A restricted free agent, Hayward netted a contract worth $1.368 million, essentially the qualifying offer the Broncos made to him two months ago. Herndon was an exclusive-rights free agent and his base salary will be $380,000.
The Broncos also re-signed backup safety Chris Young to a one-year contract worth $305,000.
Three-year veteran Hayward, coming off his best season, is expected to move into the starting right end spot to fill the vacancy created when Bertrand Berry defected to the Arizona Cardinals in free agency last month.
Hayward, 25, appeared in all 16 games in 2003, started two, and posted 44 tackles and 8½ sacks. The former Iowa State standout, chosen by Denver in the third round of the '01 draft, had just 32 tackles and three sacks in the first two seasons of his career.
A lean player with excellent quickness and upfield speed, Hayward seems poised to make the next step and should emerge as a double-digit sack threat.
Herndon, 27, is a terrific success story, one marked by persistence and grit. Out of the game for two seasons, following his release by the San Francisco 49ers in 1999, he signed with Denver in 2001 as a so-called street free agent, and earned a roster spot. Then he was elevated to the starting lineup in 2003, at right cornerback, when former first-round draft choice Deltha O'Neal was demoted.
The former Toledo standout started 11 games and finished second on the unit in tackles (78), while registering a team-best three interceptions and 14 passes defensed. Herndon will go to camp as the starter at right cornerback, opposite Champ Bailey, acquired in a high-profile trade last month and slotted as the starting left corner.
Len Pasquarelli is a senior NFL writer for ESPN.com.