NASHVILLE, Tenn. - The Orioles' first transaction of the Winter Meetings involves bringing back one of their players.
The Orioles have reached agreement with outfielder Nate McLouth on a one-year deal worth $2 million, which will become official once he passes a physical. He also could earn another $500,000 for 500 plate appearances, according to an industry source.
The club doesn't discuss the monetary side of an agreement.
Retaining McLouth was a top priority for the Orioles after he batted .268/.342/.435 with 12 doubles, seven homers, 18 RBIs and 12 stolen bases in 13 attempts over 55 games. He also went 8-for-26 in the postseason while the rest of the offense shut down.
"We were determined to get an outfielder signed before the end of the week," said executive vice president Dan Duquette. "Our fans like Nate McLouth. He did a good job for us in August, September and October."
McLouth's value increased after he replaced Nick Markakis atop the order. Whether he remains the leadoff hitter in 2013 is unknown.
"Let's see how it plays out," Duquette said.
Asked whether the Orioles are now focused on acquiring a first baseman, Duquette replied, "Did you see where Buck (Showalter) said he was going to engage Chris Davis at first base in the spring? If we have McLouth in left, (Adam) Jones in center, (Nick) Markakis in right and Davis at first, that's pretty solid. They're all quality major league players."
What about designated hitter?
"Wilson Betemit can DH against right-handed pitching," Duquette said. "Danny Valencia is a .316 hitter against left-handed pitching. I'm just giving you the good options that the team has. Just pointing out that we have some people for those jobs we're talking about. The team has some options with the people we have in place."
The Sun first reported that the Orioles and McLouth were close to an agreement.
Also, Steve Smith has removed himself from consideration for the Orioles' third base coaching job. Smith wants to spend more time with his family in San Diego. His son is a college senior, and Smith wants to attend his games.
Don Wakamatsu remains an outside candidate.
Update: Rich Dauer remains a candidate despite accepting a job as manager at Double-A San Antonio. He's on the shortened list, which is believed to contain six names.
Bobby Dickerson, the Orioles' minor league infield coordinator, would work with the infielders as an extra coach if Wakamatsu is hired.
Duquette finished in third place for "Executive of the Year" in MLB.com's GIBBY awards, trailing Oakland's Billy Beane and San Francisco's Brian Sabean. Duquette joked that he won the bronze medal.
Note: The Orioles have signed reliever Adam Russell to a minor league deal. Russell made it official on Twitter earlier today.
"Very excited to share the good news with you all. Recently signed with the Baltimore Orioles. Can't wait for another opportunity next year," Russell tweeted.
Russell, 29, went 1-2 with a 3.03 ERA in 36 games with the Rays in 2011, walking 20 and striking out 13 in 32 2/3 innings. He spent 2012 in the minors with Braves and Angels affiliates, going a combined 3-3 with a 7.02 ERA in 44 games.
The White Sox chose Russell in the sixth round of the 2004 First-Year Player Draft out of Ohio University.