The Cubs and rehabbing right-hander Mark Prior came to terms on Wednesday on a one-year contract, avoiding salary arbitration and leaving Carlos Zambrano as the only arbitration-eligible Cub left unsigned for 2007.

Prior, 26, is coming off an injury-shortened season in which he was 1-6 with a 7.21 ERA in nine starts. He was asking for $3.875 million in arbitration, while the Cubs countered with an offer of $3.4 million.

According to SI.com, Prior took a pay cut and will reportedly make $3.575 million in '07. If he reaches some incentives, the right-hander could also make an additional $300,000.

The team did not release terms of the new pact.

Prior, who made $3.65 million in '06, was on the disabled list from March 27-June 18 with a right shoulder injury, then landed back on the shelf on July 5 until the end of the season with a strained left oblique.

Since making his Major League debut in 2002, Prior owns a 42-29 career record with a 3.51 ERA in 106 starts. His 10.37 strikeouts per nine innings is the highest rate for any Cubs starter in franchise history (minimum 500 innings). Chicago selected Prior out of USC with the second overall pick in the 2001 First-Year Player Draft.

With Prior on the books, Cubs general manager Jim Hendry's only arbitration-eligible project is Zambrano, 25, who was paid $6.5 million in 2006 and is asking for $15.5 million in '07. The Cubs countered with an offer of $11.025 million. Zambrano was 16-7 with a 3.41 ERA in 33 starts last season, matching his career high in wins, and he will be eligible for free agency after the 2007 season.

If Zambrano and the Cubs cannot reach an agreement, there will be a hearing in February in front of an independent arbitrator.

Cubs pitchers and catchers report to Mesa, Ariz., for the start of Spring Training on Feb. 14.