Auburn will pay off his obligation to his former employer in the form of a loan. The university will forgive 20 percent of the amount of the loan each year on Malzahn's contract that will pay him $2.3 million per year.
The coach's base salary is $500,000 per year. In his letter of agreement with Auburn the coach will be paid off the entire amount of his base salary if he is fired without cause by the university.
If he leaves Auburn prior to the end of his contract the coach would be responsible for paying the university as a buyout the remaining amount of base salary on his five-year deal.
His overall compensation is $2.3 million per year and that includes endorsement rights, radio and television appearances, speeches and fundraising efforts on behalf of Auburn University. He will be eligible for performance bonuses for athletic and academic success of up to $1.5 million per year.
The letter of agreement signed by Malzahn on Tuesday when he was introduced as AU's new head coach includes clauses that require him to do the following items:
*Operate the program within the budget set for football by the university.
*Require that he follow all SEC and NCAA rules. Serious violations of those rules are grounds for termination.
*He is required to give his best effort to make sure his players earn their degrees.
*The agreement will be voided if Malzahn does not sign a formal contract with Auburn by Jan. 15th, 2013.