It sounds as though someone's source is getting bad information.
On Tuesday, Vic Carucci of the Buffalo News reported through a source that Buffalo Bills owner Terry Pegula made an ultimatum to GM Doug Whaley and head coach Rex Ryan: Make the playoffs in 2016 or prepare to lose your jobs.
Shortly thereafter, Jeremy White of WGR-550 in Buffalo reported through a source that the Bills planned to sign Whaley to a contract extension. White's source also spoke out on Carucci's report and said the ultimatum made by owner Terry Pegula was "absolutely not" the case. Ty Dunne of the Buffalo News later confirmed what White's source said regarding Whaley receiving an extension with the Bills.
It's possible that both sources could be correct but it's highly unlikely that the Bills would sign Whaley to a multi-year extension if his job was on the line next year.