During each offseason (after the world rolls over), players are ranked within their position group. These groups include C, 1B/OF/DH, 2B/3B/SS, SP and RP. Any free-agent in the top 20% of their position is considered a Type A free-agent and any free-agent in the top 40% is considered a Type B free-agent.
If another team signs a Type A free-agent prior to the Amateur Draft preparation period, the player's former team receives compensation. The former team receives the signing team's first round pick (or second round pick if the pick is one of the first 16 picks not including Type D picks).
If it's a Type A or a Type B free-agent, the former team receives a supplemental pick between the first two rounds of the draft. Also when the Amateur Draft preparation period is reached , the supplemental round picks will be re-ordered so that each eligible franchise has at least one pick before they have an additional pick.