A restricted free agent is a player who has recorded three years of service and is set to become a Free Agent. Teams can make qualifying offers in the form of tenders to their RFA's.
Restricted Free Agent Tender Amounts & Compensation
$2.562 Million: First and Third Round
$2.017 Million: First Round
$1.417 Million: Second Round
$927,000 Thousand: Determined by RFA's original draft status
Ex: The Houston Texans slap the First Round tender on Tight End Owen Daniels. If any club is willing to part with their First Round Draft Choice for him, they can try their luck and sign him to an offer sheet.
The Arizona Cardinals offer Daniels a 5 year deal worth $30 Million with an annual salary of $6 Million per season and offer their First Round Draft Choice as compensation.
The Texans then have the option to either match the Cardinals contract offer and pay Daniels $6 Million a season for 5 years or let him walk and decline to match the Cardinals contract offer and receive the Cardinals First Round Draft Choice as compensation.
However, if no team wishes to sign him to an offer sheet, the Texans will then have Daniels under contract for one year under his tendered amount.
Teams which choose not to match an offer on a player with the lowest tender amount will receive a Draft Choice corresponding to the round in which the player was originally drafted.
However, the highest draft choice that can be surrendered for a player under such a tender is a Second Round Draft Choice.
No compensation is required for an undrafted player on the lowest tender amount so if you have valuable URFA's, take that into consideration before offering such a tender in that scenario.