Incentive Compensation

Version: 001
Renewal Date: 7/1/2026

Objective #

The purpose of The University of Tennessee Foundation, Inc. (UTFI), annual Incentive Plan (the “Plan”) is to motivate, engage, and reward eligible employees by giving employees a financial incentive to align with UTFI to achieve certain organization-wide, campus specific, and individual Performance Goals.

Policy #

General Provisions #

1. Compliance with Legal Requirements: The Plan and the granting of awards shall be subject to all applicable federal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may be required.
2. Non-transferability: A person’s rights and interests under the Plan, including any award previously made to such person or any amounts payable under the Plan may not be assigned, pledged or transferred, except in the event of the employee’s death by will or the laws of descent and distribution.
3. No Right to Employment: Nothing in the Plan or any award shall confer upon any person the right to continue in the employment of UTFI or affect the right of UTFI to terminate the employment of any employee.
4. No Right to Award: Unless otherwise expressly set forth in an employment agreement signed by the President and CEO of UTFI and an employee, an employee shall not have any right to any award or any portion of any award under the Plan until such award has been paid to such employee, subject to the provisions of Section V.D. Moreover, participation in the Plan in one performance period does not confer any right to become an employee in the Plan in any future performance period.
5. Withholding: UTFI shall have the right to withhold from any award, any federal, state or local income or payroll taxes required by law to be withheld and to take such other action as the committee may deem advisable to enable UTFI and employees to satisfy obligations for the payment of withholding taxes and other tax obligations relating to an award.
6. Amendment or Termination of the Plan: The committee may, at any time, amend, suspend or terminate the Plan in whole or in part. Notwithstanding the foregoing, no amendment shall adversely affect the rights of any employee to awards allocated and paid prior to such amendment, suspension or termination.
7. Unfunded Status: Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between UTFI or the committee and any employee, beneficiary, legal representative or any other person. To the extent that a person acquires a right to receive payments under the Plan, such a right shall be no greater than the right of an unsecured general creditor of UTFI. All payments to be made hereunder shall be paid from the general funds of UTFI and no special or separate fund shall be established, and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA).
8. Governing Law: The Plan shall be construed, administered and enforced in accordance with the laws of the State of Tennessee without regards to conflicts of the law.
9. Section 409A of the Code: It is intended that payments under the Plan qualify as short-term deferrals exempt from the requirements of Section 409A of the Code. In the event that any award does not qualify for treatment as an exempt short-term deferral, it is intended that such amount will be paid in a manner that satisfies the requirements of Section 409A of the Code. The Plan shall be interpreted and construed accordingly.
10. Expenses: All costs and expenses in connection with the administration of the Plan shall be paid by UTFI.
11. Section Headings: The headings of the plan have been inserted for convenience of reference only and in the event of any conflict, the text of the Plan, rather than such headings, shall control.
12. Severability: In the event that any provision of the Plan shall be considered illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining provisions of the Plan, but shall be fully severable, and the Plan shall be construed and enforced as if such illegal or invalid provision had never been contained therein.
13. Gender and Number: Except where otherwise indicated by the context, wherever used, the masculine pronoun includes the feminine pronoun; the plural shall include the singular, and the singular shall include the plural.
14. Non-exclusive: Nothing in the Plan shall limit the authority of UTFI, the Board of Directors or the Committee to adopt such other compensation arrangements, as it may deem desirable for any employee.
15. Notice: Any notice to be given to UTFI or the committee shall be in writing and directed to the President and CEO of UTFI at 1525 University Ave., Knoxville, TN 37921.
16. Successors: All obligations of UTFI under the Plan with respect to awards granted hereunder shall be binding upon any successor to UTFI, whether the existence of such successor is the result of direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the assets of UTFI.

Eligibility and Participation #

Participation:

Only active employees who are in good standing with UTFI may participate in the Plan. If an employee is not an active employee, including employees who are on a leave of absence or FMLA leave, the employee is not eligible to participate in the Plan for the period they are on leave. If an employee is not in good standing, such as
being subject to a performance improvement Plan, subject to discipline, or having more than one written warning per performance period, the employee ceases to be eligible to participate in the Plan for the remainder of the then-current Plan year.

New Hires and Rehires:

An employee who is newly hired or re-hired between July 1 and September 30 of a Plan year will be eligible to participate in the Plan immediately upon hire or re-hire. An employee who is hired between October 1 and June 30 of a Plan year will be eligible to participate in the Plan on the first day of the next Plan year. By way of
illustration, if an employee is hired (or rehired) on August 1, 2022, the employee will be eligible to participate in the Plan upon hire. If an employee is hired (or rehired) on October 2, 2022, the employee will be eligible to participate in the Plan on July 1, 2023, the first day of the Plan year immediately after the date of hire (or re-hire).

Terms of Awards #

Determination of Performance Goals for UTFI and for each Affiliate

Prior to, or reasonably promptly following the commencement of each performance period, UTFI’s President and CEO, in conjunction with the applicable chancellors or vice chancellors of each affiliate, shall establish the overall goals for UTFI and for each affiliate.

Determination of Performance Goals for Individual Employees

After the overall goals for UTFI and the affiliates are established for the performance period, the supervisor of each employee, in their sole discretion, shall establish in writing the employee’s performance goals for the performance period. The performance goals shall be based on one or more performance criteria, each of
which may carry a different weight, and which may differ from employee to employee.

Determination of Target Awards

Prior to, or reasonably promptly following the commencement of each performance period, the committee shall establish the percentage of base salary or fixed amount for each job classification that shall be used to determine the primary award for each employee. The target award for each employee for any given performance period shall be based on the employee’s job classification and shall be conditioned on the achievement of the performance goals for the performance period.

Adjustments

Notwithstanding the foregoing, all primary awards, performance goals, and performance criteria for any individual employee are subject to review, modification, and approval by the employee’s unit supervisor or the committee in their sole discretion. Furthermore, any primary awards, performance goals, or performance criteria may be adjusted by the committee in connection with any one or more of the following events:

1. Material revenue or funding shortfalls;
2. significant litigation or claim judgements or settlements;
3. the effect of changes in tax laws, accounting standards or principles, or other laws or regulatory rules affecting reporting results;
4. any reorganization and restructuring programs;
5. extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 (or any successor pronouncement thereto);
6. acquisitions or divestitures;
7. any other specific unusual or nonrecurring events or objectively determinable category thereof; or
8. a change in UTFI’s fiscal year.

Payment of Awards #

Determination of Awards

1. Within thirty (30) days after the completion of each performance period, the committee shall determine the extent to which UTFI and each of the affiliates achieved UTFI or affiliate performance goals for that performance period and shall determine that portion of the overall award attributable to UTFI’s and each affiliate’s achievement of their respective performance goals.
2. Within thirty (30) days after the completion of each performance period, each employee’s supervisor or unit supervisor shall evaluate the employee’s performance for the performance period. Subject to the eligibility requirements set forth in Section II, to the extent that an employee achieved their performance goals for the performance period, then the employee shall be eligible for an award up to the maximum award, unless otherwise adjusted by the committee pursuant to Section IV.A.3 below.
3. In determining the amount of each award for each employee, UTFI may reduce, eliminate or increase the amount of the award applicable to the employee’s job classification if, in the committee’s sole discretion, such reduction, elimination or increase is appropriate. UTFI may, in its sole discretion, increase any individual employee’s award above the maximum award if, in the committee’s sole discretion, the employee’s performance and overall contribution to UTFI has been exceptional. Notwithstanding the foregoing, to avoid any appearance of any conflict of interest, no member of the committee shall participate in any vote to increase that committee member’s individual award above the maximum award, but such decision shall be made by the remaining members of the committee.

Form and Timing of Payment

Except as otherwise provided herein, as soon as practicable following UTFI’s determination pursuant to Section IV.A.1 for the applicable performance period, each employee shall receive a lump sum payment of the applicable award, less required withholding. In no event shall such payment be made later than 90 days following the last day of the performance period.

Employment Requirement

Notwithstanding the foregoing, and except as otherwise provided in Section V, no award shall be paid to any employee who is not actively employed by UTFI and in good standing, as provided in Section II.A, both on the last day of the performance period and on the date of payment of the award.

Clawback

If the committee determines that n employee has engaged in gross negligence, intentional misconduct or fraud related to UTFI, the committee may, in its sole discretion, to the extent permitted by law, and to the extent it determines in its sole judgment that it is in the best interests of UTFI to do so, require repayment of a portion or all of any award.

Termination of Employment #

Employment Requirement

Except as otherwise provided in Section V.B, if an employee’s employment terminates for any reason prior to the date that awards are paid after completion of the performance period, the employee’s right to an award for the performance period shall be forfeited. However, the committee, in its sole discretion, may approve payment of all or part of the award, subject to the committee’s determination that the performance goals for the performance period were met prior to the employee’s last day of employment. Such award, (in whole or pro-rated), will be paid at the same time and in the same manner as awards are paid to other employees. Notwithstanding the foregoing, if an employee’s employment is terminated for cause, the employee shall in all cases forfeit any award not already paid.

Termination of Employment Due to Death or Disability

If an employee’s employment is terminated by reason of their death or disability during a performance period or after the performance period but before the award is paid, the employee or their will be paid a pro-rata portion of the award that would otherwise be payable if the employee remained employed through the date that awards are paid for the performance period in which the death or disability occurred based on the employee’s performance until the date of death or disability. In the case on an employee’s disability, the employment termination shall be deemed to have occurred on the date that the employee satisfies the definition of “disability” as set forth above. Payment of such pro-rata award will be made at the same time and in the same manner as awards are paid to other employees.

Scope and Application #

This policy applies to all UTFI employees. See Section II Eligibility and Participation for details.

Policy Implementation #

Administration by the Committee

The Plan shall be administered by the committee. Members of the committee shall be appointed by the President and CEO of UTFI, with the support of the Board, before the start of each Plan year.

Authority of the Committee

Subject to provisions of the Plan and applicable law, the committee shall have the authority to:

1. designate employees or requirements for eligibility to participate in the Plan;
2. determine the terms and conditions of any award;
3. determine whether, to what extent, and under what circumstances awards may be forfeited or suspended;
4. interpret, administer, reconcile any inconsistency, correct any defect or supply any omission in the Plan or any instrument or agreement relating to, or award granted under, the Plan;
5. establish, amend, suspend or waive any rules for the administration, interpretation and application of the Plan and;
6. make any other determination and take any other action that the committee deems necessary or desirable for the administration of the Plan.

Decisions Binding

All determinations and decisions made by the committee, pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons, and shall be given the maximum deference permitted by law.

Delegation by the Committee

The committee, in its sole discretion, may delegate all or part of its authority and powers under the Plan to one or more officers of UTFI.

Agents: Limitation of Liability

The committee may appoint or retain professionals to assist in administering the Plan. The committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to it, by any officer or employee of UTFI, UTFI’s certified public accountants, attorneys, consultants or any other agents assisting in the administration of the Plan. Members of the committee and any officer or employee of UTFI acting at the direction or on behalf of the committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by UTFI with respect to any such action or determination.

Definitions #

Affiliate: Affiliate means the University of Tennessee and any other entity or campus controlled by
the University System.

Award: An award granted pursuant to the incentive Plan, the payment of which shall be contingent
on the attainment of performance goals with respect to a performance period, as determined
pursuant to Section IV.

Base Salary: Base salary is the employee’s annualized rate of base salary on the last day of the
performance period before (a) deductions for taxes or benefits and (b) deferrals of compensation
pursuant to any UTFI or affiliate-sponsored Plans.

Board: The Board of Directors of The University of Tennessee Foundation, Inc. as constituted
from time to time.

Cause:

1. If the employee is a party to an employment agreement with UTFI or an affiliate and such agreement provides for a definition of cause, the definition contained therein; or
2. If no such agreement exists, or if such agreement does not define cause, then “cause” shall mean:
   • the employee’s failure to adequately perform their duties (other than any such failure resulting from incapacity due to physical or mental illness);
   • the employee’s engagement in dishonestly, illegal conduct or misconduct, which is, in each case, materially injurious to the UTFI or its affiliates;
   • the employee’s embezzlement, misappropriation or fraud, whether or not related to the employee’s employment with the UTFI;
   • the employee’s conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent), a crime that constitutes a misdemeanor involving moral turpitude, or other crime that is work related, materially impairs the employee’s ability to perform services for the UTFI or results in material harm to the UTFI, its affiliates or the reputations of either; or
   • the employee’s violation of any restrictive covenants entered into between the employee and the UTFI or violation of the UTFI’s Code of Conduct. Refer to TM0001 Code of Conduct.

Code: The U.S. Internal Revenue Code of 1986, as amended from time to time, including any regulations or authoritative guidance promulgated thereunder and successor provisions thereto.

Committee: The President and CEO of UTFI and certain other executives of UTFI appointed by the President and CEO of UTFI, with oversight from the Board of Directors (or any committee of the Board of Directors appointed to provide such oversight) within the parameters of the Bylaws of the Board.

Disability: Unless otherwise defined in an employment agreement between the employee and the UTFI, total and permanent disability in accordance with the UTFI’s long-term disability Plan, or as defined by Section 22(c)(3) of the Code.

Maximum Award: Maximum award to any employee for any given Plan year, generally is 150% of the primary award.

UTFI: The University of Tennessee Foundation, Inc. a Tennessee non-profit corporation, and any successor thereto.

Employee: The employees of the UTFI who are eligible to participate in the Plan for that performance period.

Performance Criteria: The performance criteria upon which the performance goals for a particular performance period are based, which may include any of the following, or such other criteria as determined in accordance with Section III.B.:

1. Fundraising dollars;
2. Alumni engagement;
3. Donor satisfaction;
4. Net revenues or net revenue growth;
5. Defined contacts made;
6. Budget and expense management;
7. Productivity;
8. Defined performance competencies; or
9. Other, criteria as determined by the committee.

Such performance criteria may relate to the performance of UTFI as a whole, a campus, center, department, team, individual or any combination of these and may be applied on an absolute basis or relative to one or more peer group.

Performance Goals: The goals selected by the UTFI, for the individual employees, the UTFI, and each affiliate, to be applicable to an employee for any performance period. Performance goals shall be based upon one or more performance criteria. Performance goals may include a threshold level of performance below which no award will be paid and levels of performance at which specified percentages of the primary award will be paid and may also include a maximum level of performance above which no additional award amount will be paid.

Performance Period: The period for which performance is calculated, which unless otherwise indicated, shall be the Plan year.

Plan: The UTFI Annual Incentive Compensation Plan, as hereafter amended from time to time.

Plan Year: The UTFI’s fiscal year, which commences on July 1 each calendar year and ends on the following June 30.

Primary Award: The potential amount payable under the Plan to any employee for a particular performance period, usually expressed as a percentage of the employee’s base salary or as a fixed amount of cash.

Penalties/Disciplinary Action for Non-Compliance #

Violations of the policy and any subsections herein may be cause for disciplinary action up to and including termination of employment.

Policy Administration #

The table below identifies the responsible senior official, contact information and administrative responsibilities of policy matters.

Subject Matter	Office Name/Position Title	Email/Web Address
Authority	UTFI Chief Financial Officer & Treasurer	[email protected]
Point of Contact	UTFI Executive Director of Talent Management	[email protected]
Policy Location	Net ID Access Only
Policy Review Schedule	Annual Review

History of Revision #

Related Policies/Guidance Documents #

Policy:

TM0001 Code of Conduct Policy
TM0016 Compensation Policy

Procedure/Forms: