Exhibit 10(k)(2)
                                                                 ATTACHMENT III
                                                                               
                                                                               
                  THE QUAKER LONG TERM INCENTIVE PLAN OF 1999

                                   ARTICLE I
                               NAME AND PURPOSE

     1.1  Name.   The Quaker Long Term Incentive Plan of 1999 (the "Plan")  is
established by The Quaker Oats Company (the "Company").

     1.2  Purpose.   The  Company has established  the  Plan  to  promote  the
interests of the Company and its shareholders by providing designated employees
of  the  Company and its related affiliates with additional incentive  and  the
opportunity, through stock ownership, to increase their proprietary interest in
the Company and their personal interest in its continued success and progress.


                                  ARTICLE II
                                  DEFINITIONS

     2.1  General  Definitions.  The following words and  phrases,  when  used
herein,  unless  otherwise specifically defined or unless the  context  clearly
indicates otherwise, shall have the following meanings:

          (a)  Affiliate.   Any trade or business entity, or a predecessor  of
     such  entity, if any, which is a member of a controlled group of  business
     entities of which the Company is also a member.

          (b)  Agreement.   The  document which evidences  the  grant  of  any
     Benefit  under  the Plan and which sets forth the Benefit and  the  terms,
     conditions and provisions of, and restrictions relating to, such Benefit.

          (c)  Benefit.  Any benefit granted to a Participant under the Plan.

          (d)  Board.  The Board of Directors of the Company.

          (e)  Change in Control.  Occurrence upon events describe in Section 
     9.2.

          (f)  Code.   The  Internal Revenue Code of  1986,  as  amended,  and
     including the regulations promulgated pursuant thereto.

          
          (g)  Committee.  The Committee described in Section 5.1.

          (h)  Common Stock.  The Company's $5.00 par value common stock.

          (i)  Company.  The Quaker Oats Company.

          (j)  Effective  Date.  The date that the Plan  is  approved  by  the
     shareholders  of the Company, which must occur within one year  before  or
     after original adoption by the Board.  Any grants of Benefits prior to the
     approval by the shareholders of the Company shall be void if such approval
     is not obtained.

          (k)  Employee.  Any person employed by the Employer.
          
          (l)  Employer.  The Company and all Affiliates.
          
          (m)  Exchange Act.  The Securities Exchange Act of 1934, as amended.
          
          (n)  Fair Market Value.  The average of the high and low sales price
     of  shares  on the New York Stock Exchange (composite transactions)  on  a
     given date, or, in the absence of sales on a given date, the closing price
     (as  so reported) on the New York Stock Exchange on the last previous  day
     on which a sale occurred prior to such date.
          
          (o)  ISO.  An Option that meets the requirements of Section  422  of
     the Code.
          
          (p)  NSO.  An Option that does not qualify as an ISO.
          
          (q)  Option.  An option to purchase Shares granted under ARTICLE XIII
     of the Plan.
          
          (r)  Other  Stock Based Award.  An award under ARTICLE XVI  that  is
     valued  in  whole  or in part by reference to, or is otherwise  based  on,
     Common Stock.
          
          (s)  Participant.  An individual who is granted a Benefit under  the
     Plan.  Benefits may be granted only to Employees.
          
          (t)  Performance Goals.  The goals described under Article  XVII  of
     the  Plan that may be applied by the Committee with respect to Performance
     Shares and Other Stock Based Awards.
          
          (u)  Performance  Share.   A Share awarded to  a  Participant  under
     ARTICLE XV of the Plan.
          
          (v)  Plan.   The  Quaker Long Term Incentive Plan of  1999  and  all
     amendments and supplements thereto.
          
          (w)  1990 Plan.  The Quaker Long Term Incentive Plan of 1990 and all
     amendments and supplements thereto.
          
          (x)  Restricted Stock.  Shares issued under ARTICLE XIV of the Plan.
          
          (y)  Rule 16b-3.  Rule 16b-3 promulgated by the SEC, as amended,  or
     any successor rule in effect from time to time.
          
          (z)  SEC.  The Securities and Exchange Commission.
          
          (aa) Share.  A share of Common Stock..

     2.2  Other  Definitions.  In addition to the above  definitions,  certain
words  and  phrases used in the Plan and any Agreement may be defined elsewhere
in the Plan or in such Agreement.


                                  ARTICLE III
                                 COMMON STOCK

     3.1  Number of Shares.  The maximum number of Shares that may be delivered
to  Participants  under the Plan shall be equal to the sum  of:  (a)  8,000,000
Shares;  (b) any Shares available for future awards under the 1990 Plan  as  of
the  Effective Date; and (c) any Shares represented by awards granted under the
1990 Plan, which are forfeited, expire, or are canceled without delivery of the
Shares  after  the Effective Date or which result in the forfeiture  of  Shares
back  to the Company, subject to the provisions of Sections 3.2 and 3.3.   Such
Shares  may be authorized but unissued Shares, Shares held in the treasury,  or
both.

     3.2  Reusage.   If  an Option expires or is terminated,  surrendered,  or
canceled   without  having  been  fully  exercised;  if  Restricted  Stock   or
Performance Shares are forfeited; or if any other grant results in  any  Shares
not being issued, the Shares covered by such Option, grant of Restricted Stock,
Performance Shares or other grant, as the case may be, shall again be available
for  use under the Plan.  If an Option is exercised by tendering Shares to  the
Company  as  full  or  partial payment in connection with the  exercise  of  an
Option,  only the number of Shares issued net of the Shares tendered  shall  be
deemed  delivered  for  purposes of determining the maximum  number  of  Shares
available for delivery under the Plan.

     3.3  Adjustments.  If there is any change in the Common Stock by reason of
any  stock  dividend,  spin-off, split-up, spin-out, recapitalization,  merger,
consolidation,   reorganization,  combination  or  exchange  of   Shares,   the
limitations on the number of Shares specified under Section 3.4, the number  of
Shares  then available under Section 3.1 of the Plan for Options and grants  of
Restricted  Stock, Performance Shares and Other Stock Based Awards, the  number
of  Shares subject to outstanding Options, Restricted Stock, Performance Shares
and  Other Stock Based Awards, and the price thereof, as applicable,  shall  be
appropriately adjusted by the Committee.  Shares issued under the Plan  through
the settlement, assumption or substitution of outstanding awards or obligations
to  grant future awards as a condition of the Company acquiring another  entity
shall not reduce the maximum number of Shares available for delivery under  the
Plan.
     
     3.4  Limitations.
     
          (a)  Options.  The total number of Options (ISOs and NSOs  combined)
     which  may  be granted to a single Participant shall not exceed  1,000,000
     during  any  calendar  year,  subject to the  adjustments  provided  under
     Section 3.3.
          
          (b)  ISOs.  The total number of Shares for which ISOs may be granted
     on  or after the Effective Date shall not exceed 8,000,000 Shares, subject
     to the limitations, reusage and adjustments provided in ARTICLE III of the
     Plan.
          
          (c)  Restricted  Stock,  Performance Shares and  Other  Stock  Based
     Awards.   The  total number of Shares which may be granted  as  Restricted
     Stock,  Performance Shares and Other Stock Based Awards shall  not  exceed
     3,000,000 during the term of the Plan, subject to the adjustments provided
     in  Section  3.3.   The total number of Shares which  may  be  granted  as
     Performance Shares to a single Participant shall not exceed 350,000 during
     any  calendar  year, subject to the adjustments under  Section  3.3.   The
     total number of Shares which may be granted as Other Stock Based Awards to
     a  single  Participant shall not exceed 350,000 during any calendar  year,
     subject to the adjustments under Section 3.3.
          
          
                                  ARTICLE IV
                                  ELIGIBILITY

     The  Participants and the Benefits they receive under the  Plan  shall  be
determined  solely  by  the  Committee.   In  making  its  determinations,  the
Committee  shall  consider past, present and expected future  contributions  of
Employees and Participants to the Employer.
                                       
                                       
                                   ARTICLE V
                                ADMINISTRATION

     5.1  Committee.   The Plan shall be administered by the  Committee  (also
known as the Compensation Committee of the Board).  The Committee shall consist
of  no  less  than three members of the Board, all of whom shall  not  be  (nor
formerly  have been) employees of the Company and who shall not be eligible  to
participate  in the Plan.  The members of the Committee shall be  appointed  by
and  shall  serve  at the pleasure of the Board, which may from  time  to  time
appoint  members  in  substitution for members previously  appointed  and  fill
vacancies, however caused, in the Committee.

     5.2  Authority.   Subject to the terms of the Plan, the  Committee  shall
have complete authority to:

          (a)  determine the Employees to whom Benefits are granted, the  type
     and amounts of Benefits to be granted and the time of all such grants;

          (b)  determine  the  terms,  conditions  and  provisions  of,   and
     restrictions relating to, each Benefit granted;

          (c)  interpret and construe the Plan and all Agreements;

          (d)  prescribe, amend and rescind rules and regulations relating  to
     the Plan;

          (e)  determine the content and form of all Agreements;

          (f)  determine all questions relating to Benefits under the Plan;
          
          (g)  maintain accounts, records and ledgers relating to Benefits;
          
          (h)  maintain records concerning its decisions and proceedings;
          
          (i)  employ agents, attorneys, accountants or other persons for such
     purposes as the Committee considers necessary or desirable;
          
          (j)  take,  at  anytime,  any  action  permitted  by  Section   9.1
     irrespective of whether any Change in Control has occurred or is imminent;
     and
          
          (k)  do  and  perform  all  acts which  it  may  deem  necessary  or
     appropriate for the administration of the Plan and carry out the  purposes
     of the Plan.

     5.3  Determinations.  All determinations of the Committee shall be final.

     5.4  Delegation.   Except  as  required by Rule  16b-3  with  respect  to
Benefits to individuals who are subject to Section 16 of the Exchange Act or as
otherwise required for compliance with Rule 16b-3 or other applicable law,  the
Committee may delegate all or any part of its authority under the Plan  to  any
Employee, Employees or committee.


                                  ARTICLE VI
                                   AMENDMENT

     6.1  Power of Board.  Except as hereinafter provided, the Board shall have
the sole right and power to amend the Plan at any time and from time to time.
     
     6.2  Limitation.  The Board may not amend the Plan without approval of the
shareholders of the Company:

          (a)  in a manner which would increase the number of Shares which may
     be issued or sold or for which Options, Performance Shares, or Other Stock
     Based awards may be granted under the plan; or

          (b)  in a manner which would violate applicable law.
                                       
                                       
                                  ARTICLE VII
                             TERM AND TERMINATION

     7.1  Term.  The Plan shall commence as of the Effective Date and, subject
to   the  terms  of  the  Plan,  including  those  requiring  approval  by  the
shareholders  of  the Company and those limiting the period over  ISOs  or  any
other  Benefits may be granted, shall continue in full force and  effect  until
December 31, 2007.

     7.2  Termination.  The Plan may be terminated at any time by the Board.


                                 ARTICLE VIII
                   MODIFICATION  OR TERMINATION OF BENEFITS

     8.1  General.  Subject to the provisions of Section 8.2, the amendment  or
termination of the Plan shall not adversely affect a Participant's right to any
Benefit granted prior to such amendment or termination.
     
     8.2  Committee's  Right.   Except as hereinafter  provided,  any  Benefit
granted may be converted, modified, forfeited or canceled, in whole or in part,
by  the  Committee  if and to the extent permitted in the  Plan  or  applicable
Agreement  or  with  the consent of the Participant to whom  such  Benefit  was
granted.   The Committee may not cancel or permit the surrender of Options  and
reissue new Options, or reprice Options, at a lower purchase price.
                                       
                                       
                                  ARTICLE IX
                               CHANGE IN CONTROL

     9.1  Benefit Cancellation and Payment.

          (a)  Options.   Upon the occurrence of a Change in  Control,  Options
     outstanding  on  the date on which the Change in Control occurs  shall  be
     canceled,  and  an immediate lump sum cash payment shall be  paid  to  the
     Participant  equal  to the product of (1) the higher of  (i)  the  closing
     price  of  the  Common  Stock as reported on the New York  Stock  Exchange
     Composite  Index  on or nearest the date of payment (or, if not listed  on
     such exchange, on a nationally recognized exchange or quotation system  on
     which  trading volume in the Common Stock is highest), or (ii) the highest
     per  Share price for the Common Stock actually paid in connection with the
     Change  in  Control, over the per Share Option price of each  such  Option
     held (whether or not then fully exercisable), and (2) the number of Shares
     covered by each such Option.

          (b)  Restricted Stock.  Upon the occurrence of a Change in  Control,
     Restricted  Stock outstanding on the date on which the Change  in  Control
     occurs  shall be canceled and an immediate lump sum cash payment shall  be
     paid  to  the Participant equal to the product of (1) the higher  (i)  the
     closing  price of Common Stock as reported on the New York Stock  Exchange
     Composite  Index on or nearest the date of payment (or, if not  listed  on
     such exchange, on a nationally recognized exchange or quotation system  on
     which  trading volume in the Common Stock is highest) or (ii) the  highest
     per  share  price  for Common Stock actually paid in connection  with  the
     Change  in Control and (2) the number of Shares of such Restricted  Stock;
     plus  the  value  of  any related Cash Award relating to  such  Restricted
     Stock.

          (c)  Performance Shares.  Upon the occurrence of a Change in Control,
     any   Performance   Shares  previously  granted,  but   still   considered
     outstanding  (as  a  right to received Shares or cash equal  to  the  Fair
     Market  Value of such Shares at a future date), shall be canceled and  any
     profit  and/or  performance objectives with respect  to  such  Performance
     Shares  shall  be  deemed to have been attained to the  full  and  maximum
     extent;  and  an  immediate lump sum cash payment shall  be  paid  to  the
     Participant  in  an  amount determined in accordance with  the  terms  and
     conditions set forth in the applicable Agreement.

          (d)  Other  Stock Based Awards.  Upon the occurrence of a Change  in
     Control,  Other Stock Based Awards previously granted under the Plan,  but
     still considered outstanding, shall be canceled and an immediate lump  sum
     cash  payment shall be paid to the Participant in an amount determined  in
     accordance  with  the  terms and conditions set forth  in  the  applicable
     Agreement.

          (e)  Tax  Penalties.   If  the making of payments  pursuant  to  the
     foregoing paragraphs of this Section 9.1 would subject the Participant  to
     an  excise  tax  under Section 4999 of the Code, or would  result  in  the
     Company's  loss  of  a  federal income tax deduction  for  those  payments
     (either of these consequences is referred to individually herein as a "Tax
     Penalty"),  then  the Company shall reduce the amount of  Benefits  to  be
     canceled  to  the  extent necessary to avoid the imposition  of  such  Tax
     Penalty,  and  shall establish procedures necessary to  maintain  for  the
     Participants any form of benefit which may be provided under the  Plan  so
     that  such Participant will be in the same financial position with respect
     to  those  Benefits  not canceled as he would have been  in  the  ordinary
     course,  absent a Change in Control and assuming his continued employment;
     except  that the foregoing provisions of this paragraph (e), with  respect
     to  the cancellation of Benefits, shall not apply if such Participant  (i)
     is  entitled to a tax reimbursement for such Tax Penalty under  any  other
     agreement,  plan  or  program of the Company, or  (ii)  may  disclaim  any
     portion  of  or  all payments to be made pursuant to or  under  any  other
     agreement,  plan  or program of the Company in order  to  avoid  such  Tax
     Penalty.   Disagreements as to whether payments pursuant to the  foregoing
     would  result in the imposition of a Tax Penalty shall be resolved  by  an
     opinion  of  counsel chosen by the Participant and reasonably satisfactory
     to the Company.

     9.2  Change  in  Control.  A Change in Control shall be  deemed  to  have
occurred if:

          (a)  any "Person," which shall mean a "person" as such term is  used
     in  Sections 13(d) and 14(d) of the Exchange Act (other than the  Company,
     any  trustee  or  other  fiduciary holding securities  under  an  employee
     benefit plan of the Company, or any company owned, directly or indirectly,
     by  the  shareholders of the Company in substantially the same proportions
     as their ownership of stock of the Company), is or becomes the "beneficial
     owner"  (as  defined in Rule 13d-3 under the Exchange  Act),  directly  or
     indirectly, of securities of the Company representing 25% or more  of  the
     combined voting power of the Company's then outstanding voting securities;
     provided, however, that in determining whether any Person owns 25% or more
     of  such voting power, shares owned by such Person which were acquired  by
     that  Person  directly from the Company shall be treated as not  owned  by
     such Person;

          (b)  during  any period of 24 consecutive months (not including  any
     period  prior to May 13, 1998), individuals, who at the beginning of  such
     period  constitute the Board, and any new director (other than a  director
     designated by a Person who has entered into an agreement with the  Company
     to effect a transaction described in paragraph (a), (c) (2) or (d) of this
     Section) whose election by the Board, or whose nomination for election  by
     the  Company's shareholders, was approved by a vote of at least two-thirds
     (2/3)  of the directors before the beginning of the period cease  for  any
     reason to constitute at least a majority thereof;

          (c)  the  shareholders of the Company approve (1) a plan of complete
     liquidation  of the Company or (2) the sale or disposition by the  Company
     of all or substantially all of the Company's assets unless the acquirer of
     the  assets  or its directors shall meet the conditions for  a  merger  or
     consolidation in subparagraphs (d) (1) or (d) (2); or

          (d)  the   shareholders  of  the  Company  approve  a   merger   or
     consolidation of the Company with any other company other than:

               (1)  such a merger or consolidation which would result  in  the
          voting  securities  of  the  Company  outstanding  immediately  prior
          thereto  continuing to represent (either by remaining outstanding  or
          by  being  converted into voting securities of the surviving  entity)
          more  than 70% of the combined voting power of the Company's or  such
          surviving  entity's outstanding voting securities  immediately  after
          such merger or consolidation; or

               (2)  such a merger or consolidation which would result  in  the
          directors of the Company who were directors immediately prior thereto
          continuing  to  constitute  at least 50%  of  the  directors  of  the
          surviving entity immediately after such merger or consolidation.

In  this  paragraph (d), "surviving entity" shall mean only an entity in  which
all   of   the  Company's  stockholders  immediately  before  such  merger   or
consolidation become shareholders by the terms of such merger or consolidation,
and  the phrase "directors of the Company who were directors immediately  prior
thereto"  shall include only individuals who were directors of the  Company  at
the  beginning of the 24 consecutive month period preceding the  date  of  such
merger  or  consolidation, or who were new directors (other than  any  director
designated  by a Person who has entered into an agreement with the  Company  to
effect  a  transaction described in paragraph (a), (c)(2), (d)(1) or (d)(2)  of
this Section) whose election by the Board, or whose nomination for election  by
the Company's shareholders, was approved by a vote of at least two-thirds (2/3)
of the directors before the beginning of such period.


                                   ARTICLE X
                        AGREEMENTS AND CERTAIN BENEFITS

     10.1 Grant Evidenced by Agreement.  The grant of any Benefit  under  the
Plan may be evidenced by an Agreement which shall describe the specific Benefit
granted  and  the  terms and conditions of the Benefit.  The  granting  of  any
Benefit  may be subject to, and conditioned upon, the recipient's execution  of
any  Agreement required by the Committee.  Except as otherwise provided  in  an
Agreement,  all  capitalized terms used in the Agreement shall  have  the  same
meaning as in the Plan, and the Agreement shall be subject to all of the  terms
of the Plan.

     10.2 Provisions  of  Agreement.   Each  Agreement  shall  contain  such
provisions  that the Committee shall determine to be necessary,  desirable  and
appropriate for the Benefit granted.  Each Agreement may include, but shall not
be  limited to, the following with respect to any Benefit:  description of  the
type of Benefit; the Benefit's duration; its transferability; if an Option, the
exercise  price, the exercise period and the person or persons who may exercise
the  Option;  the  effect  upon  such Benefit of  the  Participant's  death  or
termination  of  employment; the Benefit's conditions; when,  if  and  how  any
Benefit  may be forfeited, converted into another Benefit, modified,  exchanged
for  another Benefit, or replaced; and the restrictions on any Shares purchased
or granted under the Plan.


                                  ARTICLE XI
                         REPLACEMENT AND TANDEM AWARDS

     11.1 Replacement.  Subject to Section 8.2, the Committee  may  permit  a
Participant to elect to surrender a Benefit in exchange for a new Benefit.

     11.2 Tandem Awards.  Benefits may be granted by the Committee in  tandem.
However, no Benefit may be granted in tandem with an ISO.
                                       
                                       
                                  ARTICLE XII
                 PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING

     12.1 Payment.  Upon the exercise of an Option or in the case of any other
Benefit  that requires a payment to the Company, the amount due the Company  is
to be paid:

          (a)  in cash;

          (b)  by the tender to the Company of Shares owned by the Participant
     and registered his name having a Fair Market Value equal to the amount due
     to the Company;

          (c)  in   other   property,  rights  and  credits,  including   the
     Participant's promissory note; or

          (d)  by any combination of the payment methods specified in (a), (b)
     and (c) above.

Notwithstanding the foregoing, any method of payment other than (a) may be used
only with the consent of the Committee, or if and to the extent so provided  in
the applicable Agreement.

     12.2 Dividend  Equivalents.   Grants of  Benefits  in  Shares  or  Share
equivalents may include dividend equivalent payments or dividend credit rights.

     12.3 Deferral.  The right to receive any Benefit under the Plan may,  at
the request of the Participant, be deferred for such period and upon such terms
as  the  Committee shall determine, which may include crediting of interest  on
deferrals  of  cash  and  crediting of dividends on  deferrals  denominated  in
Shares.

     12.4 Withholding.   The Company, at the time any  distribution  is  made
under  the  Plan,  whether  in  cash  or in  Shares,  may  withhold  from  such
distribution  any  amount necessary to satisfy federal,  state  and  local  tax
withholding  requirements with respect to such distribution.  Such  withholding
may be in cash or in Shares.


                                 ARTICLE XIII
                                    OPTIONS

     13.1 Types  of Options.  It is intended that both ISOs and NSOs  may  be
granted by the Committee under the Plan.

     13.2 Grant  of  Options  and  Option  Price.   Each Option may not have  a
term  that  exceeds  10 years from the date of grant, must  be  granted  to  an
Employee  and  must be granted no later than December 31, 2007.   The  purchase
price  for Shares under any Option shall be no less than the Fair Market  Value
of the Shares at the time the Option is granted.

     13.3 Early Termination of Option.

          (a)  Termination  of Employment.  All rights to exercise  an  Option
     terminate  when  the Participant's employment terminates  for  any  reason
     other  than  his  death or retirement.  Transfer from the  Company  to  an
     Affiliate, or vice versa, or from one Affiliate to another, shall  not  be
     deemed  termination of employment.  The Committee shall have the authority
     to  determine  in  each case whether an authorized  leave  of  absence  or
     absence on military or government service shall be deemed a termination of
     employment for purpose of this paragraph (a).

          (b)  Death or Retirement.  If a Participant dies while an Employee or
     his  employment  is  terminated because of retirement,  his  Option  shall
     terminate within a period not exceeding five years following his death  or
     retirement, but not later than the date the Option expires pursuant to its
     terms.   The  terms  of  Options outstanding,  except  for  those  Options
     intended  to  qualify as an ISO, may also be amended  at  anytime  by  the
     Committee or the Board to extend the Option's duration period following  a
     Participant's  death or retirement, subject to the limitations  stated  in
     the  preceding  sentence.  In the meantime, subject to the limitations  in
     the  applicable  Agreement, it may be exercised by  the  Participant,  the
     executors  or  administrators of his estate, or by his legatee  or  heirs.
     "Retirement" shall mean termination of employment at age 55 for older  for
     reasons other than death.

     13.4 Other  Requirements.  The terms of each Option which is intended  to
qualify as an ISO shall meet all requirements of Section 422 of the Code.   The
terms of each NSO shall provide that such Option will not be treated as an ISO.

     13.5 Determination by Committee.  Except as otherwise provided in Section
13.2 through Section 13.4, the terms of all Options shall be determined by  the
Committee.
                                       
                                       
                                  ARTICLE XIV
                               RESTRICTED STOCK

     14.1 Description.  The Committee may grant Benefits in  Shares  available
under  ARTICLE III of the Plan as Restricted Stock.  Shares of Restricted Stock
shall  be  issued at the time of the grant but shall be subject  to  forfeiture
until provided otherwise in the applicable Agreement or the Plan.

     14.2 Terms  and  Conditions of Restricted Stock Awards.   All  Shares  of
Restricted Stock shall be subject to the following terms and conditions, and to
such  other  terms  and  conditions as may be  provided  under  the  Agreements
described in paragraph (f) next below:

          (a)  Payment  of  Par Value.  The Committee, in its discretion,  may
     condition  any  grant  of Shares of Restricted Stock  on  payment  by  the
     Participant to the Company of an amount not in excess of the par value  of
     such  Shares.   If  any  such  shares are subsequently  forfeited  by  the
     Participant, the Company shall pay an equivalent amount to the Participant
     as soon as practicable after the forfeiture.

          (b)  Restricted  Period.  Shares of Restricted Stock  granted  to  a
     Participant  may not be sold, assigned, transferred, pledged or  otherwise
     encumbered  during a "Restricted Period" commencing on  the  date  of  the
     grant  and ending on such date as the Committee may designate, subject  to
     the following:

               (1)  The Committee may, at any time and in its sole discretion,
          reduce  or  terminate  the  Restricted Period  with  respect  to  any
          outstanding  Shares of Restricted Stock and any accrued dividends  in
          accordance with paragraph (g) below.

               (2)  The  Restricted  Period applicable  to  any  Participant's
          Shares  of  Restricted Stock shall end as of the date  on  which  the
          Participant's  employment  with the Company  and  its  Affiliates  is
          terminated by reason of the Participant's death, physical  or  mental
          disability  (as  determined  by the Committee),  or  for  such  other
          reasons as the Committee may provide.

               (3)  The Committee may, at any time, and in its sole discretion,
          allow a Participant to use his Restricted Stock during the Restricted
          Period  as  payment of the Option purchase price (in accordance  with
          Section  12.1)  for Options which he has been granted.   In  such  an
          event, a number of the Shares issued upon the exercise of the Option,
          equal  to  the number of Shares of Restricted Stock used  as  payment
          therefore,  shall  be  subject  to  the  same  restrictions  as   the
          Restricted Stock so used, plus any additional restrictions  that  may
          be  imposed by the Committee.  Such terms and conditions relating  to
          such  use  of Restricted Stock shall be provided under the Agreements
          described in paragraph (f) of this Section.

          (c)  Transfer  of Restricted Stock.  At the end of   the  Restricted
     Period  applicable to any Restricted Stock, such Shares, and  any  accrued
     dividends  will be transferred free of all restrictions to the Participant
     (or, to the Participant's legal representative, beneficiary or heir).

          (d)  Forfeitures.  Subject to paragraph (b) of this Section 14.2,  a
     Participant  whose  employment  with the Company  and  its  Affiliates  is
     terminated prior to the last day of the applicable Restricted Period shall
     forfeit all shares of Restricted Stock and any accrued dividends.

          (e)  Certificate Deposited With Company.  Each certificate issued  in
     respect  of Shares of Restricted Stock granted to a Participant under  the
     Plan  shall  be  registered in the name of the Participant and  deposited,
     together with a stock power endorsed in blank, with the Company.   At  the
     discretion of the Committee, any such certificates may be deposited  in  a
     bank  designated by the Committee.  Each such certificate shall  bear  the
     following (or a similar) legend:

           "The transferability of this certificate and the shares  of
           stock  represented  hereby are subject  to  the  terms  and
           conditions (including forfeitures) contained in The  Quaker
           Long  Term Incentive Plan of 1999 and an Agreement  entered
           into  between  the  registered owner and  The  Quaker  Oats
           Company.   A copy of the Plan and Agreement is on  file  in
           the office of the Secretary of The Quaker Oats Company, 321
           North Clark Street, Chicago, Illinois 60610."

          (f)  Restricted Stock Agreement.  The Participant shall enter into an
     Agreement  with  the  Company in a form specified  by  the  Committee  and
     containing such additional terms and conditions, if any, as the  Committee
     in  its  sole discretion shall determine, which are not inconsistent  with
     the provisions of the Plan.

          (g)  Dividends.   Regular  cash dividends payable  with  respect  to
     shares  of  Restricted Stock shall, in accordance with the terms   of  the
     applicable Agreement, be paid to the Participant currently or accrued.  If
     dividends are accrued, interest may be payable on such dividends  at  such
     rate, if any, as is established from time to time by the Committee.

          (h)  Substitution  of Rights.  Prior to the end  of  the  Restricted
     Period  with  respect  to  any Shares of Restricted  Stock  awarded  to  a
     Participant,  the  Committee may, with  the consent  of  the  Participant,
     substitute  an unsecured obligation of the Company to  pay cash  or  stock
     (on such reasonable terms and conditions as the Committee may, in its sole
     discretion,  determine) in lieu of its obligations under this ARTICLE  XIV
     to deliver unrestricted Shares plus accrued dividends.

          (i)  Shareholder Rights.  Subject to the foregoing restrictions, each
     Participant  shall have all the rights of a shareholder  with  respect  to
     Shares  of  Restricted Stock including, but not limited to, the  right  to
     vote such Shares.


                                  ARTICLE XV
                              PERFORMANCE SHARES

     15.1 Description.  Performance Shares are the right of an  individual  to
whom a grant of such Shares is made to receive Shares or cash equal to the Fair
Market  Value of such Shares at a future date in accordance with the  terms  of
such grant.

     15.2 Grant.  The Committee may grant an award of Performance Shares.   The
number of Performance Shares and the terms and conditions of the grant shall be
set  forth in the applicable Agreement, which may include Performance Goals  as
described in Article XVII.
                                       
                                       
                                  ARTICLE XVI
                           OTHER STOCK BASED AWARDS

     16.1 Description.  The Committee shall have the right to provide any other
form  of stock based awards under the Plan, if the Committee believes that such
Other  Stock  Based  Award would further the purposes for which  the  Plan  was
established.
     
     16.2 Grant.  The Committee may grant an award of Other Stock Based Awards
which  may  include, without limitation, the grant of Shares based  on  certain
conditions, or the grant of securities convertible into Shares.  The number  of
Other Stock Based Awards and the terms and conditions of the grant shall be set
forth  in  the  applicable Agreement, which may include  Performance  Goals  as
described in Article XVII.


                                 ARTICLE XVII
                               PERFORMANCE GOALS

     Performance  Shares and Other Stock Based Awards may be  governed  by  the
achievement of Performance Goals as the Committee shall determine.  Performance
Goals  that  may  be  used by the Committee for such grants shall  consist  of:
operating profits (which may include a determination based upon earnings before
income  taxes, depreciation and amortization), net profits, earnings per share,
profit returns and margins, revenues, controllable earnings, shareholder return
and/or  value,  stock  price and working capital.   Performance  Goals  may  be
measured  solely  on  a  corporate, subsidiary or business  unit  basis,  or  a
combination thereof and may reflect absolute entity performance or  a  relative
comparison of entity performance to the performance of a peer group of entities
or  other  external  measure  of the selected performance  criteria.   Profits,
earnings  and  revenues used for any Performance Goal measurement may  exclude:
gains  or  loses  on operating asset sales or dispositions; asset  write-downs;
litigation   or   claim  judgments  or  settlements;  accruals   for   historic
environmental obligations; effect of changes in tax law or rate on deferred tax
liabilities; accruals for reorganization and restructuring programs;  uninsured
catastrophic  property losses; the cumulative effect of changes  in  accounting
principles;   and  any  extraordinary  non-recurring  items  as  described   in
Accounting  Principles  Board Opinion No. 30 and/or in management's  discussion
and  analysis of financial performance appearing in the Company's annual report
to shareholders for the applicable year.


                                 ARTICLE XVIII
                           MISCELLANEOUS PROVISIONS

     17.1 Underscored References.  The underscored references contained in  the
Plan  are included only for convenience, and they shall not be construed  as  a
part of the Plan or in any respect affecting or modifying its provisions.

     17.2 Number and Gender.  The masculine and neuter, wherever used  in  the
Plan, shall refer to either the masculine, neuter or feminine; and, unless  the
context  otherwise  requires, the singular shall include  the  plural  and  the
plural the singular.

     17.3 Governing  Law.   This Plan shall be construed and  administered  in
accordance with the laws of the State of Illinois.

     17.4 Purchase  for  Investment.  The Committee may  require  each  person
purchasing  Shares  pursuant to an Option or other  award  under  the  Plan  to
represent  to  and  agree  with  the Company in writing  that  such  person  is
acquiring  the  Shares  for investment and without a view  to  distribution  or
resale.   The  certificates for such Shares may include any  legend  which  the
Committee  deems  appropriate  to reflect any restrictions  on  transfer.   All
certificates for Shares delivered under the Plan shall be subject to such stock-
transfer  orders  and other restrictions as the Committee  may  deem  advisable
under all applicable laws, rules and regulations, and the Committee may cause a
legend  or  legends  to  be put on any such certificates  to  make  appropriate
reference to such restrictions.

     17.5 No Employment Contract.  The adoption of the Plan or the granting of
a  Benefit shall not confer upon any Employee any right to continued employment
nor  shall  it interfere in any way with the right of the Employer to terminate
the employment of any of its Employees at any time.

     17.6 No Effect on Other Benefits.  The receipt of Benefits under the Plan
shall  have  no effect on any benefits to which a Participant may  be  entitled
from  the  Employer, under another plan or otherwise, or preclude a Participant
from receiving any such benefits.

     IN  WITNESS WHEREOF, this Plan is executed by a duly authorized officer of
the Company.

                                THE QUAKER OATS COMPANY
                                
                                
Dated:  May ___, 1998           By:
                                   Its Senior Vice President