EXHIBIT 4.4












                  THE QUAKER 401(k) PLAN FOR HOURLY EMPLOYEES
            (As Amended and Restated Effective as of August 3, 2001)



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                               TABLE OF CONTENTS



SECTION 1  General                                                             1
               1.1. History and Purpose                                        1
               1.2. Employers and Related Companies                            1
               1 .3. Plan Administration, Trust Agreement                      2
               1.4. Plan Year                                                  2
               1.5. Applicable Laws                                            2
               1.6. Gender and Number                                          2
               1.7. Notices                                                    2
               1.8. Evidence                                                   2
               1.9. Action by Employer                                         2
               1.10. No Reversion to Employers                                 2
               1.11. Supplements                                               2
               1.12. Form of Election and Signature                            2
               1.13. Accounting Date                                           3
               1.14 Compliance With USERRA                                     3


SECTION 2  Plan Participation                                                  3
               2.1. Eligibility for Participation                              3
               2.2. Participation Not Guarantee of Employment                  3
               2.3. Reemployment                                               3
               2.4. Leased Employees                                           3
               2.5. Foreign Assignments                                        4
               2.6. Allocation of Contributions Among Employers                4

SECTION 3  Pre-Tax and Rollover Contributions                                  4
               3.1. Pre-Tax Contributions                                      4
               3.2. Compensation                                               4
               3.3. Election Changes                                           4
               3.4. Limitations on Contributions                               5
               3.5. Maximum 401(k) Deferrals                                   5
               3.6. Correction of Excess Contributions                         5
               3.7. Pre-Tax Contributions                                      5
               3.8. Compensation                                               6
               3.9. Highly Compensated Employees                               6
               3.10. Rollover Contributions                                    7


SECTION 4  Employer Contributions                                              7
               4.1. Matching Contributions                                     7
               4.2. Qualified Matching Contributions                           7
               4.3. Limitations on Amount of Employer Contributions            7

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               4.4. Payment of Employer Contributions                          7
               4.5. ACP Test                                                   7
               4.6. Correction Under ACP Test                                  8
               4.7. Multiple Use of Alternative Limitation                     8
               4.8. Separate Testing of Early Eligible Group                   8
               4.9. Supplemental Expense Contribution                          8

SECTION 5  Plan Investments                                                    9
               5.1. Investments in General                                     9
               5.2. Investment Fund Accounting                                 9
               5.3. Investment Fund Elections                                  9
               5.4. Transfers Between Investment Funds                         9

SECTION 6  Plan Accounting                                                     9
               6.1. Participants' Accounts                                     9
               6.2. Crediting of Fund Earnings and Changes in Value           10
               6.3. Payment of ESOP Dividends                                 10
               6.4. Limitation on Allocations to Participants' Accounts       11
               6.5. Annual Additions                                          11
               6.6. Combined Limit under Section 415(e)                       12
               6.7. Correction of Accounting Error                            12
               6.8. Statement of Plan Interest                                12
               6.9. Limitation on Electing or Deceased Shareholder            12

SECTION 7  Shareholder Rights                                                 13
               7.1. Voting Rights                                             13
               7.2. Tender and Exchange Rights                                13
               7.3. Exercise of Shareholder Rights by Beneficiary             13

SECTION 8  Loans and Distributions from Participants' Accounts                13
               8.1. Loans                                                     13
               8.2. In Service Distributions and Transfers                    15
               8.3. Post-Termination Distributions                            16
               8.4. Distribution to Persons Under                             17
               8.5. Interests Not Transferable                                17
               8.6. Absence of Guaranty                                       17
               8.7. Investment Fund Accounting                                18
               8.8. Investment Fund Elections                                 18
               8.9. Investments in General                                    18
               8.10. Investment Fund Accounting                               19
               8.11. Investment Fund Elections                                19

SECTION 9  The Committee and Investment Committee                             19
               9.1. Membership                                                19






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               9.2. Rights, Powers and Duties                                 19
               9.3. Application of Rules                                      20
               9.4. History and Purpose                                       20
               9.5. Employers and Related Companies                           20
               9.6. History and Purpose                                       21
               9.7. Employers and Related Companies                           21
               9.8. Employers and Related Companies                           21
               9.9. Appointment of Successor Committee or Investment
                    Committee Members                                         21

SECTION 10     Amendment and Termination                                      21
               10.1. Amendment                                                21
               10.2. Termination                                              21
               10.3. Merger and Consolidation of Plan, Transfer of Plan
                     Assets                                                   22
               10.4. Distribution on Termination and Partial Termination      22
               10.5. Notice of Amendment, Termination or Partial Termination  22



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                                 DEFINED TERMS


415 Excess Account                                     6.4
Accounting Date                                        1.13
Accounts                                               6.1
Annual Additions                                       6.5
Beneficiary                                            8.7
Code                                                   1.1
Compensation                                           3.2
Committee                                              1.3
Corporation                                            1.1
Disabled                                               8.2(a)
Effective Date                                         1.1
Employer                                               1.2
Employers                                              1.2
ERISA                                                  1.3
ESOP                                                   1.1
Hardship                                               8.2(b)
Investment Committee                                   1.3
Investment Funds                                       5.1
Matching Account                                       6.1(a)
Matching Contributions                                 4.1
Plan                                                   1.1
Phone System                                           1.12
PIN                                                    1.12
Pre-Tax Account                                        6.1 (c)
Pre-Tax Contributions                                  3.10
Qualified Matching Account                             6.1.(b)
Qualified Matching Contributions                       4.2
Related Company                                        1.2
Rollover Account                                       6.1(d)
Rollover Contribution                                  3.1
Section 415 Affiliate                                  6.5
Section 415 Compensation                               6.4
Trustee                                                1.3
Trustees                                               1.3
Trusts                                                 1.3



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                  THE QUAKER 401(k) PLAN FOR HOURLY EMPLOYEES
                (As Amended and Restated Effective as of August 3,2001)

                                   SECTION 1

                                    General

     1.1. History and Purpose. The Quaker Stock Bonus Savings Plan (the "Plan"
) was established by The Quaker Oats Company, a New Jersey corporation (the
"Company"), effective July 1, 1986 to benefit designated groups of employees.
Effective as of June 1, 1994, the Plan was amended to designate the portion of
the Plan invested primarily in common stock of the Company ("Quaker Stock")
through the Company Stock Fund as an employee stock ownership plan ("ESOP")
within the meaning of section 4975(e) of the Internal Revenue Code of 1986. as
amended (the "Code"). Effective as of June 1, 1998 the Plan was amended and
restated to reflect administrative changes, to rename the Plan "The Quaker
401(k) Plan for Hourly Employees" and to conform the Plan to certain statutory
changes, primarily the changes required by the Small Business Job Protection
Act of 1996 ("SBJPA"). Any provisions of this document that reflect changes
required by the SBJPA shall constitute amendments to the Plan documents in
effect prior to the Effective Date as of the applicable statutory effective
date. The Plan, as amended and restated herein, shall constitute a profit
sharing plan with a cash or deferred arrangement that is intended to be
qualified under sections 401(a) and 401(k) of the Code and, as to the portion
of the Plan comprised of the Quaker Stock Fund, a stock bonus plan and an
employee stock ownership plan within the meaning of sections 401(a) and 4975(e)
of the Code.

In connection with the Company's merger with PepsiCo, Inc., the Plan was again
amended and restated effective as of August 3, 2001, (the "Effective Date"). On
the Effective Date, PepsiCo, Inc. (the "Corporation") became the sponsor of the
Plan and the Company's stock was no longer offered as an investment option
under the Plan. As a result, within this document, most references to Quaker
Stock were replaced references to PepsiCo Stock, most references to Quaker
Common Stock were replaced with references to PepsiCo, Inc. Common Stock
("PepsiCo Common Stock") and most references to Quaker Preferred Stock were
replaced with references to PepsiCo, Inc. Preferred Stock ("PepsiCo Preferred
Stock").

     1.2. Employers and Related Companies. The Company, its subsidiary
companies listed in Schedule A hereto, and any other corporation which is a
Related Company and which, with the consent of the Committee, adopts the Plan
are referred to below collectively as the "Employers" and individually as an
"Employer". The term "Related Company" means any corporation, trade or business
during any period during which it is, along with the Company, a member of a
controlled group of corporations or a controlled group of trades or businesses,
as described in sections 414(b) and 414(c), respectively, of the Code.

     1.3. Plan Administration, Trust Agreement. As of the Effective Date, the
PepsiCo Administration Committee (the "Committee") shall be the administrator
of the Plan and shall have the rights, duties and obligations of an
"administrator" as that term is defined in section 3(16)(A) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and of a "plan
administrator" as that term is defined in section 414(g) of the Code All
contributions made under the Plan will be held, managed and controlled by one
or more trustees (the "Trustee" or together the "Trustees"), acting under one
or more "Trusts" which shall each form a part of the Plan. The Corporation
shall have the authority to appoint and remove the Trustee, and the PepsiCo
Investment Committee (the "Investment Committee") shall have the authority to
monitor the Trustee's performance, to appoint and remove investment managers
within the meaning of section 3(38) of ERISA and monitor their performance, to
select or establish investment funds


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and change or eliminate any such fund, to set investment guidelines and to have
such other authority and responsibility as may be necessary or appropriate to
manage the Plan's assets. The Committee and the Investment Committee shall each
be a "named fiduciary" as described in section 402 of ERISA with respect to its
respective authority under the Plan, and each Participant shall be a named
fiduciary to the extent of the Participant's authority to exercise shareholder
nights in accordance with Section 7. In addition, both the Committee and the
Investment Committee may designate a person(s) to carry out specific tasks.

     1.4. Plan Year. The term "Plan Year" means the twelve-month period
commencing January 1 and ending December 31 of each year.

     1.5. Applicable Law. The Plan shall be construed and administered
according to the laws of the state of Illinois to the extent that such laws are
not preempted by the laws of the United States of America.

     1.6. Gender and Number. Where the context admits, words in any gender
shall include each other gender, words in the singular shall include the
plural, and the plural shall include the singular.

     1.7. Notices. Any notice or document required to be filed with the
Committee under the Plan will be properly filed if delivered or mailed by
registered mail, postage prepaid, to the Committee, in care of the Corporation
at its principal executive offices. Any notice required under the Plan may be
waived by the person entitled to notice.

     1.8. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting
on it considers to be pertinent and reliable, and to be signed, made or
presented by the proper party or parties.

     1.9. Action by Employer . Any action required or permitted to be taken by
an Employer under the Plan shall be by resolution of the Corporation's Board of
Directors, or by a duly authorized officer of the Corporation.

     1.10. No Reversion to Employers. No part of the corpus or income of the
Trust Fund shall revert to any Employer or be used for, or diverted to,
purposes other than for the exclusive benefit of Participants and other persons
entitled to benefits under the Plan, except as specifically provided in the
Trust Agreement.

     1.11. Supplements. The provisions of the Plan as applied to any group of
employees may be modified, or supplemented from time to time by the adoption of
one or more Supplements. Each Supplement shall form a part of the Plan as of
the Supplement's effective date.

     1.12. Form of Election and Signature. Unless otherwise specified herein,
any election or consent permitted or required to be made or given by any
Participant or other person entitled to benefits under the Plan, and any
permitted modification or revocation thereof, shall be made in writing or shall
be given by means of such interactive telephone system as the Committee may
designate from time to time as the sole vehicle for executing regular
transactions under the Plan (referred to generally herein as the "Phone
System"). Each Participant shall have a personal identification number or "PIN"
for purposes of executing transactions through the Phone System and entry by a
Participant of his PIN (with his Social Security Number) shall constitute his
valid signature for purposes of any transaction the Committee determines should
be executed by means of the Phone System, including but not limited to
enrolling in the Plan, electing contribution rates, making investment choices,
executing loan documents, and consenting to a


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withdrawal or distribution. Any election made through the Phone System shall be
considered submitted to the Committee on the date it is electronically
transmitted, unless such transmission occurs after the applicable cut off, in
which case it will be considered submitted on the next Accounting Date.

     1.13. Accounting Date. The term "Accounting Date" means each day the New
York Stock Exchange is open for business.

     1.14. Compliance With USERRA. Notwithstanding any provisions of the Plan
to the contrary, ontributions and benefits with respect to qualified military
service will be provided in accordance with section 414(u) of the Code.

                                   SECTION 2

                               Plan Participation

     2. 1. Eligibility for Participation. Each hourly employee of an Employer
employed in a group listed in Schedule A hereto will be entitled to participate
in the Plan, and thereby become a "Participant", on the employee's date of
hire. For purposes of this subsection 2.1, no individual shall be eligible to
be a Participant during any period in which he performs services for an
Employer under a contract, agreement or arrangement that purports to treat him
as either an independent contractor or the employee of a leasing organization,
agency, vendor or any other third-party, even if he is subsequently determined
(by judicial action or otherwise) to have instead been a common law employee of
such Employer. Participation in the Plan is entirely voluntary. and will not
commence until an eligible employee makes an election in accordance with
subsection 3. 1.

     2.2. Participation Not Guarantee of Employment . Participation in the Plan
does not constitute a guarantee or contract of employment, and will not give
any employee the right to be retained in the employ of any Employer or Related
Company nor any right or claim to any benefit under the Plan unless such right
or claim has specifically accrued under the terms of the Plan.

     2.3. Reemployment. A former Participant who is reemployed as an eligible
employee of an Employer (in accordance with Schedule A as then in effect), and
is receiving Compensation shall again become a Participant in the Plan on the
date of reemployment. No Pre-Tax Contributions will be made for such
individual, however, until he makes a new election in accordance with
subsection 3.1.

     2.4. Leased Employee. "Leased Employees" shall mean leased employees of
the Employers and Related Companies within the meaning of section 414(n)(2) of
the Code; provided, however, that if such leased employees constitute less than
twenty percent of the Employers' and Related Companies' nonhighly compensated
work force within the meaning of section 414(n)(5) (C)(ii) of the Code, the
term Leased Employees shall not include those leased employees of the Employers
and Related Companies covered by a plan described in section 414(n)(5) of the
Code, Notwithstanding any other provisions of the Plan, for purposes of the
pension requirements of section 414(n)(3) of the Code, the employees of the
Employers and Related Companies shall include Leased Employees, but Leased
Employees shall not be eligible to become Participants in the Plan. It is
intended that persons who the Employer classifies as Leased Employees are not
Participants and therefore may not become Participants even if a court or
administrative agency determines that such persons are common law employees and
not Leased Employees.


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     2.5. Foreign Assignments. Employees who are nonresident aliens and who
receive no earned income from sources within the United States shall not be
considered employees eligible for participation in the Plan.

     2.6. Allocation of Contributions Among Employers. Contributions made by
the Company under Sections 3 and 4 shall be allocated among and charged to the
Employers in accordance with such reasonable procedure as may be established by
the Committee.

                                   SECTION 3

                       Pre-Tax and Rollover Contributions

     3.1. Pre-Tax Contributions. Subject to any limitations set forth in the
Plan, each Participant may elect to have contributions made to the Plan each
payroll period through deductions from future pay in whole percentages of
Compensation, from 1% to 15%. The Committee, from time to time, may establish a
lower maximum percentage of Compensation that may be contributed on behalf of a
Participant each year, and shall establish uniform rules with respect to how
contribution elections are to be made.

     The foregoing contributions shall be "Pre-Tax Contributions", which shall
be paid to the Trust as soon as such amounts can reasonably be separated from
the Company's assets. Pre-Tax Contributions (and the earnings thereon) shall be
fully vested and nonforfeitable at all times.

As additional Pre-Tax Contributions, each Participant may elect to have any
excess dollar Credits determined to be available to him under The Quaker Flex
Plan for a calendar year prior to this year 2000 contributed to the Plan to be
allocated to his Account-on a pro rata basis during that calendar year while he
s actively employed, in accordance with uniform rules established by the
Committee.

     3.2. Compensation. Subject to the last sentence of this subsection 3.2,
prior to January 1, 1999 a Participant's "Compensation" for any period means
salary, overtime pay, sales incentives, commissions and cash bonuses paid to
him by the Employers during that portion of the period during which he met all
of the requirements of subsection 2.1, but determined prior to any reduction of
such compensation by reason of his Pre-Tax Contributions or his salary
reduction contributions to a plan maintained by the Employers under Section 125
of the Code, and excluding special allowances and ad hoc variable pay
(including but not limited to premiums. allowances, subsidies and tax
equalization payments to or for the benefit of expatriates), pay for inactive
service, compensation the receipt of which is deferred pursuant to a plan or
contract, and any benefit paid or made available under this Plan or any other
employee benefit plan maintained by an Employer. Effective January 1, 1999 a
Participant's Compensation for any period means all compensation paid to him
(or that would have been paid to him but for his election to reduce his pay and
have pre-tax contributions made on his behalf to this Plan or to a plan
governed by section 125 of the Code) while he is a Covered Employee that falls
within the definition of compensation in Treas. Reg. ss.1.415-2(d)(2), but
excluding (a) items described in Treas. Reg. ss.1.415-2(d)(3), (b) expense
reimbursements, fringe benefits, moving expenses, deferred compensation and
welfare benefits. Compensation under the Plan for a Plan Year shall not exceed
the maximum amount permitted under section 401(a)(17) of the Code for such Plan
Year.

         3.3. Election Changes. On any Accounting Day in accordance with
procedures established by the Committee, each Participant may change his
Pre-Tax Contribution election in


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accordance with subsection 3.1. The new election will take effect as soon as
administratively feasible after said election is made.

     3.4. Limitations on Contributions. To conform the operation of the Plan to
sections 401(k)(3), 402(g) and 415(c) of the Code, the Committee may modify or
revoke any Pre-Tax Contribution election made by a Participant. The Committee
may also establish administrative rules relating to the application of the
various limits imposed by law, to ensure that those limits are not
inadvertently exceeded.

     3.5. Maximum 401(k) Deferrals. In no event shall the Pre-Tax Contributions
for a Participant under the Plan (together with elective deferrals, as defined
in Code section 402(g). under any other cash-or-deferred arrangement maintained
by the Company, Corporation and the Related Companies) for any calendar year
exceed the maximum amount permitted under section 402(g) of the Code for that
year.

     3.6. Correction of Excess Deferrals. If during any calendar year a
Participant is also a participant in any other cash or deferred arrangement,
and if his elective deferrals (as defined in section 402(g) of the Code) under
such other arrangement together with Pre-Tax Contributions made on his behalf
for that calendar year exceed the maximum amount permitted for the Participant
for that calendar year under section 402(g) of the Code, the Participant, not
later than March 1 following the close of such taxable year, may request the
Committee to distribute all or a portion of such excess to him, with any
allocable gains or losses for that year (determined in accordance with any
reasonable method adopted by the Committee that either (i) conforms to the
accounting provisions of the Plan and is consistently applied to the
distribution of excess contributions, under this Section 3.6 and Section 3.8 to
all affected Participants, or (ii) satisfies any alternative method set forth
in applicable Treasury regulations. Any such request shall be in writing and
shall include adequate proof of the existence of such excess, as determined by
the Committee in its sole discretion. If the Committee is so notified, such
excess amount shall be distributed to the Participant no later than the April
15 following the close of the Participant's taxable year. In addition, if the
applicable limitation for a Plan Year happens to be exceeded with respect to
this Plan alone, or this Plan and another plan or plans of the Company,
Corporation or a Related Company, the Committee shall direct that such excess
Contributions (with allocable gains or losses) be distributed to the
Participant as soon as practicable after the, Committee is notified of the
excess deferrals by the Participant or otherwise discovers the error (but no
later than the April 15 following the close of the Participant's taxable year).
The provisions of this Section 3.6 shall be interpreted in accordance with
applicable Treasury regulations under sections 402(g) and 401 (k) of the Code.

     3.7. ADP Test. For any Plan Year the amount by which the average of the
Deferral Percentages (as defined below) for that Plan Year of each eligible
employee who is Highly Compensated for that Plan Year (the "Highly Compensated
Group Deferral Percentage") exceeds the average of the Deferral Percentages for
that Plan Year of each eligible employee who is not Highly Compensated for that
Plan Year (the "Non-highly Compensated Group Deferral Percentage") shall be
less than or equal to either (i) a factor of 1.25 or (ii) both a factor of 2
and a difference of 2. "Deferral Percentage" for any eligible employee for a
Plan Year shall be determined by dividing the Pre-Tax Contributions made on his
behalf for such year by his Section 415 Compensation (defined in subsection
6.4) as limited for such year under section 401(a)(17) of the Code, subject to
the following special rules:

     (a)  any employee eligible to participate in the Plan at any time during a
          Plan Year shall be counted, regardless of whether any Pre-Tax
          Contributions are made on his behalf for the year.


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     (b)  the Deferral Percentage for any Highly Compensated member who is
          eligible to participate in the Plan and who is also eligible to make
          other elective deferrals under one or more other arrangements
          (described in section 401(k) of the Code) maintained by the Company,
          Corporation or a Related Company that end with or within the same
          calendar year (other than a plan or arrangement subject to mandatory
          disaggregation under applicable Treasury regulations), shall be
          determined as if all such elective deferrals were made on his behalf
          under the Plan and each such other arrangement;

     (c)  excess Pre-Tax Contributions distributed to a Participant under
          subsection 3.6 shall be counted in determining such Participant's
          Deferral Percentage except in the case of a distribution to a
          non-Highly Compensated Participant required to comply with section
          401(a)(30) of the Code;

     (d)  (d) If this Plan is aggregated with one or more other plans for
          purposes of section 410(b) of the Code (other than the average
          benefit percentage test), this subsection 3.7 shall be applied as if
          all such plans were a single plan; provided, however, that for Plan
          Years beginning after 1989, such aggregated plans must all have the
          same plan year; and

     (e)  all eligible employees covered by collective bargaining agreements
          shall be tested separately from non-union Participants (as a single
          group, regardless of the number of bargaining agreements).

The provisions of this subsection 3.7 shall be interpreted in accordance with
the requirements of section 401(k) of the Code and the regulations thereunder.

     3.8. Correction of Excess Contributions. In the event that the Highly
Compensated Group Deferral Percentage for any Plan Year does not initially
satisfy one of the tests set forth in subsection 3.7. the Committee,
notwithstanding any other provision of the Plan, shall instruct the Trustee to
distribute sufficient Pre-Tax Contributions, with any allocable gains or losses
for such Plan Year determined in accordance with any reasonable method adopted
by the Committee for that Plan Year that either (i) conforms to the accounting
provisions of the Plan and is consistently applied to making corrective
distributions under this subsection 3.8 and subsection 3.6 and 4.6 to all
affected Participants or (ii) satisfies any alternative method set forth in
applicable Treasury regulations, so that the Highly Compensated Group Deferral
Percentage meets one of the tests referred to in subsection 3.7, to Highly
Compensated Participants on whose behalf such contributions were made, starting
with the Participant with the largest Pre-Tax Contributions and continuing with
the Participant with the next largest Pre-Tax Contributions (and so forth),
under the leveling method described in applicable Treasury notices and
regulations. The amounts to be distributed to any Participant pursuant to this
subsection 3.8 shall be reduced by the amounts of any Pre-Tax Contributions
distributed to him for such Plan Year pursuant to subsection 3.6. The Committee
shall return such excess Pre-Tax Contributions (and allocable interest) by the
close of the Plan Year following the Plan Year for which they were made.

     3.9. Highly Compensated Employee . An employee shall be "Highly
Compensated" for any Plan Year if he:

     (i)  was a 5-percent owner (as defined in section 416(i)(1)(B) of the
          Code) of the Corporation during that Plan Year or the preceding Plan
          Year. or;

     (ii) received Section 415 Compensation in excess of $80,000 (indexed for
          cost-of-living adjustments under section 415(d) of the Code) during
          the preceding Plan Year.


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<PAGE>


     3.10. Rollover Contributions. An eligible employee of an Employer
receiving Compensation, regardless of whether he has become a Participant, may
make a Rollover Contribution (as defined below) to the Plan. The term "Rollover
Contribution" means a rollover contribution, in cash, of all or part of the
taxable portion of a distribution which, under the applicable provisions of the
Code, is permitted to be rolled over to a qualified plan. If an employee who is
not otherwise a Participant makes a Rollover Contribution to the Plan. he shall
be treated as a Participant only with respect to such Rollover Contribution
until he has met all of the requirements for Plan participation set forth in
subsection 2.1.

                                   SECT1ON 4

                             Employer Contributions

     4.1. Matching Contributions. Subject to the conditions and limitations
specified elsewhere in this Plan, for each payroll period during a Plan Year an
Employer shall contribute to the Plan on behalf of each Participant employed by
such Employer an amount equal to 50% of the Pre-Tax Contributions made on
behalf of the Participant that do not exceed 4% of such Participant's
Compensation for such payroll period. Any contribution made pursuant to this
subsection 4.1 shall be referred to hereinafter as a "Matching Contribution".
Matching Contributions shall be fully vested and non-forfeitable (except to the
extent that they relate to Pre-Tax Contributions that are returned to a
Participant to comply with the limits under section 402(g), 401(k)(3) or 415(c)
of the Code).

     4.2 Qualified Matching Contributions. For each Plan Year any Employer may,
but shall not be required to, contribute an additional percentage of the
Pre-Tax Contributions made on behalf of Participants employed by such Employer
who are not Highly Compensated (as defined in subsection 3.9). Any contribution
made pursuant to this subsection 4.2 shall be referred to hereinafter as a
"Qualified Matching Contribution". At the discretion of the CommitteeQualified
Matching Contribution may be tested under subsection 3.7 or 4.5 in accordance
with applicable Treasury regulations.

     4.3 Limitations on Amount of Employer Contributions. In no event shall the
sum of any Pre-Tax Contributions, Matching Contributions and Qualified Matching
Contributions made by an Employer for any Plan Year exceed the limitations
imposed by Section 404 of the Code on the maximum amount deductible on account
thereof by the Employer for that year.

     4.4 Payment of Employer Contributions. Each Employer's contributions under
the Plan (other than Pre-Tax Contributions) for any Plan Year shall be paid to
the Trustee, without interest, no later than the time prescribed by law for
filing the Employer's federal income tax return, including any extensions
thereof.

     4.5 ACP Test. For any Plan Year, the amount by which the average of the
Contribution Percentages for such Plan Year (as defined below) of each eligible
employee who is Highly Compensated for such Plan Year (the "Highly Compensated
Group Contribution Percentage") exceeds the average of the Contribution
Percentages for such Plan Year of each eligible employee who is not Highly
Compensated for such Plan Year (the "Non-highly Compensated Group Contribution
Percentage") shall be less than or equal to either (i) a factor of 1.25 or (ii)
both a factor of 2 and a difference of 2. The "Contribution Percentage" for any
eligible employee for a Plan Year shall be determined by dividing his total
Matching Contributions (and, if applicable, Qualified Matching Contributions)
for that Plan Year by his Section 415 Compensation for that Plan Year, subject
to any special rules set forth in applicable


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<PAGE>


Treasury regulations. In applying this subsection 4.5, eligible employees who
are covered by collective bargaining agreements shall be disregarded.

     4.6 Correction Under ACP Test. In the event that the Highly Compensated
Group Contribution Percentage for any Plan Year does not initially satisfy one
of the tests referred to in subsection 4.5, the Committee shall direct the
Trustee to distribute to the Highly Compensated Participants to whose Accounts
Excess Aggregate Contributions (as defined below) were allocated for such year,
the amount of each such Participant's Excess Aggregate Contributions, with any
gains or losses allocable thereto for that Plan Year. The "Excess Aggregate
Contributions" for any Plan Year shall mean the excess of the aggregate amount
of After-Tax and Matching Contributions taken into account in computing the
Contribution Percentages of Highly Compensated Participants for such year over
the maximum amount of Matching Contributions permitted under the test set forth
in subsection 4.5, determined by reducing the amount of such contributions made
on behalf of Highly Compensated Participants in order of the dollar amounts of
such contributions, beginning with the highest of such dollar amounts, in
accordance with applicable Treasury regulations and notices. The gain or loss
allocable to Excess Aggregate Contributions shall be determined in accordance
with any reasonable method adopted by the Committee for that Plan Year that
either (i) conforms to the accounting provisions of the Plan and is
consistently applied to making corrective distributions under this Plan to all
affected Participants or (ii) satisfies any alternative method set forth in
applicable Treasury regulations. Notwithstanding the foregoing provisions of
this subsection 4.6, any Matching Contributions distributable as Excess
Aggregate Contributions that are attributable to excess Pre-Tax Contributions
distributed in accordance with subsections 3.6 or 3.8 shall be forfeited as of
the end of the Plan Year to which such corrective distributions relate (and
used to reduce Employer contributions to the Plan.) The Committee shall make
any necessary distribution no later than the close of the Plan Year following
the Plan Year in which such Excess Aggregate Contributions were contributed.

     4.7 Multiple Use of Alternative Limitation. Notwithstanding any other
provision of this Sections 3 or 4, if the 1.25 factors referred to in
subsections 3.7 and 4.5 are both exceeded for a Plan Year, the leveling method
of correction prescribed in subsection 4.6 shall be continued until the
aggregate limit set forth in Treas. Reg. ss.1.401(m)-2(b) is satisfied for such
Plan Year.

     4.8 Separate Testing of Early E1igible Group. Notwithstanding any other
provision of the Plan, for any Plan Year the Committee may elect, in accordance
with applicable Treasury regulations, to apply the tests set forth in
subsections 3.7 and 4.5 separately with respect to all eligible employees who
would not have been eligible to participate in the Plan for that Plan Year had
the Plan utilized the maximum age and service requirements for eligibility
permitted by the Code.

     4.9. Supplemental Expense Contribution. The Committee may make a
Supplemental Expense Contribution in such amount as the Committee may determine
and, if such contribution is made, shall direct the Trustee to use such funds
to pay such fees, expenses, charges and taxes as the Committee designates.

                                   SECTION 5

                                Plan Investments

     5.1. Investments in General. Participants shall be entitled to select
where, from among two or more investment funds (the "Investment Funds") chosen
by the Investment Committee, their Pre-Tax Contributions and Rollover
Contributions, if any, and the earnings thereon shall be


                                      13
<PAGE>


invested. The Investment Funds shall include the "PepsiCo Stock Fund," which
shall be invested in common stock of the Corporation and cash or cash
equivalents for purposes of liquidity, and at least three other funds that
satisfy the requirements of section 401(a)(28) of the Code (pertaining to ESOP
diversification). Matching Contributions (and, if applicable, Qualified
Matching Contributions) will initially be invested in the PepsiCo Stock Fund.
The Investment Committee may add or delete an Investment Fund or change the
investment strategy of any Investment Fund at any time without prior notice.
Investments of each Investment Fund shall be made as nearly as is reasonably
possible in accordance with the provisions of the Plan, but the Trustee is
authorized, subject to the provisions of Section 7, to use its discretion as to
the timing of purchases and sales of securities, and is further authorized to
keep such portion of any of the Investment Funds, as may seem advisable from
time to time, in cash or cash equivalents, and/or in short-term fixed income
investments.

     5.2. Investment Fund Accounting. The Committee shall maintain or cause to
be maintained separate subaccounts for each Participant in each of the
Investment Funds to separately reflect his interests in each such Fund and the
portion thereof that is attributable to each of his Accounts.

     5.3. Investment Fund Elections. At the time that a Participant enrolls in
the Plan he may specify the percentage, in increments of 1%, of Pre-Tax
Contributions subsequently credited to his Accounts that are to be invested in
each of the Investment Funds in accordance with uniform rules established by
the Committee. Any such investment direction shall be deemed to be a continuing
direction until changed. During any period in which no such direction has been
given in accordance with rules established by the Committee, contributions;
credited to a Participantshall be invested in the PepsiCo Stock Fund. A
Participant may modify his investment direction prospectively by entering into
the Phone System his election to do so prior to the effective time of the
chancre in accordance with uniform rules established by the Committee.

     5.4. Transfers Between Investment Funds. Subject to uniform rules
established by the Committee, each Participant may elect to transfer
prospectively, in whole percentages or dollar amounts (not less than $250 or
fund balance whichever is less) the value of his Accounts held in any
Investment Fund (including the PepsiCo Stock Fund) to any other Investment Fund
then made available to such Participant. Any such election shall be made by
entering it into the Phone System prior to the time it is to be effective in
accordance with uniform rules established by the Committee.

                                   SECTION 6

                                Plan Accounting

     6.1. Participants' Accounts. The Committee shall maintain the following
"Accounts" in the name of each Participant:

     (a)  a "Matching Account," which shall reflect Matching Contributions, if
          any, made on his behalf and the income, losses, appreciation and
          depreciation attributable thereto;

     (b)  a "Qualified Matching Account" which shall reflect Qualified Matching
          Contributions, if any, made on his behalf and the income, losses,
          appreciation and depreciation attributable thereto;


                                      14
<PAGE>


     (c)  a "Pre-Tax Account," which shall reflect Pre-Tax Contributions, if
          any, and profit sharing contributions made by the Employers prior to
          1984, made on his behalf and the income, losses, appreciation and
          depreciation attributable thereto; and

     (d)  a "Rollover Account," which shall reflect Rollover Contributions, if
          any, made by him and the income, losses, appreciation and
          depreciation attributable thereto.

In addition, the Committee may maintain subaccounts to reflect balances
transferred to this Plan from another qualified plan that are subject to
special rules. The Accounts and subaccounts provided for in this subsection 6.1
shall be for accounting purposes only, and there shall be no segregation of
assets within the Investment Funds among the separate Accounts and subaccounts.
Reference to the "balance" in a Participant's Account means the aggregate of
the balances in the subaccounts maintained in the Investment Funds attributable
to his Accounts. A Participant's interest in the ESOP portion of the Plan shall
be comprised solely of his interested in the PepsiCo Stock Fund at that
particular time.

     6.2. Crediting of Fund Earnings and Changes in Value. As of each
Accounting Date, interest, dividends and changes in value in each Investment
Fund since the preceding Accounting Date shall be credited to each
Participant's subaccounts invested in such Investment Fund by adjusting upward
or downward the balance of his subaccounts invested in such Investment Fund in
the ratio which the subaccounts of such Participant invested in such Investment
Fund bears to the total of the subaccounts of all Participants invested in such
Investment Fund as of such Accounting Date, excluding therefrom, for purposes
of this allocation only, all contributions received since the preceding
Accounting Date, so that the total of the subaccounts of all Participants in
each Investment Fund shall equal the total value of such fund (exclusive of
such contributions) as determined by the Trustee in accordance with uniform
procedures consistently applied.

The Plan shall use a daily valuation system, which generally means that
Participants' Accounts will be updated each Accounting Day to reflect activity
for that day, such as new contributions received by the Trust, changes in
Participants' investment elections, and changes in the unit value of the
Investments Funds. For this all to happen as anticipated on any given day, the
Plan's recordkeeper must receive complete and accurate information from a
variety of different sources. Although the Plan's recordkeeping system and the
interfaces between it and the sources of the necessary information - such as
the Company payroll system - will have been designed to enable the daily
valuation process to proceed smoothly, events may occur that cause an
interruption in the process affecting a single Participant or a group of
Participants. Neither the Committee, the Investment Committee, the Corporation,
the Company, the Employers, the Trustee nor the Plan guarantee that any given
transaction will be processed on the anticipated day.

For all purposes of the Plan, all valuations of shares of PepsiCo Stock which
are not readily tradable on an established securities market shall be made by
an independent appraiser (within the meaning of section 401(a)(28) of the Code)
selected by the Committee.

     6.3. Payment of ESOP Dividends. All dividends paid on PepsiCo Stock
credited to Participants' Accounts under the ESOP portion of the Plan shall be
passed through to such Participants in one of the following ways, as determined
by the Committee in its sole discretion:

     (a)  directly to Participants in proportion to the value of the interests
          in their Accounts in the PepsiCo Stock Fund on the dividend record
          date; or


                                      15
<PAGE>


     (b)  to the Trustee, in which case the Trustee will, no later than ninety
          (90) days after the end of the Plan Year in which the dividends are
          paid, distribute them to the Participants to whose Accounts they are
          attributable.

     6.4. Limitation on Allocations to Participants' Accounts. Notwithstanding
any other provision of the Plan, a Participant's Annual Additions (as defined
in subsection 6.5) for any Plan Year shall not exceed an amount equal to the
lesser of:

     (a)  25 percent of the Section 415 Compensation (as defined below) paid to
          the Participant in that Plan Year; or

     (b)  $30,000 (as adjusted for cost-of-living increases under applicable
          Treasury regulations).

A Participant's "Section 415 Compensation" for any Plan Year means his total
compensation (as described in Treas. Reg. (1.415-2(d)(1)) paid during that year
for services rendered to the Employers or to any other trade or business which,
together with an Employer is a Participant in a controlled group of
corporations or a controlled group of trades or businesses as described in
sections 414(b) and (c) of the Code, as modified by section 415(h) of the Code,
exclusive of deferred compensation and other amounts which received special tax
treatment (as described in Treas. Reg. 1.415-2(d)(2)), but including any
elective deferral under section 402(g) of the Code or salary reduction
contribution under section 125 of the Code to any plan maintained by an
Employer or Section 415 Affiliate (defined in subsection 6.5).

To correct any excess Annual Additions, unmatched Pre-Tax Contributions (and
the earnings thereon) will first be returned to the affected Participant. Then,
if the limit set forth in this subsection would still be exceeded, matched
Pre-Tax Contributions (and the earnings thereon) will be returned to the
affected Participant (and [if the Participant is a Highly-Compensated nonunion
employee] the corresponding Matching Contribution shall be forfeited). If
returning Pre-Tax Contributions (and any resulting forfeitures of Matching
Contributions) pursuant to the preceding sentence does not exhaust the excess
amount, then the remaining excess amount shall be reallocated to a "415 Excess
Account". The Committee shall establish reasonable rules to determine what
amounts must be returned and/or allocated to the 415 Excess Account pursuant to
this subsection to ensure that the limits set forth in this subsection are not
exceeded. For all purposes of the Plan, amounts reallocated to a 415 Excess
Account for any calendar year shall be treated as Matching Contributions for
the next following Plan Year or Plan Years until all amounts so held have been
allocated as Matching Contributions.

     6.5. Annual Additions. A Participant's "Annual Additions" for any Plan
Year means the sum of:

     (a)  all contributions (other than Rollover Contributions) allocated to a
          Participant's Accounts for such year, excluding Pre-Tax Contributions
          that are distributed as excess deferrals in accordance with
          subsection 3.6 but including any Pre-Tax Contributions treated as
          excess contributions under subsection 3.8; plus

     (b)  employer contributions by the Company or a Section 415 Affiliate
          allocated for such year to any individual medical account (as defined
          in section 415(l) of the Code),or to a separate account under a
          funded welfare benefit plan (as described in section 419(A)((d))(2)
          of the Code).


                                      16
<PAGE>


For purposes of applying the limits of subsection 6.5. Annual Additions shall
also include annual additions under any other defined contribution plan
maintained by a Related Company or an entity that would be a Related Company if
the ownership tests of section 414(b) and (c) of the Code were "more than 50"
rather than "at least 80" (a "Section 415 Affiliate").

     6.6. Combined Limit Under Section 415(e). If a Participant also
participates in any defined benefit plan (as defined in section 415(k) of the
Code) maintained by a Related Company. the aggregate benefits payable to, or on
account of, the Participant under such plan together with this Plan shall be
determined in a manner consistent with section 415(e) of the Code, to the
extent applicable. The benefit provided for the Participant under the defined
benefit plan shall be adjusted as necessary so that the sum of the "defined
benefit fraction" and the "defined contribution fraction" (as such terms are
defined in section 415 (e) of the Code and applicable regulations thereunder)
calculated with regard to such Participant does not exceed 1.0. For purposes of
this subsection 6.6, all qualified defined benefit plans (whether or not
terminated) of the Section 415 Affiliates shall be aggregated.

     6.7. Correction of Accounting Error . In the event of an error in the
adjustment of a Participant's Accounts, the Committee, in its sole discretion,
may correct such error by either crediting or charging the adjustment required
to make such correction to or against income and expenses of the Trust for the
Plan Year in which the correction is made, by changing the method of allocating
Employer Contributions (in a manner that does not discriminate in favor of
Highly Compensated Participants) or by the Employer of such Participant making
an additional contribution, to permit correction of the error. Except as
provided in this subsection 6.7, the Accounts of other Participants shall not
be readjusted on account of such error.

     6.8. Statement of Plan Interest. As soon as practicable after the close of
each Plan Year, the Committee shall provide each Participant with a statement
reflecting the value of his interest in the Plan.

     6.9. Limitation on Electing Or Deceased Shareholder. If a Corporation
shareholder sells PepsiCo Stock to the Trust and elects (with the consent of
the Committee) nonrecognition of gain under section 1042 of the Code, or if the
executor of the estate of a deceased Corporation shareholder sells PepsiCo
Stock to the Trust and claims (with the consent of the Committee) an estate tax
deduction under section 2057 of the Code, no portion of the PepsiCo Stock
purchased in any such transaction (or any dividends or other income
attributable thereto) may be allocated during the ten-year period following the
purchase to the Accounts of:

     (1)  the selling shareholder (in the case of a nonrecognition transaction
          under section 1042 of the Code) or the decedent (in the case of a
          sale to which Section 2057 of the Code applies); or

     (2)  his spouse, brothers or sisters (whether by the whole or half blood),
          ancestors or lineal descendants (except as to certain lineal
          descendants to the extent provided in section 409(n)(3)(A) of the
          Code), or any other person who bears a relationship to him that is
          described in section 267 (b) of the Code.

     In addition, no portion of the PepsiCo Stock purchased in any such
transaction (or any dividends or other income attributable thereto) may
thereafter be allocated to the Accounts of any Participant owning (as
determined under section 318(a) of the Code, without regard to section
318(a)(2)(B)(1) of the Code), during the entire one-year period preceding the
purchase, or on any date that PepsiCo Stock is allocated under the Plan, more
than 25% of any class of outstanding PepsiCo Stock or of the total value of any
class of outstanding PepsiCo Stock.


                                      17
<PAGE>


     To the extent that a Participant is subject to the allocation limitation
described in this subsection 6.9 for a Plan Year, he shall not share in the
allocation of Employer Contributions.

                                   SECTION 7

                               Shareholder Rights

     7.1. Voting Rights. Prior to each annual or special meeting of
shareholders of the Corporation, the Trustee shall send to each Participant a
copy of the proxy soliciting material for the meeting, together with a form
requesting instructions to the Trustee on how to vote the number of whole
shares and any fractional share of PepsiCo Stock allocated to the Participant's
Accounts. The voting instructions received by the Trustee will be held by it in
confidence. Upon receipt of such instruction, the Trustee shall vote such
shares as instructed, provided that, in the case of fractional shares, the
Trustee shall vote the combined fractional shares to the extent possible to
reflect the instruction of the Participants to whose Accounts fractional shares
are credited. The Trustee shall vote shares of PepsiCo Stock for which it does
not receive voting instructions, including those shares which are not allocated
to Participant Accounts, in the same proportion as shares with respect to which
it does receive instructions.

     7.2. Tender and Exchange Rights. The Trustee shall provide each
Participant with such notices and information statements as are provided to
Corporation shareholders generally with respect to any tender or exchange
offer, and each Participant shall be entitled to direct the Trustee with
respect to the tender or exchange of whole shares and any fractional shares of
PepsiCo Stock allocated to his Accounts. A Participant's instructions shall
remain in force until superseded in writing by the Participant. Upon receipt of
such direction, the Trustee shall tender or exchange such shares as directed,
provided that, in the case of fractional shares, the Trustee shall tender or
exchange the combined fractional shares to the extent possible to reflect the
direction of the Participants to whose Accounts fractional shares are credited.
The Trustee shall not tender or exchange shares in a Participant's Account for
which directions are not received. The Trustee shall tender or exchange shares
of PepsiCo Stock which are not allocated to Participants' Accounts such that
the ratio of tendered or exchanged unallocated shares to all unallocated shares
is the same as the ratio of tendered or exchanged shares in Participants'
Accounts to all shares in Participants' Accounts. Unless and until shares of
PepsiCo Stock are tendered or exchanged, the individual instructions received
by the Trustee from Participants shall be held in strict confidence and shall
not be divulged or released to any person, including officers and employees of
the Employers.

     7.3. Exercise of Shareholder Rights by Beneficiary . Should the Committee
receive notice that a Participant has been declared incompetent or should a
Participant die and his Account has not vet been distributed, then his
Beneficiary shall be entitled to exercise the nights of the Participant under
this Section 7.

                                   SECTION 8

              Loans and Distributions From Participants' Accounts

     8.1. Loans. Participants may obtain loans from their Accounts on the terms
and conditions as set forth in this subsection and as established by the
Committee:

     (a)  The dollar amount of such loan to any Participant, when added to the
          balance of any other outstanding loans granted under this subsection,
          shall not exceed the lesser of:


                                      18
<PAGE>


          (i)  50% of all of the Participant's Accounts, or

          (ii) $50,000 minus the excess (if any) of the highest outstanding
               balance of loans from the Plan during the year preceding the
               date the new loan is made, over the outstanding balance of all
               other loans from the Plan (as of the date the new loan is made).

          The foregoing limits shall be applied on an aggregate basis taking
          into account all loans from any plan maintained by the Corporation,
          Company or any Related Company.

     (b)  The term of any such loan shall not exceed five years, except in the
          case of a loan used to purchase the Participant's principal residence
          (the term of which may not exceed 15 years). The unpaid balance of
          any such loan shall bear a fixed rate of interest established by the
          Committee. Each loan shall provide for level payments of principal
          and interest no less frequently than quarterly. Level payments shall
          be made through payroll deductions so long as the Participant remains
          employed by an Employer or Related Company. Any loan may be prepaid
          in full at any time by the Participant.

     (c)  Each loan used for the purchase of a primary residence with a term
          longer than 5 years shall be evidenced by a promissory note or notes
          made, executed and delivered by the applying Participant to the
          Committee. Each such note or notes shall be in such form and contain
          such terms and conditions as the Committee shall determine.

     (d)  Each loan to a Participant under this subsection shall be secured by
          such Participant's nonforfeitable interest in his Accounts.

     (e)  Any application for a loan under this subsection shall constitute an
          application by the Participant directing that the Participant's
          interest in his Accounts be invested in such loan (up to the amount
          of the loan). If a loan is granted hereunder, the value of a
          Participant's Accounts shall be adjusted as of each Valuation Date to
          reflect the principal and interest credited to such Accounts as a
          result of the loan investment as directed, by the Participant
          hereunder. Under rules adopted by the Committee, loans shall be made
          from one or more of the Investment Funds in which a Participant's
          Accounts are invested prior to the making of the loans hereunder.
          Applications for loans may be made through the Phone System, except
          that applications for home purchase loans with a term in excess of 5
          years must be made in writing and accompanied by appropriate
          documentation as determined by the Committee in Its sole discretion.

     (f)  No Participant may have more than two general and one home purchase
          loans outstanding under this subsection at any given time.

     (g)  Loan payments will be suspended as permitted under section 414(u) of
          the Code (relating to qualified military service).

     (h)  The minimum amount of any loan shall be $1,000.

     (i)  Loans shall be subject to such other terms and conditions as the
          Committee may impose from time to time.

No Participant who applies for a loan and directs the investment of his
Accounts in accordance with this subsection shall be considered a fiduciary by
reason of his exercise of control over his


                                      19
<PAGE>


Accounts and no person who is otherwise a fiduciary (including the Trustee,
(the Corporation, the Committee, the Investment Committee, the Employers and
the Company) shall have any liability for any loss, or by reason of any breach,
which results from such Participant's exercise of control.

8.2. In Service Distributions and Transfers.

(a)  Each Participant who has reached age 59-1/2 or who is disabled may from
     time to time elect to have all or part of his Accounts distributed to him
     in PepsiCo Stock or in cash, except that cash shall be distributed in lieu
     of any fractional shares of PepsiCo Stock credited to the Participant's
     Account. "Disabled" for this purpose means the state of being totally and
     permanently disabled so as to be unable to perform any work for
     remuneration or profit, as determined solely by the Committee, considering
     the advice of a medical doctor.

(b)  Upon written request, a Participant may take a distribution of all or part
     of his Accounts, excluding interest earned after June 30, 1988, in the
     event of hardship. "Hardship" means when funds are required to purchase a
     primary residence for the Participant or his family to finance the post
     secondary education of the Participant or his family, to pay for
     unreimbursed medical expenses for the Participant or his dependent, to pay
     for funeral expenses of a family member or to alleviate circumstances
     which present financial hardship due to the need to (i) purchase or make
     substantial repairs to a vehicle used as the sole means of the
     Participant's transportation to and from work, (ii) pay legal fees, (iii)
     satisfy a tax debt resulting from an audit of the Participant's Federal
     tax return or (iv) satisfy credit debt where wage garnishment has been
     threatened, plus amounts necessary for applicable income and penalty
     taxes. Distributions under this paragraph shall be made as soon as
     practicable after the Committee approves the request.

(c)  A Participant who has completed at least 10 years of participation in the
     ESOP (including any years of participation in the Quaker Stock Sharing
     Plan prior to June 30, 1994) and who is at least 55 years old may elect to
     either transfer or withdraw a portion of his interest in the ESOP. An
     election to transfer must be made on the prescribed form and filed with
     the Committee within the 90 day period immediately following the last
     Accounting Date of a Plan Year in the Election Period. For purposes of
     this paragraph 8.2(c), the "Election Period" means the period of six
     consecutive Plan Years beginning with the Plan Year in which the
     Participant has attained age 55 and completed ten years of participation.
     An eligible Participant's diversification election shall be made in
     accordance with the following:

     (i)  For each of the first five Plan Years in the Election Period, the
          Participant may elect to transfer or withdraw an amount which does
          not exceed 25% of the number of shares of PepsiCo Stock credited to
          the Participant's Accounts that had been acquired by or contributed
          to the ESOP portion of the Plan less the number of such shares
          previously transferred or distributed under this paragraph 8.2(c). In
          the case of the last Plan Year in the Election Period, the
          Participant may elect to transfer an amount which does not exceed 50%
          of such shares of PepsiCo Stock less the number of such shares
          previously transferred under this paragraph 8.2(c).

     (ii) Any transfer or withdrawal under this paragraph 8.2(c) shall he
          transferred or withdrawn within 90 days after the 90 day period in
          which the election may be made. All amounts transferred pursuant to
          this paragraph 8.2(c) shall thereafter be subject to, and solely
          governed by, the terms of the Plan applicable to the ESOP portion
          thereof.


                                      20
<PAGE>


     Distributions under this subsection 8.2 shall be made in cash or in whole
shares of PepsiCo Stock (with fractional shares paid in cash) at the
Participant's election.

     8.3. Post-Termination Distributions. Subject to the following provisions
of this Section 8.,a Participant 's Accounts under the Plan shall be
distributed to him, or in the event of his death to his Beneficiary, after the
date on which his employment with the Employer and the Related Companies
terminates for any reason.

Pursuant to election by the Participant, distribution shall be in shares of
PepsiCo Stock or in cash; except that cash shall be distributed in lieu of any
fractional shares of PepsiCo Stock credited to the Participant's Accounts.
Distribution shall be made not later than 60 days after the last day of the
Plan Year in which the Participant attains age 65, or if later, in which his
termination of employment occurs, subject to the following:

(a)  A Participant may elect to have distribution made to him as soon as
     practicable after his termination of employment occurs, provided that he
     is not reemployed by an Employer or Related Company prior to such
     distribution.

(b)  Subject to paragraph (d) below a Participant who has terminated employment
     may elect to defer his distribution until he attains age 70-1/2. For
     purposes of a deferred distribution, a Participant's Accounts will be
     valued as of the Accounting Date coinciding with the distribution.

(c)  In all events distribution shall be made (or commence) no later than the
     April 1 of the calendar year following the calendar year in which he
     terminates employment or attains age 70-1/2, whichever occurs later.

(d)  If the value of the Participant's Accounts is not in excess of $5,000 at
     the end of the Plan Year in which the Participant's termination occurs.
     The Committee shall direct the Trustee to distribute immediately amounts
     credited to his Accounts to the Participant or Beneficiary, provided that
     no such distribution shall be made without the Participant's consent if
     the value of the distribution as of the Accounting Date on which it is
     processed exceeds $5,000. Any such distribution shall be in the form of
     cash or, if elected by the Participant, whole shares of PepsiCo Stock
     (with cash for any fractional shares.)

(e)  If the value of the Participant's Accounts is in excess of $5,000
     determined as of the Accounting Date coinciding with the date of
     distribution, distribution of such Account shall be made to the
     Participant at such time as the Participant elects (subject to paragraph
     (b) above) in one of the following forms chosen by the Participant:

     (i)  a single lump sum payment, or

     (ii) in a partial distribution (optional with Participant) and in
          approximately equal annual installments over a period of years not
          exceeding the Participant's life expectancy. In the event
          distribution is made in installments, the remaining balance in the
          Participant's Accounts shall continue to be adjusted for gains and
          losses as of each Accounting Date.

(f)  If a Participant with an Account balance in excess of $5,000 chooses to
     defer distribution of his Account in accordance with paragraph (b) above.
     He may make a partial


                                      21
<PAGE>


     withdrawal from his Account at any time by submitting an election in
     accordance with uniform rules established by the Committee, and may borrow
     from his Account in accordance with subsection 8.1.

(g)  If the Participant dies prior to the payment of his interest under the
     Plan (as determined under the regulations under section 401(a)(9) of the
     Code), his Beneficiary may elect to have distribution made in a lump sum
     as soon as practicable, subject to the following:

     i.   If the Beneficiary designated by the Participant is the Participant's
          surviving spouse, the lump sum distribution may be deferred by the
          Beneficiary until no later than the date on which the Participant
          would have attained age 70-1/2 and, if the surviving spouse dies
          before distribution, distribution shall be applied under this
          paragraph (f) as if the surviving spouse were a Participant.

     ii.  ii. If the Beneficiary designated by the Participant is not the
          Participant's surviving spouse, if the Participant failed to
          designate a Beneficiary or if the designated Beneficiary predeceases
          the Participant, distribution to the Beneficiary shall be made as of
          a date selected by the Committee, but no later than the fifth
          anniversary of the date of the Participant's death.

(h)  If distribution of the Participant's interest under the Plan has begun (as
     determined under the regulations under section 401(a)(9) of the Code), but
     the Participant dies before payments are completed, his Beneficiary may
     elect in writing to continue to receive installment payments over the
     period designated in the Participant's election or over a shorter period,
     or to receive an immediate lump sum distribution.

     8.4. Distribution to Persons Under Disability. Notwithstanding the
foregoing provisions of this Section, in the event that a Participant or
Beneficiary is declared incompetent and the Committee receives evidence
satisfactory to it that a conservator or other person legally charged with the
care of his person or of his estate has been appointed, the amount of any
benefit to which such Participant or Beneficiary is then entitled from the
Trust Fund shall be paid to such conservator or other person legally charged
with the care of his person or estate.

     8.5. Interests Not Transferable. The interests of Participants and their
Beneficiaries under the Plan and Trust Agreement are not subject to the claims
of their creditors and may not be voluntarily or involuntarily assigned,
alienated or encumbered, except in the case of certain qualified domestic
relations orders relating to the provision of child support, alimony or marital
rights of a spouse, child or other dependent and which meets such other
requirements as may be imposed by section 414(p) of the Code or regulations
issued thereunder, which may be paid to the alternate payee as soon as
practicable after approval of the order (if the order so permits) regardless of
the employment status of the Participant.

     8.6. Absence of Guaranty. Neither the Trustee, the Corporation, the
Company, the Committee, the Investment Committee nor the Employers in any way
guarantee the Trust Fund from loss or depreciation. The Employers do not
guarantee any payment to any person, except as may be done by providing a
written guarantee in connection with a LESOP Loan. The liability of the Trustee
to make any payment is limited to the available assets of the Trust Fund.

     8.7. Designation of Beneficiary. Subject to the provisions of subsection
8.5, each Participant, from time to time, by signing a form furnished by the
Committee, may designate any legal or natural person or persons (who may be
designated contingently or successively) to whom his benefits are to be paid if
he dies before he receives all of his benefits; provided, however, that


                                      22
<PAGE>

if a Participant is married on the date of his death, his Beneficiary shall be
his spouse unless the Participant designates as his Beneficiary a person other
than his spouse and:

(a)  (i) the Participant's spouse consents in writing to such election which is
     filed with the Committee in such form as it may require, (ii) such
     beneficiary designation may not be changed without spousal consent and
     (iii) the spouse's consent acknowledges the effect of such designation and
     is witnessed by either a notary public or a Plan representative appointed
     or approved by the Committee; or

(b)  it is established to the satisfaction of a Plan representative appointed
     or approved by the Committee that the consent required under paragraph (a)
     next above cannot be obtained because there is no spouse, because the
     spouse cannot be located or because of such other circumstances as the
     Secretary of the Treasury may prescribe in regulations.

A Beneficiary designation form will be effective only when the signed form is
filed with the Committee while the Participant is alive and will cancel all
Beneficiary designation forms signed earlier. Except as otherwise specifically
provided in this subsection, if a deceased Participant failed to designate a
Beneficiary as provided above, or if all the designated Beneficiaries of a
deceased Participant dies before him, the remaining benefits shall be paid to
the estate of the Participant. If a designated Beneficiary survives the
Participant, but dies before his entire interest in the Account of the deceased
Participant can be paid to him, the remainder of such interest of such
Beneficiary shall be paid to a beneficiary designated by such Beneficiary (on a
form and in a manner prescribed by the Committee) or, in the absence of such
designation, to the Beneficiary's estate. The term "Beneficiary" as used in the
Plan means the person or persons to whom a deceased Participant's benefits are
payable under this subsection 8.7.

     8.8. Missing Recipients. Each Participant and each Beneficiary must file
with the Committee from time to time in writing his post office address and
each change of post office address. Any communication, statement or notice
addressed to a Participant or Beneficiary at his last post office address filed
with the Committee, or if no address is filed with the Committee then, in the
case of a Participant, at his last post office address as shown on the
Employer's records, will be binding on the Participant and his Beneficiary for
all purposes of the Plan. None of the Employers, the Corporation, the Company,
the Committee, the Investment Committee or the Trustee will be required to
search for or locate a Participant or Beneficiary. If a Participant or
Beneficiary entitled to benefits under the Plan falls to claim such benefits
and the Committee determines that it is unable to reasonably find his
whereabouts, such benefits shall be forfeited and shall be used until exhausted
to reduce the Basic and Supplemental LESOP Contributions otherwise required
under Section 3 of the Employer which last employed the Participant. If the
whereabouts of the Participant or Beneficiary is subsequently determined, such
forfeiture shall be restored by the Employer whose contributions were so
reduced and such restoration shall not be treated as an Annual Addition for
purposes of subsection 6.8.

     8.9. Distribution and Transfer of PepsiCo Preferred Stock. Notwithstanding
any other provisions of the Plan to the contrary, no PepsiCo Stock shall be
distributed or transferred from the Plan in the form of PepsiCo Preferred
Stock. With respect to any portion of a Participant's Account which is to be
distributed or transferred in accordance, with the provisions of this Section
8, the Committee shall direct the Trustee either to (a) cause the Corporation
to redeem the shares of PepsiCo Preferred Stock allocated to such portion for
their fair market value in cash or (b) convert such shares into shares of
PepsiCo Stock (and cash representing the fair market value of any fractional
shares of such stock) in accordance with the then applicable conversion rate of
such PepsiCo Preferred Stock, whichever yields the greater value. If a
Participant has elected distribution in the form of PepsiCo Stock pursuant to
any applicable provision of this Section 8,

                                      23
<PAGE>


any cash resulting from the redemption of PepsiCo Preferred Stock pursuant to
this subsection shall be used to purchase whole shares of PepsiCo Common Stock,
which shall be distributed (with any remaining cash) in accordance with such
election.

     8.10. Direct Rollover Option . To the extent required under the applicable
provisions of section 401(a)(31) of the Code and regulations issued thereunder,
any person receiving an "eligible rollover distribution" (as defined in such
Code section) may direct the Trustee to transfer such distributable amount, or
a portion thereof, to an "eligible retirement plan" (as defined in such Code
section), in accordance with uniform rules established by the Committee.

     8.11. Restrictions on Distributions. Notwithstanding any other provision
of the Plan to the contrary, a Participant may not commence distribution of the
ESOP portion of his Accounts pursuant to subsection 8.3 prior to the date he
attains age 59 1/2, even though his employment with the Employers and Related
Companies has terminated, unless or until he also has a "separation from
service" within the meaning of section 401(k)(2)(B) of the Code. The foregoing
restriction shall not apply, however, if the Participant's termination of
employment occurs in connection with the sale by an Employer or a Related
Company to an unrelated corporation of at least 85% of the assets of a trade or
business or the disposition of its interest in a subsidiary to an unrelated
entity that meets the requirements for distribution under applicable Treasury
regulations.

                                   SECTION 9

                   The Committee and the Investment Committee

     9.1. Membership. The membership of the Committee and Investment Committee
referred to in subsection 1.3 each shall consist of three or more employees of
the Corporation who are appointed by the Corporation's Board of Directors. The
Committee and Investment Committee shall each act by the concurrence of a
majority of its then members by meeting or by writing without a meeting. The
Committee and Investment Committee may authorize any one of its members to
execute any documents, instrument or direction on its behalf. A written
statement by a majority of the Committee or Investment Committee members or by
an authorized Committee or Investment Committee member shall be conclusive in
favor of any person (including the Trustee) acting in reliance thereon. An
individual's Committee or Investment Committee membership shall cease
automatically when he terminates employment with the Corporation.

     9.2. Rights, Powers and Duties. The Committee shall have such
discretionary authority as may be necessary to discharge its responsibilities
under the Plan, including the following powers, rights and duties:

(a)  to adopt such rules of procedure and regulations as, in its opinion, may
     be necessary for the proper and efficient administration of the Plan and
     as are consistent with the provisions of the Plan;

(b)  to enforce the Plan in accordance with its terms and with such rules and
     regulations as may be adopted by the Committee;

(c)  to determine all questions arising under the Plan, including questions
     relating to the eligibility, benefits and other Plan rights of
     Participants and other persons entitled to benefits under the Plan and to
     remedy ambiguities inconsistencies or omissions;


                                      24
<PAGE>


(d)  to maintain and keep adequate records concerning the Plan and concerning
     its proceedings and acts in such form and detail as the Committee may
     decide;

(e)  to direct all benefit payments under the Plan;

(f)  to furnish the Employers with such information with respect to the Plan as
     may be required by them for tax or other purposes;

(g)  to employ agents and counsel (who also may be employed by the Employers or
     the Trustee); and

(h)  to delegate to employees of the Corporation, Company, or Employers and the
     agents or counsel employed by the Committee such powers as the Committee
     considers desirable; and

(i)  to allocate to any one of its members the power to act on behalf of the
     Committee with respect to any of its powers, rights or duties.

Paragraphs (g), (h) and (i) shall also apply to the Investment Committee.

     9.3. Application of Rules. In operating and administering the Plan, the
Committee shall apply all rules of procedure and regulations adopted by it in a
uniform and nondiscriminatory manner.

     9.4. Remuneration of Committee and Investment Committee Members and
Expenses of Plan Administration. No remuneration shall be paid to any Committee
or Investment Committee member as such. Except as otherwise determined by the
Corporation, the following expenses will be paid directly by the Trustee out of
assets of the Plan (regardless of whether a Supplemental Expense Contribution
has been made), or, if paid by the Corporation, Company and Employers
reimbursed by the Trustee to the maximum extent permitted by law: (a) all
direct expenses of administering the Plan, including but not limited to the
fees and expenses of persons employed by the Committee to administer the Plan,
and (b) all fees and expenses incurred in connection with the collection,
administration, management, investment, protection and distribution of the
Trust, including but not limited to the Trustee's fees and brokerage
commissions.

     9.5. Indemnification of the Committee and the Investment Committee. The
Committee,. the Investment Committee and the individual members thereof and any
employees to whom the Committee or the Investment Committee has delegated
responsibility in accordance with paragraph 9.2(h) shall be indemnified by the
Employers and Corporation against any and all liabilities, losses, costs and
expenses (including legal fees and expenses) of whatsoever kind and nature
which may be imposed on, incurred by or asserted against the Committee or the
Investment Committee, its members or such employees by reason of the
performance of a Committee or the Investment Committee function unless the
Committee or the Investment Committee, such members or employees are judicially
determined to have acted dishonestly or in willful violation of the law or
regulation under which such liability, loss, cost or expense anises.

     9.6. Exercise of Committee's Duties. Notwithstanding any other provisions
of the Plan, the Committee and the Investment Committee each shall discharge
its respective duties hereunder solely in the interests of the Participants in
the Plan and other persons entitled to benefits thereunder, and


                                      25
<PAGE>


(a)  for the exclusive purpose of providing benefits to Participants and other
     persons entitled to benefits thereunder; and

(b)  with the care, skill, prudence and diligence under the circumstances then
     prevailing that a prudent man acting in a like capacity and familiar with
     such matters would use in the conduct of an enterprise of a like character
     and with like aims.

     9.7. Information to be Furnished to Committee. The Employers shall furnish
the Committee such data and information as may be required. The records
of the Employers as to a Participant's period of employment, termination of
employment and the reasons therefore, leaves of absence, reemployment and
Compensation will be conclusive on all persons unless determined to be
incorrect. Participants and other persons entitled to benefit's under the Plan
must furnish to the Committee such evidenced data or information as it
considers desirable to carry out the Plan.

     9.8. Resignation or Removal of Committee or Investment Committee Member. A
Committee or Investment Committee member may resign at any time by giving at
least 30 days advance written notice to the Corporation and the other committee
members. The Board of Directors of the Corporation may remove a Committee or
Investment Committee member at any time by giving advance written notice to him
and the other Committee or Investment Committee members.

     9.9. Appointment of Successor Committee or Investment Committee Members.
The Corporation's Board of Directors may fill any vacancy in the membership of
the Committee or the Investment Committee and shall give prompt written notice
thereof to the other committee members, the other Employers and the Trustee.
While there is a vacancy in the membership ofthe committees the remaining
committee members shall have the same powers as the full committee until the
vacancy is filled.

                                   SECTION 10

                           Amendment and Termination

     10.1. Amendment. While the Corporation, Company and Employers expect and
intend to continue the Plan, the Plan may be amended at any time by the
Corporation by action of its Board of Directors or the duly authorized delegate
thereof, provided that no amendment shall reduce a Participant's benefits to
less than the amount he would be entitled to receive if he had resigned from
the employ of all of the Employers and the Related Companies on the day of the
amendment.

     10.2. Termination. The Plan will terminate as to all employees on any day
specified by the Corporation by action of its Board of Directors or the duly
authorized delegate thereof. Participation in the Plan will terminate as to the
employees of any Employer on the first to occur of the following:

(a)  the date it is terminated by the Corporation if 30 days' advance written
     notice of the termination is given to the Trustee, the Committee and the
     other Employers;

(b)  the date that the Company completely discontinues its contributions under
     the Plan;

(c)  the date that Employer, is judicially declared bankrupt or insolvent: or


                                      26
<PAGE>


(d)  the dissolutions merger, consolidation or reorganization of that Employer,
     or the sale by that Employer of all or substantially all of its assets,
     except that, subject to the provisions of subsection 10.3, with the
     consent of the Corporation, in any such event arrangements may be made
     whereby the Plan will be continued by any successor to that Employer or
     any purchaser of all or substantially all of that Employer's assets, in
     which case the successor or purchaser will be substituted for that
     Employer under the Plan.

     10.3. Merger and Consolidation of Plan, Transfer of Plan Assets. In the
case of any merger or consolidation with, or transfer of assets and liabilities
to, any other plan, provisions shall be made so that each affected Participant
in the Plan on the date thereof (if the Plan then terminated) would receive a
benefit immediately after the merger, consolidation or transfer which is equal
to or greater than the benefit he would have been entitled to receive
immediately prior to the merger, consolidation or transfer if the Plan had then
terminated.

     10.4. Distribution on Termination and Partial Termination. If on
termination of the Plan in accordance with subsection 10.2, a Participant
remains in the employ of an Employer or a Related Company, the amount of his
benefits shall be retained in the Trust until after his termination of
employment with all of the Employers and Related Companies and shall be paid to
him in accordance with the provisions of Section 8. On termination of the Plan,
to the extent permitted by applicable law, any amounts held under the Suspense
Account shall, to the extent that they exceed the amount required to prepay any
outstanding LESOP Loan, be allocated pro rata according to the balances of all
Participants' Accounts. The benefits payable to an affected Participant whose
employment with all of the Employers and Related Companies is terminated
coincident with the termination or of the Plan shall be paid to him in
accordance with the provisions of Section 8. All appropriate accounting
provisions of the Plan will continue to apply until the benefits of all
affected Participants have been distributed to them.

     10.5. Notice of Amendment, Termination or Partial Termination. Affected
Participants and Beneficiaries will be notified of an amendment, termination or
partial termination of the Plan as required by law.



                                      27
<PAGE>


                                  SUPPLEMENT A
                                       TO
                 THE QUAKER 401(k) PLAN FOR HOURLY EMPLOYEES

                              (Top-Heavy Status)

     A-1. Application. This Supplement A to The Quaker 401(k) Plan for Hourly
Employees (the "Plan") shall be applicable on and after the date on which the
Plan becomes Top-Heavy (as described in subsection A-5).

     A-2.Effective Date. The Effective Date of this Supplement A is July 1,
1984.

     A-3. Definitions. Unless the context clearly implies or indicates the
contrary, a word, term or phrase used or defined in the Plan is similarly used
or defined for purposes of this Supplement A.

     A-4. Affected Participant. For purposes of this Supplement A, the term
"Affected Participant" means each Participant who is employed by an Employer or
a Related Company during any Plan Year for which the Plan is Top-Heavy,
provided however, that the term "Affected Participant" shall not include any
Participant who is covered by a collective bargaining agreement if retirement
benefits were the subject of good faith bargaining between his Employer and his
collective bargaining representative.

     A-5. Top-Heavy. The Plan shall be "Top-Heavy" for any Plan Year if, as of
the Determination Date for that year (as described in paragraph (a) next
below), the present value of the benefits attributable to Key Employees (as
defined in subsection A-6) under all Aggregation Plans (as defined in
subsection A-8) exceeds 60% of the present value of all benefits under such
plans. The foregoing determination shall be made in accordance with the
provisions of section 416 of the Code. Subject to the preceding sentence:

(a)  The Determination Date with respect to any plan for purposes of
     determining Top-Heavy status for any plan year of the plan shall be the
     last day of the preceding plan year or, in the case of the first plan year
     of that plan, the last day of that year. The present value of benefits as
     of any Determination Date shall be determined as of the accounting date or
     valuation date coincident with or next preceding the Determination Date.
     If the plan years of all Aggregation Plans donot coincide, the Top-Heavy
     status of the Plan on any Determination Date shall be determined by
     aggregating the present value of Plan benefits on that date with the
     present value of the benefits under each other Aggregation Plan determined
     as of the Determination Date of such other Aggregation Plan which occurs
     in the same calendar year as the Plan's Determination Date.

(b)  Benefits under any plan (including a terminated plan which if it had not
     been terminated would have been a Required Aggregation Plan) as of any
     Determination Date shall include the amount of any distributions from that
     plan made during the plan year which includes the Determination Date or
     during any of the preceding four plan years, but shall not include any
     amounts attributable to contributions made after the Determination Date
     unless such contributions are required by section 412 of the Code or are
     made for the plan's first plan year.


                                      A-1


<PAGE>


(c)  Benefits attributable to a participant shall include benefits paid or
     payable to a beneficiary of the participant, but shall not include
     benefits paid or payable to any participant who has not performed service
     for the Employer or Related Company during any of the five plan years
     ending on the applicable Determination Date.

(d)  The accrued benefit of a Non-Key Employee shall be determined under the
     method which is used for accrual purposes for all plans of the Employer
     and Related Companies; or if there is no such method, as if the benefit
     accrued not more rapidly than the slowest accrual rate permitted under
     section 411 (b)(1)(C) of the Code.

(e)  The present value of benefits under all defined benefit plans shall be
     determined on the on the factor and the 1984 Unisex Pension Mortality
     Table.

     A-6. Key Employee. The term "Key Employee" means an employee or deceased
employee (or beneficiary of a deceased employee) who is a Key Employee within
the meaning ascribed to that term by section 416(i) of the Code. Subject to the
preceding sentence, the term Key Employee includes any employee or deceased
employee (or beneficiary of a deceased employee) who at any time during the
plan year which includes the Determination Date or during any of the four
preceding plan years was:

(a)  an officer of any Employer or Related Company with Section 415
     Compensation for that year in excess of 50 percent of the amount in effect
     under section 415(b)(1)(A) of the Code for the calendar year in which that
     year ends; provided, however, that the maximum number of employees who
     shall be considered Key Employees under this paragraph (a) shall be the
     lesser of 50 or 10% of the total number of employees of the Employers and
     the Related Companies;

(b)  one of the 10 employees owning the largest interests in any Employer or
     any Related Company (disregarding any ownership interest which is less
     than 1/2 of one percent), excluding any employee for any plan year whose
     Section 415 Compensation for that year did not exceed the applicable
     amount in effect under section 415(c)(1)(A) of the Code for the calendar
     year in which that year ends;

(c)  a 5% owner of any Employer or of any Related Company; or

(d)  a 1% owner of any Employer or any Related Company having Section 415
     Compensation in excess of $150,000.

     A-7. Non-Key Employee. The term "Non-Key Employee" means any employee or
beneficiary of a deceased employee who is not a Key Employee.

     A-8. Aggregation Plan. The term "Aggregation Plan" means the Plan and each
other retirement plan maintained by an Employer or Related Company which is
qualified under section 401 (a) of the Code and which:

(a)  during the plan year which includes the applicable Determination Date, or
     during any of the preceding four plan years, includes a Key Employee as a
     participant;


                                      A-2

<PAGE>


(b)  during the plan year which includes the applicable Determination Date or,
     during any of the preceding four plan years, enables the Plan or any plan
     in which a Key Employee participates to meet the requirements of section
     401(a)(4) or 410 of the Code; or

(c)  at the election of the Employer would meet the, requirements of sections
     401(a)(4) and 410 of the Code if it were considered together with the Plan
     and all other plans described in paragraphs (a) and (b) next above.

     A-9. Required Aggregation Plan. The term "Required Aggregation Plan" means
a plan described in either paragraph (a) or (b) of subsection A-8.

     A-10. Permitted Aggregation Plan. The term "Permitted Aggregation Plan"
means a plan described in paragraph (c) of subsection A-8.

     A-11. Vesting. For any Plan Year during which the Plan is Top-Heavy the
Account balance of any Affected Participant who has completed at least three
Years of Service shall be 100% vested. If the Plan ceases to be Top-Heavy for
any Plan Year, the provisions of this subsection A-11 shall continue to apply
to (i) the portion of an Affected Participant's Account and Forfeiture Account
balances which were accrued and vested prior to such Plan Year (adjusted for
subsequent earnings and losses) and (ii) in the case of an Affected Participant
who had completed at least 3 Years of Service, the portion of his Account and
Forfeiture Account balances which accrue thereafter.

     A-12. Minimum Contribution . For any Plan Year during which the Plan is
Top-Heavy, the minimum amount of Employer contributions and Forfeitures
allocated to the Account of each Affected Participant who is employed by an
Employer or Related Company on the last day of that year, who is not a Key
Employee and who is not entitled to a minimum benefit for that year under any
defined benefit Aggregation Plan which is top-heavy shall, when expressed as a
percentage of the Affected Participant's Section 415 Compensation, be equal to
the lesser of:

(a)  3 %; or

(b)  the Percentage at which Employer contributions and Forfeitures are
     allocated to the Accounts of the Key Employee for whom such percentages
     (when expressed as a percentage of Section 415 Compensation not in excess
     of $200,000) is greatest.

For purposes of the preceding sentence, compensation earned while not a member
of a group of employees to whom the Plan has been extended shall be
disregarded. Paragraph (b) next above shall not be applicable for any Plan Year
if the Plan enables a defined benefit plan described in paragraph A-8(a) or
A-8(b) to meet the requirements of section 401(a)(4) or 410 of the Code for
that year. Employer contributions for any Plan Year during which the Plan is
Top-Heavy shall be allocated first to non-Key Employees until the requirements
of this subsection A-12 have been met and, to the extent necessary to comply
with the provisions of this subsection A-12, additional contributions shall be
required of the Employers.


                                      A-3

<PAGE>


Elective contributions on behalf of Key Employees are taken into account in
determining the minimum required contribution. However, elective contributions
on behalf of employees other than Key Employees may not be treated as Employer
contributions for purposes of the minimum contribution or benefit requirements.

     A-13. Aggregate Benefit Limit. For any Plan Year during which the Plan is
Top Heavy, paragraphs (2)(B) and (3)(B) Section 415(e) of the Code shall be
applied by substituting "1.0" for 1.25."

     A-14. Compensation. During any Plan Year during which the Plan is
Top-Heavy, an Affected Participant's compensation shall be disregarded to the
extent it exceeds the applicable limit for that Plan Year under section
401(a)(I 7) of the Code.










                                      A-4

<PAGE>


                                   Schedule A

  Employee Groups Included in the Quaker Hourly 401(k) Plan and Effective Date

     Danville Bargaining Unit - 1/1/86

     Shiremanston Bargaining Unit - 1/1/86

     St. Joseph Bargaining Unit - l/l/86

     Lawrence Hourly - 1/1/86

     Jackson Hourly - 2/l/86

     Pekin Bargaining Unit - 9/1/86

     Dallas Distribution Center Hourly- 9/l/86

     Liqui-Dri Foods, Inc. Hourly and Salaried - 1/1/87
     (Effective 1/ 1/90 Hourly Only)

     Manhattan Hourly - l/l/87

     Fullerton Distribution Center Hourly - 4/1/87

     Kankakee Bargaining Unit (American Federation of Grain Millers,
     Local 70, AFL-CIO) - 4/1/87

     Kankakee Bargaining Unit (International Brotherhood of Fireman & Oilers,
     Powerhouse Employees, Operators, and Maintenance Men, Local #296) - 4/1/87

     Marion Bargaining Unit - 4/1/87

     Cedar Rapids Bargaining Unit (R.W.D.S.U.) - 7/1/87

     Cedar Rapids Bargaining Unit O.A.M.) - 7/1/87

     Topeka Hourly - 7/1/87

     Chattanooga Bargaining Unit - 4/1/88

     Continental Coffee Products Company - 3/l/89

     Bridgeview Hourly - 4/l/90

                                      SA-1


<PAGE>



     Seattle Hourly - 5/1/90

     Dallas Plant Bargaining Unit (UFCW 540) - 9/1/90

     Mountain Top Hourly - 6/1/90

     Richardson Foods - Macedon Bargaining Unit (IBF0253) - 7/1/90

     Richardson Foods - Battle Creek Bargaining Unit (AFGM378) - 4/1/90

     Richardson Foods - Mashall Hourly - 7/1/90

     Boyertown Hourly - 7/1/90

     Kissimmee Hourly - 1/10/92

     Newport Bargaining Unit (USWA 7198) - 1/10/92

     Putney Hourly - 2/6/92

     Indianapolis Bargaining Unit (USWA 1473) - 7/1/92

     Ashville Hourly - 9/1/92

     Ardmore Farms, Inc. - 1/1/93














                                      SA-2