Hershey Foods Corporation.

Bitte ~Titnes in a Sweet Place

[Q] Hershey's chocolate. Like baseball and aup,p~~e it was all American i.~£Hl.. S,O pie, when. H.eFeS hey": s l~u:<gtestsbarehold er -proposed sell ing the. i€QITI(p,(lny in earJ:y .ZG10:z; the residents or' Hershey ..Pennsvlvania, -the state attorney .general, legislators, rund 'current and former 'He :sh.e~:·employees reacted with. alarm. FOT them, the idea '01': selling the "Great American Ch. colate "Bar" , was an insult to a be oved American o institution and a threat to the' prir ciples ern which Milton Hershey had built his ,C ompany,

Hershey Foods' majority shareholder was H.Ot.. a. corporate raider institutional investor, Or multinational 'but rather the Hershey Trust Company. which oW'ned 77% of its. voting stock, 'The trust had been endowed by a gift, in 19:]-8~by Mi!~on Hershey himself with the obJective of s upporting the Miiton iters.h~ySchocl, an instinnion for orphans in Hershey, Pennsylvania ..Nevertheless, in: March 2002. the, Hershey Trus "s 'board of trustees .decide·a. that '.he. schoel would be better served if its boldings were less concentrated in Hershey ,st;nck.; Therefore, the Hershey Trust announced' its decisson to sel its entire stake m Hershey Foods" which .effectivelv put the ~OJI10r,a.tion. up for sale, Si x ~10~ltbsafter liJ'(lkfun,g· its ·delision. to exp lore a potential sale~the 'Po.!¢l!l~d. of the.
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Hershey Trust Company was examiniag two serious offet;s.: a joilll bid from Cadbury Sc.h.w',e}lpes:'PLC and Nestle S",A. and an. Hld~pendent {lid from the Wm Wrigley Jr .. CJJlln.pan:y." The primary ·qu~:}s.tJlon the board's 'i 1 members was whether Hershey 11Ud. f{)'(' been ·aceilriltely valued by' the bidders R11~." if' -so whether til e economic value created threJu,gb the deal wI~S consistent with their ebligaticn to safeguard Hiers hey's legacy of .oommuni ty' involvement,

This sase'was prepared -by 'Sean Carr r.r.vIBA, (3)- and GC[Jsta:ve liod~gl1·e~ t1VIB.i\ ~lJ3J" under the supervislou of.PtOtescs~rs.·1(el1neth~l. Eades, Chris Ml1Jsc~~¢.eUaPeflu S'tateTJniver,s,jtyl-: and Samuel C, ( ·We.aver~G~eFblgl1J l1·hleF.~jty) was .~1ti[:[;en3,8·.. . oasis, for c~,~ "dis.cuS'~ion,-r.athel··lhan to. illustf~te effective U ..I~ a 0,[ ineffective ~baudli:I!l~-of ·adminjs1tr~r[ive·~"i:mati.ou-, Copyright an, ~'2004 by ·the, I;Jn~versity of Virginia. Darderl'Scb,oal FOll~dalito;p~ Ohar](J~t~svH1.iC. AU-ngh.t~ reserved. TO'.order copies, ·,~~en(.l e-mai! VA. [In. to; sales ~ffardecib~.sine:SRpnb.1J.sblng.com" ..NOtpan o{ thls pul:ilicl~U(j;n n~allhe ie-produced, stored ih a

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:(lny-fo.r/rJ, Drby .a~~~y means=elearonic; or ot~he:rwise'-tvith'Ol<~,tsh« permissian o] the. .l)iJrcl(t,n Stf~afJ{.

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The IC[oni'ecnQ.,lilry Industry

In '2001:, the U,S .. confectionary industry was worth $24 billion. Choco ].tltte.products ,~[cC[911J1;1~$i. ~S5 q( tha market; .gun1.~1.2'l~.; and nonchocolate candy [ .3-2 o/a·~ The fgf
p:on~'~ll)p:tj:onof all confectionery had stagnated ill the United States during the, past four .. e~u:s ·.andthe ·C.Q(fStID.u1pti n of ehb colate, _in partlGu lair 'bad deeli ned diLri'Dg, th e y ~. o pre't\ibus yeat Despite' the di ':~~~p~oi tre-nd in the U .:8"'. market, several factors had l~g
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Developing inll~va~tive-p'r()ducts with high ~9,n.sunH:~r app'~~al nd price P'ff' a pouud Identi fy:i ug a ad acquiring target companies to execute -expanai Qll

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p.lacle.in U!.S:.,rankings. Nestle showed 6;:50/0- sales growth, and .Mars .and Hershey 'each .showed 14:0/0 gmwth ...

With a market share Qf 30 %" He~~'~1e.y the O.s. market for candy and .'g~lf1in led ~OOJ.~followed by M/...;-·i-1'w.s.~ Inc, W,~sterfo.o,tts Corp.) at 17~,1 Wm, Wrig]~y J[. Co.. % at 6~ 6.%, ~bd Nes de at 6.5%~ The otherplayers sharing the rertiainiug 40·% of the. marke inJc~l1de.d adbury Schweppes, World,s Finesr Chocolate, Inc., and 'Iootsie Ro[1 C Indus trie s.. II;c. With its, aggressive introduction of new' pr\~duc:t:s'~ Wrigley possed ,il·"l. .2..-3 o~ growth '" . ]:11 revenues over the previous year, Wrig$ey~ the largest prodiQ~~~r f ~be·\vin.g·. gum in o i~e world, had recently mtreduced Wrigley Bclipse Plash Strips which accounted for some of tl~¥ C~P~l~,p,~~y"~IS and . . hn.pr'es,&ive .p~~d-o:rm~~lc~ moved it from fourth tOo third
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Milton StUI.\!el)f" Hershey was born to ·:3 German-Mennonite famil y in south-eentral Pen1i~~iylvama ,on September 13.~ 19~57'~ shortly before the outbreak of ....eAmeriean Qi\~.il.Wat, Jrr bis y:Otl'tl1: 'R. ifs.h.,ey 'was .'a'"peos student, and . after transferring among seven diffe .ent school s, he dropped out before reachi r~g .the fourth .grade, As" a )' 01J:p.g ~"'l:d' ii'L.;:. H' eash e,.~ d ev' ~loe ...... u~ .. ~l ;.;l!'),n intere st n biecorni ngJ a' onfe ... one"'{-I and n '1'8·," h ~, 8'6'· ",I+L~ 'opened the. L~DC;~.teJ" Caramel Company in. Lancaster Pennsylvania, whi ch specialized in caramels made with fres MJ1iilk . Because he believed there would be great dernitind for iaf~fOrdable. mass-produced choeelate, Hershey sold his caramelbusiness for $1 million in .I 900\, but retained the firm's ehacolare-nraking 'machines, .' .ttra <ted by central Pennsylvania's ample supp.Jruetj of water ..dairy farms and. h3'l"d-·wro-:r:king immigrants, Hershey used the.proceeds Iron]. the sale te purchase ."'00 acres of farmland and to break-gronnd .for the. Hershey, "f~'c.t01)'ou M'[tr~·h.2~ 19{~3~ Up19'U_ irs completkm, in December 'f9h04, Hershey h·ad~ ~,pj t tlu; Iatgest, r;:"b;oco~hlte.· I factory .m. the "WQJ~] and the Het~dJ.e.y Chocolate CillflP any-d, was born, ~
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Hershey ,~nja3fe~d, rw:iiikitl:g money, but be. "wanted it used for a, purpose of enduring: good .:~" sign 011 :bd off ce wall read .. 'B usiness Is a 'Matter of Human S ervice.) Influ(A, S : . eneed \1,), utopian -(.~n~anufa.cturin:geornmanities" of I he time, Milton Hershey decided t9··.:S]].~·r:Qq,,~~l b]}sitl:es~· enterprise with:. _~ nlqde·~ lQW1.l .. in the ,~p_t18r~ll!l'e$ ~~is surrounding his new f~c!,~J'Y~. Her8]1~y~:~lpp',~d.~:IJJa village ..with 'tree-lined streets wh-Q~~e ames n "ervOk~~l exotic lands of the cOCJ:)U bel~h'~ tb:e itl,c]'Llding Trinidad, Caracas, an~:dCeylon (StJ .Lanka), Milton ,He.r~~b.ey (:t.t;ate·d the Hersll·ey Il'lliJl]:tJ.ve.U]enI Company, a division ef Hershey Cbdcolate,. whieh huilt ll·_~.colli:plelfe infrastnscmre. inclnding roads, sewers, utilities. heuses.iand ,pHbm~t~ bui]ldi~~:.~,ill ,-06"I',tne village of Derry Church, 9 Pennsyl vania, w as renamed Hershey. The develcpreent of Hershsv ~ "'P-'ep·IfIi,~~f·lV'·JI,'nJ';~I.·~h·ll·;o1:1!'e.01,·,.:?:'i ....•. ebb '_., '"'._ 111l~;:'¥f 'o,:.',f·~·"· .m....G!; ~ ~J-~,d. 'f&!.(:t ~.J-,_r=~- ~~~ J~b .'It ~+;~'e.· ,IJ.lv o:P' -.' /:: :r.~ >';;'/. . _.
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Milton Hershev's Coramitmentr The 1vfilton Hershev School

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death, t,h~ childless Milton Hershey bequeathed his entire personal fortune; to the ,Ml1t{ln ,H~rsbey Sio.hoell" including thousands of acres of land and all his sto,ck in tbe lfeIsh~~'·Ch6tci]ilte-"Company. The Hersheys designeted.the newly created Hershey 'TrUst COnlpa'll:'y as the sole trustee for the ·~rcb()ol. ccording t:o the deed of trust, A the, trustee was responsible for managing the trust's. considerabie endowmerrt and fqr r~!l.Qttillg to. the school' s managers ~ 'Ever since the bequest, 'the Hersh ey Trus ( .. Company had had. a oontmlling interest in every major Hershey entjty, Moreover the '·.:~h·" "~ rd .I,~,~ .iJti, ;1 ':'.idi _. .. 1;, . senoorl's manage[~ anr th . IlLw 1lllSl S b-,..' : " CQmpT~,seuth ,:, ,",--,',r 7" ];B·.lV-'J d UellS." H ,.els '·h· , [ (}ar~ . "e·same l' ..,e_y I~:o' .. ~ $0:( the most an :;ndep endent enrity , with 10' nlv one .', ',~ ods' 'b." o'.Qrd ~)l1 '. ever 'W'~'~ JJL)., ~~-I: . fLL .'.:" ~"O"'W: ...... ._: , f its ,.~, .' ",'.L'-b"·' """~" -, .,,,.,_ ~ - /. ., ,~-!: . .... b····· . ;;i IS""'" E' ,J,.,-:b"'t " f~" ,., an -, '3': .01 ,'.', OlgdU 0.1 [.S nme memners ,w8Q serving on tne ITU8.t, S. ,.orupu.·e.e.'·XUJIl.,I" zatienal chart, adm'lle . sth .,',_',and :' S '-" '. "".'.IllJ[On 'H'~'-''-!Ih'' ,S:~· 1,lers eY'CllOO" ·1"'MHi,. '('\ a. aitted b o. b:"oJs all.1 grr 1,,-, WIith1,,I: ; ,~ B·-·Y 2-:'0'0"'2-" th ,e" .... out J~garrl,to race and provided instruction from .kindergarten through the, 12th.grade, NIH.S enrolled i.3nO students, \~::-0. lived on the.school's 1 ~400~'acrecampus. Annual spending pel' student was S9 ti.'OOO'1 which included housing, food, clothing, and '· ~' . '.' hr T' . h me. d'iCH,1 C3I.e" MT..li'S'~ en d:o'wment aunumstered ":'1 b.Y thf,e" H ess...ey Trust Company, .;~',a:u, ',.:.!ll"li~'_'_:s I .. grown from, its initial bequest o.f $,6'0 million to' approximatsly $,),..4 billio~.~ making , it one. of the: largesteduoatienal endowments in the United States. See Ex'blili.t 4 for
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Hershev learne 'd,"Jt,-'I!..:""'J11It 'm'~,~ secret ,lJ-:r,~C mass p.'ro,d·.'~.. tion teor 11"'1~U! ~]1'ocolate 1",(l'~V ~.n· .c iU""';j- . Lii !L.;. .l._._l~~ .!l.,~ the manufaoture of huge quan ities of nne Item, ·'si[andardizl'e.d, in. design, and 'with a sontinu itv of strea ........ ~AI 'i-':'Ii'UIt·~r·· 't-h'~'held··', d" ow eosts The nlain _'" k ~.t~,··~., "....... u. ''UIUI' In,]~J'~''''::-)}'r;o·.:·{' bar ... elate t}. i~1' . tlJ;;.1~~~U. l;::',...... D.;~I .. ' ,·ll r'" ',and the milk-ehcccla ,Ie bar 'with almnnda were the bread and butter of the Hershey Chocolate Company. 'Witb this recipe Hershey had generated sales of $5 million by 191,1., more 'than 6ight times the companys first-year revenues .. By ] 921,· Hershey's .sales ;bad soared' t:o' $20 -n]1~l~.n, Il_1,1939"1 the quartermaster ofthe United States ,Antl,y asked tile Hershey Chocolate ·C~()rp(tm:tlti"n, to develop a -mi1irary'~ra;'tioll bar that could meet 'the needs ,of soldiers in, the field. The 'req~'iremet1ts for the bar were thai miL should weigh aboatfout ounces, be able , to. 'withs.randJli,g;h temperatures'" 'and taste "just .it. Little better than, ai boiled potato" The re-sult was the Pield.Ration.D. By the' end of"World War II., Hershey was IJtdduc:ing .24 million units=, lof Field RatiooD' a wl,:€k., And ,gO" wm~e, th.er confec'[ioDlers were forcred, to ~iJ1lit or even eease"prodl1ction o during fh_1e. 'war~·. H.ershey ChoGo' ·ate..Corp ora;Llon. W'BtS wil11lLng nttil]~ons of loyal cou-' th,e, '~~., A _, ,. M'f ;r,;t"",.... b'''' '.' · f· JL~le.Ut .. J SUnleTS, .as \v'e ]11 as a: p·~ac.e »1. rut"le.ncan L" ,i.I1stO lfY.,~,:/Ore--·tan i!.u:e,~I'dlion UI\l~~ '0'- 'D' 1·· th
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around tbe w:dr.ld., S:bortly after the end, 'Iof' Wtitld 'War II;, M·ilt.Qri Sr. :H.etgbey' di.ed. at age 88,
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blo·'!l'T"J~'v""~'r"·,.:~~~,~lI t" d' 4.lI:.J..!lHl sh th. ,e,... ,..... "':' ,ill:fB[I g :I] ofI, ',11J.s rth D :;:"iI&',1l ~ UJILU n:'ii"'1.'.· ~'ii'"'F'i.'~ '-'1'~" ,·:u ,'.
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l' f\:t:,;'l +'1"", HI ~I"¥1II,e-y bUOC'O,la.je. . 'C,,' " orperauon _. -.. _. d' ,e,ft~t.;):_,·.its ·.uI~n 1~aJ9r Pll..· . l:··· ..... - . . ,~. , IJl:e ~,n.; .' . k i '£:. • -," '[';~'.,.""T:;'".;" ~"",," C· 'l~1::fl' ;' :Q~llpany., IlC+.., ' ',~;.,.:.,.,., acgll,lIlBl~]o.n ;',: '~"'''''' ir pllr.a. ~~s~,'to1£.. 'I;..i B"" ·R'.: wnen 1. -,i rchased ~.~J.~ L .·,.~::,ee~,e...··,-··<,-:d·"'y, C·,_:,,····,··-.... '., ..;... 1",·· ~na4:~I~ ~1 Reese's p-, annt Butter 'C~l"P"it) 'T');';'1! ¥.u'~;''''1bl besan P'), v,!l!l"U"I!,:~ t:'Ii~>1it~q'i'c [Ll~;t1.1u.,vJl•.,. b..·.. 'H'·::.,'1:;. " ,wJa,· 1 ~t~I'n: U :C.l:": ,J,1JI;:.~1i'!~ :.;~£ .. '~,:,..,. 'oH .'~::.7"'~'.tl,'~ ~JIi. ,:y,~. ,ersJ.J.!ey ~il.h..J.,t "1:0:
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business, ,B·y 19511 sales had grown to '$1~i4,million, and by 1.9~62~, 'had reached sales
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w'p'nld~ eontinue fer ~henext 25 years, DJJiin·0 the 19608" "He;(shey·,· li!]:vl~];siBtd b''lt aenuirius 'sleveraJ] '_.. ' .~ .. '_- pasta ll100Uma:ior , . 0:' . ,J" ~·L!o.b ~.. . . f.actufer:s~, .indlu;~U~t(gSllrIll: 6ior.gi~oMacaronID, In~, ~atndiDelmenice Food'&~ Inc. By' the 19:8~Q~~. cornpan y had, beeem e the la rgest pasta manU'fa~tUrer In the Uni ted. States. tbe~' 'nTis d1verI~8ifi.cati.fYn ·away fmm chocolateproducts led '130 ,{1 e,haJI,~'en the company 's i J.' ~-~ . ~.:' . " ,- ' ...." t,,: ~ers _ey '. ,p'O'u8,{)~O[8lL.ffi:on ."'; name to Hershes F',·'· ..,;], 10·, ... ; ····~I·...,;:·· - 10, ]-O:CtA -B':;· ]""I(llti'iA ,,];12t~ve\ler~"t'h company had :.~~"T""y ,:;177~ [ ... "',."" ,,",_.Ie.. ,'.', ' . uao chaaced ;;,~,·,:"s· 'n u~~ ..'b!!·AJ, I ~l"~Q._''''''~;Y am [~~~,~~:]·c.dI '.,f.:'{l' U' ~,)~,p"I!i'~~, b usmess, :+'~.,:,-~·H'· rsh ~y .L,a~ a ,:0>"re.up". l.l:, us .; $;::' . ..a" .'. '~;'~','::.';,"', -~. rtersr ,'''.' ··-·t·, ", .. ~ . t~l. New W.b,:r1d P~Sl@." 'LLC,~ for .$.4;~Omillion plus' ¢;quity. B:;I 20n2" Het:~~h,ey remW.n.e¢l'tbre: Htmlher;';:{nJ}e, eMity m:akef'itl~ the United States,
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The Hershey Trust C'o:~panV"C.on,slders .a ~S,ale.

th~ years, '~ptb the ~P~1-P.Q8i,iQ~~) he ·si~e9(:tle:f$}.1~y rihJ~-t~.. p;~d ,of. ~lll?~:¥eJ~,' ~1~:'1 ~ h}fd "·'~llM.ge:d(see ]$)xhibjt~.S Met 6). IiI I?~cul~~ J4t tru,st~s, jJiard h~d y~)pml:d~dIfrqm, . b ]0 rnemb¢rs1, In 19 90~:to 1'9 tllembers~,in '2fJt12~~ ~jJtet.~qltllP~.Sit£[Qn:~f:die be:~d ,OO~l ..allil.' ~rh.~fte,dnw,ard e~d.1JtatiQtj pr.bfe$,sIGniljj~{ H~rslteyS~nbo~~Juin~dl![ tLtl 'VaBeH8.:·pD.bHe~, t a '''::;:;/';J, ~:,. -T' ..]., -: h ·~;%lO 1 ~ ~.,~ ), '. - - ~.,. I~ - • "- '. ~ . ',1'. .,., d·,' S;~C[@.[,~,e41UerR. .ne ooarc s· Inlllntla~il~ 1.J;QW'eiM@I~ ')ffi911J1l6w tJ~t Sgnl[l~"tJle~.il1rteJr0'S!S. ()f 'tn:€- Mi'ltoll1Je1"sfi~'y .Scbklol ,lie ;H]~rum'aEJ' J'f~,n.~cjfttf: ~. ttm~l'~\s I i~if' ';6IltlQWme!l~j11 Tfi"6 '~~n.~O'WiU&~,t :gIUW.g. "ff~~ ~,fo.'n,,H,t;[sl1~~'l ·~.a.~ ~rigfrn:aI~ft, .~t·~mr ~m~Qn! ,0f··H~~.~~~~;r ~
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'~.'Io 1964~, a~lrs'.El0Y Foods if]:.I1'Od~~1Bri:S,L}pe-r '¥O"ciftlg ,g1[.Q~" (to ¥qtes."·per -sh:.f'Mie)fQir 16he,tl'us.t~'whie.h t,o'U&oli" :.:I',~>'.1 . '. :>N: ' ,yateu, .''i,'' ,maj \-'.,>."~).", ... ':~~1.-..~, 'I~-'~f]'~' J'_, , p-, em!.ls,c':" ~'- . /~~.\~. .,.,;:',-.-: ~.~,'.,; ~>':'-;' f'h.~ ·Y( ::"":'..\ - ",,'-i-·, ,~·::";-U;kl''': 1165 O:Uly Qwner.S'llJLp!. 0" ,1I::e.e~ley ,:.';~ : 01 po;r:at[DIt 1.0.oomp~nsare d)f sl:lplor;.nor vo Oug neu ls~,
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;!'n H~I"B:heyFoods,· eV@f dIDprp~d be[o,w :li So/if., ,hts g,pechu 'VotinJg s.tot:k. reverted ~o e-C'JIImlion. Wlfb th,e'~e~€ep:Ei"'JD H:fu:s',h~y 'ilnd a s'~]~C'tg:riQ;1J,P'~f ~f[1er''fil11:1S, 'tne :N'ew' Ybdt,,s_tjjclc· E~C)lllMge;,.did, :nat.mliQw·~CGn1;lj'iihiejJ..tQ~ n:J:rti:D~atin~d:ual~;lasrses of~ccm.inlG:lts~oc-}~~ ... ~.... -::.. ,,: .-_ ..'
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,Outlllg·',_,the ~:.. 16 vears, Hershey ..s ',stG,ck had shown variable performance, "but nast . S ,. ' . )h:ad sIC!mficm)llv oU:CpcerEO!Dlerl Standard &. Poor's 50a~~sloc:k i by: an averase of ." .8 .... __" .. _ ,,' -: ... _-.. . _... nde~ : ..... ~ . ®:a" . (' lGii', ""t ., r, 11" rf :~',~d" per . yieilJ: ,~S.ee l ~'b "J-i)"~ D:e-'S:P.lt~tbe ··O:V~IYiu. ,tr'~fl.grnvestment :IJe:' ormanee rrr'f' iP) ~4JJD:~.c'l: "'7, J' _.\ s :.'.,ie'I:' :c. '-'if': - ' ...... ,'. ',"" .' --".. rrom rie";f sney S h·ares, i1?,' .earry: ?O,,··'09 th ere" ati ~'. F':r "'~lo.".".:) " .. . '," ~y . ,',0:<01 .,... '.,"': rne 'h"usrano ~I res gra d·- 'j versiifICa:· ~Qn.away f U1l~'
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io lfer$l~e~yFQ:od~~," I d I[}~:le:v{~~:, a sale O}~'-I trust ' s enure .stake m 1[1' 'h' F" d W~)':~.;i,(1~ d' Jt~lat 1h. " f'C• r, '" l' '~' T!:he V'I:I)ar- :.m... ]'" Jl~l~l~~t<ey : q~t,S .,gamer' a. higbet prermwJl··:thEtu if its '$h~es' '~Je'/''S,~idL 'Pi~eemea).;·th,eretbr~~. decision "the ~~O' sell was, tru-ttrunIOll.ijl-to puttiug Hetsb~)t Poods; Cotpbtation ..on the block, ACG.QiTrtli~lg to Robert C..V0'wler~, president and CEO of ';tlte( :He,rru16" Trust 'C·otll~&tttV:~,the trust J. ~l:.r. , .:1" ., fits '[:',.:... t ,.. '.. :,:t' ... ,'!C:i, ," ·~t<·'· '.... d ':d In{_~,Olne. .. ',plan.ne d:" ~1,.\0]_ uves 't lu]~ P'][{),IJ..:S .d:Qm the " , 'j' ~,e;: -In ,.:. V3Jlile.·'51 01.. ':U'.;0".. equl_ H3S ·i;.Ul. :xe· ,.... z: s,~, :',:. a . ; r _~~l mterrlat!~u~lseeurities lOJ ,p.ro.vci:demore ~-~stt~ight of'return-and not the volatility . lines -f", . sbo'"k ~'~ m r: .: ~ ... ,F'ql~,owing.the ~itt,chbo~u me~~ting: d;~l~-:g,ati~~l dl:~,trust told the ehairman a, f:rO»1 land CEIO of Hershev:;;_... Fo)lds Co~titation~ Richard Hr. Lennv; :to begin the, .1": process-of . ~r.. ......, . ...;}-.(. . ' ful'W}l'~ suitable.' ,"".. bi dders ·J;'~'I' r[he :cieoornp"'/aII'V-B'U'l Lenny' QP,nd,~ed' tbe· idea ,o·f sal e flP'd "..-,0 '; , - ~ . ~ ~"-~. - ....: ~'. -~. .. ,',::,:,. ',J ~askerl for Unle'to make ~ leollIl'i"e'rn:roDI,:,osal In M'~i;\J''Le.nntl-nfe's&i'lte)j .. ~ ~toclc:",bllly·:. back p ". .,-J ..~I. '_'_".J : W' ,"_. '_ ,,',dffer to .the bead of tbe ':'frust~. i;Jl.'veS,tm,'en t committee, ~ J~.Rob:elt Hillier, ~ who also ,Sb1l OJl '~be 'beard tritHersJJ:e.l- Feeds, The plan called for Hershey Foods.to FHLi.relrns~half of .the.'~b~us.l'·s, -shares at-a l'Q% pfemiu.n~ , Hershey Foods wculd.also help the trust sell the ... . remainder of' its shares ever the next three to five 'y, 'em ~"The trust's ,bQ2UZd· however, rejected the:·P4l11 fl~l t~Ie'~~gt:l1und the 10.% ~p'Jem,iUtll was insufficient. ~ d;l'at~ "1;"5"';i"fU:lf1; ':'1, vthat ..'. · ,;,l ;"'''''''1T-ib'~'' .'".,u, -It.y ·,,} !1. .. "· · to ;~!,,'~ O .I']'~ z; ,~. -~\.tV:4:, a ~la.y u:.J"a W01l&'~ld"': b ec.ow'e JlB.J1Qwn b,"" th.t9S;~,~O:PP~j.,~~~)u .$~ll:~ ..... "'1"'''' tru lEU!I''" e pu.Olw,mclllLS, ·~,.¢~HaQn 'log, 'se,0;,',1"1 ttsS POl'l,;-lLon. O.~ue, au.= deci: '.'., ': '·f·~·*-:b",· , 'to as ·s' ~I",W .... Tt.., .",,' ·llla.Ca · nnrsoay. me rU~I~ 'd "'I~'l" 1. p't'~n~;~n"·if~1r;9iii".¢!o,Ci' H·,~r·;{;.lt~,e~;v 'I '0,utio .... : '~,~' ' d'; 0;t~ P :,~,~"~,, ···o,~mO'ir'·~t,"mO·:i1hi ·p·:·,'o-~ilt',:"w'::'~Ti,i& n t;.IW"~~',if""_,t:· ,t,:t:.~ '~,~n,' :e··"n·t· ~·,W..l; '_ . .W'_' L~.fIiu '. - '. s ~ 'n:,.. .," .) d' :&:~~. 1:'6' '?l :t,.ll'7n :1" .. ensn:1.tlg '.,' " , . .' ~ ..t H ersbey- .~~- s'tOC.JLt 'pd,te so.ar,e,:~,.ll:o:rn 4~'.·· 'to ~p.,"'.j/ per ~b1are., T'ill th,e-~. . ., .. week;s~11Jmots, ~ '. ~'wi~'I:e~, about pqte.:ntia.m 'b1ddersm ~ong, the naUJl.es to emeJrge W{~;l'e:'the Willi.am

'a~l'OTIf!bOHId members that the'-~iru,st wes ',c6mp"·;:pornisin'g.:"· its ' fiduciary respon $,1 bl1:ity '~~.eon(!enllatmg ,3., l(jisl~r'opJ)ttit)nate ... ·~n:itJlltJt ,of the e1:1tlQ\vm,enl fund ill the .shares of Hershey PoodsCorporation. Therefore during a 'lnett~11g. iil Mn:rc.h 2iOQ2:1' -U'"M sf s board 'voted,'. 1.5~1. to "exp lore. a. potential sale ~"of its holdings the , was
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Jacls S~tn¥ef~~,a:,w'yer for the Hershey Trust Company:' "[The injunction] causes "' ·l·J:·h .'. h d Thrr,ep,arIaJt,,~,e, "arm, to lHL .. ~ " I t ties t"h' e 'l.. d Sf)'; 'f" Lh,e "lr',fU:SJl,t1ej Wl".tr 're,gat:, to '., ~mg~t'e ,I . ,,' .' nan ,,~, ' ItS " ~ largest asset, '.' .. ~ ,\Vhq in 't'l1~' COJJltrpQU]( has not r~Jd in 'the IY..£lp·erwhat bap']lgens in. todav's,p,' 'LV :~/,_~Ivl when ..r~IU. .I11:V'~(L~:- heavilv ,'", ,~ ~"tnm;.:~SJL;d~A., !!l ,~lill_~~.J· "y .'. aen '\1,""'1('- ,:~-,: est ~0V.l uea -]" s UJ. sinale "iii:,r.~:I:: ....?!:I' d JI ,.. 'G···· , '. '"", -- 'I" . J,.'",gy . ,-)~~m,~~ A - - C"~'IJ"~. .'. "W"':"""b m~KJt\Sh.~e·a,tt.Qt11.ey ~;~ne.rIt]'.~.o ffi':'ce better J1· .._at;un~F< .'ID.11}~,~ ""::, --a.t ,-- .. 1,,i~ ,.','1-0.. . ",. '" ',," I., ,,:,, ,finzu]'ciaJ manaaers th~U:l the board .of the Hershev 'Irust. 'arp,d literall ~ the 'watld:wm,ae ·;_o· e'x]?ertff '~:u~y lia:\ie, t ired &.S wel 1't" Jerfy' Pappert~ deputy ,altoriJ;e~yg:etw:e' ':al:: "Because-we' re m~iu~tgiil:g dlffeI~en:tclients, .. Wet;t,e managing ·th.e intem'sJ[s of the~ pu,bli,e,:, alrid-···we 11,3;ve. .ran, epportuniiy and! a duty under' law make ,sure thatthe 'LI~ti'n:\\a.te'beue~ficia;ry of the trust, the pnhl ic, is not
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During the injunction .:~e~;il1,g~~ ,~eveija1. :(bl~~t .a.:ers~,CfY ,fjqp ~,S:'execu ~i~~e'~>J'_te~~!i~d ~b .. "f':' , ,ers' ft..y D·. "1',- ~n.u, a.g:alns:~, l"[JJ~~ 1 .. lItCl11iC.1ng ""QJ. ~" ~~lZ,·,;~~,~ ,'.'. ,.... ,JLOfllIDer"';"E:'O-"f?' 'H'"I,':"', 'she ,l! ~OP{,-8.', .,,; ,,-i!] S,dLle.~ '. ,,,11. "1'·,·,· JN3{~l1arU, JU]J.uleqDa.nn", .p<"~'c .... C' Bruce; :Me]{jnne,\,t~ former CE[),· 'of HER.CO. Representative James, Sensenbrenner
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'.-.' _;]d-" I" ' ' ~ m~e:r .. "h ,eWlll:t; 0:- - b' a·.~ll • .- u,ili3'e ".. C' u;ag:o "-' ... 11 Q9'-'], T~:tl:e: WOf, ,'",s- ",af,~e~~, ""'l.,~ - 01, ~G',' ,':: ~ '~tr ,d~l1]], ',~. u, =b'een '~-.'. 'd: lfi,.' 'h-"" "., .. smn.ee '.Jl, tl '::';;:';_; when - WllliWlI W]i~de.'J'··. whHe W'add ]]~~JT li8 a .sales1i]aJt -For 11~, fanri1v'.s~~ soap-:c'.' i fact(){fv.,J~~ . ,. .._ . -~ .. t:5. . -.. ~ . ~rt:;.J. _ ,J ~~g,a;JJ Qijerrng C:~:'$tQJlJers ~~,~w:ing ,gum., In,1'89B., be, merged .ltiS.~'C:Ol:nPtu~y¥vitJJ ~llle
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:J111B,a.hofn~y'gefie:ta.l., M~ik~ F~!sJTher~ "~as"a Re-'pu.'b1j:c,a:n. eal'td&date'for"gQv~ruo:r 'of ,p~e.nnsytvnlL1i:a·/at the tUlle~

A~~~ ;~sJ·96I~ the (>pmp\~ny still offered its .original five-cent late

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E:U'QP.f#-~d. '(119.11).3. :rl~99,$J.; In 199'9,.BllrWl:igley~ ;a member ofthe fourth .generatien became rnesident .,' and, C 'E(:') After 20'I·O'U -, the O'" , V\, ' -, .. .f'r·("'_"'j'lr"]~·fJ.'I·(·ev,s' " 'J.~ ' "~O;:" Iead -, ~w.· the ..~ . _"-, '''''0, ·.'l1flp·"'tn'~ ~." r"-'··'-" ~_'" cQI)1pany: ~fo'(~L1$erl'QlI te.stih:g inn~lwti,re gnms with s~J:c~h ~(~trtibute,:s s cough Jrupllresa ~io~n ana teeth whitening .. .In ~20a2" the Wrigley fatttil)i Dvtned woo:' 3.5r%·. of the ,·coJllp,.a·ny and: coritrolled 60'90' 6£ its: vOtitfg:',s,h,Mes';. 'With"'(~(Jl revenues of'$2.4 billion, Wrigley commanded a 50% share ofthe .gJ,rjribal.glu market, and sold its products in.merethan 150 countries, ~Ne u~ly i~s"revenues were der.ived -fremgum. W [~;gle:y~~: ¢l1 site described its bu si..· ~ .all W
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W.ri,g:ey is com milled to achieving generati onal ~growtb. and ~RfO~:[,eri for our ~t*~p~o.'d~r$ ty ,: To, archIe, e·.t~, DIi.s~~9n.!. ~·'f!p:ec~vt~·I.I-:ig we .ag,~;rJi£:t .'J l~D:g7"~enn"$~,ategic 'btJ:~itu~Sg b·,a;,s,ed. .'phtn .J);nis x k~,y:rj~}eGt~ve.s" 1;h~o~e.objepttvie~ inelnde; 6
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'The Wm,i Wrigley If; Company offered. $12'~5 billion ($7 .. ··bildon in. 'stock and $5~~O S b'iUlan in cash) fot' lffi)~ -of tile- oH'~'rarfdi:n\g shares Qf Hershey Foods (2orporation, The: Hershey Trn$.tt· Campl.any 'v~tl)uld exchange its Hershey shares for cash. 'and shares in the new company I~Q be renamed Wrigley- . ershey, This offer:' the equivalent of $89' 'per share, represented a.42% premium over Hershey's preannouncement ssock price ..
The "deal mcluded commitments to the Hershey community, including. assurances ..O;.f job reeention at Hershey Foods. plants. in De['IY Township .. Some .an.aJy~,ts ~~uIJlted that W.rigl~y management was a~,,~~u it. could P.llt .. ming ~~.Esh~y products in~Q its 'product mix and Siell them ~nt~rn'ltioflaJty. Although it was v.l'llik~ly ~~~ ·W~.gll~Y' o~ulld::~hi~ve ·s:~,gnifi~antcost savings management hoped t.o: c .generate biglf:l~r sales volumes, -Wrigley,had been. successful in -sellingchewing gum internationally .'and was, hoping 'to do the same with Hershey'S, chocolates:

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eompleted several mere acquisitions, 'klCl1J~ding ~Butterfinger .Bal$yl~u:th" t,afn4J1.es:,,;~Soulce, ... Perrier 'w.ater, 8(Bd,.J\JptJ pet food. S.imllitan,eorudy, 'Pe;tet B~ac,eck~'L·letitJ.athe·; named CEO, In 1997 ,~, div~s:md-Nestle'~s nancere.bnsinesses su:eh has Go:ntadina tOtna::[o products and ,Ltj)1lJ .... J'i""'i'.I\1I;iFrIi;T'i>J?~',~m- oroduets Libby's ~flI-r. After acquiring Ralston Purina, in ,2iJOt" :N'e:stl~eensolidated its position as +"k.v, .. '. ,··d: -: ". ~ 'fl" .....111···. t1i ,~. .. ,-:-' ,....'...,,. ..' 1--,'· .' '(:N'.. . '.- '(:~J-" owe won Jd': :$ numper-one: -, '''1''(lGJ ,co:mf.'3~.y:, lr~~.s.J['~. '~-.::b··,'td _ b"·J2CiarEl.e?~.~, ..;;1.-: ITIL off,e~ ..~ ',escare), ..... n' -'w.;. '. ' '.. eaner (,:0 bottled water (P'errier')" and pet. feed (Ralst.on Purina) arwd:,tin f,niJ};C;)rt~unt pl.aty,er ·tn the "t~,·_ ind-.. ,.. ·'1 ti ",,',., .. t·'. easmeercs '.' 111. nsuy. 'T!~I.. 1>I'h lIS '. ttl,·. .",- A"']": --, 'f" ,J"w.tQng r\' fh{tit'&e' ·m Arcon, rnc., '~T <I:r, .~~ it-SO l'd~td€lp,a,,@· "d ,U1 ,~:'~e'S8U,e.~1 "1-' thalmic: r, _ ~- ,~~ -- 'W -,,1', •.. .-.-.- - .,'., OP]:: l~ihm,.m'c. pnarmaeeuucais, ~ontact-['~flS l~-O,~.lh:~onS~· j~qUJ,w.lneut C:<~ eeuiar-.' ·su;~gery., 'ana . ~ . ,- ... : - c~~or '--1-Nestle ~sstrateav, aecerdi ~~. to' iis Web site, .was as f:OIlowt~ n(~'_' '" ib..J,::' -- ~ " - -. .
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At $75 a share, 'this~offer r~Pfes~t.e~ a significantly lower premium tha:Ii that offered by Wrig ey, MQlreqlv,er, the 'bi~d WB:~ t:i()mp!icated, bytbe fastthat Nestle.received royalties frem Hershey for ,U-,S.· sales ofits .' jt Kat: and Role .brands. Trhe licensing 'arrangement had heen -n:e~oiated :b·e;tl.Y.een Rowntree and Hershey prior to NesJI{~;"s· cq uisia ,.__, tion of Rowntree, Because the liiensing agreement was structured to continue. in, 'perp;etui:~~ Hershey ,~lued the licensing at the two brands atappreximutely '$1 bilIio'D",. An Important aspec .t of tli€~agreement, however. was that :a change of ownership Of "Hershey would transfer all rights to the two brands 'back to Nes.tl,e. Therefore, according' '1'0 the agreernent regardless of Vl.ho· won 'he bidding battle for Hershey, Nes116 .stood to gain t.~~re value Qf he li:censin.g ;~(gt~ement. The deal included ,rrprovision ..making Hershey Pennsylvania, 'the headquarters of Cadbury Schweppes' operations inthe United States and. calling it the'. "chocolate cap.. '1 t-1.-. m- ..s, d ;t." t' . IDt1h,O:f'" tne wor Td 'W'· 1-. _:l~' Withnew pro. d" . ~ f.:ae rues anrr distriib.unon capa b ·'ll"' '. ."In. t~;e~' tmctron ,.:t1.!L~,e~· h 'U'··S States h h d d idati ~ d lilted aowever, It, ey expectec to rec nee-costs b' CO~O~j'~ atmg operations an: ,I ~!Y reduein 0- work zforces See Ex'bih'·it 8 £(lJF a sum"m arv ef th-e' bid ders' fina nc ials :.~.tIi _.. ', . ~.JiL'_.~ ...
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nomic side the. b'oaidneeded tel detle:11lln.e the value of Hershey as a stand-alone-entity comp,arred 'witb~ itlie bi,ds, Dieing offered, Bee E,xbib:iJt 9 for Hershey's histori cal finsncial s Ej'bj:bit 10 for Hershey management s financial ~pl'ec:{;mts, 4 and Eth.ibit 11 for industry cosnparables, 'IOn the governance side, ..'bh€\ board n,e'¢~d to decide whether se]li~g. ershey compromised the board 's original mandate .ftOt;il Milton Hershey, H
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HE,RS:HEYPAR~K, ~o,p..en~d~'19XJ1'b~ :rvHlto(JI,,£ . .He:rshs-y as a..'pr:c~;i".c a.ntJ.,pl~a.su.re-grQund$' .fo.r h~s·'em'ployeeS:i'is now h .a them e :p.I,ar~, :~~h vthal1 sa r1d~~:~~~d'ttra~i'f)ns',and daJly live.''a'ntertainm!ent. w 'm,ore· .. lOOA,ME,IR:IC,A.N!orth A,mIs,ri,can WUtUi·fe; ,Park:;'is an'1! 1 -acre w'aJk~throtlg,,'fi.zOl0 Igc.ale;cl next-to HERS:HE:VPARK. t.. .u;V

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iH,ER:SHEVPAR',I(:Nr~n •. s9,at;S, 7.~a:25~·and wa.sho me ,to tner An~n~~rh:~an ~ IHoc~ey'iL.e'8glll,e ,Hi!ERS:HEV'" BEAR'S until ,tn'e ·2002:-:2003·:seas;onl"·wt;ren tt-le\Be.8(s. moved t,o.fheit ne.w, horne res,! G~A,NT Cehter.
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HERSH-EVPA,R,t( Stil~i,m"~'~~a(s ~pte-Q7q;OQ.D and-ts horne spcntt[;itr.events.; ln~Ju tlll~_g0ttLe ~$Wmnler'Concert: ·s.er~es;
THE STAR: PAVllJON, at. H;ERSA:E¥'PARK-Stadi:_:m reek and'. a~ternativaartists ~ ... ...

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H IE:R:$H'EY' ·B,EAR.S cebab r.ate· the,j! r 6.5jn ann ivers. ary -dlurhl'g t~e··2[Q02'-20 03,:season '.They c;~ptuted ·the:ir ':9i"Q hth, ,Anu:kic3R HoCkey Lea;g u.e O.altj at Cu p ,Cham:pi[onsh ip: in '199'7~The" B EARS. ls the. oldest conti npouB~y' o.per~t'tng · ~fW~nCn~~)e, .th~ Am;eriG~n Ho~~ayLEt91iQ ~n us, TiHE, I~DT,EL HE:R:~H -;Y,_ ~nt· '1~93:S>byM'~lton S. Hernhi8:y,. hasi·23.~ 'g,ue'st rooms and 2a 500'sqlls're fOOt.ofm'eeti.n~'i· b in banquet, and ',ex:~,ibt[spaee, The-H otel has been Iret;o_gnf.zed with the' priest~gli ,AAA FQ~r Oiiamend Award .a,rldj~,::a OLJiS .. m'embef'.O.f Hbi:t()~i:C,Hote,~S':.o1j"Am,et,~ca Prleferred Hote,lts ',& Besorts. and
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H IERSH:IEy'·g CH oco LATE, lOWN! rC:A"F~E,,~ located-at He FShe!~,ls:Choootaj:e W'oirld 15('.8, ehooolata-thsmed r:e&tau rant 1fe:atli.r,j jflg full-servlce IUri,eh. and' .d[nr;m,91., Ths'C:iide. ls own,ad I~'y H,e1rshey Foods C-orp(lfati'On~ but ls ,m:an.~·g,edby H'ER'SHEY~): Hesorts.
BELLA

LUN'A Is a New YOlrk Style: Itana,n Dfd[ in lH:ershey;[ PQ""

HE'RS,HE.'V H,igh:mea,d'ow CSlmlpg:found, ,~oca1,ad 'o'ff H IE:A,SH EYPAR K' ,DriV9~,'fre;atur.es,'n~:ar.ly 800 open and' s,had:sd earn psltes .0n .5S ',aCre:sf of' 'r(ill~:ing ,c.ouAtlt'y[side~ Hlershey ,Htg'h,mera,do·w ofie,:rn, ,20, lot) '~or r.ustic 'cabi:r1s wuth 8'~ettriQ~ OBITij}Sr re,frige:rat()i,r. mlicro'wav8t b.re~irrta,$tbcu and a, co,ve;r~d 'kant porch.
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.1LI.llll::;i~,

l..-i '*-ii

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;,JIll I

"'I

Ke,nn:etr,
Hatt

v.
-,Il

C'fi,aJrman of ihe"BGard 'of He·rsh.,ey 'Tr~st C:o!:&. Mil~ttO,hH,e'~~hey S'ehool Board -ed Man,ag,e.rs
Ch~~rman-artd .CEul of HerSh,g~y :

'FUt:ha.'fd" A .., ,llmtnerm'a,t1

ILt#'"iC'J IfjII"ii:a'~~1 u. r\~ ~ ;I:~IILI,";I V~II [I~.

Ci1iaIi.rman 'arid-'O;'E(j iH,ershe-y Food~,

C,.Qtn0 Fa:UQr] .:p .

R - ic'·:'~'a.'r'd<'- A''-',~ . ~-T. ',

_,_:!

€haurtm an ,~lf;the: :Soam' HeJsHe-y

'Trlj;St {)~lm,.p,~AY.

Haft

ii,m,me,fF.;rf1:an

Food~s·Corporation
pr~si~:ent. d Ohi~ef Op:e~n3.Ur:jg: ali · Offioer :H e r.shey Foods C()rpo.r-8t·~~:1Hl

~e~l)lnetl~ .L...

'W~if;--Wfll~Ja'm 'R'.
F" -t:,; '_ ~:S~Ier ,

Kentietf:1 L

'W:qJ'f:~
-~0W"1 H~~~_ ,;GlU·U
:""'I;~\"'" ~'"

F?rersidefltAlt1;bf Ohl eliGpB-ra,tin,g

·'OffiG,e'F He;rsh~v Fq'Olqis 'CQfpqlP~~a':11 .. ~:eUrader:t~aj{m F ~fl'i()'f ttU13 BillirtJ C.arp~erne r T~'~'rn'l1 l.. '1. Cn-rt)Ora.tit~h o og·.,•
... ".~.
~ ." . . .~' .. --........ _._ ... . ~: ~ .... \ _..-n.

. . .,.

..

..

~.

Scll.oo,~:and board ot di rectors ,;of' 'Th:e ,H~rst~)ieyaanJ< Maj9a.:~'i·rl,g'.~padne 'in th.~ H a r-r:.iS,~:H.ng r I,i;lw ti'im _pi ·McN.~e:B:j 'Wa..U'Pli~e, &--N u r-iiok;!, oounsE!I.·'tC1all Hershev ~_y enti.t~es. _. .....
1".. •• __ • •

P"F"eside':nt. t)f the, MIlito 11' ,He:rs'rt~y···

• •• • .' J.I

~~din:~ '-,IPA JC)h~nE,

:Siurlli nga,me
·TrUJmH.S

Rod ,J Pl9ra,

R,~[t~d ·Y~,:~,e;J~:~i?t1~rrrf~n :§_oaf~r .~f'.the.· .an d E~eEuti1\'i~: blficer S'E ~b-orflpairJ¥

~S.t~tn[iQ.rdCdfonl$dt~'clttt ~
C.'

Jlot~hp~ 'R,j neman

EX'9CUtfVE3!

Vrqe~~pr:e,skte :Q.f :the At

',GJ:at]'ann,

Pres:liderlt USS.-a djVlsi'on ofUS~X.: ~Ct),rl~)6ra.~tOn Pifi~hotgh;PA

~D.ea:~-"()f' ei ;'Graduatll-e, 'Schoo ~ G'f ~h

P~n !l:syhf~nl8i.M'ed~o:laJS~'Ci~:ty

.J~,__ues~, '. Sr-:,~ r ~'~K,~,~n~y"

,J'ahn,. d~,
·/Jarnlsoil;1

P reSi,d.entl .CEO a,:nd chatrman or,·the

bQard of!: H~~rsley Ent:eftaln ment &. f
R',~eso "rl'
'I, .' .'
.' "", '

C'-"O
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,"0

I I:'

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II

('H-' -I'E- ,'A/-'~O~:O'__~) ... ;

: 1.

BILJ.slin:i~;s1; Admi n~straUon'JJ:olll~gl~·.,of 'Wi,lr~,.··· 0_ -__ ,Mar:'·- WiIH'"",bun:--' g~VA.- __ ____ ~IQm";-n~ _'I/, _ -- _ ,-a;m1S

i ..." .
, ,"

,,:,

"

"

W'i~l~am H'
,Alexa,f1 dar

_IIUl.drusfr~l Fhyui.dLa A:,g-rlcultu raj 'and rv"BGh,an:'i)c'a~ u'ri:i~efs:~~,¥' TaU

Flpri'GEl

Drja~.df~the, chOQ;1 of·BiJ$iness;'~ri.o1 S

ahasseec

ROfla~~1D.

Vice Pte$ide.n~.and Director NETS Inc, p(~v~~~b~ it1v€~jm:e:nt.m,r;tfila;@$·,m$nt h.~td oomp~a.ny t(~buque rqrue,i·.N M
e; -

G,I:o;9:siar C,' MoC,otllst®'t

Dean, Penn Stat:e,Ml ~tornS., HeJ:s.~ ey Medic-a)-'Ca l"Ieg~: ..

_po: ~~<Q k~~JrU~~~

JJ'h-- M ,.'O! 'n .~-'-'~

P,iie:buski'
H~Pi~J~~,r:t·

R"t:!i;f~1'~d 0:1;..'~;'J'!fm~ncd,t~~II~, 'o~M q. ~~ -,~-~-. JI'·U9~Bo~r[L~;n,d _~ O' .'!;; O' '" -.,..; '';',I '_ " ,'" ~' ." I~"~ ~. ... GE ...." 'S't~er!I";-I"'ng'J'-ilrug[ ,~ In''G' -·1'?tI,ew' . '.{Vi~o''' ~-k-''~~:.:r t..IL~_J"
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--":

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'I- I, ~,'l.1 '

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~IJ ~-_,_ '
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.I

rnA 1Gl,~·W~'.l!9~1~-'i' Jr?~l

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J:·o.s'S r>:L:1il P"

• -<"0"" ~ •

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" _ -.-. "-... -. .... __a-

so

"--' .'. en bo .,..Ji, IilIFGCtDfS 0:1 I~~Plil :l~n ners~'I:~,y.enooi seN~ ".'\':'~i;,;.,H.lB',Qa~Ul 0 ·f·~·'·'-., ·,.·,~~·.;ti-l-.&-.'.'~,·;I:;-I!V·" ,Li·,·;·~~.·'·8···'·kA,,'~
_" .. -". ....-...

I"

-.

-.

I.,

;....

nb' R·'~U .~' rt '\10- W' .' le r '!jj!·'c:.

LE!i
I.'·. '~:.'

C··'·'· .,:0;.';

Pres~derlt.,and'C'E'q~·H€:r~hey.ltllJs~;

,C:ompany
Cha,irmaJl' atJ1d' Founder .'ot iHiUih~%1:" G ro (arc h lteots"'Ii ""'rl~I urll.~~ll.
.

·C·hajrrman,. Pre.side:u1;t an,d CEb~ H,~,rs.he.:y FO'Ods Corporati'lon

Chairlma:n'11nal Founder. The Hillier Group '(ar:chI!1.er:t$)
j

J~Robert
HilJlije~,FA~:A
A. ,Johrr rCi~aig,~Esq.. WiUiam L. L~pjlay
wmiam H.

\..J I II:p' ~l •.

J'onA ..
BO
. , - .. M' "' _'. . ,er~~ P:'·' '"erh~ nd "."resl~d'". ,an.:"C' 'E'-0'.1 0,1'r.d It on-, H: " ,t.., .. !!sy
,;If ,f ... il'EH,
'C'L~1

'Ch,airman~~andC;IE()~·~nco~n ,ational l N
Co ~'po:rat[on

Robe.'r,t H;
Cajmpbe~1

C:h,a~rrii,alh ahd'C~'O (ret}f.·Sunoco lne,

S:r,VP F1'~a~lda GFO {r@{}~ Abbott and' -L Jb O~Q .' nes. I~" • a .. ratorl ,nrC ..
z., ,

,8chOr(jrl"

·1 a A,: c.;..... n" d :S'I!"

. ~:. I

. ~I

Cha~rman ~'f H., a AIEmqnde!F . ,rUCdon ··.:olmpan,y. bilil .. .....4' -, :" '~f.': .C ons t .'.- . ." . Ie'" . ,...:.~~. lir"ri'~rector ,o~: 'fam'ilV business p~Dg':r,a.ms-'at Snmd~i En,itep:r'enslIf,ial Center' Wha pion :qC'hOQ.~I:, Unmvstsit:l! of IPerlns,Y trv,arrltl.

G,6U'Y.
;~VU;I~~

[Po ;;'iI: a'

C'n~;~hla:n
D'n!rnii I'

lHi]11

Prasirdent and: leE0 The Times ,M,irro.r 'F0un·,:adQ:n dl' >i" .'
1

Lucy D"

Former P'oUcy".,advis,9rr. G,e,ne.m1.

Seliii'ees,-... Adni~l,n . _.
-.~'

John C.
Jamlj:son

Chafrm,aMI~ M!aMaJ,d ee Associates

Chao i~~m"IEUl Presldent.and C.:E~ VF O· 00 roo' ,,~'t'iO:91
_ _ '.i , \1
_... ~~ .. .' ~ _

Ha!ckr~ey~
Esq.

Wend"'" D
. - ".rJ'

Mackley J',~ MC'Oo.n~~d

~.~

.. IU

~l!

...•

P'u.riefoj[

dehn M.
Pi:etrus:ki

fihai'rman, 'Iexas Bi6techno~@gy

CQrporat!ron '

W Don ~C:o(nweU
i

',-I,.::

A .. Morris"Wi 1m lams, ,Jr~ M~Qha:et 'w,

Pres,ident·, WU~i'arris'& [Company

~:nstu~u1i'Q'n~al ReJsea,~h &. Planni "g,1
[Cor~~enIU'.
<: .. :

,Mlatuerr

:Hev. Jioh~ S.
McD ow,s.llr Jr.
Anthorrily·J.

··'· .~. '~h . ass J: '.'., . ···.... .'~ .......Ji).. 1 S1~h'. a.m!es~1LI:e Le - E':PIS:Cflp)cu:'C~IUU..;;II·y ..

Coris.tJ,a
R',obett' F.

Sch O(~~' Dts.t

SUiperintend,ent. iC'Umberlarld

Vedl!e:y

Ca;,vanarrgh
J'ln'::iill"ilI S··'• ~ u.~,~ ",: . LipSllz'j Ph" n

Manag.l ng' .dfrN3(:tor!, !DlJ iR:eal' Est'aisi Partners

I~nep,~;ndetJteducatilQ,1l ,Qal1s:u ltant d

HitFlry C.
Pen nmngtorl1

Co.,,;ft:uJ,n lHr~.Jobs for the' IFuture d ,. .

J'Ul'let"C~

H:ow~and

E:XHil,BIT 7

II

Hershey Stnck ..Prtc.e Pa,normanc.e (1QI,8B-2001)

.800/0' r--------~~--~--------~--~-----____r.
7.··O,Q~;"'.+-----------~____"==-------'---------~--r~:-===~----;:::::-;-------:---l:"'"

,'"

rHle.,~she'y Fop,d's'

.r../O, 60""01

o S~&P500

4.0~o.

20'fn

'1·9'97:...-2QO 1 ('.5 year9.)

1:966-2001 {l6 y,~arsl

Hers,hey

"i~ 0'

""'0" ~~::fIl~Ie

r32.,'~~)

(24'.9%)
l"3, .,1(0 1.a:. 0. 0.;'

1'·8..s~kl

5&.P 5:00

9 O,~Q1 J."Q.'
-e- .' "

(19"er%)

tt4.~.-?%)

EXH'IBIT 8

Bet-a.
(}redflt 'r:ati'rl g:

t)'·:·S5-,
7..'3,',8' :....
.
'

o'~>0:"-. ..'7
'_

A+'

N/····A··
.",." J

:S(aoK~p.ri;C~· 9/17/20'02. ·S.harH~ .auf:[standl'ng (mifllons) BonK value: ().f debt~($'m'i'llirons<)

.:~

1'3'Al 2 .... ~.
-,

49 ~S
~.

v. ",

0.70AAA

f\ 6'"O~ v' ,.
'~.I

51·.,9:
. w 1s·55,:Q' [G,

: ~: 'S"'S'S'.:~ '.2,8: '5:

. I _ • ,

__

iii.

B85

.229'·0.

1'9~5~60

502.5
..

.' 3'543
'j;."

_. ','

"

-.: .

8J19/2002, .5iyear
3~38o/Q

'9117/2002 ..

2.•i:1V:/Q ~~9/. 1l':t~2~9'

:1q ye.c~r :30 yea.r

4;;2:ao/~ 5:0"'.1:.;'01. , .' .""·/0.

4..lar~,

Mattur~ty

lP'tiGS
'1' 1'J'~7

Yield
IIU-, 4/::"9:'"

8/1' 51201 ,2~

211 :5/.20,2'1 21'1.5/2'(12.1 ',' No de¥}~t
~,!

tCfl.1

1,'19.4

5 7'3'
'f!:' .

s.se

Matu~ity

Prib·Q
1,25.4. 'Prlce
10.0.6

4".,3.1

Case ··44

....

H~j[£h~M Foods ,C}o rpu;r ad.Qn..· :Hitter ;

~T"ij es, m

htl t~ S Vilec,t: Place

_'3'9 .-.

Sal~'s 'Cost :of· s,@~·e.~·

Gross .p roflt .sellli~,~'~ m.'Rwk~tir1~h aJtd ad m IOJ ~.craf'va t .~ "-'.-·fI~-

$·3 r'~~Hl9. 3

~< .

' $4 43 -, -0'-" " _~ .,5,~,',

: .(;. :
Ir .~ ) ~~ I •

~.,j:..

,illS'"

2,~3n2.'1
"- ~07 "1, 1~[~;·f~ .«:

S" 2' flll:" ' '2·;'.' S·. ".-'1'_

"I -)

assa

'9"'7\19; 'n,

ru.;t7 ,,

$4~ 431.2
n ~): .< .....

'-7' ~;~'{a·· ~ .•",.

6"6(;) 5,', ·.Y.~.

"

1';-"

8-":'1u13'<
;;: 'v

t.".•

3" ..

'.

i,

~,,468.7

Opela.t~ng·lneoms

Ga~ (loss) .on salle ,n'ff: :~:usin ss n e

Ear~ ilri~gs·befor~:i~tere8,t,clfl,a '1'Cil~' ~nt-e rest: ,®xpens;a
527.8

6'it~M:..,o ~~II'Y
",'

~4a.a·
'7··...i.,{~· . ._:--tf!l~~
-

~i!S.s.4 . .-:.
,

4-12-.'6.
:82~~7

16aO.~2
7,6;3,:
_ "_. L•

48,.0

'76.0
,c;(/I,i;f" ,Q~'~*-tJ~~~

P retax lneo me,

Inoome taxes

41~L7
[J'-':VO,Q ~UU!l~

,59.4:,0.
,,2177

a.

34.,~l.5
1-":0'.tE!!111 _~'J4.J!,~'

21"-2.1
.}.

N~-t incorne

Gas'h a,nd cas h 'e"q.u~'v,ai\ents ·AdQ.©tJrHt~ rene:i vable t.raar€l-

~ .~

6_,·-.'4-' ~"'
'
.

,$

·ffi.A':2 :
.~ ....... · ~u-.
f;)6'·~O:',-'QI

s
~

>Sl9
"'':..1'

i-(} ~'-"

:$

'11' ,ft '1.

~~o)l,_ a
~;t1~
'I' -.

...\rP

/I~51' -=m~
'w

1I1'~

'0

i52·,~
'oOg,2
'-;=.r"
I J

.-

I'"

$3,2:,,;0

~a7':9.,1
·00:5".2:
~27,f1-5

m: '1,34.'1
Q'~"1' '7~:~ '.',~.~':'

I nve rita ri:~s Other ;curre nt assets Total .tajrreri'i, assets '
• _. 0.' •

-4'q5.0 , .. ~5-5··'Z,,· ~- .' ..;!,I': ....

-5Q5..£l:"
1'1M~2

4iri":"]! "l _,,~o.l~.~~

,"ii'

J;::n AI :~ ilY.:~'
'I,I' ";::;.; .. "_':. . '" . ii

5:'1. 2",1:
15,9,:5.

'~80,',·O"",

Prep e;fty~ '·p)ll.l:it" and

'e-qui pm ant,

(joodwj,!1

net

1'j:o:~H ;9~
"-5'~'~' ,f'\-: ',.·'U'O. ... .~ v
-'.
.

1_ ~~",t _ ],Utti~
.~ ...

;r),1

!'~

- !t;:.~'48-":'ii 1_ !i'~~ .• [!f

_ r ~'.., ~-151'0'5
"1"',1
l

- ..

£5'1- ~B,
.

880.5

~.~ 2·'~ ~~so ...

. ,' •. .;'

'

1i534.9~ ." ,B88.7

-

O~he r tang'tb.Je, assete

:30,.7

. 'Total as'setS:

$- l 18'4- S· , -'- -. :-.: .:'-~. :'.

L'_" . , , "

,91.6
~tb'~,A,ft:A ;;p ",..,'l' "1' 'U''''t., .

1.o6,'Q·

'1-:563· ..:"
.
,

,1

Aet::;rued HabiHti~e1S:
Shol1~t~rm bt de 'Total current Ih9b i·1t] as i
Lon~.-term debt Other· ,Ipng~term ~ ia.bB:itl~s D ere.'lifed lnc orne .taxss
B'1~7.;3·
.~u.~~. -~ :

ACG9Urits- paye.bil:El

t"46.9
'3.91.2

s rss 9 " 3c1';f:~,g

a4S:.0

,'a64~.7·
7·12:"kl

1J3~~:6: -,~_t49,,2

2\57,.H~
19Eh7'

,2·r1~,6:

asas
761~i9

• ,_. ••

$, 1·3'-"3- '0'·" 46S,,:S

. P\.. y :. -. ~ ... _, llIi' . ~ .. ••

2S~t1

7JS+
~06,4
077·0·' !Q

814,~a
jQ'7:!n 1 u_ .~. '_

ssss

'1 0:2.9., '1'

:j

,87B:2.~
8301·,9.:_
8260

s:n;:7'
3,2:7'.7' 300;,5

rrs»
..

327.2'

34£>.;,5

-224.;0

2~i7-.'1

34@.j'3 ,321..1

'36,1,,·'0
.~~~'~~

de 6' ,,

S-"· ~

Total

S:t.{)ckho~der~equny

~ia,b~i Ht1Je:S:

zas i,S~
1t04,2;,g

;2,~j?48~O
1 ,~09a;'6"
(t;'3,.lrG'""tU. '-7' ' : ~:4 t:i!:~ . ~

;2':272'7
]~ I! •

·2~,10(12:
,'- oI' ..i:II7' fi ,:,,: ~,~.·l .,:.£..

'1' - i'-"" '1'

'-7'5-:..•~ .:.. n

'Tbta~1'i;a1bn~tres acrHJ:~:quity

'(\f

mr.

...-

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_, :~ .:§
vi ~
~. ~'._.
N. ·M: ,.... !:D.

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ai

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0'·00

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(7);

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