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12 Cards in this Set

  • Front
  • Back
General rule prohibiting no-trade contracts

No-trade contracts are not allowed, except for players who have at least 8 years of service and have played 4 or more years for the team.

Trade bonuses of up to 15% are also allowed.
Restrictions on Trade Bonuses

Are contained in Exhibit 4 to a contract. Only amendment allowed to an Exhibit 4 is one fixing the percentage or specific dollar amount of the Trade Bonus.

1. Trade Bonus is limited to 15% of Base Compensation remaining to be earned at the time of the trade, excluding any unexercised option years.

2. No amendments to add Trade Bonuses are allowed, except that as part of an Extend and Trade the contract can be amended to include a trade bonus if the player is traded again, or is traded a second time (not including the E&T).
3. No trade bonus is payable more than once.
8 and 4 exception to prohibition of no-trade clause

(b) A Player Contract entered into by a player who has eight (8) or more Years of Service in the NBA and who has rendered four (4) or more Years of Service for the Team entering into such Contract may contain a prohibition or limitation of such Team’s right to trade such Contract to another NBA Team.

Note: He doesn't need to have been on that team immediately beforehand, or have served the 4 years consecutive prior to the signing of the contract with that team.
Limitation on Deferred Compensation

Cannot be more than 25% of the player's compensation for a particular season.

If there is deferred money in a contract, it must specify what season the Deferred Compensation is attributable to (to allow calculation of Team Salary, etc).
Right of Set-Off for Waived Players

If a player with a guaranteed contract is waived, the waiving team is entitled to a set-off if the player signs with another team during any of the cap years covered by the contract.
Calculation of Set-Off for Waived Players

Calculation is done separately for each remaining guaranteed year of the contract. Each year's set-off is calculated as follows:

If player had 0 years of service at time of waiver:

(Total compensation earned by player from new team) - (Minimum annual salary for that player at time contract terminated)

If player had 1 or more years of service:

(Total compensation earned by player from new team) - (Minimum annual salary for player with 1 year of service at time contract terminated)

If amount is negative, then no set-off for that year. If amount is positive, then the set-off is 50% of that amount.

Note: You subtract the minimum annual salary FROM THE YEAR THE PLAYER WAS WAIVED, even if calculation is being applied to later cap years.
What compensation from the new team is part of the set-off calculation?

Total Compensation from the new team means all compensation other than basic benefits like those provided by the NBA and travel/moving/car/housing provided temporarily to the player while he's playing for the team.
How is the set-off accomplished?

Generally by payroll deductions. But if that isn't enough to give the old team all the money it is due from the set-off, the NBA may direct any later NBA team to withhold set-off from his new compensation and send it to the old team.
If player is waived by consecutive NBA teams, who gets the right of set-off?

The first team has its entire set-off satisfied before the second team gets any.
How is set-off calculated with respect to Deferred Compensation?

In calculating the amount of set-off to which a Team may be entitled pursuant to this Article XXVII, the unearned Deferred Compensation payable to a player for or with respect to a period covered by the terminated Contract shall be discounted on an annual basis by a percentage equal to the prime rate as set by Citibank, N.A. and in effect at the time the agreement providing for such Deferred Compensation was made.
How can the player avoid being subject to set-off rights?

The player and team can agree to modify or eliminate the set-off right via amendment to a player contract.
Set-off for Amnesty Players who then play outside the NBA

The set-off amount shall be allocated among Team A and Team B in proportion to the amount of Base Compensation for the Season in question for which Team A and Team B are responsible.