Appointment of New Principal Financial Officer

On November 2, 2009, Lydall, Inc. ("Lydall" or the "Company") announced that Erika H. Turner has been appointed Vice President, Chief Financial Officer and Treasurer of the Company, effective as of November 4, 2009.

Ms. Turner, age 54, was previously employed by Superior Industries International, Inc., Van Nuys, California (NYSE: SUP), one of the world's largest OEM suppliers of cast and forged aluminum road wheels for the automotive industry, where she served as Chief Financial Officer since February 22, 2008. Prior to that, Ms. Turner was Chief Financial Officer/VP Finance since 2004 at Monogram Systems, Carson, California, a leading supplier of cabin systems and equipment to the global aerospace industry.

Ms. Turner will be entitled to receive the following compensation and benefits:
(i) an annual base salary of $275,000, less applicable withholdings, paid on a bi-weekly basis; (ii) eligibility to participate in the Company's Annual Incentive Performance Program at 40% of her actual paid base salary in accordance with the terms and conditions of the Program; (iii) the grant of an incentive stock option entitling her to purchase 12,000 shares of the Company's common stock at a per share exercise price equal to 100% of the fair market value of such stock as of November 4, 2009 (which grant is scheduled to vest in four equal annual installments); (iv) the grant as of November 4, 2009 of a time-based restricted stock award covering 5,000 shares of the Company's common stock (which grant is scheduled to vest in four equal annual installments);
(v) two weeks of paid vacation for the balance of 2009 and four weeks of paid vacation in 2010 and each year thereafter; (vi) an $800 monthly car allowance, plus 15% of the monthly amount to cover maintenance and insurance costs;
(vii) participation in the Company's moving and relocation program; and (viii) a comprehensive benefit package.

In connection with her appointment, the Company and Ms. Turner entered into an agreement, dated November 2, 2009 (the "Agreement"), specifying the compensation and benefits to which Ms. Turner will be entitled in the event that her employment is terminated. The Company's obligation to provide these termination benefits to Ms. Turner is subject to her execution without revocation of a valid release in substantially the form attached to the Agreement. A copy of the Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is hereby incorporated herein by reference.

There are no arrangements or understandings between Ms. Turner and any other person pursuant to which she was appointed to her positions, and Ms. Turner is not related to any other executive officer or director of the Company. Ms. Turner has no direct or indirect material interest in any related party transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K of the Securities Exchange Act of 1934, as amended.

Termination of Named Executive Officer

Thomas P. Smith, Vice President, Chief Financial Officer and Treasurer of the Company, resigned his positions with the Company effective as of the close of business on November 3, 2009. Pursuant to the terms of a letter agreement dated November 3, 2009 (the "Letter Agreement") between Mr. Smith and the Company, Mr. Smith will be entitled to receive severance benefits equivalent to those set forth in paragraphs 8(a) through (e) of his Employment Agreement, dated January 10, 2007 (the "Employment Agreement"), except that the payments equivalent to those described in paragraph 8(c) shall be paid in equal installments over twelve months at the times that salary payments are normally made by the Company. Mr. Smith will also be entitled to receive a pro-rated portion of his 2009 cash bonus award, subject to the terms and conditions of the 2009 Annual Incentive Performance Program. Except for the provisions of Sections 12, 13.4, 13.5 and 13.6, the Employment Agreement is terminated in its entirety as of November 3, 2009. A copy of Mr. Smith's Employment Agreement was previously filed as Exhibit 10.2 to the Company's Current Report on Form 8-K dated January 16, 2007 and is hereby incorporated herein by reference.

The Letter Agreement also provides that the Company will (i) accelerate the vesting of all unvested stock options and time-based restricted stock awards granted to Mr. Smith under the Lydall, Inc. 1992 Stock Incentive Compensation Plan (the "1992 Plan") and the Amended and Restated Lydall 2003 Stock Incentive Compensation Plan (the "2003 Plan"), and (ii) allow Mr. Smith to be able to exercise all outstanding stock options granted to Mr. Smith under the 2003 Plan throughout the entire, original ten-year terms stipulated in the option agreements, notwithstanding the termination of

Press Release

A copy of the Company's press release, dated November 2, 2009, announcing the foregoing changes in management is attached hereto as Exhibit 99.1.

Equity Award Agreements

The Compensation Committee of the Board of Directors of the Company approved new forms of agreements evidencing incentive stock options, non-qualified stock options and restricted stock awards granted under the Lydall, Inc. 2003 Stock Incentive Compensation Plan. The new forms of agreements are filed as Exhibits 10.3, 10.4, 10.5, 10.6 and 10.7 to this Current Report on Form 8-K and are hereby incorporated herein by reference.

(d) Exhibits

The following are filed as Exhibits to this report:

Exhibit
Number                               Description of Exhibit

 10.1        Agreement, dated November 2, 2009, between Lydall, Inc. and Erika H.
             Turner.

 10.2        Letter Agreement, dated November 3, 2009, between Lydall, Inc. and
             Thomas P. Smith.

 10.3        Form of Incentive Stock Option Agreement for use under the Lydall 2003
             Stock Incentive Compensation Plan.

 10.4        Form of Non-Qualified Stock Option Agreement for use under the Lydall
             2003 Stock Incentive Compensation Plan.

 10.5        Form of Restricted Stock Award Agreement for use under the Lydall 2003
             Stock Incentive Compensation Plan.

 10.6        Form of Non-Qualified Stock Option Agreement for Outside Directors
             Annual Meeting Automatic Award for use under the Lydall 2003 Stock
             Incentive Compensation Plan.

 10.7        Form of Non-Qualified Stock Option Agreement for Outside Directors in
             Lieu of Cash Based Retirement Benefits for use under the Lydall 2003
             Stock Incentive Compensation Plan.

 99.1        Press Release, dated November 2, 2009