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Page(s)
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FINANCIAL
STATEMENTS
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SUPPLEMENTAL
SCHEDULE
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EXHIBITS
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23.1
Consent of Independent Registered Public Accounting Firm
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*
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Refers
to item numbers in Form 5500 (Annual Return/Report of Employee
Benefit
Plan) for the year ended December 31,
2006.
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TASTY
BAKING COMPANY 401(k) AND COMPANY FUNDED RETIREMENT
PLAN
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|||||||
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December
31, 2006 and 2005
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2006
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2005
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|||||||
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ASSETS
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||||||||
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Investments,
at fair value
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$ |
37,537,191
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$ |
31,704,019
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||||
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Receivables:
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||||||||
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Employee contribution receivable
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40,389
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42,241
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||||||
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Employer contribution receivable
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46,290
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47,786
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||||||
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Total receivables
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86,679
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90,027
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||||||
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Net
assets available for benefits, at fair value
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37,623,870
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31,794,046
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||||||
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Adjustment
from fair value to contract value for
|
||||||||
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fully
benefit-responsive investment contracts
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80,326
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110,529
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||||||
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Net
assets available for benefits
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$ |
37,704,196
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$ |
31,904,575
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||||
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TASTY
BAKING COMPANY 401(k) AND COMPANY FUNDED RETIREMENT
PLAN
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||||||||
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For
the Years Ended December 31, 2006 and 2005
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2006
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2005
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|||||||
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ADDITIONS
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||||||||
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Additions
to net assets attributed to:
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||||||||
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Net appreciation in fair value of investments
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$ |
2,722,855
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$ |
344,905
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||||
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Cash dividends
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783,461
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112,733
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||||||
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Interest
|
472,331
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909,779
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||||||
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3,978,647
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1,367,417
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|||||||
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Contributions
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||||||||
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Participant
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2,308,193
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2,154,195
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||||||
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Employer
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2,484,654
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2,125,879
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||||||
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4,792,847
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4,280,074
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|||||||
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Asset transfer in
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-
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1,251,262
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||||||
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Total additions
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8,771,494
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6,898,753
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||||||
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DEDUCTIONS
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||||||||
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Deductions
from net assets attributed to:
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||||||||
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Benefits paid to participants
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2,968,300
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2,975,300
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||||||
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Administrative expense
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3,573
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6,120
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||||||
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Total deductions
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2,971,873
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2,981,420
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||||||
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Net increase
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5,799,621
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3,917,333
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NET
ASSETS AVAILABLE FOR BENEFITS
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||||||||
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Beginning of year
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31,904,575
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27,987,242
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||||||
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End of year
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$ |
37,704,196
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$ |
31,904,575
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NOTE
1
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DESCRIPTION
OF PLAN
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General
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The
Tasty Baking Company 401(k) and Company Funded Retirement Plan
(the Plan)
is a defined contribution plan under which all employees of Tasty
Baking
Company and Tasty Baking Oxford, Inc. (the Companies) who meet
certain
service requirements are eligible to participate. The Plan is
subject to
the provisions of the Employee Retirement Income Security Act
of 1974
(ERISA).
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Plan
Merger
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On
March 27, 2005, the Companies merged the Tasty Baking Oxford,
Inc. 401(k)
Savings Plan (the Oxford Plan) into the Tasty Baking Company
401(k) Thrift
Plan and renamed the merged plans as the Tasty Baking Company
401(k) and
Company Funded Retirement Plan. All assets of the Oxford Plan
were
transferred to the Plan immediately after the effective date
of the
merger.
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For
a description of the contribution, benefits, and vesting provisions
of the
Plan, as well as other Plan provisions, Plan participants should
refer to
the Plan document or Summary Plan Description (SPD).
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Plan
Amendments
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The
Plan made certain amendments to comply with new IRS regulations
in
2006.
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Contributions
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Under
the 401(k) portion of the Plan, employee elective deferral contributions
may be made in an amount up to the annual IRS contribution limit
of
$15,000 in 2006, and $20,000 for participants age 50 and over.
Employees
can contribute any whole percentage of their eligible compensation
as
their elective deferrals subject to the annual IRS limit. The
Companies
make matching contributions equal to 50% of the employees’ elective
deferrals that do not exceed 4% of their compensation as defined
in the
Plan. Elective deferral contributions are made through payroll
deductions
as authorized by the employees and are immediately vested. For
the
investment of their own contributions, participants may choose
from a
variety of Vanguard Group mutual fund options selected by the
Plan
Committee and a fund that invests primarily in common stock of
Tasty
Baking Company. The Plan is administered by The Vanguard Group
and the
Plan trustee is the Vanguard Fiduciary Trust Company. Prior to
March 27,
2005, the Plan was administered by Dreyfus Service Corporation
and the
Plan trustee was Dreyfus Trust
Company.
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NOTE
1
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DESCRIPTION
OF PLAN (continued)
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Contributions (continued)
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Under
the portion of the Plan called “Tasty Funded Retirement Contributions,”
the Companies also make cash contributions into individual accounts
for
all eligible employees. These contributions will be equal to
a percentage
of an employee’s eligible compensation and will increase with the
employee’s age and years of credited service. Employees become vested
in
their Tasty Funded Retirement Contributions account after five
years of
service.
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Participants
may self-direct the investment of this account, as well as their
matching
contribution account, in the same Vanguard Group mutual fund
options that
are available for the investment of their elective deferral
contributions.
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The
investment alternatives available to participants provide choices
that
cover all major sectors of the market. Participants may change
the
investment mix of their ongoing contributions and/or existing
account
balances daily, subject to certain limitations on reinvestment
in certain
Vanguard Group funds within a 60-day period.
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Participant
Accounts
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Each
participant’s account is credited with the participant’s contribution and
allocations of (a) the Company’s contribution and (b) Plan earnings, and
charged with an allocation of administrative expenses. Allocations
are
based on participant earnings or account balances, as defined.
The benefit
to which a participant is entitled is the benefit that can be
provided
from the participant’s vested account.
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Vesting
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Participants
are vested immediately in their contributions plus actual earnings
thereon. Vesting in the Company’s contribution portion of their accounts
is based on years of continuous service. A participant is 100%
vested
after five years of credited services.
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Withdrawals
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Participants
who terminate employment can elect to have the full value in
their
respective accounts distributed to them including their own contributions
and employer matching contributions made on their behalf. Tasty
Funded
Retirement Contribution amounts are also distributable upon termination
of
employment if the participant is vested as of the termination
date.
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NOTE
1
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DESCRIPTION
OF PLAN (continued)
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Withdrawals (continued)
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Active
participants may make withdrawals from their after-tax contribution
accounts at any time for any reason. Once an active participant
has been a
Plan participant for five years, matching contributions previously
made in
the form of company stock can be withdrawn upon request as of
any Plan
year-end date. Participants may make withdrawals of their elective
deferral contributions because of hardship provided certain conditions
imposed by the Plan are satisfied. Participants may also make
withdrawals
from their account balance attributable to elective deferrals
and matching
contributions on or after the attainment of age 59½. Participants may not
withdraw any portion of their Tasty Funded Retirement Contributions
account until they terminate employment, and then, only if they
are vested
in that account.
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Participant
Loans
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The
Plan allows participants to obtain loans from their vested account
balance. In addition to other loan requirements, the unpaid balance
from
all loans outstanding to a participant from the Plan shall not
exceed 50%
of the vested balance of the participant's account or $50,000,
whichever
is less. Loans bear interest at amounts determined by the Plan
Committee
and are currently the Prime Rate plus 1%. Loans are repayable
in equal
installments through payroll deductions and are collateralized
by 50% of
participant's vested account balance. A detailed description
of the Plan’s
procedures for loans is set forth in the Participant Loan Policy
which can
be obtained from the Plan Committee.
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Forfeitures
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Forfeiture
may be applied first to payment of Plan administration expenses.
Any
remaining forfeitures will be applied towards Tasty Funded Retirement
contributions that are payable by the Companies for the
participants.
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Termination
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The
Company retains the right to terminate the Plan at any time.
If the Plan
is terminated, participants become 100% vested in all amounts
held for
their benefit under the Plan.
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NOTE
2
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SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
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The
following accounting policies, which conform with generally
accepted
accounting principles, have been used consistently in the preparation
of
the Plan’s financial statements.
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Basis
of Accounting
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The
financial statements of the Plan are prepared under the accrual
method of
accounting.
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Reclassification
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Certain
prior year amount has been reclassified to conform to those
classification
used in the 2006 financial statements.
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Investment
Valuation and Income Recognition
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The
Plan’s investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which
represent
the net asset value of shares held by the Plan at year-end.
Units of the
Retirement Savings Trust are valued at net asset value at year-end.
The
Company stock fund is valued at its year-end closing price
(comprised of
year-end market price plus uninvested cash position). Participant
loans
are valued at cost which approximates fair value.
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Purchases
and sales of investments are recorded on a trade-date basis.
Interest
income is accrued when earned. Dividend income is recorded
on the
ex-dividend date. Capital gain distributions are included in
dividend
income.
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As
described in Financial Accounting Standards Board Staff Position
“FSP AAG
INV-1” and Statement of Position “SOP 94-4-1, Reporting of Fully
Benefit-Responsive Investment Contracts Held by Certain Investment
Companies Subject to the AICPA Investment Company Guide and
Defined-Contribution Health and Welfare and Pension Plans” (collectively
“the FSP”), investment contracts held by a defined-contribution plan
are
required to be reported at fair value. However, contract value
is the
relevant measurement attribute for that portion of the net
assets
available for benefits of a defined-contribution plan attributable
to
fully benefit-responsive investment contracts because contract
value is
the amount participants would receive if they were to initiate
permitted
transactions under the terms of the
plan.
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Investment
Valuation and Income Recognition
(continued)
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The
Plan invests in investment contracts through the Vanguard Retirement
Savings Trust Fund which is included in tax-exempt common collective
trusts. As required by the FSP, the Statement of Net assets Available
for
Benefits presents the fair value of the investments in the stable
value
fund as well as the adjustment of the investments in the stable
value fund
from fair value to contract value relating to the investment
contracts.
The Statement of Changes in Net Assets Available for Benefit
is prepared
on a contract value basis.
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Payment
of Benefits
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Benefits
are recorded when paid.
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Use
of Estimates
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The
preparation of financial statements in conformity with generally
accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and
disclosure contingent assets and liabilities at the date of the
financial
statements and the reported amount of additions and deductions
during the
reporting period. Actual results could differ from those
estimates.
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NOTE
2
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SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
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Risks
and Uncertainties
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The
Plan provides for various investment options including a money
market
fund, Tasty Baking Company common stock, and mutual funds.
Investment
securities are exposed to various risks such as interest rate,
market, and
credit. Due to the level of risk associated with certain investment
securities and the level of uncertainty related to changes
in the value of
investment securities, it is at least reasonably possible that
changes in
risks in the near term would materially affect participants’ account
balances and the amounts reported in the statement of net assets
available
for benefits and the statement of changes in net assets available
for
benefits.
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NOTE
3
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RELATED
PARTY TRANSACTIONS
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The
Plan invests in shares of mutual funds managed by an affiliate
of Vanguard
Fiduciary Trust Company (“VFTC”) and in shares of common stock of Tasty
Baking Company. VFTC acts as trustee for only those investments
as defined
by the Plan. Transactions in such investments qualify as party-in-interest
transactions which are exempt from the prohibited transaction
rules of
ERISA and the Code.
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NOTE
4
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INVESTMENTS
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The
following table represents investments of 5% or more of the
Plan’s net
assets:
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December
31,
|
||||
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2006
|
||||
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Tasty
Baking Company Common Stock
|
||||
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shares
400,395
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$ |
3,599,552
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Vanguard
500 Index Fund
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3,473,217
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Investor
Shares
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||||
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Vanguard
Growth & Income Fund
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4,662,835
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Investor
Shares
|
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Vanguard
Small-Cap Index Fund
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3,833,514
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Investor
Shares
|
||||
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Vanguard
Wellington Fund
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3,000,728
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Investor
Shares
|
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Vanguard
Total Bond Market Index Fund
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2,347,477
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Investor
Shares
|
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Vanguard
Retirement Savings Trust
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8,308,250
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Investor
Shares
|
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Loans
to participants
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1,856,184
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NOTE
4
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INVESTMENTS (continued)
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December
31,
|
||||
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2005
|
||||
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Tasty
Baking Company Common Stock
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||||
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455,728
shares
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$ |
3,417,957
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Vanguard
500 Index Fund
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3,067,046
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|||
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Investor
Shares
|
||||
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Vanguard
Growth & Income Fund
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3,917,488
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Investor
Shares
|
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Vanguard
Small-Cap Index Fund
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3,247,540
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Investor
Shares
|
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Vanguard
Wellington Fund
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2,286,933
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Investor
Shares
|
||||
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Vanguard
Total Bond Market Index Fund
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1,774,350
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Investor
Shares
|
||||
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Vanguard
Retirement Savings Trust
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8,232,308
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Loans
to participants
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1,751,025
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During
2006 and 2005, the Plan’s investments (including gains and losses on
investments bought and sold, as well as held during the year)
appreciated/
(depreciated) in value as
follows:
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2006
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2005
|
|||||||
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Mutual
funds
|
$ |
652,743
|
$ |
604,975
|
||||
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Common
stock
|
2,070,112
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(260,070 | ) | |||||
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Appreciation
|
$ |
2,722,855
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$ |
344,905
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NOTE
5
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PLAN
EXPENSES
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|
Tasty
Baking Company is the sponsor of the Plan and pays all administrative
expenses and fees on behalf of the participants excluding fees
for
participant loans. For the years ended December 31, 2006 and
2005, fees
and expenses totaling $88,997 and $97,604, respectively, were
paid to the
Vanguard Group and Vanguard Fiduciary Trust Company, and Dreyfus
Service
Corporation and Dreyfus Trust Company, the Plan’s administrator and
trustee, respectively, on behalf of the Plan’s
participants.
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NOTE
6
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FEDERAL
INCOME TAXES
|
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The
Internal Revenue Service issued a determination letter on June
7, 2004,
that the Plan, as amended and restated as of January 1, 2003,
which was a
non-standardized prototype profit sharing plan and trust sponsored
by
Mellon HR Solutions, constituted a qualified plan under Section
401(a) of
the Internal Revenue Code and the trust is therefore exempt from
federal
income taxes under provisions of Section 501(a) of the Code.
Tasty Baking
Company has not submitted a determination application for the
provisions
of the current Plan, which became effective on March 27, 2005.
Under
recently adopted procedures, the IRS has extended the remedial
amendment
period and determination application periods for qualified plans.
As per
these new procedures, Tasty Baking Company will not have to file
another
determination application for the Plan until January 31,
2011.
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E.I.N.
23-1145880/PN
|
|||||||||
|
Plan
Number 002
|
|||||||||
|
Schedule
H, Part IV, Line 4(i)
|
|||||||||
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Schedule
of Assets (Held at End of Year)
|
|||||||||
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December
31, 2006
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|||||
|
Description
of Investment
|
|||||||||
|
Including
Maturity Date
|
|||||||||
|
Identity
of Issue, Borrower,
|
Rate
of Interest, Collateral,
|
Current
|
|||||||
|
Lessor
or Similar Party
|
Par
of Maturity Value
|
Cost
|
Value
|
||||||
|
*
|
Tasty
Baking Company
|
Company
Stock
|
$ 4,253,149
|
$ 3,599,552
|
|||||
|
*
|
Vanguard
Retirement Savings Trust
|
Common
Collective Trust
|
8,388,576
|
8,388,576
|
|||||
|
*
|
Vanguard
500 Index Inv
|
Registered
Investment Company
|
2,957,777
|
3,473,217
|
|||||
|
*
|
Vanguard
Growth & Income Inv
|
Registered
Investment Company
|
4,025,484
|
4,662,835
|
|||||
|
*
|
Vanguard
Morgan Growth Inv
|
Registered
Investment Company
|
472,138
|
539,721
|
|||||
|
*
|
Vanguard
Prime Money Mkt
|
Registered
Investment Company
|
860,068
|
860,068
|
|||||
|
*
|
Vanguard
REIT Index Fund
|
Registered
Investment Company
|
315,907
|
378,704
|
|||||
|
*
|
Vanguard
Sm-Cap Index Inv
|
Registered
Investment Company
|
3,141,875
|
3,833,514
|
|||||
|
*
|
Vanguard
Strat Equity Fund
|
Registered
Investment Company
|
1,210,466
|
1,307,159
|
|||||
|
*
|
Vanguard
Tgt Retirement 2005
|
Registered
Investment Company
|
47,995
|
46,465
|
|||||
|
*
|
Vanguard
Tgt Retirement 2015
|
Registered
Investment Company
|
638,263
|
685,362
|
|||||
|
*
|
Vanguard
Tgt Retirement 2025
|
Registered
Investment Company
|
467,890
|
514,462
|
|||||
|
*
|
Vanguard
Tgt Retirement 2035
|
Registered
Investment Company
|
265,111
|
289,312
|
|||||
|
*
|
Vanguard
Tgt Retirement 2045
|
Registered
Investment Company
|
216,445
|
252,075
|
|||||
|
*
|
Vanguard
Target Retirment Inc
|
Registered
Investment Company
|
59,127
|
60,677
|
|||||
|
*
|
Vanguard
Total Bond Mkt Idx
|
Registered
Investment Company
|
2,353,863
|
2,347,477
|
|||||
|
*
|
Vanguard
Total Int'l Stock Idx
|
Registered
Investment Company
|
757,260
|
960,733
|
|||||
|
*
|
Vanguard
Total Stock Mkt Inv
|
Registered
Investment Company
|
102,662
|
118,991
|
|||||
|
*
|
Vanguard
Wellington Inv
|
Registered
Investment Company
|
2,818,554
|
3,000,728
|
|||||
|
*
|
Vanguard
Windsor II Fund Inv
|
Registered
Investment Company
|
404,596
|
441,705
|
|||||
|
Subtotal
- Registered Investment
|
|||||||||
|
Company
|
21,115,480
|
23,773,205
|
|||||||
|
Loans
to participants
|
5%
-
10.5%
|
1,856,184
|
1,856,184
|
||||||
|
Total
|
$ 35,613,390
|
$ 37,617,517
|
|||||||
|
*Party-In-Interest
|
|||||||||
|
TASTY
BAKING 401(k) AND COMPANY FUNDED RETIREMENT PLAN
|
||||||||||||
|
For
the Year Ended December 31, 2006
|
|
Tasty
Baking 401 (k) and Company Funded Retirement Plan, EIN 23-1145880,
PN
002
|
||||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
||||||
|
Description
of Asset
|
||||||||||||
|
Identity
|
(include
interest rate
|
Current
Value
|
||||||||||
|
of
Party
|
and
maturity in case
|
Purchase
|
Selling
|
Historical
Cost
|
of
Asset on
|
Historical
|
||||||
|
Involved
|
of
loan)
|
Price
|
Price
|
of
Asset
|
Transaction
Date
|
Gain
(Loss)
|
||||||
|
Vanguard
|
Vanguard
Retirement Savings Trust
|
$ 1,890,310
|
$ 1,890,310
|
|||||||||
|
Vanguard
|
Vanguard
Retirement Savings Trust
|
$ 1,844,570
|
$ 1,844,570
|
$ 1,844,570
|
$ -
|
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| BY | /s/ David S. Marberger | |
| David S. Marberger for the Tasty Baking Company 401(k) Plan Committee |