White Sox extend Jake Peavy

The Chicago White Sox have agreed to a two-year, $29 million extension with Jake Peavy, the team announced Tuesday.

The White Sox also declined the options on Kevin Youkilis and Brett Myers. They exercised the option on Gavin Floyd.

"Jake Peavy showed again last season why he is capable of being one of the top pitchers in the American League," Sox GM Rick 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."

Peavy, 31, went 11-12 with a 3.37 ERA in 219 innings and 194 strikeouts in 32 starts with the White Sox in 2012. He ranked among the American League leaders in quality starts (third, 23), complete games (tied for third, 4), strikeout-to-walk ratio (fourth, 3.96), IP (5th), opponents average (fifth, .234), shutouts (tied for seventh, 1), strikeouts (eighth), ERA (ninth) and starts (tied for 10th).

"I'm really excited to come back to Chicago and build on what we did last year," Peavy said in a statement. "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."

Peavy will receive $14.5 million in both 2013 and 2014. If Peavy reaches innings pitched thresholds over the course of the 2013 and 2014 seasons, he can elect to extend the contract to include the 2015 season at a salary of $15 million. Peavy will now receive the $4 million buyout payment due under terms of his previous contract in equal installments between 2016-19.

"We certainly knew those options were out there," said Peavy, referring to passing up potentially more money as a free agent. "This is about the way I feel about the White Sox organization . From the time I got there, the fan base stood behind me through a few rough years with injury. I did all in my power to be where we are today, returning to the place that I am the happiest."

To cap his perfect day, Peavy won his first Gold Glove at pitcher, sharing the award with Tampa Bay's Jeremy Hellickson. This was only the third time since the Gold Gloves were first presented in 1957 that there was a tie.

Peavy was rewarded with a $50,000 bonus for his win.

Myers went 3-4 with a 3.12 ERA in 35 relief appearances with the White Sox in 2012. He was acquired in a trade with the Houston Astros on July 21.

Youkilis batted .236 with 15 home runs, 46 RBIs and 47 runs scored in 80 games with the White Sox last season. He was acquired from the Boston Red Sox along with cash considerations in exchange for infielder/outfielder Brent Lillibridge and right-handed pitcher Zach Stewart on June 24.

"I had a real nice conversation with Kevin (Monday) talking about the option, and the same with Brett Myers as we discussed declining his option," Hahn said. "We would like to have both of them back. We obviously need to see what their market is. We are going to stay in touch and hopefully work something out at some point."

Floyd, 29, was 12-11 with a 4.29 ERA in 168 innings and 144 strikeouts in 29 starts last season. He will make $9.5 million in 2013.

Information from ESPNChicago.com baseball writer Bruce Levine and The Associated Press contributed to this report.