Harbor Funds N-CSRCertified annual shareholder report (management investment company)

HARBOR FUNDS

CODE OF BUSINESS CONDUCT AND ETHICS

Table of Contents

This Code of Business Conduct and Ethics (the “Code”) sets forth the legal and ethical standards of conduct for the principal executive officer and principal financial officer (the “Covered Officers”), of Harbor Funds (the “Trust”). Charles F. McCain and Anmarie S. Kolinski serve as the President and Treasurer, respectively, of the Trust and are the Trust’s Covered Officers.

Pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 and the Securities and Exchange Commission’s (the “SEC”) rules thereunder, the Board of Trustees of the Trust (the “Board”) has implemented the Code to promote and demonstrate honest and ethical conduct in its Covered Officers.

The Covered Officers are also employees of the Harbor Capital Advisors, Inc. (the “Adviser”). In addition to adhering to the Code, these individuals must comply with other Trust and Adviser policies and procedures, such as the Trust’s code of ethics governing personal trading activities, as adopted pursuant to Rule 17j-1 under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

Erik D. Ojala, the Trust’s Chief Compliance Officer (the “Compliance Officer”), in consultation with counsel to the Trust, is primarily responsible for implementing and enforcing this Code. The Compliance Officer, in consultation with counsel to the Trust, has the authority to interpret the Code and its applicability to particular circumstances. Any questions about the Code should be directed to the Compliance Officer and counsel to the Trust. The Compliance Officer is not a Covered Officer under this Code.

The purposes of the Code are to deter wrongdoing and to:

It is the duty of every Covered Officer to encourage and demonstrate honest and ethical conduct, as well as adhere to and require adherence to the Code and any other applicable policies and procedures designed to promote this behavior. Covered Officers must at all times conduct themselves with integrity and distinction, putting first the interests of the shareholders of the Trust they serve.

Covered Officers also must, at all times, act in good faith, responsibly and with due care, competence and diligence, without misrepresenting material facts or allowing their independent judgment to be subordinated. Covered Officers also should responsibly use and control all Trust assets and resources entrusted to them.

Covered Officers may not discourage the reporting of, actual or apparent violations of the Code or applicable laws or regulations. Individuals that report in good faith suspected violations of the Code or applicable laws or regulations should not be adversely affected in employment or other matters for making such reports. Covered Officers should create an environment that encourages the exchange of information, including concerns of the type that this Code is designed to address.

A “conflict of interest” occurs when a Covered Officer’s personal interests interfere with the interests of the Trust for which he or she serves as an officer. Covered Officers may not improperly use their position with the Trust for personal or private gain to themselves, their family, or any other person.

Certain conflicts of interest covered by this Code arise out of the relationships between Covered Officers and the Trust that already are subject to conflict of interest provisions in the Investment Company Act and the Investment Advisers Act of 1940, as amended. For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Trust because of their status as “affiliated persons” of the Trust. Covered Officers must comply with applicable laws and regulations. Therefore, any violations of existing statutory and regulatory prohibitions on individual behavior will also be deemed a violation of this Code.

As to conflicts arising from, or as a result of the advisory relationship between the Trust and the Adviser, of which the Covered Officers are also officers or employees, it is recognized by the Board that, subject to the Adviser’s fiduciary duties to the Trust, the Covered Officers will in the normal course of their duties (whether formally for the Trust or for the Adviser, or for both) be involved in establishing policies and implementing decisions which may have different effects on the Adviser and the Trust. The Board recognizes that the participation of the Covered Officers in such activities is inherent in the contract relationship between the Trust and the Adviser and is consistent with the expectation of the Board of the performance by the Covered Officers of their duties as officers of the Trust.

Covered Officers should avoid actual conflicts of interest, and appearances of conflicts of interest, between the Covered Officer’s duties to the Trust and his or her personal interests. If a Covered Officer suspects or knows of a conflict or an appearance of one, the Covered Officer must immediately report the matter to the Compliance Officer and counsel for the Trust.

When actual, apparent or suspected conflicts of interest arise that have not been addressed or reported in connection with a Covered Officer, the Adviser’s personnel aware of the matter should promptly contact the Compliance Officer and counsel for the Trust. There will be no reprisal against any person reporting in good faith an actual, apparent or suspected conflict of interest.

Upon receipt of a report of a possible conflict, the Compliance Officer and counsel to the Trust will take steps to determine whether a conflict exists. In so doing, the Compliance Officer and counsel to the Trust may take any actions they determine to be appropriate in their discretion and may use all reasonable resources, including retaining or engaging independent legal counsel, accounting firms or other consultants, subject to applicable law.¹ After full review of a report of a possible conflict of interest, the Compliance Officer and counsel to the Trust may determine that no conflict or reasonable appearance of a conflict exists. If, however, the Compliance Officer and counsel to the Trust determine that an actual conflict exists, the Compliance Officer and counsel to the Trust will seek to resolve the conflict in the best interests of the shareholders of the Trust, and will report the conflict and its resolution to the Board. If

¹ For example, retaining a Trust’s independent accounting firm may require pre-approval by the Trust’s audit committee.

the Compliance Officer and counsel to the Trust determine that the appearance of a conflict exists, the Compliance Officer and counsel to the Trust will take appropriate steps to remedy such appearance. In lieu of determining whether a conflict exists, the Compliance Officer and counsel to the Trust may refer the matter to the Board.

After receiving a report of a possible conflict of interest, the Compliance Officer and counsel to the Trust will discuss the matter with the person who reported it (and with the Covered Officer at issue, if different) for purposes of educating those involved on conflicts of interests (including how to detect and avoid them, if appropriate).

Appropriate resolution of conflicts may restrict the personal activities of the Covered Officer and/or his family, friends or other persons.

Conflicts disclosed to the Compliance Officer (and/or the Board) and counsel to the Trust, or otherwise resolved by the Compliance Officer and counsel to the Trust, are not considered to be waivers from the Code’s requirements.

Any questions about conflicts of interests, including whether a particular situation might be a conflict or an appearance of one, should be directed to the Compliance Officer and counsel to the Trust.

A Covered Officer may not use or disclose personal information about Fund shareholders, except in the performance of his or her duties for a Fund. Each Covered Officer also must abide by the Trust’s and the Adviser’s privacy policies under SEC Regulation S-P.

In connection with his or her responsibilities for or involvement with the Trust’s public communications and disclosure documents (e.g., Fund shareholder reports, registration statements, press releases), each Covered Officer must provide information to Trust service providers (within the Adviser’s organization or otherwise) and to government regulators and self-regulatory organizations that is fair, accurate, complete, objective, relevant, timely and understandable.

Further, within the scope of their duties, Covered Officers will endeavor to ensure full, fair, timely, accurate and understandable disclosure in Trust disclosure documents. Covered Officers involved in or responsible for the Trust’s public disclosure documents will oversee, or appoint others to oversee, processes for the timely and accurate creation and review of all public reports and regulatory filings. Each Covered Officer also will familiarize himself or herself with the disclosure requirements applicable to the Trust, if applicable to his or her responsibilities as a Covered Officer, and will adhere to, and will promote adherence to, Trust and Adviser disclosure controls, processes and procedures, including the Adviser’s disclosure controls and procedures, which govern the process by which Trust disclosure documents are created and reviewed.

To the extent that Covered Officers participate in the creation of a Fund’s books and records, they must do so in a way that promotes the accuracy, fairness and timeliness of those records.

In connection with his or her duties and within the scope of his or her responsibilities as a Covered Officer, each Covered Officer must comply with governmental laws, rules and regulations that apply to his or her role, responsibilities and duties with respect to the Trust (“Applicable Laws”). These requirements do not impose on Covered Officers any additional substantive duties. Additionally, Covered Officers should promote compliance with Applicable Laws.

If a Covered Officer knows of any material violations of Applicable Laws or suspects that such a violation may have occurred, the Covered Officer is expected to promptly report the matter to the Compliance Officer.

Each Covered Officer must promptly report, and promote the reporting of, any known or suspected violations of the Code to the Compliance Officer and the counsel to the Trust.

Examples of violations of the Code include, but are not limited to, the following:

The Compliance Officer and counsel to the Trust have the authority to take any and all action he or she considers appropriate in his or her sole discretion to investigate known or suspected Code violations, including consulting with the Trust’s Board, the independent Board members, a Board committee, independent legal counsel and/or counsel to the independent Board members. The Compliance Officer and counsel to the Trust also has the authority to use all reasonable resources to investigate violations, including retaining or engaging legal counsel, accounting firms or other consultants, subject to applicable law.

Any known or suspected violations of the Code must be promptly reported to the Compliance Officer and counsel to the Trust.

The Compliance Officer and counsel to the Trust will report any material violations of the Code to the Trust’s Board on a periodic basis and/or as the Board may request.

Violations of the Code will be taken seriously. In response to reported or otherwise known violations, the Adviser and the Trust’s Board may impose sanctions which they deem appropriate within the scope of their respective authority over the Covered Officer at issue. Sanctions imposed by the Adviser could include termination of employment. Sanctions imposed by the Trust’s Board could include termination of association with the Trust.

A Covered Officer may request a waiver from the Code by transmitting a written request for a waiver to the Compliance Officer and counsel to the Trust.² The request must include the rationale for the request and must explain how the waiver would be in furtherance of the standards of conduct described in and underlying purposes of the Code.

The Compliance Officer and counsel to the Trust may grant waivers from the Code, as appropriate, subject to and in furtherance of, the standards of conduct described in the Code. The Compliance Officer and counsel to the Trust must fully document their consideration of any waiver request, including the rationale for granting or denying the waiver. The Compliance Officer and counsel to the Trust will monitor the activities subject to the waiver, as appropriate, and will report to the Trust’s Board, on a periodic basis and/or as the Board may request, regarding any waivers granted since the last report. In lieu of determining whether to grant a waiver, the Compliance Officer and counsel to the Trust may refer the matter to the Trust’s Board.

The Compliance Officer and counsel to the Trust will coordinate and facilitate any required public disclosures of any waivers granted or any implicit waivers.

The Compliance Officer and counsel to the Trust may request Trust Board approval to amend the Code as appropriate. The Compliance Officer and counsel to the Trust will coordinate and facilitate any required public disclosures of Code amendments.

VII. Acknowledgement and Certification of Adherence to the Code

Each Covered Officer must sign a statement annually acknowledging that he or she has received a copy of the Code, as amended or updated, and confirming that he or she has complied with it (see Appendix A: Code Acknowledgement and Certification Form).

The Compliance Officer will create and maintain appropriate records regarding the implementation and operation of the Code, including records relating to conflicts of interest determinations and investigations of possible Code violations.

All reports and records prepared or maintained pursuant to this Code shall be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Compliance Officer, the Covered Officer, the Trust’s Board and legal counsel.

² There would not be a waiver of the Code if the Compliance Officer and counsel to the Trust determines that a matter is not a deviation from the Code’s requirements or is otherwise not covered by the Code.

APPENDIX A

CERTIFICATION

Annual Acknowledgement and Certification of

Obligations Under the Code of Business Conduct and Ethics

APPENDIX B

DEFINITIONS

Principal Executive Officer

Individual holding the office of President of the Trust, or a person performing a similar function.

Principal Financial Officer

Individual holding the office of Treasurer of the Trust, or a person performing a similar function.

Registered Management Investment Company

Registered investment companies other than a face-amount certificate company or a unit investment trust.

Waiver

A waiver is an approval of an exemption from a Code requirement.

Implicit Waiver

An implicit waiver is the failure to take action within a reasonable period of time regarding a material departure from a requirement or provision of the Code that has been made known to the Compliance Officer and counsel to the Trust.