SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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Check the appropriate box:
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[X] Definitive Proxy Statement RULE 14A-6(E)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Hershey Foods Corporation
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(Name of Registrant as Specified In Its Charter)
Hershey Foods Corporation
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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or the Form or Schedule and the date of its filing.
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Notes:
[LOGO OF HERSHEY FOODS APPEARS HERE]
Hershey Foods
Corporation Corporate
Headquarters Hershey,
Pennsylvania 17033
March 13, 1995
To Our Stockholders:
It is my pleasure to invite you to attend the 1995 Annual Meeting of
Stockholders of Hershey Foods Corporation, to be held at 2:00 P.M. on Monday,
April 24, 1995. The meeting will be held at the Hershey Theatre, located one
half block east of Cocoa Avenue on East Caracas Avenue, Hershey, Pennsylvania.
The doors to the Theatre will open at 12:30 P.M.
We also invite you to visit Hershey's Chocolate World Visitors Center anytime
on the day of the Annual Meeting where you, as a stockholder, will receive a
free sample of Hershey product. Last year, as part of our Centennial
celebration, we offered stockholders on the day of the Annual Meeting a special
stockholders' 30% discount at Chocolate World on Hershey's chocolate and non-
chocolate items. As a result of very positive stockholder feedback, we will be
offering the same 30% discount once again this year. You must show the coupon
on the back of this Proxy Statement to receive your discount and the free
product sample. We will also be serving refreshments at Chocolate World. For
your convenience, Chocolate World will be open from 9:00 a.m. to 6:00 p.m. A
map showing directions to Chocolate World appears on the back of this Proxy
Statement. PLEASE NOTE THAT THIS IS A CHANGE FROM OUR USUAL PRACTICE AND THERE
WILL BE NO REFRESHMENTS OR GIFT DISTRIBUTION AT THE HERSHEY THEATRE.
Business scheduled to be considered at the meeting includes the election of
twelve directors and the approval of the appointment of Arthur Andersen LLP as
independent public accountants for the Corporation for 1995. Additional
information concerning these matters is included in the Notice of Annual
Meeting and Proxy Statement.
As in the past, members of management will review with you the Corporation's
operations during the past year and will be available to respond to questions.
A summary of the proceedings will be made available to all stockholders.
In order that an admission ticket can be provided in advance, we again are
asking that registered holders please indicate whether they plan to attend the
Annual Meeting by marking the block in the lower right-hand corner of the proxy
card. In lieu of the card, you may send a request in the envelope provided and
we will send you an admission ticket.
If your shares are currently held in the name of your broker, bank or other
nominee and you wish to attend the meeting, you should obtain a letter from
your broker, bank or other nominee indicating that you are the beneficial owner
of a stated number of shares of stock as of the record date, February 28, 1995.
This will help facilitate registration at the meeting.
To assure proper representation of your shares at the meeting, please
carefully mark the enclosed proxy card; then sign, date, and return it at your
earliest convenience. As described in the Proxy Statement, you may elect to
vote your shares in person at the meeting even though you previously have sent
in a proxy.
I look forward to seeing you at the meeting.
Sincerely yours,
/s/ K. L. Wolfe
K. L. Wolfe
Chairman of the Board and
Chief Executive
Officer
[LOGO OF HERSHEY FOODS CORPORATION APPEARS HERE]
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
ON
APRIL 24, 1995
----------------
The Annual Meeting of Stockholders of HERSHEY FOODS CORPORATION will be held
at 2:00 P.M., Monday, April 24, 1995 at the Hershey Theatre, East Caracas
Avenue, Hershey, Pennsylvania 17033 for the following purposes:
(1) To elect twelve directors;
(2) To approve the appointment of Arthur Andersen LLP as the Corporation's
independent public accountants for 1995; and
(3) To transact such other business as may properly be brought before the
meeting and any and all adjournments thereof.
In accordance with the By-laws and action of the Board of Directors,
stockholders of record at the close of business on February 28, 1995 will be
entitled to notice of, and to vote at, the meeting and any and all adjournments
thereof.
By order of the Board of Directors,
ELEANOR S. GATHANY Acting Secretary
March 13, 1995
KINDLY MARK, SIGN, AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE IF YOU CANNOT ATTEND IN PERSON.
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PROXY STATEMENT
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SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of HERSHEY FOODS CORPORATION, a Delaware
corporation (the "Corporation" or "Hershey Foods"), for use at the Annual
Meeting of Stockholders which will be held at 2:00 P.M., Monday, April 24, 1995
at the Hershey Theatre, East Caracas Avenue, Hershey, Pennsylvania 17033, and
at any and all adjournments of that meeting for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. This Proxy Statement and
the enclosed proxy card are being sent to stockholders on or about March 13,
1995. The Corporation's principal executive offices are located at 100 Crystal
A Drive, Hershey, Pennsylvania 17033.
Shares represented by properly executed proxy cards received by the
Corporation at or prior to the meeting will be voted according to the
instructions indicated on the proxy card. Unless contrary instructions are
given, the persons named on the proxy card intend to vote the shares so
represented FOR the election of the nominees for director named in this Proxy
Statement, and FOR approval of the appointment of Arthur Andersen LLP as the
Corporation's independent public accountants for 1995. As to any other business
which may properly come before the meeting, the persons named on the proxy card
will vote according to their best judgment.
A proxy may be revoked at any time before it is voted at the meeting by
filing with the Acting Secretary of the Corporation an instrument revoking it,
by a duly executed proxy bearing a later date, or by voting by ballot at the
meeting. Shares held for each participant in the Corporation's Automatic
Dividend Reinvestment Service plan or the Corporation's Employee Savings, Stock
Investment and Ownership Plan ("ESSIOP") will be voted by the plan trustee as
directed by the participant's proxy card. If an Automatic Dividend Reinvestment
Service plan participant does not return a card, the participant's shares in
the plan will not be voted. If an ESSIOP participant does not return a card,
that participant's shares will be voted by the plan trustee in proportion to
the final aggregate vote of the plan participants actually voting on the
matter.
The cost of preparing, assembling, and mailing this proxy soliciting material
and Notice of Annual Meeting of Stockholders will be paid by the Corporation.
The Corporation has retained Chemical Bank Shareholder Services to assist in
soliciting proxies for a fee of $4,750 plus reimbursement of reasonable out-of-
pocket expenses. Additional solicitation by mail, telephone, telecopier or by
personal solicitation may be done by directors, officers and regular employees
of the Corporation, for which they will receive no additional compensation.
Brokerage houses and other nominees, fiduciaries and custodians nominally
holding shares of the Corporation's stock as of the record date will be
requested to forward proxy soliciting material to the beneficial owners of such
shares, and will be reimbursed by the Corporation for their reasonable
expenses.
VOTING SECURITIES
The Corporation has shares of two classes of stock outstanding, Common Stock
("Common Stock") and Class B Common Stock ("Class B Stock"), each with one
dollar par value. The Common Stock is entitled to cash dividends 10% higher
than those declared on the Class B Stock. The Class B Stock carries ten votes
per share, while the Common Stock carries one vote per share.
At the close of business on February 28, 1995, the record date for the Annual
Meeting, there were outstanding 71,492,218 shares of the Common Stock, and
15,242,979 shares of the Class B Stock, all of which are entitled to vote.
Holders of record of the Corporation's Common Stock on February 28, 1995 will
be entitled to one vote for each share held, and holders of record of the Class
B Stock on February 28, 1995 will be entitled to ten votes for each share held.
According to the Corporation's By-laws, the presence in person or by proxy of
the holders of a majority of the votes entitled to be cast of the outstanding
Common Stock and Class B Stock, respectively, shall constitute quorums for
matters to be voted on separately by the Common Stock as a class and the Class
B Stock as a class. The presence in person or by proxy of the holders of a
majority of the votes entitled to be cast by the combined outstanding shares of
the Common Stock and the Class B Stock shall constitute a quorum for matters to
be voted on without regard to class.
The vote required for approval of any matter which may be the subject of a
vote of the stockholders is provided for in the Corporation's Restated
Certificate of Incorporation, as amended (the "Certificate"), and By-laws. The
specific vote requirements for the proposals being submitted to a stockholder
vote at this year's Annual Meeting are set forth under the description of each
proposal in this Proxy Statement.
Abstentions and broker non-votes are counted for the purpose of determining
whether a quorum is present at the Annual Meeting. For the purpose of
determining whether a proposal (but not on the election of directors) has
received a majority vote, abstentions will be included in the vote totals with
the result that an abstention will have the same effect as a negative vote. In
instances where brokers are prohibited from exercising discretionary authority
for beneficial owners who have not returned a proxy (the broker non-votes),
those shares will not be included in the vote totals and, therefore, will have
no effect on the vote.
As of February 28, 1995 stockholders noted in the following table owned
beneficially the indicated number of shares of the Corporation's Common Stock
and Class B Stock entitled to vote at the meeting.
TITLE OF AMOUNT AND NATURE OF PERCENT
CLASS NAME OR GROUP(/1/) BENEFICIAL OWNERSHIP OF CLASS
- ----------------------- ------------------------ ------------------------------------ --------
Common Stock, Hershey Trust Company(/2/) ++
one dollar 100 Mansion Road East +
par value Hershey, PA 17033 + 20,928,493 shares held by Hershey 29.3%
+ Trust Company, as Trustee for Milton
++ Hershey School
Milton Hershey School(/2/) +
Founders Hall +
Hershey, PA 17033 ++
Hershey Trust Company(/2/) 274,283 shares held as institutional .6%
fiduciary for 58 estates and trusts
unrelated to Milton Hershey School;
and 165,000 shares held as
investments of Hershey Trust Company
Class B Stock, Hershey Trust Company(/2/) ++ 15,153,003 shares held by Hershey 99.4%
one dollar + Trust Company, as Trustee for Milton
par value ++ Hershey School
+
Milton Hershey School(/2/) ++
2
TITLE OF AMOUNT AND NATURE OF PERCENT
CLASS NAME OR GROUP(/1/) BENEFICIAL OWNERSHIP OF CLASS
- ------------------- ------------------------ ------------------------------------ --------
++ W. H. Alexander, 518 shares *
+ Director Nominee
+
+ H. O. Beaver, Jr., Director 7,273 shares *
+
+ R. H. Campbell, 300 shares *
+ Director Nominee
+
+ T. C. Graham, Director 3,200 shares *
+
+ B. Guiton Hill, Director 300 shares *
+
+ J. C. Jamison, Director 5,200 shares *
+
+ S. C. Mobley, Director 753 shares *
+
+ F. I. Neff, Director 400 shares *
+
+ R. J. Pera, Director 1,320 shares *
+
+ J. M. Pietruski, Director 2,200 shares *
+
+ V. A. Sarni, Director 1,704 shares *
Common Stock, +
one dollar ++ J. P. Viviano, Director, 52,010 shares and 84,750 stock *
par value + President and Chief options which are exercisable
+ Operating Officer
+
+ K. L. Wolfe, Director, 71,828 shares and 119,850 stock *
+ Chairman of the Board options which are exercisable
+ and Chief Executive
+ Officer
+
+ M. F. Pasquale 21,947 shares and 52,550 stock *
+ President, Hershey options which are exercisable
+ Chocolate North America
+
+ W. F. Christ 11,766 shares and 33,400 stock *
+ Senior Vice President options which are exercisable
+ and Chief Financial
+ Officer
+
+ J. F. Carr 2,786 shares and 22,650 stock *
+ President, Hershey options which are exercisable
+ International
+
+ All current Directors, 266,587 shares and 542,900 stock 1.1%
+ Nominees for Director, options which are exercisable
+ and Executive Officers
++ as a Group (29 persons)
- --------
* Less than 1%
3
(/1/) None of the current directors, director nominees or officers of the
Corporation owns more than 1% of the outstanding shares of the Common Stock. No
current director, director nominee or officer of the Corporation owns
beneficially any shares of Class B Stock. Beneficial ownership includes shares
held individually and jointly, as well as by spouses and other family members.
Such ownership also includes shares credited to the accounts of officers who
are participants in ESSIOP. All participants are given the opportunity to vote
shares held for their accounts in this plan.
In addition, certain directors and officers of the Corporation are
participants in the Long Term Incentive Program of the Corporation's 1987 Key
Employee Incentive Plan, as amended. These individuals are eligible to receive
incentive awards payable, in whole or in part, in the Corporation's Common
Stock, stock options or in certain circumstances, cash. They are permitted to
defer, in certain instances, receipt of performance share units ("PSU") awards
until a future date. Of those officers named in the preceding table, the
following are the amounts of deferred PSU awards as of February 28, 1995: K. L.
Wolfe, 5,013; J. P. Viviano, 13,878 shares; M. F. Pasquale, 10,633 shares;
W. F. Christ, 5,111 shares and J. F. Carr, 13,048. As of February 28, 1995,
receipt of PSU awards equivalent to 90,268 shares had been deferred by all
current executive officers as a group. The preceding beneficial ownership table
does not include deferred PSU awards.
(/2/) Investment decisions with respect to securities held by Hershey Trust
Company, as Trustee for Milton Hershey School, are made by the Board of
Directors of Hershey Trust Company, as Trustee, with the approval of the Board
of Managers (governing body) of Milton Hershey School. Decisions respecting the
voting of such securities are made by the Board of Directors of Hershey Trust
Company, as Trustee for Milton Hershey School. Investment decisions and
decisions with respect to voting of securities held by Hershey Trust Company as
institutional fiduciary and as investments are made by the Board of Directors
of Hershey Trust Company. Hershey Trust Company, as Trustee for Milton Hershey
School, as fiduciary of the above-noted individual trusts and estates, and as
direct owner of investment shares, will be entitled to vote 21,367,776 shares
of Common Stock at the meeting. Hershey Trust Company, as Trustee for Milton
Hershey School, will be entitled to vote 15,153,003 shares of Class B Stock at
the meeting. Hershey Trust Company will therefore be entitled to cast
21,367,776 of the 71,492,218 votes entitled to be cast on matters required to
be voted on separately by the holders of the Common Stock, and 172,897,806 of
the total 223,922,008 votes entitled to be cast by the holders of the Common
Stock and the Class B Stock voting together on other matters to be voted on
without regard to class.
Pursuant to the Corporation's Certificate, all holders of Class B Stock,
including Hershey Trust Company, are entitled to convert any or all of their
Class B Stock shares into shares of Common Stock at any time on a one-time-
only, share-for-share basis. In the event Hershey Trust Company, as Trustee for
Milton Hershey School, ceases to hold more than 50% of the outstanding shares
of the Class B Stock or 15% of the total outstanding shares of both the Common
Stock and Class B Stock, all shares of the Class B Stock will automatically be
converted into shares of the Common Stock on a share-for-share basis. The
Corporation's Certificate requires the approval of Hershey Trust Company, as
Trustee for Milton Hershey School, prior to the Corporation issuing shares of
Common Stock or undertaking any other action which would cause Hershey Trust
Company, as Trustee for Milton Hershey School, to cease having voting control
of the Corporation.
All of the outstanding shares of Hershey Trust Company are owned by Hershey
Trust Company in its capacity as Trustee for Milton Hershey School. The ten
members of the Board of Directors of Hershey Trust Company are presently the
same as the members of the Board of Managers of Milton Hershey School and
includes William H. Alexander, a director nominee to the Board of Directors of
the Corporation, and Kenneth L. Wolfe, a director and Chairman of the Board and
Chief Executive Officer of the Corporation. Directors of Hershey Trust Company
and members of the Milton Hershey School Board of Managers individually are not
considered to be beneficial owners of the Corporation's shares of Common Stock
or Class B Stock owned by Hershey Trust Company or by Milton Hershey School.
4
PROPOSAL NO. 1--ELECTION OF DIRECTORS
Twelve directors are to be elected at the meeting, each to serve until the
next annual meeting and until his or her successor shall have been elected and
qualified. Except for Messrs. William H. Alexander and Robert H. Campbell, each
of the nominees named in the following pages is presently a member of the Board
of Directors. Mr. Rod J. Pera, currently a director, is not running for re-
election to the Board. Pursuant to the Corporation's Certificate and By-laws,
one-sixth of the directors, which presently equates to two directors, is
entitled to be elected by the Common Stock voting separately as a class. The
two nominees receiving the greatest number of votes of the Common Stock voting
separately as a class shall be elected. Howard O. Beaver, Jr. and Vincent A.
Sarni have been nominated as directors to be so elected by the holders of the
Common Stock of the Corporation. The remaining ten nominees are to be elected
by the holders of the Common Stock and the Class B Stock voting together and
such nominees receiving the greatest number of votes of the Common Stock and
Class B Stock voting together without regard to class shall also be elected. In
case any of the nominees should become unavailable for election for any reason
not presently known or contemplated, the persons named on the proxy card will
have discretionary authority to vote pursuant to the proxy for a substitute.
WILLIAM H. ALEXANDER, age 53, is Managing Director, Snider
Entrepreneurial Center, The Wharton School of the University of
Pennsylvania, Philadelphia, Pennsylvania. He was with H. B.
[PHOTO OF Alexander Enterprises, Inc. from 1969 until 1993 and held a
WILLIAM H. number of management positions, including Vice President and
ALEXANDER General Manager, President and Chairman. He is also a director
APPEARS HERE] of Dauphin Deposit Corporation; Harristown Development
Corporation; Hershey Trust Company; Merchants and Business
Men's Mutual Insurance Company; Pennsylvania Blue Shield; and
Polyclinic Health System and a member of the Board of Managers,
Milton Hershey School.
----------------
HOWARD O. BEAVER, JR., age 69, is retired Chairman of the
Board, Carpenter Technology Corporation, Reading, Pennsylvania.
[PHOTO OF He served as Carpenter's Chief Executive Officer from 1971 to
HOWARD O. 1981 and as Chairman until his retirement in 1983. A Hershey
BEAVER, JR. Foods director since 1984, Mr. Beaver chairs the Audit
APPEARS HERE] Committee and is a member of the Committee on Directors and
Corporate Governance. He is a director of HERCO Inc. and serves
as an Advisory Board Member of Mellon Bank Corporation. He is
to be elected by the Common Stock as a class.
----------------
ROBERT H. CAMPBELL, age 57, is Chairman of the Board, Chief
Executive Officer and President, Sun Company, Inc.,
[PHOTO OF Philadelphia, Pennsylvania. He has been Chief Executive Officer
ROBERT H. and President since 1991, Chairman of the Board since 1992 and
CAMPBELL has been a Director of Sun Company, Inc. since 1988.
APPEARS HERE] Previously, Mr. Campbell had been Executive Vice President
since 1988 and a Group Vice President of Sun Company, Inc since
1983. He is also a director of CIGNA Corporation.
5
THOMAS C. GRAHAM, age 68, is Chairman of the Board and Chief
Executive Officer, AK Steel Corporation, formerly Armco Steel
Company, LP, in Middletown, Ohio. From 1992 to 1994 he served
as Chief Executive Officer and President of Armco Steel
[PHOTO OF Company, LP. In 1992, he served as Chairman and Chief Executive
THOMAS C. Officer, Washington Steel Corporation, Washington,
GRAHAM Pennsylvania. From 1983 to 1991 he was with USX Corporation,
APPEARS HERE] where he held the position of Vice Chairman and Chief Operating
Officer-Steel and Related Resources, and director in 1983;
President-USS and an Executive-Director of USX in 1986 and Vice
Chairman in 1990. A Hershey Foods director since 1989, he
chairs the Employee Benefit Committee and is a member of the
Compensation and Executive Organization Committee. He is also a
director of International Paper Company.
----------------
BONNIE GUITON HILL, age 53, is Dean, McIntire School of
Commerce, University of Virginia, a position she has held since
1992. She was a member of the California Governor's cabinet,
serving as Secretary of the State and Consumer Services Agency
[PHOTO OF from 1991 to 1992. From 1990 to 1991, she was President and
BONNIE GUITON Chief Executive Officer, Earth Conservation Corps, Washington
HILL D.C. and from 1989 to 1990, she served as Special Advisor to
APPEARS HERE] the President for Consumer Affairs. A Hershey Foods director
since 1993, she is a member of the Audit Committee and the
Employee Benefit Committee. She is also a director of AK Steel
Corporation; Crestar Financial Services Corporation; Louisiana-
Pacific Corporation; Niagara Mohawk Power Corporation; and The
National Environmental Education and Training Foundation.
----------------
JOHN C. JAMISON, age 60, is Chairman, Mallardee Associates, a
privately-held corporate financial services business,
Williamsburg, Virginia. From 1990 to 1992 he was President and
Chief Executive Officer of The Mariners Museum, Newport News,
[PHOTO OF Virginia. From 1983 to 1990 he was Dean of the Graduate School
JOHN C. of Business Administration, The College of William & Mary,
JAMISON Williamsburg, Virginia. He was a General Partner with Goldman
APPEARS HERE] Sachs & Co. until 1982, when he became a Limited Partner. A
Hershey Foods director since 1974, he chairs the Committee on
Directors and Corporate Governance and is a member of the Audit
Committee. He is also a director of Best Products Co., Inc.;
Riverside Health System, Inc.; Richfood Holdings, Inc.; and
Williamsburg Winery, Ltd.; and a trustee of The Mariners
Museum.
----------------
SYBIL C. MOBLEY, PH.D., age 69, is Dean, School of Business and
Industry, Florida Agricultural and Mechanical University,
Tallahassee, Florida, a position she has held since the Florida
[PHOTO OF A & M Business Department became the School of Business and
SYBIL C. Industry in 1974. A Hershey Foods director since 1983, she is a
MOBLEY, PH.D. member of the Committee on Directors and Corporate Governance
APPEARS HERE] and of the Employee Benefit Committee. Dr. Mobley is also a
director of Anheuser-Busch Companies, Inc.; Champion
International Corporation; Dean Witter, Discover & Co.; Sears,
Roebuck and Co.; and Southwestern Bell Corp.
6
FRANCINE I. NEFF, age 69, is Vice President and Director, NETS
Inc., a privately-held investment company, Albuquerque, New
[PHOTO OF Mexico. She served from 1974 to 1977 as Treasurer of the United
FRANCINE I. States. From 1977 through 1981, she was a Vice President, Rio
NEFF Grande Valley Bank of Albuquerque. A Hershey Foods director
APPEARS HERE] since 1978, she serves as a member of the Compensation and
Executive Organization Committee and the Audit Committee. She
is also a director of E-Systems, Inc.; Louisiana-Pacific
Corporation; and D. R. Horton, Inc.
----------------
JOHN M. PIETRUSKI, age 62, is Chairman of the Board of Texas
Biotechnology Corp., Houston, Texas, and President of Dansara
Company, a privately-held management consulting firm, New York,
New York. He is also retired Chairman and Chief Executive
[PHOTO OF Officer of Sterling Drug Inc. With Sterling Drug Inc. from 1977
JOHN M. to his retirement in 1988, he also held the positions of
PIETRUSKI Executive Vice President, and President and Chief Operating
APPEARS HERE] Officer. A Hershey Foods director since 1987, he chairs the
Compensation and Executive Organization Committee and is a
member of the Employee Benefit Committee. Mr. Pietruski is also
a director of Lincoln National Corporation; General Public
Utilities Corporation; and McKesson Corporation; and a regent
of Concordia College.
----------------
VINCENT A. SARNI, age 66, is retired Chairman of the Board and
Chief Executive Officer, PPG Industries Inc., Pittsburgh,
Pennsylvania, positions he held from 1984 until his retirement
[PHOTO OF in 1993. Mr. Sarni joined PPG Industries Inc. in 1968 and held
VINCENT A. a number of senior management positions, including Senior Vice
SARNI President and Vice Chairman prior to being elected Chairman and
APPEARS HERE] CEO. A Hershey Foods director since 1991, Mr. Sarni serves as a
member of the Compensation and Executive Organization Committee
and the Committee on Directors and Corporate Governance. He is
also a director of PPG Industries Inc.; PNC Financial Corp.;
The LTV Corp.; and Amtrol Inc. He is to be elected by the
Common Stock as a class.
----------------
JOSEPH P. VIVIANO, age 56, is President and Chief Operating
Officer, Hershey Foods Corporation. He was President, Hershey
Chocolate U.S.A., a division of the Corporation, from 1985 to
[PHOTO OF 1993. From 1975 through 1978, he served as President of San
JOSEPH P. Giorgio, and then served as President of the San Giorgio-
VIVIANO Skinner Company (presently the Hershey Pasta Group) through
APPEARS HERE] 1983. In 1984 he was elected Senior Vice President of the
Corporation. A director of the Corporation since 1986, he
serves as a member of the Executive Committee. He is also a
director of Chesapeake Corporation and a board member of Xavier
University.
7
KENNETH L. WOLFE, age 56, is Chairman of the Board and Chief
Executive Officer, Hershey Foods Corporation. He was elected
President and Chief Operating Officer in 1985, positions he
[PHOTO OF held through 1993. He was elected Vice President, Finance and
KENNETH L. Chief Financial Officer of the Corporation in 1981, and Senior
WOLFE Vice President and Chief Financial Officer in 1984. A director
APPEARS HERE] of the Corporation since 1984, he chairs the Executive
Committee and serves as a member of the Committee on Directors
and Corporate Governance. He is also a director of Bausch &
Lomb Inc. and Hershey Trust Company, and is a member of the
Board of Managers, Milton Hershey School.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
There were nine meetings of the Board of Directors during 1994. No director
attended less than 75% of the sum of the total number of meetings of the Board
of Directors and the total number of meetings held by all committees of the
Board of Directors on which he or she served during 1994. Average attendance
for all of these meetings equalled 95%.
The Board of Directors has five standing committees. These are the Audit
Committee, the Committee on Directors and Corporate Governance, the
Compensation and Executive Organization Committee, the Employee Benefit
Committee, and the Executive Committee. In addition, from time to time the
Board establishes committees of limited duration for special purposes.
The AUDIT COMMITTEE, which held three meetings during 1994, consists of
Messrs. Beaver (Chair), Jamison, and Pera, Ms. Guiton Hill and Mrs. Neff. The
Committee's responsibilities include recommending to the full Board the
selection of the Corporation's independent public accountants; discussing the
arrangements for, the proposed scope, and the results of the annual audit with
management and the independent public accountants; reviewing the scope of non-
audit professional services provided by the independent public accountants;
obtaining from both management and the independent public accountants their
observations on the Corporation's system of internal accounting controls;
reviewing compliance by the Corporation and its employees with laws and
regulations applicable to the Corporation's business and with the Corporation's
Code of Ethical Business Conduct; and reviewing the overall activities and
recommendations of the Corporation's internal auditors.
The COMMITTEE ON DIRECTORS AND CORPORATE GOVERNANCE, which held five meetings
during 1994, consists of Messrs. Jamison (Chair), Beaver, Sarni, and Wolfe and
Dr. Mobley. The Committee's responsibilities include reviewing the size and
composition of the Board and its committees, evaluating and recommending
candidates for election to the Board, administering the Directors' Charitable
Award Program, and reviewing and advising the full Board on issues of corporate
governance. The Committee will consider nominees recommended by stockholders.
Such recommendations should be sent in writing to the Acting Secretary of the
Corporation, 100 Crystal A Drive, Hershey, Pennsylvania 17033, and should
include the proposed nominee's name, address and biographical information.
The COMPENSATION AND EXECUTIVE ORGANIZATION COMMITTEE, which held five
meetings during 1994, consists of Messrs. Pietruski (Chair), Graham and Sarni,
and Mrs. Neff. The Committee recommends to the full Board the salaries of the
Corporation's elected officers and other key management and executive
employees; administers the Corporation's 1987 Key Employee Incentive Plan, as
amended, Employee Benefits Protection Plan, and the Amended and Restated
Supplemental Executive Retirement Plan; monitors compensation arrangements for
management employees for consistency with corporate objectives and
stockholders' interests; reviews the executive organization of the Corporation;
and monitors the development of personnel available to fill key management
positions.
8
The EMPLOYEE BENEFIT COMMITTEE, which held two meetings during 1994, consists
of Messrs. Graham (Chair), Pera, and Pietruski, Ms. Guiton Hill and Dr. Mobley.
The Committee has various responsibilities with respect to the Corporation's
and its subsidiaries' employee benefit plans and plan investments, including
reviewing and evaluating the performance and decisions of the Corporation's
Employee Benefit Management Committee and certain designees of that Committee.
The EXECUTIVE COMMITTEE, which held nine meetings during 1994, consists of
Messrs. Wolfe (Chair) and Viviano. The Committee, subject to specific
restrictions involving matters of a major nature, may exercise all powers and
authority of the Board of Directors in the management of the business affairs
of the Corporation when the full Board is not in session.
COMPENSATION OF DIRECTORS
Directors who are employees of the Corporation receive no additional
remuneration for their services as directors. Non-employee directors--those
directors not entitled to receive any salary or employee benefits from the
Corporation or its subsidiaries--receive an annual retainer of $20,000; a fee
of $1,000 for each Board meeting attended; a fee of $900 for each Board
committee meeting attended; and a fee of $100 for each Board or Board committee
meeting held by telephone conference call. Board committee chairpersons receive
an annual retainer of $2,000 in addition to meeting fees. Under the Directors'
fees deferral plan, directors may elect to defer receipt of part or all of each
year's fees for such period as they may select, to be paid beginning no later
than retirement from the Board. To further enhance the alignment of the
directors' interests with the stockholders' interests, from time to time
increases in directors' fees may be made in the Corporation's stock. In 1994,
to ensure the directors' compensation package remained competitive, non-
employee directors were granted 100 shares of Common Stock in lieu of an
increase in their annual retainer.
All directors are reimbursed for reasonable travel and other out-of-pocket
expenses incurred in connection with attendance at meetings of the Board and
its committees and for minor incidental expenses incurred in connection with
performance of directors' services. In addition, directors are provided with
travel accident insurance while traveling on the Corporation's business;
receive the same discounts as employees on purchase of the Corporation's
products; and are eligible to participate in the Corporation's Higher Education
Gift Matching Program.
The Corporation maintains a retirement plan for non-employee directors to
assist in attracting and retaining individuals of outstanding competence to
serve on the Board. Any such director who has served as a director for at least
ten years, or retires at age 70 with at least five years of service on the
Board, or retires because of disability regardless of length of service, is
entitled to receive for ten years, unless he or she should die sooner, 100% of
the annual retainer in effect at the time the director retires or is disabled.
The annual retainer includes a value assigned to stock granted in lieu of an
increase in the cash annual retainer. Directors who receive benefits under this
plan are expected to remain available to advise and consult with the members of
the Board as needed.
A Directors' Charitable Award Program (the "Program") was established to
acknowledge the service of directors, to recognize the mutual interest of the
Corporation and its directors in support of worthy nonprofit institutions and
to provide an indirect enhancement to the overall competitiveness of the
directors' benefit program to assist the Corporation in attracting and
retaining directors of the highest caliber. The Corporation is funding the
Program primarily through life insurance policies on its directors. The
charitable donations by the Corporation will be directed primarily to
educational institutions as designated by the directors.
The Program is designed so that when the Corporation receives life insurance
proceeds as a result of the deaths of specified directors, it would then donate
a specific amount per director in the name of the director to designated tax
qualified institution(s). The amount of the donation varies
9
according to the director's length of service as a director, up to a maximum
donation of $1,000,000 after five years of service. Individual directors derive
no financial benefit from the Program since all insurance proceeds and
charitable tax deductible donations accrue solely to the Corporation. All
current directors and four retired directors participate in the Program. The
amount of the charitable donation per participating director is $1,000,000,
except for Messrs. Pera and Sarni, for whom the current amount is $600,000
each, and Ms. Guiton Hill, for whom the current amount is $200,000, because of
their shorter length of service as directors.
1994 EXECUTIVE COMPENSATION
COMPENSATION AND EXECUTIVE ORGANIZATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation and Executive Organization Committee of the Board of
Directors (the "Committee") is composed entirely of non-employee directors, and
is responsible for the establishment and oversight of the Corporation's
executive compensation program.
EXECUTIVE COMPENSATION PHILOSOPHY
The Corporation's executive compensation program is designed to meet the
following objectives:
. To connect the interests of the executive officers with corporate
performance;
. To attract, retain and motivate executive talent;
. To assure a significant portion of the executive officers' total
compensation is dependent upon the appreciation of the Corporation's
common stock; and
. To provide a balanced total compensation package that recognizes the
individual contributions of the executive officers and the overall
business results of the Corporation.
Each year the Committee conducts a full review of the Corporation's executive
compensation program. The annual compensation review permits an ongoing
evaluation of the link between the Corporation's performance and its executive
compensation in the context of the compensation programs of other companies.
This review is performed with the assistance of an independent outside
consultant whose services are retained by the Corporation. The Committee
reserves the right to select and/or meet independently with any consultant at
its discretion. This annual review includes analyzing survey data comparing the
competitiveness of the Corporation's executive compensation, corporate
performance, stock price appreciation and total return to stockholders with a
peer group of companies representing the Corporation's most direct food
industry competitors for executive talent. In the performance graph on page 18,
the Corporation's performance is compared to the Standard and Poor's Food
Industry Index. The peer group considered relevant for the Corporation's
compensation comparison purposes does not include all of the companies in the
Food Industry Index as compensation data on all such companies is not readily
available. Also, the peer group includes some companies that are not in this
index because the Corporation selects those companies it believes to be the
most relevant and direct competitors for executive talent. The Committee
reviews which peer companies are selected for compensation analysis.
In the review of survey data, a statistical process involving regression
analysis is used to determine competitive compensation levels. This approach
adjusts peer group compensation levels for factors such as net sales, return on
equity, and time in position within the organization in determining predicted
values or "going rates" within the marketplace for each element of
compensation. The Corporation targets total compensation "at or above" such
"going rates."
10
The Committee believes significant equity interests in the Corporation held
by the Corporation's management align the interests of stockholders and
management. Through the programs described in this report, a very significant
portion of each executive officer's total compensation is linked directly to
individual and corporate performance and stock price appreciation.
The key elements of the Corporation's executive compensation program consist
of base salary, an annual cash incentive program, and a long-term incentive
program consisting of performance share units and stock options. Incentives
play an important role in motivating executive performance and in aligning
executive pay practices with the interests of the stockholders. The
Corporation's executive compensation program is intended to reward achievement
of both short-term and long-term business goals. To ensure proper balance in
the achievement of these business objectives, the incentive program places
greater dollars at risk in long-term incentives compared to short-term
incentives. The long-term incentive program is especially designed to assure
that the Corporation's executive officers have a significant portion of their
total compensation tied to factors which impact the performance of the
Corporation's stock.
The Committee determined the total compensation of Mr. K. L. Wolfe, the
Chairman of the Board and Chief Executive Officer, and it reviewed the total
compensation as recommended by senior management of a group of the most highly
compensated executive officers, including the individuals whose compensation is
detailed in this proxy statement. This is designed to ensure consistency
throughout the executive compensation program.
The Committee's policies with respect to each of the elements of the
executive compensation program, including the basis for the compensation
awarded to Mr. Wolfe, are discussed below. While the elements of compensation
described below are considered separately, the Committee considers the total
compensation package afforded by the Corporation to each executive officer,
including pension benefits, supplemental retirement benefits, insurance and
other benefits.
BASE SALARIES
Base salaries for new executive officers are initially determined by
evaluating the responsibilities of the position held and the experience of the
individual, and by reference to the salaries paid in the competitive
marketplace for executive talent, including a comparison of base salaries for
comparable positions at other companies.
Salary reviews are conducted annually and salary adjustments are made based
upon the performance of the Corporation and of each executive officer. The
Committee considers both financial and, where appropriate, non-financial
performance measures in making salary adjustments. Base salaries for executive
officers and all other salaried employees are set within salary ranges
established for the position as determined through the annual competitive
salary surveys described above. In the case of executive officers with
responsibility for a particular business unit, such unit's financial results
are also considered.
With respect to the base salary granted to Mr. Wolfe in 1994, which was Mr.
Wolfe's first year as Chairman of the Board and Chief Executive Officer, the
Committee made an assessment of Mr. Wolfe's 1993 individual performance as
President and Chief Operating Officer, his incentive compensation payments in
1993 and considered his relative position in the comparison of base salaries of
chief executive officers of peer companies in the surveys referred to above.
Mr. Wolfe's 1993 salary of $456,500 was increased to a 1994 base salary of
$550,000 to reflect the promotion to his new positions as well as his 1993
individual performance.
11
ANNUAL CASH INCENTIVE PROGRAM
The Corporation's executive officers, as well as other key managerial and
professional employees, are eligible for an annual cash incentive award under
the Corporation's 1987 Key Employee Incentive Plan, as amended (the "Incentive
Plan"), a plan which is administered by the Committee. Participating executive
officers are eligible to earn individual awards expressed as a percentage of
base salary. The final award is the product of the executive officer's base
salary, the applicable target percentage, the corporate or business unit
performance score and the individual performance score. Individual and short-
term (annual) corporate and business unit performance objectives are
established at the beginning of each year by the Committee. For executive
officers on corporate staff, the performance objectives for these incentive
award payments for 1994 were based on financial measures including earnings per
share, return on net assets, and management of certain administrative costs.
For executive officers at the business unit level, the performance objectives
for 1994 were a combination of operating income, a return on business unit net
assets measurement and market share. Adjustments are made to the performance
results, if necessary, to take into account extraordinary or unusual items
occurring during the performance year. Since the final award is the product of
the factors described above, the corporate or business unit performance and
individual performance scores are given equal weight in the formula. With
respect to corporate staff, the relative weights of performance objectives were
40% each for earnings per share and return on net assets and 20% for
administrative cost savings. Performance scores in excess of the objectives for
financial measures and/or individual performance expectations may result in the
individual executive officer receiving more than his/her target percentage.
However, each of the relative weights contain maximums on the components used
to calculate the annual incentive award. The range of the target percentages of
base salary used in 1994 for annual cash incentive awards for executive
officers was 25% to 60%, with the highest rate of 60% applicable only to Mr.
Wolfe.
No annual cash incentive awards are granted unless a corporate "performance
hurdle" is achieved. This hurdle is defined as the minimum rate of return which
average total invested capital must earn before any awards are paid. This is
designed with the stockholders' interest in mind by assuring the Corporation
achieves certain profitability levels before any executive is granted an annual
incentive award.
In 1994, corporate staff participants (which included Mr. Wolfe) partially
achieved the corporate performance objective set for earnings per share, and
exceeded the return on net assets and management of certain administrative
costs objectives. In addition, the Committee took into account Mr. Wolfe's
performance against his personal objectives established earlier in the year
which Mr. Wolfe met. Based on these results, Mr. Wolfe was awarded a 1994
annual cash incentive award of $346,500.
LONG-TERM INCENTIVE PROGRAM--PERFORMANCE SHARE UNITS
Performance share units ("PSUs") were contingently granted in 1994 under the
Incentive Plan to the Corporation's executive officers and certain other top
officers (a combined total of 22 individuals in 1994) based upon a percent of
annual salary. PSUs are generally granted every year and are earned based on
the Corporation's performance over a three-year cycle. Each year begins a new
three-year cycle. Provided the Corporation has achieved the established
performance objectives at the end of the three-year cycle a payment is made,
either in stock, cash or a combination of both, based on the market value of
the shares at the end of the cycle. In determining whether performance
objectives have been achieved, specified adjustments, previously established by
the Committee can be made to the corporate performance to take into account
extraordinary or unusual items occurring during the performance cycle. Payment
may be deferred to a later date at the election of the executive. The value of
each of the PSUs is tied to corporate performance (in determining what
percentage of shares are earned) and stock price appreciation. The established
performance measures in 1994 were
12
earnings per share and return on net assets. Beginning with the 1994-96 three-
year cycle, the Committee agreed to increase the maximum performance score from
100% to 120% to provide a greater incentive. The performance scores can now
range from 0% to 120%.
The Corporation has minimum stockholding guidelines for its executive
officers which require executive officers to accumulate gradually over time,
shares of Common Stock and/or deferred PSUs. The value equivalent of the shares
which must be acquired and held are equal to a multiple of two to eight times
the officer's base salary. If the minimum has not been met, the executive
officer is required to take the PSUs award in Common Stock (net of withholding
taxes) or deferred PSUs. For Mr. Wolfe, the applicable multiple in 1994 was
eight times his base salary.
In 1994, the Committee reviewed the performance objectives set for the 1992-
94 PSU cycle and the 1993-95 PSU cycle. The Committee adjusted the targets to
assure the incentives were fair and motivational to the executives.
Consequently, the targets for the 1992-94 cycle were adjusted to require higher
targets and the targets for the 1993-95 cycle were adjusted downward.
In January 1992, each executive officer and certain other top officers were
granted PSUs having a value at the time of grant equal to a percentage of the
executive officer's annual salary. This percentage was determined by the
Committee based on the recommendation of senior management and competitive
survey information. The Corporation partially achieved its target earnings per
share and return on net assets, each measure having equal weight of 50%, for
the year ended December 31, 1994. Accordingly, 95.5% of the contingent PSUs
granted in January 1992 were earned, and the holders thereof received payment
based on the value of the shares averaged over a period of 21 business days in
December 1994. Mr. Wolfe's award was valued at $345,777 based on the December
1994 "averaged" value of the PSUs from the 1992 grant.
In January 1994, executive officers were granted new contingent PSUs
consistent with past practices. The "Long-Term Incentive Program Performance
Share Unit Awards in Year Ended December 31, 1994" table in this Proxy
Statement provides additional information regarding these grants for the five
most highly compensated executive officers.
LONG-TERM INCENTIVE PROGRAM--STOCK OPTIONS
Under the Incentive Plan, stock options are periodically granted to the
Corporation's executive officers as well as to other key managerial and
professional employees. Stock options entitle the holder to purchase a fixed
number of shares at a set price for a specific duration.
The Committee sets guidelines for the size of stock option grants based on
competitive compensation data gathered from survey information discussed above.
The number of stock options granted are a function of the employee's base pay,
stock option multiples for the employee's grade level and the imputed value of
the option. Management's recommendations regarding the number of options to be
awarded to specific employees are also taken into account. While stock options
have been granted annually to executive officers and certain other top
officers, the Committee can elect not to grant stock options in a given year.
Stock option recipients other than the top officers (over 300 key employees),
generally receive stock option grants every two years.
Stock options are designed to align the interests of executives with those of
the stockholders. Stock options are granted with a ten-year term and an
exercise price equal to the market price of the Common Stock on the date of
grant, and they vest immediately for executive officers. This approach is
designed as an incentive for future performance by the creation of shareholder
value over the long-term since the benefit of the stock options cannot be
realized unless stock price appreciation occurs. Stock option awards are
determined based on competitive pay practices within the food industry;
however, the Committee also takes into account the amounts of options
outstanding or
13
previously granted. The total aggregate size of current stock grants under
consideration is taken into account in deciding the amount of total options to
be awarded.
In 1994, Mr. Wolfe received stock options to purchase 23,150 shares with an
exercise price of $49 per share. The Committee also granted Mr. Wolfe and four
other executive officers additional grants of stock options as a result of
their recent promotions in lieu of adjusting certain other elements of their
pay to take into account their increased responsibilities. For Mr. Wolfe, the
additional stock option grant was for 10,000 shares with an exercise price of
$49 per share.
POLICY REGARDING TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) to the Internal Revenue Code of 1986 (the "Code") provides
that publicly-held companies may be limited in deducting certain compensation
in excess of $1 million paid to the chief executive officer and the four other
most highly compensated officers. The Committee has considered the effect of
Section 162(m) of the Code on the Corporation's executive compensation program
to develop its policy with respect to the deductibility of the Corporation's
executive compensation. It is the Committee's position that in administering
the "performance based" portion of the Corporation's executive compensation
program, it will attempt to comply with the requirements of Section 162(m).
However, the Committee believes it needs to retain the flexibility to exercise
its judgment in assessing an executive's performance and the total compensation
system for executive officers should be managed in accordance with the
objectives outlined in the "Executive Compensation Philosophy" section of this
report and in the best overall interest of the Corporation's stockholders.
Should compliance with Section 162(m) conflict with the "Executive Compensation
Philosophy" or with what the Committee believes to be in the best interest of
the stockholders, the Committee will act in accordance with the Philosophy and
in the best interest of the stockholders, notwithstanding the effect of such
action on deductibility. However, to assure that the Corporation does not lose
deductions for compensation paid, the Committee has adopted a deferral policy
requiring the executive to defer any compensation in excess of $1 million until
the year in which such compensation would be deductible by the Corporation.
CONCLUSION
In 1994, as in previous years, a substantial portion of the Corporation's
executive compensation consisted of performance-based variable elements. In the
case of Mr. Wolfe, approximately 56% of his 1994 total compensation consisted
of performance-based variable elements, without including stock options in the
computation. The Committee intends to continue the policy of linking executive
compensation to corporate performance and returns to stockholders.
SUBMITTED BY THE COMPENSATION AND EXECUTIVE ORGANIZATION
COMMITTEE OF THE CORPORATION'S BOARD OF DIRECTORS:
John M. Pietruski, Chairman Thomas C. Graham Francine I. Neff
Vincent A. Sarni
14
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows for the fiscal years ending December 31, 1992,
1993 and 1994, the cash compensation paid by the Corporation, as well as
certain other compensation paid or accrued for those years, to each of the
five most highly compensated executive officers of the Corporation in the
capacities in which they served in 1994.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------- ----------------
NUMBER
OF
NAME AND STOCK
PRINCIPAL POSITION OPTION LTIP(/3/) ALL OTHER(/4/)
AS OF 12/31/94 YEAR SALARY(/1/) BONUS(/2/) AWARDS PAYOUTS COMPENSATION
------------------ ---- ----------- ---------- ------ --------- --------------
K. L. Wolfe 1994 $550,000 $346,500 33,150 $345,777 $14,711
Chairman and Chief 1993 456,500 308,709 16,000 440,942 14,992
Executive Officer 1992 440,000 286,528 17,000 358,204 12,541
J. P. Viviano 1994 430,000 248,325 25,300 247,319 17,903
President and Chief 1993 347,500 216,588 12,000 316,382 17,281
Operating Officer 1992 330,000 298,320 12,500 253,534 16,234
M. F. Pasquale(/5/) 1994 295,000 170,378 15,000 146,560 3,750
President, 1993 254,250 142,016 6,300 219,226 5,896
Hershey Chocolate U.S.A. 1992 245,000 131,841 7,250 176,776 5,719
W. F. Christ
Senior Vice President 1994 240,000 126,000 9,050 100,760 4,706
and Chief Financial Of- 1993 200,000 141,750 5,000 144,490 8,077
ficer 1992 175,000 125,631 4,900 104,670 7,765
J. F. Carr 1994 180,000 113,608 6,850 68,724 6,673
President, 1993 156,875 69,755 2,950 102,139 6,368
Hershey International 1992 148,350 105,240 3,400 72,106 2,455
- --------
(/1/) The 1994 salaries reflect adjustments for new positions assumed by
each of the named executive officers as of January 1, 1994. This column also
includes amounts deferred pursuant to Section 401(k) of the Internal Revenue
Code that were contributed by the executive officer to the Corporation's
Employee Savings, Stock Investment and Ownership Plan ("ESSIOP").
(/2/) This column represents annual cash incentive awards (paid out or
deferred) attributable to services rendered for that year.
(/3/) This column reports the cash value earned in PSU payouts during each
of the last three fiscal years at the end of the following three performance
cycles: 1992-94; 1991-93; 1990-92, under the 1987 Key Employee Incentive Plan,
as amended, which were paid or deferred in the fiscal year immediately
following the last year of the respective three-year cycle. Mr. Wolfe received
a portion, $99,992, of his 1994 PSU payout in Common Stock and the balance,
$245,785 was deferred.
(/4/) This column includes the Corporation's matching contributions to the
individual's ESSIOP account and any payments for unused vacation days in
excess of 20 days which by company policy are paid if not taken by the
employee. The specific amounts for 1994 are as follows: K. L. Wolfe, $3,750
(ESSIOP), $10,961 (unused vacation days); J. P. Viviano, $3,750 (ESSIOP),
$14,153 (unused vacation days); W. F. Christ, $3,750 (ESSIOP), $956 (unused
vacation days); and J. F. Carr, $3,750 (ESSIOP), $2,923 (unused vacation
days). For Mr. Pasquale, the amount provided in the column is only for ESSIOP
because he received no payment for unused vacation days.
(/5/)As of January 1, 1995, Mr. Pasquale became President of Hershey
Chocolate North America, a division of the Corporation, consisting of the
Corporation's chocolate and confectionery manufacturing operations in the
United States, Canada and Mexico.
15
LONG-TERM INCENTIVE PROGRAM--STOCK OPTIONS
The following table contains information concerning the grant of stock
options under the 1987 Key Employee Incentive Plan, as amended, to the five
most highly compensated executive officers of the Corporation as of the end of
the last fiscal year:
STOCK OPTION GRANTS FOR YEAR ENDED DECEMBER 31, 1994
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL RATES
OF STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS STOCK OPTION TERM
--------------------------------------------------- -----------------------------
% OF TOTAL
NUMBER STOCK
OF OPTIONS
SECURITIES GRANTED EXERCISE
UNDERLYING TO OR
OPTIONS EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED(/1/) IN 1994(/2/) PER SHARE(/3/) DATE 5%(/4/) 10%(/4/)
- ---- ------------ ------------ -------------- ---------- -------------- --------------
K. L. Wolfe 33,150 3.4% $49 1/3/04 $1,021,545 $2,588,796
J. P. Viviano 25,300 2.6% 49 1/3/04 779,641 1,975,763
M. F. Pasquale 15,000 1.6% 49 1/3/04 462,238 1,171,401
W. F. Christ 9,050 .9% 49 1/3/04 278,883 706,745
J. F. Carr 6,850 .7% 49 1/3/04 211,088 534,940
- --------------------------------------------------------------------------------------------------------
All Stockholders(/5/) N/A N/A N/A N/A $2,709,119,925 $6,865,441,794
- --------
(/1/) All stock options listed in this column are exercisable and have a ten-
year term. The stock options having a $49 exercise price were granted on
January 3, 1994 and were granted at a price not less than 100% of the fair
market value of the shares of Common Stock on the date of grant determined as
the closing price on the business date immediately preceding the date the stock
options were granted. All stock options expire at the end of the stock option
holder's employment except as may be provided differently in the stock option
agreement. Also, in the case of a stock option held by an employee whose
employment ends due to retirement, total disability or death, the employee or
his estate may exercise the stock option within three years of the date of
retirement, total disability or death.
(/2/) In 1994, 357 employees were granted a total of 963,800 stock options.
(/3/) The exercise price may be paid in cash, shares of Common Stock valued
at the fair market value on the date of exercise, or pursuant to a cashless
exercise procedure under which the stock option holder provides irrevocable
instructions to a brokerage firm to sell the purchased shares and to remit to
the Corporation, out of the sales proceeds, an amount equal to the exercise
price plus all applicable withholding taxes.
(/4/) The dollar amounts under these columns for all the individuals are the
result of calculations at the 5% and 10% annual appreciation rates for the term
of the options (10 years) as required by the Securities and Exchange
Commission, and, therefore, are not intended to forecast possible future
appreciation, if any, of the stock price of the Corporation.
(/5/) For "All Stockholders," the potential realizable value on 87,913,236
shares, the number of outstanding shares of Common Stock and Class B Stock on
January 3, 1994, is based on a $49 per share price (the exercise price of the
1994 options). The value of the Common Stock and Class B Stock at $49 per share
was $4,307,748,564. The amounts listed under these columns for "All
Stockholders" are the result of calculations at the 5% and 10% annual
appreciation rates for a period of ten years from January 3, 1994 through
January 3, 2004. These amounts are not intended to forecast possible future
appreciation, if any, of the stock price of the Corporation.
16
The following table sets forth information with respect to the named
executives concerning the exercise of stock options during the last fiscal year
and unexercised stock options held as of the end of the fiscal year:
AGGREGATED STOCK OPTION EXERCISES IN YEAR ENDED DECEMBER 31, 1994
AND YEAR-END STOCK OPTION VALUES
NUMBER OF
SECURITIES
NUMBER UNDERLYING VALUE OF
OF VALUE UNEXERCISED UNEXERCISED
SHARES REALIZED STOCK IN-THE-MONEY
ACQUIRED (MARKET PRICE AT OPTIONS STOCK OPTIONS
ON EXERCISE LESS EXERCISABLE AT EXERCISABLE AT
NAME EXERCISE EXERCISE PRICE) 12/31/94(/1/) 12/31/94(/1/)
- ---- -------- ---------------- -------------- --------------
K. L. Wolfe 0 $ 0 94,750 $598,775
J. P. Viviano 750 14,250 67,600 372,975
M. F. Pasquale 0 0 41,800 269,575
W. F. Christ 0 0 26,300 150,744
J. F. Carr 0 0 17,850 92,769
- --------
(/1/) All of the stock options were granted under the 1987 Key Employee
Incentive Plan, as amended, and are exercisable. The fair market value of the
Common Stock on December 30, 1994, the last trading day of the Corporation's
fiscal year, was $48.375.
LONG-TERM INCENTIVE PROGRAM--PERFORMANCE SHARE UNITS
The following table provides information concerning performance share unit
grants made to the five most highly compensated executive officers of the
Corporation during the last fiscal year under the long term incentive program
portion of the 1987 Key Employee Incentive Plan, as amended. Payments made
under the program for the three-year performance cycle ending December 31,
1994, are reported in the Summary Compensation Table.
LONG-TERM INCENTIVE PROGRAM
PERFORMANCE SHARE UNIT AWARDS IN YEAR ENDED DECEMBER 31, 1994
PERFORMANCE ESTIMATED FUTURE PAYOUTS
NUMBER OF OR OTHER UNDER NON-STOCK PRICE-
SHARES, PERIOD UNTIL BASED PLAN
UNITS OR MATURATION -------------------------------
OTHER OR THRESHOLD TARGET MAXIMUM
NAME RIGHTS (/1/) PAYOUT (#)(/2/) (#)(/3/) (#)(/4/)
- ---- ------------ ------------ --------- -------- --------
K. L. Wolfe 8,932 3 years 1,117 8,932 10,718
J. P. Viviano 5,900 3 years 738 5,900 7,080
M. F. Pasquale 3,850 3 years 481 3,850 4,620
W. F. Christ 2,500 3 years 313 2,500 3,000
J. F. Carr 1,650 3 years 206 1,650 1,980
- --------
(/1/) The performance share units (PSUs) reported in this table were granted
on January 3, 1994 for the cycle commencing January 1, 1994 and ending December
31, 1996.
For purposes of determining the number of grants, the value of each PSU is
based on the average of the daily closing prices of Hershey Foods' Common Stock
on the New York Stock Exchange as reported in The Wall Street Journal for the
December preceding the new three-year performance cycle.
17
The final value of the award is determined based upon three factors. The
first involves the number of PSUs awarded at the commencement of the three-
year cycle. The second factor relates to a performance score as measured
against predetermined earnings per share and return on net assets objectives
for the 1994-96 three-year cycle. The performance scoring can range from a
minimum of 0% to a maximum of 120% achievement. The third factor involves the
value per unit which is determined at the conclusion of the three-year cycle.
The final award is limited to a value of two times the grant price over the
term of the three-year cycle. In the case of the 1994-96 cycle, this limit is
$99.65 share.
(/2/) This column lists the number of shares of Common Stock the value of
which would be payable to the named executives at the threshold achievement
level of 12 1/2%. If the achievement level at the end of the three-year cycle
is less than this threshold, no payments are made.
(/3/) This column lists the number of shares of Common Stock the value of
which would be payable to the named executives at the target, or 100%
achievement level.
(/4/) This column lists the number of shares of Common Stock the value of
which would be payable to the named executives at the 120% or more achievement
level.
PERFORMANCE GRAPH
The following line graph compares the Corporation's cumulative total
shareholder return (Common Stock price appreciation plus dividends, on a
reinvested basis) over the last five fiscal years with the Standard and Poor's
500 Index and the Standard and Poor's Food Industry Group Index.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG S&P FOOD GROUP, S&P 500 INDEX AND HERSHEY FOODS
Measurement period S&P S&P 500 HERSHEY
(Fiscal Year Covered) FOOD GROUP INDEX FOODS
- --------------------- -------- -------- --------
Measurement PT -
1989 $ 100 $ 100 $ 100
1990 $ 107.79 $ 96.90 $ 107.55
1991 $ 157.25 $ 126.42 $ 130.23
1992 $ 156.88 $ 136.05 $ 141.27
1993 $ 143.97 $ 149.76 $ 150.60
1994 $ 160.92 $ 151.74 $ 152.66
* Total return assumes reinvestment of dividends.
Assumes $100 invested on 12/31/89 in Hershey Common Stock, S&P 500 Index and
S&P Food Group Index.
18
BENEFIT PROTECTION ARRANGEMENTS
In 1994 the Corporation entered into severance agreements (the "Severance
Agreements") with the five executive officers named in the summary compensation
table and other management personnel. The terms of these Severance Agreements
are consistent with the practices followed by other major public corporations
in the U.S. and provide that in the event the executive's employment with the
Corporation is terminated without "cause" within two years after a "change in
control" of the Corporation, the executive is entitled to certain severance
payments and benefits. A "change in control" is defined to include an event in
which Hershey Trust Company, as Trustee for Milton Hershey School (the "Hershey
Trust"), no longer holds voting control of the Corporation and another party
acquires twenty-five (25) percent or more of the combined voting power or
common equity of the Corporation. Under the terms of the Severance Agreements,
upon the executive's termination after a "change in control" as described
above, and in order to assist the executive in making a transition to new
employment, the executive would be generally entitled to receive in a lump sum
three times the executive's base salary and incentive bonus. The executive
would also be entitled to continuation of health benefits for such period and
reimbursement for federal excise taxes payable (but not for income taxes
payable). The executive would also become vested in benefits under existing
compensation and benefit programs (including those described in this Executive
Compensation section) and would generally be paid such benefits at the time of
any such change in control.
The Hershey Trust has indicated to the Corporation that it intends to
maintain voting control of the Corporation and therefore it is unlikely that
the Severance Agreements would be utilized. The Hershey Trust has also
indicated that it, however, accepts the position of the Corporation's Board of
Directors that such arrangements are part of the usual and ordinary
compensation packages at major public companies and are important to the
Corporation's ability to attract and retain key employees.
PENSION PLANS
The following table shows the estimated pension benefits payable to a covered
participant at age 60 or later under the Corporation's qualified benefit
pension plan (the "Pension Plan"), as well as the nonqualified supplemental
executive retirement plan that provides benefits that would otherwise be denied
participants by reason of certain Internal Revenue Code limitations on
qualified plan benefits, based on remuneration that is covered under the plans
and years of service with the Corporation:
PENSION PLAN TABLE
YEARS OF SERVICE
---------------------------------------------------------------
REMUNERATION 10 15 20 25 30 35
- ------------ -------- -------- -------- -------- -------- --------
$ 200,000 $ 73,333 $110,000 $110,000 $110,000 $110,000 $110,000
300,000 110,000 165,000 165,000 165,000 165,000 165,000
400,000 146,667 220,000 220,000 220,000 220,000 220,000
500,000 183,333 275,000 275,000 275,000 275,000 275,000
600,000 220,000 330,000 330,000 330,000 330,000 330,000
700,000 256,667 385,000 385,000 385,000 385,000 385,000
800,000 293,333 440,000 440,000 440,000 440,000 440,000
900,000 330,000 495,000 495,000 495,000 495,000 495,000
1,000,000 336,667 550,000 550,000 550,000 550,000 550,000
1,100,000 403,333 605,000 605,000 605,000 605,000 605,000
1,200,000 440,000 660,000 660,000 660,000 660,000 660,000
The remuneration (compensation) used to determine the amount of pension
payable is based on three years average of base salary and five years average
annual cash incentive award. The final
19
average compensation and the estimated credited years of service as of December
31, 1994, respectively, for each of the named executive officers are: K. L.
Wolfe, $766,754, 25.8 years; J. P. Viviano, $585,648, 26.7 years; M. F.
Pasquale, $399,492, 15.4 years; W. F. Christ, $336,947, 24.2 years; and J. F.
Carr, $238,174, 20.8 years. The benefits shown in the above table are
calculated using the life annuity form of payout from the Pension Plan. In
addition, the amounts shown in the table would be reduced by any applicable
Social Security benefits and for a specified percentage for each month that the
retirement occurs before age 60.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT
The Corporation believes that during 1994 its executive officers and
directors have complied with all Section 16 filing requirements with the
exception of one late report. Mr. John B. Stiles, former Vice President and
Controller, inadvertently reported on a Form 4 the sale of 2,375 shares of the
Corporation's stock two days after the due date of the Form 4.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
During 1994 the Corporation and its subsidiaries had a number of transactions
with Milton Hershey School (the "School"); with the Hershey Trust; and with
companies owned by the Hershey Trust, involving the purchase or sale of goods
and services. These latter transactions were primarily with HERCO Inc., an
entertainment and resort company based in Derry Township (Hershey),
Pennsylvania, and wholly-owned by the Hershey Trust.
The aggregate value of sales made during 1994 by the Corporation and its
subsidiaries to the School, the Hershey Trust, and companies owned by the
Hershey Trust, amounted to approximately $750,000. During the year, the
Corporation purchased goods and services from these entities in the amount of
approximately $1.7 million. In 1994, the Corporation contracted for
construction services with firms which are owned by H.B. Alexander Enterprises,
Inc, which is partially owned by Mr. William H. Alexander, a director nominee.
Approximately $550,000 paid since 1994 related to construction services
provided on a non-bid basis. All of the general construction and construction
management contracts of said firms are being concluded or sold to other parties
in which Mr. Alexander does not have an ownership interest other than as a
creditor. The above transactions were on terms that the Corporation believes to
be no less favorable to the Corporation than those which could have been
obtained from other purchasers or vendors.
Pursuant to the Corporation's Directors' Charitable Award Program, as
described in the section "The Board of Directors and its Committees" in this
Proxy Statement, one director and one former director of the Corporation
designated Milton Hershey School Trust as beneficiary of $1.1 million in
charitable donations by the Corporation. These individuals retain the
discretion to change beneficiary designees.
PROPOSAL NO. 2--APPOINTMENT OF AUDITORS
The Board of Directors, on the recommendation of the Audit Committee, has
appointed Arthur Andersen LLP as independent public accountants of the
Corporation for the year ending December 31, 1995. Although not required to do
so, the Board of Directors is submitting the appointment of that firm for
approval at the Annual Meeting. Arthur Andersen LLP has audited the
Corporation's financial statements since 1927 and is considered to be well
qualified. If the appointment is not approved, the Board of Directors will
reconsider its appointment. Representatives of Arthur Andersen LLP will be
present at the meeting with the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
20
The affirmative vote of a majority of the votes represented at the meeting in
person or by proxy of the Common Stock and Class B Stock voting together
without regard to class is required for approval of the appointment of
auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 2, AND SIGNED
PROXIES WHICH ARE RETURNED WILL BE SO VOTED UNLESS A CONTRARY VOTE IS
DESIGNATED ON THE PROXY CARD.
OTHER BUSINESS
It is not expected that any business other than that set forth in the Notice
of Annual Meeting of Stockholders and more specifically described in this Proxy
Statement will be brought before the meeting. However, if any other business
should properly come before the meeting, it is the intention of the persons
named on the enclosed proxy card to vote the signed proxies received by them in
accordance with their best judgment on such business and any matters dealing
with the conduct of the meeting.
1996 STOCKHOLDER PROPOSALS
To be eligible for inclusion in the Corporation's Proxy Statement for the
1996 Annual Meeting of Stockholders, stockholder proposals must be received by
the Corporation at its principal office, Office of the Corporate Secretary, 100
Crystal A Drive, Hershey, Pennsylvania 17033 by November 16, 1995.
By order of the Board of Directors,
Eleanor S. Gathany
Acting Secretary
March 13, 1995
STOCKHOLDERS WHO DESIRE TO HAVE THEIR STOCK VOTED AT THE MEETING ARE
REQUESTED TO MARK, SIGN, AND DATE THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. STOCKHOLDERS MAY REVOKE THEIR
PROXIES AT ANY TIME PRIOR TO THE MEETING AND STOCKHOLDERS WHO ARE PRESENT AT
THE MEETING MAY REVOKE THEIR PROXIES AND VOTE, IF THEY SO DESIRE, IN PERSON.
21
[HERSHEY FOODS CORPORATION COUPON APPEARS HERE]
[HERSHEY FOODS ANNUAL STOCKHOLDERS' MEETING MAP APPEARS HERE]
P R O X Y
HERSHEY FOODS CORPORATION THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having received the Notice of Meeting and Proxy Statement
dated March 13, 1995, appoints K. L. Wolfe, J. P. Viviano, and E. S. Gathany,
and each or any of them as Proxies, with full power of substitution, to
represent and vote all of the undersigned's shares of the Corporation's Common
Stock at the Annual Meeting of Stockholders to be held at 2:00 P.M., April 24,
1995, at the Hershey Theatre, located one half block east of Cocoa Avenue on
East Caracas Avenue, Hershey, Pennsylvania, or at any adjournment thereof.
THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S), WHO SHALL BE ENTITLED
TO ONE VOTE FOR EACH SUCH SHARE HELD. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED FOR THE ELECTION OF THE TWELVE NOMINEES FOR DIRECTOR AND FOR ITEM 2.
EXCEPT WITH REGARD TO VOTING SEPARATELY AS A CLASS ON THE ELECTION OF MESSRS.
BEAVER AND SARNI, SHARES OF THE COMMON STOCK WILL VOTE TOGETHER WITH SHARES OF
THE CLASS B COMMON STOCK WITHOUT REGARD TO CLASS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.
ITEM 1. Election of H.O. Beaver, Jr. and V.A. Sarni as Directors by holders of
the Common Stock voting as a class; and election of the following as
Directors by holders of the Common Stock and the Class B Stock voting
together without regard to class: W.H. Alexander, R.H. Campbell, T.C.
Graham, B. Guiton Hill, J.C. Jamison, S.C. Mobley, F.I. Neff,
J.M. Pietruski, J.P. Viviano, K.L. Wolfe.
(item 1. continued on back)
[_] FOR all nominees [_] WITHHOLD AUTHORITY to vote for all nominees
To withhold authority to vote for any individual nominee, write that nominee's
name in the space below.
FOR AGAINST ABSTAIN
--- ------- -------
ITEM 2. Approval of Arthur Andersen LLP as the
Corporation's independent public accountants for
1995. [_] [_] [_]
In their discretion, the Proxies are authorized to vote upon such other
business as may come before the meeting.
-----------------------------------
Signature Date
-----------------------------------
Signature Date
PLEASE MARK, SIGN (EXACTLY AS NAME(S) APPEARS ABOVE), DATE AND MAIL THIS CARD
PROMPTLY IN THE POSTAGE PREPAID RETURN ENVELOPE PROVIDED.
HERSHEY FOODS CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned, having received the Notice of Meeting and Proxy Statement
dated March 13, 1995, appoints K. L. Wolfe, J. P. Viviano and E. S. Gathany and
each or any of them as Proxies, with full power of substitution, to represent
and vote all of the undersigned's shares of the Corporation's Common Stock at
the Annual Meeting of Stockholders to be held at 2:00 P.M., April 24, 1995, at
the Hershey Theatre, located one half block east of Cocoa Avenue on East
Caracas Avenue, Hershey, Pennsylvania, or at any adjournment thereof.
THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S), WHO SHALL BE ENTITLED
TO ONE VOTE FOR EACH SUCH SHARE HELD. IF NO DIRECTION IS MADE, THE PROXY WILL
BE VOTED FOR THE ELECTION OF THE TWELVE NOMINEES FOR DIRECTOR AND FOR ITEM 2.
EXCEPT WITH REGARD TO VOTING SEPARATELY AS A CLASS ON THE ELECTION OF MESSRS.
BEAVER AND SARNI, SHARES OF THE COMMON STOCK WILL VOTE TOGETHER WITH SHARES OF
THE CLASS B COMMON STOCK WITHOUT REGARD TO CLASS.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
[X] Please mark
your votes
this way
WITHHOLD
FOR all AUTHORITY
Nominees for all Nominees
[_] [_]
--------------- -------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.
ITEM 1. Election of H.O. Beaver, Jr. and V.A. Sarni as Directors by holders of
the Common Stock voting as a class; and election of the following as Directors
by holders of the Common Stock and the Class B Stock voting together without
regard to class: W.H. Alexander, R.H. Campbell, T.C. Graham, B. Guiton Hill,
J.C. Jamison, S.C. Mobley, F.I. Neff, J.M. Pietruski, J.P. Viviano, K.L. Wolfe.
To withhold authority to vote for any nominee, write the nominee's name(s)
below:
- -------------------------------------------------------------------------------
ITEM 2. Approval of Arthur Andersen LLP as the Corporation's independent public
accountants for 1995.
For Against Abstain
[_] [_] [_]
- -------------------------------------------------------------------------------
In their discretion, the Proxies If you plan to attend the WILL
are authorized to vote upon such Annual Meeting, mark the ATTEND
other business as may come before Will Attend block. An
the meeting. admission ticket will be [_]
++++++++ mailed to you.
+
+
+
Signature(s) ______________________________________ Date _____,1995
PLEASE MARK, SIGN (EXACTLY AS NAME(S) APPEARS ABOVE), DATE AND MAIL THIS CARD
PROMPTLY IN THE POSTAGE PREPAID RETURN ENVELOPE PROVIDED. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ATTORNEYS, GUARDIANS, ETC., SHOULD SO INDICATE WHEN
SIGNING.
- --------------------------------------------------------------------------------
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
Detach here.
HERSHEY FOODS CORPORATION
EMPLOYEE SAVINGS, STOCK INVESTMENT AND OWNERSHIP PLAN
THIS VOTING INSTRUCTION IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned, having received the Notice of Meeting and Proxy Statement
dated March 13, 1995, instructs American Express Trust Company*, as Trustee, to
represent and vote all of the shares of Common Stock of Hershey Foods
Corporation which are credited to my account under the above Plan at the Annual
Meeting of Stockholders to be held at 2:00 P.M., April 24, 1995 or at any
adjournment thereof.
THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED BY THE
TRUSTEE IN THE MANNER DIRECTED. IF NO DIRECTION IS GIVEN, OR IS RECEIVED BY THE
TRUSTEE AFTER APRIL 18, 1995, THE SHARES IN THE EMPLOYEE SAVINGS, STOCK
INVESTMENT AND OWNERSHIP PLAN (ESSIOP) WILL BE VOTED BY THE TRUSTEE IN
PROPORTION TO THE FINAL AGGREGATE VOTE OF THE PLAN PARTICIPANTS ACTUALLY VOTING
ON THE MATTER. EXCEPT WITH REGARD TO VOTING SEPARATELY AS A CLASS ON THE
ELECTION OF MESSRS. BEAVER AND SARNI, SHARES OF THE COMMON STOCK WILL VOTE
TOGETHER WITH SHARES OF THE CLASS B COMMON STOCK WITHOUT REGARD TO CLASS.
THIS VOTING INSTRUCTION CARD IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
* American Express Trust Company, Trustee, has appointed Chemical Bank as agent
to tally the vote.
[X] Please mark
your votes
this way
WITHHOLD
FOR all AUTHORITY
Nominees for all Nominees
[_] [_]
---------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.
ITEM 1. Election of H.O. Beaver, Jr. and V.A. Sarni as Directors by holders of
the Common Stock voting as a class; and election of the following as Directors
by holders of the Common Stock and the Class B Stock voting together without
regard to class: W.H. Alexander, R.H. Campbell, T.C. Graham, B. Guiton Hill,
J.C. Jamison, S.C. Mobley, F.I. Neff, J.M. Pietruski, J.P. Viviano, K.L.
Wolfe. To withhold authority to vote for any nominee, write the nominee's
name(s) below:
- --------------------------------------------------------------------------------
ITEM 2. Approval of Arthur Andersen LLP as the Corporation's independent public
accountants for 1995.
For Against Abstain
[_] [_] [_]
- --------------------------------------------------------------------------------
In its discretion, the Trustee is authorized to vote the ESSIOP shares for
which direction has been given and upon such other business as may come before
the meeting.
++++++++
+
+
+
Signature(s) _____________________________________ Date ________,1995
PLEASE MARK, SIGN (EXACTLY AS NAME(S) APPEARS ABOVE), DATE AND MAIL THIS CARD
PROMPTLY IN THE POSTAGE PREPAID RETURN ENVELOPE PROVIDED. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ATTORNEYS, GUARDIANS, ETC., SHOULD SO INDICATE WHEN
SIGNING.
- --------------------------------------------------------------------------------
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
Detach here.
HERSHEY FOODS CORPORATION
CLASS B COMMON STOCK
This Proxy is Solicited on
behalf of the Board of
Directors
The undersigned, having received the Notice of Meeting and Proxy Statement dated
March 13, 1995, appoints K. L. Wolfe, J. P. Viviano, and E. S. Gathany and each
or any of them as Proxies, with full power of substitution, to represent and
vote all of the undersigned's shares of the Corporation's Class B Common Stock
at the Annual Meeting of Stockholders to be held at 2:00 P.M., April 24, 1995,
at the Hershey Theatre, located one half block east of Cocoa Avenue on East
Caracas Avenue, Hershey, Pennsylvania, or at any adjournment thereof.
The shares of Class B Common Stock represented by this proxy will be voted in
the manner directed herein by the undersigned stockholder(s), who shall be
entitled to ten votes for each such share held. If no direction is made, the
proxy will be voted FOR the election of the ten nominees for Director listed on
the reverse side and FOR Item 2. Except with regard to voting separately as a
class on the election of Messrs. Beaver and Sarni, shares of the Common Stock
will vote together with shares of the Class B Common Stock without regard to
class.
This proxy is continued on reverse side.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2
Item 1. Election of the following as Directors by holders of the Common Stock
and the Class B Common Stock voting together without regard to class:
W. H. Alexander, R. H. Campbell, T.C. Graham, B. Guiton Hill,
J.C. Jamison, S.C. Mobley, F.I. Neff, J.M. Pietruski, J.P. Viviano,
K.L. Wolfe.
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY for all nominees
To withhold authority to vote for any individual nominee, write the nominee's
name in the space below:
Item 2. Approval of Arthur Andersen LLP as the Corporation's independent public
accountants for 1995.
FOR AGAINST ABSTAIN
--- ------- -------
[ ] [ ] [ ]
In their discretion, the Proxies are authorized to vote upon such other business
as may come before the meeting.
Dated:_________________, 1995 _________________________________________
Signature
_________________________________________
Signature
Please mark, sign (exactly as name(s) appears above), date and mail this card
promptly in the postage prepaid return envelope provided. Executors,
administrators, trustees, attorneys, guardians, etc., should so indicate when
signing.
March 13, 1995
TO: HERSHEY EMPLOYEE STOCK PURCHASE PLAN (HESPP) PARTICIPANTS
I am pleased to provide you a copy of Hershey Foods' 1994 Annual Report to
Stockholders. This mailing of Annual Reports to our HESPP participants has
been designed to eliminate the duplicate mailing of Annual Reports to those
participants who will receive an Annual Report as a result of participation
in another employee plan. Your proxy card for voting your shares in HESPP
along with the proxy statement will be arriving shortly directly from
Merrill Lynch. Your completed card should be returned in the envelope
Merrill Lynch provides.
If you should have any questions, you can call the Office of the Secretary
at (717) 534-7526.
Remember, your vote is important.
--
/s/ Eleanor S. Gathany
Eleanor S. Gathany
Assistant Secretary
Enclosure
March 13, 1995
TO: FELLOW PARTICIPANTS IN HERSHEY'S EMPLOYEE SAVINGS, STOCK INVESTMENT AND
OWNERSHIP PLAN
Enclosed for your attention is a voting instruction card and a proxy
statement which explains the items to be voted upon at this year's Annual
Meeting of Stockholders. Your completed card must be received by April 18,
1995 in order to be tallied. For your convenience in returning the voting
card, a postage-paid envelope is provided. I urge you to take advantage of
this opportunity to have the shares being held for you voted at the Annual
Meeting of Stockholders on April 24, 1995.
This mailing of the voting instruction card and proxy statement to Employee
Savings, Stock Investment and Ownership Plan participants has been designed
to eliminate the duplicate mailing of Annual Reports to those employees who
will receive such as a registered stockholder.
Please note that if you own shares through the Hershey Employee Stock
Purchase Plan (HESPP), you will receive a separate proxy card from Merrill
Lynch for voting those shares.
If you should have any questions, you can call the Office of the Secretary
at (717) 534-7526.
Remember, your vote is important.
--
/s/ Eleanor S. Gathany
Eleanor S. Gathany
Assistant Secretary
Enclosures
March 13, 1995
TO: FELLOW PARTICIPANTS IN HERSHEY'S EMPLOYEE SAVINGS, STOCK INVESTMENT AND
OWNERSHIP PLAN
I am pleased to provide to you a copy of Hershey Foods' 1994 Annual Report
to Stockholders. Also enclosed is a voting instruction card and a proxy
statement which explains the items upon which you are voting. Your
completed card must be received by April 18, 1995 in order to be tallied.
For your convenience in returning the voting card, a postage-paid envelope
is provided. I urge you to take advantage of this opportunity to have the
shares being held for you voted at the Annual Meeting of Stockholders on
April 24, 1995.
Please note that if you own shares through the Hershey Employee Stock
Purchase Plan (HESPP), you will receive a separate proxy card from Merrill
Lynch for voting those shares.
If you should have any questions, you can call the Office of the Secretary
at (717) 534-7526.
Remember, your vote is important.
--
/s/ Eleanor S. Gathany
Eleanor S. Gathany
Assistant Secretary
Enclosures
