There has been a lot more talk of offer sheets this year than in the past. Several teams that are in a bit of cap crunch have pending restricted free agents that might interest some teams that have the cap room and draft picks available.
Peter Harling did a piece earlier this week looking at three restricted free agents that could tempt teams.
With all this in mind, we decided to post some rules from the CBA that deal with offer sheets:
Rule 10.2 (a) (i) (B): Group 2 Players and Free Agents.
Notwithstanding the foregoing, if a Group 2 Player requests salary arbitration, or a Club requests salary arbitration, pursuant to Article 12, such Player will not be eligible to negotiate with any Club other than his Prior Club or sign an Offer Sheet pursuant to this Article 10, except as provided in Sections 12.3(a) and 12.10.
Rule 10.2 (b) (vi): Right of First Refusal, No Draft Choice Compensation.
(A) In order for a Prior Club to obtain a Right of First Refusal for any Group 4 Player who has signed an Offer Sheet, the Prior Club must offer to such Player, in accordance with Exhibit 3 hereto, a Qualifying Offer on or before 5:00 p.m. New York time on the later of June 25 or the first Monday after the Entry Draft of the year he becomes a Group 4 free agent. Such Qualifying Offer must be for at least the Minimum Paragraph 1 Salary and if the Player meets the qualifications for being in the Entry Level System, an SPC for a term corresponding to the Player’s age as required under Section 9.1(b) or otherwise one-year SPC.
(B) Provided such Qualifying Offer has been made, the Prior Club shall have a Right of First Refusal in respect of any Offer Sheet received by such Player from a New Club, as per the terms set forth in Section 10.3.
(C) Notwithstanding any provision to the contrary contained in this Agreement, the Prior Club is not entitled to Draft Choice Compensation for the loss of a Group 4 Player.
10.3 Offer Sheet and First Refusal Procedures.
(a) When a Restricted Free Agent receives an offer to sign an SPC from any Club (the “New Club”) other than his Prior Club, which offer the Player desires to accept, he shall give to the Prior Club, in accordance with Exhibit 3 hereto, a completed certificate substantially in the form of Exhibit 6 attached hereto (the “Offer Sheet”), signed by the Restricted Free Agent and the New Club, which shall contain the “Principal Terms” (as defined below) as well as all other terms of compensation of the New Club’s offer. The Prior Club, within seven (7) days after the date it receives the Offer Sheet, may exercise or not exercise its Right of First Refusal, which shall have the legal consequence set forth below. Once an Offer Sheet for a Restricted Free Agent has been received by the Prior Club, the Prior Club may not Trade or otherwise Assign its Right of First Refusal for such Restricted Free Agent.
(b) If the Prior Club gives the Restricted Free Agent and his Certified Agent, if any, notice, in accordance with Exhibit 3 hereto, that it is exercising its Right of First Refusal (a “First Refusal Exercise Notice”), such notice to be substantially in the form of Exhibit 7 attached hereto, to the Player’s and his Certified Agent’s, if any, e-mail address listed on the Offer Sheet, if any, within the seven (7) day period, such Restricted Free Agent and the Prior Club shall be deemed to have entered into a binding agreement, which they shall promptly formalize in an SPC, containing: (i) all the Principal Terms (subject to subsection (e) below); and (ii) such additional terms as may be agreed upon between the Restricted Free Agent and the Prior Club. The Prior Club may not Trade that Restricted Free Agent for a period of one year from the date it exercises its Right of First Refusal.
(c) If the Prior Club does not give the Restricted Free Agent the First Refusal Exercise Notice within the seven (7) day period, the Player and the New Club shall be deemed to have entered into a binding agreement, which they shall promptly formalize in an SPC, containing all of the terms contained in the Offer Sheet, and the Restricted Free Agent’s Prior Club shall receive from the New Club the Draft Choice Compensation, if any, specified in Section 10.4 below.
(d) (i) A Club may have more than one Offer Sheet signed by a Restricted Free Agent outstanding at any one time and from time to time, provided that it has the available draft picks to satisfy its obligations pursuant to Section 10.4 with respect to all Offer Sheets outstanding at the relevant time. (ii) An Offer Sheet, once signed by the Player and the New Club, shall be irrevocable.
(e) For the purposes of this Article, the Principal Terms of an Offer Sheet are limited to the term, Paragraph 1 Salary and Signing Bonus and Reporting Bonus the New Club offers to the Restricted Free Agent (currently and/or as Deferred Compensation in specified installments on specified dates) in consideration for his services as a hockey Player under the SPC.
(f) All Principal Terms contained in an Offer Sheet shall be fixed and readily determinable amounts of cash, which shall not be subject to any conditions or contingencies whatsoever, except as to the date on which payment is to be made.
(g) Simultaneously with the giving of an Offer Sheet to the Prior Club, the New Club shall give a copy thereof to Central Registry and the NHLPA, all in accordance with Exhibit 3 hereto. Simultaneously with the giving of a First Refusal Exercise Notice to the Restricted Free Agent, the Prior Club shall give a copy thereof to the NHL and the NHLPA, all in accordance with Exhibit 3 hereto.
(h) Upon receipt of an Offer Sheet, the Prior Club shall immediately notify Central Registry, in accordance with Exhibit 3 hereto, a request to encumber the New Club’s required draft picks and place them in reserve for the Prior Club. Upon receipt of either a copy of such Offer Sheet or the notice from the Prior Club, Central Registry shall immediately determine whether the New Club’s required draft picks are available and unencumbered. If such draft picks are available, the League shall encumber them in reserve for the Prior Club. If the required draft picks are not available and unencumbered, the League shall immediately notify all parties (the Restricted Free Agent, his Certified Agent (if any), the New Club and the Prior Club), all in accordance with Exhibit 3 hereto, and the said Offer Sheet shall be deemed null and void. Upon receipt of any First Refusal Exercise Notice, Central Registry shall immediately release any encumbrance it has placed on the New Club’s draft picks.
Rule 10.4: Draft Choice Compensation for Restricted Free Agents. (breakdown for this year’s compensation at the top of the page)
Clubs cannot acquire picks to use as compensation (with the exception being a Club’s own draft selections that are traded and then re-acquired).
Clubs owing one (1) draft selection must have it available in the next draft.
Clubs owing two (2) draft selections in different rounds must have them available in the next draft.
Clubs owing three (3) draft selections in different rounds must have them available in the next draft.
Clubs owing two (2) draft selections in the same round, must have them available in the next three (3) drafts.
Clubs owing three (3) draft selections in the same round must have them available in the next four (4) drafts, and so on.
When a Club owes two (2) or more draft selections in the same round, the signing Club does not elect the years in which such selections shall be awarded to the Prior Club; rather, the selections next available will be transferred to the Prior Club (i.e., a Club that owes two (2) selections has them available in the next two (2) drafts – that is when they are transferred).
