<PAGE>

                                                             Exhibit 10.28

December 23, 1997

Mr. Harry Carmitchel
7437 Oak Shore Drive
Portage, MI  49024

Dear Harry:

We are pleased to confirm our offer of employment as Vice President - Applied
Products for AAF-McQuay Inc. Your starting salary will be $16,667 per month, an
annual equivalent of $200,000, paid bi-weekly. You will be eligible to
participate in our Management Incentive Program at a 50% EV level. We will
guarantee the EV value of this bonus opportunity for FY 98 and FY 99. This
guarantee will be included in your base salary. For the balance of this Fiscal
Year, your monthly earnings will be a base of $16,667, plus an additional
$16,667 for the guaranteed portion of the bonus opportunity. Beginning July 1,
1998, your salary will reflect the $16,667 per month but the guaranteed portion
of the bonus will be changed to $8,333 per month. Of course, any adjustment to
your base during the next 18 months will cause a recalculation of the bonus
guarantee since this is a reflection of a per cent of base salary.

In addition, within the Management Incentive Plan there is an Over Achievement
(OA) opportunity which will reflect a blend of the Chiller Business Unit July
STP with the Air Handling Business Unit January STP for Net Capital Employed
(NCE),and EBITDA, weighted 30% and 70% respectively. This OA amount will be for
the second half of FY 98 and thus will have a maximum payout of $50,000.

We also agree to provide you with relocation assistance per policy (forwarded
earlier) except that the provision for miscellaneous expenses, currently capped
at $5000, will be raised to $10,000. Also, we appreciate the uncertain home
market conditions currently going on in Kalamazoo and the negative impact this
could have on your equity position when selling your home. Recognizing that
equity is a combination of original purchase price, current appraised value, and
final sale price, we are interested in helping you protect your investment. Not
knowing what that might mean, I'd like to suggest that we have Corporate
Transfer Service get involved in your selling strategy and look to them to
assist us in recommending a plan which serves both of our interests.

Group life, dental, and health insurance will be available to you on the first
of the month following your employment.. Your life will automatically be insured
in the amount of $50,000 with an optional one or two times your basic annual
salary also available if you should elect this additional coverage. The various
insurance plans for you and your eligible dependents will be described in
greater detail during your benefit orientation session. You are eligible to


<PAGE>


enroll in our 401(k) Savings Plan and Pension plan after one year of service.
You will also accrue vacation at a rate of 3 weeks per year, beginning
immediately, with future accrual changes to be based on the normal vacation
schedule. However, we will credit you with two weeks of vacation immediately.


Mr. Harry Carmitchel
December 23, 1997
Page 2


AAF-McQuay, Inc. believes that a work environment free of drug and alcohol abuse
is healthier, safer, and more productive. AAF-McQuay, Inc. and its employees
have a responsibility to maintain such a workforce under the Drug Free Workplace
Act of 1988. Each candidate offered a position at AAF-McQuay, Inc. is required
to take a drug screening test. Refusal to take the test, or if the test results
show evidence of use of drugs will cause that candidate not to be employed.

Under current Federal regulations, AAF-McQuay, Inc. may hire only citizens or
aliens who are authorized to work in the United States. If you accept an offer
from AAF-McQuay Inc., before you will be placed on the payroll, you will be
required to document that you are a U.S. citizen or an alien authorized to work
in the United States. One of the following documents must be reviewed before you
can begin employment: a U.S. passport, a Certificate of U.S. Citizenship, a
Certificate of Naturalization, or an unexpired foreign passport with an attached
Employment Authorization, or other acceptable documentation.

We understand your start date to be January 5, 1997. We feel we have an exciting
and challenging opportunity for you and we are looking forward to having you
join us.



Sincerely,



Gary Boyd
Vice President, Human Resources

GB:kh

cc:  Joseph Hunter