Exhibit 10(h)(5)




                   AGREEMENT UPON SEPARATION OF EMPLOYMENT

      This Agreement Upon Separation Of Employment ("Agreement") is made and
entered  into  by  and  between Robert S. Thomason, his  successors,  heirs,
administrators, executors, personal representatives and assigns ("Thomason")
and   The  Quaker  Oats  Company,  its  officers,  directors,  shareholders,
employees, agents, assigns, subsidiaries, divisions, parents, affiliates and
successors  ("Quaker"),  collectively "the parties."   The  Agreement  shall
become effective seven (7) days after it is executed by Thomason.


1.   Economic Consideration to Thomason

     Upon  becoming  effective,  this Agreement  shall  satisfy  the  Quaker
Officers Severance Program's (the "Program") prerequisites that in order  to
qualify  for  Program benefits, an officer must execute a valid  waiver  and
release  of  all  potential  claims and must sign  an  agreement  containing
several  covenants,  including a non-competition  provision.   In  addition,
Thomason shall receive the following consideration, to which he would not be
entitled in the absence of this Agreement:
     
     A.    Thomason's  active  employment  with  Quaker  is  terminating  on
December 15, 1998.  After severance payments under the Program have expired,
and  subject to the provisions in Paragraph 5, Quaker shall pay Thomason  an
amount  equal  to  one  year of Program payments (i.e.,  final  salary  plus
average  bonus).  This sum shall be paid in equal semi-monthly  installments
commencing  as  soon  as  payments to him  under  the  Program  expire,  and
terminating  on December 15, 2000.  Payments under this paragraph  1(A)  are
consideration for the covenants in paragraph 5, not for anything else.
     
     B.    As  soon as Program benefits end and continuing through  December
15, 2000, Quaker shall provide Thomason with the same insurance coverage  as
is  provided  under the Program.  This benefit is part of the  consideration
for  the Waiver and Release in paragraph 3, and the Miscellaneous Agreements
in paragraph 4.
     
     
2.   Termination of Employment
     
     Thomason understands and agrees that his active employment relationship
with  Quaker,  its  parent  companies, affiliates and  successors,  will  be
permanently  and  irrevocably  severed as of December  15,  1998.   Thomason
agrees he shall not apply or otherwise seek reinstatement or reemployment by
Quaker  at  any  time,  and  that Quaker has no obligation,  contractual  or
otherwise,  to  rehire,  reemploy or recall him  in  the  future.   Thomason
further  stipulates that this agreement is sufficient cause  for  Quaker  to
deny any request for rescission, rehire, reemployment or recall.
     
     Thomason  agrees  that prior to the effective date of  his  termination
from  active  employment, he will return all Quaker property, including  but
not limited to keys, office pass, credit cards, computers, office equipment,
sales records and data.  Thomason further agrees that within sixty (60) days
after  his  termination  date, he will submit all outstanding  expenses  and
clear all advances and his personal advance account, if any.


3.   Waiver & Release

     A.    Thomason waives, releases and discharges Quaker from any and  all
claims  and  liabilities, demands, actions and causes of  action,  including
attorneys'  fees  and  costs and participation in a  class  action  lawsuit,
whether known or unknown, fixed or contingent, that he may have or claim  to
have  against  Quaker  as  of  the date this  Agreement  becomes  effective.
Thomason further covenants not to file a lawsuit or participate in  a  class
action   lawsuit  to  assert  such  claims.   Without  limitation,  Thomason
specifically waives all claims for back pay, future pay or any other form of
compensation or income, except as provided below.  This waiver includes  but
is  not limited to claims arising out of or in any way related to Thomason's
employment   or  termination  of  employment  with  Quaker,  including   age
discrimination  claims under the Age Discrimination In  Employment  Act  (as
amended), discrimination claims under Title VII of the Civil Rights  Act  of
1964  (as amended) or the Americans with Disabilities Act, claims for breach
of  contract,  and any other statutory or common law cause of  action  under
state, federal or local law.
     
     However, Thomason does not waive, release, discharge or covenant not to
sue  for enforcement of any rights or claims under this Agreement, nor  ones
that  arise out of conduct or omissions which occur entirely after the  date
this Agreement becomes effective.  In addition, he does not waive any rights
he  may  have as an employee on inactive status and/or as a former employee,
as  the case may be, under any of Quaker's fringe benefit or incentive plans
(e.g., its pension plan, the Program, the Long Term Incentive Plan of  1990,
etc.),  nor does he waive his right to payment for unused vacation, if  any,
pursuant  to  Quaker's  vacation policy.  Notwithstanding  anything  to  the
contrary  in Paragraph 8 of this Agreement, such benefits shall continue  to
be  governed by the ERISA plans, contracts and/or Quaker policies that exist
independent of this Agreement.
     
     B.   Quaker waives,  releases and  discharges Thomason from any and all 
claims  and  liabilities, demands,  actions and  causes of action, including 
attorneys'fees and costs, that it may have or claim to have against Thomason 
as of  the date  this  Agreement  becomes effective; provided, this  waiver, 
release  and  discharge  only  apply  to  claims as to which Quaker's senior 
officers were aware, on  or before  the effective date of this Agreement, of 
all material  facts necessary to establish Thomason's liability; and further 
provided, Quaker  does not  waive, release, discharge or covenant not to sue 
for  enforcement of any  rights  or claims  that  arise  out  of  conduct or 
omissions   which  occur  entirely  after  the  date  this Agreement becomes 
effective.

     C.   The parties  stipulate  that  nothing  contained in this Agreement 
shall  be  construed  as  an  admission by either of  them of any liability, 
wrongdoing  or  unlawful   conduct.  It  is  understood that both Quaker and 
Thomason  deny  any liability,  wrongdoing or  unlawful conduct, and each is 
providing  consideration for this waiver and release in order to resolve any 
potential disputes  between  them  amicably   and  to  avoid  the expense of 
potential litigation.

4.   Miscellaneous agreements

     The  covenants and agreements set forth in this paragraph shall  remain
in  effect  until December 15, 2001.  Covenants 4(A) and 4(B)  are  material
parts  of this Agreement, so a material breach of either of them by Thomason
would  entitle  Quaker,  at its discretion, to rescind  this  Agreement,  in
addition to any other legal or equitable remedies it might have for breach:
     
    A.   Thomason shall provide accurate information or testimony or both in
connection  with any legal matter if so requested by Quaker.  He shall  make
himself available upon request to provide such information and/or testimony,
in a  formal and/or an informal setting in accordance with Quaker's request,
subject  to  reasonable accommodation of his schedule and  reimbursement  of
reasonable  expenses, including reasonable and necessary attorney  fees  (if
independent legal counsel is reasonably necessary).

    B.   Thomason   shall  cooperate  with  media  requests  for  interviews 
regarding his termination and/or Quaker, unless directed otherwise by Quaker 
in a particular instance. He shall not disparage The Quaker Oats Company,its 
products, or any of its directors, officers or employees in these interviews, 
nor  in  any  other  private  or   public  setting; provided, if Thomason is 
compelled  to  provide  testimony  under  oath, he  shall testify truthfully 
without  regard  to  whether  his  testimony is  favorable or unfavorable to 
Quaker, and  such  testimony  shall  be  protected against claims under this 
Agreement by  the  same  privilege  that  would apply to a defamation claim.

     C.   The Quaker Oats Company, and any officer or director acting on its 
behalf, shall  answer  all reference  inquiries directed to The Quaker  Oats  
Company regarding Thomason by stating  only his positions held, compensation 
and dates of employment.  No additional information shall be provided unless 
authorized in advance, in writing, by  Thomason.  Thomason  agrees to direct 
all requests for   references  from  Quaker  to  the  highest  ranking Human 
Resources  officer within Quaker.


5.   Prohibited Conduct

     A.   Thomason  covenants  and  agrees  that through the dates set forth 
below, he  shall  not  engage in any of the following activities anywhere in 
the world:

          i.   Non-competition. Thomason shall not undertake any employment, 
consulting position  or ownership  interest which involves his Participation  
in the  management  of  a business entity that markets, sells,  distributes, 
licenses or  produces  Covered  Products, unless that business entity's sole 
involvement with Covered  Products is that it makes retail sales or consumes 
Covered Products, without competing in any way against Quaker. This covenant 
shall remain  in effect until December 15, 2000.

               a.   "Participation" shall be construed broadly  to  include,
without limitation: (1) holding a position in which he directly manages such
a  business entity; (2) holding a position in which anyone else who directly
manages such a business entity is in Thomason's reporting chain or chain-of-
command  (regardless of the number of reporting levels  between  them);  (3)
providing  input, advice, guidance, or suggestions regarding the  management
of  such  a business entity to anyone responsible therefor; (4) providing  a
testimonial  on behalf of such an operation or the product it  produces;  or
(5)  doing anything else which falls within a common sense definition of the
term "participation," as used in the present context.

               b.  "Covered Products" means any product which falls into one
or  more  of  the  following categories, so long  as  Quaker  is  producing,
marketing, distributing, selling or licensing such product anywhere  in  the
world:  sports beverages; thirst quenching beverages; hot cereals; ready-to-
eat  cereals; pancake mixes; grain-based snacks; value-added rice  products;
pancake  syrup;  value-added pasta products; dry pasta products;  and  items
Quaker produces for the food service market.

          ii.  Raiding Employees. Thomason shall not in any way, directly or 
indirectly   (including   through   someone   else   acting  on   Thomason's  
recommendation, suggestion, identification or advice), facilitate or solicit  
any  existing Quaker employee to leave the employment of Quaker or to accept 
any  position  with  any  other company or corporation.  This covenant shall 
remain in effect until December  15,  2001.  For purposes of this provision,  
the following definitions apply:

               a.   "Existing   Quaker   employee"  means  someone:  (1) who 
is  employed  by  Quaker  on  or  before the date when Thomason's employment 
terminates; (2) who  is still  employed   by  Quaker as of the date when the 
facilitating  act  or solicitation takes place; and (3) who holds a manager, 
director or officer level  position  at  Quaker  (or  an equivalent position 
based on job duties and/or  Hay points, regardless of the employee's title).

               b.   The Terms "solicit"  and "facilitate" shall be given the 
ordinary, common sense meaning appropriate in the present context.

          iii. Non-disclosure.  Thomason shall not use or disclose to anyone 
any  confidential  information  regarding   Quaker.   For   purposes of this 
provision, the term "confidential information" shall be construed as broadly 
as  Illinois   law   permits  and  shall  include all non-public information 
Thomason acquired  by virtue of his positions  with Quaker which might be of 
any value to a competitor or which might cause  any  economic loss (directly 
or via loss  of  an opportunity) or  substantial  embarrassment to Quaker or 
its customers,  distributors  or  suppliers  if disclosed.  Examples of such 
confidential information  include, without limitation,non-public information 
about Quaker's customers, suppliers,  distributors and potential acquisition 
targets; its business operations  and structure; its product lines, formulas 
and  pricing; its  processes,  machines  and  inventions;  its  research and 
know-how; its  financial  data; and its plans and strategies.  This covenant 
shall remain in effect until December 15, 2001.

     B.   In  the  event  of  a breach, threatened breach, or situation that 
creates  an  inevitable  breach  of  any term of this paragraph by Thomason, 
Quaker shall be entitled  to an  injunction compelling specific performance, 
restraining  any future violations and/or requiring affirmative acts to undo 
or minimize  the harm to Quaker,in addition to damages for any actual breach 
that occurs.The parties stipulate and represent that breach of any provision 
of this  paragraph would cause irreparable injury to Quaker, for which there 
would be  no  adequate  remedy  at  law,  due   among  other  reasons to the  
inherent  difficulty  of  determining  the  precise  causation for  loss  of  
customers,  confidential information and/or employees and of determining the 
amount and ongoing effects of such losses.

     C.   In the event Thomason breaches any term of this Paragraph 5,Quaker 
shall  have  the  option  of  seeking  injunctive  relief  or  canceling the 
remaining payments  due  under paragraph 1(A) of  this Agreement.   Quaker's  
right  to terminate Program benefits is  spelled  out in the Program, and is
not affected by this provision.

     D.   In  the  event Quaker elects to pursue injunctive relief, then the 
following rules shall apply:

          i.   While  litigation  over  the requested injunction is pending, 
Quaker may, in its  discretion, withhold  payments otherwise due to Thomason 
under   paragraph  1(A); provided, Quaker's  right  to  terminate or suspend 
Program benefits,which are separate from the benefits described in paragraph 
1(A), is spelled out in the Program and is not affected by this provision.

          ii.  If, at the  conclusion of the litigation, Quaker successfully 
obtains full  injunctive  enforcement  of all provisions in this paragraph 5 
that it  attempts to  enforce, then  Quaker  shall  pay Thomason all amounts 
otherwise  due  under  paragraph 1(A) that  were  withheld  and shall resume 
making all  payments  required  under paragraph 1(A), and shall likewise pay 
all Program payments that  were withheld.

          iii. If, at the conclusion of the litigation, Quaker obtains some, 
but not  all, of  the  injunctive relief it seeks under this paragraph, then 
Quaker  shall  make  an  election.  It may  either accept the injunction and 
proceed  as  specified  in  subparagraph  (ii)  above,  or  it  may elect to 
voluntarily vacate  and/or  not  enforce  the  injunction, in which event it 
shall have no obligation to resume paying Thomason under paragraph 1(A), nor 
to pay withheld amounts.

          iv.  If a  court  entirely declines to enforce paragraph 5 of this 
Agreement or   holds  it invalid or void, then  Quaker shall have no further 
obligation  to  pay  Thomason under paragraph 1(A),  including sums withheld 
while litigation  was pending.

          v.   If   a  court  holds  that  the provisions of paragraph 5 are 
enforceable, but further finds that Thomason did not breach any of them,then 
Quaker shall pay all  amounts  otherwise due  under paragraph 1(A) that were 
withheld,and shall resume making all payments required under paragraph 1(A).

          vi.  Thomason  shall  have no claim for damages based on any delay 
in the payments due under  Paragraph 1(A)  that results from a suspension of 
payments  or  withholding in  accordance  with  the  preceding   provisions; 
PROVIDED, if  payment  of  withheld  amounts  subsequently is required, then 
along with such  payment Quaker shall pay Thomason interest at an annualized 
rate of 6.0%.

          vii. For purposes of this paragraph,litigation shall not be deemed 
to have  concluded, and no payment shall be due, until all potential appeals  
by  all parties are waived or exhausted.

     E.   Recitals:  Thomason  stipulates  and represents that the following 
facts are true, and further  understands  and  agrees that they are material 
representations   upon  which  Quaker   is  relying  in  entering  into this 
Agreement:

          i.   Thomason  has  been Senior Vice President - Finance and Chief 
Financial  Officer for several years, and in that capacity has been a member 
of Quaker's  Senior  Leadership  Team  and  Operating  Committee.  In  these  
positions,  he participated in forming and/or was informed about the details 
of operational plans  and  strategic  long  range  plans for all of Quaker's 
businesses.  Without limitation, he  has detailed  knowledge financial plans 
and  data,  business  plans,  new  product  development,  pricing structure, 
marketing plans, sales plans, distribution plans, and supply chain plans for 
all of Quaker's products. This is: (1) information Thomason gained by virtue 
of his employment at Quaker; (2)  highly confidential and secret information 
from which Quaker derives economic value,  actual or potential, from its not 
being  generally  known  to  other  persons  outside Quaker who might obtain 
economic value from its disclosure or use;(3)information known within Quaker 
only to  key employees and those who need  to know it to perform their jobs; 
(4)  information  regarding  which  Quaker  has taken reasonable measures to 
preserve  its  confidentiality;  (5)  information  that  could not easily be 
duplicated by others, and which Quaker required considerable time and effort 
to develop; and (6)information which is likely to remain valuable and secret
for at least three years.

          ii.  By virtue of his employment at Quaker, Thomason has developed 
personal and business relationships with existing Quaker employees, which he 
otherwise would  not  have  had.  By virtue of his position as Quaker's most 
senior financial officer,he also has acquired detailed knowledge as to which 
existing Quaker employees are critical to Quaker's success and future plans, 
and  which  ones  have   skills  or  contacts   that  would be valuable to a 
competitor.


6.   Advance Determination of Permitted/Prohibited Conduct

     Thomason  may  request an advance written determination  from  Quaker's
Chief Executive Officer as to whether taking a proposed action or job would,
in  Quaker's opinion, constitute a breach of this Agreement.  In that event,
and provided that Thomason discloses in writing all material facts about the
proposed action or job, Quaker shall make a reasonable effort to respond  to
Thomason's  request  for an advance written determination  within  ten  (10)
business days after receiving it; PROVIDED, that if circumstances materially
change after the advance determination is made (e.g., if the duties of a job
change after Thomason accepts it), the determination may be reconsidered and
revised  or  reversed upon thirty days advance written notice  to  Thomason.
Quaker  shall  treat  as  confidential any non-public  information  Thomason
communicates as part of a request for an advance determination.


7.
     Choice Of Law And Forum; Attorney Fees

     A.   This   Agreement  shall be governed by and construed in accordance
     with  the laws  of  the  State  of  Illinois, without giving effect  of  
     choice  of  law principles.
     
     B.   In  the  event of any litigation over this Agreement or an alleged 
breach thereof,  Thomason consents to submit to the personal jurisdiction of 
any court, state  or  federal, in the State of Illinois.  The parties  agree  
that  the  Illinois  courts,   state  or  federal, shall  be  the  exclusive 
jurisdiction  for  any  litigation  over this Agreement or an alleged breach 
thereof.
     
     C.   In  the  event of litigation between Thomason and Quaker regarding 
any provision of  this  Agreement, the party  which prevails in such contest 
shall be entitled  to  receive  from  the other  party, in addition  to  any  
damages, injunction, or other relief awarded by a court,reimbursement of all 
litigation costs and expenses, including reasonable attorney fees, which the 
prevailing party  reasonably  incurred  as a result of such litigation, plus 
interest at the applicable federal rate provided for in 7872(f)(2)(A) of the 
Internal Revenue Code of 1986, as amended.  If,in a particular contest, each 
party  prevails  on one  or  more  issues,  the  court  shall   exercise its 
equitable  judgment  to determine which, if either, should be considered the 
prevailing party and the percentage of that party's expenses which should be 
reimbursed, taking  into account inter alia the significance of the issue(s) 
on   which  each  party  prevailed  and  the  reasonableness of each party's 
position(s).


8.   Full Agreement

     This  written document contains the entire understanding and  agreement
of  the  parties on the subject matter set forth herein, and supercedes  any
prior agreement relating to these matters.  No promises or inducements  have
been made other than those reflected herein, and no party is relying on  any
statement  or  representation by any person except those set  forth  herein,
including without limitation oral or written summaries of this Agreement.
     
     This  Agreement  cannot be modified or altered except by  a  subsequent
written  agreement signed by the parties, and only Quaker's highest  ranking
Human Resources officer or his direct superior shall have authority to  sign
such an amendment on behalf of Quaker.
     
     Without limitation, nothing in this document shall eliminate or  reduce
Thomason's obligation to comply with the Quaker Oats Code of Ethics, to  the
extent  that  certain provisions in the Code (such as non-disclosure  rules)
remain applicable to employees after termination.  Likewise, nothing in this
document shall eliminate or reduce Quaker's obligation to indemnify Thomason
in certain situations, pursuant to Quaker's by-laws or applicable law.


9.   Severability

     Each  term of this Agreement is deemed severable, in whole or in  part,
and   if  any  provision  of  this  Agreement  or  its  application  in  any
circumstance  is  found  to  be  illegal,  unlawful  or  unenforceable,  the
remaining  terms  and  provisions shall not be affected  thereby  and  shall
remain in full force and effect, except as expressly provided below.
     
     Unless Quaker consents, the provisions in paragraph 5 of this Agreement
are  not severable from each other or from Paragraph 1(A).  If any provision
or aspect of paragraph 5 is held invalid, illegal, unlawful or unenforceable
in  litigation  between Thomason and Quaker, then there is no  consideration
for payments under paragraph 1(A); PROVIDED, if any provision in paragraph 5
is  invalid or broader than the law allows, a court is authorized  to  award
the broadest injunctive relief permitted by law, and Quaker shall thereafter
make  its  election pursuant to paragraph 5(D)(iii) - if  Quaker  elects  to
accept  the  limited injunctive relief, then it shall consent to  sever  the
invalid  provision(s).  Quaker's consent to sever one or more provisions  in
paragraph  5  may be given at any time: before, during, or after litigation,
in Quaker's sole discretion.
     
     
                              The Quaker Oats Company



                              /s/ Pamela S. Hewitt
                              By one of its officers


Thomason  has been advised in writing, via this notice, to consult  with  an
attorney  before signing this Agreement.  He acknowledges that he originally
received  it  on  November 19, 1998; subsequently, after Thomason  consulted
with  his attorney, several revisions were made at his request, and  he  was
given  a revised draft containing those changes.  Thomason understands  that
he  has  twenty one (21) days from November 19, 1998 to consider and  decide
whether  to sign the Agreement, and that he may revoke the Agreement  within
seven  (7) days after signing it.  Thomason further understands that he  has
the  right  to request a different waiver, release and separation agreement,
which contains shorter non-compete, anti-raiding and non-disclosure periods.
Execution  of such a document would satisfy the Program's prerequisites  and
entitle him to Program benefits, but would not entitle him to the additional
benefits   provided  under  this  Agreement,  nor  entail   the   additional
obligations.   Thomason  affirms  that  he  has  carefully  read  and  fully
understands all provisions of this Agreement, that the consideration  he  is
receiving  is  fair  and adequate, and that he has not  been  threatened  or
coerced into signing it.



November 25, 1998             /s/ Robert S. Thomason
                                  Robert S. Thomason