Pacific Stereo Pay '70's

EMPLOYEE COMPENSATION - SALESMEN

The following are the conditions of compensation

for salesmen:

1. As a salesman you will be paid a minimum of $3.00 per hour for your first two months of full-time selling. This is a guarantee against your commissions, you will not receive less on a per hour basis during your first two months as a salesman. If you earn commissions in excess of the $3.00 per hour guarantee, the excess will be paid on the 22nd of the following month. You will earn a commission on your sales in accordance with the compensation plan detailed below.

2. Most salesmen elect to receive an advance, commonly called a draw, of $600.00 a month for a six-day week work schedule or $500.00 for a five-day week work schedule. This advance or draw is paid one-half on the 7th of the month and the other half on the 22nd of the month.

If you have received an advance against commissions during a month and earn commissions in excess of the advance, the excess will be paid to you on the 22nd of the following month. If you do not earn commissions to equal the amount already advanced, the amount advaneed in excess of the co~~issions earned will be deducted from your advance on the 22nd of the following month.

3. Spiffs paid to you during the month in cash, (product bonuses, prizes, and other rewards for specific or路the-job performance), are a part of your earnings for that month f~r tax purposes but they don't count towards an hourly/monthly minimum salary guarantee or draw. The amount you received in spiffs will be added to your commissions on the 22nd of the following month~for the purpose of computing the withholding tax on the spiffs.

The amount of the spiffs which you have already received will then be deducted from the after-tax earnings and you will receive a check for the net amount.

Example:

Commission earned (from OSI DSA): Add Spiffs received during last month: Less draw received (already taxed) Draw current month Amount taxable Tax Less Soiffs Paid Get check for this amount

$1450

+ 302

- 600

1152 300

1452

- 360 1092

- 302 $ 790

Pg. 2

Employee Compensation - Salesmen

4. Computation of Commission 1. The commission for each item Pacific Stereo carries is printed next to the listin~ of that item in the price book.

2. Pacific Stereo reserves that riqht to change the amount of commission on a specific ite~ or all items at any time. The commission printed in The price ~ook is earned when the item is sold for the amount listed as Pacific's price. (Sold means Pacific has been paid in full for the item ).

3. The amount of commission earned will be reduced according to the following formulas as the sellinq price is reduced. a. If sellinq price is qreater than or equal to the System Price printed in the price book: Commission = Selling Price Reference Commission Pacific's Price X b. If Selling Price is at Minimum Price printed in the price book or below, but abovp cost. and the sales invoice has the manager's approval: Commission = Reference Commission 4

c. If Selling Price is below System Price but above Minimum Price: . .

Commission = Selling Price - Min. Price System Price _ Min. Price x (System Comm. - Mln. Comm.) + Mln. Comm.

What this complex appearing formula defines is that if you sell an item for an amount that is halfway between the system price and the minimum price then the commission will he equal to:the minimum commission plus 1/2 the difference between the commission o system rrice and minimum commission.

4. In cases of exchanges of n~w merchandise: a. The co~mission earnerl on an exchange is the commission hased on the price of the outgoinq item minus the commission on the returned item. The price of the outqoing item is Pacific's price on the returned item plus (minus) the net amount charged (refunded) for the exchanged item.

5. Used Equipment - The same computational rulesapply. The price points are determined as follows: (TBB = Top Glue Book Pacific's Price TBB x 2 System Price TBB x 1.5 Minimum Price = TBB x 1.25 Commission = 6.5~ x Pacific's Price In cases of used trade-in's; the TBB (cost) on the USP items is added to the net invoice amount and then the commission is computed using that as~e selling price.

6. Accessories not in the price book - the same computational rules apply as with regular merchandise with the price points determined as follows: Pacific's Price = Cost x 1.67 System Price = Cost x 1.52 Minimum = Cost Commission $ = 3.5% x Pacific's Price

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Employee Compensation - Salesmen

7. System Sales - the foregoing description was for single item sales.

System Sales work the same way. Pacific, System, and Minimum prices and Reference Commissions are totalled for all items on the invoice and the sums are treated just as though it were the sale of a single item.

5. A salesman forfeits any rights to commissions on sales resulting from his layaways if these sales occur after his final date of employment.

6. Holiday pay is not applicable to commissioned salesmen, managers or assistant managers.

7.

r have read and understand this compensation plan and agree to its provisions.

SrGNED DATE

_ SALES NO.

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