In our auction league we can keep up to 5 players a year. Instead of increasing each player kept by $5, each team chooses one player to increase their salary by $1, another by $4, $7, $10, and $13. The increases add up to $25, the same as amount as increasing each by $5. It adds a little more strategy to the keepers.
I used this article to help me create our league.http://www.hardballtimes.com/main/fanta ... e-roundup/
In our league, if a player is dropped he is not eligible to be kept. Only players drafted can be kept. I think it is the best way to go. $10 is ok, nothing less than that.