SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark one)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the calendar year December 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-5084
TASTY BAKING COMPANY THRIFT PLAN
2801 Hunting Park Avenue
Philadelphia, Pennsylvania 19129
(Full title of the plan and the address of the plan,
if different from that of the issuer named below)
TASTY BAKING COMPANY
2801 Hunting Park Avenue
Philadelphia, Pennsylvania 19129
(Name of issuer of the securities held pursuant to the Plan and the
address of the principal executive offices of Tasty Baking Company)
<PAGE>
TASTY BAKING COMPANY THRIFT PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
<TABLE>
<CAPTION>
Pages
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Benefits
as of December 31, 1998 and December 31, 1997 3-4
Statements of Changes in Net Assets Available for Benefits for the fiscal
years ended December 31, 1998,
December 31, 1997 and December 31, 1996 5-7
Notes to Financial Statements 8-12
Supplemental Schedule:
Assets Held for Investment Purposes at December 31, 1998 27(a)*
</TABLE>
* Refers to item numbers in Form 5500 (Annual Return/ Report of
Employee Benefit Plan) for plan year ended December 31, 1998, which
material is incorporated herein by reference.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Thrift Plan Committee of the
Tasty Baking Company Board of Directors:
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Tasty Baking Company Thrift Plan (the "Plan") at December 31, 1998 and
1997, and the changes in net assets available for benefits for each of the three
fiscal years in the period ended December 31, 1998 in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets held
for Investment Purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in the statements of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for
benefits of each fund. The supplemental schedule and fund information are the
responsibility of the Plan's management. The supplemental schedule and fund
information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
PRICEWATERHOUSECOOPERS LLP
June 11, 1999
-2-
<PAGE>
TASTY BAKING COMPANY THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1998
<TABLE>
<CAPTION>
Total
---------------------------------------------------
Fair
Shares Cost Value
Employer Contributions
<S> <C> <C> <C>
Tasty Baking Company, Common Stock 513,972 $ 4,774,450 $ 7,807,235
PrimeSource Corporation, Common Stock 133,194 1,039,687 881,746
------------ ------------
Total 5,814,137 8,688,981
------------ ------------
Employee Contributions
Tasty Baking Company, Common Stock 25,335 209,115 384,768
PrimeSource Corporation, Common Stock 8,329 74,221 55,178
Segregated Stock Fund, Common Stock 1,039 9,027 16,383
Capital Preservation Fund LaSalle
National Trust, N.A., Collective Investment Trust 8,987,625 8,987,625
Dreyfus Mutual Funds
100% U.S. Treasury Intermediate Fund 49,276.930 630,924 633,209
Disciplined Stock Fund 113,391.851 2,793,358 4,264,996
Growth & Income Fund 65,288.327 1,208,317 1,207,181
New Leaders Fund 27,783.924 1,142,836 1,147,754
S&P 500 Index Fund 50,526.348 1,272,216 1,879,003
Loans to Participants 1,328,460 1,328,460
------------ ------------
Total Employee Contributions 17,656,099 19,904,557
------------ ------------
Net assets available for benefits $ 23,470,236 $ 28,593,538
============= ============
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE>
TASTY BAKING COMPANY THRIFT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1997
<TABLE>
<CAPTION>
Total
-----------------------------------------------------
Fair
Shares Cost Value
Employer Contributions
<S> <C> <C> <C>
Tasty Baking Company, Common Stock 506,921 $ 4,426,498 $ 9,789,916
PrimeSource Corporation, Common Stock 144,477 1,137,097 1,444,763
----------- -----------
Total 5,563,595 11,234,679
----------- -----------
Employee Contributions
Tasty Baking Company, Common Stock 30,176 229,710 582,774
PrimeSource Corporation, Common Stock 10,523 88,135 105,237
Capital Preservation Fund LaSalle
National Trust, N.A., Collective Investment Trust 8,430,376 8,430,376
Dreyfus Mutual Funds
100% U.S. Treasury Intermediate Fund 36,479.232 467,657 463,286
Disciplined Stock Fund 111,371.984 2,496,649 3,465,896
Growth & Income Fund 50,755.736 944,420 893,301
New Leaders Fund 23,471.825 950,157 1,040,976
S&P 500 Index Fund 43,562.023 975,192 1,232,805
Loans to Participants 1,264,974 1,264,974
----------- -----------
Total Employee Contributions 15,847,270 17,479,625
----------- -----------
Net assets available for benefits $21,410,865 $28,714,304
=========== ===========
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE>
<TABLE>
<CAPTION>
TASTY BAKING COMPANY THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
Employer Contributions Employee Contributions
-------------------------- -------------------------------
TBC PrimeSource TBC PrimeSource
Total Common Stock Common Stock Common Stock Common Stock
<S> <C> <C> <C> <C> <C>
Additions:
Investment income:
Cash dividends $ 1,133,478 $ 240,944 $ 24,779 $ 15,228 $ 1,697
Interest 113,076 925 -- -- --
Rollovers 13,680 -- -- -- --
Intrafund transfers -- 37,934 (36,265) (4,070) (1,951)
Net appreciation ( depreciation)
of investments (1,531,825) (1,980,517) (439,682) (117,629) (30,829)
Contributions:
Employer 363,287 363,287 -- -- --
Participating employees 1,690,964 -- -- -- --
------------ ------------ ------------ ------------ ------------
Total Additions 1,782,660 (1,337,427) (451,168) (106,471) (31,083)
Deductions:
Distributions to participants 1,903,426 645,254 111,849 91,535 18,976
Net loans to participants -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Total Deductions 1,903,426 645,254 111,849 91,535 18,976
Net increase (decrease) in net assets
available for plan benefits (120,766) (1,982,681) (563,017) (198,006) (50,059)
------------ ------------ ------------ ------------ ------------
Net assets available for plan benefits :
January 1, 1998 28,714,304 9,789,916 1,444,763 582,774 105,237
December 31, 1998 $ 28,593,538 $ 7,807,235 $ 881,746 $ 384,768 $ 55,178
============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Dreyfus Funds
Capital Mutual Funds
------------------------------------------------------------
Preservation 100% US Disciplined Growth & New Leaders
Fund Treasury Stock Fund Income Fund Fund
<S> <C> <C> <C> <C> <C>
Additions:
Investment income:
Cash dividends $ 485,251 $ 33,683 $ 204,169 $ 78,657 $ 30,301
Interest -- -- -- -- --
Rollovers -- -- -- -- --
Intrafund transfers 51,783 15,825 (145,973) 7,687 (56,131)
Net appreciation ( depreciation)
of investments (79) 6,655 685,515 49,983 (85,901)
Contributions:
Employer -- -- -- -- --
Participating employees 612,434 147,309 320,543 210,579 213,240
----------- ----------- ----------- ----------- -----------
Total Additions 1,149,389 203,472 1,064,254 346,906 101,509
Deductions:
Distributions to participants 606,054 3,685 253,970 51,878 13,929
Net loans to participants (13,914) 29,864 11,184 (18,852) (19,198)
----------- ----------- ----------- ----------- -----------
Total Deductions 592,140 33,549 265,154 33,026 (5,269)
Net increase (decrease) in net assets
available for plan benefits 557,249 169,923 799,100 313,880 106,778
----------- ----------- ----------- ----------- -----------
Net assets available for plan benefits :
January 1, 1998 8,430,376 463,286 3,465,896 893,301 1,040,976
December 31, 1998 $ 8,987,625 $ 633,209 $ 4,264,996 $ 1,207,181 $ 1,147,754
=========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Employee Contributions
------------------------------------------
Dreyfus Funds
Mutual Funds
------------
S & P 500 Segregated Loan
Index Fund Stock Fund Balance
<S> <C> <C> <C>
Additions:
Investment income:
Cash dividends $ 18,175 $ 594 --
Interest -- -- $ 112,151
Rollovers -- 13,680 --
Intrafund transfers 131,161 -- --
Net appreciation ( depreciation)
of investments 373,906 6,753 --
Contributions:
Employer -- -- --
Participating employees 186,859 -- --
----------- ----------- -----------
Total Additions 710,101 21,027 112,151
Deductions:
Distributions to participants 51,588 4,644 50,064
Net loans to participants 12,315 -- (1,399)
----------- ----------- -----------
Total Deductions 63,903 4,644 48,665
Net increase (decrease) in net assets
available for plan benefits 646,198 16,383 63,486
----------- ----------- -----------
Net assets available for plan benefits :
January 1, 1998 1,232,805 -- 1,264,974
December 31, 1998 $ 1,879,003 $ 16,383 $ 1,328,460
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE>
<TABLE>
<CAPTION>
TASTY BAKING COMPANY THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
Employer Contributions
----------------------------
TBC PrimeSource
Total Common Stock Common Stock
<S> <C> <C> <C>
Additions :
Investment income :
Cash dividends $ 1,399,915 $ 231,176 $ 27,727
Interest 107,607 853 --
Rollover 50,000 -- --
Intrafund transfers -- 27,727 (27,727)
Net appreciation ( depreciation)
of investments 5,437,959 4,126,288 332,331
Contributions :
Employer 355,206 355,206 --
Participating employees 1,633,593 -- --
----------- ----------- -----------
Total Additions 8,984,281 4,741,251 332,332
Deductions :
Distributions to participants 1,854,710 503,797 174,945
Net loans to participants -- -- --
----------- ----------- -----------
Total Deductions 1,854,710 503,797 174,945
Net increase (decrease) in net assets
available for plan benefits 7,129,571 4,237,454 157,387
----------- ----------- -----------
Net assets available for plan benefits :
January 1, 1997 21,584,733 5,552,462 1,287,376
December 31, 1997 $28,714,304 $ 9,789,916 $ 1,444,763
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Employee Contributions
---------------------------------------------------
Dreyfus Funds
Capital Mutual Funds
-------------------------------
TBC PrimeSource Preservation 100% US Disciplined
Common Stock Common Stock Fund Treasury Stock Fund
<S> <C> <C> <C> <C> <C>
Additions :
Investment income :
Cash dividends $ 14,916 $ 2,091 $ 479,105 $ 25,228 $ 358,905
Interest -- -- -- -- --
Rollover -- -- -- 25,000 --
Intrafund transfers 206 (2,869) (398,642) (22,503) 133,410
Net appreciation ( depreciation)
of investments 262,491 23,488 -- 8,516 435,225
Contributions :
Employer -- -- -- -- --
Participating employees -- -- 660,415 137,729 290,321
----------- ----------- ----------- ----------- -----------
Total Additions 277,613 22,710 740,878 173,971 1,217,862
Deductions :
Distributions to participants 75,287 16,756 590,016 61,746 186,894
Net loans to participants -- -- 27,918 (7,169) 32,571
----------- ----------- ----------- ----------- -----------
Total Deductions 75,287 16,756 617,934 54,578 219,465
Net increase (decrease) in net assets
available for plan benefits 202,326 5,954 122,944 119,393 998,397
----------- ----------- ----------- ----------- -----------
Net assets available for plan benefits :
January 1, 1997 380,448 99,283 8,307,432 343,893 2,467,499
December 31, 1997 $ 582,774 $ 105,237 $ 8,430,376 $ 463,286 $ 3,465,896
=========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Employee Contributions
---------------------------------------------------------------
Dreyfus Funds
Mutual Funds
-----------------------------------------------
Growth & New Leaders S & P 500 Loan
Income Fund Fund Index Fund Balance
<S> <C> <C> <C> <C>
Additions :
Investment income :
Cash dividends $ 150,644 $ 78,314 $ 31,810 --
Interest -- -- -- $ 106,754
Rollover 25,000 -- -- --
Intrafund transfers 3,945 91,057 195,394 --
Net appreciation ( depreciation)
of investments (29,026) 75,038 203,607 --
Contributions :
Employer -- -- -- --
Participating employees 196,396 190,926 157,805 --
----------- ----------- ----------- -----------
Total Additions 346,959 435,335 588,616 106,754
Deductions :
Distributions to participants 130,441 46,203 8,317 60,307
Net loans to participants (1,946) (7,034) 12,088 (56,428)
----------- ----------- ----------- -----------
Total Deductions 128,495 39,169 20,405 3,879
Net increase (decrease) in net assets
available for plan benefits 218,465 396,166 568,211 102,874
----------- ----------- ----------- -----------
Net assets available for plan benefits :
January 1, 1997 674,836 644,810 664,594 1,162,100
December 31, 1997 $ 893,301 $ 1,040,976 $ 1,232,805 $ 1,264,974
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
-6-
<PAGE>
<TABLE>
<CAPTION>
TASTY BAKING COMPANY THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
Employer Contributions Employee Contributions
------------------------- --------------------------
TBC PrimeSource TBC PrimeSource
Total Common Stock Common Stock Common Stock Common Stock
Additions :
<S> <C> <C> <C> <C> <C>
Investment income :
Cash dividends $ 632,619 $ 214,812 $ 30,491 $ 15,420 $ 2,339
Interest 588,637 8,482 -- -- --
Other 977 977 -- -- --
Intrafund transfers -- 32,737 (30,491) 2,339 (2,339)
Net appreciation (depreciation)
of investments 1,406,879 574,111 397,152 64,820 28,848
Contributions :
Employer 369,131 369,131 -- -- --
Participating employees 1,604,460 -- -- -- --
----------- ----------- ----------- ----------- -----------
Total Additions 4,602,703 1,200,250 397,152 82,579 28,848
Deductions :
Distributions to participants 1,062,754 273,453 129,812 51,778 11,608
Net loans to participants -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total Deductions 1,062,754 273,453 129,812 51,778 11,608
Net increase (decrease) in net assets
available for plan benefits 3,539,949 926,797 267,340 30,801 17,240
----------- ----------- ----------- ----------- -----------
Net assets available for plan benefits :
January 1, 1996 18,044,784 4,625,665 1,020,036 349,647 82,043
Transfers -- -- -- -- --
----------- ----------- ----------- ----------- -----------
December 31, 1996 $21,584,733 $ 5,552,462 $ 1,287,376 $ 380,448 $ 99,283
=========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Employee Contributions
-----------------------------------------------------------------
Dreyfus Funds
Guaranteed Capital Mutual Funds
-----------------------------------------
Investment Preservation 100% US Disciplined Growth &
Contracts Fund Treasury Stock Fund Income Fund
Additions :
<S> <C> <C> <C> <C> <C>
Investment income :
Cash dividends -- -- $ 16,853 $ 184,781 $ 93,708
Interest $ 62,020 $ 423,631 -- -- --
Other -- -- -- -- --
Intrafund transfers -- (564,643) (7,148) 57,001 129,809
Net appreciation ( depreciation)
of investments -- -- (6,811) 299,655 (32,339)
Contributions :
Employer -- -- -- -- --
Participating employees -- 728,632 146,077 249,437 186,175
----------- ----------- ----------- ----------- -----------
Total Additions 62,020 587,620 148,971 790,874 377,353
Deductions :
Distributions to participants -- 433,562 4,764 86,435 10,894
Net loans to participants -- 164,968 (19,082) 18,937 (17,131)
----------- ----------- ----------- ----------- -----------
Total Deductions -- 598,530 (14,318) 105,372 (6,237)
Net increase (decrease) in net assets
available for plan benefits 62,020 (10,910) 163,289 685,502 383,590
----------- ----------- ----------- ----------- -----------
Net assets available for plan benefits :
January 1, 1996 1,464,630 6,791,692 180,604 1,781,997 291,246
Transfers (1,526,650) 1,526,650 -- -- --
----------- ----------- ----------- ----------- -----------
December 31, 1996 $ -- $ 8,307,432 $ 343,893 $ 2,467,499 $ 674,836
=========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Employee Contributions
-------------------------
Dreyfus Funds
Mutual Funds
----------------------------------------------
New Leaders S & P 500 Loan
Fund Index Fund Balance
Additions :
<S> <C> <C> <C>
Investment income :
Cash dividends $ 44,722 $ 29,493 --
Interest -- -- $ 94,504
Other -- -- --
Intrafund transfers 124,983 257,752 --
Net appreciation (depreciation)
of investments 29,138 52,305 --
Contributions :
Employer -- -- --
Participating employees 175,097 119,042 --
----------- ----------- -----------
Total Additions 373,940 458,592 94,504
Deductions :
Distributions to participants 26,230 738 33,480
Net loans to participants (21,428) (279) (125,985)
----------- ----------- -----------
Total Deductions 4,802 459 (92,505)
Net increase (decrease) in net assets
available for plan benefits 369,138 458,133 187,009
----------- ----------- -----------
Net assets available for plan benefits :
January 1, 1996 275,672 206,461 975,091
Transfers -- -- --
----------- ----------- -----------
December 31, 1996 $ 644,810 $ 664,594 $ 1,162,100
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
-7-
<PAGE>
TASTY BAKING COMPANY THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
1. General Description of Plan:
The Tasty Baking Company 401(k)/Thrift Plan (the Plan) is a defined
contribution plan under which all employees of Tasty Baking Company who
meet certain service requirements are eligible to participate.
For allocations, benefits and vesting provisions as well as any other
questions, Plan participants should refer to the Plan document.
While Tasty Baking Company (TBC) has not expressed any intent to
discontinue the Plan, it is free to do so at any time, subject to
penalties set forth in the Employee Retirement Income Security Act of
1974 (ERISA). In the event such discontinuance resulted in the
termination of the Plan, the net assets of the Plan would be distributed
to Plan participants and beneficiaries in proportion to their respective
account balances.
Effective January 1, 1995, the Company amended the Plan by adopting an
IRC Section 401(k) prototype plan sponsored by the Dreyfus Corporation
(a trustee of the Plan). Under the Plan, as amended, the Company's
contributions continued to be invested in TBC Company common stock while
participants may choose from a selection of mutual fund options offered
by the Dreyfus Corporation for their contributions. The investment in
PrimeSource common stock resulted from a tax free dividend of two (2)
shares of Phillips & Jacobs, Incorporated (P&J) common stock for every
three (3) shares of TBC common stock when TBC spun off its wholly-owned
subsidiary P&J. P&J later merged with Momentum Corporation to form
PrimeSource Corporation.
The Plan allows participants to obtain loans at a minimum amount of
$500. 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
administrator. The rates at December 31, 1998 and 1997 were 8.75% and
9.50%, respectively. Loans are repayable in equal installments through
payroll deductions and are collateralized by 50% of participant's vested
account balance.
Accounting Period:
The Plan operates under a 52 week calendar year.
2. Summary of Significant Accounting Policies:
Investment Valuation:
Investments are stated at fair value. The value of common stock of Tasty
Baking Company and PrimeSource Corporation is determined based upon the
bid price of the stock on the NYSE and NASDAQ exchanges, respectively,
on the last day of trading of the Plan year.
The investment in Mutual Funds is represented by unit shares which are
valued at each respective fund's net asset value as publicly reported by
the fund's respective investment department. The Capital Preservation
Fund, a money market fund, is reported at fair value, which is
equivalent to cost.
-8-
<PAGE>
2. Summary of Significant Accounting Policies: (Continued)
Contributions:
Under the Plan, employee contributions may be made in an amount up to
15% of an employee's annual base salary. The Company's contribution
(employer portion) is equal to an amount not to exceed the lesser of
$450 or 100% of the contributions made by each employee. Employee
contributions are accrued based on payroll deductions authorized by the
employees.
Payment of Benefits:
Benefits are recorded when paid.
Other:
Purchases and sales of investments in Tasty Baking Company common stock,
PrimeSource Corporation common stock, the Capital Preservation Fund and
the Dreyfus Mutual Funds are reflected on a trade-date basis. Gains and
losses realized are based principally on specific identification. Plan
investments are sold to satisfy participant withdrawal requests and,
therefore, resultant gains or losses are recorded as withdrawals are
made.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis.
The Plan presents in the Statement of Changes in Net Assets Available
for Benefits the net appreciation (depreciation) in the fair value of
its investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make significant
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from
those estimates.
Risks and Uncertainties:
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.
-9-
<PAGE>
3. Investment Program:
Effective January 1, 1995, the Company amended the Plan by adopting an
IRC Section 401(k) prototype plan sponsored by the Dreyfus Corporation
(a trustee of the Plan). Under the Plan, as amended, the Company's
contributions continued to be invested in Tasty Baking Company common
stock and participants may choose from a selection of investment options
for their contributions. The investment alternatives include: Capital
Preservation Fund, Dreyfus 100% U.S. Treasury Intermediate Term Fund,
Dreyfus Disciplined Stock Fund, Dreyfus Growth and Income Fund, Inc.,
Dreyfus New Leaders Fund, Inc. and Dreyfus S&P 500 Index Fund. The
Segregated Stock Fund is used to clear trades of Tasty Baking Company
and PrimeSource Corporation common stock and is not an investment
alternative. Participants may change the investment mix of their ongoing
and/or existing invested account balances as often as three (3) times
each calendar quarter. They may sell any shares of Tasty Baking Company
or PrimeSource Corporation stock in their employee account resulting
from a participant elected fund option prior to 1995 and invest the
proceeds in any other investment funds offered. In addition,
participants may sell shares of PrimeSource Corporation stock invested
in their employer account and then purchase Tasty Baking Company shares
with the proceeds.
The Plan had 980, 909 and 931 employee participants at December 31,
1998, December 31, 1997 and December 31, 1996, respectively. The number
of employee participants under each investment program at December 31,
1998, December 31, 1997 and December 31, 1996 was as follows:
<TABLE>
<CAPTION>
No. of Employees*
1998 1997 1996
----------------------------------------
<S> <C> <C> <C>
Capital Preservation Fund 623 769 825
100% U.S. Treasury Intermediate
Term Fund 208 228 229
Disciplined Stock Fund 439 488 475
Growth & Income Fund 318 338 322
New Leaders Fund 307 312 286
S&P 500 Index 286 272 219
</TABLE>
*Employees may participate in more than one program.
-10-
<PAGE>
4. Withdrawals:
Participants who terminate from the Plan can elect to have distributed
to them the full value in their respective accounts which includes their
contributions (including supplemental contributions) and 100% of the
employer contributions made on their behalf.
Active participants may withdraw their monies saved up through 1987 once
each quarter without cause. All monies saved may be withdrawn (pre-1987
funds first) at any time but only for a hardship withdrawal as defined
by IRS regulations. Once an active participant has been a Plan
participant for five years, company contributions can be withdrawn on
any Plan year-end date. Receipt of monies by an active participant in
this regard causes no interruption to employee contributions and company
matching contributions are not penalized.
5. Contributions:
The following is a schedule of employer and participating employee
contributions:
<TABLE>
<CAPTION>
<S> <C>
Tasty Baking
Year Ended Company
December 31, 1998
Employer $ 363,287
Employee 1,690,964
----------
Total $2,054,251
==========
December 31, 1997
Employer $ 355,206
Employee 1,633,593
----------
Total $1,988,799
==========
December 31, 1996
Employer $ 369,131
Employee 1,604,460
----------
Total $1,973,591
==========
</TABLE>
-11-
<PAGE>
6. Federal Income Taxes:
The United States Treasury Department determined on November 12, 1996
that the Plan, as amended and restated in effect from January 1, 1995, a
non-standardized prototype profit sharing plan and trust sponsored by
Dreyfus Corporation, constituted a qualified trust under Section 401(a)
of the Internal Revenue Code and is therefore exempt from federal income
taxes under provisions of Section 501(a).
On the basis of the present laws and regulations, a participant is not
subject to income taxes on contributions made by the Company or on any
earnings credited to his account prior to distribution by the Trustee.
If a participant, prior to termination of employment or attaining age 59
1/2, withdraws earnings on his savings, or if he withdraws stock
purchased with contributions made by his employer, the amount of
earnings on his savings and the then current market value of such stock
and earnings thereon are taxable as ordinary income. In general, a lump
sum distribution within one taxable year, upon attaining age 59 1/2 or
termination of employment, will be ordinary income. Employees, upon
attaining age 59 1/2, who have been Plan participants for at least five
taxable years before the taxable year of a lump sum distribution can
elect a 5-year or 10-year averaging method. Employees who have attained
age 50 before 1986 and who receive a lump sum distribution can elect a
5-year or 10-year averaging method on the entire distribution, or they
can elect capital gains treatment on the portion of the distrubution
allocable to pre-1974 participation in the Plan.
The unrealized apprciation in value of the Company's stock which is
distributed as part of a lump sum distribution is not taxable at the
time of the distribution, although an employee may elect out of this
deferred treatment. The unrealized appreciation in value of the
Company's stock is subject to tax when such securities are disposed of
by the participants. A lump sum distribution received by an individual
because of separation from service will not be subject to tax if
property and cash received in excess of the individual's after-tax
contributions to the Plan is transferred to a qualified individual
retirement account or annuity, or a qualified employee's trust or
annuity plan within 60 days.
-12-
<PAGE>
SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES AT DECEMBER 31, 1998 PURSUANT
TO ITEM 27(a) ANNUAL RETURN/REPORT OF
EMPLOYEE BENEFIT PLAN FORM 5500
<PAGE>
<TABLE>
<CAPTION>
E.I.N. 23-1145880/PN 002
27(a)
TASTY BAKING COMPANY THRIFT PLAN
Assets Held for Investment Purposes
December 31, 1998
c. Description of Investment
Including Maturity Date
b. Identity of Issue, Borrower, Rate of Interest, Collateral, Current
Lessor or Similar Party Par of Maturity Value d. Cost e. Value
--------------------------------- -------------------------------- --------------- --------------
<S> <C> <C> <C>
*Tasty Baking Company Common Stock $ 4,983,565 $ 8,192,003
PrimeSource Corporation Common Stock 1,113,908 936,924
*Segregated Stock Fund Common Stock 9,027 16,383
------------ ------------
Subtotal - Common Stock 6,106,500 9,145,310
------------ ------------
Capital Preservation Fund, LaSalle Collective Investment Fund 8,987,625 8,987,625
National Trust, N.A. ------------ ------------
*Dreyfus 100% U. S. Treasury
Intermediate Term Fund Mutual Fund 630,924 633,209
*Dreyfus Disciplined Stock Fund Mutual Fund 2,793,358 4,264,996
*Dreyfus Growth and Income Fund Mutual Fund 1,208,317 1,207,181
*Dreyfus New Leaders Fund Mutual Fund 1,142,836 1,147,754
*Dreyfus S&P 500 Index Fund Mutual Fund 1,272,216 1,879,003
------------ ------------
Subtotal - Mutual Funds 7,047,651 9,132,143
------------ ------------
*Loans to Participants 8.75% - 10.00% 1,328,460 1,328,460
------------ ------------
Total $ 23,470,236 $ 28,593,538
============ ============
*Party-In-Interest
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee members who administer the Plan have duly caused this annual report to
be signed by the undersigned thereunto duly authorized.
TASTY BAKING COMPANY THRIFT PLAN
BY /s/ Carl S. Watts
Carl S. Watts for the
Administrative Committee
Date:
