Document:

Lydall, Inc.	Telephone 860 646-1233
	 	One Colonial Road	Facsimile 860 646-4917
	 	P.O. Box 151	Facsimile 860 646-8847
	 	Manchester, CT 06045-0151	www.lydall.com

 

Exhibit 10.2

 

June 12, 2012

 

 

David H. Williams

XXXXX

XXXXX

 

Dear Dave:

 

I am pleased to extend an invitation to
you to join Lydall as President of its Performance Materials business. A formal appointment as an officer of Lydall will take place
at the next Board of Directors’ meeting following your date of hire. Your starting date will be on a mutually agreed upon
date, and is contingent upon successful fulfillment of all pre-employment requirements as outlined below. Mona Estey, Vice President
of Human Resources, will assist you in all of the pre-employment procedures that may be required. As discussed, the particulars
are as follows:

 

Compensation

Your base annual rate of compensation is
$275,000 and will be paid on a bi-weekly basis. You will be eligible to participate in the Company Annual Incentive Performance
(AIP) program at 40 percent of your actual paid base salary in accordance with Plan Provisions. You will receive a written description
of the program with related targets during your orientation.

 

Sign On Bonus

The Company agrees to pay a lump sum of
$60,000 as a sign on bonus within 30 days of your date of hire, providing you are an employee in good standing as of that date.

 

Health Premium Bridge

The Company will provide reimbursement
in your first paycheck for documented COBRA premiums paid by you to bridge the Lydall health coverage waiting period of one month.

 

Stock Awards

The Compensation Committee of the Board
of Directors will grant to you 20,000 shares of Incentive Stock Options and 15,000 shares of time-based Restricted Stock effective
after expiration of the current quarter closing blackout period (This period is expected to expire on August 1, 2012). These grants
will be made under the terms of Lydall’s existing shareholder approved stock plan.

 

Executive Agreement

Attached is an Agreement that outlines
the terms of your severance arrangements.

 

Benefits

You are eligible for a comprehensive benefit
package that includes medical, dental, disability, life, and 401(k) program. The applicable waiting periods and vesting schedules
are outlined in the Benefits Handbook which will be provided to you during your orientation. A Summary of Benefits has been provided
for your review.

 

Executive Life Program: in place of the
Basic Life insurance described in the Summary of Benefits provided to all employees, you will participate in an executive life
program that provides three times your annual base salary under an individually-owned universal life policy. The premiums for this
benefit will be taxable to you as ordinary income. The other life programs (AD&D, Business Travel, and Supplemental) in the
Summary of Benefits will apply to you as described.

 

Executive Long-Term Disability (LTD) Program:
you are provided an executive LTD policy that is in addition to the group LTD program. The group program provides 60% replacement
income to a monthly maximum of $10,000. The executive program is designed to obtain replacement income to bring executive up to
100% of base salary; however, it is limited to the supplemental insurance that can be obtained from the carrier based upon each
individual executive.

    	 	 

    	 

    
 

Vacation

You will be eligible for two weeks paid
vacation for the balance of 2012, and four weeks paid vacation in 2013. You will continue at that level until you are eligible
for additional weeks according to the Vacation Policy. All other provisions of the Vacation Policy apply.

 

Company Car

You will
be provided with a $920 monthly car allowance that is intended to cover the cost of a car and its maintenance and insurance costs,
as outlined in the Company Policy. A company gas card will be provided for your use, and the personal use will be estimated by
the company and considered taxable income. 

 

Moving and Relocation

The Company has agreed to provide full
relocation assistance as outlined in the attached Full Relocation Benefit Procedure. You must follow all the requirements in this
Policy in order to be eligible for relocation benefits, including signing a Lydall Relocation Repayment Agreement that states
you are subject to repay the relocations costs to the company in the event of your voluntary termination or a termination for “cause”.
Please contact Beth Duncan at CBRB Relocation Services (XXX-XXX-XXXX xXXXX) who will assist in all aspects of your relocation including
the physical move of your household goods.

 

Other

Employment with the Company is contingent
upon: 1) your passing a substance abuse screening; 2) your signing the Confidentiality, Invention and Non-Compete Agreement; 3)
your ability to provide the Company with proper documentation to establish your identity and eligibility for employment in the
U.S; 4) completion of an Employment Application; 5) satisfactory completion and receipt of references and background checks; and
6) your providing a copy of any agreement with your current or prior employers and our determination that your employment would
not be a violation of any such agreement. Any violation of the above terms may subject you to withdrawal of the offer or termination
of employment.

 

This letter is not a contract of employment.
If you accept the offer and the other conditions for employment are satisfied, your employment with Lydall will be at-will, and
both parties remain free to terminate the employment relationship at any time, in which case, the provisions of this letter may
no longer apply. The terms of this offer must remain confidential and any disclosure to third parties, other than your legal counsel
and advisors, must receive the written approval of the Company in advance.

 

Prior to your first day of employment,
you must have completed your substance abuse screening at the clinic the company identifies for your location. You will find instructions
when you use the assigned access code (provided below) to log into our website.

 

Should you accept this invitation to join
Lydall, you will need to complete pre-employment forms and bring them to the Human Resources Department on your first day of employment.
To obtain these required forms log into www.Lydall.com, select New Hires. This website
will provide you with all of the pre-employment documents and policies you will need to begin your first day of employment. The
following are the access codes that you will need to gain access to these forms: Username: XXXX, Password: XXXX (Username and
Password are case sensitive).

 

This offer is valid for 30 days unless
accepted or withdrawn in writing. This Letter Agreement supersedes all prior understanding, whether written or oral, relating to
the terms of your employment with Lydall. We look forward to the contributions that you will bring to our team. Please feel free
to contact me if you have any questions.

 

Sincerely,

 

 

/s/ Dale G. Barnhart

Dale G. Barnhart

President and Chief Executive Officer

 

Previously provided documents: Summary of Benefits, Relocation
Procedure, Confidentiality, Invention and Non-Compete Agreement

 

 

	Acceptance of Offer:             	/s/ David H. Williams 	6/27/12
	 	David H. Williams	Date

 

    	2Exhibit
10.3

 

AGREEMENT

 

THIS AGREEMENT is made
and entered into as of the 27th day of June, 2012, by and between LYDALL, INC., a Delaware corporation and/or its subsidiaries
(together the "Company"), and David H. Williams (the "Employee").

 

W I T N E S S E T H

 

WHEREAS, the Company
and the Employee (the "Parties") have agreed to enter into this agreement (the "Agreement) relating to the termination
of the employment of the Employee;

 

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.     
Termination of Employment by the Company.

 

1.1             
Termination by the Company Other Than For Cause. The Company may terminate the Employee's employment at any time
other than for Cause (as defined in Section 1.2), by giving the Employee a written notice of termination at least 30 days before
the date of termination (or such lesser notice period as the Employee may agree to). In the event of such a termination of employment
pursuant to this Section 1.1, the Employee shall be entitled to receive (i) the benefits described in Section 3 if such
termination of employment does not occur within 18 months following a "Change of Control" (as defined in Section 5),
or (ii) the benefits described in Section 4 if such termination of employment occurs within 18 months following a Change of
Control.

 

1.2             
Termination for Cause. The Company may terminate the Employee's employment immediately for Cause for any of the following
reasons: (i) an act or acts of dishonesty or fraud by the Employee relating to the performance of his services to the Company;
(ii) a breach by the Employee of his duties or responsibilities under this Agreement resulting in significant demonstrable
injury to the Company or any of its subsidiaries; (iii) the Employee's conviction of a felony or any crime involving moral
turpitude; (iv) the Employee'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 Employee has been given written notice of the acts or omissions constituting such failure or insubordination and the
Employee has failed to cure such conduct, where susceptible to cure, within ten days following such notice; or (v) a breach by
the Employee of any provision of any material policy of the Company or of his obligations under the confidentiality, non-competition
and invention ownership agreement executed by the Employee and attached hereto as Exhibit A (the "Confidentiality Agreement").
The Company shall exercise its right to terminate the

 

    	 

    	-2-

    

Employee's employment for Cause by giving the Employee written notice of termination specifying in reasonable detail the circumstances
constituting such Cause. In the event of such termination of the Employee's employment for Cause, the Employee shall be entitled
to receive only (i) his base salary 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 Employee's date of termination to the extent not previously paid, (ii) any
other compensation and benefits to the extent actually earned by the Employee 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.

 

2.     
Termination of Employment by the Employee. The Employee may terminate his employment at any time and for any reason
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 Employee
may elect to have the Employee's employment terminate immediately following its receipt of such notice. In the event of the Employee's
termination of his employment, the Employee shall be entitled to receive only (i) his base salary 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 Employee's date of termination
to the extent not previously paid, (ii) any other compensation and benefits to the extent actually earned by the Employee
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.

 

3.     
Benefits Upon Termination Without Cause (No Change of Control). If (a) the Employee's employment hereunder shall
terminate because of termination by the Company pursuant to Section 1.1 and (b) such termination of employment does not occur
within 18 months following a Change of Control of the Company, the Employee shall be entitled to the following:

 

(a)               
The Company shall pay to the Employee his base salary earned through the date of such termination of employment in a lump
sum no later than the next payroll date following the Employee's date of termination to the extent not previously paid, and any
other compensation and benefits to the extent actually earned by the Employee 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 Employee any reimbursement amounts owing.

 

    	 

    	-3-

    
 

(c)               
The Company shall pay to the Employee one (1) times the sum of (i) the Employee'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 Employee 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 shall be paid in installments at the times that salary payments are normally made by the
Company; provided that, if at the time of the Employee's termination of employment, the Employee 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 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 Employee's termination of employment.

 

(d)              
If the Employee elects to continue coverage under the Company's health plan pursuant to COBRA, then for the period beginning
on the date of the Employee'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 Employee becomes eligible for health insurance benefits under the group
health plan of another employer, the Company will pay the same percentage of the Employee's premium for COBRA coverage for the
Employee 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 management generally. In addition, for the period beginning on the date of the Employee'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 Employee becomes eligible for life insurance benefits from another employer, the
Company will continue to provide the executive life insurance benefits that the Company would have provided to the Employee if
the Employee had continued in employment with the Company for such period, but only if the Employee timely pays the portion of
the premium for such coverage that members of management of the Company generally are required to pay for such coverage, if any.
The Employee 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.

 

(e)               
The Company will pay to the outplacement services provider reasonably selected by the Employee an amount not to exceed $10,000
for outplacement services costs incurred by Employee within the twelve months following the Employee's termination of employment.

 

(f)               
The Company's obligation to provide the severance benefits set forth in Sections 3(c), (d) and (e) upon the Employee's termination
of employment without Cause, which does not occur within 18 months following a Change of Control, is subject to the Employee's
execution without revocation of a valid release in substantially the form attached to this Agreement as Exhibit B (the "Release").

 

    	 

    	-4-

    
 

4.     
Benefits Upon Termination Without Cause (Change of Control). If (a) the Employee's employment hereunder shall terminate
because of termination by the Company pursuant to Section 1.1 and (b) such termination of employment occurs within 18 months following
a Change of Control of the Company, the Employee shall be entitled to the following:

 

(a)               The
Company shall pay to the Employee his base salary earned through the date of such termination of employment in a lump sum no later
than the next payroll date following the Employee's date of termination to the extent not previously paid, and any other compensation
and benefits to the extent actually earned by the Employee 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 Employee any reimbursement amounts owing.

 

(c)             
The Company shall pay to the Employee 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 Employee 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 Employee 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
Employee's termination of employment, the Employee 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 Employee 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 Employee's target bonus opportunity under the Company's annual bonus plan
for the calendar year of termination of the Employee's employment or, if none, such portion of the bonus awarded to the Employee
under the Company's annual bonus plan for the calendar year immediately preceding the calendar year of the termination of the Employee'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 Employee'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 Employee
shall have no right to any further bonuses under said plan; provided that, if at the time of the Employee's termination of employment,
the Employee 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 Employee shall have no right to any further bonuses under said plan.

 

    	 

    	-5-

    
 

(e)              
If the Employee elects to continue coverage under the Company's health plan pursuant to COBRA, then for the period beginning
on the date of the Employee's termination of employment and ending on the earlier of (i) the date which COBRA coverage ends but
not to exceed 24 months after the date of such termination of employment or (ii) the date the Employee becomes eligible for comparable
benefits from another employer, the Employee (and, if applicable, the Employee's spouse and dependent children) shall remain covered
by the medical, dental, executive life insurance, and, if reasonably commercially available through nationally reputable insurance
carriers, executive long-term disability plans of the Company that covered the Employee immediately prior to his termination of
employment as if the Employee had remained in employment for such period; provided, however, that the coverage under any such plan
is conditioned on the timely payment by the Employee (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. The
Employee shall notify the Company promptly if he, while eligible for benefits under this subsection (e) becomes eligible to receive
benefits from another employer.

 

(f)              
Each stock option granted by the Company to the Employee and outstanding immediately prior to termination of his employment
shall be fully vested and immediately exercisable and may be exercised by the Employee (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 Employee and outstanding immediately prior to termination of the Employee'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 Employee an amount not to exceed $10,000
for outplacement services costs incurred by Employee within the twelve months following the Employee's termination of employment.

 

(h)             
The Company shall promptly pay all reasonable attorneys' fees and related expenses incurred by the Employee in seeking to
obtain or enforce any right or benefit under this Section 4 or to defend against any claim or assertion in connection with this
Section 4, but only if and to the extent that the Employee substantially prevails.

 

(i)               
The Company will pay to the Employee an automobile allowance, in an amount equal to the Employee's monthly lease allowance
at the time of termination, each month for 24 months following termination of the Employee's employment to replace the Company-leased
automobile, which leased automobile will be returned to the Company by the Employee on the date of termination of the Employee's
employment; provided that, if at the time of the Employee's termination of employment, the Employee is a Specified Employee, then
fifty percent (50%) 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 fifty percent (50%) of the automobile allowance shall be paid in six (6) equal monthly installments,
beginning in the seventh month following the date of termination.

 

    	 

    	-6-

    
 

(j)               The Company's obligation to provide the severance benefits set forth in Sections 4(c), (d),
(e), (f), (g), (h) and (i) upon the Employee's termination of employment without Cause within 18 months following a Change of
Control is subject to the Employee's execution of the Release.

 

5.     
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 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.

 

6.     
Golden Parachute Excise Tax.

 

(a)             In the
event that any payment or benefit received or to be received by the Employee 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 Employee 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 Employee 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 Employee
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 Employee in an amount equal to the additional amount that can be paid without causing any payment to constitute an Excess
Parachute Payment.

 

    	 

    	-7-

    
 

(b)             All
determinations required to be made under this Section 6 shall be made by a nationally recognized independent accounting firm mutually
agreeable to the Company and the Employee (the "Accounting Firm") which shall provide detailed supporting calculations
to the Company and the Employee as requested by the Company or the Employee. 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 Employee as incurred or billed by the Accounting
Firm. All determinations made by the Accounting Firm pursuant to this Section 6 shall be final and binding upon the Company
and the Employee.

 

(c)             To the
extent any payment or benefit is to be reduced pursuant to this Section 6, the severance payment described in Section 3(c) or 4(c)
will first be reduced and then the bonus described in Section 4(d), in each case only to the extent necessary.

 

7.     
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 Employee or his spouse, dependents or beneficiaries may have pursuant to
any other plan or program of the Company; provided that the Employee 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.

 

8.     
General Provisions.

 

8.1             
No Duty to Seek Employment. The Employee 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 Employee hereunder shall be reduced or suspended
if the Employee accepts subsequent employment, except as expressly set forth herein.

 

8.2             
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 Employee and any deductions and withholdings required by law.

 

8.3             
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:

 

    	 

    	-8-

    
 

		To the Company:	Lydall, Inc.

P.O. Box 151

One Colonial Road

Manchester, CT 06045-0151

Attn: Chief Executive Officer
	 	 	 
	 	To the Employee:	David H. Williams
	 	 	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.

 

8.4             
No Disparagement. The Employee 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 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 Employee agrees
that the terms of this Section 8.4 shall survive the term of this Agreement and the termination of the Employee's employment.

 

8.5             
Proprietary Information and Inventions. The Confidentiality Agreement is incorporated by reference in this Agreement,
and the Employee agrees to continue to be bound thereby.

 

8.6            
Covenant to Notify Management. The Employee agrees to abide by the ethics policies of the Company as well as the
Company's other rules, regulations, policies and procedures. The Employee agrees to comply in full with all governmental laws and
regulations as well as ethics codes applicable. In the event that the Employee 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 Employee 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 Employee understands that the Employee is precluded from filing a complaint with
any governmental agency or court having jurisdiction over wrongful conduct unless the Employee has first notified the Company of
the facts and permits it to investigate and correct the concerns.

 

8.7             
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 Employee 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.

 

    	 

    	-9-

    
 

 

8.8             Beneficial
Interests. This Agreement shall inure to the benefit of and be enforceable by (a) the Company's successors and assigns
and (b) the Employee's personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees
and legatees. If the Employee 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 Employee's devisee, legatee, or other designee
or, if there be no such designee, to the Employee's estate.

 

8.9             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.

 

8.10            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 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 8.10, 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 Employee's consent.

 

8.11           
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.

 

8.12          
Statute of Limitations. The Employee 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 Employee's
employment by the Company. If such a claim is filed more than one year subsequent to the Employee's last day of employment it shall
be precluded by this provision, regardless of whether or not the claim has accrued at that time.

 

8.13           
Right to Injunctive and Equitable Relief. The Employee's obligations under Section 9.4 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 Employee breaches such obligations. Therefore, the Employee 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 Employee
and the rights and remedies of the Company under Section 8.4 and this Section 8.13 are cumulative and in addition to, and
not in lieu of, any obligations, rights, or remedies as created by applicable law. The Employee agrees that the terms of this Section
8.13 shall survive the term of this Agreement and the termination of the Employee's employment.

 

    	 

    	-10-

    
 

 

8.14           
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.

 

8.15         
  Entire Agreement. This Agreement, along with the Confidentiality 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.

 

8.16           
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 his hand
as of the day and year first above written.

 

	 	 	LYDALL, INC	 	 
	 	 	 	 	 
	 	By:     	\s\ Dale Barnhart	 	6/27/2012
	 	 	Dale Barnhart	 	Date
	 	 	President and Chief	 	
	 	 	Executive Officer	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	\s\ David H. Williams	 	6/27/2012
	 	 	David H. Williams	 	Date

 

    	 

    	-11-

    
 

EXHIBIT A

 

CONFIDENTIALITY AGREEMENT

 

Lydall, Inc.

(Also referred to as the “Company”)

 

Confidentiality, Invention and Non-Compete
Agreement

 

In consideration of my employment by the
Company, or future employment with an affiliate to whom I am transferred (together the “Company”), the compensation
and other benefits to be received by me from the Company, I agree that:

 

		1.	Definitions

The term “Confidential
Information” as used in this Agreement includes all business information and records which relate to the Company or to parties
working with the Company under a confidentiality agreement, 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 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, copywriteable or otherwise, which relates
to any activity or business in which the Company is engaged or any process, equipment, material, product or method (including computer
software) in which the Company has any direct or indirect interest.

 

		2.	Inventions

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

 

I grant to the Company without
further compensation, all my right, title and interest in and to any such Invention for the sole use and benefit of the Company,
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 the Company, I will at any time do what
the Company reasonably believes to be necessary to assist the Company to vest full right and title to each such Invention in the
Company, enable the Company 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 the Company may be involved concerning any such Invention. This will include preparing, executing and delivering any written
document, drawings, flowcharts, or computer printouts. The provisions of this section will continue after I stop working for the
Company and shall be binding on my executors, administrators and assigns, unless waived in writing by the Company.

 

		3.	Confidential Information

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

 

    	 

    	-12-

    
 

 

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

 

When I leave the Company’s
employ, or at any other time upon request by the Company, I will promptly deliver to the Company 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 the Company, 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.

 

	 	 	 
	 	 	THE FOLLOWING SECTION 4 ONLY RELATES
TO SALARIED EXEMPT AND NON-EXEMPT EMPLOYEES
	 	 	 
		4.	Non-Competition
	 	 	I acknowledge and agree that
the Company’s business competes upon a worldwide basis, and that the degree of competition in that business is high. I recognize
that the Company may assign me to duties in a geographic area or specific market. I agree that, unless I first obtain the Company’s
written consent, I will not during my employment with the Company and for a period of two (2) years following the termination of
my employment (provided, however, that if I am employed by the Company for less than two (2) years, the post-employment period
to which this section applies shall be the greater of six (6) months or the length of my employment in any capacity), directly
or indirectly or through others, individually, or as a member, officer, director, employee, agent, or investor of any partnership
or entity (except ownership of not more than one percent (1%) of the outstanding publicly traded stock of any company):
	 	 	 

		(i)	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 the Company in
(a) any market in which the company 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 my termination or (b) if the Company has assigned me to duties in a geographic area,
within two hundred fifty (250) miles of any such geographic area in which I have worked in the two (2) years preceding my termination,
	 	 	 
		(ii)	induce or encourage any employee of the Company to terminate his or her employment with the Company,
or
	 	 	 
		(iii)	solicit, induce or encourage any person, business or entity which is a supplier of, a purchaser
from, or a contracting party with, the Company to terminate any written or oral agreement, order or understanding with the Company
or to conduct business in a way that results in an adverse impact to the Company.
	 	 	 
	 	I further understand and agree
that the remedy at law for any breach or threatened breach of my agreement not to compete contained in this section would be inadequate
and that any breach or attempted breach would result in irreparable damage to the Company, 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, in
addition to all other available legal or equitable remedies, the Company may obtain injunctive relief to remedy damage caused by
such breach or threatened breach, and that the Company shall be entitled to recover from me its costs and expenses, including reasonable
attorney fees, incurred in remedying such breach or threatened breach.

 

 

 

    	 

    	-13-

    
 

		5.	General Terms

I represent and agree that I
have and will assume no obligations to others inconsistent with any of my obligations to the Company under this Agreement. I represent
and agree that the performance of my duties and obligations as an employee of the Company does not, and shall not, breach any agreement
that obligates me to refrain from competing, directly or indirectly, with the business of any other party.

 

In consideration of my employment,
I agree to conform to the policies of the Company. 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 the Company or me. No other representations or agreements have been
made regarding the term or termination of my employment.

 

This Agreement, which is ancillary
to any other agreement I may have with the Company, (a) is intended as the complete and exclusive statement of my agreement with
the Company with respect to its subject matter, (b) shall be binding upon my heirs, executors and administrators, (c) shall be
assignable by the Company to its successors; (d) shall not be modified unless in writing and signed by me and the Company, (e)
shall be governed by and construed in accordance with the law of the State of Connecticut, the Company ‘s home office state,
and (f) if any part of this Agreement is found invalid by any court, the remainder shall be valid and enforceable in law and equity.

 

 

	 	 	 	            Lydall,
    Inc.
	 	 	 	 
	Employee
Name:
	David
H. Williams
	By:
	/s/
David H. Williams

	 Date:
	 6/27/2012
	Title:
	President,
Performance Materials

 

    	 

    	-14-

    
 

 

EXHIBIT B

 

TERMINATION, VOLUNTARY RELEASE AND WAIVER
OF RIGHTS AGREEMENT

 

I, David H. Williams,
unqualifiedly accept and agree to the relinquishment of my title, responsibilities and obligations as an employee of Lydall, Inc.
and/or its subsidiaries (together "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 3, 4 of the Agreement dated as of June 27th, 2012 by and between me and the Company (the "Severance
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 any other laws, ordinances, Employee 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.

 

    	 

    	-15-

    
 

 

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 3, 4 of the Severance 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 agents or representatives from and against any and all losses, costs, damages
or expenses, including, without limitation, attorney’s 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.

 

    	 

    	-16-

    
 

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,
Employees, 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 Severance Agreement as Exhibit A and
is made a part hereof.)

 

    	 

    	-17-

    
 

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, David H. Williams,
warrant that I am competent to execute this Termination, Voluntary Release and Waiver of Rights Agreement and that I accept full
responsibility thereof.

 

I, David H. Williams,
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, David H. Williams,
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.

 

    	 

    	-18-

    
 

 

Executed this 27th day of June 27, 2012,
at xxxxxxxxxxxxxxxx.

 

	 	 	 	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 ______________, 20__, under the pains and penalties
of perjury.

 

 

,

Notary Public

My Commission Expires: 

County of Residence:

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