NBA contract terms, defined

In the confusing world of NBA finance, the following definitions will help you navigate the news:

Max contract: The maximum possible salary teams are allowed to offer players whom they are trying to lock down for the long term.

Supermax contract: Also known as the "Designated Veteran Player Extension," this allows teams to re-sign qualified players to maximum five-year contracts worth up to 35% of the salary cap with annual 8% raises.

Sign-and-trade: A contract in which one team signs an unrestricted free agent to a new contract, only to immediately trade him to another team of the player's choosing.

Trade exception: What happens in a trade when one team moves more salary than it gets in return. The resulting difference can be used by the benefiting team over the next year to acquire a player earning up to the amount of the trade exception.

Disabled player exception: This rule allows a team to replace a player who has been injured and will be out the rest of the season, or for the entire next season (if the injury occurs during the offseason). It may also be used in the case of a player’s death.

Bird rights: The Larry Bird exception allows teams to exceed the salary cap to re-sign their own free agents, at an amount up to the maximum salary.

Non-guaranteed team option: A team has until an agreed-upon date to decide whether to guarantee a player’s contract for the following season.

Taxpayer mid-level exception: This contract option is available to teams above the luxury tax apron, which is set at $138 million for the 2019-2020 season. Players can be signed up to three years with 4.5% annual raises each season.