Chip Kelly's new coaching contract with the University of Oregon

8/8/2019 Chip Kelly's new coaching contract with the University of Oregon

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EmlP'oyment Agreemel1tThis Employment Agreement ("Agreement") is made between the State of Oregon acting by andthrough the State Board of Higher Education on behalf of the University of Oregon ("University") andCharles "Chip" Kelly ("Kelly") and it entirely supersedes and replaces any and all prior agreementsbetween the parties.

Article I - Purpose

University and Kelly have entered into this Employment Agreemeht because the University desires toretain K.ellyand Kelly desires to continue to work as an employee for the Universitv. For these reasons,University has agreed to employ Kelly In a salaried position and Kelly ha s agreed to be employed by theUniversity upon the following conditions:

Article 11- Position2.01. De'scription of Kelly's Responsibilitiesa. Title, Kelly isemployed as Head Coach of the University's intercollegiate football team.However, Kelly's assignment is subject to the provisions in this Agreement regarding reassignment andterminatIon.b. DuHes. Kelly agrees to devote his best efforts full-time to the performance of his duties andresponsibilities as head coach and such other duties as may be, from time to tlme, assigned to him, togive proper time and attention to furthering his responsibilities to the Unlversltv and to comply with allthe rules, regulations, policies, arid decisions established or issued by the University, the UniversityDepartment of Intercollegiate Athletics ("the Athletic Department"), the Pacific-l0 Conference ("PAC-10"), or the National Collegiate Athletic Association ("NCAA"). Kelly also agrees that notwithstanding theprovisions of section 4.04, during the term of this Agreement, he willi not engage, directly or indirectly inany business which would detract frornhls ability to apply his best efforts to the performance of hisduties. Kelly also agrees not to usurp any corporate opportunities of University.i. General] Duties and ResponsibiUtie,s as Head Coach. During the period in which Universityemploys Kelly as Head Coaclhof the University's intercollegiate football team, Kelly agrees to undertakeand perform properly, efficiently, to the best of his ability and consonant with the standards ofUniversity, all duties and responsibilities attendant to the position of Head Coach of the University'sfootball team as set forth in this Agreement. Employee is responsible for the management andadministration of all phases ofthe intercollegiate football program in a manner that upholds thephilosophies and objectives of the Athletic Department, including compliance with NCAA,PAC-IO andUniversity rules and regulations.

ii. Specific Duties and Responsibilities as Head Coach. As Head Coach of the football team, Kelly'sspecific and essential responsibil ities include, but are not limited to, the following:A. Work with student-athletes involving recruitment and selection, leadership and instruction inpersonal and athletic development, determining eligibility and promoting academic progress.

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B. Develop, submit and monitor the football program's annual budget to generate and maximizerevenue to sustain the football program and to support other ancillary activities of the AthleticDepartment.C . Oversee the selection, purchase and maintenance of uniforms and equipment, within Universitycontracts.D. Arrange and conduct practices. and, in conjunction with Director of Athletics, arrange acompetit ive football game schedule including travel itineraries and plans.E. Supervise staff, including assistant and part-time coaches, graduate assistants and others,providing orientation and training as appropriate, conducting evaluations and recommending salaries,F . Oversee the conditioning, training and discipline of student-athletes as well as the safety ofstudent-athletes in team-related activities, all of which include, with the approval of the Director ofAthletics or designee, developing and publishing team rules and effectively administrating theirImplementation.G. Direct the team and the coaching staff at all competitive events involving the football team.Schedulle permitting, Kelly shall participate in clinics, exhibit ions and camp activities as requested by theDirector of Athletics.H. Perform the obligations of the head coach of University's intercollegiate football team regardingendorsements, media availability and appearances, public relations availability and appearances andother public and private appearances as reasonably requested by the Director of Athletics. Under-thisAgreement University is acquiring Kelly's rights related to endorsements, media availability andappearances, public relations availabil ity and appearances and other public and private appearancesreasonably related to his duties and responsibilities under this Agreement and as head coach ofUniversity's intercoliegiiate football team.I. Cooperate with other Athletic Department and University staff, including other coaches. Kellyshall perform other duties as reasonably requested by the Director of Athletics.lit. Ethical Hesponsibillities. The University has established a tradition of ethical conduct at all levelsof University life. In accordance with this tradition, Kelly agrees to represent the University in anhonorable and ethical manner at all times. Standards for ethical conduct for Athletic Department staffare established and enforced by the Director of Athletics, the University, the State Board of HigherEducation ['Board"], the PAC-10Conference and the NCAA. Internal Management Directive 8.036reflects and specifies certain requirements of the Board regarding ethical conduct as does University'sPotential Conflict of Interest Policy, both of which are hereby incorporated by reference in thisAgreement. Employee further agrees to abide by, and use his best efforts to cause his assistant coachesand other staff members he supervises to abide by, and to comply with the constltution, bylaws, andinterpretations of the NCAA , and with NCAA,PAC-l0 Conference and University rules and regulationsrelating to the conduct and administration of tine football program, including recruiting rules, as nowconstituted or as amended at any time during the term of this Agreement. ln the event Kelly becomesaware, or has reasonable cause to believe, that violations of such constitution, bylaws, interpretations,rules or regulations may have taken place, he shall report the' same to the Director of Athletics promptly



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consistent with University procedures. Kelly also agrees to adhere to, to respect and to follow theacademic standards, requirements and policies of the University at all t imes regarding the recruit ingand eligibility of prospective and current student-athletes for the football program and to use his bestefforts to ensure members of his staff also do so.

2.02. Reassignment.The University's intent is for Kelly to serve asthe Head Coach of unlversitv's intercollegiate footballteam throughout the term of this Agreement. However, the parties understand that the Universityretains the right to assign Kelly to other positions with different duties during the term of thisAgreement ("reassignment"), Should such reassignment be under consideration, University shall consultwith Kelly and seek Kelly's input at least thirty (30) calendar days before any reassignment is made. Inno event, however, will Kelly be assigned to any position which is not, in Universiity's good faithjudgment, consistent with his education, expertise or experience nor will Kelly's BaseSalary be reducedduring the term of this Agreement. If the University reassigns Kelly and Kelly refuses to accept suchreassignment, the University may terminate this Agreement pursuant to the terms and conditions fortermination by University set forth in section 6.02 hereof.2.03. Reporting Relationship.As Head Coach of the football team, Keillyshall report to the Director of Athletics or to such other personas may be designated from time to time by the Director.

Article III - Term of Employment.3.01. Term of Agreement.a. The term of this Agreement shall begin on June 15, 2010,and end on June 14, 2016. Eachperiod from June 15 to June 14 during the term of this Agreement and any extension thereof shall becalled a "Contract Year."b. If the University's intercollegiate football team wins at least 12 games in the 2010 season orparticipates in the Bowl Championship Series (BCS)Championship Game at the end of the 2010 season(in January 2011), one Contract Year shall be added to this Agreement. This additional year shall be onthe terms and conditions of this Agreement in effect during the 2015-2016 Contract Year.c. If the University's intercollegiate football team wins at least 12 games in the 2011 season orparticipates in the Bowl Championship Series (BCSj Championship Game at the end of the 2011 season(in January 2012), one Contract Year shall be added to this Agreement. This additional year shall be onthe terms and conditions of this Agreement in effect during the 2015-2016 Contract Year.

d. for each Contract Year beginning with the Contract Year that commences on June 15,2012, ifthe University's intercollegiate football team wins at least 11games (one of which must be a bowl gamewin) or wins at least 10 games (one of which must be a BCSBowl Game win), one Contract Year shall beadded to this Agreement. Any such additional year shall be on the terms and conditions of thisAgreement in effect during the Contract Year immediately preceding the additional Contract Year.

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Artie:le IV - CompensationKelly is entitled to compensation as identified in this Agreement. Kelly may earn outside income

as approved by the Universiity, consistent with NCAAand PAC-10 regulations, if any. All payments fromUniversity are subject to applicable deductions and withholding for tax purposes and employee benefitprograms and are subject to the terms and conditions in Article VI and VII regarding termination of thisAgreement.4.01. Annual Guaranteed Salarya. University shan pay Kelly all Annual Guaranteed Salary asfollows:

Contra ct Year One:Contract Year Two:Contract Year Three:Contra ct Year Four:Contract Year Five:Contract Year Six:

$2,400,000$2,800,000$3,500,000$3,800,000$4,000,000$4,000,000

b. Kelly's Annual Guaranteed Salary shall be payable in installments to Kelly on the regular paydaysof the University. During each Contract Year, the installments shall be approximately equal.4.02 Fringe Benefitsa. Standard University Fringe Benefits: Kelly shall be entitled to participate, on the same basis asother University Officers of Administration, in University fringe benefits, These currently include (but arenot limited to) group life, medical, vision, and dental insurance; paid vacation and sick leave; disabilityinsurance; the Oregon University System Optional Retirement Plan and opportunit ies to invest a portionof salary in tax deferred annuities or deferred compensation plans.h. Expenses: Kelly will receive reimbursement for all approved business-related travel andbusiness-related out-of-pocket expenses.c. Automobi.le: University shall provide at all times during the term of this Agreement whileKelly is Head Coach of the intercollegiate football team two courtesy cars for use by Kelly. Kelly mustprovide insurance covering personal use of all vehicles. Should University be unsuccessful in obtainingone or both of the courtesy cars, Kelly shall receive a stipend of $500 per month per car.d. Club Membership As Head Coach ofthe football team, Kelly wiill be provided withmembership to the Eugene Country Club as such memberships are available. The Athletic Departmentwill pay monthly dues and approved 'business-related expenses. Kelly will be responsible for anypersonal charges including, but not limited to, electric carts, lockers, restaurant charges, lessons, etc.This membership is provided to assist in fund-raising efforts. Should Kelly be reassigned Kelly'scontinued membership will depend on the wishes of the Eugene Countrv Club, needs of the new



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position and its relative (to certain Head Coach positions) utility to the promotions and/or to the fund-raising functions.e. Department Fringe Benefits: As Head Coach Kelly will receive, as part of the standard AthleticDepartment fringe benefit package: twelve season tickets to each of the University's football team'sgames and two tickets to each!home game of each of the University's other varsity intercollegiateathletic teams .. In addition, University Will pay the costs for Kellv's guest to travel to all regular seasonaway football games. In the event the football team participates, in post-season play, University agreesto pay the costs for a guest of Kelly's and any dependent children living at horne to travel to away post-season games. Kelly will be provided with use of a skyboxsuite during each home football game. Kellyor his designee will determine the weekly guest list, consistent with NCAA rules and regulations.University wiillalso provide reasonable parking accommodations for football home game events at teamfacilities. Kelly understands that these benefits may be subject to taxation.4.03 Opportunities to EarnOutside Income.While Kelly is Head Coach, he shall have the opportunity to earn income from outside the Llniversity as aresult of his position on the following terms and conditions:a. General Provisions Concerning Outside Income. The following general terms and conditionsshall apply whenever Kelly wishes to earn outside income as a result of his being Head Coach of theUniversity'S football teain:i. University Obligations are Primary. Any outside activities shall not interfere with the full l andcomplete performance of Kelly's duties and obligations asa University employee, recognizing alwaysthat his primary obligations lie with the University arid its students.ii. NCAA Rules Control. In no event shall Kelly accept or receive directly or indirectly any monies;benefit, or any gratuity whatsoever from any source whatsoever if such action would violate theconstitution, bylaws, legislation, rules, or regulations of the NCAA or the PAC-10, or their respecti.veinterpretations in effect at the time. Changes to such legislation, constitution, bylaws, rules, regulations,and interpretations automatically apply to this Agreement without the necessity of written modification,iii. University Approval is Required, Kelly shall obtain the advance written approval ofthe Directorof Athletics before receiving o r enteringintb an agreement to receive outside income, in-kind benefitsor financial benefits, Subject to other terms of this Agreement, such approval shall not be' unreasonablywithheld asto arrangements nail:directly related to head coaching responsibilities, information andactivities. Kelly shall not endorse or be a spokesperson or celebrity personality for products or servicesother than as permitted by the Director of Athletics. Kelly rnavnot knowingly enter into any agreementor participate in any activity that may involve a potential or actual conflict with his duties andobligations under this Agreement.iv. University is not Liable. University shall have no responsibility or liability for Kelly's loss of anvincome from any source resulting from termination O f this Agreement


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contemplated such a loss upon termination or reassignment or whether such a loss resulted directlv orindirectly from the termination or reassignment.4.04 Other Compensation Opportunities.

a. Camps. Kelly may earn additional compensation as a result of his responsibilities operatingUniversity's football youth summer camp. Camp operation is subject to al!1he rules and proceduresoutlined in the Athletic Department's Procedural Manual. The opportunity to operate a camp on orusing University facilities isexclusively available to Kelly only while he is actively serving as Head Coachof the football team. University shall have no responsibility or liability for loss of camp income resultingfrom termination of this Agreement as provided for in Articles VI or VII or from the reassjgnrnentasprovided in Section 2.02. Further, University does not guarantee any minimal camp-related income.Income shall be determined consistent with Department procedures and practices.b. Te[evisio.n and Radio Shows. Without University's consent, not to be unreasonably withheld,Kelly shall not earn outside income from or participate in pre-game, post-game or coach's shows,"highlights" and other television and radio show broadcasts, podcasts, Twitter, blogs, internet, and anyother form of media now existing or hereafter developed. Except for Intervlews or shows arranged byUniversity, spontaneous, live sideline interviews of thirty-seconds or less and standard interviews, Kellyshall not provide any service, commentary OJ performance relating to University football, whether ornot such service, commentary or performance is compensated, and regardless of the form of media.c. Shoe. Apparel and Equipment Contracts. The Athletic Department reserves the right to dealdirectly with manufacturers, importers, or distributors of shoes, apparel or equipment and to negotiateand contract for usage and endorsement of their products. Kelly shall not enter into any such contracts.4.05 Team Performance Incentives.As long as Kelly remains head football coach during the term of this Agreement, h shall be eligible forteam performance incentive payments each Contract Year as set forth in Exhibit A. Team performanceIncentives, if earned, shall be paid within forty-five (45) days following the last post-season game inwhich the intercollegiate football team participates.4.06 Academic Incentives.a. Graduation Success Rate. Each Contract Year during his employment as Head Coach ofUniversity's intercollegiate football team, Kelly may receive additional compensation based on thegraduation rates of student-athletes, as follows: (a) if the program has a ninety percent (90%) or greatergraduation rate based on a 4-year rollingaverage, as determined by NCAAgraduation success rate data,Kelly shall receive one hundred thousand dollars ($100,000); (b) if as determined by NCAA graduationsuccess rate data Ibasedon a 4-year rolling average, the program achieves at least eighty and less thanninety percent (80% or greater and less than 90%) graduation rate, Kelly shall receive compensation offiny thousand dollars ($50,000); and (e) if asdetermined by NCAAgraduation success rate data based ond 4-year rolling average, the program achieves at least seventy and less than 80 percent (70% or greaterand less than 80%) graduation rate, Kelly shall receive compensation of twenty-five thousand dollars($25,000). This incentive for graduation success rate is not cumulative. This incentive, if earned, shallbe paid!within forty-five (45) days of the date upon which the NCAA graduation rate data is available.



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b. Grade Point Average. Each Contract Year during his employment as Head Coach of theUniversity's intercollegiate football team, Kelly may receive additional compensation based on GradePoint Averages (GPA) of student-athletes asfollows: [a ) if the program has an annual GPA of greaterthan 3.0, Kelly shall receive one hundred thousand dollars ($100,000); (b) if the program has an annualGPAof between 2.75 and 2.99, Kelly shall receive fiftythousand dollars ($50,000); and (c] if the programhas an annual GPA of between 2.5 and 2.74, Kelly shall receive twenty-five thousand dollars ($25,000).This incentive for grade point average is not cumulative. This incentive, if earned, shall be paid withinforty-five (45) days of the date upon which the team's GPAfor the relevant Contract Year is available.c. Academic Progress Rate. EachContract Year during his employment as Head Coach ofUniversity's intercollegiate football team, Kelly may receive additional compensation based on theAcademic Progress Rate (APR) of the program asfollows: (a) if, as determined by the NCAA, theprogram hasan APRof 975 or greater based on a four-year rolling average, Kelly shall receive onehundred thousand dollars ($100,000); or (b) if, as determined by the NCAA, the program has an APRofat least 950 and no greater than 974 based on a four-year rolling average, Kelly shall receive fiftythousand dollars ($50,000). This incentive for APR is not cumulative. This incentive, if earned, shall bepaid within forty-five days of the date upon which the NCAAAPRscore is available.

Article V - Periodic Evaluation5.01 Periodic Evaluations.a. The Director of Athletics Dr designee will evaluate Kelly's performance of his job duties andresponsibilities under this Agreement annually 011 the same basis as performance evaluations are donefor other Officers of Administration. These evaluations will also take into account prior evaluations andthe expectations and goals set for Kelly in such prior evaluations.b. As part of the evaluation process, win-loss record, post-season appearance performance (if any),re,lative real! iti ng success (ta kirnginto account the relative recru iting budget, Iocati 0n of the Unlverslty Iand the demographics of the Eugene area, among other things) and relative fund-raising; and revenue-generating success shall betaken into account and evaluated against comparably situated and fundedDivision I-A intercollegiate athletics programs.

Article VI -- Termination Without Cause6.01 Automatic Termination for Death or Disabil ity.This Agreement shall terminate automatically if Kelly dies, or if Kelly becomes totally disabled (withinthe meaning of University's disabil ity insurance for Officers of Administration or within the meaning ofOregon Public Employees Retirement Svstern (PERS)regulations or federal Social SecurityAdministration regulations).If this Agreement isterminated pursuantto this section because of Kelly's death, Kelly's compensationand all other benefits shall terminate as of the calendar month in which death occurs, except that hisestate or other designated beneficiary shall be paid all such death benefits, if any, as may be containedin any benefit plan now in force or hereafter adopted by University and due to Kelly pursuant to that



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plan. lin addition, University shall pay any compensation already fully earned but not yet payable underSections 4.05 and 4.06.If this Agreement is terminated pursuant to this sect ion because Kelly becomes totally disabled, KelllYshall continue to receive the Annual Guaranteed Salary and any other standard University fringe benefitsprovided for under this Agreement until such time C IS Kelly becomes eligible for (even if subsequentlypaid retroactively) total disabil ity benefits from the Public Employees Retirement System, SocialSecurity, or a private or group insurer, Whichever first occurs. At the end of such transiition period, ifany, all salary and other standard University fringe benefits shall terminate.6.02 Termination by University Without Cause.a. The University shall have the right to terminate this Employment Agreement prior to its then inforce expiration date without cause. Termination "without cause" shall mean termination of thisAgreement on any basi'sother than those set forth in Section 7.02. Termination of Kelly without causeshalll be effectuated by delivering to Kelly written notice of University's intent to terminate thisAgreement without cause, which notice shall be effective upon the later of the date set forth in suchnotice or thirty {3D) days after Kelly receives such notice. If University exercises its right under thisSection 6.02 to terminate this Agreement without cause, Kelly shall be entitled to damages only asprovided for in Section 6.02.b below.b. Liquidated Damages Upon termination by University Without Cause. If University terminatesthis Agreement or any extensions of it without cause prior to its then linforce expiration date, Universityshall pay to Kelly, as liquidated damages, his Annual Guaranteed Salary asdefined in section 4.01 abovefor each remaining Contract Year including any year added pursuant to Section 3.01. Any partial yearshall be prorated based on the number of months remaining in the Contract Year. However, if theintercollegiate football team wins five or fewer games ill three consecutive seasons while Kelly is headcoach, liquidated damages shall be one-half of Kelly's Annual Guaranteed Salary for each remainingContract Year.University's obligation shall not accrue interest (so long as not in arrears] and shall be paid on a monthlybasis pro-rated over the balance of the term of this Agreement. University's obligations shall be subjectto Kelly's duty to mitigate, as set forth in section 6.02.c. Fallure to pay timely such liquidated damagesshall constitute a breach of this agreement and such sum shall be recoverable, together with reasonableattorney fees, in any state court of competent jurisdiction in the State of Oregon. Kelly will not beentitled to any other employee benefits except as otherwise provided herein or required by applicablelaw. lin no case shall University or the State of Oregon be liable for the loss of any collateral businessopportunities 01' any other benefits (including unemployment compensation), or perquisites or incomeresulting from activities such as but not limited to, camps, clinics, media appearances, broadcast talentfees, consulting relationships or from any other (inside-the-University or outside-the-University) sourcesthat may ensue as a result of University's termination of this Agreement without cause.The parties have bargained for and agreed to the foregoing liquidated damages provisions givingconsideration to the fact that termination of this Agreement or any extension thereof by Universitywithout cause prior to such agreement's expiration date may precipitate Or lead to Kelly losing certainsalary, benefits, compensation or other economic advantages or income related to his employment atthe UniverSity. which damages are extremely difficult to determine fairly, adequately, or w~tl1certainty.



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The parties further agree that the payment of such liquidated damages by University and acceptancethereof by Keillyshall constitute sufficient, adequate and reasonable compensation to Kelly for any Iloss,damages or injury suffered by Kelly related to such termination by Univers:ity. The foregoing shall notbe, nor be construed to be, iii penaltv, The provisions of this Section 6.02 shall be without prejudice toany other right (excluding unemployment compensation) Kelly may have under applicable law,c, Mitigation of Damages by Kelly if University Terminates Without Cause. If Universityterminates this Agreement under this Section 6.02, Kelly agrees to mitigate University's obligations topay liquidated damages under Section 6.02.b by making reasonable, good faith, and diligent efforts toobtain comparable employment assoon as reasonably possible after termination of this Agreement.Comparable employment includes employment as a coach (not necessarily as a head coach) at auniversity that competes on the NCAA Division L -A (Football Bowl Subdivision) or l AA (FootballChampionship Subdivision) level or equivalent, or with a professional team.Should Kelly obtain such comparable ernplovrnent, University's financial obligations under thisAgreement, including Section 6.02.b, shall cease so long as Kelly's monthly compensation from suchcomparable employment, excluding reasonable and usual non-rnonetarv fringe benefits such as healthand life insurance, club memberships and use of vehicles, is equal to or greater than Uniiversity'sobligation to pay liquidated damages under Section 6.02.b,. prorated on a monthly basis.If Kelly's monthly compensation, excluding reasonable and usual non-monetary fringe benefits, fromsuch comparable employment is less than Universfty'smonthly obligation to pay liquidated damages'Under Section 6.02.b, the amount of University's obligation to pay liquidated damages shall be reducedby t:he amount of Kelly's compensation, excluding reasonable and usual non-monetary fringe benefits,from such comparable employment.If, after diligent efforts to obtain comparable employment as described above, Kelly obtainsemployment that is not comparable employment, his income from suchernplovrnent (plus or minusraises and adjustments) shall be off-set against University's obligations under 6.02.b herein.Kelly shall promptly inform University of changes in his employment status (including monthly salary andtype and value of fringe benefits that are included in ti le calculation of Kelly's compensation) forpurposes of the implementation of this Section 6.02,c.6.03 Termination by Kelly.Kelly reccgnizesthat his.promise to work-for the University for the entire term of this Agreement is ofthe essence of this Agreement to the University. Kelly also recognizes that University is making a highlyvaluable investment in his continued employment by entering into this Agreement and that itsinvestment would be lost were he to resign or otherwise terminate his employment with the Universityprior to the expiration of the term of this Agreement. In recognition of these facts, the parties agreethat Kelly's decision to terminate his employment prior to the then in force expiration date of thisAgreement will be subject to the following terms and conditions:a. Written Notice. If Keilly terminates this Employment Agreement during its term, he mustgiveUniversity fifteen (15) days advance written notice ofthe termination of his employment with theUniversity. While Kelly is assignedto the position of Head Coach of the University's football team, such



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termination by Kelly must occur at a time outside the football regular playing season and post-seasonplay, if any. Simultaneous with such notice, Kelly shall inform University in writing of his employmentplans following-the termination of employment with University.b . Liquidated damages., Il f Kelly terminates this Agreement or any extensions thereof withoutcause and takes a college or professional football coaching job, he snail pay to University, as liquidateddamages; the followingOn or before the end of Contract Year One.: $4,000,000After Contract Year One but on or before the end of Contract Year Two: $3,750,000After Contract Year Two but on or before the end of Contract Year Three: $3,500,000After Contract Year Three but on or before the end of Contract Year Four: $.2,500,000After Contract Year Four but on or before the end of Contract Year 'Five: $2,250,000After the Fifth Contract Year and each Contract Year thereafter: $2,000,000c. Kelly may prorate this amount over the remaining contract months without interest 01' may pre-pay in one or more lump sums, The parties recognize and agree that projection or measurement ofUniversity's damages in such a case would-be extremely difficult and that this provision is a sufficientand reasonable estimate of the potential injury to University and that it shall be enforceable asliquidated damages and not as a penalty. :Provided, however, that if University's membership in thePAC-i0 Conference ends and University does not join, without a competition-season interruption, aconference of comparable stature and NCAAclassif ication level, this subsection shall not apply.

Article VII- Discipline-and Termination for Cause7.01 Discipline.Kelly may be disciplined for violations of NCAA, PAC-101 Oregon Board of Higher Education or Universityrule or regulation as deterrnlned by the Director of Athletics. Discipline under this provision may be inaddition to discipline imposed by the NCAAor the PAC-iO conference. Depending on the violation andthe severity of the rule, the Diret;tor of Athletics may provide an opportunity for Kelly to remediate,impose a reprimand, assessa fine (of a day's payor more), suspend (with or without pay) or, consistentwith Section 7.02, terminate Kelly. Kelly shall cooperate fully with any University investigators in thecourse of any investigation of illegal or forbidden behavior on the part of students, boosters, employees,administrators, agents of the University, or volunteers.

7.02 Termination by University for Just Cause.University shall have the right to terminate this Agreement (including any extensions) for just causeprior to its expiration. Employee waives any procedural rights he may have except those contained inthis Agreement. If University isconsidering termination for cause, Kelly shall be notified of the grounds



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and shall have an opportunity to present a statement of denial, explanation and extenuation beforesuch termination is finalized.a. Definition. "Just cause" shall include in addition to its normally understood meaning inemployment contracts and in OAR580-21-325(2), any of the following:{I} A deliberate and serious violation of the duties outlined in this Agreement or refusal orunwillingness to perform such duties in good faith and to the best of Kelly's abilities;(2) Conduct resulting in conviction for violation of any criminal statute involving moral turpitude orconviction of any state ClassA or Class B fetonv or its equivalent under federal law;(3) A serious and knowing violation of any law, rule, regulation, constitutional provision, bylaw; orinterpretation of the University, PAC-10 Conference or the NCAA,which may, in the reasonable goodfaith judgment of University, reflect or impact adversely upon University or its athletic program or whichmay result in University being placed on probation by the PAC-IO Conference or the NCAA, including anyviolation which may have occurred during prior employment at another NCAA member institution eitherby Kelly or, if known to Kelly, by a member of the coaching staff or any other person Kelly supervises ordirects;(4) Conduct by Kelly that is seriously prejudicial to the best interests of University or its athleticprogram or which seriously endangers the health and well-being of a student-athlete or which violatesuniversity's mission;(5 ) Prolonged absence from duty without the consent of the Director of Athletics; Oir(6 ) Any cause adequate to sustain the termination of any Officer of Administration.b. University's Obligations Upon Termination for Cause. In the, event this Employment Agreementis terminated for cause in accordance with the provisions of this Section, all obligations of University tomake further payments and/or to provide any other consideration (notwithstanding OAR 580-21-365)shall cease asof the end ofthemonth in which such termination occurs. In no caseshall University beliable to Kelly for the loss of any collateral business opportunities or any other benefits, perquisites orincome whether from University or other sources,

Article VIII- Miscellaneous8.01 This Agreement will be governed and construed in accordance with the laws of the State ofOregon without regard to principles of conflicts of law. In no event shall any part of this Agreement beconstrued as a waiver by the State of Oregon of its sovereign and governmental immunities or limits ofliability enforceable in the courts of the State of Oregon.8.02 The captions or headings in this Agreement are, for convenience only and in no way define, Ilimit,or describe the scope or intent of any provisions of this Agreement.8.03 The parties agree that if any term or provision of this Agreement is declared by a court ofcompetent jurisdiction to be illegal or incanflict with any law, the validity of the remaining terms and



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provisions will notbe affected, and the parties agree to attempt to substitute for any illegal, invalid, orunenforceable provision a valid or enforceable one, which achieves the economic, legal and commercialobjectives of the invalid or unenforceable provision to the greatest extent. possible.8.04 No waiver, consent, modlification, or change of any term of this Agreement shall bind eitherparty unless the same is in writing and signed by both parties and all necessary approvals have beenobtained. Suchexpress waiver, consent, modification, or change, if made, shall be effective only in thespecific instance and for the specific purpose set forth in such signed writing. Failure of either party toenforce any provision of this Agreement shall not constitute a waiver of the right to future enforcementof that or any other provision.8.05 This Agreement may be executed in counterparts, and via facsimile or electronically transmittedsignature (i.e, ernailed scanned true and correct copy of the signed Agreement), each of which will beconsidered an original and all of which together will constitute one and the same agreement. At therequest of a party, the other party will confirm facsimil!e or electronically transmitted signature page bydelivering an original signature page to the requesting party.8.0'6 This Agreement and all previous agreements between the parties may be publicly disclosed intheir entirety.8.7 Kelly'sposiUolll as head football coach is not tenure-related and has no academic rank.8.8 This Agreement, together with all incorlPorated documents and exhibits attached hereto andreferenced herein, constitutes the entire agreement between the parties with respect to the subjectmatter hereof and merges all prior and contemporaneous communications with respect to such subjectmatter. This Agreement shall nail:be modified except bva signed writing dated subsequent to the dateof this Agreement and signed by Kelly and on behalf of University by its duly authorized representative.The parties hereby acknowledge and agree that this Agreement has been negotiated by the parties andtheir respective counsel and shall be interpreted fair ly in accordance with its terms and without anystrict construction in favor of or against either party.8.9 All notices, claims, requests, demands and othercommuntcattons hereunder shall be made inwriting and shall be deemed given if delivered or mailed (registered or certified mail, postage prepaid,return receipt requested) asfollows:

To Kelly: Last Known Address on File with University Human ResourcesCopy to: David Dunn

Athletes First9140 Irvine Center DriveIrvine, CA 92618Phone: 949-475-2222Fax: 949-475-1006

To the University: Director of AthleticsUniversity of Oregon2727 Leo Harris Parkway'



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Eugene, OR 97401Phone; 541-346-4484Fa:;::541"346-5031

8.10 University reasonably believes and will use good faith efforts to ensure that its Department ofAthletics wlllhava sufficient funds to perform its duties and obligations under this Agreement. It isUniversity's intention, agreement and obligation to perform its duties and obligations under thisAgreement iffunds are legally available, but University is excused from performing its duties andobligations only to the extent and only for the period that funds are not legally ava-ilable. Universityrepresents and warrants to Kelly that this Agreement is important to the operation of the Department ofAthletics and that it anticipates that the revenues of the Department of Athletics, or funds madeavailable to the Department of Athletics by University's affiliated foundation, will be sufficient to makeboth the compensation payments to Kelly throughout the term of thss Agreement (including yearrsadded pursuant to Section 3.01) and any sums payable to Kelly for University's breach or termination ofthis Agreement. If, despite the above, University is not allotted sufficient funds for a fiscal period byappropriation, limitation, grant; or other fund source lawfully available to it for purposes of continuingto perform its duties and obligations under this Agreement, University shall notify Kelly in writing of theunavailability of funds to perform this Agreement. Within 60 days after receiving such notice from theUniversity, Kelly may elect to terminate the Agreement without liability by written notice to University.

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Signature Page Follows###



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The parties ind.icate their acceptance of and agreement to the terms and conditions ofthis EmploymentAgreement by their signatures below.

Charles E. Kelly Date

University O f Oregon

EXHIBITS

Exhibit A : Team Performance Incentives



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Chip Kelly's new coaching contract with the University of Oregon

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Transcript of Chip Kelly's new coaching contract with the University of Oregon