As filed with the Securities and Exchange Commission on October 23, 2001
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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HERSHEY FOODS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 23-0691590
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) 100 CRYSTAL A DRIVE Identification No.)
HERSHEY, PENNSYLVANIA 17033
(Address, including zip code of
registrant's principal executive office)
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HERSHEY FOODS CORPORATION
BROAD BASED STOCK OPTION PLAN
(Full title of the plan)
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ROBERT M. REESE, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
HERSHEY FOODS CORPORATION
100 CRYSTAL A DRIVE
HERSHEY, PENNSYLVANIA 17033
(717) 534-6799
(Name, address and telephone number,
including area code, of agent for service)
Copies to:
THOMAS P. DESMOND, ESQ.
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60601
(312) 609-7500
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CALCULATION OF REGISTRATION FEE
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Title of Securities Amount to Proposed Maximum Proposed Maximum Amount of
to be Registered(1) be Registered(2) Offering Price Per Aggregate Offering Price(3) Registration Fee(3)
Share
--------------------- ---------------- ------------------ --------------------------- --------------------
--------------------- ---------------- ------------------ --------------------------- --------------------
Common Stock, par
value $1.00 per share 2,000,000 (3) $105,313,552 $26,328.39
===================== ================ ================== =========================== ====================
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(1) The Registrant is also registering preferred stock purchase rights which
are evidenced by the certificate for the Common Stock being registered in
the ratio of one right for each share of Common Stock. As no additional
consideration will be received for the rights, no registration fee is
required with respect to them under Rule 457(i).
(2) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
the Hershey Foods Corporation Broad Based Stock Option Plan (the "Plan") as
the result of merger, consolidation, recapitalization, reclassification,
stock split, combination of shares or otherwise pursuant to Rule 416(a).
(3) Pursuant to Rule 457(h)(1) under the Securities Act of 1933, as amended,
the proposed maximum offering price per share and the registration fee have
been estimated based on the exercise price of $44.50 applicable to options
to purchase 1,010,100 shares and on the average high and low sales price
for the Common Stock as reported on the New York Stock Exchange on October
16, 2001, with respect to the remaining 989,900 shares.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
NOTE: The documents containing the information specified in this Part I have or
will be sent or given to participants in the Plan as specified by Rule
428(b)(1). Such documents need not be filed with the Commission either as
part of the Registration Statement or as a prospectus or prospectus
supplement pursuant to Rule 424. These documents and the documents
incorporated by reference in the Registration Statement pursuant to Item 3
of Part II of this Form S-8, taken together, constitute a prospectus that
meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by the Registrant are
incorporated in this Registration Statement by reference:
(a) Annual Report on Form 10-K for the year ended December 31, 2000, and
Quarterly Reports on Form 10-Q for the quarterly periods ended April
1, 2001 and July 1, 2001 (File No. 001-00183);
(b) Current Report on Form 8-K dated March 12, 2001 (File No. 001-00183);
(c) The description of Registrant's Common Stock contained on pages A-4
and A-26 to A-28 of Exhibit 13 of the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1997; and
(d) The description of the Registrant's rights to purchase Series A
Participating Preferred Stock contained in the Registration Statement
on Form 8-A filed with the Commission on December 15, 2000 (File No.
001-00183).
All documents subsequently filed by Registrant pursuant to Section 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold shall be deemed to be incorporated by reference in this Registration
Statement and are a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
By-Laws; Delaware Law. Section 145 of the Delaware General Corporation Law
(the "DGCL") empowers a Delaware corporation to indemnify any persons who are,
or are threatened to be made, parties to any threatened, pending or completed
legal action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation), by
reason of the fact that such person is or was a director, officer, employee or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation or
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, provided that
such person acted in good faith and in a manner he reasonably believed to be in
or not opposed to the corporation's best interests, and, for criminal
proceedings, had no reasonable cause to believe his conduct was illegal. A
Delaware corporation may indemnify officers and directors against expenses
(including attorneys' fees) in connection with the defense or settlement of an
action by or in the right of the corporation under the same conditions, except
that no indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify
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him against the expenses (including attorneys' fees) which such officer or
director actually and reasonably incurred in connection therewith.
Section 102(b)(7) of the DGCL provides that a Delaware corporation may
eliminate or limit the personal liability of a director to a Delaware
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that such provision shall not eliminate or limit
the liability of a director (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the DGCL relating to the unlawful payment of a
dividend or an unlawful stock purchase or redemption or (iv) for any transaction
from which the director derived an improper personal benefit.
Article VI of the By-laws of the Corporation provides that the
Corporation shall indemnify, in the manner and to the fullest extent permitted
by the DGCL, any person who is, was or is threatened to be made a party to any
proceeding (including any pending, threatened or completed civil or criminal
action, suit, arbitration, alternate dispute resolution mechanism, investigation
or administrative hearing) by reason of the fact that such person is or was a
director or officer of the Corporation or is or was serving, at the request of
the Corporation, in such capacity for another enterprise. The Corporation will
pay in advance of final disposition all expenses incurred by a director in
defending a proceeding which is subject to indemnification. The Corporation has
the burden of proving that a director was not entitled to indemnification.
Insurance. The Corporation's directors and officers are insured against
losses arising from any claim against them as such for wrongful acts or
omissions, subject to certain limitations.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Restated Certificate of Incorporation, as amended, of Hershey Foods
Corporation (incorporated by reference from Exhibit 3 to Registrant's
Quarterly Report on Form 10-Q for the quarter ended April 3, 1988).
4.2 By-Laws, as amended and restated, of Hershey Foods Corporation
(incorporated by reference from Exhibit 3 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998).
4.3 Hershey Foods Corporation Broad Based Stock Option Plan.
4.4 Stockholder Protection Rights Agreement between Hershey Foods
Corporation and Mellon Investor Services LLC, as Rights Agent, dated
December 14, 2000 (incorporated by reference from Exhibit 4.1 to
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000).
5.1 Opinion of Robert M. Reese regarding the legality of the Common Stock,
par value $1.00 per share, to be issued upon exercise of options
issued under the Agreement.
23.1 Consent of Andersen LLP.
23.2 Consent of Robert M. Reese (included in Exhibit 5.1).
24.1 Powers of Attorney (included on the signature pages of the
Registration Statement).
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ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement
to include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Township of Derry, County of Dauphin, State of Pennsylvania,
on this 22nd day of October, 2001.
Hershey Foods Corporation
By: /s/ R.H. Lenny
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R.H. Lenny
President and Chief Executive Officer
By: /s/ F. Cerminara
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F. Cerminara
Senior Vice President and Chief Financial
Officer
We, the undersigned officers and directors of Hershey Foods Corporation,
and each of us, do hereby constitute and appoint each and any of R.H. Lenny and
F. Cerminara our true and lawful attorney and agent, with full power of
substitution and resubstitution, to do any and all acts and things in our name
and behalf in any and all capacities and to execute any and all instruments for
us in our names in any and all capacities, which attorney and agent may deem
necessary or advisable to enable said corporation to comply with the Securities
Act and any rules, regulations, and requirements of the Commission, in
connection with this Registration Statement, including specifically, but without
limitation, power and authority to sign for us or any of us in our names in the
capacities indicated below, any and all amendments (including post-effective
amendments) hereto; and we do hereby ratify and confirm all that said attorney
and agent, or his substitute, shall do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities set forth below on this 22nd day of October, 2001.
Name Title
---- -----
/s/ K.L. Wolfe Chairman of the Board
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K.L. Wolfe
/s/ R. H. Lenny President, Chief Executive Officer and Director
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R. H. Lenny
/s/ F. Cerminara Senior Vice President and Chief Financial Officer
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F. Cerminara
/s/ D.W. Tacka Chief Accounting Officer
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D.W. Tacka
/s/ C.M. Evarts, M.D. Director
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C.M. Evarts, M.D.
/s/ B.G. Hill Director
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B.G. Hill
/s/ M. J. McDonald Director
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M.J. McDonald
/s/ J.M. Pietruski Director
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J.M. Pietruski
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
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4.1 Restated Certificate of Incorporation, as amended, of Hershey Foods
Corporation (incorporated by reference from Exhibit 3 to Registrant's
Quarterly Report on Form 10-Q for the quarter ended April 3, 1988).
4.2 By-Laws, as amended and restated, of Hershey Foods Corporation
(incorporated by reference from Exhibit 3 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998).
4.3 Hershey Foods Corporation 2001 Broad Based Stock Option Plan.
4.4 Stockholder Protection Rights Agreement between Hershey Foods
Corporation and Mellon Investor Services LLC, as Rights Agent, dated
December 14, 2000 (incorporated by reference from Exhibit 4.1 to
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000).
5.1 Opinion of Robert M. Reese regarding the legality of the Common Stock,
par value $1.00 per share, to be issued upon exercise of options
issued under the Agreement.
23.1 Consent of Andersen LLP.
23.2 Consent of Robert M. Reese (included in Exhibit 5.1)
24.1 Powers of Attorney (included on the signature pages of the
Registration Statement).
EXHIBIT 4.3
HERSHEY FOODS CORPORATION
Broad Based Stock Option Plan
1. ESTABLISHMENT AND PURPOSE
The purpose of the Broad Based Stock Option Plan (the "Plan") is to provide
to participating employees of Hershey Foods Corporation (the "Corporation") and
its subsidiaries (as defined below), upon whose efforts the Corporation is
dependent for the successful conduct of its business, an incentive to continue
and increase their efforts as employees and to remain in the employ of the
Corporation and its subsidiaries. To accomplish this purpose, the Corporation's
Board of Directors ("Board") has authorized the Compensation and Executive
Organization Committee of the Board (the "Committee") to grant, from time to
time in its sole discretion and in accordance with the Plan, options ("Options")
to purchase shares of the Corporation's Common Stock, $1.00 par value (the
"Common Stock").
2. STOCK SUBJECT TO THE PLAN
The aggregate number of shares of Common Stock for which Options may be
granted pursuant to this Plan is two million (2,000,000), subject to adjustment
in accordance with Paragraph 11 below. The shares of Common Stock issued upon
exercise of Options granted 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 (whether made before or after the exercise of the Options) or
otherwise. In addition to the shares of Common Stock actually issued or
distributed upon exercise of Options granted under the Plan, there shall be
deemed to have been issued a number of shares equal to the number of shares of
Common Stock in respect of which optionees utilize the manner of exercise of,
and payment for, Options as provided in Paragraph 5(e)(iii) of the Plan. If, for
any reason, any Option granted under the Plan expires or terminates or is
forfeited or surrendered, the number of shares of Common Stock for which such
Option was granted shall be disregarded in determining whether the aggregate
number of shares of Common Stock for which Options may be granted has been
reached.
3. Administration
The Plan shall be administered by the Committee or any successor committee
appointed by the Board. The Committee may adopt such rules and regulations as it
deems useful in governing its affairs. 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 determine the terms, conditions, form
and amount of grants, including conditions upon and provisions for vesting,
exercise and acceleration of any grants; and (v) 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.
Any dispute or disagreement which shall arise under, as a result of, or in
any way relate to the interpretation, construction or administration of the Plan
or the Options granted hereunder shall be determined in all cases by the
procedures established by the Plan, as amended or supplemented by the Committee.
All disputes or disagreements shall be initially submitted to the Vice President
of Human Resources of the Corporation for resolution. The Participant or his
legal representative or beneficiary will submit to the Vice President of Human
Resources a summary of the dispute and all materials supporting his or her
position on the matter. The Corporation will also submit materials to support
its position on the matter. The Vice President of Human Resources shall render a
decision in writing within thirty (30) days of the receipt of the submissions by
both parties. Participant or the Corporation may appeal the decision of the Vice
President of Human Resources to the Committee, but such appeal must be submitted
to the Committee within fifteen (15) calendar days of the decision by the Vice
President of Human Resources. The Committee will review the material submitted
by the parties to the Vice President of Human Resources and any additional
material the parties may wish to submit to support their position. The Committee
will render its decision in writing by the later of forty-five (45) calendar
days of its receipt of the submissions by both parties or the next regularly
scheduled meeting of the Committee following the receipt of the submissions. The
decision by the Committee shall be final, binding and conclusive for all
purposes.
4. ELIGIBILITY AND PARTICIPATION
With regard to the initial grant of Options under the Plan to be made by
the Committee at its January 7, 1997 meeting (the "Initial Grant"), the
following employees are eligible to participate in the Plan: (i) employees of
the Corporation; (ii) employees of any U.S., Canadian, or Mexican wholly-owned
subsidiary, and employees of Hershey Japan Company, Ltd, a subsidiary of Hershey
International Ltd., Hershey Corporation ZAO, a subsidiary of Hershey Holding
Corporation, and employees of the Corporation's representative offices in Russia
and China (each called a "Subsidiary Corporation" and collectively called the
"Subsidiary Corporations"), provided they were full-time employees of the
Corporation or a Subsidiary Corporation on December 3, 1996. Full-time employees
who were on paid or unpaid leave of absence, layoff, or disability on December
3, 1996 are eligible to participate in the Initial Grant provided they performed
at least one hour of work for the Corporation during 1996. In addition to the
employees described in the first two sentences of this Paragraph 4, an employee
of the Corporation on December 3, 1996 shall be eligible for participation in
the Initial Grant if such individual performed at least one hour of work for the
Corporation, or any Subsidiary Corporation, as an employee in 1996 and in five
(5) of the six (6) years 1990 through 1995. Notwithstanding any other provision
of this Paragraph 4, no individual who (i) as of December 3, 1996 was a
temporary employee (as defined in the Corporation's Human Resources Policy
Manual) of the Corporation; (ii) as of December 3, 1996 was a leased employee
(as hereinafter defined); or (iii) on January 7, 1997 is eligible to receive a
stock option grant under the Corporation's Key Employee Incentive Plan ("KEIP")
shall be eligible for participation in the Initial Grant. For purposes of the
Initial Grant, a "leased employee" shall be defined as an employee of an entity
other than the Corporation, or any Subsidiary Corporation, who performs
2
services for the Corporation, or any Subsidiary Corporation, on a short- or
long-term basis and who, in the performance of such services, may (but need not)
be under the primary direction or control of the Corporation, or any Subsidiary
Corporation. Persons who would otherwise be classified as "leased employees"
under Section 414(n) of the Internal Revenue Code of 1986, or any successor
provision, shall, without limitation of the immediately preceding sentence and
for purposes of the Initial Grant, be deemed "leased employees."
In the event that the Committee elects, in its sole discretion, to grant
Options at any time following the Initial Grant, it shall prescribe eligibility
criteria for each such grant at the time of the grant, provided however, that in
each such case, temporary employees, leased employees, and employees who on the
date of the grant are eligible to receive stock options under the Corporation's
KEIP shall not be eligible to participate in the grant.
Any employee meeting the eligibility criteria established pursuant to this
Paragraph 4 for the Initial Grant or any subsequent grant, or the estate of such
employee if deceased, shall, for the purposes of such grant, be hereinafter
referred to as a "Participant."
5. TERMS OF GRANT
The Initial Grant and any other option grants which may be made by the
Committee shall be subject to the following terms and conditions, as well as
such additional consistent terms and conditions as the Committee may establish
at the time of such grant:
(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. 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 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.
(b) Options granted under the Plan shall be exercisable 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 (10) years
from the date of grant.
(c) Unless otherwise provided by the Committee, no Option granted
hereunder may be exercised during the first five (5) years after the date of
grant by the Committee.
(d) Exercise of an Option shall be accomplished in the form and
manner established by the Committee.
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(e) The purchase price upon exercise of any Option shall be paid in
full by the Participant to the Corporation by making payment either (i) in cash,
or (ii) in a simultaneous exercise of the 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, or
(iii) by a combination of (i) and (ii).
6. VESTING
(a) All Options granted under this Plan shall have a five (5) year
vesting requirement and shall be subject to such other vesting terms and
conditions as the Committee shall prescribe in the grant. With regard to the
Initial Grant a Participant must (i) perform at least one hour of work for the
Corporation or a Subsidiary Corporation during each of the years 1997 through
2001 and (ii) be a full-time or part-time employee of the Corporation or a
Subsidiary Corporation or a Chocolate World Flex Force Employee (as defined in
the Human Resources Policy Manual) on January 6, 2002 in order to satisfy this
vesting requirement. Participants who retire under a retirement plan of the
Corporation or terminate employment after attaining age 55 ("retire" or
"retirement"), die or become disabled on or after December 4, 1996, but before
the close of business on January 6, 2002, shall not forfeit their Options under
the Initial Grant, but shall maintain such rights in the Options to the extent
set forth in Paragraph 7(b) below.
(b) Notwithstanding any other provision of the Plan or of the terms
and conditions of any grant of Options hereunder, upon the occurrence of a
Change in Control, each outstanding and unexpired Option held by a Participant
who is an employee of the Corporation or any Subsidiary Corporation or who
retired, died or became disabled 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 established at the time of the grant of the Option.
(c) For purposes of this Plan, a "Change in Control" means:
(1) Individuals who, on December 3, 1996, 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 December 3, 1996, 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
4
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 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
5
successor to the Hershey Trust Company as such trustee, and (b) the Milton
Hershey School, a Pennsylvania not-for-profit corporation.
(d) 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 (c) of Paragraph 6 hereof.
(e) 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
(b) of Paragraph 6 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.
7. TERMINATION OF EMPLOYMENT
Upon termination of the employment with the Corporation of any Participant,
such Participant's rights with respect to any Options granted under this Plan
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 the Participant's termination of
employment with the Corporation. Upon the occurrence of a Potential Change in
Control (as defined in subparagraph (d) of Paragraph 6 hereof) and for a period
of one year thereafter, and upon the occurrence of a Change in Control (as
defined in
6
subparagraph (c) of Paragraph (6) 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
terms and conditions of the grant of 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 this Paragraph 7(a). This Paragraph 7(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's employment with the Corporation terminates as
a result of his or her becoming disabled (in which event termination will be
deemed to occur on the date of such determination), or as a result of retirement
or death, Participant or his or her estate shall continue to be a Participant in
the Plan and may, for a period of up to five (5) years from the date of
disability, death or retirement, exercise such Options pursuant to the terms of
this Plan. With regard to the Initial Grant, any Participant whose employment
with the Corporation terminates in a manner described in this Paragraph 7(b)
during the period beginning December 4, 1996, and ending with the close of
business on January 31, 1997, shall have the right to exercise Options which
have vested under the Plan until the close of trading on the New York Stock
Exchange on January 31, 2002. Any provision of this Paragraph 7(b) to the
contrary notwithstanding, no Option granted pursuant to this Plan shall be
capable of being exercised prior to its becoming vested, or following its
expiration date.
(c) In the event that a Participant resigns from employment with the
Corporation, 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. A Participant's transfer to a non-participating Subsidiary
Corporation shall also not be deemed a termination of employment for purposes of
this section. The sale of a participating or non-participating Subsidiary
Corporation shall, unless the Committee determines otherwise, be deemed a
termination of the Participant's employment under paragraph 7(c) above and
employees of such subsidiary shall no longer be deemed eligible to participate
in the Plan and must exercise their Options (if vested) prior to the sale.
Options which are not vested at the time of sale will be
7
terminated. Any provision of this Paragraph 7(d) to the contrary
notwithstanding, with respect to the Initial Grant, any Participant who, on the
date of the sale of a participating or non-participating Subsidiary Corporation,
has attained the age of 55, died or become disabled while employed by the
Corporation, shall be deemed to have terminated their employment pursuant to
Paragraph 7(b), and shall continue to be Participants under the Plan in
accordance with that paragraph.
(e) The Committee shall be authorized to make all determinations and
calculations required by this Paragraph 7, 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.
8. ADDITIONAL REQUIREMENTS
No Options 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 Option, if such exercise and/or sale
would, in the opinion of counsel for the Corporation, violate the Securities Act
of 1933, as amended (or other federal or state statutes, or foreign statutes
having similar requirements), or exceed daily volume limitations imposed by the
Corporation from time to time on sales of Common Stock. Each Option shall be
subject to the further requirement that, if at any time the Committee shall
determine in its discretion that the listing or qualification of the shares
relating or subject to such Option 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 Option or the distribution or the issue of shares
thereunder, such Option 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.
A Participant's interest in Options granted under this Plan may be subject
to restrictions or other special rules as to grant, exercise, resale or other
disposition and to such other provisions as may be appropriate to comply with
federal, state and/or foreign securities and other applicable laws and stock
exchange requirements, and the grant or exercise of any Option or entitlement to
payment thereunder may be contingent upon receipt from the Participant (or any
other person permitted by this Plan to exercise any Option 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.
9. NONTRANSFERABILITY
Options granted under this Plan to a Participant 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.
10. DISCLAIMER OF RIGHTS
No provision in the Plan or any Options 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
8
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 Options, unless and until
such shares have been issued to him or her.
11. 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 each share theretofore appropriated or thereafter
subject or which may become subject to Options, 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 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 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 Options 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.
12. 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 upon the exercise of an
Option may, by notice to the Corporation, elect to have such withholding
satisfied by a reduction of the number of shares otherwise so deliverable, 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 of such shares on the date of such taxable event.
9
13. EFFECTIVE DATE AND TERMINATION OF PLAN
The Plan shall become effective upon adoption by the Board. The Board at
any time may terminate the Plan, but such termination shall not alter or impair
any of the rights or obligations under any grant of Options theretofore made
under the Plan unless the affected Participant shall so consent.
14. 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.
15. NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the Participant
to exercise such Option.
16. AMENDMENT
The Board, 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.
IN WITNESS WHEREOF, the Corporation has caused the Plan to be adopted as of
the 3rd day of December, 1996.
HERSHEY FOODS CORPORATION
By: /s/ Kenneth L. Wolfe
--------------------------
Kenneth L. Wolfe, Chairman
10
EXHIBIT 5.1
October 22, 2001
Hershey Foods Corporation
100 Crystal A Drive
Hershey, Pennsylvania 17033
Ladies and Gentlemen:
I am General Counsel of Hershey Foods Corporation, a Delaware corporation
(the "Company") and as such have acted as counsel to you in connection with the
Registration Statement on Form S-8 under the Securities Act of 1933, as amended,
to be filed with the Securities and Exchange Commission which covers 2,000,000
shares of Common Stock, $1.00 par value, of the Company (the "Shares") offered
upon exercise of options under the Company's Broad Based Stock Option Plan (the
"Plan").
I have examined the Registration Statement and such documents and records
of the Company and other documents as I have deemed necessary for the purpose of
this opinion.
Based upon the foregoing, I am of the opinion that:
1. The Company is a corporation duly organized and legally existing under
the laws of the State of Delaware.
2. The Company has taken all action necessary to authorize (i) the
Plan, (ii) the granting of options pursuant to the Plan, and (iii) the issuance
of the Shares in accordance with the Plan and upon the exercise of options
granted pursuant thereto.
3. The Shares that will be issued in accordance with the Plan and upon
the exercise of options granted pursuant to the Plan, upon such issuance will
constitute legally issued, fully paid and non-assessable Shares.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Robert M. Reese
-----------------------------
Robert M. Reese
Senior Vice President,
General Counsel and Secretary
Exhibit 23.1
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement on Form S-8 of our report dated
January 26, 2001 included in Hershey Foods Corporation's Form 10-K for the year
ended December 31, 2000 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
New York, New York
October 17, 2001