-----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, Aks8O83Ly0DWFaBzl60jH5hLA8466Yjr5QQUafvYMRELj2nFT/gJWCzR8jPnE4FZ +CE45KhuM7Nvwp4JRvmbkQ== 0001047469-99-023902.txt : 19990615 0001047469-99-023902.hdr.sgml : 19990615 ACCESSION NUMBER: 0001047469-99-023902 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990527 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990611 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: PA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09930 FILM NUMBER: 99645016 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 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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): May 27, 1999 ------------------------------- THE PENN TRAFFIC COMPANY ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 1-9930 25-0716800 - -------------------------------------------------------------------------------- (State or other (Commission (IRS Employer jurisdiction File Number) Identification No.) of incorporation) 1200 State Fair Boulevard Syracuse, New York 13221-4737 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (315) 453-7284 --------------------------- Not Applicable ----------------------------------------------------------- Page 1 This document consists of 4 pages. The exhibit index is contained on page 4 of this document. Item 3. BANKRUPTCY OR RECEIVERSHIP On May 27, 1999, The Penn Traffic Company issued a press release attached as Exhibit 99.1 hereto that announced that the U.S. Bankruptcy Court for the District of Delaware (the "BANKRUPTCY COURT") confirmed its Joint Plan of Reorganization (the "PLAN") under chapter 11 of the Bankruptcy Code. Penn Traffic initially filed for chapter 11 protection on March 1, 1999, seeking Bankruptcy Court approval to implement a prenegotiated financial restructuring with the holders of its senior and subordinated notes in accordance with the Plan. Penn Traffic expects that the Plan will be effective in June. The restructuring will cancel Penn Traffic's existing $1.13 billion of senior and subordinated notes and (i) distribute $100 million of new senior notes and 19,000,000 shares of new common stock to the holders of the existing senior notes and (ii) distribute 1,000,000 shares of the new common stock and 6 year warrants to purchase 1,000,000 shares of new common stock having an exercise price of $18.30 per share to the holders of the existing senior subordinated notes. In addition, each 100 shares of Penn Traffic's common stock outstanding immediately prior to the restructuring will be converted into one share of new common stock for a total of approximately 106,955 shares of additional new common stock. Penn Traffic also announced it expects to enter into a new secured credit facility with a bank group led by Fleet Capital Corporation as agent. Proceeds from the new facility will be used to satisfy Penn Traffic's obligations under its debtor-in-possession facility and pay certain costs of the debt restructuring process and for its ongoing working capital and capital expenditure requirements. Upon consummation of the Plan in June 1999 and taking into account all costs and expenditures related to the debt restructuring and related transactions, the Company expects to have approximately $330 - $335 million of outstanding indebtedness (including capital leases). Such indebtedness is expected to include $100 million of new senior notes, approximately $100 million of capitalized lease obligations and $130 - $135 million of secured indebtedness including borrowings under the new secured credit facility. As of May 1, 1999, Penn Traffic had approximately $1.16 billion in total assets and $1.65 billion in total liabilities. For a further description of the Plan, see the Joint Plan of Reorganization as confirmed by the Bankruptcy Court on May 27, 1999 attached hereto as Exhibit 2.1 and the Press Release attached hereto as Exhibit 99.1. Certain statements included in this Current Report on Form 8-K which are not statements of historical fact are intended to be, and are hereby identified as, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, the words "believe," "anticipate," "plan," "expect," "estimate," "intend" and other similar expressions are intended to identify forward-looking statements. The Company cautions readers that forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions; the ability of the Company to consummate the new secured credit facility in the time period indicated or at all; and the amount of indebtedness outstanding when the Plan of Reoranization is consummated. Page 2 Item 7. EXHIBITS. (c) Exhibits. 2.1 Joint Plan of Reorganization, as confirmed by the Bankruptcy Court 99.1 Press Release, dated May 27, 1999, announcing the confirmation of Penn Traffic's Plan of Reorganization under chapter 11 of the Bankruptcy Code.
Page 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. THE PENN TRAFFIC COMPANY By /S/ GARY D. HIRSCH --------------------------------- Gary D. Hirsch Chairman Dated: June 11, 1999 Page 4 EXHIBIT INDEX
Sequentially Exhibit Numbered Number Exhibit Page - ------ ------- ---- 2.1 Joint Plan of Reorganization, as confirmed by the Bankruptcy Court 99.1 Press Release, dated May 27, 1999, announcing the confirmation of Penn Traffic's Plan of Reorganization under chapter 11 of the Bankruptcy Code.
Page 5 EX-2.1 2 EX-2.1 Exhibit 2.1 UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE In re: ) Chapter 11 ) THE PENN TRAFFIC COMPANY, ET AL., ) Case No. 99-462 (PJW) ) ) Jointly Administered Debtors. ) AMENDED JOINT PLAN OF REORGANIZATION OF THE PENN TRAFFIC COMPANY, DAIRY DELL, INC., BIG M SUPERMARKETS, INC. AND PENNY CURTISS BAKING COMPANY, INC. UNDER CHAPTER 11 OF THE BANKRUPTCY CODE PAUL, WEISS, RIFKIND, WHARTON & GARRISON Alan W. Kornberg Jeffrey D. Saferstein Brian S. Hermann 1285 Avenue of the Americas New York, New York 10019-6064 (212) 373-3000 -and- YOUNG CONAWAY STARGATT & TAYLOR, LLP James L. Patton, Jr. Pauline K. Morgan 1110 N. Market Street P.O. Box 391 Rodney Square North, 11th Floor Wilmington, Delaware 19801 (302) 571-6600 Attorneys for the Debtors Dated: Wilmington, Delaware April 2, 1999, as amended, May 25, 1999 The Penn Traffic Company, Dairy Dell, Inc., Big M Supermarkets, Inc. and Penny Curtiss Baking Company, Inc. propose the following joint plan of reorganization under section 1121(a) of the Bankruptcy Code. I. DEFINITIONS AND CONSTRUCTION OF TERMS A. DEFINITIONS. Unless otherwise defined herein, or the context otherwise requires, the following terms shall have the respective meanings set forth below: ADMINISTRATIVE CLAIM means any right to payment constituting a cost or expense of administration of the Chapter 11 Cases of a kind specified under section 503(b) of the Bankruptcy Code and entitled to priority under section 507(a)(1), 507(b) or 1114(e)(2) of the Bankruptcy Code, including, without limitation, any actual and necessary costs and expenses of preserving the Debtors' estates, any actual and necessary costs and expenses of operating the Debtors' businesses, any indebtedness or obligations incurred or assumed by the Debtors in Possession in connection with the conduct of their businesses, including, without limitation, for the acquisition or lease of property or an interest in property or the rendition of services, all compensation and reimbursement of expenses to the extent awarded by the Court under sections 330, 331 or 503 of the Bankruptcy Code, and any fees or charges assessed against the Debtors' estates under section 1930 of chapter 123 of title 28 of the United States Code. ADMINISTRATIVE AND PRIORITY CLAIMS has the meaning assigned to such term in RESERVE Section VII.C.4(b)(i) of the Plan.
ALLOWED CLAIM OR ALLOWED INTEREST means, with reference to any Claim or Equity Interest, (a) any Claim against or Equity Interest in the Debtors which has been listed by the Debtors in their Schedules, as such Schedules may be amended by the Debtors from time to time in accordance with Bankruptcy Rule 1009, as liquidated in amount and not disputed or contingent, and with respect to which no contrary proof of claim or interest has been filed, (b) any Claim or Equity Interest specifically allowed under the Plan, (c) any Claim or Equity Interest which is not Disputed or (d) any Claim or Equity Interest the amount or existence of which, if Disputed, (i) has been determined by a Final Order of a court of competent jurisdiction other than the Court, or (ii) has been allowed by Final Order of the Court; PROVIDED, HOWEVER, that any Claims or Equity Interests allowed solely for the purpose of voting to accept the Plan pursuant to an order of the Court shall not be considered "Allowed Claims" or "Allowed Equity Interests" hereunder. AMENDED PENN TRAFFIC BY-LAWS means the Amended and Restated By-Laws of Reorganized Penn Traffic, which shall be in substantially the form contained in the Plan Supplement. AMENDED PENN TRAFFIC CERTIFICATE OF means the amended and restated Certificate of INCORPORATION Incorporation of Reorganized Penn Traffic, which shall be in substantially the form contained in the Plan Supplement. AMENDED SUBSIDIARIES BY-LAWS means the Amended and Restated By-Laws of the Reorganized Subsidiaries, which shall be in substantially the forms contained in the Plan Supplement. AMENDED SUBSIDIARIES CERTIFICATES OF means the amended and restated Certificates of INCORPORATION Incorporation of the Reorganized Subsidiaries, which shall be in substantially the forms contained in the Plan Supplement.
BALLOTS means each of the ballot forms distributed with the Disclosure Statement to each holder of an Impaired Claim or Equity Interest (other than to holders not entitled to vote on the Plan) upon which is to be indicated, among other things, acceptance or rejection of the Plan. BANKRUPTCY CODE means title 11 of the United States Code, 11 U.S.C. Sections 101 ET seq., as in effect on the date hereof. BANKRUPTCY RULES means the Federal Rules of Bankruptcy Procedure as promulgated by the United States Supreme Court under section 2075 of title 28 of the United States Code, and local rules of the Court, as the context may require. BIG M means Big M Supermarkets, Inc. BUSINESS DAY means any day on which commercial banks are open for business, and not authorized to close, in the City of New York, New York, except any day designated as a legal holiday by Bankruptcy Rule 9006(a). CASH means legal tender of the United States of America. CAUSES OF ACTION means all claims, choses in action and causes of action (including those assertable derivatively), liabilities, obligations, suits, debts, sums of money, damages, demands, judgments, whether known or unknown, now owned or hereafter acquired by the Debtors, and the Cash and non-Cash proceeds thereof, whether arising under the Bankruptcy Code or other Federal, state or foreign law, equity or otherwise, including, without limitation, any causes of action arising under sections 510, 544, 547, 548, 549, 550, 551 or any other section of the Bankruptcy Code.
CHAPTER 11 CASES means the chapter 11 cases commenced by the Debtors. COLLATERAL means any property or interest in property of the Debtors' estates subject to a Lien to secure the payment or performance of a Claim, which Lien is not subject to avoidance under the Bankruptcy Code or otherwise invalid under the Bankruptcy Code or applicable state law. CONFIRMATION DATE means the date on which the Confirmation Order is entered by the Court. CONFIRMATION HEARING means the hearing to consider confirmation of the Plan pursuant to section 1128 of the Bankruptcy Code, as it may be adjourned or continued from time to time. CONFIRMATION ORDER means the order entered by the Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code. COURT means, (a) the United States Bankruptcy Court for the District of Delaware, having jurisdiction over the Chapter 11 Cases; (b) to the extent there is no reference pursuant to section 157 of title 28 of the United States Code, the United States District Court for the District of Delaware; and (c) any other court having jurisdiction over the Chapter 11 Cases. CREDITORS COMMITTEE means the Official Committee of Unsecured Creditors appointed by the United States Trustee in the Chapter 11 Cases, as constituted from time to time. DEBTORS means The Penn Traffic Company, Dairy Dell, Inc., Big M Supermarkets, Inc. and Penny Curtiss Baking Company, Inc. DEBTORS IN POSSESSION means the Debtors in their capacity as debtors in possession in the Chapter 11 Cases pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
DIP CREDIT FACILITY means the Loan and Security Agreement dated as of March 2, 1999 among Penn Traffic, Big M, Dairy Dell and Penny Curtiss, as debtors and debtors in possession, the lenders identified therein, including Fleet Capital Corporation and Fleet Capital Corporation, as Agent. DIP FINANCING CLAIMS means all Claims arising under or relating to the DIP Credit Facility and all agreements and instruments relating thereto. DISCLOSURE STATEMENT means the written disclosure statement that relates to this Plan, as approved by the Court pursuant to section 1125 of the Bankruptcy Code, as such disclosure statement may be amended, modified or supplemented from time to time. DISPUTED means any Claim, or Equity Interest, or any portion thereof, that is not an Allowed Claim or Allowed Interest, including, but not limited to, Claims or Interests (a)(i) that have not been Scheduled by the Debtors or (ii) have been Scheduled at zero or as contingent, unliquidated or disputed, or (b) that are the subject of a proof of claim that differs in nature, amount or priority from the Debtors' Schedules, and (c) in either case, the allowance or disallowance of which is not yet the subject of a Final Order. EFFECTIVE DATE means the first Business Day on which all of the conditions specified in Section XIII.B.1 of the Plan have been satisfied or waived in accordance with Section XIII.B.2 of the Plan; PROVIDED, HOWEVER, that if a stay of the Confirmation Order is in effect on such date, the Effective Date will be the first Business Day after such stay is no longer in effect.
8 5/8% NOTE INDENTURE means that certain Indenture, dated as of December 15, 1993, between Penn Traffic, as issuer, and United States Trust Company of New York, as Trustee, pursuant to which the 8 5/8% Senior Notes were issued, together with any amendments or supplements thereto. 8 5/8% SENIOR NOTES means the 8 5/8% Notes, due December 15, 2003, of Penn Traffic issued and outstanding under the 8 5/8% Note Indenture. 11 1/2% 2001 NOTE INDENTURE means that certain Indenture, dated as of October 16, 1991, between Penn Traffic, as issuer, and Bankers Trust Company, as Trustee, pursuant to which the 11 1/2% 2001 Senior Notes were issued, together with any amendments or supplements thereto. 11 1/2% 2001 SENIOR NOTES means the 11 1/2% Notes, due October 15, 2001, of Penn Traffic issued and outstanding under the 11 1/2% 2001 Note Indenture. 11 1/2% 2006 NOTE INDENTURE means that certain Indenture, dated as of December 15, 1993, between Penn Traffic, as issuer, and United States Trust Company of New York, as Trustee, pursuant to which the 11 1/2% 2006 Senior Notes were issued, together with any amendments or supplements thereto. 11 1/2% 2006 SENIOR NOTES means the 11 1/2% Notes, due April 15, 2006, of Penn Traffic issued and outstanding under the 11 1/2% 2006 Note Indenture. EQUITY INCENTIVE PLAN has the meaning assigned to such term in Section V.E. of the Plan. EQUITY INTEREST OR INTEREST means any share of preferred stock or common stock or other instrument evidencing an ownership interest in the Debtors, whether or not transferable, and any option, warrant, or right, contractual or otherwise, to acquire, sell or subscribe for any such interest.
ERISA has the meaning assigned to such term in Section XII of the Plan. FINAL ORDER means an order or judgment of the Court, or other court of competent jurisdiction, as entered on the docket in the Chapter 11 Cases, the operation or effect of which has not been stayed, reversed, vacated or amended, and as to which order or judgment (or any revision, modification, or amendment thereof) the time to appeal, petition for certiorari, or seek review or rehearing has expired and as to which no appeal, petition for certiorari, or petition for review or rehearing was filed or, if filed, remains pending. GENERAL UNSECURED CLAIM means any Unsecured Claim other than a Trade Claim, Senior Note Claim or Senior Subordinated Note Claim. GOVERNMENT has the meaning assigned to such term in Section VIII.J.3 of the Plan. IMPAIRED means, when used with reference to a Claim or Equity Interest, a Claim or Equity Interest that is impaired within the meaning of section 1124 of the Bankruptcy Code. INDENTURE TRUSTEES means, (i) with respect to the 8 5/8% Note Indenture, the 10.65% Note Indenture, the 11 1/2% 2006 Note Indenture and the 10 3/8% Note Indenture, United States Trust Company of New York, in its capacity as trustee under such indentures, (ii) with respect to the 10 1/4% Note Indenture, Norwest Bank Minnesota, N.A., in its capacity as trustee under such indenture, (iii) with respect to the 11 1/2% 2001 Note Indenture, Bankers Trust Company, in its capacity as trustee under such indenture, and (iv) with respect to the 9 5/8% Note Indenture, U.S. Bank Trust, N.A., in its capacity as trustee under such indenture.
INDENTURE TRUSTEE CHARGING LIEN means any Lien or priority in payment available to any Indenture Trustee pursuant to its applicable Indenture or applicable law for payment of fees or expenses incurred by such Indenture Trustee. INFORMAL COMMITTEE means the informal committee of certain holders of Senior Notes and Senior Subordinated Notes that was formed prior to the Petition Date. INFORMAL TRADE COMMITTEE has the meaning assigned to such term in Section III.C. of the Plan. INITIAL DISTRIBUTION DATE means the Effective Date or as soon thereafter as practicable. INITIAL HOLDER means, (a) any person or entity who will initially hold shares of New Common Stock on the Effective Date, (b) any investment fund for which any person thereof acts as manager, (c) any partnership or other entity for which any person thereof acts directly or indirectly as a general partner, managing member or controlling stockholder, and (d) any person otherwise affiliated with any of the foregoing individuals or entities. INTERCOMPANY CLAIMS means any Claim held by one of the Debtors against any other Debtor, including, without limitation, (a) any account reflecting intercompany book entries by such Debtor with respect to any other Debtor, (b) any Claim not reflected in book entries that is held by such Debtor, and (c) any derivative Claim asserted or assertable by or on behalf of such Debtor against any other Debtor. LIEN has the meaning set forth in Section 101 of the Bankruptcy Code. NEW COMMON STOCK means the common stock of Reorganized Penn Traffic, par value $.01 per share, to be authorized and issued by Reorganized Penn Traffic on the Effective Date pursuant to the Plan.
NEW NOTES INDENTURE has the meaning assigned to such term in Section V.C.2. of the Plan. NEW NOTES INDENTURE TRUSTEE means the bank or trust company that will serve as trustee under the New Notes Indenture. NEW SENIOR NOTES means the promissory notes authorized and to be issued pursuant to the Plan and the New Notes Indenture, on the terms and subject to the conditions described in Exhibit "A" hereto, and - which shall be in substantially the form contained in the Plan Supplement. NEW MANAGEMENT AGREEMENT has the meaning assigned to such term in Section V.A.4 of the Plan NEW WARRANTS means the warrants to purchase in the aggregate 1,000,000 shares of New Common Stock, on the terms and subject to the conditions described in Exhibit "B" hereto, and which shall be issued pursuant to the terms of the Warrant Agreement. 95/8% NOTE INDENTURE means that certain Indenture, dated as of April 15, 1993, between Penn Traffic, as issuer, and First Trust of California, N.A., as Trustee, pursuant to which the 9 5/8% Notes were issued, together with any amendments or supplements thereto. 95/8% SENIOR SUBORDINATED NOTES means the 9 5/8% Notes, due April 15, 2005, of Penn Traffic issued and outstanding under the 9 5/8% Note Indenture. NOTE INDENTURE means any of the Senior Note Indentures or the Senior Subordinated Note Indenture OLD COMMON STOCK means the common stock, par value $.10 per share, issued by Penn Traffic and outstanding on the Petition Date.
OTHER PRIORITY CLAIM means Claims entitled to priority pursuant to section 507(a) of the Bankruptcy Code (other than Administrative Claims and Priority Tax Claims), including, without limitation, certain allowed employee compensation and benefit claims of the Debtors' employees incurred within ninety (90) and one hundred eighty (180) days, respectively, prior to the Petition Date. OTHER SECURED CLAIMS means any Claim, other than a DIP Financing Claim, to the extent reflected in the Schedules or a proof of claim as a Secured Claim, which is secured by a Lien on Collateral to the extent of the value of such Collateral, as determined in accordance with section 506(a) of the Bankruptcy Code, or, in the event that such Claim is subject to setoff under Section 553 of the Bankruptcy code, to the extent of such setoff. PBGC has the meaning assigned to such term in Article XII of the Plan. PENN TRAFFIC means The Penn Traffic Company. PENNY CURTISS means Penny Curtiss Baking Company, Inc. PENSION PLANS means the P&C Foods Pension Plan for Represented Employees, the Big Bear General Merchandise Plan, the Big Bear Food Warehouse Hourly Plan, the Penn Traffic Company Cash Balance Plan, the Riverside Division of Penn Traffic Company Pension Plan for Bargaining Employees, Pension Plan for the Bargaining Employees of Insalco Markets, and any other tax qualified defined benefit pension plan, insured by PBGC under Title IV of ERISA and maintained by the Debtors, as well as any successor plan. PETITION DATE means March 1, 1999, the date on which the Debtors filed their petitions for relief commencing the Chapter 11 Cases.
PLAN means this Plan, as it may be amended or modified from time to time, together with all addenda, exhibits, schedules or other attachments, if any. PLAN SUPPLEMENT means the forms of documents specified in Section X.M. of the Plan. PREFERRED STOCK has the meaning assigned to such term in Section V.A.3 of the Plan. PRO RATA means, at any time, the proportion that (x) with respect to Claims, the amount of a Claim in a particular Class bears to the aggregate amount of all Claims (including Disputed Claims) in such Class and (y) with respect to Equity Interests, the number of shares or other equity interests held by a particular holder in a particular Class bears to the aggregate number of all shares and other equity interests in a particular Class, unless in each case the Plan provides otherwise. PRIORITY TAX CLAIM means any unsecured Claim held by a governmental unit entitled to a priority in right of payment under section 507(a)(8) of the Bankruptcy Code. QUARTER means the period beginning on the Effective Date and ending on the immediately succeeding June 30, September 30, December 31 or March 31, and each three-month period thereafter, as the context may require. RECORD DATE means the record date for purposes of making distributions under the Plan on account of Allowed Claims and Allowed Equity Interests, which date shall be the Confirmation Date.
REGISTRATION RIGHTS AGREEMENT means a registration rights agreement by Reorganized Penn Traffic in favor of certain Initial Holders, which shall be in substantially the form contained in the Plan Supplement. RELEASED PARTIES has the meaning assigned to such term in Section VIII.I. of the Plan. REORGANIZED DEBTORS means the Debtors, or any successors thereto by merger, consolidation, or otherwise, on and after the Effective Date. REORGANIZED PENN TRAFFIC means Penn Traffic, or any successors thereto by merger, consolidation, or otherwise, on and after the Effective Date. REORGANIZED SUBSIDIARIES means the Subsidiaries, or any successors thereto by merger, consolidation, or otherwise, on and after the Effective Date. RESERVE has the meaning assigned to such term in Section VII.C.2(a)(i) of the Plan. SCHEDULES means the schedules of assets and liabilities, statements of financial affairs, and lists of holders of Claims and Equity Interests filed with the Court by the Debtors, including any amendments or supplements thereto. SCHEDULED means, with respect to any Claim or Equity Interest, the status and amount, if any, of such Claim or Equity Interest as set forth in the Schedules. SECURED CLAIM means a Claim that is secured by a Lien on property or interests in property, in which the Debtors have an interest, to the extent of the value as of the Effective Date, or such other date as is established by the Court, of such interest or Lien determined by a Final Order of the Court pursuant to section 506 of the Bankruptcy Code or as otherwise agreed upon in writing by the Debtors and the holder of such Claim.
SEGREGATED ACCOUNT has the meaning assigned to such term in Section VII.C.6. of the Plan. SENIOR NOTE CLAIMS means the unsecured Claims of the Senior Noteholders (excluding the fees and expenses of the Indenture Trustees). SENIOR NOTES means, collectively, the 11 1/2% 2001 Senior Notes; the 10 1/4% Senior Notes; the 8 5/8% Senior Notes; the 10 3/8% Senior Notes; the 10.65% Senior Notes; and the 11 1/2% 2006 Senior Notes. SENIOR NOTEHOLDERS means the holders of the Senior Notes. SENIOR NOTE INDENTURES means collectively the 8 5/8% Note Indenture, the 10.65% Note Indenture, the 11 1/2% 2001 Note Indenture, the 10 3/8% Note Indenture, the 10 1/4% Note Indenture and the 11 1/2% 2006 Note Indenture. SENIOR SUBORDINATED NOTE CLAIMS means the unsecured Claims of the Senior Subordinated Noteholders (excluding the fees and expenses of the Indenture Trustees). SENIOR SUBORDINATED NOTE INDENTURE means the 9 5/8% Note Indenture. SENIOR SUBORDINATED NOTEHOLDERS means the holders of the Senior Subordinated Notes. SENIOR SUBORDINATED NOTES means the 9 5/8% Senior Subordinated Notes. SUBORDINATION-RELATED RIGHTS has the meaning assigned to such term in Section VIII.C of the Plan. SUBSEQUENT DISTRIBUTION DATE means the twentieth day after the end of the Quarter following the Quarter in which the Initial Distribution Date occurs and the twentieth day after the end of each such subsequent Quarter. SUBSIDIARIES means Dairy Dell, Big M and Penny Curtiss.
SUBSIDIARY EQUITY INTERESTS means any share of common stock or other instrument evidencing a present ownership interest in any of the Subsidiaries, whether or not transferable, and any options, warrants or rights, contractual or otherwise, to acquire any such interest. 10.65% NOTE INDENTURE means that certain Indenture, dated as of December 15, 1993, between Penn Traffic, as issuer, and United States Trust Company of New York, as Trustee, pursuant to which the 10.65% Senior Notes were issued, together with any amendments or supplements thereto. 10 1/4% NOTE INDENTURE means that certain Indenture, dated as of February 18, 1992, between Penn Traffic, as issuer, and Marine Midland Bank, N.A., as original Trustee, pursuant, to which the 10 1/4% Senior Notes were issued, together with any amendments or supplements thereto. 10 3/8% NOTE INDENTURE means that certain Indenture, dated as of October 1, 1992, between Penn Traffic, as issuer, and United States Trust Company of New York, as Trustee, pursuant to which the 10 3/8% Senior Notes were issued, together with any amendments or supplements thereto. 10.65% SENIOR NOTES means the 10.65% Notes, due November 1, 2004, of Penn Traffic issued and outstanding under the 10.65% Note Indenture. 10 1/4% SENIOR NOTES means the 10 1/4% Notes, due February 15, 2002, of Penn Traffic issued and outstanding under the 10 1/4% Note Indenture. 10 3/8% SENIOR NOTES means the 10 3/8% Notes, due October 1, 2004, of Penn Traffic issued and outstanding under the 10 3/8% Note Indenture.
TRADE-CLAIM means an unsecured Claim of an entity against the Debtors for (i) goods provided prior to the Petition Date by such entity to the Debtors for resale to the general public in the ordinary course of business; PROVIDED, HOWEVER, that such entity has continued to provide goods to the Debtors before and after the Petition Date on customary terms and credit, or as otherwise acceptable to the Debtors, and (ii) goods (not resold to the general public) and services provided to the Debtors in the ordinary course of the Debtors' businesses. TRANSFER AGENT means the transfer agent for the New Common Stock and New Warrants. UNSECURED CLAIM means any Claim that is not a Secured Claim, Administrative Claim, Priority Tax Claim or Other Priority Claim. WARRANT AGENT means the warrant agent for the New Warrants. WARRANT AGREEMENT means a warrant agreement pursuant to which the New Warrants will be issued, which shall be in substantially the form contained in the Plan Supplement.
B. INTERPRETATION, APPLICATION OF DEFINITIONS AND RULES OF CONSTRUCTION. Wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include both the singular and plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, feminine and neuter, such meanings to be applicable to both the singular and plural forms of the terms defined. Capitalized terms in the Plan that are not defined herein shall have the same meaning assigned to such terms by the Bankruptcy Code or Bankruptcy Rules, as the case may be. The words "herein," "hereof," and "hereunder" and other words of similar import refer to the Plan as a whole and not to any particular section or subsection in the Plan unless expressly provided otherwise. All gender references shall be deemed to refer to both genders. The words "includes" and "including" are not limiting and mean that the things specifically identified are set forth for purposes of illustration, clarity or specificity and do not in any respect qualify, characterize or limit the generality of the class within which such things are included. Captions and headings to articles, sections and exhibits are inserted for convenience of reference only, are not a part of this Plan, and shall not be used to interpret this Plan. The rules of construction set forth in section 102 of the Bankruptcy Code shall apply to this Plan. In computing any period of time prescribed or allowed by this Plan, the provisions of Bankruptcy Rule 9006(a) shall apply. II. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS A. INTRODUCTION. All Claims and Equity Interests, except Administrative Claims and Priority Tax Claims, are placed in the Classes set forth below. In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims, as described below, have not been classified. A Claim or Equity Interest is placed in a particular Class only to the extent that the Claim or Equity Interest falls within the description of that Class, and is classified in other Classes to the extent that any portion of the Claim or Equity Interest falls within the description of such other Classes. A Claim is also placed in a particular Class for the purpose of receiving distributions pursuant to the Plan only to the extent that such Claim is an Allowed Claim in that Class and such Claim has not been paid, released, or otherwise settled prior to the Effective Date. 1. UNCLASSIFIED CLAIMS (NOT ENTITLED TO VOTE ON THE PLAN). (a) ADMINISTRATIVE CLAIMS. (b) PRIORITY TAX CLAIMS. 2. UNIMPAIRED CLASSES OF CLAIMS (DEEMED TO HAVE ACCEPTED THE PLAN AND, THEREFORE, NOT ENTITLED TO VOTE ON THE PLAN). (a) CLASS 1: OTHER PRIORITY CLAIMS. Class 1 consists of all Other Priority Claims. (b) CLASS 2: OTHER SECURED CLAIMS. Class 2 consists of all Other Secured Claims. (c) CLASS 3: DIP FINANCING CLAIMS. Class 3 consists of all DIP Financing Claims. (d) CLASS 4: TRADE CLAIMS. Class 4 consists of all Trade Claims. 3. IMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS (ENTITLED TO VOTE ON THE PLAN). (a) CLASS 5: GENERAL UNSECURED CLAIMS. Class 5 consists of all General Unsecured Claims. (b) CLASS 6: SENIOR NOTE CLAIMS. Class 6 consists of all Senior Note Claims. (c) CLASS 7: SENIOR SUBORDINATED NOTE CLAIMS. Class 7 consists of all Senior Subordinated Note Claims. (d) CLASS 8: EQUITY INTERESTS. Class 8 consists of all Equity Interests. III. TREATMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS A. ADMINISTRATIVE CLAIMS. Except to the extent that any entity entitled to payment of any Allowed Administrative Claim agrees to a different treatment, each holder of an Allowed Administrative Claim shall receive Cash in an amount equal to such Allowed Administrative Claim on the later of the Effective Date and the date such Administrative Claim becomes an Allowed Administrative Claim, or as soon thereafter as is practicable; PROVIDED, HOWEVER, that Allowed Administrative Claims representing liabilities incurred in the ordinary course of business by the Debtors in Possession or liabilities arising under loans or advances to or other obligations incurred by the Debtors in Possession (to the extent authorized and approved by the Court if such authorization and approval was required under the Bankruptcy Code) shall be paid in full and performed by the Reorganized Debtors, as the case may be, in the ordinary course of business in accordance with the terms and subject to the conditions of any agreements governing, instruments evidencing, or other documents relating to, such transactions. B. PROFESSIONAL COMPENSATION AND REIMBURSEMENT CLAIMS. All entities seeking an award by the Court of compensation for services rendered or reimbursement of expenses incurred through and including the Confirmation Date under sections 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of the Bankruptcy Code (a) shall file their respective final applications for allowances of compensation for services rendered and reimbursement of expenses incurred through the Confirmation Date by the date that is 30 days after the Effective Date or such other date as may be fixed by the Court and (b) if granted, such an award by the Court shall be paid in full in such amounts as are awarded by the Court (i) on the date such Administrative Claim becomes an Allowed Administrative Claim, or as soon thereafter as is practicable or (ii) upon such other terms as may be mutually agreed upon between such holder of an Administrative Claim and the Debtors in Possession or, on and after the Effective Date, the Reorganized Debtors. C. FEES AND EXPENSES OF THE INFORMAL COMMITTEE AND INFORMAL TRADE COMMITTEE. The reasonable fees and expenses incurred after the Petition Date by (i) the Informal Committee's counsel and financial advisors, including, without limitation, the success fee payable to Houlihan, Lokey, Howard & Zukin, Inc. pursuant to its engagement letter with the Debtors dated as of December 15, 1998 and (ii) the counsel to the Trade Relations Committee of the National Food Manufacturers Credit Association (the "Informal Trade Committee") (which were retained by agreement with the Debtors prior to the Petition Date (together with the reasonable fees and expenses of local counsel) with respect to these Chapter 11 Cases) shall be paid (without application by or on behalf of any such professionals to the Bankruptcy Court and without notice and a hearing) by the Reorganized Debtors as an Administrative Claim under the Plan. If the Reorganized Debtors and any such professional retained by the Informal Committee or the Informal Trade Committee cannot agree on the amount of fees and expenses to be paid to such professional, the amount of any such fees and expenses shall be determined by the Bankruptcy Court. D. PRIORITY TAX CLAIMS. Except to the extent that a holder of an Allowed Priority Tax Claim has been paid by the Debtors prior to the Effective Date or agrees to a different treatment, each holder of an Allowed Priority Tax Claim shall receive, at the sole option of the Reorganized Debtors, (a) Cash in an amount equal to such Allowed Priority Tax Claim on the later of the Effective Date and the date such Priority Tax Claim becomes an Allowed Priority Tax Claim, or as soon thereafter as is practicable, or (b) equal quarterly Cash payments in an aggregate amount equal to such Allowed Priority Tax Claim, together with interest at a fixed annual rate equal to the federal statutory rate as provided in 26 U.S.C. Section 6621, over a period through the sixth anniversary of the date of assessment of such Allowed Priority Tax Claim. Each Priority Tax Claim which is not payable on or before the Effective Date will survive confirmation of the Plan, remain unaffected thereby, and be paid as and when due, except to the extent that a holder of such Claim agrees to a different treatment. IV. TREATMENT OF CLAIMS AND EQUITY INTERESTS A. CLASS 1 - OTHER PRIORITY CLAIMS. 1. DISTRIBUTIONS. Except to the extent that a holder of an Allowed Other Priority Claim agrees to a different treatment, in full and final satisfaction of such claim, each holder of an Allowed Other Priority Claim shall receive payment in full in Cash on the later of the Effective Date and the date when such Other Priority Claim becomes an Allowed Claim, or as soon thereafter as practicable. 2. IMPAIRMENT AND VOTING. Class 1 shall be unimpaired under the Plan. Holders of Allowed Claims in Class 1 are presumed to accept the Plan and are not entitled to vote to accept or reject the Plan. B. CLASS 2 - OTHER SECURED CLAIMS. 1. DISTRIBUTIONS. Except to the extent that a holder of an Allowed Secured Claim agrees to a different treatment, at the sole option of the Debtors, in full and final satisfaction of such claim, (i) each Allowed Other Secured Claim shall be reinstated and rendered unimpaired in accordance with section 1124(2) of the Bankruptcy Code, notwithstanding any contractual provision or applicable nonbankruptcy law that entitles the holder of an Allowed Other Secured Claim to demand or receive payment of such Allowed Other Secured Claim prior to the stated maturity of such Allowed Other Secured Claim from and after the occurrence of a default, (ii) each holder of an Allowed Other Secured Claim shall receive Cash in an amount equal to such Allowed Other Secured Claim, including any interest on such Allowed Other Secured Claim required to be paid pursuant to section 506(b) of the Bankruptcy Code, on the later of the Effective Date and the date such Allowed Other Secured Claim becomes an Allowed Other Secured Claim, or as soon thereafter as is practicable, or (iii) each holder of an Allowed Other Secured Claim shall receive the collateral securing its Allowed Other Secured Claim and any interest on such Allowed Other Secured Claim required to be paid pursuant to section 506(b) of the Bankruptcy Code, in full and complete satisfaction of such Allowed Other Secured Claim on the later of the Effective Date and the date such Allowed Other Secured Claim becomes an Allowed Other Secured Claim, or as soon thereafter as is practicable. 2. IMPAIRMENT AND VOTING. Class 2 shall be unimpaired under the Plan. The holders of Allowed Claims in Class 2 are presumed to accept the Plan and are not entitled to vote to accept or reject the Plan. C. CLASS 3 - DIP FINANCING CLAIMS. 1. DISTRIBUTIONS. On the Effective Date, or as soon thereafter as practicable, in full and final satisfaction of such claims, each holder of a DIP Financing Claim (which shall be deemed Allowed) shall receive payment in full in Cash. 2. IMPAIRMENT AND VOTING. Class 3 shall be unimpaired under the Plan. The holders of the DIP Financing Claims are presumed to accept the Plan and are not entitled to vote to accept or reject the Plan. D. CLASS 4 - TRADE CLAIMS. 1. DISTRIBUTIONS. To the extent not satisfied by the Debtors in the ordinary course of business, in full and final satisfaction of such claims, the legal, equitable and contractual rights to which such Allowed Trade Claim entitles the holder thereof shall be left unaltered and, accordingly, shall be satisfied on the latest of (i) the Effective Date, (ii) the date such Trade Claim becomes an Allowed Claim, (iii) the date an Allowed Trade Claim becomes due and payable in the ordinary course of business consistent with the Debtors' ordinary payment practices, and (iv) the date on which the Debtors and the holder of such Allowed Trade Claim agree in writing. Holders of Allowed Trade Claims shall retain any prepetition security arrangements that were in existence as of the Petition Date (and extended pursuant to the Order Authorizing Payment of Prepetition Claims of Certain Trade Creditors and Goods and Service Providers dated March 2, 1999) to secure post-confirmation obligations and such prepetition security interests shall continue to the same extent and priority as they existed as of the Petition Date, without the necessity of any further actions to continue the perfection of such security interests. 2. IMPAIRMENT AND VOTING. Class 4 shall be unimpaired under the Plan. The holders of Allowed Claims in Class 4 are presumed to accept the Plan and are not entitled to vote to accept or reject the Plan. E. CLASS 5 - GENERAL UNSECURED CLAIMS. 1. DISTRIBUTIONS. On the Effective Date, or as soon thereafter as practicable, or upon such later date when such Claim becomes an Allowed Claim, in full and final satisfaction of such claim, at the Debtors' option (i) each holder of an Allowed General Unsecured Claim will receive payment in full in Cash of its Allowed General Unsecured Claim, or (ii) each Allowed General Unsecured Claim will be reinstated by curing all outstanding defaults with all legal, equitable and contractual rights remaining unaltered. 2. IMPAIRMENT AND VOTING. Class 5 is impaired under the Plan. The holders of Allowed Claims in Class 5 are entitled to vote to accept or reject the Plan. F. CLASS 6 - SENIOR NOTE CLAIMS. 1. DISTRIBUTIONS. On the Effective Date, or as soon thereafter as is practicable, in full and final satisfaction of such claims, each holder of an Allowed Senior Note Claim will receive its Pro Rata share of (i) $100 million of New Senior Notes; and (ii) 19,000,000 shares of New Common Stock. In addition, if Class 7 does not vote in favor of the Plan, the holders of Allowed Senior Note Claims shall receive, on the Effective Date, the New Warrants that would have been distributed to the holders of Allowed Senior Subordinated Note Claims if Class 7 voted in favor of the Plan and the New Common Stock that would have been distributed to the holders of Allowed Equity Interests. The New Warrants and New Common Stock received by the holders of Allowed Senior Note Claims pursuant to the preceding sentence shall be distributed to the holders of Allowed Senior Subordinated Note Claims and Allowed Equity Interests that voted in favor of the Plan and did not object to the Plan. Any New Warrants and New Common Stock remaining after distribution of such New Warrants and New Common Stock to the holders of Allowed Senior Subordinated Note Claims and Equity Interests shall be canceled. 2. IMPAIRMENT AND VOTING. Class 6 is impaired under the Plan. The holders of Allowed Claims in Class 6 are entitled to vote to accept or reject the Plan. 3. ALLOWANCE. The Senior Note Claims shall be Allowed in the following aggregate amounts: the 11 1/2% 2001 Senior Notes, $111,933,239; the 10 1/4% Senior Notes, $132,004,878; the 8 5/8% Senior Notes, $212,423,714; the 10 3/8% Senior Notes, $104,322,917; the 10.65% Senior Notes, $103,550,000; and the 11 1/2 2006 Senior Notes, $104,344,444. The holders of Senior Note Claims and Indenture Trustees under the Senior Note Indentures shall not be required to file proofs of claim. The fees and expenses owed to the Indenture Trustees shall be paid in accordance with Section VII.C.6. hereof. G. CLASS 7 - SENIOR SUBORDINATED NOTE CLAIMS. 1. DISTRIBUTIONS. On the Effective Date, or as soon thereafter as is practicable, in full and final satisfaction of such claims, each holder of an Allowed Senior Subordinated Note Claim will receive its pro rata share of (i) 1,000,000 shares of New Common Stock; and (ii) the New Warrants. Notwithstanding anything to the contrary, it shall be a condition to the receipt by holders of Allowed Senior Subordinated Notes of the distribution of the New Warrants that Class 7 vote in favor of the Plan. If such condition is not satisfied, holders of Allowed Senior Subordinated Note Claims shall receive only the New Common Stock and the holders of Allowed Senior Note Claims shall receive the New Warrants that would have been distributed to the holders of Allowed Senior Subordinated Note Claims if Class 7 voted in favor of the Plan; PROVIDED, HOWEVER, that any holder of an Allowed Senior Subordinated Note Claim that votes in favor of the Plan (and does not object to confirmation of the Plan) shall receive its Pro Rata share of New Warrants from the holders of Allowed Senior Note Claims as if Class 7 voted in favor of the Plan. All remaining New Warrants held by the holders of Allowed Senior Note Claims after distribution to holders of Allowed Senior Subordinated Note Claims that vote in favor of the Plan (and do not object to the Plan) shall be canceled. 2. IMPAIRMENT AND VOTING. Class 7 is impaired under the Plan. The holders of Allowed Claims in Class 7 are entitled to vote to accept or reject the Plan. 3. ALLOWANCE. The Senior Subordinated Note Claims shall be Allowed in the aggregate amount of $414,437,500 and the holders of Senior Subordinated Note Claims and Indenture Trustee under the Senior Subordinated Note Indenture shall not be required to file proofs of claim. The fees and expenses owed to the Indenture Trustee shall be paid in accordance with Section VII.C.6. hereof. H. CLASS 8 - EQUITY INTERESTS. 1. DISTRIBUTIONS. On the Effective Date or as soon thereafter as practicable, each 100 shares of Old Common Stock shall entitle the holder thereof to receive 1 share of New Common Stock; PROVIDED, HOWEVER, that if Class 7 (Senior Subordinated Note Claims) or Class 8 votes against the Plan, the holders of Allowed Class 8 Equity Interests shall receive no distributions whatsoever and the holders of Allowed Senior Note Claims shall receive the New Common Stock that would have been distributed to the holders of Allowed Equity Interests if Classes 7 and 8 voted in favor of the Plan; PROVIDED, HOWEVER, that a holder of an Equity Interest that votes in favor of the Plan (and does not object to confirmation of the Plan) shall receive its Pro Rata share of New Common Stock from the holders of Allowed Senior Note Claims as if Classes 7 and 8 voted in favor of the Plan. All remaining New Common Stock held by the holders of Allowed Senior Note Claims that would have been distributed to holders of Equity Interests had they voted in favor of the Plan, shall be canceled. All Equity Interests other than Old Common Stock shall be canceled on the Effective Date and the holders thereof shall receive no distributions. 2. IMPAIRMENT AND VOTING. Class 8 is impaired under the Plan. The holders of Allowed Equity Interests are entitled to vote to accept or reject the Plan. V. PROVISIONS REGARDING CORPORATE GOVERNANCE AND MANAGEMENT OF THE REORGANIZED DEBTORS A. DIRECTORS AND OFFICERS OF REORGANIZED PENN TRAFFIC; AMENDED CERTIFICATE OF INCORPORATION AND AMENDED BY-LAWS. 1. THE INITIAL BOARD OF DIRECTORS. The initial board of directors of Reorganized Penn Traffic shall consist of ten (10) members, seven (7) of whom shall be designated by Satellite Fund Management, LLC, DDJ Capital Management, LLC and Loomis Sayles & Company, LP whose names shall be disclosed on or before the date of the Confirmation Hearing, and three (3) of whom shall be Joseph V. Fisher, Martin A. Fox and Gary D. Hirsch. The Board of Directors of Reorganized Penn Traffic will select a Chairman of the Board of Directors of Reorganized Penn Traffic at their initial meeting who will not initially serve as an executive officer of Reorganized Penn Traffic. 2. MANAGEMENT OF REORGANIZED PENN TRAFFIC. (a) MANAGEMENT OF PENN TRAFFIC. Effective as of the Effective Date, an Executive Committee of the Board of Directors shall manage the business of Reorganized Penn Traffic and shall have all of the authority customarily delegated to the senior executive officers of a corporation, subject to oversight of the entire Board of Directors. The members of the Executive Committee will consist of Gary M. Hirsch, Martin A. Fox and Joseph V. Fisher, with Mr. Hirsch serving as Chairman of the Executive Committee and Mr. Fox as Vice-Chairman thereof. Mr. Fisher, Penn Traffic's President and Chief Executive Officer, will report to the Chairman of the Executive Committee and to Reorganized Penn Traffic's Board of Directors. (b) OTHER COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors will also establish such other committees it deems appropriate including an Audit Committee and a Compensation and Stock Option Committee that will be composed only of independent Directors who do not serve as executive officers of Reorganized Penn Traffic. The Audit Committee will be responsible for review and approval of Reorganized Penn Traffic's financial statements and for the selection of Reorganized Penn Traffic's independent certified public accountants (currently PricewaterhouseCoopers LLP). The Compensation and Stock Option Committee will, subject to existing contractual arrangements, approve compensation arrangements for Reorganized Penn Traffic's executive officers and grant additional stock options under Reorganized Penn Traffic's Equity Incentive Plan, taking into account, in each case, the recommendations of the Executive Committee. (c) OFFICERS. The officers of Penn Traffic immediately prior to the Effective Date shall serve as the initial officers of Reorganized Penn Traffic on and after the Effective Date. Such officers shall serve in accordance with any employment agreement with Reorganized Penn Traffic and applicable nonbankruptcy law. 3. AMENDED PENN TRAFFIC CERTIFICATE OF INCORPORATION AND AMENDED PENN TRAFFIC BY-LAWS. The adoption of the Amended Penn Traffic Certificate of Incorporation and Amended Penn Traffic By-Laws will be deemed to have occurred and be effective as of the Effective Date without any further action by the directors or stockholders of the Debtors or the Reorganized Debtors. The Amended Penn Traffic Certificate of Incorporation will, among other things, contain appropriate provisions (i) governing the authorization of up to 30,000,000 shares of New Common Stock (up to 20,109,846 will be issued on the Effective Date) and 1,000,000 shares of preferred stock, par value of $.01 per share (the "PREFERRED STOCK"), that will be available for issuance and whose terms and conditions may be established by the Board of Directors, (ii) prohibiting the issuance of nonvoting equity securities as required by section 1123(a)(6) of the Bankruptcy Code, (iii) establishing the Executive Committee, an Audit Committee and a Compensation and Stock Option Committee and defining their roles, and (iv) implementing such other matters as stockholders and directors of Reorganized Penn Traffic believe are necessary and appropriate to effectuate the terms and conditions of the Plan. The Amended Penn Traffic Certificate of Incorporation will not include any "super-majority" voting provisions. On or prior to the Effective Date, Penn Traffic will file with the Secretary of State of the State of Delaware, in accordance with sections 103 and 303 of the Delaware General Corporation Law, the Amended Penn Traffic Certificate of Incorporation and such certificate shall be the certificate of incorporation for Reorganized Penn Traffic. The Amended Penn Traffic Certificate of Incorporation shall be substantially in the form contained in the Plan Supplement. 4. NEW MANAGEMENT AGREEMENT. On the Effective Date, Reorganized Penn Traffic shall enter into a new management agreement with Hirsch & Fox, LLC (the "NEW MANAGEMENT AGREEMENT"), pursuant to which Hirsch & Fox will provide the services of Gary D. Hirsch, as Chairman of the Executive Committee, and Martin A. Fox, as Vice Chairman of the Executive Committee, as directed by the Board of Directors. The New Management Agreement will be on the terms as described in Exhibit "C" hereto and shall be in substantially the form included in the Plan Supplement. B. DIRECTORS AND OFFICERS OF THE REORGANIZED SUBSIDIARIES. 1. THE INITIAL BOARD OF DIRECTORS. The initial board of directors of the Reorganized Subsidiaries shall be Gary D. Hirsch, Martin A. Fox and Joseph V. Fisher. Mr. Hirsch shall be Chairman. 2. MANAGEMENT OF THE REORGANIZED SUBSIDIARIES. The officers of the Reorganized Subsidiaries immediately prior to the Effective Date shall serve as the initial officers of the Reorganized Subsidiaries on and after the Effective Date. Such officers shall serve in accordance with any employment agreement with the Reorganized Subsidiaries and applicable nonbankruptcy law. 3. AMENDED SUBSIDIARIES CERTIFICATES OF INCORPORATION AND AMENDED SUBSIDIARIES BY-LAWS. The adoption of the Amended Subsidiaries Certificate of Incorporation and Amended Subsidiaries By-Laws will be deemed to have occurred and be effective as of the Effective Date without any further action by the directors or stockholders of the Debtors or the Reorganized Debtors. The Amended Subsidiaries Certificate of Incorporation will, among other things, contain appropriate provisions (i) prohibiting the issuance of nonvoting equity securities as required by section 1123(a)(6) of the Bankruptcy Code, and (ii) implementing such other matters as stockholders and directors of the Reorganized Subsidiaries believe are necessary and appropriate to effectuate the terms and conditions of the Plan. The Amended Subsidiaries Certificate of Incorporation will not include any "super-majority" voting provisions. On or prior to the Effective Date, the Subsidiaries will file with the Secretary of State of the State of Delaware, in accordance with sections 103 and 303 of the Delaware General Corporation Law, the Amended Subsidiaries Certificate of Incorporation and such certificate shall be the certificate of incorporation for the Reorganized Subsidiaries. The Amended Subsidiaries Certificate of Incorporation shall be substantially in the form contained in the Plan Supplement. C. SECURITIES TO BE ISSUED PURSUANT TO THE PLAN. 1. NEW COMMON STOCK. On the Effective Date, Reorganized Penn Traffic will issue 20,109,846 shares of New Common Stock without further act or action under applicable law, regulation, rule or order. Each share of New Common Stock will entitle its holder to one vote. Holders of New Common Stock will have the right to participate proportionately in any dividends distributed by Reorganized Penn Traffic, subject to the dividend preference of any shares of Preferred Stock that may be issued after the Effective Date. 2. NEW SENIOR NOTES. The New Senior Notes will be issued by Reorganized Penn Traffic pursuant to an indenture (the "NEW NOTES INDENTURE"), which will be qualified under the Trust Indenture Act of 1939, as amended. An indenture trustee will be selected prior to the Confirmation Hearing. The New Notes Indenture and the New Senior Notes will be in substantially the forms included in the Plan Supplement. 3. THE NEW WARRANTS. On the Effective Date, Reorganized Penn Traffic will issue New Warrants to purchase up to 1,000,000 shares of New Common Stock (without giving effect to any options that may be issued under the Equity Incentive Plan) without further act or action under applicable law, regulation, rule or order. The New Warrants will be in substantially the form included in the Plan Supplement. D. SECURITIES LAWS MATTERS. Each Initial Holder receiving a distribution of New Common Stock representing more than 10% of the aggregate New Common Stock issued on the Effective Date shall be entitled to become a party to the Registration Rights Agreement, which provides that Reorganized Penn Traffic will file and maintain the effectiveness of a shelf registration right statement for such Holder for the New Common Stock, shares of New Common Stock issued upon exercise of the New Warrants, the New Warrants and the New Senior Notes, covering the resale of all such securities. Certificates evidencing shares of New Common Stock received by an Initial Holder who is deemed to be an affiliate of the Debtors by reason of its equity holdings or otherwise will bear a legend stating, in substance, that such shares have not been registered under the Securities Act or under the securities laws of any state or other jurisdiction and may not be sold, offered for sale or otherwise transferred unless registered or qualified under such Act and applicable state securities laws or unless the Reorganized Debtors receive a certificate executed by a duly authorized officer of such Initial Holder or an opinion of counsel, as applicable, reasonably satisfactory to the Reorganized Debtors, that such registration or qualification is not required. The Registration Rights Agreement will be in substantially the form included in the Plan Supplement. E. REORGANIZED PENN TRAFFIC EQUITY INCENTIVE PLAN. On the Effective Date, Reorganized Penn Traffic will adopt a stock option plan (the "EQUITY INCENTIVE PLAN") which permits Reorganized Penn Traffic to grant to its officers and directors options to acquire shares of New Common Stock. Such stock option plan shall be on the terms described in Exhibit "D" hereto and shall be in substantially the form contained in the Plan Supplement. VI. SUBSTANTIVE CONSOLIDATION OF THE DEBTORS On the Confirmation Date, the Chapter 11 Cases shall be substantively consolidated for all purposes related to the Plan, including, without limitation, for purposes of voting, confirmation and distribution. Subject to the occurrence of the Effective Date, (i) all assets and liabilities of Dairy Dell, Big M and Penny Curtiss shall be deemed merged or treated as though they were merged into and with the assets and liabilities of Penn Traffic, (ii) no distributions shall be made under the Plan on account of intercompany Claims among the Debtors and such Claims shall be discharged on the Effective Date, (iii) no distributions shall be made under the Plan on account of Subsidiary Equity Interests, (iv) all guarantees of the Debtors of the obligations of any other Debtor shall be deemed eliminated so that any claim against any Debtor and any guarantee thereof executed by any other Debtor and any joint or several liability of any of the Debtors shall be deemed to be one obligation of the consolidated Debtors and (v) each and every Claim filed or to be filed in the Chapter 11 Case of any of the Debtors shall be deemed filed against the consolidated Debtors, and shall be deemed one Claim against and obligation of the consolidated Debtors. Such substantive consolidation shall not (other than for purposes related to the Plan) affect (i) the legal and corporate structure of the Reorganized Debtors, (ii) Subsidiary Equity Interests and (iii) pre and post Petition Date guarantees that are required to be maintained (a) in connection with executory contracts or unexpired leases that were entered into during the Chapter 11 Cases or that have been or will be assumed, (b) pursuant to the Plan, or (c) in connection with any financing entered into by the Reorganized Debtors on the Effective Date. VII. PROVISIONS REGARDING VOTING AND DISTRIBUTIONS UNDER THE PLAN AND TREATMENT OF DISPUTED, CONTINGENT AND UNLIQUIDATED ADMINISTRATIVE CLAIMS, CLAIMS AND EQUITY INTERESTS A. VOTING OF CLAIMS AND EQUITY INTERESTS. Each holder of an Allowed Claim or an Allowed Equity Interest in an Impaired Class of Claims or Equity Interests shall be entitled to vote separately to accept or reject the Plan as provided in such order as may be entered by the Court establishing certain procedures with respect to the solicitation and tabulation of votes to accept or reject the Plan, or any other order or orders of the Court. B. NONCONSENSUAL CONFIRMATION. If any Impaired Class of Claims or Equity Interests entitled to vote shall not accept the Plan by the requisite statutory majorities provided in sections 1126(c) or 1126(d) of the Bankruptcy Code, as applicable, the Debtors reserve the right to have the Court confirm the Plan under section 1129(b) of the Bankruptcy Code. C. DISTRIBUTIONS. 1. METHOD OF DISTRIBUTIONS UNDER THE PLAN. (a) DATE AND DELIVERY OF DISTRIBUTIONS. Distributions under the Plan shall be made by the Reorganized Debtors or their designee to the holders of Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Other Priority Claims, Allowed DIP Financing Claims, Allowed Other Secured Claims, Allowed Trade Claims, Allowed General Unsecured Claims and Allowed Equity Interests at the addresses set forth on the Schedules, unless such addresses are superseded by proofs of claim or transfers of claim filed pursuant to Bankruptcy Rule 3001 (or at the last known addresses of such holders if the Debtors or the Reorganized Debtors have been notified in writing of a change of address). Distributions under the Plan to the holders of Allowed Senior Note Claims and Allowed Senior Subordinated Note Claims shall be made to the New Notes Indenture Trustee who shall make the distributions to the holders of Allowed Senior Note Claims and Allowed Senior Subordinated Note Claims. New Senior Notes (including any interest earned thereon), New Common Stock (including dividends paid on account thereof) and New Warrants shall be held in trust by the disbursing agent or the Reorganized Debtors, as applicable, for the benefit of the potential claimants of such securities and shall not constitute property of the Reorganized Debtors. (b) DISTRIBUTION OF CASH. Any payment of Cash by the Reorganized Debtors pursuant to the Plan shall be made at the option and in the sole discretion of the Reorganized Debtors, by (i) a check drawn on, or (ii) wire transfer from, a domestic bank selected by the Reorganized Debtors. (c) DISTRIBUTION OF UNCLAIMED PROPERTY. Any distribution of Cash under the Plan which is unclaimed after the later to occur of (a) two years after distribution or (b) six months after the date on which such claimant's Claim is Allowed shall be transferred to the Reorganized Debtors notwithstanding state or other escheat or similar laws to the contrary. Distributions under the Plan consisting of New Notes, New Common Stock or New Warrants that are unclaimed for a period of two years after distribution shall be cancelled and any dividends or interest which has been paid with respect to such securities shall be transferred to the Reorganized Debtors and entitlement by the holder of a Claim or Equity Interest to such distribution shall be extinguished and forever barred. The Debtors shall file with the Court a list of holders of unclaimed distributions of Cash, New Notes, New Common Stock and New Warrants on the first and second anniversaries of the Effective Date. (d) SATURDAYS, SUNDAYS, OR LEGAL HOLIDAYS. If any payment or act under the Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on the next succeeding Business Day, and shall be deemed to have been completed as of the required date. (e) FRACTIONAL DOLLARS AND FRACTIONAL SHARES AND WARRANTS. (i) FRACTIONAL DOLLARS. Whenever the issuance of any New Senior Note would otherwise call for the issuance in an amount for a fraction of a dollar, the actual issuance of such New Senior Note shall reflect a rounding of such fraction to the nearest whole dollar (up or down), with half dollars being rounded down. (ii) FRACTIONAL SHARES AND WARRANTS. Whenever any distribution of shares of New Common Stock or New Warrant to a holder would otherwise call for the distribution of a fractional share or warrant, the Transfer Agent or Warrant Agent shall allocate one whole share or one whole warrant to holders in order of the fractional portion of their entitlements, starting with the largest fractional portion until all remaining shares and warrants have been allocated. Upon the allocation of a whole share or a whole warrant to a holder in respect of the fraction portion of its entitlement, such fractional portion shall be canceled. If two or more holders are entitled to equal fractional entitlements and the number of holders so entitled exceeds the number of whole shares or whole warrants, as the case may be, which remain to be allocated, the Transfer Agent or Warrant Agent shall allocate the remaining whole shares or whole warrants to such holders by random lot or such other impartial method as the Transfer Agent or Warrant Agent deems fair, in the Transfer Agent's or Warrant Agent's sole discretion. Upon the allocation of all of the whole shares or whole warrants authorized under the Plan, all remaining fractional portions of the entitlements shall be canceled and shall be of no further force and effect. (f) DISTRIBUTIONS TO HOLDERS AS OF THE RECORD DATE. As at the close of business on the Record Date, the claims register (for Claims) and transfer ledger (for Equity Interests) shall be closed, and there shall be no further changes in the record holders of any Claims or Equity Interests. The Debtors and the Reorganized Debtors shall have no obligation to recognize any transfer of any Claims or Equity Interests occurring after the Record Date. The Debtor and the Reorganized Debtors shall instead be entitled to recognize and deal for purposes under the Plan (except as to voting to accept or reject the Plan pursuant to Section VII.A) with only those record holders stated on the claims register (for Claims) and transfer ledgers (for Equity Interests) as of the close of business on the Record Date. 2. DISPUTED TRADE CLAIMS AND GENERAL UNSECURED CLAIMS. (a) DISTRIBUTIONS WITHHELD FOR DISPUTED TRADE CLAIMS. (i) ESTABLISHMENT AND MAINTENANCE OF RESERVE. On the Effective Date, the Reorganized Debtors shall place into a reserve an amount of Cash, equal to 100% of the distributions to which holders of Disputed Trade Claims would be entitled under the Plan as of such date if such Disputed Trade Claims, were Allowed Claims (the "RESERVE"). (ii) PROPERTY HELD IN RESERVE. Cash held in the Reserve, if any, shall be deposited in a segregated bank account or accounts in the name of the Reorganized Debtors and designated as held in trust for the benefit of holders of Allowed Trade Claims. Cash held in the Reserve shall not constitute property of the Reorganized Debtors. The Reorganized Debtors shall invest the Cash held in the Reserve in a manner consistent with the investment guidelines set forth in the Plan Supplement. The Reorganized Debtors shall pay, or cause to be paid, out of the funds held in the Reserve, any tax imposed on the Reserve by any governmental unit with respect to income generated by the property held in the Reserve. The yield earned on such invested Cash (net of applicable taxes) shall be distributed to the Reorganized Debtors on the last Subsequent Distribution Date under the Plan. (iii) DISTRIBUTIONS UPON ALLOWANCE OF DISPUTED TRADE CLAIMS. The holder of a Disputed Trade Claim that becomes an Allowed Claim subsequent to the Initial Distribution Date shall receive a distribution of Cash from the Reserve on the next Subsequent Distribution Date that follows the Quarter during which such Disputed Trade Claim becomes an Allowed Claim pursuant to a Final Order. Such distributions shall be made in accordance with the Plan based upon the distributions that would have been made to such holder under the Plan if the Disputed Trade Claim had been an Allowed Claim on or prior to the Effective Date. Any Cash held in the Reserve after all Trade Claims have been Allowed or disallowed shall be transferred to and become the property of the Reorganized Debtors. (b) DISTRIBUTIONS WITHHELD FOR DISPUTED GENERAL UNSECURED CLAIMS. The holder of a Disputed General Unsecured Claim that becomes an Allowed Claim subsequent to the Initial Distribution Date shall receive a distribution of cash from the Reorganized Debtors on the next Subsequent Distribution Date that follows the Quarter during which such Disputed General Unsecured Claim becomes an Allowed Claim pursuant to Final Order. Such distributions shall be made in accordance with the Plan based on the distributions that would have been made to such holder under the Plan if the Disputed General Unsecured Claim had been an Allowed Claim on or prior to the Effective Date. 3. OBJECTIONS TO AND RESOLUTION OF ADMINISTRATIVE CLAIMS, CLAIMS AND EQUITY INTERESTS; ADMINISTRATIVE AND PRIORITY CLAIMS RESERVE. (a) OBJECTIONS TO AND RESOLUTION OF ADMINISTRATIVE CLAIMS, CLAIMS AND EQUITY INTERESTS. Except as to applications for allowances of compensation and reimbursement of expenses under sections 330 and 503 of the Bankruptcy Code, the Debtors, and the Reorganized Debtors shall have the exclusive right to make and file objections to Administrative Claims, Claims and Equity Interests subsequent to the Confirmation Date. All objections shall be litigated to a Final Order; PROVIDED, HOWEVER, that the Reorganized Debtors shall have the authority to compromise, settle, otherwise resolve or withdraw any objections, without approval of the Court. Unless otherwise ordered by the Court, the Debtors and the Reorganized Debtors shall file all objections to Administrative Claims, Claims and Equity Interests that are the subject of proofs of claims, requests for payment filed with the Court (other than applications for allowances of compensation and reimbursement of expenses) or proofs of interest and serve such objections upon the holders of the Administrative Claim, Claim or Equity Interest as to which the objection is made as soon as is practicable, but in no event later than 60 days after the Effective Date or such later date as may be approved by the Court. (b) ADMINISTRATIVE AND PRIORITY CLAIMS RESERVE. (i) ESTABLISHMENT OF ADMINISTRATIVE AND PRIORITY CLAIMS RESERVE. On the Effective Date, the Reorganized Debtors shall place into reserve an amount of Cash equal to (i) the sum of the aggregate amount of all Disputed Administrative Claims, Disputed Priority Tax Claims, and Disputed Other Priority Claims, plus (ii) an amount to be determined by the Court to be reserved for any Disputed Administrative Claims, Disputed Priority Tax Claims and Disputed Other Priority Claims that are unliquidated (the "ADMINISTRATIVE AND PRIORITY CLAIMS RESERVE"). (ii) CASH HELD IN ADMINISTRATIVE AND PRIORITY CLAIMS RESERVE. Cash held in the Administrative and Priority Claims Reserve shall be deposited in a segregated bank account or accounts in the name of the Reorganized Debtors and designated as held in trust for the benefit of holders of Allowed Administrative Claims, Allowed Priority Tax Claims and Allowed Other Priority Claims. Cash held in the Administrative and Priority Claims Reserve shall not constitute property of the Reorganized Debtors. The Reorganized Debtors shall invest the Cash held in the Administrative and Priority Claims Reserve in a manner consistent with investment guidelines to be included in the Plan Supplement. The Reorganized Debtors shall pay, or cause to be paid, out of the funds held in the Administrative and Priority Claims Reserve, any tax imposed on the Administrative and Priority Claims Reserve by any governmental unit with respect to income generated by Cash held in the Administrative and Priority Claims Reserve. Any Cash held in the Administrative and Priority Claims Reserve after all Administrative and Priority Claims have been Allowed or disallowed shall be transferred to and become the property of the Reorganized Debtors. 4. ALLOCATION OF CONSIDERATION. The aggregate consideration to be distributed to the holders of Allowed Claims in each Class under the Plan (other than the Claims, if any, of the Internal Revenue Service) shall be treated as first satisfying an amount equal to the stated principal amount of the Allowed Claim for such holders and any remaining consideration as satisfying accrued, but unpaid, interest and costs, if any, and attorneys' fees where applicable. 5. CANCELLATION AND SURRENDER OF EXISTING SECURITIES AND AGREEMENTS. On the Effective Date, the Senior Notes, Senior Subordinated Notes and Equity Interests shall be deemed canceled and such agreements and securities, including the Senior Note Indentures and the Senior Subordinated Note Indenture, together with all instruments issued pursuant thereto, shall have no further legal effect other than as evidence of any right to receive distributions, fees and expenses under the Plan. In addition, the Note Indentures shall be terminated and the Indenture Trustee's obligations shall be discharged. Notwithstanding any other provision of the Plan, as a condition precedent to receiving any distribution under the Plan, each holder of a promissory note, share certificate, or other instrument or security evidencing a Claim or Equity Interest must surrender such promissory note, share certificate, or other instrument or security to the Reorganized Debtors or their designee or must execute and deliver an affidavit of loss and furnish an indemnity or bond in substance and amount reasonably satisfactory to the Reorganized Debtors. Any holder of a Claim or Equity Interest that fails to surrender such instrument or security or to provide the affidavit and indemnity or bond, before the later to occur of (i) the second anniversary of the Effective Date and (ii) six months following the date such holder's Claim becomes an Allowed Claim or Equity Interest, shall be deemed to have forfeited all rights, Claims, and/or Equity Interests and may not receive or participate in any distribution under the Plan. 6. INDENTURE TRUSTEE FEES. On or prior to the Effective Date, each Indenture Trustee shall furnish to the Debtors a certification stating the aggregate amount of (i) its previously invoiced but then unpaid fees and unreimbursed expenses (including the fees and expenses of its counsel), in accordance with and to the extent provided for in its Note Indenture, whether incurred prior or subsequent to the Petition Date, and (ii) an estimate of such fees and expenses from the latest date covered by its last invoice to and including the Effective Date and an estimate of any post- Effective Date fees and expenses. On the Effective Date, in full satisfaction of such fees and expenses, each Indenture Trustee shall receive an amount of Cash equal to the aggregate amount stated in its aforementioned certification, without application by or on behalf of such Indenture Trustee or its respective counsel to the Court. In the event the Debtors deliver written notice to an Indenture Trustee that the Debtors contest the amount certified to by such Indenture Trustee, the amount not in dispute shall be paid to such Indenture Trustee on the Effective Date, and the balance of the amount so certified will be held in trust, in a segregated interest bearing money market account (the "SEGREGATED ACCOUNT"), until the final resolution of the dispute. The respective Indenture Trustee and the Reorganized Debtors, to the extent to which each is entitled to the funds so held in the Segregated Account, shall also be entitled to all interest and income earned thereon. Distributions made to the holders of Allowed Claims pursuant to the Plan will not be reduced on account of such payments to each Indenture Trustee or funds held in the Segregated Account as set forth above. The Confirmation order shall provide that each Indenture Trustee Charging Lien shall attach to all Cash to be distributed under the Plan until the aggregate amount stated in its certification has been paid in full or, to the extent contested by the Debtors, paid into the Segregated Account referred to in the preceding paragraph and the balance paid the Indenture Trustee, whereupon the respective Indenture Trustee Charging Lien shall be released as to funds paid to the Indenture Trustee and shall be transferred to the Segregated Account to the extent of the amount in dispute. The amount by which an Indenture Trustee's actual fees and expenses which were estimated as referred to in (ii) above are later determined by the Indenture Trustee to exceed or be less than its estimate, as well as the amount of any Indenture Trustee's fees and expenses for services requested by any of the Reorganized Debtors after the Effective Date, shall be promptly paid by or reimbursed to (as the case may be) the Reorganized Debtors upon receipt of certification thereof from the Indenture Trustee or, where appropriate, the amount held in the Segregated Account adjusted accordingly. Any dispute between the Debtors or the Reorganized Debtors and any Indenture Trustee regarding such Indenture Trustee's fees and expenses, unless resolved by agreement of the Debtors or the Reorganized Debtors and any Indenture Trustee, shall be determined only in the appropriate state court in accordance with the provisions of the respective Note Indenture. If no such action is instituted by the Debtors or the Reorganized Debtors within 90 days after the Effective Date, the amount in dispute and all interest and income earned thereon shall be promptly turned over to the respective Indenture Trustee, free and clear of any interest of the Reorganized Debtors. The Reorganized Debtors shall bear all reasonable legal fees and expenses of each Indenture Trustee to the extent incurred in the Indenture Trustee's successful pursuit of funds held in the aforementioned Segregated Account. VIII. IMPLEMENTATION AND EFFECT OF CONFIRMATION OF THIS PLAN A. REGISTRATION RIGHTS AGREEMENT, NEW NOTES INDENTURE, THE AMENDED PENN TRAFFIC CERTIFICATE OF INCORPORATION, THE AMENDED PENN TRAFFIC BY-LAWS, THE AMENDED SUBSIDIARIES CERTIFICATES OF INCORPORATION, THE AMENDED SUBSIDIARIES BY- LAWS, THE NEW MANAGEMENT AGREEMENT, THE EQUITY INCENTIVE PLAN, THE WARRANT AGREEMENT, THE SUPPLEMENTAL RETIREMENT PLAN, THE AMENDMENT TO JOSEPH V. FISHER'S EMPLOYMENT AGREEMENT AND OTHER IMPLEMENTATION DOCUMENTS. On or before the Effective Date, the Reorganized Debtors will execute the Registration Rights Agreement, the New Notes Indenture, the Amended Penn Traffic Certificate of Incorporation, the Amended Penn Traffic By-Laws, the Amended Subsidiaries Certificates of Incorporation, the Amended Subsidiaries ByLaws and Other Implementation Documents, the New Management Agreement, the Equity Incentive Plan, the Warrant Agreement, the Supplemental Retirement Plan, the Amendment to Joseph V. Fisher's Employment Agreement and all other documents required and necessary to implement the Plan, without the requirement of any further corporate action. B. CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS IN REORGANIZED DEBTORS. The Debtors, as Reorganized Debtors, shall continue to exist after the Effective Date with all powers of corporations under the laws of their state of incorporation and without prejudice to any right to alter or terminate such existence (whether by merger or otherwise) under such applicable state law. Except as otherwise expressly provided in the Plan, on the Effective Date, the Reorganized Debtors shall be vested with all of the property of their estates free and clear of all claims, liens, encumbrances, charges and other interests of creditors and equity security holders; and the Reorganized Debtors may operate their businesses free of any restrictions imposed by the Bankruptcy Code, the Bankruptcy Rules or by the Court, subject only to the terms and conditions of the Plan. C. TERMINATION OF SUBORDINATION RIGHTS. All Claims of the Senior Noteholders and the Senior Subordinated Noteholders against the Debtors and all rights and Claims between or among the Senior Noteholders and the Senior Subordinated Noteholders relating in any manner whatsoever to claimed subordination rights, rights to postpetition and default interest, or similar rights, if any (collectively, "SUBORDINATION-RELATED RIGHTS"), shall be deemed satisfied by the distributions under, described in, contemplated by, and/or implemented by, this Plan to holders of such Claims, and such rights shall be deemed waived, released, discharged, and terminated as of the latest to occur of the Effective Date and the Initial Distribution Date, and all actions related to the enforcement of such Subordination-Related Rights shall be permanently enjoined. Distributions under, described in, contemplated by, and/or implemented by, this Plan shall not be subject to levy, garnishment, attachment, or like legal process by any holder of a Claim, including, but not limited to, the Senior Noteholders, by reason of any claimed Subordination-Related Rights or otherwise, so that each holder of a Claim shall have and receive the complete benefit of the distributions in the manner set forth and described in this Plan. D. DISCHARGE OF THE DEBTORS. The rights afforded herein and the treatment of all Claims and Equity Interests herein shall be in exchange for and in complete satisfaction, discharge, and release of all Claims and Equity Interests of any nature whatsoever, including any interest accrued on such Claims from and after the Petition Date, against the Debtors, the Debtors in Possession, the Reorganized Debtors or any of their assets or properties, arising prior to the Effective Date. Except as otherwise expressly specified in the Plan, the Confirmation Order shall act as of the Effective Date as a discharge of all debts of, Claims against, liens on, and Equity Interests in the Debtors, their assets and properties, arising at any time before the entry of the Confirmation Order, regardless of whether a proof of Claim or Equity Interest with respect thereto was filed, whether the Claim or Equity Interest is Allowed, or whether the holder thereof votes to accept the Plan or is entitled to receive a distribution thereunder. Except as otherwise expressly specified in the Plan, after the Effective Date, any holder of such discharged Claim or Equity Interest shall be precluded from asserting against the Debtors, Reorganized Debtors, or any of their assets or properties, any other or further Claim or Equity Interest based on any document, instrument, act, omission, transaction, or other activity of any kind or nature that occurred before the entry of the Confirmation Order. E. INJUNCTION. Except as otherwise expressly provided in the Plan, the Confirmation Order, or a separate order of the Court, all entities who have held, hold, or may hold Claims against or Equity Interests in the Debtors which arose before or were held as of the Effective Date, are permanently enjoined, on and after the Effective Date, from (a) commencing or continuing in any manner any action or other proceeding of any kind against the Debtors, with respect to any such Claim or Equity Interest, (b) the enforcement, attachment, collection, or recovery by any manner or means of any judgment, award, decree, or order against the Debtors on account of any such Claim or Equity Interest, (c) creating, perfecting, or enforcing any encumbrance of any kind against the Debtors or against the property or interests in property of the Debtors on account of any such Claim or Equity Interest and (d) asserting any right of setoff, subrogation, or recoupment of any kind against any obligation due from the Debtors or against the property or interests in property of the Debtors on account of any such Claim or Equity Interest. Such injunction shall extend to successors of the Debtors (including, without limitation, the Reorganized Debtors) and their respective properties and interests in property. F. PRESERVATION/WAIVER OF CAUSES OF ACTION. 1. PRESERVATION OF RIGHTS. Pursuant to the Plan, and sections 544, 548, 549, 550, 551, 553 and 1123(b)(3)(B) of the Bankruptcy Code, the Debtors (and the Reorganized Debtors) shall retain all rights and all Causes of Action accruing to the Debtors, their estates, or the Reorganized Debtors, including, without limitation, (i) the avoidance of any transfer of an interest of the Debtors in property or any obligation incurred by the Debtors; PROVIDED, HOWEVER, that the Debtors waive any and all claims and Causes of Action related to payments made before the Petition Date on account of the Senior Notes or the Senior Subordinated Notes, or (ii) the turnover of any property to their estates, and except as expressly noted in the Plan or Confirmation Order, nothing contained in the Plan or the Confirmation Order shall be deemed to be a waiver or relinquishment of any such rights or Causes of Action. Nothing contained in the Plan or the Confirmation Order shall be deemed to be a waiver or relinquishment of any Claim, Cause of Action, right of setoff, or other legal or equitable defense which the Debtors had immediately prior to the Petition Date which is not specifically waived or relinquished by the Plan. The Reorganized Debtors shall have, retain, reserve and be entitled to assert all such Claims, Causes of Action, rights of setoff and other legal or equitable defenses which the Debtors had immediately prior to the Petition Date as fully as if the Chapter 11 Cases had not been commenced; and all of the Reorganized Debtors' legal and equitable rights respecting any Claim which is not specifically waived or relinquished by the Plan may be asserted after the Effective Date to the same extent as if the Chapter 11 Cases had not been commenced. G. VOTES SOLICITED IN GOOD FAITH. The Debtors have, and upon confirmation of the Plan shall be deemed to have, solicited acceptances of the Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code. The Debtors (and each of their affiliates, agents, directors, officers, employees, advisors, and attorneys) have participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code in the offer, issuance, sale, and purchase of the securities offered and sold under the Plan and therefore have not, and on account of such offer, issuance, sale, solicitation, and/or purchase will not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or the offer, issuance, sale, or purchase of the securities offered and sold under the Plan. H. ADMINISTRATIVE CLAIMS INCURRED AFTER THE CONFIRMATION DATE. Administrative Claims incurred by the Reorganized Debtors after the date and time of the entry of the Confirmation Order, including (without limitation) Claims for professionals' fees and expenses incurred after such date, shall not be subject to application and may be paid by the Reorganized Debtors in the ordinary course of business and without application for or Court approval. I. THE DEBTORS' RELEASE. On the Effective Date, the Debtors and the Reorganized Debtors, on behalf of themselves and their estates, shall be deemed to release unconditionally all of their respective officers, directors, employees, advisors, attorneys, financial advisors, accountants, and other professionals and each of the Indenture Trustees, counsel to each of the respective Indenture Trustees, the Creditors Committee members, counsel to the Creditors Committee, the Informal Committee members, counsel to the Informal Committee, financial advisors to the Creditors Committee and Informal Committee and each of their representatives and agents (including any professionals retained by such persons or entities) (the "RELEASED PARTIES") from any and all claims, obligations, suits, judgments, damages, rights, Causes of Action and liabilities whatsoever, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, based in whole or in part upon actions taken in their respective capacities described above or any omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Chapter 11 Cases or the Plan, except that (i) no individual shall be released from any act or omission that constitutes gross negligence or willful misconduct, and (ii) the Reorganized Debtors shall not relinquish or waive the right to assert any of the foregoing as a legal or equitable defense or right of set-off or recoupment against any Claims of any such persons asserted against the Debtors. J. EXCULPATION, RELEASE AND INJUNCTION OF RELEASED PARTIES. 1. EXCULPATION. The Debtors and the Reorganized Debtors and the Released Parties shall have no liability whatsoever to any holder or purported holder of an Administrative Claim, Claim, or Equity Interest for any act or omission in connection with, or arising out of, the Plan, the Disclosure Statement, the negotiation of the Plan, the negotiation of the other documents included in the Plan Supplement, the pursuit of approval of the Disclosure Statement or the solicitation of votes for confirmation of the Plan, the Chapter 11 Cases, the consummation of the Plan, the administration of the Plan or the property to be distributed under the Plan, or any transaction contemplated by the Plan or Disclosure Statement or in furtherance thereof (including, without limitation, the Equity Incentive Plan, employment contracts, programs and arrangements adopted in connection with the Plan or the Chapter 11 Cases), except for willful misconduct or gross negligence as determined by a Final Order, and, in all respects, shall be entitled to rely upon the advice of counsel with respect to their duties and responsibilities under the Plan. This exculpation shall be in addition to, and not in limitation of, all other releases, indemnities, exculpations and any other applicable law or rules protecting such Released Parties from liability. 2. INJUNCTION. Pursuant to section 105 of the Bankruptcy Code, no holder or purported holder of an Administrative Claim, Claim or Equity Interest shall be permitted to commence or continue any action, employment of process, or any act to collect, offset, or recover any claim against a Released Party that accrued on or prior to the Effective Date and has been released or waived pursuant to Section VIII.J.1. 3. LIMITATION OF GOVERNMENTAL RELEASES. Notwithstanding Sections VIII.J.1. and 2 of the Plan, the Plan shall not release, discharge, or exculpate any non-debtor party from any debt owed to the United States Government and/or its agencies, including the Pension Benefit Guaranty Corporation (the "GOVERNMENT"), or from any liability arising under the Internal Revenue Code, the Employee Retirement Income Security Act of 1974, as amended, or the environmental laws, securities laws or criminal laws of the United States. In addition, notwithstanding Sections VIII.J.1. and 2 of the Plan, the Plan shall not enjoin or prevent the Government from collecting any such liability from any such non-debtor party. K. TERM OF BANKRUPTCY INJUNCTION OR STAYS. All injunctions or stays provided for in the Chapter 11 Cases under sections 105 or 362 of the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date, shall remain in full force and effect until the Effective Date. L. PRESERVATION OF INSURANCE. The Debtors' discharge and release from all Claims as provided herein, except as necessary to be consistent with this Plan, shall not diminish or impair the enforceability of any insurance policy that may cover Claims against the Debtors, the Reorganized Debtors (including, without limitation, its officers and directors) or any other person or entity. M. OFFICERS' AND DIRECTORS' INDEMNIFICATION RIGHTS AND INSURANCE. Notwithstanding any other provisions of the Plan, the obligations of the Debtors to indemnify their directors, officers, and employees against any obligations, liabilities, costs or expenses pursuant to the articles of incorporation or by-laws of the Debtors, applicable state law, specific agreement, or any combination of the foregoing, shall survive the Effective Date. In addition, the Reorganized Debtors shall obtain tail coverage under their existing directors and officers liability insurance policy covering their existing directors and officers for any and all Claims brought against them, which coverage shall extend for a period of not less than six (6) years after the Effective Date, subject to the reasonable approval of price and terms thereof by Satellite Fund Management, LLC, DDJ Capital Management LLC and Loomis Sayles & Company LP. IX. RETENTION OF JURISDICTION The Court shall have exclusive jurisdiction of all matters arising out of, and related to, the Chapter 11 Cases and the Plan pursuant to, and for the purposes of, section 105(a) and section 1142 of the Bankruptcy Code and for, among other things, the following purposes: (1) to hear and determine applications for the assumption or rejection of executory contracts or unexpired leases pending on the Confirmation Date, and the allowance of Claims resulting therefrom; (2) to determine any other applications, adversary proceedings, and contested matters pending on the Effective Date; (3) to ensure that distributions to holders of Allowed Claims and Allowed Equity Interests are accomplished as provided herein; (4) to resolve disputes as to the ownership of any Claim or Equity Interest; (5) to hear and determine timely objections to Administrative Claims, Claims and Equity Interests; (6) to enter and implement such orders as may be appropriate in the event the Confirmation Order is for any reason stayed, revoked, modified or vacated; (7) to issue such orders in aid of execution of the Plan, to the extent authorized by section 1142 of the Bankruptcy Code; (8) to consider any modifications of the Plan, to cure any defect or omission, or to reconcile any inconsistency in any order of the Court, including, without limitation, the Confirmation Order; (9) to hear and determine all applications for compensation and reimbursement of expenses of professionals under sections 330, 331, and 503(b) of the Bankruptcy Code; (10) to hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of the Plan; (11) to hear and determine any issue for which the Plan requires a Final Order of the Court; (12) to hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505 and 1146 of the Bankruptcy Code; (13) to hear any other matter not inconsistent with the Bankruptcy Code; (14) to hear and determine disputes arising in connection with compensation and reimbursement of expenses of professionals for services rendered during the period commencing on the Confirmation Date through and including the Effective Date; and (15) to enter a final decree closing the Chapter 11 Cases. X. MISCELLANEOUS PROVISIONS A. PAYMENT OF STATUTORY FEES. All fees payable on or before the Effective Date (i) pursuant to section 1930 of title 28 of the United States Code, as determined by the Court at the Confirmation Hearing, and (ii) to the United States Trustee, shall be paid by the Debtors on or before the Effective Date and all such fees payable after the Effective Date shall be paid by the Reorganized Debtors. B. DISSOLUTION OF CREDITORS COMMITTEE. The appointment of the Creditors Committee shall terminate on the Effective Date except that it shall survive for the limited purposes of reviewing applications for final allowance of compensation and reimbursement of expenses of professionals and with respect to any appeal of the Confirmation Order. C. MODIFICATION OF THE PLAN. The Debtors reserve the right, in accordance with the Bankruptcy Code, to amend or to modify the Plan prior to the entry of the Confirmation Order. After entry of the Confirmation Order, the Reorganized Debtors or the Debtors may amend or modify the Plan, or remedy any defect or omission or reconcile any inconsistency in the Plan in such a manner as may be necessary to carry out the purpose and intent of the Plan. Any material modifications to the Plan shall be subject to the Creditors Committee's consent. D. GOVERNING LAW. Unless a rule of law or procedure is supplied by Federal law (including the Bankruptcy Code and Bankruptcy Rules) or the Delaware General Corporation Law or such other corporate law that may apply to the Subsidiaries, the laws of the State of New York (without reference to the conflicts of laws provisions thereof) shall govern the construction and implementation of the Plan and any agreements, documents, and instruments executed in connection with the Plan. E. FILING OR EXECUTION OF ADDITIONAL DOCUMENTS. On or before the Effective Date, the Debtors or the Reorganized Debtors, shall file with the Court or execute, as appropriate, such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan. F. WITHHOLDING AND REPORTING REQUIREMENTS. In connection with the Plan and all instruments issued in connection therewith and distributions thereon, the Reorganized Debtors shall comply with all withholding and reporting requirements imposed by any federal, state, local, or foreign taxing authority and all distributions hereunder shall be subject to any such withholding and reporting requirements. G. EXEMPTION FROM TRANSFER TAXES. Pursuant to section 1146(c) of the Bankruptcy Code, the issuance, transfer or exchange of New Senior Notes, New Common Stock or New Warrants under the Plan, the making or assignment of any lease or sublease or the making or delivery of any other instrument whatsoever, in furtherance of or in connection with the Plan shall not be subject to any stamp, real estate transfer, recording or other similar tax. H. SECTION 1145 EXEMPTION. Pursuant to, in accordance with, and solely to the extent provided under section 1145 of the Bankruptcy Code, the issuance of the New Senior Notes, New Common Stock and New Warrants under the Plan is exempt from the registration requirements of Section 5 of the Securities Act, as amended, and any State or local law requiring registration for offer or sale of a security or registration or licensing of an issuer of, underwriter of, or broker or dealer in such New Senior Notes, New Common Stock or New Warrants and is deemed to be a public offering of New Senior Notes, New Common Stock and New Warrants. I. WAIVER OF FEDERAL RULE OF CIVIL PROCEDURE 62(A). The Debtors may request that the Confirmation Order include (a) a finding that Fed. R. Civ. P. 62(a) shall not apply to the Confirmation Order and (b) authorization for the Debtors to consummate the Plan immediately after entry of the Confirmation Order. J. HEADINGS. Headings used in the Plan are for convenience and reference only and shall not constitute a part of the Plan for any purpose. K. EXHIBITS/SCHEDULES. All Exhibits and Schedules to the Plan are incorporated into and constitute a part of the Plan as if set forth herein. L. NOTICES. All notices, requests, and demands hereunder to be effective shall be in writing and unless otherwise expressly provided herein, shall be deemed to have been duly given or made when actually delivered or, in the case of notice by facsimile transmission, when received and telephonically confirmed, addressed as follows: TO THE DEBTORS: The Penn Traffic Company, 411 Theodore Fremd Avenue, Attention: Martin A. Fox, with a copy to Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York, New York 10019-6064, attention: Alan W. Kornberg, Tel.: (212) 373-3000/Fax: (212) 757-3990. TO THE CREDITORS COMMITTEE: Akin, Gump, Strauss, Hauer & Feld, L.L.P., 590 Madison Avenue, New York, New York 10022, attention: Daniel H. Golden, Tel.: (212) 872-8010/Fax: (212) 872-1002. M. PLAN SUPPLEMENT. Forms of the documents relating to the Amended Penn Traffic Certificate of Incorporation, the Amended Penn Traffic Bylaws, the Amended Subsidiaries Certificates of Incorporation, the Amended Subsidiaries By-Laws, the New Notes Indenture, the Warrant Agreement, the Registration Rights Agreement, New Management Agreement, investment guidelines referred to in Section VII.C.2.(a)(ii), the Supplemental Retirement Plan, the Amendment to Joseph V. Fisher's Employment Agreement and Equity Incentive Plan shall be contained in the Plan Supplement which has been filed with the Clerk of the Court. The Plan Supplement may be inspected in the office of the Clerk of the Court during normal court hours. Holders of Claims or Equity Interests may obtain a copy of the Plan Supplement upon written request to the Debtors in accordance with Section X.L. of the Plan. N. CONFLICT. The terms of this Plan shall govern in the event of any inconsistency with the summaries of the Plan set forth in the Disclosure Statement. O. SETOFF BY THE UNITED STATES. The valid setoff rights, if any, of the United States of America will be unaffected by this Plan or confirmation thereof. XI. EXECUTORY CONTRACTS AND UNEXPIRED LEASES Other than (i) executory contacts or unexpired leases which (x) are the subject of a motion to reject pending on the Confirmation Date, (y) were previously assumed or rejected by the Debtors, or (z) have expired or terminated pursuant to their own terms during the pendency of the Chapter 11 Cases, (ii) employment agreements, if any, terminated prior to or in connection with the Plan, and (iii) Pension Plans, which are specifically dealt with in Article XII of the Plan, all of the executory contracts, unexpired leases and employment agreements that exist between the Debtors and any person are specifically assumed as of the Effective Date pursuant to the Plan. All Claims for damages arising from the rejection of executory contracts or unexpired leases must be filed with the Court in accordance with the terms of the order authorizing such rejection. Any Claims not filed within such time will be forever barred from assertion against the Debtors, their estates and the Reorganized Debtors. All Allowed Claims arising from the rejection of executory contracts or unexpired leases shall be treated as Class 5 Claims. The Reorganized Debtors, except as otherwise agreed by the parties, will cure any and all undisputed defaults within 60 days of the Effective Date under any executory contract, unexpired lease or employment agreement assumed pursuant to the Plan in accordance with section 365 of the Bankruptcy Code. All disputed defaults that are required to be cured shall be cured either within 30 days of the entry of a Final Order determining the amount, if any, of the Debtors or the Reorganized Debtors' liability with respect thereto, or as may otherwise be agreed to by the parties. XII. BENEFIT PLANS All employment and severance agreements and policies, and all employee compensation and benefit plans, policies, and programs of the Debtors applicable generally to its employees, including agreements and programs subject to section 1114 of the Bankruptcy Code, as in effect on the Effective Date, including, without limitation, all savings plans, retirement plans, health care plans, disability plans, severance benefit plans, incentive plans, and life, accidental death, and dismemberment insurance plans, but not including the Pension Plans, shall be deemed to be, and shall be treated as though they are, executory contracts that are assumed under the Plan, and the Debtors' obligations under such agreements and programs shall survive the Effective Date of the Plan, without prejudice to the Reorganized Debtors' rights under applicable non-bankruptcy law to modify, amend, or terminate the foregoing arrangements, except for (i) such executory contracts or plans specifically rejected pursuant to the Plan (to the extent such rejection does not violate section 1114 of the Bankruptcy Code) and (ii) such executory contracts or plans as have previously been terminated, or rejected, pursuant to a Final Order, or specifically waived by the beneficiaries of such plans, contracts, or programs. Debtors affirm and agree that they are and will, immediately following the Effective Date, continue to be the contributing sponsors of the Pension Plans which are defined benefit pension plans insured by the Pension Benefit Guaranty Corporation (the "PBGC") under Title IV of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. Sections 1301-1461; that the Pension Plans are subject to minimum funding requirements of ERISA and Section 412 of the Internal Revenue Code; that no provision of the Plan, the Confirmation Order, or Section 1141 of the Bankruptcy Code, shall, or shall be construed to, discharge, release, or relieve the Debtors or any other party, in any capacity, from any liability with respect to the Pension Plans under ERISA or under Internal Revenue Code Section 412; and that neither the PBGC nor the Pension Plans shall be enjoined from enforcing such liability as a result of the Plan's provisions for satisfaction, release and discharge of claims. XIII. EFFECTIVENESS OF THE PLAN A. CONFIRMATION OF THE PLAN. The Plan can be confirmed either under section 1129(a) of the Bankruptcy Code or in a non-consensual manner under section 1129(b) of the Bankruptcy Code so long as the conditions of Section XIII.B.1. have been satisfied or waived pursuant to Section XIII.B.2. B. EFFECTIVENESS OF THE PLAN. 1. CONDITIONS PRECEDENT TO EFFECTIVENESS The Plan shall not become effective unless and until it has been confirmed and the following conditions have been satisfied in full or waived pursuant to Section XIII.B.2.: (1) the Confirmation Order in a form satisfactory to the Debtors and the Creditors Committee shall have become a Final Order; (2) the Effective Date shall have occurred within six months following the Petition Date; (3) the Amended Penn Traffic Certificate of Incorporation and Amended Subsidiaries Certificates of Incorporation shall have been properly filed with the Secretary of State in their respective state of incorporation; (4) all authorizations, consents and regulatory approvals required (if any) for the Plan's effectiveness shall have been obtained; (5) the Court shall have ordered the substantive consolidation of the Chapter 11 Cases as provided in Section VI of the Plan; (6) the aggregate amount of Class 5 Claims does not exceed $50 million; and (7) on the Effective Date, the Reorganized Debtors have entered into a senior secured credit facility of not less than $275 million consisting of a term loan and a revolving working capital facility that will have not less than $50 million of undrawn availability thereunder in form acceptable to Satellite Fund Management, LLC, DDJ Capital Management, LLC and Loomis Sayles & Company, LP. 2. WAIVER OF CONDITIONS The Debtors may waive any or all of the conditions set forth in Section XIII.B.1. above at any time, with the prior consent of the Creditors Committee, without leave of or order of the Court and without any formal action. 3. EFFECT OF FAILURE OF CONDITIONS In the event that the Effective Date does not occur on or before one hundred and twenty (120) days after the Confirmation Date, upon notification submitted by the Debtors to the Court: (a) the Confirmation Order shall be vacated, (b) no distributions under the Plan shall be made, (c) the Debtors and all holders of Claims and Equity Interests shall be restored to the STATUS QUO ANTE as of the day immediately preceding the Confirmation Date as though the Confirmation Date had never occurred, and (d) the Debtors' obligations with respect to the Claims and Equity Interests shall remain unchanged and nothing contained in the Plan shall constitute or be deemed a waiver or release of any Claims or Equity Interests by or against the Debtors or any other person or to prejudice in any manner the rights of the Debtors or any person in any further proceedings involving the Debtors. 4. VACATUR OF CONFIRMATION ORDER If an order denying confirmation of the Plan is entered, then the Plan shall be null and void in all respects, and nothing contained in the Plan shall (a) constitute a waiver or release of any Claims against or Equity Interests in the Debtors; (b) prejudice in any manner the rights of the holder of any Claim against, or Equity Interest in, the Debtors; (c) prejudice in any manner any right, remedy or claim of the Debtors; or (d) be deemed an admission against interest by the Debtors. Dated: April 2, 1999, as amended, May 25, 1999 THE PENN TRAFFIC COMPANY By: --------------------------------- Name: Martin A. Fox Title: Vice Chairman-Finance DAIRY DELL, INC. By: --------------------------------- Name: Martin A. Fox Title: Vice President BIG M SUPERMARKETS, INC. By: --------------------------------- Name: Martin A. Fox Title: Vice President PENNY CURTISS BAKING COMPANY, INC. By: --------------------------------- Name: Martin A. Fox Title: Vice President TABLE OF CONTENTS
PAGE ---- I. DEFINITIONS AND CONSTRUCTION OF TERMS..............................................................1 A. Definitions...................................................................................1 B. Interpretation, Application of Definitions and Rules of Construction.................................................................................15 II. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS.....................................................15 A. Introduction.................................................................................15 1. Unclassified Claims (not entitled to vote on the Plan)...................................16 2. Unimpaired Classes Of Claims (deemed to have accepted the Plan and, therefore, not entitled to vote on the Plan)........................................16 3. Impaired Classes of Claims and Equity Interests (entitled to vote on the Plan)................................................................................16 III. TREATMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS............................................................17 A. Administrative Claims. ......................................................................17 B. Professional Compensation And Reimbursement Claims...........................................17 C. Fees and Expenses of the Informal Committee and Informal Trade Committee....................................................................................18 D. Priority Tax Claims..........................................................................18 IV. TREATMENT OF CLAIMS AND EQUITY INTERESTS..........................................................18 A. Class 1 - Other Priority Claims..............................................................18 1. Distributions............................................................................18 2. Impairment and Voting....................................................................19 B. Class 2 - Other Secured Claims...............................................................19 1. Distributions............................................................................19 2. Impairment and Voting....................................................................19 C. Class 3 - DIP Financing Claims...............................................................19 D. Class 4 - Trade Claims.......................................................................20 1. Distributions............................................................................20 2. Impairment and Voting....................................................................20 E. Class 5 - General Unsecured Claims...........................................................20 1. Distributions............................................................................20 2. Impairment and Voting....................................................................20 F. Class 6 - Senior Note Claims.................................................................20 1. Distributions............................................................................20 2. Impairment and Voting....................................................................21 3. Allowance................................................................................21 G. Class 7 - Senior Subordinated Note Claims....................................................21 1. Distributions............................................................................21
2. Impairment and Voting....................................................................22 3. Allowance................................................................................22 H. Class 8 - Equity Interests...................................................................22 1. Distributions............................................................................22 2. Impairment and Voting....................................................................22 V. PROVISIONS REGARDING CORPORATE GOVERNANCE AND MANAGEMENT OF THE REORGANIZED DEBTORS.............................................................23 A. Directors and Officers of Reorganized Penn Traffic; Amended Certificate of Incorporation and Amended By-Laws.............................................23 1. The Initial Board of Directors...........................................................23 2. Management of Reorganized Penn Traffic...................................................23 3. Amended Penn Traffic Certificate of Incorporation and Amended Penn Traffic By-Laws.....................................................................24 4. New Management Agreement.................................................................24 B. Directors and Officers of the Reorganized Subsidiaries.......................................25 1. The Initial Board of Directors...........................................................25 2. Management of the Reorganized Subsidiaries...............................................25 3. Amended Subsidiaries Certificates of Incorporation and Amended Subsidiaries By-Laws.....................................................................25 C. Securities to Be Issued Pursuant to the Plan.................................................25 1. New Common Stock.........................................................................25 2. New Senior Notes.........................................................................26 3. The New Warrants.........................................................................26 D. Securities Laws Matters......................................................................26 E. Reorganized Penn Traffic Equity Incentive Plan...............................................26 VI. SUBSTANTIVE CONSOLIDATION OF THE DEBTORS..........................................................27 VII. PROVISIONS REGARDING VOTING AND DISTRIBUTIONS UNDER THE PLAN AND TREATMENT OF DISPUTED, CONTINGENT AND UNLIQUIDATED ADMINISTRATIVE CLAIMS, CLAIMS AND EQUITY INTERESTS..................................................................................27 A. Voting of Claims and Equity Interests........................................................27 B. Nonconsensual Confirmation...................................................................27 C. Distributions................................................................................28 1. Method of Distributions Under the Plan...................................................28 2. Disputed Trade Claims and General Unsecured Claims.......................................30 (a) Distributions Withheld For Disputed Trade Claims.....................................30 (b) Distributions Withheld for Disputed General Unsecured Claims..........................................................................30 3. Objections To And Resolution Of Administrative Claims, Claims and Equity Interests; Administrative and Priority Claims Reserve.........................31 4. Allocation of Consideration..............................................................32 5. Cancellation and Surrender of Existing Securities and Agreements.........................32 6. Indenture Trustee Fees...................................................................33
VIII. IMPLEMENTATION AND EFFECT OF CONFIRMATION OF THIS PLAN.........................................................................................34 A. Registration Rights Agreement, New Notes Indenture, the Amended Penn Traffic Certificate of Incorporation, the Amended Penn Traffic By-Laws, the Amended Subsidiaries Certificates of Incorporation, the Amended Subsidiaries By-Laws, the New Management Agreement, the Equity Incentive Plan, the Warrant Agreement, the Supplemental Retirement Plan, the Amendment to Joseph V. Fisher's Employment Agreement and Other Implementation Documents.................................................34 B. Continued Corporate Existence and Vesting of Assets in Reorganized Debtors......................................................................................34 C. Termination of Subordination Rights..........................................................35 D. Discharge of the Debtors.....................................................................35 E. Injunction...................................................................................35 F. Preservation/Waiver of Causes of Action......................................................36 1. Preservation of Rights...................................................................36 G. Votes Solicited in Good Faith................................................................36 H. Administrative Claims Incurred after the Confirmation Date...................................37 I. The Debtors' Release.........................................................................37 J. Exculpation, Release and Injunction of Released Parties......................................37 1. Exculpation..............................................................................37 2. Injunction...............................................................................38 3. Limitation of Governmental Releases......................................................38 K. Term of Bankruptcy Injunction or Stays.......................................................38 L. Preservation of Insurance....................................................................38 M. Officers' and Directors' Indemnification Rights and Insurance................................39 IX. RETENTION OF JURISDICTION.........................................................................39 X. MISCELLANEOUS PROVISIONS..........................................................................40 A. Payment of Statutory Fees....................................................................40 B. Dissolution of Creditors Committee...........................................................40 C. Modification of the Plan.....................................................................40 D. Governing Law................................................................................40 E. Filing or Execution of Additional Documents..................................................41 F. Withholding and Reporting Requirements.......................................................41 G. Exemption From Transfer Taxes................................................................41 H. Section 1145 Exemption.......................................................................41 I. Waiver of Federal Rule of Civil Procedure 62(a)..............................................41 J. Headings.....................................................................................41 K. Exhibits/Schedules...........................................................................42 L. Notices......................................................................................42 M. Plan Supplement..............................................................................42 N. Conflict.....................................................................................42 O. Setoff by the United States..................................................................42 XI. EXECUTORY CONTRACTS AND UNEXPIRED LEASES..........................................................43
XII. BENEFIT PLANS.....................................................................................43 XIII. EFFECTIVENESS OF THE PLAN.........................................................................44 A. Confirmation of the Plan.....................................................................44 B. Effectiveness of the Plan....................................................................44 1. Conditions Precedent to Effectiveness....................................................44 2. Waiver of Conditions.....................................................................45 3. Effect of Failure of Conditions..........................................................45 4. Vacatur of Confirmation Order............................................................46
EXHIBITS TO THE PLAN A - Summary of New Senior Notes B - Summary of New Warrants C - Summary of New Management Agreement D - Summary of Equity Incentive Plan EX-99.1 3 EX-99.1 Exhibit 99.1 Immediate Release: Contact: Marc Jampole Jampole Communications, Inc. 412-471-2463 PENN TRAFFIC ANNOUNCES CONFIRMATION OF PRE-NEGOTIATED FINANCIAL RESTRUCTURING SYRACUSE, NEW YORK, MAY 27, 1999 --- The Penn Traffic Company (OTC: PNFT) today announced that the U.S. Bankruptcy Court for the District of Delaware confirmed its Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code. Penn Traffic expects that its Plan of Reorganization will be effective in approximately two weeks. "The Company has successfully completed its financial restructuring," said Gary D. Hirsch, Chairman of Penn Traffic. "We now look forward to continuing the process of rebuilding our franchise and profitability. This has certainly been a challenging time for our Company. We have come through this process very well with the cooperation of all parties and the efforts of our employees." "The creditors are pleased with the rapid confirmation of the restructuring plan and look forward to the future success of the Company," said Jeffrey Werbalowsky, Senior Managing Director, Houlihan, Lokey, Howard & Zukin Capital, financial advisor to the Official Committee of Unsecured Creditors. "Our employees continue to dedicate themselves to improving our business and serving our customers," said Joseph V. Fisher, President and Chief Executive Officer of Penn Traffic. "We now have a great opportunity to attract more customers to our stores and rebuild our market share. It's an exciting time at Penn Traffic." Penn Traffic filed its petition for relief under Chapter 11 on March 1, 1999, seeking to implement a pre-negotiated financial restructuring with the holders of its senior and subordinated notes. (more) The Penn Traffic Company Page 2 The restructuring will cancel Penn Traffic's existing $1.13 billion of senior and subordinated notes and (i) distribute $100 million of new senior notes and 19,000,000 shares of new common stock to the holders of existing senior notes and (ii) distribute 1,000,000 shares of new common stock and six-year warrants to purchase 1,000,000 shares of new common stock having an exercise price of $18.30 per share to the holders of the existing senior subordinated notes. In addition, each 100 shares of Penn Traffic's common stock outstanding immediately prior to the restructuring will be converted into one share of new common stock for a total of approximately 107,000 shares of additional new common stock. Penn Traffic also announced it expects to enter into a new $340 million secured credit facility with a bank group led by Fleet Capital Corporation as agent. Proceeds from the new facility will be used to satisfy the Company's obligations under its debtor-in-possession facility and for its ongoing working capital and capital expenditure requirements. The credit facility is initially expected to have more than $100 million in unused borrowing capacity. "Our new capital structure will enable us to launch an aggressive store and infrastructure capital program," said Mr. Hirsch. "We expect over the next 18 months to make capital expenditures of approximately $100 million for new, enlarged and remodeled stores and for other investments. With our dramatically reduced debt burden, we expect to be able to implement this program while maintaining substantial financial flexibility and liquidity." Certain statements included above which are not statements of historical fact are intended to be, and are hereby identified as, "forward-looking statements" as defined in the Securities Exchange Act of 1934, as amended, and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, the success or failure of the Company in implementing its current business and operational strategies; the ability of the Company to consummate its Chapter 11 Plan and close the new secured credit facility described above; and availability and terms of necessary or desirable financing or refinancing. ******************************************************************************** The Penn Traffic Company operates 214 supermarkets in Pennsylvania, upstate New York, Ohio and West Virginia under the "Big Bear," "Big Bear Plus," "Bi-Lo Foods," "P&C Foods," and "Quality Markets" trade names. Penn Traffic also operates wholesale food distribution businesses serving 93 licensed franchises and 77 independent operators. -----END PRIVACY-ENHANCED MESSAGE-----