Document:

Letter of Understanding with Bertrand Ploquin

 Exhibit 10.1 
  

			
		
	 	 	 Mr. Bertrand Ploquin
 18 Allée
des Grèbes
 44500 La Baule

		
	 	 	 July 26, 2005

		
	 	 	 

					
	 Dear Mr. Ploquin
	  	 	  	 Monsieur Ploquin,

		 	
	 Further to our last discussions, we are pleased to confirm that Lydall Inc, as ultimate shareholder of Lydall Thermique Acoustique SAS (the Company), proposes to you the following
terms and conditions for the exercise of your duties as President of Lydall Thermique Acoustique SAS. These terms or conditions must be ratified by the Compensation and Stock Option Committee of Lydall Inc’s Board of Directors.
	  	 	  	 Suite à nos dernières discussions, nous sommes heureux de vous confirmer que Lydall Inc., en tant qu’actionnaire ultime de Lydall Thermique
Acoustique S.A.S. (la « Société »), vous propose les termes et les conditions suivants pour l’exercice de vos fonctions de Président de Lydall Thermique Acoustique S.A.S. Ces termes et conditions
doivent être ratifiés par le Comité de rémunération du Conseil d’administration de Lydall Inc.

		 	
	 For purposes of this letter of understanding, the global automotive business is referenced as “Group”.
	  	 	  	 Dans le cadre de cette lettre, l’activité automobile mondiale est défini comme étant le
« Groupe ».

		 	
	 In your capacity of President of Lydall Thermique Acoustique, your duties are subject to the following terms and conditions from 1st August 2005:
	  	 	  	 En tant que Président de Lydall Thermique Accoustique, vos fonctions seront soumises aux termes et conditions suivants à compter du
1er Août 2005.

		 	
	Remuneration	  	 	  	Rémunération
		 	
	 For 2005, your gross annual fixed remuneration is €200,000 (two
hundred thousand euros) payable in twelve equal instalments. This will be reevaluated on a periodic basis.
	  	 	  	 Pour l’année 2005, votre rémunération fixe brute annuelle s’élève à 200.000 € (deux cent mille euros) payable en douze mensualités égales. Cette rémunération sera réévaluée sur une base
périodique.

		 	
	 You are eligible for a bonus up to 40% of your fixed annual remuneration, which will depend upon meeting certain requirements in accordance with the practices in force within the
Company. This bonus depends on the overall results of both the Company and the Group and is awarded for an annual period of professional duties.
	  	 	  	 Vous pourrez bénéficier d’un bonus pouvant aller jusqu’à 40% de votre rémunération fixe brute annuelle, en
fonction de la réalisation de conditions conformément aux pratiques en vigueur au sein de la Société. Ce bonus dépend des résultats d’ensemble de la Société et du Groupe et sera
attribuée pour une période annuelle d’activité professionnelle.

		 	
	Company car	  	 	  	Véhicule de fonction
		 	
	 You will benefit from a company car, which shall be leased by the group for a monthly amount
	  	 	  	 Vous bénéficierez d’un véhicule de société en leasing dont le coût supporté par la société
ne

  

 1 

					
	 that may not exceed EUR 950 per month.
	  	 	  	 pourra excéder 950 euros par mois.

		 	
	 The company shall pay the compulsory and optional insurance and for maintenance, gas and repairs.
	  	 	  	 La Société acquittera les coûts d’assurance, de l’entretien et du carburant.

		 	
	 You will be authorized to have unrestricted use of the vehicle entrusted to you.
	  	 	  	 Vous êtes autorisé à utiliser le véhicule qui vous est confié pour tout usage.

		 	
	 The use of a company car for personal requirements shall constitute a benefit in kind, which will be taken into account in particular for the calculation of your tax and social
security payments.
	  	 	  	 L’usage privé du véhicule de société constitue un avantage en nature, qui sera pris en compte notamment pour le calcul de vos
charges sociales et impôts.

		 	
	 Any fines related to the use of the company car shall be paid in full by you, even if they are addressed to the Company or one of the other companies of the group.
	  	 	  	 Toute amende liée à l’utilisation du véhicule de société devra être acquittée par vous, même si la
contravention est adressée à la Société ou toute société du Groupe.

		 	
	 You will undertake to inform the Company of any claim or incident that could take place in respect of the vehicle, within 48 hours of the discovery of said claim or
incident.
	  	 	  	 Vous vous engagez à informer la Société de toute réclamation ou incident concernant le véhicule dans les 48 heures
après avoir eu connaissance de la réclamation ou de l’incident.

		 	
	 You have read the insurance contract and will undertake to comply with the clauses thereof.
	  	 	  	 Vous avez pris connaissance du contrat d’assurance et vous engagez à respecter les dispositions de celui-ci.

		 	
	 The car that is made available to you must be given back to the company in the event of the termination of your duties as President from the effective date of discontinuance of
duties.
	  	 	  	 Le véhicule devra être restitué à la Société lors de la cessation de vos fonctions en tant que Président,
à compter de la date de cessation effective de vos fonctions.

		 	
	Paid holidays	  	 	  	Congés payés
		 	
	 You will benefit of 6 weeks of paid holidays per year, accrued on a monthly basis, to be taken at dates to be agreed.
	  	 	  	 Vous bénéficierez de six semaines de congés payés par an, acquis sur une base mensuelle, à des dates qui seront
déterminées par accord.

		 	
	Benefits	  	 	  	Avantages sociaux
		 	
	 You will benefit from the private and welfare insurance contract in force in Lydall Thermique Acoustique.
	  	 	  	 Vous bénéficierez des dispositions en vigueur au sein de Lydall Thermique Acoustique en ce qui concerne les régimes de prévoyance
et mutuelle.

		 	
	 You will also benefit from a private insurance called GSC “complementary regime” option 2 for 24 months providing unemployment insurance benefits in the event of revocation
of your office as President of Lydall Thermique Acoustique.
	  	 	  	 Vous bénéficierez d’une assurance privée appelée « GSC », régime complémentaire avec
l’option 2 pour 24 mois, vous permettant de pouvoir bénéficier d’indemnités journalières en cas de révocation de vos fonctions de Président de Lydall Thermique Acoustique.

		 	
	 To the extent that you do not qualify for full coverage under the GSC insurance due to the

	  	 	  	 Dans l’hypothèse où vous ne pourriez obtenir l’ensemble des garanties de l’assurance GSC

  

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	 waiting period of up to 18 months, the Company will enhance your severance payments as outlined under “Termination”.
	  	 	  	 en raison de la période d’attente allant jusqu’à 18 mois, la Société déterminera les
indemnités de rupture conformément au paragraphe « Cessation des fonctions » ci-dessous.

		 	
	Exclusivity, confidentiality	  	 	  	Exclusivité, confidentialité
		 	
	 You will be required to work exclusively for Lydall group and not to engage into any other professional activity, even non paid and/or non competing.
	  	 	  	 Vous vous engagez à consacrer entièrement votre activité professionnelle au groupe Lydall et vous interdisez l’exercice
de toute autre activité professionnelle, même non concurrente, ou non rémunérée.

		 	
	 You will also undertake to maintain absolute discretion as regards all information which you may obtain by virtue of your offices within Lydall Thermique Acoustique and not
to provide information on this company or on the Group, or its clients.
	  	 	  	 Vous vous engagez également à maintenir la plus absolue discrétion concernant les informations que vous avez pu obtenir dans
le cadre de vos fonctions au sein de Lydall Thermique Acoustique, et de ne communiquer aucune information sur la société, le Groupe, ou ses clients.

		 	
	Termination	  	 	  	Cessation des fonctions
		 	
	 In the event of termination of your office as President at the initiative of the Company, other than for gross misconduct in the performance of your office, you will
receive a compensation as follows:
	  	 	  	 En cas de cessation de vos fonctions de Président à l’initiative de la Société, pour tout motif autre qu’une
faute grave dans l’exercice de ces fonctions, vous recevrez une indemnité dans les conditions suivantes :

		 	
	 These provisions do not apply in the event of termination of your office further to a change of control where specific provisions are provided below in the section called
“Change of Control”.
	  	 	  	 Ces dispositions ne sont pas applicables en cas de cessation de vos fonctions suite à un changement de contrôle, où des
dispositions spécifiques sont prévues ci-dessous dans la section intitulée “Changement de contrôle”.

		 	
	 The compensation will amount to 12 months’ gross remuneration on the basis of your gross remuneration (including bonus) of the last 12 months of work,
	  	 	  	 Le montant de cette indemnité sera égal à 12 mois de rémunération brute (comprenant les avantages en
nature et bonus) des douze derniers mois de travail ,

			 		
	 •
	    	 The payment of the compensation will be conditioned upon the signature of a settlement agreement providing for a release of claims against Lydall, Inc, Lydall Thermique Acoustique and
the Group concerning the performance and termination of your offices within the Lydall group.
	  	 	  	 •
	    	 Le paiement de cette indemnité sera conditionné à la signature d’un protocole d’accord transactionnel prévoyant une
renonciation à instance et action à l’encontre de Lydall Inc, Lydall Thermique Acoustique, et du Groupe, concernant l’exercice et la fin de vos mandats et fonctions au sein du Groupe Lydall.

			 		
	 •
	    	 This settlement agreement shall be signed within 15 days as from the date of effect of your revocation, and shall also provide for your resignation
	  	 	  	 •
	    	 Ce protocole d’accord transactionnel devra être signé dans les 15 jours à compter de la date d’effet de votre révocation,
et devra prévoir votre

  

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	 	    	 from all other corporate offices you hold within the Lydall group;
	  	 	  	 	    	 démission de tous les mandats que vous détenez au sein du Groupe Lydall.

			 		
	 •
	    	 If, in view of the procedure and cause of your revocation, you consider it is not of your interest to sign a settlement agreement as defined above, Lydall will not be liable for any
payment to you;
	  	 	  	 •
	    	 Si, au vu de la procédure et du motif de votre révocation, vous considérez que ce n’est pas dans votre intérêt de
signer ce protocole d’accord transactionnel, selon les termes ci-dessus, Lydall ne sera pas tenu de vous verser cette indemnité.

			 		
	 •
	    	 The compensation shall be regarded as a gross amount from which Lydall will deduct before payment the all social security contributions which would be payable at the date of
payment.
	  	 	  	 •
	    	 Le montant de l’indemnité sera considéré comme un montant brut, duquel Lydall déduira, avant paiement, les charges sociales
qui pourront être dues à la date dudit paiement.

		 	
	 To the extent that you have not yet qualified for full benefits under the GSC policy due to the 18 month waiting period when you are terminated, Lydall agrees to add to you
termination pay a proportional amount equal to the portion of GSC insurance not yet payable.
	  	 	  	 Dans l’hypothèse où vous ne pourriez obtenir, lors de la cessation de vos fonctions, la totalité des garanties
prévues par la GSC en raison du délai d’attente de 18 mois, Lydall accepte d’augmenter l’indemnité prévue ci-dessus d’un montant proportionnel à la part de la garantie GSC qui n’a pas
été payée.

		 	
	Non-competition	  	 	  	Non-concurrence
		 	
	 You will undertake, following the termination of your office for any reason whatsoever, not to directly or indirectly perform or acquire an interest, in any way, either
alone or jointly with other parties, for any reason whatsoever or under any legal form whatsoever, any activity that directly competes with the Group’s business activities in France, Germany and North America or which may pose a threat to the
business activities of the Group, without the consent of the Company.
	  	 	  	 Vous vous engagez, lors de la cessation de votre mandat, pour quelque motif que ce soit, à ne pas exercer ou acquérir une
participation, que ce soit directement ou indirectement, de quelque manière que ce soit et pour quelque motif que ce soit, seul ou avec un tiers, dans toute activité qui serait directement concurrente des activités du Groupe en
France, en Allemagne, et en Amérique du Nord ou qui pourrait être considérée comme une menace pour les activités du Groupe, sans l’accord de la Société.

		 	
	 You will undertake not to acquire or set up direct or indirect holdings, in companies, enterprises or groups performing business activities that compete with those
performed by Group, without the consent of the Company.
	  	 	  	 Vous vous engagez à ne pas créer ou acquérir une participation, directe ou indirecte, dans une société,
entreprise ou groupe, dont les activités sont concurrentes avec les activités du Groupe, sans l’accord de la Société.

		 	
	 You will undertake not to take up a position of manager, director, corporate officer, employee or consultant in any other company, enterprise
	  	 	  	 Vous vous engagez à n’accepter aucun poste de directeur, de mandataire, administrateur, salarié ou de consultant dans toute
société,

  

 4 

											
	 or group, the activity of which may be liable to pose a threat to Group, without the consent of the Company.
	    	 	 	 	 	 entreprise ou groupe, dont les activités seraient concurrentes à celles du Groupe, sans l’accord de la
Société.

		 		
	 You shall undertake not to directly or indirectly employ, for any reason whatsoever, even within the scope of a business activity that does not compete with those performed
by the Group, employees or corporate officers from any of the companies making up the Group, within the consent of the Company.
	    	 	 	 	 	 Vous vous engagez à ne pas embaucher, de manière directe ou indirecte, pour quelque motif que ce soit, même si le domaine
d’activité n’est pas concurrent du Groupe, des employés ou mandataires des sociétés du Groupe, sans l’accord de la Société.

		 		
	 Undertakings provided above shall be limited to:
	    	 	 	 	 	 Les obligations prévues ci-dessus seront limitées :

			 			
	 •
	 	 The geographical areas in France, Germany and the United States where the Group’s business is carried out or will carry out business activities;
	    	 	 	 	 	 •
	 	 aux zones d’implantation géographiques en France, Allemagne et Etats-Unis où le Groupe exerce ses activités ou exercera de futures
activités ;

			 			
	 •
	 	 a time period of 12 months following the effective termination of your office.
	    	 	 	 	 	 •
	 	 à une période de 12 mois à compter de la cessation effective de vos fonctions.

		 		
	 In case of any breach of this non-competition obligation, the company may claim any damages before the court the amount of which will be in accordance with the harm
suffered.
	    	 	 	 	 	 En cas de violation de cette clause de non-concurrence, la Société pourra demander tout dommage-intérêt devant la
juridiction compétente, en raison du préjudice subi.

		 		
	 In compensation for compliance with the non-competition obligation, you will receive in the event of termination at the initiative of the Company (except in the event of
gross or serious misconduct) a monthly indemnity the gross amount of which will be equal to 5/10ths of your 12 months of compensation of the last 12 months of work.
	    	 	 	 	 	 En contrepartie de cette obligation de non-concurrence, vous percevrez en cas de cessation de vos fonctions à l’initiative de la
Société (sauf en cas de faute lourde ou grave), une indemnité mensuelle d’un montant brut égal à 5/10ème de vos 12 mois de rémunération des 12 derniers mois de travail.

		 		
	 The Company may release you from this non-competition obligation, and, accordingly, will be released from the payment of the financial compensation, on condition that it
informs you in writing within eight days of the termination of your duties.
	    	 	 	 	 	 La Société pourra vous libérer de cette obligation de non-concurrence, et, en conséquence, sera libérée
du paiement de la contrepartie financière, à la condition que vous soyez informé par écrit dans les huit jours à compter de la cessation de vos fonctions.

		 		
	Change of control	    	 	 	 	 	Changement de contrôle
		 		
	 If you are terminated by the Company other than for “Cause” and such termination of duties occurs within 12 months following a “Change of Control” of
the Company (as defined below), you will be entitled to a compensation as
	    	 	 	 	 	 Si la Société met fin à vos fonctions pour un motif autre qu’une « Cause » et cette cessation
intervient dans les douze mois suivant un Changement de Contrôle de la Société (tel que défini ci-dessous), vous bénéficierez d’une

  

 5 

					
	 follows:
	  	 	  	 indemnité dans les conditions suivantes:

		 	
	 The compensation will equal 12 months’ gross remuneration calculated on the basis of your gross remuneration (including bonus) of the last 12 months of work. The terms of payment
will be determined within 30 days following a Change of Control.
	  	 	  	 L’indemnité sera égale à 12 mois de votre rémunération brute annuelle (incluant les avantages en nature et bonus) sur
la base de votre rémunération brute des 12 derniers mois de travail. Les conditions de paiement seront fixées dans les 30 jours suivant un Changement de Contrôle.

		 	
	Definitions	  	 	  	Définitions
		 	
	 Change of Control. For the purposes of this Agreement, a “Change of Control” shall be deemed to have occurred if (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 Lydall Inc or any subsidiary of Lydall Inc.) 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 Lydall Inc. 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 Lydall Inc’s shareholders, was approved by at least a majority of the Current Directors then on the Board); (c) the shareholders of Lydall Inc approve (i) a plan of complete liquidation of Lydall Inc or (ii) an agreement
providing for the merger or consolidation of Lydall Inc other than a merger or consolidation in which (x) the holders of the common stock of Lydall Inc 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 or, (d) the shareholders of Lydall Inc approve an agreement (or agreements) providing for the sale or other
	  	 	  	 Changement de contrôle : Dans le cadre de cet accord, un « Changement de Contrôle » sera supposé avoir lieu si
(a) une ou toute personne agissant ensemble, qui serait considérée comme un « groupe » au sens de la section 13(d) du Securities Exchange Act de 1934, tel que modifié (« l’ Exchange
Act »), (autre que la société Lydall Inc ou toute filiale de Lydall Inc), venait à détenir (comme défini dans la règle 13d-3 du Exchange Act), directement ou indirectement, au moins 25% du total
des droits de vote de toutes les catégories d’actions composant le capital social de Lydall Inc, ayant le droit de vote généralement pour les élections du Conseil (b) les Administrateurs Actuels (comme défini
ci-dessous) cessent pour quelque raison que ce soit de représenter au moins la majorité des membres du Conseil (à cet effet, un “Administrateur Actuel” signifie tout membre du Conseil à la date des
présentes et tout successeur d’un Administrateur Actuel, dont l’élection ou la nomination pour l’élection par les actionnaires de Lydall Inc, a été approuvée par au moins la majorité
des Administrateurs Actuels présents au sein du Conseil à ce moment-là) (c) les actionnaires de Lydall Inc approuvent (i) un plan de liquidation totale de Lydall Inc, ou (ii) un accord prévoyant la fusion ou consolidation
de Lydall Inc autre qu’une fusion ou consolidation dans laquelle (x) les détenteurs des actions ordinaires de Lydall Inc, immédiatement avant la fusion ou consolidation, ont, directement ou indirectement, au moins la
majorité du capital de la société absorbante ou survivante, immédiatement après la fusion ou consolidation, ou (y) le Conseil immédiatement avant la fusion ou consolidation représente,
immédiatement après la fusion ou

  

 6 

					
	 disposition (in one transaction or a series of transactions) of all or substantially all of the assets of Lydall Inc.
	  	 	  	 consolidation, une majorité du Conseil d’Administration de la société survivante ou absorbante, ou (d) les actionnaires de Lydall
Inc. approuvent un accord (ou des accords) prévoyant la cession ou disposition (dans une transaction ou une série de transactions) de tout ou une majorité des actifs de Lydall Inc.

		 	
	 b. Cause. The word “cause”, as used in this Agreement, shall mean (i) conviction of a crime involving moral turpitude,[this may not
be enforceable in France] or (ii) material and unexcused breach of your obligations under this Agreement, which results in material harm to the Company and which is not cured within the period set forth below; provided, however, that a termination
shall not be for “cause” hereunder unless, such conviction or breach is detailed in a written notice of intent to terminate, providing for sixty (60) days from receipt by you to cure the breach prior to your termination; except that such
notice would not be required if[he is the President]the Company would be immediately harmed.
	  	 	  	 b. Cause signifie (i) condamnation à un crime impliquant une turpitude morale, ou (ii) une violation matérielle et inexcusable de vos
obligations dans le cadre du présent accord, qui entraîne un préjudice pour la Société, et auquel il n’est pas remédié dans la période prévue ci-dessous ; considérant
toutefois qu’une telle cessation ne sera pas considérée comme une « Cause » , tel que définie ci-dessus, à moins qu’une telle violation n’ait été précisée
dans une lettre d’intention de mettre fin aux fonctions, et prévoyant un délai de 60 jours à compter de la réception de cette lettre par M. Ploquin en vue de remédier à cette violation avant de pouvoir
mettre fin à ses fonctions. Toutefois, cette lettre de notification ne sera pas requise si la Société subissait immédiatement un préjudice.

		 	
	 I trust the above reflects the content of our discussion, and I would be grateful if you could confirm your acceptance of the above by returning me a signed copy of this letter by
[•] 2005 at the latest.
	  	 	  	 J’espère que les dispositions ci-dessus reflètent le contenu de nos discussions et vous serais gré de bien vouloir confirmer votre
accord à la présente en nous retournant une copie signée de la présente le [•] 2005 au plus tard.

		 	
	 Fait en double exemplaires,
  
	  	 	  	 
		 	
	 /s/ David Freeman
  
 Date: 8/1/2005
  
 Mr. David Freeman
  
 Chief Executive Officer
  
 Lydall,
Inc.
	  	 	  	 /s/ Bertrand Ploquin
  

  

 7Agreement with John F. Tattersall

  
 Exhibit 10.2

  
 SEVERANCE AGREEMENT 
  
 THIS AGREEMENT is made and entered into as of the 1st day of August, 2005, by and between
LYDALL, INC., a Delaware corporation (the “Company”), and John F. Tattersall of 16 Cinnamon Lane, Clifton Park, NY 12065 (the “Executive”). 
  

W I T N E S S E T H 
  
 WHEREAS, the Company and the Executive (the “Parties”) have agreed to enter into this agreement (the
“Agreement) relating to the severance of the employment of the Executive by the Company; 
  
 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: 
  

	1.0	Termination of Employment by the Company. 

  
 1.1 Involuntary Termination by the Company Other Than For Permanent and Total Disability or Cause. The Company may terminate the Executive’s
employment at any time. If termination is for reasons other than (i) the Executive’s Permanent and Total Disability (as defined in Section 1.2) or (ii) for Cause (as defined in Section 1.3), termination shall be effective upon the Company
giving the Executive a written notice of termination at least 30 days before the date of termination (or such lesser notice period as to which the Executive may agree). In the event of such a termination of employment pursuant to this Section, the
Executive shall be entitled to receive (i) the benefits described in Section 3 if such termination of employment does not occur within 12 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 12 months following a “Change of Control” (as defined in Section 5). 
  
 1.2 Termination Due to Permanent and Total Disability. If the Executive incurs a Permanent and Total Disability, as defined below, the Company may
terminate the Executive’s employment by giving the Executive written notice of termination at least 30 days before the date of such termination (or such lesser notice period as the Executive may agree to). In the event of such termination of
the Executive’s employment because of Permanent and Total Disability, the Executive shall be entitled to receive (i) his base salary through the date which is twelve months following the date of such termination of employment, reduced by any
amounts paid to the Executive under any 

 
disability program maintained by the Company, such base salary to be paid at the normal time for the payment of such base salary, (ii) a bonus for the year
of termination of employment and for the next succeeding year (to be paid at the normal time for payment of such bonuses) in an amount equal to the average of the three highest annual bonuses earned by the Executive under the Company’s annual
incentive bonus plan for any of the five calendar years preceding the calendar year of his termination of employment (or, if the Executive was not eligible for a bonus for at least three calendar years in such five-year period, then the average of
such bonuses for all of the calendar years in such five-year period for which the Executive was eligible), with any deferred bonuses counting for the year earned rather than the year paid; (iii) any other compensation and benefits to the extent
actually earned by the Executive under any other benefit plan or program of the Company as of the date of such termination of employment, such compensation and benefits to be paid at the normal time for payment of such compensation and benefits, and
(iv) any reimbursement amounts owed for “Business Expenses” defined herein as: reasonable, documented and necessary expenses incurred by the Executive in performing his duties, provided the Executive properly accounts therefore in
accordance with the policies established by the company. In addition, if the Executive elects to continue coverage under the Company’s health plan pursuant to COBRA, the Company for a period of twelve months following termination of the
Executive’s employment by reason of Permanent and Total Disability will pay the same percentage of the Executive’s premium for COBRA coverage for the Executive and, if applicable, his spouse and dependent children, as the Company paid at
the applicable time for coverage under such plan for actively employed senior executives generally. For the period of twelve months following the termination of the Executive’s employment by reason of Permanent and Total Disability, the Company
will continue to provide the life insurance benefits that the Company would have provided to the Executive if the Executive had continued in employment with the Company for such period, but only if the Executive timely pays the portion of the
premium for such coverage that senior executives of the Company generally are required to pay for such coverage, if any. For purposes of this Agreement, the Executive shall be considered to have incurred a Permanent and Total Disability if and only
if the Executive has incurred a disability entitling the Executive to disability benefits under the Company’s long-term disability plan. 
  
 1.3 Termination for Cause. The Company may terminate the Executive’s employment immediately for Cause for any of the following reasons: (i) an
act or acts of dishonesty or fraud on the part of the Executive resulting or intended to result directly or indirectly in substantial gain or personal enrichment to which the Executive was not legally entitled at the expense of the Company or any of
its subsidiaries; (ii) a willful material breach by the Executive of his duties 

  

 -2- 

 
or responsibilities under this Agreement resulting in demonstrably material injury to the Company or any of its subsidiaries; (iii) the Executive’s
conviction of a felony or any crime involving moral turpitude, (iv) habitual neglect or insubordination (defined as refusal to execute or carry out directions from the Board or its duly appointed designees) where the Executive has been given written
notice of the acts or omissions constituting such neglect or insubordination and the Executive has failed to cure such conduct, where susceptible to cure, within thirty days following such notice, or (v) a material breach by the Executive of any of
his obligations under the Confidentiality and Non-Compete Agreement executed by the Executive and attached hereto as Exhibit A. The Company shall exercise its right to terminate the Executive’s employment for Cause by giving the Executive
written notice of termination specifying in reasonable detail the circumstances constituting such Cause. In the event of such termination of the Executive’s employment for Cause, the Executive shall be entitled to receive only (i) his base
salary 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 at the normal time for payment of
such base salary, (ii) any other compensation and benefits to the extent actually earned by the Executive under any other benefit plan or program of the Company as of the date of such termination of employment, such compensation and benefits to be
paid and at the normal time for payment of such compensation and benefits and (iii) any reimbursement of Business Expenses. The Executive will not be entitled to a bonus payment. 
  

	2.0	Termination of Employment By Death. 

  
 In the event of the death of the Executive during the course of his employment hereunder, the Executive’s estate (or other person or entity having
such entitlement pursuant to the terms of the applicable plan or program) shall be entitled to receive (i) the Executive’s base salary earned through the date of the Executive’s death plus the Executive’s base salary for the period of
vacation time earned but not taken for the year of the Executive’s death, such base salary to be paid at the normal time for payment of such base salary, (ii) if earned, a bonus for the year of the Executive’s death (to be paid within 90
days after the Executive’s death) in an amount equal to a pro rata portion of the average of the three highest annual bonuses earned by the Executive under the Company’s annual incentive bonus plan for any of the five calendar years
preceding the calendar year of the Executive’s death (or, if the Executive was not eligible for a bonus for at least three calendar years in such five-year period, then the average of such bonuses for all of the calendar years in such five-year
period for which the Executive was eligible), with any 

  

 -3- 

 
deferred bonuses counting for the year earned rather than the year paid and with the pro rata portion being determined by dividing the number of days of the
Executive’s employment during such calendar year up to his death by 365 (366 if a leap year), (iii) any other compensation and benefits to the extent actually earned by the Executive under any other benefit plan or program of the Company as of
the date of such termination of employment, such compensation and benefits to be paid at the normal time for payment of such compensation and benefits, and (iv) any reimbursement of Business Expenses. In addition, in the event of such death, the
Executive’s beneficiaries shall receive any death benefits owed to them under the Company’s employee benefit plans. If the Executive’s spouse and/or dependent children elect to continue coverage under the Company’s health plan
following the Executive’s death pursuant to COBRA, the Company for a period of 12 months following the Executive’s death will pay the same percentage of the premium for COBRA coverage for the Executive’s spouse and/or dependent
children, as applicable, as the Company would have paid in respect of the Executive’s coverage under such plan if the Executive had continued in employment with the Company for such period. 
  

	3.0	Benefits Upon Termination Without Cause (No Change of Control). 

  
 If the Executive’s employment hereunder is terminated by the Company, other than for Cause or Permanent and Total Disability, and such termination of
employment does not occur within 12 months following a “Change of Control” of the Company (as defined in Section 5), the Executive shall be entitled to the following: 
  
 (a) Salary. The Company shall pay to the Executive his base salary earned through the date of such
termination of employment and any other compensation and benefits to the extent actually earned by the Executive under any benefit plan or program of the Company as of the date of such termination of employment, such base salary, compensation and
benefits to be paid at the normal time for payment of such base salary, compensation and benefits. 
  
 (b) Expense Reimbursement. The Company shall reimburse the Executive for any Business Expenses. 
  
 (c) Severance Payment. The Company shall pay to the
Executive 12 months’ severance, at the Executive’s annual rate of base salary immediately preceding his termination of employment, in equal installments spread over the period of 12 months beginning on the date of termination. 

 
 (d) Bonus. If the date of termination occurs after
the first anniversary of the Executive’s hire date, the Company 

  

 -4- 

 
shall pay to the Executive in addition, the average of his annual bonuses earned under the Company’s annual incentive bonus plan for the three calendar
years preceding his termination of employment (or, if the Executive was not eligible for a bonus in each of those three calendar years, then the average of such bonuses for all of the calendar years in such three-year period for which he was
eligible), with any deferred bonuses counting for the year earned rather than the year paid. Such installments shall be paid at the times that salary payments are normally made by the Company. 
  
 (e) Health Benefits. If the Executive elects to
continue coverage under the Company’s health plan pursuant to COBRA, then for the period beginning on the date of the Executive’s termination of employment and ending on the earlier of (i) the date which is 12 months after the date of such
termination of employment or (ii) the date on which the Executive commences substantially full-time employment as an employee of an employer that offers health benefits, the Company will pay the same percentage of the Executive’s premium for
COBRA coverage for the Executive and, if applicable, his spouse and dependent children, as the Company paid at the applicable time for coverage under such plan for actively employed senior executives generally. The Executive shall notify the Company
promptly if he, while eligible for benefits under this subsection (d), commences substantially full-time employment as an employee of an employer that offers health insurance benefits. 
  
 (f) Outplacement. The Company will provide the Executive with outplacement services selected by the
Executive, at the Company’s expense not to exceed $10,000. 
  

	4.0	Benefits Upon Termination Without Cause (Change of Control). 

  
 If the Executive’s employment hereunder is terminated by the Company, other than for Cause or Permanent and Total Disability, and such termination of
employment occurs within 12 months following a “Change of Control” of the Company (as defined in Section 5), the Executive shall be entitled to the following: 
  
 (a) Salary. The Company shall pay to the Executive his base salary earned through the date of such
termination of employment and any other compensation and benefits to the extent actually earned by the Executive under any benefit plan or program of the Company as of the date of such termination of employment, such base salary, compensation and
benefits to be paid at the normal time for payment of such base salary, compensation and benefits. 
  

 -5- 

 (b) Expense Reimbursement. The Company shall reimburse the Executive for any
Business Expenses. 
  
 (c) Severance. The
Company shall pay to the Executive as a severance benefit an amount equal to two (2) times the sum of (i) his annual rate of base salary immediately preceding his termination of employment, and (ii) the average of his three highest annual bonuses
earned under the Company’s annual incentive bonus plan for any of the five calendar years preceding his termination of employment (or, if the Executive was not eligible for a bonus for at least three calendar years in such five-year period,
then the average of such bonuses for all of the calendar years in such five-year period for which the Executive was eligible), with any deferred bonuses counting for the year earned rather than the year paid. Such severance benefit shall be paid in
a lump sum within 30 days after the date of such termination of employment. 
  
 (d) Bonus. The Company shall pay to the Executive as a bonus for the year of termination of his employment an amount equal to a portion (determined as provided in the next sentence) of the Executive’s
expected bonus opportunity under the Company’s annual incentive bonus plan for the calendar year of the termination of the Executive’s employment or, if none, such portion of the bonus awarded to the Executive under the Company’s
annual incentive bonus plan for the calendar year immediately preceding the calendar year of the termination of his employment, with deferred bonuses counting for the year earned rather than the year paid. Such portion shall be determined by the
Company, in its sole reasonable discretion, as of the time of the Executive’s termination by dividing the number of days of the Executive’s employment during such calendar year up to his termination of employment by 365 (366 if a leap
year) and prorating accordingly the expected bonus calculated by the Company, based on information available on or about the date of termination of the Executive. Such payment shall be made in a lump sum within 30 days after the date of such
termination of employment, and the Executive shall have no right to any further bonuses under said plan. 
  
 (e) Health Benefit. During the period of 12 months beginning on the date of the Executive’s termination of employment, the
Executive (and, if applicable, the Executive’s spouse and dependent children) shall remain covered by the medical and dental, plans of the Company that covered the Executive immediately prior to his termination of employment as if the Executive
had remained in employment for such period; provided, however, that the coverage under any such plan is conditioned on the timely payment by the Executive (or his spouse or dependent 

  

 -6- 

 
children) of the portion of the premium for such coverage that other employees with the Company generally are required to pay for such coverage. 

 
 (f) Pension Enhancement. The Company shall
supplement the benefits payable in respect of the Executive under the Company’s Pension Plan (and any successor plans thereto) (collectively, the “Pension Plans”) by paying the difference between (i) the benefits that the Executive
would have been entitled to receive under the Pension Plans if he had been credited with one additional year of service (but no additional years of age) for purposes of the benefit accrual formula under the Pension Plans as of the date of
termination of the Executive’s employment and (ii) the benefits that the Executive is entitled to receive under the Pension Plans determined without regard to this subsection. Such benefits shall be payable in the same form and at the same time
as the benefits under the respective Pension Plans. 
  
 (g) Car Allowance. The Company will pay the Executive a car allowance, in an amount equal to Executive’s lease allowance at the time of termination, per month for 12 months following termination of the Executive’s
employment to replace the Company-leased automobile, which leased automobile will be returned to the Company by the Executive on the date of termination of the Executive’s employment. 
  
 (h) Outplacement. The Company will provide the
Executive with out-placement services selected by the Executive, at the Company’s expense not to exceed $10,000. 
  

	5.0	Change of Control. 

  
 For the purposes of this Agreement, a “Change of Control” shall be deemed to have occurred if (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) the shareholders of the Company approve (i) a plan of complete liquidation of the Company or 

  

 -7- 

 
(ii) an agreement providing for 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; or (d) the shareholders of the Company approve an
agreement (or agreements) providing for the sale or other disposition (in one transaction or a series of transactions) of all or substantially all of the assets of the Company. 
  

	6.0	Golden Parachute Excise Tax. 

  
 (a) In the event that any payment or benefit received or to be received by the Executive pursuant to this Agreement or any other plan, program or
arrangement of the Company or any of its affiliates would constitute an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then the payments under this
Agreement shall be reduced (by the minimum possible amounts) until no amount payable to the Executive under this Agreement constitutes an “excess parachute payment” within the meaning of Section 280G of the Code; provided, however, that no
such reduction shall be made if the net after-tax payment (after taking into account Federal, state, local or other income and excise taxes) to which the Executive would otherwise be entitled without such reduction would be greater than the net
after-tax payment (after taking into account Federal, state, local or other income and excise taxes) to the Executive resulting from the receipt of such payments with such reduction. If, as a result of subsequent events or conditions (including a
subsequent payment or absence of a subsequent payment under this Agreement or other plan, program or arrangement of the Company or any of its affiliates), it is determined that payments under this Agreement have been reduced by more than the minimum
amount required to prevent any payments from constituting an “excess parachute payment”, then an additional payment shall be promptly made to the Executive in an amount equal to the additional amount that can be paid without causing any
payment to constitute an excess parachute payment. 
  
 (b) All
determinations required to be made under this Section shall be made by the Company and reviewed by a nationally recognized independent accounting firm mutually agreeable to the Company and the Executive (the “Accounting Firm”) which shall
provide detailed supporting calculations to the Company and the Executive as requested by the Company or the Executive. All fees and expenses of the Accounting Firm shall be borne solely by the Company and shall be paid by 

  

 -8- 

 
the Company upon demand of the Executive as incurred or billed by the Accounting Firm. All determinations made by the Accounting Firm pursuant to this
Section 11 shall be final and binding upon the Company and the Executive. 
  
 (c) To the extent any payment or benefit is to be reduced pursuant to this Section, the payments described in this Agreement will be reduced in the following order: the severance payment, then the bonus payment, and
then any supplemental pension benefits, in each case only to the extent necessary. 
  

	7.0	Entitlement to Other Benefits. 

  
 Except as otherwise provided in this Agreement, this Agreement shall not be construed as limiting in any way any rights or benefits that the Executive or
his spouse, dependents or beneficiaries may have pursuant to any other plan or program of the Company. 
  

	8.0	General Provisions. 

  
 8.1 Deductions and Withholding. All amounts payable or which become payable under any provision of this Agreement shall be subject to any
deductions authorized by the Executive and any deductions and withholdings required by law. 
  
 8.2 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 may be personally served or may be faxed with a copy deposited in the United States mail, registered or certified, return receipt requested, postage prepaid, addressed as follows: 
  

			
	To the Company:	  	 Lydall, Inc.
 P.O. Box 151
 One Colonial Road
 Manchester, CT 06045-0151
 Attn: General Counsel

		
	To the Executive:	  	 John F. Tattersall
 16 Cinnamon Lane
 Clifton Park, NY 12065

  
 or such other address as such party
shall have specified most recently by written notice. Notice mailed as provided herein shall be deemed given on the fifth business day following the date so mailed or on the date of actual receipt, whichever is earlier. 
  

 -9- 

 8.3 No Disparagement. The Executive shall not during the period of his employment with the
Company, nor during the two-year period beginning on the date of termination of his employment for any reason, disparage the Company or any of its subsidiaries or affiliates or any of their shareholders, directors, officers, employees or agents. The
Executive agrees that the terms of this Section shall survive the term of this Agreement and the termination of the Executive’s employment. 
  
 8.4 Proprietary Information and Inventions. The Confidentiality and Non-Compete Agreement executed on March 31, 2000 by the Executive and attached
hereto as Exhibit A is incorporated by reference in this Agreement, and the Executive agrees to continue to be bound thereby. 
  
 8.5 Covenant to Notify Management. The Executive agrees to abide by the ethics policies of the Company as well as the Company’s other rules,
regulations, policies and procedures. The Executive agrees to comply in full with all governmental laws and regulations as well as ethics codes applicable. In the event that the Executive is aware or suspects the Company, or any of its officers or
agents, of violating any such laws, ethics, codes, rules, regulations, policies or procedures, the Executive agrees to bring all such actual and suspected violations to the attention of the Company immediately so that the matter may be properly
investigated and appropriate action taken. The Executive understands that the Executive may be liable for failing to take prompt steps to stop or eliminate violations of ethical standards, Company policies and governmental laws and regulations once
such matters become apparent to the Executive. As a result, the Executive has an affirmative duty to report such alleged violations to the Company without delay and is precluded from filing a complaint with any court having jurisdiction over
wrongful conduct unless the Executive has first notified the Company of the facts and permits it to investigate and correct the concerns. 
  
 8.6 Amendments and Waivers. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company. No waiver by either Party hereto at any time of any breach by the other Party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other
Party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 
  
 8.7 Beneficial Interests. This Agreement shall inure to the benefit of and be enforceable by a) the Company’s successors and assigns and b)
the Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amounts are still 

  

 -10- 

 
payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the
Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate. 
  
 8.8 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. 
  
 8.9 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, 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. 
  
 8.10 Choice of Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Connecticut. 
  
 8.11
Statute of Limitations. The Executive and the Company hereby agree that there shall be a one year statute of limitations for the filing of any requests for arbitration or any lawsuit relating to this Agreement or the terms or conditions of
Executive’s employment by the Company. If such a claim is filed more than one year subsequent to the Executive’s last day of employment it shall be precluded by this provision, regardless of whether or not the claim has accrued at that
time. 
  
 8.12 Right to Injunctive and Equitable Relief.
The Executive’s obligations under Section 8.3 are of a special and unique character, which gives them a peculiar value. The Company cannot be reasonably or adequately compensated for damages in an action at law in the event the Executive
breaches such obligations. Therefore, the Executive expressly agrees that the Company shall be entitled to injunctive and other equitable relief without bond or other security in the event of such breach in addition to any other rights or remedies
which the Company may possess or be entitled to pursue. Furthermore, the obligations of the Executive and the rights and remedies of the Company under Section 8.3 and this Section are cumulative and in 

  

 -11- 

 
addition to, and not in lieu of, any obligations, rights, or remedies as created by applicable law. 
  
 8.13 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. 
  
 8.14 Entire Agreement. This Agreement, along with the Confidentiality and Non-Compete Agreement by and between the
Executive and the Company, 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 and Non-Compete 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 and Non-Compete
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. 
  
 8.15 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. 
  

 -12- 

 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/    DAVID FREEMAN        	 	 	 	Date 8/1/2005
	 	 	David Freeman	 	 	 	 	 	 
	 	 	Chief Executive Officer and President	 	 	 	 	 	 
			
	/s/    JOHN F.
TATTERSALL        	 	 	 	Date 7/27/2005
	John F. Tattersall	 	 	 	 	 	 

  

 -13-

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