NOTICE OF 2018 ANNUAL MEETING AND PROXY STATEMENT …

NOTICE OF 2018 ANNUAL MEETING AND PROXY STATEMENT

2017 ANNUAL REPORT TO STOCKHOLDERS

May 2, 2018 10:00 a.m., Eastern Daylight Time GIANT Center 550 West Hersheypark Drive Hershey, Pennsylvania

Michele Buck President and Chief Executive Officer

March 22, 2018

Dear Stockholder:

It is my pleasure to invite you to attend the 2018 Annual Meeting of Stockholders of The Hershey Company, which will be held at 10:00 a.m., Eastern Daylight Time on Wednesday, May 2, 2018. Detailed instructions regarding meeting attendance and how to vote your Hershey shares prior to the meeting can be found in the proxy materials that accompany this letter. Your vote is extremely important, and I encourage you to review the materials and submit your vote today.

Hershey is a remarkable company that has prospered for 124 years. The core of who we are, and will continue to be, is a consumer-centric company that invests in our iconic brands. This business model has served us well and consistently delivered strong financial results. We continue the legacy of our founder, Milton Hershey, by delivering those results while maintaining our commitment to doing good. In addition to winning in the market, our founder was driven by creating a sense of community and helping children in need. Our employees come to work every day with a drive to win commercially but also knowing that our success directly contributes to those in need.

Our vision is to be an innovative snacking powerhouse. We are working hard to delight consumers across more snacking occasions and leverage our advantaged business model and capabilities to deliver top-quartile net sales growth and stockholder returns. In a highly competitive and difficult growth environment, we have consistently delivered top and bottom line growth and maintained market share. We are committed to transforming our business to achieve our long-term financial objectives.

Achieving our vision begins with our U.S. business and leadership position in confection. Over the past several years, our iconic brands have grown at an annual rate of more than 4% and gained 2.1 share points in the U.S. candy, mint and gum category. This strong performance continued in 2017 with growth of 4.6% and a market share gain of 0.6 points. Our iconic brands will always be a critical part of our focus and a continued source of strength. The scale and leverage of our core brands has been a primary driver of our margins. We have done this in a high quality balanced way, while continuing to invest in our brands. Our balance sheet and cash flows remain strong and in 2017 we returned $827 million to stockholders through dividends and share repurchases.

Although we saw slower momentum as we ended the year, I was pleased with the progression of our business in 2017. We drove our core chocolate brands with mid-single-digit growth, expanded our snacks portfolio with the acquisition of Amplify Snack Brands and delivered EBIT margin expansion and strong EPS growth while maintaining our market share in a competitive environment. As the largest acquisition in Company history, Amplify's brands deliver on consumers' desires for clean, simple, transparent ingredients. Skinny Pop, the jewel of this portfolio, has scale, great margins and participates in a category with strong growth. It is now our sixth-largest brand.

We've made tremendous progress in our international business, returning this segment to profitability in 2017. We are optimizing our channel and product mix with a focus on the Hershey's brand. Focused distribution expansion and a more streamlined portfolio should enable us to further increase our gross margins. We improved operating income in this segment by $40 million in 2017, with good visibility into continued expansion in 2018.

As we look ahead to 2018, I am confident in our business model and our strong confectionery position in the U.S. This strength provides us financial flexibility to smartly invest more broadly to capture more snacking occasions. Our focus on productivity and cost savings, as well as international operating income improvements, should continue to drive margin expansion. This in turn should enable investments in capabilities and iconic brands that give us a competitive edge at retail and with consumers.

Thank you for your continued investment in The Hershey Company, and we look forward to seeing you at the meeting.

Michele Buck

Safe Harbor Statement

Please refer to the 2017 Annual Report to Stockholders that accompanies this letter for a discussion of Risk Factors that could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied in this letter to stockholders or elsewhere. This letter to stockholders is not part of our proxy soliciting material.

John P. Bilbrey Non-Executive Chairman of the Board

March 22, 2018

As a 38-year veteran within consumer-packaged goods, my greatest honor has been to lead and then support The Hershey Company management team and Board as its Chairman. As I step down from the Board this May, I know the Company is strongly positioned for the future.

2017 was a transformational year for The Hershey Company. We welcomed Michele Buck as our CEO and her vision of transforming the Company into an innovative snacking powerhouse is guiding our business strategies. We continue to focus on our U.S. confection business with strong growth in our core chocolate brands. The Company is expanding its portfolio with disciplined investment in broader snacking categories. Our international markets continue to play an important role creating profitable growth for the Company.

The Hershey Company has stood the test of time with its portfolio of iconic brands that consumers love, remarkable people that are driven to win and a deep sense of purpose that is woven into the very fabric of the Company.

I could not be more proud of how the Hershey team strives for excellence and operates with the highest integrity. We are champions for our iconic brands in the market. We are there for one another in times of need. We care and take action to make a difference in our communities, and specifically in the lives of children. We think about not just what's best for Hershey, but what's best for our consumers as well as our customers, suppliers, partners and vendors.

This Company has built an indelible legacy with tremendous success over the past 124 years. We are positioned for another century of growth and prosperity. On behalf of The Hershey Company Board of Directors, we would like to thank you, our stockholders, for your loyalty and continued support for our business. It has been an exciting journey and we are confident that the best days are ahead for this great Company.

John P. Bilbrey

TABLE OF CONTENTS

NOTICE OF 2018 ANNUAL MEETING OF STOCKHOLDERS

Page

PROXY STATEMENT SUMMARY

2018 Annual Meeting of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Voting Matters and Board Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Our Director Nominees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

Governance Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

Executive Compensation Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

PROXY STATEMENT

Questions and Answers about the Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

The Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Meetings and Committees of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Proposal No. 1 ? Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Non-Employee Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Share Ownership of Directors, Management and Certain Beneficial Owners . . . . . . . . . . . . . . . . . 34 Audit Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Information about our Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Proposal No. 2 ? Ratification of Appointment of Independent Auditors . . . . . . . . . . . . . . . 41

Compensation Discussion & Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 The Role and Philosophy of the Compensation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Compensation Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Setting Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Base Salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Annual Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Long-Term Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Perquisites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Severance and Change in Control Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Compensation Policies and Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Stock Ownership Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Compensation Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 2017 Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 2017 Grants of Plan-Based Awards Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Outstanding Equity Awards at 2017 Fiscal-Year End Table . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 2017 Option Exercises and Stock Vested Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 2017 Pension Benefits Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 2017 Non-Qualified Deferred Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Potential Payments upon Termination or Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Separation Payments under Retirement Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 CEO Pay Ratio Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

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Proposal No. 3 ? Advise on Named Executive Officer Compensation . . . . . . . . . . . . . . . . . . 84

Section 16(a) Beneficial Ownership Reporting Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Certain Transactions and Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Compensation Committee Interlocks and Insider Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

2017 ANNUAL REPORT TO STOCKHOLDERS

Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Supplemental Item. Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Item 7. Management's Discussion and Analysis of Financial Condition and Results of

Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Item 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . 43

Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial

Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . 103

Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Item 15. Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Schedule II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107

Certifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

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Notice of 2018 Annual Meeting of Stockholders

Wednesday, May 2, 2018 10:00 a.m., Eastern Daylight Time

GIANT Center

The 2018 Annual Meeting of Stockholders (the "Annual Meeting") of The Hershey Company (the "Company") will be held on Wednesday, May 2, 2018, beginning at 10:00 a.m., Eastern Daylight Time, at GIANT Center, 550 West Hersheypark Drive, Hershey, Pennsylvania. The purposes of the meeting are as follows:

1. To elect the 11 nominees named in the Proxy Statement to serve as directors of the Company until the 2019 Annual Meeting of Stockholders;

2. To ratify the appointment of Ernst & Young LLP as the Company's independent auditors for the fiscal year ending December 31, 2018;

3. To conduct an advisory vote regarding the compensation of the Company's named executive officers; and

4. To discuss and take action on any other business that is properly brought before the Annual Meeting.

The Proxy Statement accompanying this Notice of 2018 Annual Meeting of Stockholders describes each of these items in detail. The Proxy Statement contains other important information that you should read and consider before you vote.

The Board of Directors of the Company has established the close of business on March 5, 2018 as the record date for determining the stockholders who are entitled to notice of, and to vote at, the Annual Meeting and any adjournment or postponement thereof.

The Company is furnishing proxy materials to its stockholders through the Internet as permitted under the rules of the Securities and Exchange Commission. Under these rules, many of the Company's stockholders will receive a Notice of Internet Availability of Proxy Materials instead of a paper copy of the Notice of 2018 Annual Meeting of Stockholders and Proxy Statement, our proxy card, and our Annual Report on Form 10-K. We believe this process gives us the opportunity to serve you more efficiently by making the proxy materials available quickly online and reducing costs associated with printing and postage. Stockholders who do not receive a Notice of Internet Availability of Proxy Materials will receive a paper copy of the proxy materials by mail.

By order of the Board of Directors,

Leslie M. Turner Senior Vice President, General Counsel and Corporate Secretary

March 22, 2018

Your vote is important. Instructions on how to vote are contained in our Proxy Statement and in the Notice of Internet Availability of Proxy Materials. Please cast your vote by telephone or over the Internet as described in those materials. Alternatively, if you requested a copy of the proxy/voting instruction card by mail, you may mark, sign, date and return the proxy/voting instruction card in the envelope provided.

Proxy Statement Summary

2018 ANNUAL MEETING OF STOCKHOLDERS

Date and Time: Wednesday, May 2, 2018 10:00 a.m., Eastern Daylight Time

Place:

GIANT Center 550 West Hersheypark Drive Hershey, Pennsylvania 17033

Record Date: March 5, 2018

VOTING MATTERS AND BOARD RECOMMENDATIONS

Voting Matter

Proposal 1: Election of Directors Proposal 2: Ratification of Appointment of

Independent Auditors Proposal 3: Advise on Named Executive Officer

Compensation

Board Vote

Page Number with

Recommendation More Information

FOR each nominee

23

FOR

41

FOR

84

This Proxy Statement Summary contains highlights of certain information in this Proxy Statement. Because it is only a summary, it does not contain all the information that you should consider prior to voting. Please review the complete Proxy Statement and the Company's 2017 Annual Report on Form 10-K that accompanies the Proxy Statement for additional information.

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In order to avoid copyright disputes, this page is only a partial summary.

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