AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT made and entered into as of this 31st day of January,
1994 with Amendment No. 1 made and entered into as of the 31st day of December,
1994 and Amendment No. 2 made and entered into the 31st day of December, 1995
and as further amended the 31st day of December, 1997 by and between MICHAEL
FOODS, INC., a Minnesota corporation (hereinafter referred to as "Michael
Foods") and GREGG A. OSTRANDER (hereinafter referred to as "Ostrander").

         WHEREAS, Ostrander has served as Chief Operating Officer of Michael
Foods from February 1993 through December 1993; and

         WHEREAS, Ostrander has served as President and Chief Executive Officer
of Michael Foods since December 1993; and

         WHEREAS, Michael Foods wishes to retain the full-time services of
Ostrander as President and Chief Executive Officer of Michael Foods; and

         WHEREAS, Michael Foods and Ostrander have agreed to enter into this
Agreement effective as of January 1, 1994.

         NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties agree as follows:

         1. EMPLOYMENT AND DUTIES. Michael Foods shall employ Ostrander to serve
as President and Chief Executive Officer of Michael Foods and in such capacity
Ostrander shall perform such duties as the Bylaws provide and as the Board of
Directors of Michael Foods may from time to time determine. Ostrander shall
devote his full time and efforts to the business of Michael Foods. Ostrander
shall also serve, at the request of Michael Foods, as a Director of Michael
Foods and each of its subsidiaries.

         2. TERM. This Agreement shall be effective as of January 1, 1994 and
shall continue through December 31, 1997, unless earlier terminated as provided
herein. This Agreement is hereby extended automatically and shall continue for
successive two-year terms unless otherwise terminated in accordance with Section
5.

         3. BASE SALARY. For all services rendered by Ostrander, Michael Foods
agrees to pay to Ostrander an annual Base Salary for each of the calendar years
of this Agreement from January 1, 1998 an amount of at least $405,000 payable in
substantially equal semi-monthly installments.

         4. ADDITIONAL BENEFITS AND WORKING FACILITIES.

                  a. On or before February 15, 1994, Michael Foods shall deliver
         to Ostrander a non-qualified stock option to purchase 20,000 shares of
         Michael


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         Foods Common Stock. The date of grant of such option shall be deemed to
         be January 3, 1994 and the exercise price shall be determined in
         accordance with the Michael Foods Non-Qualified Stock Option Plan as of
         the close of business on that date.

                  b. For each calendar year during the term of this Agreement,
         Ostrander shall be entitled to participate in the Executive Incentive
         Compensation Plan of Michael Foods. Any Incentive Compensation or
         Options earned under said Plan shall be determined and paid or granted
         in accordance with the Plan.

                  c. Michael Foods shall provide Ostrander with medical
         insurance and shall permit Ostrander to participate in other fringe
         benefit plans as Michael Foods may from time to time establish for its
         executive officers. The terms of said benefits shall be no less
         generous than those offered to other executive officers of Michael
         Foods.

                  d. Ostrander is entitled to take vacations at reasonable times
         and for customary and reasonable lengths of time consistent with his
         overall responsibilities as President and Chief Executive Officer of
         Michael Foods.

                  e. Michael Foods shall reimburse Ostrander for all reasonable
         expenses incurred by Ostrander in connection with Michael Foods'
         business, including but not limited to expenses of travel and
         entertainment, upon presentation of itemized statements therefor.

                  f. On or before January 3, 1995, Michael Foods shall deliver
         to Ostrander a non-qualified stock option to purchase 40,000 shares of
         Michael Foods Common Stock. The date of grant of such option shall be
         deemed to be January 3, 1995 and the exercise price shall be determined
         in accordance with the Michael Foods Non-Qualified Stock Option Plan as
         of the close of business on that date, or $10.00 per share, whichever
         is greater.

                  g. On or before January 2, 1996, Michael Foods shall deliver
         to Ostrander a non-qualified stock option to purchase 40,000 shares of
         Michael Foods Common Stock. The date of grant of such option shall be
         deemed to be January 2, 1996 and the exercise price shall be determined
         in accordance with the Michael Foods Non-Qualified Stock Option Plan as
         of the close of business on that date, or $10.00 per share, whichever
         is greater.

                  h. On or before March 5, 1998, Michael Foods shall deliver to
         Ostrander a non-qualified stock option to purchase 68,500 shares of
         Michael Foods Common Stock. The date of grant of such option shall be
         deemed to be December 31, 1997 and the exercise price shall be
         determined in accordance with the Michael Foods Non-Qualified Stock
         Option Plan as of the close of business on that date, which was $24.375
         per share.


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         5. EVENTS OF TERMINATION. The employment of Ostrander hereunder shall
terminate as follows:

                  a. Upon the Incapacity or death of Ostrander;

                  b. Upon thirty (30) days' written notice by either party; or

                  c. Without notice by Michael Foods for Cause.

         "Cause" for purposes hereof shall mean a determination by Michael Foods
that Ostrander has (i) committed an illegal or dishonest act that directly
reflects upon his fitness to act as President and Chief Executive Officer; (ii)
intentionally breached his fiduciary obligations to Michael Foods; or (iii)
refused or is unable to perform his duties hereunder, other than as a result of
illness or disability, for a period of thirty (30) days.

         "Incapacity" for purposes hereof shall mean a determination by Michael
Foods in its sole discretion that Ostrander is unable to perform his job
responsibilities as President and Chief Executive Officer as a result of chronic
illness, physical, mental or any other disability for a period of six (6) months
or more.

         If Ostrander's employment is terminated under subsection (a) or by
Michael Foods under subsection (b), Ostrander shall receive as a termination
payment all amounts due under this agreement which is defined as two years' Base
Salary, plus Ostrander shall receive fifty percent (50%) of that Base Salary
amount in lieu of any Incentive Compensation or Options for that two-year
period, plus any Incentive Compensation earned for any year prior to the year of
termination which is unpaid at the date of termination. Such termination payment
shall be made in substantially equal monthly installments beginning on the first
day of the month following termination of employment for twenty-four (24)
months. If Ostrander's employment is terminated by Ostrander under subsection
(b), Ostrander shall receive no termination payment; however, Ostrander will be
entitled to receive any Incentive Compensation earned for any year prior to the
year of termination which is unpaid at the date of termination. If Michael Foods
terminates Ostrander under subsection (c) above, no amount shall be paid beyond
the last day of service by Ostrander and Ostrander shall not be deemed to have
earned any Incentive Compensation or Options for the year of termination. In the
case of Incapacity or death, or termination by Michael Foods without Cause, all
options to purchase common stock previously granted to Ostrander shall become
fully vested and not subject to forfeiture.

         For purposes of this Section 5, this Agreement and Ostrander's
employment hereunder shall be deemed terminated by Michael Foods without Cause
if, after the date hereof there is a Change in Control of Michael Foods and
thereafter Ostrander's Duties are Substantially Reduced or Negatively Altered
without his prior written consent.

         "Change in Control" means a Change in Control of Michael Foods of a
nature that would be required to be reported in response to Item 1(a) of Michael
Food's Current Report on Form 8-K, as in effect on the effective date of this
agreement, pursuant to


<PAGE>


section 13 of the Securities Exchange Act of 1934 (the "Exchange Act"); provided
that, without limitation, such a Change in Control shall be deemed to have
occurred at such time as any "person" within the meaning of Section 14(d) of the
Exchange Act, other than Michael Foods, a subsidiary of Michael Foods or any
employee benefit plan sponsored by Michael Foods or a subsidiary of Michael
Foods, acquires (1) the power to elect, appoint or cause the election or
appointment of at least a majority of the members of the Board of Directors of
Michael Foods through the acquisition of beneficial ownership of capital stock
of Michael Foods or otherwise, or (2) all, or substantially all, of the
properties and assets of Michael Foods; provided, however, that a Change in
Control shall not be deemed to have occurred if (x) the acquisition of such
power or properties and assets is pursuant to a merger, consolidation, or sale
of properties and assets and (y) by reason of such transaction, no person, or
related persons constituting a "group" for purposes of Section 13(d) of the
Exchange Act, shall acquire the power to elect, appoint or cause the election or
appointment of a majority of the members of the Board of Directors of such
successor or transferee.

         "DUTIES ARE SUBSTANTIALLY REDUCED OR NEGATIVELY ALTERED" means, after
any Change in Control and without Ostrander's express written consent:

         (i) the assignment to Ostrander of any duties inconsistent with
Ostrander's positions, duties, responsibilities and status with Michael Foods
immediately prior to a Change in Control, or a change in Ostrander's reporting
responsibilities, titles or offices as in effect immediately prior to a Change
in Control, or any removal of Ostrander from, or any failure to re-elect
Ostrander to, any of such positions, except in connection with the termination
of Ostrander's employment for Cause, upon the Incapacity or death of Ostrander,
or upon the voluntary termination by Ostrander;

         (ii) a reduction in Ostrander's base salary in effect immediately prior
to any Change in Control; or the failure by Michael Foods to increase such base
salary each year after a Change in Control by an amount which at least equals,
on a percentage basis, the mean average percentage increase in base salary for
all employees similarly situated during the two (2) full calendar years
immediately preceding a Change in Control;

         (iii) Michael Foods requiring Ostrander to be based anywhere other than
the geographic location at which Ostrander was based immediately preceding the
Change in Control except for required travel on business to an extent
substantially consistent with the business travel obligations Ostrander
experienced immediately preceding a Change in Control;

         (iv) the failure by Michael Foods to continue in effect benefit and
compensation plans substantially equivalent to the benefit or compensation plans
or arrangements in which Ostrander was participating immediately preceding any
Change in Control; the taking of any action by Michael Foods not required by law
which would adversely affect Ostrander's participation in or materially reduce
Ostrander's benefits under any of such plans or deprive Ostrander of any
material fringe benefit enjoyed by Ostrander at the time of the Change in
Control, but this provision shall not apply to any stock option plan maintained
by Michael Foods prior to the Change in Control; or the


<PAGE>


failure by Michael Foods to provide Ostrander with the number of paid vacation
days, holidays and personal days to which Ostrander was then entitled in
accordance with Michael Foods' normal leave policy in effect immediately
preceding a Change in Control.

         6. ADDITIONAL DOCUMENTS. The parties shall each, without further
consideration, execute such additional documents as may be reasonably required
in order to carry out the purposes and intent of this Agreement and to fulfill
the obligations of the respective parties hereunder.

         7. WAIVER. Any waiver of any term or condition of this Agreement shall
not operate as a waiver of any other breach of such term or condition, or of any
other term or condition, nor shall any failure to enforce a provision hereof
operate as a waiver of such provisions or of any other provision hereof.

         8. NOTICES. All communications with respect to this Agreement shall be
considered given if delivered or sent as follows:

                  a. To Ostrander by first class, certified mail, postage
         prepaid, return receipt requested, addressed as follows:

                  Gregg A. Ostrander
                  21520 Fairview Street
                  Greenwood, Minnesota  55331

                  b. To Michael Foods by first class, certified mail, postage
         prepaid, return receipt requested, addressed as follows:

                  Michael Foods, Inc.
                  324 Park National Bank Building
                  5353 Wayzata Boulevard
                  Minneapolis, Minnesota  55416

or mailed to such other addresses as the parties hereto may designate by notice
given in like manner. Notice shall be effective three (3) days after mailing or
upon personal delivery.

         9. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement of
the parties hereto with respect to the subject matter hereof and no party shall
be liable or bound to another in any manner by any warranties, representations
or guarantees, except as specifically set forth herein.

         10. MODIFICATIONS, AMENDMENTS AND WAIVERS. The parties hereto at any
time may by written agreement extend or modify this Agreement. This Agreement
shall not be altered or otherwise amended except pursuant to an instrument in
writing executed by the parties hereto.

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         11. SEVERABILITY. No finding or adjudication that any provision of this
Agreement is invalid or unenforceable shall affect the validity or
enforceability of the remaining provisions herein, and this Agreement shall be
construed as though such invalid or unenforceable provisions were omitted.

         12. MISCELLANEOUS.

                  a. The terms and conditions of this Agreement shall inure to
         the benefit of and be binding upon the respective legal
         representatives, successors and assigns of the party thereto.

                  b. This Agreement is made pursuant to and shall be construed
         under the laws of the State of Minnesota.

                  c. This Agreement may be executed in one or more counterparts
         and each of such counterparts shall for all purposes be deemed to be an
         original, but all such counterparts shall together constitute one and
         the same instrument.

         IN WITNESS WHEREOF, the parties have executed this Agreement the date
and year above written.

                                       MICHAEL FOODS, INC.



                                       By   /s/ John Reedy
                                       Its  VP - Finance


                                       /s/ Gregg A. Ostrander
                                       GREGG A. OSTRANDER