ARTICLE XI: FREE
AGENCY
INDEX
Section 1. General Rules
Section 2. No Individually-Negotiated
Right of First Refusal
Section 3. Withholding Services
Section 4. Qualifying Offers
to Make Certain Players Restricted Free Agents
Section 5. Restricted Free Agency
Section
1. General Rules.
(a) Subject to the provisions of Article VII, including,
but not limited to, Article VII, Section 6(b), and subject
further to Article II, Section 14:
(i) an Unrestricted Free Agent is free at any time
beginning on the first day of the Moratorium Period
to negotiate, and free at any time after the last
day of the Moratorium Period to enter into, a Player
Contract with any Team; and
(ii) a Restricted Free Agent is free at any time beginning
on the first day of the Moratorium Period to negotiate
a Player Contract with his Prior Team and to negotiate
an Offer Sheet (as defined in Section 5(b) below)
with any Team other than his Prior Team, and is free
at any time after the last day of the Moratorium Period
to enter into a Player Contract with his Prior Team
or an Offer Sheet with any Team other than his Prior
Team.
(b) No compensation obligation of any kind to another
Team shall be applicable to any Free Agent. No right
of first refusal of any kind shall be applicable to
any Free Agent other than a Restricted Free Agent.
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Section 2. No Individually-Negotiated
Right of First Refusal.
(a) No Player Contract, or any Renegotiation, Extension,
or other amendment of a Player Contract, executed after
the date of this Agreement, may include any individually-
negotiated right of first refusal or other limitation
on player movement following the last Salary Cap Year
covered by such Player Contract.
(b) No right of first refusal rule, practice, policy,
regulation or agreement providing for a right of first
refusal shall be applied to any player as a result of
that player’s entry into a player contract with
or the playing with any team in any professional basketball
league other than the NBA.
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Section 3. Withholding
Services.
A player who withholds playing services called for by
a Player Contract for more than thirty (30) days after
the start of the last Season covered by his Player Contract
shall be deemed not to have “complet[ed] his Player
Contract by rendering the playing services called for
thereunder.” Accordingly, such a player shall
not be a Veteran Free Agent and shall not be entitled
to negotiate or sign a Player Contract with any other
professional basketball team unless and until the Team
for which the player last played expressly agrees otherwise.
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Section 4. Qualifying
Offers to Make Certain Players Restricted Free Agents.
(a)
(i) From the day following the Season covered by
the second Option Year of a First Round Pick’s
Rookie Scale Contract through the immediately following
June 30, the player’s Team may make a Qualifying
Offer to the player. If such a Qualifying Offer is
made, then, on the July 1 following such Season, the
player shall become a Restricted Free Agent, subject
to a Right of First Refusal in favor of the Team (“ROFR
Team”), as set forth in Section 5 below. If
such a Qualifying Offer is not made, then the player
shall become an Unrestricted Free Agent on such July
1. If a Team does not timely exercise its Option with
respect to the first Option Year or second Option
Year of a player’s Rookie Scale Contract in
accordance with Article VIII, the player shall, following
his second or third Season (as the case may be) become
an Unrestricted Free Agent.
(ii) A Team that makes a Qualifying Offer to a player
following the second Option Year of his Rookie Scale
Contract may elect simultaneously to offer the player
an alternative Contract covering six (6) Seasons that
provides Salary for the first Salary Cap Year equal
to the Maximum Annual Salary under Article II, Section
7(a), with annual increases in Salary equal to 10.5%
of the Salary for the first Salary Cap Year (a “Maximum
Qualifying Offer”). Providing a player with
a Maximum Qualifying Offer shall have the consequence
described in Section 5(b) below. A Maximum Qualifying
Offer shall be subject to the following:
(A) A Maximum Qualifying Offer shall contain only
Base Compensation and no bonuses of any kind.
(B) A Maximum Qualifying Offer shall state that
the player’s Base Compensation for the first
Season shall equal “the Maximum Annual Salary
applicable to the player in the first Season of
the Contract,” and that the Base Compensation
in each of the five (5) subsequent Seasons shall
“be increased by 10.5% of the Base Compensation
for the first Season.” Such a Contract, if
timely accepted by the player in accordance with
subsection (ii)(D) below, shall be deemed amended
to provide for specific Base Compensation for each
Season covered by the Contract, based on the Maximum
Annual Salary applicable to the player in the first
Season.
(C) A Maximum Qualifying Offer cannot contain an
Option or ETO, and must provide full Base Compensation
protection in each Season for lack of skill and
non-insured injury or illness (with no individually-negotiated
conditions or limitations on such protection).
(D) The Team’s offer of a Maximum Qualifying
Offer must remain open for the same period that
the player’s Qualifying Offer remains open
and cannot be withdrawn, except that if the Team
withdraws its Qualifying Offer, the Maximum Qualifying
Offer shall be deemed to be withdrawn simultaneously.
(E) A player may accept either his Qualifying Offer
or his Maximum Qualifying Offer, but not both.
(b) Any Veteran Free Agent (other than a First Round
Pick whose first Option Year or second Option Year was
not exercised) who will have three (3) or fewer Years
of Service as of the June 30 following the end of the
last Season covered by his Player Contract will be a
Restricted Free Agent if his Prior Team makes a Qualifying
Offer to the player at any time from the day following
such Season through the immediately following June 30.
If such a Qualifying Offer is made, then, on the July
1 following the last Season covered by the player’s
Player Contract, the player shall become a Restricted
Free Agent, subject to a Right of First Refusal in favor
of the Team (“ROFR Team”), as set forth
in Section 5 below. If such a Qualifying Offer is not
made, then the player shall become an Unrestricted Free
Agent on such July 1.
(c)
(i) A player who receives a Qualifying Offer must
be given at least until the October 1 following its
issuance to accept it, but in no event may a Qualifying
Offer be accepted after the March 1 following its
issuance. Notwithstanding the preceding sentence,
a Qualifying Offer may be withdrawn by the Team at
any time through the July 23 following its issuance.
If the Qualifying Offer is not withdrawn on or before
July 23, it may be withdrawn thereafter but only if
the player agrees in writing to the withdrawal. If
a Qualifying Offer is withdrawn, the player shall
immediately become an Unrestricted Free Agent. If
a Qualifying Offer is withdrawn on or after July 24,
the Team also shall be deemed to have renounced the
player in accordance with Article VII, Section 4(g).
(ii) If a Qualifying Offer is neither withdrawn nor
accepted and the deadline for accepting it passes,
the Team’s Right of First Refusal shall continue,
subject to Section 5(a) below.
(iii) A player who knows that he has a physical disability
that would render him physically unable to perform
the playing services required under a Player Contract
the following Season may not validly accept a Qualifying
Offer received under this Section 4 or Section 5 below,
unless the ROFR Team consents after disclosure of
such physical disability. Notwithstanding the immediately
preceding sentence, a player who knows that he has
a physical disability that would render him physically
unable to perform the playing services required under
a Player Contract the following Season remains subject
to the ROFR Team’s Right of First Refusal.
(d) Any claim that a Contract offered as a Qualifying
Offer or a Maximum Qualifying Offer fails to meet one
or more of the criteria for a Qualifying Offer or a
Maximum Qualifying Offer shall be made by notice to
the Team, in writing, no later than ten (10) days after
a copy of the Qualifying Offer or Maximum Qualifying
Offer was given by the Team or the NBA to the Players
Association. Such notice must set forth the specific
changes that allegedly must be made to the offered Contract
in order for it to constitute a Qualifying Offer or
a Maximum Qualifying Offer. Upon receipt of such notice,
if the requested changes are necessary to satisfy the
requirements of a Qualifying Offer or a Maximum Qualifying
Offer, the Team may, within five (5) business days,
offer the player an amended Contract incorporating the
requested changes. If the Team offers such an amended
Contract, the player and the Players Association shall
be precluded from asserting that such Contract does
not constitute a timely and valid Qualifying Offer or
Maximum Qualifying Offer.
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Section 5. Restricted
Free Agency.
(a) If a Restricted Free Agent does not sign an Offer
Sheet with any Team by March 1 of the Season for which
the Qualifying Offer is made, and does not sign a Player
Contract with the ROFR Team before that Season ends,
then his ROFR Team may reassert its Right of First Refusal
for the following Season by extending another Qualifying
Offer (on the same terms as the prior Qualifying Offer)
on or before the next June 30. A ROFR Team may continue
to reassert its Right of First Refusal by following
the foregoing procedure in each subsequent year in which
that Restricted Free Agent does not sign an Offer Sheet
with any Team by March 1 of the Season for which the
Qualifying Offer is made, and does not sign a Player
Contract with the ROFR Team before that Season ends.
In each Season in which a Team reasserts its Right of
First Refusal by extending another Qualifying Offer
in accordance with this Section 5(a), the Team may also
elect to simultaneously provide the player with a Maximum
Qualifying Offer (on the same terms as the prior Maximum
Qualifying Offer). Any such Qualifying Offer and Maximum
Qualifying Offer shall be governed by the provisions
of Section 4 above.
(b) When a Restricted Free Agent receives an offer to
sign a Player Contract from a Team other than the ROFR
Team (the “New Team”), which he desires
to accept, he shall give to the ROFR Team a completed
certificate substantially in the form of Exhibit G annexed
hereto (the “Offer Sheet”), signed by the
Restricted Free Agent and the New Team, which shall
have attached to it a Uniform Player Contract separately
specifying: (i) the “Principal Terms” (as
defined in Section 5(c) below) of the New Team’s
offer; and (ii) any non-Principal Terms of the New Team’s
offer that the ROFR Team is not required to match (as
specified in Section 5(c) below) but which would be
included in the player’s Player Contract with
the New Team if the ROFR Team does not exercise its
Right of First Refusal. The Offer Sheet must be for
a Player Contract with a term of more than one (1) season
(not including any Option Year), unless the ROFR team
has tendered the player both a Qualifying Offer and
a Maximum Qualifying Offer, in which case the Offer
Sheet must be for a Player Contract with a term of more
than two (2) Seasons (not including any Option Year).
In order to extend an Offer Sheet, the New Team must
have Room for the player’s Player Contract at
the time the Offer Sheet is signed. The ROFR Team, upon
receipt of the Offer Sheet, may exercise its Right of
First Refusal, which shall have the consequences hereinafter
set forth below in this Section 5.
(c) The following rules shall govern the signing of
an Offer Sheet by a Restricted Free Agent who has one
(1) or two (2) Years of Service:
(i) Notwithstanding any other provision of this Agreement,
no such Offer Sheet may provide for Salary plus Unlikely
Bonuses in the first Salary Cap Year totaling more
than 108% of the Average Player Salary for the prior
Salary Cap Year (or if the prior Salary Cap Year’s
Average Player Salary has not been determined, 108%
of the Estimated Average Player Salary for the prior
Salary Cap Year). Annual increases or decreases in
Salary and Unlikely Bonuses shall be governed by Article
VII, Section 5(c)(1).
(ii) If an Offer Sheet provides for the maximum allowable
amount of Salary for the first two (2) Salary Cap
Years pursuant to Section 5(c)(i) above, then, subject
to Section 5(c)(iii) below, the Offer Sheet may provide
for Salary for the third Salary Cap Year of up to
the maximum amount that the player would have been
eligible to receive for the third Salary Cap Year
absent the restriction in the first sentence of Section
5(c)(i) above and had the player’s Salary for
the first two (2) Salary Cap Years been the maximum
amount permitted under Article II, Section 7(a) and
Article VII, Section 5(c)(1). If the Offer Sheet provides
for Salary for the third Salary Cap Year in accordance
with the foregoing sentence, then, subject to Section
5(c)(iii) below, (A) the player’s Salary for
each Salary Cap Year after the third Salary Cap Year
may increase or decrease in relation to the previous
Salary Cap Year’s Salary by no more than 6.9%
of the Salary for the third Salary Cap Year, (B) the
Offer Sheet cannot contain bonuses of any kind, and
(C) the Offer Sheet must provide for 100% of the Base
Compensation in each Season to be protected for lack
of skill and non-insured injury or illness.
(iii) If a Team extends an Offer Sheet in accordance
with Section 5(c)(ii) above, then, for purposes of
determining whether the Team has Room for the Offer
Sheet, the Salary for the first Salary Cap Year covered
by the Offer Sheet shall be deemed to equal the average
of the aggregate Salaries for such Salary Cap Year
and each subsequent Salary Cap Year covered by the
Offer Sheet. If the ROFR Team does not exercise its
Right of First Refusal, the player’s Salary
for each Salary Cap Year covered by the Contract with
the Team that extended the Offer Sheet shall be deemed
to equal the average of the aggregate Salaries for
each such Salary Cap Year. If the ROFR Team exercises
its Right of First Refusal, the player’s Salary
for each Salary Cap Year covered by the Contract with
the ROFR Team shall be the Salary for such Salary
Cap Year as set forth in the Contract.
(d) The Principal Terms of an Offer Sheet are only:
(i) the term of the Contract;
(ii) the fixed and specified Compensation that the
New Team will pay or lend to the Restricted Free Agent
and/or his designees as a signing bonus, Current Base
Compensation, and/or Deferred Base Compensation in
specified installments on specified dates;
(iii) Incentive Compensation; provided, however, that
the only elements of such Incentive Compensation that
shall be included in the Principal Terms are the following:
(A) bonuses that qualify as Likely Bonuses based upon
the performance of the Team extending the Offer Sheet
and the ROFR Team; and (B) Generally Recognized League
Honors; and
(iv) Any allowable amendments to the terms contained
in the Uniform Player Contract (e.g., Base Compensation
protection, an Early Termination Option, a trade bonus,
etc.).
(e) If, within seven (7) days from the date it receives
an Offer Sheet, the ROFR Team gives to the Restricted
Free Agent a “First Refusal Exercise Notice”
substantially in the form of Exhibit H annexed hereto,
then, subject to Section 5(h) below, such Restricted
Free Agent and the ROFR Team shall be deemed to have
entered into a Player Contract containing all the Principal
Terms (but not any terms other than the Principal Terms)
included in the Uniform Player Contract attached to
the Offer Sheet (except that if the Contract contains
an Exhibit 6, such Exhibit 6 shall be deemed deleted).
Such Contract may not thereafter be amended in any manner
for a period of one (1) year.
(f) If the ROFR Team does not give the First Refusal
Exercise Notice within the aforementioned seven (7)
day period, then the player and the New Team shall be
deemed to have entered into a Player Contract containing
all of the terms and conditions included in the Uniform
Player Contract attached to the Offer Sheet (including,
if the Contract contains an Exhibit 6, that the player
pass a physical examination to be conducted by the Team
as a condition precedent to the validity of the Contract).
Such Contract may not thereafter be amended in any manner
for a period of one (1) year.
(g) After exercising its Right of First Refusal as described
in this Section 5, the ROFR Team may not trade the Restricted
Free Agent for one (1) year, without the player’s
consent. Even with the player’s consent, for one
(1) year, neither the ROFR Team exercising its Right
of First Refusal nor any other Team may trade the player
to the Team whose Offer Sheet was matched.
(h) Any Team may condition its First Refusal Exercise
Notice on the player reporting for and passing, in the
sole discretion of the Team, a physical examination
to be conducted by a physician designated by the Team
within two (2) days from its exercise of the Right of
First Refusal. In connection with the physical examination,
the player must supply all information reasonably requested
of him, provide complete and truthful answers to all
questions posed to him, and submit to all examinations
and tests requested of him. In the event the player
does not pass the physical examination: (i) the ROFR
Team may withdraw its First Refusal Exercise Notice
within two (2) days of such examination; and (ii) if
the First Refusal Exercise Notice is withdrawn, the
player and the New Team shall be deemed to have entered
into a Player Contract in accordance with the provisions
of Section 5(f) above. In the event the player does
not submit to the requested physical examination within
two (2) days of the exercise of the Right of First Refusal
then, until such time as the player submits to the requested
physical examination and is notified of the results,
the ROFR Team’s conditional First Refusal Exercise
Notice shall remain in effect, except that the ROFR
Team may elect at any time to withdraw its First Refusal
Exercise Notice, which shall have the effect of invalidating
the Offer Sheet and causing the Team that issued the
Offer Sheet to be prohibited from signing or acquiring
the player for a period of one (1) year from the date
the First Refusal Exercise Notice was withdrawn. If
the player does not submit to the requested physical
examination on or before March 1, the Offer Sheet shall
be deemed invalid and the Team that issued the Offer
Sheet shall be prohibited from signing or acquiring
the player for a period of one (1) year from such March
1.
(i) A Team shall not be permitted to exercise its Right
of First Refusal pursuant to an agreement to trade the
Player Contract to another Team pursuant to Article
VII, Section 8(e).
(j) There may be only one (1) Offer Sheet signed by
a Restricted Free Agent outstanding at any one time,
provided that the Offer Sheet has also been signed by
a Team. An Offer Sheet, both before and after it is
given to the ROFR Team, may be revoked or withdrawn
only upon the written consent of the ROFR Team, the
New Team and the Restricted Free Agent. In such event,
a Restricted Free Agent shall again be free to negotiate
and sign an Offer Sheet with any Team, and any Team
shall again be free to negotiate and sign an Offer Sheet
with such Restricted Free Agent, subject only to the
ROFR Team’s renewed Right of First Refusal.
(k) A Team that holds the Right of First Refusal with
respect to a Restricted Free Agent may relinquish such
Right of First Refusal at any time except during the
period that the player has been given to accept a Qualifying
Offer. If a Team relinquishes its Right of First Refusal
with respect to a Restricted Free Agent, the player
shall immediately become an Unrestricted Free Agent
and the Team shall be deemed to have renounced the player
in accordance with Article VII, Section 4(g) hereof.
In order to relinquish its Right of First Refusal with
respect to a Restricted Free Agent, a Team shall provide
the NBA with an express, written statement relinquishing
such Right of First Refusal. The NBA shall provide a
copy of such statement to the Players Association by
fax or e-mail within three (3) business days following
its receipt thereof.
(l) An expedited arbitration before the System Arbitrator,
whose decision shall be final and binding upon all parties,
shall be the exclusive method for resolving any disputes
concerning this Section 5. If a dispute arises between
the player and either the ROFR Team or the New Team,
as the case may be, relating to the contents of an Offer
Sheet, and/or whether the binding agreement is between
the Restricted Free Agent and the New Team or the Restricted
Free Agent and the ROFR Team, such dispute shall immediately
be submitted to the System Arbitrator, who shall resolve
such dispute within five (5) days.
(m) A Restricted Free Agent may not give an Offer Sheet
to the ROFR Team at any time after the March 1 of the
Season for which he has been made a Qualifying Offer.
(n) On the same day as the giving of an Offer Sheet
to the ROFR Team, the ROFR Team shall cause a copy thereof
to be given to the NBA, which shall cause a copy thereof
to be promptly given to the Players Association. On
the same day as the giving of a First Refusal Exercise
Notice to the Restricted Free Agent, the ROFR Team shall
cause a copy thereof to be given to the New Team, which
shall cause a copy thereof to be promptly given to the
NBA, which shall cause a copy thereof to be promptly
given to the Players Association.
(o) There may be no consideration of any kind given
by one Team to another Team in exchange for a Team’s
decision to exercise or not to exercise its Right of
First Refusal, or in exchange for a Team’s decision
to submit or not to submit an Offer Sheet to a Restricted
Free Agent.
(p) Any Offer Sheet, First Refusal Exercise Notice or
other writing required or permitted to be given under
this Section 5, shall be either by personal delivery
or by pre-paid certified, registered or overnight mail
addressed as follows:
To any NBA Team: addressed to that Team at the principal
address of such Team as then listed on the records
of the NBA or at the Team’s principal office,
to the attention of the Team’s general manager;
To the NBA: National Basketball Association, Olympic
Tower, 645 Fifth Avenue, New York, NY 10022, Attn:
General Counsel;
To the Players Association: National Basketball Players
Association, Two Penn Plaza, Suite 2430, New York,
NY 10121, Attn: Counsel.
To a Restricted Free Agent: to his address listed
on the Offer Sheet, and, if the Restricted Free Agent
designates a representative on the Offer Sheet and
lists such representative’s address thereof,
a copy shall be sent to such representative at such
address.
(q) An Offer Sheet shall be deemed given only when
actually received by the ROFR Team. A First Refusal
Exercise Notice shall be deemed given when sent by the
ROFR Team. A Qualifying Offer shall be deemed given
when sent by the ROFR Team. Other writings required
or permitted to be given under this Section 5 shall
be deemed given only when actually received by the party
to whom addressed.
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