Exhibit 10.4
HERSHEY FOODS CORPORATION
Broad Based Stock Option Plan
(Amended and Restated as of August 19, 2002)
1. ESTABLISHMENT AND PURPOSE
The purpose of the Broad Based Stock Option Plan (the "Plan") is to
provide to participating employees of Hershey Foods Corporation (the
"Corporation") and its subsidiaries (as defined below), upon whose efforts the
Corporation is dependent for the successful conduct of its business, an
incentive to continue and increase their efforts as employees and to remain in
the employ of the Corporation and its subsidiaries. To accomplish this purpose,
the Corporation's Board of Directors ("Board") has authorized the Compensation
and Executive Organization Committee of the Board (the "Committee") to grant,
from time to time in its sole discretion and in accordance with the Plan,
options ("Options") to purchase shares of the Corporation's Common Stock, $1.00
par value (the "Common Stock").
2. STOCK SUBJECT TO THE PLAN
The aggregate number of shares of Common Stock for which Options may be
granted pursuant to this Plan is two million (2,000,000), subject to adjustment
in accordance with Paragraph 11 below. The shares of Common Stock issued upon
exercise of Options granted under this Plan may be either authorized but
unissued shares, treasury shares held by the Corporation or any direct or
indirect subsidiary thereof, or shares acquired by the Corporation through open
market purchases (whether made before or after the exercise of the Options) or
otherwise. In addition to the shares of Common Stock actually issued or
distributed upon exercise of Options granted under the Plan, there shall be
deemed to have been issued a number of shares equal to the number of shares of
Common Stock in respect of which optionees utilize the manner of exercise of,
and payment for, Options as provided in Paragraph 5(e)(iii) of the Plan. If, for
any reason, any Option granted under the Plan expires or terminates or is
forfeited or surrendered, the number of shares of Common Stock for which such
Option was granted shall be disregarded in determining whether the aggregate
number of shares of Common Stock for which Options may be granted has been
reached.
3. ADMINISTRATION
The Plan shall be administered by the Committee or any successor
committee appointed by the Board. The Committee may adopt such rules and
regulations as it deems useful in governing its affairs. Any action of the
Committee with respect to the administration of the Plan shall be taken by
majority vote at a Committee meeting or written consent of all Committee
members.
Subject to the terms and conditions of the Plan, the Committee shall
have authority: (i) to construe and interpret Plan provisions; (ii) to define
the terms used in the Plan; (iii) to prescribe, amend and rescind rules and
regulations relating to the Plan; (iv) to determine the terms,
conditions, form and amount of grants, including conditions upon and provisions
for vesting, exercise and acceleration of any grants; and (v) to make all other
determinations necessary or advisable for the administration and operation of
the Plan. The Committee shall have the right to impose varying terms and
conditions with respect to each grant or award. All determinations and
interpretations made by the Committee shall be final, binding and conclusive on
all Participants and on their legal representatives and beneficiaries.
Any dispute or disagreement which shall arise under, as a result of, or
in any way relate to the interpretation, construction or administration of the
Plan or the Options granted hereunder shall be determined in all cases by the
procedures established by the Plan, as amended or supplemented by the Committee.
All disputes or disagreements shall be initially submitted to the Vice President
of Human Resources of the Corporation for resolution. The Participant or his
legal representative or beneficiary will submit to the Vice President of Human
Resources a summary of the dispute and all materials supporting his or her
position on the matter. The Corporation will also submit materials to support
its position on the matter. The Vice President of Human Resources shall render a
decision in writing within thirty (30) days of the receipt of the submissions by
both parties. Participant or the Corporation may appeal the decision of the Vice
President of Human Resources to the Committee, but such appeal must be submitted
to the Committee within fifteen (15) calendar days of the decision by the Vice
President of Human Resources. The Committee will review the material submitted
by the parties to the Vice President of Human Resources and any additional
material the parties may wish to submit to support their position. The Committee
will render its decision in writing by the later of forty-five (45) calendar
days of its receipt of the submissions by both parties or the next regularly
scheduled meeting of the Committee following the receipt of the submissions. The
decision by the Committee shall be final, binding and conclusive for all
purposes.
4. ELIGIBILITY AND PARTICIPATION
With regard to the initial grant of Options under the Plan to be made
by the Committee at its January 7, 1997 meeting (the "Initial Grant"), the
following employees are eligible to participate in the Plan: (i) employees of
the Corporation; (ii) employees of any U.S., Canadian, or Mexican wholly-owned
subsidiary, and employees of Hershey Japan Company, Ltd, a subsidiary of Hershey
International Ltd., Hershey Corporation ZAO, a subsidiary of Hershey Holding
Corporation, and employees of the Corporation's representative offices in Russia
and China (each called a "Subsidiary Corporation" and collectively called the
"Subsidiary Corporations"), provided they were full-time employees of the
Corporation or a Subsidiary Corporation on December 3, 1996. Full-time employees
who were on paid or unpaid leave of absence, layoff, or disability on December
3, 1996 are eligible to participate in the Initial Grant provided they performed
at least one hour of work for the Corporation during 1996. In addition to the
employees described in the first two sentences of this Paragraph 4, an employee
of the Corporation on December 3, 1996 shall be eligible for participation in
the Initial Grant if such individual performed at least one hour of work for the
Corporation, or any Subsidiary Corporation, as an employee in 1996 and in five
(5) of the six (6) years 1990 through 1995. Notwithstanding any other provision
of this Paragraph 4, no individual who (i) as of December 3, 1996 was a
temporary employee (as defined in the Corporation's Human Resources Policy
Manual) of the Corporation; (ii) as of December 3, 1996 was a leased employee
(as hereinafter defined); or (iii) on January 7, 1997 is eligible to receive a
stock option grant under
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the Corporation's Key Employee Incentive Plan ("KEIP") shall be eligible for
participation in the Initial Grant. For purposes of the Initial Grant, a "leased
employee" shall be defined as an employee of an entity other than the
Corporation, or any Subsidiary Corporation, who performs services for the
Corporation, or any Subsidiary Corporation, on a short- or long-term basis and
who, in the performance of such services, may (but need not) be under the
primary direction or control of the Corporation, or any Subsidiary Corporation.
Persons who would otherwise be classified as "leased employees" under Section
414(n) of the Internal Revenue Code of 1986, or any successor provision, shall,
without limitation of the immediately preceding sentence and for purposes of the
Initial Grant, be deemed "leased employees."
In the event that the Committee elects, in its sole discretion, to
grant Options at any time following the Initial Grant, it shall prescribe
eligibility criteria for each such grant at the time of the grant, provided
however, that in each such case, temporary employees, leased employees, and
employees who on the date of the grant are eligible to receive stock options
under the Corporation's KEIP shall not be eligible to participate in the grant.
Any employee meeting the eligibility criteria established pursuant to
this Paragraph 4 for the Initial Grant or any subsequent grant, or the estate of
such employee if deceased, shall, for the purposes of such grant, be hereinafter
referred to as a "Participant."
5. TERMS OF GRANT
The Initial Grant and any other option grants which may be made by the
Committee shall be subject to the following terms and conditions, as well as
such additional consistent terms and conditions as the Committee may establish
at the time of such grant:
(a) The exercise price per share with respect to each Option shall
be determined by the Committee in its sole discretion, but shall not be less
than 100% of the Fair Market Value of the Common Stock as of the date of the
grant of the Option. As used in the Plan (unless a different method of
calculation is required by applicable law, and except as otherwise specifically
provided in any Plan provision), "Fair Market Value" on or as of any date shall
mean (i) the closing price of the Common Stock as reported in the New York Stock
Exchange Composite Transactions Report (or any other consolidated transactions
reporting system which subsequently may replace such Composite Transactions
Report) for the New York Stock Exchange trading day immediately preceding such
date, or if there are no sales on such date, on the next preceding day on which
there were sales, or (ii) in the event that the Common Stock is no longer listed
for trading on the New York Stock Exchange, an amount determined in accordance
with standards adopted by the Committee.
(b) Options granted under the Plan shall be exercisable for such
periods as shall be provided by the Committee at the time of granting, but in no
event shall any Option granted extend for a period in excess of ten (10) years
from the date of grant.
(c) Unless otherwise provided by the Committee, no Option granted
hereunder may be exercised during the first five (5) years after the date of
grant by the Committee.
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(d) Exercise of an Option shall be accomplished in the form
and manner established by the Committee.
(e) The purchase price upon exercise of any Option shall be paid in
full by the Participant to the Corporation by making payment either (i) in cash,
or (ii) in a simultaneous exercise of the Option and sale of the shares thereby
acquired pursuant to a brokerage arrangement approved in advance by the
Committee to assure its conformity with the terms and conditions of the Plan, or
(iii) by a combination of (i) and (ii).
6. VESTING
(a) All Options granted under this Plan shall have a five (5) year
vesting requirement and shall be subject to such other vesting terms and
conditions as the Committee shall prescribe in the grant. With regard to the
Initial Grant a Participant must (i) perform at least one hour of work for the
Corporation or a Subsidiary Corporation during each of the years 1997 through
2001 and (ii) be a full-time or part-time employee of the Corporation or a
Subsidiary Corporation or a Chocolate World Flex Force Employee (as defined in
the Human Resources Policy Manual) on January 6, 2002 in order to satisfy this
vesting requirement. Participants who retire under a retirement plan of the
Corporation or terminate employment after attaining age 55 ("retire" or
"retirement"), die or become disabled on or after December 4, 1996, but before
the close of business on January 6, 2002, shall not forfeit their Options under
the Initial Grant, but shall maintain such rights in the Options to the extent
set forth in Paragraph 7(b) below.
(b) Notwithstanding any other provision of the Plan or of the terms
and conditions of any grant of Options hereunder, upon the occurrence of a
Change in Control, each outstanding and unexpired Option held by a Participant
who is an employee of the Corporation or any Subsidiary Corporation or who
retired, died or became disabled while employed by the Corporation or any
Subsidiary Corporation shall become fully vested and exercisable notwithstanding
any vesting schedule or installment schedule relating to the exercisability of
such Option established at the time of the grant of the Option.
(c) For purposes of this Plan, a "Change in Control" means:
(1) Individuals who, on December 3, 1996, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a
director subsequent to December 3, 1996, whose election or nomination
for election was approved by a vote of at least two-thirds of the
Incumbent Directors then on the Board (either by specific vote or by
approval of the proxy statement of the Corporation in which such
person is named as nominee for director, without written objection to
such nomination) shall be an Incumbent Director; provided, however,
that no individual initially elected or nominated as a director of the
Corporation as a result of an actual or threatened election contest
(as described in Rule 14a-11 under the Exchange Act) ("Election
Contest") or other actual or threatened solicitation of proxies or
consents by or on behalf of any person (as such term is defined in
Section 3(a)(9) of the Exchange Act and as used in Section 13(d)(3)
and 14(d)(2) of the Exchange Act) ("Person") other than the Board
("Proxy Contest"), including by
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reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest, shall be deemed an Incumbent Director; and
provided further, however, that a director who has been approved by
the Hershey Trust while it beneficially owns more than 50% of the
combined voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors
(the "Outstanding Corporation Voting Power") shall be deemed to be an
Incumbent Director; or
(2) The acquisition or holding by any Person of beneficial
ownership (within the meaning of Section 13(d) under the Exchange Act
and the rules and regulations promulgated thereunder) of shares of the
Common Stock and/or the Class B Common Stock of the Corporation
representing 25% or more of either (i) the total number of then
outstanding shares of both Common Stock and Class B Common Stock of
the Corporation (the "Outstanding Corporation Stock") or (ii) the
Outstanding Corporation Voting Power; provided that, at the time of
such acquisition or holding of beneficial ownership of any such
shares, the Hershey Trust does not beneficially own more than 50% of
the Outstanding Corporation Voting Power; and provided, further, that
any such acquisition or holding of beneficial ownership of shares of
either Common Stock or Class B Common Stock of the Corporation by any
of the following entities shall not by itself constitute such a Change
in Control hereunder: (i) the Hershey Trust; (ii) any trust
established by the Corporation or by any Subsidiary Corporation for
the benefit of the Corporation and/or its employees or those of a
Subsidiary Corporation or by any Subsidiary Corporation for the
benefit of the Corporation and/or its employees or those of a
Subsidiary Corporation; (iii) any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any Subsidiary
Corporation; (iv) the Corporation or any Subsidiary Corporation; or
(v) any underwriter temporarily holding securities pursuant to an
offering of such securities; or
(3) The approval by the stockholders of the Corporation of any
merger, reorganization, recapitalization, consolidation or other form
of business combination (a "Business Combination") if, following
consummation of such Business Combination, the Hershey Trust does not
beneficially own more than 50% of the total voting power of all
outstanding voting securities of (x) the surviving entity or entities
(the "Surviving Corporation") or (y) if applicable, the ultimate
parent corporation that directly or indirectly has beneficial
ownership of more than 50% of the combined voting power of the then
outstanding voting securities eligible to elect directors of the
Surviving Corporation; or
(4) The approval by the stockholders of the Corporation of (i)
any sale or other disposition of all or substantially all of the
assets of the Corporation, other than to a corporation (the "Acquiring
Corporation") if, following consummation of such sale or other
disposition, the Hershey Trust beneficially owns more than 50% of the
total voting power of all outstanding voting securities eligible to
elect directors (x) of the Acquiring Corporation or (y) if applicable,
the ultimate parent corporation that directly or indirectly has
beneficial ownership of more than 50% of the combined voting power of
the then outstanding voting securities eligible to elect directors of
the Acquiring Corporation, or (ii) a liquidation or dissolution of the
Company.
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For purposes of this Plan, "Hershey Trust" means either or both of (a)
the Hershey Trust Company, a Pennsylvania corporation, as Trustee for the Milton
Hershey School, or any successor to the Hershey Trust Company as such trustee,
and (b) the Milton Hershey School, a Pennsylvania not-for-profit corporation.
(d) For purposes of this Plan, a "Potential Change in Control"
means:
(1) The Hershey Trust by action of any of the Board of
Directors of Hershey Trust Company; the Board of Managers of Milton
Hershey School; the Investment Committee of the Hershey Trust; and/or
any of the officers of Hershey Trust Company or Milton Hershey School
(acting with authority) undertakes consideration of any action the
taking of which would lead to a Change in Control as defined herein,
including, but not limited to consideration of (i) an offer made to
the Hershey Trust to purchase any number of its shares in the
Corporation such that if the Hershey Trust accepted such offer and
sold such number of shares in the Corporation the Hershey Trust would
no longer have more than 50% of the Outstanding Corporation Voting
Power, (ii) an offering by the Hershey Trust of any number of its
shares in the Corporation for sale such that if such sale were
consummated the Hershey Trust would no longer have more than 50% of
the Outstanding Corporation Voting Power, or (iii) entering into any
agreement or understanding with a person or entity that would lead to
a Change in Control; or
(2) The Board approves a transaction described in subsection
(2), (3) or (4) of the definition of a Change in Control contained in
subparagraph (c) of Paragraph 6 hereof.
(e) In the event that a transaction which would constitute a Change
in Control if approved by the stockholders of the Corporation is to be submitted
to such stockholders for their approval, each Participant who is an employee and
who holds an Option granted under the Plan at the time scheduled for the taking
of such vote, whether or not then exercisable, shall have the right to receive a
notice at least ten (10) business days prior to the date on which such vote is
to be taken. Such notice shall set forth the date on which such vote of
stockholders is to be taken, a description of the transaction being proposed to
stockholders for such approval, a description of the provisions of subparagraph
(b) of Paragraph 6 of the Plan and a description of the impact thereof on such
Participant in the event that such stockholder approval is obtained. Such notice
shall also set forth the manner in which and price at which all Options then
held by each such Participant could be exercised upon the obtaining of such
stockholder approval.
7. TERMINATION OF EMPLOYMENT
Upon termination of the employment with the Corporation of any
Participant, such Participant's rights with respect to any Options granted under
this Plan shall be as follows:
(a) In the event that the participant is terminated or discharged
by the Corporation for any reason, except as to and the extent provided
otherwise by the Committee in writing and except as provided below after the
occurrence of a Change in Control, the
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participant's rights and interests under the Plan shall immediately terminate
upon notice of termination of employment.
Upon the occurrence of a Potential Change in Control and for a period
of one (1) year thereafter, the following special provision and notice
requirement shall be applicable in the event of the termination of the
employment of any participant holding an Option under the Plan: (i) in no event
may a notice of termination of employment be issued to such a participant unless
at least ten (10) business days prior to the effective date of such termination,
the participant is provided with a written notice of intent to terminate the
participant's employment which sets forth in reasonable detail the reason for
such intent to terminate, the date on which such termination is to be effective,
and a description of the participant's rights under this Plan and under the
agreements granting such Option or Options, including the fact that no such
Option may be exercised after such termination has become effective and the
manner, extent and price at which all Options then held by such participant may
be exercised; and (ii) such notice of intent to terminate a participant's
employment shall not be considered a "notice of termination of employment" for
purposes of the first sentence of this Paragraph 7(a). This Paragraph 7(a) is
intended only to provide for a requirement of notice to terminate upon the
occurrence of the events set forth herein and shall not be construed to create
an obligation of continued employment or a contract of employment in any manner
or to otherwise affect or limit the Corporation's ability to terminate the
employment of any participant holding an Option under the Plan.
Upon the occurrence of a Change in Control and for a period of two (2)
years thereafter, in the event of the termination of a participant's employment
by the Corporation for any reason other than for Cause (as defined below) or by
the participant for Good Reason (as defined below), such participant shall have
one (1) year from the date of termination of employment to exercise such Option
or until the date of expiration of the Option, if earlier. In addition, all
restrictions and limitations on the exercise of such Option or the sale of
shares of Common Stock purchased pursuant to exercise of an Option relating to
minimum stockholding requirements shall immediately terminate upon the
occurrence of a Change in Control.
For purposes of this Plan, "Cause" means, with respect to a participant
who is covered under the Hershey Foods Corporation Employee Benefits Protection
Plan (Group 2), the Hershey Foods Corporation Executive Benefits Protection Plan
(Group 3), or the Hershey Foods Corporation Executive Benefits Protection Plan
(Group 3A), "cause" as defined in the plan applicable to such participant, and
with respect to all other participants, means (a) the willful and continued
failure of an employee to substantially perform the employee's duties with the
Corporation (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to the employee by the employee's supervisor which specifically
identifies the manner in which the employee's supervisor believes that the
employee has not substantially performed the employee's duties; or (b) the
willful engaging by the employee in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Corporation. For purposes of the
preceding clauses (a) and (b), no act or failure to act, on the part of the
employee, shall be considered "willful" unless it is done, or omitted to be
done, by the employee in bad faith or without reasonable belief that the
employee's action or omission was in the best interests of the Corporation. Any
act, or failure to act, based upon the instructions or with the approval of a
senior officer of the Corporation or the employee's superior or based upon the
advice
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of counsel for the Corporation shall be conclusively presumed to be done, or
omitted to be done, by the employee in good faith and in the best interests of
the Corporation.
For purposes of this Plan, "Good Reason" means, with respect to a
participant who is covered under the Hershey Foods Corporation Employee Benefits
Protection Plan (Group 2), the Hershey Foods Corporation Executive Benefits
Protection Plan (Group 3), or the Hershey Foods Corporation Executive Benefits
Protection Plan (Group 3A), "good reason" as defined therein, and with respect
to all other participants, means "good reason" as defined in the Hershey Foods
Corporation Amended and Restated Severance Benefits Plan as in effect
immediately prior to the Change in Control.
(b) If a Participant's employment with the Corporation terminates
as a result of his or her becoming disabled (in which event termination will be
deemed to occur on the date of such determination), or as a result of retirement
or death, Participant or his or her estate shall continue to be a Participant in
the Plan and may, for a period of up to five (5) years from the date of
disability, death or retirement, exercise such Options pursuant to the terms of
this Plan. With regard to the Initial Grant, any Participant whose employment
with the Corporation terminates in a manner described in this Paragraph 7(b)
during the period beginning December 4, 1996, and ending with the close of
business on January 31, 1997, shall have the right to exercise Options which
have vested under the Plan until the close of trading on the New York Stock
Exchange on January 31, 2002. Any provision of this Paragraph 7(b) to the
contrary notwithstanding, no Option granted pursuant to this Plan shall be
capable of being exercised prior to its becoming vested, or following its
expiration date.
(c) In the event that a Participant resigns from employment with
the Corporation, the Participant's rights and interests under the Plan shall
immediately terminate upon such resignation; provided, however, that the
Committee shall have the absolute discretion to review the reasons and
circumstances of the resignation and to determine whether, alternatively, and to
what extent, if any, the Participant may continue to hold any rights or
interests under the Plan.
(d) A transfer of a Participant's employment without an intervening
period from the Corporation to a Subsidiary Corporation or vice versa, or from
one Subsidiary Corporation to another, shall not be deemed a termination of
employment. A Participant's transfer to a non-participating Subsidiary
Corporation shall also not be deemed a termination of employment for purposes of
this section. The sale of a participating or non-participating Subsidiary
Corporation shall, unless the Committee determines otherwise, be deemed a
termination of the Participant's employment under paragraph 7(c) above and
employees of such subsidiary shall no longer be deemed eligible to participate
in the Plan and must exercise their Options (if vested) prior to the sale.
Options which are not vested at the time of sale will be terminated. Any
provision of this Paragraph 7(d) to the contrary notwithstanding, with respect
to the Initial Grant, any Participant who, on the date of the sale of a
participating or non-participating Subsidiary Corporation, has attained the age
of 55, died or become disabled while employed by the Corporation, shall be
deemed to have terminated their employment pursuant to Paragraph 7(b), and shall
continue to be Participants under the Plan in accordance with that paragraph.
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(e) The Committee shall be authorized to make all determinations
and calculations required by this Paragraph 7, including any determinations
necessary to establish the reason for terminations of employment for purposes of
the Plan, which determinations and calculations shall be conclusive and binding
on any affected Participants and estates.
8. Additional Requirements
No Options granted pursuant to the Plan shall be exercisable or
realized in whole or in part, and the Corporation shall not be obligated to
sell, distribute or issue any shares subject to any such Option, if such
exercise and/or sale would, in the opinion of counsel for the Corporation,
violate the Securities Act of 1933, as amended (or other federal or state
statutes, or foreign statutes having similar requirements), or exceed daily
volume limitations imposed by the Corporation from time to time on sales of
Common Stock. Each Option shall be subject to the further requirement that, if
at any time the Committee shall determine in its discretion that the listing or
qualification of the shares relating or subject to such Option under any
securities exchange requirements or under any applicable law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Option or the
distribution or the issue of shares thereunder, such Option may not be exercised
in whole or in part unless such listing, qualification, consent or approval
shall have been effected or obtained free of any condition not acceptable to the
Board.
A Participant's interest in Options granted under this Plan may be
subject to restrictions or other special rules as to grant, exercise, resale or
other disposition and to such other provisions as may be appropriate to comply
with federal, state and/or foreign securities and other applicable laws and
stock exchange requirements, and the grant or exercise of any Option or
entitlement to payment thereunder may be contingent upon receipt from the
Participant (or any other person permitted by this Plan to exercise any Option
or receive any distribution hereunder) of a representation that at the time of
such exercise it is his or her then present intention to acquire the shares
being distributed for investment and not for resale.
9. NONTRANSFERABILITY
Options granted under this Plan to a Participant shall be nonassignable
and shall not be transferable by him or her otherwise than by will or the laws
of descent and distribution, and shall be exercisable, during the employee's
lifetime, only by the employee or the employee's guardian or legal
representative.
10. DISCLAIMER OF RIGHTS
No provision in the Plan or any Options granted pursuant to the Plan
shall be construed to confer upon the Participant any right to be employed by
the Corporation or by any Subsidiary Corporation, or to interfere in any way
with the right and authority of the Corporation or any Subsidiary Corporation
either to increase or decrease the compensation of the Participant at any time,
or to terminate any relationship of employment between the Participant and the
Corporation or any of its Subsidiary Corporations.
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Participants under the Plan shall have none of the rights of a
stockholder of the Corporation with respect to shares subject to Options, unless
and until such shares have been issued to him or her.
11. STOCK ADJUSTMENTS
In the event that the shares of Common Stock, as presently constituted,
shall be changed into or exchanged for a different number or kind of shares of
stock or other securities of the Corporation or of another corporation (whether
by reason of merger, consolidation, recapitalization, reclassification, stock
split, combination of shares or otherwise), or if the number of such shares of
Common Stock shall be increased through the payment of a stock dividend, or a
dividend on the shares of Common Stock of rights or warrants to purchase
securities of the Corporation shall be made, then there shall be substituted for
or added to each share available under and subject to the Plan as provided in
Paragraph 2 hereof, and each share theretofore appropriated or thereafter
subject or which may become subject to Options, under the Plan, the number and
kind of shares of stock or other securities into which each outstanding share of
Common Stock shall be so changed or for which each such share shall be exchanged
or to which each such share shall be entitled, as the case may be. Outstanding
options also shall be appropriately amended as to price and other terms as may
be necessary to reflect the foregoing events. In the event there shall be any
other change in the number or kind of the outstanding shares of Common Stock, or
of any stock or other securities into which the Common Stock shall have been
changed or for which it shall have been exchanged, then if the Board shall, in
its sole discretion, determine that such change equitably requires an adjustment
in the shares available under and subject to the Plan, or in any Options granted
under the Plan, such adjustments shall be made in accordance with such
determination.
No fractional shares of Common Stock or units of other securities shall
be issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding downward to the
nearest whole share or unit.
12. TAXES
The Corporation shall be entitled to withhold the amount of any tax
attributable to any amounts payable or shares of Common Stock deliverable under
the Plan. The person entitled to any such delivery upon the exercise of an
Option may, by notice to the Corporation, elect to have such withholding
satisfied by a reduction of the number of shares otherwise so deliverable, or by
delivery of shares of stock already owned by the Participant, with the amount of
shares subject to such reduction or delivery to be calculated based on the Fair
Market Value of such shares on the date of such taxable event.
13. EFFECTIVE DATE AND TERMINATION OF PLAN
The Plan shall become effective upon adoption by the Board. The Board
at any time may terminate the Plan, but such termination shall not alter or
impair any of the rights or obligations under any grant of Options theretofore
made under the Plan unless the affected Participant shall so consent.
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14. APPLICATION OF FUNDS
The proceeds received by the Corporation from the sale of capital stock
pursuant to Options will be used for general corporate purposes.
15. NO OBLIGATION TO EXERCISE OPTION
The granting of an Option shall impose no obligation upon the
Participant to exercise such Option.
16. AMENDMENT
The Board, by majority vote at any time and from time to time, may
amend the Plan in such respects as it shall deem advisable, to conform to any
change in any applicable law or in any other respect.
IN WITNESS WHEREOF, the Corporation has caused this Broad Based Stock
Option Plan to be amended and restated as of the 19th day of August, 2002.
HERSHEY FOODS CORPORATION
By: /s/ Marcella K. Arline
----------------------
Marcella K. Arline,
Vice President, Human Resources
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