RESTRICTED STOCK AWARD AGREEMENT
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THIS AGREEMENT is made as of the 29th day of October, 2004 (the "Grant
Date"), by and between Tasty Baking Company ("Company") and [NAME] ("Grantee").
WHEREAS, Grantee is a valued employee of the Company and/or one of its
subsidiaries (collectively referred to as the "Employer"); and
WHEREAS, the Company's Board of Directors adopted the Tasty Baking
Company 2003 Long Term Incentive Plan ("Plan") on March 27, 2003, and the Plan
was approved by shareholders of the Company on May 2, 2003; and
WHEREAS, as additional compensation for Grantee's past and future
services to the Employer, and to induce the Grantee to continue his or her
efforts to enhance the value of the Company for shareholders, generally, and
pursuant to the actions of the Company's Board of Directors and the Board's
Compensation Committee on the Grant Date, the Company wishes to transfer shares
of Common Stock of the Company to Grantee pursuant to the terms of the Plan,
subject to the conditions set forth herein.
NOW, THEREFORE, the Company and Grantee hereby agree as follows:
1. Subject to the satisfaction of the vesting requirements set forth in
Paragraph 3 below, the Company shall transfer to Grantee [SHARES] ([#]) shares
of the Company's common stock, par value $.50 per share ("Award Shares"), net of
that number of Award Shares used to satisfy withholding taxes pursuant to
Paragraph 5 below, at which time Grantee shall become the beneficial owner of
the Award Shares so transferred.
2. The Grantee shall receive a cash payment from the Company equal to
the amount of any cash dividend paid with respect to each share of the Company's
common stock the record date of which is on or after the Grant Date ("Dividend
Equivalent"), multiplied by the number of Award Shares that are outstanding as
of such record date. For this purpose, an Award Share shall be considered
"outstanding" as of a record date to the extent that it neither has been
forfeited pursuant to Paragraph 3(b) below, on or before that record date, nor
transferred to the Grantee or used to satisfy withholding taxes pursuant to
Paragraph 5, below on or before that record date. Any amount payable pursuant to
this Paragraph shall be subject to all applicable withholding taxes.
3. (a) Grantee shall vest in and be entitled to one-fifth of the Award
Shares on each of the first through fifth anniversaries of the Grant Date,
provided that Grantee remains in the continuous employment of the Employer as of
such date. In addition, in the event that the closing price of the Company's
common stock, as reported on the New York Stock Exchange, is at least fourteen
dollars ($14.00) per share on each of ten (10) consecutive New York Stock
Exchange trading days, the Award Shares shall vest as of the later of (i) the
close of such 10th day, or (ii) the third anniversary of the Grant Date, except
to the extent that any portion of the Award Shares had become vested prior to
such later date, and provided the Grantee remains in the continuous employment
of the Employer as of such later date.
(b) If the Grantee's employment with the Employer is
terminated for any reason (including death) before he or she has become vested
in all Award Shares, the Grantee shall forfeit his entitlement to receive any
Award Shares with respect to which he had not yet acquired a vested interest,
whether or not the Grantee is reemployed by the Employer.
4. Award Shares shall be transferred to the Grantee as soon as
practicable following the date they become vested pursuant to Paragraph 3 above,
but in all events such transfer shall occur on or before March 15th of the
calendar year following the calendar year in which vesting occurs.
Notwithstanding the preceding sentence, transfers of Award Shares that have
become vested on an accelerated basis by reason of the Company's common stock
achieving a closing price of at least fourteen dollars ($14.00) per share on
each of 10 consecutive New York Stock Exchange trading days shall be deferred to
the extent necessary to comply with Section 409A(2) and (3) of the Internal
Revenue Code of 1986, as amended, as determined by the Committee.
5. Unless the Grantee and the Company make other arrangements
satisfactory to the Company with respect to the payment of withholding taxes,
the number of vested Award Shares to be transferred to the Grantee shall be
reduced by that number of Award Shares having a value, as of the date they are
transferred to the Grantee, equal to the minimum amount of Federal, state and
local taxes required to be withheld with respect to such Award Shares.
6. As a further condition to the receipt of the Award Shares, Grantee
shall provide the Company with such certifications and other documents as may be
required, in the opinion of its legal counsel, to comply with applicable
securities laws in connection with the issuance of the Award Shares.
7. Nothing in this Agreement shall confer upon Grantee any right to
continue in the employ of the Employer or any affiliate thereof, or shall
interfere with or restrict in any way the rights of such person to terminate
Grantee's employment at any time, subject to the terms of any employment
agreement by and between the Employer and Grantee.
8. This Award Agreement is subject to the terms of the Plan, and the
Grantee hereby acknowledges receipt of a copy of the Plan. All capitalized terms
not defined herein shall have the definition set forth in the Plan.
9. This Agreement shall be governed by the substantive law of the
Commonwealth of Pennsylvania, without giving effect to the choice of law
principles thereof.
The parties hereby have entered into this Agreement with intent to be
legally bound hereby, as of the first date set forth above.
ATTEST: TASTY BAKING COMPANY
___________________________________ By:________________________________
[NAME]
Witness: GRANTEE
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[NAME]
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