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UniFirst Corporation
Service Compensation Plan – Standard ABS - 7% Base & 1.25% Incentive In accordance with the Employment and Restrictive Covenant Agreement you have entered with UniFirst Corporation (“UniFirst”), the following Service Compensation Plan contains information on how your compensation is calculated in your role as a Route Service Representative (“RSR”) or Route Helper with UniFirst. This Service Compensation Plan consists of three sections: 1. The RSR Compensation Policy
2. The Route Helper Compensation Policy
3. Employee Acknowledgement
All three sections constitute the entire Service Compensation Plan. UniFirst reserves the right to modify this Service Compensation Plan, including the RSR’s Route Guarantee and commission structure, at any time. SECTION 1: The RSR Compensation Policy
1. Exempt Employment Status
2. Pay Period
3. Pay Structure
4. Route Guarantee
5. Service Commission
6. Additional Service Commission Incentive
7. Service Chargebacks
8. Sales Incentives
9. Sales Chargebacks
10. PoweRoutes & Other Incentive Programs
11. Sick & Vacation Time Calculations
12. Saturday Meeting Pay
13. Miscellaneous
SECTION 2: The Route Helper Compensation Components 1. Exempt Employment Status
2. Base Pay
3. Commissions/Incentives
SECTION 3: Employee Acknowledgement
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SECTION 1 – The RSR Compensation Policy
1. Exempt Employment Status
RSRs are salaried/commissioned professionals paid on a weekly basis. Under the Department of Transportation (DOT) Federal Motor Carrier Act, RSRs are exempt employees and therefore not eligible for overtime. This is, in part, due to their responsibilities involving the transportation of goods involved in interstate commerce
(including goods originating from UniFirst’s out-of-state facilities). 2. Pay Period
Your pay period will run from Sunday to Saturday. You will be paid weekly on the Friday following each pay period. Your weekly pay will consist of:
(1) Your Route Guarantee earned the week before.
(2) Any advanced sales incentive (“Sales Incentive”) and service commission
(“Service Commission”) resulting from service and sales from the week before. Sales Incentive and Service Commissions are advanced to you as draws.
3. Pay Structure
As a salaried/commissioned professional, your commission is based on the dollar volume of your route and your sales efforts. As your route volume grows through your sales efforts, your weekly commission may also increase, subject to the terms and conditions set forth in this policy.
4. Route Guarantee is $
Understandably, some routes are smaller in scale and still growing and may have a lower weekly volume than others. To protect your income, we have established a minimum route compensation guarantee for each location (“Route Guarantee”). All UniFirst Route Service Representatives are entitled to compensation in the form of a weekly Route Guarantee. You will never be paid below the Route Guarantee (unless, of course, you take an unpaid leave or an unpaid absence).
Under certain circumstances UniFirst may increase the weekly Route Guarantee amount on a temporary basis, which is based on the RSR’s 13 week average. A new RSR will begin with training pay equal to the Route Guarantee for at least six (6) to eight (8) weeks until they complete the Service Certification Program. Page 3
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5. Service Commission – Your Location’s Base Commission Rate is 7% Service Commissions are based on route volume. The base rate for Service Commissions is 7% of route volume (“the Base Commission Rate”). As shown in the example below, the Base Commission Rate is multiplied by your route’s weekly route volume in order to determine your gross volume. If your gross volume is below the Route Guarantee, you will be paid the Route Guarantee. If your gross volume exceeds the Route Guarantee, you will receive the Route Guarantee plus the difference between your gross volume and Route Guarantee.
Additionally, you may receive advanced Service Commission and Sales Incentive draws. Sales Incentives are comprised of ABUS and Sales Leads, as defined herein. In this example, the RSR’s commission rate is 7%.
The example below is based on a Route Guarantee of $650. Example only:
Weekly
Route
Volume
Multiplied by
7%
commission rate
RSR Gross
Volume
Commission
Draw
(RSR Gross
Volume Minus
Route Guarantee
as Long as >0)
Total
Compensation
(Route
Guarantee +
Service
Commission
Draw)
$9,000 $9,000 x 7% = $630.00 $0* $650.00
$9,500 $9,500 x 7% = $665.00 $15.00 $665.00
$10,000 $10,000 x 7% = $700.00 $50.00 $700.00
$11,000 $11,000 x 7% = $770.00 $120.00 $770.00
$11,500 $11,500 x 7% = $805.00 $155.00 $805.00
*RSR will receive the Route Guarantee instead of Service Commission because Service Commission is less than the example’s Route Guarantee of $650. UniFirst reserves the right to modify the base commission rate, as outlined above, for any accounts with special pricing agreements.
6. Additional Service Commission Incentive (up to 1.25%) Through sales efforts, RSRs may be eligible to increase their base 7% Service Commission rate by up to 1.25 percentage points, based on three additional service commission incentive factors. The three additional service commission incentive categories are:
(1) Expired and about to Expire Contract Percentage,
(2) Lost Account Percentage, and
(3) Net Merchandise Costs.
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The Additional Service Commission will be advanced to you (in addition to your base Service Commission) for the entire next fiscal quarter. The Additional Service Commission is recalculated at the start of each fiscal quarter based upon your route’s performance in the prior fiscal quarter. Expired and about to Expire Contract Percentage – this is the percentage of an RSR’s Total Settled Revenue (most recent 52 weeks) of agreements that are expired or about to expire within the next thirteen (13) months.
Your Expired and about to Expire Contract Percentage only considers agreements controlled by your location. National accounts and agreements not controlled by your location are not included in the calculation.
Expired Value = (Total Settled Revenue Expired or
About to Expire / Total Settled Revenue of the Route) * 100 Expired and about to Expire Contract Percentage Value From Value To Incentive
Percentage
Achieved
0.00% 20.00% 0.41%
20.01% 25.00% 0.28%
Example: An RSR has a total settled revenue full route amount of $500,000.00 at Quarter-End. Their Expired/About to Expire total settled revenue amount within 13 months is $50,000.00; $50,000.00 / $500,000.00 * 100 = 10% Using the calculated 10%, we see it falls within the first tier on the chart, meaning the RSR will have an additional .41% in Expired Value added to his/her Service Incentive Rate.
Please reference the Customer Contracts report in Tableau for this information. Lost Account Percentage – this is the percentage of an RSR’s Total Settled Revenue
(most recent 52 weeks) of Lost Account Customers during a quarter, compared to the Final Settled Route Revenue of the Previous Fiscal Year. All customers, including national accounts, are included in this calculation. Page 5
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Lost Account Value = (Full Quarter’s Total Settled Revenue of Lost Accounts Processed
/ Final Settled Route Revenue of Previous Fiscal Year) * 100. Lost Account Percentage
Value From Value To Incentive
Percentage
Achieved
-999.00% 1.25% 0.42%
1.26% 1.50% 0.28%
1.51% 1.75% 0.14%
Example:
An RSR has $5,000.00 for his/her current quarter’s total settled revenue of lost accounts processed.
His/her total settled route revenue from the prior fiscal year was $500,000.00; ($5,000.00
/ $500,000.00) * 100 = 1%
Using the table above, we can see that 1% falls within the first tier, the RSR will have an additional Service Incentive rate of 0.42% in Lost Account Value. Net Merchandise Costs Percentage – this is the percentage of the amount of revenue generated from all lost and damaged goods subtracted from merchandise costs. The goal of each RSR is to have merchandise costs be less than or equal to the revenue from lost and damaged goods.
Your Net Merchandise Cost is based on a sliding scale giving you the opportunity to be eligible for additional compensation even if you have not achieved the highest level of the performance metric. The Net Merchandise Cost Percentage is calculated with the following formula:
Previous Quarter Gross Replacement Garment Cost – Previous Quarter Extra Charges Revenue
= Previous Quarter Net Replacement Cost
After that
(Previous Quarter Net Replacement Cost / Previous Quarter Total Uniform Rental Volume) * 100
= Net Merchandise Cost Percentage
Using the table below, we can then see which tier it falls under, giving us the incentive percentage award to the RSR.
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Net Merchandise Costs
Value From Value To Incentive Percentage
Achieved
-999.00% -1.00% 0.42%
-0.99% 0.50% 0.28%
0.51% 2.0% 0.14%
Note: All accounts, including National Accounts, are included in this calculation. Example:
An RSR had a previous quarter gross replacement garment cost of $15,379.20, extra charge revenue of $15,285.90, and the previous quarters total uniform rental volume was
$54,000.00.
$15,379.20 – $15,285.90 = $93.30 (This is the previous quarters Net Merchandise Cost)
($93.30 / $54,000.00) * 100 = .17% (This is the Net Merchandise Cost Percentage) We can see that .17% falls within the second tier, so the RSR would be awarded an additional 0.28% Service Incentive rate.
Maximum Route Volume Incentive – Base Service Commission Rate + Additional Service Incentive (i.e., Expired and about to Expire Contract Percentage + Lost Account Percentage + Net Merchandise Costs Incentive Percentage) Below is an example showing the total compensation of an RSR who is eligible for the highest percentage in each of the three-additional service commission incentive categories.
In this example, the RSRs new commission rate is 8.25%. The example below is based on a Route Guarantee of $650.00 Weekly
Route
Volume
Multiplied by
8.25%
commission rate
RSR
Gross
Volume
Commission
Draw
(RSR Gross
Volume Minus
Route Guarantee
as Long as >0)
Total
Compensation
(Route
Guarantee +
Service
Commission
Draw)
$9,000 $9,000 x 8.25% = $742.50 $92.50 $742.50
$9,500 $9,500 x 8.25% = $783.75 $133.75 $783.75
$10,000 $10,000 x 8.25% = $825.00 $175.00 $825.00
$11,000 $11,000 x 8.25% = $907.50 $257.50 $907.50
$11,500 $11,500 x 8.25% = $948.75 $298.75 $948.75
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UniFirst reserves the right to modify the Additional Service Commission incentive, as outlined above, for accounts with special pricing agreements. 7. Service Chargebacks
The Service Commissions (including any Additional Service Commission) is advanced and not considered earned to you on the condition that an accounts receivable credit
(“A/R Credit”) is not issued. In the event that an A/R Credit is issued within one-hundred and eighty (180) days of service, a service chargeback (“Service Chargeback”) will be deducted from your weekly Service Commission draw at a maximum rate of $50 per week until the original Service Commission amount has been charged back to UniFirst. Service Chargebacks will never reduce your compensation below the weekly Route Guarantee.
On a weekly basis, you will receive a commission sheet outlining your Service Chargebacks, if any. If you disagree with how any of your Service Chargebacks have been calculated, please immediately bring the issue to the attention of your supervisor or manager.
8. Sales Incentives
You are eligible to earn Sales Incentives which are advanced to you as a draw. Sales Incentives are comprised of incentives for: (1) selling additional business
(“ABUS”) and (2) sales leads.
A. ABUS
RSRs must sell a minimum quota of $10 of ABUS each week. Whenever you add rental products that represent a new type of revenue into an account, you will be advanced a Sales Incentive draw for the sale on a ratio of four (4) to one (1). Example: If you add facility service products or mats to a uniform account and the additional business is equal to $35 in ABUS revenue, you will be advanced a Sales Incentive draw of $140.00 ($35 x 4 = $140.00).
One Way Usage Products
For products where less than 100% of the initial install credit is given, the RSR will be advanced a sales credit equal to 1/13th of the initial install on a ratio of four (4) to one (1) of the specific product. For the remainder of the 13 weeks, the RSR will receive an advance sales credit of 1/13th the install price on a ratio of four (4) to one
(1) for any additional installs until the end of the 13th week. Page 8
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After the initial 13 weeks, RSRs will no longer generate one way product commission and subsequent installs of the specific product will count towards the RSRs route volume.
If a chargeback occurs for a specific product while within the 13 weeks, the RSR will be subject to charge backs equal to the total of all advanced one way sales credits. One Way Items % of Initial Install
Soap 1/13th
Paper 1/13th
Trash Can Liners 1/13th
Gloves 1/13th
Disposable 1/13th
Chemicals 1/13th
B. Sales Leads
As an RSR you are also eligible to earn Sales Incentives up to $1,000 for each sales lead that you turn over to UniFirst’s Outside Sales Representatives that turns into a new account (“Sales Leads”).
The Service Department must turn leads over to the Sales Department. As an RSR you will be advanced a one-time Sales Incentive draw at a ratio of two (2) to one (1) for Sales Lead. The maximum payout for any lead is $1,000. Example: An RSR approaches a company not currently doing business with UniFirst and obtains contact information to discuss a sales opportunity. The information is passed to the Sales Department, which then sells the account on behalf of UniFirst. If that account value has weekly revenue of $75, the one-time advanced Sales Incentive draw would be $150 ($75 x 2 = $150).
9. Sales Chargebacks
Incentives achieved on ABUS and Sales Leads are collectively called Sales Incentive. They are advanced to you subject to the condition that the sale not be reduced or deactivated within ninety (90) days. A sales chargeback (“Sales Chargeback”) to recover advanced Sales Incentive previously paid to you will be applied if a sale is reduced or deactivated within the ninety (90) day period.
The Sales Chargeback will be an amount equal to the amount of the Sales Incentive that was advanced to you in the event of a deactivation or prorated in the event of a sale reduction.
Sales Chargebacks will only be applied to future commissions and, if necessary, the balance may be deducted from any additional weekly advanced Sales Incentive. The Sales Chargeback may also be deducted from you in increments until the entire original Sales Incentive amount or prorated Sales Incentive amount is charged back to UniFirst. Page 9
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Sales Chargebacks will never reduce your compensation below the weekly Route Guarantee.
On a weekly basis, you will receive a commission sheet outlining your Sales Chargebacks, if any. If you disagree with how any of your Sales Chargebacks have been calculated, please immediately bring the issue to the attention of your supervisor or manager.
10. PoweRoutes & Other Incentive Programs
UniFirst will also, occasionally, offer you the opportunity to earn additional compensation through formal incentive programs. Program details will be provided to you prior to the kick-off of any incentive program including the earning potential of the program.
Example: UniFirst generally runs two PoweRoutes Programs each year (Spring & Fall) where you are incented on Direct Sales at a higher commission rate of 10%. 11. Sick and Vacation Time Calculations
All RSRs are required to adhere to UniFirst’s policies on attendance and vacation. For calculation purposes, UniFirst will pay sick and vacation time at the greater of 1/5 of the weekly route volume or 1/5 of the Route Guarantee for each day they are out on an approved paid sick or vacation day.
12. Saturday Meeting Pay
RSRs who are required to attend a Saturday meeting at their location will be paid a sum equal to 1/5 their routes’ guarantee pay.
13. Miscellaneous
Loss Charges – RSRs must be involved with picking up/counting lost and damaged items to receive loss charge incentive pay. If no service is conducted by the RSR, they are not entitled to loss charge incentive pay.
Contract Buyouts – UniFirst does not pay RSRs on contract buyouts. This also includes Merchandise Buyout charges at the end of the Contract. Page 10
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SECTION 2 - The Route Helper Compensation Components 1. Exempt Employment Status
UniFirst Route Helpers are salaried professionals paid on a weekly basis. Under a provision of the Department of Transportation (DOT) Federal Motor Carrier Act, Route Helpers are exempt, and not eligible for overtime because their responsibilities involve transporting goods in interstate commerce (including goods originating from UniFirst’s out-of-state facilities).
2. Base Pay
As a Route Helper, you will receive a weekly salary. The minimum salary for a Route Helper is determined by the geographic market of the location and the weekly amount will never be less than the locations’ route guarantee. 3. Commissions/Incentives
Route Helpers are not entitled to any commission(s)/incentive(s) that may occur on the routes that they are covering.
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SECTION 3 – Employee Acknowledgement
Employee Acknowledgement:
On this date I acknowledge that I have been given and I understand the UniFirst Corporation Service Compensation Plan. I have received and reviewed the following sections:
The RSR Compensation Policy
The Route Helper Compensation Components
Employee Acknowledgement
I understand the requirements of the UniFirst Corporation Service Compensation Plan and agree to comply with its requirements. By signing below, I specifically authorize UniFirst Sales and Service Chargebacks to future Sales and Service Commissions and Sales Incentives, respectively, when a condition on an advanced Sales or Service Commission is not satisfied. I understand that Sales and Service Chargebacks will not decrease my pay below the Route Guarantee.
Signature:
Employee Signature Date
Print Name
Manager Signature Date
Print Name