A team can have at most one player on its roster whom they have designated for a longer extension, plus at most one player designated by another team whom they acquired in trade.
For example, the Oklahoma City Thunder extended Russell Westbrook's rookie scale contract in 2011 (with the extension taking effect in 2012-13). They selected Westbrook as their designated player and extended him through 2016-17 (five new years, six total). The Thunder therefore are not allowed to designate another player for a five-year extension (Kevin Durant signed his five-year extension under the 2005 CBA) until 2017, as long as Westbrook is on their roster. However, they can trade for one (and only one) player who was designated by another team.