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Compensation Clause
A. Definition: A compensation clause is basically an agreement between parties that states
that an individual will be get paid for the services they provided to a company or
organization as an employee.
B. Explanation: Compensation clauses are essential for putting together a good, strong
contract for a coach as well as the university. A contract should definitely include the
compensation that the coach will receive in the position, along with any provisions
concerning increases in the general base salary throughout the duration of the contract. It
should also include any perquisites or fringe benefits (vacation, health insurance, etc.)
that the coach would receive during his or her time employed at the school. Bonus
clauses are another aspect that should be added to a coaching contract (Buckner, 2003).
C. Examples:
William Swinney, Clemson University, ACC
“During the Term of this Agreement, University shall pay to Coach and Coach shall
accept from University, in payment for his services hereunder, a base salary at the rate of
Two Hundred and Forty Five Thousand and No/100 Dollars ($245,000.00) per Contract
Year, prorated as required for the first Contract Year (the “Base Salary”), payable in
twenty-six (26) installments per Contract Year, but in any case, in accordance with
University’s standard payroll procedures and no less frequently than monthly.”
(Clemson University, 2008)

James Harbaugh, University of Michigan, Big 10

“Base Salary. As compensation for the services performed under this Agreement, the
Head Coach shall be paid a base salary (“Base Salary”) of $500,000 per Contract Year.
The Base Salary provided for above shall be paid to the Head Coach in accordance with
the University’s normal payroll procedures.”
(University of Michigan, 2014)

Charlie Strong, University of Texas at Austin, Big 12

“Effective January 24, 2014, the annual Base Salary for duties performed by Coach under
this Agreement shall be $5,000,000 payable in 12 monthly installments (or as modified
by start and/or ending dates within a month). The base salary will be reviewed at least
annually.”
(University of Texas at Austin, 2014)

Christopher Holtmann, Ohio State University, Big 10

“Coach shall not be entitled to receive any further unearned compensation or benefits
under this Agreement (Coach is not deemed to have earned bonuses and supplemental
compensation which Coach must repay to Ohio State in accordance with Section 5.7.”
(Ohio State University, 2017)
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Roy Williams, University of North Carolina, ACC

“In years in which the Men's Basketball team is invited to the NCAA post-season
basketball tournament, COACH will receive additional compensation from
UNIVERSITY in the form of a bonus for increased responsibilities in the amount equal
to one-twelfth (1112th) of then-applicable salary. Any amount earned hereunder shall be
paid within seventy-five (75) days following the last game of the NCAA post-season
basketball tournament.”
(University of North Carolina, 2018)

Scott Satterfield, Appalachian State University, Sun Belt

“Coach shall receive a bonus of Two Thousand Five Hundred Dollars ($2,500) for each
semester (fall term and spring term) that the aggregate football team grade point average
is above 2.7 as determined by the Director of the Academic Support Program for Student-
Athletes. The maximum amount is Five Thousand Dollars ($5,000) per year.”
(Appalachian State University, 2015)

Perquisites & Benefits

A. Definition: Benefits are things provided to employees from their companies on top of
their normal salary. Usual benefits may include overtime, insurance, vacation time, etc.
Perquisites, or “perks” are certain benefits that employees of a higher power or that are
above a certain level in a company get. Some perquisites may be time off with pay,
executive services, retirement coverage, etc. (Ellig, 1981).
B. Explanation: When creating an effective coaches’ contract, it is crucial that the coach
receives many different perquisites and benefits, because that is what is going to initially
attract attention but keep the coach at the select school for as long as possible. A contract
with excellent benefits will help ensure that the chosen coach is happy and successful,
making him/her want to coach and win games for their college or university.
C. Examples:
William Swinney, Clemson University, ACC
“During the Term of this Agreement, University shall furnish to Coach two (2) new, full-
size automobiles and shall reimburse Coach, or pay directly, for automobile liability and
comprehensive insurance and taxes, if applicable, upon said vehicles, to be paid within
sixty (60) days of Coach’s written notice to University of such expenses. The two (2)
automobiles will be replaced at least every twelve (12) months with two (2) new
automobiles.”
(Clemson University, 2008)

James Harbaugh, University of Michigan, Big 10

“During the Term of this Agreement, the Head Coach shall be entitled to elect the
standard University fringe benefits applicable to his position. The fringe benefits are
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provided in accordance with the rules of the University’s fringe benefit program, and are
subject to change if and when the University’s benefit program(s) change.”
(University of Michigan, 2014)

Termination Provisions & Liquidated Damages Provisions

A. Definition: There are generally two types of termination provisions: termination for cause
or default and termination for convenience. Termination for cause or default means that
one of the parties involved in the contract failed to perform something they were required
to do under the contract. Termination for convenience basically gives the owner the right
to terminate the contract an any point in time for any reason.
Liquidated damages provision is a predetermined amount of money that must be paid if
one party involved fails to perform under a contract. This is usually an estimated amount.
Buy-out provisions are agreements between two parties or partners of a company or
business that discusses details when one partner decides to leave the business.
B. Explanation: It is common for a coach and the represented university to ensure that the
coach receives maximum compensation if the coach was terminated without cause. Some
schools only guarantee a portion of the coach’s compensation on their initial contract, so
it is important for a coach’s contract to initially state their compensation in the event that
they leave early (Belzer, 2017).
Liquidated damages provisions are a valid part of a coach’s contract only if the amount of
the damages represents a reasonable estimate of the cost of the actual damages that
occurred. However, liquidated damages provisions cannot be used strictly to compel
performance
C. Examples:
Scott Satterfield, Appalachian State University, Sun Belt
“Appalachian has the right to terminate this Agreement “for cause” in accordance with
EPA Policies. In addition to the meaning of “for cause” in University and/or Appalachian
policies and procedures, as well as its normally understood meaning in employment
agreements, the term “for cause” includes, but is not limited to:
5.1.1 A violation of the duties set forth in this Agreement or refusal or unwillingness to
perform such duties in good faith and to the best of Coach’s abilities.
5.1.2 A violation by Coach of any of the other terms and conditions of this Agreement;”
(Appalachian State University, 2015)

James Harbaugh, University of Michigan, Big 10

“The parties agree that the University may terminate the Head Coach’s employment
under this Agreement without cause prior to the expiration of the Term upon notice
provided by the Athletic Director.”
(University of Michigan, 2014)
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Roy Williams, University of North Carolina, ACC

“This agreement may be terminated by UNIVERSITY for Cause at any time upon written
notice to COACH. For purpose hereof, “Cause” should mean the following:
(a) Any material breach by COACH of the terms of this Agreement, including but not
limited to material failure to perform any of the duties specified in Section II or
Section VIII.”
(University of North Carolina, 2018)

Nick Saban, University of Alabama, SEC

“If the University terminates this Contract without cause prior to its expiration as
permitted by Section 5.01(d) hereof, the University shall pay, and Employee agrees to
accept as liquidated damages, an amount equal to the sum of annual base salary and talent
fees for each month remaining on the term of the Contract calculated from the first full
month immediately following the effective date of termination without cause (the
“Liquidated Damages”).”
(University of Alabama, 2007)

Paul Chryst, University of Wisconsin, Big 10

“This Agreement may be terminated by Coach by giving University written notice of the
termination of his employment with University or by accepting another coaching
position.”
(University of Wisconsin, 2017)

Charlie Strong, University of Texas at Austin, Big 12

“The dollar amount equal to the total compensation that the University will be obligated
to pay any football assistant coaches, on Coach’s staff at the time that he terminates this
Agreement but not retained on the new head coach’s football staff, who remain employed
by the University sixty (60) days after the Coach terminates this Agreement.”
(University of Texas at Austin, 2014)

Restrictive Covenant & Reassignment Clause

A. Definition: A restrictive covenant is any sort of agreement between two parties that
forces the buyer to either take or abstain from a specific action. Restrictive covenants are
usually simple, but in some cases can be extremely complex.
Reassignment provisions are obligations, rights, and duties that can be transferable
between one party to the next. These reassignments can be in whole or in part and usually
have detailed conditions attached with them.
B. Explanation: Restrictive covenants are basically a balance between the freedom of
employers to protect their business and the freedom of the individual to move to other
employment. They can be upheld if they can be shown to be protecting the legitimate
business interests of the employer, are in the public interest, or do not unreasonably
prevent the employee from earning a living (2020 Worksmart, n.d.).
Reassignment clauses are good because they can sometimes keep an employee from be
terminated by instead giving them a new title and different duties. One bad part of
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reassignment clauses is that when a coach or employee is reassigned, it is not always that
they are to be compensated the same in their new position. These issues often lead to long
negotiations between the coach and the institution (Buckner, 2003).
C. Examples:
Paul Chryst, University of Wisconsin, Big 10
“Pursuant to NCAA Bylaw 11.2.2 Coach shall discuss with and obtain annually prior
written approval from the Director of Athletics before entering into any agreement under
which he will receive athletically relat3ed income and benefits from sources outside the
University.”
(University of Wisconsin, 2017)

James Harbaugh, University of Michigan, Big 10

“The Head Coach represents and warrants to the University that he is not bound by or
subject to any contractual or other obligation that would be violated by his execution or
performance of this Agreement, including, but not limited to, any non-competition
agreement presently in effect.”
(University of Michigan, 2014)

Morals or Personal Conduct Clauses

A. Definition: Personal conduct clauses are used as a means of ensuring that the two parties
involved obtain to a certain behavioral standard and not cause problems or scandals to the
opposing party. These are also used to preserve public as well as private image of each
party to the contract.
B. Explanation: In coaching contracts, it is important for universities to have morals clauses
because college coaches are more often than not, a spokesperson for the university.
Universities must protect their reputation at all costs, especially when a coach acts or
speaks in an inappropriate or potentially damaging way. Morals clauses gives universities
the opportunity to terminate a coach’s employment if he or she were to act a certain way
that would harm the university.
C. Examples:
Scott Satterfield, Appalachian State University, Sun Belt
“This agreement will be governed by and contracted under the laws of the State of North
Carolina without regard to its conflicts of law provisions. The courts of North Carolina
will be the forum for any lawsuits arising from or incident to this Agreement. The parties
agree that any rule to the effect that an agreement shall be constructed against the party
drafting it shall have no application to this Agreement.”
(Appalachian State University, 2015)

Charlie Strong, University of Texas at Austin, Big 12

“Coach agrees to know, recognize, and comply in all respects with NCAA and other
Governing Athletics Rules and University Rules. In the performance of all his duties and
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obligations under this Agreement, Coach will abide by and comply with all Governing
Athletics Rules and University Rules and all decisions issued by the University.
Violations of any Governing Athletics Rules or University Rules by Coach will be
sufficient cause for disciplinary action.”
(University of Texas at Austin, 2014)

Term and Extensions

A. Definition: A term contract is an agreement stating a fixed duration of time that the
contract will be in effect. Each party is to adhere to the terms and conditions within the
contract until the expiration date of the contract.
A contract extension is simply when the original contract gets extended for a longer
period of time than originally stated, with the terms and conditions of the original staying
the same for the extension.
A rollover provision is when a contract is automatically renewed after the anniversary
date without having any additional agreement and/or signature.
B. Explanation: Many universities have automatic contract extensions that are triggered by
certain performances. For example, a coach might be assured a one-year extension for
winning a conference championship and/or making a postseason appearance (Belzer,
2017).
C. Examples:
Nick Saban, University of Alabama, SEC
“The term of this Contract shall be eight (8) years, commencing January 4, 2007, and
ending January 31, 2015, subject to earlier termination in accordance with the provisions
of Article V hereof. To extend or renew the contract term, both parties must sign a
written agreement to do so. Employee agrees that oral agreements to renew or extend this
Contract are invalid and non-binding. For the purposes of this Contract, a "Contract
Year" shall mean a twelve-month period beginning February 1 of one year and ending on
January 31 of the immediately succeeding year.”
(University of Alabama, 2007)

Christopher Holtmann, Ohio State University, Big 10

“This Agreement is renewable solely upon an offer from Ohio State and an acceptance by
Coach, both of which must be in writing and signed by the parties.”
(Ohio State University, 2017)
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References
2020 Worksmart. (n.d.). What is a restrictive covenant? Retrieved from
https://worksmart.org.uk/work-rights/pay-and-contracts/contract-changes/what-restrictive-
covenant
Appalachian State University. (2014, September). Football Head Coach Employment
Agreement. Retrieved from https://2michy3wy0l30d34041dt1et-wpengine.netdna-
ssl.com/football/wp-content/uploads/coach-contracts/scottsatterfield-appalachiansu-employment-
contract.pdf
Belzer, J. (2017, October 3). Making Sense of College Coaching Contracts. Retrieved from
https://athleticdirectoru.com/articles/making-sense-of-college-coaching-contracts/
Buckner, M. L. (2003, March 21). Structuring College Coaches´ Employment Agreements:
Important Clauses And Issues In Agreements - (Part One). Retrieved from
https://www.mondaq.com/unitedstates/Employment-and-HR/14556/Structuring-College-
Coaches-Employment-Agreements-Important-Clauses-And-Issues-In-Agreements--Part-One
Clemson University. (2008, December). Football Head Coach Employment Agreement.
Retrieved from http://www.documentcloud.org/documents/1200647-clemson-coach-dabo-
swinneys-contract.html
Ellig, B. R. (1981). Perquisites: the intrinsic form of pay. Retrieved from
https://www.ncbi.nlm.nih.gov/pubmed/10250354
Ohio State University. (2017, December). Football Head Coach Employment Agreement.
Retrieved from http://media.cleveland.com/osu_impact/other/Chris%20Holtmann
%20Employment%20Agreement%20-%20Fully%20Executed%20(00334073xB7A09).pdf
University of Alabama. (2007, June). Football Head Coach Employment Agreement. Retrieved
from http://media.ledger-enquirer.com/static/SEC-Coaching-Contracts/Alabama/Alabama-
Sabans-signed-contract-Amend.pdf
University of Michigan. (2014, December). Football Head Coach Employment Agreement.
Retrieved from http://media.mlive.com/wolverines_impact/other/Harbaugh%20employment
%20agrmt.pdf
University of North Carolina. (2018, October). Basketball Head Coach Employment Agreement.
Retrieved from
https://goheels.com/documents/2018/12/18/Roy_Williams_2018_Employment_Contract.pdf
University of Texas at Austin. (2014, January). Football Head Coach Employment Agreement.
Retrieved from https://hkm.com/football/wp-content/uploads/coach-contracts/charliestrong-uta-
employment-contract.pdf
University of Wisconsin. (2017, February). Football Head Coach Employment Agreement.
Retrieved from https://madison.com/wsj/paul-chryst-contract/pdf_b6b0e04e-0d5a-534a-af0d-
63e4e8085705.html
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