Exhibit 10(o)


    Exhibit
      10(o)

    
 

    TASTY
      BAKING COMPANY

     

    DEFERRED
      STOCK UNIT PLAN FOR DIRECTORS

     

    EFFECTIVE
      AS OF FEBRUARY 15, 2007

     

    A.  PURPOSE

     

    This
      Tasty
      Baking Company Deferred Stock Unit Plan for Directors (the “Plan”) is intended
      to enable the Company to attract and retain high caliber persons to serve as
      directors by providing deferred units of common stock of Tasty Baking Company
      (the “Company”) to Directors of the Company. The Plan is established, effective
      as of February 15, 2007, to grant awards of deferred stock units (“DSUs”) to
      members of the Board of Directors under the LTIPs (as defined in Section D.
      3,
      below), subject to such terms and conditions as determined by the Compensation
      Committee of the Board of Directors (the “Committee”). 

     

    B.  ADMINISTRATION

     

    1.  The
      Plan
      is to be administered by the Committee.

     

    2.  The
      Committee shall have the power and authority to adopt, amend and rescind
      administrative guidelines, rules and regulations pertaining to the Plan and
      to
      interpret and rule on any questions respecting any provision of the
      Plan.

     

    3.  Decisions
      of the Committee concerning the Plan shall be binding on the Company and on
      all
      persons eligible to participate in the Plan.

     

    C.  ELIGIBILITY

     

    All
      individuals who serve on the Board of Directors of the Company on and after
      the
      date of adoption of the Plan shall be eligible to participate in the Plan,
      other
      than a Director who is an officer or employee of the Company.

     

    D.  GRANTS
      OF DEFERRED STOCK UNITS, PAYMENT AND VESTING.

     

    1.  For
      each
      fiscal quarter of the Company ending after February 15, 2007, the Company shall
      credit DSUs to the Director’s account under the Plan, provided that he or she is
      a Director of the Company on the last day of such quarter, equivalent in value
      to $4,000 on the last day of such quarter. The number of DSUs that are credited
      for the quarter shall be determined by dividing $4,000 by the per share closing
      price of shares of the Company’s common stock on NASDAQ (or any national
      securities exchange or stock market on which the shares are then listed) on
      the
      last business day of the quarter. 

     

    2.  On
      each
      date that the Company pays dividends on its common stock subsequent to February
      15, 2007, the Company shall credit DSUs to the Director’s account, provided he
      or she is a Director of the Company on the dividend record date, equal to the
      number of shares of common stock of the Company that would result from the
      reinvestment of dividends in shares of common stock of the Company equal to
      the
      number of DSUs that are credited to the Director’s account immediately prior to
      the record date of such dividends. The number of such DSUs shall be determined
      by dividing the total amount of such dividend equivalents by the per share
      closing price of the Company’s common stock on NASDAQ (or any national
      securities exchange or stock market on which the shares are then listed) on
      the
      date that the Company pays the dividend to shareholders. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.  Grants
      of
      DSUs that are credited to a Director’s account under this Plan shall be made
      under the Tasty Baking Company 2003 or 2006 Long Term Incentive Plans, or such
      other long term incentive plan as from time to time in effect (such plans
      collectively, the “LTIPs”), as determined by the Committee. Grants of DSUs under
      the LTIPs shall only be made to the extent permitted under and in accordance
      with applicable law and stock market rules. In addition to the terms and
      conditions set forth herein, the terms and conditions of the DSUs awarded to
      Directors under the Plan shall be governed by the respective LTIP under which
      they were granted, including without limitation, the equitable adjustment and
      change of control provisions set forth in the LTIP. 

     

    4.  Upon
      a
      Director’s termination of service as a Director of the Company, he or she shall
      be entitled to receive payment in shares of common stock of Tasty Baking Company
      equal to the number of vested DSUs that are credited to the Director’s account.
      Fractional DSUs shall be rounded upwards to the next whole number of shares.
      If
      the Director’s termination of service is due to death, payment of the shares
      shall be made to the Director’s estate. 

     

    5.  A
      Director
      may elect to receive payment of his or her account balance under the Plan in
      a
      lump sum or in annual installments payable over five (5) years. For individuals
      serving as Directors of the Company on February 15, 2007, any such election
      must
      be made on or before December 31, 2007, or such later date as may be permitted
      in regulations or other guidance issued by the Internal Revenue Service under
      Section 409A of the Internal Revenue Code of 1986, as amended (“the Code”). Any
      individual who commences service as a Director after February 15, 2007, shall
      elect the form of payment of benefits under the Plan no later than thirty (30)
      days after becoming a Director or by such later date as may be permitted by
      regulations or other guidance under Section 409A of the Code. In the absence
      of
      an election by a Director as to the form of payment, benefits shall be paid
      in a
      lump sum. Payment of benefits in the form of a lump sum or installments shall
      commence not later than December 31st
      of the
      year in which the Director terminates service, or if later, the 15th
      day of
      the third month following the date of the Director’s termination of service. Any
      election by a Director as to the form of payment may only apply to amounts
      that
      would not otherwise be payable in 2007 and may not cause an amount to be paid
      in
      2007 that would not otherwise be payable in 2007.

     

    6.  Any
      benefits accrued hereunder by reason of service as a Director of the Company
      shall be vested upon the completion of five years of continuous service on
      the
      Board of Directors (whether before or after the adoption of the Plan), and
      no
      amendment, suspension or termination of the Plan shall have any material adverse
      effect thereon. For the avoidance of doubt, in the event a Director has not
      completed five years of continuous service at the time his or her service as
      a
      Director of the Company terminates, he/she will not be entitled to receive
      any
      shares or other benefit under the Plan. 

     

    
      
        
        

      

      
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    E.  AMENDMENT,
      SUSPENSION AND TERMINATION OF PLAN

     

    The
      Committee may from time to time amend, suspend or terminate the Plan, in whole
      or in part, except that no such amendment, suspension or termination shall
      materially adversely affect benefits already paid or accrued under the Plan.
      Any
      termination of the Plan must satisfy the requirements of Section 409A of the
      Code or any regulations or other guidance issued thereunder.

     

    F.  FUNDING

     

    The
      Plan
      shall not be funded. No promises under this Plan shall be secured by any
      specific assets of the Company, nor shall any assets of the Company be
      designated as attributable or allocated to the satisfaction of such promises.
      

     

    G.  GENERAL
      PROVISIONS

     

    1.  Neither
      the establishment of the Plan nor the payment of any benefit hereunder nor
      any
      action of the Company, including its Board of Directors, in connection therewith
      shall be held or construed to confer upon any individual any legal right to
      remain on the Board of Directors of the Company.

     

    2.  No
      benefit
      under the Plan shall be subject in any manner to anticipation, alienation,
      sale,
      transfer, assignment, pledge, encumbrance, or charge, and any attempt thereat
      shall be void. No such benefit shall, prior to receipt thereof by an individual,
      be in any manner liable for or subject to such individual’s debts, contracts,
      liabilities, engagements, or torts.

     

    3.  This
      Plan
      shall inure to the benefit of, and be binding upon, the successors and assigns
      of the Company.

     

    4.  The
      Company shall deduct from the amount of any payments hereunder all taxes
      required to be withheld by applicable laws.

     

    5.  This
      Plan
      shall be governed by, and construed in accordance with, the laws of the
      Commonwealth of Pennsylvania. 

     

    6.  The
      Company intends that transactions pursuant to the Plan shall be exempt under
      Rule 16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934,
      as amended, unless otherwise determined by the Company. 

     

     

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