year of termination of employment, such base salary to be paid in a lump sum no later than the next payroll date following the Executive’s date of
termination to the extent not previously paid, (ii) any other compensation and benefits to the extent actually earned by the Executive under any other benefit plan or program of the Company as of the date of such termination of employment, such
compensation and benefits to be paid at the normal time for payment of such compensation and benefits to the extent not previously paid and (iii) any reimbursement amounts owing under Section 4. 
 6. Termination of Employment by the Executive. 
 (a) Good Reason. The Executive may terminate his employment for Good Reason by giving the Company a written notice of termination at least 30 days before the date of such termination (or such lesser notice
period as the Company may agree to) specifying in reasonable detail the circumstances constituting such Good Reason. In the event of the Executive’s termination of his employment for Good Reason, the Executive shall be entitled to receive
(i) the benefits described in Section 8 if such termination of employment does not occur within 18 months following a Change of Control, or (ii) the benefits described in Section 9 if such termination of employment occurs within
18 months following a Change of Control. For purposes of this Agreement, Good Reason shall mean, without the Executive’s written consent, (i) a significant reduction in the scope of the Executive’s authority, functions, duties or
responsibilities from that which is contemplated by this Agreement; provided that a change in scope solely as a result of the Company no longer being public or becoming a subsidiary of another corporation shall not constitute Good Reason,
(ii) any reduction in the Executive’s base salary, other than an across-the-board reduction affecting substantially all members of senior management of the Company on substantially the same proportional basis, or (iii) any material
breach by the Company of any provision of this Agreement without the Executive having committed any material breach of the Executive’s obligations hereunder or under the Confidentiality Agreement, in each case, which breach is not cured within
thirty days following written notice thereof to the Company of such breach. In addition, in the case of a termination of employment within 18 months following a Change of Control, Good Reason shall also include the relocation of the Executive’s
office location to a location more than 50 miles away from the Executive’s then current principal place of employment. If an event constituting a ground for termination of employment for Good Reason occurs, and the Executive fails to give
notice of termination within 30 days after the occurrence of such event, the Executive shall be deemed to have waived his right to terminate employment for Good Reason in connection with such event (but not for any other event for which the 30-day
period has not expired). 
  

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 (b) Other. The Executive may terminate his employment at any time and for any reason, other than
pursuant to subsection (a) above, by giving the Company a written notice of termination to that effect at least 30 days before the date of termination (or such lesser notice period as the Company may agree to); provided, however, that the
Company following receipt of such notice from the Executive may elect to have the Executive’s employment terminate immediately following its receipt of such notice. In the event of the Executive’s termination of his employment pursuant to
this subsection (b), the Executive shall be entitled to receive only (i) his base salary pursuant to Section 3.1 earned through the date of such termination of employment plus his base salary for the period of vacation time earned but
not taken for the year of termination of employment, such base salary to be paid in a lump sum no later than the next payroll date following the Executive’s date of termination to the extent not previously paid, (ii) any other compensation
and benefits to the extent actually earned by the Executive under any other benefit plan or program of the Company as of the date of such termination of employment, such compensation and benefits to be paid at the normal time for payment of such
compensation and benefits to the extent not previously paid, and (iii) any reimbursement amounts owing under Section 4. 
 7.
Termination of Employment By Death. In the event of the death of the Executive during the course of his employment hereunder, the Executive’s estate (or other person or entity having such entitlement pursuant to the terms of the
applicable plan or program) shall be entitled to receive (i) the Executive’s base salary pursuant to Section 3.1 earned through the date of the Executive’s death plus the Executive’s base salary for the period of vacation
time earned but not taken for the year of the Executive’s death, such base salary to be paid in a lump sum no later than the next payroll date following the Executive’s date of termination to the extent not previously paid, (ii) a
bonus for the year of the Executive’s death (to be paid within 90 days after the Executive’s death) in an amount equal to a pro rata portion of the average of the three highest annual bonuses earned by the Executive under the
Company’s annual bonus plan for any of the five calendar years preceding the calendar year of the Executive’s death (or, if the Executive was not eligible for a bonus for at least three calendar years in such five-year period, then the
average of such bonuses for all of the calendar years in such five-year period for which the Executive was eligible), with any deferred bonuses counting for the year earned rather than the year paid and with the pro rata portion being determined by
dividing the number of days of the Executive’s employment during such calendar year up to his death by 365 (366 if a leap year), (iii) any other compensation and benefits to the extent actually earned by the Executive under any other
benefit plan or program of the Company as of the date of such termination of employment, such compensation and benefits to be paid at the normal time for payment of such compensation and benefits to the extent not previously paid, and (iv) any
reimbursement amounts owing under Section 4. In addition, in the event of such death, the Executive’s beneficiaries shall receive any death benefits owed to them under the Company’s employee benefit plans. If the Executive’s
spouse and/or dependent children elect to continue coverage under the Company’s health plan following the Executive’s death pursuant to COBRA, the Company for a period of 12 months following the Executive’s death will pay the same
percentage of the premium for COBRA coverage for the Executive’s spouse and/or dependent children, as applicable, as the Company would have paid in respect of the Executive’s coverage under such plan if the Executive had continued in
employment with the Company for such period. 
  

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 8. Benefits Upon Termination Without Cause or For Good Reason (No Change of Control). If
(a) the Executive’s employment hereunder shall terminate (i) because of termination by the Company pursuant to Section 5.1, or (ii) because of termination by the Employee for Good Reason pursuant to Section 6(a), and
(b) such termination of employment does not occur within 18 months following a Change of Control of the Company, the Executive shall be entitled to the following: 
 (a) The Company shall pay to the Executive his base salary pursuant to Section 3.1 earned through the date of such termination of employment in a lump sum no later than the next payroll date following the
Executive’s date of termination to the extent not previously paid, and any other compensation and benefits to the extent actually earned by the Executive under any benefit plan or program of the Company as of the date of such termination of
employment, any such compensation and benefits to be paid at the normal time for payment of such compensation and benefits to the extent not previously paid. 
 (b) The Company shall pay the Executive any reimbursement amounts owing under Section 4. 
 (c) The
Company shall pay to the Executive in equal installments spread over the period of 12 months beginning on the date of the Executive’s termination of employment an amount equal in the aggregate to the sum of (i) the Executive’s annual
rate of base salary in effect immediately preceding his termination of employment, and (ii) the average of his annual bonuses earned under the Company’s annual bonus plan for the three calendar years preceding his termination of employment
(or, if the Executive was not eligible for a bonus in each of those three calendar years, then the average of such bonuses for all of the calendar years in such three-year period for which he was eligible), with any deferred bonuses counting for the
year earned rather than the year paid (the “Severance Benefit”). The Severance Benefit installments shall be paid at the times that salary payments are normally made by the Company; provided that, if at the time of the Executive’s
termination of employment, the Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations and guidance issued thereunder (a
“Specified Employee”), then fifty percent (50%) of the Severance Benefit shall be paid in a lump sum on the first payroll date that occurs six (6) months after the date of the Executive’s termination of employment, and the
remaining fifty percent (50%) of the Severance Benefit shall be paid in equal installments spread over six (6) months at the times that salary payments are normally made by the Company, beginning on the second payroll date that occurs six
(6) months after the date of the Executive’s termination of employment. 
 (d) If the Executive elects to continue coverage under
the Company’s health plan pursuant to COBRA, then for the period beginning on the date of the Executive’s termination of employment and ending on the earlier of (i) the date which is 12 months after the date of such termination of
employment or (ii) the date the Executive becomes eligible for health insurance benefits under the group health plan of another employer, the Company will pay the same percentage of the Executive’s premium for COBRA coverage for the
Executive and, if applicable, his spouse and dependent children, as the Company paid at the applicable time for coverage under such plan for actively employed members of senior management 

  

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generally. In addition, for the period beginning on the date of the Executive’s termination of employment and ending on the earlier of (i) the date
which is 12 months after the date of such termination of employment or (ii) the date on which the Executive becomes eligible for life insurance benefits from another employer, the Company will continue to provide the life insurance benefits
that the Company would have provided to the Executive if the Executive had continued in employment with the Company for such period, but only if the Executive timely pays the portion of the premium for such coverage that members of senior management
of the Company generally are required to pay for such coverage, if any. The Executive shall notify the Company promptly if he, while eligible for benefits under this subsection (d), becomes eligible to receive health and/or life insurance
benefits from another employer. In the event that the Executive’s participation in the Company’s group life insurance plan is barred, the Company shall arrange to provide the Executive with comparable life insurance coverage to the extent
available at a cost not to exceed 125% of the cost of the group life insurance coverage offered through the Company’s group life insurance plan; provided that the Executive shall pay the same proportionate share of the premium for such coverage
that members of senior management of the Company generally are required to pay for group life insurance coverage under the Company’s group life insurance plan, if any. 
 (e) The Company will pay to the outplacement services provider reasonably selected by the Executive an amount not to exceed $10,000 for outplacement
services costs incurred by Executive within the twelve months following the Executive’s termination of employment. 
 (f) The
Company’s obligation to provide the severance benefits set forth in Sections 8(c), (d) and (e) upon the Executive’s termination of employment without Cause or for Good Reason, which does not occur within 18 months following a
Change of Control, is subject to the Executive’s execution without revocation of a valid release in substantially the form attached to this Agreement as Exhibit B (the “Release”). 
 9. Benefits Upon Termination Without Cause or For Good Reason (Change of Control). If (a) the Executive’s employment hereunder shall
terminate (i) because of termination by the Company pursuant to Section 5.1, or (ii) because of termination by the Employee for Good Reason pursuant to Section 6(a), and (b) such termination of employment occurs within 18
months following a Change of Control of the Company, the Executive shall be entitled to the following: 
 (a) The Company shall pay to the
Executive his base salary pursuant to Section 3.1 earned through the date of such termination of employment in a lump sum no later than the next payroll date following the Executive’s date of termination to the extent not previously paid,
and any other compensation and benefits to the extent actually earned by the Executive under any benefit plan or program of the Company as of the date of such termination of employment, any such compensation and benefits to be paid at the normal
time for payment of such compensation and benefits to the extent not previously paid. 
 (b) The Company shall pay the Executive any
reimbursement amounts owing under Section 4. 
  

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 (c) The Company shall pay to the Executive as a severance benefit an amount equal to two (2) times
the sum of (i) his annual rate of base salary in effect immediately preceding his termination of employment, and (ii) the average of his three highest annual bonuses earned under the Company’s annual bonus plan for any of the five
calendar years preceding his termination of employment (or, if the Executive was not eligible for a bonus for at least three calendar years in such five-year period, then the average of such bonuses for all of the calendar years in such five-year
period for which the Executive was eligible), with any deferred bonuses counting for the year earned rather than the year paid (the “COC Severance Benefit”). The COC Severance Benefit shall be paid in a lump sum within 30 days after the
date of such termination of employment; provided that, if at the time of the Executive’s termination of employment, the Executive is a Specified Employee, then the COC Severance Benefit shall be paid in a lump sum on the date that is six
(6) months after the date of such termination of employment. 
 (d) The Company shall pay to the Executive as a bonus for the year of
termination of his employment an amount equal to a portion (determined as provided in the next sentence) of the Executive’s target bonus opportunity under the Company’s annual bonus plan for the calendar year of termination of the
Executive’s employment or, if none, such portion of the bonus awarded to the Executive under the Company’s annual bonus plan for the calendar year immediately preceding the calendar year of the termination of the Executive’s
employment, with deferred bonuses counting for the year earned rather than the year paid. Such portion shall be determined by dividing the number of days of the Executive’s employment during such calendar year up to his termination of
employment by 365 (366 if a leap year). Such payment shall be made in a lump sum within 30 days after the date of such termination of employment, and the Executive shall have no right to any further bonuses under said plan; provided that, if at the
time of the Executive’s termination of employment, the Executive is a Specified Employee, then such payment shall be made in a lump sum on the date that is six (6) months after the date of such termination of employment, and the Executive
shall have no right to any further bonuses under said plan. 
 (e) For the period beginning on the date of the Executive’s termination
of employment and ending on the earlier of (i) the date which is 24 months after the date of such termination of employment or (ii) the date the Executive becomes eligible for comparable benefits from another employer, the Executive (and,
if applicable, the Executive’s spouse and dependent children) shall remain covered by the medical, dental, life insurance, and, if reasonably commercially available through nationally reputable insurance carriers, long-term disability plans of
the Company that covered the Executive immediately prior to his termination of employment as if the Executive had remained in employment for such period; provided, however, that the coverage under any such plan is conditioned on the timely payment
by the Executive (or his spouse or dependent children) of the portion of the premium for such coverage that actively employed members of senior management of the Company generally are required to pay for such coverage. In the event that the
Executive’s participation in any such plan is barred, the Company shall arrange to provide the Executive (and, if applicable, his spouse and dependent children) with comparable benefits to the extent available at a cost not to exceed 125% of
the cost of providing benefits to the Executive under the Company’s plan or plans. The Executive shall notify the Company promptly if he, while eligible for benefits under this subsection (e) becomes eligible to receive benefits from
another employer. 
  

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 (f) Each stock option granted by the Company to the Executive and outstanding immediately prior to
termination of his employment shall be fully vested and immediately exercisable and may be exercised by the Executive (or, following his death, by the person or entity to which such option passes) at any time prior to the expiration date of the
applicable option (determined without regard to any earlier termination of the option that would otherwise occur by reason of termination of his employment). Each restricted stock award granted by the Company to the Executive and outstanding
immediately prior to termination of the Executive’s employment shall be fully vested upon such termination of employment. 
 (g) The
Company will pay to the outplacement services provider reasonably selected by the Executive an amount not to exceed $10,000 for outplacement services costs incurred by Executive within the twelve months following the Executive’s termination of
employment. 
 (h) The Company shall promptly pay all reasonable attorneys’ fees and related expenses incurred by the Executive in
seeking to obtain or enforce any right or benefit under this Section 9 or to defend against any claim or assertion in connection with this Section 9, but only if and to the extent that the Executive substantially prevails. 
 (i) The Company will pay to the Executive an automobile allowance, in an amount equal to the Executive’s monthly lease allowance at the time of
termination, each month for 24 months following termination of the Executive’s employment to replace the Company-leased automobile, which leased automobile will be returned to the Company by the Executive on the date of termination of the
Executive’s employment; provided that, if at the time of the Executive’s termination of employment, the Executive is a Specified Employee, then twenty-five percent (25%) of the automobile allowance shall be paid in a lump sum on the
date that is six (6) months after the date of termination, and the remaining seventy-five percent (75%) of the automobile allowance shall be paid in eighteen (18) equal monthly installments, beginning in the seventh month following
the date of termination. 
 (j) The Company’s obligation to provide the severance benefits set forth in Sections 9(c), (d), (e), (f),
(g), (h) and (i) upon the Executive’s termination of employment without Cause or for Good Reason within 18 months following a Change of Control is subject to the Executive’s execution of the Release. 
 10. Change of Control. For the purposes of this Agreement, a “Change of Control” shall be deemed to occur upon the consummation of any
of the following events: (a) any person or persons acting together which would constitute a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (other than the
Company or any subsidiary of the Company) shall beneficially own (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, at least 25% of the total voting power of all classes of capital stock of the Company entitled to vote generally
in the election of the Board; (b) Current Directors (as herein defined) shall cease for any reason to 

  

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constitute at least a majority of the members of the Board (for this purpose, a “Current Director” shall mean any member of the Board as of the
date hereof and any successor of a Current Director whose election, or nomination for election by the Company’s shareholders, was approved by at least a majority of the Current Directors then on the Board); (c) (i) the complete
liquidation of the Company or (ii) the merger or consolidation of the Company, other than a merger or consolidation in which (x) the holders of the common stock of the Company immediately prior to the consolidation or merger have, directly
or indirectly, at least a majority of the common stock of the continuing or surviving corporation immediately after such consolidation or merger or (y) the Board immediately prior to the merger or consolidation would, immediately after the
merger or consolidation, constitute a majority of the board of directors of the continuing or surviving corporation, which liquidation, merger or consolidation has been approved by the shareholders of the Company; or (d) the sale or other
disposition (in one transaction or a series of transactions) of all or substantially all of the assets of the Company pursuant to an agreement (or agreements) which has (have) been approved by the shareholders of the Company. 
 11. Golden Parachute Excise Tax. 
 (a)
In the event that any payment or benefit received or to be received by the Executive pursuant to this Agreement or any other plan, program or arrangement of the Company or any of its affiliates would constitute an “excess parachute
payment” within the meaning of Section 280G of the Code (“Excess Parachute Payment”), then the payments under this Agreement shall be reduced (by the minimum possible amounts) until no amount payable to the Executive under this
Agreement constitutes an Excess Parachute Payment; provided, however, that no such reduction shall be made if the net after-tax payment (after taking into account Federal, state, local or other income and excise taxes) to which the Executive would
otherwise be entitled without such reduction would be greater than the net after-tax payment (after taking into account Federal, state, local or other income and excise taxes) to the Executive resulting from the receipt of such payments with such
reduction. If, as a result of subsequent events or conditions (including a subsequent payment or absence of a subsequent payment under this Agreement or other plan, program or arrangement of the Company or any of its affiliates), it is determined
that payments under this Agreement have been reduced by more than the minimum amount required to prevent any payments from constituting an Excess Parachute Payment, then an additional payment shall be promptly made to the Executive in an amount
equal to the additional amount that can be paid without causing any payment to constitute an Excess Parachute Payment. 
 (b) All
determinations required to be made under this Section 11 shall be made by a nationally recognized independent accounting firm mutually agreeable to the Company and the Executive (the “Accounting Firm”) which shall provide detailed
supporting calculations to the Company and the Executive as requested by the Company or the Executive. All fees and expenses of the Accounting Firm shall be borne solely by the Company and shall be paid by the Company upon demand of the Executive as
incurred or billed by the Accounting Firm. All determinations made by the Accounting Firm pursuant to this Section 11 shall be final and binding upon the Company and the Executive. 
  

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 (c) To the extent any payment or benefit is to be reduced pursuant to this Section 11, the severance
payment described in Section 8(c) or 9(c) will first be reduced and then the bonus described in Section 9(d), in each case only to the extent necessary. 
 12. Entitlement to Other Benefits. Except as otherwise provided in this Agreement, this Agreement shall not be construed as limiting in any way any rights or benefits that the Executive or his spouse,
dependents or beneficiaries may have pursuant to any other plan or program of the Company; provided that the Executive shall not be eligible to receive any benefits under any circumstances under any severance plan or policy of the Company,
including, without limitation, the Lydall, Inc. Severance Plan. 
 13. General Provisions. 
 13.1 No Duty to Seek Employment. The Executive shall not be under any duty or obligation to seek or accept other employment following termination
of employment, and no amount, payment or benefits due to the Executive hereunder shall be reduced or suspended if the Executive accepts subsequent employment, except as expressly set forth herein. 
 13.2 Deductions and Withholding. All amounts payable or which become payable under any provision of this Agreement shall be subject to any
deductions authorized by the Executive and any deductions and withholdings required by law. 
 13.3 Notices. All notices, demands,
requests, consents, approvals or other communications (collectively “Notices”) required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be delivered personally, sent by
facsimile transmission with a copy deposited in the United States mail, registered or certified, return receipt requested, postage prepaid, or sent by overnight mail addressed as follows: 
  

			
	To the Company:	  	Lydall, Inc.
		  	P.O. Box 151
		  	One Colonial Road
		  	Manchester, CT 06045-0151
		  	Attn: Chief Executive Officer
		
	To the Executive:	  	Thomas P. Smith
		  	 xxxxx

		  	 xxxxx


 or such other address as such party shall have specified most recently by written notice. Notice mailed as
provided herein shall be deemed given when so delivered personally or sent by facsimile transmission, or, if sent by overnight mail, on the day after the date of mailing. 
 13.4 No Disparagement. The Executive shall not during the period of his employment with the Company, nor following the date of termination of his employment for any reason, publish or communicate to any person
or entity any Disparaging (as defined 

  

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below) remarks, comments or statements concerning the Company, or any of its subsidiaries or affiliates or any of their shareholders, directors, officers,
employees or agents. “Disparaging” remarks, comments or statements are those that impugn the character, honesty, integrity or morality or business acumen or abilities in connection with any aspect of the operation of business of the
individual or entity being disparaged. The Executive agrees that the terms of this Section 14.4 shall survive the term of this Agreement and the termination of the Executive’s employment. 
 13.5 Proprietary Information and Inventions. The Confidentiality Agreement is incorporated by reference in this Agreement, and the Executive
agrees to continue to be bound thereby. 
 13.6 Covenant to Notify Management. The Executive agrees to abide by the ethics policies of
the Company as well as the Company’s other rules, regulations, policies and procedures. The Executive agrees to comply in full with all governmental laws and regulations as well as ethics codes applicable. In the event that the Executive is
aware or suspects the Company, or any of its officers or agents, of violating any such laws, ethics, codes, rules, regulations, policies or procedures, the Executive agrees to bring all such actual and suspected violations to the attention of the
Company immediately so that the matter may be properly investigated and appropriate action taken. The Executive understands that the Executive is precluded from filing a complaint with any governmental agency or court having jurisdiction over
wrongful conduct unless the Executive has first notified the Company of the facts and permits it to investigate and correct the concerns. 
 13.7 Amendments and Waivers. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company. No waiver by either
Party hereto at any time of any breach by the other Party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other Party shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. 
 13.8 Beneficial Interests. This Agreement shall inure to the benefit of and be
enforceable by (a) the Company’s successors and assigns and (b) the Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die
while any amounts are still payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no
such designee, to the Executive’s estate. 
 13.9 Successors. The Company will require any successors (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company 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. 
 13.10 Assignment. This Agreement and the rights, duties, and obligations hereunder may not be
assigned or delegated by any Party without the prior written consent of 

  

 - 13 - 








 
the other Party and any attempted assignment or delegation without such prior written consent shall be void and be of no effect. Notwithstanding the
foregoing provisions of this Section 14.10, the Company may assign or delegate its rights, duties and obligations hereunder to any affiliate or to any person or entity which succeeds to all or substantially all of the business of the Company or
one of its subsidiaries through merger, consolation, reorganization, or other business combination or by acquisition of all or substantially all of the assets of the Company or one of its subsidiaries without the Executive’s consent.

 13.11 Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut
without regard to the conflicts of law provisions thereof. 
 13.12 Statute of Limitations. The Executive and the Company hereby agree
that there shall be a one year statute of limitations for the filing of any requests for arbitration or any lawsuit relating to this Agreement or the terms or conditions of Executive’s employment by the Company. If such a claim is filed more
than one year subsequent to the Executive’s last day of employment it shall be precluded by this provision, regardless of whether or not the claim has accrued at that time. 
 13.13 Right to Injunctive and Equitable Relief. The Executive’s obligations under Section 13.4 are of a special and unique character,
which gives them a peculiar value. The Company cannot be reasonably or adequately compensated for damages in an action at law in the event the Executive breaches such obligations. Therefore, the Executive expressly agrees that the Company shall be
entitled to injunctive and other equitable relief without bond or other security in the event of such breach in addition to any other rights or remedies which the Company may possess or be entitled to pursue. Furthermore, the obligations of the
Executive and the rights and remedies of the Company under Section 13.4 and this Section 13.13 are cumulative and in addition to, and not in lieu of, any obligations, rights, or remedies as created by applicable law. The Executive agrees
that the terms of this Section 13.13 shall survive the term of this Agreement and the termination of the Executive’s employment. 
 13.14 Severability or Partial Invalidity. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full
force and effect. 
 13.15 Entire Agreement. This Agreement, along with the Confidentiality Agreement and the attached Indemnification
Agreement, constitutes the entire agreement of the Parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the Parties with respect to the subject matter hereof. This
Agreement may not be changed orally and may only be modified in writing signed by both Parties. This Agreement, along with the Confidentiality Agreement, is intended by the Parties as the final expression of their agreement with respect to such
terms as are included herein and therein and may not be contradicted by evidence of any prior or contemporaneous agreement. The Parties further intend that this Agreement, along with the Confidentiality Agreement, constitutes the complete and
exclusive statement of their terms and that no extrinsic evidence may be introduced in any judicial proceeding involving such agreements. 
  

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 13.16 Counterparts. This Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed an original but all of which together shall constitute one and the same instrument. 
 IN WITNESS WHEREOF,
the Company has caused this Agreement to be executed by its duly authorized officer and the Employee has hereunto set her hand as of the day and year first above written. 
  

									
	LYDALL, INC.	  		  		  	
				
	By:	  	 /s/ David Freeman
	  		  	 1/10/07

		  	David Freeman	  		  		  	Date
		  	President and Chief Executive Officer	  		  	
				
		  	 /s/ Thomas P. Smith
	  		  	 1/10/07

		  	Thomas P. Smith	  		  		  	Date


  

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 EXHIBIT A 
 CONFIDENTIALITY AGREEMENT 
 LYDALL EMPLOYEE AGREEMENT 
 In consideration of my employment by any subsidiary or affiliated company of Lydall, Inc., (“Lydall”) and of the compensation and other benefits to be received
by me from Lydall, I, Thomas P. Smith agree that: 
  

	 	1.	The term “Confidential Information” as used in this Agreement includes all business information and records which relate to Lydall and which are not known to the public
generally, including, but not limited to, technical notebook records, technical reports, patent applications, machine equipment, computer software, models, process and product designs including any drawings and descriptions, unwritten knowledge and
“know-how”, operating instructions, training manuals, production and development processes, production or other schedules, customer lists, customer buying records, product sales records, sales requests, territory listings, market surveys,
plans including marketing plans and long-range plans, salary information, contracts, supplier lists, product costs, policy statements, policy statements, policy procedures, policy manuals, flowcharts, computer printouts, program listings,
reproductions and correspondence. 

 The term “Invention” as used in this Agreement includes any
discovery, improvement, design or idea, patentable or otherwise, which relates to any activity or business in which Lydall is engaged or any process, equipment, material, product or method (including computer software) in which Lydall has any direct
or indirect interest. 
  

	 	2.	I will disclose promptly to Lydall any Invention conceived, developed or perfected by me, either alone or jointly with another or others, while I am a Lydall employee, whether or
not such conception, development or perfection occurs during the hours of my employment. 

  

	 	3.	I grant to Lydall without further compensation, all my right, title and interest in and to any such Invention for the sole use and benefit of Lydall, together with all U.S. and
foreign patents, trademarks or copyrights that may at any time be granted, and all reissues, renewals and extensions of such patents, trademarks or copyrights. At the request and expense of Lydall, I will at any time do what Lydall reasonably
believes to be necessary to assist Lydall to vest full right and title to each such Invention in Lydall, Inc.; enable Lydall to obtain and maintain full right and title in any country; prosecute applications for and secure patents (including their
reissue, renewal and extension), trademarks, copyrights and any other form of protection for each such Invention; and prosecute or defend any interference or opposition which may be declared involving any such application or patent and any
litigation in which Lydall may be involved concerning any such Invention. This will include preparing, executing and delivering any written document, drawings, flowcharts, or computer printouts. The provision of this paragraph will continue after I
stop working for Lydall and shall be binding on my executors, administrators and assigns, unless waived in writing by Lydall. 

  

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	 	4.	I have not disclosed and will not disclose to Lydall, and I will not use, in the discharge of my duties as an employee of Lydall, any trade secret or confidential information
belonging to a former employer or other person and which has been classified by the former employer or other person as a trade secret or confidential information. The limitation set forth in this paragraph 4 shall not apply to matters which
(a) are or become public knowledge, (b) were previously known to Lydall, (c) are subsequently received by Lydall from a third party, or (d) are independently derived by Lydall. 

  

	 	5.	I will not, directly or indirectly, during or at any time after the period of my employment by Lydall, use for myself or other, or disclose to others, any Confidential Information,
no matter how such information becomes known to me, unless I first obtain Lydall’s written consent. 

  

	 	6.	When I leave Lydall’s employ, or at any other time upon request by Lydall, I will promptly deliver to Lydall all documents and records, including but not limited to those
listed under the definition of Confidential Information, which are in my possession or under my control and which pertain to Lydall, any of its activities or any of my activities while in the course of my employment and all copies thereof. I will
not retain or deliver to any others copies of these documents or records. 

  

	 	7.	I acknowledge and agree that Lydall’s business competes upon a nationwide and worldwide basis, and that the degree of competition in that business is high; I recognize that
Lydall may assign me responsibilities in geographic regions of Lydall’s selection. Accordingly, I agree that, unless I first obtain Lydall’s written consent, I will not during my employment with Lydall and for a period of two
(2) years following the termination of my employment with Lydall (provided, however, that if I am employed by Lydall for less than two (2) years, the post-employment period to which this paragraph 7 applies shall be the greater of six
(s) months or a period of time equal to the duration of my employment by Lydall in any capacity,1) directly or
indirectly: 

  

	 	(i)	own, manage, operate, join, control or participate in the ownership, management, operation or control of, or work for (as an employee, consultant or independent contractor) or have
any material financial interest in, any business competitive with Lydall in (a) any market in which the Division(s) of Lydall for which I have worked in the two (2) preceding years has sold or attempted to sell any of its product in the
two (2) years preceding such termination or (b) if Lydall has assigned me a specific geographic area for responsibility, within two hundred fifty (250) miles of any geographic location in which Lydall has assigned me responsibilities
in the two (2) years preceding such termination; 

  

	 	(ii)	induce or attempt to induce any person who is an employee of Lydall to terminate his or her employment with Lydall; or 

  

	 	(iii)	induce or attempt to induce any person, business or entity which, as of the date of the termination of my employment, is a supplier of, a purchaser from , or a contracting party
with Lydall to terminate any written or oral agreement, order or understanding with Lydall. 

  

 - 17 - 









	 	8.	I further understand and agree that the remedy at law for any breach or threatened breach of my agreement not to compete contained in paragraph 7 would be inadequate and that any
breach or attempted breach would result in irreparable damage to Lydall, the monetary amount of which would be impossible to ascertain. Thus, I agree that in the event of any breach or threatened breach of my agreement not to compete contained in
paragraph 7, in addition to any and all other legal or equitable remedies which may be available, Lydall may obtain preliminary injunctive relief to remedy damage caused by such breach or threatened breach, and that Lydall shall be entitled to
recover from me its costs and expenses including reasonable attorney fees incurred in remedying such breach or threatened breach. 

  

	 	9.	Should any claim or dispute relating to this agreement arise, I agree that the claim will be settled by arbitration in the state of the Division of Lydall for which I was last
working, in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment will be binding and may be entered in any court with jurisdiction. 

  

	 	10.	I represent and agree that I have and will assume no obligations to others inconsistent with any of my obligations to Lydall under this Agreement. 

  

	 	11.	In consideration of my employment, I agree to conform to the policies of Lydall. I understand that my employment is for an indefinite period and can be terminated at any time, with
or without cause or prior notice by either Lydall or me, and will remain so unless a written agreement for a specific term is entered into and executed by me and Lydall’s CEO. No other representations or agreements have been made regarding the
term or termination of my employment. I understand that no employee of Lydall other than its CEO has the authority to enter into any agreement, commitment or guarantees binding on Lydall regarding my employment and then only by a signed, written
document. 

  

	 	12.	This Agreement, which is ancillary to any other agreement I may have with Lydall, (a) is intended as the complete and exclusive statement of my agreement with Lydall with
respect to its subject matter; (b) shall be binding upon my heirs, executors and administrators; (c) shall not be modified unless in writing and signed by me and Lydall; and (d) shall be governed by and construed in accordance with
the law of the State of Connecticut, Lydall’s home office state. 

  

	 	13.	Should any part of this Employee Agreement be found invalid by any court, the remainder shall be valid and enforceable in law and equity. 

 1 individually; or
as a member, employee or agent of any partnership; or as an officer, agent, employee, director, or investor of any other corporation or entity; or as a stockholder (except of not more than two percent (2%) of the outstanding stock of any
company listed on a national securities exchange or actively traded in the over-the-counter securities market) or investor of any other corporation or entity; 
  

									
	Signed at	 	 Avon, CT
	 		 	on	 	 3/31/2000

		 	(City/State)	 		 	 (Date)

				
	Employee’s Name:	 	 Thomas P. Smith
	 		 	Lydall Corporate Division
		 	(Print or Type)	 		 	

  

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	By:	 	 /s/ Thomas P. Smith
	 		 	By	 	 /s/ Christopher R. Skomorowski

		 	(Employee Signature)	 		 		 	(Division President)
					
	S.S.#	 	###-##-####	 		 	Witness:	 	 /s/ Nancy H. Poulin


 Acknowledgement of Receipt 
  

			
	 I acknowledge receipt of a copy of this document on
	  	 3/31/2000

		  	(date)

  

			
	Employee’s Signature	 	 /s/ Thomas P. Smith


  

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 EXHIBIT B 
 TERMINATION, VOLUNTARY RELEASE AND WAIVER OF RIGHTS AGREEMENT 
 I,
            , unqualifiedly accept and agree to the relinquishment of my title, responsibilities and obligations as an employee of Lydall, Inc. (“the Company”), and
concurrently and unconditionally agree to sever my relationship as an employee of the Company, in consideration for the voluntary payment to me by the Company of the separation benefits set forth in Section      of the
Employment Agreement dated as of             , 2006 by and between me and the Company (the “Employment Agreement”), which is made a part hereof. 
 1. In exchange for this consideration, which I understand that the Company is not otherwise obligated to provide to me, I voluntarily agree to waive and
forego any and all claims, rights, interests, covenants, contracts, warranties, promises, undertakings, actions, suits, causes of action, obligations, debts, attorneys’ fees or other expenses, accounts, judgments, fines, fees, losses and
liabilities, of any kind, nature or description, in law, equity or otherwise (collectively, “Claims”) that I may have against the Company and to release the Company and their respective affiliates, subsidiaries, officers, directors,
employees, representatives, agents, successors and assigns (hereinafter collectively referred to as “Releasees”) from any obligations any of them may owe to me, accepting the aforestated consideration as full settlement of any monies or
obligations owed to me by Releasees that may have arisen at any time prior to the date of my execution of this Termination, Voluntary Release and Waiver of Rights Agreement (the “Agreement”), except as specifically provided below in the
following paragraph number 2. 
 2. I do not waive, nor has the Company asked me to waive, any rights arising exclusively under the Fair
Labor Standards Act, except as such waiver may henceforth be made in a manner provided by law. I do not waive, nor has the Company asked me to waive, any vested benefits that I may have or that I may have derived from the course of my employment
with the Company. I understand that such vested benefits will be subject to and administered in accordance with the established and usual terms governing same. I do not waive any rights which may in the future, after the execution of this Agreement,
arise exclusively from a substantial breach by the Company of a material obligation of the Company expressly undertaken in consideration of my entering into this Agreement. 
 3. Except as set forth in paragraph 2, I do fully, irrevocably and forever waive, relinquish and agree to forego any and all Claims whatsoever, whether
known or unknown, that I may have or may hereafter have against the Releasees or any of them arising out of or by reason of any cause, matter or thing whatsoever from the beginning of the world to the date hereof, including without limitation any
and all matters relating to my employment with the Company and the cessation thereof and all matters arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000 et seq., the Americans with Disabilities Act of
1990, 42 U.S.C. § 12101 et seq., the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq., the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq.,
the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., all as amended, or under 

  

 - 20 - 








 
any other laws, ordinances, executive orders, regulations or administrative or judicial case law arising under the statutory or common laws of the United
States, the State of Connecticut or any other applicable county or municipal ordinance. 
 4. As a material inducement to the Company to
enter into this Agreement, I, the undersigned, recognize that I may have been privy to certain confidential, proprietary and trade secret information of the Company which, if known to third parties, could be used in a manner that would reduce the
value of the Company for its shareholders. In order to reduce the risk of that happening, I, the undersigned, agree that for a period of two (2) years after termination of employment, I, the undersigned, will not, directly or indirectly,
assist, or be part of or have any involvement in, any effort to acquire control of the Company through the acquisition of its stock or substantially all of its assets, without the prior consent of the Board of Directors of the Company. This
provision shall not prevent the undersigned from owning up to not more than one percent (1%) of the outstanding publicly traded stock of any company. 
 5. I further acknowledge pursuant to the Older Worker’s Benefit Protection Act (29 U.S.C. § 626(f)), I expressly agree that the following statements are true: 
 a. The payment of the consideration described in Section      of the Employment Agreement is in addition to the standard
employee benefits and anything else of value which the Company owes me in connection with my employment with the Company or the separation of employment. 
 b. I have [twenty-one days] days from [date of receipt] to consider and sign this agreement. If I choose to sign this Agreement before the end of the [twenty-one] day period, that decision is completely voluntary and
has not been forced on me by the Company. 
 c. I will have seven (7) days after signing the Agreement in which to revoke it, and the
Agreement will not become effective or enforceable until the end of those seven (7) days. 
 d. I am now being advised in writing to
consult an attorney before signing this Agreement. 
 I acknowledge that I have been given sufficient time to freely consult with an attorney
or counselor of my own choosing and that I knowingly and voluntarily execute this Agreement, after bargaining over the terms hereof, with knowledge of the consequences made clear, and with the genuine intent to release claims without threats,
duress, or coercion on the part of the Company. I do so understanding and acknowledging the significance of such waiver. 
 6. Further, in
view of the above-referenced consideration voluntarily provided to me by the Company, after due deliberation, I agree to waive any right to further litigation or claim against any or all of the Releasees except as specifically provided in paragraph
number 2 above. I hereby agree to indemnify and hold harmless the Releasees and their respective 

  

 - 21 - 








 
agents or representatives from and against any and all losses, costs, damages or expenses, including, without limitation, attorneys fees incurred by said
parties, or any of them, arising out of any breach of this Agreement by me or by any person acting on my behalf, or the fact that any representation made herein by the undersigned was false when made. 
 7. As a material inducement to the Company to enter into this Agreement, I, the undersigned, understand and agree that if I should fail to comply with
the conditions hereof or to carry out the agreement set forth herein, all amounts previously paid under this Agreement shall be immediately forfeited to the Company and that the right or claim to further payments and/or benefits hereunder would
likewise be forfeited. 
 8. As a further material inducement to the Company to enter into this Agreement, the undersigned provides as
follows: 
 First. I represent that I have not filed any complaints or charges against the Company, or any of the Releasees relating to
the relinquishment of my former titles and responsibilities at the Company or the terms of my employment with the Company and that if any agency or court assumes jurisdiction of any complaint or charge against the Company or any of the Releasees on
behalf of me concerning my employment with the Company, I understand and agrees that I have, by my knowing and willing execution of this Agreement waived my rights to any form of recovery or relief against the Company, or any of the Releasees,
including but not limited to, attorney’s fees. Provided, however, that this provision shall not preclude the undersigned from pursuing appropriate legal relief against the Company for redress of a substantial breach of a material obligation of
the Company expressly undertaken in consideration of my entering into this Agreement. 
 Second. I acknowledge and understand that the
consideration for this release shall not be in any way construed as an admission by the Company or any of the Releasees of any improper acts or any improper employment decisions, and that the Company, specifically disclaims any liability on the part
of itself, the Releasees, and their respective agents, employees, representatives, successors or assigns in this regard. 
 Third. I
acknowledge and agree that this Agreement shall be binding upon me, upon the Company, and upon our respective administrators, representatives, executives, successors, heirs and assigns and shall inure to the benefit of said parties and each of them.

 Fourth. I represent, understand and agree that this Agreement sets forth the entire agreement between the parties hereto, and fully
supersedes any and all prior agreements or understandings between the parties pertaining to the subject matter hereof, except for the confidentiality and non-competition agreement previously executed by me, the terms of which retain their full force
and effect, and which are in no way limited or curtailed by this Agreement. (A copy of that agreement is attached to the Employment Agreement as Exhibit A and is made a part hereof.) 
  

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 Fifth. Modification. This Agreement may not be altered or changed except by an agreement in
writing that has been properly executed by the party against whom any waiver, change, modification or discharge is sought. 
 Sixth.
Severability. All provisions and terms of this Agreement are severable. The invalidity or unenforceability of any particular provision(s) or term(s) of this Agreement shall not affect the validity or enforceability of the other provisions and
such other provisions shall be enforceable in law or equity in all respects as if such particular invalid or unenforceable provision(s) or term(s) were omitted. Notwithstanding the foregoing, the language of all parts of this Agreement shall, in all
cases, be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. 
 Seventh. No
Disparagement. Unless otherwise required by a court of competent jurisdiction or pursuant to any recognized subpoena power, I agree and promise that I will not make any oral or written statements or reveal any information to any person, company,
or agency which is disparaging or damaging to the reputation or business of the Company, its subsidiaries, directors, officers or affiliates, or which would interfere in any way with the business relations between the Company or any of its
subsidiaries or affiliates and any of their customers, suppliers or vendors whether present or in the future. 
 Eighth.
Confidentiality. The Company and the undersigned agree to refrain from disclosing to third parties and to keep strictly confidential all details of this Agreement and any and all information relating to its negotiation, except as necessary to
each party’s accountants or attorneys. 
 Ninth. Termination of Agreement. Notwithstanding anything to the contrary in
this Agreement, this Agreement may be terminated by the Company and all further payment obligations of the Company will cease, if: (a) the undersigned is terminated for “Cause” prior to the undersigned’s separation date; or
(b) facts are discovered after the undersigned’s separation date that would have supported a termination for “Cause” had such facts been discovered prior to the undersigned’s separation date. 
 AFFIRMATION OF RELEASOR 
 I,
            , warrant that I am competent to execute this Termination, Voluntary Release and Waiver of Rights Agreement and that I accept full responsibility thereof. 
 I,             , warrant that I have had the opportunity to consult with an attorney
of my choosing with respect to this matter and the consequences of my executing this Termination, Voluntary Release and Waiver of Rights Agreement. 
 I,             , have read this Termination, Voluntary Release and Waiver of Rights Agreement carefully and I fully understand its terms. I execute this document voluntarily
with full and complete knowledge of its significance. 
  

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 Executed this      day of
            , 2006 at
                                       
 . 
  

							
		  		  		  	NAME
	STATE OF                                    
                         	  	)	  		  	
		  	)	  		  	SS:
	COUNTY OF                                    
                     	  	)	  		  	

 Subscribed and sworn to before me, a Notary Public in and for said County and State, this
             day of             , 2006 under the pains and penalties of perjury. 
 , Notary Public 
 My Commission
Expires: 
 County of Residence: 
  

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 EXHIBIT C 
 INDEMNIFICATION AGREEMENT 
 This Agreement, made and entered into by and between Lydall, Inc.,
a Delaware corporation (“Company”), and Thomas P. Smith (“Indemnitee”): 
 WHEREAS, highly competent persons are becoming
more reluctant to serve publicly-held corporations as directors or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the corporation; and 
 WHEREAS, the current impracticability of obtaining
adequate insurance and the uncertainties relating to indemnification have increased the difficulty of attracting and retaining such persons; 
 WHEREAS, the Board of Directors of the Company has determined that the inability to attract and retain such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such
persons that there will be increased certainty of such protection in the future; and 
 WHEREAS, it is reasonable, prudent and necessary for
the Company contractually to obligate itself to indemnify such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and

 WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the
condition that he be so indemnified; 
 NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and
Indemnitee do hereby covenant and agree as follows: 
 Section 1. Services by Indemnitee. Indemnitee agrees to serve (as a
director, officer, employee, agent of the Company) (at the request of the Company, as a director, officer, employee, agent, fiduciary of another corporation, partnership, joint venture, trust employee benefit plan or other enterprise. Indemnitee may
at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in
such position. 
 Section 2. Indemnification - General. The Company shall indemnify, and advance Expenses (as hereinafter
defined) to, Indemnitee (a) as provided in this Agreement and (b) to the fullest extent permitted by applicable law in effect on the date hereof and as amended from time to time. The rights of Indemnitee provided under the preceding
sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement. 
  

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 Section 3. Proceedings Other than Proceedings by or in the Right of the Company. Indemnitee
shall be entitled to the rights of indemnification provided in this Section 3 if, by reason of his Corporate Status (as hereinafter defined), he is, or is threatened to be made, a party to any threatened, pending, or completed Proceeding (as
hereinafter defined), other than a Proceeding by or in the right of the Company. Pursuant to this Section 3, Indemnitee shall be indemnified against all expenses, judgements, penalties, fines, and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner be reasonably believed to be in or not opposed to the best interests of the Company and,
with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. 
 Section 4. Proceedings by or
in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be made, a party to any threatened, pending or completed
Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection with such
Proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; provided, however, that if applicable law so provides, no indemnification against such Expenses shall be made
in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware, or the court in which such
Proceeding shall have been brought or is pending, shall determine that such indemnification may be made. 
 Section 5.
Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the
merits or otherwise, in any Proceeding, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on
the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all expenses actually and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result
as to such claim, issue or matter. 
 Section 6. Indemnification for Expenses of a Witness. Notwithstanding any other provision
of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his
behalf in connection therewith. 
  

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 Section 7. Advancement of Expenses. The Company shall advance all reasonable Expenses
incurred by or on behalf of Indemnitee in connection with any Proceeding within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses
advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. 
 Section 8.
Procedures for Determination of Entitlement to Indemnification. 
 (a) To obtain indemnification under this Agreement, Indemnitee
shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification. 
 (b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 8(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case; (i)if a Change in Control (as hereinafter defined) shall be made in the Independent Counsel (as hereinafter defined) in a written opinion to
the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as
hereinafter defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to
the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by the Board of Directors, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including
providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to
such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with this person, persons or entity making such determination shall be borne by the Company (Irrespective of the
determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. 
 (c) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) hereof, the Independent Counsel shall be 

  

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selected as provided in this Section 8(c). If a Change of Control shall not have occurred, the Independent Counsel shall be selected by the Board of
Directors, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. If a Change of Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless
Indemnitee shall request that such selection be made by the Board of Directors, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so
selected. In either event, Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such
selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 17 of this
Agreement, and the objection shall set forth with particularity the factual basis of such assertion. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until
such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 8(a) hereof, no Independent Counsel shall
have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made the Company or
Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court of by such other person as the Court shall designate, and the person with respect to whom all
objections are so resolved or the person so appreciated shall act as Independent Counsel under Section 8(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 8(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 8(c), regardless of the manner in which such Independent Counsel was selected or
appointed. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 10(a)(iii) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the
applicable standards of professional conduct then prevailing). 
 Section 9. Presumptions and Effect of Certain Proceedings.

 (a) If a Change of Control shall have occurred, in making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 8(a) of this Agreement,
and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. 
 (b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement of conviction, or upon a plea of nolo
contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself 

  

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adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful. 
 Section 10. Remedies of Indemnitee. 
 (a) In the event that (i) a determination is made pursuant to Section 8 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section 7 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 8(b) of this Agreement within 90 days after receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to Section 5 or 6 of this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within 10
(10) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of
his entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this
Section 10(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. 
 (b) In the event that a determination shall have been made pursuant to Section 8(b) of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 10 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that
adverse determination. If a Change of Control shall have occurred, in any judicial proceeding or arbitration commenced pursuant to this Section 10 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification
or advancement of Expenses, as the case may be. 
 (c) If a determination shall have been made pursuant to Section 8(b) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 (d) In the event that Indemnitee, pursuant to this Section 10, seeks a judicial adjudication of or an award in arbitration to
enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the 

  

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Company, and shall be indemnified by the Company against, any and all expenses (of the types described in the definition of Expenses in Section 17 of
this Agreement) actually and reasonably incurred by him in such judicial adjudication or arbitration, but only if he prevails therein. If it shall be determined in said judicial adjudication or arbitration that Indemnitee is entitled to receive part
but not all of the indemnification or advancement of expenses sought, the expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated. 
 Section 11. Non-Exclusivity; Survival of Rights; Insurance; Subrogation. 
 (a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the By-Laws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. 
 (b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy or policies. 
 (c) In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnities, who shall execute all papers required and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such rights. 
 (d) The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnities has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. 
 Section 12. Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a)10 years after the date that
Indemnitee shall have ceased to serve as a director, officer, employee, or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the
Company; or (b) the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of expenses hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 10 of this Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. 
  

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 Section 13. Severability. If any provision or provisions of this Agreement shall be held to
be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed to as to
give effect to the intent manifested thereby. 
 Section 14. Exception to Right of Indemnification or Advancement of Expenses.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, or any claim therein prior to a Change
in Control, unless the bringing of such Proceeding or making of such claim shall have been approved by the Board of Directors. 
 Section 15. Identical Counterparts. This agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same
Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. 
 Section 16. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 Section 17. Definitions. (a) The phrase “Change of Control,” as used in this Agreement, shall mean i) an
acquisition of the Company by means of a merger or consolidation or purchase of substantially all of its assets if and when incident thereto (A) the composition of the Board of Directors of the Company (the “Board”) or its successor
changes so that a majority of the Board is not comprised of individuals who were members of the board immediately prior to such merger, consolidation or purchase of assets or (B) the stockholders of the Company acquire a right to receive, in
exchange for or upon surrender a majority of their stock, cash or other securities or a combination of the two; and/or ii) the acquisition by a person (as that term is hereafter defined) of the voting rights with respect to 25 percent or more of the
outstanding Common Stock of the Company if such person was not an officer or director of the Company on the date of this Agreement; and/or iii) the election or appointment to the Board of any director or directors whose appointment or election or
nomination for election was not approved by a vote of at least a majority of the directors then still in office who were either directors on the date hereof or whose election, appointment or nomination for election was previously so approved.

  

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 (b) “Corporate Status” describes the status of a person who is or was a director, officer,
employee or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company. 
 (c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee. 
 (d) “Effective Date” means January 10, 2007. 
 (e) “Expenses” shall include all reasonable attorney’s fees, retainers, court costs, transcript costs, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding. 
 (f) “Independent Counsel” means a
law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such
party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. 
 (g) “Proceeding” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any
other proceeding, whether civil, criminal, administrative, or investigative, except one (i) initiated by an Indemnitee pursuant to Section 10 of this Agreement to enforce his rights under this Agreement or (ii) pending on or before
the Effective Date. 
 Section 18. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver. 
 Section 19. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing
upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. 
  

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 Section 20. Notices. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so mailed: 
  

			
	(a)	  	If to Indemnitee, to:
		
		  	Thomas P. Smith
		  	xxxxx
		  	xxxxx
		
	(b)	  	If to the Company to:
		
		  	Mary Tremblay
		  	Vice President, General Counsel and Secretary
		  	Lydall, Inc.
		  	P.O. Box 151
		  	One Colonial Road
		  	Manchester, CT 06045-0151


 or to such other address as may have been furnished to Indemnitee by the Company or to the Company by
Indemnitee, as the case may be. 
 Section 21. Governing Law. The parties agree that this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware. 
 Section 22. Miscellaneous. Use of the masculine
pronoun shall be deemed to include usage of the feminine pronoun where appropriate. 
 IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the day and year first written. 
  

									
	ATTEST:	 		 	LYDALL, INC.,
					
	By	 	 /s/ Huijing Shi
	 		 	By	 	 /s/ David Freeman

					
		 		 		 	INDEMNITEE	 	
				
		 		 		 	 /s/ Thomas P. Smith

		 		 		 	xxxxx
		 		 		 	xxxxx

  

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