<PAGE>   1
                                                                   Exhibit 10.7


                              EMPLOYMENT AGREEMENT 


         THIS EMPLOYMENT AGREEMENT is made as of December 1, 1997, by and
between CUNO INCORPORATED, a Delaware corporation (the "Company"), and MARK G.
KACHUR ("Executive").

                                    RECITALS

         WHEREAS, Executive is and has been serving as a member of the Company's
Board of Directors (the "Board") and Chief Operating Officer of the Company and
is an integral part of its management;

         WHEREAS, Executive and the company are parties to an employment
agreement dated December 3, 1993 (assigned to the Company by Commercial
Intertech Corp.) which was extended for an additional year until April 10, 1998
by letter dated April 10, 1997;

         WHEREAS, Executive and the Company desire to terminate the December 3,
1993 Agreement and Extension and to replace it with this Agreement;

         WHEREAS, the Company wishes to ensure that Executive will not compete
with the company for a period of two years after the last date on which he is
either an employee of the Company or a member of the Board; and

         WHEREAS, Executive is prepared to enter into this employment agreement
with the Company and to give the Company assurances it desires;

         NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein set forth, the parties hereto have agreed and do hereby
mutually agree as follows:

         1. Employment, Contract Period. During the period specified in this
Section 1, the Company shall employ Executive, and Executive shall serve the
Company, on the term and subject to the conditions set forth herein. The term of
Executive's employment hereunder shall commence as of December 1, 1997 (the
"Effective Date"), and, subject to prior termination as provided in Section 6
hereof, shall continue through November 30, 2000. The term of Executive's
employment hereunder is sometimes hereinafter referred to as the "Contract
Period."
<PAGE>   2
         2. Responsibility. At all times during the Contract Period, Executive
shall serve the Company as the Company's President and Chief Executive Officer
and shall (a) devote his full business time and effort exclusively to the
performance of duties as assigned to him by the Board that are normally incident
to the office of Chief Executive Officer, and (b) use his best efforts to
promote the interests of the Company and its affiliates.

         3. Remuneration. At all times during the Contract Period, the Company
shall pay to Executive compensation as provided in this Section 3.

                  (a) Base Salary. The Corporation shall pay Executive a base
         salary at an annual rate of not less than $350,000 paid on a monthly
         basis. The annual rate of base salary may be increased at the
         discretion of the Compensation Committee of the Board (the
         "Committee"). If increased, the annual rate of base salary may not
         thereafter be decreased during the term of this Agreement.

                  (b) Annual Incentive Compensation. The Corporation may pay
         Executive an annual bonus under the provisions of the Company's Senior
         Management Target Incentive Plan and the Salaried Employee Incentive
         Plan or any successor plans, but only if and when authorized by the
         Committee.

                  (c) Performance Shares. The Company will grant herewith 25,000
         Performance Shares under the Company's Performance Share Plan to
         Executive with respect to a three-year performance period ending on
         October 31, 2000. If, while Executive remains employed pursuant to this
         Agreement, the Company, in its fiscal year ending October 31, 1998,
         makes grants of Performance Shares under the Company's Performance
         Share Plan (with respect to the three-year performance period ending on
         October 31, 2001), the Company shall then grant not fewer than 25,000
         of such Performance Shares to Executive. Each grant of Performance
         Shares is subject to the terms of the Company's Performance Share Plan,
         and will not be distributed until earned according to the performance
         requirements for each performance period.

                  (d) Restricted Shares. The Company shall grant to Executive,
         effective as of the Effective Date, 25,000 restricted shares of the
         Company's Common Stock pursuant to the Company's 1996 Stock Incentive
         Plan (with 5-year vesting).


                                       2
<PAGE>   3
                  (e) Options. The Company shall grant to the Executive,
         effective as of the Effective Date options to purchase 100,000 shares
         of the Company's Common Stock in the form of non-qualified stock
         options pursuant to the Company's 1996 Stock Incentive Plan.

         4. Employee Benefits. Executive shall be included, to the extent
eligible thereunder with respect to the requirements applicable to all employees
eligible thereunder, under any and all existing plans (and any plans that later
may be adopted) providing benefits for the Company's employees. These plans,
include, but are not limited to:

                  (a) The Company's group life insurance plan, under which
         Executive shall be eligible for life insurance equal to four times his
         then-current base salary as defined in the Plan or the Group
         Replacement Insurance plan, at Executive's option.

                  (b) The Company's hospitalization and medical plans, as
         provided to all Company employees.

                  (c) The Company's long-term disability plan, as provided to
         all Company employees.

                  (d) Any pension, thrift plans, profit-sharing plans, stock
         purchase plans, and any and all other similar or comparable benefits.

                  (e) The SERP and any other supplemental executive retirement
         plan or excess benefit plan.

Executive shall also be provided with a suitable automobile allowance under the
terms of the Company's executive automobile program, automobile insurance, paid
vacation of at least four weeks per year, officers' and directors' liability
insurance coverage in an amount reasonably available, and estate planning
counsel.

         5. Supplemental Executive Retirement Plan. Company agrees to grant to
Executive a supplemental executive retirement plan ("SERP") that contains the
following provisions:

                  (a) a SERP retirement benefit calculated in accordance with
         the formula under the Pension Plan for Salaried Employees of CUNO
         Incorporated, provided, however that such benefit will be calculated
         (i) using base salary plus target award plan bonuses excluding the
         stock payout premium, (ii) based upon average compensation of the
         highest 3 consecutive years during the 10 year period immediately
         preceding separation from service, and (iii) using years of service as


                                       3
<PAGE>   4
         follows: (I) upon attainment of age 60, 12 years of service; (II) upon
         attainment of age 62, 17 years of service; and (III) upon attainment of
         age 65, 25 years of service.

                  (b) a SERP retirement benefit in the event of a change in
         control, calculated in the same manner as a SERP retirement benefit,
         provided however, that such benefit will be calculated (i) using 15
         years of service, if greater than the service mentioned above; and (ii)
         based upon Executive's highest annualized base salary plus the greater
         of (I) an amount equal to the highest earned annual target award bonus
         excluding the stock payout premium, or (II) an amount equal to the
         highest target level bonus excluding the stock payout premium.

         6.       Termination.

                  (a) Death or Disability. Executive's employment hereunder will
         terminate immediately upon Executive's death. The Company may terminate
         Executive's employment hereunder immediately upon giving notice of
         termination if Executive is disabled, by reason of physical or mental
         impairment, to such an extent that he has been unable to substantially
         perform his duties under this Agreement for an aggregate of 180 days
         (whether business or non-business days and whether or not consecutive)
         during any period of twelve consecutive calendar months.

                  (b) For "Cause". The Company may terminate Executive's
         employment under this Agreement for "Cause" only on the basis of:

                           (i) Executive's willful failure substantially to
                  perform his duties with the Company, after a written demand
                  for substantial performance is delivered to Executive by the
                  Board, which written demand specifically identifies the manner
                  in which the Board believes Executive has not substantially
                  performed his duties, or

                           (ii) Executive's willful engagement in conduct
                  materially injurious to the Company.

         For purposes of this Agreement, no act or failure to act on Executive's
         part shall be considered "willful" unless done, or omitted to be done,
         by Executive not in good faith and without reasonable belief that his
         action or omission was in the best interest of the Company. Executive
         shall not be deemed to have been terminated 


                                       4
<PAGE>   5
         for Cause unless and until there shall have been delivered to Executive
         a copy of a resolution duly adopted by the affirmative vote of not less
         than two-thirds of the entire membership of the Board at a meeting of
         the Board called and held for that purpose, finding that in good faith
         opinion of the Board, Executive was guilty of conduct set forth in
         clause (i) or clause (ii) of this subsection 6(b) and specifying the
         particulars thereof in detail. No termination of Executive's employment
         by the Company for "Cause" shall be effective unless and until it is
         communicated by the Company to Executive by a written notice that
         refers to either or both of clause (i) and clause (ii) of this
         subsection 6(b) as the specific termination provision or provisions
         relied upon by the Company and that sets forth in reasonable detail the
         facts and circumstances claimed to provide a basis for termination of
         Executive's employment under the provision or provisions so indicated.

                  (c) Without "Cause". The Company may terminate Executive's
         employment under this Agreement without "Cause" at any time, effective
         at such time as the Board may specify in a motion duly adopted by the
         affirmative vote of two-thirds of the members of the Board then in
         office.

         7. Compensation and Benefits Following Termination Without "Cause". If
the Company terminates Executive's employment under this Agreement without
"Cause:"

                  (a) the Company shall pay to Executive, in immediately
         available funds, within 10 days of the date of termination of
         Executive's employment, a lump sum amount that is equal to the sum of
         (A) 24 months' of base salary at the highest rate paid to Executive
         before the termination, plus (B) two times the average of the annual
         cash bonuses, if any, received by Executive under the provisions of the
         Company's Incentive plans or any successor plan with respect to each of
         the two most recent fiscal years of the Company ended before the
         termination;

                  (b) the restrictions on any restricted shares held by
         Executive immediately before the termination of his employment shall
         expire simultaneously with the termination of his employment;

                  (c) any options to purchase shares in the Company held by
         Executive immediately before the termination of his employment that
         were not otherwise exercisable by Executive shall be exercisable by
         Executive at any time during the 90-day period beginning immediately
         after the date of termination of his employment; and


                                       5
<PAGE>   6
                  (d) with the exception of health and medical benefits, which
         the Company will provide for a period of one year after termination,
         the Company shall not be obligated to pay any compensation, benefits,
         or perquisites to Executive by reason of this Agreement after the
         termination of his employment.

If Executive receives any payments under this Agreement as a result of
termination of his employment following a termination without Cause, those
payments shall be in lieu of any and all other claims or rights that Executive
may have for severance, separation, and/or salary continuation pay upon that
termination of his employment.

         8. Compensation and Benefits Following Termination on Account of
Disability. If the Company terminates Executive's employment under subsection
6(a) of this Agreement by reason of Executive's disability:

                  (a) the Company shall pay and provide to Executive, not later
         than 75 days after the end of the fiscal year in which the termination
         occurs, that portion of the total bonus, if any, to which he would have
         been entitled had he continued to be employed under this Agreement
         through the end of the fiscal year in which the termination occurs,
         equal to the total bonus multiplied by a fraction, the numerator of
         which is the number of days in the fiscal year ending on or before the
         date of Executive's termination and the denominator of which is 365;

                  (b) the restrictions on any restricted shares held by
         Executive immediately before the termination of his employment shall
         terminate simultaneously with the termination of his employment.

         9. Miscellaneous Services following Termination of Employment.
Following termination of his full-time employment under this Agreement,
Executive shall make himself available at all reasonable times for consultation
by and with the Company's officers and directors. If Executive is called upon to
render services of this nature, he shall, in consideration therefor and as a
condition thereto, receive reasonable compensation for the services rendered and
reimbursement for any travel or other out-of-pocket expenses incurred in
connection therewith.

         10. Benefit. This Agreement shall inure to the benefit of and be
enforceable by Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributed, devisees, and legatees. If
Executive should die while any amounts are still payable to Executive hereunder,
all such amounts, unless otherwise provided herein, shall be paid 


                                       6
<PAGE>   7
in accordance with the terms of this Agreement to Executive's devisee, legatee,
or other designee or, if there be no such designee, to Executive's estate.



         11. Successor to the Company. The Company shall require any successor
or assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all the business and/or assets of the
Company, by agreement in form and substance satisfactory to Executive,
expressly, absolutely and unconditionally to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.

         12. Confidential Information and Noncompetition. Executive agrees and
acknowledges that Executive's talents, skills, and experience are unique, and
that Company has invested considerable efforts and money in developing and
compiling customer lists, supplier lists, and trade and market information, in
developing business techniques and practices, and in maintaining valuable market
relationships; that such items and all other information that relates to the
business of the Company, the business of any customer or supplier of the
Company, or the business of any person, firm, or corporation that consults with
or is affiliated with the Company, constitute for purposes hereof the
"Confidential Information" of the Company; and that the Confidential Information
is valuable property of the company and is vital to the operation and
continuation of the Company's business. Confidential Information shall not
include information so generally known as to be part of the public domain.
Executive acknowledges that the Company has and will disclose Confidential
Information to Executive and afford him access to Confidential Information in
connection with his employment with the Company. Executive agrees that he shall
use such Confidential Information solely for the benefit of the Company.
Executive further acknowledges that the grant of 25,000 restricted shares
referred to in section 3(d) is being made by the Company in order to induce
Executive to agree to the restrictions contained in this Section 12 and that
Executive has received valuable consideration commensurate with those
restrictions. Accordingly, Executive agrees and acknowledges that:

                  (a) Except as required in the performance of his duties as an
         employee of the Company, Executive shall not at any time, either
         directly or indirectly, use, divulge, disclose, or communicate to any
         person, firm, or corporation in any manner whatsoever any Confidential
         Information.


                                       7
<PAGE>   8
                  (b) Executive has been given access to the Company's
         Confidential Information solely for purposes relating to his employment
         by the Company. Executive shall have no rights in such Confidential
         Information or any letters patent, copyrights, or other proprietary
         rights relating thereto, and Executive hereby assigns to the Company
         any supplemental or additional information relating to the Confidential
         Information acquired by Executive, whether solely or in collaboration
         with others, that relates in any manner to either the subject of
         Executive's work for the Company or any business of the Company during
         the Contract Period ("Improvements"). Executive will disclose promptly
         in writing to the Company all such Improvements or information
         supplemental or related thereto, and such Improvements shall be treated
         for all purposes as Confidential Information hereunder.

                  (c) During the Contract Period and thereafter, at the request
         of the Company and without expense to Executive, Executive shall
         cooperate in the procurement of any patent, copyright, trademark, or
         trade name protection in the Company's name that may be necessary or
         desirable to vest, or to perfect the record of, title to the
         Confidential Information in the Company. Executive agrees to execute
         all documents and do all things necessary or desirable in any
         controversy or otherwise to aid Company in obtaining and enforcing
         proper protection of its Confidential Information.

                  (d) During the period commencing on the Effective Date and
         ending on the second anniversary of the first date on which Executive
         is neither employed by the Company nor a member of the Board (the
         "Restriction period"), Executive shall not, directly or indirectly,
         own, operate, have any other than a minor financial interest in, be
         employed by, or in any other manner take part in or consult with any
         business that is the same as, similar to, or competitive with the
         business of the Company as such business is conducted during the
         Contract Period. During the Restriction period, Executive shall not
         solicit (other than for the benefit of the Company during the Contract
         period) any sale or purchase to or from any person who is or was a
         customer or supplier of the Company during the term of Executive's
         employment by the Company, either as an employee, agent, consultant,
         licensee, independent contractor, owner, or otherwise.

                  (e) At any time upon request of the Company and upon
         termination of his employment by the Company, Executive shall deliver
         to the Company, and shall not retain for his own or another's use, any
         and all lists, information, notes, memoranda, documents, devices, and
         any other material, and all copies thereof, relating to 


                                       8
<PAGE>   9
         Executive's work or the products or business of the company of which
         Executive had knowledge.



                  (f) If any provision of this Section 12 is determined by any
         court of competent jurisdiction to be unenforceable by reason of its
         extending for too great a period of time or over too great a
         geographical area, it shall be interpreted to extend only over the
         maximum period of time for which it may be enforceable, or over the
         maximum geographical area to which it may be enforceable, or both; and
         such partial unenforceability shall not affect any other provision of
         this Agreement. Executive acknowledges that, in light of the
         proprietary interest of the Company in the Confidential Information,
         the restrictions set forth herein are reasonable and that the remedies
         at law for the breach of any provision of this Section 12 are
         inadequate. Accordingly, in the event of any breach, or reasonable
         belief as to the existence or imminence of a breach, of the provisions
         hereof, the Company shall be entitled to injunctive relief to enjoin
         the breach (in addition to any other legal and equitable remedies that
         the Company may have, including an equitable accounting of gain to
         Executive resulting from the breach), together with all costs and
         expenses, including reasonable attorney's fees, related to the
         enforcement by the Company of its rights hereunder.

         13. Anti-dilution. If, at any time after the Effective Date and before
the date on which any grant of Performance Shares is to be made to Executive
pursuant to Section 3(c), above, there occurs any stock dividend, stock split,
or share combination of the shares of Common Stock of the Company or any
reclassification, recapitalization, merger, consolidation, other form of
business combination, liquidation, or dissolution involving the Company or any
spin-off or other distribution to shareholders of the Company (other than normal
cash dividends), the number of shares of the Company's Common Stock to be
granted as Performance Shares shall be appropriately adjusted to the extent
necessary in such manner that the benefit to executive of the grant of those
Performance Shares is maintained substantially as before the occurrence of the
event.

         14. Validity. The invalidity or unenforceability of any provision 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.

         15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.


                                       9
<PAGE>   10
         16. Legal Fees and Expenses. Except for fees and expenses related to
the Company's enforcement of the provisions of Section 12, the Company shall pay
all legal fees and expenses that Executive may incur as a result of the
Company's contesting the validity, enforceability, or Executive's interpretation
of, or determinations under, this Agreement.

         17. Notices. All notices under this Agreement shall be in writing and
shall be deemed effective when delivered in person, or three days after deposit
thereof in the official U.S. mails, postage prepaid, for delivery as registered
or certified mail, addressed as follows:


                           If to the Company:

                           CUNO Incorporated
                           Attention:  Corporate Secretary
                           400 Research Parkway
                           Meriden, Connecticut  06450


                           If to the Executive:

                           Mark G. Kachur
                           2 White Pine Lane
                           Guilford, CT  06437

In lieu of personal notice or notice by deposit in the official U.S. mails, a
party may give notice by confirmed telegram or fax. Either party may change the
address to which notice to that party may be mailed by notifying the other party
of the change in the manner contemplated in this section.

         18. Effect on Existing Termination and Change of Control Agreement.
Executive and the Company are parties to a Termination and Change of Control
Agreement dated as of December 13, 1996, pursuant to which Executive may become
entitled to severance compensation if Executive's employment is terminated under
certain circumstances following a Change in Control, as defined in that
agreement (the "Change in Control Agreement"). Executive and the Company intend
that if a Change in Control, as defined in the Change in Control Agreement,
occurs and thereafter Executive receives any payments pursuant to Section 7 of
this Agreement (any "Section 7 Payments"), the entire amount of such Section 7


                                       10
<PAGE>   11
Payments will be treated as damages paid to the Executive by the Company as a
result of the Company's breach of an employment contract with the Executive with
the result that the payments otherwise due under the Change in Control Agreement
will be reduced by the full amount of the Section 7 Payments. The provisions of
this Section 18 shall prevail over any inconsistent language in the Change in
Control Agreement and, to the extent necessary to be effective shall be deemed
to be an amendment to the Change in Control Agreement.

         19. Entire Agreement. This Agreement replaces and supersedes the
Employment Agreement between Executive and the Company dated as of December 3,
1993. This Agreement expresses the entire agreement of the parties with respect
to the subject matter hereof, and all promises, representations, understandings,
arrangements, and prior agreements are merged herein and superseded hereby. No
person, other than pursuant to a resolution of the Board, shall have any
authority on behalf of the Company to agree to modify or change this Agreement
or anything in reference thereto, and any such modification or change must be in
writing and signed by both parties.

         20. Governing Law. This Agreement has been entered into in, and is
intended to be performed primarily within, the State of Connecticut and shall be
construed, interpreted, and governed in accordance with the laws of the State of
Connecticut.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.


EXECUTIVE                                            CUNO INCORPORATED



By:/s/ Mark G. Kachur                           By:  /s/ Paul J. Powers
   ----------------------------                    -----------------------------
         MARK G. KACHUR                              PAUL J. POWERS



                                       11