<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
HERSHEY FOODS CORPORATION
---------------------------------
(Name of Registrant as Specified in its Charter)
HERSHEY FOODS CORPORATION
----------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[x] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(2), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each of securities to which transaction applies:
- ---------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- ----------------------------------------------------------------------------
<PAGE>
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:/1/
- -----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- -------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
- ------------------------------------
/1/Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
(LOGO OF HERSHEY FOODS APPEARS HERE)
Hershey Foods
Corporation Corporate
Headquarters Hershey,
Pennsylvania 17033
March 14, 1994
To Our Stockholders:
It is my pleasure to invite you to attend the 1994 Annual Meeting of
Stockholders of Hershey Foods Corporation, to be held at 2:00 P.M. on Monday,
April 25, 1994. The meeting will be held at the Hershey Theatre, located one
half block east of Cocoa Avenue on East Caracas Avenue, Hershey, Pennsylvania.
As a special feature this year, all stockholders are invited to view the
Milton S. Hershey exhibit at the Hershey Museum and will be entitled to a 30%
discount on Hershey's chocolate and non-chocolate products at Hershey's
Chocolate World visitors center on the day of the Annual Meeting. On the back
of this Proxy Statement is a map showing directions to the Hershey Museum and
Hershey's Chocolate World as well as a coupon you will need to present at both
locations.
Business scheduled to be considered at the meeting includes the election of
twelve directors and the approval of the appointment of Arthur Andersen & Co.
as independent public accountants for the Corporation for 1994. 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
during the meeting. 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.
Also, please be advised that due to increasing stockholder attendance at the
Annual Meeting, we anticipate that seating and parking will be limited.
Therefore, stockholders are encouraged not to bring guests.
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. 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/Kenneth L. Wolfe
Kenneth L. Wolfe
Chairman of the Board and
Chief Executive Officer
<PAGE>
(LOGO OF HERSHEY FOODS APPEARS HERE)
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
ON
APRIL 25, 1994
----------------
The Annual Meeting of Stockholders of HERSHEY FOODS CORPORATION will be held
at 2:00 P.M., Monday, April 25, 1994 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 & Co. as the
Corporation's independent public accountants for 1994; 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 March 1, 1994 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,
WILLIAM LEHR, JR.
Vice President and Secretary
March 14, 1994
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.
<PAGE>
---------------------------------
PROXY STATEMENT
---------------------------------
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 25, 1994
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 14,
1994. 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 & Co. as the
Corporation's independent public accountants for 1994. 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 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 ("ESSIP") 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 ESSIP 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 Georgeson & Company Inc. to assist in soliciting
proxies for a fee of $7,500 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 March 1, 1994, the record date for the Annual
Meeting, there were outstanding 72,113,618 shares of the Common Stock, and
15,242,979 shares of the Class B Stock, all
<PAGE>
of which are entitled to vote. Holders of record of the Corporation's Common
Stock on March 1, 1994 will be entitled to one vote for each share held, and
holders of record of the Class B Stock on March 1, 1994 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 purposes 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 March 1, 1994, the 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.
<TABLE>
<CAPTION>
TITLE OF AMOUNT AND NATURE OF PERCENT
CLASS NAME OR GROUP(/1/) BENEFICIAL OWNERSHIP OF CLASS
- -------------- ------------------------ ------------------------------------ --------
<S> <C> <C> <C>
Common Stock, Hershey Trust
one dollar Company(/2/) 100 Mansion
par value Road East Hershey, PA 20,928,493 shares held by Hershey 29.0%
17033 Trust Company, as Trustee for Milton
Hershey School
Milton Hershey
School(/2/) Founders
Hall Hershey, PA 17033
Hershey Trust 283,097 shares held as institutional .6%
Company(/2/) fiduciary for 54 estates and trusts
unrelated to Milton Hershey School;
and 175,000 shares held as
investments of Hershey Trust Company
Class B Stock, Hershey Trust
one dollar Company(/2/) 15,153,003 shares held by Hershey 99.4%
par value Trust Company, as Trustee for Milton
Milton Hershey Hershey School
School(/2/)
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
TITLE OF AMOUNT AND NATURE OF PERCENT
CLASS NAME OR GROUP(/1/) BENEFICIAL OWNERSHIP OF CLASS
- ------------ ------------------------ ---------------------------------- --------
<S> <C> <C> <C>
Common Stock H. O. Beaver, Jr., 6,437 shares *
one dollar Director
par value T. C. Graham, Director 3,100 shares *
B. Guiton Hill, Director 100 shares *
J. C. Jamison, Director 5,100 shares *
S. C. Mobley, Director 634 shares *
F. I. Neff, Director 300 shares *
R. J. Pera, Director 1,226 shares *
J. M. Pietruski, 2,100 shares *
Director
V. A. Sarni, Director 1,604 shares *
H. R. Sharbaugh, 3,100 shares *
Director
J. P. Viviano, Director, 55,394 shares and 68,350 stock *
President and Chief options which are exercisable
Operating Officer(/3/)
K. L. Wolfe, Director, 70,417 shares and 94,750 stock *
Chairman of the Board options which are exercisable
and Chief Executive
Officer(/3/)
R. A. Zimmerman 109,262 shares and 100,500 stock *
Retired Chairman of the options which are exercisable
Board and Chief
Executive Officer(/3/)
M. F. Pasquale 19,462 shares and 41,800 stock *
President, Hershey options which are exercisable
Chocolate U.S.A.(/3/)
C. M. Skinner 14,041 shares and 20,900 stock *
President, Hershey Pasta options which are exercisable
Group
All current Directors, 287,903 shares and 468,800 stock 1.0%
Nominees for Director, options which are exercisable
and Executive Officers
as a Group (29 persons)
</TABLE>
- --------
* Less than 1%
(/1/) None of the current directors or officers of the Corporation owns more
than 1% of the outstanding shares of the Common Stock. No current director or
officer of the Corporation owns beneficially any shares of Class B Stock. All
current directors are nominees for director. 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
directors and officers who are participants in ESSIP. 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. These individuals are
3
<PAGE>
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 stock awards as
of March 1, 1994: R. A. Zimmerman, 17,232 shares; J. P. Viviano, 13,878
shares; M. F. Pasquale, 11,070 shares; and C. M. Skinner, 3,152 shares. As of
March 1, 1994, receipt of PSU stock awards equivalent to 81,975 shares had
been deferred by all current executive officers as a group. The preceding
beneficial ownership table does not include deferred PSU stock 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 respecting the 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 21,386,590 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
21,386,590 of the 72,113,618 votes entitled to be cast on matters required to
be voted on separately by the holders of the Common Stock, and 172,916,620 of
the total 224,543,408 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 eight
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
include Kenneth L. Wolfe, who is also a director and Chairman of the Board and
Chief Executive Officer of the Corporation, and Rod J. Pera, who is a director
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.
(/3/) In 1993, these officers held the following positions: R. A. Zimmerman,
Chairman of the Board and Chief Executive Officer; K. L. Wolfe, President and
Chief Operating Officer; J. P. Viviano, President, Hershey Chocolate U.S.A.;
and M. F. Pasquale, Senior Vice President and Chief Financial Officer.
4
<PAGE>
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. Each of the nominees named in the following pages is presently a
member of the Board of Directors. 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.
HOWARD O. BEAVER, JR., age 68, is retired Chairman of the
Board, Carpenter Technology Corporation, Reading, Pennsylvania.
He served as Carpenter's Chief Executive Officer from 1971 to
1981 and as Chairman until his retirement in 1983. A Hershey
Foods director since 1984, Mr. Beaver is a member of the Audit
Committee and the Committee on Directors and Corporate
Governance. He is a director of HERCO Inc. and serves as an
(PHOTO) Advisory Board Member of Mellon Bank Corporation. He is to be
elected by the Common Stock as a class.
----------------
THOMAS C. GRAHAM, age 67, is President and Chief Executive
Officer, Armco Steel Company, LP in Middletown, Ohio. In 1992,
he served as Chairman and Chief Executive Officer, Washington
Steel Corporation, Washington, Pennsylvania. From 1983 to 1991
he was with USX Corporation, 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
(PHOTO) Executive Organization Committee. He is also a director of
International Paper Company.
----------------
BONNIE GUITON HILL, age 52, 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
from 1991 to 1992. From 1990 to 1991, she was President and
Chief Executive Officer, Earth Conservation Corps, Washington
D.C. and from 1989 to 1990, she served as Special Advisor to
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
Louisiana-Pacific Corporation; Niagara Mohawk Power
(PHOTO) Corporation; The National Environmental Education and Training
Foundation; and The Virginia Retirement System.
5
<PAGE>
JOHN C. JAMISON, age 59, 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,
Virginia. From 1983 to 1990 he was Dean of the Graduate School
of Business Administration, The College of William & Mary,
Williamsburg, Virginia. He was a General Partner with Goldman
Sachs & Co. until 1982, when he became a Limited Partner, a
position he continues to hold. 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 Riverside Health System, Inc.; Richfood Holdings,
Inc.; and Williamsburg Winery, Ltd.; and a trustee of The
Mariners Museum. Mr. Jamison was recently named to become a
(PHOTO) director of Best Products Co., Inc. subject to the approval of
the Bankruptcy Court for the Southern District of New York.
----------------
SYBIL C. MOBLEY, PH.D., age 68, is Dean, School of Business and
Industry, Florida Agricultural and Mechanical University,
Tallahassee, Florida, a position she has held since the Florida
A & M Business Department became the School of Business and
Industry in 1974. A Hershey Foods director since 1983, she is a
member of the Committee on Directors and Corporate Governance
and of the Employee Benefit Committee. Dr. Mobley is also a
director of Anheuser-Busch Companies, Inc.; Champion
(PHOTO) International Corporation; Dean Witter, Discover & Co.; Sears,
Roebuck and Co.; and Southwestern Bell Corp.
----------------
FRANCINE I. NEFF, age 68, is Vice President and Director, NETS
Inc., a privately- held investment company, Albuquerque, New
Mexico. She served from 1974 to 1977 as Treasurer of the United
States. From 1977 through 1981, she was a Vice President, Rio
Grande Valley Bank of Albuquerque. A Hershey Foods director
since 1978, she serves as a member of the Compensation and
Executive Organization Committee and the Audit Committee. She
(PHOTO) is also a director of E-Systems, Inc.; Louisiana-Pacific
Corporation; and D. R. Horton, Inc.
----------------
ROD J. PERA, age 53, is a partner in McNees, Wallace & Nurick,
a Harrisburg, Pennsylvania law firm. He is also Chairman of the
Board of Hershey Trust Company, Hershey, Pennsylvania, and a
member of the Board of Managers of Milton Hershey School. He
has been with McNees, Wallace & Nurick since 1966, became a
partner in that firm in 1971, and served as Managing Partner
from 1984 to 1992. A Hershey Foods director since 1991, he
serves as a member of the Employee Benefit Committee and the
Audit Committee. Mr. Pera also serves on the Boards of HERCO
(PHOTO) Inc.; Polyclinic Health Systems; and the Greater Harrisburg
Foundation.
6
<PAGE>
JOHN M. PIETRUSKI, age 61, 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
Officer of Sterling Drug Inc. With Sterling Drug Inc. from 1977
to his retirement in 1988, he also held the positions of
Executive Vice President, and President and Chief Operating
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; Cytogen Corporation; and McKesson
(PHOTO) Corporation; a trustee, Rutgers University Foundation; and a
regent of Concordia College.
----------------
VINCENT A. SARNI, age 65, is retired Chairman of the Board and
Chief Executive Officer, PPG Industries Inc., Pittsburgh,
Pennsylvania, positions he held from 1984 until his retirement
in 1993. Mr. Sarni joined PPG Industries Inc. in 1968 and held
a number of senior management positions, including Senior Vice
President and Vice Chairman prior to being elected Chairman and
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.;
(PHOTO) The LTV Corp.; and Amtrol Inc. He is to be elected by the
Common Stock as a class.
----------------
H. ROBERT SHARBAUGH, age 65, is retired Chairman of the Board
and Chief Executive Officer, Sun Company, Inc., Radnor,
Pennsylvania. Mr. Sharbaugh served as Sun's Chief Executive
Officer and/or Chairman of the Board from 1974 until 1979. A
Hershey Foods director since 1982, he chairs the Audit
Committee and is a member of the Compensation and Executive
(PHOTO) Organization Committee. He is also a director of Mellon Bank
Corporation.
----------------
JOSEPH P. VIVIANO, age 55, 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
1993. From 1975 through 1978, he served as President of San
Giorgio, and then served as President of the San Giorgio-
Skinner Company (presently the Hershey Pasta Group) through
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
(PHOTO) director of Chesapeake Corporation and a board member of Xavier
University.
7
<PAGE>
KENNETH L. WOLFE, age 55, is Chairman of the Board and Chief
Executive Officer, Hershey Foods Corporation. He was elected
President and Chief Operating Officer in 1985, positions he
held through 1993. He was elected Vice President, Finance and
Chief Financial Officer of the Corporation in 1981, Senior Vice
President and Chief Financial Officer in 1984. A director 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
(PHOTO) 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 1993. No director
attended less than 79% 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 1993. Average attendance
for all of these meetings equalled 96%.
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 four meetings during 1993, consists of
Messrs. Sharbaugh (Chair), Beaver, Jamison, and Pera, and 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; and reviewing the overall activities and recommendations
of the Corporation's internal auditors.
The Committee on Directors and Corporate Governance, which held three
meetings during 1993, 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 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 three
meetings during 1993, consists of Messrs. Pietruski (Chair), Graham, Sarni, and
Sharbaugh 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 and the 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
<PAGE>
The Employee Benefit Committee, which held two meetings during 1993, 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 1993, 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 $900 for each Board meeting attended; a fee of $750 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 1993,
to ensure the directors' compensation package remains 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.
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 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 according to the
director's length of service as a director for a maximum donation of $1,000,000
after
9
<PAGE>
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 three
retired directors participate in the Program. The amount of the charitable
donation per participating director would be $1,000,000, except for Messrs.
Pera and Sarni, for whom the current amount is $400,000 each, and Ms. Guiton
Hill, for whom the current amount is $200,000, because of their shorter length
of service as directors.
1993 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
the Committee 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 and increases in shareholder value by tying a significant
portion of their total compensation to meeting specific short-term and
long-term performance goals of the Corporation and to appreciation in the
Corporation's stock price;
. To attract, retain and motivate executive talent; 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. 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 19, the Corporation's performance is compared to that for the Standard
and Poor's Food Industry Index. The peer group considered relevant for the
Corporation's 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 said
index because the Corporation selects those companies it believes to be the
most relevant and direct competitors for the compensation comparison. The
Committee reviews which peer companies are selected for compensation analysis.
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.
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 to pay "at or above" such "going rates."
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
10
<PAGE>
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 long-term 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. R. A. Zimmerman, the
Chairman of the Board and Chief Executive Officer in 1993, and it reviewed the
total compensation as recommended by senior management of a group of the most
highly compensated corporate 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. Zimmerman, 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.
Through December 31, 1993, salary reviews were conducted every 12 to 18
months and salary adjustments were made based upon the performance of the
Corporation and of each executive officer. Where appropriate, the Committee
also considered non-financial performance measures. Base salaries for executive
officers and all other salaried employees were 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
were also considered.
With respect to the base salary granted to Mr. Zimmerman in 1993, the
Committee made an assessment of Mr. Zimmerman's 1992 individual performance,
his incentive compensation payments in 1992 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. Zimmerman's 1993 base salary
remained at the same level as his 1992 base salary. Not adjusting Mr.
Zimmerman's 1993 base salary effectively maintained the value of his 1993 short
and long-term incentives at their 1992 levels; therefore, in view of the
Corporation's and Mr. Zimmerman's exemplary performance in 1992, the Committee
in 1993 granted Mr. Zimmerman an additional grant of 5,000 performance share
units for a total 1993 grant of 15,000 performance share units, all of which
have been forfeited because of Mr. Zimmerman's retirement on December 31, 1993.
Performance share units are described below.
11
<PAGE>
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 (the "Incentive Plan"), a
plan approved by the stockholders and administered by the Committee.
Participating executive officers are eligible to earn individual awards
expressed as a percentage of base salary. Individual and short-term (annual)
corporate and division performance objectives are established at the beginning
of each year. For executive officers on corporate staff, the corporate
performance measures for these incentive award payments for 1993 were based on
financial measures including earnings per share, return on net assets, and
management of certain administrative costs. For executive officers at the
division level, the business factors for 1993 were a combination of operating
income, a return measurement and market share. The final award is the product
of the executive officers' base salary, the applicable target percentage, the
business unit (corporate or division) performance score and the individual
performance score. Adjustments are made, 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 business unit
performance and individual performance scores are given equal weight in the
formula. With respect to corporate staff performance objectives, the relative
weights of each of the business unit factors are 40% each for earnings per
share and return on net assets and 20% for administrative cost savings.
Performance in excess of the targets for financial measures and 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
1993 for annual cash incentive awards for executive officers was 30% to 60%,
with the highest rate of 60% applicable only to Mr. Zimmerman.
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 1993, corporate staff participants (which included Mr. Zimmerman) exceeded
the corporate performance objectives set for earnings per share, return on net
assets and management of certain administrative costs. In addition, the
Committee took into account Mr. Zimmerman's performance against his personal
objectives established earlier in the year which Mr. Zimmerman met. Based on
these results, Mr. Zimmerman was awarded a 1993 annual cash incentive award of
$414,534.
LONG TERM INCENTIVE PROGRAM--PERFORMANCE SHARE UNITS
Performance share units (PSUs) were contingently granted in 1993 under the
Incentive Plan to the Corporation's executive officers and certain other top
officers (a combined total of 22 individuals in 1993) 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. Adjustments are made, if necessary, to take
into account extraordinary or unusual items occuring during the performance
cycle. Payment may be deferred to a later date at the election of the
executive. The value of the PSUs is tied to corporate performance (in
determining what percentage of shares are earned) and stock price appreciation.
The established performance measures are earnings per share and return on net
assets. For the 1993-95 three-year cycle, performance scores can range from 0%
to 100%.
12
<PAGE>
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 award in Common Stock (net of withholding
taxes) or deferred PSUs. For Mr. Zimmerman the applicable multiple in 1993 was
eight times his base salary.
In January 1991, 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 met its target earnings per share and
return on net assets, each measure having equal weight of 50%, for the year
ended December 31, 1993. Accordingly, 100% of the contingent PSUs granted in
January 1991, which was the maximum percent achievable under this Program, were
earned, and the holders thereof received payment based on the value of the
shares averaged over a period of 22 business days in December 1993. Mr.
Zimmerman received a payment valued at $660,168 based on the December 1993
"averaged" value of the PSUs from the 1991 grant.
In January 1993, executive officers were granted new contingent PSUs based on
the same approach. The "Long Term Incentive Program Performance Share Unit
Awards in Year Ended December 31, 1993" 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.
For administrative reasons, stock option recipients, other than the top
executives, (over 300 key employees) generally receive stock option grants
every two years in double the amount they would have received were the grants
to this larger group made annually. Only 21 top officers and two new key
employees were granted stock options in 1993.
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. Since stock option awards are
determined based on competitive pay practices within the food industry, the
Committee does not take into account the amounts of options outstanding or
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 1993, Mr. Zimmerman received stock options to purchase 20,000 shares with
an exercise price of $47 per share.
13
<PAGE>
POLICY REGARDING 1993 CHANGES IN TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Omnibus Budget Reconciliation Act of 1993 ("OBRA") was signed into law in
August, 1993. Under OBRA a new Section 162(m) was added to the Internal Revenue
Code of 1986 (the "Code") which 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.
Certain types of compensation, including "performance-based" compensation, are
excluded from the compensation limit.
The Committee has considered the effect of new 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 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 overall best 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.
CONCLUSION
In 1993, as in previous years, a substantial portion of the Corporation's
executive compensation consisted of performance-based variable elements. In the
case of Mr. Zimmerman, approximately 65% of his 1993 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 H. Robert Sharbaugh
14
<PAGE>
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows for the fiscal years ending December 31, 1991,
1992 and 1993, 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 1993. Effective December 31, 1993, Mr.
Zimmerman retired from his positions as Chairman and Chief Executive Officer,
Mr. Wolfe became Chairman and Chief Executive Officer, and Mr. Viviano became
President and Chief Operating Officer. Effective January 1, 1994, Mr. Pasquale
became President, Hershey Chocolate U.S.A.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------- -------------------
NUMBER OF
NAME AND STOCK
PRINCIPAL POSITION OPTION LTIP/(3)/ ALL OTHER/(4)/
AS OF 12/31/93 YEAR SALARY/(1)/ BONUS/(2)/ AWARDS PAYOUTS COMPENSATION
- ------------------ ---- ----------- ---------- --------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
R. A. Zimmerman 1993 $590,000 $414,534 20,000 $660,168 $92,933
Chairman and Chief 1992 590,000 419,136 28,000 483,808 5,772
Executive Officer 1991 540,000 275,000 9,800 562,520 5,550
K. L. Wolfe 1993 456,500 308,709 16,000 440,942 14,992
President and Chief 1992 440,000 286,528 17,000 358,204 12,541
Operating Officer 1991 400,000 246,198 6,550 373,674 11,704
J. P. Viviano 1993 347,500 216,588 12,000 316,382 17,281
President, Hershey 1992 330,000 298,320 12,500 253,534 16,234
Chocolate U.S.A. 1991 300,000 153,188 4,700 233,044 14,771
M. F. Pasquale 1993 254,250 142,016 6,300 219,226 5,896
Senior Vice President 1992 245,000 131,841 7,250 176,776 5,719
and Chief Financial Of- 1991 225,000 117,233 3,250 156,702 5,550
ficer
C. M. Skinner 1993 208,750 145,838 5,000 149,472 5,219
President, 1992 200,000 136,500 5,050 109,322 5,000
Hershey Pasta Group 1991 175,000 93,931 2,250 104,468 4,375
</TABLE>
- --------
/(1)/ This column 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
("ESSIP").
/(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 performance share unit
payouts during each of the last three fiscal years at the end of the following
three performance cycles: 1991-93; 1990-92; 1989-91, under the 1987 Key
Employee Incentive Plan, which were paid or deferred in the fiscal year
immediately following the last year of the respective three-year cycle.
/(4)/ This column includes the Corporation's matching contributions to the
individual's ESSIP 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 1993 are as follows: R. A. Zimmerman, $5,531 (ESSIP),
$19,325 (unused vacation days); K. L. Wolfe, $5,896 (ESSIP), $9,096 (unused
vacation days); and J. P. Viviano, $5,896 (ESSIP), $11,385 (unused vacation
days). For Messrs. Pasquale and Skinner, the amounts provided in the column
are only for ESSIP because they received no payments for unused vacation days.
For Mr. Zimmerman, the amount reported for 1993 in this column also includes
$68,077 for his earned 1994 vacation days received as a result of his
retirement.
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<PAGE>
LONG TERM INCENTIVE PROGRAM--STOCK OPTIONS
The following table contains information concerning the grant of stock
options under the 1987 Key Employee Incentive Plan 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, 1993
<TABLE>
<CAPTION>
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 1993/(2)/ PER SHARE/(3)/ DATE 5%/(4)/ 10%/(4)/
- ---- ------------ ------------ -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
R. A. Zimmerman 20,000 17.2% $47.00 12/30/96 $202,576 $436,254
K. L. Wolfe 16,000 13.7% 47.00 1/3/03 472,929 1,198,494
J. P. Viviano 12,000 10.3% 47.00 1/3/03 354,697 898,871
M. F. Pasquale 6,300 5.4% 47.00 1/3/03 186,216 471,907
C. M. Skinner 5,000 4.3% 47.00 1/3/03 147,790 374,529
- --------------------------------------------------------------------------------------------------------
All Stockholders/(5)/ N/A N/A N/A N/A $2,665,732,000 $6,755,488,271
</TABLE>
- --------
/(1)/ All stock options listed in this column are exercisable and have a
ten-year term except for Mr. Zimmerman's which are for a four-year term as a
result of his retirement. The stock options having a $47.00 exercise price
were granted on January 4, 1993 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)/ Historically and for administrative reasons, stock option recipients
other than top officers receive stock options every other year in double the
amounts they would receive if the grants were made annually. In 1993 only top
officers and two new key employees (a combined total of 23 individuals) were
granted a total of 116,600 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 except
for Mr. Zimmerman 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. With respect to the dollar amounts shown for Mr. Zimmerman, they
are the result of calculations at the 5% and 10% annual appreciation rates for
the four-year term of his options. As a result of his retirement, Mr.
Zimmerman's options expire on December 30, 1996.
16
<PAGE>
/(5)/ For "All Stockholders," the gain on 90,186,336 shares, the number of
outstanding shares of Common Stock and Class B Common Stock on January 4,
1993, is based on a $47.00 per share price (the exercise price of the 1993
options). The value of the Common Stock and Class B Stock at $47.00 per share
was $4,238,757,792. 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 4, 1993 through
January 3, 2003. These amounts are not intended to forecast possible future
appreciation, if any, of the stock price of the Corporation.
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, 1993
AND YEAR-END STOCK OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
NUMBER SECURITIES VALUE OF
OF VALUE UNDERLYING UNEXERCISED
SHARES REALIZED UNEXERCISED IN-THE-MONEY
ACQUIRED (MARKET PRICE AT STOCK STOCK OPTIONS
ON EXERCISE LESS OPTIONS EXERCISABLE EXERCISABLE
NAME EXERCISE EXERCISE PRICE) AT 12/31/93/(1)/ AT 12/31/93/(1)/
- ---- -------- ---------------- ------------------- ----------------
<S> <C> <C> <C> <C>
R. A. Zimmerman 0 $ 0 100,550 $1,186,313
K. L. Wolfe 0 0 61,600 637,275
J. P. Viviano 0 0 43,050 415,163
M. F. Pasquale 0 0 26,800 286,325
C. M. Skinner 3,600 102,375 15,250 109,194
</TABLE>
- --------
/(1)/ All of the stock options were granted under the 1987 Key Employee
Incentive Plan and are exercisable. The fair market value of the Common Stock
on the Corporation's fiscal year end, December 31, 1993, was $49.
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. Payments made under said
program for the three-year performance cycle ending December 31, 1993 are
reported in the Summary Compensation Table.
LONG TERM INCENTIVE PROGRAM
PERFORMANCE SHARE UNIT AWARDS IN YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
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)/ (#)/(3)/
- ---- ----------- ------------ --------- -------- --------
<S> <C> <C> <C> <C> <C>
R. A. Zimmerman 15,000/(4)/ 3 years 1,875 15,000 15,000
K. L. Wolfe 7,500 3 years 938 7,500 7,500
J. P. Viviano 5,000 3 years 625 5,000 5,000
M. F. Pasquale 2,900 3 years 363 2,900 2,900
C. M. Skinner 2,500 3 years 313 2,500 2,500
</TABLE>
- --------
/(1)/ The performance share units (PSUs) reported in this table were granted
on January 4, 1993 for the cycle commencing January 1, 1993 and ending
December 31, 1995.
17
<PAGE>
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.
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 1993-95 three-year cycle. The performance scoring can range from a
minimum of 0% to a maximum of 100% 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 1993-95 cycle, this limit is
$93.04 per 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)/ These columns list the number of shares of Common Stock the value of
which would be payable to the named executives at the 100% or more achievement
level.
/(4)/ PSUs are contingently granted and the recipient must continue to
participate in the Program for the entire three-year cycle or the grant is
prorated or forfeited. As a result of Mr. Zimmerman's retirement as of
December 31, 1993, his 15,000 PSUs grant was forfeited.
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
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------
REMUNERATION 10 15 20 25 30 35
- ------------ ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 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
</TABLE>
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
18
<PAGE>
average compensation and the estimated credited years of service as of December
31, 1993, respectively, for each of the named executive officers are: R. A.
Zimmerman, $903,202, 31.7 years; K. L. Wolfe, $693,236, 24.8 years; J. P.
Viviano, $536,697, 25.7 years; M. F. Pasquale, $363,347, 14.4 years; and C. M.
Skinner, $315,507, 35.1 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.
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.
<TABLE>
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG HERSHEY FOODS, S&P FOOD GROUP INDEX AND S&P 500 INDEX
<CAPTION>
S&P Food
Measurement period Hershey Group S&P 500
(Fiscal year Covered) Foods Index Index
- --------------------- -------- -------- --------
<S> <C> <C> <C>
Measurement PT -
1988 100 100 100
1989 $141.33 $136.43 $131.69
1990 $151.92 $147.06 $127.59
1991 $184.02 $214.53 $166.47
1992 $199.64 $214.03 $179.16
1993 $212.82 $196.42 $197.22
</TABLE>
* Assumes $100 invested on 12/31/88 in Hershey Common Stock, S&P 500 Index and
S&P Food Group Index.
19
<PAGE>
CERTAIN TRANSACTIONS AND RELATIONSHIPS
During 1993 the Corporation and its subsidiaries had a number of transactions
with Milton Hershey School (the "School"); with Hershey Trust Company ("Hershey
Trust"); and with companies owned by Hershey Trust, involving the purchase or
sale of goods and services. These latter transactions were primarily with HERCO
Inc. ("HERCO"), an entertainment and resort company based in Derry Township
(Hershey), Pennsylvania, wholly-owned by Hershey Trust.
On November 2, 1993, the Corporation purchased, as part of its previously
announced $200 million stock repurchase program, two million shares of its
Common Stock from Hershey Trust. The Corporation paid Hershey Trust
approximately $103.1 million for the shares. The price per share was determined
based on a market price-based formula.
The aggregate value of sales made during 1993 by the Corporation and its
subsidiaries to the School, Hershey Trust, and companies owned by Hershey
Trust, amounted to approximately $800,000. During the year, the Corporation
purchased goods and services from these entities in the amount of approximately
$2.6 million. All of 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.
From time to time the Corporation also makes purchases of real property in
the Hershey, Pennsylvania area from Hershey Trust and HERCO, which have
substantial real estate holdings in the area. These transactions are made on
terms that the Corporation believes are as favorable to it as would be
available to other purchasers. In October 1993, the Corporation purchased from
HERCO approximately 14 1/2 acres of land containing a 39,055 square foot
warehouse building in Derry Township, Pennsylvania and HERCO's rights in the
HERSHEY trademark for meats and commissary services for $1.8 million.
The Harrisburg, Pennsylvania law firm of McNees, Wallace & Nurick, of which
Rod J. Pera, a director, is a partner, provided legal services to the
Corporation in 1993 and is providing such services in 1994.
Pursuant to the Corporation's Directors' Charitable Award Program (the
"Program"), as described in the section "The Board of Directors and its
Committees" in this Proxy Statement, retired director Kenneth V. Hatt, while
still a member of the Board of Directors of the Corporation, designated Milton
Hershey School Trust as beneficiary of a $500,000 charitable donation by the
Corporation, and Rod J. Pera, a director, has designated Milton Hershey School
Trust as beneficiary of a $400,000 charitable donation by the Corporation.
Messrs. Hatt and Pera 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 & Co. as independent public accountants of the
Corporation for the year ending December 31, 1994. 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 & Co. 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 & Co. 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
<PAGE>
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.
1995 STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Corporation's Proxy Statement
for the 1995 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 15,
1994.
By order of the Board of Directors,
William Lehr, Jr.
Vice President and Secretary
March 14, 1994
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
<PAGE>
=================================================================
------------------
This coupon entitles Hershey Foods
Corporation Stockholders
to 30% off all chocolate and
non-chocolate merchandise at
Hershey Foods Chocolate World
on April 25, 1994.
------------------
The coupon also entitles
Stockholders and their guests
to free admission to
the Hershey Museum
on April 25, 1994.
(LOGO OF HERSHEY FOODS CORPORATION APPEARS HERE)
*Please retain coupon to enable you to use it at both
locations. You need only show your coupon to use it.
This coupon is valid on April 25, 1994 only.
=================================================================
HOURS OF OPERATION FOR MONDAY, APRIL 25TH
Chocolate World 9:00 AM - 5:45 PM
Hershey Museum 10:00 AM - 5:45 PM
The Hershey Museum is an educational service of The M.S. Hershey Foundation.
<PAGE>
[MAP APPEARS HERE]
HERSHEY FOODS
ANNUAL STOCKHOLDERS'
MEETING
======================
Hershey Theatre
Hershey, PA
Monday, April 25, 1994
(LOGO OF HERSHEY FOODS CORPORATION APPEARS HERE)
<PAGE>
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 14, 1994, appoints K. L. Wolfe, J. P. Viviano, and W. Lehr, Jr.
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 25, 1994, 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.
<PAGE>
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:
T.C. Graham, B. Guiton Hill, J.C. Jamison, S.C. Mobley, F.I Neff,
R.J. Pera, J.M. Pietruski, H.R. Sharbaugh, 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 & Co. as the Corporation's independent
public accountants for 1994.
FOR AGAINST ABSTAIN
--- ------- -------
[ ] [ ] [ ]
In their discretion, the Proxies are authorized to vote upon such other
business as may come before the meeting.
Dated: , 1994
------------------------ ------------------------------
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.
<PAGE>
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 14, 1994, instructs The Northern 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 25, 1994 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 19, 1994, THE SHARES IN THE EMPLOYEE SAVINGS, STOCK
INVESTMENT AND OWNERSHIP PLAN (ESSIP/SASIP) 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.
* The Northern Trust Company, Trustee, has appointed Chemical Bank as agent to
tally the vote.
<PAGE>
- --------------------------------------------------------------------------------
Please mark
[X] your votes
this way
------------ ----------------
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: T.C. Graham, B. Guiton Hill, J.C. Jamison, S.C. Mobley,
F.I. Neff, R.J. Pera, J.M. Pietruski, H.R. Sharbaugh, J.P. Viviano, K.L. Wolfe.
To withhold authority to vote for any nominee, write the nominee's name(s) be-
low:
WITHHOLD
FOR all AUTHORITY
Nominees for all Nominees
[_] [_]
- --------------------------------------------------------------------------------
ITEM 2. Approval of Arthur Andersen & Co. as the Corporation's independent
public accountants for 1994.
For Against Abstain
[_] [_] [_]
- --------------------------------------------------------------------------------
In its discretion, the Trustee is authorized to vote the ESSIP/SASIP shares for
which direction has been given and upon such other business as may come before
the meeting.
If you plan to attend the WILL
Annual Meeting, mark the Will ATTEND
Attend block. An admission [_]
ticket will be mailed to you.
Signature(s) _____________________________________ Date _________,1994
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.
- --------------------------------------------------------------------------------
<PAGE>
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 14, 1994, appoints K. L. Wolfe, J. P. Viviano, and W. Lehr, Jr.,
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 25,
1994, 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: T.C. Graham, B. Guiton Hill, J.C.
Jamison, S.C. Mobley, F.I. Neff, R.J. Pera, J.M. Pietruski, H.R.
Sharbaugh, J.P. Viviano, K.L. Wolfe.
(item 1. continued on back)
<PAGE>
[_] 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.
ITEM 2. Approval of Arthur Andersen & Co. as the Corporation's independent
public accountants for 1994.
FOR AGAINST ABSTAIN
--- ------- -------
[_] [_] [_]
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.
<PAGE>
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 14, 1994, appoints K. L. Wolfe, J. P. Viviano and W. Lehr, Jr. 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 25, 1994, 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.
<PAGE>
- --------------------------------------------------------------------------------
Please mark
[X] your votes
this way
-------------- -------------------
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: T.C. Graham, B. Guiton Hill, J.C. Jamison, S.C. Mobley,
F.I. Neff, R.J. Pera, J.M. Pietruski, H.R. Sharbaugh, J.P. Viviano, K.L. Wolfe.
To withhold authority to vote for any nominee, write the nominee's name(s) be-
low:
WITHHOLD
FOR all AUTHORITY
Nominees for all Nominees
[_] [_]
- --------------------------------------------------------------------------------
ITEM 2. Approval of Arthur Andersen & Co. as the Corporation's independent
public accountants for 1994.
For Against Abstain
[_] [_] [_]
- --------------------------------------------------------------------------------
In their discretion, the Proxies are authorized to vote upon such other
business as may come before the meeting.
If you plan to attend the WILL
Annual Meeting, mark the Will ATTEND
Attend block. An admission [_]
ticket will be mailed to you.
Signature(s) ____________________________________ Date _________,1994
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.
- --------------------------------------------------------------------------------
<PAGE>
March 14, 1994
TO: FELLOW PARTICIPANTS IN HERSHEY'S EMPLOYEE SAVINGS, STOCK INVESTMENT AND
OWNERSHIP PLAN
Enclosed for your attention is a voting instruction card which explains
the items to be voted upon at this year's Annual Meeting of Stockholders. Your
completed card must be received by April 19, 1994 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 25,
1994.
This mailing of the voting instruction card to Savings, Stock Investment
and Ownership Plan participants has been designed to eliminate the duplicate
mailing of Annual Reports and Proxy Statements 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) 534-7527.
Remember, your vote is important.
--
Very truly yours,
/s/ William Lehr, Jr.
William Lehr, Jr.
Vice President and Secretary
WL,JR./bd
Enclosures
<PAGE>
March 14, 1994
TO: FELLOW PARTICIPANTS IN HERSHEY'S EMPLOYEE SAVINGS, STOCK INVESTMENT AND
OWNERSHIP PLAN
I am pleased to provide you a copy of Hershey Foods' 1993 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 19, 1994 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 25, 1994.
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) 534-7527.
Remember, your vote is important.
--
Very truly yours,
/s/ William Lehr, Jr.
William Lehr, Jr.
Vice President and Secretary
WL,JR./bd
Enclosures
<PAGE>
March 14, 1994
TO: HERSHEY EMPLOYEE STOCK PURCHASE PLAN (HESPP) PARTICIPANTS
I am pleased to provide you a copy of Hershey Foods' 1993 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) 534-7527.
Remember, your vote is important.
--
Very truly yours,
/s/ William Lehr, Jr.
William Lehr, Jr.
Vice President and Secretary
WL,JR./bd
Enclosure
