LYDALL INC /DE/
AGMT + GENERAL RELEASE WITH RAYMOND J. LANZI
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>dex102.txt
<DESCRIPTION>AGMT + GENERAL RELEASE WITH RAYMOND J. LANZI
<TEXT>

<PAGE>

                                                                    Exhibit 10.2


                                                 March 28, 2001




Mr. Raymond J. Lanzi
409 Osprey Lookout Court
Ponte Vedra Beach, FL  32082


Dear Ray:

This letter states Lydall, Inc.'s ("Lydall") amended proposal to extend special
separation benefits to you in exchange for your execution of a release, dated
February 23, 2001, of possible claims against Lydall. The special benefits would
become effective after the previously provided Termination, Voluntary Release
and Waiver of Rights Agreement ("Release") is executed. This offer to extend
special separation benefits is conditioned on your execution of the Release.

In reviewing this proposal, you should be aware that Lydall's offer to extend
special separation benefits to you in consideration for your agreement to sign a
Release does not involve an exchange or forfeiture of any benefits to which you
are presently or otherwise entitled, nor are you being asked to release any
rights arising out of future events. To the contrary, Lydall's extension of this
offer is contingent upon your execution of a mutually acceptable Release wherein
you agree to waive certain rights expressly set forth therein relating to your
past employment relationship with Lydall. Lydall encourages you to review the
attached Release, with your attorney if you choose, and to discuss any questions
or modifications you propose with Lydall. You should note that should you decide
to sign the Release, you are entitled to revoke it within seven (7) calendar
days after executing it, and the Release does not become effective or
enforceable until the revocation period has expired.

An immediate response to Lydall's separation benefit proposal is not required. A
reasonable period for your deliberation and review will be provided before a
final decision must be made. If, however, no communication at all is received by
the undersigned within twenty-one (21) calendar days of your receipt of this
correspondence, your silence shall be interpreted as a rejection of this offer,
whereupon Lydall's proposal to extend the separation benefits discussed herein
shall be withdrawn.

The following special Separation Benefits Section is a summary of benefits
offered to you only if you should sign the Termination, Voluntary Release and
Waiver of Rights Agreement.

                                       1
<PAGE>

SEPARATION PAY
--------------

You will receive separation pay equal to your base compensation, less applicable
taxes, for fifteen months ($350,000). Of that amount $44,546.94 has been paid to
you between February 5, 2001 and March 31, 2001. The remaining amount of
$305,453.06 will be paid in two installments. The first installment will be made
on April 3, 2001 in the amount of $155,453.06 and the second installment will be
made on January 2, 2002 in the amount of $150,000. Severance checks are not
direct deposited to your bank, therefore, you will receive them by mail.

HEALTH COVERAGE
---------------

Lydall agrees to pay your medical and/or dental premiums under COBRA, for the
full 18-month period allowed under this law, beginning February 5, 2001 and
ending on August 4, 2002.

Lydall agrees to provide your current level of medical coverage for you and your
spouse under the United Health Care self-insured medical plan (or a comparable
program that the company may offer to salaried employees in the future) for the
period starting August 5, 2002 until October 23, 2003. The amount Lydall agrees
to pay under this self-insured program is limited to a combined maximum of
$100,000 for any claims incurred during this period. Any claims incurred above
that amount will be entirely your responsibility.

COMPANY CAR
-----------

Upon receipt of: (1) evidence of the successful transfer of your current company
car lease to your name, (2) evidence of automobile and or umbrella insurance
coverage which combined are in an amount no less than $1,000,000 and (3) your
agreement to maintain insurance at that level for the life of the lease, Lydall
agrees to pay to you a total of $25,000 in two installments: $12,500 to be paid
on April 3, 2001, and $12,500 to be paid on January 2, 2002. The first
installment will be made as soon as practical after receipt of the attached
release. The second installment will be made on January 2, 2002.

QUALIFIED PENSION PLAN AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (SERP)
------------------------------------------------------------------------

Lydall agrees to enhance your retirement benefits, when applying the early
retirement reduction factor, by calculating the benefit as if your age at your
chosen retirement date were increased by 15 months. This affords you greater
pension benefits than you would otherwise currently receive, because the closer
you are to full retirement age (age 65) the less your earned benefit is reduced.
These enhanced benefits under both the Qualified Pension Plan and the SERP will
be paid from the Supplemental Executive Retirement Plan (SERP).

                                       2
<PAGE>

STOCK OPTIONS
-------------

Lydall agrees to extend the time period during which you are allowed to exercise
your vested options under the 1992 Incentive Stock Compensation Plan to two (2)
years from your date of termination (February 4, 2003). This agreement does not
allow for the continued or accelerated vesting of your options not yet vested.
Therefore you will be permitted to exercise only those options over the next two
years for which you are vested as of February 4, 2001.

Be advised that this extension, by law, automatically converts the options from
Incentive Stock Options (ISO's) to Non-qualified Options, if they are exercised
more than 90 days after your termination.

OTHER BENEFITS
--------------

All other benefits you have held as an employee have ended as of your
termination date of February 4, 2001 according to the terms of the Plan
Documents.


It is our hope that this correspondence conveys clearly the special separation
benefits Lydall is proposing to extend to you in consideration for your
execution of a mutually acceptable Release. Acceptance of this proposal is your
own choice and is not required, but is purely voluntary on your part.

If you have any questions regarding any aspect of this correspondence, or wish
to discuss these benefits or their possible modification further, please contact
me at your earliest convenience.

                                                     Sincerely,


                                                     Walter A. Ruschmeyer
                                                     Executive Vice President -
                                                     Finance and Administration,
                                                     Chief Financial Officer

WAR:MGE:chc







                                                    Date:
--------------------------------------------------       -----------------------
Signature - Employee (Receipt of Letter)

                                       3
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