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UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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______________________________
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FORM
8-K
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CURRENT
REPORT
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Pursuant
to Section 13 or 15(d) of the
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Securities
Exchange Act of 1934
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January
27,
2006
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Date
of Report (Date of earliest event
reported)
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The
Hershey
Company
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(Exact
name of registrant as specified in its
charter)
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Delaware
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(State
or other jurisdiction of
incorporation)
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1-183
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23-0691590
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(Commission
File Number)
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(IRS
Employer Identification No.)
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100
Crystal A Drive, Hershey, Pennsylvania
17033
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(Address
of Principal Executive Offices) (Zip
Code)
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Registrant's
telephone number, including area code: (717)
534-6799
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any
of the following provisions:
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[
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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[
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Page
1 of 4 Pages
Exhibit
Index - Page 4
INFORMATION
TO
BE INCLUDED IN REPORT
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Item
1.01
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Entry
Into a Material Definitive
Agreement
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On
January 27, 2006, The Hershey Company (the “Company”) announced that it has
entered into an agreement (“Agreement”) with Hershey Trust Company, as Trustee
for the benefit of Milton Hershey School (the “Milton Hershey School Trust”),
dated January 27, 2006, under which the Milton Hershey School Trust intends
to
participate on a proportional basis in plans approved by the Company’s Board of
Directors (“Board”) to repurchase the Company’s outstanding Common Stock, par
value one dollar per share (“Common Stock”). The Board had approved the
repurchase of $250 million of its Common Stock in April 2005, and in December
2005 approved the repurchase of an additional $500 million of its Common Stock.
The Company expects to complete both authorizations by the end of 2006. The
term
of the Agreement will commence on January 30, 2006 and expire on July 31, 2006
(the “Term”). The parties, by mutual consent, may renew the Agreement for
subsequent additional terms. This Agreement is a renewal of an existing
agreement that commenced on December 13, 2005 and will expire on January 30,
2006.
Under
the
terms of the Agreement, the Milton Hershey School Trust will sell to the Company
on a weekly basis during the Term the number of shares of Common Stock equal
to
the product of the aggregate number of shares of Common Stock the Company has
purchased on the open market from persons other than the Milton Hershey School
Trust during the preceding calendar week (the “Prior Week Shares”) multiplied by
.44. The purchase price for each weekly purchase will be the volume weighted
average price (“VWAP”) paid by the Company for the Prior Week Shares. The VWAP
is calculated by dividing the total consideration paid by the Company, without
taking commissions into account, for the Prior Week Shares by the Prior Week
Shares, excluding any transaction involving the purchase of shares of Common
Stock directly from affiliates of the Company. The Milton Hershey School Trust
is not required to sell shares to the Company if the VWAP for the shares for
such week is less than $55 per share.
A
copy of
the Agreement is attached hereto and filed as Exhibit 10.1. The description
of
the Agreement contained herein is not complete and is qualified in its entirety
by reference to the Agreement which is incorporated by reference
herein.
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Item
7.01
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Regulation
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The
Company issued a press release on January 27, 2006 announcing its entry into
the
Agreement with the Milton Hershey School Trust. A copy of that press release
is
attached hereto and furnished as Exhibit 99.1.
Page
2 of 4 Pages
Exhibit
Index - Page 4
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Item
9.01
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Financial
Statements and
Exhibits
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(d)
Exhibits
| 10.1 |
Agreement
dated January 27, 2006 between The Hershey Company and Hershey Trust
Company, Trustee for the Benefit of Milton Hershey
School
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| 99.1 |
Press
Release dated January 27, 2006
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date:
January 27, 2006
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THE
HERSHEY COMPANY
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By:
/s/
David J. West
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David
J. West
Senior
Vice President, Chief Financial
Officer
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Page
3 of 4 Pages
Exhibit
Index - Page 4
EXHIBIT
INDEX
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Exhibit
No.
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Description
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10.1
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Agreement
dated January 27, 2006 between The Hershey Company and Hershey Trust
Company, Trustee for the Benefit of Milton Hershey
School
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99.1
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Press
release dated January 27, 2006
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Page
4 of 4 Pages
Exhibit
Index - Page 4
Exhibit
10.1
AGREEMENT
THIS
AGREEMENT, is entered into on January 27, 2006 by The Hershey Company (the
“Company”) and HERSHEY TRUST COMPANY, as Trustee for the benefit of Milton
Hershey School (the “Trust”).
RECITALS
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I.
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The
Company’s Board of Directors has authorized a stock repurchase program
(the “Stock Repurchase Program”) for the purchase of shares of the
Company’s outstanding Common Stock, par value one dollar per share
(“Shares”).
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II.
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By
their agreement dated December 12, 2005 (“Prior Agreement”) the Trust
agreed to sell Shares to the Company and the Company agreed to purchase
Shares from the Trust in connection with the Stock Purchase Program
as
provided in the Prior Agreement.
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III.
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The
Trust desires to renew the Prior Agreement in order to sell Shares
to the
Company, and the Company desires to renew the Prior Agreement in
order to
purchase Shares from the Trust, in connection with the Stock Repurchase
Program as provided in this Agreement.
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IV.
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This
Agreement is being entered into in good faith and not as part of
a plan or
scheme to evade the prohibitions of Rule 10b5-1 under the Securities
Exchange Act of 1934, as amended (the “1934
Act”).
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IN
CONSIDERATION OF the mutual promises contained in this Agreement, the Company
and the Trust agree:
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Purchase
and Sale
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1.
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The
Company shall deliver to the Trust a completed notice in the form
attached
to this Agreement as Exhibit “A” (a “Notice”) at or before 12:00 p.m.
Eastern Time each Monday or, if Monday is not a business day, on
the next
business day setting forth, with respect to the calendar week preceding
the date on which the Notice is delivered, the Prior Week Shares
(as
described below) and the VWAP (as described below) for such calendar
week.
The Trust shall, after receipt of the Notice, deliver and sell to
the
Company, and the Company shall buy from the Trust (each such transaction,
a “Sale”), at or before 12:00 p.m. Eastern Time on the second business day
following receipt of the Notice (a “Closing Date”) a number of Shares (the
“Sale Shares”) equal to 0.44, multiplied by the aggregate number of Shares
the Company has purchased on the open market from persons other than
the
Trust or any affiliate of the Company during the calendar week ending
immediately prior to the date of the relevant Notice (the “Prior Week
Shares”). On each Closing Date, (a) the Trust shall deliver to the
Company’s transfer agent stock instructions to transfer the Sale Shares to
the Company, together with such stock powers and other instruments
as may
be necessary to give effect to such instructions, and (b) the Company
shall pay the purchase price
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for
the Sale Shares in immediately available funds to such account
as the
Trust has designated in
writing.
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2.
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The
price per Share to be paid by the Company under each Sale shall be
the
Volume Weighted Average Price (“VWAP”) paid by the Company for the Prior
Week Shares. For purposes of this Agreement, VWAP is calculated by
dividing the total consideration paid, without taking commissions
into
account, for the Prior Week Shares by the Prior Week Shares; provided,
however, that the calculation of the VWAP for any Sale shall not
take into
consideration and shall exclude any transaction involving the purchase
of
Shares directly from affiliates of the Company.
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3.
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Notwithstanding
anything herein to the contrary, the Trust shall not be required
to effect
any Sale if the VWAP for the Shares applicable to such Sale is less
than
$55.00 per Share. The Company shall not be obligated to deliver a
Notice
and neither the Company nor the Trust shall be required to effect
a Sale
if the performance of their respective obligations would violate
applicable law; without limiting the foregoing, the Trust shall not
be
obligated to effect any Sale at (i) any time that any officer or
director
of either the Company or the Trust is in possession of material non-public
information regarding the Company, or (ii) any time after the Company
has
purchased Prior Week Shares when an officer or director of either
the
Company or the Trust was in possession of material non-public information
regarding the Company, unless, in either case, the Company’s purchases of
Prior Week Shares are made pursuant to the provisions of a plan adopted
by
the Company under SEC Rule 10b5-1(c). Only one Notice may be delivered
and
one Sale may be effected each week.
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4.
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Any
fractional amounts of Shares required to be sold to the Company under
any
Notice shall be rounded up to the nearest whole
number.
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5.
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For
purposes of this agreement, (a) “business day” means a day on which the
New York Stock Exchange is open for trading, and (b) “affiliate” has the
meaning given it in Rule 12b-2 under the 1934
Act.
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B.
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Term.
The term of this Agreement shall commence on January 30, 2006 and
shall
continue through July 31, 2006 with respect to the Prior Week Shares
for
the calendar week ending July 28, 2006. The parties, by mutual agreement,
may renew this Agreement for additional terms, subject to mutual
agreement
on the floor price in Section A.3. with respect to such renewal period.
It
is the intent of the parties that the Trust participate in the Stock
Repurchase Program on a pro rata basis with the public stockholders.
Accordingly, the parties agree that upon renewal the multiplier contained
in Section A.1., i.e. “0.44” will be adjusted, if necessary, to properly
account for the then current ownership position of the Trust and
the
public stockholders.
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| C. |
Representations
and Warranties.
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1.
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The
Trust represents and warrants to the Company that (a) each Sale will
have
been duly authorized by the Board of Directors of the Trust, (b)
no Sale
will contravene, or require any consent, notice or filing which has
not
been obtained, given or made, under (i) any law applicable to the
Trust, (ii) the organizational documents of the Trust or (iii) any
judgment, order or decree or any contract or agreement to which the
Trust
is subject, (c) the Trust has or will have valid title to the Shares
to be
sold to the Company and the legal right and power to sell, transfer
and
deliver such Shares, and (d) the delivery of the Shares under each
Sale will, upon payment of the purchase price therefor, pass valid
title
to the Company to such Shares free and clear of any security interests,
claims, liens, equities, and other
encumbrances.
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2.
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The
Company represents and warrants to the Trust that (a) each Sale will
have
been duly authorized by the Board of Directors of the Company, and
(b) no
Sale will contravene, or require any consent, notice or filing which
has
not been obtained, given or made, under (i) any law applicable to
the
Company, (ii) the organizational documents of the Company or (iii)
any
judgment, order or decree or any contract or agreement to which the
Company is subject.
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D.
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Third-Party
Beneficiaries. This Agreement is intended solely for the benefit
of the
Company and the Trust and may not be
assigned.
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E.
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Arbitration.
All disputes that may arise between the parties regarding the
interpretation or application of this Agreement and the legal effect
of
this Agreement shall, to the exclusion of any court of law, be arbitrated
and determined by a board of arbitrators, unless the parties can
resolve
the dispute by mutual agreement. Either party shall have the right
to
submit any dispute to arbitration ten (10) days after the other party
has
been notified as to the nature of the dispute. If the dispute goes
to
arbitration, each party shall select one arbitrator and the two
arbitrators shall jointly select a third arbitrator. The arbitration
shall
be governed by the rules of the American Arbitration Association
and the
laws of the State of Delaware. The proceeding shall be held in Hershey,
Pennsylvania. The parties consent that any papers, notices, or process
necessary or proper for the institution or continuance of, or relating
to
any arbitration proceeding, or for the confirmation of an award and
entry
of judgment on any award made, including appeals in connection with
any
judgment or award, may be served on each of the parties by registered
mail
addressed to the party at the principal office of the party, or by
personal service on the party. The Company and the Trust consent
to the
jurisdiction of the arbitration panel and agree that its decision
shall be
final and not subject to appeal.
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F.
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Sales
Plan. It is the intent of the parties that this Agreement comply
with the
requirements of Rule 10b5-1(c) under the 1934 Act and this Agreement
shall
be interpreted to comply with the requirements of Rule 10b5-1(c)
under the
1934 Act.
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G.
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Complete
Agreement. This Agreement constitutes the entire agreement between
the
parties with respect to its subject matter and supersedes all prior
agreements, oral or written, with respect to such subject
matter.
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H.
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Governing
Law. This Agreement shall be governed by and construed in accordance
with
the laws of the State of Delaware.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
THE
HERSHEY COMPANY
| By: |
/s/
Richard H. Lenny
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Name: Richard
H. Lenny
Title: Chairman,
President and CEO
HERSHEY
TRUST COMPANY
| By: |
/s/
Robert C. Vowler
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Name: Robert
C. Vowler
Title: President,
CEO and Secretary
EXHIBIT
“A”
THE
HERSHEY COMPANY STOCK PURCHASE NOTICE
Date:
________________
Item
1. Prior
Week Shares: _______________________.
Item
2. Sale
Shares to be purchased by The Hershey Company in connection with this Notice
(Prior Week Shares times 0.44): __________________.
Item
3. Volume
Weighted Average Price under Sale effected in connection with this Notice:
___________________.
Item
4. Total
amount payable under Sale effected in connection with this Notice:
______________________.
Exhibit
99.1
THE
HERSHEY COMPANY ANNOUNCES NEW STOCK PURCHASE
AGREEMENT
WITH HERSHEY TRUST COMPANY
HERSHEY,
Pa., January 27, 2006 — The
Hershey Company (NYSE:HSY) and Hershey Trust Company, as trustee for the Milton
Hershey School Trust, announced today that they have entered into an agreement
under which the School Trust intends to participate on a proportional basis
in
the Company’s Common Stock repurchase program. This agreement will take effect
January 30, 2006, and expire July 31, 2006. This agreement is a renewal of
an
existing agreement which began December 13, 2005, and will expire January 30,
2006. The terms of the agreement are described in a Form 8-K to be filed today
with the SEC.
The
Company’s Board of Directors had approved the repurchase of $250 million of its
Common Stock in April 2005, of which $187.1 million was utilized through the
end
of 2005, leaving $62.9 million in that authorization. An additional $500 million
authorization was approved by the Company’s Board in December 2005. The Company
expects to complete both authorizations by the end of 2006.
Safe
Harbor Statement
This
release contains statements which are forward-looking. These statements are
made
based upon current expectations which are subject to risk and uncertainty.
Actual results may differ materially from those contained in the forward-looking
statements. Factors which could cause results to differ materially include,
but
are not limited to: the Company’s ability to implement and generate expected
ongoing annual savings from the program to advance its value-enhancing strategy;
changes in the Company’s business environment, including actions of competitors
and changes in consumer preferences; customer and consumer response to selling
price increases; changes in governmental laws and regulations, including taxes;
market demand for new and existing products; changes in raw material and other
costs; pension cost factors such as actuarial assumptions, market
performance, and employee retirement decisions; changes in the value of the
Company’s Common Stock; the Company’s ability to implement improvements to and
reduce costs associated with its supply chain; and such other matters as
discussed in the Company’s Annual Report on Form 10-K for 2004.
#
# #
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Media
Contact:
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Stephanie
L. Moritz
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(717)
534-7641
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Financial
Contact:
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James
A. Edris
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(717)
534-7556
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