Smith's career year included 17 TDs and just 5 INTs last season. (Wikimedia Commons)

After some uncertainty but with no hard feelings, Alex Smith has agreed to be the quarterback of the 49ers for at least the next three years, signing a $33-million contract Wednesday. For the last few weeks the team was in active pursuit of Peyton Manning, putting Smith on the back burner for awhile.

"I'm not offended at all," Smith told reporters at 49ers headquarters. "I would have relished the opportunity to compete for the starting quarterback job with Peyton Manning. I feel like I've been through way worse than this. Free agency is always going to be a little crazy, maybe this year more than most. You get to a point where you stop worrying about that stuff."

Smith's contract will pay him $8 million per season with $16.5 million guaranteed, according to a source close to the negotiations.  

"I'm glad this is finally done," Smith said, "For me this was the plan all along. When the season ended, I wanted to be back here. It dragged out a little bit but I'm glad it's over. Glad it's done. Glad to get back to work."  

On Sunday, Smith met with the Miami Dolphins to discuss a possible deal. According to Smith, the meeting lasted five and a half hours and "seemed serious at the time."

While Smith actively pursued free agency, the 49ers actively sought Manning. The four-time NFL MVP worked out for San Francisco head coach Jim Harbaugh as early as last week before choosing to sign with the Denver Broncos on Monday.

"We are pleased that Alex has chosen to continue his career as a 49er," said 49ers general manager Trent Baalke. "His contributions were instrumental to our success in 2011, and we look forward to the continued growth of our offense under his leadership."

Last season, Smith made strides under Harbaugh's direction, throwing for 3,150 yards, 17 touchdowns, and just five interceptions. During the 2010 season, a year before Harbaugh's arrival, Smith threw 10 picks and had 2,370 yards in the air during 11 games.  

"The thing from day one, when I first met coach Harbaugh, is he has always been up front and always honest with me," said Smith. "He has continued to do that during this entire process.  That is one of the reasons I love playing for him."

Under Harbaugh's leadership and with Smith under center, the 49ers turned around their fortunes in 2011, going 13-3 in the regular season before falling to the eventual Super Bowl champion New York Giants in the playoffs. It was the first time the franchise had made it to the postseason since 2002.

Expectations for the 49ers will be high next season. The team is returning all of its starters on its top-ranked defense. San Francisco has also been busy adding new talent through free agency.

The 49ers signed Super Bowl hero Mario Manningham to a two-year contract and even took a chance on future Hall of Famer Randy Moss. Both should provide excellent targets for Smith next season. Combine that with weak divisional opponents and the crushing blow of suspensions to the New Orleans Saints and the 49ers may just be the favorites to win the NFC.

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