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Hershey Media Report 7/30/16
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Hershey Trust Reform Deal Reached With Pa. AG
Jul 29, 2016 | Law360
By Melissa Daniels
The Hershey Trust and the Milton Hershey School reached an agreement with Pennsylvania Attorney General Kathleen Kane to create 10-year term limits and limit trustee compensation to $110,000 following an investigation into its practices, Kane announced on Friday. -
Why Did Mondelez’s Stock Price Fall after Its 2Q16 Results?
Jul 29, 2016 | Market Realist
By Sue Miller
Brief mention of the Mondelez bid for Hershey in the context of Mondelez earnings. Relevant portion pasted below. -
UPDATE: Overhauled Hershey Trust to feature significant changes to board: Kane
Jul 29, 2016 | Pennsylvania Live
By Nick Malawskey
Pennsylvania Attorney General Kathleen Kane said on Friday her office had struck a new agreement with the Hershey Trust board, which oversees Milton S. Hershey's $12 billion-plus endowment of the private Milton Hershey School in Derry Township. -
Cadbury Maker Mondelez Hopes to Get a Sweet Slice of China's Chocolate Market
Jul 29, 2016 | China Topix
By Charissa Echavez
Brief mention of the Mondelez bid for Hershey in the context of Mondelez entering the Chinese market. Relevant portion pasted below.
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Hershey Trust Reform Deal Reached With Pa. AG
Jul 29, 2016 | Law360
By Melissa Daniels
The Hershey Trust and the Milton Hershey School reached an agreement with Pennsylvania Attorney General Kathleen Kane to create 10-year term limits and limit trustee compensation to $110,000 following an investigation into its practices, Kane announced on Friday.
The Hershey Trust owns at least 8.3 percent of the common stock of Hershey Co. and serves as the trustee for the Milton Hershey School, a live-in school for disadvantaged children in central Pennsylvania. Each entity has a board, and in recent months Kane’s office investigated whether the two boards were operating fairly and within the bounds of an existing agreement.
Highlights include limiting boards of directors to 10-year terms, instituting annual performance evaluations and limiting compensation to $110,000 per year, whereas there previously were no such restrictions, the Attorney General’s Office said.
"All of our efforts that led to this agreement were made to ensure that the vision of Milton and Catherine Hershey remains intact," Kane said in a statement, referring to the founders of the school. "They had the foresight to establish a deed of trust to provide a superb education for generations of disadvantaged children. The reforms in this agreement will help ensure that continues."
Kane's announcement comes nearly two months after an attorney with the trust was placed on administrative leave following a letter slamming the board and about a month after the companyrejected a $22.8 billion takeover from Mondelez International.
The deal, which was filed in the Orphans' Court Division of the Dauphin County Court of Common Pleas, replaces an agreement reached in May 2013.
It is the result of an investigation by the Charitable Trusts and Organizations Section, which specializes in examining whether charitable assets are used appropriately.
Other compensation provisions in the deal include allowing federally determined annual cost of living adjustments. Any director who is also a director with Hershey Co. or its entertainment and resorts company may not earn more than $80,000 for their trust service, according to the agreement.
Members cannot reimburse first-class airline tickets or other “frivolous” expenses like spa treatments or entertainment. Board chairs may receive an additional $30,000 for their role, and board committee chairs can earn up to $10,000. The size of the boards is also increased to 13 members each, whereas before they were limited to nine.
The agreement also requires three sitting members to retire by the end of the year and two others to retire by the end of 2017. Any new directors must have their resume screened by the Office of Attorney General 30 days before their election. Board members will have a maximum age of 75.
The deal requires the school and trust to enforce a conflict of interest policy and refrain from appointing any directors who also are a director or executive for the Milton S. Hershey Medical Center or Pennsylvania State University.
The deal also continues an existing requirement that the school and trust provide written notice to the Attorney General at least 30 days before any real estate transaction involving more than $250,000 or a lease of more than three years.
The Milton Hershey School in Dauphin County was created in 1909 by the Hershey family to aid disadvantaged children, and now serves as a residential and education facility for students from across the country.
An open letter from Velma Redmond, who chairs the board of managers of the Milton Hershey School and the board of directors of the Hershey Trust, called the deal a successful resolution that includes simple, straightforward calculations for compensation.
“Although total compensation would be reduced for directors, we are confident that we will still be able to attract qualified candidates with the education, training and experience to undertake the full range of board responsibilities relevant to educating and caring for at-risk and dependent children in a residential setting, and overseeing financial, business, investment and real estate assets to sustain the mission of the school now and in perpetuity,” the letter said.
Redmond, who is one of the managers that the agreement says must retire by the end of 2017, also said the student retention rate this past school year was 93.2 percent, and most students from the school pursue college degrees. The school trust’s income has nearly doubled in the past 10 years, the letter says, which has allowed the school to grow. -
Why Did Mondelez’s Stock Price Fall after Its 2Q16 Results?
Jul 29, 2016 | Market Realist
By Sue Miller
As of July 27, Mondelez’s stock hasn’t appreciated much since its last quarter earnings release. However, the stock rose 3% after its 1Q16 results when earnings exceeded estimates by 20%. The company’s strong start to 2016 benefited its stock. It also increased 6% on June 30 when it sent a preliminary letter of proposal to Hershey with a takeover bid of $23 billion. Mondelez’s market value as of July 27 is $68.2 billion. Mondelez gained 22% in 2015. So far, the stock hasn’t appreciated in 2016 as of July 27. It closed at $43.94.
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UPDATE: Overhauled Hershey Trust to feature significant changes to board: Kane
Jul 29, 2016 | Pennsylvania Live
By Nick Malawskey
Pennsylvania Attorney General Kathleen Kane said on Friday her office had struck a new agreement with the Hershey Trust board, which oversees Milton S. Hershey's $12 billion-plus endowment of the private Milton Hershey School in Derry Township.
Among the key provisions is the resignation of five of the nine existing board members. Three – Robert Cavanaugh, Joseph Senser and James Nevels – will resign by the end of this year. Two others – James Mead and Velma Redmond – will resign by the end of next year.
The agreement also imposes a 10-year term limit for trust board members, and expands the board to 13 members. Kane said the agreement will also limit trust board members' base compensation to $110,000 per year.
Among other key provisions, the agreement limits the number of board members who sit on the Hershey Co.'s board to three, requires a 30-day notice prior to the election of new trust company board members and prohibits trust company board members from sitting simultaneously on the boards of the Hershey Co. and Hershey Entertainment & Resorts, which is also owned by the trust. It also prohibits the president of the Milton Hershey School and the CEO of the Trust Co. from sitting on the board of the Hershey Co.
It also continues to enforce provisions of a 2013 agreement between Kane's office and the trust, which require annual reports from the school to the AG's office, written notification of real estate transactions, as well as limits to reimbursement and travel expenses.
"All of our efforts that led to this agreement were made to ensure that the vision of Milton and Catherine Hershey remains intact," Attorney General Kane said in a statement. "They had the foresight to establish a Deed of Trust to provide a superb education for generations of disadvantaged children. The reforms in this agreement will help ensure that continues."
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Cadbury Maker Mondelez Hopes to Get a Sweet Slice of China's Chocolate Market
Jul 29, 2016 | China Topix
By Charissa Echavez
Meanwhile, according to Food Business News, Rosenfeld confirmed the company's offer to acquire another chocolate maker Hershey Co., which was rejected late last month. She, however, refused to divulge further information about the matter.
Read more: http://www.chinatopix.com/articles/96792/20160729/cadbury-maker-mondelez-hopes-slice-chinas-2-8b-chocolate-market.htm#ixzz4FtpooV9u
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