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Cabarrus Arena Food & Beverage Incentives for FY2012 <br />The current Food and Beverage Services Agreement between SMG, Cabarrus County, and SMG <br />Food and Beverage, LLC sets an incentive schedule if SMG Food and Beverage produces a <br />profit at the Cabarrus Arena location. This schedule ties SMG Food and Beverage incentives <br />directly to profitability and provides a method of distributing profits between the parties to the <br />agreement. <br />Incentive Fee <br />For the fiscal year ending June 30, 2012, SMG Food and Beverage produced a $90,532 Net <br />Operating Income from operations on $489,752 in Gross Revenue at Cabarrus Arena. Applying <br />the formula specified in the Food and Beverage Services Agreement results in an incentive of <br />$24,488 to SMG Food and Beverage. <br />$489,752 Gross Food & Beverage Revenue <br />x 5% Percentage of Gross Revenue Due SMG F &B <br />$ 24,488 Food & Beverage Incentive Due SMG F &B <br />Profit Distribution <br />The current Food and Beverage Services Agreement defines the term "Positive Net Operating <br />Income" as Net Operating Income for the fiscal year less any Incentive Fee for that year. The <br />agreement specifies that the first $50,000 of Net Operating Income remains with the facility, the <br />next $50,000 goes to SMG Food and Beverage, and anything in excess of $100,000 remains with <br />the facility. This distribution results in a total of $50,000 remaining with the facility and $15,744 <br />to SMG Food and Beverage for the fiscal year ending June 30, 2012. <br />$ <br />90,532 <br />Net Operating Income <br />-$ <br />24,488 <br />SMG F &B Incentive Fee <br />$ <br />66,044 <br />Positive Net Operating Income Available for Distribution <br />-$ <br />50,000 <br />Initial Amount to Remain with Facility <br />$ <br />16,044 <br />Positive Net Operating Income Remaining for Distribution <br />To SMG Food and Beverage <br />Attachment number 1 <br />F -2 Page 41 <br />