Article 8 ROOKIE SCALE

8.1 Rookie Scale Contracts for First Round Picks.

  1. Each Rookie Scale Contract between a Team and a First Round Pick shall cover a period of two (2) Seasons, but shall have an Option in favor of the Team for the player’s third Season and a second Option in favor of the Team for the player’s fourth Season. The Option for the player’s third Season shall be exercisable during the period from the day following the last day of the first Season through the immediately following October 31. The Option for the player’s fourth Season shall be exercisable during the period from the day following the last day of the second Season through the immediately following October 31. (For clarity, consistent with the rule set forth in Article XLII, Section 2, if October 31 in any year falls on a Saturday, Sunday or Federal Holiday, then the deadline for exercising Options in Rookie Scale Contracts shall be deemed to fall on the following business day.) Such Options shall be exercisable by notice to the player that is either personally delivered to the player or his representative or sent by email or pre-paid certified, registered, or overnight mail to the last known address of the player or his representative, signed by the Team, informing the player that the Team has exercised such Option.
    1. The Rookie Salary Scale applicable to a First Round Pick is determined by the first Season to be covered by the player’s Rookie Scale Contract. Accordingly, for example, if a player’s Rookie Scale Contract commences with the 2017-18 Season, the 2017-18 Rookie Salary Scale shall apply. Within a particular Rookie Salary Scale, a First Round Pick’s applicable Rookie Scale Amounts are determined by the player’s selection number in the NBA Draft. Accordingly, for example, the Rookie Scale Amounts applicable to the eighth player selected in the first round of the NBA Draft shall be those specified in the applicable Rookie Salary Scale for the eighth pick. Notwithstanding anything to the contrary in this Section 1(b)(i) or in Section 1(b)(ii) below, beginning on January 10 of each Season, an unsigned First Round Pick’s applicable Rookie Scale Amount for such Season shall be reduced daily through the end of the Regular Season by the product of the applicable Rookie Scale Amount (as set forth in the applicable Rookie Salary Scale) multiplied by a fraction, the numerator of which is one (1) and the denominator of which is the total number of days in such Regular Season.
    2. Notwithstanding Section 1(b)(i) above, if, pursuant to any provision of this Agreement or the NBA Constitution and By-Laws, one (1) or more Teams is required to forfeit one (1) or more draft picks in the first round of a particular NBA Draft, then: (A) the Rookie Salary Scale for the Salary Cap Year immediately following such Draft shall be adjusted by removing one (1) or more Rookie Scale Amounts from the middle of the Rookie Salary Scale, as follows: if one (1) first round pick is forfeited, then the Rookie Scale Amounts that would have been applicable to the 15th player selected in the first round (absent any forfeiture of picks) (hereinafter, the “15th Pick”) shall be removed from the Rookie Salary Scale; if two (2) first round picks are forfeited, then the Rookie Scale Amounts applicable to the 15th Pick and the pick immediately following the 15th Pick shall be removed from the Rookie Salary Scale; if three (3) first round picks are forfeited, then the Rookie Scale Amounts applicable to the 15th Pick and the picks immediately preceding and immediately following the 15th Pick shall be removed from the Rookie Salary Scale; and if more than three picks are forfeited, additional Rookie Scale Amounts shall be removed from the Rookie Salary Scale in accordance with the foregoing procedure; and (B) the Rookie Scale Amounts applicable to players selected in such Draft shall be determined by their selection number under the Rookie Salary Scale as adjusted by Section 1(b)(ii)(A) above. Accordingly, for example, if one First Round Pick were forfeited in the first round of the 2018 Draft, the applicable Rookie Scale Amounts would remain unchanged for the first 14 picks, and the Rookie Scale Amounts applicable to the remaining 15 picks in the first round would be the Rookie Scale Amounts that (absent any forfeiture of picks) would have been applicable to picks 16 through 30.
    1. A Rookie Scale Contract shall provide in each of the two (2) Seasons covered by the Contract and the first Option Year at least eighty percent (80%) of the applicable Rookie Scale Amount in Current Base Compensation. Components of Salary in excess of eighty percent (80%), if any, are subject to individual negotiation, except that (i) in no event may Salary plus Unlikely Bonuses for any Salary Cap Year exceed one hundred twenty percent (120%) of the applicable Rookie Scale Amount, and (ii) a Rookie Scale Contract may not provide for a signing bonus (except for an “international player” payment in excess of the Excluded International Player Payment Amount made in accordance with Article VII, Section 3(e)) or a loan. A Rookie Scale Contract may provide for a payment schedule in any Season that is more favorable to the player than that called for under paragraph 3 of the Uniform Player Contract, subject to the other provisions of this Agreement.
    2. A Rookie Scale Contract must provide for Compensation protection for lack of skill and injury or illness in each of the two (2) Seasons covered by the Contract and the first Option Year to the extent of not less than eighty percent (80%) of the applicable Rookie Scale Amount. To the extent permitted by Article II, Section 4(l), a Team and a First Round Pick may negotiate additional conditions or limitations applicable to the player’s Base Compensation protection, except that lack of skill and injury or illness protection to the extent of at least eighty percent (80%) of the applicable Rookie Scale Amount in each of the first two (2) Seasons and the first Option Year shall contain no such individually-negotiated additional conditions or limitations.
    3. The terms and conditions (other than with respect to the payment schedule for the player’s Base Compensation) that apply to the second Option Year shall be unchanged from all terms and conditions that applied to the player’s first Option Year (including but not limited to the percentage of Base Compensation that is protected), except that the Salary, (excluding Incentive Compensation), Likely Bonuses, and Unlikely Bonuses for the second Option Year shall be increased over the Salary (excluding Incentive Compensation), Likely Bonuses, and Unlikely Bonuses, respectively, for the first Option Year by the applicable percentage specified in the applicable Rookie Salary Scale.
  4. Notwithstanding any other provision of this Agreement, if a trade of a Rookie Scale Contract would, by reason of a trade bonus contained in such Contract, cause the player’s Salary plus Unlikely Bonuses for the Salary Cap Year in which such trade occurs to exceed one hundred twenty percent (120%) of the player’s applicable Rookie Scale Amount for such Salary Cap Year, such player’s trade bonus shall be deemed amended to the extent necessary to reduce the player’s Salary plus Unlikely Bonuses for such Salary Cap Year to one hundred twenty percent (120%) of the applicable Rookie Scale Amount.

8.2 Rookie Contracts for Later-Signed First Round Picks.

Except as provided in Section 3 below, a First Round Pick who does not sign with the Team that holds his draft rights for any portion of the three (3) Seasons following the NBA Draft in which he was selected (and who did not play intercollegiate basketball during such period) may enter into either (a) a Rookie Scale Contract in accordance with Section 1 above, or (b) if the Team has Room in excess of the applicable first-year Rookie Scale Amount and subject to the provisions of Article VII, a Contract covering no fewer than three (3) Seasons (not including any Option Year) that provides for Base Compensation in the first Season greater than one hundred twenty percent (120%) of the applicable first-year Rookie Scale Amount.

8.3 Loss of Draft Rights.

If for any reason a Team fails to make a Required Tender to a First Round Pick in accordance with Article X, withdraws a Required Tender to a First Round Pick in accordance with Article X, or renounces a First Round Pick in accordance with Article X, or if a First Round Pick selected in a Subsequent Draft does not sign a Contract for a period of one (1) year following such Subsequent Draft in accordance with Article X, then the rules set forth in Sections 1 and 2 above shall not apply, and such First Round Pick shall become a Rookie Free Agent. In addition, any Team that fails to make a Required Tender to a First Round Pick, withdraws a Required Tender to a First Round Pick, renounces a First Round Pick, or fails to sign within one (1) year a First Round Pick selected in a Subsequent Draft shall be prohibited from signing such player until after he has signed a Player Contract with another NBA Team, and either (a) the player completes the playing services called for under the Contract, or (b) the Contract is terminated in accordance with the NBA waiver procedure.

8.4 2018-19 and 2019-20 Rookie Salary Scales.

The Rookie Scale Amounts for the 2018-19 and 2019-20 Salary Cap Years shall be calculated in accordance with the following:

  1. For purposes of this Section 4, the “Baseline Rookie Scale” for the 2017-18 Salary Cap Year shall be the Rookie Salary Scale annexed hereto as Exhibit B-2. The Baseline Rookie Scale for the 2018-19 and 2019-20 Salary Cap Years shall be calculated by taking the Baseline Rookie Scale for the prior Salary Cap Year and adjusting the Rookie Scale amounts therein by applying the percentage increase (or decrease) in the Salary Cap from the preceding Salary Cap Year to the current Salary Cap Year (e.g., to determine the 2018-19 Baseline Rookie Scale, the percentage increase (or decrease) in the Salary Cap from the 2017-18 Salary Cap Year to the 2018-19 Salary Cap Year would be applied); provided, however, that the applicable “4th Year Option” and Qualifying Offer percentages shall remain unchanged.
  2. The Rookie Salary Scale for the 2018-19 and 2019-20 Salary Cap Years shall be calculated by taking the Baseline Rookie Scale for that Salary Cap Year and increasing (i) the Rookie Scale amounts therein in respect of the 2018-19 Salary Cap Year by thirty percent (30%), and (ii) the Rookie Scale amounts therein in respect of the 2019-20 Salary Cap Year and subsequent Salary Cap Years by forty-five percent (45%). (For clarity, the foregoing 45% increase in Rookie Scale Amounts for the 2019-20 Salary Cap Year would be applied in both the 2018-19 and 2019-20 Rookie Salary Scales.)
  3. For illustrative purposes, an example of the 2018-19 and 2019-20 Rookie Salary Scales assuming five percent (5%) annual growth in the Salary Cap is annexed hereto as Exhibit B-3.

8.5 Existing Rookie Scale Contract Increases.

  1. In respect of any Rookie Scale Contract in effect as of the effective date of this Agreement that: (i) was entered into prior to the execution of this Agreement and is not terminated on or before June 30, 2017; and (ii) has a term including the 2016-17, 2017-18, 2018-19, and/or 2019-20 Season, such Contract shall be deemed amended on July 1, 2017 as follows: the remaining Base Compensation, Incentive Compensation, and Base Compensation protection shall be increased: (i) fifteen percent (15%) in respect of the 2017-18 Season; (y) thirty percent (30%) in respect of the 2018-19 Season; and (z) forty-five percent (45%) in respect of the 2019-20 Season (collectively the “Rookie Scale Conforming Increases”).
  2. Rookie Scale Conforming Increases shall be paid by the player’s Team in accordance with the payment schedule set forth in the player’s Contract for each applicable Season (i.e., each payment to the player under his Contract shall be increased by 15%, 30% or 45%, as applicable), and then reimbursed to the Team out of a League-wide fund created and maintained by the NBA.
  3. As set forth in Article IV, Sections 6(g)(3) and 6(d), Rookie Scale Conforming Increases and the CBA benefits associated therewith (e.g., the employer’s share of payroll taxes) will both be included in the calculation of Benefits (and thus, consistent with Article I, Section 1(www), in the calculation of Total Salaries and Benefits). However, subject to Section (d)(ii) below and as set forth in Article VII, Sections 3(j) and 4(a), the Rookie Scale Conforming Increases shall be excluded from the calculation of an individual player’s Salary and each Team’s Team Salary (and thus will not affect, for example, the amount of room, if applicable, a Team has below the Salary Cap, the amount of Traded Player Exceptions, etc.).
  4. With respect to any player whose Contract (before applying the Rookie Scale Conforming Increase) provides for Base Compensation in respect of the 2017-18 Season (or any future Season) that is less than the Minimum Player Salary for the Salary Cap Year encompassing the applicable Season pursuant to 2017-18 Minimum Annual Salary Scale:
    1. such player shall receive the applicable Rookie Scale Conforming Increase and then, if necessary, any additional Base Compensation required to reach his applicable Minimum Player Salary;
    2. such player shall have his Salary deemed equal to his applicable Minimum Player Salary; and
    3. notwithstanding Article IV, Section 6(g)(4), the amount that is the difference between his Salary under his Rookie Scale Contract prior to his Rookie Scale Conforming Increase and his applicable Minimum Player Salary shall be paid directly by his Team (and not reimbursed out of the League-wide Rookie Scale Conforming Increases fund).