Rule V Primer

Here's how it works:

• Players who signed when 18 or younger are eligible for the draft after five years.
• Players who signed when 19 or older are eligible after four years.
• If these players aren't on their teams' 40 man rosters, they're exposed.
• As in the June draft, teams draft in reverse order of the previous season's standings.
• Teams that draft players must pay $50k to the player's original team.
• Those selected must remain on the 25-man roster or the major league DL for the entire season.
• Otherwise, the claiming team has to offer the player back to his original team for $25k.
• First, however, he must clear outright waivers.
• This gives the other 28 teams the opportunity to claim him. If any team claims the player, he must remain on their roster for the entire season or go through waivers again.
• The draft was more relevant before it was modified under the current Collective Bargaining Agreement, when players were eligible a year earlier.

Thanks to ESPN.com's Keith Law, Cot's Baseball Contracts and ESPN.com's Rob Neyer.

http://www.mlbtraderumors.com/2009/06/the-rule-5-draft.html