exh102.htm


    Exhibit
      10.2

    
 

    THE
      HERSHEY COMPANY

    


    DIRECTORS’
      COMPENSATION PLAN

    


    (Amended
      and Restated as of June 14, 2007)

    


    


    1

    


    PURPOSE

    


    The
      purposes of the Directors' Compensation Plan (“Plan”) are to provide Directors
      of The Hershey Company (“Company”) with payment alternatives for the
      retainer and fees payable for services as members of the Board of Directors
      (“Board”) of the Company or as a chair of any committee thereof (together,
“Director Fees”), to provide Directors the opportunity to elect to receive all
      or a portion of the Directors Fees in Deferred Stock Units (“DSUs”), each
      representing an obligation of the Company to issue one share of Common Stock
      of
      the Company, $1.00 par value per share (“Common Stock”), and to promote the
      identification of interests between such Directors and the stockholders of
      the
      Company by paying a portion of each Director’s compensation in Restricted Stock
      Units (“RSUs”), each RSU representing an obligation of the Company to issue one
      share of Common Stock.

    


    


    2

    


    ELIGIBILITY

    


    Any
      Director of the Company who is not an employee of the Company or any of its
      subsidiaries shall be eligible to participate in the Plan.  Except as
      the context may otherwise require, references in this Plan to a “Director” shall
      mean only those directors of the Company who are participants in the
      Plan.

    


    


    3

    


    PAYMENT

    


    (a)           Director
      Fees.  A Director shall be entitled to Director Fees, in such
      amounts as shall be determined by the Board, for services on the Board and
      as a
      chair of any committee of the Board.  Pursuant to Section 4 hereof, a
      Director may elect to have payment of Directors Fees made currently in cash
      and/or Common Stock or deferred for subsequent payment in cash or Common Stock;
      provided that if paid currently, fees payable for services as a chair of any
      committee of the Board shall be payable only in cash.  Any shares of
      Common Stock payable under this Section 3(a) shall be paid by the issuance
      to
      the Director of a number of shares of Common Stock equal to the cash amount
      of
      the retainer so payable divided by the Fair Market Value of one share of the
      Common Stock, as defined in Section 12 hereof.  Any fractional share
      of Common Stock resulting from such payment shall be rounded to the nearest
      whole share.  The 


    
      
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    Company
      shall issue share certificates to the Director for the shares of Common Stock
      acquired or, if requested in writing by the Director and permitted under such
      plan, the shares acquired shall be added to the Director's account under the
      Company's Automatic Dividend Reinvestment Plan.  As of the date on
      which the part or whole of the retainer is payable in shares of Common Stock,
      the Director shall be a stockholder of the Company with respect to such
      shares.  Unless otherwise elected in Section 4, any remaining Director
      Fees shall be payable in cash.

    


    (b)           Restricted
      Stock Units.  A Director shall also be entitled to receive
      RSUs, in such amounts as shall be determined by the Board, for services on
      the
      Board.  Beginning January 1, 2006 and thereafter, unless otherwise
      directed by the Board, RSUs having a value of $25,000 (or such other amount
      as
      the Board shall from time to time determine) shall be awarded to each Director
      on the first day of January, April, July and October.  The number of
      full and fractional RSUs so awarded shall be determined by dividing $25,000
      (or
      such other amount) by the average of the per share closing price of the Common
      Stock on the New York Stock Exchange as published in The Wall Street
      Journal (or such other reliable publication as the Board or its
      delegates may determine) for the last three trading days of the month preceding
      the date of the award.  Directors whose membership on the Board
      commences after January  1, 2006 on a day which is not the first day of any
      January, April, July or October, shall be awarded a pro rata number of RSU’s
      with respect to the quarter during which the Director joined the Board equal
      to
      the number of RSUs awarded to each Director who was a member of the Board on
      the
      first day of the applicable quarter, multiplied by a fraction, the numerator
      of
      which equals the number of days remaining in the quarter after the first day
      on
      which such Director became a member of the Board, and the denominator being
      the
      total number of days in the quarter.  A Restricted Stock Unit Account
      shall be established on the books of the Company in the name of each Director.
      During the period of the Director’s membership on the Board, the Director’s
      Restricted Stock Unit Account shall be subject to credits, adjustment and
      substitution to reflect any dividend or other distribution on the outstanding
      Common Stock or any split or consolidation or other change affecting the Common
      Stock. Any such credit, adjustment or substitution shall be made in a manner
      similar to that set forth in Section 6(a) and 6(b) with respect to Deferred
      Stock Compensation Accounts.  RSUs awarded pursuant to the Plan shall
      vest upon termination of the Director’s membership on the Board by reason of
      retirement, death or disability, or such other circumstances as the Board,
      in
      its sole discretion, shall at any time determine (provided that a termination
      of
      a Director’s membership on the Board following a Change in Control (as defined
      in the Company’s Executive Benefits Protection Plan (Group 3A), the “EBPP”)
      shall be considered a retirement for this purpose). RSUs not vested upon or
      in
      connection with the Director’s termination of membership on the Board, as
      aforesaid, shall be forfeited as of the date of such termination. The balance
      of
      the Director’s Restricted Stock Unit Account which becomes vested shall be paid
      in a lump sum in accordance with Section 7.  If payment hereunder
      would result in the issuance of a fractional share of Common Stock, such
      fractional share shall not be issued and cash in lieu of such fractional share
      shall be paid to the Director based upon the average of the per share closing
      price of the Common Stock on the New York Stock Exchange as published in
The Wall Street Journal (or such other reliable publication as
      the Board or its delegates may determine) for the three trading days immediately
      preceding the date of payment.  The Company shall issue share
      certificates to the Director, or the Director’s designated beneficiary, for the
      shares of Common Stock represented by the Director’s vested RSUs, or if
      requested in writing by the Director and permitted under such plan, the shares
      to be distributed shall be added to the Director’s account under the Company’s
      Automatic Dividend Reinvestment


    
      
        
        

      

      
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    Plan.
      As
      of the date on which the Director is entitled to receive payment of shares
      of
      Common Stock, a Director shall be a stockholder of the Company with respect
      to
      such shares.

    


    


    4

    


    ELECTIONS

    


    (a)           Director
      Fee Payment Alternatives.  A
      Director may elect any one of the following alternatives with respect to payment
      of Director Fees:

    


    
      	 	
              (1)

            	
              to
                receive currently full payment in cash and/or Common Stock, as set
                forth
                in Section 3(a) above, on the date or dates on which the Director
                Fees are
                payable;

            


    

    


    
      	 	
              (2)

            	
              to
                defer payment of all or a portion of the Director Fees for subsequent
                payment in cash (a “Cash Deferral
                Election”);

            


    

    


    
      	 	
              (3)

            	
              to
                defer payment of all or a portion of the Director Fees for subsequent
                payment in shares of Common Stock (a “Stock Deferral Election”);
                or

            


    

    


    
      	 	
              (4)

            	
              a
                combination of (2) and (3).

            


    

    


    (b)           Filing
      and Effectiveness of Elections.  The election by a Director
      to receive payment of Director Fees other than as set forth in Section 4(a)(1)
      on the date on which the Director Fees are otherwise payable is made by filing
      with the Secretary of the Company a Notice of Election in the form prescribed
      by
      the Company (an “Election”).  In order to be effective for any
      calendar year, an Election must be received by the Secretary of the Company
      on
      or before December 31 of the preceding calendar year, except that if a Director
      files a Notice of Election on or before 30 days subsequent to the Director's
      initial election to the office of Director, the Election shall be effective
      on
      the date of filing with respect to Director Fees payable for any portion of
      the
      calendar year which remains at the date of such filing.  An Election
      may not be modified or terminated after the beginning of a calendar year for
      which it is effective.  Unless modified or terminated by filing a new
      Notice of Election on or before December 31 immediately preceding the
      calendar year for which such modification or termination is effective, an
      Election shall be effective for and apply to Director Fees payable for each
      subsequent calendar year.  Director Fees earned at any time for which
      an Election is not effective shall be paid as set forth in Section 4(a)(1)
      on
      the date when the Director Fees are otherwise payable.  Any
      Election shall terminate on the date a Director ceases to be a member of the
      Board.

    


    (c)           Cash
      Deferral Elections.  Director Fees deferred pursuant to a
      Cash Deferral Election shall be deferred and paid as provided in Sections 5
      and
      7.

    


    (d)           Stock
      Deferral Elections.  Director Fees deferred pursuant to a
      Stock Deferral Election shall be deferred and paid as provided in Sections
      6 and
      7.

    


    


    
      
        
        

      

      
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    5

    


    DEFERRED
      CASH COMPENSATION ACCOUNT

    


    (a)           General.  The
      amount of any Director Fees deferred in accordance with a Cash Deferral Election
      shall be credited on the date on which such Director Fees are otherwise payable
      to a deferred cash compensation account maintained by the Company in the name
      of
      the Director (a “Deferred Cash Compensation Account”).  A separate
      Deferred Cash Compensation Account shall be maintained for each calendar year
      for which a Director has elected a different number of payment installments
      or
      as otherwise may be agreed between the Director and the Company.

    


    (b)           Adjustment
      for Earnings or Losses.  The amount in the Director's
      Deferred Cash Compensation Account shall be adjusted to reflect net earnings,
      gains or losses in accordance with the provisions of The Hershey Company
      Deferred Compensation Plan relating to Investment Credits and Investment
      Options.  The adjustment for earnings, gains or losses shall be equal
      to the amount determined under (1) below as follows:

    


    (1)        
        Deemed
      Investment Options.  The total amount determined by
      multiplying the rate earned (positive or negative) by each fund available
      (taking into account earnings distributed and share appreciation (gains) or
      depreciation (losses) on the value of shares of the fund) for the applicable
      period by the portion of the balance in the Director's Deferred Cash
      Compensation Account as of the end of each such period, respectively, which
      is
      deemed to be invested in such fund pursuant to paragraph (2)
      below.  Subject to elimination, modification or addition by the Board,
      the funds available for the Director's election of deemed investments pursuant
      to paragraph (2) below shall be one or more of the funds available
      (excluding Common Stock) under the Investment Options of The Hershey Company
      Deferred Compensation Plan.

    


    (2)           Deemed
      Investment Elections.

    


    (A)           The
      Director shall designate, on a form prescribed by the Company, the percentage
      of
      the deferred Director Fees that are to be deemed to be invested in the available
      funds under paragraph (1) above.  Said designation shall be effective
      on a date specified therein and remain in effect and apply to all subsequent
      deferred Director Fees until changed as provided below.

    


    (B)           A
      Director may elect to change, on a calendar year basis (or on such other basis
      as permitted from time to time by the Board), the deemed investment election
      under paragraph (A) above with respect to future deferred Director Fees among
      one or more of the options then available by written notice to the Secretary
      of
      the Company, on a form prescribed by the Company (or by voice or other form
      of
      notice permitted by the Company), at least ten days before the first day of
      the
      calendar year for which the change is to be effective, with such change to
      be
      effective for Director Fees credited to the Deferred Cash Compensation Account
      on and after the effective date of the change.


    
      
        
        

      

      
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    (C)           A
      Director may elect to reallocate the balance of his Deferred Cash Compensation
      Account, subject to limitations imposed by the Board, on a calendar year
      basis,  among the deemed investment options then
      available.  A Director may make such an election by written notice to
      the Secretary of the Company, on a form prescribed by the Company (or by voice
      or other form of notice permitted by the Company), at least ten days before
      the
      first day of the calendar year for which the transfer election is to be
      effective, with such transfer to be based on the value of the Deferred Cash
      Compensation Account on the last day of the calendar year preceding the
      effective date of the transfer election.

    


    (D)           The
      election of deemed investments among the options provided above shall be the
      sole responsibility of each Director.  The Company and Board members
      are not authorized to make any recommendation to any Director with respect
      to
      such election.  Each Director assumes all risk connected with any
      adjustment to the value of his Deferred Cash Compensation
      Account.  Neither the Board nor the Company in any way guarantees
      against loss or depreciation.

    


    (E)           All
      payments from the Plan shall be made pro-rata from the portion of the Director's
      Deferred Cash Compensation Account which is deemed to be invested in such funds
      as may be available from time to time for deemed investment elections under
      the
      Plan.

    


    (F)           The
      Company shall not be required or obligated to invest any amounts in the funds
      provided as deemed investment options, and such funds shall be used solely
      to
      measure investment performance.  Further, the Company shall not be
      precluded from providing for its liabilities hereunder by investing in such
      funds or in any other investments deemed to be appropriate by the
      Board.

    


    (c)           Manner
      of Payment.  The balance of a Director's Deferred Cash
      Compensation Account will be paid to the Director or, in the event of the
      Director's death, to the Director's designated beneficiary, in accordance with
      the Cash Deferral Election.  A Director may elect at the time of
      filing the Notice of Election for a Cash Deferral Election to receive payment
      of
      the Director Fees in annual installments rather than a lump sum, provided that
      the payment period for installment payments shall not exceed fifteen years
      following the Payment Commencement Date, as described in Section 7
      hereof.  The amount of any installment shall be determined by
      multiplying (i) the balance in the Director's Deferred Cash Compensation Account
      on the date of such installment by (ii) a fraction, the numerator of which
      is
      one and the denominator of which is the number of remaining unpaid installments
      (including the installment payment then being determined).  The
      balance of the Deferred Cash Compensation Account shall be appropriately reduced
      on the date of payment to the Director or the Director's designated beneficiary
      to reflect the installment payment made hereunder.  Amounts held
      pending distribution pursuant to this Section 5(c) shall continue to be credited
      with the earnings, gains or losses as described in Section 5(b)
      hereof.

    


    
      
        
        

      

      
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    6

    


    DEFERRED
      STOCK COMPENSATION ACCOUNT

    


    (a)           General.  The
      amount of any Director Fees deferred in accordance with a Stock Deferral
      Election shall be credited to a deferred stock compensation account maintained
      by the Company in the name of the Director (a “Deferred Stock Compensation
      Account”).  A separate Deferred Stock Compensation Account shall be
      maintained for each calendar year for which a Director has elected a different
      number of payment installments or as otherwise determined by the
      Board.  On each date on which Director Fees are otherwise payable and
      a Stock Deferral Election is effective for a Director, the Director's Deferred
      Stock Compensation Account for that calendar year shall be credited with a
      number of full and fractional Deferred Stock Units (“DSUs”) equal to the cash
      amount of the Director Fees payable divided by the Fair Market Value of one
      share of the Common Stock, as defined in Section 12 hereof, on the date on
      which
      such Director Fees are payable.  If a dividend or distribution is paid
      on the Common Stock in cash or property other than Common Stock, on the date
      of
      payment of the dividend or distribution to holders of the Common Stock each
      Deferred Stock Compensation Account shall be credited with a number of full
      and
      fractional DSUs equal to the number of full and fractional DSUs credited to
      such
      Account on the date fixed for determining the stockholders entitled to receive
      such dividend or distribution times the amount of the dividend or distribution
      paid per share of Common Stock divided by the Fair Market Value of one share
      of
      Common Stock, as defined in Section 12 hereof, on the date on which the dividend
      or distribution is paid, it being intended that the number of full and
      fractional DSUs credited as a result of the dividend or distribution shall
      be
      equal to the number of full and fractional shares that would be issued if the
      DSUs credited to the Account were actual shares participating in the Company’s
      dividend reinvestment plan.  If the dividend or distribution is paid
      in property, the amount of the dividend or distribution shall equal the fair
      market value of the property on the date on which the dividend or distribution
      is paid.  The Deferred Stock Compensation Account of a Director shall
      be charged on the date of distribution with any distribution of shares of Common
      Stock made to the Director from such Account pursuant to Section 6(c)
      hereof.

    


    (b)           Adjustment
      and Substitution.  The number of DSUs credited to each
      Deferred Stock Compensation Account shall be proportionately adjusted to reflect
      any dividend or other distribution on the outstanding Common Stock payable
      in
      shares of Common Stock or any split or consolidation of the outstanding shares
      of Common Stock.  If the outstanding Common Stock shall, in whole or
      in part, be changed into or exchangeable for a different class or classes of
      securities of the Company or securities of another Company or cash or property
      other than Common Stock, whether through reorganization, reclassification,
      recapitalization, merger, consolidation or otherwise, the Board shall adopt
      such
      amendments to the Plan as it deems necessary to carry out the purposes of the
      Plan, including the continuing deferral of any amount of any Deferred Stock
      Compensation Account.

    


     (c)           Manner
      of Payment.  The balance of a Director's Deferred Stock
      Compensation Account will be paid in shares of Common Stock to the Director
      or,
      in the event of the Director's death, to the Director's designated beneficiary,
      in accordance with the Stock Deferral Election.  A Director may elect
      at the time of filing of the Notice of Election for a Stock Deferral Election
      to
      receive payment of the shares of Common Stock credited to the Director's
      Deferred Stock


    
      
        
        

      

      
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    Compensation
      Account in annual installments rather than a lump sum, provided that the payment
      period for installment payments shall not exceed fifteen years following the
      Payment Commencement Date as described in Section 7 hereof.  The
      number of shares of Common Stock distributed in each installment shall be
      determined by multiplying (i) the number of DSUs credited to such Director’s
      Deferred Stock Compensation Account on the date of payment of such installment,
      by (ii) a fraction, the numerator of which is one and the denominator of which
      is the number of remaining unpaid installments (including the installment
      payment then being determined) and by rounding such result down to the nearest
      whole number of shares.  The balance of the number of DSUs credited to
      such Director’s Deferred Stock Compensation Account shall be appropriately
      reduced in accordance with this Section 6(c) to reflect the installment payments
      made hereunder.  DSUs remaining in a Deferred Stock Compensation
      Account pending distribution of shares of Common Stock pursuant to this Section
      6(c) shall continue to be credited with respect to dividends or distributions
      paid on the Common Stock pursuant to Section 6(a) hereof and shall be subject
      to
      adjustment pursuant to Section 6(b) hereof.  If a lump sum payment or
      the final installment payment hereunder would result in the issuance of a
      fractional share of Common Stock, such fractional share shall not be issued
      and
      cash in lieu of such fractional share shall be paid to the Director based on
      the
      Fair Market Value of a share of Common Stock, as defined in Section 12 hereof,
      on the date immediately preceding the date of such payment.  The
      Company shall issue share certificates to the Director, or the Director's
      designated beneficiary, for the shares of Common Stock distributed hereunder,
      or
      if requested in writing by the Director and permitted under such plan, the
      shares to be distributed shall be added to the Director's account under the
      Company's Automatic Dividend Reinvestment Plan.  As of the date on
      which the Director is entitled to receive payment of shares of Common Stock,
      a
      Director shall be a stockholder of the Company with respect to such
      shares.

    


    


    7

    


    PAYMENT
      COMMENCEMENT DATE

    


    Payment
      of amounts in a Restricted Stock Unit Account (if vested), Deferred Cash
      Compensation Account or a Deferred Stock Compensation Account shall commence
      on
      the first business day next succeeding the 89th day following
      the
      day on which the Director ceases to be a member of the Board for any reason,
      including death or disability.  The Governance Committee of the Board
      may provide for the accelerated payment of Deferred Cash Compensation Accounts
      and Deferred Stock Compensation Accounts in one lump sum in connection with
      a
      change in control event within the meaning of the regulations promulgated under
      Code Section 409A, notwithstanding any other payment options previously selected
      by a Director under his or her Cash Deferral Elections and Stock Deferral
      Elections.

    


    
      
        
        

      

      
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    8

    


    BENEFICIARY
      DESIGNATION

    


    A
      Director may designate, in the Beneficiary Designation form prescribed by the
      Company, any person to whom payments of cash or shares of Common Stock are
      to be
      made if the Director dies before receiving payment of all amounts due
      hereunder.  A beneficiary designation will be effective only after the
      signed beneficiary designation form is filed with the Secretary of the Company
      while the Director is alive and will cancel all beneficiary designations signed
      and filed earlier.  If the Director fails to designate a beneficiary,
      or if all designated beneficiaries of the Director die before the Director
      or
      before complete payment of all amounts due hereunder, any remaining unpaid
      amounts shall be paid in one lump sum to the estate of the last to die of the
      Director or the Director's designated beneficiaries, if any.

    


    


    9

    


    NON-ALIENABILITY
      OF BENEFITS

    


    Neither
      the Director nor any beneficiary designated by the Director shall have the
      right
      to, directly or indirectly, alienate, assign, transfer, pledge, anticipate
      or
      encumber (except by reason of death) any amount that is or may be payable
      hereunder, nor shall any such amount be subject to anticipation, alienation,
      sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment
      by
      creditors of the Director or the Director's designated beneficiary or to the
      debts, contracts, liabilities, engagements, or torts of any Director or
      designated beneficiary, or transfer by operation of law in the event of
      bankruptcy or insolvency of the Director or any beneficiary, or any legal
      process.

    


    


    10

    


    NATURE
      OF
      ACCOUNTS

    


    Any
      Restricted Stock Unit Account, Deferred Cash Compensation Account or Deferred
      Stock Compensation Account shall be established and maintained only on the
      books
      and records of the Company, and no assets or funds of the Company or the Plan
      or
      shares of Common Stock of the Company shall be removed from the claims of the
      Company's general or judgment creditors or otherwise made available until such
      amounts are actually payable to Directors or their designated beneficiaries
      as
      provided herein.  The Plan constitutes a mere promise by the Company
      to make payments in the future.  The Directors and their designated
      beneficiaries shall have the status of, and their rights to receive a payment
      of
      cash or shares of Common Stock under the Plan shall be no greater than the
      rights of, general unsecured creditors of the Company.  No person
      shall be entitled to any voting rights with respect to shares credited to any
      RSU or Deferred Stock Compensation Account which is not yet payable to a
      Director or the Director's designated beneficiary.  The Company shall
      not be obligated under any circumstance to fund its financial obligations under
      the Plan, and the Plan is intended to constitute an unfunded plan for tax
      purposes.  However, the Company may, in its discretion, set aside
      funds in a trust or other vehicle, subject to the claims of its


    
      
        
        

      

      
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    creditors,
      in order to assist it in meeting its obligations under the Plan, if such
      arrangement will not cause the Plan to be considered a funded deferred
      compensation plan under the Internal Revenue Code of 1986, as
      amended.

    


    


    11

    


    ADMINISTRATION
      OF PLAN; HARDSHIP WITHDRAWAL

    


    Full
      power and authority to construe, interpret, and administer the Plan shall be
      vested in the Board.  Decisions of the Board shall be final,
      conclusive, and binding upon all parties.  Notwithstanding the terms
      of a Cash Deferral Election or a Stock Deferral Election made by a Director
      hereunder, the Board may, in its sole discretion, permit the withdrawal of
      amounts credited to a Deferred Cash Compensation Account or shares credited
      to a
      Deferred Stock Compensation Account with respect to Director Fees previously
      payable, or permit the early vesting and payment of RSUs previously awarded,
      upon the request of a Director or the Director's representative, or following
      the death of a Director upon the request of a Director's beneficiary or such
      beneficiary's representative, if the Board determines that the Director or
      the
      Director's beneficiary, as the case may be, is confronted with an unforeseeable
      emergency.  An unforeseeable emergency is a severe financial hardship
      to the Director resulting from illness or accident of the Director, the
      Director’s spouse, beneficiary or dependent, loss of the Director’s property due
      to casualty or similar extraordinary and unforeseeable circumstances beyond
      the
      Director’s control, which hardship cannot be relieved through insurance,
      cessation of deferrals under the Plan or liquidation of assets that would not
      cause a severe financial hardship.  Cash needs arising from
      foreseeable events, such as the purchase or building of a house or education
      expenses, will not be considered to be the result of an unforeseeable financial
      emergency. The Director or the Director's beneficiary shall provide to the
      Board such evidence as the Board, in its discretion, may require to demonstrate
      that such emergency exists and financial hardship would occur if the withdrawal
      were not permitted.  The withdrawal shall be limited to the amount or
      to the number of shares, as the case may be, necessary to meet the
      emergency.  Payment shall be made as soon as practicable after the
      Board approves the payment and determines the amount of the payment or number
      of
      shares which shall be withdrawn.  In the case of a hardship withdrawal
      from the Deferred Cash Compensation Account or Deferred Stock Compensation
      Account, payment shall be made in a single lump sum from the portion of the
      Deferred Cash Compensation Account or Deferred Stock Compensation Account,
      as
      applicable, with the largest number and in reverse order of installment
      payments, in each case in accordance with Section 5(b)(2)(E) if the distribution
      is from the Deferred Cash Compensation Account.  No Director shall
      participate in any decision of the Board regarding such Director's request
      for a
      withdrawal under this Section 11.

    


    


    
      
        
        

      

      
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    12

    


    FAIR
      MARKET VALUE

    


    Fair
      Market Value of the Common Stock (“Fair Market Value”) on a single date shall be
      the closing price on the applicable date (or if not a trading date, the next
      preceding trading date), and Fair Market Value, where the determination is
      made
      over a period of more than one day, shall be the average of the closing
      price for all trading dates for the applicable period covered by a
      payment.  For purposes of Section 3(a) and 6(a) hereof, the applicable
      period for a quarterly Directors Fees payment or credit shall be the three
      calendar months immediately preceding the calendar month during which the day
      on
      which the payment or credit is being made, and the applicable period for
      a Directors Fees payment relating to a period other than a quarter shall be
      determined under similar principles.  The closing price of the Common
      Stock for a single date or for each day within the applicable period shall
      be as quoted in The Wall Street Journal (or in such other
      reliable publication as the Board or its delegate, in its discretion, may
      determine to rely upon).

    


    


    13

    


    SECURITIES
      LAWS; ISSUANCE OF SHARES; NONCERTIFICATED SHARES

    


    The
      obligation of the Company to issue or credit shares of Common Stock under the
      Plan shall be subject to (i) the effectiveness of a registration statement
      under
      the Securities Act of 1933, as amended, with respect to such shares, if deemed
      necessary or appropriate by counsel for the Company, (ii) the condition that
      the
      shares shall have been listed (or authorized for listing upon official notice
      of
      issuance) upon each stock exchange, if any, on which the Common Stock shares
      may
      then be listed and (iii) all other applicable laws, regulations, rules and
      orders which may then be in effect.  If, on the date on which any
      shares of Common Stock would be issued sufficient shares of Common Stock are
      not
      available under the Plan or the Company is not obligated to issue shares
      pursuant to this Section 13, then no shares of Common Stock shall be issued
      but
      rather, in the case of Common Stock to be issued currently, cash shall be paid
      in payment of the Director Fees payable.  The Board shall adopt
      appropriate rules and regulations to carry out the intent of the immediately
      preceding sentence if the need for such rules and regulations
      arises.  To the extent the Plan provides for issuance of share
      certificates to reflect the transfer of shares of Common Stock, the transfer
      of
      such shares may be effected on a noncertificated or “book-entry”
basis.

    


    


    14

    


    GOVERNING
      LAW

    


    The
      provisions of this Plan shall be interpreted and construed in accordance with
      the laws of the State of Delaware.

    


    


    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    15

    


    EFFECTIVE
      DATE; AMENDMENT AND TERMINATION

    


    The
      Plan
      was adopted by the Board on December 4, 1996, and became effective as of
      January 1, 1997.  The Plan was previously amended and restated
      effective October 2, 2001 and
      December 3, 2002.  The Plan, as amended and restated herein,
      shall be effective as of June 14, 2007.  The Board may amend or
      terminate the Plan at any time, provided that no such amendment or termination
      shall adversely affect rights with respect to amounts or shares then credited
      to
      any Deferred Cash Compensation Account or Deferred Stock Compensation
      Account.

    


    


    16

    


    AUTHORIZED
      SHARES; DESIGNATION AS AWARD UNDER EQUITY AND INCENTIVE COMPENSATION
      PLAN


    


    Shares
      issued hereunder with respect to RSUs and DSUs credited prior to April 17,
      2007
      shall be deemed issued as part of the aggregate of 300,000 (reflecting prior
      stock splits and stock dividends and as shall be adjusted and subject to
      adjustment to reflect future stock splits and stock dividends) shares of Common
      Stock previously authorized for issuance hereunder.  Effective as of
      April 17, 2007, the crediting of RSUs and the ability to make elections to
      receive Directors Fees in shares of Common Stock or to defer payment of
      Directors Fees and have such fees credited as DSUs shall constitute a
      non-employee directors award under The Hershey Company Equity and Incentive
      Compensation Plan (the “EICP”).  This Plan and the related Notice of
      Election and other documents contemplated hereunder shall constitute the award
      agreement for purposes of the EICP and shares of Common Stock issued with
      respect to such RSUs, Directors Fees or DSUs shall be deemed issued from the
      shares authorized for issuance under the EICP.

    


    


     

    
      	 	THE
              HERSHEY
              COMPANY 	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Marcella
              K.
              Arline                                         	 
	 	 	
              Marcella
                K. Arline, Senior Vice
                President, 

            	 
	 	 	
              Chief
                People Officer

            	 
	 	 	 	 


    


    
      
        
        

      

      
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