HERSHEY FOODS CORPORATION
KEY EMPLOYEE INCENTIVE PLAN
1. ESTABLISHMENT AND PURPOSE
Hershey Foods Corporation (the "Corporation") hereby establishes the Key Employee Incentive Plan (the
"Plan"). The purpose of the Plan is to provide to selected key employees of the Corporation and its subsidiaries
(as defined below), upon whose efforts the Corporation is dependent for the successful conduct of its business,
further incentive to continue and increase their efforts as employees and to remain in the employ of the
Corporation and its subsidiaries.
The Plan continues the Annual Incentive Program ("AIP"), with certain modifications, as in effect under the
Corporation's Management Incentive Plan ("MIP") established in 1975 and as amended thereafter, pursuant to
which participants are entitled to receive cash awards based on achievement of performance goals during annual
performance cycles. The Plan also continues the Long-Term Incentive Program ("LTIP") portion of the MIP with
certain modifications. In addition to performance stock units ("Performance Stock Units"), the LTIP portion now
also includes nonqualified stock options for the purchase of Common Stock ("Options"); stock appreciation
rights ("SARs"); and restricted stock units ("Restricted Stock Units").
As used herein, (i) the term "Subsidiary Corporation" shall mean any present or future corporation which is or
would be a "subsidiary corporation" of the Corporation as defined in Section 424 of the Internal Revenue Code
of 1986 (the "Code"), and (ii) the term "Corporation" defined above shall refer collectively to Hershey Foods
Corporation and its Subsidiary Corporations unless the context indicates otherwise.
2. STOCK SUBJECT TO THE PLAN
The aggregate number of shares of the Corporation's Common Stock, $1.00 Par Value (the "Common Stock"),
which may be covered by Performance Stock Units, Options, SARs and Restricted Stock Units granted
pursuant to the LTIP portion of the Plan will be established by the Board of Directo