Document:

PepsiCo, Inc. 1995 Stock Option Incentive Plan

 
Exhibit
10.14 
 
 
PEPSICO, INC. 
1995 Stock Option Incentive Plan 
(as amended and restated, effective August 2, 2001) 
 
 
1.    Purposes. The principal purposes of the 1995 Stock Option Incentive Plan (the “Plan”) are to provide long-term incentives in the form of stock options to those persons with significant
responsibility for the success and growth of PepsiCo, Inc. and its subsidiaries, affiliates, divisions and other businesses in which it has a substantial financial interest, to assist the Company in attracting and retaining key employees on a
competitive basis, and to associate the interests of such employees with those of PepsiCo’s shareholders. 
 
2.    Definitions. Unless the context clearly indicates otherwise, the following terms, when used in this Plan,
shall have the meanings set forth below: 
 
(a)    “Change in Control” means the occurrence of any of the following events: (i) acquisition of 20% or more of the outstanding voting securities of PepsiCo, Inc. by another entity or group; excluding,
however, the following (A) any acquisition by PepsiCo, Inc., or (B) any acquisition by an employee benefit plan or related trust sponsored or maintained by PepsiCo, Inc.; (ii) during any consecutive two-year period, persons who constitute the Board
of Directors of PepsiCo, Inc. (the “Board”) at the beginning of the period cease to constitute at least 50% of the Board (unless the election of each new Board member was approved by a majority of directors who began the two-year period);
(iii) PepsiCo, Inc. shareholders approve a merger or consolidation of PepsiCo, Inc. with another company, and PepsiCo, Inc. is not the surviving company; or, if after such transaction, the other entity owns, directly or indirectly, 50% or more of
the outstanding voting securities of PepsiCo, Inc.; (iv) PepsiCo, Inc. shareholders approve a plan of complete liquidation of PepsiCo, Inc. or the sale or disposition of all or substantially all of PepsiCo, Inc.’s assets; or (v) any other
event, circumstance, offer or proposal occurs or is made, which is intended to effect a change in the control of PepsiCo, Inc., and which results in the occurrence of one or more of the events set forth in clauses (i) through (iv) of this paragraph.

 
(b)    “Committee”
means the Compensation Committee of the Board of Directors of PepsiCo, as appointed from time to time by the Board, consisting of two or more outside disinterested members of the Board. 
 
(c)    “Common Stock” or “Stock” means PepsiCo Common Stock, par
value 1 2/3 cents per share. 
 
(d)    “Company” means PepsiCo, Inc., its divisions, direct and indirect
subsidiaries, affiliates and other businesses in which it has a substantial financial interest. 

 
(e)    “Fair Market Value” means an amount equal to the mean of the high and low sales prices for Common Stock as reported on the composite tape for securities listed on the New York Stock Exchange, on
the date in question (or, if no sales of Stock were made on said Exchange on such date, on the next preceding day on which sales were made on such Exchange), carried out to four decimal places. 
 
(f)    “Grant Date” means the
date an Option is granted under the Plan. The date of grant of an Option shall be the date as of which the Committee determines that such Option shall become effective. 
 
(g)    “Option” or “Stock Option” means a right granted under the
Plan to purchase a share of PepsiCo Common Stock at a fixed price for a specified period of time. 
 
(h)    “Option Exercise Price” means the price at which a share of Common Stock covered by an Option granted
hereunder may be purchased. 
 
(i)    “Optionee” means an eligible employee of the Company who has received a Stock Option granted under the Plan. 
 
(j)    “PepsiCo” means PepsiCo, Inc., a North Carolina corporation.

 
(k)    “Retirement” means termination from employment by the Company for reasons other than death after the employee has fulfilled the requirements for either a normal, early or disability retirement
pension, as defined under the Company’s retirement program applicable to such employee at the date of termination of employment. 
 
(l)    “Totally Disabled” shall have the meaning set forth in the Company’s long term disability
program applicable to U.S. salaried employees. 
 
(m)    “Variable Awards” are rights to receive grants of either cash payments or Stock Options based upon the performance of PepsiCo business units during a three-year performance period. The election to
receive cash or Stock Options is made by the participant at the beginning of the three-year performance period. 
 
3.    Administration of the Plan. The Plan shall be administered by the Committee, which shall have all
the powers vested in it by the terms of the Plan, including, but not limited to, authority to determine the persons to be granted Options under the Plan, to determine the size and applicable terms and conditions of grants to be made to such persons,
to determine the time when Options will be granted and any conditions which must be satisfied by employees before an award is made, to determine when Options may be exercised and 
 

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whether they may be deferred,
to determine whether an award should be reduced or eliminated, and to authorize grants to eligible persons. 
 
The Committee shall have full power and authority to administer and interpret the Plan and to adopt such rules, regulations, agreements,
guidelines and instruments for the administration of the Plan as the Committee deems necessary or advisable. The Committee’s interpretations of the Plan, and all actions taken and determinations made by the Committee concerning any matter
arising under or with respect to the Plan or any Options granted hereunder shall be final, binding and conclusive on all parties concerned, including, without limitation, Optionees, the Company, its employees, PepsiCo and its shareholders.

 
4.    Eligibility.
All Company employees who hold positions graded at Band I or Band II, or the equivalent, on a Grant Date are eligible to be granted Options under the Plan. Employees who are hired at or promoted to an eligible level after a Grant Date are
eligible to receive a pro-rated grant at such time and on such terms and conditions as may be determined by the Committee in its discretion. Notwithstanding the foregoing, no employee may be granted Options which, if exercised in the aggregate,
would result in that employee receiving more than 10% of the maximum number of shares available for issuance under the Plan. 
 
5.    Awards. Unless otherwise determined by the Committee, regular grants of Stock Options will generally be
made annually in amounts determined from time to time by the Committee. The Committee may also approve special or pro-rata grants of Options in its discretion. The Committee may also grant Options in connection with Variable Awards. All Options
granted under the Plan shall be evidenced by agreements containing such terms and conditions (not inconsistent with the Plan) as the Committee may determine. Unless otherwise determined by the Committee, Options will be subject to the following
terms and conditions: 
 
(a)    Option Exercise Price. The Option Exercise Price shall be equal to the Fair Market Value of a share of Common Stock on the Grant Date. 
 
(b)    Term. Options shall be granted with a term of ten (10) years. 
 
(c)    Exercisability. Regular
grants of Options generally become 100% vested and exercisable on the third anniversary of the Grant Date. Special or pro-rata grants of Options shall become vested and exercisable at such times as may be determined by the Committee at the time of
grant. Options granted in connection with Variable Awards shall be exercisable immediately. Once exercisable, Options may be exercised until the expiration of their term. Fractional Options may not be exercised and no fractional shares shall be
purchasable or deliverable under the Plan. 
 

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(d)    Termination of Employment, Death, Total Disability or Retirement. All Options shall automatically expire upon, and no Option may be exercised after, the termination of the Optionee’s employment
with the Company; provided, however, that if such termination occurs by reason of the Optionee’s death, Total Disability or Retirement, then the Optionee’s designated beneficiary (or, if none, his or her legal representative), in the event
of death, or the Optionee, in the event of Retirement or Total Disability, shall be vested in the following: (i) if such termination occurs after the first anniversary of the Grant Date, all of the Options; and (ii) if such termination occurs prior
to the first anniversary of the Grant Date, a pro-rated portion of the Options based on the Optionee’s active service during the first year following the Grant Date. Any Options that become vested under this paragraph may be exercised from the
date on which such Options would have vested had the Optionee’s employment continued through the date on which the term of the Options expires. 
 
(e)    Buy-out of Option Gains. The Committee shall have the right, at any time, in its sole discretion and
without the consent of the holder thereof, to cancel a Stock Option and pay to the holder the excess of the Fair Market Value of the shares covered by such Option over the Option Exercise Price for such Option as of the date the Committee provides
written notice of its intention to exercise this right. Payments of buy out amounts may be made in cash, in shares of Common Stock, or partly in cash and partly in Common Stock as the Committee deems advisable. Payments of any such buy out amounts
shall be made net of any applicable foreign, federal (including FICA), state and local withholding taxes. 
 
(f)    Misconduct. The Committee shall determine the terms and conditions relating to an Optionee’s
misconduct and such terms and conditions shall be set out in the option agreement. Unless the Committee determines otherwise at the time of grant, in the event that an Optionee has (i) used for profit or disclosed to unauthorized persons,
confidential information or trade secrets of the Company, (ii) breached any contract with or violated any fiduciary obligation to the Company, (iii) engaged in unlawful trading in the securities of PepsiCo or of another company based on information
gained as a result of that Optionee’s employment with the Company, or (iv) committed a felony or other serious crime, then that Optionee may, at the option of the Company, forfeit all rights to any unexercised Options granted under the Plan and
in such event all of that Optionee’s outstanding Options shall automatically terminate and lapse. 
 
(g)    Assignment or Transfer. Unless the Committee determines otherwise, during an Optionee’s lifetime,
his or her Options shall not be transferable and shall only be exercisable by the Optionee and any purported transfer shall be null and void. No Option, nor any rights or interests therein, shall be assignable or transferable except by will or the
laws of descent and distribution. 
 

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6.    Foreign Employees. Without amending the Plan, the Committee may grant Options to eligible employees who are foreign nationals on such terms and conditions different from those specified in this Plan
as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of the Plan, and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans and the
like as may be necessary or advisable to comply with provisions of laws in other countries in which the Company operates or has employees. 
 
7.    Exercising Options. To exercise an Option, the holder thereof shall give notice of his or her exercise to
PepsiCo, or its agent, specifying the number of shares of Common Stock to be purchased and identifying the specific Options that are being exercised. From time to time the Committee may establish procedures relating to effecting such exercises. An
Option is exercisable during an Optionee’s lifetime only by the Optionee; provided, however, that in the event the Optionee is incapacitated and unable to exercise Options, such Options may be exercised by such Optionee’s legal guardian,
legal representative, fiduciary or other representative whom the Committee deems appropriate based on applicable facts and circumstances. 
 
8.    Payment of Option Exercise Price. The Option Exercise Price for the Options being exercised must be paid
in full at time of issuance of the Common Stock. In addition, in order to enable the Company to meet any applicable foreign, federal (including FICA), state and local withholding tax requirements, an Optionee shall also be required to pay the amount
of tax to be withheld at the time of exercise. No share of Stock will be delivered to any Optionee until all such amounts have been paid by the Optionee. The obligation of PepsiCo to deliver cash or Common Stock shall be subject to currency or other
restrictions imposed by any government. 
 
9.    Shares of Stock Subject to the Plan. The shares that may be delivered or purchased under the Plan shall not exceed an aggregate of 52,800,000 shares of Common Stock, which has been adjusted from the
initial authorized amount of 25,000,000 and which is subject to any further adjustments which may be made pursuant to Section 10 hereof. Shares of Stock used for purposes of the Plan may be either shares of authorized but unissued Common Stock or
treasury shares or both. Stock covered by Options which have terminated or expired prior to exercise or have been surrendered or cancelled shall be available for further option hereunder. 
 
10.    Dilution and Other Adjustments. In the event of any change in the
outstanding shares of Common Stock by reason of any stock split, stock dividend, recapitalization, merger, consolidation, combination or exchange of shares or other similar corporate change, such equitable adjustments may be made in the Plan and the
Options granted hereunder as the Committee 
 

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determines are necessary or
appropriate, including if necessary, an adjustment in the number of shares and Option Exercise Prices per share applicable to Options then outstanding and in the number of shares which are reserved for issuance under the Plan. Any such adjustment
shall be conclusive and binding for all purposes of the Plan. 
 
11.    Change in Control. Notwithstanding anything to the contrary herein, at the date of a Change in Control, all outstanding and unvested Options granted under the Plan shall immediately vest and become
exercisable, and all Options then outstanding under the Plan shall remain outstanding in accordance with their terms. In the event that any Option granted under the Plan becomes unexercisable during its term on or after a Change in Control because:
(i) the individual who holds such Option is involuntarily terminated (other than for cause) within two (2) years after the Change in Control; (ii) such Option is terminated or adversely modified; or (iii) PepsiCo Common Stock is no longer issued and
outstanding, or no longer traded on a national securities exchange, then the holder of such Option shall immediately be entitled to receive a lump sum cash payment equal to the greater of (x) the gain on such Option or (y) the Black-Scholes value of
such Option (as determined by a nationally recognized independent investment banker chosen by PepsiCo), in either case calculated on the date such Option becomes unexercisable. For purposes of the preceding sentence, the gain on an Option shall be
calculated as the difference between the closing price per share of PepsiCo Common Stock as of the date such Option becomes unexercisable less the Option Exercise Price of such Option. 
 
Any amount required to be paid pursuant to this Section 11 shall be paid within twenty (20) days after the
date such amount becomes payable. 
 
12.    Registration, Listing and Qualification of Shares. Each Option shall be subject to the requirement that if at any time the registration, listing or qualification of the shares covered thereby upon
any securities exchange or under any foreign, federal, state or local law, or the consent or approval of any governmental regulatory body, is determined to be necessary or desirable as a condition of, or in connection with, the granting of such
Option or the purchase of shares thereunder, no such Option may be delivered or exercised, as the case may be, unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any condition
not acceptable to the Committee. Any person exercising an Option shall make such representations and agreements and furnish such information as the Committee may request to assure compliance with the foregoing or any other applicable legal
requirements. 
 
13.    No
Rights to Options or Employment. No employee or other person shall have any claim or right to be granted an Option under the Plan. Having received an Option under the Plan shall not give an employee any right to receive any other grant under the
Plan. An Optionee shall have no rights to or 
 

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interest in any Option except
as set forth herein or in the terms and conditions of the Option. Neither the Plan nor any action taken hereunder shall be construed as giving any employee any right to be retained in the employ of the Company. 
 
14.    Rights as Shareholder. An
Optionee under the Plan shall have no rights as a holder of Common Stock with respect to Options granted hereunder, unless and until certificates for shares of Common Stock are issued to such Optionee. 
 
15.    Costs and Expenses. Except
as provided in Sections 5 and 8 hereof with respect to taxes, the costs and expenses of administering the Plan shall be borne by PepsiCo and shall not be charged to any grant nor to any employee receiving a grant. 
 
16.    Plan Unfunded. The Plan
shall be unfunded. Except for reserving a sufficient number of authorized shares to the extent required by law to meet the requirements of the Plan, PepsiCo shall not be required to establish any special or separate fund or to make any other
segregation of assets to assure the delivery of PepsiCo Common Stock upon exercise of any Option granted under the Plan. 
 
17.    Amendments. The Committee may at any time terminate or from time to time amend the Plan in whole or in
part, but no such action shall adversely affect any rights or obligations with respect to any awards theretofore made under the Plan and no such action shall be valid if such action requires shareholder approval under applicable law to be valid.
With the consent of affected Optionees, the Committee may amend outstanding agreements evidencing awards under the Plan in a manner not inconsistent with the terms of the Plan. 
 
18.    Other Actions. This Plan shall not restrict the authority of the Committee
or of PepsiCo, for proper corporate purposes, to grant or assume stock options, other than under the Plan, to or with respect to any employee or other person. 
 
19.    Governing Law. This Plan shall be governed by and construed in accordance with the laws of the State of
North Carolina. 
 
20.    Effectiveness of the Plan. This Plan shall become effective on July 27, 1995. 
 

7The Quaker Long Term Incentive of 1990

Exhibit 10.16 
 
SECOND AMENDMENT 
TO THE 
QUAKER LONG TERM INCENTIVE PLAN OF 1990 
(As Amended and Restated Effective as of September 1, 1996) 
 
WHEREAS, The Quaker Long Term Incentive Plan of 1990, as amended and restated effective as of September 1,
1996 (the “Plan”), was established by The Quaker Oats Company (the “Company”) for the benefit of its eligible employees; and 
 
WHEREAS, amendment of the Plan is desirable to eliminate the cancellation and payment of cash in connection with any change in control
transaction which would preclude pooling of interests accounting, if such treatment would otherwise apply to the transaction, but otherwise retain the full effect and benefit of the plan provisions, including the elimination of further service
requirements as a condition of the options or restricted stock; 
 
NOW, THEREFORE, pursuant to the authority delegated to the undersigned by resolution of the Board of Directors, the Plan is hereby amended as of the 21st day of November, 2000, by adding a new paragraph 9.1(h) immediately following paragraph 9.1(g) as follows: 
 
(h)    Pooling of
Interests.  Notwithstanding any other provision of the Plan, Options outstanding on the date of a Change in Control which is intended to qualify as a pooling of interests transaction, which would otherwise be cancelled and cashed out in
accordance with paragraph (a) above, after application of the limitations set forth in paragraph (g) above, shall not be subject to any additional service requirement as a condition of exercise but shall not otherwise be subject to the provisions of
such paragraph (a), and the Restricted Period with respect to Restricted Stock, which would otherwise be cancelled and cashed out in accordance with paragraph (c) above, after application of the limitations of paragraph (g) above, shall lapse on the
date of any such Change in Control but such Restricted Stock shall not otherwise be subject to the provisions of such paragraph (c). 
 
IN WITNESS WHEREOF, this Amendment is executed below by a duly authorized officer  of the Company. 
 

	 The Quaker Oats Company

	
	 By:
	 	 /s/    Robert S. Morrison

	 Its:
	 	 Chairman of the Board, President
and Chief Executive Officer

 
FIRST
AMENDMENT 
TO THE 
QUAKER LONG TERM INCENTIVE PLAN OF 1990 
(As Amended and Restated Effective as of September 1,
1996) 
 
WHEREAS, The Quaker Long Term
Incentive Plan of 1990, as amended and restated effective as of September 1, 1996 (the “Plan”), was established by the Quaker Oats Company (the “Company”) for the benefit of its eligible employees; and 
 
WHEREAS, amendment of the Plan is desirable; 
 
NOW, THEREFORE, the Plan is hereby amended effective as of May
13, 1998, by substituting the following for Section 9.2 of the Plan: 
 
“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 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 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 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 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) of this Section; 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 ‘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 stockholders, was approved by a vote of at least
two-thirds (2/3) of the directors before the beginning of such period.” 
 
IN WITNESS WHEREOF, this Amendment is executed below by a duly authorized officer of the Company. 
 

	 	 	 	 	 The Quaker Oats Company

	
	 Date:  August 30, 1999
	 	 	 	 By:
	 	 /s/    Pamela S. Hewitt

	 	 	 	 	 	 	 Its:
	 	 Senior Vice President

 
THE QUAKER
LONG TERM INCENTIVE PLAN OF 1990 
(As Amended and Restated Effective as of September 1, 1996) 
 
ARTICLE I 
NAME AND PURPOSE 
 
1.1    Name.  The Quaker Long Term Incentive Plan of 1990 (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 officers and other key 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 described 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 as an officer or key employee.

 
(l)     Employer. The Company and all Affiliates. 
 
(m)    Exchange Act. The Securities Exchange Act of 1934, as amended. 
 
(n)    Fair Market
Value. The mean between 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 422A 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 XVIII 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 Share. A Share awarded to a Participant under ARTICLE XVI of the Plan.

 
(u)    Performance Units. A Benefit awarded to a Participant under ARTICLE XVII of the Plan. 
 
(v)    Plan. The Quaker Long Term Incentive Plan of 1990 and all amendments and supplements
thereto. 
 
(w)    Restricted Stock. Shares issued under ARTICLE XV of the Plan. 
 
(x)    Rule 16b-3. Rule 16b-3 promulgated by the SEC, as amended, or any successor rule in
effect from time to time. 

 
(y)      SEC.  The Securities and Exchange Commission. 
 
(z)      Share.  A share of Common Stock. 
 
(aa)    Stock
Appreciation Right.  A Benefit awarded to a Participant under ARTICLE XIV of the Plan. 
 
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 number of Shares which may be issued or sold or for which Options, Stock Appreciation Rights, or Performance Shares may be granted under the Plan shall be 26,000,000 Shares (after adjustment for the 1994 2-for-1 stock
split), subject to the provisions of Sections 3.2 and 3.3 of the Plan. Such Shares may be authorized but unissued Shares, Shares held in the treasury, or both. 
 
3.2    Reusage.  If an Option or Stock Appreciation Right 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 or Stock Appreciation Right, grant of Restricted
Stock, Performance Shares or other grant, as the case may be, shall again be available for use under the Plan. 
 
3.3    Adjustments.  If there is any change in the Common Stock of the Company by reason of any stock
dividend, spin-off,  split-up, spin-out, recapitalization, merger, consolidation, reorganization, combination or exchange of Shares, the number of Stock Appreciation Rights and number and class of shares available for Options and grants of
Restricted Stock, Performance Shares and Other Stock Based Awards and the number of Shares subject to outstanding Options, Stock Appreciation Rights, grants of Restricted Stock and Performance Shares, and Other Stock Based Awards, and the price
thereof, as applicable, shall be appropriately adjusted by the Committee. 
 
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 members of the Board, 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 individuals 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, Stock Appreciation Rights, or Performance Shares 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, 1998.  
 
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.  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. 

 
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)    Stock Appreciation Rights.  Upon the occurrence of a Change in Control, Stock Appreciation Rights 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 Fair Market Value of one Share on the date on which the Stock Appreciation Right was granted, and (2) the number of such Stock Appreciation Rights held. 
 
(c)    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.

 
(d)    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. 
 
(e)    Performance Units.  Upon the occurrence of a Change in Control, any
Performance Units previously granted, but still considered outstanding (as a right to receive cash at a future date), shall be canceled and any profit and/or performance objectives with respect to such Performance Units 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. 
 
(f)    Other Stock
Based Awards and other Benefits.  Upon the occurrence of a Change in Control, Other Stock Based Awards or other Benefits 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. 
 
(g)    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 (g), 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 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 September 11, 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 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 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 allor 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 “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 stockholders, 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. 
 
10.3    Certain
Benefits.  Any Benefit granted to an individual who is subject to Section 16 of the Exchange Act shall not be transferable other than by will or the laws of descent and distribution and shall be exercisable during his lifetime only by
him, his guardian or his legal representative. 

 
ARTICLE
XI 
REPLACEMENT AND TANDEM AWARDS 
 
11.1    Replacement.  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 except a Stock Appreciation Right. 
 
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    Shares for ISOs.  The number of Shares for which ISOs may be granted on or after the Effective Date shall not exceed 26,000,000 Shares, subject to the overall Plan limitations, permitted
reusage and adjustments provided for in ARTICLE III. 
 
13.3    Grant of Options and Option Price.  Each Option must be granted to an Employee and must be granted no later than December 31, 1998. No single employee may be granted more than 1,000,000
Options (after adjustment for the 1994 2-for-1 stock split) during any Fiscal Year of the Company. 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.

 
13.4    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.  Effective for Options granted after November 9, 1994, 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. 
 
13.5    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. 

 
13.6    Determination by Committee.  Except as otherwise provided in Section 13.2 through Section 13.5, the terms of all Options shall be determined by the Committee. 
 
ARTICLE XIV 
STOCK APPRECIATION RIGHTS 
 
14.1    Description.  The Committee may from time to time grant Stock Appreciation Rights. Upon
electing to receive payment of a Stock Appreciation Right, a Participant shall receive an amount in cash, in Common Stock or in any combination thereof, as the Committee shall determine, equal to the amount, if any, by which the Fair Market Value of
one Share on the date on which such election is made exceeds the Fair Market Value of one Share on the date on which the Stock Appreciation Right was granted. 
 
14.2    Grant of Tandem Award.  The Committee may grant a Stock Appreciation Right in tandem with
another Benefit, in which case: the exercise of the other Benefit shall cause a correlative reduction in Stock Appreciation Rights standing to a Participant’s credit which were granted in tandem with the other Benefit, and the payment of a
Stock Appreciation Right shall cause a correlative reduction of the Shares under such other Benefit. 
 
14.3    ISO Tandem Award.  When a Stock Appreciation Right is granted in tandem with ISO, it shall
have such terms and conditions as shall be required for the ISO with which it is granted in tandem to qualify as an ISO. 
 
14.4    Payment of Award.  A Stock Appreciation Right shall be paid, to the extent payment is elected
by the Participant (and is otherwise due and payable), as soon as practicable after the date on which such election is made. 
 
ARTICLE XV 
RESTRICTED STOCK 
 
15.1    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. 
 
15.2    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, any accrued dividends in accordance
with paragraph (g) below, and any corresponding Cash Award pursuant to Section 15.3. 
 
(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 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, any accrued dividends and any corresponding Cash Award, 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 15.2(b), 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, and any corresponding Cash Award. 

(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 1990 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 XV to deliver unrestricted Shares plus accrued dividends. 
 
(i)    Stockholder Rights.  Subject to the foregoing restrictions, each Participant
shall have all the rights of a stockholder with respect to Shares of Restricted Stock including, but not limited to, the right to vote such Shares. 
 
15.3    Cash Awards and Restricted Stock.  The Committee, at the time it grants Restricted Stock to a
Participant or at any time thereafter may grant a corresponding Cash Award which will entitle the Participant to receive cash as of the date as of which the Restricted Stock is transferred to him pursuant to paragraph 15.2(c), in an amount which is
not in excess of 200 percent of the Fair Market Value of the Restricted Stock as of that 

date. Any such Cash Award shall be in addition to the Participant’s rights to the Shares of Restricted Stock and shall be subject to
such additional terms and conditions, if any, as the Committee determines which are not inconsistent with the terms and conditions of the Plan. The Committee may, at any time, grant unrestricted Shares (in lieu of such a Cash Award and subject to
the limitations thereof) to any participant under the Plan subject to such terms and conditions as the Committee may determine. 
 
ARTICLE XVI 
PERFORMANCE SHARES 
 
16.1    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. Generally, such right shall be based upon the attainment of profit and/or performance objectives. 
 
16.2    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. 
 
ARTICLE XVII 
PERFORMANCE UNITS 
 
17.1    Description.  Performance Units are the right of an individual to whom a grant of such Units is made to receive cash at a future date in accordance with the terms of such grant. Generally,
such right shall be based upon the attainment of profit and/or performance objectives. 
 
17.2    Grant.  The Committee may grant an award of Performance Units. The number of Performance Units and the terms and conditions of the grant shall be set forth
in the applicable Agreement. 
 
ARTICLE XVIII

OTHER STOCK BASED AWARDS AND OTHER BENEFITS 
 
18.1    Other Stock Based Awards.  The Committee shall have the right to
grant Other Stock Based Awards which may include, without limitation, the grant of Shares based on certain conditions, the payment of cash based on the performance of the Common Stock, and the grant of securities convertible into Shares.

 
18.2    Other
Benefits.  The Committee shall have the right to provide types of Benefits under the Plan in addition to those specifically listed, if the Committee believes that such Benefits would further the purposes for which the Plan was
established. 

 
ARTICLE
XIX 
MISCELLANEOUS PROVISIONS 
 
19.1    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. 
 
19.2    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. 
 
19.3    Governing Law.  This Plan shall be construed and administered in accordance with the laws of
the State of Illinois. 
 
19.4    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. 
 
19.5    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. 
 
19.6    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 Program is executed by a duly authorized officer of the Company. 
 

	 	 	 	 	 THE QUAKER OATS COMPANY

	
	 October 14, 1996
	 	 	 	 By:
	 	 /s/    Doug Ralston        

	 	 	 	 	 	 	 Its
	 	 Senior Vice President

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