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                                                                    EXHIBIT 10-K

                              SEVERANCE AGREEMENT

         THIS SEVERANCE AGREEMENT (this "Agreement"), dated as of the 1st day
of April, 1997, is by and between Veritas DGC Inc., a Delaware corporation (the
"Company"), and Richard W. McNairy ("Employee") whose address is 6519 Lussier,
Sugar Land, Texas 77479.

         In consideration of the payments described below, the agreements set
forth in this Agreement and other good and valuable consideration, the
adequacy, mutuality, receipt and sufficiency of which are hereby acknowledged,
the Company and Employee hereby agree as follows:

         1.      Employment Agreements.   All contracts, agreements and
understandings with respect to Employee's employment with the Company are
hereby terminated in their entirety including, without limitation, that certain
letter agreement, dated October 31, 1994, between the Company and Employee (the
"Letter Agreement"), and neither party shall have any further rights, duties or
obligations arising thereunder or any way attributable thereto except as
otherwise specifically provided herein.

         2.      Severance Payment.  Subject to the last sentence of this
Section 2 and provided that Employee does not exercise his revocation right
provided in Section 4(b), on April 30, 1997, the Company shall pay to Employee
the sum of $283,654 (the "Severance Payment") by check or wire transfer of
immediately available funds to an account specified by Employee in writing.  In
the event Employee exercises his revocation right provided in Section 4(b), he
shall have no right to receive, and the Company shall have no obligation to
pay, the Severance Payment.  The Severance Payment and payments made by the
Company on behalf of Employee pursuant to Section 5(b) shall be in full
satisfaction of, and Employee hereby waives and relinquishes any and all rights
to receive, any and all other amounts owed by the Company to Employee, whether
arising under any contract, agreement, understanding or otherwise, including,
without limitation, any amounts due under the Letter Agreement, any right to
receive any salary, bonus or severance payments.  Employee acknowledges and
agrees that all applicable withholding deductions, including those for
benefits, FICA and income taxes, will be withheld from the Severance Payment
and the Bonus Payment.

         3.      Release.  (a)  Employee hereby unconditionally, irrevocably
and forever releases and discharges the Company, its subsidiaries, their
respective officers, directors, shareholders, employees, agents and assigns and
all other persons, firms or entities in control of, under the direction of, or
associated with the Company (collectively, the "Company Representatives") from
any and all claims, causes of action, suits, charges, complaints, obligations,
liabilities, promises, agreements, contracts, damages, accrued benefits or
other liabilities of any kind or character, whether known or hereafter
discovered and whether arising in tort, contract, by law or otherwise
(collectively, "Claims"), arising from or in any way connected with or related
to Employee's employment with the Company or the termination of  Employee's
employment with the Company,  including, without limitation, any Claims arising
under or attributable to any  state or federal law prohibiting discrimination
based on race, color, religion, sex, age or other protected classification,
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including without limitation, Title VII of the Civil Rights Act of 1964 (42
U.S.C. Section  3,000 et seq.), age discrimination under the Age Discrimination
Employment Act of 1967 (20 U.S.C. Section 621 et seq.) ("ADEA"), age
discrimination under the Texas Commission on Human Rights Act (Tex. Rev. Civ.
Stat. Ann. Art. 5221k), age discrimination under the Older Worker's Benefit
Protection Act, P.L. 101-433 (104 Stat. 978), wrongful termination in violation
of public policy or unlawful retaliation, and the Vocational Rehabilitation Act
of 1973 (29 U.S.C. Section  701 et seq.); provided that the foregoing release
shall not apply to any Claims attributable to any indemnity obligations of  the
Company to Employee arising under the Company's charter or bylaws or pursuant
to any preexisting contractual indemnity by the Company in favor of Employee.
Employee voluntarily acknowledges and agrees that the consideration described
in this Agreement is sufficient payment for the full, final and complete
release stated herein and that no other promises or representations have been
made to him by the Company, any Company Representative or any other person
purporting to act on behalf the Company.

         (b)     The Company hereby unconditionally and irrevocably forever
releases and discharges Employee, his heirs and legal representatives, from and
against any and all Claims arising from or in any way connected with or related
to Employee's employment with the Company.  The Company voluntarily
acknowledges and agrees that the consideration described in this Agreement is
sufficient payment for the full, final and complete release stated herein and
that no other promises or representations have been made by Employee, his
agents or representatives to the Company or any Company Representative.

         4.      Certain Acknowledgments and Right to Revoke.

         (a)    Voluntary Action, Etc. BY EXECUTING THIS AGREEMENT, EMPLOYEE
ACKNOWLEDGES AND AGREES AS FOLLOWS: (i) THAT HE HAS READ THIS AGREEMENT AND
UNDERSTANDS THAT THIS AGREEMENT CONTAINS A WAIVER OF RIGHTS AND CLAIMS THAT
EMPLOYEE MIGHT OTHERWISE HAVE AGAINST THE COMPANY, INCLUDING RIGHTS AND CLAIMS
UNDER THE ADEA; (ii) THAT HE HAS BEEN GIVEN A PERIOD OF LEAST TWENTY-ONE DAYS
WITHIN WHICH TO CONSIDER THIS AGREEMENT; (iii) THAT HE HAS BEEN ADVISED IN
WRITING TO CONSULT AN ATTORNEY OF HIS CHOICE PRIOR TO SIGNING THIS AGREEMENT
AND THAT HE HAS BEEN AFFORDED THE OPPORTUNITY TO CONSULT AN ATTORNEY OF HIS
CHOICE PRIOR TO SIGNING THIS AGREEMENT, (iv) THAT HE IS WAIVING RIGHTS AND
CLAIMS ONLY IN EXCHANGE FOR CONSIDERATION THAT IS IN ADDITION TO ANYTHING TO
WHICH HE IS ALREADY ENTITLED; AND (v) THAT HE HAS READ AND FULLY UNDERSTANDS
THE RELEASE IN SECTION 3 ABOVE AND EXECUTES THIS AGREEMENT FREELY AND
VOLUNTARILY WITHOUT THREAT, DURESS, COERCION, OR PROMISE OF ANY FUTURE
CONSIDERATION.

         (b)     Revocation.  Employee shall have seven days following his
execution of this Agreement in which to revoke this Agreement, and anything
else in this agreement to the contrary





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notwithstanding, this Agreement shall not become effective or enforceable until
the revocation period has expired.  In the absence of such revocation, this
Agreement shall become effective and enforceable on the eighth day following
Employee's execution of this Agreement.

         5.      Options and Benefits.   (a) The Company and Employee
acknowledge that Employee was previously granted 8,333 options to purchase
shares of the Company's common stock, par value $.01 per share ("Stock
Options"), with an exercise price of $6.00 per share (of which 5,333 remain
unexercised) and 13,000 Stock Options with an exercise price of $5.25 per
share, which Stock Options are fully vested in accordance with the terms
thereof.  In addition, on March 11, 1997, Employee was granted two additional
groups of Stock Options, one group being 13,333 Stock Options and the other
being 15,690 Stock Options, each with an exercise price of $19.375 per share.
With respect to the group of 13,333 Stock Options, the Company agrees that all
of said Stock Options shall be fully vested in Employee as of the date of grant
thereof and that the Company shall provide documentation to Employee evidencing
the full vesting thereof.  With respect to the group of 15,690 Stock Options,
Employee acknowledges and agrees that none of said Stock Options will at any
time vest in Employee and that Employee shall not have any right to exercise
said Stock Options at any time. Solely for purpose of the exercise, but not the
vesting, provisions of the Stock Options vested in Employee on the date hereof,
Employee shall be deemed to be in the employ of the Company until March 31,
1998 (the "Deemed Employment Period").  Subject to the preceding provisions of
this Section 5, nothing herein shall affect, waive, terminate or release any
rights that Employee may have arising under any stock option agreements between
the Company and Employee.  Subject to the first sentence of this Section 5(a),
Employee's rights with respect to any Stock Options held by him shall be
governed by the terms and provisions of any stock option agreements related
thereto and the 1992 Amended and Restated Employee Nonqualified Stock Option
Plan of the Company.

         (b)     Unless Employee gives notice to the Company pursuant to the
next sentence within ninety days following the date hereof, the Company shall
maintain in force and effect, at its sole expense and for the continued benefit
of Employee and Employee's dependents, for the period from the date hereof
through the earlier of (i) eighteen months from the date hereof, or (ii) the
commencement date of similar benefits from a new employer (the "Benefits
Termination Date"), all medical, dental, health and accident, hospitalization,
disability and other similar employee welfare benefit plans maintained by the
Company in which Employee was entitled to participate immediately prior to the
date hereof.  If Employee's participation in any such benefit plan is barred,
the Company, at its sole cost and expense, shall arrange to have issued for the
benefit of Employee and his dependents individual policies of insurance
providing benefits substantially similar (on an after-tax basis) to those that
Employee is entitled to receive under such benefit plans for a period of
eighteen months or such lesser period as Employee shall remain unemployed.
Employee shall not be required to pay any premiums or other charges for such
policies.  All payments made by the Company pursuant to this Section 5(b) shall
be credited against any obligation that the Company may have under applicable
law to provide such benefits to Employee following his termination of
employment with the Company, and, except as otherwise provided by applicable
law, after the Benefits





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Termination Date, the Company shall have no obligation further to provide any
such benefits to Employee.  In addition, to the extent (i) the Company makes
similar payments with respect to its other senior executives and (ii) permitted
by applicable law, the Company will make its so-called "matching contribution"
to Employee's 401(k) Plan account in respect of the Company's fiscal year ended
July 31, 1997.  The Company shall promptly notify Employee following the
payment of said contribution, if any.  In the event the Company does not make
said contribution, either due to restrictions imposed by law or because the
Company did not make similar contributions to its other senior executives in
such fiscal year, Employee shall have no right to receive any other payment or
benefit in lieu of said contribution.

         6.      Confidentiality.  From and after the date hereof, Employee
agrees not to disclose to any third person or use for any purpose any of the
Company's Proprietary Information (as hereinafter defined).  For purposes of
this Agreement, "Proprietary Information" shall mean any information, data,
records, reports, documents and agreements relating to the Company, its
subsidiaries, its and their respective businesses or any Company Representative
disclosed to or received by Employee during the period of his employment with
the Company or during negotiation of his employment with the Company
(including, without limitation, customer lists, price discounts, sales
information, Company methods of doing business, accounting procedures,
production methods, engineering designs and any other items that are not
published for general distribution to the public); provided that "Proprietary
Information" shall not include (i) information which is or becomes generally
available to the public other than as a result of a disclosure in violation of
this Agreement and (ii) information disclosed pursuant to any applicable law,
rule, regulation or order.  Employee agrees to keep the terms and conditions of
this Agreement confidential; provided that Employee may disclose the terms of
this Agreement to his spouse, attorney and accountant if he obtains the prior
agreement of such person to hold such information in confidence.

         7.      Survival.  The representations, warranties, covenants and
agreements contained in this Agreement shall survive the termination of the
Deemed Employment Period.

         8.      Severability.  If any provision of this Agreement shall be
adjudged by a court of competent jurisdiction to be void or unenforceable, that
finding shall in no way affect any other provision of this Agreement or the
validity or enforceability of this Agreement.

         9.      Further Assurances; Future Cooperation.  Each party to this
Agreement agrees to do  such things as may be reasonably requested by the other
party to this Agreement in order more effectively to consummate or document the
transactions contemplated by this Agreement.

         10.     Binding Agreement; Captions.  This Agreement is binding upon,
and shall inure to the benefit of, the parties to this Agreement and their
respective legal representatives, heirs, devisees, legatees, successors and
assigns.  Titles and captions of or in this Agreement are inserted only as a
matter of convenience and for reference and in no way affect the scope of this
Agreement or the intent of its provisions.





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         11.     Entire Agreement.  This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof,
supersedes all prior agreements of any of the parties to this Agreement with
respect to its subject matter, including, without limitation, the Letter
Agreement, and may not be revoked, modified or amended except by a written
instrument signed by both parties.

         12.     Binding Arbitration.  Should any dispute arise between the
parties with respect to this Agreement or the rights, duties and obligations of
the parties hereunder, each of the parties irrevocably agrees that the
exclusive remedy of each of them shall be to commence binding arbitration
proceedings under the rules of the American Arbitration Association, with any
such arbitration proceeding to be conducted in Houston, Texas, applying the
substantive law of the State of Texas.  Each party agrees to deposit with the
neutral arbitrator an amount equal to 50% of the arbitrator's preliminary
estimate of the costs of arbitration (excluding counsel fees) as security for
costs.  Actual costs of arbitration (including counsel fees of both parties)
shall be apportioned by the arbitrator in such a manner as he shall deem
equitable in light of any financial award.

         13.     Waiver; Governing Law; Counterparts.  Failure of any party to
this Agreement at any time or times to require the performance of any provision
of this Agreement shall in no manner affect the right to enforce the same; and
the waiver by any party to this Agreement of any provision (or a breach of any
provision) of this Agreement, whether by conduct or otherwise, shall not be
deemed or construed either as a further or continuing waiver of any such
provision or breach or as a waiver of any other provision (or a breach of any
other provision) of this Agreement.  This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of Texas.  This
Agreement may be executed in two or more counterparts, each of which shall be
an original for all purposes, but all of which taken together shall constitute
but one and the same instrument.





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         IN WITNESS WHEREOF, this Agreement is executed on April 21, 1997.
          
                                        VERITAS DGC INC.


                                        By: /s/ DAVID B. ROBSON
                                           -----------------------------------
                                           David B. Robson
                                           Chairman of the Board and Chief
                                           Executive Officer



                                        RICHARD W. MCNAIRY

                                        /s/  RICHARD W. MCNAIRY
                                        ------------------------------------





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