Document:

EXHIBIT 10.4

                            HERSHEY FOODS CORPORATION

                           AMENDED AND RESTATED (1999)

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                                      EFFECTIVE June 9, 1999

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                           HERSHEY FOODS CORPORATION

                          AMENDED AND RESTATED (1999)

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

         1.  PURPOSE OF PLAN.  The purpose of the Amended  and  Restated  (1999)
Supplemental  Executive  Retirement Plan  (hereinafter  called the "Plan") is to
obtain for Hershey Foods Corporation  (hereinafter called the "Corporation") all
of the  benefits  which  flow  from  maintaining  a  strong  management  team by
providing  to  executive  and  upper  level  management  employees  the means to
continue  their  attained  standard of living during  retirement and by offering
benefits  that will assist in attracting  executive  and upper level  management
employees of outstanding  ability.  The Plan is an amendment to and  restatement
(as amended) of the Hershey Foods Corporation Amended and Restated  Supplemental
Executive Retirement Plan, as amended from time to time which was in effect from
November 1, 1994 to June 8, 1999.

         2.       DEFINITIONS.  The  following  words and  phrases  as used in
the Plan  shall have the  following  meanings,  unless a different meaning is
plainly required by the context:

                  a.  "Cause"  means the willful  engaging by the
Participant  in illegal  conduct or gross  misconduct  which is materially and
demonstrably injurious to the Corporation.

         For purposes of this definition,  no act or failure to act, on the part
of the Participant,  shall be considered "willful" unless it is done, or omitted
to be done, by the Participant in bad faith and without  reasonable  belief that
the  Participant's   action  or  omission  was  in  the  best  interest  of  the
Corporation.  Any act or failure to act,  based upon prior approval given by the
Board or upon  the  instruction  or with the  approval  of the  Chief  Executive
Officer or the  Participant's  superior  or based upon the advice of counsel for
the  Corporation  shall be  conclusively  presumed to be done,  or omitted to be
done,  by  the  Participant  in  good  faith  and in the  best  interest  of the
Corporation.

                  b.  "Committee" means the Compensation and Executive
 Organization Committee of the Board of Directors of the Corporation (the
 "Board").

                  c. "Deferred Retirement Date" means the first day of the month
following  a  Participant's  termination  of  employment  with  the  Corporation
provided such termination occurs after his Normal Retirement Date.

                  d.  "Disability"  or  "Disabled",  for  purposes of this Plan,
shall have the same meaning as provided in Section 1.16 of the Retirement  Plan,
as such section may be amended from time to time.

                  e.  "Early  Retirement  Date" means the first day of any month
following a Participant's  termination of employment with the Corporation  which
is coincident with or

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following  a  Participant's   fifty-fifth  (55th)  birthday  and  prior  to  the
Participant's Normal Retirement Date.

                  f.  "Final  Average  Compensation"  means  the  sum of (1) the
highest annual average of a Participant's  basic salary paid or accrued over any
thirty-six  (36)  consecutive  month  period  during  his last ten (10) years of
employment with the Corporation and (2) the highest annual average of his annual
awards under the Annual Incentive Program  (hereinafter called the "AIP") of the
Corporation's Key Employee Incentive Plan ("KEIP") paid or accrued over any five
(5) consecutive calendar years during his last ten (10) years of employment with
the Corporation.  If a Participant dies, retires, or suffers a Disability during
a calendar year and only a partial AIP award is made for that year, for purposes
of the Plan,  his AIP award for such year will be  considered to equal the award
actually  made  divided by the fraction of such year that he was employed by the
Corporation  prior to his death,  retirement  or  Disability.  If a  Participant
otherwise terminates employment with the Corporation during a calendar year, his
AIP award for that year for purposes of the Plan will be  considered  to be zero
(0), regardless of whether any AIP award is actually made for that year.

                  g. "GATT Interest Rate" means,  for purposes of this Plan, for
any specific month, the annual interest rate on 30-year  Treasury  securities as
specified  by the  Commissioner  of the  Internal  Revenue  Service  in  revenue
rulings,  notices or other guidance,  published in the Internal  Revenue Service
Bulletin,  decreased by the percentage  applicable to such month as set forth on
Schedule I attached hereto.

                  h. "Lump Sum Interest Rate" means, as of any specific date:

                           (x) after  January  1, 1998 and prior to  January  1,
         2000 the sum of one twelfth (1/12th) of each PBGC Interest Rate for the
         twelve months preceding such date;

                           (y) after  December  31, 1999 and prior to January 1,
         2001,  the sum of  one-twelfth  (1/12th) of each GATT Interest Rate for
         November  1999 and each month  thereafter  to and  including the second
         month  preceding  the month during which such date occurs plus,  if the
         number  of months  for  which a GATT  Interest  Rate is  determined  as
         described is less than twelve, the sum of one-twelfth  (1/12th) of each
         PBGC  Interest  Rate for  December  1999 and  each  preceding  month in
         reverse  chronological order until the total number of months for which
         a GATT Interest  Rate and/or a PBGC  Interest Rate has been  determined
         equals twelve; and

                           (z) after  December 31, 2000,  the sum of one twelfth
         (1/12th) of each GATT Interest Rate for the twelve  consecutive  months
         beginning with the thirteenth  (13th) month  preceding the month during
         which such date occurs.

                   i. "Normal  Retirement  Date" means, for the purposes of this
Plan,  the first day of the month  nearest a  Participant's  sixty-fifth  (65th)
birthday,  except that if his birthday is

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equally near the first of two calendar months,  the first day of the month prior
to his sixty-fifth (65th) birthday shall be his Normal Retirement Date.

                   j. "PBGC Interest Rate" means,  for any specific  month,  the
interest rate used by the Pension  Benefit  Guaranty  Corporation for such month
for purposes of valuing  immediate  annuities for  terminating  single  employer
plans with insufficient assets to pay guaranteed benefits.

                   k. "Participant"  means an employee of the Corporation who is
eligible to receive a benefit under the Plan in accordance  with the  provisions
of Paragraph 3 (I.E., has attained age 55, has ten (10) Years of Service and has
participated in the performance share unit portion of the KEIP for at least five
(5) of his last ten (10) years of employment with the Corporation).

                   l. "Retirement Plan" means the Corporation's Retirement Plan,
amended and restated  effective  January 1, 1989, as in effect from time to time
and any successor plan thereto.

                   m. "Years of Service",  for purposes of this Plan, shall have
the same meaning as provided in Section  1.56 of the  Retirement  Plan,  as such
section may be amended from time to time.

         3.  ELIGIBILITY.  An  employee of the  Corporation  will be eligible to
receive  a  benefit  pursuant  to  Section  4 of the Plan if, at the time of his
termination of employment with the Corporation, such employee (i) is at least 55
years of age, (ii) has ten (10) Years of Service,  and (iii) has participated in
the performance share unit portion of the KEIP for at least five (5) of his last
ten (10) years of  employment  with the  Corporation.  No  Participant  shall be
entitled  to receive  any  benefits  under the Plan if his  employment  with the
Corporation  is terminated  for Cause.  Notwithstanding  the above,  an employee
whose  employment  is  terminated  with  the  Corporation  prior  to his  Normal
Retirement  Date for reason of  Disability  will be treated as  provided  for in
Paragraph 4.c.

         4.  RETIREMENT BENEFITS.

                  a. Normal Retirement  Benefit.  An employee who qualifies as a
Participant, and who retires (or whose employment is otherwise terminated, other
than for Cause) on or after his Normal  Retirement  Date shall be entitled under
the Plan to  receive  a  normal  retirement  benefit  which  shall be an  annual
benefit, payable in monthly installments, equal to:

                           (1) the product of three and  two-thirds  percent
         (3 2/3%) of his  Final  Average  Compensation  and his Years of Service
         not in excess of fifteen (15) Years of Service;

                           reduced by:

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                           (2) one hundred  percent (100%) of the  Participant's
         retirement   benefit   under   the   Retirement   Plan  and  any  other
         tax-qualified   defined   benefit   pension  plan   maintained  by  the
         Corporation  or any affiliate  thereof or any defined  benefit  pension
         plan  maintained  by  any  other  entity,  payable  as a  life  annuity
         commencing  at his Normal  Retirement  Date or his Deferred  Retirement
         Date if he retires  after his Normal  Retirement  Date,  regardless  of
         whether  such  benefit  payment is in that form or begins at that time;
         and

                           (3) one hundred  percent (100%) of the primary social
         security  benefit to which the  Participant  would be  entitled  on his
         Normal  Retirement  Date or his Deferred  Retirement Date if he retires
         after his Normal  Retirement Date regardless of whether he receives any
         portion of such primary Social Security benefit on such date.

         Payment of such benefit shall commence on his Normal Retirement Date if
he retires (or otherwise has his employment terminated, other than for Cause) on
such date and on his Deferred  Retirement  Date if he retires (or  otherwise has
his  employment  terminated,  other than for Cause) after his Normal  Retirement
Date.

                  b. Early  Retirement  Benefit.  An employee who qualifies as a
Participant, and who retires (or whose employment is otherwise terminated, other
than for  Cause) on or after his Early  Retirement  Date and prior to his Normal
Retirement Date shall be entitled under the Plan to receive an early  retirement
benefit which shall be an annual benefit payable in monthly installments,  equal
to:

                           (1) the product of three and  two-thirds  percent
 (3 2/3%) of his Final  Average  Compensation  and his Years of Service not in
 excess of fifteen (15) Years of Service;

                           reduced by:

                           (2) one  hundred  percent  (100%)  of his  retirement
         benefit under the Retirement Plan and any other  tax-qualified  defined
         benefit  pension plan  maintained by the  Corporation  or any affiliate
         thereof or any defined  benefit  pension plan  maintained  by any other
         entity,  payable as a life annuity  commencing at his Early  Retirement
         Date or the first  date  thereafter  on which  such  benefits  would be
         payable if they are not payable on his Early Retirement Date regardless
         of whether such benefit payment is in that form or begins at that time;
         and

                           (3) one hundred  percent (100%) of the primary Social
         Security  benefit to which the  Participant  would be  entitled  on his
         Early  Retirement  Date or the  first  date  thereafter  on which  such
         benefits  would  be  payable  if they  are  not  payable  on his  Early
         Retirement  Date  regardless of whether he receives any portion of such
         primary Social Security benefit on such date; and

                           (4) the product of (a) the difference between (1) and
         the sum of (2) and (3), (b) five-twelfths of a percent (5/12%), and (c)
         the number of complete

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         calendar months by which the Participant's  date of termination of
         employment precedes his sixtieth (60th) birthday.

         Payment of such  benefit  shall  commence on the first day of the month
coincident with the Participant's retirement or other termination of employment,
other than for Cause.

                  c.  Disability  Retirement  Benefit.  If an employee who is an
active  participant in the performance  share unit portion of the KEIP suffers a
Disability  prior to his  Normal  Retirement  Date  and  while  employed  by the
Corporation, the period of his Disability will be recognized as Years of Service
and as years of participation in the performance  share unit portion of the KEIP
under the Plan. If such Disability  continues to his Normal Retirement Date, for
purposes  of the Plan,  he will  retire on that date and will be  entitled  to a
normal  retirement   benefit   calculated  in  accordance  with  Paragraph  4.a.
commencing on that date. In calculating  the benefit under  Paragraph  4.a., the
Participant's  Final  Average  Compensation  shall be equal to his  annual  base
compensation  immediately  prior to his  Disability  plus the average of his AIP
earned during the three (3) years  immediately  prior to the commencement of his
Disability.

                  d. Pre-Retirement  Death Benefit. If a Participant dies before
his employment by the Corporation terminates,  his designated  beneficiary(ies),
or his estate if he has not  designated  any  beneficiary  or  beneficiaries  in
accordance  with procedures  established by the Committee,  shall receive within
ten (10) days of the  Participant's  death a death benefit equal to the lump sum
present value of one hundred percent (100%) of the retirement benefit that would
have been payable to the Participant  under  Paragraphs 4.a. or 4.b.  (including
the spousal  survivor benefit payable pursuant to Paragraph 4.e. with respect to
any  Participant  survived  by a spouse)  if he had  retired  on the date of his
death. The lump sum present value of the retirement  benefit shall be calculated
using:  (x) for each  Participant  who was a Participant on January 1, 1998, (i)
the 83 GAM  mortality  tables;  and (ii) an  interest  rate  equal to the sum of
one-twelfth  (1/12th)  of each PBGC  Interest  Rate for the twelve  (12)  months
immediately  preceding  the date of the  Participant's  death;  and (y) for each
Participant  who first  became a  Participant  after  January 1,  1998,  (i) the
prevailing   commissioner's  standard  mortality  table  (described  in  Section
807(d)(5)(A) of the Internal Revenue Code of 1986, as amended from time to time)
used to determine reserves for group annuity contracts issued on the date of the
Participant's  death (without regard to any other  subparagraph for such Section
807(d)(5))  that is  prescribed  by the  Commissioner  of the  Internal  Revenue
Service in revenue rulings, notices, or other guidance published in the Internal
Revenue Bulletin;  and (ii) an interest rate equal to the Lump Sum Interest Rate
as of the date of the Participant's death.

                  e.  Post-Retirement  Death  Benefit.  If a Participant  who is
receiving monthly retirement  benefits under this Plan following his termination
of employment by the Corporation  dies, his surviving  spouse, if he is survived
by a spouse,  shall be  entitled  to receive a death  benefit  which  shall be a
monthly  payment for the spouse's life,  beginning on the first day of the month
following the Participant's death, equal to:

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                           (1) fifty percent (50%) of the monthly  retirement
         benefit to which the Participant was entitled under the Plan prior to
         his death;

                           reduced by:

                           (2) the monthly  annuity value of any life  insurance
         provided  by the  Corporation  or any  affiliate  thereof  for  retired
         employees  that  is  in  excess  of  post-retirement  group  term  life
         insurance  regularly  provided  by the  Corporation  or  any  affiliate
         thereof.

         5.  ADMINISTRATION  OF THE PLAN.  The  Committee  is  charged  with the
administration  of the Plan.  It shall have full power and authority to construe
and interpret the Plan. Its decisions shall be final,  conclusive and binding on
all parties. Subject to Paragraph 10 of this Plan, the Committee shall also have
the  power,  in its sole  discretion,  at any time (i) to waive,  in whole or in
part,  application of any of the  eligibility  requirements of Paragraph 3 or of
the benefit  reduction  factors in Paragraph 4.a. and 4.b. and (ii) to determine
the timing and form of payment of any benefit under the Plan, in the case of any
individual Participant or other employee of the Corporation participating in, or
who has participated in, the performance share unit portion of the KEIP.

         6. OPTIONAL FORMS OF PAYMENT. In lieu of the monthly retirement benefit
(including  the spousal  survivor  benefit  payable  pursuant to Paragraph  4.e.
hereof) payable  pursuant to Paragraph 4.a. or 4.b. hereof to a Participant (and
his surviving  spouse) who retires (or whose employment is terminated other than
for Cause) after August 2, 1994 (such benefit  payable to a  Participant  and/or
his surviving  spouse is herein  referred to for purposes of this Paragraph 6 as
the "Applicable Retirement Benefit"),  such Participant may elect to receive the
following form of benefit payment:

         A lump sum cash  payment,  payable to the  Participant  within ten (10)
days after the Participant's  date of retirement (or the  Participant's  date of
termination of employment other than for Cause),  equal to the actuarial present
value of the  Applicable  Retirement  Benefit,  calculated  using:  (x) for each
Participant  who was a Participant  on January 1, 1998, (i) the 83 GAM mortality
tables;  and (ii) an interest  rate equal to one  twelfth  (1/12th) of each PBGC
Interest  Rate  for the  twelve  months  immediately  preceding  the date of the
Participant's retirement (or the Participant's date of termination of employment
other than for Cause), calculated in accordance with the Corporation's practices
for  determining  retirement  benefits;  and (y) for each  Participant who first
became a  Participant  after January 1, 1998 (i) the  prevailing  commissioner's
standard  mortality  table  (described in Section  807(d)(5)(A)  of the Internal
Revenue Code of 1986,  as amended from time to time) used to determine  reserves
for group annuity contracts issued on the date of the  Participant's  retirement
(or the  Participant's  date of termination of employment  other than for Cause)
(without regard to any other  subparagraph  for such Section  807(d)(5)) that is
prescribed  by the  Commissioner  of the  Internal  Revenue  Service  in revenue
rulings,  notices, or other guidance published in the Internal Revenue Bulletin;
and (ii) an interest  rate equal to the Lump Sum Interest Rate as of the date of
the Participant's retirement.

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Prior to March 1,  1998,  any such  election  must be made at least one  hundred
(180) days prior to the date that the  Applicable  Retirement  Benefit  payments
would otherwise become payable.  After February 28, 1998, any such election must
be made by those  Participants  designated by the Committee from time to time at
least two (2) years and by all other Participants at least one (1) year prior to
the date that the Applicable  Retirement Benefit payments would otherwise become
payable.

         7.       PAYMENT UPON CHANGE IN CONTROL

                  a. Any former employee or the surviving  spouse of an employee
or former employee who is receiving a benefit under  Paragraphs 4.a., 4.b., 4.d.
or 4.e.  hereof (or  pursuant  to the terms of any  version of this Plan) at the
time of a Change in Control  (collectively  or individually,  "SERP  Recipient")
shall receive,  in lieu of the future monthly  retirement benefit (including the
spousal  survivor benefit in the case of a benefit under Paragraph 4.a. or 4.b.)
to which he is entitled  (such future  benefit  payable to the SERP Recipient is
herein referred to for purposes of this paragraph 7.a as the "Future  Retirement
Benefit"),  a  lump  sum  cash  payment,  payable  to  the  SERP  Recipient,  as
applicable,  within ten (10) days after a Change in Control  (or such later date
that is  forty-five  (45)  days  after  the  notice  required  by the  following
provisions of this Paragraph 7.a. is provided to the applicable SERP Recipient),
equal  to  the  actuarial  present  value  of  his  Future  Retirement  Benefit,
calculated  using:  (i) the 83 GAM mortality  tables;  and (ii) an interest rate
equal to the PBGC Interest Rate as of the date of the Change of Control.

                  Notwithstanding   the   foregoing,   the  provisions  of  this
Paragraph 7.a. shall not apply with respect to a SERP Recipient unless such SERP
Recipient  consents to the application of this Paragraph 7.a. within thirty (30)
days after the date the SERP Recipient  receives  written notice of the terms of
this Paragraph 7.a., as provided for by the following sentence.  The Corporation
shall  provide  each  SERP  Recipient,  a  written  notice  of the terms of this
Paragraph 7.a. and the consent requirement  contained herein not later than five
(5) days after the  earliest  of (x) the  occurrence  of a  Potential  Change in
Control,  (y) the date that the Corporation  provides notice to its stockholders
that a vote on a transaction which, if consummated, would constitute a Change in
Control will be submitted to the Corporation's stockholders for approval, or (z)
the occurrence of a Change of Control.

                     b. For purposes of Paragraphs 7 and 10, a "Change in
Control" means:

                           (1) Individuals who, on June 8, 1999,  constitute the
         Board (the "Incumbent Directors") cease for any reason to constitute at
         least a majority  of the  Board,  provided  that any person  becoming a
         director  subsequent to June 8, 1999,  whose election or nomination for
         election was approved by a vote of at least two-thirds of the Incumbent
         Directors  then on the Board (either by specific vote or by approval of
         the proxy statement of the Corporation in which such person is named as
         nominee for director,  without  written  objection to such  nomination)
         shall be an Incumbent Director;  PROVIDED,  HOWEVER, that no individual
         initially  elected or nominated as a director of the  Corporation  as a
         result of an actual or  threatened  election  contest (as  described in
         Rule 14a-11  under the  Exchange  Act)  ("Election  Contest")  or other
         actual or  threatened  solicitation  of  proxies or  consents

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         by or on behalf of any Person other than the  Board ("Proxy  Contest"),
         including  by reason of any  agreement  intended to avoid or settle any
         Election Contest or Proxy Contest,  shall be deemed an Incumbent
         Director;  and PROVIDED FURTHER,  HOWEVER, that a director who has been
         approved by the Hershey  Trust while it  beneficially  owns more than
         50% of the  combined  voting power of the then outstanding voting
         securities of the Corporation entitled to vote generally in the
         election of directors (the "Outstanding Company Voting Power") shall be
         deemed to be an Incumbent Director;

                           (2) The  acquisition  or  holding  by any  Person  of
         beneficial  ownership  (within the  meaning of Section  13(d) under the
         Exchange Act and the rules and regulations  promulgated  thereunder) of
         shares of the  Common  Stock  and/or  the  Class B Common  Stock of the
         Corporation  representing 25% or more of either (i) the total number of
         then  outstanding  shares of both Common Stock and Class B Common Stock
         of the  Corporation  (the  "Outstanding  Company  Stock")  or (ii)  the
         Outstanding  Company  Voting Power;  provided that, at the time of such
         acquisition or holding of beneficial  ownership of any such shares, the
         Hershey  Trust  does  not   beneficially  own  more  than  50%  of  the
         Outstanding Company Voting Power; and provided,  further, that any such
         acquisition  or holding  of  beneficial  ownership  of shares of either
         Common Stock or Class B Common Stock of the  Corporation  by any of the
         following  entities  shall  not by itself  constitute  such a Change in
         Control hereunder: (i) the Hershey Trust; (ii) any trust established by
         the Corporation or by any Subsidiary for the benefit of the Corporation
         and/or  its  employees  or those of a  Subsidiary;  (iii) any  employee
         benefit  plan  (or  related  trust)  sponsored  or  maintained  by  the
         Corporation or any  Subsidiary;  (iv) the Corporation or any Subsidiary
         or (v) any underwriter  temporarily  holding securities  pursuant to an
         offering of such securities;

                           (3)  The   approval  by  the   stockholders   of  the
         Corporation   of   any   merger,   reorganization,    recapitalization,
         consolidation  or  other  form of  business  combination  (a  "Business
         Combination") if, following  consummation of such Business Combination,
         the Hershey Trust does not  beneficially own more than 50% of the total
         voting power of all  outstanding  voting  securities  eligible to elect
         directors  of (x) the  surviving  entity or  entities  (the  "Surviving
         Corporation")  or (y) if applicable,  the ultimate  parent  corporation
         that directly or indirectly has  beneficial  ownership of more than 50%
         of the combined voting power of the then outstanding  voting securities
         eligible to elect directors of the Surviving Corporation; or

                           (4)  The   approval  by  the   stockholders   of  the
         Corporation   of  (i)  any  sale  or  other   disposition   of  all  or
         substantially  all of the  assets of the  Corporation,  other than to a
         corporation (the "Acquiring Corporation") if, following consummation of
         such sale or other  disposition,  the Hershey Trust  beneficially  owns
         more  than 50% of the  total  voting  power of all  outstanding  voting
         securities eligible to elect directors (x) of the Acquiring Corporation
         or (y) if applicable,  the ultimate parent corporation that directly or
         indirectly  has  beneficial  ownership of more than 50% of the combined
         voting  power of the then  outstanding  voting  securities  eligible to
         elect directors of the Acquiring Corporation,  or (ii) a liquidation or
         dissolution of the Corporation.

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                     c. For purposes of Paragraphs 7 and 10, a "Potential Change
 in Control" means:

                           (1) The  Hershey  Trust by action of any of the Board
         of Directors of Hershey Trust Company;  the Board of Managers of Milton
         Hershey School; the Investment  Committee of the Hershey Trust;  and/or
         any of the officers of Hershey Trust Company or Milton  Hershey  School
         (acting  with  authority)  undertakes  consideration  of any action the
         taking of which  would lead to a Change in  Control as defined  herein,
         including, but not limited to consideration of (i) an offer made to the
         Hershey  Trust to purchase any number of its shares in the  Corporation
         such that if the Hershey Trust accepted such offer and sold such number
         of shares in the  Corporation  the  Hershey  Trust might no longer have
         more than 50% of the Outstanding Company Voting Power, (ii) an offering
         by the Hershey Trust of any number of its shares in the Corporation for
         sale such that if such sale were consummated the Hershey Trust might no
         longer have more than 50% of the  Outstanding  Company  Voting Power or
         (iii)  entering  into any agreement or  understanding  with a person or
         entity that would lead to a Change in Control; or

                           (2) the Board  approves a  transaction  described  in
         subsection  (2),  (3) or (4) of the  definition  of a Change in Control
         contained in Paragraph 7.b.

                  d. For purposes of this Paragraph 7: (i) "Hershey Trust" means
either or both of (a) the Hershey Trust Company, a Pennsylvania corporation,  as
Trustee for the Milton  Hershey  School,  or any  successor to the Hershey Trust
Company as such  trustee,  and (b) the Milton  Hershey  School,  a  Pennsylvania
not-for-profit  corporation;  (ii)  "Exchange  Act"  shall  mean the  Securities
Exchange Act of 1934 and the rules and regulations promulgated thereunder; (iii)
"Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d)(3) and 14(d) thereof;  and (iv) "Subsidiary"
shall  mean  any  corporation   controlled  by  the  Corporation,   directly  or
indirectly.

         8.  PAYMENT OF  BENEFITS.  Nothing  contained in the Plan and no action
taken  pursuant to the  provisions  of the Plan shall  create or be construed to
create a trust of any kind, or a fiduciary  relationship between the Corporation
and the  Participant,  his spouse or any other person.  No person other than the
Corporation  shall by virtue of the  provisions of the Plan have any interest in
such assets.  To the extent that any person acquires a right to receive payments
from the  Corporation  under the Plan,  such right shall be no greater  than the
right of any unsecured  general  creditor of the  Corporation.  The right of the
Participant  or any other person to the payment of benefits under the Plan shall
not be assigned, transferred, pledged or encumbered; such payments and the right
thereto are expressly  declared to be  non-assignable  and  nontransferable.  No
payments  hereunder  shall  be  subject  to the  claim of the  creditors  of the
Participant nor of any other person entitled to payments hereunder. Any payments
required  to be made  pursuant  to the  Plan to a  person  who is  under a legal
disability  may be made by the  Corporation to or for the benefit of such person
in such of the following ways as the Committee shall determine:

                  a.       directly to such person.
                  b.       to the legal representative of such person.

                                       9
<PAGE>

                  c.       to a near relative of such person to be used for such
person's benefit.
                  d.       directly in payment of expenses of support,
maintenance or education of such person.

                   The  Corporation   shall  not  be  required  to  see  to  the
application by any third party of any payments made pursuant to the Plan.

         9.   EFFECTIVE  DATE  OF  PLAN.   This  Amended  and  Restated   (1999)
Supplemental  Executive  Retirement  Plan  shall be  effective  June 9, 1999 and
Participants  who become eligible to retire under the Plan on or after that date
shall be entitled to the benefits provided hereunder.

         10.  AMENDMENT,  SUSPENSION OR  TERMINATION  OF THE PLAN.  The Board of
Directors of the  Corporation  may, at any time,  suspend or terminate the Plan.
The Board may also from time to time,  amend the Plan in such respects as it may
deem  advisable in order that  benefits  provided  hereunder  may conform to any
change  in law or in other  respects  which  the  Board  deems to be in the best
interest of the Corporation. No such suspension, termination or amendment of the
Plan shall adversely  affect any right of any person who is a Participant at the
time of such  suspension,  termination  or  amendment  or his  beneficiary(ies),
estate or surviving spouse, as applicable, to receive benefits under the Plan in
accordance with its provisions in effect  immediately  prior to such suspension,
termination   or   amendment   without   the   consent   of  such   Participant,
beneficiary(ies),  estate or surviving  spouse.  Any benefits  payable under the
terms of the Plan at the time of any suspension, termination or amendment of the
Plan shall remain in effect according to their original terms, or such alternate
terms as may be in the best  interests  of both  parties  and  agreed  to by the
Participant or his  beneficiaries,  estate or surviving  spouse,  as applicable.
Notwithstanding the foregoing,  (a) the Plan may not be terminated or amended in
any manner that is adverse to the  interests of a  Participant  or the surviving
spouse of a  Participant  without the consent of the  Participant  or  surviving
spouse,  as applicable,  either:  (i) after a Potential Change in Control occurs
and for one (1) year following the cessation of the Potential Change in Control,
or (ii) for a two year period  beginning on the date of a Change in Control (the
"Coverage Period"); and (b) no termination of this Plan or amendment hereof in a
manner adverse to the interests of any  Participant  (without the consent of the
Participant  or surviving  spouse)  shall be effective  if such  termination  or
amendment  occurs  (i) at the  request  of a third  party  who has  taken  steps
reasonably  calculated to effect a Change of Control, or (ii) in connection with
or in anticipation of a Change of Control.  After the Coverage Period,  the Plan
may not be amended or terminated in any manner that would  adversely  affect the
entitlement of a Participant or his surviving spouse (without the consent of the
Participant or surviving  spouse) to benefits that have accrued  hereunder.  For
purposes of the  immediately  preceding  two  sentences  of this  Paragraph  10,
"Participant" shall include any employee of the Corporation participating in the
performance  share unit  portion  of the KEIP  (regardless  of whether  any such
employee meets the other  eligibility  requirements  of Paragraph 3) at the time
(a) the Coverage  Period  commences  and  thereafter  or (b) his  employment  is
terminated  or the Plan is amended  (i) at the  request of a third party who has
taken steps  reasonably  calculated  to effect a Change of  Control,  or (ii) in
connection with or in anticipation of a Change of Control.

                                       10
<PAGE>

         IN WITNESS WHEREOF,  Hershey Foods  Corporation has caused this Hershey
Foods Corporation Amended and Restated (1999) Supplemental  Executive Retirement
Plan to be executed as of this 9th day of June, 1999.

                                          HERSHEY FOODS CORPORATION

                                     By: /s/ Kenneth L. Wolfe
                                         ------------------------
                                            Kenneth L. Wolfe
                                            Chief Executive Officer

                                       11
<PAGE>

                                   SCHEDULE I
                                       to
                           AMENDED AND RESTATED (1999)
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

November 1999             1.850%              January 2002               0.848%
December 1999             1.811%              February 2002              0.809%
                                              March 2002                 0.771%
January 2000              1.773%              April 2002                 0.732%
February 2000             1.734%              May 2002                   0.694%
March 2000                1.696%              June 2002                  0.655%
April 2000                1.657%              July 2002                  0.617%
May 2000                  1.619%              August 2002                0.578%
June 2000                 1.580%              September 2002             0.540%
July 2000                 1.542%              October 2002               0.501%
August 2000               1.503%              November 2002              0.463%
September 2000            1.465%              December 2002              0.424%
October 2000              1.426%
November 2000             1.388%              January 2003               0.385%
December 2000             1.349%              February 2003              0.347%
                                              March 2003                 0.308%
January 2001              1.310%              April 2003                 0.270%
February 2001             1.272%              May 2003                   0.231%
March 2001                1.233%              June 2003                  0.193%
April 2001                1.195%              July 2003                  0.154%
May 2001                  1.156%              August 2003                0.116%
June 2001                 1.118%              September 2003             0.077%
July 2001                 1.079%              October 2003               0.039%
August 2001               1.041%              November 2003 and each
September 2001            1.002%              succeeding month           0.000%
October 2001              0.964%
November 2001             0.925%
December 2001             0.887%EXHIBIT 10.5

                            HERSHEY FOODS CORPORATION

                       EXECUTIVE BENEFITS PROTECTION PLAN

                                   (GROUP 3A)

         The Hershey Foods Corporation Executive Benefits Protection Plan (Group
3A),  as set forth  herein,  is intended  to help  attract and retain  qualified
management  employees and maintain a stable work environment by making provision
for the protection of covered  employees in connection  with a Change in Control
as set forth herein.

                                    ARTICLE 1

                                   DEFINITIONS

         As hereinafter  used,  the following  words shall have the meanings set
forth below.

         1.1    AIP  means the Annual Incentive Program under the KEIP.

         1.2    ANNUAL BASE SALARY  means with respect to an Executive the
         higher of:

                  1.2.1    his highest annual base salary in effect during the
         one (1) year period preceding a Change in Control; or

                  1.2.2 his highest  annual base salary in effect during the one
         year period preceding his Date of Termination.

For purposes of the foregoing,  salary reduction  elections pursuant to Sections
125 and 401(k) of the Code shall not be taken into account.

         1.3    ANNUAL BONUS  means with respect to an Executive the highest of:

                                       1
<PAGE>

                  1.3.1  the  average  of the  three  highest  bonuses  paid  or
payable,  including  any bonus or  portion  thereof  which has been  earned  but
deferred,  to him by the  Company in respect of the five  fiscal  years (or such
shorter  period  during which he has been employed by the Company or eligible to
receive  any bonus  payment)  immediately  preceding  the fiscal year in which a
Change in Control  occurs  (annualized  for any fiscal  year  during such period
consisting  of less than twelve full months or with respect to which he has been
employed by the Company or eligible to receive a bonus for less than twelve full
months);

                  1.3.2 the  bonus  paid or  payable  (annualized  as  described
above),  including  any  bonus or  portion  thereof  which has been  earned  but
deferred, to him by the Company in respect of the most recently completed fiscal
year prior to the Change in Control;

                  1.3.3 the  bonus  paid or  payable  (annualized  as  described
above), including any bonus or portion thereof which has been earned or deferred
for the most recently  completed  fiscal year preceding his Date of Termination;
and

                  1.3.4  his  100%  target  bonus  award  amount  for  the  year
including his Date of Termination.

For purposes herein,  only payments under the AIP, as well as payments under any
successor or replacement substitute plan, shall be treated as bonus payments.

         1.4      BASE AMOUNT  shall have the meaning ascribed to such term in
Section 280G(b)(3) of the Code.

         1.5      BOARD  means the Board of Directors of the Company.

         1.6      CAUSE  means with respect to an Executive:

                  1.6.1 his  willful  and  continued  failure  to  substantially
perform his duties with the Company (other than any such failure  resulting from
incapacity due to physical or mental

                                       2
<PAGE>

illness), after a written demand forsubstantial  performance is delivered to him
by the Board or the Chief  Executive  Officer of the Company which  specifically
identifies  the manner in which the Board or Chief  Executive  Officer  believes
that the Executive has not substantially performed his duties; or

                  1.6.2 his  willfully  engaging  in  illegal  conduct  or gross
misconduct which is materially and demonstrably injurious to the Company.

For  purposes of this  Section  1.6, no act or failure to act, on the part of an
Executive, shall be considered willful unless it is done, or omitted to be done,
by him in bad faith and  without  reasonable  belief that his action or omission
was in the best interests of the Company. Any act, or failure to act, based upon
prior approval  given by the Board or upon the  instruction or with the approval
of the Chief  Executive  Officer or an  Executive's  superior  or based upon the
advice of counsel for the Company shall be conclusively  presumed to be done, or
omitted to be done, by the Executive in good faith and in the best  interests of
the Company.  The cessation of employment of an Executive shall not be deemed to
be for Cause unless and until there shall have been delivered to him a copy of a
resolution duly adopted by the affirmative vote of not less than  three-quarters
of the entire  membership of the Board at a meeting of the Board called and held
for such purpose (after  reasonable notice is provided to him and he is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, he is guilty of the conduct described in
Subsection  1.6.1 or 1.6.2 above,  and  specifying  the  particulars  thereof in
detail.

         1.7  CLRP  means  the  Hershey  Foods  Corporation  Compensation  Limit
Replacement Plan and any successor or replacement plan thereof.

         1.8      CHANGE IN CONTROL  means:

                  1.8.1  individuals who, on June 8, 1999,  constitute the Board
(the  "Incumbent  Directors")  cease  for any  reason to  constitute  at least a
majority of the Board,  provided that any person becoming a director  subsequent
to June 8, 1999,  whose  election or  nomination  for

                                       3
<PAGE>

election was approved by avote of at least two-thirds of the Incumbent Directors
then on the Board (either by specific vote or by approval of the proxy statement
of the Company in which such person is named as nominee  for  director,  without
written objection to such nomination) shall be an Incumbent Director;  PROVIDED,
HOWEVER,  that no individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest (as described in
Rule 14a-11  under the  Securities  Exchange Act of 1934 (the  "Exchange  Act"))
("Election  Contest") or other actual or threatened  solicitation  of proxies or
consents  by or on behalf of any  person  (as such term is  defined  in  Section
3(a)(9) of the Exchange Act and as used in Section  13(d)(3) and 14(d)(2) of the
Exchange Act) ("Person")  other than the Board ("Proxy  Contest"),  including by
reason of any  agreement  intended  to avoid or settle any  Election  Contest or
Proxy  Contest,  shall be deemed an Incumbent  Director;  and PROVIDED  FURTHER,
HOWEVER,  that a director  who has been  approved by the Hershey  Trust while it
beneficially  owns  more  than  50% of the  combined  voting  power  of the then
outstanding  voting  securities of the Company entitled to vote generally in the
election of directors (the  "Outstanding  Company Voting Power") shall be deemed
to be an Incumbent Director;

                  1.8.2 the  acquisition  or holding by any Person of beneficial
ownership  (within the meaning of Section  13(d) under the  Exchange Act and the
rules and  regulations  promulgated  thereunder)  of shares of the Common  Stock
and/or  the  Class B Common  Stock of the  Company  representing  25% or more of
either (i) the total number of then outstanding  shares of both Common Stock and
Class B Common Stock of the Company (the  "Outstanding  Company  Stock") or (ii)
the  Outstanding  Company  Voting  Power;  provided  that,  at the  time of such
acquisition or holding of beneficial  ownership of any such shares,  the Hershey
Trust does not beneficially own more than 50% of the Outstanding  Company Voting
Power; and provided, further, that any such acquisition or holding of beneficial
ownership  of  shares  of  either  Common  Stock or Class B Common  Stock of the
Company by any of the following  entities shall not by itself  constitute such a
Change in Control  hereunder:  (i) the Hershey Trust; (ii) any trust established
by the Company or by any  Subsidiary  for the benefit of the Company  and/or its
employees or those of a Subsidiary;  (iii) any employee benefit plan (or related
trust)  sponsored  or  maintained  by the  Company or any  Subsidiary;  (iv) the
Company or any Subsidiary or (v) any underwriter  temporarily holding securities
pursuant to an offering of such securities;

                                       4
<PAGE>

                  1.8.3 the approval by the  stockholders  of the Company of any
merger,  reorganization,   recapitalization,  consolidation  or  other  form  of
business  combination (a "Business  Combination") if, following  consummation of
such Business Combination, the Hershey Trust does not beneficially own more than
50% of the total voting power of all outstanding  voting securities  eligible to
elect  directors  of (x)  the  surviving  entity  or  entities  (the  "Surviving
Corporation")  or  (y) if  applicable,  the  ultimate  parent  corporation  that
directly or indirectly has beneficial ownership of more than 50% of the combined
voting  power  of the  then  outstanding  voting  securities  eligible  to elect
directors of the Surviving Corporation; or

                  1.8.4 the approval by the  stockholders  of the Company of (i)
any sale or other  disposition of all or substantially  all of the assets of the
Company, other than to a corporation (the "Acquiring Corporation") if, following
consummation of such sale or other  disposition,  the Hershey Trust beneficially
owns  more  than  50% of the  total  voting  power  of  all  outstanding  voting
securities  eligible to elect directors (x) of the Acquiring  Corporation or (y)
if applicable,  the ultimate parent  corporation that directly or indirectly has
beneficial  ownership of more than 50% of the combined  voting power of the then
outstanding  voting  securities  eligible to elect  directors  of the  Acquiring
Corporation, or (ii) a liquidation or dissolution of the Company.

         1.9  CODE  means the Internal Revenue Code of 1986, as amended from
time to time.

         1.10  COMPANY  means Hershey Foods Corporation, a Delaware corporation.

         1.11  COVERAGE PERIOD means the period commencing on the date on which
a Change in Control occurs and ending on the date which is the second
anniversary thereof.

         1.12  DATE OF TERMINATION  has the meaning assigned to such term in
Section 4.2 hereof.

         1.13  DEFERRAL  ELECTION means with respect to an Executive each of his
elections  to defer all or any part of any of his AIP or PSU awards as permitted
under the  Deferred  Compensation  Plan or any deferral  arrangements  in effect
prior to the effective date thereof.

                                       5
<PAGE>

         1.14  DEFERRED COMPENSATION  PLAN means the Hershey  Foods  Corporation
Deferred Compensation Plan and any successor or replacement plan thereof.

         1.15  DISABILITY  means with respect to an Executive  his absence from
his  duties  with  the  Company  on a  full-time  basis  for 180 consecutive
business days as a result of incapacity  due to mental or physical  illness
which is  determined to be total and permanent by a  physician  selected by the
Company or its insurers and  acceptable  to the  Executive  or his  legal
representative  (such  agreement  as to acceptability  not to be withheld
unreasonably),  provided  that such  absence shall constitute  Disability only
if the Executive is entitled to  long-term  disability  benefits  for the period
of his  disability after such 180 day  period at lest equal to 70% of the
greater of his base  salary as of the first day of such 180 day  period or his
Annual Base Salary.

         1.16  EFFECTIVE DATE  means June 8, 1999.

         1.17  EXECUTIVE means each person who is listed on Schedule I hereto,
as it may be amended from time to time pursuant to Article 7 hereof.

         1.18  EXCISE TAX  means any excise tax imposed under Section 4999 of
the Code.

         1.19     GOOD REASON  means with respect to an Executive:

                  1.19.1 the assignment to him of any duties inconsistent in any
respect with his  position  (including  status,  offices,  titles and  reporting
relationships),  authority,  duties  or  responsibilities  immediately  prior to
either the Potential  Change in Control which  precedes the Change in Control or
the Change in  Control or any other  action by the  Company  which  results in a
diminution   in  any   respect   in  such   position,   authority,   duties   or
responsibilities,  excluding  for this  purpose an isolated,  insubstantial  and
inadvertent  action not taken in bad faith and which is  remedied by the Company
promptly after receipt of notice thereof given by the Executive;

                                       6
<PAGE>

                  1.19.2 a reduction by the Company in his annual base salary as
in effect, as applicable,  on the Effective Date or as the same may be increased
from time to time, or on the date he first becomes an Executive if he was not an
Executive on the  Effective  Date or as the same may be  increased  from time to
time;

                  1.19.3 the  Company's  requiring him to be based at any office
or location  that is more than 35 miles from his office or location  immediately
prior to either the  Potential  Change in Control  which  precedes the Change in
Control or the Change in Control;

                  1.19.4  the  Company's  requiring  him to  travel  on  Company
business to a substantially  greater extent than required  immediately  prior to
either the Potential  Change in Control which  precedes the Change in Control or
the Change in Control;

                  1.19.5 the failure by the Company, without his consent, to pay
to him any portion of his current compensation,  or to pay to him any portion of
an installment of deferred  compensation under any deferred compensation program
of the Company within seven (7) days of the date such compensation is due;

                  1.19.6 the  failure by the  Company to  continue in effect any
compensation  plan in which he  participates  immediately  prior to  either  the
Potential  Change in  Control  preceding  the Change in Control or the Change in
Control which is material to his total  compensation,  including but not limited
to the KEIP,  the CLRP,  and the  SERP,  as  applicable,  or any  substitute  or
alternative  plans adopted prior to either such  Potential  Change in Control or
Change in  Control,  unless an  equitable  arrangement  (embodied  in an ongoing
substitute or alternative  plan) has been made with respect to such plan, or the
failure by the Company to continue the Executive's  participation therein (or in
such  substitute or alternative  plan) on a basis not materially less favorable,
both  in  terms  of the  amount  of  benefits  provided  and  the  level  of his
participation  relative  to other  participants,  as existed at the time of such
Potential Change in Control or Change in Control;

                                       7
<PAGE>

                  1.19.7 the  failure by the  Company to continue to provide him
with  benefits  substantially  similar to those  enjoyed by him under any of the
Company's pension, life insurance,  medical, health and accident,  disability or
other  welfare  plans in which he was  participating  at the time of either  the
Potential  Change in  Control  preceding  the Change in Control or the Change in
Control,  the  taking of any  action by the  Company  which  would  directly  or
indirectly materially reduce any of such benefits or deprive him of any material
fringe benefit enjoyed by him at the time of such Potential Change in Control or
Change in Control,  or the failure by the Company to provide him with the number
of paid  vacation  days to which he is entitled on the basis of years of service
with the Company in accordance  with the  Company's  normal  vacation  policy in
effect at the time of such Potential Change in Control or Change in Control;

                  1.19.8  any  purported  termination  by  the  Company  of  his
employment  after a Change in  Control  otherwise  than in  accordance  with the
termination procedures of Sections 4.1 through 4.4 hereof;

                  1.19.9 any material  failure by the Company to comply with and
satisfy  any of its  obligations  under  this Plan after a  Potential  Change in
Control that is followed within one (1) year by a Change in Control; or

                  1.19.10 any material failure by the Company to comply with and
satisfy  any of its  obligations  under any  grantor  trust  established  by the
Company to provide  itself with a source of funds to assist itself in satisfying
its  liabilities  under  this Plan after (i) a Change in  Control  described  in
Subsection  1.8.1,  clause (ii) of Subsection 1.8.4, or clause (i) of Subsection
1.8.4 other than a sale or other disposition to a corporation;  (ii) a Change in
Control  described in Subsection 1.8.2 if during the Coverage Period,  Incumbent
Directors,  as described in Subsection 1.8.1, cease for any reason to constitute
at least a  majority  of the  Board;  (iii) a Change  in  Control  described  in
Subsection  1.8.3  if,  at  any  time  during  the  Coverage  Period,  Incumbent
Directors,  as described  in  Subsection  1.8.1,  do not  constitute  at least a
majority  of the board of  directors  of the  Surviving  Corporation;  or (iv) a
Change in Control  described in clause (i) of Subsection  1.8.4 involving a sale
or other  disposition  to a  corporation  if, at any time  during  the  Coverage
Period,
                                       8
<PAGE>

Incumbent  Directors,  as described in Subsection  1.8.1,  do not  constitute at
least a majority of the board of directors of such corporation.

For purposes of this Plan, any good faith  determination  of Good Reason made by
the Executive shall be conclusive.

         1.20  HERSHEY   PENSION  PLAN  means  the  Hershey  Foods   Corporation
Retirement Plan and any successor or replacement plan thereof.

         1.21  HERSHEY  TRUST  means  either  or both of (a) the  Hershey  Trust
Company, a Pennsylvania  corporation,  as Trustee for the Milton Hershey School,
or any  successor  to the Hershey  Trust  Company as such  trustee,  and (b) the
Milton Hershey School, a Pennsylvania not-for-profit corporation.

         1.22  HIGHEST PSU AMOUNT  means with respect to an Executive the
highest of:

                  1.22.1 the average of the cash values of the three highest PSU
awards paid or payable,  including  any PSU award or portion  thereof  which has
been  earned but  deferred,  to him by the Company in respect of the five fiscal
years (or such shorter  period  during which he has been employed by the Company
or eligible  to receive a PSU award)  immediately  preceding  the fiscal year in
which the Change in Control occurs;

                  1.22.2  the  cash  value  of the PSU  award  paid or  payable,
including  any PSU award or portion  thereof which has been earned but deferred,
to him by the  Company in respect of the most  recently  completed  fiscal  year
prior to the Change in Control;

                  1.22.3  the  cash  value  of the PSU  award  paid or  payable,
including  any PSU award or portion  thereof which has been earned but deferred,
to him by the Company for the most recently  completed fiscal year preceding his
Date of Termination; and

                                       9
<PAGE>

                  1.22.4  the cash  value of his 100%  target  PSU award for the
year including his Date of Termination  (each such PSU award being valued at the
higher of (i) the highest closing price of the Company's Common Stock on the New
York Stock Exchange  during the period running from sixty (60) days prior to the
Change in Control until the  Executive's  Date of  Termination,  and (ii) if the
Change in Control  involves a transaction  in which an offer is made to purchase
shares of Common Stock from the Company's stockholders,  the price at which such
offer is made).

         1.23  KEIP means the Hershey Foods Corporation  Key Employee  Incentive
Plan and any successor or replacement plan thereof.

         1.24  NOTICE OF INTENT TO TERMINATE  shall have the meaning assigned to
 such term in Section 4.1 hereof.

         1.25 MANDATORY  RETIREMENT AGE means age sixty-five (65) in the case of
an  Executive  who has  served  for a minimum  of two (2) years at a high  level
executive   or  high   policy-making   position   and  who  is   entitled  to  a
nonforfeitable,  immediate, annual employer-provided retirement benefit from any
source, which is at least equal to a benefit,  computed as a life annuity, of at
least  $44,000  per year (or such  other  amount  as may be  provided  by future
legislation).  In the case of all other Executives,  there shall be no Mandatory
Retirement Age.

         1.26 PLAN  means  the  Hershey  Foods  Corporation  Executive  Benefits
Protection Plan (Group 3A), as set forth herein, as amended from time to time.

         1.27 PLAN  ADMINISTRATOR  means the person  appointed by the  Company's
Chief Executive Officer from time to time to administer the Plan.

         1.28  POTENTIAL CHANGE IN CONTROL  means the occurrence of any of the
following:

                  1.28.1  the  Hershey  Trust by  action  of any of the Board of
Directors  of Hershey  Trust  Company;  the Board of Managers of Milton  Hershey
School; the Investment Committee

                                       10
<PAGE>

of the Hershey  Trust;  and/or any of  theofficers  of Hershey  Trust Company or
Milton Hershey School (acting with authority)  undertakes  consideration  of any
action the taking of which would lead to a Change in Control as defined  herein,
including,  but not limited to consideration of (1) an offer made to the Hershey
Trust to  purchase  any  number of its  shares in the  Company  such that if the
Hershey Trust  accepted such offer and sold such number of shares in the Company
the Hershey Trust might no longer have more than 50% of the Outstanding  Company
Voting  Power,  (2) an offering by the Hershey Trust of any number of its shares
in the  Company  for sale such that if such sale were  consummated  the  Hershey
Trust might no longer have more than 50% of the Outstanding Company Voting Power
or (3) entering into any agreement or understanding with a person or entity that
would lead to a Change in Control;
or

                  1.28.2  the  Board   approves  a   transaction   described  in
Subsection  1.8.2,  1.8.3 or  1.8.4 of the  definition  of a Change  in  Control
contained herein.

         1.29  SERP means the Hershey Foods  Corporation  Supplemental Executive
Retirement Plan and any successor or replacement plan thereof.

         1.30  SEVERANCE BENEFITS  has the meaning assigned to such term in
Section 3.2 hereof.

         1.31  SUBSIDIARY  means any corporation controlled by the Company,
directly or indirectly.

         1.32  VESTED CURRENT BONUS AMOUNT  shall have the meaning assigned to
such term in Section 2.1 hereof.

         1.33  VESTED CURRENT PSU AMOUNT shall have the meaning assigned to such
 term in Section 2.2 hereof.

         1.34  VESTED DEFERRED BONUS AMOUNT shall have the meaning assigned to
such term in Section 2.1 hereof.

                                       11
<PAGE>

         1.35  VESTED DEFERRED PSU AMOUNT  shall have the meaning assigned to
 such term in Section 2.2 hereof.

         1.36  VESTED PENSION BENEFIT  shall have the meaning assigned to such
term in Section 2.3 hereof.

         1.37  VESTED PENSION AMOUNT  shall have the meaning assigned to such
term in Section 2.3 hereof.

         1.38  WELFARE BENEFITS  shall have the meaning assigned to such term in
 Subsection 3.2.2 hereof.

                                    ARTICLE 2

                     VESTING OR PAYMENT OF CERTAIN BENEFITS

                       IN THE EVENT OF A CHANGE IN CONTROL

         2.1   VESTING OF AIP BENEFITS; PAYMENT OF BENEFITS. Upon the occurrence
 of a Change in Control:

                  2.1.1    each Executive shall have a vested and nonforfeitable
 right hereunder to receive in cash an amount equal to the sum of:

                           2.1.1.1    the greater of (x) the 100% target award
amount of all then outstanding contingent target AIP grants made to him under
the KEIP, and (y) the amount that would have been payable to him under such
contingent target AIP grants as of the end  of  the  applicable  award  period
calculated  using  as  the applicable performance factors, his and the Company's
actual performance on an annualized basis as of the date of the  Change in
Control  (the  greater of (x) and (y) is herein referred to as the "Vested
Current Bonus Amount"); and

                           2.1.1.2    the value of all AIP Awards, as defined in
the KEIP ("AIP  Awards")  previously  earned by him for which  payment  has been
deferred  ("Deferred  AIP
                                       12
<PAGE>

Awards") (this value,  calculated as of the date of payment to the Executive and
taking  into  account  his  selection  of  Investment  Options as defined in the
Deferred  Compensation  Plan and his Deferral  Elections  applicable  thereto is
herein referred to as the "Vested Deferred Bonus Amount");

                  2.1.2  the  Company  shall,  within  five  (5)  business  days
following the Change in Control,  pay to each  Executive a lump sum cash payment
equal to his Vested Current Bonus Amount; and

                  2.1.3  the Company shall, on the later of (i) the first day of
January of the year first  following the year during which the Change in Control
occurs and (ii) the one hundred  twentieth  (120th) day  following the Change in
Control,  pay to each  Executive  a lump sum cash  payment  equal to his  Vested
Deferred  Bonus Amount  attributable  to his Deferred AIP Awards not  previously
paid to him in accordance with any of his applicable Deferral Elections if prior
to the Change in Control,  he elects,  in his sole  discretion,  to receive such
lump sum cash payment at such time.

         2.2      VESTING OF PSU BENEFITS; PAYMENT OF BENEFITS.  Upon the
occurrence of a Change in Control:

                  2.2.1 each  Executive  shall have a vested and  nonforfeitable
right hereunder to receive in cash an amount equal to the sum of:

                           2.2.1.1    the 100% target award amount of the
contingent  target  Performance  Stock Unit ("PSU") grants,  if any, made to him
under the KEIP for the cycle ending in the year of the Change in Control  valued
at the higher of (i) the highest closing price of the Company's  Common Stock on
the New York Stock  Exchange  during the sixty  (60) day  period  preceding  and
including  the date of the Change in Control,  and (ii) if the Change in Control
involves a  transaction  in which an offer is made to purchase  shares of Common
Stock  from the  Company's  stockholders,  the price at which such offer is made
("Vested Current PSU Amount"); and

                                       13
<PAGE>

                           2.2.1.2    the value of all PSU Awards, as defined in
the KEIP ("PSU  Awards"),  previously  earned by the Executive for which payment
has been deferred  ("Deferred PSU Awards"),  where,  for purposes of calculating
the value of the Executive's  Deferred PSU Awards ("Vested Deferred PSU Amount")
as of the date of payment to him  (whether in  accordance  with his  election as
described in Subsection 2.2.3, his election as described in Subsection 3.4.3, or
in the absence of any such election in accordance  with his applicable  Deferral
Elections),  all  components of his Deferred PSU Awards that are  denominated in
shares of the  Company's  Common  Stock shall be valued at the higher of (i) the
highest  closing  price of the  Company's  Common  Stock  on the New York  Stock
Exchange  during the sixty (60) day period  preceding  and including the date of
the Change in Control,  and (ii) if the Change in Control involves a transaction
in which an offer is made to purchase  shares of Common Stock from the Company's
stockholders, the price at which such offer is made and investment credits shall
be applied  thereto and to all  components  of such Deferred PSU Awards that are
not  denominated in shares of the Company's  Common Stock in accordance with the
provisions  of the  Deferred  Compensation  Plan from the date of the  Change in
Control to the date of payment to the Executive in accordance with his selection
of Investment Options as defined in the Deferred Compensation Plan.;

                  2.2.2  the  Company  shall,  within  five  (5)  business  days
following the Change in Control,  pay to each  Executive a lump sum cash payment
equal to his Vested Current PSU Amount; and

                  2.2.3 the Company shall,  on the later of (i) the first day of
January of the year first  following the year during which the Change in Control
occurs and (ii) the one hundred  twentieth  (120th) day  following the Change in
Control,  pay to each  Executive  a lump sum cash  payment  equal to his  Vested
Deferred PSU Amount  attributable to his Deferred PSU Awards not previously paid
to him in accordance with any of his applicable  Deferral  Elections if prior to
the Change in Control,  he elects, in his sole discretion,  to receive such lump
sum cash payment at such time.

         2.3      VESTED PENSION AMOUNT.  Upon the occurrence of a Change in
Control:

                                       14
<PAGE>

                  2.3.1 each  Executive who either is a participant  in the SERP
on the date of the  Change in Control  or was a  participant  in the SERP on the
date of the  Potential  Change in Control  preceding the Change in Control shall
have a vested and  nonforfeitable  right  hereunder to receive in cash an amount
equal  to  the  actuarial  present  value  (as  determined  in  accordance  with
Subsection  2.3.1.3  hereof) of the monthly  retirement  benefit  (including the
spousal  survivor  benefit) to which he and his spouse  would be entitled  under
Section 4 of the SERP if he  retired  as of the date of the  Change in  Control,
taking into account  Subsections  2.3.1.1 and 2.3.1.2 hereof (the amount of such
monthly  retirement  benefits for him and his spouse being herein referred to as
such  Executive's  "SERP  Benefit",  the  actuarial  present  value of such SERP
Benefit being herein referred to as such  Executive's  "Vested Pension  Benefit"
and the Vested Pension  Benefit plus all investment  credits  applied thereto in
accordance with the provisions of Section 2.5 hereof being herein referred to as
"Vested Pension Amount"), where:

                           2.3.1.1  for purposes of determining such Executive's
SERP  Benefit as of the date of a Change in Control,  he shall:  (i) be credited
for all purposes under the SERP with additional  Years of Service (as defined in
the SERP)  equal to the  lesser of three (3) or the  number of years  (including
fractions  thereof) from the date of the Change in Control until he would attain
Mandatory  Retirement Age if applicable to him; (ii) be credited for purposes of
Section 3 of the SERP (and not for the  purposes of any other  provision  of the
SERP,  including but not limited to Section 4) with additional  Years of Service
(as  defined  in the SERP)  equal to the  excess,  if any,  of ten (10) over his
actual number of Years of Service (including  fractions thereof) completed as of
the date of the Change in Control; (iii) be deemed for the purposes of Section 3
of the SERP (and not for the  purposes  of any other  provision  of the SERP) to
have five (5) years of  participation  in the performance  share unit portion of
the  KEIP  during  his  last  ten (10)  years  of  employment  with the  Company
regardless of his actual years of  participation  in the performance  share unit
portion of the KEIP at the time of the Change in Control; (iv) be deemed for all
purposes under the SERP  (including but not limited to clause (4) of Section 4.b
of the SERP) to have his age increased by three (3) years (or such lesser number
of years (including fractions) until he would attain Mandatory Retirement Age if
applicable  to him);  and (v) be deemed to have been paid his Annual Base Salary
and Annual Bonus for three (3) additional

                                       15
<PAGE>

years (or such  lesser  number  of years  (including  fractions)  until he would
attain  Mandatory   Retirement  Age  if  applicable  to  him)  for  purposes  of
calculating "Final Average Compensation" in Section 2.f. of the SERP;

                           2.3.1.2    if such Executive has not yet attained age
fifty-five (55) (after  increasing his age by three (3) years as provided in the
preceding  Subsection  2.3.1.1),  he shall upon the  occurrence of the Change in
Control be deemed  nevertheless to have attained age fifty-five (55),  provided,
however,  the  reduction  factor  prescribed by clause (4) of Section 4.b of the
SERP shall still be given effect in calculating  his SERP Benefit,  with his age
being increased by three (3) years as provided in Subsection 2.3.1.1 hereof;

                           2.3.1.3    the actuarial present value of such
Executive's  SERP  Benefit,  as  determined  in  accordance  with the  foregoing
provisions  of this  Section  2.3  shall  be  determined  using:  (i) the 83 GAM
mortality  tables;  and (ii) an interest rate equal to 100% of the interest rate
that  would be used (as of the date of the  Change in  Control)  by the  Pension
Benefit Guaranty  Corporation for purposes of determining the present value of a
lump sum distribution on plan  termination;  and (iii) the date of the Change in
Control  as the date on which  payment  of the  Executive's  SERP  Benefit is to
commence and as the date as of which the  actuarial  present  value of such SERP
Benefit is calculated; and

                           2.3.2     each Executive who neither is a participant
in the SERP on the date of the Change in Control  nor was a  participant  in the
SERP on the date of the  Potential  Change in  Control  preceding  the Change in
Control  shall have a vested and  nonforfeitable  right  hereunder to receive in
cash an amount equal to the sum of:

                           2.3.2.1    a lump sum cash amount equal to the
actuarial  equivalent of the excess of (x) the retirement pension (determined as
a straight life annuity  commencing at Normal  Retirement Age, as defined in the
Hershey Pension Plan) which he would have accrued under the terms of the Hershey
Pension  Plan  (as in  effect  immediately  prior  to the  Change  in  Control),
determined as if he were fully vested thereunder and had accumulated  thirty-six
(36) additional months of service credit thereunder during each of which he will
be deemed to have been paid

                                       16
<PAGE>

one-twelfth  (1/12th) of the sum of his highest annual rate of compensation
as an employee of the Company and his Annual  Bonus (but in no event shall he be
deemed to have  accumulated  additional  months of service credit after he would
have attained  Mandatory  Retirement Age, if applicable) over (y) the retirement
pension  (determined as a straight life annuity  commencing at Normal Retirement
Age) which he has accrued  pursuant to the terms of the Hershey  Pension Plan as
of the date of the Change in Control; and

                           2.3.2.2    if he is a participant in the CLRP, a lump
sum cash amount ("CLRP Benefit") equal to his Excess Account,  as defined in the
CLRP (as in effect immediately prior to the Change in Control)  determined as if
he were fully vested  thereunder and had accumulated  thirty-six (36) additional
months of service  credit  thereunder  during each of which he will be deemed to
have been paid  one-twelfth  (1/12th) of the sum of his  highest  annual rate of
compensation as an employee of the Company and his Annual Bonus, but in no event
shall he be deemed to have accumulated additional months of service credit after
he would have attained  Mandatory  Retirement Age, if applicable (the sum of the
amounts  described in Subsections  2.3.2.1 and 2.3.2.2 is herein  referred to as
such  Executive's  "Vested Pension  Benefit" and the Vested Pension Benefit plus
all, if any, investment credit applied thereto in accordance with the provisions
of Section 2.5 hereof is herein referred to as such Executive's  "Vested Pension
Amount").

For purposes of this Subsection 2.3.2,  "actuarial  equivalent" amounts shall be
determined  using the same methods and assumptions  prescribed under the Hershey
Pension Plan immediately prior to the Change in Control.

                  2.4 PAYMENT OF VESTED PENSION AMOUNT UPON TIMELY ELECTION. The
Company  shall,  on the later of (i) the first day of  January of the year first
following  the year  during  which the  Change in  Control  occurs  and (ii) the
one-hundred  twentieth (120th) day following the Change in Control,  pay to each
Executive  a lump sum cash  payment  equal to his  Vested  Pension  Amount  plus
interest thereon at the rate provided in Section  1274(b)(2)(B) of the Code from
the date of the Change in Control to the date of payment if, prior to the Change
in Control,  he elects,  in his sole  discretion,  to receive such lump sum cash
payment at such time.

                                       17
<PAGE>

                  2.5   CONVERSION  OF  VESTED   PENSION   BENEFIT  TO  DEFERRED
COMPENSATION  PLAN ACCOUNT IN ABSENCE OF SECTION 2.4 ELECTION.  In the event the
Executive  makes no election  under  Section 2.4 hereof,  an amount equal to his
Vested Pension Benefit shall be credited to him under the Deferred  Compensation
Plan and subject to the provisions of this Subsection 2.5, the provisions of the
Deferred Compensation Plan shall apply thereto as if such amount were a Deferred
AIP Award.  Within ten (10) days of the Change in Control  the  Executive  shall
select one or more  Investment  Options as defined in the Deferred  Compensation
Plan to be effective  with respect to such amount and  thereafter may change his
selection of such  Investment  Options in accordance  with the provisions of the
Deferred Compensation Plan. Investment credits shall be applied to the amount of
his Vested  Pension  Benefit in accordance  with the  provisions of the Deferred
Compensation  Plan from the date of the Change in Control to the date of payment
to the Executive in accordance with his selection of such Investment Options. If
the Executive makes no election under Section 2.4 hereof and does not select one
or more Investment  Options as defined in the Deferred  Compensation Plan within
ten (10) days of the Change in Control in accordance  with the provisions of the
second sentence of this Section 2.5,  investment credits shall be applied to the
amount of his Vested  Pension  Benefit from the date of the Change in Control to
the earlier of the date he makes a selection of Investment  Options with respect
thereto in accordance with the provisions of the Deferred  Compensation Plan and
the date of payment in accordance  with the latest of his  pre-Change in Control
selections of Investment Options relating to his Deferred AIP Awards or Deferred
PSU Awards,  if any. If there are no such  pre-Change  in Control  selections of
Investment Options,  then investment credits shall be applied in accordance with
the  provisions of the  immediately  preceding  sentence by treating the Hershey
Fixed Income Fund Investment Option under the Deferred  Compensation Plan as his
latest  pre-Change in Control selection of Investment  Options.  Within ten (10)
days of the Change in Control the Executive shall make a Deferral  Election with
respect to his Vested Pension  Amount.  If the Executive makes no election under
Section  2.4 hereof and makes no Deferral  Election  within ten (10) days of the
Change in Control in accordance with the immediately  preceding  sentence,  then
for purposes hereof he will be considered to have made a Deferral Election under
the Deferred  Compensation  Plan to have his Vested  Pension Amount paid to him,
his designated  beneficiaries or his estate,  as applicable,  in accordance with
the latest of his  pre-Change  in Control  Deferral

                                       18
<PAGE>

Elections relating to his Deferred AIP Awards or Deferred PSU Awards, if any. If
there are no such pre-Change in Control  Deferral  Elections,  then for purposes
hereof he will be considered to have made a Deferral Election under the Deferred
Compensation  Plan to have his Vested Pension Amount paid to him, his designated
beneficiaries  or his  estate,  as  applicable,  on the  first  day of the month
following  his  termination  of employment  by the Company.  His Vested  Pension
Amount shall be paid to him in accordance with the Deferral  Election  described
in the preceding  three  sentences,  as applicable,  or any subsequent  Deferral
Election with respect thereto permitted in accordance with the provisions of the
Deferred Compensation Plan.

                  2.6 SERP OR CLRP AMENDMENTS.  Notwithstanding any provision of
the SERP,  CLRP,  or Deferred  Compensation  Plan,  none of the SERP,  CLRP,  or
Deferred  Compensation  Plan may be  terminated or amended in any manner that is
adverse to the interests of any Executive without his consent either:  (i) after
a  Potential  Change  in  Control  occurs  and for one (1)  year  following  the
cessation of the Potential Change in Control, or (ii) after a Change in Control.
Any termination or amendment of the SERP, CLRP, or Deferred Compensation Plan in
a manner adverse to the interests of an Executive within one (1) year prior to a
Potential  Change in Control  shall not be given  effect for purposes of Section
2.3 or Section 2.5 hereof.

                                    ARTICLE 3

                          EXECUTIVE BENEFITS AND RIGHTS

                         UPON TERMINATION OF EMPLOYMENT

         3.1  GENERAL  TERMINATION  RIGHTS  AND  BENEFITS.   If  an  Executive's
employment  by the Company is  terminated  at any time after a Change in Control
for any reason (whether by him or the Company), the Company shall pay to him the
payments described in Subsections 3.1.1 through 3.1.7 below.

                  3.1.1 PREVIOUSLY EARNED SALARY. The Company shall pay his full
salary to him through  his Date of  Termination  at the  highest  rate in effect
during the period between the Potential  Change in Control  preceding the Change
in Control  and the date the Notice of Intent to  Terminate  is given,  together
with  all  compensation  and  benefits  payable  to  him  through  the  Date

                                       19
<PAGE>

of Termination  under the terms of any compensation or benefit plan,  program or
arrangement maintained by the Company during such period.

                  3.1.2 PREVIOUSLY  EARNED  BENEFITS.  The Company shall pay his
normal post-termination compensation and benefits to him as such payments become
due. Such post-termination  compensation and benefits shall be determined under,
and  paid in  accordance  with the  Company's  retirement,  insurance,  pension,
welfare and other compensation or benefit plans, programs and arrangements.

                  3.1.3 PAYMENT OF VESTED  CURRENT  BONUS AMOUNT.  Except to the
extent that the Company has previously paid or concurrently pays to him all or a
portion of his Vested Current Bonus Amount  pursuant to Section 2.1,  Subsection
3.1.1 or Subsection  3.1.2 hereof,  the Company shall pay to him a lump sum cash
payment equal to his Vested Current Bonus Amount.

                  3.1.4 PAYMENT OF VESTED  DEFERRED BONUS AMOUNT.  Except to the
extent that the Company has previously paid or concurrently pays to him all or a
portion of his Vested Deferred Bonus Amount pursuant to Section 2.1,  Subsection
3.1.1 or Subsection  3.1.2 hereof,  the Company shall pay to him a lump sum cash
payment equal to his Vested Deferred Bonus Amount.

                  3.1.5  PAYMENT OF VESTED  CURRENT PSU  AMOUNTS.  Except to the
extent that the Company has previously paid or concurrently pays to him all or a
portion of his Vested  Current PSU Amount  pursuant to Section  2.2,  Subsection
3.1.1 or Subsection  3.1.2 hereof,  the Company shall pay to him a lump sum cash
payment equal to his Vested Current PSU Amount.

                  3.1.6  PAYMENT OF VESTED  DEFERRED PSU AMOUNTS.  Except to the
extent that the Company has previously paid or concurrently pays to him all or a
portion of his Vested  Deferred PSU Amount  pursuant to Section 2.2,  Subsection
3.1.1 or Subsection  3.1.2 hereof,  the Company shall pay to him a lump sum cash
payment equal to his Vested Deferred PSU Amount.

                                       20
<PAGE>

                  3.1.7 PAYMENT OF VESTED PENSION  AMOUNT.  Except to the extent
that the  Company has  previously  paid or  concurrently  pays to him his Vested
Pension  Amount,  the Company  shall pay to him a lump-sum cash payment equal to
his Vested Pension Amount.

         3.2  SEVERANCE  BENEFITS.  In addition to the payments  provided for by
Section 3.1 hereof, the Company shall pay to an Executive the payments described
in  Subsections  3.2.1  through  3.2.4  below  (the  "Severance   Benefits")  in
accordance  with such  Subsections  upon  termination of his employment with the
Company (i) during the Coverage  Period,  unless such  termination is (a) by the
Company  for  Cause,  (b) by  reason  of his  death or  Disability  or after his
Mandatory  Retirement Age, if applicable,  or (c) by him without Good Reason; or
(ii) prior to his Mandatory  Retirement Age, if applicable,  but during the 13th
full calendar  month of the Coverage  Period for any reason other than his death
or Disability.

                  3.2.1  LUMP-SUM  SEVERANCE  PAYMENT.  In lieu  of any  further
salary payments to him for periods  subsequent to the Date of  Termination,  the
Company shall pay to him a lump sum severance  payment,  in cash, equal to three
(3) (or, if less,  the number of years,  including  fractions,  from the Date of
Termination until he would have reached Mandatory Retirement Age, if applicable)
times the sum of (a), (b) and (c) where (a) equals his Annual Base  Salary,  (b)
equals his Annual Bonus and (c) equals his Highest PSU Amount.

                  3.2.2 CONTINUED  BENEFITS.  For a thirty-six (36) month period
(or, if less, the number of months from the Date of  Termination  until he would
have  reached  Mandatory  Retirement  Age,  if  applicable)  after  the  Date of
Termination,  the  Company  shall  provide  him  with  life  insurance,  health,
disability and other welfare benefits ("Welfare Benefits") substantially similar
in all respects to those which he was receiving  immediately prior to the Notice
of  Termination  on  substantially  the same  terms  and  conditions,  including
contributions  required from him for such benefits (without giving effect to any
reduction  in such  benefits  subsequent  to the  Potential  Change  in  Control
preceding  the  Change in  Control or the  Change in  Control,  which  reduction
constitutes or may constitute Good Reason);  provided that if he cannot continue
to  participate in the Company plans  providing  Welfare  Benefits,  the Company
shall  otherwise  provide  such  benefits  on the  same  after-tax  basis  as if
continued  participation had been

                                       21
<PAGE>

permitted.  The  Executive  shall be  entitled  to elect to change  his level of
coverage and/or his choice of coverage options (such as Executive only or family
medical  coverage)  with  respect to the Welfare  Benefits to be provided by the
Company to him to the same  extent  that  actively  employed  executives  of the
Company are permitted to make such changes; provided, however, that in the event
of any such  changes  he shall pay the  amount of any cost  increase  that would
actually be paid by an actively  employed  executive of the Company by reason of
such actively employed  executive making the same change in level of coverage or
coverage options. Notwithstanding the foregoing, in the event that the Executive
becomes reemployed with another employer and becomes eligible to receive welfare
benefits form such  employer,  the Welfare  Benefits  described  herein shall be
secondary to such benefits,  but only to the extent that the Company  reimburses
him for any increased  cost and provides any  additional  benefits  necessary to
give him the Welfare Benefits provided hereunder.

                  3.2.3   OUTSTANDING   AWARDS.   If  an  Executive's   Date  of
Termination  occurs  within the  Coverage  Period and during any  calendar  year
following the calendar year during which a Change in Control occurs, he shall be
entitled to a lump sum cash payment with respect to each outstanding  contingent
target AIP and PSU grant under the KEIP or any similar types of grants under any
replacement plans or programs equal to the sum of :

                           3.2.3.1    the sum of the product of (x) and (y)for
each then  outstanding  contingent  target PSU grant  under the KEIP (or similar
types of grants under any replacement  plan or program) for the applicable award
period that  includes his Date of  Termination,  where (x) is an amount equal to
the 100% target award amount of such outstanding contingent target PSU grant and
(y) is a  fraction  the  numerator  of  which  is the  number  of days  from and
including  the first  day of the award  period  applicable  to such  outstanding
contingent  target PSU grant that includes the  Executive's  Date of Termination
until (and  including) his Date of Termination  and the  denominator of which is
the number of days in the award period applicable to such outstanding contingent
target PSU grant; and

                          3.2.3.2    the sum of the product of (x) and (y) for
each then outstanding contingent target AIP grant made to him under the KEIP (or
similar  types of  grants  under  any

                                       22
<PAGE>

replacement plans or programs) for the applicable award period that includes his
Date of Termination, where (x) is an amount equal to the greater of (A) the 100%
target award amount of such outstanding contingent target AIP grant, and (B) the
amount  that would have been  payable  to him under such  contingent  target AIP
grant as of the end of the applicable award period,  calculated utilizing as the
applicable  performance  factors his and the Company's actual  performance on an
annualized  basis  as of his  Date of  Termination,  and (y) is a  fraction  the
numerator of which is the number of days from and including the first day of the
award period  applicable to such outstanding  contingent AIP grant that includes
his Date of Termination  until (and  including) his Date of Termination  and the
denominator of which is the number of days in such applicable award period.

Contingent  target PSU grants  under the KEIP or a similar type of grant under a
replacement  plan or program shall be valued at the highest closing price of the
Company's  Common Stock on the New York Stock Exchange during the period running
from sixty (60) days prior to the Change in Control until the  Executive's  Date
of Termination.

                  3.2.4  RELOCATION  ALLOWANCE.  In the event that an  Executive
relocates  following his Date of Termination  and during the Coverage  Period at
the request of a successor  employer,  the Company shall pay to him a relocation
allowance of $75,000; provided,  however, that any such payment shall be reduced
by any payments received by him from such successor  employer for the purpose of
reimbursing  him for  costs  of  relocation.  The  Company  shall  pay him  such
relocation allowance within five (5) business days after delivery of his written
request and may  condition  the  payment of the  relocation  allowance  upon his
agreeing  in  writing  to  report  to the  Company  any such  payments  from any
successor  employer  and  agreeing  in writing to  reimburse  to the Company any
amounts  received from the Company pursuant to this Subsection 3.2.4 that should
have been so reduced.

         3.3 GROSS-UP  PAYMENT.  In the event that an Executive becomes entitled
to the  Severance  Benefits or any other  benefits  or payments  under this Plan
(other  than  pursuant  to this  Section  3.3),  or the  KEIP by  reason  of the
accelerated   vesting  of  stock  options  thereunder   (together,   the  "Total
Benefits"),  and in the event that any of the Total  Benefits will be subject to

                                       23
<PAGE>

the Excise Tax, the Company shall pay to him an additional amount (the "Gross-Up
Payment")  such that the net amount  retained  by him,  after  deduction  of any
Excise Tax on the Total  Benefits and any  federal,  state and local income tax,
Excise Tax and FICA and Medicare withholding taxes upon the payment provided for
by this Section 3.3, shall be equal to the Total Benefits.

         For purposes of  determining  whether any of the Total Benefits will be
subject  to the  Excise Tax and the  amount of such  Excise  Tax,  (i) any other
payments or benefits  received or to be received by an Executive  in  connection
with a Change in Control or his termination of employment  (whether  pursuant to
the terms of this Plan or any other  plan,  arrangement  or  agreement  with the
Company,  any Person whose  actions  result in a Change in Control or any Person
affiliated  with the  Company or such  Person)  shall be  treated  as  parachute
payments  within the meaning of Section  280G(b)(2) of the Code,  and all excess
parachute  payments within the meaning of Section 280G(b)(1) shall be treated as
subject to the Excise Tax,  unless in the opinion of tax counsel ("Tax Counsel")
selected by the Company's  independent auditors and acceptable to the Executive,
such  other  payments  or  benefits  (in  whole or in  part)  do not  constitute
parachute  payments,  or such excess  parachute  payments  (in whole or in part)
represent  reasonable  compensation  for services  actually  rendered within the
meaning of Section  280G(b)(4) of the Code in excess of the Base Amount,  or are
otherwise not subject to the Excise Tax,  (ii) the amount of the Total  Benefits
which shall be treated as subject to the Excise Tax shall be equal to the lesser
of (A) the total  amount of the Total  Benefits  reduced  by the  amount of such
Total Benefits that in the opinion of Tax Counsel are not parachute payments, or
(B) the  amount of excess  parachute  payments  within  the  meaning  of Section
280G(b)(1)  (after  applying  clause  (i),  above),  and  (iii) the value of any
non-cash  benefits or any deferred payment or benefit shall be determined by the
Company's  independent  auditors in accordance  with the  principles of Sections
280G(d)(3) and (4) of the Code.  For purposes of  determining  the amount of the
Gross-Up  Payment,  an Executive  shall be deemed to pay federal income taxes at
the highest  marginal  rate of federal  income  taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
highest  marginal rate of taxation in the state and locality of his residence on
the Date of  Termination,  net of the  reduction  in federal  income taxes which
could be obtained from  deduction of such state and local taxes  (calculated  by
assuming  that any  reduction  under  Section  68 of the Code in the  amount  of
itemized deductions  allowable to him

                                       24
<PAGE>

applies  first to reduce the amount of such  state and local  income  taxes that
would otherwise be deductible by him).

         In the event that the Excise Tax is subsequently  determined to be less
than the amount taken into account  hereunder at the time of  termination  of an
Executive's  employment,  he shall  repay to the  Company,  at the time that the
amount of such reduction in Excise Tax is finally determined, the portion of the
Gross-Up  Payment  attributable  to such  reduction  (plus  that  portion of the
Gross-Up Payment attributable to the Excise Tax, federal, state and local income
taxes and FICA and  Medicare  withholding  taxes  imposed on the  portion of the
Gross-Up  Payment being repaid by him to the extent that such repayment  results
in a  reduction  in Excise  Tax,  FICA and  Medicare  withholding  taxes  and/or
federal,  state or local  income  taxes)  plus  interest  on the  amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code. The Company
may require an Executive to agree in writing to the repayment obligation imposed
by the preceding  sentence as a condition to receiving the Gross-Up Payment.  In
the event  that the  Excise Tax is  determined  to exceed the amount  taken into
account  hereunder at the time of the  termination of an Executive's  employment
(including  by reason of any payment the  existence or amount of which cannot be
determined  at the time of the  Gross-Up  Payment),  the  Company  shall make an
additional  Gross-Up  Payment,  determined  as previously  described,  to him in
respect of such excess (plus any interest, penalties or additions payable by him
with  respect  to such  excess)  at the time that the  amount of such  excess is
finally determined.

         3.4      TIMING OF PAYMENTS.  The payments provided for:

                  3.4.1 in Subsections 3.1.1, 3.1.3, 3.1.5, 3.2.1 and 3.2.3, and
in Section  3.3 hereof  shall be made to an  Executive  not later than the fifth
(5th) day  following his Date of  Termination;  provided,  however,  that if the
amounts of such payments cannot be finally  determined on or before such day the
Company  shall pay to the  Executive on such day an estimate,  as  determined in
good faith by the Company,  of the minimum amount of such payments and shall pay
the remainder of such payments  (together  with interest at the rate provided in
Section 1274(b)(2)(B) of the Code from the fifth (5th) day following the Date of
Termination to the payment of such  remainder) as soon as the amount thereof can
be determined

                                       25
<PAGE>

but in no  event  later  than  the  thirtieth  (30th)  day  after  the  Date  of
Termination.  In the event that the amount of the estimated payments exceeds the
amount subsequently  determined to have been due, such excess shall constitute a
loan by the Company to the  Executive,  payable on the fifth (5th)  business day
after  demand by the Company  (together  with  interest at the rate  provided in
Section 1274(b)(2)(B) of the Code from the fifth (5th) day following the Date of
Termination to the payment of such remainder);

                  3.4.2 in Subsection 3.1.4 hereof shall be made to an Executive
on the later of (i) the first day of  January of the year  first  following  the
year  during  which  his Date of  Termination  occurs  and (ii) the one  hundred
twentieth  (120th) day following his Date of Termination if prior to his Date of
Termination he elects, in his sole discretion,  to receive his previously unpaid
Deferred AIP Awards at such time. In the event the Executive makes such election
and the amount of the payment  described in  Subsection  3.1.4 cannot be finally
determined on or before the later of such one hundred  twentieth  (120th) day or
January 1, as  applicable,  the Company  shall pay to the  Executive on such one
hundred  twentieth  (120th) day or January 1, as  applicable,  an  estimate,  as
determined in good faith by the Company,  of the minimum  amount of such payment
and shall pay the remainder of such payment  (together with interest at the rate
provided in Section  1274(b)(2)(B)  of the Code from such one hundred  twentieth
(120th) day or January 1, as  applicable,  to the payment of such  remainder) as
soon as the amount  thereof  can be  determined  but in no event  later than the
thirtieth (30th) day after such one hundred  twentieth (120th) day or January 1,
as applicable. In the event that the amount of the estimated payment exceeds the
amount subsequently  determined to have been due, such excess shall constitute a
loan by the Company to the  Executive,  payable on the fifth (5th)  business day
after  demand by the Company  (together  with  interest at the rate  provided in
Section  1274(b)(2)(B)  of the Code from the one hundred  twentieth  (120th) day
following the Date of Termination or January 1, as applicable, to the payment of
such  remainder).  In the  event  the  Executive  makes  no such  election,  his
previously  unpaid  Deferred AIP Awards shall be paid in accordance with each of
his applicable Deferral Elections;

                  3.4.3 in Subsection 3.1.6 shall be made to an Executive on the
later of (i) the first  day of  January  of the year  first  following  the year
during which his Date of Termination

                                       26
<PAGE>

occurs and (ii) the one  hundred  twentieth  (120th) day  following  his Date of
Termination  if  prior  to his  Date  of  Termination  he  elects,  in his  sole
discretion,  to receive his previously  unpaid Deferred PSU Awards at such time.
In the event the  Executive  makes such  election  and the amount of the payment
provided for in Subsection  3.1.6 cannot be finally  determined on or before the
later of such one hundred twentieth (120th) day or January 1, as applicable, the
Company shall pay to the Executive on such one hundred  twentieth (120th) day or
January  1, as  applicable,  an  estimate,  as  determined  in good faith by the
Company,  of the minimum  amount of such payment and shall pay the  remainder of
such  payment   (together   with  interest  at  the  rate  provided  in  Section
1274(b)(2)(B) of the Code from such one hundred twentieth (120th) day or January
1, as  applicable,  to the  payment  of such  remainder)  as soon as the  amount
thereof can be determined  but in no event later than the  thirtieth  (30th) day
after such one hundred twentieth (120th day or January 1, as applicable.  In the
event that the amount of the estimated  payment exceeds the amount  subsequently
determined to have been due, such excess shall  constitute a loan by the Company
to the  Executive,  payable on the fifth (5th)  business day after demand by the
Company (together with interest at the rate provided in Section 1274(b)(2)(B) of
the Code  from the one  hundred  twentieth  (120th)  day  following  the Date of
Termination or January 1, as applicable, to the payment of such remainder).

                  3.4.4 in Subsection 3.1.7 shall be made to him on the later of
(i) the first day of January  following his Date of Termination and (ii) the one
hundred twentieth (120th) day following his Date of Termination if, prior to his
Date of Termination,  he elects, in his sole discretion, to receive such payment
at such time. In the event the Executive makes no such election, then his Vested
Pension Amount shall be paid in accordance with the provisions of Section 2.5

         3.5 REIMBURSEMENT OF LEGAL COSTS. The Company shall pay to an Executive
all legal fees and expenses  incurred by him as a result of a termination of his
employment  which  entitles him to any payments  under this Plan  (including all
such fees and expenses,  if any,  incurred in contesting or disputing any Notice
of Intent to  Terminate  under  Section  4.3  hereof or in  seeking to obtain or
enforce any right or benefit provided by this Plan or in connection with any tax
audit or proceeding to the extent  attributable  to the  application  of Section
4999 of the Code to any

                                       27
<PAGE>

payment or benefit provided hereunder).  Such payments shall be made within five
(5) business days after delivery of his respective  written requests for payment
accompanied  by such  evidence  of fees and  expenses  incurred  as the  Company
reasonably may require.

         3.6 EXECUTIVES' COVENANT.  The Company may condition the payment of the
amounts and  provision of the benefits  described in Article 3 of the Plan to an
Executive upon his providing to the Company a written agreement that, subject to
the terms and  conditions  of this Plan,  in the event of a Potential  Change in
Control, he will remain in the employ of the Company until the earliest of (a) a
date which is nine months  after the date of such  Potential  Change in Control,
(b) the date of a Change  in  Control,  (c) the date of his  termination  of his
employment  for Good Reason  (determined  by treating  the  Potential  Change in
Control for this  purpose as a Change in Control in applying the  definition  of
Good Reason) or by reason of death or  Disability,  (d) the  termination  by the
Company of his  employment  for any reason or (e) his attaining  age  sixty-five
(65).

                                    ARTICLE 4

                           TERMINATION PROCEDURES AND

                           COMPENSATION DURING DISPUTE

         4.1  NOTICE OF  INTENT TO  TERMINATE.  After a Change in  Control,  any
purported  termination  of an  Executive's  employment  (other than by reason of
death) must be preceded by a written  Notice of Intent to Terminate  from him to
the Company or the Company to him, as  applicable,  in  accordance  with Section
8.17 hereof.  For  purposes of this Plan, a Notice of Intent to Terminate  shall
mean a notice which shall indicate the notifying  party's opinion  regarding the
specific provisions of this Plan that will apply upon such termination and shall
set forth in reasonable detail the facts and circumstances  claimed to provide a
basis for the application of the provisions so indicated.  Further,  a Notice of
Intent to Terminate for Cause is required to include a copy of a resolution duly
adopted by the  affirmative  vote of not less than  three-quarters  (3/4) of the
entire  membership  of the Board at a meeting of the Board  which was called and
held for the purpose of considering such termination (after reasonable notice to
the Executive and an

                                       28
<PAGE>

opportunity  for him,  together with his counsel,  to be heard before the Board)
finding that,  in the good faith opinion of the Board,  he was guilty of conduct
set forth in Subsection  1.6.1 or 1.6.2 herein,  and specifying the  particulars
thereof in detail.

         4.2 DATE OF  TERMINATION.  Date of  Termination  , with  respect to any
purported  termination of an Executive's  employment  after a Change in Control,
shall mean (except as provided in Section 4.3 hereof) (a) if his  employment  is
terminated  by reason of his death,  his date of death (b) if his  employment is
terminated for Disability,  thirty (30) days after Notice of Intent to Terminate
is given (provided that he shall not have returned to the full-time  performance
of his duties during such thirty (30) day period),  and (c) if his employment is
terminated  for any other reason,  the date specified in the Notice of Intent to
Terminate  (which (i) in the case of a termination by the Company,  shall not be
less than thirty  (30) days,  except in the case of a  termination  for Cause in
which case it shall not be less than ten (10) days,  provided  that the  Company
may  require  him to not report to work during such ten (10) day period and (ii)
in the case of a  termination  by an  Executive,  shall not be less than fifteen
(15) days nor more than sixty (60) days, respectively, from the date such Notice
of Intent to Terminate is given).

         4.3 DISPUTE CONCERNING  TERMINATION.  If within fifteen (15) days after
any Notice of Intent to Terminate is given (within eight (8) days in the case of
a  termination  for Cause by the  Company),  or, if later,  prior to the Date of
Termination  (as  determined  without  regard to this Section  4.3),  the person
receiving  such Notice of Intent to Terminate  notifies  the person  giving such
notice that a dispute  exists  concerning  the  termination or the provisions of
this Plan that apply to such  termination,  the Date of Termination shall be the
date on which  the  dispute  is  finally  resolved,  either  by  mutual  written
agreement of the parties to such dispute or by a final judgment, order or decree
of a court of competent jurisdiction (which is not appealable or with respect to
which  the  time  for  appeal  therefrom  has  expired  and no  appeal  has been
perfected); provided, however, that the Date of Termination shall be extended by
a notice of  dispute  only if such  notice is given in good faith and the person
giving such notice  pursues  the  resolution  of such  dispute  with  reasonable
diligence.

                                       29
<PAGE>

         4.4  COMPENSATION  DURING  DISPUTE.  If a purported  termination  of an
Executive's employment occurs following a Change in Control and such termination
or the  provisions of this Plan that apply upon such  termination is disputed in
accordance  with Section 4.3 hereof  (including a dispute as to the existence of
good faith and/or reasonable diligence  thereunder),  the Company shall continue
to pay the  Executive  the full  compensation  (including,  but not  limited to,
salary)  at his  Annual  Base  Salary  and  continue  his  participation  in all
compensation  plans required to be maintained  hereunder and continue to provide
to him the Welfare  Benefits  provided for in Subsection  3.2.2 hereof until the
dispute is finally resolved in accordance with Section 4.3 hereof.  Amounts paid
under this Section 4.4 are in addition to all other  amounts due under this Plan
(other  than those due under  Subsection  3.1.1  hereof) and shall not be offset
against or reduce any other amounts due under this Plan.

                                    ARTICLE 5

                               PLAN ADMINISTRATION

         5.1   AUTHORITY TO PLAN ADMINISTRATOR.  The Plan shall be interpreted,
administered  and  operated  by the Plan  Administrator,  subject to the express
provisions of the Plan.

         5.2   DELEGATION OF DUTIES. The Plan Administrator may delegate any of
his  duties  hereunder  to such  person or  persons  from time to time as he may
designate.

         5.3 ENGAGEMENT OF THIRD PARTIES.  The Plan  Administrator is empowered,
on behalf of the Plan,  to engage  accountants,  legal  counsel  and such  other
personnel as he deems necessary or advisable to assist him in the performance of
his duties under the Plan. The functions of any such persons engaged by the Plan
Administrator  shall be limited to the  specified  services and duties for which
they are engaged,  and such persons shall have no other duties,  obligations  or
responsibilities  under the Plan.  Such persons shall exercise no  discretionary
authority or  discretionary  control  respecting the management of the Plan. All
reasonable expenses thereof shall be borne by the Company.

                                       30
<PAGE>

                                    ARTICLE 6

                                     CLAIMS

         6.1 CLAIMS PROCEDURE. Claims for benefits under the Plan shall be filed
with the Plan  Administrator.  If any  Executive  or other  payee  claims  to be
entitled to a benefit under the Plan and the Plan Administrator  determines that
such claim should be denied in whole or in part,  the Plan  Administrator  shall
notify such person of its decision in writing. Such notification will be written
in a manner  calculated  to be  understood  by such person and will  contain (a)
specific  reasons for the denial,  (b)  specific  reference  to  pertinent  Plan
provisions,  (c)  a  description  of  any  additional  material  or  information
necessary for such person to perfect such claim and an  explanation  of why such
material or information is necessary,  and (d) information as to the steps to be
taken if the person  wishes to submit a request  for review.  Such  notification
will  be  given  within  90  days  after  the  claim  is  received  by the  Plan
Administrator.  If such notification is not given within such period,  the claim
will be considered  denied as of the last day of such period and such person may
request a review of his claim.

         6.2 REVIEW  PROCEDURE.  Within 60 days after the date on which a person
receives a written notice of a denied claim (or, if  applicable,  within 60 days
after the date on which such denial is considered to have  occurred) such person
(or his duly authorized  representative) may (a) file a written request with the
Plan  Administrator for a review of his denied claim and of pertinent  documents
and (b) submit written issues and comments to the Plan  Administrator.  The Plan
Administrator  will  notify  such  person  of  its  decision  in  writing.  Such
notification  will be written in a manner  calculated  to be  understood by such
person and will  contain  specific  reasons for the decision as well as specific
references  to pertinent  Plan  provisions.  The decision on review will be made
within  60  days  after  the   request  for  review  is  received  by  the  Plan
Administrator.  If the  decision on review is not made within such  period,  the
claim will be considered denied.

         6.3 CLAIMS AND REVIEW  PROCEDURES NOT MANDATORY.  The claims  procedure
and review procedure provided for in this Article 6 are provided for the use and
benefit of Executives who

                                       31
<PAGE>

may choose to use such  procedures,  but compliance  with the provisions of this
Article 6 is not mandatory for any Executive  claiming  benefits under the Plan.
It  shall  not be  necessary  for any  Executive  to file a claim  with the Plan
Administrator  or to exhaust the  procedures  and remedies  provided for by this
Article 6 prior to bringing any legal claim or action,  or  asserting  any other
demand, for payments or other benefits to which he claims entitlement hereunder.

                                    ARTICLE 7

                        PLAN MODIFICATION OR TERMINATION

         The Plan may be amended or terminated by resolution of the Board at any
time; provided,  however, that: (a) Schedule I hereto may be amended at any time
and in any manner by resolution of the Compensation  Committee of the Board upon
recommendation  of the Company's  Chief  Executive  Officer;  and (b) Schedule I
hereto may be amended at any time by the Company's  Chief  Executive  Officer to
delete any one or more persons therefrom. Notwithstanding the foregoing: (a) the
Plan may not be  terminated  or amended in a manner  adverse to the interests of
any Executive, without his consent (including the amendment of Schedule I hereto
to delete him therefrom) (i) after a Potential  Change in Control occurs and for
one (1) year following the cessation of a Potential  Change in Control,  or (ii)
for the two-year period following  consummation of the transaction(s)  resulting
from or in the  Change  in  Control;  and  (b) no  termination  of this  Plan or
amendment hereof in a manner adverse to the interests of any Executive,  without
his  consent  (including  the  amendment  of  Schedule  I hereto to  delete  him
therefrom),  shall be effective if such  termination or amendment  occurs (i) at
the request of a third party who has taken steps reasonably calculated to effect
a Change in Control or (ii) in connection with or in anticipation of a Change in
Control or Potential  Change in Control.  For this  purpose,  the cessation of a
Potential  Change in  Control  occurs if a Change in  Control  has not  occurred
within one year following the Potential Change in Control. In the event that the
termination  of this  Plan by the  Company  or an  amendment  hereof in a manner
adverse to the  interests of any Executive  (without his consent)  occurs within
six (6) months  prior to a  Potential  Change in Control or a Change in Control,
there shall be a presumption  that the  conditions of subclauses (i) and (ii) of
clause  (b) of the  next  preceding  sentence  shall  have  been  met.  Upon the

                                       32
<PAGE>

expiration  of the  Coverage  Period,  the Plan may not be amended in any manner
which would adversely  affect the rights which any Executive has at that time to
receive any and all  payments  or  benefits  pursuant to Articles 2, 3, and 4 by
reason of a Change in Control which has  theretofore  occurred or by reason of a
termination  of his  employment  during the Coverage  Period,  and the Company's
obligations  to make such payments and provide such  benefits  shall survive any
termination of the Plan.

                                    ARTICLE 8

                                  MISCELLANEOUS

         8.1  TERMINATIONS IN ANTICIPATION OF CHANGE IN CONTROL.  An Executive's
employment  shall be deemed to have been terminated by the Company without Cause
during the  Coverage  Period if his  employment  is  terminated  by the  Company
without  Cause prior to a Change in Control or  Potential  Change in Control and
such  termination  of employment (a) was at the request of a third party who had
indicated  an  intention  to take or had taken steps  reasonably  calculated  to
effect a Change in Control,  or (b)  otherwise  arose in  connection  with or in
anticipation  of a Change in Control and (c) in either case, a Change in Control
does occur which may involve  such third party (or a party  competing  with such
third party to effectuate a Change in Control).  An Executive shall be deemed to
have  terminated his employment for Good Reason during the Coverage Period if he
terminates  his  employment  with Good  Reason  prior to a Change in  Control or
Potential Change in Control if the circumstance or event which  constitutes Good
Reason  (a)  occurred  at the  request  of a third  party who had  indicated  an
intention to take or had taken steps reasonably calculated to effect a Change in
Control,  or (b) otherwise  arose in  connection  with or in  anticipation  of a
Change in Control,  and (c) in either case, a Change in Control does occur which
may  involve  such third  party (or a party  competing  with such third party to
effectuate a Change in Control).  In the event of a  termination  of  employment
described in this Section 8.1, the  Executive  shall be entitled to all payments
and other  benefits to which he would have been  entitled  had such  termination
occurred  during the Coverage  Period (other than salary  pursuant to Subsection
3.1.1 hereof for any period after the actual date of  termination)  and he shall
be entitled to an additional  payment in an amount which shall compensate him to
the

                                       33
<PAGE>

extent that he was  deprived by such  termination  of the  opportunity  prior to
termination of employment to exercise any stock options granted to him under the
KEIP  (including any such stock options that were not exercisable at the time of
his  termination  of  employment)  at the highest  market price of the Company's
Common  Stock  reached in  connection  with the  Change in Control or  Potential
Change in  Control  if a  Potential  Change in  Control  shall  occur and not be
followed  by a Change in Control  within  twelve  (12)  months of the  Potential
Change in  Control.  In the  event  that the  termination  of  employment  of an
Executive as described in this Section 8.1 occurs  following a Potential  Change
in Control or within six (6) months prior to a Change in Control, there shall be
a  presumption  that  clauses  (a) and (b) of the  first two  sentences  of this
Section 8.1 shall have been met.

         8.2  BURDEN.  In  any  proceeding  (regardless  of who  initiates  such
proceeding) in which the payment of Severance  Benefits or other compensation or
benefits  under  this Plan is at issue,  (i) the  burden of proof as to  whether
Cause exists for purposes of this Plan shall be upon the Company and (ii) in the
event that the last sentence of Section 8.1 applies,  the Company shall have the
burden to  prove,  by clear  and  convincing  evidence,  that a  termination  of
employment  has  not  been  made in  anticipation  of a  Change  in  Control  as
contemplated by Section 8.1.

         8.3 NO RIGHT TO  CONTINUED  EMPLOYMENT.  Nothing  in the Plan  shall be
deemed to give any  Executive  the  right to be  retained  in the  employ of the
Company,  or to interfere  with the right of the Company to discharge him at any
time and for any lawful reason, with or without notice,  subject in all cases to
the terms of this Plan.

         8.4 NO ASSIGNMENT OF BENEFITS.  Except as otherwise  provided herein or
by law, no right or interest of any Executive under the Plan shall be assignable
or transferable,  in whole or in part, either directly or by operation of law or
otherwise,   including  without  limitation  by  execution,  levy,  garnishment,
attachment, pledge or in any manner; no attempted assignment or transfer thereof
shall be  effective;  and no right or interest of any  Executive  under the Plan
shall be liable  for,  or  subject  to,  any  obligation  or  liability  of such
Executive.

                                       34
<PAGE>

         8.5 DEATH.  This Plan shall inure to the benefit of and be  enforceable
by an Executive's personal or legal representatives,  executors, administrators,
successors,  heirs,  distributees,  devisees and legatees. If an Executive shall
die while any amount would still be payable to him hereunder (other than amounts
which,  by their terms,  terminate  upon his death) if he had continued to live,
all such amounts,  unless otherwise provided herein, shall be paid in accordance
with the  terms  of this  Plan to the  executors,  personal  representatives  or
administrators of his estate.

         8.6  INCOMPETENCY.  Any  benefit  payable  to or for the  benefit of an
Executive,  if legally  incompetent  or incapable of giving a receipt  therefor,
shall be deemed  paid when paid to his  guardian  or to the party  providing  or
reasonably  appearing  to provide  for his care,  and such  payment  shall fully
discharge the Company, the Plan Administrator and all other parties with respect
thereto.

         8.7 REDUCTION OF BENEFITS BY LEGALLY REQUIRED BENEFITS. Notwithstanding
any other provision of this Plan to the contrary, if the Company is obligated by
law or by  contract  (other  than  under  this  Plan) to pay  severance  pay,  a
termination  indemnity,  notice  pay,  or the like,  to an  Executive  or if the
Company  is  obligated  by law or by  contract  to  provide  advance  notice  of
separation  ("Notice  Period")  to an  Executive,  then any  Severance  Benefits
payable to him  hereunder  shall be reduced by the amount of any such  severance
pay, termination  indemnity,  notice pay or the like, as applicable,  and by the
amount of any pay received during any Notice Period;  provided however, that the
period  following  a Notice of Intent to  Terminate  shall not be  considered  a
Notice Period.

         8.8   ENFORCEABILITY.  If any provision of the Plan shall be held
invalid or unenforceable,  such invalidity or unenforceability  shall not affect
any other provisions  hereof, and the Plan shall be construed and enforced as if
such provisions had not been included.

         8.9   EFFECTIVE DATE.  The Plan shall be effective as of the Effective
Date and shall  remain in effect  unless  and  until  terminated  by the  Board,
subject to the requirements of Article 7 hereof.

                                       35
<PAGE>

         8.10  NO  MITIGATION.  The  Company  agrees  that,  if  an  Executive's
employment  by the  Company  is  terminated  during  the  Coverage  Period,  the
Executive is not required to seek other  employment  or to attempt in any way to
reduce any amounts payable to him by the Company pursuant to this Plan. Further,
the amount of any payment or benefit provided for under this Plan (other than to
the extent provided in Subsections  3.2.2 and 3.2.4) shall not be reduced by any
compensation  earned by him as a result of  employment by another  employer,  by
retirement  benefits,  by offset against any amount claimed to be owed by him to
the Company, or otherwise.

         8.11 SUCCESSORS. In addition to any obligations imposed by law upon any
successor  to the  Company,  the  Company  shall be  obligated  to  require  any
successor  (whether  direct or  indirect,  by purchase,  merger,  consolidation,
operation  of law, or  otherwise)  to all or  substantially  all of the business
and/or  assets of the  Company to  expressly  assume  and agree to  perform  the
Company's  obligations under this Plan in the same manner and to the same extent
that the Company  would be required to perform  them if no such  succession  had
taken  place.  Failure of the Company to obtain such  assumption  and  agreement
prior to the  effectiveness  of any such succession shall entitle each Executive
to compensation and benefits from the Company in the same amount and on the same
terms  as he  would  be  entitled  to  hereunder  if he  were to  terminate  his
employment for Good Reason during the Coverage Period.

         8.12 CONSENT TO  CANCELLATION  OF AWARDS AND REDUCTION OF SERP BENEFIT.
The Company may  condition  the payment to an  Executive  of his Vested  Current
Bonus Amount,  Vested  Current PSU Amount,  Vested  Deferred Bonus Amount and/or
Vested  Deferred  PSU  Amount  upon  his  providing  a  written  consent  to the
cancellation of the applicable  contingent target AIP and PSU grants and AIP and
PSU Awards for which payment has been deferred on which his Vested Current Bonus
Amount,  Vested Current PSU Amount,  Vested  Deferred Bonus Amount and/or Vested
Deferred  PSU Amount is based and in lieu of which such  amounts  are paid.  The
Company may condition the payment to an Executive of his Vested  Pension  Amount
or the providing of any benefit or payment under Section 2.5 or Subsection 3.4.4
hereof upon his providing a written consent to, as applicable, (i) the reduction
of the  benefit  to be paid  under  the SERP  (whether  in the form of a monthly
payment to him and his surviving  spouse or

                                       36
<PAGE>

as a lump sum) such  reduction to be in the amount of the SERP Benefit which was
used in the  calculation  of his  Vested  Pension  Benefit  or the amount of any
payments or benefits  provided under Subsection  3.4.4, or (ii) the reduction of
his Excess  Account  under the CLRP,  such  reduction to be in the amount of the
CLRP Benefit which was used in the calculation of his Vested Pension Benefit.

         8.13 EMPLOYMENT BY SUBSIDIARY.  For purposes of this Plan, an Executive
who is employed by a  Subsidiary  shall be treated as if employed by the Company
and his  entitlement  to benefits  hereunder  shall be  determined as if he were
employed by the Company. For such purpose, the Subsidiary shall be treated as if
it were an unincorporated division of the Company.

         8.14 WAIVER. No waiver by an Executive at any time of any breach of the
terms of this Plan, or compliance  with, any condition or provision of this Plan
to be performed by the Company shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.

         8.15  WITHHOLDING TAXES.  Any payments to an Executive provided for
hereunder  shall  be  paid  net of any  applicable  withholding  required  under
federal,  state  or local  law and any  additional  withholding  to which he has
agreed.

         8.16  CONSTRUCTION.  The headings and captions  herein are provided for
reference and  convenience  only,  shall not be considered part of the Plan, and
shall not be employed in the  construction  of the Plan.  Neither the gender nor
the  number  (singular  or plural)  of any word  shall be  construed  to exclude
another gender or number when a different gender or number would be appropriate.

         8.17 NOTICES.  Any notice or other communication  required or permitted
pursuant  to the terms  hereof  shall be deemed  to have  been duly  given  when
delivered  or  mailed by United  States  Mail,  first  class,  postage  prepaid,
addressed to the intended recipient at his last known address (which in the case
of an  Executive  shall be the address  specified  by him in any written  notice
provided to the Company in accordance with this Section 8.17).

                                       37
<PAGE>

         8.18  STATUTORY CHANGES.  All references to sections of the Exchange
Act or the Code shall be deemed  also to refer to any  successor  provisions  to
such sections.

         8.19  GOVERNING LAW.  This Plan shall be construed and enforced
according  to the laws of the State of Delaware to the extent not  preempted  by
Federal law, which shall otherwise control.

       IN WITNESS WHEREOF, the Company has caused the Plan to be adopted as of
the 8th day of June, 1999.

                            HERSHEY FOODS CORPORATION

                          By:  /s/ Kenneth L. Wolfe
                              --------------------------
                               Kenneth L. Wolfe
                               Chairman and Chief Executive Officer

                                       38

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