On the same day he agreed to terms on a two-year, $29 million contract extension, White Sox right-hander Jake Peavy won his first American League Gold Glove Award.

Peavy, who made one error in 37 chances in 2012, shared the honor with Tampa Bay's Jeremy Hellickson. Peavy held opponents to a 52.9 percent (9-for-17) success rate on stolen bases. He is the third Sox pitcher to win the award, joining left-handers Jim Kaat (1974-75) and Mark Buehrle (2009-11).

Catcher A.J. Pierzynski was also nominated for a Gold Glove.

It took Rick Hahn four days on his new job to make a big splash. The White Sox general manager re-signed right-hander Jake Peavy to a two-year, $29 million extension and picked up the $9.5 milllion option on Gavin Floyd, solidifying the right-handed side of his rotation for 2013.

Peavy will receive $14.5 million in each of the next two seasons, with performance incentives that would extend his contract through 2015 for another $15 million. The $4-million buyout for Peavy's $22 million club option for 2013 will be paid out over 2016-19 in equal installments, softening the payroll blow for next season and making the deal possible, Hahn said.

The bigger factor was Peavy's desire to return. He has been saying that all along, and it turns out he meant it.

"I'm really excited to come back to Chicago and build on what we did last year," Peavy said. "I made no secret of the fact that this is where I want to play. Chicago is a great city with great fans, and I can't think of a better place to try and win a championship. With the guys we have coming back, I think we have a great opportunity to accomplish some special things."

"Jake Peavy showed again last season why he is capable of being one of the top pitchers in the American League," Hahn said in a statement. "Early on in this process, Jake expressed his strong desire to remain with the White Sox, and we're happy to reach a deal that keeps him at the top end of our rotation and his influence in our clubhouse for at least the next two years."

The 31-year-old former Cy Young winner went 11-12 with a 3.37 ERA over 219 innings and 194 strikeouts in 32 starts in 2012. He ranked among American League leaders in complete games (four), strikeout-to-walk ratio (3.96), innings, average against (.234.) and ERA.

The Sox declined the 2013 options for right-hander Brett Myers ($10 million) and third baseman Kevin Youkilis ($13 million). Myers gets a $3 million buyout and Youkilis a $1 million buyout. The Sox hold exclusive negotiating rights to them through Friday.

Floyd, 29, was 12-11 with a 4.29 ERA and 144 strikeouts in 29 starts last season. He reached double figures in victories for the fifth consecutive season, joining Tampa Bay's James Shields, Detroit's Justin Verlander and Los Angeles' Jered Weaver as the only AL pitchers to do so.

Catcher A.J. Pierzynski, pitchers Francisco Liriano and Brian Bruney, outfielder Dewayne Wise and infielder Jose Lopez are all eligible to become free agents as the free agent filing period starts Monday, the first day after the World Series.
If the Sox don't pick up club options on pitchers Jake Peavy ($22 million), Brett Myers ($10 million) and Gavin Floyd ($9.5) and infielders Kevin Youkilis ($13 million) and Orlando Hudson ($8 million), those players can become free agents as well. Floyd doesn't have a buyout, and letting him go would leave the Sox short on right-handed starters, unless Peavy and Myers are brought back at higher prices.
While the options on Peavy, Youkilis, Myers and Hudson aren't expected to be picked up, Floyd stands a better chance of having his picked up by the Sox.
"We have a bunch of option decisions,'' general manager Rick Hahn said. "We'll announce them right after the World Series. I have a pretty good sense of how [Floyd] fits in. I'd hate to answer on one guy and not the others.''

Widely regarded as one of baseball's top assistant general managers for some time now, Rick Hahn will be much more than a No. 2 man as the White Sox new GM.

Hahn was officially promoted to White Sox senior vice president and general manager on Friday. The promotion, which had been reported in September, changes Ken Williams' title from the one Hahn now holds to executive vice president.

While touting Hahn as "one of the most respected young executives in baseball,'' chairman Jerry Reinsdorf said in a statement that Williams would "maintain oversight and final approval on major baseball decisions." But make no mistake: This won't be the same management tandem that has operated effectively for 12 years. Williams will be doing other things -- he was vague when asked about specifics -- and Hahn will be making baseball decisions while conferring with Williams and Reinsdorf when necessary.

"That was an important part to me," Hahn said. "There were a lot of factors involved, but one of them was making sure that it wasn't going to be an escalation of titles and sort of 'business as usual.' "

Williams, 48, growing weary at times from the stress of the job, has talked about this move for years. He held the GM job since 2000, the fourth-longest tenure of any GM in baseball.

"You cannot say enough about Ken Williams' value to the Chicago White Sox, his contributions to our success and the passion he brings to the ballpark each and every day," Reinsdorf said. "Kenny raised the idea of promoting Rick several years ago, and we all have agreed that this is the right time to increase the scope and range of Kenny's involvement while he continues to maintain oversight and final approval on major baseball decisions."

The Sox finished .500 or better nine times under Williams. Citing Hahn's "new ideas," Williams said he won't "get in his way" on a job that "has to have a certain amount of autonomy."

"It's not any different than what I had to do with regards to when I had an idea before we made that particular deal, or started down a path to acquire a player via free agency,'' Williams said. "I had to go have that conversation with Jerry. And ultimately, he would weigh in. You generally go to a consensus."

Said Hahn: "If at the end of the day I want to make a move they disagree with, we're going to have to get in a room just like we have the last 12 years and hash it out and come to a decision for our organization.''

Williams, who badly wanted a second title to go with the 2005 World Series championship, has mixed feelings about leaving the GM chair, but one side is there's a lot he won't miss. He has been transferring calls from other GMs to Hahn.

"He has been doing the job for a number of weeks," Williams said.

The promotion of Hahn, 41, a Winnetka native, Michigan graduate and holder of degrees from Harvard Law School and Northwestern's Kellogg graduate school of management, "is very well deserved," Reinsdorf said. His duties will be expanded to include all player personnel matters, coaching staff decisions and player development and scouting operations.

"He is one of the most respected young executives in baseball today and that reputation is well earned given his relationships with other team executives, players, agents, manager Robin Ventura and our coaches, members of the media and White Sox fans. Kenny and Rick together have worked very successfully over the past 12 seasons, and I am excited to see this dynamic grow and expand as Rick assumes more day-to-day authority and responsibility while Kenny is allowed to focus even more on macro issues, talent evaluation and long-term planning for the organization."

One of Rick Hahn's first duties as new general manager of the White Sox will be addressing free agency - in particular the status of catcher A.J. Pierzynski and right-hander Jake Peavy, and the expensive options on third baseman Kevin Youkilis and right-handers Brett Myers and Gavin Floyd.

"You have to prioritize,'' Hahn said after being introduced as Ken Williams replacement at U.S. Cellular Field on Friday. "You have to look at not only the cost on the option to bring them back but also get a sense of trades or free agent options of what's the marginal cost of replacing this guy. You'd prefer the option was at a reasonable price and it's good value but it's not the case in all of these.''

Peavy has a $22 million option that won't be picked up. Youkilis' is $13 million, Myers' is $10 million and Floyd's $9.5. All but Floyd have buyouts.

Hahn expects the club payroll to be in the neighborhood of where it was at the beginning of 2011 - around $97 million. He expects Peavy to get a big offer elsewhere, which could price him out of the Sox plans.

"Look, there aren't a lot of free agent pitchers out there,'' Hahn said. "There is a fair amount of money perhaps to be spent by other clubs so that one's [Peavy] going to be a challenge.''

Asked if Pierzynski, who turns 36 after his best offensive season, has a good chance of staying, Hahn said he wouldn't get into trying to handicap the odds.

"We've had A.J. here for eight years and he's been a fantastic member of the organization for every minute of it,'' Hahn said. "We've signed him to three multiyear deals and two years ago at this time there was a thick level of pessimism about him coming back. I talked to [Pierzynski agent] Steve Hilliard last week and it was a good dialogue. We'll stay in touch. Until he gets out there and sees what his market is and we explore alternatives and other ways to spend our money it's impossible to handicap.''

Hahn compared the possibility of parting ways with Pierzynski to Mark Buehrle leaving last year.

"It's hard. ... there's a sentimental side.

Hahn said he views backup Tyler Flowers as a viable everyday option to Pierzynski.

"We're meeting next week as an organization and that's one of the topics,'' Hahn said. "Based on the history we've had with him he'll be a quality everyday catcher in the big leagues, yes. It's tough for a young kid to have sporadic playing time and continue that development. But defensively he certainly can handle the position. He can get on base some and he's going to have some power. I think he will be a valuable and viable catcher in the big leagues.''

Flowers suffered a hairline fracture near a knuckle on his left hand in September, preventing him from playing winter ball. Hahn said Flowers will be ready for the start of spring training.

Peavy proved himself to be healthy throughout 2012, which bodes well for his bank book.

"Pitchers get paid a significant amount and Jake given his track record, and him answering questions about his health he is going to be a popular guy, so that one is going to be a challenge. We've had good talks already, honest conversations. Jake's preference is to be back in Chicago but there comes opportunities elsewhere where it doesn't make sense for us to chase.''

Hahn's move to the GM position, with Williams becoming Executive Vice President, has been in serious planning stages since last November. The impending move of Williams getting a new title was reported in September.

While Hahn will sign off with Williams and Reinsdorf on major decisions, he will be making the day-to-day GM decisions. He needed to be clear on that before accepting the promotion

"That was important,'' Hahn said. "One of them was making sure it wasn't just an escalation in titles and business as usual. Kenny made that clear from the start and we had to talk things through and go through different scenarios. It took a few months of going back and forth.''