61
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
For the fiscal year ended March 31, 1994
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 the 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
accountants, 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 trustee (or other persons who administer the Plan) have duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
The Quaker Stock Bonus Savings Plan
(Name of Plan)
ROBERT C. PENZKOVER
(Robert C. Penzkover)
Director-Employee Benefits
DENNIS M. CORRY
(Dennis M. Corry)
Manager-Benefit Plans
MELANIE PHEATT
(Melanie Pheatt)
Manager-Employee Benefits
Date: September 26, 1994
Exhibit Index
Exhibit Paper (P) or
Number Description Electronic (E)
(a) The Quaker Stock Bonus E
Savings Plan Financial
Statements as of
March 31, 1994 and 1993
(b) Consent of Independent E
Public Accountants
Exhibit (a)
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
FINANCIAL STATEMENTS
AS OF MARCH 31, 1994 AND 1993
TOGETHER WITH INDEPENDENT AUDITORS' REPORT
Washington, Pittman & McKeever
Certified Public Accountants
819 South Wabash Avenue
Suite 600
Chicago, Illinois 60605
INDEPENDENT AUDITORS' REPORT
To The Plan Committee of The Quaker Stock Bonus Savings Plan
THE QUAKER OATS COMPANY
We have audited the accompanying Statements of Net Assets Available for
Benefits of THE QUAKER STOCK BONUS SAVINGS PLAN (the "Plan") as of March
31, 1994 and March 31, 1993, and the related Statement of Changes in Net
Assets Available for Benefits for the year ended March 31, 1994. These
financial statements are the responsibility of the Plan's administrators.
Our responsibility is to express an opinion on the 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 of the Plan as of March 31, 1994
and March 31, 1993, and the changes in its net assets for the year ended
March 31, 1994 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 accompanying supplemental
Schedule of 1994 Investment Transactions in Excess of 5% of the
Beginning Plan Assets is presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting Disclosure under
the Employee Retirement Income Security Act of 1974 and is not a required
part of the basic financial statements. The supplemental schedule has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
WASHINGTON, PITTMAN & McKEEVER
Chicago, Illinois
July 8, 1994
1
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF MARCH 31, 1994
(000's omitted)
<TABLE>
<CAPTION> Quaker Short-Term
Stock Investment
Total Fund Fund
ASSETS
<S> <C> <C> <C>
Cash $1,059 $ 429 $630
The Quaker Oats Company common stock,
at market (792,298 shares,
cost $43,000) 49,617 49,617 --
Contributions receivable - Employer 71 71 --
- Employee 87 62 25
Dividends and interest receivable 418 416 2
Total assets 51,252 50,595 657
LIABILITIES
Payable for Quaker stock purchased 303 303 --
Liability to terminated participants 394 386 8
Total liabilities 697 689 8
NET ASSETS $50,555 $49,906 $649
</TABLE>
See Notes to Financial Statements.
2
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF MARCH 31, 1993
(000's omitted)
<TABLE>
<CAPTION>
Quaker Short-Term
Stock Investment
Total Fund Fund
ASSETS
<S> <C> <C> <C>
Cash $ 640 $ 281 $ 359
The Quaker Oats Company common stock,
at market (672,011 shares,
cost $34,600) 45,025 45,025 --
Contributions receivable - Employer 56 56 --
- Employee 194 179 15
Dividends and interest receivable 323 322 1
Total assets 46,238 45,863 375
LIABILITIES
Payable for Quaker stock purchased 181 181 --
Liability to terminated participants 605 593 12
Total liabilities 786 774 12
NET ASSETS $45,452 $45,089 $ 363
</TABLE>
See Notes to Financial Statements.
3
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED MARCH 31, 1994
(000's omitted)
<TABLE>
<CAPTION>
Quaker Short-term
Stock Investment
Total Fund Fund
<S> <C> <C> <C>
Investment Income:
Dividends $ 1,521 $ 1,521 $ --
Interest 24 9 15
Total investment income 1,545 1,530 15
Realized gain on The Quaker Oats
Company common stock 190 190 --
Unrealized loss on The Quaker Oats
Company common stock (3,807) (3,807) --
Employee contributions 6,872 6,526 346
Employer contributions 3,439 3,439 --
Contributions from other plans 194 179 15
Distributions to employees (3,426) (3,334) (92)
Interfund and interplan transfers 96 94 2
Increase in net assets during
the period 5,103 4,817 286
Net assets at beginning of period 45,452 45,089 363
Net assets at end of period $ 50,555 $ 49,906 $ 649
</TABLE>
See Notes to Financial Statements.
4
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 1994 and 1993
(000's omitted)
NOTE 1 - THE QUAKER STOCK BONUS SAVINGS PLAN
The Quaker Stock Bonus Savings Plan (the "Plan") was adopted by The Quaker
Oats Company (the "Company") on July 10, 1985, and became effective January
1, 1986.
The Plan covers all employees of the Company who are included in a group
designated by the Board of Directors or the Executive Committee and have
completed one year of service prior to January 1, 1986. Other 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.
Effective January 1993, the Plan was amended to allow participants to
contribute one to ten percent of their earnings, depending upon their
location, in whole percentage increments to the Plan before Federal and
most state withholding taxes are computed. Additionally, the amendment
allows participants a monthly option to change their investment election.
Participants can elect to invest their contribution in either the Quaker
Stock Fund or the Short-Term Investment Fund. The Company contributes an
additional 50% of the participants' contributions to the Quaker Stock Fund
to a maximum of 2% of the participants' contributions. Participants have a
monthly option to change their investment election and an annual 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%.
Participants who are at least 59 1/2 or who become totally and permanently
disabled also have an annual option to transfer the money they have
invested in the Quaker Stock Fund to the Short-Term Investment Fund in
multiples of 25%.
The Plan also allows a participant to contribute to the Plan any portion of
a pretax distribution received from other qualified plans when the
contribution qualifies as a tax-free roll-over to the Plan pursuant to
either Section 402(a)(5)or Section 408(d)(3)of the Internal Revenue Code.
Effective January 1993, employees may elect to deposit excess funds from
The Quaker Flex Plan to the Plan.
Effective April 1, 1994, the Plan year end was changed from March 31 to
June 30. This change will result in a three-month stub period from
April 1, 1994 to June 30, 1994.
5
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 1994 AND 1993
(000's omitted)
NOTE 1 - THE QUAKER STOCK BONUS SAVINGS PLAN (Continued)
Generally, all contributions are not subject to Federal income taxes until
distributed to the participant or his/her beneficiary.
If a participant's employment with the Company is terminated, the Plan will
distribute his/her account balance to him/her or his/her beneficiary. A
participant under age 55 at the time of termination of employment may elect
to defer a lump-sum distribution or the start of installment payments until
age 65. A participant age 55 or older may elect to defer a lump-sum
distribution or the start of installment payments until the participant
attains the age 70 1/2. If a participant terminates during a Plan year,
has attained age 65 on or before his/her termination date and no
distribution or deferral election is received by April 29 following the
Plan year in which termination occurred, an automatic lump-sum distribution
will be made. A participant may elect in writing to receive a distribution
in one of the following ways: (a) in a lump sum; (b) in a partial
distribution; or (c) in approximately equal yearly installments over a
chosen period. The period chosen, however, must be no longer than his/her
life expectancy when distributions begin as determined by Internal Revenue
Service (IRS) regulations. If the distribution is made through installment
payments, the participant's remaining account balance will continue to be
adjusted for investment gains or losses. If a participant's account value
is $3,500 or less, an automatic lump-sum distribution will be made if no
distribution election is made before the earlier of: (a) one year from the
date of termination; or (b) July 29th following the Plan year in which
termination occurred.
A participant may request in writing to receive all or a portion of his/her
account if he/she is at least 59 1/2 years of age or if he/she is totally
and permanently disabled as determined by the Company with the advice of a
medical doctor. Additionally, a participant may receive, at the Company's
discretion, all or a portion of his/her account (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 his/her family or alleviating an
immediate and substantial financial hardship.
6
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 1994 AND 1993
(000's omitted)
NOTE 1 - THE QUAKER STOCK BONUS SAVINGS PLAN (Continued)
The Plan may be terminated at any time by an action by the Board of
Directors of the Company. In the event of termination of the Plan, the
value of the accounts determined as of the effective date of such
termination shall be paid to the participants, former participants or their
beneficiaries.
The Company currently pays all administrative expenses incurred by the Plan
except brokerage fees.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared on the accrual
basis of accounting.
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.
Security purchases and sales, including related gains and losses, are
recognized on the transaction trade date. Realized gains and losses from
security transactions are computed by determining the cost of securities
sold on an average cost basis.
Interest income is recorded when earned and dividend income is recorded as
of the record date.
7
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 1994 AND 1993
(000's omitted)
NOTE 3 - INCOME TAXES
The Plan obtained its latest determination letter on August 13, 1987, in
which the IRS 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 and the Plan tax counsel believe that the Plan is
currently being operated in compliance with the applicable requirements of
the Internal Revenue Code. Therefore, they believe that the Plan was
qualified and tax-exempt as of March 31, l994. To comply with the Tax
Reform Act of 1986, the Plan administrator applied for a new tax
determination letter on June 30, 1994.
NOTE 4 - SCHEDULES
Schedules I, II, III and IV, as required by Line 22a of Form 5500, are
omitted because they are not applicable or because the required information
is included in the financial statements or notes thereto. Schedule V is
included as a supplementary schedule.
NOTE 5 - CURRENT VALUE GAINS (LOSSES)
The net realized and unrealized gains (losses) based on the "Current Value"
reporting requirements of the Department of Labor and the IRS instructions
for Form 5500 are as follows:
Year Ended
March 31, 1994
Net realized gains on investments $ 10
Net unrealized (losses) on investments (3,627)
Net depreciation in fair value of
investments $ (3,617)
8
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
SCHEDULE OF 1994 INVESTMENT TRANSACTIONS IN EXCESS OF 5%
Schedule V
OF THE BEGINNING PLAN ASSETS
<TABLE>
<CAPTION>
*Purchase Cost/ Value
and Proceeds of of Net
Sale Price Expense Asset Asset Gain
<S> <C> <C> <C> <C> <C>
Description
Quaker Stock Fund -
The Quaker Oats Company
common stock
130,860 shares bought
in 55 transactions $68.368 $6,543 $8,946,636 $8,946,636
- ----
Quaker Stock Fund -
The Quaker Oats Company
common stock
225 shares sold
on July 9, 1993 $73.948 $12 $16,638 $16,650 $4,903
</TABLE>
* Represents transactions at average purchase price.
9
58
Exhibit (b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report (and references to our Firm) included in or made a part of this
Form 11-K. It should be noted that we have not examined any financial
statements of The Quaker Stock Bonus Savings Plan subsequent to March 31,
1994 or performed any procedures to the date of our report.
WASHINGTON, PITTMAN & McKEEVER
(Washington, Pittman & McKeever)
September 26, 1994
