Beaten to the punch, here is the explanation:
From
https://thewincolumn.ca/2021/08/11/h...y-are-so-rare/
"How do offer sheets work?
An offer sheet is a binding NHL contract that is offered to an eligible RFA whose rights are owned by a different NHL club. The rules of the offer sheet are the restrictions in the RFA designation. Any player who is a Group 1 RFA, 10.2.c RFA, or a UFA cannot be tendered an offer sheet.
One key example of this is the Vancouver Canucks. Elias Pettersson is eligible to sign an offer sheet as he is an RFA, whereas Quinn Hughes is not eligible to sign an offer sheet as he is a 10.2c RFA.
If a player chooses to sign an offer sheet with another NHL team, their original team—the one that holds their rights—has a choice. They can either match the offer sheet which means they inherit the signed contract as is, or they can choose not to match. If they do not match, the player is now a member of the other team with their contract being the offer sheet. In return, the original team gets compensation in the form of draft picks from the signing team, depending on what the average annual value (AAV) of the offer sheet was."