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Exhibit 10.5
January 22, 1999
Mr. Xxxx Xxxxxxx
Dear Xxxx:
The purpose of this letter is to evidence amendments to your Employment
Agreement with Cleveland Indians Baseball Company Limited Partnership dated
April 10, 1998 (the "Employment Agreement"). Paragraph 3 of the Employment
Agreement concerning an annual bonus shall be deleted in its entirety and
replaced with the following new Paragraph 3:
3. BONUS.
(a) On or before January 1 of each year during the
term of this Agreement, the Club shall establish a Bonus
Target based upon the amount of adjusted gross revenue from
sources taken into account to compute the Bonus Target
("Adjusted Gross Revenues From Bonus Revenues") that the Club
anticipates realizing from revenue sources subject to your
management and oversight, including annual ticket sales and
ticketing services revenue, ballpark signage and scoreboard
promotions revenue, luxury suite & club seat license fee
revenue, revenue from the rental of ballpark areas to groups,
net revenue from the sale of radio and local television
advertising (as controlled by the Club) and local promotional
revenue, all as set forth in the annual budget prepared by the
Club in the ordinary course of the Club's business. Adjusted
Gross Income From Bonus Revenues shall be computed by
deducting from gross income from such sources all expenses
incurred directly to produce such income. Following completion
of each championship season, the
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Mr. Xxxx Xxxxxxx
January 22, 1999
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Bonus Target will be adjusted to reflect actual number of
championship season and exhibition game home dates that the
Club actually realizes revenues from the sale of tickets at
normal and customary prices.
(b) In the event that the Club earns Adjusted Gross
Income From Bonus Revenues equal to or greater than the Bonus
Target, you shall be paid a bonus equal to the greater of (i)
one-half (50%) of a player's share payable to the Club's
players as determined pursuant to Major League Rule 45(b)(2)
as the same shall be amended from time to time or (ii) the
Bonus Formula Amount. The Bonus Formula Amount shall be equal
to (i) $25,000 if the Club earns Adjusted Gross Income From
Bonus Revenues equal to or greater than 100% of the Bonus
Target, (ii) $37,500 if the Club earns Adjusted Gross Income
From Bonus Revenues equal to or greater than 102.5% of the
Bonus Target or (iii) $50,000 if the Club earns Adjusted Gross
Income From Bonus Revenues equal to or greater than 105% of
the Bonus Target.
(c) The Club shall determine the amount of the
Adjusted Gross Income From Bonus Revenues earned by the Club
as soon as practicable after the end of each fiscal year, but
in no event later than March 31. In the event of a dispute
between you and the Club regarding this computation, the
matter will be referred to the firm of independent accountants
engaged by the Club to provide an annual certified audit of
the Club's financial records. This firm shall compute the
Adjusted Gross Revenues From Bonus Revenues of the Club based
upon generally accepted accounting principles employing the
same bases, definition and methods used to establish the Bonus
Target. The determination made by the firm shall be final and
binding on all parties. The General Partner retains the right
to modify the list of items of gross income and expenses to be
included in the computation of the Bonus Target from year to
year; provided however, the method of computing the Bonus
Target shall not be modified after it has been established
with respect to any particular year without your consent,
which shall not be unreasonably withheld.
This amendment shall be effective as of April 10, 1998. All of the
other terms of the contract will remain unchanged and in full force and effect.
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Mr. Xxxx Xxxxxxx
January 22, 1999
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Please indicate your acceptance of these amendments by executing both
copies of this letter and returning one of the executed copies to me. You may
retain the other copy for your records.
Very truly yours,
CLEVELAND INDIANS BASEBALL
COMPANY LIMITED PARTNERSHIP
By: Cleveland Indians Baseball Company,
Its General Partner
/s/ Xxxxxxx X. Xxxxxx
By:
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Xxxxxxx X. Xxxxxx, Chief Executive Officer
ACCEPTED:
/s/ Xxxx Xxxxxxx
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Date: 2/12/99
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