Exhibit 10(g)


                     THE QUAKER OATS COMPANY
                        STOCK OPTION PLAN
                      FOR OUTSIDE DIRECTORS

                            ARTICLE I
                        NAME AND PURPOSE

     1.1   Name.  The Quaker Oats Company Stock Option  Plan  for
Outside Directors is established by The Quaker Oats Company.
     
     1.2   Purpose.   The  Company has established  the  Plan  to
promote  the  interests of the Company and  its  shareholders  by
providing  nonemployee  members of the Board  of  Directors  with
additional   incentive   and  the  opportunity,   through   stock
ownership, to increase their proprietary and personal interest in
its continued success and progress through stock ownership.

                           ARTICLE II
                           DEFINITIONS

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

          (a)  Agreement.  The document which evidences the grant
     of   any   Option  hereunder  and  sets  forth  the   terms,
     conditions, provisions and restrictions of such Option.

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

          (c)    Change  in  Control.   Occurrence  upon   events
     describe in Section 6.2.

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

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

          (f)  Company.  The Quaker Oats Company.
          
          (g)   Director.  A member of the Board who  is  not  an
     Employee.

          (h)  Effective Date.  January 1, 1999.

          (i)   Employee.  Any person employed by the Company  or
     its controlled group of businesses.

          (j)   Exchange  Act.  The Securities  Exchange  Act  of
     1934, as amended.
          
          (k)   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 on the New York
     Stock  Exchange  on the last previous day on  which  a  sale
     occurred prior to such date.
          
          (l)     Immediate   Family.    The   Participant,   the
     Participant's   spouse,  parents,  children,   stepchildren,
     sisters,  brothers  and  grandchildren,  including  adoptive
     relationships.
          
          (m)   ISO.   An  Option that meets the requirements  of
     Section 422 of the Code.
          
          (n)  NSO.  An Option that does not qualify as an ISO.
          
          (o)   Option.   An  option to purchase  Shares  granted
     under ARTICLE IX of the Plan.
          
          (p)   Participant.  A Director who is granted an Option
     under the Plan.
          
          (q)   Plan.  The Quaker Oats Company Stock Option  Plan
     for  Outside  Directors, and all amendments and  supplements
     thereto.
          
          (r)  Share.  A share of Common Stock.
          
          (s)  Trading Day.  A day on which Shares are traded  on
     the New York Stock Exchange.

     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
                     SHARES AND COMMON STOCK

     3.1   Shares  Available  Under Plan.   Shares  delivered  to
Participants  under  the  Plan may  be  authorized  but  unissued
Shares, Shares held in the treasury, or both.
     
     3.2   Adjustments.  In the event of any change in the Common
Stock     through    stock    dividends,    splits,    spin-offs,
recapitalizations,  reclassifications, or otherwise,  or  in  the
event  that  any other stock shall be substituted for the  Common
Stock   as   the   result  of  any  merger,   consolidation,   or
reorganization, then the Board shall make appropriate  adjustment
or  substitution in the number, kind, and price of shares subject
to outstanding Options.
     
                           ARTICLE IV
                         ADMINISTRATION

     4.1   Authority  and  Administration.   The  Plan  shall  be
administered by the Board and, subject to the terms of the  Plan,
the Board shall have complete authority to:

          (a)  determine the terms, conditions and provisions of,
     and restrictions relating to, each option granted;
          
          (b)    interpret  and  construe  the   Plan   and   all
     Agreements;

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

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

          (e)  determine all questions relating to Options;
          
          (f)  maintain accounts, records and ledgers relating to
     Options;
          
          (g)   maintain  records concerning  its  decisions  and
     proceedings;
          
          (h)   employ  agents, attorneys, accountants  or  other
     persons  for such purposes as the Board considers  necessary
     or desirable;
          
          (i)  take, at any time, any action permitted by Section
     6.1,  irrespective  of  whether any Change  in  Control  has
     occurred or is imminent; and
          
          (j)   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.

     4.2   Determinations.  All determinations of the Board shall
be final.

     4.3  Delegation.  The Board may delegate all or any part  of
its  authority  under  the  Plan to any  Employee,  Employees  or
committee.

                            ARTICLE V
                    TERMINATION AND AMENDMENT

     5.1   General.  The Plan shall commence as of the  Effective
Date  and may be terminated or amended at any time by the  Board.
Subject  to  the  provisions of Section 5.2, the  termination  or
amendment  of the Plan shall not adversely affect a Participant's
right  to  any  Option  granted  prior  to  such  termination  or
amendment.

     5.2   Board's  Right.  Except as hereinafter  provided,  any
Option   granted   may   be   converted,   modified,   forfeited,
surrendered,  replaced or canceled, in whole or in part,  by  the
Board  if  and to the extent permitted in the Plan or  applicable
Agreement  or  with the consent of the Participant to  whom  such
Option  was  granted.   The Board may not cancel  or  permit  the
surrender of Options and reissue new Options, or reprice Options,
at a lower purchase price.
                                
                           ARTICLE VI
                        CHANGE IN CONTROL

    6.1   Option  Cancellation and Payment.  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 amount by which 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,  exceeds the per Share Option price of each such  Option
held  (whether  or  not then fully exercisable),  times  (2)  the
number of Shares covered by each such Option.

     6.2  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;

          (b)   during  any period of 24 consecutive months  (not
     including   any   period  prior  to  the  Effective   Date),
     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 shareholders  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 VII
                    AGREEMENTS AND PROVISIONS

     7.1   Grant Evidenced by Agreement.  The grant of any Option
under  the  Plan  may  be evidenced by an Agreement  which  shall
describe the specific Option granted and the terms and conditions
of the Option.  The granting of any Option may be subject to, and
conditioned  upon,  the recipient's execution  of  any  Agreement
required  by  the  Board.   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.

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

                          ARTICLE VIII
                     PAYMENT AND WITHHOLDING

     8.1   Payment.  Upon the exercise of an Option,  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  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 Board, or if and  to
the extent so provided in the applicable Agreement.

     8.2  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 IX
                             OPTIONS

     9.1  Grant and Option Price.
          
          (a)   Annual Grant.  On the first Trading Day  of  each
     calendar  year, each Director shall be granted an Option  to
     purchase   the  number  of  Shares  determined  by  dividing
     $105,000  by  the Fair Market Value of the  Shares  on  such
     Trading Day.  In  the event a New Director is elected to the
     Board after the annual Option grant has been awarded for the
     year of such  Director's  election,  such  Director shall be 
     granted an  Option  to   purchase  the   number  of   shares 
     determined  by  dividing  $8,750 by the Fair Market Value of 
     the Shares  on  the  Director's  election date (if a Trading 
     Day, or if not, the first Trading Day following such date of 
     election); multiplied  by  the  number  of  full  or partial 
     calandar months which remain in such year. The purchase 
     price for Shares  under  any  Option  shall  equal  the Fair 
     Market Value of the Shares on the grant date  of the Option.  
     Each Option may not have a term  that exceeds  10 years from 
     the date of grant and  may  only  be granted to a Director.
          
          (b)    Annual   Election.   Each  calendar   year,   in
     accordance  with procedures established by the  Board,  each
     Director may elect to have additional Options granted to him
     in  lieu of any or all of the following:  (i) the Director's
     annual  cash retainer as established by the Board from  time
     to  time;  (ii)  the Director's Board committee  chair  fee;
     (iii)  the  Director's annual common stock unit award  under
     The  Quaker Oats Company Stock Compensation Plan for Outside
     Directors;   or   (iv)   any  other  Director   compensation
     established by the Board.  Based on the Director's election,
     such  awards  shall be converted into an Option to  purchase
     the  number of Shares determined by dividing three times the
     dollar value of the converted award by the Fair Market Value
     of the Shares on the grant date of the Option.  All terms of
     such  elected  Options shall be the same as Options  granted
     and described in (a) above on the same grant date.

     9.2    Early   Termination  of  Option.   If  a  Participant
terminates service as a Director for any reason, including death,
all  rights  to exercise an Option terminate within a period  not
exceeding five years following his death or termination, but  not
later  than  the date the Option expires pursuant to  its  terms.
The  terms of Options outstanding may also be amended at any time
by  the Board to extend the Option's duration period following  a
Participant's  death or termination, subject to  the  limitations
stated  in  the preceding sentence.  In the meantime, the  Option
may  be  exercised subject to the limitations in  the  applicable
Agreement.

     9.3   Transferability.  Except as otherwise provided in this
Section  9.3,  an  Option  is  not  transferable  other  than  as
designated  by the Participant by will or by the laws of  descent
and  distribution,  and  during the Participant's  life,  may  be
exercised only by the Participant.  However, the Participant  may
transfer an Option for no consideration to or for the benefit  of
the    Participant's   Immediate   Family   (including,   without
limitation, to a trust for the benefit of the Participant or  the
Participant's  Immediate Family or to a  partnership  or  limited
liability  company for the Participant or one or more members  of
the  Participant's Immediate Family), subject to such  limits  as
the  Board may establish, and the transferee shall remain subject
to all the terms and conditions applicable to the Option prior to
such transfer.
     
     9.4   Other Requirements.  It is intended that only NSOs may
be  granted  under  the  Plan.  The terms of  each  Option  shall
provide that such Option will not be treated as an ISO.

     9.5   Determination by Board.  Except as otherwise  provided
in  Section  9.1 through Section 9.4, all Option terms  shall  be
determined by the Board.
                                
                            ARTICLE X
                    MISCELLANEOUS PROVISIONS

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

     10.2  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.

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

     10.4  Purchase for Investment.  The Board may  require  each
Participant purchasing Shares pursuant to an Option to  represent
to and agree with the Company in writing that such Participant 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 Board 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 Board may  deem  advisable
under  all applicable laws, rules and regulations, and the  Board
may  cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions.

    10.5  No Service Contract.  The adoption of the Plan  or  the
granting  of an Option shall not confer upon any Participant  any
right  to  continued service as a Director nor shall it interfere
in  any  way with the right of the Company or Board to  terminate
the service of any Director at any time.

     10.6  No  Effect  on  Other Benefits.  Except  as  specified
herein,  the  receipt of Options under the  Plan  shall  have  no
effect on any compensation or benefits to which a Participant may
be entitled from the Company, under another plan or otherwise, or
preclude  a  Participant from receiving any such compensation  or
benefits.

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

                                THE QUAKER OATS COMPANY
                                
                                
Dated:  March 17, 1999         By: /s/ John G. Jartz
                                   Its Senior Vice President