THE QUAKER LONG TERM INCENTIVE PLAN

 Exhibit 10(k)(7)

                                       
                                       
                                       
                  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  describe  in
          Section 9.2.

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

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

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

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

               (k)   Employee.   Any  person employed by the  Employer  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.

Page 2               
               
               (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.
                                  
Page 3                                  
                                  
                                  ARTICLE IV
                                  ELIGIBILITY

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

           5.1   Committee.   The Plan shall be administered by  the  Committee
(also  known as the Compensation Committee of the Board).  The Committee  shall
consist  of  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

Page 4                
                
                
               (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

Page 5

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
     
Page 6     
     
     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
     
Page 7     
     
     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  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 "directors of the Company who were directors immediately  prior

Page 8

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.
                                  
Page 9                                  
                                  
                                  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

Page 10

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.

Page 11

           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
               
Page 12               
               
               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.

Page 13                

                (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.
                                 
Page 14                                 
                                 
                                 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

Page 15

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/Douglas J. Ralston
                                         Its Senior Vice President

Page 16 

Basic Info X:

Name: THE QUAKER LONG TERM INCENTIVE PLAN
Type: Incentive Plan
Date: Nov. 12, 1996
Company: QUAKER OATS CO
State: New Jersey

Other info:

Date:

  • September 1 , 1996
  • September 11 , 1996
  • December 31 , 1998
  • November 9 , 1994
  • October 14 , 1996

Organization:

  • Board of Directors of the Company
  • New York Stock Exchange
  • Securities and Exchange Commission
  • Number of Shares
  • Performance Shares and Other Stock Based Awards
  • ADMINISTRATION 5.1 Committee
  • Compensation Committee of the Board
  • Power of Board
  • Change in Control
  • b Stock Appreciation Rights
  • Company of Shares
  • Grant of Options and Option Price
  • Early Termination of Option
  • Termination of Employment
  • Fair Market Value of one Share
  • 14.2 Grant of Tandem Award
  • Conditions of Restricted Stock Awards
  • c Transfer of Restricted Stock
  • Certificate Deposited With Company
  • Quaker Oats Company
  • Shares of Restricted Stock
  • the State of Illinois

Location:

  • Chicago
  • Illinois

Money:

  • $ 5.00

Person:

  • sDouglas J. Ralston

Percent:

  • 30 %
  • 5 %
  • 70 %
  • 50 %
  • 200 percent