THE FORM OF EMPLOYMENT / SEVERANCE AGREEMENT

 
EMPLOYMENT AGREEMENT
 
                                                                   Exhibit 10(j)
 
EMPLOYMENT AGREEMENT WITH ERIC C. FAST - January 22, 2001
 
          The parties to this Employment Agreement (this "Agreement") are CRANE
CO., a Delaware corporation (the "Company"), and ERIC C. FAST ("Mr. Fast"). Mr.
Fast is currently employed as President and Chief Operating Officer of the
Company under the terms of an employment agreement dated September 8, 1999 (the
"Original Employment Agreement"). The Company desires to ensure itself of the
services of Mr. Fast as Chief Executive Officer as of and following the
resignation of R. S. Evans from such position and Mr. Fast desires to accept
such employment on the terms and conditions set forth below.
 
          Accordingly, the parties, intending to be legally bound, agree as
follows:
 
          1.   Employment and Term. The Company offers to employ Mr. Fast as the
               -------------------
President and Chief Executive Officer ("CEO") of the Company, and Mr. Fast
accepts such employment with the Company, for the Term set forth below. The term
of Mr. Fast's employment under this Agreement (the "Term") shall commence upon
the date of the Company's 2001 annual shareholders meeting, provided that R. S.
Evans resigns as CEO as of such date, or such other date agreed upon by the
parties in writing (the "Effective Date"). The Term shall end on the second
anniversary of that date, subject to extension of the Term as set forth in the
immediately following sentence or earlier expiration of the Term as provided in
Section 7. The Term shall be automatically extended for one (1) additional year
as of each annual anniversary of the Effective Date unless either the Company or
Mr. Fast provides written notice to the other of non-renewal not later than
ninety (90) days prior to any such anniversary date. In the event that the Term
shall not commence as stated above, then this Agreement shall be of no force or
effect and the Original Employment Agreement shall continue in full force and
effect. During the Term, the Board of Directors of the Company (the "Board")
shall nominate Mr. Fast to serve on the Board, and Mr. Fast agrees that, if
elected as a director by the Company's stockholders, he shall serve as such.
 
     2.   Duties. During the Term, Mr. Fast shall serve as President and Chief
          ------
Executive Officer of the Company, and shall perform the duties, services and
responsibilities and have the authority commensurate to such position. Mr. Fast
shall report to the Board. Mr. Fast shall perform his duties at the Company's
executive offices, reasonable periods of travel for business purposes excepted.
Mr. Fast shall devote his best efforts to promote the Company's interests, and
he shall perform his duties and responsibilities faithfully, diligently and to
the best of his ability, consistent with sound business practices. Mr. Fast
shall devote his full working time to the business and affairs of the Company.
Nothing in this Agreement shall preclude Mr. Fast from devoting reasonable
periods required for engaging in charitable and community activities, serving as
a director of other companies and managing his personal investments; provided,
that such activities do not, in the good faith determination of the Board,
interfere in any material respect with the regular performance of his duties and
responsibilities under this Agreement.
 
          3. Base Salary. During the Term, the Company shall pay Mr. Fast a base
             -----------
salary (the "Base Salary") at an annual rate of no less than $650,000. Such Base
Salary shall be subject to increase from time to time during the Term at the
discretion of the Board. The Base Salary shall be payable in accordance with the
Company's regular payroll practices, but no less frequently than monthly.
<PAGE>
 
EMPLOYMENT AGREEMENT WITH ERIC C. FAST - January 22, 2001
 
          4.   Incentive Compensation. During the Term, Mr. Fast shall be
               ----------------------
entitled to participate in the Company's EVA Incentive Compensation Plan (the
"EVA Plan") with a participation percentage of 30% for the period from the
commencement of the Term through December 31, 2001, and thereafter as fixed by
the Board from time to time, subject to the terms and conditions of such Plan.
 
          5.   Other Benefits
               --------------
 
          (a)  Participation in Plans. During the Term, Mr. Fast shall be
               ----------------------
entitled to participate in and receive benefits as a senior executive under and
subject to the terms and conditions of all of the Company's employee benefit
plans, programs and arrangements, as they may be duly amended, approved or
adopted by the Board from time to time, including any retirement plan, savings
plan, life insurance plan, health insurance plan, accident or disability
insurance plan and any vacation policy.
 
          (b)  Stock Option Awards. As of the date of the Board meeting in April
               -------------------
2001, Mr. Fast shall be granted non-qualified stock options to purchase 200,000
shares of Crane Common Stock. As of the date of the Board meeting in January
2002, Mr. Fast shall be granted non-qualified stock options to purchase 300,000
shares of Crane Common Stock. The foregoing share amounts are subject to
appropriate adjustments to take account of the effect of any change in the
number of issued shares of Crane Common Stock in connection with a stock
dividend, stock split, recapitalization or similar event that occurs prior to
the applicable grant date. The exercise price per share of each such stock
option shall be equal to the fair market value per share of the Common Stock on
the date of grant of such option. For this purpose, the "fair market value"
shall be determined by the average of the high and low prices of the Common
Stock on the New York Stock Exchange on the ten consecutive trading days ending
on the date of grant. Each option shall vest and become exercisable 50% one year
after the grant date, 75% two years after the grant date and 100% three years
after the grant date. All of the terms and conditions of each such option shall
be governed by and set forth in a written stock option agreement containing such
terms and conditions, consistent with this letter and the applicable stock
option plan, as are customary for such grants by the Company.
 
          (c)  Restricted Stock Award. As of the April 2001 Board meeting, Mr.
               ----------------------
Fast shall also be granted 65,000 shares of Crane Common Stock (the "Restricted
Stock") under the Crane Co. Restricted Stock Award Plan or other applicable
stock incentive plan (the "Restricted Stock Plan"). The Restricted Stock shall
be subject to transfer and forfeiture restrictions that shall lapse with respect
to 16,250 shares on each of the second, third, fourth and fifth anniversaries of
the date of grant. The foregoing share amounts are subject to appropriate
adjustments to take account of the effect of any change in the number of issued
shares of Crane Common Stock in connection with a stock dividend, stock split,
recapitalization or similar event that occurs prior to the date of grant of such
Restricted Stock. All of the terms and conditions of the Restricted Stock shall
be governed by the Restricted Stock Plan and set forth in a written restricted
stock agreement containing such terms and conditions, consistent with this
Agreement and the Restricted Stock Plan, as are customary for such grants by the
Company.
 
                                                                               2
<PAGE>
 
EMPLOYMENT AGREEMENT WITH ERIC C. FAST - January 22, 2001
 
          (d)  Expense Reimbursement. During the Term, Mr. Fast shall be
               ---------------------
entitled to receive prompt reimbursement for all reasonable expenses incurred by
Mr. Fast in performing services under this Agreement, provided that such
expenses are properly accounted for and are in accordance with the policies and
practices for senior executives in effect from time to time as established by
the Company.
 
          6.   Covenants.  In order to induce the Company to enter into this
               ---------
Agreement, Mr. Fast hereby covenants as follows:
 
          (a)  Confidentiality. Mr. Fast agrees and understands that in his
               ---------------
current and former position with the Company, Mr. Fast has been and will be
exposed to and receive information relating to the confidential affairs of the
Company, including but not limited to technical information, business and
marketing plans, strategies, customer information, other information concerning
the Company's products, promotions, development, financing, expansion plans,
business policies and practices, and other forms of information considered by
the Company to be confidential and in the nature of trade secrets. Mr. Fast
agrees that during the Term and thereafter, Mr. Fast shall keep such information
confidential and shall not disclose such information, either directly or
indirectly, to any third person or entity without the prior written consent of
the Company; provided, however, that (i) Mr. Fast shall have no such obligation
             --------  -------
to the extent such information is or becomes publicly known or generally known
in the Company's industry other than as a result of Mr. Fast's breach of his
obligations hereunder, and (ii) Mr. Fast may, after giving prior notice to the
Company to the extent practicable under the circumstances, disclose such
information to the extent required by applicable laws or governmental
regulations or judicial or regulatory process. This confidentiality covenant has
no temporal or territorial restriction. Upon expiration of the Term, Mr. Fast
shall promptly return to the Company all property, keys, notes, memoranda,
writings, lists, files, reports, customer lists, correspondence, tapes, disks,
cards, surveys, maps, logs, machines, technical data or any other tangible
product or document which has been produced by, received by or otherwise
submitted to Mr. Fast in the course or otherwise as a result of Mr. Fast's
position with the Company during or prior to the Term, provided that the Company
shall retain such materials and make them available to Mr. Fast if requested by
him in connection with any litigation against Mr. Fast under circumstances in
which (i) Mr. Fast demonstrates to the reasonable satisfaction of the Company
that the materials are necessary to his defense in the litigation, and (ii) the
confidentiality of the materials is preserved to the reasonable satisfaction of
the Company.
 
          (b)  Records. All papers, books and records of every kind and
               -------
description relating to the business and affairs of the Company, or any of its
affiliates, whether or not prepared by Mr. Fast, other than personal notes
prepared by or at the direction of Mr. Fast, shall be the sole and exclusive
property of the Company, and Mr. Fast shall surrender them to the Company
immediately upon expiration of the Term and at any time upon request by the
Board.
 
                                                                               3
<PAGE>
 
EMPLOYMENT AGREEMENT WITH ERIC C. FAST - January 22, 2001
 
          (c) Non-Competition. By and in consideration of payments and benefits
              ---------------
to be provided to Mr. Fast by the Company hereunder, Mr. Fast's exposure to the
proprietary information of the Company and as an inducement to the Company to
enter into this Agreement with Mr. Fast, Mr. Fast agrees that for a period of
two (2) years after Mr. Fast's employment with the Company terminates for any
reason (the "Non-Competition Period"), Mr. Fast shall not, directly or
indirectly, own, manage, operate or control, whether as officer, director,
employee, partner or investor, any Competing Enterprise. For purposes of this
paragraph, the term "Competing Enterprise" shall mean any person, corporation,
partnership or other entity (or any of their respective subsidiaries) which
competes anywhere in the world with any business of the Company or any of its
subsidiaries from which the Company derived more than five (5) percent of its
sales or income during the most recently completed fiscal year. Notwithstanding
anything contained in this Section 6(c) to the contrary, Mr. Fast shall not be
prohibited from (i) owning less than five percent (5%) of any class of
securities or debt of any corporation or other entity, whether publicly traded
or privately held, (ii) serving as a general or limited partner or having a
similar ownership interest in any partnership or investment company that owns or
controls a Competing Enterprise so long as Mr. Fast is not actively engaged in
the management of such Competing Enterprise or (iii) serving as a director of
any entity which derives less than 10 percent of its sales and income from
competing businesses. The Board shall consider any written request from Mr. Fast
to waive this covenant as to any particular circumstance, and such waiver shall
not be unreasonably withheld.
 
          (d)  Non-Solicitation. During the Non-Competition Period, Mr. Fast
               ----------------
shall not directly or indirectly solicit for employment on his own behalf, or on
behalf of any other enterprise, any individual who is an employee of the Company
during the Term or the Non-Competition Period.
 
          (e)  Assignment. Mr. Fast irrevocably assigns to the Company, or to
               ----------
any party designated by the Company, his entire right, title and interest in all
Developments that are made, conceived, or developed by Mr. Fast, in whole or in
part, alone or jointly with others, within the scope of his affiliation with the
Company. Such assignment shall include, without limitation, all Intellectual
Property Rights in such Developments. "Developments" shall mean all discoveries,
inventions, designs, improvements, enhancements, ideas, concepts, techniques,
know-how, software, documentation or other works of authorship, whether or not
copyrightable or patentable, related to any business or technology that has been
developed or is under development by the Company. "Intellectual Property Rights"
shall mean all forms of intellectual property rights and protections that may be
obtained for, or may pertain to, the confidential information (described in
Section 6(a)) and Developments and may include without limitation all right,
title and interest in and to (i) all Letters Patent and all filed, pending or
potential applications for Letters Patent, including any reissue, reexamination,
division, continuation or continuation-in-part applications throughout the world
now or hereafter filed; (ii) all trade secrets, and all trade secret rights and
equivalent rights arising under the common law, state law, Federal law and laws
of foreign countries; (iii) all mask works, copyrights other literary property
or author's rights, whether or not protected by copyright or as a mask work,
under common law, state law, Federal law and laws of foreign countries; and (iv)
all proprietary indicia, trademarks, tradenames, symbols, logos and/or brand
names under common law, state law, Federal law and laws of foreign countries.
 
                                                                               4
<PAGE>
 
EMPLOYMENT AGREEMENT WITH ERIC C. FAST - January 22, 2001
 
          (f)  Blue Pencil. The provisions contained in this Section 6 as to the
               -----------
time periods, geographic area and scope of activities restricted shall be deemed
divisible, so that if any provision contained in this Section 6 is determined to
be invalid or unenforceable, that provision shall be deemed modified so as to be
valid and enforceable to the full extent lawfully permitted.
 
          (g)  Enforcement. Mr. Fast agrees and warrants that the covenants
               -----------
contained herein are reasonable, that valid consideration has been and shall be
received therefor and that the agreements set forth herein are the result of
arms-length negotiations between the parties hereto. Mr. Fast recognizes that
the provisions of this Section 6 are vitally important to the continuing welfare
of the Company, and its affiliates, and that money damages constitute a totally
inadequate remedy for any violation thereof. Accordingly, in the event of any
such violation by Mr. Fast, the Company, and its affiliates, in addition to any
other remedies they may have, shall have the right to institute and maintain a
proceeding to compel specific performance thereof or to issue an injunction
restraining any action by Mr. Fast in violation of this Section 6.
 
          7.   Termination of Employment.
               -------------------------
 
          (a)  Death or Disability. Mr. Fast's employment under this Agreement
               -------------------
shall terminate upon his death or disability. Mr. Fast shall be deemed to be
disabled at the end of any period of 180 consecutive days during which, by
reason of physical or mental injury or disease, Mr. Fast has, in the good faith
determination of the Board, been unable to perform substantially his usual and
customary duties under this Agreement. At any time and from time to time, upon
reasonable request therefor by the Company, Mr. Fast shall submit to reasonable
medical examination for the purpose of determining the existence, nature and
extent of any such disability. The Company shall promptly give Mr. Fast notice
of any such determination of Mr. Fast's disability and of the decision of the
Company to terminate Mr. Fast's employment by reason thereof.
 
          (b)  Termination by the Company. The Company may terminate Mr. Fast's
               --------------------------
employment under this Agreement with or without Cause (as defined below) by
giving written notice to Mr. Fast of such termination. For purposes of this
Agreement, the Company shall have "Cause" to terminate Mr. Fast's employment
under this Agreement if (i) Mr. Fast commits any intentional act or acts of
disloyalty, misconduct, or moral turpitude or is convicted of a felony, (ii) Mr.
Fast commits an intentional act of fraud, embezzlement or theft in connection
with his duties or in the course of his employment with the Company or (iii) Mr.
Fast intentionally violates any of the provisions of Section 6.
 
          (c)  Termination by Mr. Fast. Mr. Fast may resign from his employment
               -----------------------
with the Company by giving at least sixty (60) days prior written notice to the
Company.
 
                                                                               5
<PAGE>
 
EMPLOYMENT AGREEMENT WITH ERIC C. FAST - January 22, 2001
 
          8.   Compensation Upon Termination.
               -----------------------------
 
          (a)  As a Result of Death, Disability, Cause or Resignation. If Mr.
               ------------------------------------------------------
Fast's employment under this Agreement is terminated prior to the scheduled
expiration of the Term by reason of his death or disability, termination by the
Company for Cause or resignation by Mr. Fast, then Mr. Fast (or in the case of
his death, his personal representative) shall be entitled to receive the
following benefits (collectively, the "Pre-Termination Benefits"): (i) the
amount of his Accrued Obligations (as defined below), such amount to be paid in
a single lump sum cash payment within thirty (30) days of the date of
termination, and (ii) any payments which Mr. Fast, his spouse, beneficiaries or
estate may be entitled to receive pursuant to any employee benefits plan or
program of the Company. As used in this Agreement, "Accrued Obligations" means,
as of the date of termination, (A) any accrued but unpaid Base Salary and (B)
any accrued and unpaid expense reimbursements.
 
          (b)  By the Company other than for Cause.
               -----------------------------------
 
               (i)  Payments and Benefits. If, prior to scheduled expiration of
                    ---------------------
the Term, the Company terminates Mr. Fast's employment without Cause, or if the
Company notifies Mr. Fast that it does not intend to extend the Term as
contemplated by Section 1 hereof, Mr. Fast shall be entitled to receive the Pre-
Termination Benefits and, subject to Section 8(b)(ii), he shall be entitled to
the following (the "Post-Termination Benefits"): (1) he shall receive a lump sum
in cash within thirty (30) days after the date of termination equal to the sum
of (A) two (2) times his annual base salary at the then current rate and (B) the
greater of (I) the amount then credited to Mr. Fast's bank account under the EVA
Plan or (II) two (2) times the highest annual bonus Mr. Fast received from the
Company for any of the five most recent fiscal years completed prior to the date
of termination, (2) Mr. Fast and/or his family shall remain eligible for a
period of two (2) years after the date of termination to receive benefits under
all welfare plans maintained by the Company, provided that Mr. Fast shall bear
any portion of the cost of such benefits as is required to be borne by similarly
situated employees, and provided further, that such benefits shall be
discontinued prior to the end of such two (2)-year period to the extent, but
only to the extent, that Mr. Fast receives substantially similar benefits from a
subsequent employer and (iii) all stock options granted to Mr. Fast by the
Company shall become fully vested and shall remain exercisable for a period of
two (2) years after the date of termination (but not after the original
expiration date of such options), and all restricted stock granted to Mr. Fast
by the Company shall become fully vested and non-forfeitable.
 
                                                                               6
<PAGE>
 
EMPLOYMENT AGREEMENT WITH ERIC C. FAST - January 22, 2001
 
               (ii) Conditions to Receipt of Post-Termination Benefits under
                    --------------------------------------------------------
Section 8(b)(i). As a condition to receiving any Post-Termination Benefits (but
--------------
not Pre-Termination Benefits) to which Mr. Fast would otherwise be entitled
under Section 8(b)(i), Mr. Fast shall execute a release (the "Release"), in
substantially the form of Annex A hereto, of any claims, whether arising under
Federal, state or local statute, common law or otherwise, against the Company
and its direct or indirect subsidiaries, and their respective officers,
directors and stockholders which arise or may have arisen on or before the date
of the Release, other than any claims under this Agreement or any rights to
indemnification from the Company and its direct or indirect subsidiaries
pursuant to any provisions of the Company's (or any of its subsidiaries')
certificate of incorporation or by-laws, any written indemnification agreement
between the Company and Mr. Fast or any directors and officers liability
insurance policies maintained by the Company. If Mr. Fast fails or otherwise
refuses to execute a Release within a reasonable time after the Company's
request to do so, Mr. Fast will not be entitled to any Post-Termination
Benefits. In addition, if, following a termination of employment that gives Mr.
Fast a right to the payment of Post-Termination Benefits, Mr. Fast engages in
any activities that violate any of the covenants in Section 6, Mr. Fast shall
have no further right or claim to any Post-Termination Benefits and shall
promptly repay any Post-Termination Benefits previously received (such repayment
to be in addition to any other rights or remedies available to the Company in
respect of such violation).
 
              (iii) Payment Obligation. Except as otherwise provided in Section
                    ------------------
8(b)(i)(2) or Section 8(b)(ii), (1) the Company's obligation to make the
payments and the arrangements provided for herein shall be absolute and
unconditional, and shall not be affected by any circumstances, including,
without limitation, any offset, counterclaim, recoupment, defense, or other
right which the Company may have against Mr. Fast or any other party, (2) all
amounts payable by the Company hereunder shall be paid without notice or demand,
(3) Mr. Fast shall not be obligated to seek other employment in mitigation of
the amounts payable or arrangements made under any provision of this Agreement,
and (4) the obtaining of any such other employment shall in no event effect any
reduction of the Company's obligations to make the payments and arrangements
required to be made under this Agreement.
 
          9.   Miscellaneous.
               -------------
 
               (a)  Binding Effect. This Agreement shall be binding upon and
                    --------------
inure to the benefit of the heirs and representatives of Mr. Fast and the
successors and assigns of the Company.
 
                                                                               7
<PAGE>
 
EMPLOYMENT AGREEMENT WITH ERIC C. FAST - January 22, 2001
 
               (b)  Notices. Any notice or other communication under this
                    -------
Agreement shall be in writing and shall be considered given when mailed by
registered, return receipt requested mail, to the parties at the following
addresses (or at such other address as a party may specify by notice to the
others):
 
               (i)  to the Board or the Company, to:
 
                    Crane Co.
                    100 First Stamford Place
                    Stamford, CT  06902
                    Attention:  Corporate Secretary
 
               (ii) to Mr. Fast:
 
                    Mr. Eric C. Fast
                    200 Locust Avenue
                    Rye, New York  10580
 
Addresses may be changed by written notice sent to the other party at the last
recorded address of that party.
 
               (c)  Execution in Counterparts. This Agreement may be executed in
                    -------------------------
two or more counterparts, each of which shall constitute an original, but all of
which together shall constitute but a single instrument.
 
               (d)  Jurisdiction and Governing Law. This Agreement shall be
                    ------------------------------
governed by and construed in accordance with the laws of the State of Delaware
applicable to agreements made and to be performed in Delaware.
 
               (e)  Severability. If any provision of this Agreement, or the
                    ------------
application of any provision to any person or circumstance, shall for any reason
and to any extent be invalid or unenforceable, the remainder of this Agreement
and the application of that provision to other persons or circumstances shall
not be affected but shall be enforced to the full extent permitted by law.
 
               (f)  Prior Understandings. Except as otherwise expressly provided
                    --------------------
in Section 1 with respect to the Original Employment Agreement, this Agreement
embodies the entire understanding of the parties hereof, and supersedes all
other oral or written agreements or understandings between them regarding the
subject matter hereof. No change, alteration or modification hereof may be made
except in a writing, signed by each of the parties hereto. Notwithstanding any
provision of this Agreement to the contrary, Mr. Fast's Employment/Severance
Agreement, dated as of September 27, 1999 (the "Change in Control Agreement"),
shall remain in effect, and upon the occurrence of a Change in Control (as
defined in the Change in Control Agreement), this Agreement shall terminate and
Mr. Fast's rights shall be governed by the Change in Control Agreement. If Mr.
Fast becomes eligible to receive severance payments and benefits under the
Change in Control Agreement, he shall not be eligible for any severance payments
and benefits under this Agreement.
 
                                                                               8
<PAGE>
 
EMPLOYMENT AGREEMENT WITH ERIC C. FAST - January 22, 2001
 
          IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
 
                                   CRANE CO.
 
                                   By: /s/ R. S. Evans
                                      ----------------
                                   Name:  R. S. Evans
 
                                   Title:   Chairman and Chief Executive Officer
 
                                   /s/ E. C. Fast
                                   ------------------
                                   Eric C. Fast
<PAGE>
 
EMPLOYMENT AGREEMENT With Eric c. fast - January 22, 2001
 
                                                                         Annex A
 
                                 FORM OF RELEASE
                                 ---------------
          The undersigned individual and Crane Co., a Delaware corporation (the
"Company"), are parties to an Employment Agreement, dated as of January 22, 2001
(the Agreement"). Under Section 8(b)(ii) of the Agreement, the undersigned's
right to receive certain Post-Termination Benefits (as defined in the Agreement)
is subject to, among other things, the undersigned's execution and delivery of
this Release. The undersigned acknowledges that, by signing this Release and
accepting the Post-Termination Benefits, the undersigned is giving up forever
the right to seek any further monetary or other relief from the Company as a
result of the undersigned's employment or termination of employment.
 
          Pursuant to that understanding and as a consideration for the
Post-Termination Benefits, the undersigned, intending to be legally bound,
irrevocably and unconditionally releases, acquits and discharges the Company and
any of its affiliated companies, its past and present officers, directors,
trustees, representatives, shareholders, agents, servants, employees, successors
and assigns (separately and collectively, "releasees") jointly and individually
from any and all claims, known or unknown, which the undersigned, his heirs,
executors, administrators, successors or assigns have, shall or may have against
releasees and any and all liability which the releasees may have to the
undersigned whether called claims, demands, causes of action, judgments, debts,
accounts, obligations, damages, or liabilities, arising from any and all bases,
however called, including but not limited to, claims of discrimination,
contract, tort, conversion, interference with contract, wrongful discharge,
conspiracy, fiduciary breach or whistleblower under any federal, state or local
law, rule, ordinance, or regulation. This Release relates to claims arising from
and during employment or as a result of the undersigned's termination of
employment and the facts and events related thereto, whether those claims are
past or present, whether they rise from common law or statute, order or
ordinance. The Undersigned specifically acknowledges that this Release is
applicable to any claim under the Age Discrimination in Employment Act of 1967,
as amended, (or any similar state or local law). This Release is for any relief
no matter how called, including, but not limited to, wages, back pay, front pay,
compensatory damages, liquidated damages, punitive damages, damages for pain or
suffering, claims for non-vested benefits costs or attorneys' fees, or to be
continued in the employ of the Company or reinstated to employment with the
Company. Further, the undersigned agrees that the undersigned will not be
entitled to any benefit from any claim or proceedings filed by the undersigned
or on his behalf with any agency or court.
 
          Notwithstanding the foregoing, this Release shall not extinguish the
undersigned's rights as expressly set forth in the Agreement. Finally, nothing
contained in this Release is intended to or constitutes a waiver of any rights
the undersigned may have to indemnification under applicable Company policies or
any individual indemnification agreement with respect to any claim brought by
third parties against the undersigned in connection with his Company employment.
The undersigned states that he knows and understands the contents of this
Release, that he executes this document knowingly and voluntarily as his own
free act and deed, and that this document was freely negotiated and entered into
without fraud, duress or coercion. The undersigned acknowledges that he was
given at least twenty-one (21) days in which to consider whether to execute this
Release before being required to make a decision and that he may revoke the
Release for a period of seven (7) days from the date that he executed the
Release, in which event he shall not be entitled to the Post-Termination
Benefits.
 
__________________________          Date:______________
         [Employee]

EX-10.1 2 dex101.htm THE FORM OF EMPLOYMENT / SEVERANCE AGREEMENT

Exhibit 10.1

Form of Employment / Severance Agreement

Between the Company and certain executive officers

Form I

CRANE CO.

EMPLOYMENT/SEVERANCE AGREEMENT

(Revised 3/95)

AGREEMENT by and between CRANE CO., a Delaware corporation (the “Company”), and [Name] (the “Employee”), dated as of the      day of                     , 2006.

The Board of Directors of the Company (the “Board”), on the advice of its Organization and Compensation Committee, has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Employee, notwithstanding the possibility, threat, or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Employee by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control, to encourage the Employee’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Employee with compensation arrangements upon a Change of Control which provide the Employee with individual financial security and which are competitive with those of other corporations and, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

l. Certain Definitions.

(a) The “Effective Date” shall be the first date during the “Change of Control Period” (as defined in Section l(b)) on which a Change of Control occurs. Anything in this Agreement to the contrary notwithstanding, if the Employee’s employment with the Company is terminated prior to the date on which a Change of Control occurs, and it is reasonably demonstrated that such termination (l) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (2) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination.

(b) The “Change of Control Period” is the period commencing on the date hereof and ending on the earlier to occur of (i) the third anniversary of such date or (ii) the first day of the month next following the Employee’s normal retirement date (“Normal Retirement Date”) under Crane Co.’s Pension Plan for Non Bargaining Employees effective January 1, 1985 or under that retirement plan of a subsidiary of the Company in which the Employee is a participant, or any successor retirement plan (the “Retirement Plan”); provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as the “Renewal

 

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Date”), the Change of Control Period shall be automatically extended so as to terminate on the earlier of (x) three years from such Renewal Date or (y) the first day of the month coinciding with or next following the Employee’s Normal Retirement Date, unless at least 60 days prior to the Renewal Date the Company shall give notice that the Change of Control Period shall not be so extended.

2. Change of Control. For the purpose of this Agreement, a “Change of Control” shall mean:

(i) The acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by the Company or any of its subsidiaries, or any employee benefit plan (or related trust) of the Company or its subsidiaries, or the Crane Fund, a charitable trust under the laws of the State of Illinois, or any corporation with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by substantially the same individuals and entities who were the beneficial owners, respectively, of the common stock and voting securities of the Company immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding shares of common stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, as the case may be; or

(ii) Individuals who, as of the date hereof, constitute the Board (as of the date hereof the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

(iii) Approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, with respect to which substantially the same individuals and entities who were the respective beneficial owners of the common stock and voting securities of the Company immediately prior to such reorganization, merger or consolidation do not,

 

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following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation, or a complete liquidation or dissolution of the Company or of the sale or other disposition of all or substantially all of the assets of the Company.

3. Employment Period. The Company hereby agrees to continue the Employee in its employ, and the Employee hereby agrees to remain in the employ of the Company, for the period commencing on the Effective Date and ending on the earlier to occur of (a) the third anniversary of such date or (b) the first day of the month coinciding with or next following the Employee’s Normal Retirement Date (the “Employment Period”).

4. Terms of Employment.

(a) Position and Duties.

(i) During the Employment Period, (A) the Employee’s position (including status, offices, titles and reporting requirements) authority duties and responsibilities shall be at least commensurate in all material respects with those held, exercised and assigned at any time during the 90-day period immediately preceding the Effective Date and (B) the Employee’s services shall be performed at the location where the Employee was employed immediately preceding the Effective Date or any office or location less than thirty-five (35) miles from such location.

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Employee is entitled, the Employee agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Employee hereunder, to use the Employee’s reasonable best efforts to perform faithfully and efficiently such responsibilities. It is expressly understood and agreed that to the extent that any outside activities have been conducted by the Employee prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Employee’s responsibilities to the Company.

(b) Compensation.

(i) Base Salary. During the Employment Period, the Employee shall receive an annual base salary (“Base Salary”) at a rate at least equal to twelve times the highest monthly base salary paid or payable to the Employee by the Company during the twelve-month period immediately preceding the month in which the Effective Date occurs.

 

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During the Employment Period, the Base Salary shall be reviewed at least annually and shall be increased at any time and from time to time as shall be substantially consistent with increases in base salary awarded in the ordinary course of business to other key employees of the Company and its subsidiaries. Any increase in Base Salary shall not serve to limit or reduce any other obligation to the Employee under this Agreement. Base Salary shall not be reduced after any such increase.

(ii) Annual Bonus. In addition to Base Salary, the Employee shall be eligible (but not entitled) to receive, for each fiscal year during the Employment Period, an annual bonus (an “Annual Bonus”) (either pursuant to any incentive compensation plan maintained by the Company or otherwise) in cash on the same basis as in the fiscal year immediately preceding the fiscal year in which the Effective Date occurs or, if more favorable to the Employee, on the same basis as awarded at any time thereafter to other key employees of the Company and its subsidiaries.

(iii) Incentive, Savings and Retirement Plans. In addition to Base Salary and Annual Bonus payable as hereinabove provided, the Employee shall be entitled to participate during the Employment Period in all incentive, savings and retirement plans, practices, policies and programs applicable to other key employees of the Company and its subsidiaries.

Such plans, practices, policies and programs, in the aggregate, shall provide the Employee with compensation, benefits and reward opportunities at least as favorable in the aggregate as the most favorable of such compensation, benefits and reward opportunities provided by the Company for the Employee under such plans, practices, policies and programs as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as provided at any time thereafter with respect to other key employees of the Company and its subsidiaries.

(iv) Welfare Benefit Plans. During the Employment Period, the Employee and/or the Employee’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its subsidiaries (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs), at least as favorable as the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee and/or the Employee’s family, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries.

 

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(v) Expenses. During the Employment Period, the Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Employee in accordance with the most favorable policies, practices and procedures of the Company and its subsidiaries in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries.

(vi) Fringe Benefits. During the Employment Period, the Employee shall be entitled to fringe benefits, including use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of the Company and its subsidiaries in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries.

(vii) Office and Support Staff. During the Employment Period, the Employee shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Employee by the Company and its subsidiaries at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as provided at any time thereafter with respect to other key employees of the Company and its subsidiaries.

(viii) Vacation. During the Employment Period, the Employee shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its subsidiaries as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries.

5. Termination.

(a) Death or Disability. This Agreement shall terminate automatically upon the Employee’s death. If the Company determines in good faith that the Disability of the Employee has occurred (pursuant to the definition of “Disability” set forth below), it may give to the Employee written notice (given in accordance with Section 12(b) hereof) of its intention to terminate the Employee’s employment. In such event, the Employee’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Employee (the “Disability Effective Date”), provided that, within the 30 days after such receipt, the Employee shall not have returned to full-time performance of the Employee’s duties. For purposes of this Agreement, “Disability” means disability which, at least 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Employee or the Employee’s legal representative (such agreement as to acceptability not to be withheld unreasonably).

 

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(b) Cause. The Company may terminate the Employee’s employment for “Cause.” For purposes of this Agreement, “Cause” shall constitute either (i) personal dishonesty or breach of fiduciary duty involving personal profit at the expense of the Company; (ii) repeated violations by the Employee of the Employee’s obligations under Section 4(a) of this Agreement which are demonstrably willful and deliberate on the Employee’s part and which are not remedied in a reasonable period of time after receipt of written notice from the Company; (iii) the commission of a criminal act related to the performance of duties, or the furnishing of proprietary confidential information about the Company to a competitor, or potential competitor, or third party whose interests are adverse to those of the Company; (iv) habitual intoxication by alcohol or drugs during work hours; or (v) conviction of a felony.

(c) Good Reason. The Employee’s employment may be terminated by the Employee for Good Reason. For purposes of this Agreement, “Good Reason” means:

(i) the assignment to the Employee of any duties inconsistent in any respect with the Employee’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, 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 promptly after receipt of notice thereof given by the Employee;

(ii) any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Employee;

(iii) the Company’s requiring the Employee to be based at any office or location other than that described in Section 4(a)(i)(B) hereof, except for travel reasonably required in the performance of the Employee’s responsibilities;

(iv) any purported termination by the Company of the Employee’s employment otherwise than as expressly permitted by this Agreement; or

(v) any failure by the Company to comply with and satisfy Section 11(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of “Good Reason” made by the Employee shall be conclusive. Anything in this Agreement to the contrary notwithstanding, a termination by the Employee for any reason during the 30-day period immediately following the first anniversary of the Effective Date shall be deemed to be a termination for Good Reason for all purposes of this Agreement.

 

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(d) Notice of Termination. Any termination by the Company for Cause or by the Employee for Good Reason shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice). The failure by the Employee to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Employee hereunder or preclude the Employee from asserting such fact or circumstance in enforcing the Employee’s rights hereunder.

(e) Date of Termination. “Date of Termination” means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be; provided, however, that (i) if the Employee’s employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Employee of such termination and (ii) if the Employee’s employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Employee or the Disability Effective Date, as the case may be.

6. Obligations of the Company upon Termination.

(a) Death. If the Employee’s employment is terminated by reason of the Employee’s death, this Agreement shall terminate without further obligations to the Employee’s legal representatives under this Agreement, other than those obligations accrued or earned and vested (if applicable) by the Employee as of the Date of Termination, including, for this purpose (i) the Employee’s full Base Salary through the Date of Termination at the rate in effect on the Date of Termination or, if higher, at the highest rate in effect at any time from the 90-day period preceding the Effective Date through the Date of Termination (the “Highest Base Salary”), (ii) the product of the Annual Bonus paid to the Employee for the last full fiscal year and a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (iii) any compensation previously deferred by the Employee (together with accrued interest thereon, if any) and not yet paid by the Company and any accrued vacation pay not yet paid by the Company (such amounts specified in clauses (i), (ii) and (iii) are hereinafter referred to as “Accrued Obligations”). All such Accrued Obligations shall be paid to the Employee’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Employee’s family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Company and any of its subsidiaries to surviving families of employees of the Company and such subsidiaries under such plans, programs, practices and policies relating

 

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to family death benefits, if any, in accordance with the most favorable plans, programs, practices and policies of the Company and its subsidiaries in effect at any time during the 90-day period immediately preceding the Disability Effective Date or, if more favorable to the Employee and/or the Employee’s family, as in effect on the date of the Employee’s death with respect to other key employees of the Company and its subsidiaries and their families.

(b) Disability. If the Employee’s employment is terminated by reason of the Employee’s Disability, this Agreement shall terminate without further obligations to the Employee, other than those obligations accrued or earned and vested (if applicable) by the Employee as of the Date of Termination, including for this purpose, all Accrued Obligations. All such Accrued Obligations shall be paid to the Employee in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Employee shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the Company and its subsidiaries to disabled employees and/or their families in accordance with such plans, programs, practices and policies of the Company and its subsidiaries in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee and/or the Employee’s family, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries and their families.

(c) Cause; Other than for Good Reason. If the Employee’s employment shall be terminated for Cause, this Agreement shall terminate without further obligations to the Employee other than the obligation to pay to the Employee the Highest Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Employee (together with accrued interest thereon, if any). If the Employee terminates employment other than for Good Reason, this Agreement shall terminate without further obligations to the Employee, other than those obligations accrued or earned and vested (if applicable) by the Employee through the Date of Termination, including for this purpose, all Accrued Obligations. All such Accrued Obligations shall be paid to the Employee in a lump sum in cash within 30 days of the Date of Termination.

(d) Good Reason; Other Than for Cause or Disability. If, during the Employment Period, the Company shall terminate the Employee’s employment other than for Cause, Disability, or death or if the Employee shall terminate his employment for Good Reason:

(i) the Company shall pay to the Employee in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

A. to the extent not theretofore paid, the Employee’s Highest Base Salary through the Date of Termination; and

 

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B. the product of (x) the greater of the Annual Bonus paid or payable (annualized for any fiscal year consisting of less than twelve full months or for which the Employee has been employed for less than twelve full months) to the Employee for the most recently completed fiscal year during the Employment Period, if any, or the average bonus (annualized for any fiscal year consisting of less than twelve full months or with respect to which the Employee has been employed by the Company for less than twelve full months) paid or payable to the Employee by the Company and its affiliated companies in respect of the three fiscal years immediately preceding the fiscal year in which the Effective Date occurs (the “Average Annual Bonus”), such greater amount being hereafter referred to as the “Highest Annual Bonus,” and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365;

C. the sum of (i) the Highest Base Salary and (ii) the Average Annual Bonus; and

D. in the case of compensation previously deferred by the Employee, all amounts previously deferred (together with accrued interest thereon, if any) and not yet paid by the Company, and any accrued vacation pay not yet paid by the Company; and

(ii) for the remainder of the Employment Period, or such longer period as any plan, program, practice or policy may provide, the Company shall continue benefits to the Employee and/or the Employee’s family at least equal to those which would have been provided to them as if the Employee’s employment had not been terminated, in accordance with the most favorable employee welfare benefit plans (as such term is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) of the Company and its subsidiaries (including health insurance and life insurance) during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as in effect at any time thereafter with respect to other key employees and their families, and for purposes of eligibility for retiree benefits pursuant to such employee welfare benefit plans, the Employee shall be considered to have remained employed until the end of the Employment Period and to have retired on the last day of such period.

7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Employee’s continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices provided by the Company or any of its subsidiaries and for which the Employee may qualify, nor shall anything herein limit or otherwise affect such rights as the Employee may have under any stock option, restricted stock, stock appreciation right, or other agreements with the Company or any of its subsidiaries. Amounts which are vested benefits or which the Employee is otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its subsidiaries at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program; provided, however, that in the event the terms of any such plan, policy, practice or program concerning the payment of benefits

 

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thereunder shall conflict with any provision of this Agreement, the terms of this Agreement shall take precedence but only if and to the extent the payment would not adversely affect the tax exempt status (if applicable) of any such plan, policy, practice or program and only if the Employee agrees in writing that such payment shall be in lieu of any corresponding payment from such plan, policy, practice or program.

8. Full Settlement. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Employee or others. In no event shall the Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Employee under any of the provisions of this Agreement. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Employee may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Employee about the amount of any payment pursuant to Section 9 of this Agreement), plus in each case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended (the “Code”).

9. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any economic benefit or payment or distribution by the Company to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (including, but not limited to, any economic benefit received by the Employee by reason of the acceleration of rights under the various option, restricted stock and stock appreciation right plans of the Company, but excluding any other economic benefit, which by the terms of the agreement or other document providing for such economic benefit, is expressly excluded from inclusion in the economic benefits covered by this Section 9(a)) (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Employee shall be entitled to receive an additional payment (a “Gross-Up-Payment”) in an amount such that after payment by the Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(b) Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall be made by the Company’s regular outside independent

 

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public accounting firm (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Employee within 15 business days of the Date of Termination, if applicable, or such earlier time as is requested by the Company. The initial Gross-Up Payment, if any, as determined pursuant to this Section 9(b), shall be paid to the Employee within 5 days of the receipt of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by the Employee, it shall furnish the Employee with an opinion that the Employee has substantial authority not to report any Excise Tax on the Employee’s federal income tax return. Any determination by the Accounting Firm shall be binding upon the Company and the Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9(c) and the Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Employee.

 

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(c) The Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the later of either (i) the date the Employee has actual knowledge of such claim, or (ii) ten days after the Internal Revenue Service issues to the Employee either a written report proposing imposition of the Excise Tax or a statutory Notice of Deficiency with respect thereto, and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Employee shall not pay such claim prior to the expiration of the thirty-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Employee in writing prior to the expiration of such period that it desires to contest such claim, the Employee shall:

(i) give the Company any information reasonably requested by the Company relating to such claim,

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(iii) cooperate with the Company in good faith in order effectively to contest such claim,

(iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this Section 9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Employee to request or accede to a request for an extension of the statute of limitations with respect only to the tax claimed, or pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Employee to pay such claim and sue for a refund, the

 

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Company shall advance the amount of such payment to the Employee, on an interest-free basis and shall indemnify and hold the Employee harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations requested or acceded to by the Employee at the Company’s request and relating to payment of taxes for the taxable year of the Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by the Employee of an amount advanced by the Company pursuant to Section 9(c), the Employee becomes entitled to receive any refund with respect to such claim, the Employee shall (subject to the Company’s complying with the requirements of Section 9(c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Employee of an amount advanced by the Company pursuant to Section 9(c), a determination is made that the Employee shall not be entitled to any refund with respect to such claim and the Company does not notify the Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

(e) In the event that any state or municipality or subdivision thereof shall subject any Payment to any special tax which shall be in addition to the generally applicable income tax imposed by such state, municipality, or subdivision with respect to receipt of such Payment, the foregoing provisions of this Section 9 shall apply, mutatis mutandis, with respect to such special tax.

10. Confidential Information. The Employee shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its subsidiaries, and their respective businesses, which shall have been obtained by the Employee during the Employee’s employment by the Company or any of its subsidiaries and which shall not be or become public knowledge (other than by acts by the Employee or the Employee’s representatives in violation of this Agreement). After termination of the Employee’s employment with the Company, the Employee shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the Employee under this Agreement.

 

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11. Successors.

(a) This Agreement is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Employee’s legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly 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 had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

12. Miscellaneous.

(a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force and effect.

 

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(b) 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 Employee:

If to the Company:

Crane Co.

100 First Stamford Place

Stamford, CT 06902

Attention: Secretary

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

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Employee’s failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.

(f) This Agreement contains the entire understanding of the Company and the Employee with respect to the subject matter hereof. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(g) The Employee and the Company acknowledge that the employment of the Employee by the Company is “at will,” and, prior to the Effective Date, may be terminated by either the Employee or the Company at any time. Upon a termination of the Employee’s employment or prior to the Effective Date, there shall be no further rights under this Agreement.

 

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IN WITNESS WHEREOF, the Employee has hereunto set Employee’s hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.

 

 

 

 

EMPLOYEE

  

 

CRANE CO.

 

 

By:

 

  

 

 

 

 

 

 

 

 

 

Attest:

 

  

 

 

Secretary

****************

Employment/Severance Agreements in substantially the above form have been entered into by the company with the following executive officers on the following dates:

 

 

 

 

A. I. duPont

  

January 22, 1996

E. C. Fast

  

September 27, 1999

T. M. Noonan

  

April 10, 2000

E. M. Kopczick

  

January 22, 2001

J. A. Nano

  

November 26, 2001

T. J. Perlitz

  

September 6, 2005

C. P. Robb

  

June 7, 2005

J. R. Vipond

  

March 10, 2005

M. H. Mitchell

  

March 8, 2004

 

  

 

 

  

 

 

  

 

 

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