Kenneth L. Wolfe
Chairman of the Board and
Chief Executive Officer

Joseph P. Viviano
President and
Chief Operating Officer

An important contributor to the corporation's success in 1997 was our continued quest for productivity improvement generated by our Quality Through Excellence initiative. We cannot overemphasize the critical role Hershey employees play in quality enhancement, cost control, customer service and overall productivity improvement.

To recognize the significant contribution by all of our employees to the market growth of the corporation, the Board of Directors approved a worldwide, broad-based employee stock option program in December 1996. This program, called HSY Growth, provided eligible employees with a one-time grant of 100 stock options on January 7, 1997.

This grant enables employees to increase their stake in the corporation or provides them with an opportunity to become owners for the first time. We believe this will provide an even greater incentive for all employees to enhance the value of our businesses for our stockholders.

We have made tremendous strides in achieving the goals we have set for your corporation thanks to the fine efforts of the entire Hershey team. We are committed to maintaining and enhancing the leadership positions of our businesses, adding value in everything we do and increasing profitability. Most importantly, by focusing on these goals, we are committed to maximizing value for you, our stockholders.