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Contracts Glossary

* Please see Larry Coon's Salary Cap FAQ for detailed information on the NBA's current Collective Bargaining Agreement.

1st Round Cap Hold
The amount an unsigned 1st round draft pick counts against the salary cap.
Amnesty
The amount that a player still earns if he is waived via the amnesty provision (this amount no longer counts against the salary cap).
Buyout Adjustment
The amount that a player's guaranteed salary is reduced due to a buyout agreement.
Cap Hit
The amount of the player's salary that counts against the salary cap.
Early Termination Option
An option that allows a player to terminate his contract before the scheduled end date.
Free Agent Cap Hold
The amount a free agent counts against the salary cap.
Free Agent Rights
The rights a team holds on a free agent.
Guaranteed
The amount of a player's remaining salary that is guaranteed.
Likely Incentives
Contract incentives that a player is likely to reach (these count against the salary cap).
Luxury Tax Adjustments
The amount that a player's guaranteed salary is reduced due to adjustments for luxury tax purposes.
Luxury Tax Amount
The amount that counts toward determining whether or not a team owes luxury tax.
Minimum Base
The player's minimum base salary, based on years of service.
Player Option
An option that allows a player to extend his contract for one additional season after the scheduled end date.
Qualifying Offer
A standing offer to a restricted free agent for a one-year guaranteed contract; the offer becomes a regular contact if the player signs it.
Setoff Adjustment
The reduction in a player's guaranteed salary due to rules of setoff (which may come into play after the player is waived).
Signing Bonus
The amount of any signing bonus that counts against the cap in a given year.
Team Option
An option that allows a team to extend a player's contract for one additional season after the scheduled end date.
Trade Incoming
The amount of salary incoming in a trade; used to determine whether or not a trade is legal.
Trade Kicker
The percentage of a player's salary that is awarded as a bonus in the event of a trade.
Trade Outgoing
The amount of salary outgoing in a trade; used to determine whether or not a trade is legal.
Unguaranteed
The amount of a player's remaining salary that is not guaranteed.
Unlikely Incentives
Contract incentives that a player is unlikely to reach (these do not count against the salary cap).
Veteran Reimbursement Adjustment
The amount that the team will be reimbursed by the league toward a given player's salary.
Years of Service
The number of years of service a player has in the NBA.