SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Year Ended December 31, 2000
(A) Full title of the plan and the address
of the plan, if different from that of
the issuer named below:
The Penn Traffic Company
401(k) Savings Plan
(B) Name of issuer of the securities held
pursuant to the plan and the address
of its principal executive office:
The Penn Traffic Company
1200 State Fair Boulevard
Syracuse, NY 13209
THE PENN TRAFFIC COMPANY
401(k) SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
THE PENN TRAFFIC COMPANY
401(k) SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
PAGE
Report of Independent Accountants ..................................... 1
Financial Statements:
Statements of Net Assets Available for Benefits,
December 31, 2000 and 1999 ....................................... 2
Statements of Changes in Net Assets Available for Benefits,
Years Ended December 31, 2000 and 1999 ........................... 3
Notes to Financial Statements ...................................... 4-8
Supplemental Schedules:
Schedule I - Schedule of Assets Held for Investment Purposes at
December 31, 2000 (Schedule H, Part IV, Item (i)) .. 9
Schedule II - Schedule of Reportable Transactions
for the Year Ended December 31, 2000 (Schedule H,
Part IV, Item (j)).................................. 10
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator
of The Penn Traffic Company
401(k) Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of The Penn Traffic Company 401(k) Savings Plan (the "Plan") at December 31,
2000 and 1999, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility
of the Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets
Held for Investment at December 31, 2000 and Reportable Transactions for the
year ended December 31, 2000 are presented for purposes of additional
analysis and are not a required part of the basic financial statements but
are supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of
the Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
May 11, 2001
1
THE PENN TRAFFIC COMPANY
401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2000 AND 1999
- -------------------------------------------------------------------------------
2000 1999
Assets:
Investments, at fair value:
Cash and cash equivalents $ -- $ 7,657,376
Fixed income funds 29,090,849 23,383,894
Equity funds 75,673,882 62,201,866
Balanced funds 11,659,244 9,420,743
Penn Traffic common stock 6,841 15,873
Participant loans 5,291,598 5,326,382
------------ ------------
Total investments 121,722,414 108,006,134
------------ ------------
Receivables:
Accrued income -- 8,055,522
Employee contributions 379,047 176,675
Employer contributions 56,084 20,917
------------ ------------
Total receivables 435,131 8,253,114
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $122,157,545 $116,259,248
============ ============
The accompanying notes are an integral part of the financial statements.
2
THE PENN TRAFFIC COMPANY
401(k) SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
2000 1999
Additions to net assets:
Investment income:
Interest and dividends $ 7,095,480 $ 7,045,716
Realized gain on investments 5,747,199 10,650,627
Net depreciation in fair value of investments (4,602,713) (582,929)
Interest on loans to participants 209,366 443,289
------------- -------------
Total investment income 8,449,332 17,556,703
Participant contributions 6,084,894 9,773,607
Employer contributions 613,875 1,112,149
------------- -------------
Total additions 15,148,101 28,442,459
------------- -------------
Deductions from net assets:
Payments to participants (8,986,293) (17,123,095)
Payment of individual insurance contract premiums (22,362) (42,263)
Administrative expenses (241,149) (220,013)
------------- -------------
Total deductions (9,249,804) (17,385,371)
------------- -------------
Increase in net assets 5,898,297 11,057,088
Net assets available for plan benefits:
Beginning of year 116,259,248 105,202,160
------------- -------------
End of Year $ 122,157,545 $ 116,259,248
============= =============
The accompanying notes are an integral part of the financial statements.
3
THE PENN TRAFFIC COMPANY
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following brief description of The Penn Traffic Company 401(k) Savings
Plan (the "Plan") sponsored by The Penn Traffic Company (the "Company") is
provided for general information purposes only. Participants should refer
to the Plan agreement, as amended, for a more complete description of the
Plan's provisions.
GENERAL
The Plan is a defined contribution plan established by the Company on May
29, 1987. The Plan is designed to provide benefits to all Company employees
who have attained age twenty-one and have completed at least six months of
service. Effective January 1, 1999, the length of service requirement was
amended from one year to six months. As part of the Plan, the Company
entered into a trust agreement with the US Bancorp Trust Company (the
"Bank"), under which the Bank, as trustee, transfers contributions to a
separate trust fund in the Bank's trust department. The assets of the Plan
are held by the Bank's trust department in a fiduciary capacity and as such
are not assets of the Bank. Effective July 2000, the assets of the Plan
were transferred to Fidelity Investments Institutional Operations Company,
Inc., trustee and recordkeeper, pursuant to the terms of the agreement
between the Penn Traffic Company 401(k) Savings Plan and Fidelity
Management Trust Company.
CONTRIBUTIONS
Through automatic payroll deduction, employees in the Plan ("participants")
may contribute from 1% to 15% of eligible pay on a pre-tax basis, up to the
annual IRS dollar limit as specified in writing and may change such
election at any time. The Company makes matching contributions to each
participant account equal to 50% of the first 3% of the participant's
contribution. Participant's are 100% vested in both the Company's matching
contributions and their contributions to the Plan.
INVESTMENTS
Effective July 2000, the assets of the Plan were transferred from US
Bancorp to Fidelity Investments. Participants have several options to which
they can direct their contributions.
INVESTMENT OPTIONS PRIOR TO JULY 1, 2000
Stable Fund - consists of a mix of guaranteed investment contracts and
three actively managed mutual funds.
MAS Equity Fund - The fund invests primarily in stocks of large blue chip
companies with similar financial characteristics and above average
dividend yields.
Acorn Fund - The fund invests in stocks of small companies and is
aggressively managed with a higher degree of risk.
Delaware Fund - The fund invests in stocks, bonds and money market
instruments.
The Penn Traffic Common Stock Fund - The fund is no longer offered as an
investment option consists of common stock of the Company.
4
THE PENN TRAFFIC COMPANY
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENTS (CONTINUED)
INVESTMENT OPTIONS SUBSEQUENT TO JULY 1, 2000
Morely Capital Management Fund - The fund invests in investment contracts
offered by major insurance companies and other approved financial
institutions and in certain types of fixed income securities. A small
portion of the fund is invested in a money market fund to provide daily
liquidity.
Fidelity Fund - The fund invests primarily in common stocks. The fund
potentially invests a portion of its assets in bonds, including lower
quality debt securities. Invests in domestic and foreign issuers.
Fidelity Puritan Fund - The fund invests approximately 60% of assets
in stocks and other equity securities and the remainder in bonds and other
debt securities, including lower quality debt securities.
Fidelity Growth Company Fund - This fund normally invests in common
stocks. The fund invests in companies that it believes have above average
growth potential.
Fidelity Diversified International Fund - The fund normally invests in at
least 65% of total assets in foreign securities. The fund normally invests
primarily in common stock.
Fidelity Mid-Cap Stock Fund - The fund normally invests at lest 65% of
total assets in common stocks of companies with medium market
capitalizations.
Fidelity Freedom Funds - These funds are asset allocation mutual funds
that invest in a combination of Fidelity equity, fixed income, and
money market funds.
Spartan U.S. Equity Index Fund - This fund normally invests at least 80%
of assets in common stocks included in the S&P 500, which basically
represents the performance of common stocks publicly traded in the United
States.
A life insurance plan which allows employees to elect to purchase life
insurance for themselves and their spouses and children is still effective
for those employees purchasing such insurance before January 1, 1989 (see
Note 3).
PARTICIPANT LOANS
Participants may, upon application to the plan administrator, obtain loans
of not less than $1,000 but not more than the lesser of $50,000 or 50% of
the participant's individual investment account balance. The period of
repayment may not exceed 30 years for home loans or 5 years for all other
loans.
VESTING
Participants are immediately vested in their contributions to the Plan as
well as any Company matching contributions.
5
THE PENN TRAFFIC COMPANY
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN (CONTINUED)
BENEFIT PAYMENTS
Each participant is entitled to a benefit equal to 100% of the
participant's vested accrued benefit as of the valuation date upon normal
retirement or termination of employment from the Company. In the event of
the participant's death, benefits are distributed to a designated
beneficiary. Distributions of the Penn Traffic Company common stock are
made in either whole shares of the Company's common stock or in cash as
specified by the participant. A participant attaining the age of 59 1/2 has
the right to withdraw all or a portion of their Plan assets. Benefits are
recorded when paid.
INVESTMENT INCOME
Net investment fund income is allocated quarterly to each participant's
investment account in the ratio of their individual investment account to
the investment fund in total.
RECLASSIFICATIONS
Certain amounts from 1999 have been reclassified for comparative purposes.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared on the accrual basis of
accounting.
VALUATION OF INVESTMENTS
Interest and dividend income are recognized as earned and expenses are
recognized when the related obligation is incurred. Unrealized appreciation
or depreciation, and realized gains and losses, for the year are reflected
in the statement of changes in net assets available for benefits.
Investments, excluding guaranteed investment contracts in 1999 which are
recorded at cost.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts revenues and expenses during the reporting period. Actual results
could differ from those estimates.
6
THE PENN TRAFFIC COMPANY
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
funds. Investment securities are exposed to various risks, such as interest
rate, market and credit. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in
the value of investment securities, it is at least reasonably possible that
changes in risks in the near term would materially affect participants'
account balances and the amounts reported in the statement of net assets
available for benefits and the statement of changes in net assets available
for benefits.
ADMINISTRATIVE COSTS
Expenses incurred by the Trustee in connection with investment transactions
and payments to participants are paid by the Plan. Professional and
administrative fees and other expenses of the Plan are also paid by the
Plan. Personnel and facilities of the Company are used by the Plan for its
accounting and other activities at no charge to the Plan.
3. INSURANCE PLAN
Participants of the Plan are permitted to have a portion of their
contributions directed towards the purchase of individual life insurance
contracts for themselves, their spouse and their children, for those
employees electing this option before January 1, 1989. As a result of these
elections, the Plan disburses funds periodically to the First Colony Life
Insurance Company for the payment of life insurance premiums. These
insurance contracts are allocated on an individual participant basis and,
as such, are excluded from Plan assets. For the years ended December 31,
2000 and 1999, Plan assets included $22,362 and $42,263, respectively, of
funds to be directed toward the purchase of individual life insurance
contracts.
4. INVESTMENTS
Investments which exceed 5% of the Plan's net assets at December 31, 2000
include:
FAIR VALUE
Fidelity Mid Cap Stock Fund $48,661,134
Managed Income Fund 29,090,849
Fidelity Puritan Fund 9,865,321
Fidelity Fund 23,190,206
7
THE PENN TRAFFIC COMPANY
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
- --------------------------------------------------------------------------------
5. BENEFIT DISTRIBUTIONS PAYABLE
At December 31, 1999, the amount allocated to participant accounts
who have elected to withdraw from the Plan but have not yet been paid was
approximately $2,124,000. This amount represents the difference in net
assets available for benefits between the Form 5500 and the audited
financial statements. At December 31, 2000, all participants electing for a
withdrawal had been paid.
6. INCOME TAX STATUS
The Internal Revenue Service determined and informed the Company by a
letter dated August 14, 1995 that the Plan and related trust meets the
requirements of Sections 401(a) and 401(k) of the Internal Revenue Code
("IRC") and that the Plan is exempt from taxation under Section 501(a) of
the IRC. The Plan has been amended subsequent to the receipt of the latest
determination letter. However, the Plan's administrator believes that the
Plan is designed and currently being operated in compliance with the
applicable requirements of the IRC.
Under present federal income tax laws, a participant will not be subject to
federal income taxes on the contributions by the participant or on interest
or profits on the sale of securities held by the Plan until the
participant's assets are distributed.
7. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company expressly
reserves the right to terminate the Plan. In the event of termination,
participants will become 100% vested in their accounts and all Plan
objectives will be satisfied. All unallocated assets will then be allocated
to the accrued benefits of the participants' accounts at the date of
termination in accordance with the terms of the Plan and the Employee
Retirement Income Security Act of 1974 (ERISA).
8. TRANSACTIONS WITH PARTIES-IN-INTEREST
As of December 31, 2000 and 1999, the Plan held the following:
DECEMBER 31, 2000 DECEMBER 31, 1999
--------------------------------------------------------
NUMBER MARKET NUMBER MARKET
OF SHARES VALUE OF SHARES VALUE
Company common stock 1,403 $6,841 1,716 $ 15,873
8
THE PENN TRAFFIC COMPANY SCHEDULE I
401(k) SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
(SCHEDULE H, PART IV, ITEM (i))
- --------------------------------------------------------------------------------
(c) DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE,
(b) IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, (e) CURRENT
(a) LESSOR, OR SIMILAR PARTY PAR OR MATURITY VALUE (d) COST VALUE
* Fidelity Investments Institutional
Operations Company, Inc. Fidelity ** $ 792,026
* Fidelity Investments Institutional
Operations Company, Inc. Morely Capital Management ** 29,090,849
* Fidelity Investments Institutional
Operations Company, Inc. Penn Traffic Stock ** 6,841
* Fidelity Investments Institutional
Operations Company, Inc. Fidelity Fund ** 23,190,206
* Fidelity Investments Institutional
Operations Company, Inc. Fidelity Puritan Fund ** 9,865,321
* Fidelity Investments Institutional
Operations Company, Inc. Fidelity Growth Company Fund ** 2,177,021
* Fidelity Investments Institutional
Operations Company, Inc. Fidelity Diversified International Fund ** 430,683
* Fidelity Investments Institutional
Operations Company, Inc. Fidelity Mid Cap Stock Fund ** 48,661,134
* Fidelity Investments Institutional
Operations Company, Inc. Fidelity Freedom Funds ** 1,793,924
* Fidelity Investments Institutional
Operations Company, Inc. Spartan US Equity Index Fund ** 422,811
* Fidelity Investments Institutional
Operations Company, Inc. Participant Loans ** 5,291,598
---------------
Total investments $ 121,722,414
===============
* Denotes party-in-interest investment.
** Cost omitted for participant directed participants
9
THE PENN TRAFFIC COMPANY SCHEDULE II
401(k) SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2000
(SCHEDULE H, PART IV, ITEM (j))
- --------------------------------------------------------------------------------
NUMBER NUMBER COST OF NET
OF PURCHASE OF SELLING INVESTMENTS GAIN/
PURCHASES PRICE SALES PRICE SOLD (LOSS)
DESCRIPTION OF INVESTMENT
No reportable transactions noted.
* As of beginning of Plan year.
10
EXHIBITS
Exhibit Number Description
23.1 Consent of Independent Public Accountants
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan has duly caused this Annual Report to be signed by the
undersigned thereunto duly authorized.
THE PENN TRAFFIC COMPANY
401(k) SAVINGS PLAN
By:
-----------------------------------
Bernadette Randall-Barber
Chairperson
Administrative Committee
Date: May 11, 2001
11
EXHIBIT INDEX
The following exhibit is filed as part of the Annual Report:
Exhibit Number Description Page Number
23.1 Consent of Independent Accountants 13
12