The San Diego Padres have reportedly settled the largest arbitration differential of the offseason. The Padres have agreed to a one-year, $8.575 million contract to avoid salary arbitration with third baseman Chase Headley, according to FOX Sports' Ken Rosenthal.

Headley, a Super Two who was eligible for arbitration for the third time, initially filed for $10.3 million, while San Diego countered with a $7.075 million contract.

The 28-year-old Headley had his best season in 2012, posting a .286/.376/.498 line in 699 plate appearances for the Padres. The most significant bump in Headley's game came in the power department; despite playing in the power-suppressing Petco Park, the switch-hitter slugged 31 homers, 19 more than his career-high of 12 in 2009. Headley also earned an All-Star bid, a Gold Glove, and a Silver Slugger while finishing fifth in MVP voting.

Headley's breakout season came under odd conditions; he saw a decrease in his BABIP, line-drive rate, and fly-ball rate while posting an increase in his ground-ball rate.

While he played better away from Petco Park, the difference in his offense was not a stark contrast. In 345 home plate appearances, Headley hit .272/.357/.455 with 13 homers, and in 354 away plate appearances, he hit .300/.395/.541 with 18 home runs.