Gerald Wallace agreed to a three-year deal that will prevent him from becoming an unrestricted free agent next summer, the Observer has learned. A source close to Wallace said he can opt out of the contract after two seasons.

Financial terms were not available, but Wallace previously turned down a three-year deal worth about $16 million.

This compromise avoids a potentially touchy situation. Had Wallace signed the one-year qualifying offer, he'd become an unrestricted free agent in the summer of '06 but would have little financial security. It was also a gamble for the Bobcats: Under NBA rules, Wallace could have vetoed any trade, leaving the team in danger of losing him without compensation.

Wallace and his agent, Rob Pelinka, met with Bobcats coach-general manager Bernie Bickerstaff Thursday. They couldn't agree then, and Bickerstaff said afterward he expected Wallace to play for the qualifying offer, worth about $2 million.