Hershey Foods (HSY)

Considering industry-specific and broader market practices to establish pay levels that attract, retain and motivate executive talent;

Tying the amounts paid or awarded to performance;

Setting goals under incentive plans by reference to one or more financial, strategic and organizational objectives, and linking the executives’ compensation to those measures;

Using our Common Stock for long-term incentive compensation to tie a significant amount of the executive officers’ total compensation to the market value of our Common Stock; and

Requiring stock ownership by all executives.

Considering industry-specific and broader market practices to establish pay levels that attract, retain and motivate executive talent;

Tying the amounts paid or awarded to performance;

Setting goals under incentive plans by reference to financial, strategic and organizational objectives, and linking the executive’s compensation to those measures he or she can affect most directly;

Using our Common Stock for long-term incentive compensation to tie a significant amount of the executive officer’s total compensation to the market value of our Common Stock; and

Requiring stock ownership by all executives.

Adheres to a disciplined pay-for-performance approach which permits differentiation between “good” and “great” performance.

Considers pay levels in the context of industry-specific and broader market practices, enabling the Company to attract, retain and motivate executive talent. The Company uses a total-rewards package to recognize the individual contributions of executive officers and the overall business results of the Company. Final pay is set above or below target depending upon Company performance and individual performance.

Aligns incentive plans with financial, strategic and organizational objectives, and links the executive’s compensation to those measures he or she most directly can affect.

Weights long-term incentives to stock-based awards so that a significant portion of each executive officer’s total compensation is dependent upon the market value of our Common Stock. Stock ownership is required of all executives.

Responds to the evolving external environment and the need for strong corporate governance practices by creating and maintaining programs that are in the best interests of the Company and its stockholders, without being inappropriately influenced by outside factors.