Agreement dated January 27, 2006


    


    


    Exhibit
      10.1

    


    AGREEMENT

    


    THIS
      AGREEMENT, is entered into on January 27, 2006 by The Hershey Company (the
      “Company”) and HERSHEY TRUST COMPANY, as Trustee for the benefit of Milton
      Hershey School (the “Trust”).

    


    RECITALS

    


    
      	
              I.

            	
              The
                Company’s Board of Directors has authorized a stock repurchase program
                (the “Stock Repurchase Program”) for the purchase of shares of the
                Company’s outstanding Common Stock, par value one dollar per share
                (“Shares”). 

            


    

     

    
      	
              II.

            	
              By
                their agreement dated December 12, 2005 (“Prior Agreement”) the Trust
                agreed to sell Shares to the Company and the Company agreed to purchase
                Shares from the Trust in connection with the Stock Purchase Program
                as
                provided in the Prior Agreement.

            


    

     

    
      	
              III.

            	
              The
                Trust desires to renew the Prior Agreement in order to sell Shares
                to the
                Company, and the Company desires to renew the Prior Agreement in
                order to
                purchase Shares from the Trust, in connection with the Stock Repurchase
                Program as provided in this Agreement.


            


    

     

    
      	
              IV.

            	
              This
                Agreement is being entered into in good faith and not as part of
                a plan or
                scheme to evade the prohibitions of Rule 10b5-1 under the Securities
                Exchange Act of 1934, as amended (the “1934
                Act”).

            


    

     

    


    IN
      CONSIDERATION OF the mutual promises contained in this Agreement, the Company
      and the Trust agree:

    


    
      	
            	A.	
              Purchase
                and Sale

            


    

    


    
      	 	
              1.

            	
              The
                Company shall deliver to the Trust a completed notice in the form
                attached
                to this Agreement as Exhibit “A” (a “Notice”) at or before 12:00 p.m.
                Eastern Time each Monday or, if Monday is not a business day, on
                the next
                business day setting forth, with respect to the calendar week preceding
                the date on which the Notice is delivered, the Prior Week Shares
                (as
                described below) and the VWAP (as described below) for such calendar
                week.
                The Trust shall, after receipt of the Notice, deliver and sell to
                the
                Company, and the Company shall buy from the Trust (each such transaction,
                a “Sale”), at or before 12:00 p.m. Eastern Time on the second business day
                following receipt of the Notice (a “Closing Date”) a number of Shares (the
                “Sale Shares”) equal to 0.44, multiplied by the aggregate number of Shares
                the Company has purchased on the open market from persons other than
                the
                Trust or any affiliate of the Company during the calendar week ending
                immediately prior to the date of the relevant Notice (the “Prior Week
                Shares”). On each Closing Date, (a) the Trust shall deliver to the
                Company’s transfer agent stock instructions to transfer the Sale Shares to
                the Company, together with such stock powers and other instruments
                as may
                be necessary to give effect to such instructions, and (b) the Company
                shall pay the purchase price

               

               

            


    

    
       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	
                 

                 

              	
                for
                  the Sale Shares in immediately available funds to such account
                  as the
                  Trust has designated in
                  writing.

              


      

    

    


    
      	 	
              2.

            	
              The
                price per Share to be paid by the Company under each Sale shall be
                the
                Volume Weighted Average Price (“VWAP”) paid by the Company for the Prior
                Week Shares. For purposes of this Agreement, VWAP is calculated by
                dividing the total consideration paid, without taking commissions
                into
                account, for the Prior Week Shares by the Prior Week Shares; provided,
                however, that the calculation of the VWAP for any Sale shall not
                take into
                consideration and shall exclude any transaction involving the purchase
                of
                Shares directly from affiliates of the Company.


            


    

    


    
      	 	
              3.

            	
              Notwithstanding
                anything herein to the contrary, the Trust shall not be required
                to effect
                any Sale if the VWAP for the Shares applicable to such Sale is less
                than
                $55.00 per Share. The Company shall not be obligated to deliver a
                Notice
                and neither the Company nor the Trust shall be required to effect
                a Sale
                if the performance of their respective obligations would violate
                applicable law; without limiting the foregoing, the Trust shall not
                be
                obligated to effect any Sale at (i) any time that any officer or
                director
                of either the Company or the Trust is in possession of material non-public
                information regarding the Company, or (ii) any time after the Company
                has
                purchased Prior Week Shares when an officer or director of either
                the
                Company or the Trust was in possession of material non-public information
                regarding the Company, unless, in either case, the Company’s purchases of
                Prior Week Shares are made pursuant to the provisions of a plan adopted
                by
                the Company under SEC Rule 10b5-1(c). Only one Notice may be delivered
                and
                one Sale may be effected each week.

            


    

    


    
      	 	
              4.

            	
              Any
                fractional amounts of Shares required to be sold to the Company under
                any
                Notice shall be rounded up to the nearest whole
                number.

            


    

    


    
      	 	
              5.

            	
              For
                purposes of this agreement, (a) “business day” means a day on which the
                New York Stock Exchange is open for trading, and (b) “affiliate” has the
                meaning given it in Rule 12b-2 under the 1934
                Act.

            


    

    


    
      	
            	
              B.

            	
              Term.
                The term of this Agreement shall commence on January 30, 2006 and
                shall
                continue through July 31, 2006 with respect to the Prior Week Shares
                for
                the calendar week ending July 28, 2006. The parties, by mutual agreement,
                may renew this Agreement for additional terms, subject to mutual
                agreement
                on the floor price in Section A.3. with respect to such renewal period.
                It
                is the intent of the parties that the Trust participate in the Stock
                Repurchase Program on a pro rata basis with the public stockholders.
                Accordingly, the parties agree that upon renewal the multiplier contained
                in Section A.1., i.e. “0.44” will be adjusted, if necessary, to properly
                account for the then current ownership position of the Trust and
                the
                public stockholders.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    
      
        	
              	C.	
                Representations
                  and Warranties.

              


      

    

    


    
      	 	
              1.

            	
              The
                Trust represents and warrants to the Company that (a) each Sale will
                have
                been duly authorized by the Board of Directors of the Trust, (b)
                no Sale
                will contravene, or require any consent, notice or filing which has
                not
                been obtained, given or made, under (i) any law applicable to the
                Trust, (ii) the organizational documents of the Trust or (iii) any
                judgment, order or decree or any contract or agreement to which the
                Trust
                is subject, (c) the Trust has or will have valid title to the Shares
                to be
                sold to the Company and the legal right and power to sell, transfer
                and
                deliver such Shares, and (d) the delivery of the Shares under each
                Sale will, upon payment of the purchase price therefor, pass valid
                title
                to the Company to such Shares free and clear of any security interests,
                claims, liens, equities, and other
                encumbrances.

            


    

    


    
      	 	
              2.

            	
              The
                Company represents and warrants to the Trust that (a) each Sale will
                have
                been duly authorized by the Board of Directors of the Company, and
                (b) no
                Sale will contravene, or require any consent, notice or filing which
                has
                not been obtained, given or made, under (i) any law applicable to
                the
                Company, (ii) the organizational documents of the Company or (iii)
                any
                judgment, order or decree or any contract or agreement to which the
                Company is subject.

            


    

    


    
      	
            	
              D.
                

            	
              Third-Party
                Beneficiaries. This Agreement is intended solely for the benefit
                of the
                Company and the Trust and may not be
                assigned.

            


    

    


    
      	
            	
              E.
                

            	
              Arbitration.
                All disputes that may arise between the parties regarding the
                interpretation or application of this Agreement and the legal effect
                of
                this Agreement shall, to the exclusion of any court of law, be arbitrated
                and determined by a board of arbitrators, unless the parties can
                resolve
                the dispute by mutual agreement. Either party shall have the right
                to
                submit any dispute to arbitration ten (10) days after the other party
                has
                been notified as to the nature of the dispute. If the dispute goes
                to
                arbitration, each party shall select one arbitrator and the two
                arbitrators shall jointly select a third arbitrator. The arbitration
                shall
                be governed by the rules of the American Arbitration Association
                and the
                laws of the State of Delaware. The proceeding shall be held in Hershey,
                Pennsylvania. The parties consent that any papers, notices, or process
                necessary or proper for the institution or continuance of, or relating
                to
                any arbitration proceeding, or for the confirmation of an award and
                entry
                of judgment on any award made, including appeals in connection with
                any
                judgment or award, may be served on each of the parties by registered
                mail
                addressed to the party at the principal office of the party, or by
                personal service on the party. The Company and the Trust consent
                to the
                jurisdiction of the arbitration panel and agree that its decision
                shall be
                final and not subject to appeal.

            


    

    


    
      	
            	
              F.
                

            	
              Sales
                Plan. It is the intent of the parties that this Agreement comply
                with the
                requirements of Rule 10b5-1(c) under the 1934 Act and this Agreement
                shall
                be interpreted to comply with the requirements of Rule 10b5-1(c)
                under the
                1934 Act.

            


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	
            	
              G.
                

            	
              Complete
                Agreement. This Agreement constitutes the entire agreement between
                the
                parties with respect to its subject matter and supersedes all prior
                agreements, oral or written, with respect to such subject
                matter.

            


    

    


    
      	
            	
              H.
                

            	
              Governing
                Law. This Agreement shall be governed by and construed in accordance
                with
                the laws of the State of Delaware.

            


    

    


    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed as of the day and year first above written.

    


    THE
      HERSHEY COMPANY

    


    
      	
            	By:	
              /s/
                Richard H. Lenny

            


    

      
      Name: Richard
      H. Lenny

      
      Title: Chairman,
      President and CEO

    


    


    HERSHEY
      TRUST COMPANY

    


    
      	
            	By:	
              /s/
                Robert C. Vowler

            


    

      
      Name: Robert
      C. Vowler

      
      Title: President,
      CEO and Secretary


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    EXHIBIT
      “A”

    


    


    THE
      HERSHEY COMPANY STOCK PURCHASE NOTICE

    


    


    Date:
      ________________

    


    


    Item
      1. Prior
      Week Shares: _______________________. 

     

    Item
      2. Sale
      Shares to be purchased by The Hershey Company in connection with this Notice
      

              
      (Prior Week Shares times 0.44): __________________. 

     

    Item
      3. Volume
      Weighted Average Price under Sale effected in connection with this Notice:
      ___________________. 

     

    Item
      4. Total
      amount payable under Sale effected in connection with this Notice:
      ______________________.