Trust Agreement


    

      Exhibit
        10.1

      


      


      AGREEMENT

      


      THIS
        AGREEMENT, is entered into on July 26, 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 agreements dated December 12, 2005 and January 27, 2006 (“Prior
                  Agreements”) the Trust agreed to sell Shares to the Company and the
                  Company agreed to purchase Shares from the Trust in connection
                  with the
                  Stock Repurchase Program as provided in the Prior
                  Agreements.

              


      

       

      
        	
                III.

              	
                The
                  Trust desires to renew the January 27, 2006 Prior Agreement in
                  order to
                  sell Shares to the Company, and the Company desires to renew the
                  January
                  27, 2006 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 0.46, 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 July 31, 2006 and
                  shall
                  continue through February 5, 2007 with respect to the Prior Week
                  Shares
                  for the calendar week ending February 2, 2007. 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. “0.46” 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 and CEO

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          



      

      


      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 0.46): __________________. 

       

      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:
        ______________________.