Exhibit 10.1 







RETIREMENT AGREEMENT
AND GENERAL RELEASE 



        This
Retirement Agreement and General Release (the “Agreement”) is made as of
the 21st day of October, 2004, by and between Hershey Foods Corporation, a Delaware
corporation (the “Company”), and Frank Cerminara
(“Employee”), and together with the Company, (the
“Parties”). 


RECITALS



        WHEREAS,
Employee is on the date hereof an employee of the Company holding the office of Senior
Vice President, Chief Financial Officer; and 



        WHEREAS,
Employee has informed the Company that he desires to resign as an officer of the Company
(“Resignation”) effective December 31, 2004 (the “Resignation
Date”), and to retire from the Company (“Retirement”) effective
January 1, 2006, whereupon Employee’s employment with the Company shall terminate;
and 



        WHEREAS,
Employee has offered to provide to the Company certain services relating to the transition
of his duties as Chief Financial Officer to his successor (“Transition
Services”) from the Resignation Date to and including December 31, 2005 (such
period hereinafter called the “Transition Period”); and 



        WHEREAS,
in order to secure the services of Employee throughout the Transition Period, Company is
willing to retain Employee during such period as an employee of the Company on a paid
leave of absence; and 



        WHEREAS,
the Company and Employee desire voluntarily to enter into this Agreement in order to set
forth the definitive rights and obligations of the Parties during the Transition Period
and at Retirement; and 



        WHEREAS,
the Parties acknowledge that they have entered into this Agreement for their mutual
cooperation and benefit. 



        NOW,
THEREFORE, in consideration of the mutual covenants, commitments and agreements set forth
herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as
follows: 



     1.    
          Acknowledgment of Retirement Date. The Parties acknowledge and agree that
          the Retirement shall be effective (the “Retirement Date”) as of
          the earliest of (i) January 1, 2006; (ii) in the event Employee breaches any of
          his covenants, agreements or obligations hereunder, the date the Company
          provides notice of such breach to Employee; and (iii) Employee’s date of
          death. 






     2.    
          Resignation from Company Offices. Effective on the Resignation Date,
          Employee hereby voluntarily resigns from all of his positions and offices with
          the Company and its subsidiaries, including, without limitation, Senior Vice
          President, Chief Financial Officer and each office he may occupy of any
          subsidiary of the Company. 



     3.    
          Employee’s Acknowledgment of Consideration. Employee specifically
          acknowledges and agrees that certain of the obligations created and payments
          made to him by the Company under this Agreement are promises and payments to
          which he is not otherwise entitled under any law, contract, or benefit plan
          maintained by the Company. 



     4.    
          Paid Leave of Absence. 



		4.1	
Employee shall be placed on a paid leave of absence during the Transition Period. During
the Transition Period, Employee’s employment with the Company shall continue on the
same basis and under the same terms as existed immediately prior to the Resignation Date,
except that Employee shall (i) have no assigned duties and shall perform no services for
the Company other than the Transitional Services as reasonably requested by the Company
from time to time, and (ii) be eligible for and participate in only those compensation and
benefit programs of the Company set forth in Section 4.2 below.






		 4.2 	The
following conditions shall apply during the Transition Period:






	 	4.2.1	The
Company shall pay to Employee a base salary equal to his 2004 base salary in accordance
with the Company’s normal and customary payroll procedures.  






	 	4.2.2	The
Company shall pay to Employee, on or before March 15, 2005, Employee’s 2004
contingent target grant (scored on the basis of actual achievement of the Company’s
objectives and Employee’s personal objectives for 2004 and calculated on the basis
of Employee’s 2004 base salary and target percentage) under the Annual Incentive
Program (“AIP”) of the Company’s Key Employee Incentive Plan (“KEIP”).
This payment shall be subject to customary withholding.  






	 	4.2.3	Employee
shall be eligible to receive a grant of stock options under the KEIP, which grant shall
be made at such time, in such manner and subject to such terms and conditions as are
consistent with the grant of stock options to other KEIP participants in 2005 by the
Compensation Committee of the Company’s Board of Directors.  






	 	4.2.4	Except
as provided for below and in Section 4.3, Employee shall continue to be eligible to
receive the following, and only the following, employment benefits and participate in or
receive benefits under the following, and only the following, programs and benefit plans
(in accordance with the terms and conditions of the programs and benefit plans of the
Company, including, without limitation, such terms and conditions permitting the 





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	 	 	Company to
amend or terminate such programs and benefit plans) applicable to Employee immediately
prior to the Resignation Date:  






		    (a)                        the
Hershey Foods Corporation Flexible Benefits Plan;  







		    (b)                        the
Company’s life insurance program for active employees;  







		    (c)                        the
Hershey Foods Corporation Supplemental Executive Retirement Plan           (“SERP”);  







		    (d)                        the
Hershey Foods Corporation Deferred Compensation Plan           (“DCP”);  







		    (e)                        the
Hershey Foods Corporation Retirement Plan (“HRA”); and  







		    (f)                        the
Hershey Foods Corporation Employee Savings Stock Investment and Ownership           Plan (“ESSIOP”).  







	 	
From
and after the Retirement Date, Employee shall not be entitled to any payments or benefits
of any kind from the Company under this Section 4.2, and any vested rights under the SERP,
the DCP, the HRA and the ESSIOP, shall be determined by the terms and conditions of those
plans respectively. 






		         4.3 	Notwithstanding
the foregoing, the parties agree:






	 	 4.3.1 	Employee
shall not be eligible to accrue,  earn or participate in salary  adjustments  after the
Resignation Date; 






	 	4.3.2 	Employee
shall not be eligible to receive any employment benefits or participate in or receive any
payments or benefits under any programs or benefit plans not listed in Section 4.2 (in
particular, Employee shall not, effective immediately, be eligible for any benefits under
any Company employee benefit protection program, including its Executive Benefits
Protection Plans, whether Group 2, 3 or 3A and its Severance Benefits Plan);  






	 	4.3.3 	Upon
the Resignation Date, Employee’s coverage under the Company’s short-term
disability plan, and the Company’s premium contributions under the long-term
disability plan, shall cease;  






	 	4.3.4 	Employee
shall not be permitted to contribute to a medical reimbursement account or dependent care
assistance account under the Company’s flex benefits plan for any period after
December 31, 2005; and  






	 	4.3.5 	Employee
shall not be eligible to make contributions to, and the Company shall make no matching
contribution to, the Employee’s ESSIOP account after December 31, 2005.  





 3 








		4.4	
Employee shall not participate in any part of the Long -Term Incentive Program
(“LTIP”) of the KEIP during 2005 or any subsequent year and any
outstanding contingent target grants of Performance Stock Units or stock options granted
to Employee prior to January 1, 2005 shall be administered in accordance with the rules of
the KEIP.






		4.5	
Following the Retirement Date, and on or before March 15, 2006, the Company shall pay to
Employee, in lieu of a 2005 contingent target grant under the AIP of the KEIP, a lump-sum
cash payment of $256,800.00.






		4.6	
During the Transition Period, Employee shall have no assigned duties and shall perform no
services for the Company except as may be reasonably requested by the Company from time to
time.






		4.7	
Except as provided for in Section 6 below, employee shall be free to seek and accept other
employment after the Retirement Date.






	 	         4.8  	Employee
 shall not be  subject to the  minimum  stockholding  requirements  for  Company
 executives  following  the                   Resignation Date. 






		4.9 	
The Company will provide for the continuation of financial advisory services comparable to
other senior executives of the Company through December 31, 2005, tax preparation services
for the tax years ending December 31, 2004 and 2005 and, upon Employee’s request,
retirement transition assistance pursuant to a Company-approved program through Drake Beam
Morin, Inc. for a six month period beginning January 1, 2006. 






5.        COBRA
Rights and Retiree Medical Coverage.  



	 	5.1.1	Effective
as of the Retirement Date, as required by the continuation coverage provisions of Section
4980B of the U. S. Internal Revenue Code of 1986, as amended (“the Code”),
Employee shall be offered the opportunity to elect continuation coverage under the group
medical plan of the Company (“COBRA coverage”). The Company shall
provide Employee with the appropriate COBRA coverage notice and election form for this
purpose. Employee shall notify the Company within two weeks of any change in his
circumstances that would warrant discontinuation of his COBRA coverage and benefits
(including but not limited to Employee’s receipt of group medical and dental
benefits from any other employer). The existence and duration of Employee’s rights
and/or the COBRA rights of any of Employee’s eligible dependents shall be determined
in accordance with Section 4980B of the Code. 






	 	5.1.2	As
an alternative to COBRA coverage, Employee shall be offered the opportunity to elect
coverage under the Hershey Foods Corporation Retiree Medical and Life Insurance Plan, as
amended, for so long as the Company shall make such plan available. It is the Parties’ intention
that, should Employee elect coverage under






 4 





	 		this Section
5.1.2, such coverage shall be deemed an alternative medical coverage which satisfies the
continuation of coverage requirements of COBRA. As such, the period of time which
Employee receives coverage under the Retiree Medical and Life Insurance Plan shall be
credited towards Employee’s continuation of coverage requirements under COBRA.  






     6.    
          Confidential, Proprietary and Privileged Information; Non-Competition.
          The parties agree the terms and conditions of that certain Long-Term Incentive
          Program Participation Agreement and Mutual Agreement to Arbitrate Claims by and
          between the Company and Employee executed by Employee on January 23, 1997
          (“Participation and Arbitration Agreement”), a copy of which is
          attached hereto, are incorporated herein by reference and made a part hereof as
          if fully set forth herein. Notwithstanding any provisions to the contrary in the
          Participation and Arbitration Agreement, the terms and conditions thereof shall
          remain in effect for three years after the Retirement Date regardless of whether
          Employee is eligible or not to receive benefits under the SERP. 



7.     General
Release and Waiver by Employee.  



		7.1	
Employee, for and on behalf of himself and each of his heirs, executors, administrators,
personal representatives, successors and assigns, hereby acknowledges full and complete
satisfaction of and fully and forever releases, acquits and discharges the Company,
together with its subsidiaries and affiliates, and each of its and their past and present
direct and indirect stockholders, directors, members, partners, officers, employees,
agents, inside and outside counsel and representatives and its and their respective heirs,
executors, administrators, personal representatives, successors and assigns (collectively,
the “Releasees”), from any and all claims, demands, suits, causes of
action, liabilities, obligations, judgments, orders, debts, liens, contracts, agreements,
covenants and causes of action of every kind and nature, whether known or unknown,
suspected or unsuspected, concealed or hidden, vested or contingent, in law or equity,
existing by statute, common law, contract or otherwise, which have existed, may exist or
do exist, through and including the execution and delivery by Employee of this Agreement
(but not including the Parties’ performance under this Agreement), including, without
limitation, any of the foregoing arising out of or in any way related to or based upon:






	 	7.1.1	Employee’s
application for and employment with the Company, his being an employee of the Company,
his Resignation or his Retirement;  






	 	7.1.2	any
and all claims in tort or contract, and any and all claims alleging breach of an express
or implied, or oral or written, contract, policy manual or employee handbook;  






	 	7.1.3	any
alleged misrepresentation, coercion, duress, defamation, interference with contract,
intentional or negligent infliction of emotional distress, sexual harassment, negligence
or wrongful discharge; or  






 5 





	 	7.1.4	any
federal, state or local statute, ordinance or regulation, including but not limited to
the Fair Labor Standards Act, the Equal Pay Act, Title VII of the Civil Rights Act of
1964, the Americans With Disabilities Act, the Family and Medical Leave Act, and the
Pennsylvania Human Relations Act.  






		7.2	
Employee acknowledges and agrees that other than to seek the Company’s performance
under this Agreement he is waiving all rights to sue or obtain equitable, remedial or
punitive relief from any or all Releasees of any kind whatsoever, including, without
limitation, reinstatement, back pay, front pay, attorneys’ fees and any form of
injunctive relief. Employee acknowledges and agrees that this waiver and release is an
essential and material term of this Agreement. Employee further acknowledges and agrees
that he will not assert any breach of any agreement, plan, or right referred to herein
based on any action or inaction of the Releasees prior to the date hereof.






		7.3	
Employee understands and intends that this Section 7 constitutes a general release, and
that no reference therein to a specific form of claim, statute or type of relief is
intended to limit the scope of such general release and waiver; provided, however,
notwithstanding any other provision of this Section 7, the provisions of this Section 7
shall not apply to any rights Employee may have under the Age Discrimination in Employment
Act of 1967, as amended.






		7.4	
Employee expressly waives all rights afforded by any statute which limits the effect of a
release with respect to unknown claims. Employee understands the significance of his
release of unknown claims and his waiver of statutory protection against a release of
unknown claims.






		7.5	
Employee agrees that he will not be entitled to or accept any benefit from any claim or
proceeding within the scope of this Section 7 general release that is filed or instigated
by him or on his behalf with any agency, court or other government entity.






     8.    
          Employee’s Representations and Covenants Regarding Actions. Employee
          represents, warrants and covenants to each of the Releasees that at no time
          prior to or contemporaneous with his execution of this Agreement has he filed or
          caused or knowingly permitted the filing or maintenance, in any state, federal
          or foreign court, or before any local, state, federal or foreign administrative
          agency or other tribunal, any charge, claim or action of any kind, nature and
          character whatsoever (“Claim”), known or unknown, suspected or
          unsuspected, which he may now have or has ever had against the Releasees which
          is based in whole or in part on any matter referred to in Section 7.1 above,
          and, to the maximum extent permitted by law Employee is prohibited from filing
          or maintaining, or causing or knowingly permitting the filing or maintaining, of
          any such Claim in any such forum. Employee hereby grants the Company his
          perpetual and irrevocable limited power of attorney with full right, power and
          authority to take all actions necessary to dismiss or discharge any such Claim.
          Employee further covenants and agrees that he will not encourage any person or
          entity, including but not limited to any current or former employee, officer,
          director or stockholder of the Company, to institute any Claim against



 6 






 the Releasees
or any of them, and that except as expressly permitted by law or administrative
policy or as required by legally enforceable order he will not aid or assist
any such person or entity in prosecuting such Claim.  



     9.    
          No Disparaging Remarks. Employee hereby covenants to each of the
          Releasees and agrees that he shall not, directly or indirectly, within or
          without the Company, make or solicit or encourage others to make or solicit any
          disparaging or negative remarks concerning the Releasees (as defined in Section
          7 of this Agreement), or any of their products, services, businesses or
          activities. Employee understands that, in addition to the consequences such
          breach may have under other provisions of this Agreement, his breach of this
          Section 9 and the Company’s delivery to him of notice of such breach shall
          accelerate his Retirement Date to the date of such notice; shall result in his
          Retirement on such date; shall eliminate his entitlement to any subsequent
          payment or benefits under this Agreement; and shall subject him to liability for
          any damages arising from such remarks. Employee further understands that his
          breach of this Section 9 could cause his benefits under the SERP to be suspended
          or terminated. 



     10.    
          No Conflict of Interest. Employee hereby covenants and agrees that he
          shall not, directly or indirectly, incur any obligation or commitment, or enter
          into any contract, agreement or understanding, whether express or implied, and
          whether written or oral, which would be in conflict with his obligations,
          covenants or agreements hereunder or which could cause any of his
          representations or warranties made herein to be untrue or inaccurate. 



     11.    
          Confidentiality. The Company and Employee agree that the terms and
          conditions of this Agreement are to be strictly confidential, except that
          Employee may disclose the terms and conditions to his family, attorneys,
          accountants, tax consultants, state and federal tax authorities or as may
          otherwise be required by law. The Company may disclose the terms and conditions
          of this Agreement and the circumstances of Employee’s Resignation and/or
          Retirement as the Company deems necessary or appropriate to its or its
          affiliates’ or representatives’ officers, employees, board of
          directors, insurers, attorneys, accountants, state and federal tax authorities,
          or as otherwise allowed or required by law. Employee represents that except as
          expressly authorized by this Section 11 he has not discussed, and agrees that
          except as expressly authorized by this Section 11 or by the Company he will not
          discuss, this Agreement or the circumstances of his Resignation and/or
          Retirement, and that he will take affirmative steps to avoid or absent himself
          from any such discussion even if he is not an active participant therein.
          EMPLOYEE ACKNOWLEDGES THE SIGNIFICANCE AND MATERIALITY OF THIS PROVISION TO THIS
          AGREEMENT, AND HIS UNDERSTANDING THEREOF. 



     12.    
          Return of Corporate Property; Conveyance of Information. Employee hereby
          covenants and agrees that upon his Retirement, or at such earlier date as the
          Company may request in writing, Employee shall immediately return all documents,
          keys, ID cards, credit cards (without further use thereof), laptop computer, and
          all other items which are the property of the Company and/or which contain
          confidential information; and, in the case of documents, to return any and all
          materials of any kind and in whatever medium evidenced, including, without
          limitation, all hard disk drive data, diskettes, microfiche, photographs,
          negatives, blueprints, printed materials, tape recordings and videotapes. 



 7 







     13.    
          Remedies. In the event that Employee has breached any of his covenants,
          agreements or obligations under this Agreement, the Company shall notify
          Employee in writing at his home address as shown in the Company’s records
          of the reason for such determination. The notice shall be sent via hand delivery
          or overnight courier. Employee hereby acknowledges and affirms that in the event
          of any breach by Employee of any of his covenants, agreements and obligations
          hereunder, Employee’s Retirement shall be effective as of the day the
          Company provides notice thereof. Employee further hereby acknowledges and
          affirms that in the event of such breach monetary damages would be inadequate to
          compensate the Releasees or any of them. Accordingly, in addition to other
          remedies which may be available to the Releasees hereunder or otherwise at law
          or in equity, any Releasee shall be entitled to specifically enforce such
          covenants, obligations and restrictions through injunctive and/or equitable
          relief, in each case without the posting of any bond or other security with
          respect thereto. Should any provision hereof be adjudged to any extent invalid
          by any court or tribunal of competent jurisdiction, each provision shall be
          deemed modified to the minimum extent necessary to render it enforceable. 



     14.    
          Acknowledgment of Voluntary Agreement. Employee hereby acknowledges and
          affirms that he is entering into this Agreement knowingly and voluntarily,
          without coercion or duress of any sort, in order to receive the payments and
          other consideration from the Company as set forth herein. Employee acknowledges
          and affirms that he has been given adequate opportunity to review and consider
          this Agreement. 



     15.    
          Complete Agreement; Inconsistencies. This Agreement and the Participation
          and Arbitration Agreement constitute the complete and entire agreement between
          Employee and the Company with respect to the subject matter hereof, and
          supersede in their entirety any and all prior understandings, commitments,
          obligations and/or agreements, whether written or oral, with respect thereto; it
          being understood and agreed that this Agreement and those agreements, including
          the mutual covenants, agreements, acknowledgments and affirmations contained
          herein and therein, are intended to constitute a complete settlement and
          resolution of all matters set forth in Section 7 hereof. 



     16.    
          No Strict Construction. The language used in this Agreement shall be
          deemed to be the language mutually chosen by the Parties to reflect their mutual
          intent, and no doctrine of strict construction shall be applied against any
          Party. 



     17.    
          Third Party Beneficiaries. The Releasees are intended third-party
          beneficiaries of this Agreement, and this Agreement may be enforced by each of
          them in accordance with the terms hereof in respect of the rights granted to
          such Releasees hereunder. Except and to the extent set forth in the preceding
          sentence, this Agreement is not intended for the benefit of any person other
          than the Parties, and no such other person shall be deemed to be a third party
          beneficiary hereof. Without limiting the generality of the foregoing, it is not
          the intention of the Company to establish any policy, procedure, course of
          dealing or plan of general application for the benefit of or otherwise in
          respect of any other employee, officer, director or stockholder, irrespective of
          any similarity between any contract, agreement, commitment or understanding
          between the Company and such other employee, officer, director or stockholder,
          on the one hand, and any contract, agreement, commitment or understanding
          between the Company and Employee, on the other hand, and irrespective of any
          similarity in facts or circumstances involving such other employee, officer,
          director or stockholder, on the one hand, and the Employee, on the other hand. 



 8 







     18.    
          Tax Withholdings. Notwithstanding any other provision herein, the Company
          shall be entitled to withhold from any amounts otherwise payable hereunder to
          Employee any amounts required to be withheld in respect of federal, state or
          local taxes. 



     19.    
          Governing Law. All issues and questions concerning the construction,
          validity, enforcement and interpretation of this Agreement shall be governed by,
          and construed in accordance with, the laws of the Commonwealth of Pennsylvania,
          without giving effect to any choice of law or conflict of law rules or
          provisions (whether of the Commonwealth of Pennsylvania or any other
          jurisdiction) that would cause the application hereto of the laws of any
          jurisdiction other than the Commonwealth of Pennsylvania. In furtherance of the
          foregoing, the internal law of the Commonwealth of Pennsylvania shall control
          the interpretation and construction of this Agreement, even though under any
          other jurisdiction’s choice of law or conflict of law analysis the
          substantive law of some other jurisdiction may ordinarily apply. 



     20.    
          Severability. The invalidity or unenforceability of any provision of this
          Agreement shall not affect the validity or enforceability of any other provision
          of this Agreement, which shall otherwise remain in full force and effect. 



     21.    
          Counterparts. This Agreement may be executed in separate counterparts,
          each of which shall be deemed to be an original and all of which taken together
          shall constitute one and the same agreement. 



     22.    
          Successors and Assigns. The Parties’ obligations hereunder shall be
          binding upon their heirs, personal representatives, successors and assigns. The
          Parties’ rights and the rights of the other Releasees shall inure to the
          benefit of, and be enforceable by, any of the Parties’ and Releasees’
          respective heirs, personal representatives, successors and assigns. 



     23.    
          Amendments and Waivers. No amendment or waiver shall be binding upon any
          party hereto unless consented to in writing by such party. 



     24.    
          Headings. The headings of the Sections and subsections hereof are for
          purposes of convenience only, and shall not be deemed to amend, modify, expand,
          limit or in any way affect the meaning of any of the provisions hereof. 



     25.    
          Waiver of Jury Trial. Each of the Parties hereby waives its rights to a
          jury trial of any claim or cause of action based upon or arising out of this
          Agreement or any dealings between the Parties relating to the subject matter
          hereof to the extent the resolution of such matter is not governed by the
          Participation and Arbitration Agreement. Each of the Parties also waives any
          bond or surety or security upon such bond which might, but for this waiver, be
          required of the other party. The scope of this waiver is intended to be
          all-encompassing of any and all disputes that may be filed in any court and that
          relate to the subject matter of this Agreement, including, without limitation,
          contract claims, tort claims, breach of duty claims, and all other common law
          and statutory claims. EACH OF THE PARTIES ACKNOWLEDGES THAT THIS WAIVER IS A
          MATERIAL INDUCEMENT TO ENTER INTO THIS AGREEMENT, THAT EACH HAS ALREADY RELIED
          ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO
          RELY ON THIS WAIVER IN ITS RELATED FUTURE



 9 







  DEALINGS.  Each of the
Parties further  represents and warrants that he or it knowingly and voluntarily
waives his or its jury trial rights. This waiver may not be modified orally, but
only in  writing,  and the  waiver  shall  apply to any  subsequent  amendments,
renewals,  supplements  or  modifications  to this  Agreement.  In the  event of
litigation,  this Agreement may be filed as a written  consent to a trial by the
court. 



     * * * * *  



        IN
WITNESS WHEREOF, the Parties have executed this Confidential Separation Agreement and
General Release effective as of the date of the first signature affixed below or as
otherwise provided in this Agreement. 




READ CAREFULLY BEFORE
SIGNING 



I have read this Confidential
Separation Agreement and General Release. I understand that by executing this Confidential
Separation Agreement and General Release I will relinquish any right or demand, other than
those created by or otherwise set forth in this Agreement, I may have against the
Releasees or any of them. 





Dated:      10/21/04  


 By:  
/s/Frank Cerminara   

          Frank Cerminara



          
      HERSHEY FOODS CORPORATION



Dated:      10/21/04  


 By:  
/s/Marcella K. Arline   

          Marcella K. Arline

                Senior Vice President,

      Chief People Officer











	 	  	 






HERSHEY FOODS
CORPORATION 




Long-Term Incentive
Program Participation Agreement 



        The
undersigned is an executive employee of Hershey Foods Corporation or one of its
subsidiaries (hereinafter collectively referred to as “Hershey”). I understand
that I have been selected to participate in the Key Employee Incentive Plan (the
“Plan”), including the Long-Term Incentive Program (“LTIP”) under the
Plan. I understand, acknowledge and agree that the purpose of this Agreement is to provide
for enhanced confidentiality requirements, an agreement not to compete with Hershey once I
become eligible for supplemental retirement benefits, and an arbitration program to be the
sole and exclusive method for resolving disputes. I understand and acknowledge that by
this Agreement, both I and Hershey, in order to avoid delay and expense, are mutually
waiving the right of access to a judicial forum for resolving disputes covered by the
arbitration program. I hereby accept the opportunity to participate in the Plan, including
the LTIP, and in consideration of my selection by Hershey to be a participant in the Plan
and being eligible to receive benefits under the Plan, I agree to the following: 




1.     Participation. 



        I
understand and agree that participating in the LTIP at any time is no guarantee I will be
selected to participate in the LTIP or any other aspect of the Plan in any future years. I
understand and agree that participation in the Plan and the LTIP is voluntary;
specifically, I understand that I am under no obligation to participate in the LTIP or any
other aspect of the Plan, and that I may retain my job if I decline to so participate. I
understand and agree that if I elect to participate in the Plan and the LTIP, then,
depending on my job performance, the financial performance of Hershey and the achievement
of certain goals and objectives, I will be eligible to receive Annual Incentive Program
Awards, Performance Stock Unit Awards and Stock Options, in accordance with the terms of
the Plan, as it may be amended from time to time. 




2.     Confidentiality. 



        I
acknowledge that due to the nature of my employment and the position of trust that I hold
with Hershey, I will have special access to, learn, be provided with, and in some cases
will prepare and create for Hershey, trade secrets and other confidential and proprietary
information relating to Hershey’s business, including, but not limited to,
information about Hershey’s manufacturing processes; manuals, recipes and ingredient
percentages; engineering drawings; product and process research and development; new
product information; cost information; supplier data; strategic business information;
marketing, financial and business development information, plans, forecasts, reports and
budgets; customer information; new product strategies, plans and project activities; and
acquisition and divestiture strategies, plans and project activities. I acknowledge and
agree











that
such information, whether or not in written form, is the exclusive property of Hershey,
that it has been and will continue to be of critical importance to the business of
Hershey, and that the disclosure of it to, or use by, competitors or others will cause
Hershey substantial and irreparable harm. Accordingly, I will not, either during my
employment or at any time after the termination (whether voluntary or involuntary) of my
employment with Hershey, use, reproduce or disclose any trade secrets or other
confidential information relating to the business of Hershey which is not generally
available to the public, except as may be specially authorized and necessary in
discharging my assigned duties as an employee of Hershey. I understand and agree that my
obligations under this Agreement shall be in addition to, rather than in lieu of, any
obligations I may already have under any Confidentiality Agreement or other agreement
with Hershey relating to confidential information or under any applicable statute or at
common law.  




3.     Unfair Competition. 



        I
understand and acknowledge that Hershey is engaged in the business of developing,
producing, marketing, selling and distributing confectionery products and
chocolate-related grocery products. I acknowledge that the scope of Hershey’s
business and operations is world-wide. I acknowledge that due to the nature of my
employment with Hershey, I have special access to, contact with, and information about,
Hershey’s business activities as described above and to its customers, suppliers,
agents, licensees and licensors. I acknowledge that Hershey has incurred considerable
expense and invested considerable time and resources in developing relationships with
customers, suppliers, agents, licensees and licensors, and that those relationships are
critical to the success of Hershey’s business. 



        Accordingly,
both (a) during the term of my employment with Hershey, and (b) for a period of three (3)
years following the termination of my employment for any reason, provided at the time of
such termination I am eligible to receive benefits under Hershey’s Supplemental
Executive Retirement Plan, I shall not, without the prior written consent of Hershey,
directly or indirectly serve or act as an officer, director, employee, consultant,
adviser, agent or representative for the domestic or worldwide confectionery or
chocolate-related grocery businesses of any entity or individual that is in competition
with Hershey’s confectionery or chocolate-related grocery businesses. 




4.     Survival of
Obligations. 



        Both
I and Hershey understand and agree that our respective rights and obligations under, and
the terms and conditions of, this Agreement (and the Mutual Agreement to Arbitrate Claims
appended hereto) shall apply and continue during, and survive the termination (for any
reason) of, my employment with Hershey. 


 2 







5.     Arbitration and
Mediation. 



        Both I
and Hershey promise to arbitrate any claim covered by the Mutual Agreement to Arbitrate
Claims which is attached hereto and incorporated in full herein by reference. 



        Both
I and Hershey further agree, before seeking arbitration of any claim, to engage in good
faith efforts to resolve the dispute through nonbinding mediation. Mediation shall be
conducted by, and in accordance with procedures for the mediation of employment disputes
of, one of the American Arbitration Association, the Judicial Arbitration + Mediation
Services, Inc. (JAMS/Endispute) or the Center for Public Resources (CPR) as Hershey and I
may agree (and if such agreement is not possible, then the mediation procedures of CPR
shall apply), together with any other procedures as may be agreed upon by me and Hershey. 




6.     Savings Clause and
Severability. 



        a. 
       All
provisions of this Agreement (and of the Mutual Agreement to Arbitrate Claims appended
hereto) are severable, and if any of them is determined to be invalid or unenforceable
for any reason, the remaining provisions and portions shall be unaffected thereby and
shall remain in full force to the fullest extent permitted by law.  



             b. 
       
          Without limiting the foregoing, I specifically agree that each of the covenants
          set forth in Paragraph 3 of this Agreement is severable; that if any of them is
          held invalid or unenforceable by reason of length of time, area covered or
          activity covered, or any combination thereof, or for any other reason, the court
          or arbitrator shall adjust, reduce or otherwise reform any such covenant to the
          extent necessary to cure any invalidity and to protect the interests of Hershey
          to the fullest extent of the law; that the area, time period and scope of
          activity restricted shall be the maximum area, time period and scope of activity
          the court or arbitrator deems valid and enforceable; and that, as reformed, such
          covenant shall then be enforced. 



             c. 
       
          Without limiting the foregoing, I also specifically agree that if any part of
          the Mutual Agreement to Arbitrate Claims is determined to be invalid or
          unenforceable for any reason, then the invalid or unenforceable portion shall be
          severed and the agreement to submit any claim to binding arbitration shall be
          interpreted and enforced as if the invalid or unenforceable portion did not
          appear. 




7.     Miscellaneous. 



             a. 
       
          Any notice to Hershey shall be in writing and shall be sent by certified mail to
          Hershey Foods Corporation, 100 Crystal A Drive, Hershey, PA 17033-0810,
          Attention: Vice President, Human Resources. Any notice to me shall be in writing
          and shall be sent to me by certified mail at the latest address listed for me in
          Hershey’s employment records, unless I specifically notify Hershey in
          writing that notice shall be delivered to me at a different address. Notice
          shall be deemed delivered when personally delivered or a properly addressed
          notice is deposited with the U.S. Postal Service for delivery by certified mail. 


 3 







             b. 
       
          I understand and agree that neither this Agreement nor the Mutual Agreement to
          Arbitrate Claims shall be construed in any way as an agreement or guarantee of
          employment for any period of time and that I remain an employee-at-will for all
          purposes. 



             c. 
       
          The rights and obligations under this Agreement and the Mutual Agreement to
          Arbitrate Claims shall inure to the benefit of, shall be binding upon, and may
          be enforced by and for the benefit of, Hershey Foods Corporation, any subsidiary
          or affiliate of Hershey Foods Corporation, and their successors and assigns. 



             d. 
       
          Any waiver by either Hershey or me of any breach, or the failure to enforce any
          of the terms or conditions, of this Agreement or the Mutual Agreement to
          Arbitrate Claims, shall not in any way affect, limit, or waive any rights
          thereafter to enforce, and compel strict compliance with, every term and
          condition of this Agreement and the Mutual Agreement to Arbitrate Claims. 



             e. 
       
          This Agreement and the Mutual Agreement to Arbitrate Claims constitute the
          entire agreement between Hershey and me with respect to the matters addressed
          herein and therein, there being no representations, warranties, commitments, or
          other agreements, except as set forth herein and therein. This Agreement and the
          Mutual Agreement to Arbitrate Claims may be amended only by an instrument in
          writing executed by me and an authorized officer of Hershey. 



             f. 
       
          The substantive law governing this Agreement shall be the law of the
          Commonwealth of Pennsylvania. The law of arbitrability shall be that set forth
          in the Federal Arbitration Act. If for any reason the Federal Arbitration Act is
          inapplicable, then the law of arbitrability shall be that of the Commonwealth of
          Pennsylvania. 



 4 







Long-Term Incentive
Program Participation Agreement 




Mutual Agreement To
Arbitrate Claims 



        I
recognize that differences may arise between Hershey Foods Corporation (the
“Company”) and me during or following my employment with the Company, and that
those differences may or may not be related to my employment. I understand and agree that
by entering into this Mutual Agreement to Arbitrate Claims (“Arbitration
Agreement”), I anticipate gaining the benefits of a speedy, impartial
dispute-resolution procedure. 



        I
understand that any reference in this Arbitration Agreement to the Company will be a
reference also to all subsidiary and affiliated entities, all benefit plans, the benefit
plans’ sponsors, fiduciaries, administrators, affiliates and agents, and all
successors and assigns of any of them. 




A.     Claims Covered by the
Arbitration Agreement. 



        The
Company and I mutually consent to the resolution by arbitration of all claims or
controversies (“claims”), past, present, or future, whether or not arising out
of my employment (or its termination), that the Company may have against me or that I may
have against the Company or against its officers, directors, employees or agents in their
capacity as such. The only claims that are arbitrable are those that, in the absence of
this Arbitration Agreement, would have been justiciable under applicable state or federal
law. The claims covered by this Arbitration Agreement include, but are not limited to,
claims arising out of, connected with or relating to the Long-Term Incentive Program
Participation Agreement and this Arbitration Agreement; claims for wages or other
compensation due; claims for breach of any contract or covenant (express or implied); tort
claims; claims for discrimination (including, but not limited to, race, sex, sexual
orientation, religion, national origin, age, marital status, or medical condition,
handicap or disability); claims for benefits (except claims under an employee benefit or
pension plan that either specifies that its claims procedure shall culminate in an
arbitration procedure different from this one or is underwritten by a commercial insurer
which decides claims); and claims for violation of any federal, state, or other
governmental law, statute, regulation, or ordinance, except as otherwise provided in this
Arbitration Agreement. 




B.     Claims Not Covered by
the Arbitration Agreement. 



        Claims
I may have for workers’ compensation or unemployment compensation benefits are not
covered by this Agreement. 



        Also
not covered are claims by the Company for injunctive and/or other equitable relief,
including but not limited to those for unfair competition and/or the use and/or
unauthorized disclosure of trade secrets or confidential information, as to which I
understand and agree that the Company may seek and obtain relief from a court of competent
jurisdiction. In such an injunctive/equitable proceeding, I understand and agree that the
court is entitled to and will award to the prevailing party costs and actual
attorneys’ fees incurred. 


 5 







C.     Required Notice of
All Claims. 



        The
Company and I agree that the aggrieved party must give written notice of any claim to the
other party. Written notice to the Company, or its officers, directors, employees or
agents, shall be sent pursuant to the notice provision of the Agreement to which this
Arbitration Agreement is appended. 



The written notice shall identify and
describe the nature of all claims asserted and the facts upon which such claims are based. 




D.     Representation. 



        Any
party may be represented by an attorney or other representative selected by the party. 




E.     Discovery. 



        Each
party shall have the right to take the deposition of one individual and any expert witness
designated by another party. Each party also shall have the right to make requests for
production of documents to any party. The subpoena right specified below shall be
applicable to discovery pursuant to this paragraph. Additional discovery may be had only
where the arbitrator selected pursuant to this Arbitration Agreement so orders, upon a
showing of substantial need. 




F.     Designation of
Witnesses. 



        At
least 30 days before the arbitration, the parties must exchange lists of witnesses,
including any expert, and copies of all exhibits intended to be used at the arbitration. 




G.     Subpoenas. 



        Each
party shall have the right to subpoena witnesses and documents for the arbitration. 




H.     Arbitration
Procedures. 



        The
arbitration will be held under the auspices of one of the American Arbitration
Association, Judicial Arbitration + Mediation Services, Inc. or Center for Public
Resources, with the designation of such sponsoring organization to be made by the party
that did not initiate the claim. 



        The
arbitration shall be confidential and closed to the public. Any evidence proffered in the
arbitration shall be held in strict confidence and not disclosed to any third party. 


 6






        The
Company and I agree that, except as provided in this Agreement, the arbitration shall be
in accordance with the then-current dispute arbitration procedures of the sponsoring
organization for the type of claim involved. The arbitration shall take place in or near
the location in which I am or was last employed by the Company. 



        The
Arbitrator shall be selected as follows. The sponsoring organization shall give each party
a list of 7 arbitrators. Each party may strike all names on the list it deems
unacceptable. If only one common name remains on the lists of all parties, that individual
shall be designated as the Arbitrator. If more than one common name remains on the lists
of all parties, the parties shall strike names alternately from the list of common names
until only one remains. The party who did not initiate the claim shall strike first. If no
common name exists on the lists of all parties, the sponsoring organization shall furnish
an additional list and the process shall be repeated. If no arbitrator has been selected
after two lists have been distributed, then the parties shall strike alternately from a
third list, with the party initiating the claim striking first, until only one name
remains. That person shall be designated as the Arbitrator. 



        The
Arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the
Commonwealth of Pennsylvania or federal law, or both, as applicable to the claim(s)
asserted. The Arbitrator is without jurisdiction to apply any different substantive law,
or law of remedies. The Federal Rules of Evidence shall apply. The Arbitrator, and not any
federal, state, or local court or agency, shall have exclusive authority to resolve any
dispute relating to the interpretation, applicability, enforceability or formation of this
Arbitration Agreement, including but not limited to any claim that all or any part of this
Arbitration Agreement is void or voidable. The arbitration shall be final and binding upon
the parties, except as provided in this Arbitration Agreement. 



        The
Arbitrator shall have jurisdiction to hear and rule on pre-hearing disputes and is
authorized to hold pre-hearing conferences by telephone or in person, as the Arbitrator
deems necessary. The Arbitrator shall have the authority to entertain a motion to dismiss
and/or a motion for summary judgment by any party and shall apply the standards governing
such motions under the Federal Rules of Civil Procedure. 



        Either
party, at its expense, may arrange for and pay the cost of a court reporter to provide a
stenographic record of proceedings. 



        Either
party, upon request at the close of hearing, shall be given leave to file a post-hearing
brief. The time for filing such a brief shall be set by the Arbitrator. 



        The
Arbitrator shall render a proposed award and opinion in the form typically rendered in
labor arbitrations. 



        Either
party shall have the right, within 20 days of issuance of the Arbitrator’s proposed
award and opinion, to file with the Arbitrator a motion to reconsider (accompanied by a
supporting brief), and the other party shall have 20 days from the date of the motion to
respond. The Arbitrator thereupon shall reconsider the issues raised by the motion and,
promptly, either confirm or change the decision, which (except as provided by this
Arbitration Agreement) shall then be final and conclusive upon the parties. The costs of
such a motion for reconsideration and written opinion of



 7 






the
Arbitrator shall be borne by the party prevailing on the motion, unless the Arbitrator
orders otherwise.  




I.     Arbitration Fees and
Costs. 



        The
Company and I shall equally share the fees and costs of the Arbitrator; provided, however,
that my maximum contribution will be no more than 20% of the amount at issue. Each party
will deposit funds or post other appropriate security for its share of the
Arbitrator’s fee, in an amount and manner determined by the Arbitrator, 10 days
before the first day of hearing. Each party shall pay for its own costs and
attorneys’ fees, if any. However, if any party prevails on a statutory claim which
affords the prevailing party attorneys’ fees, or if there is a written agreement
providing for fees, the Arbitrator may award fees to the prevailing party as provided by
statute or agreement. 




J.     Exclusivity, Waiver
and Binding Effect. 



        The
procedure set out in this Arbitration Agreement is the exclusive procedure for resolving
claims covered hereunder. The resolution of any claim covered by this Arbitration
Agreement pursuant to the procedure set out herein shall be final and binding on the
parties to the fullest extent permitted by law. Both I and the Company expressly waive any
right to resolve any claim covered by this Arbitration Agreement through any other means,
including by filing a lawsuit in court for trial by the court or before a jury. Both I and
the Company are precluded from bringing or raising in court or before another forum any
claim which could have been brought or raised hereunder, unless the right to pursue a
statutory claim or remedy is expressly preserved by law. Neither I nor the Company shall
seek to enjoin any proceeding hereunder on the basis that any award resulting therefrom
would not be enforceable. 




K.     Interstate Commerce. 



        I
understand and agree that the Company is engaged in transactions involving interstate
commerce. 




L.     Consideration. 



        The
promises by the Company and by me to arbitrate differences, rather than litigate them
before courts or other bodies, provide consideration for each other. In addition, my
participation in this Long-Term Incentive Program provides further consideration for this
Arbitration Agreement. 



 8 







        IN
WITNESS WHEREOF, by signing my name below, I am acknowledging that I am entering into this
Long-Term Incentive Program Participation Agreement and Mutual Agreement to Arbitrate
Claims voluntarily and with a full understanding of all of their terms and conditions,
and, intending to be legally bound, I am agreeing to such terms and conditions. 



     
          
          
          Long-Term Incentive
Program Participant 





/s/ Frank Cerminara

                                                      (Signature)


                                                      Frank Cerminara


                                                     Name (Print)




Date:     1/23/97      



        IN
WITNESS WHEREOF, Hershey Foods Corporation and/or its employing subsidiary, intending to
be legally bound, has or have caused this Agreement to be signed by its or their
authorized officer. 




/s/ Robert M. Reese

                                                     Vice President




                                                     Date:    Jan. 17, 1997    




 9