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Rill \I /►PAv <br />CabarrusArena - <br />_ & Events Center <br />Cabarrus Arena Management Incentives for FY2010 <br />The management agreement between Cabarrus County and SMG outlines incentives for SMG to exceed certain <br />performance thresholds. This total fee is composed of a quantitative portion relating to Gross Operating <br />Revenue and a qualitative portion relating to more subjective performance measures. <br />Ouantitative Incentive Fee <br />For the year ending June 30, 2010, SMG surpassed the $932,509 Gross Operating Revenue threshold that <br />triggers the quantitative incentive fee. Gross Operating Revenue for the year was $985,621. In accordance with <br />the management agreement, SMG should receive a quantitative incentive fee which is the lesser of fifteen <br />percent of Gross Operating Revenue in excess of the threshold or an incentive cap equal to seventy -five percent <br />of the base fee. <br />The calculated incentive based on G <br />$ 985,621 <br />- $ 932,509 <br />$ 53,112 <br />X 15% <br />$ 7,967 <br />ross Operating Revenue in excess of the threshold is as follows: <br />Gross Operating Revenue <br />Incentive Threshold <br />Gross Operating Revenue in Excess of Incentive Threshold <br />Percentage of Excess Revenue Available for Incentive <br />Potential Incentive for FY 2010 <br />The calculation to determine the incentive cap is: <br />$95,000 Base Management Fee <br />x 75% Cap Percentage <br />$71,250 Maximum Possible Incentive <br />Based on these calculations and the current management agreement, the quantitative incentive fee due SMG for <br />fiscal year 2009 is $7,697. <br />Qualitative Incentive Fee <br />For the fiscal year ending June 30, 2010, Cabarrus County staff awarded SMG ninety -four of a possible one <br />hundred points in the subjective performance areas of customer service, maintenance and operations, and <br />overall management. Applying the formulas outlined in the management agreement results in a qualitative <br />incentive fee to SMG of $22,325. <br />$23,750 Maximum Qualitative Incentive per Agreement <br />x 94% Percentage of Total Points Awarded to SMG <br />$22,325 Qualitative Incentive Fee Due SMG <br />Attachment number 2 <br />Page 62 <br />F -2 <br />