The Yankees cut David Herndon from their 40-man roster. Then, the Yankees signed David Herndon. Huh? Okay, they had a good reason. But, I think the Phillies would have taken this approach with Herndon and kept him in the organization for depth if they had the chance.
This is how it worked. The Yankees, like the Blue Jays and like the Phillies, did not feel that David Herndon was worth tying up a 40-man roster spot during the offseason, keeping the team from making different moves and giving them flexibility. To outright a player off of the 40-man roster and send him to AAA, the player needs to go through waivers where any other team can claim him.
In the case of Herndon, the Phillies tried to sneak him through and he was claimed by the Blue Jays. The Blue Jays then tried to sneak him through and keep him around for depth, and he was claimed again, this time by the Yankees. However, the Yankees probably made a deal with Herndon: If you pass through waivers, declare free agency and we can take care of you. And they did.
Herndon agreed to a split minor-league contract. He is Yankees property and not assigned to the 40-man roster. They promised him a $750,000 salary if he makes the major league team, and a $180,000 salary to play at AAA. He also can get $50,000 in incentives.
This way Herndon and the Yankees both win. Herndon has stability by knowing what organization he will remain with throughout the offseason, he will earn a decent salary whether in the minor leagues or the major leagues. The Yankees win because he is a depth option for the bullpen and they don't have to worry about the roster spot right now. Should a bullpen player get hurt, the Yankees have Herndon stashed away in the minors and he has some ability and the potential to be a decent relief option.