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01/07/10 11:04 AM EST

Mitre agrees to terms with Yankees

Right-hander will compete for fifth spot in starting rotation

NEW YORK -- The Yankees avoided salary arbitration with right-hander Sergio Mitre on Wednesday, agreeing to terms on a one-year contract.

Mitre will earn a base salary of $850,000, plus possible performance incentives, MLB.com has confirmed. The Yankees officially announced the signing on Thursday morning.

Mitre, 28, was 3-3 with a 6.79 ERA in 12 games (nine starts) for the Yankees in 2009, returning to the big leagues after undergoing Tommy John ligament-replacement surgery in July. The Yankees had declined his option for $1.25 million in November, with the intent of re-signing him to a lesser deal.

Yankees general manager Brian Cashman has said that Mitre will enter Spring Training in competition for the fifth starter's role -- alongside Joba Chamberlain, Chad Gaudin and Phil Hughes -- as well as auditioning for a long relief slot.

If Mitre does not make the team out of Spring Training, he would have to clear waivers to be assigned to the Minor Leagues, but his affordable contract and potential upside could make him attractive to other clubs.

Mitre has pitched in parts of six Major League seasons with the Cubs, Marlins and Yankees, compiling a career record of 13-26 with a 5.56 ERA in 90 games.

Bryan Hoch is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.