Document:

Exhibit 10.6

 

FORM (FOR FRENCH EMPLOYEES) OF

LYDALL, INC.

PERFORMANCE SHARE AWARD AGREEMENT

(Three-Year Period)

 

THIS PERFORMANCE SHARE
AWARD AGREEMENT (this “Agreement”) is made between Lydall, Inc., a Delaware corporation (“Lydall” or the
“Company”), and the recipient (the “Recipient”) with respect to an Award under Lydall’s 2012 Stock
Incentive Plan (the “Plan”) pursuant to the award letter (the “Award Letter”), dated [_________], from
Lydall to the Recipient. All capitalized terms used but not defined in this Agreement shall have the same meanings that have been
ascribed to them in the Plan, unless the context clearly requires otherwise.

 

1.Grant of Performance
Shares. On the Date of Grant (as defined in the Award Letter), the Recipient has been granted the number of shares of Restricted
Stock as set forth in the Award Letter (the “Performance Shares”). The Performance Shares are subject to the terms
and conditions set forth in the Award Letter, this Agreement and the Plan. By accepting this Agreement, Recipient understands that
the Performance Shares will be forfeited unless both (a) the Performance Objectives (as defined below) are met and (b) the Recipient
remains in employment by the Company through the date of the Certification (as defined below).

 

2.Acceptance
of Award. The Recipient shall have no rights with respect to the Performance Shares unless the Recipient accepts this Agreement
no later than the close of business on the date that is sixty (60) days after the Date of Grant. Such acceptance shall be effected
by accessing the website of Lydall’s administrative agent (the “Administrative Agent”), referenced in the Award
Letter and completing the required on-line grant acknowledgment process.

 

3.Ownership
of Performance Shares; No Rights to Dividends on Performance Shares That Do Not Vest. As soon as practicable after the acceptance
of the Award by the Recipient, Lydall will cause the Performance Shares to be issued in book entry form in the name of the Recipient,
whereupon they will be held for the benefit of the Recipient by the Administrative Agent until the Performance Shares vest or are
forfeited in accordance with the terms and conditions of the Plan and this Agreement. Upon such issue, the Recipient shall be the
holder of record of the Performance Shares granted hereunder and will have, subject to the terms and conditions of the Plan and
this Agreement, voting rights of a stockholder with respect to such Shares. Lydall shall retain custody of all Unvested Dividends
made or declared with respect to the Performance Shares, subject to the same restrictions, terms and conditions as are applicable
to the Performance Shares, until such time, if ever, as the Performance Shares shall vest.

 

4.Performance
Condition.

 

(a)Period.
The Performance Period for the Performance Shares is defined in the Award Letter.

 

(b)Performance
Objectives. The actual number of Shares eligible for vesting will depend upon satisfaction of the Performance Objectives as
defined below. To the extent this Award is intended to be a Section 162(m) Award, this Award shall be subject to Section 9(h) of
the Plan. The “Performance Objectives” shall be the EPS (as defined below) for the last full fiscal year of
the Performance Period compared to the target for such fiscal year (the “EPS Target”) established by the Plan
Administrator, as stated in the Award Letter and calculated as set forth in the following table:

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        EPS Achievement
	
        “Vesting Percentage”

        of Performance Shares

	Below Threshold	Less than 95% of EPS Target	None
	Threshold	95% of EPS Target	80%
	Target	100% of EPS Target	100%
	Maximum	110% of EPS Target	120%

 

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

 

The Vesting Percentage of the Performance
Shares where performance achievement is between Threshold and Target will be scaled on a linear basis from 80% to 100%, and the
Vesting Percentage of the Performance Shares where performance achievement is between Target and Maximum will be scaled on a linear
basis from 100% to 120%.

 

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

 

(c)Determination
of Level of Performance Objectives Achieved. As soon as practicable following the completion of the Performance Period and
the preparation of Lydall’s audited financial statements for the applicable period, the Plan Administrator shall (a) determine
the satisfaction of the Performance Objectives and (b) certify in writing, in accordance with the requirements of Section 162(m)
to the extent applicable, the extent to which the Performance Objectives have been achieved, if at all, and the Vesting Percentage
as defined in 4(b) resulting therefrom (such certification being hereinafter referred to as the “Certification”).

 

(d)Delivery of
Vested Shares. Following the Certification, the Recipient shall be entitled to receive that number of Shares calculated by
multiplying the number of Performance Shares set forth in the Award Letter by the Vesting Percentage set forth in the Certification,
together with any Unvested Dividends relating thereto, provided the Recipient has settled all applicable tax withholding obligations
arising from the vesting of the Award, as set forth in Section 6 below. All such vested Shares to which the Recipient is entitled,
together with any Unvested Dividends, if any, relating thereto and any additional Performance Shares, if any, to which the Recipient
is entitled by virtue of the Vesting Percentage being in excess of 100%, shall be released or delivered, as applicable, to the
Recipient as soon as reasonably practical after the date of the Certification. Delivery of Shares will be made electronically via
book entry to an account in the name of the Recipient maintained with Lydall’s transfer agent. In connection therewith, the
Recipient agrees to execute any documents reasonably requested by Lydall or the Administrative Agent.

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5.Forfeiture;
Transfer Restrictions.

 

(a)All Performance
Shares that do not vest pursuant to Section 4, as well as any Unvested Dividends relating to the Performance Shares that do not
vest, shall be forfeited, effective as of the date of the Certification.

 

(b)If the Recipient’s
employment with the Company terminates for any reason whatsoever prior to the date on which the Certification is made, then, effective
upon the date of such termination, all of the Performance Shares, as well as any Unvested Dividends relating thereto, shall be
forfeited.

 

(c)Neither the Performance
Shares, nor the Recipient’s interest in any of the Performance Shares or Unvested Dividends, may be encumbered, sold, assigned,
transferred, pledged or otherwise disposed of at any time prior to the date of the Certification. In the event any such action
is taken, all of the Performance Shares evidenced by this Agreement, as well as any Unvested Dividends relating thereto, shall
thereupon automatically be forfeited, effective as of the date of such event.

 

(d)All forfeited
Shares shall be delivered promptly to Lydall by the Administrative Agent, and Lydall shall direct the transfer agent and registrar
of the Common Stock to make appropriate entries upon its or their records.

 

(e)The Plan Administrator
shall make all determinations as to whether an event has occurred resulting in the forfeiture of Performance Shares and any related
Unvested Dividends, and all such determinations of the Plan Administrator shall be final and conclusive.

 

(f)The Performance
Shares shall be subject to the forfeiture and recoupment provisions of Section 10(a) of the Plan.

 

6.Taxation.

 

(a)The Recipient
recognizes and agrees that there may be certain tax issues that affect the Recipient arising from the grant and/or vesting of the
Performance Shares and that the Recipient is solely responsible for payment of any personal income tax and the employee’s
share of the social security contributions (together “Tax Liabilities”) resulting therefrom. The Company expressly
provides no tax advice to the Recipient and recommends that the Recipient seek personal tax advice.

 

(b)Any applicable
income and employment tax withholding obligations associated with the vesting of the Performance Shares must be satisfied in accordance
with the Plan and sub-section (c) below, prior to the delivery of vested Shares to the Recipient.

 

(c)Unless otherwise
determined by the Plan Administrator, Recipient’s tax withholding liability will be satisfied through “net withholding”
whereby the number of vested Shares actually delivered to the Recipient is reduced by a number of Shares with a fair market value
of the Common Stock on the vesting date equal to the Company’s minimum statutory withholding tax liability.

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7.No Employment
Rights. Nothing in this Agreement shall be deemed to: (a) confer or be deemed to confer upon the Recipient any right to continue
in the employ of the Company or in any way affect the right of the Company to dismiss or otherwise terminate the Recipient’s
employment at any time for any reason with or without cause, (b) impose upon the Company any liability for any forfeiture of Performance
Shares which may result if the Recipient’s employment is terminated, or (c) affect the Company’s right to terminate
or modify any contractual relationship with a Recipient who is not an employee of the Company.

 

8.Changes in
Capitalization. Neither this Agreement nor the grant of the Performance Shares shall affect in any way the right or power of
Lydall or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in
Lydall’s capital structure or its business, or any merger or consolidation of Lydall or any Lydall Affiliate, or any issue
of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of Lydall or any Lydall Affiliate, or any sale or transfer of all or any part of Lydall’s assets
or business, or any other corporate act or proceedings, whether of a similar character or otherwise.

 

9.Change in
Control. Upon a Change in Control Event or other Reorganization Event, the Performance Shares shall be subject to the terms
of the Plan.

 

10.Plan Terms
and Plan Administrator Authority. This Agreement and the rights of the Recipient hereunder are subject to all of the terms
and conditions of the Plan, as it may be amended from time to time, as well as to such rules and regulations as the Plan Administrator
may adopt for the administration of the Plan. It is expressly understood that the Plan Administrator is authorized to administer,
construe and make, in its sole and absolute discretion, all determinations necessary or appropriate for the administration of the
Plan and this Agreement, all of which shall be binding upon the Recipient. This Agreement shall be interpreted and applied in a
manner consistent with the provisions of the Plan, and in the event of any inconsistency between this Agreement and the Plan, the
terms of the Plan shall control.

 

11.Miscellaneous

 

(a)Amendment;
Modification; Waiver. No provision of this Agreement may be amended, modified or waived unless authorized by the Plan Administrator,
and no amendment or modification of this Agreement may be made without Recipient’s consent except as permitted by Section
9(e) of the Plan.

 

(b)Notices.
Except as otherwise provided herein, every notice or other communication relating to this Agreement shall be in writing, and shall
be mailed or delivered to the party for whom it is intended at such address as may from time to time be designated by such party
in a notice mailed or delivered to the other party as herein provided; provided, that, unless and until some other address be so
designated, all notices or communications to the Company shall be mailed to or delivered to Lydall’s Vice President, General
Counsel and Secretary, with a copy to its Vice President of Human Resources, both at Lydall, Inc., One Colonial Road, P. O. Box
151, Manchester, Connecticut, 06045-0151, and all notices by the Company to the Recipient may be given to the Recipient personally
or may be mailed to him or her at the last address designated for the Recipient on the employment records of the Company. For purposes
of this section, the term “mailed” includes electronic delivery methods.

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(c)Appointment
of Agent. By accepting the Performance Shares evidenced by this Agreement, the Recipient hereby irrevocably nominates, constitutes
and appoints each of Lydall’s Vice President of Human Resources and the Administrative Agent as his or her agent and attorney-in-fact
to take any and all actions and to execute any and all documents, in the name and on behalf of the Recipient, for any purpose necessary
or convenient for the administration of the Plan and this Agreement. This power is intended as a power coupled with an interest
and shall survive the Recipient’s death. In addition, it is intended as a durable power and shall survive the Recipient’s
incapacity. Lydall has the right to change the appointed transfer agent or Administrative Agent from time to time.

 

(d)Governing Law;
Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding
choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than the
State of Delaware, and the Recipient agrees to the exclusive jurisdiction of Connecticut courts.

 

(e)Compliance
with Laws. The issuance or delivery of Shares pursuant to this Agreement shall be subject to, and shall comply with, any applicable
requirements of any federal and state securities laws, rules and regulations (including, without limitation, the provisions of
the Securities Act and the Exchange Act, and any rules and regulations promulgated thereunder) and any other law or regulation
applicable thereto. Lydall shall not be obligated to issue or deliver to Recipient any Shares pursuant to this Agreement if such
issuance or delivery would violate any such requirements.

 

(f)Severability.
The invalidity or unenforceability of any provision of this Agreement shall not affect the validity, legality or enforceability
of the remainder of this Agreement, it being intended that all rights and obligations of the Company and the Recipient shall be
enforceable to the fullest extent permitted by law.

 

12.Statute of
Limitations. The Recipient hereby agrees that there shall be a one-year statute of limitations for the filing of any claim
relating to this Agreement or the terms or conditions of the Performance Shares. If such a claim is filed more than one year subsequent
to the earlier of the date on which the vesting of the Performance Shares is scheduled to occur or termination of the Recipient’s
employment, it shall be precluded by this provision, whether or not the claim has accrued at that time.

 

13.Data Privacy.
The Recipient hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of
his or her personal data as described in this Agreement by and among, as applicable, his or her employer or contracting party and
Lydall for the exclusive purpose of implementing, administering and managing his or her participation in the Plan. The Recipient
understands that Lydall holds certain personal information about him or her, including, but not limited to, his or her name, home
address and telephone number, work location and phone number, date of birth, hire date, details of all awards or any other entitlement
to shares awarded, cancelled, exercised, vested, unvested or outstanding in the Recipient’s favor, for the purpose of implementing,
administering and managing the Plan (“Personal Data”). The Recipient understands that Personal Data may be transferred
to any third parties assisting in the implementation, administration and management of the Plan, that these third parties may be
located in the Recipient’s country or elsewhere, and that such third party’s country may have different data privacy
laws and protections than the Recipient’s country. The Recipient understands that he or she may request a list with the names
and addresses of any potential third parties receiving the Personal Data by contacting in writing the individuals listed in Section
11(b) of this Agreement. The Recipient authorizes such third parties to receive, possess, use, retain and transfer the Personal
Data, in electronic or other form, for the purposes of implementing, administering and managing his or her participation in the
Plan. The Recipient understands that Personal Data will be held only as long as is necessary to implement, administer and manage
his or her participation in the Plan. The Recipient understands that he or she may, at any time, view Personal Data, request additional
information about the storage and processing of Personal Data, require any necessary amendments to Personal Data or refuse or withdraw
the consents herein, in any case without cost, by contacting in writing the individuals listed in Section 11(b) of this Agreement.
The Recipient understands, however, that refusing or withdrawing his or her consent may affect his or her ability to participate
in the Plan. For more information on the consequences of Recipient’s refusal to consent or withdrawal of consent, the Recipient
understands that he or she may contact in writing the individuals listed in Section 11(b) of this Agreement.

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14.Nature of
the Grant. By entering into this agreement and accepting the grant of Performance Shares, Recipient acknowledges that: (i)
the Plan is established voluntarily by Lydall, it is discretionary in nature and it may be modified, amended, suspended or terminated
by Lydall at any time unless otherwise provided in the Plan and this Agreement; (ii) the grant of the Performance Shares is voluntary
and occasional and does not create any contractual or other right to receive future grants of Performance Shares, or benefits in
lieu of Performance Shares, even if Performance Shares have been granted repeatedly in the past; (iii) all decisions with respect
to future grants, if any, will be at the sole discretion of the Plan Administrator; (iv) the Recipient’s participation in
the Plan shall not create a right to further employment with the Recipient’s employer and shall not interfere with the ability
of the Recipient’s employer to terminate the Recipient’s employment relationship at any time with or without cause;
(v) the Recipient’s participation in the Plan is voluntary; (vi) the Performance Share grant is an extraordinary item that
does not constitute compensation of any kind for services of any kind rendered to Lydall or Recipient’s employer, and which
is outside the scope of the Recipient’s employment contract, if any; (vii) the Performance Share grant is not part of normal
or expected compensation or salary for any purpose including, but not limited to, calculating any severance, resignation, termination,
redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (viii) in
the event that Recipient’s employer is not Lydall, the grant of Performance Shares will not be interpreted to form an employment
contract or relationship with Lydall; and furthermore, the grant of Performance Shares will not be interpreted to form an employment
contract with Recipient’s employer or any subsidiary or affiliate of Lydall; and (ix) in consideration of the Performance
Share grant, no claim or entitlement to compensation or damages shall arise from termination of the Performance Shares (for any
reason whatsoever and whether or not in breach of local labor laws) and Recipient irrevocably releases Lydall and his or her employer
from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction
to have arisen, then, by accepting this Agreement, Recipient shall be deemed irrevocably to have waived his or her entitlement
to pursue such claim.

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IN WITNESS WHEREOF,
the undersigned officer of Lydall has executed this Agreement.

 

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

 

 

    	7Exhibit 10.7

 

FORM (FOR GERMAN EMPLOYEES) OF

LYDALL, INC.

PERFORMANCE SHARE AWARD AGREEMENT

(Three-Year Period)

 

THIS PERFORMANCE SHARE
AWARD AGREEMENT (this “Agreement”) is made between Lydall, Inc., a Delaware corporation (“Lydall” or the
“Company”), and the recipient (the “Recipient”) with respect to an Award under Lydall’s 2012 Stock
Incentive Plan (the “Plan”) pursuant to the award letter (the “Award Letter”), dated [_________], from
Lydall to the Recipient. All capitalized terms used but not defined in this Agreement shall have the same meanings that have been
ascribed to them in the Plan, unless the context clearly requires otherwise.

 

1.Grant of Performance
Shares. On the Date of Grant (as defined in the Award Letter), the Recipient has been granted the number of shares of Restricted
Stock as set forth in the Award Letter (the “Performance Shares”). The Performance Shares are subject to the terms
and conditions set forth in the Award Letter, this Agreement and the Plan. By accepting this Agreement, Recipient understands that
the Performance Shares will be forfeited unless both (a) the Performance Objectives (as defined below) are met and (b) the Recipient
remains in employment by the Company through the date of the Certification (as defined below).

 

2.Acceptance
of Award. The Recipient shall have no rights with respect to the Performance Shares unless the Recipient accepts this Agreement
no later than the close of business on the date that is sixty (60) days after the Date of Grant. Such acceptance shall be effected
by accessing the website of Lydall’s administrative agent (the “Administrative Agent”), referenced in the Award
Letter and completing the required on-line grant acknowledgment process.

 

3.Ownership
of Performance Shares; No Rights to Dividends on Performance Shares That Do Not Vest. As soon as practicable after the acceptance
of the Award by the Recipient, Lydall will cause the Performance Shares to be issued in book entry form in the name of the Recipient,
whereupon they will be held for the benefit of the Recipient by the Administrative Agent until the Performance Shares vest or are
forfeited in accordance with the terms and conditions of the Plan and this Agreement. Upon such issue, the Recipient shall be the
holder of record of the Performance Shares granted hereunder and will have, subject to the terms and conditions of the Plan and
this Agreement, voting rights of a stockholder with respect to such Shares. Lydall shall retain custody of all Unvested Dividends
made or declared with respect to the Performance Shares, subject to the same restrictions, terms and conditions as are applicable
to the Performance Shares, until such time, if ever, as the Performance Shares shall vest.

 

4.Performance
Condition.

 

(a)Period.
The Performance Period for the Performance Shares is defined in the Award Letter.

 

(b)Performance
Objectives. The actual number of Shares eligible for vesting will depend upon satisfaction of the Performance Objectives as
defined below. To the extent this Award is intended to be a Section 162(m) Award, this Award shall be subject to Section 9(h) of
the Plan. The “Performance Objectives” shall be the EPS (as defined below) for the last full fiscal year of
the Performance Period compared to the target for such fiscal year (the “EPS Target”) established by the Plan
Administrator, as stated in the Award Letter and calculated as set forth in the following table:

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        EPS Achievement
	
        “Vesting Percentage”

        of Performance Shares

	Below Threshold	Less than 95% of EPS Target	None
	Threshold	95% of EPS Target	80%
	Target	100% of EPS Target	100%
	Maximum	110% of EPS Target	120%

 

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

 

The Vesting Percentage of the Performance
Shares where performance achievement is between Threshold and Target will be scaled on a linear basis from 80% to 100%, and the
Vesting Percentage of the Performance Shares where performance achievement is between Target and Maximum will be scaled on a linear
basis from 100% to 120%.

 

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

 

(c)Determination
of Level of Performance Objectives Achieved. As soon as practicable following the completion of the Performance Period and
the preparation of Lydall’s audited financial statements for the applicable period, the Plan Administrator shall (a) determine
the satisfaction of the Performance Objectives and (b) certify in writing, in accordance with the requirements of Section 162(m)
to the extent applicable, the extent to which the Performance Objectives have been achieved, if at all, and the Vesting Percentage
as defined in 4(b) resulting therefrom (such certification being hereinafter referred to as the “Certification”).

 

(d)Delivery of
Vested Shares. Following the Certification, the Recipient shall be entitled to receive that number of Shares calculated by
multiplying the number of Performance Shares set forth in the Award Letter by the Vesting Percentage set forth in the Certification,
together with any Unvested Dividends relating thereto, provided the Recipient has settled all applicable tax withholding obligations
arising from the vesting of the Award, as set forth in Section 6 below. All such vested Shares to which the Recipient is entitled,
together with any Unvested Dividends, if any, relating thereto and any additional Performance Shares, if any, to which the Recipient
is entitled by virtue of the Vesting Percentage being in excess of 100%, shall be released or delivered, as applicable, to the
Recipient as soon as reasonably practical after the date of the Certification. Delivery of Shares will be made electronically via
book entry to an account in the name of the Recipient maintained with Lydall’s transfer agent. In connection therewith, the
Recipient agrees to execute any documents reasonably requested by Lydall or the Administrative Agent.

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5.Forfeiture;
Transfer Restrictions.

 

(a)All Performance
Shares that do not vest pursuant to Section 4, as well as any Unvested Dividends relating to the Performance Shares that do not
vest, shall be forfeited, effective as of the date of the Certification.

 

(b)If the Recipient’s
employment with the Company terminates for any reason whatsoever prior to the date on which the Certification is made, then, effective
upon the date of such termination, all of the Performance Shares, as well as any Unvested Dividends relating thereto, shall be
forfeited.

 

(c)Neither the Performance
Shares, nor the Recipient’s interest in any of the Performance Shares or Unvested Dividends, may be encumbered, sold, assigned,
transferred, pledged or otherwise disposed of at any time prior to the date of the Certification. In the event any such action
is taken, all of the Performance Shares evidenced by this Agreement, as well as any Unvested Dividends relating thereto, shall
thereupon automatically be forfeited, effective as of the date of such event.

 

(d)All forfeited
Shares shall be delivered promptly to Lydall by the Administrative Agent, and Lydall shall direct the transfer agent and registrar
of the Common Stock to make appropriate entries upon its or their records.

 

(e)The Plan Administrator
shall make all determinations as to whether an event has occurred resulting in the forfeiture of Performance Shares and any related
Unvested Dividends, and all such determinations of the Plan Administrator shall be final and conclusive.

 

(f)The Performance
Shares shall be subject to the forfeiture and recoupment provisions of Section 10(a) of the Plan.

 

6.Taxation.

 

(a)The Recipient
recognizes and agrees that the allocation or issue of Performance Shares constitutes a cash benefit that may be subject to inland
payroll tax/income tax and that the Recipient is solely responsible for payment of such tax liabilities. The Company expressly
provides no tax advice to the Recipient and recommends that the Recipient seek personal tax advice.

 

(b)The Recipient
undertakes to satisfy all tax liabilities relating to the allocation and issue of the Performance Shares, including possible commitments
to pay tax, properly, on time and in due form. The Recipient shall compensate Lydall Gerhardi GmbH & Co. KG and Lydall for
all damages incurred by either company as the result of the Recipient’s failure to meet his/her taxation obligations and
duties under fiscal law, properly or on time. Should Lydall Gerhardi GmbH & Co. KG and Lydall suffer damages from a breach
of such fiscal obligations on the part of the Recipient, either or both companies shall be entitled to assert claims directly against
the Recipient.

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(c)Lydall Gerhardi
GmbH & Co. KG and the Recipient agree that all payments made by Lydall Gerhardi GmbH & Co. KG on the Recipient’s
payroll/income tax debts to third parties, particularly to any tax authority, shall be made exclusively and solely for account
of the Recipient. If Lydall Gerhardi GmbH & Co. KG has made payments on or in connection with the Recipient’s tax debts
that are covered by the withholding (and payment) of the Recipient’s claims to remuneration, the Recipient undertakes to
reimburse Lydall Gerhardi GmbH & Co. KG immediately for such payments.

 

(d)Unless otherwise
determined by the Plan Administrator, Recipient’s tax withholding liability will be satisfied through “net withholding”
whereby the number of vested Shares actually delivered to the Recipient is reduced by a number of Shares with a fair market value
of the Common Stock on the vesting date equal to the Company’s minimum statutory withholding tax liability outlined in (b)
above.

 

7.No Employment
Rights. Nothing in this Agreement shall be deemed to: (a) confer or be deemed to confer upon the Recipient any right to continue
in the employ of the Company or in any way affect the right of the Company to dismiss or otherwise terminate the Recipient’s
employment at any time for any reason with or without cause, (b) impose upon the Company any liability for any forfeiture of Performance
Shares which may result if the Recipient’s employment is terminated, or (c) affect the Company’s right to terminate
or modify any contractual relationship with a Recipient who is not an employee of the Company.

 

8.Changes in
Capitalization. Neither this Agreement nor the grant of the Performance Shares shall affect in any way the right or power of
Lydall or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in
Lydall’s capital structure or its business, or any merger or consolidation of Lydall or any Lydall Affiliate, or any issue
of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of Lydall or any Lydall Affiliate, or any sale or transfer of all or any part of Lydall’s assets
or business, or any other corporate act or proceedings, whether of a similar character or otherwise.

 

9.Change in
Control. Upon a Change in Control Event or other Reorganization Event, the Performance Shares shall be subject to the terms
of the Plan.

 

10.Plan Terms
and Plan Administrator Authority. This Agreement and the rights of the Recipient hereunder are subject to all of the terms
and conditions of the Plan, as it may be amended from time to time, as well as to such rules and regulations as the Plan Administrator
may adopt for the administration of the Plan. It is expressly understood that the Plan Administrator is authorized to administer,
construe and make, in its sole and absolute discretion, all determinations necessary or appropriate for the administration of the
Plan and this Agreement, all of which shall be binding upon the Recipient. This Agreement shall be interpreted and applied in a
manner consistent with the provisions of the Plan, and in the event of any inconsistency between this Agreement and the Plan, the
terms of the Plan shall control.

 

11.Miscellaneous

 

(a)Amendment;
Modification; Waiver. No provision of this Agreement may be amended, modified or waived unless authorized by the Plan Administrator,
and no amendment or modification of this Agreement may be made without Recipient’s consent except as permitted by Section
9(e) of the Plan.

    	4

    	 

    
 

(b)Notices.
Except as otherwise provided herein, every notice or other communication relating to this Agreement shall be in writing, and shall
be mailed or delivered to the party for whom it is intended at such address as may from time to time be designated by such party
in a notice mailed or delivered to the other party as herein provided; provided, that, unless and until some other address be so
designated, all notices or communications to the Company shall be mailed to or delivered to Lydall’s Vice President, General
Counsel and Secretary, with a copy to its Vice President of Human Resources, both at Lydall, Inc., One Colonial Road, P. O. Box
151, Manchester, Connecticut, 06045-0151, and all notices by the Company to the Recipient may be given to the Recipient personally
or may be mailed to him or her at the last address designated for the Recipient on the employment records of the Company. For purposes
of this section, the term “mailed” includes electronic delivery methods.

 

(c)Appointment
of Agent. By accepting the Performance Shares evidenced by this Agreement, the Recipient hereby irrevocably nominates, constitutes
and appoints each of Lydall’s Vice President of Human Resources and the Administrative Agent as his or her agent and attorney-in-fact
to take any and all actions and to execute any and all documents, in the name and on behalf of the Recipient, for any purpose necessary
or convenient for the administration of the Plan and this Agreement. This power is intended as a power coupled with an interest
and shall survive the Recipient’s death. In addition, it is intended as a durable power and shall survive the Recipient’s
incapacity. Lydall has the right to change the appointed transfer agent or Administrative Agent from time to time.

 

(d)Governing Law;
Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding
choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than the
State of Delaware, and the Recipient agrees to the exclusive jurisdiction of Connecticut courts.

 

(e)Compliance
with Laws. The issuance or delivery of Shares pursuant to this Agreement shall be subject to, and shall comply with, any applicable
requirements of any federal and state securities laws, rules and regulations (including, without limitation, the provisions of
the Securities Act and the Exchange Act, and any rules and regulations promulgated thereunder) and any other law or regulation
applicable thereto. Lydall shall not be obligated to issue or deliver to Recipient any Shares pursuant to this Agreement if such
issuance or delivery would violate any such requirements.

 

(f)Severability.
The invalidity or unenforceability of any provision of this Agreement shall not affect the validity, legality or enforceability
of the remainder of this Agreement, it being intended that all rights and obligations of the Company and the Recipient shall be
enforceable to the fullest extent permitted by law.

 

12.Statute of
Limitations. The Recipient hereby agrees that there shall be a one-year statute of limitations for the filing of any claim
relating to this Agreement or the terms or conditions of the Performance Shares. If such a claim is filed more than one year subsequent
to the earlier of the date on which the vesting of the Performance Shares is scheduled to occur or termination of the Recipient’s
employment, it shall be precluded by this provision, whether or not the claim has accrued at that time.

    	5

    	 

    
 

13.Data Privacy.
The Recipient hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of
his or her personal data as described in this Agreement by and among, as applicable, his or her employer or contracting party and
Lydall for the exclusive purpose of implementing, administering and managing his or her participation in the Plan. The Recipient
understands that Lydall holds certain personal information about him or her, including, but not limited to, his or her name, home
address and telephone number, work location and phone number, date of birth, hire date, details of all awards or any other entitlement
to shares awarded, cancelled, exercised, vested, unvested or outstanding in the Recipient’s favor, for the purpose of implementing,
administering and managing the Plan (“Personal Data”). The Recipient understands that Personal Data may be transferred
to any third parties assisting in the implementation, administration and management of the Plan, that these third parties may be
located in the Recipient’s country or elsewhere, and that such third party’s country may have different data privacy
laws and protections than the Recipient’s country. The Recipient understands that he or she may request a list with the names
and addresses of any potential third parties receiving the Personal Data by contacting in writing the individuals listed in Section
11(b) of this Agreement. The Recipient authorizes such third parties to receive, possess, use, retain and transfer the Personal
Data, in electronic or other form, for the purposes of implementing, administering and managing his or her participation in the
Plan. The Recipient understands that Personal Data will be held only as long as is necessary to implement, administer and manage
his or her participation in the Plan. The Recipient understands that he or she may, at any time, view Personal Data, request additional
information about the storage and processing of Personal Data, require any necessary amendments to Personal Data or refuse or withdraw
the consents herein, in any case without cost, by contacting in writing the individuals listed in Section 11(b) of this Agreement.
The Recipient understands, however, that refusing or withdrawing his or her consent may affect his or her ability to participate
in the Plan. For more information on the consequences of Recipient’s refusal to consent or withdrawal of consent, the Recipient
understands that he or she may contact in writing the individuals listed in Section 11(b) of this Agreement.

 

14.Nature of
the Grant. By entering into this agreement and accepting the grant of Performance Shares, Recipient acknowledges that: (i)
the Plan is established voluntarily by Lydall, it is discretionary in nature and it may be modified, amended, suspended or terminated
by Lydall at any time unless otherwise provided in the Plan and this Agreement; (ii) the grant of the Performance Shares is voluntary
and occasional and does not create any contractual or other right to receive future grants of Performance Shares, or benefits in
lieu of Performance Shares, even if Performance Shares have been granted repeatedly in the past; (iii) all decisions with respect
to future grants, if any, will be at the sole discretion of the Plan Administrator; (iv) the Recipient’s participation in
the Plan shall not create a right to further employment with the Recipient’s employer and shall not interfere with the ability
of the Recipient’s employer to terminate the Recipient’s employment relationship at any time with or without cause;
(v) the Recipient’s participation in the Plan is voluntary; (vi) the Performance Share grant is an extraordinary item that
does not constitute compensation of any kind for services of any kind rendered to Lydall or Recipient’s employer, and which
is outside the scope of the Recipient’s employment contract, if any; (vii) the Performance Share grant is not part of normal
or expected compensation or salary for any purpose including, but not limited to, calculating any severance, resignation, termination,
redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments; (viii) in
the event that Recipient’s employer is not Lydall, the grant of Performance Shares will not be interpreted to form an employment
contract or relationship with Lydall; and furthermore, the grant of Performance Shares will not be interpreted to form an employment
contract with Recipient’s employer or any subsidiary or affiliate of Lydall; and (ix) in consideration of the Performance
Share grant, no claim or entitlement to compensation or damages shall arise from termination of the Performance Shares (for any
reason whatsoever and whether or not in breach of local labor laws) and Recipient irrevocably releases Lydall and his or her employer
from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction
to have arisen, then, by accepting this Agreement, Recipient shall be deemed irrevocably to have waived his or her entitlement
to pursue such claim.

    	6

    	 

    
 

IN WITNESS WHEREOF,
the undersigned officer of Lydall has executed this Agreement.

 

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

 

 

    	7

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