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Employment Agreement This Employment Agreement is made this 30" day of March 2009, between the University of Oragon ("University") and Charles "Chip" Kelly (‘Kelly’) and it entroly supersedes and replaces any and all prior employment agreements botwoen thoce two parties, including an earlier agreement dated December 4, 2008 that set out the terms {or this agreement. Article |= Purpose University and Kelly have entered into this Employment Agreement because the University desires to hire Kelly and Kelly desires to work as ar ‘employee for the University. For these reasons, University has agreed to employ Kelly in @ salaried position and Kelly has agreed to be employed by the University upon tre following conditions: Article it~ Position 201. Description of Kellys Responsibilities 8. Title, ‘Kelly is employed as Head Coach of the University's intercollegiate football team. However, Kelly's assignment is subject to the provisions in this agreement regarding reassignment and termination. b. Dutes, Kelly agrees to devote his best efforts ful-sime to the performance of hs duties and responsibilties as head coach or others as may bo, from time to time, assigned to him, to glve proper time and attention to furthering his responsibilities to the University and to comply with all the rutes, regulations, polices, and decisions established or issued by the University, the University Department of intercollegiate Athletics (‘the Athletic Department’), tho Pacifc-10 Conference ("PAC-10"), or the National Collegiate Athletics Association ("NCAA"). Kelly also agroes that notwithstanding the provisions of ‘section 4.04, during the term ofthis Employment Agreement, he will not engage, directly or indirecly In any business which would detract from his ablity to apply his best efforts o the performance of his duties. Kelly also agrees not to usurp ‘any corporate opportunities of University |. Gereral Duties and Responsibilities as Heed Coach, During the period in which University employs Kelly as Head Coach of the University’s intercollegiate football team, Kelly agrees to undertake and perform properly, efficiently, to the best of his abilly and Consonant with the standards of University, all duties and responsibilities attendant to the position of Head Coach of the University’s football team as set forth in section 2. Employee is responsible for the management and administration ofall phases of the intercollegiate football program in a manner that upholds the philosophies and objectives of the Department of intercollegiate ‘Aletis, including compliance with NCAA, Conference and University rules and regulations, ‘Spociic Duties and Responsibiliies as Head Coach, As Head Ceach ofthe football team, Kelly's speciic and essential responsibilties include, but are not limited to: ‘A. Work with studentathletes involving recruitment and selection, leadership and instruction in personal and athletic development, determining eligibility and promoting academic progress. B. Develop, submit and monitor the football program's annual budget to generate and maximize revenue to sustain the {football program and to support other ancilary activites of the of the department, ©. Oversee the selection, purchase and maintenance of uniforms and ‘equipment, within University contracts. D. Arrange and conduct practices and, in conjunction with Director of Athletics, arrange competitive event schedule including travel itineraries and plans. E. _Suporvse staff, including assistant and part-time coaches, ‘graduate assistants and others, providing orientation and training 2s appropriate, conducting evaluations and recommending salaries. F. Oversee the conditioning, training and discipline of student- athietes as well as the safety of student-athletes in team- elated actives. all of which include. with the approval of the Director of Athletics or designee, developing and publishing team rules and effectively administrating thelr implementation 202. Direct the team and the coaching staff at all competitive {events involving the football team. Schedule permitting, Participates in clinics, exhibitions and camp activios as Tequested by the Director of Athletics. H. Schedule permiting, participate in public relations events 2s requested by the Director of Athletics. Compensation for ccortain of these activities may be provided separately. | Canparate with ather Deparment and University staff including other coaches. Performs other duties as reasonably requested by the Director of Athletics. Ethical Responsibillies: The University has established a tration of ethical conduct at all lavels of University life. In accordance with ths tradition, Employee, as a member of the Department, agrees to represent the University in an honorable and ethical manner at all times. Standards for ethical conduct for Department staff are established and enforced by the Director of Athletics, the University the State Board of Higher Education, the PAC-10 Conference and the NCAA. Intemal Management Directive 8.038 reflects and specifies certain requirements of the Board regarding t’hrical conduct as does University's Confit of Interest Policy, both ‘of which are hereby incorporated by reference in this Agreement. Employee further agrees to abide by, and use his best efforts to ‘cause his Assistant Coaches to abide by, and to comply with the ‘constitution, bylaws, and interpretations of the NCAA, and with NCAA, PAC-10 Conference and University rules and regulations relating to the conduct and administration ofthe football program, including recruiting rules, as now constituted or as amended at any ‘time during the term ofthis agreement. In the event Kelly becomes ‘aware, or has reasonable cause to believe, that violations of such ‘constitution, bylaws, interpretations, rules or regulations may have taken place, he shail report the same promptly consistent with Uriversity procedures Kelly also agrees to adhere to, to respect 2nd to follow the academic standards, requirements and policies of the University at all times including during the recruiting and eligibility of prospective and current student-athietes for the football program and to use his best efforts ta ensure members of his staf ‘also do 80. “anment ‘The University’s intent is for Kelly to serve as the Head Coach of University's intercollegiate football team throughout the term ofthis Agreement. However, the patties understand that the University retains the right to assign {kelly to other positions with diferent duties during the term ofthis agreement reassignment’). Should such reassignment be under consideration, University shall consult with Kelly and seek Kelly's input at least thirty (30) calendar days before any reassignment is made. In no event, however, will Kelly be assigned {o any position which is not, In University’s good faith judgment, consistent with his education, expertise or experience nor will Kells Base Salary be reduced during the term o' this agreement. If the University reassigns Kelly and Kally ‘efuses to accept such reassignment, the University may terminate this, ‘Agreement pursuant to the terms and condltions for termination by University set {orth in section 5.92 hereof. 2.03. Report ionshi ‘As Head Coach ofthe football taam, Kelly shall report to the Athletic, Director or to such other person as may be designated from time to time by the Athietic Director. Article Il - Torm of Employment 3.01. Ter ment, ‘The term o' this Employment Agreement shall be fora period of five years, Which began March 30, 2009, and expires March 30, 2014, However, the parties ‘may agree to extend this agreement for additional years. Should neither party decide to extend this agreement beyond its expiration date which includes any subsequent extensions, the agreement shall merely expire without penalty to either party. This agreement shall automatically be extended for an additional year each time the football team participates in a NCAA-authorized post-season bow. It may also be extended by mutual agreement of the parties. Article IV- Compensation Kelly is entiled to compensation as identifed in this agreement. Kelly ‘may earn supplemental income related to his employment as approved by the University, consistent with NCAA and PAC-10 reaulations. ifany. Each of these, Items is described below. All payments from University are subject to normal ‘deductions and withholding for state, local and federal taxes and for any retirement or other benefit program in which Kelly Employee participates and are subject to the terms and conditions in Atice V regarding termination of this ‘Agreement, 401. ‘Guaranteed Base Salary: Supplemental Salary Component a. University shall pay Kelly a guaranteed base salary of four hundred fifty thousand dollars ($450,000) per year for services and satisfactory performance of the terms and conditions of this Employment Agreement, Boginning Apri, 2011, this amount shall be increased to five hundred thousand {dollars ($500,000) per year. These amounts shall be subject to upward adjustment, if ayy, made pursuant to the evaluation process described in Article 5 and Article VII bolow. Kellys baco calary shall be payable in twelve (12) Installments by the University to Kelly on the last day of each calendar month during the term of this Agreement b. University shail also pay Kelly a salary supplement of four hundred thousand dollars ($400,000) per year. Beginning April 1, 2011, this amount shall be increased to five hundred thousand dollars ($500,000) per year. These ‘amounts are suoject to adjustments made pursuant fo the evaluation process described in Aricle 5 below and are payable in twelve (12) installments by the University to Kelly on the last day of each calendar month during the term of this ‘Agreement. ©. University shall pay Kelly four hundred thousand dollars ($400,000) per year in recognition of his activities related to media broadcasts and other actives arising out of University’s agreement with IMG Communications, Inc. or lis successor ("IMG"), Beginning Apri 1, 2011, this amount shall be increased to five hundred thousand dollars ($500,000) per year. These amounts are payable in twelve (12) instalments by the University to Kelly on the last day of each calendar month during the term of this Agreement. 4d. Uriversty reserves the right to reallocate the compensation elements of 4.0°b and c above in its discretion from year to year, ©. The cumulative amounts identified in paragraph a, b and c of the ‘section 4.04 shall be identified as the Annual Guaranteed Salary. 4.02. Fringe Benefits a. Standard University Eringe Benefits; Kelly shall be entitled to participate, on the same basis as other University employees, in the standard University fringe benefits consistent with his classification, including (but not limited to) group if, medical, and dental insurance; paid vacation and sick leave; membership in the Public Employees Retirement System (PERS) ; and opportunities to invest a portion of salary in tax deferred annuities or deferred ‘compensation plans. a. Expenses: Kelly will recive reimbursement fr all approved business-related travel and business-related out-of-pocket expenses. ©. Aulomobile: University shal provide at all imes during the term of this Agreement and while Kelly is Head Coach one courtesy car for use by Kelly ‘and one for use by Kelly's spouse, or a car stipend . The Athletic Department will insure Kelly's car for official business. but Kelly must provide insurance for Personal use for soth cars. Should University be unsuccessful in obtaining a ‘courtesy car for Kelly, Kelly shall receive a stipend of up to $500 per month per car authorized inlieu of a courtesy car. d. Chua Membership As Head Coach of the football team, Kelly wil be provided with membership to the Eugene Country Club as such memberships are available. The Athletic Department wil pay monthly dues and approved business-related expenses. Kelly willbe responsible for any personal charges including, but notlimited to, electric carts, lockers, restaurant charges, lessons, etc. This membership is provided to assist in fund-raising efforts. Should Kelly bbe reassigned Kelly's continued membership will depend on the wishes of the Eugene County Club, needs of the new position and its relative lo certain Head ‘Coach postions) ulity to the promotions andlor to the fund-raising functions, f. _Detartment Fringe Benefits: As Head Coach Kelly will recelve, as part of the standard Athlatic Department fringe benefit package: twelve season tickets to each of he University’s football team’s games, and two tickets to each home game of each of the University's other varsity intercollegiate athletic teams. In addition, University wil pay the costs for Kelly's spouse to travel to all regular ‘season away football games. In the event the football team participates in post- ‘season play, University agrees to pay the costs for Kelly's spouse and any dependent children living at home to travel to away post-season games. Kelly ill be provided use of a skybox suite during each home football game. Kelly or his designee will determine the weekly guest Iist, consistent with NCAA rules and regulations. Kelly understands that these benefits if received, wil ikly be reportable and taxable. University wil also provide reasonable parking accommodations for football home game events at team facies. 4.03. nities to Earn Outside i While Kellyis Head Coach, he shall have the opportunity to earn income ‘rom outside the University as a result of his position on the following terms and ‘conditions: G2noral Provisions Gonceming Outside Income. The following ‘general terms and conditions shell apply whenever Kelly wishes fo eam outside Income as a result of his being Head Coach of the University's football eam: b. University Obliaations are Primary. “Any outside activities shall not imerfere with the full and complete performance of Kelly's dulles ‘and obligations as a University employee, recognizing always that his primary obligations lie with the University and its students NCAA Rule Control, Inno event shall Kelly accept or receive directly or indirectly any monies, benefit, or any other gratuity ‘whatsoever from any person, corporation, University booster club ‘or alumni association or other benefactor if such action would Violate NCAA PAC-10 Conference legislation or the constitution, bylaws, rules and regulations or their interpretation in effect at the time. Changes of such legisiation, constitution, bylaws, rules and ‘regulations or interpretations automatically apply fo this Agreement wihout the necessity of written modification, Unversity is Required. Kelly shall obtain the advance ‘writen approval consistent with University and NCAA requirements before entering into agreements for outside income or in-kind benefits or financial benefits. Subject to other terms of this ‘Agreement, such approval shall not be unreasonably withheld as to arrangements not directly related to head coaching responsibilities, information and activiies. Kelly shall not endorse or be a ‘spckesperson or celebrity personality for products or services ‘manufactured, sold or provided by non-Oregon Sports Network ‘spensors or by non-universty-contracted-sponsors (other than as. required by the Athletic Department) without prior witen approval Inversty is not Liable, Any income produced by these activities {are independent of Kelly's guaranteed base salary, and University ‘shall have no responsibility or liability for any loss of such outside’ income resulting from termination ofthis Agreement as provided for Section 5.01, 6.02 and 6.03 or from the reassignment as provided in Section 2.02, regardless of Kelly's expectations based on past history o representations and regardless of whether either party Could have foreseen or contemplated such a loss upon termination ‘or reaceignment or whether ouch a loge reaulted directly or Indirectly {rom the termination or reassignment. Camps. Kelly may earn additional compensation as a result of his responsibilities cperating University's football youth summer camp. Camp ‘operation’ particpation Is subject fo all the rules and procedures outlined in the Department's Procedural Manual. The opportunity to operate a camp on or using University facts is exclusively available to Kelly only while he Is actively serving as Head Coach of the football team. University shall have no responsibilty or tally for loss of camp income resulting from termination ofthis ‘Agreement as provided for in Section 5.01, 6.02 and 5.03 or from the ‘reassignment as provided in Section 2.02. Further, University does not guaranteo any minimal carmp-related income. Income shall be determined consistent with Department procedures and practices. &—_Telavision and Radia Shows. Kelly's opportuniins to aarn outside Income from pre-game, post-game or coach's show, “highlights’ and other {television and radio show broadcasts are granted and conferred solely through University approval consistent withthe terms of University’s Agreement with IMG. Except for spontaneous, lve sideline interviews consistent with any restrictions arising out of University’s Agreement with IMG, Kelly shall not provide any such services, commentary or performance relating to University of Oregon Football ‘except as consisient with University’s Agreement with IMG unless approved by the Athletic Department. Opportunities to eam income from an OSN Agreement ‘are available to Kelly only while he is actively serving as Head Coach of the University’s football team. University shall have no responsibilty or ability for loss of OSN or ofher talent contract income (other than for fuliling the terms of ‘any OSN contract or being liable for its breach) resulting from termination of this ‘Agreement as provided for in Section 5,01, 5.02 and 8.03 or from the reassignment as provided in Section 2.02. d. Shee, Apparel and Equipment Contra The Athletic Department reserves the right to deal directly with manufacturers, importers, or distributors of shoes, apparel or equipment to negotiate and contract for ‘usagalendorsement of their products. The Athletic Department has entered (and will enter) nto shoe, apparel or equipment contracts which require Kelly's ‘compliance and /or fulfilment of University obligations and which prectude Kelly from independenly entering into contracts with such parties (including design, Consulting or usage-dependent customer contact or coaching clinic contracts). ‘The Athletic Department allows Kelly to participate in the revenue from such arrangements so long as he is Head Coach under Section 4.01b of this ‘Agrooment. Kelly shall not himself enter info any such contracts. University shall have no responsisilty or liability for loss (which includes reduction or cessation) (of supplemental income under this provision(whether eared by Kelly as ‘contracting party or paid to Kelly as a result of revenue from a Department contract ar derived from restricted gift) resulting from termination ofthis ‘Agreement as provided for in Section 6.01, §.02 and §.03 or from the reassignment as provided In Section 2.02. 4.05 Supplemental Compensation for Team Performance. Each season during his employment as Head Coach of University's football team, if University’s football team participates in a pre-season or post-season ‘game or a tournament (beyond the present twelve-game schedule or thiteen games if team glays University of Hawall) or is ranked in a final pol, Kelly shall be eligible to receive supplemental compensation in consideration af his, additional and extraordinary efforts in spectically preparing the team for, and ‘coaching the team during, such events, Such supplemental compensation shall be as follows: 4. BCS Bowl Game $75,000 Pacific-10 Conference Bow for $75,000 Standing of 1%, 2° or 3 BCS Bowl Championship Game $100,000 2. BCS Bowl Championship Game Win $260,000, 3, Pacifio-10 Conference Champion ‘$100,000 (Win or Tie) 4, Top 11 - 25 Ranking in Finat Poll $ 16,000 (AP, Coaches or BCS Pol!) Top 10 Ranking in Final Poll '$100,000 8. OSU Civil War Win '$ 25,000 6. 12 Wins in a Season (not including bowls) $200,000 7. Undefeated Season including Bowl Game $160,000 Kelly's receipt of the supplemental salary for final poll ranking shall have ‘no effect on his receipt of supplemental salary for team’s participation in a post- ‘season bowl game. Kelly may eam a maximum of seven salary supplements in a given year pursuant to this section: one for team's participation in a post- ‘season bow game, a second for team’s victory in the BCS Championship Game, a third for final Paciic-10 Conference standing, a fourth based on team's ranking Ina final seasor poll, a fith for beating OSU, a sixth based on wins in a season ‘and a seventh for completing a season without losing any games. Kelly's salary ‘supplement willbe at the maximum level eamed in each category. This ‘supplemental compensation, if payable, shall be paid within forty-five (45) days following the last post-season game or tournament in which team participates. 4.06 Supplemental Compensation Related to Student-Athlete Graduation Rates, Grade Point Averages and Academic Progress Report Score, Each year during his employment as Head Coach of the Men's Football Program, Kelly may receive additional compensation based on the graduation rates of student-athletes, as follows: (a) if the program has an ninety percent (90%) or greater graduation rate based on a 4-year rolling average, as determined by NCAA graduation success rate data, Kelly shall receive one hundred thousand dollars ($100,000); (b) i as determined by NCAA graduation success rate data based on a 4-year rolling average, the program achieves at least eighty and less than ninety percent (80% or greater and less than 90%) ‘graduation rate, Kelly shall receive compensation of fiy thousand dollars ($50,000); and (e) if as determined by NCAA graduation success rate data based ‘on a 4-year rolling average, the program achieves at least seventy and less than £80 percent (70% or greater and less than 80%) graduation rate, Kelly shall receive compensation of twenty-five thousand dollars ($25,000). This ‘supplemental compensation, i payable, shall be paid within forty-five (45) days of the date unon which the NCAA graduation rate data is available. Each year during his employment as Head Coach of the Men's Football, Program, Kelly may receive additional compensation based on Grade Point ‘Averages (GPA) of student-athletes as follows: (a) ifthe program has a GPA of greater than 3.0 for an academic year, Kelly shall receive one hundred thousand ‘dollars ($100,000); (b) i the program has a GPA of between 2.75 and 2.99 for an ‘academic year, Kelly shall recolve fity thousand dollars ($50,000); and (c)f the program has a GPA of between 2.5 and 2.74 for an academic year, Kelly shall receive twenty-five thousand dollars ($26,000). This supplemental ‘compensation, payable, shall be paid within forty-five (45) days of the date ‘upon which the tgam's GPA for the previous academic year is available, Each year during his employment as Head Coach of the Men's Football Program, Kelly may receive additional compensation based on the program's scores on the NCAA Academic Progress Report (APR) as follows: (a) if, a5 dotermined by the NCAA, the program has an APR of 975 or greater based on a ‘fouryear roling average, Kelly shall receive one hundred thousand dollars ($100,000); or (b) if, as determined by the NCAA, the program has an APR of at least 950 and no greater than 974 based on a four-year roling average, Kelly shall receive ffl thousand dollars ($50,000). This supplemental compensation, if payable, shal be paid within forty-five days of the date upon which the NCAA APR score is available. 4.07 Supplemental Compensation for Ticket Sales and Televised Games, During his employment as Head Coach of the Football Program, Kelly ‘may receive addtional compensation based on annual season reserve ticket sales, as follows: (a) forthe 2009 season two-tenths percent (.2%) of gross receints of season reserve tickets; (b) for the 2010 season three and one-quarter percent (3.25%) of gross receipts of season reserve tickets of thirteen milion dollars ($13,000,000) or less and one and sixty-five hundreths percent (1.65%) of ‘Foss receipts in excess of thirteen milion dollars ($13,000,000); () for the 2011 and in subsequent years one and sixty-five hundredths percent (1.65%) of gross receipts of thirteen milion dollars or less ($13,000,000) or less and one and ten, 0 hundreths percent (1.10%) of gross receipts in excess of thirteen milion dollars (813,000,000) of season reserve tickets. "Gross receipts of season reserve ticket sales" means the amount received In payment for season reserve tickets from all sales to the general public and to University faculty and staf, including sales of season tickets within ‘skybox suites. It does not include general admission season tickets, the value of tickets provided to sponsors as part of any sponsor agreement or tickets that are “comped,” including tickets provided to coaches and other athletic staff as part of their employment or tickets made available (o the University Pracidant to carry Cut his official duties. "Gross recoipts of season ticket sales" shall equal the amount shown on the annual season ticket report generated at the close of the football season, usually in January. Kelly shall also receive twenty-five thousand dollars ($25,000) for each televised Pac-10 Game in which Oregon participates. Notwithstanding the above, during the 2009 season, Kelly is guaranteed to receive no less than two hundred fit thousand dollars ($250,000) combined compensation from ticket sales and televised games. This supplemental compensation from ticket sales and from {televised Pac-10 Games, if payable, shal be paid in one lump sum as par of the ( April ay period of each calendar year following the end of the season, 4.08 Supplemental Compensation for Peer Recognition, During his employment as Head Coach of the Men's Football Program, Kelly may receive additional compensation based on recognition by his peers for outstanding performance as follows: (a) for Pac-10 Coach of the Year twenty- five thousand dellars ($25,000) and (b) for National Coach of the Year twenty-five ‘thousand dollars (§25,000). These amounts are cumulative. This supplemental compensation, i payable, shall be paid within forty-five days of the date upon which the award is announced. Article V — Periodic Evaluation 5.01 Periodic Evaluations @, The Athletic Director or designee will evaluate Kelly's performance of his job duties and responsibilities under this Agreement annually on the same basis as performance evaluations are done for other employaae of Kalle classification within the University. These evaluations will also take into account prior evaluations and the expectations and goals set for Kelly in such prior evaluations. " b. _Aspart of the evaluation process, winloss record, post-season ‘appearance performance (i any), relative recruiting success (taking into account the relative recruiting budget, location of the University, and the demographics of the Eugene area among other things) and relative fund-raising and revenue- {generating success shal be taken into account and evaluated against ‘omparably situated and funded Division |-A intercollegiate athletics programe. ©. Using the annual evaluations specified in (a) and (b) above, Kelly's Guaranteed Base Salary may be adjusted upward in contract years following the first year. Usina the annual evaluations specified in (a) and (b) above, Employee's salaty supplement may be adjusted Article VI = Termination Without Cause 6.01 Automatic Termination for Death or Disabil. ‘This Employment Agreement shall terminate automatically if Kelly dies, or it Kelly becomes totally disabled (within the meaning of University’s disabilty lngurance for employees of Kelly's classification or within the meaning of Oregon Public Employees Retirement System (PERS) regulations or federal Social ‘Security Administration regulations) so that the Kelly's physical or mental Incapacity is of a nature which prevents him from performing his duties under this, ‘Agroement. I this agroomentis terminated pursuant to this section because of Kelly's

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