KSU Files Suit Over "Secret Agreement" With Football Coach

By: Kansas State University Email
By: Kansas State University Email

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May 20, 2009

Kansas State University and its athletic corporation is filing suit today, asking a court to declare invalid a secret agreement signed by Bob Krause, its former athletic director, and by former head
football coach Ron Prince for a company called In Pursuit of
Perfection, LLC. The secret agreement was signed without the knowledge of anyone else at K-State, according to K-State President Jon Wefald.

If determined to be valid, K-State's athletic corporation would have to
make $3.2 million in deferred compensation payments to In Pursuit of
Perfection between 2015 and 2020.

In addition to other legal claims, K-State argues that Ron Prince's
attorney, Ohio sports agent Neil Cornrich, impermissibly negotiated
this secret agreement without involving attorneys for the university.
K-State contends that, under attorney ethical rules, Cornrich was
required to obtain permission from K-State lawyers before negotiating
directly with Krause.

Interim athletic director James Epps issued the following statement:
"On May 11, 2009, I learned of a secret deferred compensation agreement that Bob Krause apparently negotiated with Ron Prince's attorney. This alleged deal was made without the knowledge of anyone else in the athletics department, including its attorney. This deal was apparently constructed as a further supplement to the buyout provision contained in Prince's employment contract. I do not know why any additional supplement was justified, or why Bob Krause concealed this agreement from everyone until it was inadvertently discovered last week.

"I do not believe that this agreement is valid, and the athletics
department will vigorously fight any attempt to enforce it."

K-State President Jon Wefald said, "I learned shortly after Jim Epps
about the secret deferred compensation agreement between Bob Krause and
Ron Prince's attorney. I was shocked and saddened to find out about
this agreement. No one in central administration or athletics knew
about this agreement. We all thought that the August 2008 press release
accurately described Ron Prince's one year contract extension and his
salary increase from $750,000 to $1.1 million. We thought that any
compensation he was owed was in that contract. We had no knowledge whatsoever of this secret agreement between August 2008 and May 2009, and it was therefore unavailable to the auditors, Grant Thornton, who were retained by the Board of Regents to do an exit analysis.

"After Jim Epps and I learned about the secret agreement, we spent
several days explaining to Ron Prince and his agent why they should
consider the agreement was null and void. That failed. We believe that
this secret agreement made between Bob Krause and Ron Prince's attorney is null and void and we will act accordingly.

"This has happened on my watch. I appointed Bob Krause to be athletic
director. He has been a longtime friend. I regret deeply and apologize
that this happened while I was president. But we do regard this secret
agreement as null and void. Like the Interim AD Jim Epps and his staff,
we have been completely caught off guard.

"I have asked for Bob Krause's resignation as director of economic
development for the K-State Olathe Innovation Campus and he has
resigned, effective today.”

K-State discovered the secret agreement May 11, 2009, while responding to routine informational requests in a lawsuit involving one of its former assistant football coaches.

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