Hershey Foods (HSY)

Discharge Not for Cause; Resignation for Good Reason

Our employment agreement with Mr. West obligates the Company to pay severance benefits if we terminate his employment for reasons other than for Cause or if Mr. West resigns for Good Reason. Mr. West will have Good Reason to resign if there is a material breach of the employment agreement by the Company, including a failure to maintain Mr. West in his current positions, adversely changing his authority or responsibilities, failing to pay or provide agreed-upon compensation and benefits, or giving notice to stop the daily renewal of the term of the employment agreement. Mr. West must give the Company notice and an opportunity to cure the breach before resigning for Good Reason. The severance benefits payable to Mr. West are a lump sum equal to a pro rata AIP award for the year of termination based on actual Company results plus two times his annual base salary and target AIP award for the year of termination, and continuation of health and other benefits for five years, subject to reduction for benefits received from a subsequent employer. In addition, any unvested stock options held by Mr. West will remain outstanding and continue to vest during the two-year period following termination of employment.

With respect to the named executive officers other than Mr. West, under the EBPP, we have agreed to two times salary paid in a lump sum if we terminate the executive officer’s active employment without Cause. These benefits are also payable if the executive officer resigns from active employment for Good Reason. Good Reason arises under the EBPP if we appoint a new

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Chief Executive Officer and, during the first two years of his or her tenure, the executive officer’s position, authority, duties or responsibilities are diminished or base salary is reduced. An applicable two-year period commenced December 1, 2007 with Mr. West’s appointment as our new Chief Executive Officer. If an executive officer’s employment is terminated for reasons other than for Cause or for Good Reason, the executive will be placed on a two-year leave of absence. During the two-year leave of absence, the executive officer’s employment continues, so that he or she will continue to earn, vest or participate in our benefit plans, contingent target AIP awards and previously granted stock options during the leave of absence period.

The following table summarizes the amount of severance benefits that would be payable to the named executive officer had his or her employment terminated on December 31, 2008, under circumstances entitling the officer to severance benefits as described above:

In addition, all stock options outstanding at the time of termination of active employment will remain outstanding and continue to vest as if the executive officer’s employment continued during the two-year leave of absence. The executive officer will not be entitled to receive base salary, new stock option, contingent target PSU or RSU awards or other awards during the leave of absence. Information with respect to stock options held by each executive officer as of December 31, 2008 appears in the Outstanding Equity Awards table.

Discharge Not for Cause; Resignation for Good Reason

Our employment agreement with Mr. West obligates the Company to pay severance benefits if we terminate his employment for reasons other than for “cause” or if Mr. West resigns for “good reason.” Mr. West will have “good reason” to resign if there is a material breach of the employment agreement by the Company, including a failure to maintain Mr. West in his current positions, adversely changing his authority or responsibilities, failing to pay or provide agreed-upon compensation and benefits, or giving notice to stop the daily renewal of the term of the employment agreement. Mr. West must give the Company notice and an opportunity to cure the breach before resigning for “good reason.” The severance benefits payable to Mr. West are a lump sum equal to a pro rata AIP award for the year of termination at target plus two times his annual base salary and target AIP award for the year of termination, and continuation of health and other benefits for five years, subject to reduction for benefits received from a subsequent employer. In addition, any unvested stock options held by Mr. West will remain outstanding and continue to vest during the two-year period following termination of employment.

With respect to the named executive officers other than Mr. West, under the EBPP, we have agreed to two times salary paid in a lump sum if we terminate the executive officer’s active employment without cause. These benefits are also payable if the executive officer resigns from active employment for “good reason.” “Good reason” arises under the EBPP if we appoint a new Chief Executive Officer and, during the first two years of his or her tenure, the executive officer’s position, authority, duties or responsibilities are diminished or base salary is reduced. An applicable two-year period commenced December 1, 2007 with Mr. West’s appointment as our new Chief Executive Officer. During the leave of absence, the executive officer’s employment continues, so that he or she will continue to earn, vest or participate in our benefit plans and previously granted stock options and contingent target AIP awards during the leave of absence period.

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The following table summarizes the amount of severance benefits that would be payable to the named executive officer had his or her employment terminated on December 31, 2007, under circumstances entitling the officer to severance benefits as described above:

In addition, all stock options outstanding at the time of termination of active employment will remain outstanding and continue to vest as if the executive officer’s employment continued during the two-year leave of absence. The executive officer will not be entitled to receive base salary, new stock option, contingent target PSU or RSU awards or other awards during the leave of absence. Information with respect to stock options held by each executive officer as of December 31, 2007 appears in the Outstanding Equity Awards table.

Discharge Not for Cause; Resignation for Good Reason

Our employment agreement with Mr. Lenny obligates the Company to pay severance benefits if we terminate his employment for reasons other than for “cause” or if Mr. Lenny resigns for “good reason.” Mr. Lenny will have “good reason” to resign if there is a material breach of the employment agreement by the Company, including a failure to maintain Mr. Lenny in his current positions, adversely changing his authority or responsibilities, failing to pay or provide agreed-upon compensation and benefits, requiring that he relocate more than 50 miles from Hershey, Pennsylvania or giving notice to stop the daily renewal of the term of the employment agreement. Mr. Lenny must give the Company notice and an opportunity to cure the breach before resigning for “good reason.” The severance benefits payable to Mr. Lenny are a lump sum equal to a pro rata AIP award for the year of termination at target plus two times his annual base salary and target AIP award for the year of termination, and continuation of health and other benefits for two years, subject to reduction for benefits received from a subsequent employer.

With respect to the named executive officers other than Mr. Lenny, under the EBPP, we have agreed to pay severance benefits in the form of a two-year paid leave of absence if we terminate the executive officer’s active employment without cause. These benefits are also payable if the executive officer resigns from active employment for “good reason.” “Good reason” arises under the EBPP if we appoint a new Chief Executive Officer and, during the first two years of his or her tenure, the executive officer’s position, authority, duties or responsibilities are diminished or base salary is reduced. During the leave of absence, the executive officer’s employment continues, so that he or she will continue to receive a base salary and to earn, vest or participate in our benefit plans and previously granted stock options and contingent target AIP and PSU awards during the leave of absence period.

As reflected on the Grants of Plan-Based Awards table, in February 2006 the independent directors approved a maximum contingent AIP award for Mr. Lenny for 2006. A specific AIP

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target or target award was not defined by the Committee. For illustrative purposes only, in the following severance and change in control calculations we have used an AIP target of 125% of salary for Mr. Lenny, and the actual target percent approved by the Committee for the other named executive officers.

The following table summarizes the amount of severance benefits that would be payable to the named executive officer had his or her employment terminated on December 31, 2006, under circumstances entitling the officer to severance benefits as described above:

In addition, all stock options outstanding at the time of termination of active employment will remain outstanding and continue to vest as if the executive officer’s employment continued during the two-year leave of absence. The executive officer will not be entitled to receive new stock option, contingent PSU or RSU awards or other awards during the leave of absence. Information with respect to stock options held by each executive officer as of December 31, 2006 appears in the Outstanding Equity Awards table.