-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MroQ3y9RywqMkqOpxXhNXN8Wc21wQ0E8uAyd3ekorB3GwfWrIWyqDrE9b80ivNep KWxeWMlQFHD15Zils/EA/w== 0000081371-97-000008.txt : 19970627 0000081371-97-000008.hdr.sgml : 19970627 ACCESSION NUMBER: 0000081371-97-000008 CONFORMED SUBMISSION TYPE: 11-KT PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970626 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUAKER OATS CO CENTRAL INDEX KEY: 0000081371 STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [2040] IRS NUMBER: 361655315 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-KT SEC ACT: 1934 Act SEC FILE NUMBER: 033-02709 FILM NUMBER: 97630549 BUSINESS ADDRESS: STREET 1: QUAKER TOWER STREET 2: PO BOX 049001 CITY: CHICAGO STATE: IL ZIP: 60604-9001 BUSINESS PHONE: 3122228503 11-KT 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM ll-K [ ] Annual Report Pursuant to Section l5(d) of the Securities Exchange Act of 1934 [X] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the transition period from July 1, 1996 to December 31, 1996 Commission file number 1-12 Full title of the Plan and the address of the Plan, if different from that of the issuer named below: The Quaker Stock Bonus Savings Plan Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office: The Quaker Oats Company P.O. Box 049001 Chicago, Illinois 60604-9001 Item 1. See Item 4. Item 2. See Item 4. Item 3. See Item 4. Item 4. Financial Statements and Exhibits (a) Financial Statements The Quaker Stock Bonus Savings Plan is subject to the Employee Retirement Income Security Act of 1974 (ERISA), and the report of Washington, Pittman & McKeever, independent public accoun- tants, as prepared in accordance with the financial reporting requirements of ERISA is attached hereto and incorporated into this report. (b) Exhibit Consent of Independent Public Accountants - Washington, Pittman & McKeever. SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the administrators of the Plan have duly caused this annual report to be signed on their behalf by the undersigned hereunto duly authorized. The Quaker Stock Bonus Savings Plan (Name of Plan) DENNIS M. CORRY (Dennis M. Corry) Senior Manager - Benefit Plans KATHLEEN KEARNEY (Kathleen Kearney) Manager - Benefit Plans ANNE TUMMINARO (Anne Tumminaro) Manager - Employee and Management Services Date: June 26, 1997 Exhibit Index Exhibit Paper (P) or Number Description Electronic (E) (a) The Quaker Stock Bonus E Savings Plan Financial Statements as of December 31, 1996 and June 30, 1996 (b) Consent of Independent E Public Accountants Exhibit (a) THE QUAKER OATS COMPANY THE QUAKER STOCK BONUS SAVINGS PLAN FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND JUNE 30, 1996 TOGETHER WITH INDEPENDENT AUDITOR'S REPORT THE QUAKER OATS COMPANY THE QUAKER STOCK BONUS SAVINGS PLAN AS OF DECEMBER 31, 1996 AND JUNE 30, 1996 TABLE OF CONTENTS PAGE INDEPENDENT AUDITOR'S REPORT 6 STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 7-8 STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 9-10 NOTES TO FINANCIAL STATEMENTS 11-16 SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES 17 SCHEDULE OF REPORTABLE TRANSACTIONS 18 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 19 INDEPENDENT AUDITOR'S REPORT To the Plan Committee of THE QUAKER STOCK BONUS SAVINGS PLAN of The Quaker Oats Company We have audited the accompanying Statements of Net Assets Available for Benefits of The Quaker Stock Bonus Savings Plan (Plan) as of December 31, 1996 and June 30, 1996, and the related Statements of Changes in Net Assets Available for Benefits for the six months ended December 31, 1996 and the year ended June 30, 1996. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1996 and June 30, 1996, and the changes in net assets available for benefits for the six months ended December 31, 1996 and the year ended June 30, 1996 in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedules of Assets Held for Investment Purposes and of Reportable Transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements. These schedules contain supplementary information required by the Department of Labor's Rules and Regulations for Reporting Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. WASHINGTON, PITTMAN & McKEEVER Chicago, Illinois June 12, 1997 THE QUAKER OATS COMPANY THE QUAKER STOCK BONUS SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1996 (dollars in thousands)
Union Non-Union Union (Non-ESOP) (ESOP) (Non-Sch. E) Non- Stock Bonus Stock Bonus PAYSOP Schedule E Schedule E Quaker Quaker Quaker Money Money Total Stock Fund Stock Fund Stock Fund Market Fund Market Fund ASSETS The Quaker Oats Company common stock, at market (1,815,232 shares, cost $51,743) $69,206 $7,848 $60,706 $652 $ - $ - Collective Short-Term Investment Fund 1,376 65 264 2 150 895 Total investments 70,582 7,913 60,970 654 150 895 Contributions receivable - Employee 185 20 157 - 1 7 Contributions receivable - Employer 174 19 155 - - - Dividends and interest receivable 521 59 452 5 1 4 Total assets 71,462 8,011 61,734 659 152 906 LIABILITIES Payable for Quaker stock purchased 179 15 164 - - - Interfund payable (receivable) - 1 (3) - (1) 3 Total liabilities 179 16 161 - (1) 3 NET ASSETS AVAILABLE FOR BENEFITS $71,283 $7,995 $61,573 $659 $ 153 $903 See accompanying notes to financial statements. THE QUAKER OATS COMPANY THE QUAKER STOCK BONUS SAVINGS PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AS OF JUNE 30, 1996 (dollars in thousands) Union Non-Union Union Non-Union (Non-ESOP) (ESOP) (Non-Sch. E) (Schedule E) Non- Stock Bonus Stock Bonus PAYSOP PAYSOP Schedule E Schedule E Quaker Quaker Quaker Quaker Money Money Total Stock Fund Stock Fund Stock Fund Stock Fund Market Fund Market Fund ASSETS The Quaker Oats Company common stock, at market (1,862,630 shares, cost $52,398) $63,096 $7,775 $54,550 $ 771 $ - $ - $ - Collective Short-Term Investment Fund 1,170 52 163 1 - 167 787 Total investments 64,266 7,827 54,713 772 - 167 787 Contributions receivable - Employee 307 36 258 - - 2 11 Contributions receivable - Employer 179 28 151 - - - - Dividends and interest receivable 536 66 460 6 - 1 3 Total assets 65,288 7,957 55,582 778 - 170 801 LIABILITIES Payable for Quaker stock purchased 89 2 87 - - - - Interfund payable (receivable) - - 1 (2) - - 1 Total liabilities 89 2 88 (2) - - 1 NET ASSETS AVAILABLE FOR BENEFITS $65,199 $7,955 $55,494 $ 780 $ - $170 $ 800 See accompanying notes to financial statements. THE QUAKER OATS COMPANY THE QUAKER STOCK BONUS SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 (dollars in thousands) Union Non-Union Union (Non-ESOP) (ESOP) (Non-Sch. E) Non- Stock Bonus Stock Bonus PAYSOP Schedule E Schedule E Quaker Quaker Quaker Money Money Total Stock Fund Stock Fund Stock Fund Market Fund Market Fund ADDITIONS Investment Income: Dividends $ 1,029 $ 115 $ 904 $ 10 $ - $ - Interest 35 2 7 - 4 22 Total investment income 1,064 117 911 10 4 22 Realized gain on The Quaker Oats Company common stock - (Note 4) 1,009 9 994 6 - - Unrealized gain (loss) on The Quaker Oats Company common stock - (Note 5) 6,765 676 6,101 (12) - - Employee contributions 3,378 378 2,846 - 19 135 Employer contributions 1,008 123 885 - - - Contributions from other plans 6 - 4 - 2 - Total additions 13,230 1,303 11,741 4 25 157 DEDUCTIONS Distributions to participants 6,234 157 5,964 15 3 95 Dividends to participants 912 - 912 - - - Total deductions 7,146 157 6,876 15 3 95 Increase (decrease) in net assets 6,084 1,146 4,865 (11) 22 62 Net assets available for benefits, beginning of period 65,199 7,955 55,494 780 170 800 Interfund transfers, net - (1,106) 1,214 (110) (39) 41 NET ASSETS AVAILABLE FOR BENEFITS, END OF PERIOD $71,283 $ 7,995 $61,573 $ 659 $ 153 $ 903 See accompanying notes to financial statements. THE QUAKER OATS COMPANY THE QUAKER STOCK BONUS SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED JUNE 30, 1996 (dollars in thousands) Union Non-Union Union Non-Union (Non-ESOP) (ESOP) (Non-Sch.E) (Schedule E) Non- Stock Bonus Stock Bonus PAYSOP PAYSOP Schedule E Schedule E Quaker Quaker Quaker Quaker Money Money Total Stock Fund Stock Fund Stock Fund Stock Fund Market Fund Market Fund ADDITIONS Investment Income: Dividends $ 2,083 $ 255 $ 1,803 $ 25 $ - $ - $ - Interest 71 4 19 - - 9 39 Total investment income 2,154 259 1,822 25 - 9 39 Realized gain on The Quaker Oats Company common stock - (Note 4) 1,403 107 895 344 57 - - Unrealized gain (loss) on The Quaker Oats Company common stock - (Note 5) 839 100 2,820 (255) (1,826) - - Employee contributions 7,091 822 6,006 - - 43 220 Employer contributions 2,358 316 2,042 - - - - Contributions from other plans 15 - 15 - - - - Total additions 13,860 1,604 13,600 114 (1,769) 52 259 DEDUCTIONS Distributions to participants 9,094 1,189 7,026 595 76 50 158 Dividends to participants 1,792 - 1,762 - 30 - - Total deductions 10,886 1,189 8,788 595 106 50 158 Increase (decrease) in net assets 2,974 415 4,812 (481) (1,875) 2 101 Net assets available for benefits, beginning of period 62,225 8,014 48,975 1,055 3,371 157 653 Interfund transfers, net - (474) 1,707 206 (1,496) 11 46 NET ASSETS AVAILABLE FOR BENEFITS, END OF PERIOD $65,199 $7,955 $55,494 $ 780 $ - $ 170 $ 800
See accompanying notes to financial statements. THE QUAKER OATS COMPANY THE QUAKER STOCK BONUS SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND JUNE 30, 1996 NOTE 1 - THE QUAKER STOCK BONUS SAVINGS PLAN The following brief description of The Quaker Stock Bonus Savings Plan (Plan) provides only general information. The Plan document should be referred to for the complete Plan provisions. General The Plan was adopted by The Quaker Oats Company (Company) and provides a program under which eligible employees may acquire an ownership interest in the Company and accumulate funds on a pretax basis for long-term retirement savings. The Plan is intended to qualify as a cash or deferred arrangement under Section 401(k) of the Internal Revenue Code and is subject to the provisions of the Employee Retirement Income Security Act of 1974. This report discusses the six-month transition period ended December 31, 1996. The Plan year end changed from a June 30 fiscal year end to a fiscal year aligned with the calendar year beginning January 1, 1997. Overall responsibility for administering the Plan rests with the Plan's administrative committee which is appointed by the Board of Directors of the Company. The Plan's trustee, The Northern Trust Company, is responsible for the management and control of the Plan's assets and has certain discretionary authority and control over such assets. The Plan's administrative committee has appointed Hewitt Associates as the Plan's record keeper. The Company pays all expenses incurred by the Plan. Eligibility The Plan covers those employees of the Company who were included in a group designated by the Board of Directors or the Executive Committee of the Board and had completed one year of service prior to the original effective date of the Plan. Under the current terms of the Plan, designated employees of the Company are eligible to participate in the Plan on the first day of the month following the date on which they complete one year of service. Participants' Accounts Participants in the Plan may invest in the Quaker Stock Fund or the Money Market Fund. The Quaker Stock Fund invests in common stock of the Company. Effective June 1, 1994, a portion of the Plan was designated an Employee Stock Ownership Plan (ESOP), within the meaning of Section 4975(e)(7) of the Internal Revenue Code. An ESOP account is maintained for each participant included in a group listed on Schedule E of the Plan. Effective June 30, 1994, the Quaker Stock Sharing Plan (PAYSOP) was merged into the Plan and the net assets of the PAYSOP were transferred into the Plan. Such assets transferred into the Plan were separately maintained as PAYSOP accounts until June 30, 1995, at which time the PAYSOP accounts were merged into the ESOP accounts. Those participants who did not have ESOP accounts had their PAYSOP accounts converted into special ESOP subaccounts. A non-ESOP account is maintained for each participant, consisting of the portion of the participant's account that is not included in an ESOP or PAYSOP account. The Money Market Fund invests in short-term fixed-income securities. Contributions The Plan allows participants to contribute 1 percent to 15 percent of their earnings, depending upon their location, in whole percentage increments, to the Plan before Federal and most state withholding taxes are computed. Participants have the option to change their investment election once a month. Participants may elect to invest their contributions in either the Quaker Stock Fund or the Short-Term Investment (Money Market) Fund. The Company contributes an addi- tional 50 percent of a participant's contributions to the Quaker Stock Fund to a maximum of 4 percent of a participant's eligible earnings. Once a year, participants have the option to transfer all or a portion of their monies they have accumulated in the Short-Term Investment Fund to the Quaker Stock Fund in multiples of 25 percent. Once a year, participants who are at least age 59 1/2 or who become totally and permanently disabled may transfer funds, in multiples of 25 percent, between the two funds. The Plan provides for discretionary cash contributions by the Company. Participants may contribute to the Plan any portion of distributions received from other qualified plans when the contributions qualify as a tax-free roll- over. Participants may elect to deposit excess funds from The Quaker Flex Plan to the Plan. The Company does not provide additional contributions on these funds. Generally, all contributions are not subject to Federal income taxes until distributed to the participant or the participant's beneficiary. Distributions All dividends received with respect to Company stock held on the record date a) in a participant's ESOP account, and b) in a participant's PAYSOP account, if the participant's group is listed on Schedule E of the Plan, are distributed to participants no later than 90 days after the end of the Plan year in which the dividends are received. A participant may elect in writing to receive distribution of all or a portion of his account if he is at least age 59 1/2 or if he is totally and permanently disabled as determined by the Company with the advice of a medical doctor. Additionally, a participant may receive the portion of his account consisting of participant contributions (and, for those not listed on Schedule E, excluding any amounts that have been invested in the Quaker Stock Fund for less than two full Plan years after the year in which they were invested) in the event of a hardship. Hardship means when funds are required for purchasing or making capital expenditures for a primary residence, financing the post- secondary education of a participant or the participant's family or alleviating an immediate and substantial financial hardship. Effective June 1, 1994, a participant may elect to withdraw a portion of his ESOP or PAYSOP account if the participant: a) is an employee; b) has completed at least 10 years of service since becoming a participant in the ESOP (including years of participation in the PAYSOP prior to June 30, 1994); and c) is at least age 55. Generally, the annual maximum amount subject to this election is 25 percent of the participant's account balance, reduced by any amounts previously distributed under this provision. If a participant's employment with the Company is terminated, the Plan will distribute the account balance to the participant or the participant's beneficiary. A participant may defer the lump-sum distribution or the start of installment payments until age 70 1/2. If a participant terminates employment, attains age 65 in a Plan year, and no distribution or deferral election is received by the 15th day after the end of the Plan year, an automatic lump-sum distribution will be made. A participant may elect in writing to receive the distribution in one of the following ways: (a) in a lump sum; or (b) in approximately equal annual installments over a chosen period. The period chosen, however, must be no longer than the participant's life expectancy when distributions begin as determined by Internal Revenue Service regulations. If the distribution is made through installment payments, a participant's remaining account balance will continue to be adjusted for net earnings and gains and losses as of each valuation date. If a participant's account value is $3,500 or less, an automatic lump-sum distribution will be made as soon as practicable after the end of the Plan year in which termination occurs. This does not apply to accounts under $3,500 at the end of the transition period ended December 31, 1996. Plan Terminations The Plan may be terminated at any time by action of the Company's Board of Directors. In the event of the Plan termination, the value of the accounts determined as of the effective date of such termination shall be held for the benefit of participants, former participants or their beneficiaries. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The preparation of the financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the Plan's management to use estimates and assumptions that affect the accompanying financial statements and disclosures. Actual results could differ from these estimates and assumptions. The accompanying financial statements have been prepared on the accrual basis of accounting. Interest income is recorded as earned and dividend income is recorded as of the record date. Investment Valuation Investments are included in the accompanying Statements of Net Assets Available for Benefits at fair market value. Fair market value is based on published market prices. Net realized and unrealized gains and losses for the period are reflected in the accompanying Statement of Changes in Net Assets Available for Benefits. The net realized gain or loss on the investments sold is calculated as the difference between the proceeds received and the average cost of the investments. The net realized gain or loss on the distribution of investments is calculated as the difference between the fair market value on the date of distribution and the average cost of the investments. The net unrealized gain or loss is calculated as the difference between the fair market value of the investments less the cost of the investments at the end of the Plan year and the fair market value of the investments less the cost of the investments at the beginning of the Plan year. Security purchases and sales, including related gains and losses, are recognized on the transaction trade date. Brokerage commissions increase the cost or decrease the sale proceeds on the security transactions. NOTE 3 - FEDERAL INCOME TAXES The Plan obtained its latest determination letter on August 20, 1996, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, the Plan administrator believes that the Plan was qualified and the related trust was tax-exempt as of December 31, l996 and June 30, 1996. NOTE 4 - REALIZED GAIN ON INVESTMENTS The realized gain on Quaker stock was as follows:
Six Months Ended Year Ended December 31, 1996 June 30, 1996 Proceeds from the sale/distribution of Quaker stock $ 5,093 $ 6,942 Less: Cost of investments sold/distributed 4,084 5,539 REALIZED GAIN ON INVESTMENTS $ 1,009 $ 1,403
NOTE 5 - UNREALIZED GAIN ON INVESTMENTS The unrealized gain on Quaker stock was as follows:
Six Months Ended Year Ended December 31, 1996 June 30, 1996 Unrealized gain, beginning of year $ 10,698 $ 9,859 Unrealized gain during the year 6,765 839 UNREALIZED GAIN, END OF YEAR $ 17,463 $ 10,698
NOTE 6 - CURRENT VALUE GAIN Based on the Current Value reporting requirements of the Department of Labor and the Internal Revenue Service instructions for Form 5500, the net realized gain on the investments sold is calculated as the difference between proceeds received and the fair market value of investments on the first day of the Plan year or the acquisition date if purchased during the Plan year. The net realized gain on the distribution of investments is calculated as the difference between fair market value of investments on the date of distribution and the fair market value of investments on the first day of the Plan year. The net unrealized gain is calculated as the difference between the fair market value of investments at the end of the Plan year and the fair market value at the beginning of the Plan year. The net realized gain and net unrealized gain were as follows:
Six Months Ended Year Ended December 31, 1996 June 30, 1996 Net realized gain on investments $ 202 $ 247 Net unrealized gain on investments 7,572 1,995 NET GAIN IN FAIR VALUE OF INVESTMENTS $ 7,774 $ 2,242
NOTE 7 - RECONCILIATION OF THE FORM 5500 TO THE FINANCIAL STATEMENTS The following is a reconciliation of net assets available for benefits per the Form 5500 to the financial statements:
As of As of December 31, 1996 June 30, 1996 Net assets available for benefits per the Form 5500 $ 71,126 $ 63,928 Add: Distributions payable to participants 157 1,271 NET ASSETS AVAILABLE FOR BENEFITS PER THE FINANCIAL STATEMENTS $ 71,283 $ 65,199
The following is a reconciliation of benefits paid to participants per the Form 5500 to the financial statements:
Six Months Ended Year Ended December 31, 1996 June 30, 1996 Distributions to participants per the Form 5500 $ 5,120 $ 6,543 Add: Distributions payable, beginning of year 1,271 3,822 Less: Distributions payable, end of year 157 1,271 DISTRIBUTIONS TO PARTICIPANTS PER THE FINANCIAL STATEMENTS $ 6,234 $ 9,094
THE QUAKER OATS COMPANY THE QUAKER STOCK BONUS SAVINGS PLAN FORM 5500 ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1996 (dollars in thousands) Market Description Number of Shares Cost Value The Quaker Oats Company Common Stock * 1,815,232 $51,743 $69,206 Collective Short-Term Investment Fund 1,376 1,376 Total Investments $53,119 $70,582 * Identifies a party-in-interest to the Plan. THE QUAKER OATS COMPANY THE QUAKER STOCK BONUS SAVINGS PLAN FORM 5500 ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 (dollars in thousands)
Purchase Sale Current Net Description of Security Price # of Trades Price # of Trades Cost of Security Value Gain The Quaker Oats Company Common Stock $ 3,428 46 $ 2,836 16 $ 2,303 $ 6,264 $ 533
Exhibit (b) CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our report dated June 12, 1997 (and all references to our Firm) included in or made a part of the Form 11-K. It should be noted that we have not audited any financial statements of The Quaker Stock Bonus Savings Plan subsequent to December 31, 1996 or performed any audit procedures subsequent to the date of our report. WASHINGTON, PITTMAN & McKEEVER Chicago, Illinois June 20, 1997 -----END PRIVACY-ENHANCED MESSAGE-----