Compensation Summary


    Exhibit
      10.2

    


    


    


    Compensation
      Summary

    (As
      reported in The Hershey Company’s 

    Current
      Report on Form 8-K, filed February 22, 2006)

    


    


    Base
      Salaries. On
      February 15, 2006, the Compensation and Executive Organization Committee
      (“Committee”) of the Board of Directors of The Hershey Company (the “Company”)
      approved the base salaries of the executive officers who will be named in the
      Company’s 2006 Proxy Statement (“Named Executive Officers”) other than Richard
      H. Lenny, Chairman of the Board, President and Chief Executive Officer, and
      on
      February 16, 2006, the Committee recommended to the Company’s independent
      directors as a group the base salary for Mr. Lenny, as follows:

    


    
      	
              Name

            	
              Base
                Salary

            
	
              Richard
                H. Lenny

            	
              $
                1,100,000

            
	
              Marcella
                K. Arline

            	
              $   
                375,000

            
	
              Michele
                G. Buck

            	
              $   
                400,000

            
	
              Thomas
                K. Hernquist

            	
              $   
                420,000

            
	
              Burton
                H. Snyder

            	
              $   
                435,000

            
	
              David
                J. West

            	
              $   
                485,000

            


    

    


    The
      independent directors as a group approved the recommended base salary for Mr.
      Lenny on February 16, 2006. Base salaries are effective as of January 1,
      2006.

    


    2006
      Annual Incentive Program (AIP) Target Goals. On
      February 15, 2006, the Committee approved the target grants for a 2006 AIP
      award
      under the Company’s Key Employee Incentive Plan (“Incentive Plan”) for executive
      officers other than Mr. Lenny, and on February 16, 2006, the Committee
      recommended to the independent directors as a group a target grant for Mr.
      Lenny’s 2006 AIP award. For executive officers other than Mr. Lenny, the final
      award is the product of the executive officer’s base salary, the applicable
      target percentage and a performance score calculated as the sum of a corporate
      performance score and an individual score. The corporate performance objectives
      for the Named Executive Officers other than Mr. Lenny are based on the Company’s
      earnings per share-diluted, consolidated net sales and earnings before interest
      and taxes (“EBIT”) margin. The range of the target percentages of base salary
      used in the 2006 AIP target grants for the Named Executive Officers other than
      Mr. Lenny is 60% to 70%. For Mr. Lenny, the Committee recommended to the
      independent directors that his final award be calculated on the basis of a
      contingent target maximum grant. For 2006, the Committee recommended that the
      independent directors waive the maximum AIP award specified in Mr. Lenny’s March
      12, 2001 Executive Employment Agreement and approve a contingent target maximum
      grant for Mr. Lenny equal to the maximum AIP award available to executive
      officers under the Incentive Plan with an award at this maximum


    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    being
      contingent upon his achievement of his 2006 corporate performance goal from
      among the corporate performance objectives for the other Named Executive
      Officers. The Committee, in its recommendation to the independent directors
      of a
      final 2006 AIP award for Mr. Lenny, whether at or below the maximum level,
      will consider such corporate and individual performance factors it deems
      relevant. The Committee has the right to adjust the Company’s performance
      results, if necessary, to take into account extraordinary or unusual items
      occurring during the performance year, subject, in the case of Mr. Lenny, to
      the
      approval of the independent directors as a group. The independent directors
      as a
      group approved the Committee’s recommended 2006 AIP target grant for Mr. Lenny
      on February 16, 2006.

    


    Performance
      Stock Unit (PSU) Awards for the 2003-2005 Cycle.
      The
      Committee approved PSU awards under the Incentive Plan for the Named Executive
      Officers other than Mr. Lenny effective February 16, 2006, and recommended
      to
      the independent directors as a group a PSU award under the Incentive Plan for
      Mr. Lenny, as follows:

     

    
      	
               

              Name

            	
              Performance

              Stock
                Unit Award

            
	
              Mr.
                Lenny

            	
              145,000
                units

            
	
              Ms.
                Arline

            	
              16,500
                units

            
	
              Mr.
                Hernquist

            	
              18,250
                units

            
	
              Mr.
                Snyder

            	
              22,250
                units

            
	
              Mr.
                West

            	
              18,000
                units

            


    

    


    The
      independent directors as a group approved the recommended PSU award for Mr.
      Lenny on February 16, 2006. Ms. Buck was not eligible for a PSU award for
      the 2003-2005 cycle.

    


    PSUs
      awarded for the 2003-2005 performance cycle will not be paid out until their
      normal vesting date on December 31, 2008 or, if earlier, an accelerated vesting
      date based upon the executive’s retirement, disability or death. If an
      executive’s employment terminates prior to December 31, 2008 other than by
      retirement, disability or death, the PSU award will be forfeited. Once vested,
      the award will be paid in shares of Company Common Stock plus regular dividends
      from January 1, 2006 to the vesting date.

    


    PSU
      Grant for the 2006-2008 Cycle. The
      Committee also approved, effective February 16, 2006, contingent target grants
      of PSUs under the Incentive Plan for executive officers other than Mr. Lenny,
      and on February 16, 2006, the Committee recommended to the independent directors
      as a group a contingent target grant of PSUs under the Incentive Plan for Mr.
      Lenny, for the 2006-2008 PSU performance cycle. PSU grants are based upon a
      percentage of the executive officer’s base salary and are earned based upon the
      Company’s performance relative to certain performance objectives over the
      three-year cycle. The performance objectives for the 2006-2008 performance
      cycle
      are as follows: the Company’s three-year compound annual growth in earnings per
      share-diluted measured against an internal target and measured against the
      three-year


    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    compound
      annual growth in earnings per share-diluted of a peer group of 15 food, beverage
      and consumer packaged goods companies and the cumulative three-year improvement
      in the Company’s economic return on invested capital measured against an
      internal target. The total performance score can range from a minimum of 0%
      to a
      maximum of 250% based upon each of the performance measurements having a 50%
      weighted value in the formula. Upon completion of the performance cycle, an
      award will be paid on the basis of the number of PSUs originally awarded to
      the
      executive, the Company’s performance against the performance objectives for the
      cycle and the value per unit, which is determined at the conclusion of the
      cycle
      based upon the average of the daily closing prices of the Common Stock on the
      New York Stock Exchange in December of the final year of the cycle. The
      Committee has the right to adjust the Company’s performance results, if
      necessary, to take into account extraordinary or unusual items occurring during
      the performance cycle, subject, in the case of Mr. Lenny, to the approval of
      the
      independent directors as a group. Awards will be paid only in shares of Common
      Stock. The independent directors as a group approved the Committee’s recommended
      contingent target PSU grant for Mr. Lenny on February 16, 2006. 

     

    Stock
      Option Grants.
      The
      Committee approved stock option grants under the Incentive Plan for the
      executive officers other than Mr. Lenny, and recommended to the independent
      directors as a group a stock option grant to Mr. Lenny, all such grants to
      be
      effective February 16, 2006. The independent directors as a group approved
      the grant of stock options to Mr. Lenny on February 16, 2006. All such grants
      were made subject to the Incentive Plan and the Terms and Conditions for stock
      option grants previously filed with the Securities and Exchange
      Commission.

    


    Additional
      information regarding the compensation of the Company’s executive officers will
      be provided in the Company’s Proxy Statement for the 2006 Annual Meeting of
      Stockholders, which will be filed in March 2006.