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                                                                   EXHIBIT 10.22


                              EMPLOYMENT AGREEMENT

         This Employment Agreement ("Agreement") is entered into as of this 14th
day of August, 1999, by and between The Penn Traffic Company (the "Company") and
Leslie Knox ("Executive").

         1. EMPLOYMENT. (a) The Company hereby agrees to engage, hire and employ
Executive as Senior Vice President, Chief Marketing Officer during the Term (as
defined).

         (b) Executive hereby accepts employment as Senior Vice President, Chief
Marketing Officer of the Company and agrees to provide to the Company his
full-time services, performing such duties as shall reasonably be required and
otherwise on the terms and subject to the conditions set forth in this
Agreement.

         2. TERM. The term of employment of Executive under this Agreement shall
commence effective on May 3, 1999 (the "Effective Date") and will continue until
May 3, 2001 unless earlier terminated in accordance with this Agreement (the
"Term").

         3. LOCATION OF EMPLOYMENT. Executive shall render services primarily at
the Company's offices that are located in Syracuse, New York. In an effort to
assist Executive in relocating his primary residence to the Syracuse, New York
area, the Company shall provide Executive with relocation assistance in the
manner set forth on Schedule A attached hereto.

         4. COMPENSATION.

                  (a) Base Salary. The Company shall pay to Executive during the
Term a base salary of not less than $275,000 per annum ("Base Salary"). The Base
Salary shall be paid in accordance with the Company's standard payroll practices
and will be subject to withholding and other applicable taxes.

                  (b) Target Bonus. Subject to the provisions of this Paragraph
4(b), the Executive shall be entitled to receive an annual cash bonus (the
"Target Bonus") for each fiscal year of the Company (i.e, year ending on or
about January 30 of each year) in an amount up to 40% of Base Salary depending
upon whether the Company meets, exceeds or falls short of its budgeted goals for
the applicable fiscal year ("Target Performance") and based on other personal
criteria established in advance of such fiscal year. Notwithstanding the
preceding sentence, the Target Bonus Executive shall be entitled to receive for
the fiscal year ending January 29, 2000 shall not be less than $55,000. Payments
of Target Bonus for any fiscal year shall be made during the first quarter of
the fiscal year immediately following the year in respect of which the Target
Bonus is payable and will only be paid to Executive if he is employed with the
Company at that time.

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                  (c) Options. Executive shall, on the date the Company emerges
from protection under chapter 11 of the Bankruptcy Code, be granted 10-year
options to purchase 50,000 shares of the Company's common stock, par value $.01
per share (the "Common Stock"), with an exercise price equal to the fair market
value thereof on the date of grant. Such options shall vest in five (5)
substantially equal annual increments on the grant date and on each of the first
four anniversaries of the grant date on which Executive is still employed with
the Company.

                  (d) 401K. Executive will be entitled to participate in the
Company's 401(K) plan six (6) months after the Effective Date.

                  (e) Pension. Executive will be entitled to receive pension
benefits from the Company on terms comparable to executives of the stature and
rank of Executive. Executive will become fully vested in his pension benefits on
the fifth anniversary of the Effective Date assuming Executive remains employed
with the Company on that date.

         5. FRINGE BENEFITS.

                  (a) Executive shall, from and after the Effective Date, have
the right to participate in the Company's medical, dental, disability, life and
other insurance plans maintained during the Term by the Company for executives
of the stature and rank of Executive, and any other plans and benefits, if any,
generally maintained by the Company for executives of the stature and rank of
Executive during the Term, in each case in accordance with the terms and
conditions of such plan as from time-to-time in effect (collectively referred to
herein as "Fringe Benefits").

                  (b) Subject to the requirements of Executive's office,
Executive shall be entitled to four weeks annual vacation to be taken in
accordance with the vacation policy of the Company prorated for the fiscal year
ending January 29, 2000 for the number of days Executive was employed by the
Company in such year (based on 365-day year).

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                  (c) The Company will, upon being provided with reasonable
supporting documentation thereof, promptly reimburse Executive for actual,
ordinary and necessary travel and accommodation cost, entertainment and other
business expenses incurred as a necessary part of discharging Executive's duties
hereunder.

         6. NO COMPETITION; CONFIDENTIALITY.

                  (a) Executive agrees that while this Agreement is in effect
and for a period of 12 months (with respect to the matters referred to in clause
(i) below) and 18 months (with respect to the matters referred to in clauses
(ii) and (iii) below) after the termination of this Agreement (the "Termination
Date"), the Executive will not without the prior written consent of the Company,
as principal, agent, employee, employer, consultant, stockholder (other than as
the holder of shares of capital stock of the Company or of not more than 2% of
the shares of any other corporation), director or co-partner, or in any other
individual or representative capacity whatsoever, directly or indirectly:

                  (i) engage in any way in any wholesale and/or retail food
business which operates in any state in the United States in which the Company
operates during the Term;

                  (ii) induce or attempt to induce any person who is in the
employ of the Company or any subsidiary thereof to leave the employ of the
Company or such subsidiary, or employ or attempt to employ any such person or
any person who at any time during the preceding twelve (12) months was in the
employ of the Company or any subsidiary thereof; or

                  (iii) induce or attempt to induce or assist any other person,
firm or corporation to do any of the actions referred to in (i) or (ii) above
(provided, that this Paragraph 6 shall not be interpreted so as to prohibit the
Executive from providing references for employees of the Company or its
subsidiaries or affiliates who have been solicited by an employee or prospective
employer without violation of (ii) above).

         Notwithstanding the foregoing, the provisions of this Section 6(a)
shall not apply if this Agreement is terminated by the Executive for Good
Reason.

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                  (b) Executive agrees that while this Agreement is in effect
and for a period of three years following the end of the Term, he will not at
any time from and after the date hereof, divulge, furnish or make accessible to
any person, or himself make use of other than for the sole benefit of the
Company, any confidential or proprietary information of the Company obtained by
him while in the employ of the Company other than in connection with his
employment with the Company as provided hereunder, including, without
limitation, information with respect to any products, services, improvements,
formulas, designs, styles, processes, research, analyses, suppliers, customers,
methods of distribution or manufacture, contract terms and conditions, pricing,
financial condition, organization, personnel, business activities, budgets,
plans, objectives or strategies of the Company or its proprietary products or of
any subsidiary or affiliate of the Company and that he will, prior to or upon
the termination of his employment with the Company, return to the Company all
such confidential or non-public information, whether in written or other
physical form or stored electronically on computer disks or tapes or any other
storage medium, and all copies thereof, in his possession or custody or under
his control; provided, however, that (x) the restrictions of this paragraph
shall not apply to publicly available information or information known generally
to the public (without any action on the part of the Executive prohibited by the
restrictions of this Paragraph), and (y) the Executive may disclose such
information as may required pursuant to any subpoena or other lawful process
issued pursuant to any applicable law, rule or regulation.

                  Notwithstanding the foregoing, in the event that Executive
receives a subpoena or other process or order which may require him to disclose
any confidential information, the Executive agrees (i) to notify the Company
promptly of the existence, terms and circumstances surrounding such process or
order, and (ii) to cooperate with the Company, at the Company's request and at
its expense, including, but not limited to, attorneys' fees and expenses, in
taking legally available steps to resist or narrow such process or order and to
obtain an order (or other reliable assurance reasonably satisfactory to the
Company) that confidential treatment will be given to such information as is
required to be disclosed.

                  (c) In view of the services which the Executive will perform
for the Company and its subsidiaries and affiliates, which are special, unique,
extraordinary and intellectual in character and will place him in a position of
confidence and trust with the customers and employees of the Company and its
subsidiaries and affiliates and will provide him with access to confidential
financial information, trade secrets, "know-how" and other confidential and
proprietary information of the Company and its subsidiaries and affiliates, and
recognizing the substantial sums paid and to be paid to the Executive pursuant
to the terms hereof, the Executive expressly acknowledges that the restrictive
covenants set forth in this Paragraph 6 are necessary in order to protect and
maintain the proprietary interests and other legitimate business interests of
the Company and its subsidiaries and affiliates and that the enforcement of such
restrictive covenants will not prevent Executive from earning a livelihood. The
Executive acknowledges that the remedy at law for any breach or threatened
breach of this Paragraph 6 will be inadequate and, accordingly, that the Company
shall, in addition to all other available remedies (including, without
limitation, seeking damages sustained by reason of such breach), be entitled to
specific performance or injunctive relief without being required to post bond or
other security and without having to prove the inadequacy of the available
remedies at law.

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         7. GROUNDS FOR TERMINATION BY COMPANY. The Company may terminate this
Agreement and Executive's employment hereunder for "Cause" by written notice to
Executive setting forth the grounds for termination with specificity. "Cause"
shall mean (i) the commission by the Executive of an act of fraud or
embezzlement (including the unauthorized disclosure of confidential or
proprietary information of the Company or any of its subsidiaries that results
in, or that could reasonably be expected to result in, a material injury to the
Company or such subsidiary); (ii) a felony conviction or guilty plea of the
Executive or a conviction or guilty plea of any other crime involving moral
turpitude; (iii) willful misconduct as an employee of the Company that results
in material injury to the Company; (iv) the willful failure of the Executive to
render services to the Company in accordance with his employment, which failure
amounts to a material neglect of his duties to the Company, as determined in
each case by the Board in good faith; and (v) willful and material
insubordination on the part of the Executive.

                  Any termination for Cause shall be effective upon notice by
the Company to Executive as provided at the beginning of this Paragraph 7.

         8. GROUNDS FOR TERMINATION BY EXECUTIVE. Executive may terminate this
Agreement and his employment hereunder for Good Reason (as hereinafter defined)
by written notice to the Company setting forth the grounds for termination with
specificity. "Good Reason" shall mean (a) any material diminution in authority
or title that was made for reasons other than Cause or (b) the failure by the
Company to pay any compensation or other amount due to the

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Executive under this Agreement, which failure is not remedied within ten (10)
business days after written notice thereof is delivered to the Company by
Executive. Any termination for Good Reason shall be effective as of the business
day immediately following the date upon which the Company was required to (but
did not) remedy such failure.

         9. TERMINATION FOR DEATH OR DISABILITY.

                  (a) If during the Term, Executive should die, Executive's
employment shall be deemed to have terminated as of the date of death.

                  (b) If during the Term, Executive should suffer a disability
which, in fact, prevents Executive from substantially performing his duties
hereunder for a period of 180 consecutive days or 230 or more days in the
aggregate, in any period of 12 consecutive months, then and in any such event
the Company may terminate Executive's services hereunder by a written notice to
Executive setting forth the grounds for such termination with specificity, which
termination will take effect 30 days after such notice is given. Executive may
only be terminated for disability if the Company's termination notice is given
within 60 days following the end of the aforementioned 180- or 230-day period,
whichever the Company relies upon. The existence of Executive's disability for
the purposes of this Agreement shall be determined by a physician mutually
selected by the Company and Executive, and Executive agrees to submit to an
examination by such physician for purposes of such determination.

         10. EFFECT OF COMPANY'S TERMINATION OTHER THAN UNDER PARAGRAPH 7 OR 9
OR EFFECT OF EXECUTIVE'S TERMINATION UNDER PARAGRAPH 8. If (i) the Company
terminates Executive's employment under this Agreement for any reason other than
Cause, or other than due to his death or disability or (ii) Executive terminates
Executive's employment under this Agreement for Good Reason, then, provided that
the Executive enters into a severance agreement and executes a full release, in
each case in a form reasonably satisfactory to the Company:

                  (a) The Company shall continue to pay to Executive his Base
Salary then in effect (in the manner in which Base Salary payments have
theretofore been paid) for a period equal to 12 months from the date of
termination.

                  (b) The Company shall continue to provide to the Executive the
benefits described in Paragraph 5(a) hereof for a period of 12 months from the
date of termination.

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         11. EFFECT OF COMPANY'S TERMINATION FOR CAUSE, EXECUTIVE'S TERMINATION
WITHOUT GOOD REASON, TERMINATION UPON DEATH OR DISABILITY.

                  If the Company terminates Executive's employment under this
Agreement for Cause or Executive terminates his employment under this Agreement
other than for Good Reason, or if Executive's employment is terminated due to
his death or disability, then the Company shall continue to pay Executive (or
his designated beneficiary) his Base Salary through the effective date of
termination and, in the case of termination due to Executive's death or
disability, Executive shall also be entitled to receive a pro rata portion
(calculated on the basis of a 365 day year) of the Executive's Target Bonus for
the year in which such termination occurs.

         12. EXECUTIVE'S REPRESENTATIONS AND WARRANTIES. Executive represents
and warrants to the Company as follows:

                  (a) Executive has the unfettered right to enter into this
Agreement on the terms and subject to the conditions hereof, and Executive has
not done or permitted to be done anything which may curtail or impair any of the
rights granted to the Company herein.

                  (b) Neither the execution and delivery of this Agreement by
Executive nor the performance by Executive of any of Executive's obligations
hereunder constitute or will constitute a violation or breach of, or a default
under, any agreement, arrangement or understanding, or any other restriction of
any kind, to which Executive is a party or by which Executive is bound.

         13. INDEMNIFICATION, ETC.. The Company agrees to hold harmless and
promptly indemnify Executive to the fullest extent permitted by law against all
damages and/or losses which Executive may suffer as a result of Executive's
services as, and/or for activities engaged in by Executive while Executive is,
an officer and/or employee of the Company or any affiliate thereof, including
either paying or reimbursing Executive, promptly after request, for any
reasonable and documented expenses and all attorneys' fees and costs actually
incurred by Executive in connection with defending, or himself instituting
and/or maintaining, any claim, action, suit or proceeding arising from
circumstances to which the Company's above indemnification relates; provided,
however, that no such indemnification shall be paid for damages or losses
incurred by Executive that result from actions by Executive that Delaware law
explicitly prohibits an employer from indemnifying its directors or employees
against, including, without limitation, to the extent any such damages or losses
arise through the gross negligence, bad faith or misconduct of Executive or the
breach by Executive of any of Executive's obligations under or representations
and warranties made pursuant to this Agreement. This indemnity shall survive the
termination of this Agreement.

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         14. NOTICES. Any notice, consent, termination or other communication
under this Agreement shall be in writing and shall be considered given on the
date when hand delivered or, if sent by registered or certified mail, on the
fifth day after such notice is mailed or, if sent by overnight courier
guaranteeing overnight delivery, on the day after such notice is so sent, in
each case to the parties at the following addresses (or at such other address as
a party may specify by notice in accordance with the provisions hereof to the
other):

                                        IF TO EXECUTIVE, TO EXECUTIVE AT:

                                   Mr. Lester Knox
                                   59 Timber Wood Drive
                                   Winfield, Pennsylvania 17889

                                               IF TO THE COMPANY:

                                   The Penn Traffic Company
                                   1200 State Fair Boulevard
                                   Syracuse, New York 13221
                                   Attn: Francis D. Price, General Counsel

                                                 WITH A COPY TO:

                                   The Penn Traffic Company
                                   411 Theodore Fremd Ave.
                                   Rye, New York 10580
                                   Attn: Martin A. Fox, Vice Chairman - Finance

         15. COMPLETE AGREEMENT AND MODIFICATION. This Agreement contains a
complete statement of all the arrangements between the parties with respect to
Executive's employment by the Company, supersedes all existing agreements or
arrangements between them concerning Executive's employment, and can only be
amended or modified by a written instrument signed by the Company and Executive.

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         16. SEVERABILITY PROVISIONS. If any provision of this Agreement is
declared invalid, illegal or incapable of being enforced by any court of
competent jurisdiction, all of the remaining provisions of this Agreement shall
nevertheless continue in full force and effect and no provisions shall be deemed
dependent upon any other provision unless expressly set forth herein.

         17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
entered into and performed entirely within such State.

         18. WAIVER. The failure of a party to insist upon strict adherence to
any term of this Agreement shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Agreement.

         19. HEADING. The headings in this Agreement are solely for the
convenience of reference and shall not affect its interpretation.

         20. WITHHOLDING. Any amount payable under this Agreement shall be
reduced by any amount that the Company is obligated by law or regulation to
withhold in respect of any such payment.

         21. HEIRS, SUCCESSORS AND ASSIGNS. This Agreement will inure to the
benefit of, and be enforceable by, Executive's heirs and the Company's
successors and assigns. The Company shall have the right to assign this
Agreement or any part hereof or any rights hereunder to any
successor-in-interest to the Company and to any affiliate of the Company;
provided, however, that in the event of any such assignment the assignee shall
expressly agree in writing to assume all of the Company's obligations under this
Agreement, and Company shall remain secondarily liable to Executive for the
performance of all such obligations.

         WHEREFORE, the parties hereto have executed this Agreement as of the
day and year first above written.

THE PENN TRAFFIC COMPANY


By: /s/ Joseph V. Fisher                          /s/ Leslie Knox
    ------------------------------                ------------------------------
    Name: Joseph V. Fisher                        Leslie Knox
    Title: President

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                                   SCHEDULE A

                              RELOCATION ASSISTANCE

         [attach from offer letter]