ENVIRODYNE INDUSTRIES, INC.
                     CORPORATE OFFICE
                   SEVERANCE PAY POLICY


     Envirodyne Industries, Inc. (the "Company") hereby adopts the
Envirodyne Industries, Inc. Severance Pay Policy (this "Policy") for
its eligible employees at its Corporate Office effective as of May 15,
1996 and thereafter until otherwise amended or terminated by the
Company; provided, however, that in the event a Change of Control (as
         --------  -------
hereinafter defined) or the elimination or consolidation of all or
part of this office occurs during the term of this Policy, the term of
this Policy shall be deemed to be extended to and including the
anniversary date twenty-four (24) months following the effective date
of such Change of Control or office consolidation or elimination. 
With respect to "Employees" as defined in Section A, this Policy shall
replace and supersede any and all other policies, plans or programs of
the Company regarding severance benefits.

     A.   Covered Employees
          -----------------

          All permanent, full-time salaried executive and
     administrative personnel employed by the Company at its
     Corporate Office (Employees) are covered by this Policy.

     B.     Eligibility
            -----------

          An Employee shall be eligible for the severance pay set
     forth in this Policy in the event of any actions/decisions deemed
     to eliminate or consolidate all or part of this office including,
     but not limited to, a Change of Control or office consolidation
     or elimination and:

     (1)  any involuntary separation of employment from the Company
          for any reason other than death, disability or willful
          misconduct on the part of the Employee;

     (2)  any voluntary separation of employment from the Company
          following a reduction in the Employee's base compensation
          and/or incentive bonus opportunity from that in effect on
          the day immediately before the effective date of the Change
          of Control or office consolidation or elimination; or

     (3)  any voluntary separation of employment from the Company
          following a reduction in the Employee's principal
          responsibilities from those in effect on the day immediately
          before the effective date of the Change of Control or office
          consolidation or elimination.

     C.     Amount of Severance Pay
            -----------------------
          An Employee eligible for severance pay under Section B shall
          receive the following:

     (1)  Cash Payment

          (a)  Employees in Level I-P and Level I of the Approved
               --------------------------------------------------
               Company Management Incentive Plan
               ---------------------------------

               An amount equivalent to eighteen (18) months' salary
               (at the highest annual rate in effect during the three-
               year period prior to termination), plus a target bonus
               under the Management Incentive Plan (MIP) in effect at
               the time of termination.
<PAGE>
          (b)  Other Approved Company Management Plan Participants
               ---------------------------------------------------

               An amount equivalent to nine (9) months' salary (at the
               highest annual rate in effect during the three-year
               period prior to termination), plus a target bonus under
               the Management Incentive Plan (MIP) in effect at the
               time of termination.

          (c)  All Other Employees
               -------------------

               An amount equivalent to four (4) months salary (at the
               highest annual rate in effect during the three year
               period prior to termination), plus " notice pay"
               equivalent to one (1) month's pay.

          (d)  Form of Payment
               ---------------

               Employees shall elect to receive their cash severance
               payment in a single lump sum or in semi-monthly
               installment payments, consistent with paragraphs (a),
               (b) and (c) above and the Company's established payroll
               procedures for the duration of the severance period. 
               All cash severance payments will be net of all
               applicable federal and state withholding taxes.  An
               Employee receiving installment payments may at any time
               elect to suspend such future payments and receive any
               remaining installments in a lump sum.

     (2)  Group Insurance
          ---------------

          Medical, life and dental insurance benefits, if any, in
          effect at the time of termination shall be extended to the
          earlier of when the Employee is covered by another
          employer's plan or:

          (a)  for any Employee electing cash severance payment in a
               single lump sum, six (6) months after termination.
 
          (b)  for any Employee electing cash severance payment in
               installment payments, the end of the month in which the
               severance installment payments expire.
 
          (c)  All other insurance coverage (LTD; AD/D; travel/
               accident) will cease effectiveness as of the conclusion
               of the severed employee's last day of active
               employment.
 
     (3)   Envirodyne Retirement Savings Plan
           ----------------------------------
           Participation in the Envirodyne Retirement Income Plan
           will cease as of the employee's last day of active
           employment.  Company contributions to the Plan on behalf
           of such employee will also cease of the employee's last
           day of active employment.  The act of severance as
           defined in this Policy will, however, cause an
           acceleration of the vesting provision of the Plan such
           that the terminated employee will be one hundred percent
           (100%) vested in the company's contributions on his/her
           behalf as of the last day of the employee's active
           employment with the Company.
<PAGE>
     (4)   Vacation
           --------
           Employees shall receive cash payment for earned but not
           taken vacation in addition to severance pay.  Payments for
           earned but not taken vacation shall be made at the time of
           termination.
 
     (5)   Outplacement
           ------------
           At the discretion of the Company, outplacement services may
           be provided for Employees in the manner determined by the
           Company.  No payment shall be made to an Employee in lieu
           of outplacement services.

     D.    Severance Policy Integration
           ----------------------------
           Notwithstanding any provision of this Policy to the
           contrary, the severance pay under this Policy shall be
           reduced by the severance benefits then payable to an
           Employee under any other agreement, understanding, plan,
           policy, program or arrangement of the Company or a
           subsidiary of the Company.
 
     E.    Other Company Payments
           ----------------------
           In addition to any severance benefits payable to an
           Employee under this Policy, such Employee shall be entitled
           to receive all benefits payable under any other plan or
           agreement of the Company unrelated to severance benefits.

     F.    Change of Control Definition
           ----------------------------
           A "Change of Control" for purposes of this Policy shall
              -----------------
           mean the occurrence of either of the following events:  (i)
           any person (as such term is used in Sections 13(d) and
           14(d) of the Securities Exchange Act of 1934 (the "Exchange
           Act")) is or becomes a "beneficial owner" (as defined in
           Rules 13d-3 and 13d-5 under the Exchange Act, except that a
           person shall be deemed to have "beneficial ownership" of
           all shares that any such person has the right to acquire
           whether such right is exercisable immediately or only after
           the passage of time), directly or indirectly, of more than
           50% of the Common Stock of the Company or (ii) during any
           period of two consecutive years, individuals who at the
           beginning of such period constituted the Board of Directors
           of the Company (together with any new or replacement
           directors whose election by such Board or whose nomination
           for election by the shareholders of the Company was
           approved by a vote of a majority of the directors of the
           Company then still in office who were either directors at
           the beginning of such period or whose election or
           nomination for election was previously so approved) cease
           for any reason to constitute a majority of the Board of
           Directors of the Company then in office.

     G.    General Release
           ---------------
           Notwithstanding Section B or any other provision of this
           Policy to the contrary, in order to receive any severance
           pay under this Policy, an Employee must sign a statement, 
           in such form as determined by the Company, which releases
           the Company and its subsidiaries, shareholders, directors,
           officers, employees, successors and assigns from any
           existing and future claims except as such claims of any
           nature relate directly to the payment of any benefits due 
           under this Policy or any other severance benefit.

     H.    No Alienation of Severance Benefits
           -----------------------------------
           No interest of an Employee or his spouse or any other
           beneficiary under this Policy, or any right to receive any
           payments or distribution hereunder, shall be subject in any
           manner to sale, transfer, assignment, pledge, attachment,
           garnishment, or other alienation or encumbrance of any
           kind, nor may such interest or right to receive a payment
           or distribution be taken voluntarily or involuntarily, for
           the satisfaction of the obligations or debts of, or other
           claims against, an Employee or his spouse or other
           beneficiary, including claims for alimony, support,
           separate maintenance, and claims of bankruptcy proceedings.
          
     I.    Administration
           --------------
           The President of the Company and the Vice President, Human
           Resources of Envirodyne Industries, Inc. be responsible for
           interpreting and assuring the effective administration of
           this Policy.  All exceptions to or interpretations of this
           Policy must be approved in advance.

     J.    Duration of Policy
           ------------------
           This Policy shall become effective as of May 15, 1996, and
           shall remain in effect until this Policy is otherwise
           amended or terminated by the Company; provided, however,
                                                 --------  -------
           that in the event a Change of Control or the elimination or
           consolidation of all or part of this office occurs during
           the term of this Policy, the term of this Policy shall be
           deemed to be extended to and including the anniversary date
           twenty-four (24) months following the effective date of
           such Change of Control or office consolidation or
           elimination.

     IN WITNESS WHEREOF, Envirodyne Industries, Inc. has caused this
instrument to be executed by its duly authorized officer on May 15,
1996.
                              ENVIRODYNE INDUSTRIES, INC.
                              By: __________________________
                                  F. Edward Gustafson
                                  Chief Executive Officer
                                  Envirodyne Industries, Inc.