<P> For example, suppose the Non-Taxpayer Mid-Level exception is $9 million . With 5% raises, a three - year contract would total $28.35 million . But if they added a fourth year to the contract, the salary would total $38.7 million . If the player retires after three seasons and continues drawing his salary for the additional season, then he effectively will be paid $38.7 million for three years' work . In essence, they are giving the player a three - year contract with additional deferred compensation . </P> <P> To address this issue, CBAs since at least the 1990s have included what is now called the "over-38 rule", under which certain contracts that extend past the player's 38th birthday are presumed to cover seasons following the player's expected retirement . The age threshold that triggered this rule was originally set at 35, changed to 36 in the 1999 CBA, and changed again to 38 in the 2017 CBA . The salary for any years that come after the player's 38th birthday is presumed to be deferred compensation, and is shifted for cap purposes to the under - 38 seasons of the deal, with the over-38 year (s) being referred to as "zero years" in the CBA . If the player continues to play under the deal (proving the presumption of retirement wrong), the salary that had originally been treated as deferred is distributed evenly over the remaining years of the contract, starting with the second season before the zero years . This rule had been a larger issue before the 2011 CBA, which limited the maximum contract length to 5 years . </P> <P> While the threshold age was changed in the 2017 CBA, the mechanics of the rule remained the same . Notably, several members of the union's executive committee at the time the 2017 CBA was negotiated were older players who were seen as potential major beneficiaries of a change to an over-38 rule . For example, the change to an over-38 rule gave union president Chris Paul, scheduled to become a free agent after the 2016--17 season, a potential gain of nearly $50 million over the life of his next contract . Similarly, executive committee members LeBron James and Carmelo Anthony, who could opt out of their current contracts after the same season, had the potential for similar gains with this change . </P> <Ul> <Li> Teams below the salary cap may trade without regard to salary, as long as they don't end up more than $100,000 above the cap following a trade . </Li> <Li> Teams above the cap (or teams below the cap but would end up more than $100,000 over the cap following a trade) cannot acquire more than 125% plus $100,000 of the salary they trade away . Under the 2011 CBA, teams that remain below the luxury tax threshold even after the trade can acquire the lesser of 150% plus $100,000, or 100% plus $5 million, of the salary they trade away . There is no lower limit--teams may divest themselves of as much salary as they wish (or can convince another team to take on) in a trade . </Li> <Li> No free agent signed in the offseason can be traded until December 15 of that year or until three months have passed (whichever comes later), a rule that prevents teams from signing free agents with the intent of using them strictly as trade fodder . For draft picks this moratorium lasts 30 days . </Li> <Li> If teams acquire a player in a trade, they are allowed to trade that player straight - up for another individual player immediately . However, if teams wish to package that player with another and make a trade, they must wait 60 days before doing so . </Li> </Ul>

What is a veteran contract in the nba