Head men’s basketball coach Tubby Smith and University officials agreed to the terms of a seven-year contract Tuesday, worth at least $1.75 million a year.

If he meets all performance-based goals outlined in the contract, the University will pay Smith $3.5 million, including money paid to his retirement fund.

In comparison, former men’s basketball head coach Dan Monson, who resigned last year, made $490,000 annually.

“Certainly, we were happy to finally get everything finalized with our contract as well,” Smith said. “The lawyers stretched it out long enough, but I’m happy to have that done.”

Of Smith’s guaranteed salary, $600,000 is his base compensation. The additional $1.15 million comes in the form of “supplemental compensation,” which includes media and fundraising appearances, community involvement and endorsements.

Aside from his salary, a number of monetary incentives based on team performance, on and off the court, are included in the contract.

A national championship win for the Gophers, would put an additional $500,000 in Smith’s pocket.

For a Final Four appearance, the University would pay Smith $250,000, and $100,000 each time the team appears in the NCAA Tournament.

The incentives are not limited to NCAA tournament appearances. A Big Ten regular-season championship will earn Smith an additional $250,000.

Smith will make $100,000 for a second-place regular-season finish through the 2009-2010 season, and another $100,000 for a Big Ten tournament championship title.

The contract also sets aside retirement funds for Smith, beginning in 2011. The University will contribute $250,000 annually to Smith’s retirement fund starting then.

Smith will receive additional money for his team’s positive academic performance.

If the team posts an Academic Progress Rate of 950 or better, Smith will receive an additional $100,000.

For each year the team’s graduation rate is 50 percent or higher, the University will also pay Smith $100,000.

Currently, the men’s basketball program has an APR of 887 and a graduation rate of 38 percent, according to the NCAA.

Earlier this year, University officials finalized head football coach Tim Brewster’s contract, setting his annual base compensation at $800,000.

The target graduation rate in Smith’s contract is 25 percent less than Brewster’s and the target APR is 25 points less.

Brewster will see $100,000 if his team has a 75 percent graduation rate and $50,000 for an APR of 975 of better.

–Zach Eisendrath contributed to this report.