Key Contract Terms

Rookie Compensation Pool:

The League-wide limit on the total amount of Salary which all of the NFL clubs may contract for in signing Drafted and Undrafted Rookies during each League Year as described in Article 7 (Rookie Compensation).

25% Rule for Rookies:

No Player Contract signed by a Rookie may provide for an annual increase in Salary of more than 25% of the contract’s Year-One Rookie Salary, unless such Contract provides only for Paragraph 5 Salary which is equal to the then-applicable Minimum Salary for each League Year of the contract. For example, if a rookie player’s contract pays him a total of $1-million in the first year of his NFL player contract he cannot earn more than $1.25-million in total salary in year two, $1.5-million in total salary in year three, $1.75-million in total salary in year four and $2-million in year five.

Signing Bonus:

A signing bonus is a guaranteed bonus that is paid to the player when the player and the club execute a written contract. Signing bonuses and anything else treated as a signing bonus (guaranteed option bonuses and guaranteed roster bonuses) are prorated equally over the length of the player’s contract. Generally, the signing bonus amount is divided by the number of contract years. For example, a $5-million signing bonus in a five year contract, will count $1-million against capitalized Team Salary for each year of the five seasons, even though the player may have received the full $5-million immediately.

Roster Bonus:

A bonus that is given to a player if a player is a member of either the 80-man roster or 53-man roster on a specified date.

Option Bonus:

A bonus that is given in conjunction with a Club’s right to exercise a future option year in a player’s contract. An option bonus is treated as a signing bonus and prorated equally over the remaining years of the contract. For example, a rookie signs a five-year contract in 2021 that includes a club option for a sixth year if in 2026 the club pays the player an option exercise bonus of $5-million. For purposes of proration, the $5-million is prorated equally beginning in 2021 over the remaining term of the contract including the option year.

Paragraph 5 Salary (Base Salary):

The salary that a player shall earn if he is on the team’s 53-man active/inactive roster throughout that contract year. Generally, Paragraph 5 Salary is not guaranteed, unless otherwise specified.

Split Salary:

A contract clause that stipulates that the player will receive one salary if he is a member of the 53-man Active/Inactive list (the “up” amount) and another salary if the player is placed on a reserve list (such as Reserve/Injured) and is therefore not a member of the Active/Inactive list (the “down” amount).

Paragraph 5 Salary Escalator:

A contract clause that increases a player’s Paragraph 5 Salary based upon the fulfillment of a contingency in a prior contract year. For example, a player has an escalator clause that stipulates that his 2012 Paragraph 5 Salary shall increase by $1-million if player participates in 35 percent of the offensive snaps in any previous contract year.

Likely-To-Be-Earned (LTBE) Incentives:

Incentive bonuses that are included in Team Salary for Salary Cap purposes based on the player’s and/or team’s performance during the prior year .

Not-Likely-To-Be-Earned (NLTBE) Incentives:

Incentive bonuses that are not included in Team Salary for Salary Cap purposes based on the player’s and/or team’s performance during the prior year.

Workout Bonus:

Any bonus amount that is paid to a player in exchange for the player’s participation in the Club’s Off-Season Workout Program.

Voidable Contract Year:

Any contract year that the player has the right to terminate based upon a contingency. For example, a player has a voidable contract year clause that stipulates that he can void the remaining years on his contract if he catches 10 touchdown passes in any of the previous contract years.

Accrued Season:

An Accrued Season is a season during which a player has been on full pay status (Active, Inactive or Injured Reserve List) for six (6) or more regular season games. Earning an Accrued Season entitles a player to advance to the free agency system which governs a player’s negotiating rights once his contract expires. A player with four (4) or more Accrued seasons becomes an Unrestricted Free Agent once his contract expires (unless he is designated as a Franchise Player). A player with three (3) but less than four (4) Accrued Seasons when his contract expires becomes a Restricted Free Agent.

Credited Season:

A Credited Season is any season in which a player is on one of the following lists for at least three (3) regular season or post-season games: Active List, Inactive List, Injured Reserved List or Physically Unable to Perform List. A player can also earn a Credited Season if he is released injured and paid the equivalent of at least three (3) game checks. Earning Credited Seasons entitles players to various benefits under the CBA, such as Termination Pay, Severance, and Pension.

Restricted Free Agent:

A player whose contract expires when he has three (3) Accrued Seasons (but less than four) is a Restricted Free Agent. If his old club provides him with a sufficient “Qualifying Offer” on or before the last day of that League Year, it retains the right to either match an offer the player may get from another club or to receive draft choice compensation from the club making the offer to the Restricted Free Agent.

Unrestricted Free Agent:

A player whose contract expires when he has accumulated at least four (4) Accrued Seasons. This player is free to sign with any other club if he does so by July 22 of the same year. If he does not sign elsewhere, his exclusive rights revert to his old club after July 22, provided that the old club has given him a written tender by June 1 offering to resign him for an additional year at a ten percent increase in salary (the “June 1 Tender”) . An Unrestricted Free Agent can be restricted in signing elsewhere, however, if he is designated as a Franchise or Transition Player.

Exclusive Rights Player:

A player whose contract expires at a time when he has less than three Accrued Seasons in the NFL cannot market his services to other clubs if his old club gives him a minimum salary tender on or before the last day of that League Year. If the tender is provided, this player can only re-sign with his old club (unless the tender is later withdrawn).

Franchise Player:

Each club may designate one player who would otherwise be an Unrestricted Free Agent as a Franchise Player. The designation must be made within a two-week period beginning on the twenty-second day before the first day of the new League Year and will end at 4:00 p.m., New York time on the eighth day before the first day of the new League Year. The club must tender the Franchise player an offer equal to the average of the top five salaries in the League at the player’s position. If the tender offers the top five average applicable at the end of the previous season, the Franchise Player can seek offers from other clubs, but the old team can match the offer or receive two first round draft choices from the offering team. If the tender offers the top five average applicable at the end of the upcoming Restricted Free Agent signing period, the club retains exclusive rights to the player and he cannot negotiate with other teams. Once signed by the player, the tender is guaranteed.