Exhibit 10.5

The Hershey Company

Deferred Compensation Plan

Amended and Restated as of October 1, 2007

This Deferred Compensation Plan (the “Plan”) allows participants in the
following programs of The Hershey Company Equity and Incentive Compensation Plan
(the “EICP”) to defer receipt of all or part of the following awards: (1) cash
awards under the Annual Incentive Program (the “AIP”), (2) the cash equivalent
or Common Stock of The Hershey Company (the “Company”) representing performance
stock unit (“PSU”) awards under the EICP, and (3) awards of Common Stock of the
Company pursuant to restricted stock unit (“RSU”) awards under the EICP granted
on or after January 1, 2001. This Plan also allows participants in The Hershey
Company Amended and Restated (2007) Supplemental Executive Retirement Plan (the
“DB SERP”) and The Hershey Company Compensation Limit Replacement Plan (the
“CLRP”) to defer receipt of all or a portion of a lump sum cash payment payable
under the DB SERP and CLRP. In addition, the Company may allocate Supplemental
Core Retirement and Supplemental Match Contributions on behalf of eligible Plan
Participants, and the Company may credit a specified percentage of Compensation
for the benefit of certain Plan Participants under the Defined Contribution
Supplemental Executive Retirement Plan (the “DC SERP”). The Plan is intended to
benefit those executives of the Company and subsidiaries who are specified as
participants in and receive awards under the EICP, former participants of the DB
SERP and CLRP, and Plan Participants with compensation in excess of Code section
401(a)(17), to secure their goodwill, loyalty and achievement, and to help
attract and retain highly qualified executives.

For Grandfathered Amounts (as defined below), the terms of the Plan in effect on
December 31, 2004 and the requirements summarized in Appendix A of this Plan
shall be followed in all respects.

Article I

Definitions

The following definitions apply to this Plan:

1.1 401(k) Plan. “401(k) Plan” means The Hershey Company 401(k) Plan, formerly
the Hershey Foods Corporation Employee Savings Stock Investment and Ownership
Plan, as in effect from time to time and any successor plan thereto.

1.2 Account. “Account” means a bookkeeping account established by the Company
for each Participant under the Plan, which includes, but is not limited to, the
following Sub-Accounts: (i) a Supplemental Core Retirement Contributions
Sub-Account, (ii) a Supplemental Match Contributions Sub-Account, (iii) an AIP
Sub-Account, (iv) a PSU Sub-Account, (v) an RSU Sub-Account, (vi) a DB SERP
Sub-Account, (vii) a CLRP Sub-Account, and (viii) a DC SERP Sub-Account.

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1.3 AIP and AIP Awards. “AIP” means the Annual Incentive Program, and any
successor or replacement program thereof, of the EICP, including annual
incentives awarded under the Company’s Sales Incentive Program and any successor
or replacement thereof, and “AIP Awards” means cash awards made to a Participant
under the AIP of the EICP.

1.4 AIP Sub-Account. “AIP Sub-Account” means a bookkeeping account established
by the Company for each Participant electing to defer under this Plan all or a
portion of his or her AIP Awards.

1.5 Board or Board of Directors. “Board” or “Board of Directors” means the Board
of Directors of the Company.

1.6 Change in Control. “Change in Control” means a Change in Control as such
term is defined in the EICP.

1.7 Change in Control Event. “Change in Control Event” means a Change in Control
Event as defined under Code section 409A and applicable guidance thereunder.

1.8 Code. “Code” means the Internal Revenue Code of 1986, as amended.

1.9 Committee or Compensation Committee. “Committee” or “Compensation Committee”
means the Compensation and Executive Organization Committee of the Board or any
successor committee having similar authority.

1.10 Company. “Company” means The Hershey Company, a Delaware corporation.

1.11 Company Common Stock or Common Stock. “Company Common Stock” or “Common
Stock” means the publicly traded common stock of the Company.

1.12 Compensation. “Compensation” means the sum of (i) base salary paid to a
Participant during a calendar year and (ii) AIP Awards for that calendar year,
whether paid or deferred.

1.13 CLRP and CLRP Benefits. “CLRP” means The Hershey Company Amended and
Restated Compensation Limit Replacement Plan, and any successor or replacement
plan thereof, and “CLRP Benefits” means amounts payable to a Participant under
the CLRP that are deferred under this Plan.

1.14 CLRP Sub-Account. “CLRP Sub-Account” means a bookkeeping account
established by the Company for each Participant electing to defer under this
Plan all or a portion of his or her lump sum cash payment payable under the
CLRP.

1.15 Core Retirement Contributions. “Core Retirement Contributions” means
contributions made by the Company on behalf of an employee who is eligible to
receive such contributions under the 401(k) Plan.

1.16 DB SERP and DB SERP Benefits. “DB SERP” means The Hershey Company Amended
and Restated (2007) Supplemental Executive Retirement Plan and any successor or
replacement plan thereof, and “DB SERP Benefits” means amounts payable to a
Participant under the DB SERP.

 

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1.17 DB SERP Sub-Account. “DB SERP Sub-Account” means a bookkeeping account
established by the Company for each Participant electing to defer under this
Plan all or a portion of his or her lump sum cash payment payable under the DB
SERP.

1.18 DC SERP and DC SERP Benefits. “DC SERP” means the Defined Contribution
Supplemental Executive Retirement Plan as described under Article VI, or any
successor or replacement plan thereof, and “DC SERP Benefits” means amounts
credited to a Participant’s DC SERP Sub-Account in accordance with Article VI.

1.19 DC SERP Sub-Account. “DC SERP Sub-Account” means a bookkeeping account
established by the Company for each Participant to which amounts are credited on
behalf of the Participant under the DC SERP.

1.20 Determination Date. “Determination Date” means the last day of each
calendar quarter or any other date specified by the Plan Administrator in its
sole discretion.

1.21 Disabled or Disability. “Disabled” or “Disability” means Disabled as that
term is defined in The Hershey Company Retirement Plan, as in effect from time
to time and any successor plan thereto.

1.22 EBPP. “EBPP” means, with respect to a Participant, The Hershey Company
Employee Benefits Protection Plan (Group 2), The Hershey Company Executive
Benefits Protection Plan (Group 3), The Hershey Company Executive Benefits
Protection Plan (Group 3A), or The Hershey Company Severance Benefits Plan, as
applicable to such Participant, and any successor or replacement plans thereof.

1.23 EICP. “EICP” means The Hershey Company Equity and Incentive Compensation
Plan (formerly known as the Hershey Foods Corporation Key Employee Incentive
Plan) and any successor or replacement plan thereof.

1.24 Grandfathered Amounts. “Grandfathered Amounts” means amounts that were
deferred under this Plan, if any, by a Participant who was neither an active
employee of the Company nor on a paid or Disabled leave of absence on October 1,
2007, to which such Participant had a nonforfeitable right as of December 31,
2004, plus subsequent investment credits. Grandfathered Amounts are only subject
to the terms of the Plan in effect on December 31, 2004 and the requirements set
forth in Appendix A of this Plan. Grandfathered Amounts are exempt from the
requirements under Code section 409A.

1.25 Initial Deferral Election. “Initial Deferral Election” means an election to
defer (i) AIP Awards, (ii) PSU Awards, (iii) RSU Awards, (iv) DB SERP Benefits,
and/or (v) CLRP Benefits, in accordance with the requirements set forth under
Section 4.1.

1.26 Investment Options. “Investment Options” means those investment options
which are to be used as earnings indices as described in Section 2.1. Except as
hereafter provided with respect to a Participant’s constructive investment in
Company Common Stock:

 

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(a) the Investment Options are chosen by the Plan Administrator and are subject
to change from time to time as the Plan Administrator, in its sole discretion,
deems necessary or appropriate, and (b) no provision of this Plan shall be
construed as either giving any Participant an interest in any of these
Investment Options or requiring that the Company make any investment in any such
Investment Options. Investment Options, other than the Company Common Stock
Investment Option, may be added, modified or deleted from time to time in the
discretion of the Plan Administrator; provided, however, that after the
occurrence of a Change in Control, the Plan Administrator shall not add or
delete any Investment Option that was in effect immediately prior to the Change
in Control unless the overall mix of Investment Options is substantially the
same as that provided to participants in the 401(k) Plan or other tax-qualified
retirement plan of the Company (whichever has the most investment options
available for selection by its participants).

1.27 Long Term Disability Plan. “Long Term Disability Plan” means The Hershey
Company Long Term Disability Plan and any successor or replacement plan thereof.

1.28 Participant. “Participant” means an employee of the Company who meets the
eligibility criteria for participation in this Plan established by the Plan
Administrator from time to time.

1.29 Plan. “Plan” means The Hershey Company Deferred Compensation Plan as set
forth herein and as amended from time to time.

1.30 Plan Administrator. “Plan Administrator” means the Employee Benefits
Committee of the Company, or any successor committee having similar authority,
or such other individual or committee as may be determined by the Compensation
Committee from time to time.

1.31 Plan Year. “Plan Year” means the calendar year.

1.32 PSU and PSU Awards. “PSU” means performance stock units granted under the
EICP, and “PSU Awards” means PSU awards made to a Participant under the EICP.

1.33 PSU Sub-Account. “PSU Sub-Account” means a bookkeeping account established
by the Company for each Participant electing to defer under this Plan all or a
portion of his or her PSU Awards.

1.34 Retirement Plan. “Retirement Plan” means The Hershey Company Retirement
Plan, as in effect from time to time and any successor plan thereto.

1.35 RSU and RSU Awards. “RSU” means restricted stock units granted under the
EICP, and “RSU Awards” means RSU awards made to a Participant under the EICP.

1.36 RSU Sub-Account. “RSU Sub-Account” means a bookkeeping account established
by the Company for each Participant electing to defer under this Plan all or a
portion of his or her RSU Awards.

1.37 Separation from Service. “Separation from Service” or “Separates from
Service” means a “separation from service” within the meaning of Code section
409A; provided that, in

 

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the event a Participant becomes Disabled and takes a leave of absence from
active employment in connection therewith, a Separation from Service shall not
occur for up to 29 months following the first day of such leave of absence, as
permitted under Code section 409A and the regulations issued thereunder.

1.38 Supplemental Core Retirement Contributions. “Supplemental Core Retirement
Contributions” means amounts credited to a Participant’s Supplemental Core
Retirement Contributions Sub-Account in accordance with Section 3.1.

1.39 Supplemental Core Retirement Contributions Sub-Account. “Supplemental Core
Retirement Contributions Sub-Account” means a bookkeeping account established by
the Company for each Participant to which Supplemental Core Retirement
Contributions are credited on behalf of the Participant.

1.40 Supplemental Match Contributions. “Supplemental Match Contributions” means
amounts credited to a Participant’s Supplemental Match Contributions Sub-Account
in accordance with Section 3.2.

1.41 Supplemental Match Contributions Sub-Account. “Supplemental Match
Contributions Sub-Account” means a bookkeeping account established by the
Company for each Participant to which Supplemental Match Contributions are
credited on behalf of the Participant.

1.42 Trust. “Trust” means the trust described in Section 9.2.

1.43 Year of Service. “Year of Service” means years of Vesting Service as that
term is defined in the 401(k) Plan.

Article II

Account and Sub-Accounts

2.1 Establishment of Account and Sub-Accounts. Except as provided in
Section 9.2, any amounts deferred by a Participant will not be funded or set
aside for future payment by the Company. Instead, an Account with Sub-Accounts
will be established to which (i) Supplemental Core Retirement Contributions and
(ii) Supplemental Match Contributions, along with deferrals of (iii) AIP Awards,
(iv) PSU Awards, (v) RSU Awards, (vi) DB SERP Benefits, (vii) CLRP Benefits, and
(viii) DC SERP Benefits, shall be credited to each respective Sub-Account, along
with investment credits as provided in Section 2.3.c. below.

2.2 Participants as Unsecured Creditors. A Participant’s entitlement to receive
the amount reflected by his or her Sub-Accounts, to the extent vested, will be
based solely on an unfunded unsecured unconditional promise to pay by the
Company that is not assignable.

2.3 Investment Credits to Sub-Accounts. Subject to such limitations as may from
time to time be required by law, imposed by the Plan Administrator, or set forth
in Section 2.3.f. below, and subject to such operating rules and procedures as
may be imposed from time to time by the Plan Administrator, each Participant may
express to the Plan Administrator a preference as to how the Participant’s
Account should be constructively invested among the Investment Options
(“Investment Preference”), in which the Participant shall designate the
percentage of his or her Account to be constructively invested in each
Investment Option. Following a Change in Control only, any Participant
Investment Preference (whether expressed prior to, or following, a Change in
Control) shall be binding upon the Plan Administrator.

 

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a. All Investment Preferences shall be in writing on a form supplied by and
filed with the Plan Administrator or in any other form as determined by the Plan
Administrator from time to time in its sole discretion. Participants may change
their Investment Preferences effective as of the beginning of each Plan Year, or
more frequently if permitted in the discretion of the Plan Administrator;
provided, however, that following a Change in Control, Participants shall be
permitted to change their Investment Preferences at least as frequently as they
could under procedures in effect immediately prior to the Change in Control.

b. Except as set forth above following a Change in Control, all Investment
Preferences shall be advisory only and shall not bind the Company or the Plan
Administrator. Neither the Company nor Plan Administrator shall be obligated to
invest any funds in connection with this Plan. Moreover, should the Company
voluntarily choose to invest any amount under this Plan, the Plan Administrator
shall have complete discretion as to investments, and no Participant shall have
any claim on such investments as a fund to provide benefits hereunder.

c. From time to time, but not less frequently than each Determination Date, the
Plan Administrator shall allocate the net earnings or losses of the Plan that
have occurred since the preceding Determination Date among the Accounts of
Participants, and to the extent a Participant’s Investment Preference is honored
by the Plan Administrator, such net earnings or losses shall be allocated as
though the Participant’s Account had been invested in the Investment Options in
accordance with the Participant’s Investment Preference. The “net earnings or
losses” of the Plan shall be equal to the net increase or net decrease (taking
into account any constructive dividends or interest thereon), as the case may
be, in the value of a Participant’s Account since the last Determination Date,
based on either the Participant’s Investment Preference (if honored) or the
funds constructively invested by the Plan Administrator and allocated to the
Accounts of Participants hereunder.

d. If the Plan Administrator receives an Investment Preference from a
Participant that it deems to be incomplete, unclear or improper, such
Participant’s pre-existing Investment Preference then in effect (if any) shall
remain in effect until the beginning of the next Plan Year, unless the Plan
Administrator provides for, and permits the application of, corrective action
prior thereto. If a Participant fails to file an effective Investment Preference
and no pre-existing Investment Preference is on file, the Participant’s Account
will be constructively invested in the Investment Option designated by the Plan
Administrator from time to time as a default Investment Option.

e. If the Plan Administrator determines that the constructive value of an
Account as of any date on which distributions are to be made differs materially
from the constructive value of the Account on the prior Determination Date upon
which the distribution is to be based, the Plan Administrator, in its
discretion, shall have the right to designate any date in the interim as a
Determination Date for the purpose of constructively revaluing the Account so
that the Account from which the distribution is being made will, prior to the
distribution, reflect its share of such material difference in value. Similarly,
the Plan Administrator may adopt a policy of providing for regular interim
valuations without regard to the materiality of changes in the value of the
Accounts.

 

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f. Notwithstanding the foregoing provisions of this Section 2.3 to the contrary,
(i) prior to a Change in Control, that portion of all deferred PSUs that is
payable in Company Common Stock under the EICP and all deferred RSUs shall be
constructively invested in Company Common Stock, (ii) a Participant’s Account
shall be credited from time to time with the amount of any dividends declared
and paid on such Company Common Stock, and shall be adjusted in connection with
any stock dividend, split, reorganization, liquidation or other event which
affects the number of shares of Common Stock represented by such PSUs and/or
RSUs, and (iii) no other amounts deferred under this Plan shall be
constructively invested in Company Common Stock. Following a Change in Control,
no amounts deferred under this Plan shall be required to be constructively
invested in Company Common Stock.

2.4 Statement of Account and Sub-Accounts. Within a reasonable time after the
end of each Plan Year, the Plan Administrator shall submit to each Participant a
statement of the balance in his or her Account, including his or her
Sub-Accounts; provided, however, that following a Change in Control, such
statement of Account and Sub-Accounts shall be provided on at least a quarterly
basis.

Article III

Supplemental Core Retirement and Supplemental Match Contributions

3.1 Supplemental Core Retirement Contributions.

a. Each Plan Year, for a Participant who (i) is eligible to receive Core
Retirement Contributions under Section 5.2(g) of the 401(k) Plan and (ii) defers
to this Plan AIP Awards for that Plan Year, the Company shall credit to such
Participant’s Supplemental Core Retirement Contributions Sub-Account an amount
equal to three percent (3%) of those deferred AIP Award amounts as soon as
administratively practicable following the last day of the Plan Year.

b. In addition to any amounts credited pursuant to Section 3.1.a., each Plan
Year, for a Participant who is eligible to receive Core Retirement Contributions
under Section 5.2(g) of the 401(k) Plan, the Company shall credit to such
Participant’s Supplemental Core Retirement Contributions Sub-Account an amount
equal to three percent (3%) of the excess of (1) plus (2) less (3), where (1),
(2), and (3) are determined as follows:

(1) Compensation for that Plan Year as defined under Section 1.14 of the 401(k)
Plan, other than AIP Awards and without application of the limitation under Code
section 401(a)(17) (indexed for inflation);

(2) Amounts awarded under the AIP for that Plan Year that are not deferred under
this Plan; and

(3) The limit under Code section 401(a)(17) (indexed for inflation).

 

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c. The amounts described in Sections 3.1.a. and 3.1.b. above shall be credited
to a Participant’s Supplemental Core Retirement Contributions Sub-Account as
soon as administratively practicable following the last day of the Plan Year,
provided that the Participant either (x) was employed on the last day of the
Plan Year or (y) during the year he or she (1) terminated employment while at
least age 55, (2) retired in accordance with the provisions of any applicable
Company-sponsored qualified or nonqualified retirement plan or program,
(3) became Disabled, or (4) died. In the case of any allocation for a Plan Year
for which the Participant was not employed on December 31, except as provided in
Section 3.1.d., the amount determined under Section 3.1.b.(1) shall be based on
the Participant’s actual Compensation paid for services performed through the
Participant’s last active day worked for the Company during the year, and which
shall not include any amounts paid on account of the Participant’s severance
from employment with the Company.

d. If a Participant becomes Disabled, such Participant shall continue to be
credited with Supplemental Core Retirement Contributions, in accordance with
Sections 3.1.a. and 3.1.b. until the earlier of (i) two (2) years from the date
benefits commence under the Company’s Long Term Disability Plan or (ii) the date
he or she is no longer eligible for benefits under the Long Term Disability
Plan, based on the amount of annual Compensation (as defined in
Section 3.1.b.(1) above) that was payable to the Participant at the time he or
she becomes Disabled.

3.2 Supplemental Match Contributions. Each Plan Year, for a Participant who
defers remuneration under the 401(k) Plan equal to (i) the maximum deferral
percentage as permitted by the plan administrator of the 401(k) Plan or (ii) the
maximum contribution limit under Code section 402(g) (indexed for inflation)
(provided, however, the Plan Administrator may waive the conditions in (i) or
(ii) in their entirety if it determines, in its sole discretion, that the
Participant did not satisfy those conditions due to administrative, regulatory
or other circumstances beyond the Participant’s reasonable control), the Company
shall credit to such Participant’s Supplemental Match Contributions Sub-Account
an amount, if any, determined under a., b., and c. below:

a. Four and one-half percent (4-1/2%) of those amounts awarded under the AIP
that are deferred under this Plan for that Plan Year.

b. In addition to any amounts credited pursuant to Section 3.2.a., four and
one-half percent (4-1/2%) of (1) plus (2) less (3), where (1), (2), and (3) are
determined as follows:

(1) Compensation as defined under Section 1.14 of the 401(k) Plan, other than
AIP Awards and without application of the limitation under Code section
401(a)(17) (indexed for inflation), for that Plan Year;

(2) Amounts awarded under the AIP for that Plan Year that are not deferred under
this Plan; and

(3) The limit under Code section 401(a)(17) (indexed for inflation).

 

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c. The amounts described in Sections 3.2.a. and 3.2.b. above shall be credited
to a Participant’s Supplemental Match Contributions Sub-Account as soon as
administratively practicable following the last day of the Plan Year, provided
that the Participant either (x) was employed on the last day of the Plan Year or
(y) during the year he or she (1) terminated employment while at least age 55,
(2) retired in accordance with the provisions of any applicable
Company-sponsored qualified or nonqualified retirement plan or program,
(3) became Disabled, or (4) died. In the case of any allocation for a Plan Year
for which the Participant was not employed on December 31, except as provided in
the case of a Participant who becomes Disabled, the amount determined under
Section 3.2.b.(1) shall be based on the Participant’s actual Compensation paid
for services performed through the Participant’s last active day worked for the
Company during the year, and which shall not include any amounts paid on account
of the Participant’s severance from employment with the Company.

3.3 Time and Form of Distribution.

a. Nonelective Initial Deferral. Amounts held in a Participant’s Supplemental
Core Retirement Contributions Sub-Account and Supplemental Match Contributions
Sub-Account shall be payable in a lump sum cash payment within ninety (90) days
following the earlier of a Separation from Service, subject to the requirements
under Section 5.2.b., or death, subject to the requirements under Section 5.2.c.

b. Change in Time and Form of Distribution. A Participant may make an election
to change the time or form of distribution from that specified in Section 3.3.a.
pursuant to Section 4.2.b. (i.e., a Participant may elect to change the form of
payment to any form described in Section 5.1.a.), but only if the requirements
of Section 4.2.a. are satisfied. A distribution of a Participant’s Supplemental
Core Retirement Contributions Sub-Account and/or Supplemental Match
Contributions Sub-Account subject to an election to change under this
Section 3.3.b. shall be made following the occurrence of the distributable event
designated by the Participant in such election to change. Notwithstanding an
election to change under this Section 3.3.b., in the case of death, a
distribution will be made in accordance with Section 5.2.c.

3.4 Vesting. A Participant shall become one hundred percent (100%) vested in his
or her Supplemental Core Retirement Contributions Sub-Account and Supplemental
Match Contributions Sub-Account on the date following the completion of three
(3) Years of Service with the Company (or, if earlier, the date of any death or
Disability of the Participant).

Article IV

Elections to Defer

4.1 Initial Deferral Election.

a. AIP Awards. A Participant may elect under the Plan to defer receipt of all or
a portion of his or her anticipated AIP Award, but such election must be made no
later than June 30 of the calendar year on which such award is based. Deferred
AIP Awards shall be credited to a Participant’s AIP Sub-Account as soon as
administratively practicable following the last day of the Plan Year. If a
Participant receives a hardship withdrawal under the 401(k) Plan or a withdrawal
upon an Unforeseeable Emergency under Section 5.2.d., the Participant’s Initial
Deferral Election, if any, for his or her anticipated AIP Award for the Plan
Year in which the withdrawal occurs shall be cancelled.

 

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b. PSU Awards. A Participant may elect under the Plan to defer receipt of all or
a portion of the cash or Company Common Stock amount earned as a PSU Award by a
date specified by the Plan Administrator in its sole discretion, but such
election must be made no later than June 30 of the calendar year in which the
performance period for such PSU Award ends. Deferred PSU Awards shall be
credited to a Participant’s PSU Sub-Account as soon as administratively
practicable following the last day of the Plan Year.

c. RSU Awards. A Participant may elect under the Plan to defer receipt of all or
a portion of the Company Common Stock amount earned as an RSU Award, but such
election must be made no later than thirty (30) days after the date of grant and
at least 12 months in advance of the first vesting date with respect to such
grant. Deferred RSU Awards shall be credited to a Participant’s RSU Sub-Account
as soon as administratively practicable following the last day of the Plan Year.
Upon the occurrence of both a Change in Control and Change in Control Event, all
restrictions on a Participant’s RSU Awards shall lapse pursuant to the terms of
the EICP.

d. DB SERP Benefits. A Participant may elect to defer all or a portion of the
lump sum cash payment payable under the DB SERP, provided the election is made
at least twelve (12) months before such amounts are payable under the DB SERP. A
distribution of DB SERP Benefits under this Plan may not be made earlier than
five (5) years from the date the distribution would have been made under the DB
SERP but for the Participant’s election to defer such amounts under this Plan.
Deferred DB SERP Benefits shall be credited to a Participant’s DB SERP
Sub-Account as soon as administratively practicable following the date a
distribution of them under the DB SERP would have otherwise been made.

e. CLRP Benefits. A Participant may elect to defer all or a portion of the lump
sum cash payment payable under the CLRP, provided the election is made at least
twelve (12) months before such amounts are payable under the CLRP. A
distribution of CLRP Benefits under this Plan may not be made earlier than five
(5) years from the date the distribution would have been made under the CLRP but
for the Participant’s election to defer such amounts under this Plan. Such CLRP
Benefits shall be credited to a Participant’s CLRP Sub-Account as soon as
administratively practicable following the date a distribution under the CLRP
would have otherwise been made.

f. Any Initial Deferral Election under this Section 4.1:

(1) Must specify:

(i) The time of distribution under one of the distributable events set forth
under Sections 5.2.a. and 5.2.b.; and

(ii) The form of distribution as set forth under Section 5.1.

(2) Shall be irrevocable, except as otherwise provided in this Plan; and

 

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(3) Shall be made in accordance with procedures and distribution rules
established by the Plan Administrator.

4.2 Changes in Time and Form of Distribution.

a. A Participant may make a subsequent election to change the time or form of
distribution otherwise specified in Section 3.3.a., in his or her Initial
Deferral Election pursuant to Section 4.1., and/or as specified in
Section 6.3.a. (hereinafter, a “Subsequent Deferral Election”), in accordance
with procedures and distribution rules established by the Plan Administrator and
only if the following conditions are satisfied:

(1) The election may not take effect until at least twelve (12) months after the
date on which the election is made;

(2) In the case of an election to change the time and form of a distribution
under Sections 5.2.a., 5.2.b. (which includes an election to change the
distribution that would occur upon a Separation from Service under Sections
3.3.a. and 6.3.a.), and 5.2.e., a distribution may not be made earlier than five
(5) years from the date the distribution would have otherwise been made; and

(3) The election must be made at least twelve (12) months before the date of the
first scheduled distribution.

b. A Participant may make a Subsequent Deferral Election under Section 3.3.b.,
4.2.a., or 6.3.b. that indicates a change to a (i) form of distribution set
forth in Section 5.1.a. and/or (ii) distributable event described in Sections
5.2.a. and 5.2.b.; provided, however, a Separation from Service distribution
event may only be changed to a distribution five (5) or more years following
Separation from Service.

4.3 Special Election During Transition Years. Notwithstanding the provisions of
Section 4.2, during 2007 or 2008, a Participant who is an active employee of the
Company (including on a paid leave of absence) on or after October 1, 2007 may
make an election to receive all or a specified portion of his or her Account
commencing upon a distributable event described in Sections 5.2.a. and 5.2.b.
(including one (1) or more years after Separation from Service) in a lump sum or
substantially equal installment payments over a number of years (to be specified
by the Participant) up to fifteen (15) years. Any such election must become
irrevocable on or before December 31, 2008 and must be made in accordance with
procedures and distribution rules established by the Plan Administrator.

Article V

Distribution of Deferrals

The provisions of this Article V shall apply only to amounts subject to Code
section 409A. Distribution rules applicable to Grandfathered Amounts are
summarized in Appendix A of this Plan.

 

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5.1 Forms of Distribution.

a. A Participant may elect to receive his or her (i) AIP Awards, (ii) PSU
Awards, (iii) RSU Awards, (iv) DB SERP Benefits, and/or (v) CLRP Benefits, which
he or she has deferred under this Plan, in:

(1) A lump sum payment; or

(2) Substantially equal annual installment payments over a number of years (to
be specified by the Participant) up to fifteen (15) years.

All amounts of a Participant’s Account constructively invested in Company Common
Stock shall be distributed in the form of Company Common Stock, except in the
event a Change in Control occurs, in which case amounts constructively invested
in Company Common Stock shall be dealt with in accordance with the terms of the
EBPP applicable to such Participant. All other amounts shall be distributed in
cash.

b. Distributions shall be made or commence (in the case of installment payments)
(1) within ninety (90) days following the occurrence of a distributable event
set forth under Section 5.2.b.; or (2) within the period following the date
selected by the Participant, if any, under Section 5.2.a., to the extent
permitted in Treas. Reg. § 1.409A-3(d). In the event a Participant has elected
to receive annual installment payments, payments after the initial installment
shall be made as soon as administratively practicable during the first calendar
quarter of each calendar year after the year in which the prior installment
payment was made.

c. Notwithstanding the form of distribution elected under Section 5.1.a., if a
Participant’s Account balance is less than the applicable dollar amount under
Code section 402(g)(1)(B) at the time the Participant Separates from Service,
the full Account balance shall be distributed in a lump sum payment within
ninety (90) days following the Participant’s Separation from Service.

5.2 Permissible Distributable Events. A Participant may designate in his or her
Initial Deferral Election under Section 4.1 to receive a distribution:

a. As of a specified date or time.

b. Upon a Separation from Service.

(1) In the case of a Separation from Service of a Key Employee, a distribution
may not be made before the date which is six (6) months after the date of the
Key Employee’s Separation from Service (hereinafter called the “Waiting
Period”); provided, however, in the event of the Key Employee’s death during the
Waiting Period, distribution shall be made on the date of the Key Employee’s
death pursuant to Section 5.2.c. Any payments that would otherwise be made
during the Waiting Period shall be accumulated and paid in the first month
following the Waiting Period, and thereafter, made in accordance with
Section 5.1.b.

 

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(2) During the Waiting Period, a Key Employee’s Account will continue to accrue
investment credits in accordance with Section 2.1.c.

(3) For purposes of this Section 5.2.b., Key Employee means a “specified
employee” under Code section 409A(a)(2)(B)(i) (i.e., a key employee (as defined
under Code section 416(i) (without regard to paragraph (5) thereof)) of a
corporation any stock in which is publicly traded on an established securities
market or otherwise) and applicable Treasury regulations and other guidance
under Code section 409A. Key Employees shall be determined in accordance with
Code section 409A and pursuant to the methodology established by the Plan
Administrator.

c. Distribution Upon Death. Notwithstanding any provision in the Plan to the
contrary, if a Participant dies, the unpaid portion of such Participant’s
Account balance shall be distributed to the Participant’s beneficiary, or in the
absence of a beneficiary, to the Participant’s estate in an immediate lump sum
payment as soon as administratively practicable within ninety (90) days
following the date of death. A Participant may designate or change his or her
beneficiary (without the consent of any prior beneficiary) on a form provided by
the Plan Administrator and delivered to the Plan Administrator before the
Participant’s death.

d. Withdrawals for Unforeseeable Emergency. A Participant may withdraw all or
any portion of his AIP Sub-Account or the cash portion of his or her PSU
Sub-Account in the event of demonstrated Unforeseeable Emergency. “Unforeseeable
Emergency” means for this purpose a severe financial hardship to a Participant
resulting from an illness or accident of the Participant, the Participant’s
spouse, or a dependent (as defined in Code section 152(a)) of the Participant,
loss of the Participant’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant. The amounts distributed with respect to
an Unforeseeable Emergency may not exceed the amounts necessary to satisfy such
Unforeseeable Emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such hardship is or may be relieved through reimbursement or
compensation by insurance or otherwise or by liquidation of the Participant’s
assets (to the extent the liquidation of such assets would not itself cause
severe financial hardship) or by cessation of deferrals under the Plan. A
Participant seeking a withdrawal on account of an Unforeseeable Emergency must
request a hearing with the Plan Administrator. If the Plan Administrator renders
a decision in favor of permitting a withdrawal for an Unforeseeable Emergency,
such withdrawal amounts shall be payable to the Participant as soon as
administratively practicable within ninety (90) days following such decision.

e. Distribution Upon a Change in Control. Notwithstanding any provision in the
Plan to the contrary, a Participant’s Account balance under the Plan shall be
distributed in an immediate lump sum payment on the later of (i) the first
business day of January of the year following the year in which both a Change in
Control and Change in Control Event occurs and (ii) the one hundred twentieth
(120th) day following the occurrence of both a Change in Control and Change in
Control Event.

 

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5.3 Withholding. Any payments made pursuant to Articles III, V, or VI shall be
subject to appropriate federal, state and/or local income tax withholdings. With
respect to any withholdings on a distribution of Company Common Stock, the
Company will first withhold from the cash equivalent of dividends on such
Company Common Stock and interest earned on such cash equivalent that are
payable to the Participant on the date of distribution, and if such withholdings
are insufficient, then the Company will withhold from such distribution such
number of shares of Company Common Stock having a fair market value (as defined
in the EICP) equal to the amount required to satisfy the remaining tax to be
withheld, unless the Participant elects to (i) deposit with the Company such
amount of cash or (ii) direct the Company to withhold cash from other amounts
then distributed under this Plan to satisfy such withholding tax. In addition,
the Company may reduce a Participant’s Account balance in order to meet any
federal, state, or local tax withholdings with respect to Plan benefits. The
Company shall report Plan payments and other Plan-related information to the
appropriate governmental agencies as required under applicable laws.

Article VI

DC SERP

6.1 Eligibility. An individual will be eligible to become a Participant in this
Plan and receive DC SERP Benefits in accordance with this Article VI if the
individual is selected by the Compensation Committee in its sole discretion.

6.2 Benefits. A Participant meeting the eligibility requirements under
Section 6.1 shall receive DC SERP Benefits in an amount equal to a percentage of
Compensation determined by the Compensation Committee in its sole discretion.
Such DC SERP Benefits shall be credited to a Participant’s DC SERP Sub-Account
as soon as administratively practicable following the last day of the Plan Year,
provided that the Participant:

a. defers remuneration under the 401(k) Plan equal to either (1) the maximum
deferral percentage as permitted by the plan administrator of the 401(k) Plan or
(2) the maximum contribution limit under Code section 402(g) (indexed for
inflation) (provided, however, the Plan Administrator may waive the conditions
in (i) or (ii) in their entirety if it determines, in its sole discretion, that
the Participant did not satisfy those conditions due to administrative,
regulatory or other circumstances beyond the Participant’s reasonable control);
and

b. either (x) was employed on the last day of the Plan Year, or (y) during the
year he or she (1) terminated employment while at least age 55, (2) retired in
accordance with the provisions of any applicable Company-sponsored qualified or
nonqualified retirement plan or program, (3) became Disabled, or (4) died. In
the case of any allocation for a Plan Year for which the Participant was not
employed on December 31, except as provided for in the next paragraph for a
Participant who becomes Disabled, the allocation shall be based on the amount of
the Participant’s actual Compensation paid for services performed through the
Participant’s last active day worked for the Company during the year and shall
not include any amounts paid on account of the Participant’s severance from
employment with the Company.

 

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If a Participant becomes Disabled, such Participant shall continue to be
credited with DC SERP Benefits in accordance with this Section 6.2 until the
earlier of (i) two (2) years from the date benefits commence under the Long Term
Disability Plan or (ii) the date he or she is no longer eligible for benefits
under the Long Term Disability Plan, based on the amount of Compensation that
was payable to the Participant at the time he or she became Disabled.

6.3 Time and Form of Benefit.

a. Nonelective Initial Deferral. Amounts held in a Participant’s DC SERP
Sub-Account shall be payable in a lump sum cash payment within ninety (90) days
following the earlier of a Separation from Service, subject to the requirements
under Section 5.2.b., or death, subject to the requirements under Section 5.2.c.

b. Change in Time and Form of Distribution. A Participant may make an election
to change the time or form of the distribution of his or her DC SERP Sub-Account
as specified in Section 6.3.a. in accordance with Section 4.2.b. (i.e., a
Participant may elect to change the form of payment to any form described in
Section 5.1.a.), but only if the requirements of Section 4.2.a. are satisfied. A
distribution of a Participant’s DC SERP Sub-Account subject to an election to
change under this Section 6.3.b. shall be made following the occurrence of a
distributable event set forth under Sections 5.2.a. and 5.2.b. Notwithstanding
an election to change made under this Section 6.3.b., in the case of death, a
distribution will be made in accordance with Section 5.2.c.

6.4 Vesting. Benefits under this Article VI shall be payable only to the extent
vested. A Participant shall become vested in his or her DC SERP Sub-Account in
accordance with the following vesting schedule, provided the Participant has
first completed five (5) Years of Service with the Company:

 

Age

   Vested Percentage

45

   0 percent

46

   10 percent

47

   20 percent

48

   30 percent

49

   40 percent

50

   50 percent

51

   60 percent

52

   70 percent

53

   80 percent

54

   90 percent

55

   100 percent

Notwithstanding the above, in all cases, a Participant shall be 100% vested in
his or her DC SERP Benefits if he or she dies or becomes Disabled while employed
with the Company.

 

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Article VII

Plan Administrator

7.1 Plan Administrator Duties. The Plan Administrator shall administer this
Plan. All members of the committee comprising the Plan Administrator may be
Participants. A member of the committee comprising the Plan Administrator who is
a Participant may not vote on matters involving a personal benefit claim or
appeal under this Plan, but any such individual shall otherwise be fully
entitled to act in matters arising out of or affecting this Plan notwithstanding
his or her participation herein. The Plan Administrator shall have the authority
to make, amend, interpret, and enforce all appropriate rules and regulations for
the administration of this Plan and decide or resolve any and all questions,
including interpretations of this Plan, as may arise in connection with the
Plan.

7.2 Agents. In the administration of this Plan, the Plan Administrator may, from
time to time, employ agents and delegate to them or to others (including
employees of the Company) such administrative duties as it sees fit. The Plan
Administrator may from time to time consult with counsel, who may be counsel to
the Company.

7.3 Binding Effect of Decisions. In carrying out its duties herein, the Plan
Administrator (or its designee) shall have full discretion to exercise all
powers and to make all determinations, consistent with the terms of the Plan, in
all matters entrusted to it, and its determinations shall be final and binding
on all parties.

7.4 Indemnity. The Company shall indemnify and hold harmless the Plan
Administrator and any employees to whom administrative duties under this Plan
are delegated, against any and all claims, loss, damage, expense, or liability
arising from any action or failure to act with respect to this Plan, except in
the case of willful misconduct.

Article VIII

Amendment and Termination

8.1 Amendment. The Committee may at any time amend the Plan in whole or in part.
However, no amendment shall be effective to decrease or restrict any then
existing Account or to change the Company’s obligations under (a) any then
existing Initial or Subsequent Deferral Election, (b) any then existing
agreement entered into between the Company and the Participant, or (c) the
provisions of the EBPP applicable to such Participant, except as set forth in
Section 8.2. After the occurrence of a Change in Control, no amendment shall be
made to this Plan that would adversely affect the rights of any Participant
without the consent of such Participant, except for such changes that the
Committee reasonably determines, upon the advice of nationally recognized tax
counsel, are necessary to fulfill the intent of the Plan to defer federal income
taxation of Participants’ Accounts until such Accounts are paid in accordance
with the terms of the Plan.

8.2 Board’s Right to Terminate. The Board may at any time terminate the Plan in
its entirety, in which event no new Initial or Subsequent Deferral Elections
shall be made and no further benefit accruals shall occur, but the obligations
of the Company under this Plan and under existing Initial or Subsequent Deferral
Elections and Account balances shall continue, unless the Board determines, in
its sole discretion, that all such amounts shall be distributed upon Plan
termination in accordance with the requirements under Code section 409A.

 

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8.3 No Material Modification. Notwithstanding the foregoing, no amendment of the
Plan shall apply to Grandfathered Amounts, unless it specifically provides that
it applies to such amounts. The purpose of this restriction is to prevent a Plan
amendment from resulting in an inadvertent “material modification” to
Grandfathered Amounts.

Article IX

Miscellaneous

9.1 Unfunded Plan. This Plan is intended to be an “unfunded” plan maintained
primarily to provide deferred compensation for a “select group of management or
highly compensated employees” within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, and shall be so construed.

9.2 Rabbi Trust. The Company shall establish promptly a revocable trust
(“Trust”) to hold assets, subject to the claims of the Company’s creditors in
the event of the Company’s insolvency, for the purpose of the payment of the
benefits hereunder, which Trust shall become irrevocable upon a Change in
Control. The Company shall contribute to the Trust cash in such amounts and at
such times as are specified in this Plan and in the applicable trust agreement.
Upon the occurrence of a Change in Control, the Company shall contribute to a
separate Trust account maintained for each Participant under the Trust, in cash,
an amount equal to 100% of the value of each such Participant’s Account, less
any amount credited to such Participant’s Trust account as of the date of such
contribution. Amounts paid to Participants from the Trust shall discharge the
obligations of the Company hereunder to the Participants to the extent of the
payments so made.

9.3 Unsecured General Creditor. This Plan is unfunded. Benefits shall be paid
from the Company’s general assets. Participants and their beneficiaries, heirs,
successors, and assigns shall have no legal or equitable rights, interest or
claims in any property or assets owned or which may be acquired by the Company.
Such assets of the Company shall not be held under any trust for the benefit of
Participants, their beneficiaries, heirs, successors or assigns, or held in any
way as collateral security against the obligations of the Company under this
Plan, except in the limited circumstances described in Section 9.2. The
Company’s obligation under the Plan shall be that of an unfunded and unsecured
promise of the Company to pay money in the future. The Company in its sole
discretion, may, however, elect to provide for its liabilities under this Plan
through a trust or funding vehicle, provided, however, that the terms of any
such trust or funding vehicle shall not alter the status of Participants and
beneficiaries as mere general unsecured creditors of the Company or otherwise
cause the Plan to be funded or benefits taxable to Participants except upon
actual receipt.

9.4 Nonassignability. Neither a Participant nor any other person shall have any
right to commute, sell, assign, transfer, pledge, anticipate, mortgage, or
otherwise encumber, transfer, hypothecate, or convey in advance of actual
receipt the amounts, if any, payable hereunder, or any part thereof. The rights
to all such amounts are expressly declared to be unassignable and
non-transferable. No part of the amounts payable shall, prior to actual payment,
be subject to

 

17

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seizure or sequestration for the payment of any debts, judgments, alimony, or
separate maintenance owed by Participants or any other person, nor be
transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency, except as required by law.

9.5 Domestic Relations Orders. Notwithstanding Section 9.4, all or a portion of
a Participant’s Account may be paid to another person as specified in a domestic
relations order that the Plan Administrator determines meets certain
requirements (a “Domestic Relations Order”). For this purpose, a Domestic
Relations Order means a judgment, decree, or order (including the approval of a
settlement agreement) which is:

(a) Issued pursuant to a State’s domestic relations law;

(b) Relates to the provision of child support, alimony payments or marital
property rights to a spouse, former spouse, child or other dependent of the
Participant;

(c) Creates or recognizes the right of a spouse, former spouse, child or other
dependent of the Participant to receive all or a portion of the Participant’s
benefits under the Plan;

(d) Provides for payment in an immediate lump sum as soon as practicable after
the Company determines that a Domestic Relations Order exists; and

(e) Meets such other requirements established by the Plan Administrator.

The Plan Administrator in its sole discretion shall determine whether any
document received by it is a Domestic Relations Order. In making this
determination, the Plan Administrator may consider the rules applicable to
“domestic relations orders” under Code section 414(p) and ERISA section 206(d),
and such other rules and procedures as it deems relevant. If an order is
determined to be a Domestic Relations Order, the amount to which any other
person is entitled under the Order shall be paid in a single lump sum payment as
soon as administratively practicable within ninety (90) days after such
determination.

9.6 Not a Contract of Employment. The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between the Company and a
Participant, and a Participant shall have no rights against the Company except
as may otherwise be specifically provided herein. Moreover, nothing in the Plan
shall be deemed to give a Participant the right to be retained in the service of
the Company or to interfere with the right of the Company to discipline or
discharge an employee at any time. The foregoing provisions of this Section 9.6
to the contrary notwithstanding, this Plan shall not diminish any rights or
increase any obligations of a Participant or the Company under any employment
agreement entered into by the Participant and the Company prior to such
Participant’s most recent Initial or Subsequent Deferral Election, or after such
deferral election to the extent that such employment agreement specifically
provides that it shall supersede any inconsistency with the terms of this Plan.

9.7 Forfeiture of Benefits. If a Participant’s employment is terminated because
of willful misfeasance or gross negligence in the performance of his or her
duties, his or

 

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her right to benefits under this Plan shall be forfeited in the discretion of
(i) the Committee, in the case of officers covered by Section 16(b) of the
Securities and Exchange Act of 1934 or (ii) the Plan Administrator, in the case
of all other Participants, and the Company shall have no further obligation
hereunder to such Participant or his or her beneficiary(ies); provided, however,
that notwithstanding any provision of the Plan, (a) upon a Change in Control, a
Participant’s Supplemental Core Retirement Contributions, Supplemental Match
Contributions, AIP Awards, PSU Awards, DB SERP Benefits, CLRP Benefits, and DC
SERP Benefits deferred under the Plan (together, the “Deferred Benefits”) shall
vest pursuant to the provisions of Article 2 of the EBPP applicable to such
Participant, respectively; and (b) upon both a Change in Control and Change in
Control Event, a Participant’s RSU Awards shall vest pursuant to Section 7.IV(b)
of the EICP. If a Participant is not a participant under any EBPP or the EICP:
(x) upon a Change in Control, Article 2 of the Employee Benefits Protection Plan
(Group 2) shall nevertheless apply to the Participant’s Deferred Benefits; and
(y) upon both a Change in Control and Change in Control Event, Section 7.IV(b)
of the EICP shall nevertheless apply to the Participant’s RSU Awards. Upon
vesting as set forth above, such Deferred Benefits and RSU Awards shall not be
subject to forfeiture under this Section 9.7 and shall be payable pursuant to
Section 5.2.e.

9.8 Effect of Taxation. If a portion of the Participant’s Account balance is
includible in income under Code section 409A, such portion shall be distributed
immediately to the Participant.

9.9 Terms. Use of the masculine, feminine and neuter pronouns in this Plan are
intended to be interchangeable and use of the singular will include the plural,
unless the context clearly indicates otherwise.

9.10 Captions. The captions of the articles, sections and paragraphs of this
Plan are for convenience only and shall not control or affect the meaning or
construction of any of its provisions.

9.11 Governing Law. This Plan shall be governed by the laws of the United States
and, to the extent not preempted thereby, the laws of Pennsylvania; provided,
however, that after a Change in Control, any court or tribunal that adjudicates
any dispute, controversy or claim arising between a Participant or Participants
and the Committee, Plan Administrator, Company or any of their delegates or
successors, relating to or concerning the provisions of this Plan, will apply a
de novo standard of review to any determinations made by such person. Such de
novo standard shall apply notwithstanding the grant of full discretion hereunder
to any such person or characterization of any decision by such person as final,
binding or conclusive on any party.

9.12 Validity. The illegality or invalidity of any provision of this Plan shall
not affect its remaining parts, but this Plan shall be construed and enforced
without such illegal or invalid provisions.

9.13 Notice. Any notice or filing required or permitted to be given to the Plan
Administrator under the Plan shall be sufficient if in writing and hand
delivered, or sent by registered or certified mail, to:

 

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Employee Benefits Committee

The Hershey Company

100 Crystal A Drive

Hershey, Pennsylvania 17033

Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

9.14 Successors. The provisions of this Plan shall bind and inure to the benefit
of the Company and its successors and assigns. The term successors as used
herein shall include any corporation or other business entity which shall,
whether by merger, consolidation, purchase of assets, or otherwise, acquire all
or substantially all of the business or assets of the Company, and successors of
any such corporation or other business entity.

9.15 Incapacity. If the Plan Administrator finds that any Participant or
beneficiary to whom a benefit is payable under this Plan is unable to care for
his or her affairs, any payment due (unless prior claim therefore shall have
been made by a duly authorized guardian or other legal representative) may be
paid, upon appropriate indemnification of the Plan Administrator, to any person
who is charged with the support of the Participant or beneficiary. Any such
payment shall be payment for the account of the Participant and shall be a
complete discharge of any liability of the Company under the Plan to the
Participant or beneficiary.

IN WITNESS WHEREOF, the Company has caused The Hershey Company Deferred
Compensation Plan, Amended and Restated as of October 1, 2007, to be executed
the 27th day of December, 2007.

 

THE HERSHEY COMPANY By:   /s/ Marcella K. Arline   Marcella K. Arline   Senior
Vice President, Chief People Officer

 

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Appendix A

Distribution of the Grandfathered Amounts shall be made in accordance with the
Plan terms as in effect on October 3, 2004 and as summarized in this Appendix A.

Article I

Distribution of Deferrals

1.1 Initial Election of Distribution Options in Deferral Election.

a. A Participant must specify in each of his or her Deferral Elections when such
Account will be distributed. Distribution may be made or begin in any future
Plan Year or Years, but distributions must begin not later than the Plan Year
following the calendar year in which the Participant attains age 70. The
Participant may elect to receive amounts deferred in a lump sum or in up to ten
substantially equal annual installments. A Participant may specify different
distribution dates and forms of payment under each of his or her Deferral
Elections. All amounts of a Participant’s Accounts constructively invested in
Company Common Stock shall be distributed in the form of Company Common Stock,
except in the event a Change in Control occurs, in which case amounts
constructively invested in Company Common Stock shall be dealt with in
accordance with the terms of the EBPP applicable to such Participant. All other
amounts shall be distributed in cash.

b. Any provision of this Plan to the contrary notwithstanding, all distributions
hereunder shall be deferred until such time (but not beyond the occurrence of a
Change in Control unless otherwise specified in a Participant’s Deferral
Election), in the discretion of the Committee, as such distribution would not be
disallowed as a deduction under Section 162(m) of the Internal Revenue Code.

1.2 Changes in Distribution Options.

a. A Participant is entitled to one future opportunity to further lengthen (not
shorten) the deferral period provided in a Deferral Election and to make one
future change with regard to lengthening (not shortening) the payment schedule
provided in that Deferral Election up to a maximum payment schedule of ten
years.

b. Any change in the deferral period or the payment schedule must be submitted
to the Plan Administrator in writing, on a form provided by the Plan
Administrator, at least twelve months, or such shorter period as the Plan
Administrator may accept, but in no event later than the December 31, before the
date payments were originally scheduled to begin. No change in the deferral
period shall be permitted if such change would cause payments to begin after the
Plan Year following the calendar year in which the Participant attains age 70.

1.3 Payment of Deferred Amounts.

a. Upon the date elected by the Participant, the Company shall begin to pay to
the Participant an amount equal to the total amount then credited to the
Participant’s Accounts. Such amount is to be paid either in one lump sum or in
substantially equal annual installments over a

 

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period of years as previously elected by the Participant, which period shall be
not more than ten years. Each annual installment shall include investment
credits on the remaining balance during the previous Plan Year until the
Accounts shall have been paid in full. A Participant may continue to express
investment preferences as provided in the Plan during the period that an Account
is being distributed.

b. If the Participant dies before payment in full of the amount standing to the
Participant’s credit in the Accounts, the unpaid balance may be paid in one lump
sum or in substantially equal installments to the Participant’s beneficiary over
the remaining distribution period elected by the Participant. If the Participant
dies before the beginning date of the deferred payment and did not indicate a
specific method of distribution, then the Participant’s designated beneficiary
may petition the Plan Administrator regarding the method of distribution. In the
absence of a designated beneficiary, the balance of the Accounts will be paid in
a lump sum to the estate of the Participant as soon as possible.

c. If the Participant’s employment is terminated for any reason other than
Retirement, death or Disability before the elected payment date, then the
Company, acting through the Plan Administrator, at its discretion, but subject
to any limitations set forth in the EBPP applicable to such Participant (or any
successor or replacement plan thereof) or any employment agreement to which the
Participant is a party or is covered, at any time thereafter may:

(1) Immediately pay over any amounts credited to the Participant’s Accounts to
the Participant; provided, however, if such termination of employment occurs at
any time following a Change in Control, the Company and the Plan Administrator
may not pay over any amounts credited to a Participant’s Accounts, unless prior
to the occurrence of the Change in Control, such Participant made an election
pursuant to which such Participant consented to receive an immediate payment of
such Participant’s Accounts in the event such Participant’s employment is
terminated following a Change in Control for any reason other than Retirement,
death or Disability.

(2) Deposit any amounts credited to the Participant’s Accounts in a grantor
trust for the Company’s benefit who will manage and pay over such amounts to the
Participant in accordance with the terms of this Plan, with administrative costs
in such event being charged to the Participant’s Accounts; provided, however,
that following a Change in Control, all such administrative costs shall be borne
solely by the Company.

(3) Continue to itself maintain and pay over amounts deferred to the Participant
in accordance with the terms of this Plan and the Participant’s election
pursuant thereto.

d. If both the Participant and his or her beneficiary die after payments to the
Participant begin and before all payments are made from the Participant’s
Accounts, the remaining value of the Accounts shall be determined as of the date
of death of the beneficiary or Participant, whichever is later, and shall be
paid as promptly as possible in one lump sum to the estate of the survivor of
the Participant and such beneficiary.

 

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e. A Participant may designate or change his or her beneficiary (without the
consent of any prior beneficiary) on a form provided by the Plan Administrator
and delivered to the Plan Administrator before the Participant’s death.

f. Subject to Section 3.1 of the Plan in effect on October 3, 2004: (1) if a
Participant elects to receive amounts deferred in a lump sum or in annual
installments on a date prior to Retirement, such payments will commence or
payment will be made in the month of January of the Plan Year selected by the
Participant; (2) if the Participant elects to receive amounts deferred in a lump
sum (other than amounts deferred as Common Stock for payment in a lump sum) or
in annual installments after Retirement, such payments shall commence or payment
shall be made in the month of January of the Plan Year following the calendar
year in which the Participant retires; and (3) if a Participant elects to
receive amounts deferred as Common Stock in a lump-sum after Retirement, such
payment will be made in the month of January of the Plan Year following the
calendar year in which the Participant retires, unless an earlier date is
approved by the Plan Administrator upon application by the Participant.

g. Notwithstanding anything herein to the contrary, if, at any time, the Company
determines (based on advice of tax counsel), by reason of legislation relating
to, amendment of, or interpretation by a court or administrative body of, the
provisions of the Internal Revenue Code of 1986, as amended, or any rules and
regulations promulgated thereunder, that any amounts deferred by a Participant
under this Plan shall be currently taxable, such Participant shall be entitled
to elect to receive immediate payment of any such deferred amounts (without any
reduction other than applicable tax withholding).

1.4 Hardship Distributions. The Plan Administrator may, in its discretion,
accelerate payments to a Participant in an amount up to the AIP bonus or the
cash portion of a PSU award previously deferred, together with investment
credits to date, in the event of demonstrated severe financial hardship (or any
similar circumstances under which a payment would be permitted without causing
the imposition of federal income taxes on Participants’ Accounts that have not
been distributed, pursuant to Revenue Procedure 92-65 or any successor Revenue
Procedure, Revenue Ruling, regulation or other applicable administrative
determination issued by the Internal Revenue Service.) Any such payments made
will be limited to the amount needed to meet the demonstrated financial need. A
Participant seeking a financial hardship withdrawal from his or her Accounts
must request a hearing with the Plan Administrator, who will then render a
decision on whether to permit such distribution.

1.5 Other Withdrawals: Forfeiture Penalty. A Participant may, by written request
on a form provided by the Plan Administrator, withdraw all or any portion of any
of his Accounts as of any Determination Date, provided that the Participant
shall forfeit 10% of the amount withdrawn as a penalty.

1.6 Withholding. Any payments made pursuant to Articles III, V, or VI of the
Plan in effect on October 3, 2004 shall be subject to appropriate federal, state
or local income tax withholdings. With respect to any withholdings required on a
distribution of Company Common Stock, the Company will first withhold from the
cash equivalent of dividends on such Company Common Stock and interest earned on
such cash equivalent that are payable to the Participant on the date of
distribution, and if such withholdings are insufficient, then the Company will
withhold from such distribution such number of shares of Company Common Stock
having a fair market value (as defined in the Hershey Foods Corporation Key
Employee Incentive Plan, as in effect on October 3, 2004) equal to the amount
required to satisfy the remaining withholding tax obligation, unless the
Participant elects to (i) deposit with the Company such amount of cash or
(ii) direct the Company to withhold cash from other amounts then distributed
under this Plan to satisfy such withholding tax obligation.

 

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