Ok, it is always best to give rookie players Offer 1. Offer 1 will usually avoid incentives and keeps down any signing bonuses. RFAs will usually accept a contract with no bonus, so don't give them any more. A good guideline as far as extending players is give them a signing bonus if they have a overall over 85; otherwise turn them down.
You may want to use the strategy I mentioned earlier in another thread. As far as veterans, try and keep it as close to Offer 1 as you can. You will have to give veterans a signing bonus and possibly incentives, but try to stick to performance based-incentives. I don't mind giving a veteran incentives for performance, but stay away from start 16 game incentives unless the player is a backup.
20 million in cap penalties is usually all you can accrue in 1 year, and you should get a warning about being fired. If you cut 1 more player after the warning with a bonus, you will be fired. Try only to cut players with no bonus if you can, but all contracts past the rookie one will have bonuses, so just be careful. Incentives will count as aplayers salary if they are met, so be careful on handing them out.