Players that can be selected from the Rule 5 draft are those that are not included on the 40 man roster and have been with the same organization for four years (signed after age 18) or for five years (signed at age 18 or younger)
As in the amateur draft, the selection order of the teams is based on each team's win-loss record from the prior regular season, each round starting with the team with the worst record and proceeding in order to the team with the best record. Any player selected under Rule 5 is immediately added to his new team's 40-man roster; thus, teams who do not have an available roster spot may not participate in the Rule 5 draft. Players who are not currently on their team's 40-man roster are eligible to be selected in the Rule 5 draft, but only after a standard exemption period has elapsed. See Selection eligibility below.
If chosen in the Rule 5 draft, a player must be kept on the selecting team's 25-man major league roster for the entire season after the draft—he may not be optioned or designated to the minors. The selecting team may, at any time, waive the Rule 5 draftee. If a Rule 5 draftee clears waivers by not signing with a new MLB team, he must be offered back to the original team, effectively canceling the Rule 5 draft choice. Once a Rule 5 draftee spends an entire season on his new team's 25-man roster, his status reverts to normal and he may be optioned or designated for assignment.
The reason I am rambling is because the Yankees decided to not place Zach Kroenke on their 40 man roster, which would have protected him from being selected as part of this draft. He was picked up by the D'Backs today; a selection that I should be surprised about as Kroenke has shown he has talent that is worthy of that selection. Hes a solid lefty with a decent fastball and a slider. As I embarked on my travels to AAA games this year, I found myself drawn to this play. I am disappointed he is no longer a Yankee and wish him well on his new journey. It was obvious the Yankees didn't have much interest in him and he will hopefully get more playing time now that hes on a different team.