Exhibit 10(b)

                          DEFERRED COMPENSATION PLAN
                   FOR DIRECTORS OF THE QUAKER OATS COMPANY
          (As Amended and Restated Effective as of November 1, 1996)

1.   PURPOSE

     The purpose of this Plan is to offer non-employee members of the Board  of
     Directors  ("Directors")  the  opportunity  to  defer  receipt  of   their
     directors' compensation, under terms advantageous to both the Director and
     The  Quaker  Oats Company ("Company"), until termination of the Director's
     service with the Company.

2.   DEFINITIONS

     a.   "Beneficiary" shall mean the person or persons designated  from  time
          to  time  in writing by a Participant to receive payments  under  the
          Plan  after the death of such Participant, or, in the absence of  any
          such  designation  or  in the event that such  designated  person  or
          persons shall predecease such Participant, the Participant's estate.

     b.   "Cash  Unit"  shall mean a Deferred Amount and any  interest  carried
          over the deferral period and which shall be credited with interest as
          set forth in Section 4, during the period of deferral.

     c.   "Common  Stock Unit" shall mean a Deferred Amount which is  converted
          into a unit for purposes of this Plan by dividing a dollar amount  by
          the Fair Market Value of a share of the Company's common stock.

     d.   "Compensation" shall mean payments which the Director  receives  from
          the Company for services as a member of its Board of Directors.  Such
          payments  may include directors' fees, retainers, meeting fees,  fees
          for  chairing committees or undertaking special projects directed  by
          the  Board  of  Directors, but shall exclude direct reimbursement  of
          expenses.

     e.   "Deferred Amount" shall mean an amount of Compensation deferred under
          this  Plan  and  carried during the deferral period as either  Common
          Stock Units or Cash Units.

     f.   "Dividend Equivalent" shall mean an amount equal to the cash dividend
          paid  on  a share of the Company's common stock credited to a  Common
          Stock  Unit  as if such a Unit were an actual share of  common  stock
          issued and outstanding.

     g.   "Fair Market Value" shall mean the average of the closing prices of a
          share of the Company's common stock as reported by the New York Stock
          Exchange  -  Composite  Transactions Reporting  System  for  the  ten
          business  days  commencing on the third and  ending  on  the  twelfth
          business  day  following the release of quarterly and annual  summary
          statements of the Company's sales and earnings.

     h.   "Termination  of  Service"  shall mean  the  termination  (by  death,
          retirement or otherwise) of a Participant's service as a Director  of
          the Company.

3.   DEFERRAL OF COMPENSATION

     Each  Director may elect to have all or a portion of his Compensation  for
     any calendar year, commencing with the calendar year beginning January  1,
     1997,  deferred  under  this Plan.  Such election  shall  be  executed  in
     writing  by  the Director, prior to the start of the calendar year  during
     which  such Compensation is earned, on a form prescribed by the  Secretary
     of the Company.  An election, once made, shall be irrevocable for the next
     calendar  year,  and  it shall continue in effect for subsequent  calendar
     years  until  changed prospectively by the Participant.  The election  may
     specify that the Participant desires to have all or a specified percentage
     of  his  Compensation for the year deferred under the Plan.  Any  election
     for  deferral  shall  specify that the Participant desires  to  have  such
     Deferred  Amounts  carried as Common Stock Units,  or  Cash  Units,  or  a
     combination, during the period of deferral.

4.   TREATMENT OF DEFERRED AMOUNTS

     The  Company  shall  establish  on  its books  the  necessary  account  to
     accurately  reflect  the  Company's liability to  each  Director  who  has
     deferred  Compensation under this Plan.  To this account shall be credited
     Deferred  Amounts, Dividend Equivalents on Common Stock, and  interest  on
     Cash  Units.  Payments to the Participant following Termination of Service
     shall be debited to the account.  Rights and interests under this Plan may
     not be assigned.

     a.   Cash  Units.  A Participant who has elected to defer Compensation  in
          Cash Units shall have the amount of such Compensation credited to his
          account  on the same date that it would otherwise be payable to  him.
          Deferred  Amounts carried as Cash Units shall earn interest from  the
          date  of  credit to the date of payment.  At the end of  each  month,
          interest  at  the  new issue 10-year "A" rated industrial  bond  rate
          quoted  by  Salomon Brothers in its Bond Market Roundup, or  by  such
          other  recognized  source  as  the  Secretary  of  the  Company   may
          designate,  for the week in which the preceding month ends  shall  be
          credited to the cash units accrued in each account.

     b.   Common  Stock  Units.   A  Participant  who  has  elected  to   defer
          Compensation  in  Common Stock Units shall have the  amount  of  such
          Compensation credited to his account on the same date that  it  would
          otherwise be payable to him.  Such Deferred Amount shall be converted
          into  a  whole  number of Common Stock Units once  a  fiscal  quarter
          (during  the last month thereof) by dividing the Deferred  Amount  by
          the  Fair  Market Value of the Company's common stock, as defined  in
          Section 2g.  No fractional Common Stock Units shall be credited,  but
          such  amounts  shall be carried forward to the next  quarter  without
          interest.  If Common Stock Units exist in a Participant's account  on
          a dividend declaration date for the Company's common stock,  Dividend
          Equivalents  shall be credited to the Participant's  account  on  the
          following  dividend  payment date.  Such  amounts  shall  be  carried
          forward without interest until the next quarterly date when they  may
          be converted into Common Stock Units.

          In the event of any change in the outstanding shares of the Company's
          common   stock   by   reason  of  any  stock   split   or   dividend,
          recapitalization, merger, consolidation, combination or  exchange  of
          stock or similar corporate change, the Secretary of the Company shall
          make  such  equitable  adjustments, if any, by  reason  of  any  such
          change,  deemed  appropriate  in the number  of  Common  Stock  Units
          credited to each Participant's account.
          
     c.   Transfers  Between  Accounts.   Participants  may  transfer  Deferred
          Amounts  within their account from one investment medium (e.g.,  Cash
          Units) into the other (e.g., Common Stock Units) upon application  to
          the  Secretary  of  the Company and approval by the  Company's  legal
          advisors.   Such  transfers normally shall be  made  during  the  ten
          business  days  commencing on the third and  ending  on  the  twelfth
          business  day  following the release of quarterly and annual  summary
          statements of the Company's sales and earnings.

5.   PAYMENT OF DEFERRED AMOUNTS

     At the time a Director first elects to defer Compensation under this Plan,
     the  Participant  shall irrevocably specify, on a form prescribed  by  the
     Secretary of the Company, the number of annual installments (not exceeding
     15)  that  the  Participant desires to receive  payment  of  the  Deferred
     Amount.   Payments shall be made in the manner elected by the Participant,
     commencing  as  of  the January 1 immediately following the  Participant's
     Termination  of  Service,  except  as provided  in  Section  6  below.   A
     Beneficiary  shall also be designated on such form; and  such  Beneficiary
     may  be  changed by the Participant at anytime.  If no effective  election
     has been made at the time of Termination of Service, payment of the entire
     Deferred Amount shall be made to a Participant (or a Beneficiary,  if  the
     Participant  shall have died) on the January 1 immediately  following  the
     Participant's  Termination of Service.  Regardless of when Termination  of
     Service  occurs,  however, no payment of a Deferred  Amount  may  commence
     until the Participant has attained age 55.

     All payments of Deferred Amounts under this Plan shall be made in cash out
     of  the  general assets of the Company.  The payment value of each  Common
     Stock  Unit shall be the Fair Market Value just prior to the payment date.
     The  amount of each annual installment payment to a Participant  shall  be
     determined  by dividing the Cash Units and/or Common Stock  Units  in  the
     Participant's account by the number of installments remaining to be  paid,
     and,  in  the  case of Common Stock Units, multiplying the result  by  the
     payment value.

     As  of  the  date on which the last payment with respect to  Common  Stock
     Units  is to be made to any director or his beneficiary under this Section
     5, the Company shall pay the director or beneficiary (a) the net amount of
     any  Dividend  Equivalents carried over to the  year  in  accordance  with
     Section  4b;  and (b) the amount which would be determined  in  accordance
     with  Section 4b, for any dividend payment date following the actual  last
     transfer date, if such transfer follows the record date relating  to  such
     dividend payment date.

6.   ACCELERATION OF PAYMENTS

     The  Compensation  Committee of the Board of Directors (the  "Compensation
     Committee"  and  the "Board") is empowered to accelerate  the  payment  of
     Deferred  Amounts  to  a  Participant or  to  all  Participants  or  to  a
     Beneficiary,  whether  before  or after the Participant's  Termination  of
     Service,  for reasons of individual hardship, death, changes  in  the  tax
     laws  or  accounting principles, or other reasons which negate or diminish
     the continued value of Deferred Amounts to Participants or to the Company;
     provided however that following a Change in Control, as defined in Section
     7,  such acceleration may be carried our for any reason deemed appropriate
     by the Compensation Committee.

7.   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 Securities Exchange Act of 1934,  as
          amended (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
          stockholders 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 30%
          or   more  of  the  combined  voting  power  of  the  Company's  then
          outstanding voting securities; provided, however, that this paragraph
          (a) shall not apply to any Person who becomes such a beneficial owner
          of  such Company securities pursuant to an agreement with the Company
          approved  by  the Board, entered into before such Person  has  become
          such a beneficial owner of Company securities representing 5% or more
          of the combined voting power of the Company's then outstanding voting
          securities;

     (b)  during  any period of 24 consecutive months (not including any period
          prior to November 13, 1996), 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  he 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 stockholders, 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  stockholders  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 stockholders 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  stockholders  by  the  terms  of  such  merger   or
     consolidation, and the phrase "director 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 on 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 stockholders,
     was  approved  by  a vote of at least two-thirds (2/3)  of  the  directors
     before the beginning of such period.
     
8.   AMENDMENT OR TERMINATION

     The  Board or the Executive Committee may amend or terminate this Plan  at
     any  time.   No amendment or termination shall adversely affect  any  then
     existing Deferred Amounts or rights under this Plan.

IN  WITNESS WHEREOF, this Plan, as stated, is effective as of November 1, 1996,
and is executed by a duly authorized officer of the Company.
     
     
                                      THE QUAKER OATS COMPANY


March 5, 1997                         By: /s/Douglas J. Ralston
                                     Its: Senior Vice President