Document:

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                                                                   EXHIBIT 10.25

                              EMPLOYMENT AGREEMENT

       THIS EMPLOYMENT AGREEMENT, made as of this 11th day of December, 2002, by
and between Natco Group Inc., a corporation organized and existing under the
laws of the State of Delaware (hereinafter referred to as "NATCO"), and Patrick
M. McCarthy (hereinafter referred to as "the Executive").

                                   WITNESSETH

       WHEREAS, NATCO's Board of Directors (the "Board") has determined that it
is in the best interests of NATCO and its stockholders to ensure that NATCO and
its affiliates will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a termination of the
Executive's employment in certain circumstances, including following a Change in
Control as defined herein. The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties
and risks created by a pending or threatened termination of the Executive's
employment in such circumstances and to provide the Executive with compensation
and benefits arrangements upon such a termination which ensure that the
compensation and benefits expectations of the Executive will be satisfied and
which are competitive with those of other corporations; and

       WHEREAS, NATCO desires to continue the Executive in the employment
capacity hereinafter set forth and the Executive agrees to accept such
employment on the terms and conditions hereinafter set forth;

       NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is hereby agreed by and between NATCO and the Executive as
follows:

       1.     Capacity and Services.

              (a) NATCO hereby agrees to continue to employ the Executive and
the Executive hereby agrees to accept such employment by NATCO as President of
NATCO on the terms and conditions set forth herein. The employment of the
Executive pursuant to this Employment Agreement shall commence on December 11,
2002 and continue through the Period of Active Employment, as defined in
Paragraph 1(e) of this Employment Agreement. In his capacity as President of
NATCO, the Executive shall assume such responsibilities, perform such duties,
and have such authority, as may from time to time be assigned or delegated by
the Board of Directors of NATCO (the "Board") or the Chief Executive Officer of
NATCO (the "CEO"), consistent with the Executive's position. The Executive
agrees to perform such duties in accordance with the By-laws of NATCO, the
instructions of the CEO and the Board, and NATCO's policies.

              (b) The Executive shall devote his full business time to his
duties hereunder, provided, however, that the foregoing shall not prevent the
Executive from serving as a member of the board of directors of a corporation if
the Board, or the appropriate Committee thereof, determines in its sole
discretion that such membership is not adverse to the interests of NATCO.
Subject to the foregoing, the Executive shall not engage in any business
activities that are directly or indirectly competitive with any business then
conducted by NATCO or any of its affiliated companies.

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              (c) The Executive may be an investor, shareholder, joint venturer,
or partner (hereinafter referred to as an "Investor") in any enterprise,
association, corporation, joint venture or partnership (hereinafter referred to
as an "Investment"), provided, however, that any such Investment does not (i)
violate NATCO's conflict of interest policy as in effect from time to time, (ii)
require the Executive's involvement in the management (except service on boards
of directors to the extent permitted by Paragraph 1(b) of this Employment
Agreement) or operation of such Investment (recognizing that the Executive shall
be permitted to monitor and oversee the Investment, as would any prudent
Investor) or (iii) interfere with the performance of the Executive's duties and
obligations hereunder.

              (d) The Executive shall fully and faithfully discharge his duties
under the direction of the Board.

              (e) "Period of Active Employment", as used herein, shall mean the
period beginning on December 11, 2002 and terminating on the date on which the
first of the following events occurs:

                  (i)    The death of the Executive;

                  (ii)   The Disability of the Executive, as provided in
                         Paragraph 7 of this Employment Agreement;

                  (iii)  The termination of the Executive's employment, as
                         provided in Paragraph 13 of this Employment
                         Agreement; or

                  (iv)   Expiration of the Term of this Employment Agreement,
                         as provided in Paragraph 2 hereof (or as such
                         expiration may be extended pursuant to Paragraph 3
                         hereof).

       2.     Term of Employment.

              The term ("Term") of this Employment Agreement shall commence on
December 11, 2002 (the "Commencement Date") and unless extended or terminated
earlier as provided hereunder, shall continue through the third anniversary of
the Commencement Date.

       3.     Term Extension.

              Commencing on the anniversary of the Commencement Date (the
"Extension Date") and on each subsequent Extension Date each year thereafter,
the Term of this Employment Agreement shall automatically be extended for one
additional year, unless at least 90 days prior to such Extension Date, NATCO
shall have given notice that it does not wish to extend this Employment
Agreement. Notwithstanding the foregoing, upon the occurrence of a Change in
Control, as defined in Paragraph 13 hereof, during the Term of this Agreement,
including any extensions thereof, this Employment Agreement shall automatically
be extended until the end of the Effective Period, as defined in Paragraph 13
hereof, and may not be terminated by NATCO during such time.

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       4.     Compensation and Benefits.

              (a) During the Period of Active Employment, NATCO shall pay to the
Executive as base compensation for his services hereunder, a base salary of
$275,000 per annum ("Base Salary"), payable in arrears and subject to increase
from time to time at the sole discretion of the Board. Amounts payable shall be
reduced by standard withholding and other authorized deductions.

              (b) During the Period of Active Employment, the Executive shall
have the right to participate in any of NATCO's fringe benefit and insurance
plans presently in effect or that may be established for the benefit of
executives of NATCO. NATCO reserves the right to modify, suspend or discontinue
any or all such plans or benefits at any time without recourse by the Executive.

              (c) The Executive shall be entitled to take vacation in accordance
with NATCO's policy and practices for senior executives.

              (d) During the Period of Active Employment, NATCO shall, upon
receipt of appropriate itemized vouchers for expenses, submitted to NATCO on a
monthly basis in accordance with NATCO's procedures from time to time in effect,
reimburse the Executive for any reasonable and actual costs of leasing an
automobile for the Executive's business and private use during the Period of
Active Employment ("Monthly Automobile Lease Cost"). The make, model, color and
year of the leased automobile described herein may be selected by the Executive.
In addition to reimbursement of the Monthly Automobile Lease Cost, during the
Period of Active Employment, NATCO shall, upon receipt of itemized vouchers for
expenses, submitted to NATCO on a monthly basis in accordance with NATCO's
procedures from time to time in effect, reimburse the Executive for his
reasonable and necessary expenses, including maintenance, repairs, gasoline and
insurance, incurred in the operation of the leased automobile described herein.

       5.     Bonus Compensation.

              (a) During each fiscal year in which the Executive is employed by
NATCO under the terms and conditions of this Employment Agreement, the Executive
will be eligible to receive Bonus Compensation pursuant to the Natco Group Inc.
Target Bonus Plan (the "Bonus Plan"), which Bonus Compensation shall be payable
at the time and in the manner provided for (or elected) under the terms of the
Bonus Plan. For these purposes, Executive's "target" annual bonus will be 60% of
his Base Salary. The Board will determine, annually, the criteria which
determine "target" performance.

              (b) In the event the Executive is employed by NATCO under the
terms and conditions of this Employment Agreement for a period less than any
full fiscal year and the Executive's employment with NATCO has been terminated
due to the Executive's death or Disability pursuant to Section 13(a), or by
NATCO without Cause or by the Executive for Good Reason pursuant to Paragraph
13(d) hereof, any Bonus Compensation payable to the Executive under Paragraph
5(a) of this Employment Agreement shall be prorated accordingly. If the
Executive terminates his employment without Good Reason as provided in Paragraph
13(b) hereof or NATCO terminates the Executive's employment for Cause as
provided in Paragraph 13(c) hereof, the Executive shall not be eligible for any
Bonus Compensation under this Employment Agreement for the year in which such
termination occurs.

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              (c) Any Bonus Compensation payment to which the Executive is
entitled under the terms of Paragraph 5(a) of this Employment Agreement shall be
paid to the Executive as soon as practicable after financial statements have
been prepared for the fiscal period to which such Bonus Compensation payment
relates, but no later than ninety days from the date such financial statements
shall have been prepared.

              (d) During each fiscal year in which the Executive is employed by
NATCO under the terms and conditions of this Employment Agreement, the Executive
will be eligible to receive additional bonus payments as the Board deems
appropriate in its sole and absolute discretion.

              (e) All references to Bonus Compensation herein are to the gross
amounts thereof. NATCO shall have the right to deduct therefrom all taxes which
may be required to be deducted or withheld under any provision of applicable law
now in effect or which may become effective any time during the term of this
Employment Agreement.

       6.     Certain Expenses Incident to Employment.

              Subject to such rules and procedures as from time to time are
specified by NATCO or the Board, NATCO agrees to reimburse the Executive for
travel, entertainment or other reasonable business expenses or disbursements
incurred ordinarily by the Executive as part of and in connection with the
performance of his duties under this Employment Agreement.

       7.     Disability.

              "Disability" or "Disabled", as used in Paragraphs 1(e) and 13(a)
of this Employment Agreement, shall mean a physical or mental incapacity of the
Executive which has prevented him from performing the duties customarily
assigned him by the Board for ninety (90) days, whether or not consecutive, out
of any twelve (12) consecutive months and which thereafter can reasonably be
expected, in the judgment of a physician selected by NATCO, to continue.

       8.     Agreement Not to Compete.

              (a) Except as otherwise provided by this Employment Agreement, the
Executive hereby agrees that, during the Period of Active Employment, the
Executive will not directly or indirectly, either through any form of ownership
(other than ownership of securities of a publicly-held corporation of which the
Executive owns less than one percent of any class of outstanding securities), or
as a director, officer, principal agent, employer, advisor, consultant,
copartner, or in any individual or representative capacity, either for his own
benefit or for the benefit of any other person, firm, corporation or other
entity, engage in any business that is in competition with NATCO or any of its
affiliated companies.

              (b) In view of the unique and valuable services it is expected the
Executive will render to NATCO, Executive's knowledge of the customers, trade
secrets, and other proprietary information relating to the business of NATCO and
its customers and suppliers and similar knowledge regarding NATCO it is expected
that the Executive will obtain, and in consideration of the compensation to be
received under this Paragraph 8, Executive agrees that in the event his
employment with NATCO is terminated by NATCO without Cause (as defined in
Paragraph 13(j)(i) hereof or by the Executive for Good Reason as defined in
Paragraph 13(j)(v) hereof) during the Effective Period (as defined in Paragraph
13(j)(iv) hereof), he will not, directly or

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indirectly for a period beginning on the date of termination and ending on the
first anniversary of such date of termination:

                     (i)    serve as an officer, director, employee, principal,
                            partner, agent, independent contractor or consultant
                            of or for, or otherwise have a financial interest
                            in, any Prohibited Business (as defined below) which
                            sells or offers to sell products or services in
                            competition with the NATCO or any of its
                            subsidiaries or affiliates in the Geographic
                            Territory (as defined below); provided that this
                            covenant will not prevent Executive from purchasing
                            or owning not more than one percent (1%) of any
                            class of securities of any corporation, whether or
                            not such corporation is a Prohibited Business;

                     (ii)   sell or offer to sell to any Person in the
                            Geographic Territory any goods or services of any
                            type then sold or offered by NATCO or any of its
                            subsidiaries or affiliates;

                     (iii)  otherwise intentionally interfere with or cause a
                            reduction or termination of the business between
                            NATCO or any of its subsidiaries or affiliates and
                            any customer or prospective customer of NATCO or any
                            of its subsidiaries or affiliates;

                     (iv)   hire or attempt to hire any person employed or
                            engaged by NATCO or any of its subsidiaries or
                            affiliates or encourage or solicit any such person
                            to terminate his or her employment or engagement
                            with NATCO or such subsidiary or affiliate of NATCO;

                     (v)    intentionally interfere with or cause a reduction or
                            termination of the business relationship between
                            NATCO or any of its subsidiaries or affiliates and
                            any business which supplies or supplied goods or
                            services to NATCO or its subsidiaries or affiliates;
                            or

                     (vi)   make any public statement which is either intended
                            to be or reasonably likely to be injurious or
                            detrimental to NATCO or any of its subsidiaries or
                            affiliates or which is derogatory to any current or
                            former director, officer or employee of NATCO or any
                            of its subsidiaries or affiliates.

              (c) The Executive acknowledges and agrees that, given the nature
of the businesses in which NATCO and its subsidiaries and affiliates are engaged
and given his past service as President of NATCO, the restrictive covenants
contained above are reasonable in the sense that they are no greater than is
necessary to protect the legitimate interests of NATCO and not unduly harsh and
oppressive in curtailing the Executive's legitimate efforts to earn a
livelihood. The parties therefore intend that these restrictive covenants be
enforced to the fullest extent permitted by applicable law. Each of these
restrictive covenants is a separate and independent contractual provision.

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              (d) For purpose of this Agreement, "Prohibited Business" means any
Person that is in competition with NATCO or any of its subsidiaries or
affiliates in the oil and gas process equipment business; "Geographic Territory"
means the United States of America; and "Person" means any corporation,
partnership, joint venture, trust, sole proprietorship, limited liability
company, unincorporated business association, individual or other entity.

              (e) In consideration of the restrictive covenants set forth in
this Paragraph 8, NATCO shall pay in a lump sum to the Executive, on or within
thirty (30) days after the Executive's date of termination of employment, cash
in an amount equal to the Executive's Base Salary in effect on the date of
termination.

       9.     Intangible and Other Property Rights.

              (a) All right, title and interest of every kind and nature
whatsoever, whether now known or unknown, in and to any intangible property,
including all trade names, unregistered trademarks and service marks, brand
names, patents, copyrights, registered trademarks and service marks and all
trade secrets and confidential know-how (the "Intangible Property"), invented,
created, written, developed, furnished, produced or disclosed by the Executive
hereunder shall, as between the parties hereto, be and remain the sole and
exclusive property of NATCO for any and all purposes and uses whatsoever, and
the Executive shall have no right, title or interest of any kind or nature
therein or thereto, or in or to any results or proceeds therefrom. The Executive
will, at the request of NATCO, execute such assignments, certificates and other
instruments as NATCO may from time to time deem necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend its right,
title and interest in and to any of the foregoing.

              (b) The Executive agrees that all "Intangible Property",
materials, books, files, reports, correspondence, records and documents
(collectively "NATCO Material") used, prepared or made available to the
Executive in the course of rendering his services to NATCO hereunder shall
remain the property of NATCO. At the end of the Period of Active Employment, all
NATCO Material shall be returned immediately to NATCO.

       10.    Confidentiality.

              The Executive shall hold in a fiduciary capacity for the benefit
of NATCO all secret or confidential information, knowledge or data relating to
NATCO and its affiliates, which shall have been obtained by the Executive during
his employment by NATCO and which shall not be public knowledge. After
termination of the Executive's employment with NATCO, he shall not, without the
prior written consent of the Board, communicate or divulge any such information,
knowledge or data to anyone other than the Board and those designated by the
Board.

       11.    Rights and Remedies Upon Breach.

              (a) The Executive hereby acknowledges and agrees that the
provisions contained in Paragraphs 8, 9, and 10 of this Agreement (the
"Restrictive Covenants"), are reasonable and valid in duration and in all other
respects. If any court of competent jurisdiction determines that any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the Restrictive Covenants will not thereby be affected and will be
given full effect without regard to

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the invalid portions. If any restriction contained in Paragraphs 8, 9 or 10
hereof is deemed to be invalid, illegal or unenforceable by reason of the
extent, duration or geographical scope thereof, or otherwise, then the court
making such termination shall have the right to reduce such extent, duration,
geographical scope or other provisions hereof, and in its reduced form such
restriction shall then be enforceable in the manner contemplated hereby.

              (b) If the Executive breaches, or threatens to commit a breach of,
any of the Restrictive Covenants, NATCO will have the following rights and
remedies, each of which rights and remedies will be independent of the others
and severally enforceable, and each of which is in addition to, and not in lieu
of, any other rights and remedies available to NATCO under law or in equity:

                  (i)    Specific Performance. The right and remedy to have the
                         Restrictive Covenants specifically enforced by any
                         court of competent jurisdiction, it being agreed that
                         any breach or threatened breach of the Restrictive
                         Covenants would cause irreparable injury to NATCO and
                         that money damages would not provide an adequate remedy
                         to NATCO.

                  (ii)   Accounting. The right and remedy to require the
                         Executive to account for and pay over to NATCO all
                         compensation, profits, monies, accruals, increments
                         or other benefits derived or received by the
                         Executive as the result of any action constituting a
                         breach of the Restrictive Covenants.

                  (iii)  Cessation of Severance Benefits. The right and remedy
                         to cease any further severance, benefit or other
                         compensation payments under this Agreement to the
                         Executive or the Executive's Beneficiary from and after
                         the commencement of such breach by the Executive.

       12.    Notice of Termination.

              (a) Any termination of the Executive's employment by NATCO, or by
any affiliate of NATCO by which the Executive is employed, for Cause or by the
Executive for Good Reason, both terms as defined in Paragraph 13 hereof, shall
be communicated by a Notice of Termination to the other party hereto given in
accordance with Paragraph 25 of this Employment Agreement. For purposes of this
Employment Agreement, a Notice of Termination for termination of employment for
Cause or Good Reason means a written notice which (i) is given at least thirty
(30) days prior to the Date of Termination; (ii) indicates the specific
termination provision in this Employment Agreement relied upon; (iii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated; (iv) specifies the employment termination date; and
(v) allows the recipient of the Notice of Termination at least thirty (30) days
to cure the act or omission relied upon in the Notice of Termination. The
failure to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause will not waive any right of the
party giving the Notice of Termination hereunder or preclude such party from
asserting such fact or circumstance in enforcing its rights hereunder.

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              (b) A Termination of Employment of the Executive will not be
deemed to be for Cause, as defined in Paragraph 13 hereof, unless and until
there has been delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters of the entire membership of
the Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive has engaged in the conduct
described in Paragraph 13(j)(i) hereof, and specifying the particulars of such
conduct.

              (c) A Termination of Employment of the Executive will not be
deemed to be for Good Reason, as defined in Paragraph 13 hereof, unless the
Executive gives the Notice of Termination provided for herein within twelve (12)
months after the Executive has actual knowledge of the act or omission of NATCO
constituting such Good Reason.

       13.    Termination of Employment.

              (a) Termination Upon Death or Disability of Executive. If the
Executive dies or becomes Disabled during the Term hereof, this Employment
Agreement will terminate in accordance with Paragraph 1(e) hereof; provided,
however, that in any such event, NATCO will pay to the Executive, or to his
estate or designated beneficiary, as the case may be, (i) a lump sum in cash
equal to the Executive's Base Salary through the date of termination, to the
extent not theretofore paid, and (ii) such other benefits that have vested in
the Executive at the time of such termination as a result of his participation
in any benefits plans of NATCO or any of its affiliates, in accordance with and
subject to the provisions of such plans. Any bonus Compensation that has been
earned under the Bonus Plan, the payment of which has been deferred under the
Bonus Plan, will be paid to the Executive, or to his estate or designated
beneficiary, as the case may be, in accordance with the terms of the Bonus Plan.

              (b) Termination by the Executive. If the Executive terminates this
Employment Agreement for any reason other than Good Reason, as defined below,
NATCO shall have no further obligations or responsibilities hereunder (except
for Base Salary amounts earned but not yet paid to the Executive through the
date of the Executive's termination) and the Executive shall not be entitled to
receive any Bonus Compensation pursuant to Paragraph 5(a) of this Employment
Agreement nor any severance pay specified in any severance plan or policy that
NATCO presently has in effect or may establish in the future for employees of
NATCO. Any Bonus Compensation that has been earned under the Bonus Plan, the
payment of which has been deferred under the terms of the Bonus Plan, will be
paid to the Executive in accordance with the terms of the Bonus Plan. Any
benefits that have vested in the Executive at the time of such termination as a
result of his participation in any of NATCO's benefit plans will be paid to the
Executive, or to his estate or designated beneficiary, subject to the provisions
of such plans.

              (c) Termination for Cause. NATCO has the right, at any time during
the Term of this Employment Agreement, subject to all of the provisions hereof,
and exercisable by serving a Notice of Termination in accordance with Paragraph
12 above, to terminate the Executive's employment under this Employment
Agreement and discharge the Executive for Cause. If such right is exercised, the
obligations of NATCO to the Executive will be limited solely to payment by NATCO
of unpaid Base Salary accrued, and subject to the provisions of the applicable
benefit plans, any benefits vested, up to the effective date specified in the
Notice of Termination, and the Executive shall not be entitled to receive any
Bonus Compensation pursuant to Paragraph 5(a) hereof or any

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severance pay specified in any severance plan or policy that NATCO presently has
in effect or may establish in the future for employees of NATCO. Any Bonus
Compensation that has been earned under the Bonus Plan, the payment of which has
been deferred under the terms of the Bonus Plan, will be paid to the Executive
in accordance with the terms of the Bonus Plan.

              (d) Termination by NATCO Without Cause or by the Executive for
Good Reason. NATCO has the right, at any time during the Term, subject to all of
the provisions hereof, to terminate the Executive's employment under this
Employment Agreement and discharge the Executive without Cause. Furthermore,
notwithstanding any other provision of this Employment Agreement, the
Executive's employment under this Agreement may be terminated at any time during
the Term by the Executive for Good Reason. In the event of termination of
employment either by NATCO without Cause or by the Executive for Good Reason
prior to the occurrence of a Change in Control, the Executive shall be entitled
to severance pay in accordance with any severance plan or policy that NATCO then
has in effect. Any bonus Compensation that has been earned under the Bonus Plan,
the payment of which has been deferred under the terms of the Bonus Plan, will
be paid to the Executive in accordance with the terms of the Bonus Plan.

              (e) Termination of Employment following a Change in Control. If,
during the Effective Period, as defined herein, NATCO terminates the Executive's
employment other than for Cause or the Executive terminates his employment with
NATCO for Good Reason, NATCO will pay the following to the Executive as soon as
practicable following the date of termination, but in no event later than thirty
(30) days, or such period otherwise specifically provided, thereafter:

                  (i)    cash in the amount of the Executive's Base Salary
                         through the Date of Termination to the extent not
                         theretofore paid, including amounts due for accrued
                         but unused vacation time;

                  (ii)   cash in the amount of the Bonus Compensation earned
                         by the Executive under the Bonus Plan in accordance
                         with its terms through the date of termination,
                         based on NATCO performance through such date and
                         prorationed by multiplying such Bonus Compensation
                         by the fraction obtained by dividing the number of
                         days in the year through the Date of Termination by
                         365, payable no later than sixty (60) days following
                         the date of termination;

                  (iii)  cash in an amount equal to the product of two times
                         the Executive's Base Salary at the greater of (A)
                         the rate in effect at the time Notice of Termination
                         is given or (B) the rate in effect immediately
                         preceding the Change in Control, payable in a lump
                         sum;

                  (iv)   a lump sum cash amount equal to the product of three
                         times the target Bonus Compensation at the greater
                         of (A) the target Bonus Compensation in effect at
                         the time Notice of Termination is given or (B) the
                         target Bonus Compensation in effect immediately
                         preceding the Change in Control;

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                     (v)    the continuation of the provision of health
                            insurance, dental insurance and life insurance
                            benefits for a period of three years following the
                            date of termination to the Executive and the
                            Executive's family at least equal to and to the same
                            extent as those which would have been provided to
                            them in accordance with this Employment Agreement
                            and the plans, programs, practices and policies of
                            NATCO as in effect and applicable generally to other
                            peer executives and their families during the 90-day
                            period immediately preceding the Effective Period or
                            on the date of termination, at the election of the
                            Executive; provided, however, that if the Executive
                            becomes re-employed with another employer and is
                            eligible to receive medical or other welfare
                            benefits under another employer provided plan, the
                            medical and other welfare benefits described herein
                            will be secondary to those provided under such other
                            plan during such applicable period of eligibility;

                     (vi)   any and all deferred Bonus Compensation under the
                            Bonus Plan at the time and in the manner provided
                            for (or elected) under the terms of the Bonus Plan.

              If, during the Effective Period as defined herein, NATCO
terminates the Executive's employment for Cause, or the Executive terminates his
employment without Good Reason, NATCO's obligations and responsibilities to the
Executive under this Employment Agreement are limited to those stated in
Paragraphs 13(b) and 13(c), as the case may be.

              (f) "Compensation" Under Retirement Plans. Any and all amounts
paid under Paragraph 13 of this Employment Agreement in the amount of or
otherwise in respect of the Executive's Base Salary and Bonus Compensation,
whether or not deferred under a deferred compensation plan or program, are
intended to be and will be "Compensation" for purposes of determining
Compensation under any and all retirement plans sponsored or maintained by NATCO
or by any affiliate controlled by NATCO.

              (g) Effect of Death. In the event of the Executive's death
following the Executive's date of termination, but prior to the payment of any
severance payments and benefits provided under this Paragraph 13, if any, such
payments and benefits will be paid to the Executive's beneficiary.

              (h) Mitigation of Damages. The Executive will not be required to
mitigate damages or the amount of any payment provided for under Paragraph 13 of
this Employment Agreement by seeking other employment or otherwise. Except as
otherwise specifically provided in this Employment Agreement, the amount of any
payment provided for under Paragraph 12 of this Employment Agreement will not be
reduced by any compensation earned by the Executive as the result of
self-employment or employment by another employer or otherwise.

              (i) Stock Options. The benefits provided under Paragraph 13 of
this Employment Agreement are intended to be in addition to the value of any
options to acquire common stock of NATCO awarded to the Executive under the
Natco Group Inc. 1998 Stock Incentive Plan

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and the Natco Group Inc. 2001 Stock Incentive Plan (collectively the "Stock
Plans") and any other incentive or similar plan or agreement heretofore or
hereafter adopted by NATCO. Notwithstanding the terms of the Stock Plans, any
other incentive plan or agreement, or any award agreement evidencing awards of
stock options to purchase stock of NATCO, all outstanding stock options held by
the Executive shall fully vest as of the date of the Change in Control and
become immediately exercisable in accordance with their terms; provided,
however, that if NATCO terminates the Executive's employment other than for
Cause or the Executive terminates employment with NATCO for Good Reason during
the Effective Period, then such stock options shall be exercisable for the
longer period of (A) three months after the Executive's date of termination or
(B) eighteen months after the effective date of the Change in Control, unless
the term of the stock options expires before the end of such longer period, in
which case the stock option shall be exercisable until the expiration of its
term.

              (j) Definitions. The following terms shall have the meanings
ascribed to them as follows:

                     (i)    "Cause" means:

                            (A)    the Executive's willful and continued failure
                                   to substantially perform the Executive's
                                   duties with NATCO or its affiliates, as
                                   provided in this Employment Agreement (other
                                   than any such failure resulting from the
                                   Executive's incapacity due to physical or
                                   mental illness), after a written demand for
                                   substantial performance is delivered to the
                                   Executive by NATCO which specifically
                                   identifies the manner in which NATCO believes
                                   that the Executive has not substantially
                                   performed his or her duties;

                            (B)    the final conviction of the Executive, or an
                                   entering of a guilty plea or a plea of no
                                   contest by the Executive, to a felony or of a
                                   misdemeanor involving moral turpitude; or

                            (C)    the willful engaging by the Executive in
                                   illegal conduct or gross misconduct which is
                                   materially and demonstrably injurious to
                                   NATCO; or

                            (D)    a material breach by the Executive of the
                                   terms of this Employment Agreement.

For purposes of this definition, no act or failure to act on the part of the
Executive shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without a reasonable belief that the
action or omission was in the best interests of NATCO or its affiliates. Any
act, or failure to act, based on authority given pursuant to a resolution duly
adopted by the Board or the advice of counsel to NATCO or its affiliates will be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interest of NATCO and its affiliates.

                                       11

<PAGE>

                     (ii)   "Change in Control" means the occurrence of any one
                            of the following events:

                            (A)    NATCO is not the surviving entity in any
                                   merger or consolidation (or survives only as
                                   a subsidiary of an entity);

                            (B)    NATCO sells, leases or exchanges, or agrees
                                   to sell, lease or exchange, all or
                                   substantially all of its assets to any other
                                   person or entity;

                            (C)    NATCO is to be dissolved and liquidated;

                            (D)    any person or entity, including a "group" as
                                   contemplated by Paragraph 13(d)(3) of the
                                   Securities Exchange Act of 1934, as amended,
                                   acquires or gains ownership or control
                                   (including, without limitation, power to
                                   vote) of more than 50% of the outstanding
                                   shares of NATCO's voting stock (based upon
                                   voting power); or

                            (E)    as a result of or in connection with a
                                   contested election of Directors, the persons
                                   who were Directors of NATCO before such
                                   election shall cease to constitute a majority
                                   of the Board.

                     (iii)  "Director means an individual elected to the Board
                            by the stockholders of the Company or by the Board
                            under applicable corporate law who is serving on the
                            Board on the date of this Agreement or who is
                            elected to the Board after such date.

                     (iv)   "Effective Period" means the 36-month period
                            following a Change in Control.

                     (v)    "Good Reason" means, unless the Executive has
                            consented in writing thereto, the occurrence of any
                            of the following:

                            (A)    the assignment to the Executive of any duties
                                   inconsistent with the Executive's position,
                                   including any material change in status,
                                   title, authority, duties or responsibilities
                                   or any other action which results in a
                                   material diminution in such status, title,
                                   authority, duties or responsibilities,
                                   excluding for this purpose an isolated,
                                   insubstantial and inadvertent action not
                                   taken in bad faith and which is remedied by
                                   NATCO or the Executive's employer promptly
                                   after receipt of notice thereof given by the
                                   Executive;

                            (B)    a reduction by NATCO or the Executive's
                                   employer of the Executive's Base Salary;

                                       12
<PAGE>

                            (C)    the relocation of the Executive's office to a
                                   location more than 35 miles from its location
                                   on the Commencement Date;

                            (D)    following a Change in Control, unless a plan
                                   providing a substantially similar
                                   compensation or benefit is substituted, (A)
                                   the failure by NATCO or any of its affiliates
                                   or successors to continue in effect any
                                   material fringe benefit or compensation plan,
                                   retirement plan, life insurance plan, health
                                   and accident plan or disability plan in which
                                   the Executive is participating prior to the
                                   Change in Control, or (B) the taking of any
                                   action by NATCO or any of its affiliates or
                                   successors which would adversely affect the
                                   Executive's participation in or materially
                                   reduce his benefits under any of such plans
                                   or deprive him of any material fringe
                                   benefit; or

                            (E)    following a Change in Control, the failure of
                                   NATCO or the affiliate of NATCO by which the
                                   Executive is employed, or any affiliate which
                                   directly or indirectly owns or controls any
                                   affiliate by which the Executive is employed,
                                   to obtain the assumption in writing of
                                   NATCO's obligation to perform this Employment
                                   Agreement by any successor to all or
                                   substantially all of the assets of NATCO or
                                   such affiliate within fifteen (15) days after
                                   a reorganization, merger, consolidation, sale
                                   or other disposition of assets of NATCO or
                                   such affiliate.

                            (F)    any purported termination of the Executive's
                                   employment by NATCO which is not effected
                                   pursuant to a Notice of Termination
                                   satisfying the requirements of Paragraph 12
                                   hereof; and for purposes of this Employment
                                   Agreement, no such purported termination
                                   shall be effective.

                            (G)    a termination of employment by the Executive
                                   for any reason or no reason at all during the
                                   30-day period immediately following the first
                                   anniversary of a Change in Control, which
                                   shall be deemed to be a termination for Good
                                   Reason.

                            For purposes of this Employment Agreement, any
                            determination of "Good Reason" made by the Executive
                            in good faith based upon his reasonable belief and
                            understanding shall be conclusive.

       14.    Limitation of Benefits.

              (a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any benefit, payment or distribution by
NATCO to or for the benefit of the Executive (whether payable or distributable
pursuant to the terms of this Agreement or otherwise) (a "Payment") would, if
paid, be subject to the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), then the Payment shall be reduced to the extent necessary to
avoid the imposition of the Excise Tax. The Executive may select the Payments to
be limited or reduced.

                                       13
<PAGE>

              (b) All determinations required to be made under this Paragraph
14, including whether an Excise Tax would otherwise be imposed and the
assumptions to be utilized in arriving at such determination, shall be made by
Independent Tax Counsel which shall provide detailed supporting calculations
both to the NATCO and the Executive within fifteen (15) business days of the
receipt of notice from the Executive that a Payment is due to be made, or such
earlier time as is requested by NATCO. For purposes of this paragraph,
"Independent Tax Counsel" will mean a lawyer, a certified public accountant with
a nationally recognized accounting firm, or a compensation consultant with a
nationally recognized actuarial and benefits consulting firm with expertise in
the area of executive compensation, who will be selected by NATCO and will be
reasonably acceptable to the Executive, and whose fees and disbursements will be
paid by NATCO. Any determination by the Independent Tax Counsel shall be binding
upon NATCO and the Executive. If, as a result of any uncertainty in the
application of Section 4999 of the Code at the time the initial determination is
made by the Independent Tax Counsel hereunder, Payments hereunder have been
unnecessarily limited by this Paragraph 14 ("Underpayment"), consistent with the
calculations required to be made hereunder, then the Independent Tax Counsel
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be properly paid by NATCO to or for the benefit of the
Executive. If, however, Payments hereunder have not been sufficiently limited by
this Section 14, consistent with the calculations required to be made hereunder,
to prevent the imposition of an Excise Tax upon the Executive (the
"Overpayment"), then the Executive shall notify NATCO in writing within fifteen
(15) days of any claim by the Internal Revenue Service, that, if successful,
would require the payment by the Executive of any Excise Tax, and the
Independent Tax Counsel shall determine the amount of Overpayment that has
occurred and any such Overpayment shall be properly refunded by the Executive by
or for the benefit of NATCO so as to properly prevent the imposition of the
Excise Tax.

       15.    Representation and Warranty.

              The Executive hereby represents and warrants that the execution
and performance of this Employment Agreement will not result in or constitute a
default, breach or violation, or an event which, with notice or lapse of time or
both, would be a default, breach or violation, of any understanding, agreement
..or commitment, written or oral, express or implied, to which the Executive is a
party or by which the Executive or his property is bound.

       16.    Rights and Waivers.

              All rights and remedies of the parties hereto are separate and
cumulative, and no one of them, whether exercised or not, shall be deemed to be
to the exclusion of any other rights or remedies or shall be deemed to limit or
prejudice any other legal or equitable rights or remedies under this Employment
Agreement unless such waiver is in writing and signed by such party. No delay or
omission on the part of either party in exercising any right or remedy shall
operate as a waiver of such right or remedy or any other rights or remedies. A
waiver on any one occasion shall not be construed as a bar to or waiver of any
right or remedy on any future occasion.

                                       14

<PAGE>

       17.    Non-Assignability of Executive's Duties.

              This Employment Agreement is personal to the Executive and, with
the exception of the Executive's rights to compensation and benefits hereunder,
which may be transferred by will or operation of law, this Agreement shall not,
without the prior written consent of the Board, be assignable by the Executive.

       18.    Savings Clause.

              If any provision of this Employment Agreement or the application
hereof is held invalid, the invalidity shall not affect other provisions or
application of this Employment Agreement that can be given effect without the
invalid provisions or application, and to this end the provisions of this
Employment Agreement are declared to be severable.

       19.    Construction.

              Each party has cooperated in the drafting and preparation of this
Employment Agreement. Hence, in any construction to be made of this Employment
Agreement, the same shall not be construed against any party on the basis of
that party being the "drafter."

       20.    Entire Agreement.

              This Employment Agreement supersedes all prior agreements between
the parties concerning the subject matter hereof, other than any and all
promissory notes entered into by and between the Executive and NATCO, and this
Employment Agreement constitutes the entire Employment Agreement between the
parties with respect thereto. This Employment Agreement may be modified only
with a written instrument duly executed by each of the parties. No person has
any authority to make any representations or promises on behalf of any of the
parties not set forth herein and this Employment Agreement has not been executed
in reliance upon any representation or promise except those contained herein.

       21.    Paragraph Headlines.

              The paragraph headings and captions of this Employment Agreement
are for reference purposes only, are not part of the provisions hereof and shall
not erect in any way the meaning or interpretation of this Employment Agreement.

       22.    Governing Law.

              This Employment Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without reference to principles
of conflict of laws.

       23.    Arbitration.

              Any dispute between the parties to this Employment Agreement
relating to or in respect of this Employment Agreement, its negotiation,
execution, performance, subject matter, or any course of conduct or dealing or
actions under or in respect of this Employment Agreement, shall be submitted to,
and resolved exclusively by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA"). Such
arbitration shall take place

                                       15
<PAGE>

in Houston, Texas. Arbitration shall be commenced by filing a demand for
arbitration with the AAA within sixty (60) days after such dispute has arisen.
The prevailing party in such an arbitration proceeding shall be entitled to
recover reasonable attorneys' fees, all reasonable out-of-pocket costs and
disbursements, as well as any and all charges that may be made for the cost of
the arbitration and the fees of the arbitrators.

       24.    Enforcement of Arbitration Award.

              In the event of litigation to enforce an arbitration award in
connection with or concerning the subject matter of this Employment Agreement,
the prevailing party shall be entitled to recover all reasonable costs and
expenses incurred by such party in connection therewith, including reasonable
attorneys' fees.

       25.    Notices.

              All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

              If to the Executive, to him at:

              Patrick M. McCarthy
              14214 Whispering Lake Ct.
              Cypress, Texas  77429

              If to NATCO, to it at:

              Brookhollow Central III
              2950 North Loop West, Suite 750
              Houston, Texas 77092
              Attention: Chief Financial Officer

              With a copy to:
              O'Melveny & Myers LLP
              Citigroup Center
              153 East 53rd Street
              New York, New York  1022-4611

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications hereunder shall be
effective when actually received by the addressee.

                                       16
<PAGE>
       26.    Legal Counsel.

              In entering into this Employment Agreement, the parties represent
that they have relied upon the advice of their attorneys, who are attorneys of
their own choice, and that the terms of this Employment Agreement have been
completely read and explained to them by their attorneys, and that those terms
are fully understood and voluntarily accepted by them.

              In witness whereof, the parties hereto have executed this
Agreement as of the date first above written.

On behalf of
NATCO GROUP INC.                              PATRICK M. MCCARTHY

By: /s/ J. Michael Mayer                      /s/ Patrick M. McCarthy
   -----------------------------              --------------------------

Title: Senior Vice President and
       Chief Financial Officer
      --------------------------

                                       17<PAGE>
                                                                   EXHIBIT 10.26

                                NATCO GROUP INC.

                                SENIOR MANAGEMENT
                           CHANGE IN CONTROL AGREEMENT

       THIS AGREEMENT is entered into this 11th day of December, 2002 by and
between NATCO GROUP INC., a Delaware corporation (the "Company"), and Robert A.
Curcio (the "Executive").

       WHEREAS, the Company's Board of Directors (the "Board") has determined
that it is in the best interests of the Company and its stockholders to ensure
that the Company and its affiliates will have the continued dedication of the
Executive, notwithstanding the possibility, threat or occurrence of a
termination of the Executive's employment in certain circumstances, including
following a Change in Control as defined herein. The Board believes it is
imperative to diminish the inevitable distraction of the Executive by virtue of
the personal uncertainties and risks created by a pending or threatened
termination of the Executive's employment in such circumstances and to provide
the Executive with compensation and benefits arrangements upon such a
termination which ensure that the compensation and benefits expectations of the
Executive will be satisfied and which are competitive with those of other
corporations who may seek to employ the Executive.

       NOW, THEREFORE, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement with the Executive, and it is
hereby agreed as follows:

1.     Definitions. For purposes of this Agreement, the following terms will
have the following meanings unless otherwise expressly provided in this
Agreement:

       (a)    Board. "Board" means the Board of Directors of the Company.

       (b)    Cause. "Cause" means:

              (i)    the Executive's willful and continued failure to
                     substantially perform the Executive's duties with the
                     Company or its affiliates (other than any such failure
                     resulting from the Executive's incapacity due to physical
                     or mental illness), after a written demand for substantial
                     performance is delivered to the Executive by the Company
                     which specifically identifies the manner in which the
                     Company believes that the Executive has not substantially
                     performed his or her duties;

              (ii)   the final conviction of the Executive of, or an entering of
                     a guilty plea or a plea of no contest by the Executive, to
                     a felony or of a misdemeanor involving moral turpitude; or

                                       1

<PAGE>

              (iii)  the willful engaging by the Executive in illegal conduct or
                     gross misconduct which is materially and demonstrably
                     injurious to the Company.

                     For purposes of this definition, no act or failure to act
                     on the part of the Executive shall be considered "willful"
                     unless it is done, or omitted to be done, by the Executive
                     in bad faith or without a reasonable belief that the action
                     or omission was in the best interests of the Company or its
                     affiliates. Any act, or failure to act, based on authority
                     given pursuant to a resolution duly adopted by the Board,
                     the instructions of a more senior officer of the Company or
                     the advice of counsel to the Company or its affiliates will
                     be conclusively presumed to be done, or omitted to be done,
                     by the Executive in good faith and in the best interests of
                     the Company and its affiliates.

       (c)    Change in Control. A "Change in Control" means the occurrence of
       any one of the following events:

              (i)    the Company is not the surviving entity in any merger or
                     consolidation (or survives only as a subsidiary of an
                     entity);

              (ii)   the Company sells, leases or exchanges or agrees to sell,
                     lease or exchange all or substantially all of its assets to
                     any other person or entity;

              (iii)  the Company is to be dissolved and liquidated;

              (iv)   any person or entity, including a "group" as contemplated
                     by Section 13(d)(3) of the Securities Exchange Act of 1934,
                     as amended, acquires or gains ownership or control
                     (including, without limitation, power to vote) of more than
                     50% of the outstanding shares of the Company's voting stock
                     (based upon voting power); or

              (v)    as a result of or in connection with a contested election
                     of Directors, the persons who were Directors of the Company
                     before such election shall cease to constitute a majority
                     of the Board.

       (d)    Date of Termination means the date specified in a Notice of
       Termination pursuant to paragraph 3 hereof, or the Executive's last date
       as an active employee of the Company and its affiliates before a
       termination of employment due to death, Disability, or other reason, as
       the case may be.

       (e)    Director. "Director" means an individual elected to the Board by
       the stockholders of the Company or by the Board under applicable
       corporate law who is serving on the Board on the date of this Agreement
       or who is elected to the Board after such date.

                                       2

<PAGE>

       (f)    Disability. "Disability" means the Executive's total and permanent
       disability as defined under the terms of the Company's long-term
       disability plan in effect on the Date of Termination.

       (g)    Effective Period. The "Effective Period" means the 24-month period
       following any Change in Control.

       (h)    Good Reason. "Good Reason" means, unless the Executive has
       consented in writing thereto, the occurrence of any of the following:

              (i)    the assignment to the Executive of any duties inconsistent
                     with the Executive's position, including any material
                     change in status, title, authority, duties or
                     responsibilities or any other action which results in a
                     material diminution in such status, title, authority,
                     duties or responsibilities, excluding for this purpose an
                     isolated, insubstantial and inadvertent action not taken in
                     bad faith and which is remedied by the Company or the
                     Executive's employer promptly after receipt of notice
                     thereof given by the Executive;

              (ii)   a reduction by the Company or the Executive's employer of
                     the Executive's base salary;

              (iii)  the relocation of the Executive's office to a location more
                     than 35 miles from its location as of the Commencement
                     Date;

              (iv)   following a Change in Control, unless a plan providing a
                     substantially similar compensation or benefit is
                     substituted, (A) the failure by the Company or any of its
                     affiliates or successors to continue in effect any material
                     fringe benefit or compensation plan, retirement plan, life
                     insurance plan, health and accident plan or disability plan
                     in which the Executive is participating prior to the Change
                     in Control, or (B) the taking of any action by the Company
                     or any of its affiliates or successors which would
                     adversely affect the Executive's participation in or
                     materially reduce his benefits under any of such plans or
                     deprive him of any material fringe benefit; or

              (v)    following a Change in Control, the failure of the Company
                     or the affiliate of the Company by which the Executive is
                     employed, or any affiliate which directly or indirectly
                     owns or controls any affiliate by which the Executive is
                     employed, to obtain the assumption in writing of the
                     Company's obligation to perform this Agreement by any
                     successor to all or substantially all of the assets of the
                     Company or such affiliate within fifteen (15) days after a
                     reorganization, merger, consolidation, sale or other
                     disposition of assets of the Company or such affiliate.

                                       3

<PAGE>

              (vi)   any purported termination of the Executive's employment by
                     the Company which is not effected pursuant to a Notice of
                     Termination satisfying the requirements of paragraph 3
                     hereof; and for purposes of this Agreement, no such
                     purported termination shall be effective.

              For purposes of this Agreement, any determination of "Good Reason"
              made by the Executive in good faith based upon his reasonable
              belief and understanding shall be conclusive.

2.     Term. The term ("Term") of this Agreement shall commence on the date
first above written (the "Commencement Date") and, unless terminated earlier as
provided hereunder, shall continue through the third anniversary of the
Commencement Date (the "Termination Date"); provided, however, that commencing
on the anniversary of the Commencement Date (the "Extension Date") and on each
subsequent Extension Date each year thereafter, the term of this Agreement shall
automatically be extended for one additional year, unless at least 90 days prior
to such Extension Date, the Company shall have given notice that it does not
wish to extend this Agreement. Upon the occurrence of a Change in Control during
the term of this Agreement, including any extensions thereof, this Agreement
shall automatically be extended until the end of the Effective Period and may
not be terminated by the Company during such time.

3.     Notice of Termination.

       (a) Any termination of the Executive's employment by the Company, or by
       any affiliate of the Company by which the Executive is employed, for
       Cause, or by the Executive for Good Reason shall be communicated by
       Notice of Termination to the other party hereto given in accordance with
       paragraph 11 of this Agreement. For purposes of this Agreement, a "Notice
       of Termination" for termination of employment for Cause or for Good
       Reason means a written notice which (i) is given at least thirty (30)
       days prior to the Date of Termination; (ii) indicates the specific
       termination provision in this Agreement relied upon, (iii) to the extent
       applicable, sets forth in reasonable detail the facts and circumstances
       claimed to provide a basis for termination of the Executive's employment
       under the provision so indicated, (iv) specifies the employment
       termination date; and (v) allows the recipient of the Notice of
       Termination at least thirty (30) days to cure the act or omission relied
       upon in the Notice of Termination. The failure to set forth in the Notice
       of Termination any fact or circumstance which contributes to a showing of
       Good Reason or Cause will not waive any right of the party giving the
       Notice of Termination hereunder or preclude such party from asserting
       such fact or circumstance in enforcing its rights hereunder.

       (b) A Termination of Employment of the Executive will not be deemed to be
       for Cause unless and until there has been delivered to the Executive a
       copy of a resolution duly adopted by the affirmative vote of not less
       than three-quarters of the entire membership of the Board at a meeting of
       the Board called and held for such purpose (after reasonable notice is
       provided to the Executive and the Executive is given an opportunity,
       together with counsel, to be heard before the Board), finding that, in
       the

                                       4

<PAGE>

       good faith opinion of the Board, the Executive has engaged in the conduct
       described in paragraph 1(b) hereof, and specifying the particulars of
       such conduct.

       (c) A Termination of Employment of the Executive will not be deemed to be
       for Good Reason unless the Executive gives the Notice of Termination
       provided for herein within twelve (12) months after the Executive has
       actual knowledge of the act or omission of the Company constituting such
       Good Reason.

4.     Obligations of the Company Upon Termination of Executive's Employment
Following a Change in Control

       (a)    If, during the Effective Period, the Company terminates the
       Executive's employment other than for Cause or the Executive terminates
       employment with the Company for Good Reason, the Company will pay the
       following to the Executive as soon as practicable following the Date of
       Termination, but in no event later than thirty (30) days, or such period
       otherwise specifically provided, thereafter:

              (i)    cash in the amount of the Executive's annual base salary
                     through the Date of Termination to the extent not
                     theretofore paid, including amounts due for accrued but
                     unused vacation time;

              (ii)   cash in the amount of the annual bonus earned by the
                     Executive through the Date of Termination based on the
                     Company's performance through such date and prorationed by
                     multiplying such bonus amount by the fraction obtained by
                     dividing the number of days in the year through the Date of
                     Termination by 365, payable no later than sixty (60) days
                     following the Date of Termination;

              (iii)  cash in an amount equal to the product of two times the
                     Executive's annual base salary at the greater of (A) the
                     rate in effect at the time Notice of Termination is given
                     or (B) the rate in effect immediately preceding the Change
                     in Control, payable in a lump sum;

              (iv)   a lump sum cash amount equal to the product of two times
                     the target annual bonus at the greater of (A) the target
                     annual bonus in effect at the time Notice of Termination is
                     given or (B) the target annual bonus in effect immediately
                     preceding the Change in Control;

              (v)    the continuation of the provision of health insurance,
                     dental insurance and life insurance benefits for a period
                     of two years following the Date of Termination to the
                     Executive and the Executive's family at least equal to and
                     to the same extent as those which would have been provided
                     to them in accordance with the plans, programs, practices
                     and policies of the Company as in effect and applicable
                     generally to other peer executives and their families
                     during the 90-day period immediately preceding the
                     Effective Period or on the Date of Termination, at the
                     election of the

                                       5

<PAGE>

                     Executive; provided, however, that if the Executive becomes
                     re-employed with another employer and is eligible to
                     receive medical or other welfare benefits under another
                     employer provided plan, the medical and other welfare
                     benefits described herein will be secondary to those
                     provided under such other plan during such applicable
                     period of eligibility.

       (b)    "Compensation" Under Retirement Plans. Any and all amounts paid
       under this Agreement in the amount of or otherwise in respect of the
       Executive's annual base salary and bonuses, whether or not deferred under
       a deferred compensation plan or program, are intended to be and will be
       "Compensation" for purposes of determining Compensation under any and all
       retirement plans sponsored or maintained by the Company or by any
       affiliate controlled by the Company.

       (c)    Deferred Bonus Under Natco Group Inc. Target Bonus Plan. The
       benefits provided under this paragraph 4 are intended to be in addition
       to and separate from any and all bonus compensation amounts earned under
       the Natco Group Inc. Target Bonus Plan ("Target Bonus Plan"), the payment
       of which has been deferred under the terms of the Target Bonus Plan. Any
       and all such deferred bonus compensation shall be payable at the time and
       in the manner provided for (or elected) under the terms of the Target
       Bonus Plan.

       (d)    Effect of Death or Disability. If the Executive's employment is
       terminated by reason of the Executive's death or Disability during the
       Term of this Agreement, this Agreement shall terminate automatically on
       the date of death or, in the event of Disability, on the Date of
       Termination. In the event of the Executive's death following the
       Executive's Date of Termination, but prior to the payment of the
       severance payments and benefits provided under paragraph 4 hereof, if
       any, such payments and benefits will be paid to the Executive's surviving
       spouse, or if the Executive has no surviving spouse, then to the
       Executive's estate.

       (e)    Exclusivity of Severance. The severance payments and benefits
       provided for under this Agreement are separate and apart from and, to the
       extent they are actually paid, will be in lieu of any payment under any
       policy or plan of the Company or any of its affiliates regarding
       severance payments generally.

5.     Mitigation of Damages. The Executive will not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise. Except as otherwise specifically provided
in this Agreement, the amount of any payment provided for under this Agreement
will not be reduced by any compensation earned by the Executive as the result of
self-employment or employment by another employer or otherwise.

6.     Stock Options. The benefits provided under paragraph 4 above are intended
to be in addition to the value of any options to acquire common stock of the
Company awarded under the Natco Group Inc. 2001 Stock Incentive Plan (the "Stock
Plan") and any other incentive or similar plan heretofore or hereafter adopted
by the Company. Notwithstanding the terms of the Stock Plan, any award agreement
entered into pursuant to the Stock Plan or any other incentive

                                       6

<PAGE>
plan or agreement, all outstanding stock options held by the Executive shall
fully vest as of the date of the Change in Control and become immediately
exercisable in accordance with their terms; provided, however, that if the
Company terminates the Executive's employment other than for Cause or the
Executive terminates employment with the Company for Good Reason during the
Effective Period, then such stock options shall be exercisable for the longer
period of (a) three months after the Executive's Date of Termination or (b)
eighteen months after the effective date of the Change in Control, unless the
term of the stock option expires before the end of such longer period, in which
case the stock option shall be exercisable until the expiration of its term.

7.     Limitation of Benefits.

       (a)    Anything in this Agreement to the contrary notwithstanding, in the
       event it shall be determined that any benefit, payment or distribution by
       the Company to or for the benefit of the Executive (whether payable or
       distributable pursuant to the terms of this Agreement or otherwise) (a
       "Payment") would, if paid, be subject to the excise tax imposed by
       Section 4999 of the Code (the "Excise Tax"), then the Payment shall be
       reduced to the extent necessary to avoid the imposition of the Excise
       Tax. The Executive may select the Payments to be limited or reduced.

       (b)    All determinations required to be made under this Section 7,
       including whether an Excise Tax would otherwise be imposed and the
       assumptions to be utilized in arriving at such determination, shall be
       made by Independent Tax Counsel which shall provide detailed supporting
       calculations both to the Company and the Executive within fifteen (15)
       business days of the receipt of notice from the Executive that a Payment
       is due to be made, or such earlier time as is requested by the Company.
       For purposes of this paragraph, "Independent Tax Counsel" will mean a
       lawyer, a certified public accountant with a nationally recognized
       accounting firm, or a compensation consultant with a nationally
       recognized actuarial and benefits consulting firm with expertise in the
       area of executive compensation, who will be selected by the Company and
       will be reasonably acceptable to the Executive, and whose fees and
       disbursements will be paid by the Company. Any determination by the
       Independent Tax Counsel shall be binding upon the Company and the
       Executive. If, as a result of any uncertainty in the application of
       Section 4999 of the Code at the time the initial determination is made by
       the Independent Tax Counsel hereunder, Payments hereunder have been
       unnecessarily limited by this Section 7 ("Underpayment"), consistent with
       the calculations required to be made hereunder, then the Independent Tax
       Counsel shall determine the amount of the Underpayment that has occurred
       and any such Underpayment shall be properly paid by the Company to or for
       the benefit of the Executive. If, however, Payments hereunder have not
       been sufficiently limited by this Section 7, consistent with the
       calculations required to be made hereunder, to prevent the imposition of
       an Excise Tax upon the Executive (the "Overpayment"), then the Executive
       shall notify the Company in writing within fifteen (15) days of any claim
       by the Internal Revenue Service, that, if successful, would require the
       payment by the Executive of any Excise Tax, and the Independent Tax
       Counsel shall determine the amount of Overpayment that has occurred and
       any such

                                       7

<PAGE>

       Overpayment shall be properly refunded by the Executive by or for the
       benefit of the Company so as to properly prevent the imposition of the
       Excise Tax.

8.     Confidential Information; Non-Solicitation. For the Term of this
Agreement, and for the period of time during which the Executive receives
benefits pursuant to paragraph 4(a)(v) hereof, the Executive covenants and
agrees as follows:

       (a)    To hold in a fiduciary capacity for the benefit of the Company and
       its affiliates all secret, proprietary or confidential material,
       knowledge, data or any other information relating to the Company or any
       of its affiliated companies and their respective businesses
       ("Confidential Information"), which has been obtained by the Executive
       during the Executive's employment by the Company or any of its affiliated
       companies and that has not been, is not now and hereafter does not become
       public knowledge (other than by acts by the Executive or representatives
       of the Executive in violation of this Agreement), and will not, without
       the prior written consent of the Company or as may otherwise be required
       by law or legal process, communicate or divulge any such information,
       knowledge or data to anyone other than the Company and those designated
       by it; the Executive further agrees to return to the Company any and all
       records and documents (and all copies thereof) and all other property
       belonging to the Company or relating to the Company, its affiliates or
       their businesses, upon termination of Executive's employment with the
       Company and its affiliates; and,

       (b)    Not to solicit or entice any other employee of the Company or its
       affiliates to leave the Company or its affiliates to go to work for any
       other business or organization which is in direct or indirect competition
       with the Company or any of its affiliates, nor request or advise a
       customer or client of the Company or its affiliates to curtail or cancel
       such customer's business relationship with the Company or its affiliates.

9.     Rights and Remedies Upon Breach.

       (a)    The Executive hereby acknowledges and agrees that the provisions
       contained in paragraph 8 of this Agreement (the "Restrictive Covenants"),
       are reasonable and valid in duration and in all other respects. If any
       court of competent jurisdiction determines that any of the Restrictive
       Covenants, or any part thereof, is invalid or unenforceable, the
       remainder of the Restrictive Covenants will not thereby be affected and
       will be given full effect without regard to the invalid portions.

       (b)    If the Executive breaches, or threatens to commit a breach of, any
       of the Restrictive Covenants, the Company will have the following rights
       and remedies, each of which rights and remedies will be independent of
       the others and severally enforceable, and each of which is in addition
       to, and not in lieu of, any other rights and remedies available to the
       Company under law or in equity:

              (i)    Specific Performance. The right and remedy to have the
                     Restrictive Covenants specifically enforced by any court of
                     competent jurisdiction, it being agreed that any breach or
                     threatened breach of the Restrictive

                                       8

<PAGE>

                     Covenants would cause irreparable injury to the Company and
                     that money damages would not provide an adequate remedy to
                     the Company.

              (ii)   Accounting. The right and remedy to require the Executive
                     to account for and pay over to the Company all
                     compensation, profits, monies, accruals, increments or
                     other benefits derived or received by the Executive as the
                     result of any action constituting a breach of the
                     Restrictive Covenants.

              (iii)  Cessation of Severance Benefits. The right and remedy to
                     cease any further severance, benefit or other compensation
                     payments under this Agreement to the Executive or the
                     Executive's beneficiary from and after the commencement of
                     such breach by the Executive.

10.    Arbitration. The Company and Executive agree that any claim, dispute or
controversy arising under or in connection with this Agreement (including,
without limitation, any such claim, dispute or controversy arising under any
federal, state or local statute, regulation or ordinance or any of the Company's
employee benefit plans, policies or programs) shall be resolved solely and
exclusively by binding arbitration. The arbitration shall be held in the city of
Houston, Texas (or at such other location as shall be mutually agreed by the
parties). The arbitration shall be conducted in accordance with the Expedited
Employment Arbitration Rules (the "Rules") of the American Arbitration
Association (the "AAA") in effect at the time of the arbitration, except that
the arbitrator shall be selected by alternatively striking from a list of five
arbitrators supplied by the AAA. All fees and expenses of the arbitration,
including a transcript if either requests, shall be borne equally by the
parties. If Executive prevails as to any material issue presented to the
arbitrator, the entire cost of such proceedings (including, without limitation,
Executive's reasonable attorneys fees) shall be borne by the Company. If
Executive does not prevail as to any material issue, each party will pay for the
fees and expenses of its own attorneys, experts, witnesses, and preparation and
presentation of proofs and post-hearing briefs (unless the party prevails on a
claim for which attorney's fees are recoverable under the Rules). Any action to
enforce or vacate the arbitrator's award shall be governed by the Federal
Arbitration Act, if applicable, and otherwise by applicable state law. If either
the Company or Executive pursues any claim, dispute or controversy against the
other in a proceeding other than the arbitration provided for herein, the
responding party shall be entitled to dismissal or injunctive relief regarding
such action and recovery of all costs, losses and attorney's fees related to
such action. Notwithstanding the provisions of this paragraph, either party may
seek injunctive relief in a court of competent jurisdiction, whether or not the
case is then pending before the panel of arbitrators. Following the court's
determination of the injunction issue, the case shall continue in arbitration as
provided herein.

11.    Notices. Any notice provided for in this Agreement will be given in
writing and will be delivered personally, telegraphed, telexed, sent by
facsimile transmission or sent by certified, registered or express mail, postage
prepaid. Any such notice will be deemed given when so delivered personally,
telegraphed, telexed or sent by facsimile transmission, or, if mailed, on the
date of actual receipt thereof. Notices will be properly addressed to the
parties at their respective

                                       9

<PAGE>
addresses set forth below or to such other address as either party may later
specify by notice to the other in accordance with the provisions of this
paragraph:

       If to the Company:

       Natco Group Inc.
       Brookhollow Central III
       2950 North Loop West, Suite 750
       Houston, Texas  77092
       Attention: Chief Financial Officer

       If to the Executive:

       Robert A. Curcio
       13710 Cypress Pond Circle
       Cypress, Texas 77429

12.    Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto, and any and all prior
employment or severance agreements and related amendments entered into between
the Company and the Executive.

13.    Waivers and Amendments. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by the parties hereto or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder will operate as a
waiver thereof, nor will any waiver on the part of any party of any such right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.

14.    Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the state of Texas (without giving effect to the
choice of law provisions thereof), where the employment of the Executive will be
deemed, in part, to be performed, and enforcement of this Agreement or any
action taken or held with respect to this Agreement will be taken in the courts
of appropriate jurisdiction in Houston, Texas.

15.    Assignment. This Agreement, and any rights and obligations hereunder, may
not be assigned by the Executive and may be assigned by the Company only to any
successor in interest, whether by merger, consolidation, acquisition or the
like, or to purchasers of substantially all of the assets of the Company.

16.    Binding Agreement. This Agreement will inure to the benefit of and be
binding upon the Company and its respective successors and assigns and the
Executive and his legal representatives.

                                       10
<PAGE>

17.    Counterparts. This Agreement may be executed in separate counterparts,
each of which when so executed and delivered will be deemed an original, but all
of which together will constitute one and the same instrument.

18.    Headings. The headings in this Agreement are for reference purposes only
and will not in any way affect the meaning or interpretation of this Agreement.

19.    Authorization. The Company represents and warrants that the Board of
Directors of the Company has authorized the execution of this Agreement.

20.    Validity. The invalidity or unenforceability of any provisions of this
Agreement will not affect the validity or enforceability of any other provisions
of this Agreement, which will remain in full force and effect.

21.    Tax Withholding. The Company will have the right to deduct from all
benefits and/or payments made under this Agreement to the Executive any and all
taxes required by law to be paid or withheld with respect to such benefits or
payments.

22.    No Contract of Employment. Nothing contained in this Agreement will be
construed as a contract of employment between the Company or any of its
affiliates and the Executive, as a right of the Executive to be continued in the
employment of the Company or any of its affiliates, or as a limitation of the
right of the Company or any of its affiliates to discharge the Executive with or
without cause.

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

The Company

NATCO GROUP INC.                              THE EXECUTIVE

By: /s/ J. Michael Mayer                      /s/ Robert A. Curcio
   -----------------------------              --------------------------
                                              Robert A. Curcio
Title: Senior Vice President and
       Chief Financial Officer
      --------------------------
NATCO

                                       11

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