Hershey Foods (HSY)

2009 Annual Incentive Program (AIP) Target Awards. The Committee approved 2009 contingent target awards for our
named executive officers, excluding Mr. West, and recommended to the independent directors as a group a 2009 contingent target award for Mr. West, under the annual incentive program (“AIP”) of the Company’s Equity and
Incentive Compensation Plan (“Incentive Plan”). For named executive officers other than Mr. West, the final award, if any, will be calculated as the product of the executive officer’s base salary, his applicable target percentage
(described below), a corporate performance score (weighted 75%) reflecting the Company’s achievement in 2009 of certain growth objectives (described below) and an individual performance score (weighted 25%) based upon the executive’s
achievement in 2009 of certain individual performance goals. For Mr. West, the Committee recommended that the final award, if any, be calculated as the product of his base salary, applicable target percentage and the Company’s achievement
of the 2009 corporate growth objectives. The corporate growth objectives are based upon the Company’s diluted earnings per share from operations (weighted 40%), consolidated net sales (weighted 40%) and free cash flow (weighted 20%). The target
percentage of base salary used in the 2009 AIP contingent target award for each of the named executive officers is as follows:

The Committee may, in its discretion, increase or decrease by up to 30% the component of the final award paid to
any named executive officer other than Mr. West based upon Company financial performance at the conclusion of the 2009 performance period, and for Mr. West, may recommend to the independent directors that a similar adjustment be made to
his final award. Additionally, the Committee may reduce the final award by up to 10% for any named executive officer (excluding Mr. West) who does not model Hershey’s corporate values.

The independent directors as a group approved the Committee’s recommended 2009 AIP contingent target
award for Mr. West on February 17, 2009.

Performance Stock Units (PSUs) for the 2009-2011 Cycle. The Committee
also approved, effective February 17, 2009, contingent target awards of PSUs under the Incentive Plan for the named executive officers other than Mr. West, and recommended to the independent directors as a group a contingent target award
of PSUs for Mr. West, for the 2009-2011 PSU performance cycle. Awards for the 2009-2011 performance cycle for all named executive officers (including Mr. West) will be based upon the following metrics: the Company’s three-year
relative total stockholder return (“TSR”) versus a peer group of companies (50% of the target award); the Company’s three-year compound annual growth in diluted earnings per share (“EPS”) from operations measured against an
internal target (12.5% of the target award); and annual growth in the Company’s diluted EPS from operations measured against an internal target for each year of the three-year performance cycle (12.5% of the target award per year). Payment, if
any, for awards will be made at the conclusion of the three-year performance cycle. The Committee will approve the targets for the annual diluted EPS from operations metrics at the beginning of each of the three years in the performance cycle. The
total performance score for the three-year cycle can range from a minimum of 0% to a maximum of 250%. Upon completion of the performance cycle, an award will be paid, if at all, only in shares of our Common Stock. The independent directors as a
group approved the Committee’s recommended contingent target PSU award for Mr. West on February 17, 2009.

As a condition to
receiving the contingent target PSU award for the 2009-2011 performance cycle and all future PSU performance cycles, the named executive officers other than Mr. West will be required to sign an Executive Confidentiality and Restrictive Covenant
Agreement (“ECRCA”) prohibiting the executive from: (i) disclosing the Company’s confidential information at any time during or following the executive’s employment with the Company; (ii) competing with the Company in
any geographic area in which the Company does business in the domestic and worldwide chocolate, confectionery, confectionery-related snack or chocolate-related businesses at any time during the executive’s employment with the Company and for a
period of 12 months following termination of the executive’s employment; and (iii) recruiting or soliciting the Company’s employees for a period of 12 months following termination of the executive’s employment; or
(iv) disparaging the Company’s reputation in any way at any time during the executive’s employment with the Company and for a period of 12 months following termination of the executive’s employment. The ECRCA contains certain
exceptions to these restrictions that are customary in agreements of this type. The ECRCA will be filed as an exhibit to our 2009 Annual Report on Form 10-K.

FACE="Times New Roman" SIZE="2">Mr. West was not required to sign the ECRCA because he continues to be bound by the non-disclosure, non-competition, non-solicitation and non-disparagement provisions of the Amended and Restated Executive
Employment Agreement, as amended, between him and the Company, dated as of October 2, 2007.

Stock Option Awards. The Committee approved stock option awards under the Incentive Plan for our
executive officers other than Mr. West, and recommended to the independent directors as a group a stock option award to Mr. West, all such awards to be effective February 17, 2009. The independent directors as a group approved the
grant of stock options to Mr. West on February 17, 2009. All such awards were made subject to the Incentive Plan and the Terms and Conditions of Nonqualified Stock Option Awards, which was filed as an exhibit to the Company’s 2007
Annual Report on Form 10-K.

RSU Award. Effective February 17, 2009, the Committee also approved a special recognition grant of
2,500 RSUs to Mr. Bilbrey to be paid in shares upon vesting. The RSUs will vest in equal increments over the next four years.

SIZE="2">Additional information regarding the compensation of the Company’s executive officers will be provided in the Company’s Proxy Statement for the 2009 Annual Meeting of Stockholders, which will be filed in March 2009.

The special award creates a two-year, 2008-2009 performance cycle under which eligible
executives received contingent target awards equal to two-thirds of the target value of the PSU award for the 2007-2009 performance cycle. The performance objective for the 2008-2009 performance cycle is the Company’s two-year compound annual
growth in absolute diluted earnings per share from operations measured against an internal target. The total performance score can range from a minimum of 0% to a maximum of 150%. Upon completion of the performance cycle, an award will be paid on
the basis of the number of PSUs originally awarded to the executive, the Company’s performance against the performance objectives for the cycle and the value per unit, which is determined at the conclusion of the cycle based upon the average of
the daily closing prices of our Common Stock on the New York Stock Exchange in December of the final year of the cycle. To prevent the possible payment of a duplicate award to any executive under the 2007-2009 and 2008-2009 performance cycles, the
amount of any PSUs earned by an executive under the 2007-2009 performance cycle will reduce the total PSUs earned by that executive under the 2008-2009 special award (but not below zero). Awards will

be paid only in shares of our Common Stock. The independent directors as a group approved the Committee’s recommended contingent target PSU award for
Mr. West on February 13, 2008.

As a condition to receiving the special award, Mr. Bilbrey and other executive officers
(excluding Mr. West) will be required to sign an Executive Confidentiality and Restrictive Covenant Agreement (“ECRCA”), approved by the Board on February 13, 2008, prohibiting the executive from: (i) disclosing the
Company’s confidential information at any time during or following the executive’s employment with the Company; (ii) competing with the Company in any geographic area in which the Company does business in the domestic and worldwide
confectionery, snack, better-for-you, balanced nutrition and chocolate-related grocery products businesses at any time during the executive’s employment with the Company and for a period of 12 months following termination of the
executive’s employment; and (iii) recruiting or soliciting the Company’s employees, or disparaging the Company’s reputation in any way, at any time during the executive’s employment with the Company and for a period of 12
months following termination of the executive’s employment. The ECRCA contains certain exceptions to these restrictions that are customary in agreements of this type. The ECRCA will be filed as an exhibit to our Quarterly Report on Form 10-Q
for the first quarter of 2008.

Mr. West was not required to sign the ECRCA because he continues to be bound by the non-disclosure,
non-competition, non-solicitation and non-disparagement provisions of the Amended and Restated Executive Employment Agreement (“Executive Employment Agreement”) between him and the Company, dated as of October 2, 2007.
Mr. West’s Executive Employment Agreement will be filed as an exhibit to the Company’s 2007 Annual Report on Form 10-K. Each of the executive officers (including Messrs. West and Bilbrey) also will continue to be bound by the terms of
the Long-Term Incentive Program Participation Agreement, filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K on February 18, 2005.

FACE="Times New Roman" SIZE="2">Amendment to Executive Benefits Protection Plan (Group 3A). On February 13, 2008, our Board approved an amendment to the Company’s Executive Benefits Protection Plan (Group 3A) (“Group 3A
Plan”) that would reduce the Lump-Sum Severance Payment payable to an eligible participant whose employment with the Company is terminated as the result of a Change in Control from three-times the sum of Annual Base Salary and Annual Incentive
Pay to two-times the sum of Annual Base Salary and Annual Incentive Pay. Capitalized terms used herein shall have the meanings ascribed to them in the Group 3A Plan. The Group 3A Plan, Amended and Restated as of October 2, 2007, will be filed
as an exhibit to the Company’s 2007 Annual Report on Form 10-K. The Group 3A Plan containing the amendment described above will be filed as an exhibit to our Quarterly Report on Form 10-Q for the first quarter of 2008.