Exhibit 10.2     Amended and Restated Supplemental Executive Retirement Plan

Exhibit 12      Computation of Ratio of Earnings to Fixed Charges

-16-

                                                                    EXHIBIT 10.1

                            HERSHEY FOODS CORPORATION

                           KEY EMPLOYEE INCENTIVE PLAN

              (Amended and Restated by the Board February 13, 2002)


1.   ESTABLISHMENT AND PURPOSE

     Hershey Foods Corporation (the "Corporation") hereby establishes the Key
     Employee Incentive Plan (the "Plan"). The purpose of the Plan is to provide
     to selected key employees of the Corporation and its subsidiaries (as
     defined below), upon whose efforts the Corporation is dependent for the
     successful conduct of its business, further incentive to continue and
     increase their efforts as employees and to remain in the employ of the
     Corporation and its subsidiaries.

     The Plan continues the Annual Incentive Program ("AIP"), with certain
     modifications, as in effect under the Corporation's Management Incentive
     Plan ("MIP") established in 1975 and as amended thereafter, pursuant to
     which participants are entitled to receive cash awards based on achievement
     of performance goals during annual performance cycles. The Plan also
     continues the Long-Term Incentive Program ("LTIP") portion of the MIP with
     certain modifications. In addition to performance stock units ("Performance
     Stock Units"), the LTIP portion also includes nonqualified stock options
     for the purchase of Common Stock ("Options"); stock appreciation rights
     ("SARs"); and restricted stock units ("Restricted Stock Units").

     As used herein, (i) the term "Subsidiary Corporation" shall mean any
     present or future corporation which is or would be a "subsidiary
     corporation" of the Corporation as defined in Section 424 of the Internal
     Revenue Code of 1986 (the "Code"), and (ii) the term "Corporation" defined
     above shall refer collectively to Hershey Foods Corporation and its
     Subsidiary Corporations unless the context indicates otherwise.

2.   STOCK SUBJECT TO THE PLAN

     The aggregate number of shares of the Corporation's common stock, $1.00 par
     value per share (the "Common Stock") that may be issued under the Plan
     pursuant to awards granted wholly or partly in Common Stock (including
     rights or options which may be exercised for or settled in Common Stock) is
     19,000,000 (inclusive of shares that are the subject of awards outstanding
     as of February 13, 2002 and shares issued pursuant to awards under this
     Plan prior to such date). The shares of Common Stock issued under this Plan
     may be either authorized but unissued shares, treasury shares held by the
     Corporation or any direct or indirect subsidiary thereof, or shares
     acquired by the Corporation through open market purchases or otherwise. The
     number of shares of Common Stock that are the subject of any awards
     outstanding on or after February 13, 2002 that are forfeited or terminated,
     surrendered, expire unexercised, are settled in cash in lieu of Common
     Stock or are exercised or settled in a manner such that some or all of the
     shares covered by the award are not issued or are exchanged for awards that
     do not involve Common Stock, shall again

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     immediately  become  available  for  issuance  as  awards  hereunder.   The
     Committee  may  from  time  to  time  adopt  and  observe  such  procedures
     concerning  the counting of shares  against the Plan maximum as it may deem
     appropriate.

3.   ADMINISTRATION

     The Plan shall be administered by the Compensation and Executive
     Organization Committee (the "Committee"), or any successor committee,
     appointed by and consisting solely of members of the Board of Directors
     (the "Board") of the Corporation, each of whom qualifies as both a
     "nonemployee director" within the meaning of Rule 16b-3 or its successor
     under the Securities Exchange Act of 1934 (the "Exchange Act") and an
     "outside director" within the meaning of Section 162(m) of the Code.
     Committee members shall not be eligible to participate in the Plan. The
     Board may from time to time remove and appoint members of the Committee in
     substitution for, or in addition to, members previously appointed and may
     fill vacancies, however caused, in the Committee. The Committee may adopt
     such rules and regulations as it deems useful in governing its affairs. To
     the extent provided by resolution of the Board, the Committee may authorize
     the Chief Executive Officer of the Corporation and other senior officers of
     the Corporation to designate officers and employees to be recipients of
     awards, to determine the terms, conditions, form and amount of any such
     awards, and to take such other actions which the Committee is authorized to
     take under this Plan, provided that the Committee may not delegate to any
     person the authority to grant awards to, or take other action with respect
     to, participants who at the time of such awards or action are subject to
     Section 16 of the Exchange Act or are "covered employees" as defined in
     Section 162(m) of the Code. Any action of the Committee with respect to the
     administration of the Plan shall be taken by majority vote at a Committee
     meeting or written consent of all Committee members.

     Subject to the terms and conditions of the Plan, the Committee shall have
     authority: (i) to construe and interpret Plan provisions; (ii) to define
     the terms used in the Plan; (iii) to prescribe, amend and rescind rules and
     regulations relating to the Plan; (iv) to select particular employees to
     participate in the Plan, (v) to determine the terms, conditions, form and
     amount of grants, distributions or payments made to each participant,
     including conditions upon and provisions for vesting, exercise and
     acceleration of any grants, distributions or payments; (vi) upon the
     request of a participant in the Plan, to approve and determine the duration
     of leaves of absence which may be granted to the participant without
     constituting a termination of his or her employment for purposes of the
     Plan; and (vii) to make all other determinations necessary or advisable for
     the administration and operation of the Plan. The Committee shall have the
     right to impose varying terms and conditions with respect to each grant or
     award. All determinations and interpretations made by the Committee shall
     be final, binding and conclusive on all participants and on their legal
     representatives and beneficiaries.

4.   FAIR MARKET VALUE

     As used in the Plan (unless a different method of calculation is required
     by applicable law, and except as otherwise specifically provided in any
     Plan provision), "Fair Market Value" on

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     or as of any date shall mean (i) the closing  price of the Common  Stock as
     reported in the New York Stock Exchange Composite  Transactions  Report (or
     any other consolidated transactions reporting system which subsequently may
     replace such Composite Transactions Report) for the New York Stock Exchange
     trading day  immediately  preceding  such date, or if there are no sales on
     such date, on the next preceding day on which there were sales,  or (ii) in
     the event that the Common Stock is no longer  listed for trading on the New
     York Stock  Exchange,  an amount  determined in accordance  with  standards
     adopted by the Committee.

5.   ELIGIBILITY AND PARTICIPATION

     Key employees of the Corporation or of any of its Subsidiary Corporations,
     including officers and directors who are regular employees but not members
     of the Committee, who in the opinion of the Committee are in a position to
     contribute significantly to the success of the Corporation or any
     Subsidiary Corporation, division or operating unit thereof, shall be
     eligible for selection to participate in the Plan. In making this selection
     and in determining the form and amount of grants, distributions and
     payments under the Plan, the Committee shall take into account the duties
     of the respective employees, their present and potential contributions to
     the success of the Corporation or any Subsidiary Corporation, division or
     operating unit thereof, and such other factors as the Committee may deem
     relevant in connection with accomplishing the purposes of the Plan. An
     employee who has been selected to participate may, if he or she is
     otherwise eligible, receive more than one grant from time to time, and may
     be granted any combination of contingent target grants under the AIP or
     under the LTIP components of the Plan, as the Committee shall determine.

6.   ANNUAL INCENTIVE PROGRAM

     The Committee may from time to time, subject to the provisions of the Plan
     and such other terms and conditions as the Committee may determine,
     establish contingent target grants for those eligible employees it selects
     to participate in the AIP. Each such contingent grant may be, but need not
     be, evidenced by a written instrument, and shall be determined in relation
     to the participant's level of responsibility in the Corporation and the
     competitive compensation practices of other major businesses, and such
     other factors as are deemed appropriate by the Committee.

     (a) Awards actually earned by and paid to AIP participants ("AIP Awards")
         will be based primarily upon achievement of Performance Goals (as
         defined in Section 9 below) over a one-year performance cycle as
         approved by the Committee.

     (b) The Committee, within the limits of the Plan, shall have full authority
         and discretion to determine the time or times of establishing
         contingent target grants; to select from among those eligible the
         employees to receive awards; to review and certify the achievement of
         Performance Goals; to designate levels of awards to be earned in
         relation to levels of achievement of Performance Goals; to adopt such
         financial and nonfinancial performance or other criteria for the
         payment of awards as it may determine from time to time; to make
         awards; and to establish such other measures as may be necessary to
         achieve the objectives of the Plan. The financial or non-financial
         Performance Goals established by

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         the  Committee may be based upon one or more  Performance  Factors (as
         defined in Section 9 below).

     (c) The maximum amount any participant can receive as an AIP Award for any
         calendar year shall not exceed $3,000,000.

     (d) AIP Awards as earned under the terms of the Plan shall be paid in cash
         and may exceed or be less than the contingent target grants, subject
         nevertheless to the maximum award limit set forth in subparagraph (c)
         above. Payment shall normally be made as soon as possible following the
         close of the year, but payment of all or any portion may be deferred by
         participants with the approval of the Committee.

7.   LONG-TERM INCENTIVE PROGRAM

     The LTIP consists of the following four components:

     I.  Performance Stock Units

         The Committee may, subject to the provisions of the Plan and such other
         terms and conditions as the Committee may determine, grant Performance
         Stock Units to reflect the value of contingent target grants
         established for each eligible employee selected for participation. Each
         grant of Performance Stock Units may be, but need not be, evidenced by
         a written instrument. Such contingent target grants shall be determined
         in relation to the employee's level of responsibility in the
         Corporation or any Subsidiary Corporation, division or operating unit
         thereof, and the competitive compensation practices of other major
         businesses.

         (a)  Awards actually earned by and paid to holders of Performance Stock
              Units ("PSU Awards") will be based upon achievement of Performance
              Goals over performance cycles as approved by the Committee. Such
              performance cycles each shall cover such period of time, not
              exceeding five years, as the Committee from time to time shall
              determine.

         (b)  The Committee, within the limits of the Plan, shall have full
              authority and discretion to determine the time or times of
              establishing contingent target grants and the granting of
              Performance Stock Units; to select from among those eligible the
              employees to receive PSU Awards; to review and certify the
              achievement of Performance Goals; to designate levels of awards to
              be earned in relation to levels of achievement of Performance
              Goals; to adopt such financial and nonfinancial performance or
              other criteria for the payment of PSU Awards as it may determine
              from time to time; to make awards; and to establish such other
              measures as may be necessary to the objectives of the Plan. The
              Performance Goals established by the Committee may be based on one
              or more of the Performance Factors.

         (c)  Payments of PSU Awards shall be made in shares of Common Stock or
              partly in cash as the Committee in its sole discretion shall
              determine and shall be charged against the

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              shares  available  under the LTIP portion of the Plan as provided
              in Paragraph 2;  provided,  however,  that no  fractional  shares
              shall be  issued  and any such  fraction  will be  eliminated  by
              rounding downward to the nearest whole share.

         (d)  PSU Awards as earned under the terms of the Plan may exceed or be
              less than the contingent target grants. Payment shall normally be
              made as soon as possible following the close of the year, but
              payment of all or any portion may be deferred by participants with
              the approval of the Committee.

         (e)  The maximum number of PSUs a participant can receive as a PSU
              Award in any calendar year is 75,000.

     II. Stock Options

         The Committee may, from time to time, subject to the provisions of the
         Plan and such other terms and conditions as it may determine, grant
         nonqualified Options to purchase shares of Common Stock of the
         Corporation to employees eligible to participate in the Plan. Each
         grant of an Option shall be on such terms and conditions and be in such
         form as the Committee may from time to time approve, subject to the
         following:

         (a)  The exercise price per share with respect to each Option shall be
              determined by the Committee in its sole discretion, but shall not
              be less than 100% of the Fair Market Value of the Common Stock as
              of the date of the grant of the Option.

         (b)  Options granted under the Plan shall be exercisable, in such
              installments and for such periods, as shall be provided by the
              Committee at the time of granting, but in no event shall any
              Option granted extend for a period in excess of ten years from the
              date of grant.

         (c)  The maximum number of shares of Common Stock covered by Options
              granted to a participant for any calendar year shall not exceed
              500,000.

         (d)  Among other conditions that may be imposed by the Committee, if
              deemed appropriate, are those relating to (i) the period or
              periods and the conditions of exercisability of any Option; (ii)
              the minimum periods during which grantees of Options must be
              employed, or must hold Options before they may be exercised; (iii)
              the minimum periods during which shares acquired upon exercise
              must be held before sale or transfer shall be permitted; (iv)
              conditions under which such Options or shares may be subject to
              forfeiture; and (v) the frequency of exercise or the minimum or
              maximum number of shares that may be acquired at any one time.

         (e)  Exercise of an Option shall be by written notice stating the
              election to exercise in the form and manner determined by the
              Committee.

         (f)  The purchase price upon exercise of any Option shall be paid in
              full by making payment (i) in cash; (ii) in whole or in part by
              the delivery of a certificate or

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              certificates of shares of previously-acquired Common Stock of the
              Corporation,  valued at its then Fair Market Value; or (iii) by a
              combination of (i) and (ii).

         (g)  Notwithstanding subparagraph (f) above, any optionee may make
              payment of the Option price through a simultaneous exercise of his
              or her Option and sale of the shares thereby acquired pursuant to
              a brokerage arrangement approved in advance by the Committee to
              assure its conformity with the terms and conditions of the Plan.

         (h)  The  Committee may require the surrender of outstanding Options as
              a condition to the grant of new Options.

         (i)  Notwithstanding any other provision of the Plan or of any Option
              agreement between the Corporation and an employee, upon the
              occurrence of a Change in Control, each outstanding Option held by
              a participant who is an employee of the Corporation or any
              Subsidiary Corporation or who retired while employed by the
              Corporation or any Subsidiary Corporation shall become fully
              vested and exercisable notwithstanding any vesting schedule or
              installment schedule relating to the exercisability of such Option
              contained in the applicable Option agreement or otherwise
              established at the time of grant of the Option.

         (j)  For purposes of this Plan, 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 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
                  Corporation entitled to vote generally in the election of
                  directors (the "Outstanding Corporation Voting Power") shall
                  be deemed to be an Incumbent Director; or

              (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

                                       6


                  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  Corporation  Stock") or (ii)
                  the Outstanding  Corporation 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
                  Corporation  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 Corporation for the benefit
                  of the  Corporation  and/or  its  employees  or  those  of a
                  Subsidiary  Corporation or by any Subsidiary Corporation for
                  the benefit of the Corporation and/or its employees or those
                  of a Subsidiary Corporation; (iii) any employee benefit plan
                  (or  related   trust)   sponsored  or   maintained   by  the
                  Corporation   or  any  Subsidiary   Corporation;   (iv)  the
                  Corporation  or  any  Subsidiary   Corporation  or  (v)  any
                  underwriter  temporarily  holding securities  pursuant to an
                  offering of such securities; or

              (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 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 Company.

              For purposes of this Plan, "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

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         (k)  For purposes of this Plan, 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
                  would no longer have more than 50% of the Outstanding
                  Corporation 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
                  would no longer have more than 50% of the Outstanding
                  Corporation 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 subparagraph (j) of Paragraph 7II hereof.


         (l)  In the event that a transaction which would constitute a Change in
              Control if approved by the stockholders of the Corporation is to
              be submitted to such stockholders for their approval, each
              participant who is an employee and who holds an Option granted
              under the Plan at the time scheduled for the taking of such vote,
              whether or not then exercisable, shall have the right to receive a
              notice at least ten (10) business days prior to the date on which
              such vote is to be taken. Such notice shall set forth the date on
              which such vote of stockholders is to be taken, a description of
              the transaction being proposed to stockholders for such approval,
              a description of the provisions of subparagraph (i) of Paragraph
              7II of the Plan and a description of the impact thereof on such
              participant in the event that such stockholder approval is
              obtained. Such notice shall also set forth the manner in which and
              price at which all Options then held by each such participant
              could be exercised upon the obtaining of such stockholder
              approval.

     III.Stock Appreciation Rights

         The Committee may, from time to time, subject to the provisions of the
         Plan and such other terms and conditions as the Committee may
         determine, grant SARs to employees eligible to participate in the Plan.
         SARs may, but need not be evidenced by an agreement executed by the
         Corporation and the holder, and shall be subject to such terms and
         conditions consistent with the Plan as the Committee shall impose from
         time to time, including the following:

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         (a)  SARs may, but need not, relate to Options granted under the Plan,
              as the Committee shall determine from time to time. In no event
              shall any SARs granted extend for a period in excess of ten years
              from the date of grant.

         (b)  A holder shall exercise his or her SARs by giving written notice
              of such exercise in the form and manner determined by the
              Committee, and the date upon which such written notice is received
              by the Corporation shall be the exercise date for the SARs.

         (c)  A holder of SARs shall be entitled to receive upon exercise the
              excess of the Fair Market Value of a share of Common Stock at the
              time of exercise over the Fair Market Value of a share at the time
              the SARs were granted, multiplied by the number of shares with
              respect to which the SARs relate.

         (d)  In the sole discretion of the Committee, the amount payable to the
              holder upon exercise of SARs may be paid either in Common Stock or
              in cash or in a combination thereof. To the extent paid in Common
              Stock, the value of the Common Stock that shall be distributed
              shall be the Fair Market Value of a share of Common Stock upon
              exercise of the SARs as provided in Paragraph 2; provided,
              however, that no fractional shares shall be issued and any such
              fraction will be eliminated by rounding downward to the nearest
              whole share.

         (e)  In the sole discretion of the Committee, SARs related to specific
              Options may be exercisable only upon surrender of all or a portion
              of the related Option, or may be exercisable, in whole or in part,
              only at such times and to the extent that the related Option is
              exercisable, and the number of shares purchasable pursuant to the
              related Option may be reduced to the extent of the number of
              shares with respect to which the SARs are exercised.

         (f)  In lieu of receiving payment at the time of exercise of SARs,
              payment of all or any portion may be deferred by the participant
              with the approval of the Committee.

         (g)  The maximum number of SARs granted to a participant during any
              calendar year shall not exceed 500,000.

     IV. Restricted Stock Units

         The Committee may, from time to time, subject to the provisions of the
         Plan and such other terms and conditions as it may determine, grant
         Restricted Stock Units to employees eligible to participate in the
         Plan. Each grant of Restricted Stock Units may be, but need not be
         evidenced by a written instrument. The grant of Restricted Stock Units
         shall state the number of Restricted Stock Units covered by the grant,
         and shall contain such terms and conditions and be in such form as the
         Committee may from time to time approve, subject to the following:

         (a) Each Restricted Stock Unit shall be equivalent in value to a share
             of Common Stock.

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         (b)  Vesting of each grant of Restricted Stock Units shall require the
              holder to remain in the employment of the Corporation or a
              Subsidiary Corporation for a prescribed period (a "Restriction
              Period"). The Committee shall determine the Restriction Period or
              Periods which shall apply to the shares of Common Stock covered by
              each grant of Restricted Stock Units. Except as otherwise
              determined by the Committee and provided in the written instrument
              granting the Restricted Stock Units, and except as otherwise
              provided in Paragraph 8, all Restricted Stock Units granted to a
              participant under the Plan shall terminate upon termination of the
              participant's employment with the Corporation or any Subsidiary
              Corporation before the end of the Restriction Period or Periods
              applicable to such Restricted Stock Units, and in such event the
              holder shall not be entitled to receive any payment with respect
              to those Restricted Stock Units. The Committee may also, in its
              sole discretion, establish other terms and conditions for the
              vesting of Restricted Stock Units, including conditioning vesting
              on the achievement of one or more of the Performance Factors.
              Notwithstanding any other provisions of the Plan or of any written
              instrument granting Restricted Stock Units, upon the occurrence of
              a Change in Control as defined in subparagraph (j) of Paragraph
              7II hereof, all restrictions on Restricted Stock Units held by a
              participant who is an employee of the Corporation or any
              Subsidiary Corporation shall lapse.

         (c)  Upon expiration of the Restriction Period or Periods applicable to
              each grant of Restricted Stock Units, the holder shall, without
              payment on his part, be entitled to receive payment in an amount
              equal to the aggregate Fair Market Value of the shares of Common
              Stock covered by such grant upon such expiration. Such payment may
              be made in cash, in shares of Common Stock equal to the number of
              Restricted Stock Units with respect to which such payment is made,
              or in any combination thereof, as the Committee in its sole
              discretion shall determine. Further upon such expiration, the
              holder shall be entitled to receive a cash payment in an amount
              equal to each cash dividend the Corporation would have paid to
              such holder during the term of those Restricted Stock Units as if
              the holder had been the owner of record of the shares of Common
              Stock covered by such Restricted Stock Units on the record date
              for the payment of such dividend.

         (d)  In lieu of receiving payment at the time of expiration of the
              Restriction Period or Periods, payment of all or any portion may
              be deferred by the participant with the approval of the Committee.

         (e)  The maximum number of shares of Common Stock as to which
              Restricted Stock Units may be granted to a participant for any
              calendar year shall not exceed 75,000.

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8.   TERMINATION OF EMPLOYMENT

     Upon termination of employment with the Corporation of any participant,
     such participant's rights with respect to any contingent target grants
     under the AIP, or any Performance Stock Units, Options, SARs or Restricted
     Stock Units granted under the LTIP, shall be as follows:

     (a) In the event that the participant is terminated or discharged by the
         Corporation for any reason, except as and to the extent provided
         otherwise by the Committee in writing, the participant's rights and
         interests under the Plan shall immediately terminate upon notice of
         termination of employment. Upon the occurrence of a Potential Change in
         Control (as defined in subparagraph (k) of Paragraph 7II hereof) and
         for a period of one year thereafter, and upon the occurrence of a
         Change in Control (as defined in subparagraph (j) of Paragraph 7II
         hereof), the following special provisions and notice requirements shall
         be applicable in the event of the termination of the employment of any
         participant holding an Option under the Plan: (i) in no event may a
         notice of termination of employment be issued to such a participant
         unless at least ten (10) business days prior to the effective date of
         such termination the participant is provided with a written notice of
         intent to terminate the participant's employment which sets forth in
         reasonable detail the reason for such intent to terminate, the date on
         which such termination is to be effective, and a description of the
         participant's rights under this Plan and under the agreements granting
         such Option or Options, including the fact that no such Option may be
         exercised after such termination has become effective and the manner,
         extent and price at which all Options then held by such participant may
         be exercised; and (ii) such notice of intent to terminate a
         participant's employment shall not be considered a "notice of
         termination of employment" for purposes of the first sentence of this
         Paragraph 8 (a). This Paragraph 8 (a) is intended only to provide for a
         requirement of notice to terminate upon the occurrence of the events
         set forth herein and shall not be construed to create an obligation of
         continued employment or a contract of employment in any manner or to
         otherwise affect or limit the Corporation's ability to terminate the
         employment of any participant holding an Option under the Plan.

     (b) If a participant terminates employment with the Corporation as the
         result, in the sole judgment of the Committee, of his or her becoming
         totally disabled (in which event termination will be deemed to occur on
         the date the Committee makes such determination), or if a participant
         should die or (except as to Restricted Stock Units) retire while
         employed by the Corporation or any of its Subsidiary Corporations, then
         the participant or, as the case may be, the person or persons to whom
         the participant's interest under the Plan shall pass by will or by the
         laws of descent and distribution (the "Estate"), shall have the
         following rights:

         (i)  the grantee of a contingent AIP grant or the Estate shall be
              entitled to receive payment of an AIP award as, and to the extent,
              determined by the Committee;

         (ii) if the holder of Performance Stock Units shall have been employed
              for at least two-thirds of the related performance cycle prior to
              the date of termination or death, then, except as otherwise
              provided in the written instrument (if any) evidencing the

                                       11


              Performance Stock Units, and subject to any further adjustments
              the Committee may make in its absolute discretion, the participant
              or the Estate shall be entitled to receive payment of a PSU Award
              upon the expiration of the related performance cycle, provided
              that such award shall be adjusted by multiplying the amount
              thereof by a fraction, the numerator of which shall be the number
              of full and partial calendar months between the date of the
              beginning of each such performance cycle and the date of
              termination or death, and the denominator of which shall be the
              number of full and partial calendar months from the date of the
              beginning of the performance cycle to the end of the said
              performance cycle;

         (iii)except as otherwise provided in the terms and conditions of the
              stock option or SAR grant, the holder or the Estate shall be
              entitled to exercise (provided any vesting requirement has been
              satisfied as of the date of exercise) any Option or SAR for a
              period of five years (three years in the case of options or SARs
              granted prior to 1997) from such date of death, total disability
              or retirement, or for such longer period as the Committee may
              determine in the case of financial hardship or other unusual
              circumstances (subject to the maximum exercise period for Options
              and SARs specified in Paragraph 7II(b) and 7III(a) hereof,
              respectively);

         (iv) except as otherwise provided in the written instrument evidencing
              the Restricted Stock Units, upon death or termination due to total
              disability the holder or the Estate shall be entitled to receive
              payment in respect of the Restricted Stock Units, provided that
              such Units shall be adjusted by multiplying the amount thereof by
              a fraction, the numerator of which shall be the number of full and
              partial calendar months between the date of grant of such Units
              and the date of death or termination, and the denominator of which
              shall be the number of full and partial calendar months from the
              date of the grant to the end of the Restriction Period. Upon
              retirement, the participant's rights with respect to Restricted
              Stock Units shall immediately terminate.

     (c) In the event of resignation by the participant, the participant's
         rights and interests under the Plan shall immediately terminate upon
         such resignation; provided, however, that the Committee shall have the
         absolute discretion to review the reasons and circumstances of the
         resignation and to determine whether, alternatively, and to what
         extent, if any, the participant may continue to hold any rights or
         interests under the Plan.

     (d) A transfer of a participant's employment without an intervening period
         from the Corporation to a Subsidiary Corporation or vice versa, or from
         one Subsidiary Corporation to another, shall not be deemed a
         termination of employment.

     (e) The Committee shall be authorized to make all determinations and
         calculations required by this Paragraph 8, including any determinations
         necessary to establish the reason for terminations of employment for
         purposes of the Plan, which determinations and calculations shall be
         conclusive and binding on any affected participants and Estates.

                                       12


9.   PERFORMANCE FACTORS; ADDITIONAL REQUIREMENTS

     Without limiting the type or number of awards that may be made under this
     Plan, an award may be in the form of a performance-based award intended to
     comply as "performance-based" compensation under Section 162(m) of the Code
     (such award a "Performance Award"). A Performance Award shall be paid,
     vested or otherwise deliverable solely on account of the attainment of one
     or more pre-established, objective performance goals ("Performance Goals")
     established by the Committee prior to the earlier to occur of (x) 90 days
     after the commencement of the period of service to which the Performance
     Goal relates and (y) the elapse of 25% of the period of service (as
     established in good faith at the time the Performance Goal is established),
     and in any event while the outcome is substantially uncertain. A
     Performance Goal is objective if a third party having knowledge of the
     relevant facts could determine whether the goal is met. A Performance Goal
     may be based on one or more of the following business criteria: earnings
     per share, return on net assets, market share, control of costs, net sales,
     cash flow, return on invested capital, economic value-added measures, sales
     growth, earnings growth, stock price, return on equity, financial ratings,
     regulatory compliance, achievement of balance sheet or income statement
     objectives, or other financial, accounting or quantitative objectives
     established by the Committee (collectively, the "Performance Factors").
     Performance Factors may be particular to a participant or the division,
     line of business or other unit in which the participant works, or the
     Corporation generally, or may be absolute in their terms or measured
     against or in relationship to the performance of a peer group or other
     external or internal measure. A Performance Goal may, but need not be,
     based upon a change or an increase or positive result under a particular
     Performance Factor and could include, for example, maintaining the status
     quo, limiting economic losses, or a relative comparison of performance to
     the performance of a peer group or other external or internal measure
     (measured, in each case, by reference to specific Performance Factors). A
     Performance Goal may include or exclude items to measure specific
     objectives, including, without limitation, extraordinary or other
     non-recurring items, acquisitions and divestitures, internal restructuring
     and reorganizations, accounting charges and effects of accounting changes.
     In interpreting Plan provisions applicable to Performance Goals and
     Performance Awards applicable to awards to employees who are "covered
     employees" under Section 162(m) of the Code, it is the intent of the Plan
     to conform with the standards of Section 162(m) of the Code and Treasury
     Regulations Section 1.162-27(e)(2)(i), and the Committee in establishing
     such goals and interpreting the Plan shall be guided by such provisions.
     Prior to the payment of any compensation based on the achievement of
     Performance Goals to any such "covered employee", the Committee must
     certify in writing that applicable Performance Goals and any of the
     material terms thereof were, in fact, satisfied. Subject to the foregoing
     provisions, the terms, conditions and limitations applicable to any
     Performance Awards made pursuant to this Plan shall be determined by the
     Committee.

     No Performance Stock Units, Options, SARs or Restricted Stock Units
     (hereinafter collectively an "Interest") granted pursuant to the Plan shall
     be exercisable or realized in whole or in part, and the Corporation shall
     not be obligated to sell, distribute or issue any shares subject to any
     such Interest, if such exercise and sale would, in the opinion of counsel

                                       13


     for the Corporation, violate the Securities Act of 1933, as amended (or
     other Federal or state statutes having similar requirements). Each Interest
     shall be subject to the further requirement that, if at any time the Board
     of Directors shall determine in its discretion that the listing or
     qualification of the shares relating or subject to such Interest under any
     securities exchange requirements or under any applicable law, or the
     consent or approval of any governmental regulatory body, is necessary or
     desirable as a condition of, or in connection with, the granting of such
     Interest or the distribution or issue of shares thereunder, such Interest
     may not be exercised in whole or in part unless such listing,
     qualification, consent or approval shall have been effected or obtained
     free of any condition not acceptable to the Board of Directors.

     Interests may be subject to restrictions as to resale or other disposition
     and to such other provisions as may be appropriate to comply with Federal
     and state securities laws and stock exchange requirements, and the exercise
     of any Interest or entitlement to payment thereunder may be contingent upon
     receipt from the holder (or any other person permitted by this Plan to
     exercise any Interest or receive any distribution hereunder) of a
     representation that at the time of such exercise it is his or her then
     present intention to acquire the shares being distributed for investment
     and not for resale.

10.  NONTRANSFERABILITY

     Unless otherwise approved by the Committee, contingent AIP grants,
     Performance Stock Units, Options, SARs and Restricted Stock Units granted
     under the Plan to an employee shall be nonassignable and shall not be
     transferable by him or her otherwise than by will or the laws of descent
     and distribution, and shall be exercisable, during the employee's lifetime,
     only by the employee or the employee's guardian or legal representative.

11.  DISCLAIMER OF RIGHTS

     No provision in the Plan or any contingent target AIP grants, Performance
     Stock Units, Options, SARs or Restricted Stock Units granted pursuant to
     the Plan shall be construed to confer upon the participant any right to be
     employed by the Corporation or by any Subsidiary Corporation, or to
     interfere in any way with the right and authority of the Corporation or any
     Subsidiary Corporation either to increase or decrease the compensation of
     the participant at any time, or to terminate any relationship of employment
     between the participant and the Corporation or any of its Subsidiary
     Corporations.

     Participants under the Plan shall have none of the rights of a stockholder
     of the Corporation with respect to shares subject to Performance Stock
     Units, Options, SARs or Restricted Stock Units unless and until such shares
     have been issued to him or her.

                                       14


12.  STOCK ADJUSTMENTS

     In the event that the shares of Common Stock, as presently constituted,
     shall be changed into or exchanged for a different number or kind of shares
     of stock or other securities of the Corporation or of another corporation
     (whether by reason of merger, consolidation, recapitalization,
     reclassification, stock split, combination of shares or otherwise), or if
     the number of such shares of Common Stock shall be increased through the
     payment of a stock dividend, or a dividend on the shares of Common Stock of
     rights or warrants to purchase securities of the Corporation shall be made,
     then there shall be substituted for or added to each share available under
     and subject to the Plan as provided in Paragraph 2 hereof, and to the
     limitations set forth in Paragraphs 7II (c); 7III (g) and 7IV (e), and each
     share theretofore appropriated or thereafter subject or which may become
     subject to Performance Stock Units, Options, SARs or Restricted Stock Units
     under the Plan, the number and kind of shares of stock or other securities
     into which each outstanding share of Common Stock shall be so changed or
     for which each such share shall be exchanged or to which each such share
     shall be entitled, as the case may be. Outstanding Options and SARs also
     shall be appropriately amended as to price and other terms as may be
     necessary to reflect the foregoing events. In the event there shall be any
     other change in the number or kind of the outstanding shares of Common
     Stock, or of any stock or other securities into which the Common Stock
     shall have been changed or for which it shall have been exchanged, then if
     the Board of Directors shall, in its sole discretion, determine that such
     change equitably requires an adjustment in the shares available under and
     subject to the Plan, or in any Performance Stock Units, Options, SARs or
     Restricted Stock Units theretofore granted or which may be granted under
     the Plan, such adjustments shall be made in accordance with such
     determination.

     No fractional shares of Common Stock or units of other securities shall be
     issued pursuant to any such adjustment, and any fractions resulting from
     any such adjustment shall be eliminated in each case by rounding downward
     to the nearest whole share or unit.

13.  TAXES

     The Corporation shall be entitled to withhold the amount of any tax
     attributable to any amounts payable or shares of Common Stock deliverable
     under the Plan. The person entitled to any such delivery, whether due to
     the settlement of PSUs, the exercise of an Option or SAR, or the vesting of
     Restricted Stock Units, or any other taxable event may, by notice to the
     Corporation, elect to have any such required withholding satisfied by a
     reduction of the number of shares otherwise so deliverable (a "Stock
     Withholding Election"), or by delivery of shares of Stock already owned by
     the Participant, with the amount of shares subject to such reduction or
     delivery to be calculated based on the Fair Market Value on the date of
     such taxable event.


                                       15


14.  EFFECTIVE DATE AND TERMINATION OF PLAN

     The Plan as amended and restated herein shall become effective upon
     adoption by the Board of Directors of the Corporation.

     The Board of Directors at any time may terminate the Plan, but such
     termination shall not alter or impair any of the rights or obligations
     under any contingent target AIP grants, Performance Stock Units, Options,
     SARs or Restricted Stock Units theretofore granted under the Plan unless
     the affected participant shall so consent.

15.  APPLICATION OF FUNDS

     The proceeds received by the Corporation from the sale of capital stock
     pursuant to Options will be used for general corporate purposes.

16.  AMENDMENT

     The Board of Directors by majority vote, at any time and from time to time,
     may amend the Plan in such respects as it shall deem advisable, to conform
     to any change in any applicable law or in any other respect; provided that
     any such amendment shall not adversely alter or impair any of the rights or
     obligations under any contingent target AIP grants, Performance Stock
     Units, Options, SARs or Restricted Stock Units theretofore granted under
     the Plan unless the affected participant shall so consent. Notwithstanding
     the foregoing, the Plan may not be terminated or amended in a manner
     adverse to the interests of any participant (without the consent of the
     participant) either: (a) after a Potential Change in Control occurs and for
     one (1) year following the cessation of a Potential Change in Control, or
     (b) for a two-year period beginning as of the date of a Change in Control
     (the "Coverage Period"). Upon the expiration of the Coverage Period,
     subparagraph (l) of Paragraph 7II of the Plan and Paragraph 8 (a) of the
     Plan may not be amended in any manner that would adversely affect any
     participant without the consent of the participant.



                                     /s/ Marcella K. Arline
                                     --------------------------------------
                                     Marcella K. Arline
                                     Vice President, Human Resources

                                       16

                                                                    EXHIBIT 10.2


                            HERSHEY FOODS CORPORATION

                           AMENDED AND RESTATED (2002)
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN



         1.    PURPOSE OF PLAN. The purpose of the Amended and Restated (2002)
Supplemental Executive Retirement Plan, effective as of January 1, 2002
(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
constitutes an amendment, restatement and continuation of the prior plan which
was most recently restated as of June 9, 1999.

               To the extent provided by law, the benefits provided hereunder
with respect to any Participant who retired or whose employment with the
Corporation terminated prior to January 1, 2002, will, except as otherwise
specifically provided for herein, be governed in all respects by the terms of
the plan document then in effect on the date of the Participant's retirement or
other termination of employment.

         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 an employee of the
Corporation  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 an employee of the Corporation, shall be considered "willful" unless
it is done, or omitted to be done, by the employee in bad faith and without
reasonable belief that the employee'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 employee'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 employee 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") or other such person, persons or committees as the Board may prescribe
from time to time.

               Effective as of October 2, 2001, Committee shall also mean the
Employee Benefits Committee of the Corporation, to which the Board has delegated
certain duties with respect to the administration of the Corporation's employee
benefit plans, or any successor

                                       1


committee as designated by the Board.

               c.    "Deferred Retirement Date" means the first day of the month
following an employee'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 an employee's termination of employment with the Corporation which is
coincident with or following his fifty-fifth (55th) birthday and prior to his
Normal Retirement Date.

               Effective as of January 1, 2002, 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 following the earlier of (i)
the date the Participant attains age fifty-five (55) or (ii) the date the
Committee (in its sole discretion) deems the Participant to have attained age
fifty-five (55) if such Participant terminated his or her employment with the
Corporation under an early retirement plan, program or arrangement and prior to
the Participant's Normal Retirement Date.

               f.    "Final Average Compensation" means the sum of (1) the
highest annual average of a Vested 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 Vested Participant dies, retires, or
suffers a Disability or if a Participant 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 Vested
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 "applicable interest rate" as specified by the
Commissioner of the Internal Revenue Service in Section 417(e)(3) of the
Internal Revenue Code of 1986, as amended (the "Code") (as such applicable
interest rate is modified from time to time 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,
the sum of one-twelfth (1/12th) of each GATT Interest Rate for the twelve
consecutive

                                       2


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 an employee's sixty-fifth (65th)
birthday, except that if his birthday is 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, as of any specific date, an employee
of the Corporation who, as of such date, is a participant in the performance
share unit portion of the KEIP or who, as of such date, is not then but had been
a participant 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, 1997, as in effect from time to time
and any successor plan thereto.

               m.    "Vested Participant" means, as of any specific date, a
Participant who, as of such date, satisfies each eligibility requirement set
forth in the first sentence of Section 3 of the Plan or any prior version of the
Plan.

               n.    "Years of Service", for purposes of this Plan, shall have
the same meaning as provided in Section 1.59 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
fifty-five (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 employee
of the Corporation, regardless of whether he satisfies all the eligibility
requirements to be a Vested 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 Section 4.c.

               Notwithstanding anything in this Section to the contrary, with
respect to a person who elected to participate in the Hershey Foods Corporation
2001 Early Retirement Plan (the "ERP") and who terminates his or her employment
with the Corporation under the terms and conditions of the ERP, such person's
age at the time of his or her termination from

                                       3


employment  shall be the  greater  of (y) such  person's  actual  age or (z) age
fifty-five (55) for purposes of determining such person's eligibility to receive
a benefit under this Plan as set forth in subsection (i) of this Section.

         4.    RETIREMENT BENEFITS.

               a.    Normal Retirement Benefit. An employee who qualifies as a
Vested Participant on the date of his termination of employment with the
Corporation, 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:

                     (2) one hundred percent (100%) of the Vested
         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 Vested 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
Vested Participant on the date of his termination of employment with the
Corporation, 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 the product of:

                     (1) the benefit determined in accordance with Section 4.a.
         above; and

                                       4


                     (2) one (1) minus the product of (a) five-twelfths of
         a percent (5/12%), and (b) the number of complete calendar months by
         which the Vested Participant's date of termination of employment
         precedes his sixtieth (60th) birthday. Notwithstanding anything in the
         preceding sentence to the contrary, with respect to a Participant in
         this Plan who is eligible for enhanced benefits under the ERP and
         terminates his or her employment under the terms and conditions of the
         ERP, the number of complete calendar months described in subsection
         4b.(2)(b) shall not exceed sixty (60).

                  Payment of such benefit shall commence on the first day of the
month coincident with the Vested 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 Section 4.a. commencing
on that date. In calculating the benefit under Section 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 and qualifies as a Vested
Participant on his date of death, 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 Vested 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 Vested Participant under Sections 4.a. or 4.b. (including
the spousal survivor benefit payable pursuant to Section 4.e. with respect to
any Vested 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 Vested Participant who was a Vested 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 Vested Participant's
death; and (y) for each Vested Participant who first became a Vested 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 Vested 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 Vested
Participant's death. Notwithstanding anything in this paragraph to the contrary,
the

                                       5


lump sum cash value of the benefit described in this Section 4.d. with
respect to each Vested Participant who (A) was a Vested Participant as of
January 1, 1998 and (B) whose employment with the Corporation terminated due to
his or her death on or after January 1, 2002, shall be equal to the greater of
the value of the lump sum cash payment calculated pursuant to the rates and
factors set forth in subsections (x) or (y) of this paragraph.

               e.    Post-Retirement Death Benefit. If a Vested 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 Vested Participant's death, equal to:

                     (1) fifty percent (50%) of the monthly  retirement benefit
         to which the Vested 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 Section 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 Section 3 or of the
benefit reduction factors in Sections 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, Vested Participant or other employee of the Corporation
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 Section 4.e.
hereof) payable pursuant to Section 4.a. or 4.b. hereof to a Vested  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 Vested
Participant  and/or his surviving  spouse is herein  referred to for purposes of
this Section 6 as the "Applicable Retirement Benefit"),  such Vested Participant
may elect to receive the following form of benefit payment:

               A lump sum cash payment, payable to the Vested Participant
within ten (10) days after the Vested Participant's date of retirement (or the
Vested 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 Vested Participant who was a Vested 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 (12)
months

                                       6


immediately preceding the date of the Vested Participant's retirement (or
the Vested 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 Vested Participant who first
became a Vested 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 Vested
Participant's retirement (or the Vested Participant's date of termination of
employment other than for Cause) (without regard to any other subparagraph of
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 Vested Participant's retirement.
Notwithstanding anything in this paragraph to the contrary, the lump sum cash
value of the Applicable Retirement Benefit for each Vested Participant who (A)
was a Vested Participant as of January 1, 1998 and (B) whose employment with the
Corporation terminated on or after January 1, 2002, shall be equal to the
greater of the value of the lump sum cash payment calculated pursuant to the
rates and factors set forth in subsections (x) or (y) of this paragraph.

               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. Notwithstanding
anything in the preceding sentence to the contrary, any Vested Participant who
was eligible for enhanced benefits under the ERP and terminates his or her
employment with the Corporation under the terms and conditions of the ERP,
shall, with the Committee's approval, be allowed to make such election at any
time prior to the date that his or her Applicable Retirement Benefit payment
would otherwise be 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 Sections 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 Section 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 Section 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 Section 7.a. is provided to the applicable SERP Recipient),
equal to the actuarial present value of his Future Retirement Benefit,
calculated using: (x) for each SERP Recipient who was (or whose benefit is
applicable to a Vested Participant who was) a Vested Participant on January 1,
1998, (i) the 83 GAM mortality tables; and (ii) an interest rate equal to the
PBGC Interest Rate as of the date of the Change in Control; and (y) for each
SERP Recipient who first became (or whose benefit is the result of a Vested
Participant who first became) a Vested 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

                                       7


amended  from  time to  time)  used to  determine  reserves  for  group  annuity
contracts  issued on the date of the  Change in Control  (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  Change  in
Control.  Notwithstanding  anything in this paragraph to the contrary,  the lump
sum cash value of the  benefit  described  in this  Section  7.a.  for each SERP
Recipient who was, or whose benefit is  applicable to a Vested  Participant  who
(A) was a Vested Participant as of January 1, 1998 and (B) whose employment with
the  Corporation  terminated on or after January 1, 2002,  shall be equal to the
greater of the value of the lump sum cash  payment  calculated  pursuant  to the
rates and factors set forth in subsections (x) or (y) of this paragraph.

               Notwithstanding the foregoing, the provisions of this Section
7.a. shall not apply with respect to a SERP Recipient unless such SERP Recipient
consents to the application of this Section 7.a. within thirty (30) days after
the date the SERP Recipient receives written notice of the terms of this Section
7.a., as provided for by the following sentence. The Corporation shall provide
each SERP Recipient, a written notice of the terms of this Section 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 in Control.

               b.    For purposes of Sections 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 (2/3) 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 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;

                                       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
         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.

               c.    For purposes of Sections 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

                                       9


         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 Section 7.b.

               d.    For purposes of this Section 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 any Participant, Vested Participant, spouse of a Participant or Vested
Participant, 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 any Vested 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 any Vested
Participant or 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.
               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.

                                       10


         9.    EFFECTIVE DATE OF PLAN. This Amended and Restated (2002)
Supplemental Executive Retirement Plan shall be effective January 1, 2002 and
Vested 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, or its duly appointed delegee, if applicable, 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, or its delegee in accordance with the Board's
delegation of authority thereto, 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 Vested 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 Vested 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
Vested 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 (2) 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, or
such Participant's surviving spouse, (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 Section 10, whether an employee of
the Corporation qualifies as a Participant shall be determined at the time (a)
the Coverage Period commences and any time 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.

                                       11


         IN WITNESS WHEREOF, Hershey Foods Corporation has caused this Hershey
Foods Corporation Amended and Restated (2002) Supplemental Executive Retirement
Plan to be executed as of the first day of January, 2002.


                            HERSHEY FOODS CORPORATION



                                    By: /s/ Marcella K. Arline
                                         -------------------------------
                                         Marcella K. Arline
                                         Vice President, Human Resources


                                       12


                                   SCHEDULE I
                                       to
                           AMENDED AND RESTATED (2002)
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN



January 2001             1.310%     January 2003                       0.385%
February 2001            1.272%     February 2003                      0.347%
March 2001               1.233%     March 2003                         0.308%
April 2001               1.195%     April 2003                         0.270%
May 2001                 1.156%     May 2003                           0.231%
June 2001                1.118%     June 2003                          0.193%
July 2001                1.079%     July 2003                          0.154%
August 2001              1.041%     August 2003                        0.116%
September 2001           1.002%     September 2003                     0.077%
October 2001             0.964%     October 2003                       0.039%
November 2001            0.925%     November 2003 and each
December 2001            0.887%     succeeding month                   0.000%


January 2002             0.848%
February 2002            0.809%
March 2002               0.771%
April 2002               0.732%
May 2002                 0.694%
June 2002                0.655%
July 2002                0.617%
August 2002              0.578%
September 2002           0.540%
October 2002             0.501%
November 2002            0.463%
December 2002            0.424%

EXHIBIT 12

                                             HERSHEY FOODS CORPORATION
                                 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                                    (in thousands of dollars except for ratios)
                                                    (Unaudited)

                                                           For the Three Months Ended
                                                           --------------------------
                                                           March 31,       April 1,
                                                             2002           2001
                                                         -----------      ----------

Earnings:

Income before income taxes                               $  137,514        $ 126,859

Add (deduct):

   Interest on indebtedness                                  16,244           18,269
   Portion of rents representative of the
     interest factor (a)                                      3,525            3,649
   Amortization of debt expense                                 116              116
   Amortization of capitalized interest                       1,045            1,055
                                                            --------         -------
          Earnings as adjusted                           $  158,444        $ 149,948
                                                            ========         =======
Fixed Charges:

   Interest on indebtedness                              $   16,244        $  18,269
   Portion of rents representative of the
    interest factor (a)                                       3,525            3,649
   Amortization of debt expense                                 116              116
   Capitalized interest                                         329              272
                                                            --------         -------
       Total fixed charges                               $   20,214        $  22,306
                                                            ========         =======
Ratio of earnings to fixed charges                             7.84             6.72
                                                            ========         =======

NOTE:

(a)  Portion of rents representative of the interest factor consists of all
     rental expense pertaining to operating leases used to finance the purchase
     or construction of warehouse and distribution facilities, and one-third of
     rental expense for other operating leases.