Mike answered 1 and 2 nicely, but I think that 3 can be elaborated on a bit. Later on in the free agent signing period, you can often drop a year off the term from the demands. During the resign free agent period (the one before arb), depending on what it says in the message window, sometimes you have to offer significantly more than what they are "demanding" in order to avoid them becoming free agents. I hope that made sense for you.