-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LWFQ11RhJte9lOyVXjkfK4ZT4l2klnW5F4+RfhgEj8LJxj22VW7SqntyCAanoV7R DIq/hIN5OBVQg5hdEtFMSA== 0000950142-06-001347.txt : 20060630 0000950142-06-001347.hdr.sgml : 20060630 20060630163638 ACCESSION NUMBER: 0000950142-06-001347 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060629 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060630 DATE AS OF CHANGE: 20060630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENN TRAFFIC CO CENTRAL INDEX KEY: 0000077155 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 250716800 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-08858 FILM NUMBER: 06938215 BUSINESS ADDRESS: STREET 1: 1200 STATE FAIR BLVD CITY: SRYACUSE STATE: NY ZIP: 13221-4737 BUSINESS PHONE: 8145369900 MAIL ADDRESS: STREET 1: 1200 STATE FAIR BLVD CITY: SYRACUSE STATE: NY ZIP: 13221-4737 8-K 1 form8k_062906.txt CURRENT REPORT ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): June 29, 2006 THE PENN TRAFFIC COMPANY - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) DELAWARE - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 001-9930 25-0716800 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 1200 STATE FAIR BOULEVARD SYRACUSE, NEW YORK 13221-4737 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (315) 453-7284 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) N/A - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (SEE General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT On June 29, 2006, The Penn Traffic Company (the "Company") entered into a consulting agreement (the "Agreement") with Robert J. Kelly ("Kelly") for the provision to the Company by Kelly of certain consulting and advisory services as mutually determined by Kelly and the Company's Board of Directors (the "Board"). Kelly currently serves as, and will continue to serve as, the Non-Executive Chairman of the Board. The Agreement has an initial six-month term, which automatically renews for successive three-month periods unless either party elects to the terminate the Agreement. Either party may terminate the Agreement upon 30 days prior written notice to the other party. During the term of the Agreement, Kelly is entitled to receive a fee of $3,000 for each day (or $15,000 for a five-day week) spent providing consulting services to the Company, but may not receive fees for more than 40 days of service during each three-month period under the Agreement. Kelly is also entitled to reimbursement of his reasonable expenses incurred while performing services for the Company. During the term of the Agreement, Kelly will not receive any directors' fees for serving as a member of the Board or for serving as Non-Executive Chairman of the Board. Under the Agreement, the Company indemnifies Kelly, in the manner and to the fullest extent permitted by applicable law and the Company's by-laws, in the event he is a party to or threatened to be a party to any action, suit or proceeding by reason of his performance or non-performance of the services to be provided to the Company under the Agreement, except with regard to any act or conduct for which a director of a Delaware corporation is not entitled to indemnification under applicable law. A copy of the Agreement is attached as Exhibit 99.1 hereto and is incorporated by reference herein. ITEM 8.01. OTHER EVENTS. On June 30, 2006, the Company issued the press release that is attached as Exhibit 99.2 hereto and is incorporated by reference herein. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (d) The following are attached as Exhibits to this Current Report on Form 8-K: EXHIBIT NO. EXHIBIT. ----------- -------- 99.1 Consulting Agreement dated as of June 29, 2006 99.2 Press Release dated June 30, 2006 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf by the undersigned hereunto duly authorized. THE PENN TRAFFIC COMPANY By: /s/ Francis D. Price, Jr. ----------------------------- Name: Francis D. Price, Jr. Title: Vice President Dated: June 30, 2006 EXHIBIT INDEX EXHIBIT NO. EXHIBIT. ----------- -------- 99.1 Consulting Agreement dated as of June 29, 2006 99.2 Press Release dated June 30, 2006 EX-99 2 ex99-1form8k_062906.txt EXHIBIT 99.1 EXHIBIT 99.1 ------------ CONSULTING AGREEMENT CONSULTING AGREEMENT, dated as of June 29, 2006, between Robert J. Kelly (the "CONSULTANT") and The Penn Traffic Company, a Delaware corporation (the "COMPANY"). WHEREAS, the Company deems it advisable to retain the Consultant to provide consulting and advisory services and the Consultant is willing to provide such services to the Company, on the terms and conditions described herein. IT IS, THEREFORE, AGREED: 1. ENGAGEMENT; CONSULTING PERIOD. Subject to Section 4 of this Agreement, the Company hereby engages the Consultant, and the Consultant hereby agrees to provide the services described herein, for the period (the "CONSULTING PERIOD") beginning on the date hereof and ending on the six (6) month anniversary of the date hereof; PROVIDED, that the Consulting Period shall be automatically extended for additional consecutive three (3) month periods (and each additional three (3) month period shall also constitute the "Consulting Period") unless either party shall have notified the other of its desire to terminate this Agreement in accordance with Section 4. 2. CONSULTING SERVICES AND RELATIONSHIP. (a) SERVICES. During the Consulting Period, the Consultant shall provide consulting and advisory services to the Company with respect to the business of the Company and its subsidiaries as mutually determined by the Board of Directors of the Company and the Consultant. During the Consulting Period, the Consultant shall continue to serve as Non-Executive Chairman. (b) RELATIONSHIP. The Consultant shall be an independent contractor, and not an employee of the Company, within the meaning of all federal, state and local laws and regulations governing employment insurance, workers' compensation, industrial accident, labor and taxes. The Consultant shall not, by reason of this Agreement, acquire any benefits, privileges or rights under any benefit plan operated by the Company, or their respective subsidiaries or affiliates for the benefit of their employees, including, without limitation, (i) any pension or profit-sharing plans or (ii) any plans providing medical, dental, disability or life insurance protection. (c) INDEMNIFICATION. The Company shall indemnify, in the manner and to the fullest extent permitted by applicable law and the by-laws of the Company, the Consultant (or his estate) in the event he (or his estate) was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action, suit or proceeding, whether or not by or in the right of the Company, and whether civil, criminal, administrative, investigative or otherwise, by reason of the performance or alleged lack of performance of any obligation pursuant to Section 2(a), other than with respect to any act or conduct for which a director of a Delaware corporation is not entitled to indemnification under applicable law, against expenses (including reasonable attorney's fees) ("EXPENSES"), judgments, fines and amounts paid in settlement actually and reasonably incurred by the Consultant (or his estate) in connection with such action, suit or proceeding (including, without limitation, in connection with the defense or settlement of such action, suit or proceeding). To the extent and in the manner provided or allowed by applicable law, any Expenses shall be paid by the Company in advance of the final disposition of such action, suit or proceeding, even if the Consultant is alleged to have not met the applicable standard of conduct required under this Section 2(c) or is alleged to have committed conduct such that, if true, the Consultant (or his estate) would not be entitled to indemnification under this Section 2(c), upon receipt of an undertaking, which need not be secured, by or on behalf of the Consultant (or his estate) to repay such amount if it shall ultimately be determined that the Consultant (or his estate) is not entitled to be indemnified by the Company as authorized in this Section. The Company's obligations under this Section 2(c) shall survive any termination of this Agreement. (d) REPRESENTATIONS AND WARRANTIES. The Consultant represents and warrants that (i) he has the right to enter into and perform his obligations under this Agreement and (ii) he has not entered nor shall he enter into any arrangement or agreement which (A) will interfere or conflict with the rights granted to the Company hereunder, (B) would prohibit him from entering into and fully performing this Agreement or (C) would be violated, breached or under which he would be in default by virtue of executing this Agreement or performing hereunder. 3. COMPENSATION. (a) CONSULTING FEE. During the Consulting Period, the Company shall pay the Consultant the sum of $3,000 for each day (or $15,000 for a five (5) day week) spent by the Consultant providing the services to the Company set forth in Section 2(a), payable in arrears on the last business day of each calendar month upon the submission by the Consultant of documentation specifying the number of days spent by the Consultant in any such month; PROVIDED that, notwithstanding the foregoing, the number of days during each three (3) month period for which the Consultant shall be entitled to fees hereunder shall not exceed 40. During the Consulting Period, the Consultant shall not be entitled to receive any directors' fees (whether annual fees or attendance fees) for serving as a member of the Board of Directors (or any committee thereof) or as Non-Executive Chairman of the Board of Directors (and, for the avoidance of doubt, the Consultant shall not be entitled to receive fees under this Section 3(a) for his attendance at meetings of the Company's Board of Directors). (b) EXPENSE REIMBURSEMENT. Reasonable expenses, including, but not limited to, hotel accommodations, meals, and rental car expenses (if the Company is unable to provide the Consultant with the use of a car) while the Consultant is providing the services to be provided hereunder, and economy class airfare incurred by Consultant for travel in connection with the performance of his duties hereunder, shall be promptly reimbursed by the Company in accordance with, and subject to documentation as may be required by, Company policies. 4. TERM. Notwithstanding any other provision of this Agreement either the Consultant or the Company may terminate this Agreement for any reason whatsoever upon thirty (30) days prior written notice to the other party, whereupon the Consulting Period shall terminate at the expiration of such 30-day period. 5. CONFIDENTIAL INFORMATION. The Consultant shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company and its business which shall have been obtained during the Consulting Period and which is not public knowledge or which becomes public knowledge solely by acts of the Consultant in violation of this Agreement. After expiration of the Consulting Period, the Consultant shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. 6. SUCCESSORS. (a) This Agreement is personal to the Consultant and shall not be assignable by the Consultant without the prior written consent of the Company. (b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors or assigns. 7. MISCELLANEOUS. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to the principles of conflict of laws of the State of New York, or such principles of any other jurisdiction which could cause the application of the laws of any jurisdiction other than the State of New York. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors or legal representatives. (b) All notices and other communications shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, or by an internationally recognized overnight courier service, addressed as follows: IF TO THE CONSULTANT (BEFORE AUGUST 2006): Robert J. Kelly 77-978 Lago Drive LaQuinta, CA 92353 IF TO THE CONSULTANT (AFTER AUGUST 2006): Robert J. Kelly 58-205 Carmona LaQuinta, CA 92253 IF TO THE COMPANY: The Penn Traffic Company 1200 State Fair Blvd. Syracuse, NY 13209 Attn: Robert Chapman IF TO THE BOARD, TO THE CHAIRMAN OF THE COMPENSATION COMMITTEE: John Burke 22549 Malden Street West Hills, CA 91304 or to such other address as either party shall have furnished to the other in accordance herewith. Notices and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement. (d) The failure of the Company at any time to enforce performance by the Consultant of any provisions of this Agreement shall in no way affect the Company's rights thereafter to enforce the same, nor shall the waiver by the Company of any breach of any provision hereof be held to be a waiver of any other breach of the same or any other provision. (e) This Agreement contains the entire understanding of the Company and the Consultant with respect to the subject matter hereof, and supersedes and renders null and void any previous agreements between them with respect thereto. (f) The Company may withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. IN WITNESS WHEREOF, the Consultant has hereunto set his hand and the Company has caused this Agreement to be duly executed in its name and on its behalf, all as of the day and year first above written. /s/ Robert J. Kelly --------------------------------- Robert J. Kelly THE PENN TRAFFIC COMPANY By: /s/ Francis D. Price, Jr. ----------------------------- Name: Francis D. Price, Jr. Title: Vice President EX-99 3 ex99-2form8k_062906.txt EXHIBIT 99.2 EXHIBIT 99.2 ------------ [GRAPHIC OMITTED] [LOGO - THE PENN TRAFFIC COMPANY] FOR IMMEDIATE RELEASE CONTACT: Marc Jampole Jampole Communications, Inc. 412-471-2463 PENN TRAFFIC'S WORKING CAPITAL LENDERS AGAIN EXTEND DEADLINE FOR DELIVERY OF AUDITED FINANCIALS COMPANY ANNOUNCES FURTHER DELAY OF FINALIZATION AND RELEASE OF AUDITED FINANCIAL STATEMENTS SYRACUSE, NEW YORK - JUNE 30, 2006 - The Penn Traffic Company announced today that in light of the previously announced governmental investigations seeking information relating to the Company's promotional and allowance practices and policies, Penn Traffic would be further delaying the finalization and release of its audited financial statements for its 2003, 2004 and 2005 fiscal years. At Penn Traffic's request, the lenders under Penn Traffic's $164 million revolving credit facilities have agreed to extend the June 30, 2006 deadline for delivery of its audited financial statements to September 30, 2006, enabling Penn Traffic to continue to access fully its working capital facility. At June 15, 2006, Penn Traffic had undrawn availability of approximately $46 million and a 30 day average undrawn availability of approximately $45 million under this revolving credit facility. "We continue to be extremely gratified that our lenders have been understanding in working with us" said Robert Chapman, Penn Traffic's President and Chief Executive Officer, "and we look forward to getting past this disruption so that we can achieve the goals we established for our reorganized Company and its more than 8,500 employees." FORWARD LOOKING STATEMENTS This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, as amended, reflecting management's current analysis and expectations, based on what management believes to be reasonable assumptions. These forward-looking statements include statements relating to our anticipated financial performance and business prospects. Statements preceded by, followed by or that include words such as "believe," "anticipate," "estimate," "expect," "could," and other similar expressions are to be considered such forward-looking statements. Forward-looking statements may involve known and unknown risks, uncertainties and other factors, which may cause the actual results to differ materially from those projected, stated or implied, depending on such factors as: the ability of the Company to improve its operating performance and effectuate its business plans; the ability of the Company to operate pursuant to the terms of its credit facilities and to comply with the terms of its lending agreements or to amend or modify the terms of such agreements as may be needed from time to time; its ability to generate cash; its ability to attract and maintain adequate capital; its ability to refinance; increases in prevailing interest rates; the ability of the Company to obtain trade credit, and shipments and terms with vendors and service providers for current orders; the Company's ability to maintain contracts that are critical to its operations; potential adverse developments with respect to the Company's liquidity or results of operations; general economic and business conditions; competition, including increased capital investment and promotional activity by the Company's competitors; availability, location and terms of sites for store development; the successful implementation of the Company's capital expenditure program; labor relations; labor and employee benefit costs including increases in health care and pension costs and the level of contributions to the Company sponsored pension plans; the result of the pursuit of strategic alternatives; economic and competitive uncertainties; changes in strategies; changes in generally accepted accounting principles; adverse changes in economic and political climates around the world, including terrorist activities and international hostilities; and the outcome of pending or yet-to-be-instituted legal proceedings and governmental investigations, including the previously announced SEC and U.S. Attorney's Office investigations. The Company cautions that the foregoing list of important factors is not exhaustive. Accordingly, there can be no assurance that the Company will meet future results, performance or achievements expressed or implied by such forward-looking statements. This paragraph is included to provide safe harbor for forward-looking statements, which are not generally required to be publicly revised as circumstances change, and which the Company does not intend to update. ****************************************************************************** The Penn Traffic Company operates 111 supermarkets in Pennsylvania, upstate New York, Vermont and New Hampshire under the BiLo, P&C and Quality trade names. Penn Traffic also operates a wholesale food distribution business serving 79 licensed franchises and 43 independent operators and Penny Curtiss, a Syracuse-based commercial bakery. -----END PRIVACY-ENHANCED MESSAGE-----