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Cabarrus Arena Food & Beverage Incentives for FY2009 <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 profitabilit}* 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, 2009, SMG produced a $133,525 Net Operating Income from <br />operations on $629,067 in Gross Revenue at Cabarrus Arena. Applying the formula specified in <br />the Food and Beverage Services Agreement results in an incentive of $31,453 to SMG Food and <br />Beverage. <br />$629,067 Gross Food & Beverage Revenue <br />x 5% Percentage of Gross Revenue Due SMG F&B <br />$ 31,453 Food & Beverage litcetitive 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 $52,072 remauiing with the facility and $50,000 <br />to SMG Food and Beverage far the fiscal year ending June 30, 2009. <br />$133,525 Net Operating Income <br />- 31 453 SMG F&B Incentive Fee <br />$102,072 Positive Net Operating Income Available for Distribution <br />- SO 000 Initial Amount to Remain with Facility <br />$ 52,072 Positive Net Operating Incorne Remauiing for Distribution <br />- 50 000 To SMG Food and Beverage <br />$ 2,072 Remaining Net Operating Income Remaining with Facility <br />F-1 <br />Attachment number 1 <br />Page 44 <br />