January 11, 1999



Ms. Susan Fein Zawel
31 Harrows Lane
Purchase, New York 10577

Dear Ms. Fein Zawel:

         Reference is made to the Employment Agreement (the "Agreement") dated
January 8, 1996 between United Industrial Corporation and you. Terms defined in
the Agreement are used herein as so defined. The Agreement is hereby amended as
follows:

          1.   Paragraph 2 is amended to change the Termination Date to June 30,
               2001.

          2.   Clause (iii) at the end of Paragraph 3 is amended to delete the
               reference to six (6) months and to substitute one (1) year
               therefor.

          3.   Paragraph 4(a) is amended to change Employee's salary effective
               as of January 1, 1999 to one hundred fifty-one thousand four
               hundred ten dollars (151,410).

          4.   Paragraph 16 is amended to change the Employer's address for
               notices to the address set forth above.

         Except as amended hereby the Agreement is hereby ratified and confirmed
and shall remain in full force and effect.


Ms. Susan Fein Zawel
January 11, 1999
Page 2



         Kindly confirm your agreement to the foregoing by signing below where
indicated and returning a signed copy to the undersigned.




                                     Very truly yours,

                                     UNITED INDUSTRIAL CORPORATION

                                     By: /s/ Richard R. Erkeneff
                                         -----------------------------------
                                         Richard R. Erkeneff, President




Confirmed and Agreed To:




Susan Fein Zawel    
- -------------------------
Susan Fein Zawel