How is the 25% rule under the CBA enforced?

The correct answer highlights how the 25% rule operates within the context of the Collective Bargaining Agreement (CBA) regarding rookie contracts. Specifically, the rule states that when a rookie enters the league, the annual salary increases for that player's contract are capped at 25% of the initial year's salary. This ensures that rookie contracts remain manageable for teams while progressively rewarding players for their performance and development over time.

This rule is significant because it helps teams plan their salary cap effectively by putting limitations on how much they can allocate toward increases in rookie salaries. If there were no limitations, teams could struggle with financial planning as rookie players' salaries could potentially escalate too quickly.

The other choices do not accurately describe the 25% rule's function in the CBA. For example, capping signing bonuses or restricting performance incentives does not fall within the specifics of this rule, which is focused solely on the increment of rookie salaries over the duration of the contract.