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Item 9A. Controls and Procedures

2024-02-20 compared with 2023-02-17 · 43 added, 19 removed, 196 unchanged (24% of the section changed)

8 unchanged sentences

Management’s report on the Company’s internal control over financial reporting appears on the following page.

There were no changes in the Company’s internal control over financial reporting during the fourth quarter of 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

We rely extensively on information systems and technology to manage our business and summarize operating results.

We are in the process of a multi-year implementation of a new global enterprise resource planning (“ERP”) system, which will replace our existing operating and financial systems.

We are in the process of a multi-year implementation of a new global enterprise resource planning (“ERP”) system, which replaces our existing operating and financial systems.

The ERP system is designed to accurately maintain the Company’s financial records, enhance operational functionality, and provide timely information to the Company’s management team related to the operation of the business.

The implementation is expected to occur in phases over the next several years.

During the third quarter of 2022, we completed the implementation of our new ERP system for one operating segment which is included in our International segment.

The portion of the transition to the new ERP system which we have completed to date did not result in significant changes in our internal control over financial reporting.

However, as the next phases of the updated processes are rolled out in connection with the ERP implementation, we will give appropriate consideration to whether these process changes necessitate changes in the design of and testing for effectiveness of internal controls over financial reporting.

During the third quarter of 2022, we completed the implementation of one operating segment that is included in our International segment.

In July 2023, we completed the transition to the new ERP system as the consolidated book of record.

During October 2023, we completed the implementation of our new ERP system in the North America Salty Snacks segment.

We updated our internal controls to reflect changes to the financial reporting business processes impacted by the implementation.

Additionally, the Company acquired certain assets that provide additional manufacturing capacity from Weaver Popcorn Manufacturing, Inc.

(“Weaver”) (May 2023).

Other than the implementation of the new ERP system in North America Salty Snacks and the ongoing integration of the Weaver acquisition, there have been no changes to the Company’s internal control over financial reporting during the fourth quarter of 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Further, the final implementation phase will occur in 2024 for the remainder of the business.

The implementation will result in changes to our internal controls over financial reporting.

As implementation occurs, we will evaluate quarterly whether such changes materially affect our internal control over financial reporting.

The Hershey Company | 2023 Form 10-K | Page 99

7 unchanged sentences

Based on this assessment, management concluded that, as of December 31, 2023, the Company’s internal control over financial reporting was effective based on those criteria.

Management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the acquisition of certain assets that provide additional manufacturing capacity from Weaver, which is included in the 2023 consolidated financial statements of the Company and constituted 1.4% of total assets as of December 31, 2023.

This exclusion is in accordance with the guidance issued by the U.S.

Securities and Exchange Commission that allows companies to exclude acquisitions from management’s report on internal control over financial reporting for the first year after the acquisition.

The Company’s independent auditors have audited, and reported on, the Company’s internal control over financial reporting as of December 31, 2023.

OTHER INFORMATION

Director and Executive Officer Trading

A portion of our directors’ and officers’ compensation is in the form of equity awards and, from time to time, they may engage in open-market transactions with respect to their Company securities for diversification or other personal reasons.

All such transactions in Company securities by directors and officers must comply with the Company’s Insider Trading Policy, which requires that transactions be in accordance with applicable U.S.

federal securities laws that prohibit trading while in possession of material nonpublic information.

Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables directors and officers to prearrange transactions in the Company’s securities in a manner that avoids concerns about initiating transactions while in possession of material nonpublic information.

The following table describes the contracts, instructions or written plans for the purchase or sale of securities adopted by our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) during the three months ended December 31, 2023, that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

No other Rule 10b5-1 trading arrangements or “non-Rule 10b5–1 trading arrangements” (as defined by S-K Item 408(c)) were entered into or terminated by our directors or officers during such period.

Name and Title Date of Adoption of 10b5-1 Plan Duration of 10b5-1 Plan (1)

Aggregate Number of Securities to be Sold or Purchased

VP, Chief Accounting Officer

11/3/2023 2/24/2024 Sell 453 shares

(1) The plan duration is until the date listed in this column or such earlier date upon the completion of all trades under the plan (or the expiration of the orders relating to such trades without execution) or the occurrence of such other termination events as specified in the plan.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

7 unchanged sentences

Information regarding our Code of Conduct applicable to our directors, officers and employees is located in Part I of this Annual Report on Form 10-K, under the heading “Available Information.”

To the extent disclosure of any delinquent form under Section 16(a) of the Securities Exchange Act of 1934 is made by the Company, such disclosure will be set forth in our Proxy Statement under the caption “Delinquent Section 16(a) Reports” and is incorporated herein by reference.

EXECUTIVE COMPENSATION.

33 unchanged sentences

4) 2.300% Notes due 2026

5) 7.200% Debentures due 2027

6) 4.250% Notes due 2028

7) 2.450% Notes due 2029

7) 7.200% Debentures due 2027

8) 1.700% Notes due 2030

15 unchanged sentences

Amended and Restated Trademark and Technology License Agreement between Huhtamäki (now Iconic IP Interests, LLC) and the Company is incorporated by reference from Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999.

Five Year Credit Agreement dated as of July 2, 2019, among the Company and the banks, financial institutions and other institutional lenders listed on the respective signature pages thereof (“Lenders”), Bank of America, N.A., as administrative agent for the Lenders, JPMorgan Chase Bank, N.A., Citibank, N.A.

and PNC Bank, National Association, as syndication agents, Royal Bank of Canada, as documentation agent, and BofA Securities, Inc., JPMorgan Chase Bank, N.A., Citibank, N.A., PNC Capital Markets LLC and RBC Capital Markets, as joint lead arrangers and joint book managers, is incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed July 2, 2019 .

Five Year Credit Agreement dated as of April 2 6 , 20 23 , among the Company and the banks, financial institutions and other institutional lenders listed on the respective signature pages thereof (“Lenders”), Bank of America, N.A., as administrative agent for the Lenders, JPMorgan Chase Bank, N.A.

and Citibank, N.A.

, as syndication agents, Royal Bank of Canada, as documentation agent, and BofA Securities, Inc., JPMorgan Chase Bank, N.A., Citibank, N.A.

, RBC Capital Markets , and U.S.

Bank National Association , as joint lead arrangers and joint book managers, is incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed April 2 6 , 20 23 .

Stock Purchase Agreement, dated February 1 3 , 202 3 , between Milton Hershey School Trust, by its trustee, Hershey Trust Company, and The Hershey Company, is incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 1 5 , 202 3 .

Am ended and Restated Master S upply Agreement between the Company and Barry Callebaut, AG, dated August 31 , 20 21 .

Stock Purchase Agreement, dated February 14, 2022, between Milton Hershey School Trust, by its trustee, Hershey Trust Company, and The Hershey Company, is incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 16, 2022.

Amended and Restated Master Supply Agreement between the Company and Barry Callebaut, AG, dated August 31, 2021 , is incorporated by reference from Ex hibit 10.7 to the Company ’ s Annual Report on Form 10-K for the year ended December 31, 2022 .

The Company’s Equity and Incentive Compensation Plan, amended and restated February 22, 2011, and approved by our stockholders on April 28, 2011, is incorporated by reference from Appendix B to the Company’s proxy statement filed March 15, 2011.

Form of Notice of Award of Restricted Stock Units (February 22, 2017 - February 25, 2019 version) is incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 2, 2017.

Form of Notice of Award of Restricted Stock Units (February 26, 2019 - February 22, 2021 version) is incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.

1 unchanged sentence

Form of Notice of Award of Restricted Stock Units (3-year vest, effective February 23, 2021) is incorporated by reference from Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 4, 2021.

Form of Notice of Special Award of Restricted Stock Units (pro-rata vest, February 22, 2017 - February 25, 2019 version) is incorporated by reference from Exhibit 10.2(a) to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 2, 2017.

Form of Notice of Special Award of Restricted Stock Units (pro-rata vest, February 26, 2019 - February 22, 2021 version) is incorporated by reference from Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.

2 unchanged sentences

Form of Notice of Special Award of Restricted Stock Units (3-year cliff vest, effective February 26, 2019) is incorporated by reference from Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.

The Hershey Company | 2022 Form 10-K | Page 100

Terms and Conditions of Nonqualified Stock Option Awards under the Equity and Incentive Compensation Plan (pre-February 15, 2016 version) is incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed February 24, 2012.

Terms and Conditions of Nonqualified Stock Option Awards under the Equity and Incentive Compensation Plan (February 15, 2016 - February 21, 2017 version) is incorporated by reference from Exhibit 10.12(b) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

The Hershey Company | 2023 Form 10-K | Page 104

Terms and Conditions of Nonqualified Stock Option Awards under the Equity and Incentive Compensation Plan (February 22, 2017 - February 25, 2019 version) is incorporated by reference from Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 2, 2017.

1 unchanged sentence

Terms and Conditions of Nonqualified Stock Option Awards under the Equity and Incentive Compensation Plan (effective February 23, 2021) is incorporated by reference from Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 4, 2021.

Form of Notice of Award of Performance Stock Units (February 22, 2017 - February 25, 2019 version) is incorporated by reference from Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 2, 2017.

Form of Notice of Award of Performance Stock Units (February 26, 2019 - February 22, 2021 version) is incorporated by reference from Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.

7 unchanged sentences

The Company’s Compensation Limit Replacement Plan, Amended and Restated as of January 1, 2009, is incorporated by reference from Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

First Amendment to the Company’s Compensation Limit Replacement Plan, Amended and Restated as of December 31, 2023.

The Company’s Executive Benefits Protection Plan (Group 3A), Amended and Restated as of June 27, 2012, is incorporated by reference from Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 1, 2012.

3 unchanged sentences

Employee Confidentiality and Restrictive Covenant Agreement, amended as of September 8, 2021, is incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 4, 2021.

The Hershey Company | 2022 Form 10-K | Page 101

Executive Employment Agreement, effective as of March 1, 2017, by and between the Company and Michele G.

1 unchanged sentence

The Company’s Directors’ Compensation Plan, Amended and Restated as of December 2, 2008, is incorporated by reference from Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

The Hershey Company Insider Trading Policy, Amended and Restated as of February 27, 2023.

Subsidiaries of the Registrant.

Consent of Ernst & Young LLP.

The Hershey Company | 2023 Form 10-K | Page 105

Certification of Michele G.

5 unchanged sentences

Voskuil, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

The Hershey Company Compensation Recover y Policy, effective October 2, 2023.

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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ARWAY Director February 20, 2024

BROWN Director February 17, 2023

/s/ VICTOR L.

6 unchanged sentences

DIANE KOKEN Director February 20, 2024

/s/ HUONG MARIA T.

KRAUS Director February 20, 2024

Huong Maria T.

/s/ ROBERT M.

1 unchanged sentence

PEREZ Director February 20, 2024

SCHOPPERT Director February 17, 2023

The Hershey Company | 2023 Form 10-K | Page 107

29 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures