EXHIBIT 99.1
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December 12, 2006
Xx. Xxxxxx Xxxxxxx
Co-Chief Operating Officer
The Penn Traffic Company
X.X. Xxx 0000 Xxxxxxxx, XX 00000
Dear Xxx:
On behalf of The Penn Traffic Company Board of Directors, it is my pleasure to
offer you the position of Chief Executive Officer and President reporting
directly to the Board. Your employment in this capacity will begin immediately.
While this letter is not a contractual agreement, it does contain the major
elements of our offer to you.
1. SALARY: Your starting salary will be $500,000 per year with a
performance and salary review within the first six months of
employment in this role.
2. SIGN-ON BONUS: That bonus which was defined in your offer letter of
October 2, 2006 shall remain in force with payments on or about
January 4, 2007 and April 4, 2007.
3. MANAGEMENT PERFORMANCE INCENTIVE PROGRAM (BONUS): 75% of your base
salary at 100% of Plan and increasing to twice (150%) that amount
for exceeding Plan.
4. RELOCATION PLAN: That plan offered to you as part of our offer of
employment on October 2, 2006 shall remain in force.
5. BENEFITS: Xxxx benefits for which you are currently eligible shall
remain in place.
These include:
Medical, Dental, Vision and Prescription Drug
Coverage Term Life Insurance (company paid)
Supplemental Life Insurance
Short-Term Disability
Long Term Disability
6. VACATION: Four weeks paid vacation each year.
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Xxxxxx Xxxxxxx
December 12, 2006
7. 401(K)PLAN: Effective after 6 months of employment. Subject to the
limits required by law and the Plan; (a) may defer from 1-25% of
salary, taxed deferred; (b) Company to match 50% of the first 3% of
employee deferral after 1 year of employment. In addition, Company
to contribute 3% of your earned total compensation after 1 year of
service and 1000 hours and must be on payroll on the last day of the
year.
8. PENN TRAFFIC HOLIDAYS: As per Company Plan, currently six (6) per
year.
9. 5% EMPLOYEE DISCOUNT
10. SEVERANCE PLAN: 52 weeks of Severance
11. CHANGE IN CONTROL: See attached document.
12. EQUITY: You will participate in the Company plan and receive stock
commensurate with your position at the time the plan is executed for
the management team. Additionally, you will receive 100,000 Shares
of Phantom Stock based on the Stock Price on the day you formally
accept the Board of Directors offer of this position (e.g. if the
100,000 Shares are trading at $15.00 on the effective date and
increase to $20.00 per share on May 1, 2009, the Company would pay
you $500,000 ($5.00 per share x 100,000 shares).
13. BOARD OF DIRECTORS: a seat on the Board of Directors is included in
this offer.
It is important to reiterate that this letter is an offer of employment and in
no way should be construed to be an employment contract for a definite term.
Employment at The Penn Traffic Company is at will, subject to termination by
the Company or you at any time.
Xxx, we look forward to working with you in your new capacity. If you have any
questions regarding this offer or the position, please contact me directly.
Sincerely,
/s/ Xxxx Xxxxx
Xxxx Xxxxx
Chairman, Compensation Committee
Member, Board of Directors
The Penn Traffic Company
Enclosure: Change in Control Agreement
Cc: Xxxxxx Xxxxx, Chairman, Board of Directors
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Xxxxxx Xxxxxxx
December 12, 2006
As agreement with the terms of this letter, please sign one copy of this letter
and retain a second copy for your files. Please return the original to my
attention________________________, 2006,
I, Xxxxxx Xxxxxxx, accept this offer of employment on this 12th date of
December 2006.
/s/ Xxxxxx Xxxxxxx
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(Signature)
