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TIMBERLINE RESOURCES CORPORATION 101 East Lakeside Avenue Coeur |
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1.
To elect the nominees to Timberline’s board of directors (the “Board”) to serve until Timberline’s 2017 annual meeting of Stockholders or until successors are duly elected and qualified;
2.
To ratify the appointment of Timberline’s independent registered public accounting firm for the fiscal year ended September 30, 2016; and
3.
Any other business that may properly come before the Meeting.
| 1. | To ratify the appointment of Timberline's independent registered public accounting firm for the fiscal year ended September 30, 2019; |
| 2. | To approve the adoption of the Company's 2018 Stock and Incentive Plan; |
| 3. | To approve, for purposes of complying with the rules of the TSX Venture Exchange, the purchase of shares of common stock of the Company by Americas Gold Exploration Inc., of which Donald McDowell, a director of the Company is the principal shareholder, the Company's Vice President of Corporate Development and a director of the Company, the result of which will be Mr. McDowell owning over 20% of the Company's issued and outstanding shares of common stock; |
| 4. | To approve an amendment the Company's Certificate of Incorporation to change the name of the Company from "Timberline Resources Corporation" to a name to be selected by the Board of Directors of the Company; and |
| 5. | Any other business that may properly come before the Meeting. |
October 19, 2018
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1.
To elect the following nominees to the Board to serve until Timberline’s 2016 annual meeting of Stockholders or until successors are duly elected and qualified: Leigh Freeman, Steven Osterberg, Paul Dircksen, Robert Martinez, Giulio Bonifacio and Paul Zink;
2.
To ratify the appointment of Timberline’s independent registered public accounting firm for the fiscal year of 2016; and
3.
Any other business that may properly come before the Meeting.
| 1. | To ratify the appointment of Timberline's independent registered public accounting firm for the fiscal year ended September 30, 2019; |
| 2. | To approve the adoption of the Company's 2018 Stock and Incentive Plan (the "2018 Incentive Plan"); |
| 3. | To approve for purposes of complying with the rules of the TSX Venture Exchange, the purchase of shares of common stock of the Company by Americas Gold Exploration Inc. ("AGEI"), of which Donald McDowell, a director of the Company, is the principal shareholder, the Company's Vice President of Corporate Development and a director of the Company, the result of which will be Mr. McDowell owning over 20% of the Company's issued and outstanding shares of common stock (the "AGEI Stock Purchase"); |
| 4. | To approve an amendment the Company's Certificate of Incorporation to change the name of the Company from "Timberline Resources Corporation" to a name to be selected by the Board of Directors of the Company (the "Name Change"); and |
| 5. | Any other business that may properly come before the Meeting. |
2018.
nominee
.approve the Name Change.
iii
2018
www.timberlineresources.co/meetings/. Directions for attending the Meeting can also be found at this website.
(a)
the Company’s Annual Report to Shareholders, which consists of its latest Annual Report on Form 10-K;
(b)
this Proxy Statement; and
(c)
the Form of Proxy.
| (a) | this Proxy Statement; and |
| (b) | the Form of Proxy. |
iv
INFORMATION CONTAINED IN THIS PROXY STATEMENT | 1 |
QUESTIONS AND ANSWERS ABOUT PROXY MATERIALS AND VOTING | 2 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 7 |
| PROPOSAL 1 — RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 10 |
PROPOSAL 2 — APPROVAL OF THE ADOPTION OF THE 2018 INCENTIVE PLAN | 12 |
| EXECUTIVE COMPENSATION | 20 |
PROPOSAL 3 — AGEI STOCK PURCHASE PROPOSAL | 27 |
PROPOSAL 4 — APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION TO EFFECT NAME CHANGE | 28 |
| OTHER MATTERS | 29 |
| APPENDICES | 29 |
QUESTIONS AND ANSWERS ABOUT PROXY MATERIALS AND VOTING
PROPOSAL 1 — ELECTION OF DIRECTORS
INFORMATION ON THE BOARD OF DIRECTORS, EXECUTIVE OFFICERS, AND KEY EMPLOYEES
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PROPOSAL 2 — RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
INFORMATION CONTAINED IN THIS PROXY STATEMENT
October 5, 2018.
Information contained in this Proxy Statement should not be construed as legal, tax or financial advice and Stockholders are urged to consult their own professional advisors in connection with the matters considered in this Proxy Statement.
1.
The election of the nominees to the Board to serve until Timberline’s 2017 annual meeting of stockholders or until successors are duly elected and qualified;
2.
The ratification of the appointment of Timberline’s independent registered public accounting firm for the fiscal year of 2016; and
3.
Any other business that may properly come before the Meeting.
| 1. | To approve the adoption of the Company's 2018 Stock and Incentive Plan (the "2018 Incentive Plan"); |
| 2. | To approve for purposes of complying with the rules of the TSX Venture Exchange, the purchase of shares of common stock of the Company by AGEI, of which Donald McDowell, a director of the Company, is the principal shareholder, the Company's Vice President of Corporate Development and a director of the Company, the result of which will be Mr. McDowell owning over 20% of the Company's issued and outstanding shares of common stock (the "AGEI Stock Purchase"); |
| 3. | To approve an amendment the Company's Certificate of Incorporation to change the name of the Company from "Timberline Resources Corporation" to a name to be selected by the Board of Directors of the Company (the "Name Change"); and |
| 4. | Any other business that may properly come before the Meeting. |
firm, FOR the approval of the 2018 Incentive Plan, FOR the approval of the AGEI Stock Purchase and FOR the approval of the name change.
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Completing your proxy card over the internet at the following website: www.iproxydirect.com/TLRS;
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Downloading or requesting a proxy card (as detailed below), signing your proxy card and mailing it to the attention of: Issuer Direct Corp., c/o Proxy Services, 500 Perimeter Park Drive, Suite D, Morrisville, NC 27560;
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Calling to vote via the telephone at (866) 752-VOTE (8683);
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Signing and faxing your proxy card to the number provided on the proxy card (202-521-3464); or
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Attending the Meeting and voting in person.
| – | Completing your proxy card over the internet at the following website: www.proxyvote.com; |
| – | Downloading or requesting a proxy card (as detailed below), signing your proxy card and mailing it to the attention of: Vote processing, c/o Broadridge, 51 Mercedes Way, Englewood, New York 11717; |
| – | Signing and faxing your proxy card to the number provided on the proxy card; or |
| – | Attending the Meeting and voting in person. |
Chief Executive Officer
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Signing another proxy with a later date and mailing it to the attention of: Steven Osterberg, Chief Executive Officer, at 101 E. Lakeside Avenue, Coeur d’Alene, ID 83814, so long as it is received prior to 2:00PM Pacific daylight time on September 28, 2016;
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Delivering a written notice of the revocation of your proxy to the attention of: Steven Osterberg, Chief Executive Officer, at 101 E. Lakeside Avenue, Coeur d’Alene, ID 83814, so long as it is received prior to 2:00PM Pacific daylight time on September 28, 2016; or
–
Voting in person at the Meeting.
| – | Signing another proxy with a later date and mailing it to the attention of: Steven Osterberg, Chief Executive Officer, at 101 E. Lakeside Avenue, Coeur d'Alene, ID 83814, so long as it is received prior to 2:00PM Pacific daylight time on November 28, 2018; |
| – | Delivering a written notice of the revocation of your proxy to the attention of: Steven Osterberg, Chief Executive Officer, at 101 E. Lakeside Avenue, Coeur d'Alene, ID 83814, so long as it is received prior to 2:00PM Pacific daylight time on November 28, 2018; or |
| – | Voting in person at the Meeting. |
3
–
Submit a properly executed proxy card (even if you do not provide voting instructions); or
–
Attend the Meeting and vote in person.
| – | Submit a properly executed proxy card (even if you do not provide voting instructions); or |
| – | Attend the Meeting and vote in person. |
How many votes are needed to elect directors?
The nominees for election as directors at the Meeting will be elected by a plurality of the votes cast at the Meeting. The nominees with the most votes will be elected. A properly executed proxy card markedWITHHELD with respect to the election of directors will not be voted and will not countFOR orAGAINST any of the nominees for which the vote was withheld.
4
circumstances. These individuals will receive no additional compensation for their services other than their regular salaries. Upon request, Timberline will reimburse brokers, dealers, banks, voting trustees and their nominees who are holders of record of Timberline Shares on the record date for the reasonable expenses incurred for mailing copies of the proxy materials to the beneficial owners of such Timberline Shares.
determined.
Timberline’s 2015
PROPOSAL 1 — ELECTION
GENERAL QUESTIONS
What is the current composition of the Board?
Timberline’s current bylaws require the Board to have three or more persons, and may be increased or decreased from time to time, exclusively by resolution approved by the affirmative vote of a majority of the Board. The current Board is composed of six (6) directors.
Is the Board divided into classes? How long is the term?
No, the Board is not divided into classes. All directors serve one-year terms until their successors are elected and qualified at the next annual meeting.
Who is standing for election this year?
The Board of Directors has nominated the following six (6), current Board Members for election at the Meeting, to hold office until the 2017 annual meeting:
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Steven Osterberg
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Paul Dircksen
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Robert Martinez
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Leigh Freeman
–
Giulio T. Bonifacio
–
Paul H. Zink
What if a nominee is unable or unwilling to serve?
Should any one or more of these nominees become unable or unwilling to serve, which is not anticipated, the Board may designate substitute nominees, in which event the proxy representatives will vote proxies that otherwise would be voted for the named nominees for the election of such substitute nominee or nominees.
How are nominees elected?
Directors are elected by a plurality of the votes cast in person or represented by proxy and entitled to vote at the meeting.
THE BOARD RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES.
6
INFORMATION ON THE BOARD OF DIRECTORS, EXECUTIVE OFFICERS,CERTAIN BENEFICIAL OWNERS AND KEY EMPLOYEES
MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
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(1)
Dr. Osterberg was Vice President of Exploration until January 19, 2016 when he was appointed President & Chief Executive Officer.
(2)
Mr. Dircksen was Executive Chairman of the Board of Directors until August 15, 2014. Mr. Dircksen was President & Chief Executive Officer until his resignation from those offices effective on December 31, 2014 when he began serving as Vice-President of Business Development and Technical Services until December 31, 2015.
(3)
“Independent” in accordance with Rules 121 and 803A of the NYSE MKT Company Guide.
The following is a description of the business background of the Directors and executive officers of Timberline Resources Corporation:
Board of Directors and Executive Officers
Steven Osterberg – President, Chief Executive Officer, Principal Financial Officer, Director
Dr. Osterberg was appointed as our President and Chief Executive Officer on January 19, 2016. Dr. Osterberg was previously our Vice-President, Exploration from February 1, 2012 to January 19, 2016. Prior to his appointment, since April 2009, Dr. Osterberg was a Senior Geologist with Tetra Tech, Inc., a mining-related consulting firm. From November 2004 through March 2009, Dr. Osterberg was an independent consulting geologist. During this period, Dr. Osterberg also co-founded Jack’s Fork Exploration, Inc., a privately held mineral exploration company, where he served as a Director until 2013. From 2002 to 2004, Dr. Osterberg was a Senior Geologist at Tetra Tech-MFG, Inc. Dr. Osterberg holds a Ph.D. in geology from the University of Minnesota and is a licensed professional geologist (P.G.) and qualified person (QP) with the Society for Mining, Metallurgy & Exploration (SME). Dr. Osterberg is employed on a full-time basis with Timberline Resources.
For the following reasons, the Board concluded that Dr. Osterberg should serve as a Director of the Company, in light of its business and structure. Dr. Osterberg has extensive knowledge of the Company’s properties having served and continuing to serve as the Company’s Vice-President, Exploration. Further, Dr. Osterberg’s degree and qualifications in geology provided expertise to the Board regarding the Company’s exploration potential. These skills were determined by the Board to be valuable to the Board at the time the Board appointed Dr. Osterberg to the Board, as the Company’s primary assets are exploration stage properties.
7
Paul Dircksen – Director
Mr. Dircksen has over 40 years of experience in the mining and exploration industry, serving in executive, managerial, and technical roles at a number of companies. He has been a director since January 2005 and was our Vice President of Business Development and Technical Services from January 2015 through December 2015. Mr. Dircksen was Executive Chairman from September 2009 to August 2014 and was our President and Chief Executive Officer from March 2011 through December 2014. He was our Vice President of Exploration from May 2006 through February 2011. Working in the United States and internationally, he has a strong technical background, serving as a team member on approximately ten gold discoveries, seven of which later became operating mines. From January 2005 to May 2006, he was self-employed as a consulting geologist until joining Timberline Resources. Prior to 2005, Mr. Dircksen served in technical and executive roles for Brett Resources, Bravo Venture Group, Orvana Minerals Corp., Lacana Gold, and Cordex Exploration. He holds an M.S. in Geology from the University of Nevada. Mr. Dircksen currently serves as a director of Avrupa Minerals.
For the following reasons, the Board concluded that Mr. Dircksen should serve as a Director of the Company, in light of its business and structure. Mr. Dircksen’s extensive management experience in mineral exploration companies and background in mineral projects enable him to provide operating and leadership insights to the Board as the Executive Chairman. Further, his training and experience as a geologist allow him to bring technical expertise in regard to mineral exploration to the Company. These skills are valuable to the Board at this time, as the Company’s primary assets are exploration stage properties.
Robert Martinez – Director
Mr. Martinez was appointed to the Board of Directors in January 2010. He is a metallurgical engineer with over 35 years of experience in the mining and exploration industry. Since May 2005, Mr. Martinez has been an independent mine management and metallurgical consultant. In addition, from May 2005 until September 2008, Mr. Martinez was a member of the Board of Directors of Metallica Resources Inc., and from August 2005 until May 2009, he was a member of the Board of Directors of Zacoro Metals. From August 1988 until December 2004, Mr. Martinez held various management and executive positions at NYSE-listed Coeur d’Alene Mines Corporation including serving as Vice President and General Manager of the Rochester Mine, Vice President of Engineering and Operations, Senior Vice President of Operations, and President and Chief Operating Officer. Mr. Martinez holds a B.S. in Metallurgical Engineering from the University of Arizona and has completed graduate work in business at Western New Mexico University and Dartmouth College.
For the following reasons, the Board concluded that Mr. Martinez should serve as a Director of the Company, in light of its business and structure. Mr. Martinez’s technical and management experience in mining and metallurgy enables him to provide operating insight to the Board. Further, his training and experience as a metallurgical engineer allow him to bring technical expertise to the Board as a director. These skills are valuable to the Board at this time, as the Company’s primary assets are exploration stage properties.
Leigh Freeman – Director
Mr. Freeman was appointed to the Board of Directors in January 2013 and was appointed as Chairman of the Board of Directors in April 2016. He has over 40 years of experience in the mining industry. At present, he is Principal with Leigh Freeman Consultancy. Mr. Freeman has served in technical, managerial and executive positions with junior and senior mining and service companies. He was a co-founder, President and Director of Orvana Minerals and also held several positions with Placer Dome. Mr. Freeman also serves as a trustee of the Montana Tech Foundation and on the industry advisory board for the mining programs at the University of Arizona, Montana Tech and South Dakota School of Mines. In addition, he co-chaired the Education Sustainability Committee for the Society for Mining, Metallurgy & Exploration (SME).
For the following reasons, the Board concluded that Mr. Freeman should serve as a Director of the Company, in light of its business and structure. Mr. Freeman’s technical and management experience in mining and mineral exploration enables him to provide operating insight to the Board. Further, his training and experience as a geological engineer allow him to bring technical expertise to the Board as a director. These skills are valuable to the Board at this time, as the Company’s primary assets are exploration stage properties.
8
Giulio T. Bonifacio – Director
Mr. Bonifacio was appointed to our Board of Directors on July 6, 2016. He has over 30 years in senior executive positions in the mining industry. Since September 2006, Mr. Bonifacio has been the founder, President & CEO of Nevada Copper Corp. which advanced the Pumpkin Hollow Copper Project from the exploration stage and now ranks as the largest fully permitted, shovel-ready copper project in the Americas. Among his many accomplishments, Mr. Bonifacio has been instrumental in arranging over $400 million of capital funding to projects of merit while being involved with and having a very good understanding of every stage of development from exploration to production. Mr. Bonifacio is a Chartered Professional Accountant with extensive experience and knowledge in areas of capital markets, project finance, securities matters and mergers & acquisitions. Mr. Bonifacio has held senior executive roles primarily in the precious metal sector with Getty Resources Limited, TOTAL S.A., and Vengold Inc. and was a director of Goldrock Mines Corp. which was recently acquired by Fortuna Silver Mines Inc.
For the following reasons, the Board concluded that Mr. Bonifacio should serve as a Director of the Company, in light of its business and structure. Mr. Bonifacio’s executive and financial background enables him to provide guidance to the Board on strategic and financial matters that are critical at this stage in the Company’s development. Further, his leadership experience and capital markets expertise allow him to bring managerial and financial expertise to the Board as a director. These skills are valuable to the Board at this time, as the Company’s primary assets are exploration stage properties.
Paul H. Zink – Director
Mr. Zink was appointed to our Board of Directors on July 6, 2016. He has over 35 years as a natural resource professional. From December 2013 through March 2016, Mr. Zink served as Sr. VP and CFO at Rare Element Resources, Ltd. (“REE”) where he remains a consultant. He managed the financial, investor relations and business development functions for the company, including successful financing in the recent difficult financial markets environment. From March 2013 through November 2013, Mr. Zink served as Chief Executive Officer and Chief Investment Officer of Americas Bullion Royalty Corp., and from 2010 until March 2013, he served as President of Eurasian Capital, the royalty and merchant banking division of Eurasian Minerals, Inc. His previous experience includes serving as President of International Royalty Corporation (“IRC”). Over his career in mining, he has also held high level positions with Pegasus Gold, Inc. and Koch Industries, with responsibilities including corporate development, credit, and mergers and acquisitions. Early in his career, he spent more than 15 years with J.P. Morgan & Co. in commercial and investment banking roles covering the minerals and energy sectors. Mr. Zink has also previously served on the boards of directors of Atna Resources Ltd., REE, and IRC.
For the following reasons, the Board concluded that Mr. Zink should serve as a Director of the Company, in light of its business and structure. Mr. Zink’s executive and financial background enables him to provide guidance to the Board on strategic and financial matters that are critical at this stage in the Company’s development. Further, his leadership experience and financing expertise allow him to bring managerial and financial expertise to the Board as a director. These skills are valuable to the Board at this time, as the Company’s primary assets are exploration stage properties.
Arrangements between Officers and Directors
To our knowledge, there is no arrangement or understanding between any of our officers and any other person, including Directors, pursuant to which the officer was selected to serve as an officer.
Family Relationships
None of our Directors are related by blood, marriage, or adoption to any other Director, executive officer, or other key employees.
9
Other Directorships
No directors of Timberline are also directors of issuers with a class of securities registered under Section 12 of the U.S. Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”) (or which otherwise are required to file periodic reports under the U.S. Exchange Act).
Legal Proceedings
Timberline is not aware of any material legal proceedings to which any director, officer or affiliate of Timberline, or any owner of record or beneficially of more than five percent of common stock of Timberline, or any associate of any director, officer, affiliate of Timberline, or security holder is a party adverse to Timberline or any of its subsidiaries or has a material interest adverse to Timberline or any of its subsidiaries.
Timberline is not aware of any of its directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses) or being subject to any of the items set forth under Item 401(f) of Regulation S-K.
CORPORATE GOVERNANCE
Board of Directors Structure
Our current bylaws require the Board to have three (3) or more persons, and may be increased or decreased from time to time, exclusively by resolution approved by the affirmative vote of a majority of the Board. The current Board is composed of six (6) Directors.
Director Independence
We have six directors as of August 9, 2016, including four independent directors, as follows:
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Leigh Freeman
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Robert Martinez
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Giulio Bonifacio
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Paul Zink
An “independent” director is a director whom the Board of Directors has determined satisfies the requirements for independence under Section 803A of the NYSE MKT LLC (the “NYSE-MKT”) Company Guide.
Meetings of the Board and Board Member Attendance the Meeting
During the fiscal year ending September 30, 2015, the Board held eleven (11) meetings of the Board. None of the incumbent Directors attended fewer than 75% of the board meetings.
Board members are not required to attend the Meeting.
Communications to the Board
Stockholders who are interested in communicating directly with members of the Board, or the Board as a group, may do so by writing directly to the individual Board member c/o Chief Executive Officer, Steven Osterberg, at Timberline Resources Corporation, 101 East Lakeside Avenue, Coeur d’Alene, Idaho 83814. Our Chief Executive Officer will forward communications directly to the appropriate Board member. If the correspondence is not addressed to the particular member, the communication will be forwarded to a Board member to bring to the attention of the Board. Our Chief Executive Officer will review all communications before forwarding them to the appropriate Board member.
10
Board Committees
Our Board of Directors has established three board committees: an Audit Committee, a Compensation Committee, and a Corporate Governance and Nominating Committee.
The information below sets out the current members of each of Timberline Resources’ board committees and the advisory board and summarizes the functions of each of the committees in accordance with their mandates.
Audit Committee and Audit Committee Financial Experts
We have a standing Audit Committee and audit committee charter, which complies with Rule 10A-3 of the Exchange Act, and the requirements of the NYSE MKT LLC. Our Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. Our Audit Committee is composed of one (1) director who, in the opinion of the Board, is independent (in accordance with Rule 10A-3 of the Exchange Act and the requirements of Section 803A of the NYSE MKT Company Guide) and financially literate (pursuant to the requirements of Section 803B of the NYSE MKT Company Guide): Leigh Freeman (Chairman). Leigh Freeman satisfies the requirement of a “financial expert” as defined under Item 407(d)(5) of Regulation S-K and meets the requirements for financial sophistication under the requirements of Section 803B of the NYSE MKT Company Guide.
Our Audit Committee meets with our management and our external auditors to review matters affecting financial reporting, the system of internal accounting and financial controls and procedures and the audit procedures and audit plans. Our Audit Committee reviews our significant financial risks, is involved in the appointment of senior financial executives and annually reviews our insurance coverage and any off-balance sheet transactions.
Our Audit Committee monitors our audit and the preparation of financial statements and all financial disclosure contained in our SEC filings. Our Audit Committee appoints our external auditors, monitors their qualifications and independence and determines the appropriate level of their remuneration. The external auditors report directly to the Audit Committee. Our Audit Committee has the authority to terminate our external auditors’ engagement and approve in advance any services to be provided by the external auditors that are not related to the audit.
During the fiscal year ended September 30, 2015, the Audit Committee met four (4) times. A copy of the Audit Committee charter is available on our website at www.timberline-resources.com.
Audit Committee Report
Our Audit Committee oversees our financial reporting process on behalf of the Board. The Audit Committee has one (1) member, who is “independent” as determined under Rule 10A-3 of the U.S. Exchange Act and the rules of the NYSE-MKT. The Audit Committee operates under a written charter adopted by the Board.
The Audit Committee assists the Board by overseeing the (1) integrity of our financial reporting and internal control, (2) independence and performance of our independent auditors, (3) and provides an avenue of communication between management, the independent auditors and the Board.
In the course of providing its oversight responsibilities regarding the 2015 financial statements, the Committee reviewed the 2015 audited financial statements, which appear in the 2015 Annual Report to Stockholders, with management and our independent auditors. The Audit Committee reviewed accounting principles, practices, and judgments as well as the adequacy and clarity of the notes to the financial statements.
The Audit Committee reviewed the independence and performance of the independent auditors who are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States, and such other matters as required to be communicated by the independent auditors in accordance with Statement of Auditing Standards 61, as superseded by Statement of Auditing Standard 114 – the Auditor’s Communication With Those Charged With Governance, as modified or supplemented.
The Audit Committee meets with the independent auditors to discuss their audit plans, scope and timing on a regular basis, with or without management present. The Audit Committee has received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight
11
Board for independent auditor communications with audit committees concerning independence, as may be modified or supplemented.
In reliance on the reviews and discussions referred to above, the Committee recommended to the Board, and the Board has approved, that the audited financial statements be included in Timberline’s Annual Report to the SEC on Form 10-K for the year ended September 30, 2015. The Audit Committee and the Board have also recommended the selection of DeCoria, Maichel and Teague P.S. as independent auditors for Timberline for the fiscal year 2016.
USubmitted by the Audit Committee Members
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Leigh Freeman (Chairman)
Compensation Committee
We have a Compensation Committee currently composed of one (1) director, who, in the opinion of our Board of Directors, is independent (under Section 803A of the NYSE-MKT Company Guide): Leigh Freeman.
We have a Compensation Committee charter that complies with the requirements of the NYSE-MKT. Our Compensation Committee is responsible for considering and authorizing terms of employment and compensation of executive officers and providing advice on compensation structures in the various jurisdictions in which we operate. Our Chief Executive Officer may not be present during the voting determination or deliberations of his or her compensation; however, our Compensation Committee does consult with our Chief Executive Officer in determining and recommending the compensation of directors and other executive officers.
In addition, our Compensation Committee reviews both our overall salary objectives and significant modifications made to employee benefit plans, including those applicable to executive officers, and propose awards of stock options. The Compensation Committee has determined that the Corporation’s compensation policies and practices for its employees generally, not just executive officers, are not reasonably likely to have a material adverse effect on the Corporation.
The Compensation Committee does not and cannot delegate its authority to determine director and executive officer compensation. Our management has not engaged the services of an external compensation consultant during the fiscal year 2015.
During the fiscal year ended September 30, 2015, the Compensation Committee met one (1) time. A copy of the Compensation Committee charter is available on our website at www.timberline-resources.com.
Corporate Governance and Nominating Committee
We have a Corporate Governance and Nominating Committee currently composed of one (1) director, who, in the opinion of our Board of Directors, is independent (under Section 803A of the NYSE-MKT Company Guide): Robert Martinez (Chairman). We have a Corporate Governance and Nominating Committee charter that complies with the requirements of the NYSE-MKT.
Our Corporate Governance and Nominating Committee is responsible for developing our approach to corporate governance issues. The Committee evaluates the qualifications of potential candidates for director and recommends to the Board nominees for election at the next annual meeting or any special meeting of stockholders, and any person to be considered to fill a Board vacancy resulting from death, disability, removal, resignation or an increase in Board size. The Committee has adopted a Director Nominating Process and Policy which sets forth the criteria the Board will assess in connection with the consideration of a candidate, including the candidate’s integrity, reputation, judgment, knowledge, independence, experience, accomplishments, commitment and skills, all in the context of an assessment of the perceived needs of the Board at that time. A copy of the Director Nominating Process and Policy is available on our website at www.timberline-resources.com.
We do not have a formal policy regarding diversity in the selection of nominees for directors. The Corporate Governance and Nominating Committee does, however, consider diversity as part of its overall selection strategy. In considering diversity of the Board as a criteria for selecting nominees, the Corporate Governance and Nominating Committee takes into account various factors and perspectives, including differences of viewpoint, professional
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experience, education, skills and other individual qualities and attributes that contribute to Board heterogeneity, as well as race, gender and national origin. The Corporate Governance and Nominating Committee seeks persons with leadership experience in a variety of contexts. The Corporate Governance and Nominating Committee believes that this conceptualization of diversity is the most effective means to implement Board diversity. The Corporate Governance and Nominating Committee will assess the effectiveness of this approach as part of its annual review of its charter.
The Committee will consider recommendations for director nominees made by stockholders and others if these individuals meet the criteria set forth in the Director Nominating Process and Policy. For consideration by the Committee, the nominating stockholder or other person must provide the Corporate Secretary’s Office with information about the nominee, including the detailed background of the suggested candidate that will demonstrate how the individual meets our director nomination criteria. If a candidate proposed by a stockholder meets the criteria, the individual will be considered on the same basis as other candidates.No stockholder or stockholders holding 5% or more of our outstanding stock, either individually or in aggregate, recommended a nominee for election to the Board.
All of the nominees included on the proxy card accompanying this Proxy Statement were nominated by the Corporate Governance and Nominating Committee and were recommended by our current Board.
During the fiscal year ended September 30, 2015, the Corporate Governance and Nominating Committee met one (1) time. A copy of the Corporate Governance and Nominating Committee charter is available on our website at www.timberline-resources.com.
Board Leadership Structure
The Board has reviewed our current Board leadership structure in light of the composition of the Board, our size, the nature of our business, the regulatory framework under which we operate, our stockholder base, our peer group and other relevant factors. Considering these factors we have determined to have a separate Chief Executive Officer and Chairman of the Board. We have determined that this structure is currently the most appropriate Board leadership structure for us. The Board noted the following factors in reaching its determination:
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The Board of Directors’ Role in Risk Management Oversight
The understanding, identification and management of risk are essential elements for the successful management of Timberline. Risk oversight begins with the Board and the Audit Committee. The Audit Committee consists of Leigh Freeman (Chairman), an independent director.
The Audit Committee reviews and discusses policies with respect to risk assessment and risk management. The Audit Committee also has oversight responsibility with respect to the integrity of our financial reporting process and systems of internal control regarding finance and accounting, as well as its financial statements.
At the management level, an internal audit provides reliable and timely information to the Board and management regarding our effectiveness in identifying and appropriately controlling risks. Annually, management presents to the Audit Committee a report summarizing the review of our methods for identifying and managing risks.
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Additionally, our Corporate Governance and Nominating Committee reviews the risks related to succession planning and the independence of the Board. The Compensation Committee reviews the risks related to our various compensation plans.
In the event that a committee is allocated responsibility for examining and analyzing a specific risk, such committee reports on the relevant risk exposure during its regular reports to the entire Board to facilitate proper risk oversight by the entire Board.
Based on a review of the nature of operations, we do not believe that any areas of Timberline are incented to take excessive risks that would likely have a material adverse effect on our operations.
EXECUTIVE COMPENSATION
The following summary compensation tables set forth information concerningas of October 5, 2018, regarding the annual and long-term compensation for services in all capacities to the Company for the year ended September 30, 2015 of those persons who were, at September 30, 2015 (i) the chief executive officer (Kiran Patankar) (ii) the chief financial officer (Randal Hardy) and (iii) the two other most highly compensated executive officers of the Company, whose annual base salary and bonus compensation was in excess of $100,000 (Paul Dircksen – Vice-President, Business Development and Technical Services and Steven Osterberg - Vice-President, Exploration):
SUMMARY COMPENSATION TABLE | ||||||
Name and principal Position | Year | Salary ($) | Bonus ($) | Option Awards(5) ($) | All Other Compensation ($) | Total ($) |
Kiran Patankar, President, Chief Executive Officer(1) | 2015 | 159,375 | 50,000 | 16,411(6) | 69,000(2) | 294,786 |
Randal Hardy, Chief Financial Officer | 2015 | 214,771 | 0 | 15,000(7) | 0 | 229,771 |
| 2014 | 216,500 | 0 | 0 | 55,527(3) | 272,027 |
Steven Osterberg, Vice-President, Exploration | 2015 | 173,958 | 0 | 12,000(8) | 0 | 185,958 |
| 2014 | 175,000 | 0 | 0 | 0 | 175,000 |
Paul Dircksen, Vice—President, Business Development and Technical Services(4) | 2015 | 116,375 | 0 | 13,500(9) | 0 | 129,875 |
| 2014 | 220,500 | 0 | 0 | 68,434(3) | 288,934 |
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(1) Mr. Patankar was President & Chief Executive Officer from January 1, 2015 until his termination effective January 19, 2016. (2) Stock grant award of 100,000 common stock shares valued at $0.69. (3) Reimbursement of taxes related to transfer of SERP plan value to employee in fiscal year 2012 (See Retirement, Resignation or Termination Plans, below). (4) Mr. Dircksen was President & Chief Executive Officer until his resignation from those offices effective on December 31, 2014 when he was appointed Vice-President of Business Development and Technical Services. (5) Option awards are valued using the Black-Scholes method in accordance with FASB ASC Topic 718. These amounts reflect the Company’s accounting expense for these awards, and do not correspond to the actual value that may be recognized by the named executive officers. For additional information on the assumptions underlying the valuation of the Company’s stock options, please refer to Note 16 of the Company’s consolidated financial statements included in its Annual Report on Form 10-K. (6) 34,189 stock option awards, with an exercise price of $0.74 per share. The option awards vested immediately. (7) 50,000 stock option awards, with an exercise price of $0.48 per share. The option awards vested immediately. (8) 40,000 stock option awards, with an exercise price of $0.48 per share. The option awards vested immediately. (9) 45,000 stock option awards, with an exercise price of $0.48 per share. The option awards vested immediately. | ||||||
Executive Compensation Agreements
Patankar Employment Agreement
On August 28, 2015, Kiran Patankar, who was our President and Chief Executive Officer until January 19, 2016, entered into an employment agreement (“Patankar Agreement”) setting forth the material terms of his employment with the Company.
Pursuant to the terms of the Patankar Agreement, Mr. Patankar was a full-time executive employee for an indefinite period of time. The Patankar Agreement detailed that Mr. Patankar’s duties pursuant to his employment were to fulfill the obligations and duties of the President and Chief Executive Officer and report to the Board of Directors. In consideration for rendering such services, Mr. Patankar would be compensated with an annual salary of not less than $225,000, less required and authorized deductions and withholdings, payable in semi-monthly payments consistent with the Company’s normal payroll practices. The Company would also pay for (or reimburse Mr. Patankar the cost of) health, dental and vision insurance for Mr. Patankar and his eligible family members. The Patankar Agreement provided for the reimbursement of all reasonable business expenses of Mr. Patankar.
The Patankar Agreement also provided that Mr. Patankar was eligible to participate in such profit-sharing, bonus, stock purchase, incentive and performance award programs that were made available to our employees with comparable authority or duties. Mr. Patankar was eligible to receive performance bonuses and other incentive compensation based upon the recommendations and approval, and subject to the sole discretion,ownership of our Board of Directors. The Patankar Agreement provided that Mr. Patankar was entitled to take six (6) weeks of paid vacation in each 12 month period of employment and would be permitted to carry-over up to six (6) weeks of unused vacation into the next calendar year.
The Patankar Agreement provided that Mr. Patankar may be terminated (i) without “Cause” upon 90 days written notice or (ii) with “Cause” immediately upon written notice, and Mr. Patankar may resign (i) for “Good Reason” immediately upon written notice, and (ii) without “Good Reason” upon 30 days written notice. “Cause” was as defined in the Patankar Agreement and included: material breach of the Patankar Agreement by Mr. Patankar, conviction of a crime involving moral turpitude, fraud or misrepresentation, or the commission of such acts by Mr. Patankar, and Mr. Patankar’s inability to fulfill his duties under the Patankar Agreement. “Good Reason” was as defined in the Patankar Agreement and included assignment of duties inconsistent with Mr. Patankar’s duties, a reduction without consent to Mr. Patankar’s base salary, a requirement to relocate without Mr. Patankar’s consent, the failure of the Company to obtain the assumption of obligations under the Patankar Agreement by any successor or breach of the Patankar Agreement by the Company. The Patankar Agreement also terminated upon retirement, permanent disability or death.
Upon termination without Cause or resignation for Good Reason following a Change in Control of the Company (as defined in the Patankar Agreement) or upon termination due to death or permanent disability, the Company would: (a) pay Mr. Patankar a severance benefit equal to the product of his base annual salary immediately preceding his termination, inclusive of any non-equity performance bonus earned in the twelve (12) months preceding termination, multiplied by a “change in control multiplier” equal to two (2) plus one twelfth (1/12) of the number of full years (up to a maximum of twelve (12) years) that Mr. Patankar was employed by the Registrant, (b) pay for health insurance benefits for Mr. Patankar and his eligible family members up to $20,000 per year for a period of one (1) year plus one (1) additional month for each full year that Mr. Patankar was employed by the Company or until such benefits were paid for by another employer, and (c) pay Mr. Patankar the value of his earned but unused vacation days.
Upon termination without Cause or resignation for Good Reason not following a Change in Control of the Company, the Company would: (a) pay Mr. Patankar a severance benefit equal his base annual salary immediately preceding his termination, inclusive of any non-equity performance bonus earned in the twelve (12) months preceding termination, (b) pay for health insurance benefits for Mr. Patankar and his eligible family members up to $20,000 per year for a period of one (1) year plus one (1) additional month for each full year that Mr. Patankar was employed by the Company or until such benefits are paid for by another employer, and (c) pay Mr. Patankar the value of his earned but unused vacation days.
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Receipt of any severance payments was conditioned upon the execution of a separation agreement and release of claims against the Company.
Upon termination with Cause or resignation without Good Reason, the Company would on the date of termination pay Mr. Patankar: (a) his earned salary, bonus or other compensation, (b) the value of Mr. Patankar’s earned but unused vacation days and (c) unreimbursed business expenses.
Upon retirement, the Patankar Agreement provided that the Company was not obligated to pay Mr. Patankar a monthly retirement benefit but would endeavor in good faith to devise and implement a retirement plan for Mr. Patankar and the other employees of the Company.
The Patankar Agreement provided for Mr. Patankar to maintain the confidentiality of the Company’s confidential information and contained a non-competition provision pursuant to which Mr. Patankar agreed for a one year period following termination to not directly or indirectly for himself or on behalf of others (a) solicit for employment or as a consultant or independent contractor or enter into an independent contract or relationship with any person employed by the Company at any time during such period or otherwise interfere with such employment relationship, (b) induce or attempt to induce any customer, supplier, licensee or business relation of the Company to cease doing business with the Company, or (c) disparage the Company.
The Patankar Agreement also contained standard provisions regarding notices, amendments, governing law and jurisdiction.
On January 19, 2016, Mr. Patankar’s employment with Timberline Resources was terminated.
Dircksen Employment Agreement
On September 22, 2015, Mr. Paul Dircksen, current Vice President Business Development & Technical Services and director of the Company and the former President and Chief Executive Officer of the Company, entered into a letter agreement, effective September 21, 2015, regarding Mr. Dircksen’s ongoing relationship with the Company (the “Dircksen Agreement”). Upon execution of the Dircksen Agreement, by mutual agreement, Mr. Dircksen’s employment agreement with the Company, dated effective May 1, 2006, was terminated in its entirety and Mr. Dircksen waived any claims, rights or assertions related to any of the terms and conditions of the prior employment agreement, including any provisions relating to payment for any change of control.
Pursuant to the Dircksen Agreement, Mr. Dircksen will continue as a consultant to the Company at an annual compensation rate of $73,500 payable bi-monthly in accordance with the Company’s normal practices until a change of control occurs. The Company will reimburse Mr. Dircksen and his spouse for health coverage benefits for 13 years through payment of medical and dental insurance coverage premiums up to $12,000 per year. The Company has also agreed to transfer title of the Company truck which Mr. Dircksen currently drives to Mr. Dircksen.
If a change of control occurs, the Company has agreed to consider in good faith continuing Mr. Dircksen’s consulting arrangement on mutually agreeable terms.
The Dircksen Agreement further provides that the Company will inform the Company’s compensation committee at the time it is considering issuing awards under the Company’s proposed 2015 Stock and Incentive Plan, which was approved by the shareholders on September 24, 2015, that Mr. Dircksen and the Company have agreed that the value of the surrender of Mr. Dircksen’s change of control rights contained in Mr. Dircksen’s prior employment agreement is approximately $160,000. The Dircksen Agreement, however, does not bind the Company or the compensation committee to undertake any issuance of awards under the 2015 Stock and Incentive Plan and the issuance of any such awards to Mr. Dircksen in the future remains in the sole discretion of the Compensation Committee.
Mr. Dircksen retired as an employee effective December 31, 2015, and remains a director of the Company.
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Osterberg Employment Agreement
On August 28, 2015, Steven Osterberg, our Vice President of Exploration, and subsequently on January 19, 2016, appointed as our President and Chief Executive Officer, entered into an employment agreement (“Osterberg Agreement”) setting forth the material terms of his employment with the Company.
Pursuant to the terms of the Osterberg Agreement, the Company employs Mr. Osterberg as a full-time executive employee for an indefinite period of time. The Osterberg Agreement details that Mr. Osterberg’s duties pursuant to his employment are to fulfill the obligations and duties of the Vice President of Exploration and report to the Chief Executive Officer of the Company. In consideration for rendering such services, Mr. Osterberg shall be compensated with an annual salary of not less than $150,000, less required and authorized deductions and withholdings, payable in semi-monthly payments consistent with the Company’s normal payroll practices. The Company will also pay for (or reimburse Mr. Osterberg the cost of) health, dental and vision insurance for Mr. Osterberg and his eligible family members. The Osterberg Agreement provides for the reimbursement of all reasonable business expenses of Mr. Osterberg.
The Osterberg Agreement also provides that Mr. Osterberg is eligible to participate in such profit-sharing, bonus,common stock purchase, incentive and performance award programs which are made available to employees of the Company with comparable authority or duties. Mr. Osterberg is eligible to receive performance bonuses and other incentive compensation based upon the recommendations and approval, and subject to the sole discretion, of our Board of Directors. The Osterberg Agreement provides that Mr. Osterberg is entitled to take six (6) weeks of paid vacation in each 12 month period of employment and will be permitted to carry-over up to six (6) weeks of unused vacation into the next calendar year.
by:
The Osterberg Agreement provides that Mr. Osterberg may be terminated (i) without “Cause” upon 90 days written notice or (ii) with “Cause” immediately upon written notice, and Mr. Osterberg may resign (i) for “Good Reason” immediately upon written notice and (ii) without “Good Reason” upon 30 days written notice. “Cause” is as defined in the Osterberg Agreement and includes: material breach of the Osterberg Agreement by Mr. Osterberg, conviction of a crime involving moral turpitude, fraud or misrepresentation, or the commission of such acts by Mr. Osterberg, and Mr. Osterberg’s inability to fulfill his duties under the Osterberg Agreement. “Good Reason” is as defined in the Osterberg Agreement and includes assignment of duties inconsistent with Mr. Osterberg’s duties, a reduction without consent to Mr. Osterberg’s base salary, a requirement to relocate without Mr. Osterberg’s consent, the failure of the Company’s to obtain the assumption of obligations under the Osterberg Agreement by any successor or breach of the Osterberg Agreement by the Company. The Osterberg Agreement also terminates upon retirement, permanent disability or death.
| · | each named executive officer, each director and all of our directors and executive officers as a group; and |
| · | each person who is known by us to own more than 5% of our shares of common stock |
Upon termination without Cause or resignation for Good Reason following a Change in Control of the Company (as defined in the Osterberg Agreement) or upon termination due to death or permanent disability, the Company shall: (a) pay Mr. Osterberg a severance benefit equal to the product of his base annual salary immediately preceding his termination, inclusive of any non-equity performance bonus earned in the twelve (12) months preceding termination, multiplied by a “change in control multiplier” equal to one (1) plus one twelfth (1/12) of the number of full years (up to a maximum of twelve (12) years) that Mr. Osterberg was employed by the Company, (b) pay for health insurance benefits for Mr. Osterberg and his eligible family members up to $20,000 per year for a period of one (1) year plus one (1) additional month for each full year that Mr. Osterberg was employed by the Company or until such benefits are paid for by another employer, and (c) pay Mr. Osterberg the value of his earned but unused vacation days.
Upon termination without Cause or resignation for Good Reason not following a Change in Control of the Company, the Company shall: (a) pay Mr. Osterberg a severance benefit equal his base annual salary immediately preceding his termination, inclusive of any non-equity performance bonus earned in the twelve (12) months preceding termination, (b) pay for health insurance benefits for Mr. Osterberg and his eligible family members up to $20,000 per year for a period of one (1) year plus one (1) additional month for each full year that Mr. Osterberg was employed by the Company or until such benefits are paid for by another employer, and (c) pay Mr. Osterberg the value of his earned but unused vacation days.
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Receipt of any severance payments is conditioned upon the execution of a separation agreement and release of claims against the Company.
Upon termination with Cause or resignation without Good Reason, the Company shall on the date of termination pay Mr. Osterberg: (a) his earned salary, bonus or other compensation, (b) the value of Mr. Osterberg’s earned but unused vacation days and (c) unreimbursed business expenses.
Upon retirement, the Osterberg Agreement provides that the Company is not obligated to pay Mr. Osterberg a monthly retirement benefit but shall endeavor in good faith to devise and implement a retirement plan for Mr. Osterberg and the other employees of the Company.
The Osterberg Agreement provides for Mr. Osterberg to maintain the confidentiality of the Company’s confidential information and contains a non-competition provision pursuant to which Mr. Osterberg agrees for a one year period following termination to not directly or indirectly for himself or on behalf of others (a) solicit for employment or as a consultant or independent contractor or enter into an independent contract or relationship with any person employed by the Company at any time during such period or otherwise interfere with such employment relationship, (b) induce or attempt to induce any customer, supplier, licensee or business relation of the Company to cease doing business with the Company, or (c) disparage the Company.
The Osterberg Agreement also contains standard provisions regarding notices, amendments, governing law and jurisdiction.
Mr. Osterberg’s contract was not amended or in any way altered in relation to his appointment as President and Chief Executive Officer on January 19, 2016.
Hardy Employment Agreement
On September 2, 2015, Randal Hardy, our then Chief Financial Officer, entered into a letter agreement regarding Mr. Hardy’s continued employment (the “Hardy Agreement”).
Pursuant to the terms of the Hardy Agreement, the Company employed Mr. Hardy as a full-time executive employee for an indefinite period of time. The Hardy Agreement details that Mr. Hardy’s duties pursuant to his employment are to fulfill the obligations and duties of the Chief Financial Officer of the Company and report to the Chief Executive Officer of the Company. In consideration for rendering such services, Mr. Hardy shall be compensated with an annual salary of not less than $175,000, less required and authorized deductions and withholdings, payable in semi-monthly payments consistent with the Company’s normal payroll practices. The Company will also pay for (or reimburse Mr. Hardy the cost of) health, dental and vision insurance for Mr. Hardy and his eligible family members. The Hardy Agreement provides for the reimbursement of all reasonable business expenses of Mr. Hardy.
The Hardy Agreement also provides that Mr. Hardy is eligible to participate in such profit-sharing, bonus, stock purchase, incentive and performance award programs which are made available to employees of the Company with comparable authority or duties. Mr. Hardy is eligible to receive performance bonuses and other incentive compensation based upon the recommendations and approval, and subject to the sole discretion, of the Board. The Hardy Agreement provides that Mr. Hardy is entitled to take six (6) weeks of paid vacation in each 12 month period of employment and will be permitted to carry-over up to six (6) weeks of unused vacation into the next calendar year.
The Hardy Agreement provides that Mr. Hardy may be terminated (i) without “Cause” upon 90 days written notice, (ii) with “Cause” immediately upon written notice, or Mr. Hardy may resign (i) for “Good Reason” immediately upon written notice and (ii) without “Good Reason” upon 30 days written notice. “Cause” is as defined in the Hardy Agreement and includes: material breach of the Hardy Agreement by Mr. Hardy, conviction of a crime involving moral turpitude, fraud or misrepresentation, or the commission of such acts by Mr. Hardy, and Mr. Hardy’s inability to fulfill his duties under the Hardy Agreement. “Good Reason” is as defined in the Hardy Agreement and includes assignment of duties inconsistent with Mr. Hardy’s duties, a reduction without consent to Mr. Hardy’s base salary, a requirement to relocate without Mr. Hardy’s consent, the failure of the Company to obtain the assumption of
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obligations under the Hardy Agreement by any successor or breach of the Hardy Agreement by the Company. The Hardy Agreement also terminates upon retirement, permanent disability or death.
Upon termination without Cause or resignation for Good Reason following a Change in Control of the Registrant (as defined in the Hardy Agreement) or upon termination due to death or permanent disability, the Registrant shall: (a) pay Mr. Hardy a severance benefit equal to the product of his base annual salary immediately preceding his termination, inclusive of any non-equity performance bonus earned in the twelve (12) months preceding termination, multiplied by a “change in control multiplier” equal to one (1) plus one twelfth (1/12) of the number of full years (up to a maximum of twelve (12) years) that Mr. Hardy was employed by the Company, (b) pay for health insurance benefits for Mr. Hardy and his eligible family members up to $20,000 per year for a period of one (1) year plus one (1) additional month for each full year that Mr. Hardy was employed by the Company or until such benefits are paid for by another employer, and (c) pay Mr. Hardy the value of his earned but unused vacation days.
Upon termination without Cause or resignation for Good Reason not following a Change in Control of the Company, the Registrant shall: (a) pay Mr. Hardy a severance benefit equal his base annual salary immediately preceding his termination, inclusive of any non-equity performance bonus earned in the twelve (12) months preceding termination, (b) pay for health insurance benefits for Mr. Hardy and his eligible family members up to $20,000 per year for a period of one (1) year plus one (1) additional month for each full year that Mr. Hardy was employed by the Registrant or until such benefits are paid for by another employer, and (c) pay Mr. Hardy the value of his earned but unused vacation days.
Receipt of any severance payments is conditioned upon the execution of a separation agreement and release of claims against the Company.
Upon termination with Cause or resignation without Good Reason, the Registrant shall on the date of termination pay Mr. Hardy: (a) his earned salary, bonus or other compensation, (b) the value of Mr. Hardy’s earned but unused vacation days and (c) unreimbursed business expenses.
Upon retirement, the Hardy Agreement provides that the Registrant is not obligated to pay Mr. Hardy a monthly retirement benefit but shall endeavor in good faith to devise and implement a retirement plan for Mr. Hardy and the other employees of the Registrant.
The Hardy Agreement provides for Mr. Hardy to maintain the confidentiality of the Registrant’s confidential information and contains a non-competition provision pursuant to which Mr. Hardy agrees for a one year period following termination to not directly or indirectly for himself or on behalf of others (a) solicit for employment or as a consultant or independent contractor or enter into an independent contract or relationship with any person employed by the Company at any time during such period or otherwise interfere with such employment relationship, (b) induce or attempt to induce any customer, supplier, licensee or business relation of the Company to cease doing business with the Company, or (c) disparage the Company.
The Hardy Agreement also contains standard provisions regarding notices, amendments, governing law and jurisdiction.
On January 19, 2016, Mr. Hardy resigned as Chief Financial Officer. In connection with Mr. Hardy’s resignation, Mr. Hardy agreed to waive his rights to severance under his employment agreement with the Company in exchange for the issuance to Mr. Hardy of 100,000 Stock Units (or equivalent equity securities) of the Company and continuation of his health benefits under the terms of his former employment agreement, and both Mr. Hardy and the Company have agreed to waive any and all claims they have against each other in relation to Mr. Hardy’s employment as Chief Financial Officer and his resignation from that office. Additionally, in consideration of Mr. Hardy’s waivers, as noted above, the Company has agreed to hire Mr. Hardy as a consultant to the Company at a rate of $85 per hour.
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Retirement, Resignation or Termination Plans
We sponsor no plan, whether written or verbal, that would provide compensation or benefits of any type to an executive upon retirement, or any plan that would provide payment for retirement, resignation, or termination as a result of a change in control of our Company or as a result of a change in the responsibilities of an executive following a change in control of our Company. Specific executive employment agreements described above do, however, provide thatif the executive’s employment is terminated by the Company without Cause or by the executive for Good Reason, as such terms are defined in their respective employment agreements, the executive will be entitled to receive payments as set forth in the above discussions, which payments are greater in the event that such termination or resignation is in relation to a change in control transaction.
Prior to September 30, 2012, we maintained a Supplemental Executive Retirement Plan (SERP), which is funded by insurance and covers Paul Dircksen. We were party to a Supplemental Income Agreement (“Agreement” for purposes of this paragraph) with Paul Dircksen, which provided for the payment of deferred compensation to Mr. Dircksen upon his death, Disability, Retirement or Early Retirement, or upon a Change in Control as defined in Regulations issued by the Internal Revenue Service under IRC Section 409A. Under the terms of the Agreement, if Mr. Dircksen remained actively and continuously employed on a full time basis until his Retirement (defined as his voluntary termination of employment on or after attaining age 65) or his death, Mr. Dircksen would be paid $100,000 pursuant to the Agreement. If Mr. Dircksen remained actively and continuously employed on a full time basis until his Early Retirement (defined as his voluntary termination of employment after attaining age 60 and before attaining age 65) or his Disability (as defined in the Agreement) he would be paid each year for ten years an amount equal to 5% of the cash surrender value of the life insurance policy funding the Agreement (the “Policy’). Upon a Change in Control, the Policy would be distributed to Mr. Dircksen and the Agreement would be terminated, with no further obligations on the part of the Company.
During the year ended September 30, 2012, we determined that we no longer wished to maintain SERPs for our management or employees. The Policy was distributed to Mr. Dircksen and the Agreement was terminated. In addition, a SERP in a form substantially the same as that provided to Mr. Dircksen that was maintained for a former non-executive employee of the Company was transferred to Randal Hardy during the year ended September 30, 2012. Upon transfer, the Policy was distributed to Mr. Hardy and the Agreement was terminated. During the year ended September 30, 2014, Mr. Dircksen and Mr. Hardy were reimbursed for taxes related to the transfer of the SERP plan value.
Outstanding Equity Awards At Fiscal Year-End
The following table sets forth the stock options granted to our named executive officers as of September 30, 2015. No stock appreciation rights were awarded.
Name | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Option Exercise Price ($)(1) | Option Expiration Date |
Kiran Patankar | 34,189 | $0.74 | 1/4/2020 |
Paul Dircksen | 12,501 12,500 45,000 | $11.64 $5.88 $0.48 | 3/31/2016 4/11/2017 12/17/2019 |
Randal Hardy | 8,334 12,500 50,000 | $11.64 $5.88 $0.48 | 3/31/2016 4/11/2017 12/17/2019 |
Steven Osterberg | 8,334 8,334 40,000 | $6.48 $5.88 $0.48 | 2/1/2017 4/11/2017 12/17/2019 |
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(1)
DIRECTOR COMPENSATION
The following table sets forth the compensation granted to our directors during the fiscal year ended September 30, 2015. Compensation to Directors that are also executive officers is detailed above and is not included on this table.
Name | Fees Earned or Paid in Cash(2) ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
Leigh Freeman | 0 | 0 | 13,500(3) | 0 | 0 | 0 | 0 |
Robert Martinez | 0 | 0 | 13,500(3) | 0 | 0 | 0 | 0 |
William M. Sheriff | 0 | 0 | 16,500(4) | 0 | 0 | 0 | 0 |
John Watson(1) | 0 | 0 | 10,500(5) | 0 | 0 | 0 | 0 |
(1) Resigned from the Board of Directors effective on September 24, 2015. (2) See Compensation of Directors, below, for a description of cash compensation earned by Directors. (3) 45,000 stock option awards, with an exercise price of $0.48 per share. The option awards vested immediately. (4) 55,000 stock option awards, with an exercise price of $0.48 per share. The option awards vested immediately. (5) 35,000 stock option awards, with an exercise price of $0.48 per share. The option awards vested immediately. | |||||||
Compensation of Directors
Directors that were also executive officers received no monetary compensation for serving as a Director. Non-executive directors are granted non-qualified stock options and stock awards as compensation. Such stock awards are determined at the sole discretion of the Company’s Compensation Committee.
OTHER GOVERNANCE MATTERS
Code of Business and Ethical Conduct
We have adopted a corporate Code of Business and Ethical Conduct administered by our President and Chief Executive Officer, Steven Osterberg. We believe our Code of Business and Ethical Conduct is reasonably designed to deter wrongdoing and promote honest and ethical conduct, to provide full, fair, accurate, timely and understandable disclosure in public reports, to comply with applicable laws, to ensure prompt internal reporting of code violations, and to provide accountability for adherence to the code. Our Code of Business and Ethical Conduct provides written standards to promote:
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Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
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Full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the Commission and in other public communications made by an issuer;
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Compliance with applicable governmental laws, rules and regulations; and
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The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
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Accountability for adherence to the code.
Our Code of Business and Ethical Conduct is available on our web site at www.timberline-resources.com. A copy of the Code of Business and Ethical Conduct will be provided to any person without charge upon written request to us at our executive offices: Timberline Resources Corporation, 101 East Lakeside Avenue, Coeur d’Alene, Idaho 83814. We intend to disclose any waiver from a provision of our code of ethics that applies to any of our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions that relates to any element of our code of ethics on our website. No waivers were granted from the
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requirements of our Code of Business and Ethical Conduct during the year ended September 30, 2015, or during the subsequent period from October 1, 2015 through the date of this Proxy Statement.
Compensation Interlocks and Insider Participation
There were no compensation committee or board interlocks among the members of our Board.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the U.S. Exchange Act, requires our officers, directors, and persons who beneficially own more than 10% of our common stock (“10% Stockholders”), to file reports of ownership and changes in ownership with the SEC. Such officers, directors and 10% Stockholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms that they file.
Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during the fiscal year ended September 30, 2015, all filing requirements applicable to our officers, directors and greater-than-10%-beneficial owners were complied with.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following tables set forth information as of August 9, 2016, regarding the ownership of our common stock by:
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each named executive officer, each director and all of our directors and executive officers as a group; and
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each person who is known by us to own more than 5% of our shares of common stock.
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Title of Class | Name of Beneficial Owner | Number of Shares of Common | Percentage of |
Common Stock | Leigh Freeman (a)(1) Chairman of the Board, Director |
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Common Stock |
Steve Osterberg (b)(2) President & Chief Executive Officer, Director |
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Common Stock |
Randal Hardy (b)(3)
Former Chief Financial Officer |
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Common Stock |
Donald McDowell (a)(4) Director |
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Common Stock |
Paul Dircksen(a)(5) Director |
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Common Stock |
Dave Mathewson (a)(6) Director |
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| Common Stock | Steven Gilbertson (a)(7) Director | -/100,000 | * |
Common Stock | Total Directors and Executive Officers as a group |
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Title of Class | Name and Address of Beneficial | Number of Shares of Common | Percentage of |
Common Stock | Americas Gold Exploration, Inc. 2131 Stone Hill Circle Reno, NV 89519 | 10,000,000/5,000,000(8) | 25.63% |
| Common Stock | William Matlack 2131 Stone Hill Circle Reno, NV 89519 | 2,126,200/5,290,500(9) | 12.61% |
| Common Stock | American Gold Capital US Inc. c/o Gunpoint Exploration Ltd. Suite 201, 1512 Yew Street Vancouver, BC V6K 3E4 Canada |
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| Common Stock | Palisade Global Investments | 1,666,667/1,666,667(10) | 6.04% |
| Common Stock | Eric Muschinski | 1,741,667/1,741,667(11) | 6.30% |
| Common Stock | Nicholas Stuart Bryant The Manor House South Warnborough Hook, Hampshire RG29 1RR United Kingdom | 2,450,000/2,450,000(12) | 8.75% |
less than 1%.
The percentages listed for each stockholdershareholder are based on 24,106,95253,527,819 shares outstanding as of August 9, 2016October 5, 2018 and assume the exercise by that stockholdershareholder only of his entire option andor warrant, holdings exercisable within 60 days of August 9, 2016.
October 5, 2018.
Director only
Officer and Director
A vested option to purchase 8,334 shares was granted to this stockholder on January 18, 2013 with an exercise price of $2.64 per share and an expiration date of January 18, 2018. A vested option to purchase 45,000 shares was granted to this stockholder on December 17, 2014 with an exercise price of $0.48 per share and an expiration date of December 17, 2019. . A vested option to purchase 250,000 shares was granted to this stockholder on July 6, 2016 with an exercise price of $0.40 per share and an expiration date of July 6, 2021. A vested option to purchase 200,000 shares was granted to this stockholder on February 2, 2018 with an exercise price of $0.17 per share and an expiration date of February 2, 2023. This stockholder participated in the Company’s private placement financing inacquired units on June 30, 2016 and purchased units comprisingwhich included 65,066 shares of common stock and 65,066 warrants to acquire 65,066 sharesone share of common stock at awith an exercise price of $0.25 per share withand an expiration date of May 31, 2019.
A vested option to purchase 8,334 shares was granted to this stockholder on February 1, 2012 with an exercise price of $6.48 per share and an expiration date of February 1, 2017. A vested option to purchase 8,334 shares was granted to this stockholder on April 11, 2012 with an exercise price of $5.88 per share and an expiration date of April 11, 2017. A vested option to purchase 40,000 shares was granted to this stockholder on December 17, 2014 with an exercise price of $0.48 per share and an expiration date of December 17, 2019. A vested option to purchase 250,000 shares was granted to this stockholder on July 6, 2016 with an exercise price of $0.40 per share and an expiration date of July 6, 2021. A vested option to purchase 500,000 shares was granted to this stockholder on February 2, 2018 with an exercise price of $0.17 per share and an expiration date of February 2, 2023. This stockholder participated in the Company’s private placement financing inacquired units on June 30, 2016 and purchased units comprisingwhich included 266,667 shares of common stock and 266,667 warrants to acquire 266,667 sharesone share of common stock at awith an exercise price of $0.25 per share withand an expiration date of May 31, 2019.
This stockholder acquired units on April 12, 2017 which included 65,000 shares of common stock and 65,000 warrants to acquire one share of common stock with an exercise price of $0.40 and an expiration date of January 31, 2020. This stockholder acquired units on May 4, 2018 which included 125,000 shares of common stock and 125,000 warrants to acquire one share of common stock with an exercise price of $0.08 and an expiration date of April 30, 2021.
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A vested option to purchase 600,00050,000 shares was granted to this stockholder on December 17, 2014 with an exercise price of $0.48 per share and an expiration date of December 17, 2019. A vested option to purchase 50,000 shares was granted to this stockholder on July 6, 2016 with an exercise price of $0.40 per share and an expiration date of July 6, 2021. This stockholder participated in the Company’s private placement financing in June 2016 and purchased units comprising 1,100,000 shares of common stock and 1,100,000 warrants to acquire 1,100,000 shares of common stock at a price of $0.25 per share with an expiration date of May 31, 2019.
(4)
A vested option to purchase 12,500500,000 shares was granted to this stockholder on April 11, 2012February 2, 2018 with an exercise price of $5.88$0.17 per share and an expiration date of February 2, 2023. This stockholder acquired units on April 11, 2017.12, 2017 which included 40,000 shares of common stock and 40,000 warrants to acquire one share of common stock with an exercise price of $0.40 and an expiration date of January 31, 2020. This stockholder acquired units on May 4, 2018 which included 125,000 shares of common stock and 125,000 warrants to acquire one share of common stock with an exercise price of $0.08 and an expiration date of April 30, 2021.
(5)
A vested option to purchase 6,250 shares was granted to this stockholder on April 11, 2012 with an exercise price of $5.88 per share and an expiration date of April 11, 2017. A vested option to purchase 45,000 shares was granted to this stockholder on December 17, 2014 with an exercise price of $0.48 per share and an expiration date of December 17, 2019. A vested option to purchase 200,000 shares was granted to this stockholder on July 6, 2016February 2, 2018 with an exercise price of $0.40$0.17 per share and an expiration date of February 2, 2023.
(6)
A vested option to purchase 200,000 Donald McDowell, a director of the Company, is the principal holder of shares was granted toof this stockholderentity, owning approximately 75% of the voting securities.
We are
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Related Persons
There were no reportable transactions with related parties, including 5% or greater security holders, during the two fiscal years ended September 30, 2015 and 2014.
Except as indicated herein, no officer, director, promoter, or affiliate of Timberline has or proposes to have any direct or indirect material interest in any asset acquired or proposed to be acquired by Timberline through security holdings, contracts, options, or otherwise. In cases where we have entered into such related party transactions, we believe that we have negotiated consideration or compensation that would have been reasonable if the party or parties were not affiliated or related.
Policy for Review of Related Party Transactions
We have a policy for the review of transactions with related persons as set forth in our Audit Committee Charter and internal practices. The policy requires review, approval or ratification of all transactions in which we are a participant and in which any of our directors, executive officers, significant stockholders or an immediate family member of any of the foregoing persons has a direct or indirect material interest, subject to certain categories of transactions that are deemed to be pre-approved under the policy - including employment of executive officers, director compensation (in general, where such transactions are required to be reported in our proxy statement pursuant to SEC compensation disclosure requirements), as well as certain transactions where the amounts involved do not exceed specified thresholds. All related party transactions must be reported for review by the Audit Committee of the Board of Directors pursuant to the Audit Committee’s charter and the rules of the NYSE MKT.
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Following its review, the Audit Committee determines whether these transactions are in, or not inconsistent with, the best interests of the Company and its stockholders, taking into consideration whether they are on terms no less favorable to the Company than those available with other parties and the related person's interest in the transaction. If a related party transaction is to be ongoing, the Audit Committee may establish guidelines for the Company's management to follow in its ongoing dealings with the related person.
Our policy for review of transactions with related persons was followed in all of the transactions set forth above and all such transactions were reviewed and approved in accordance with our policy for review of transactions with related persons.
EQUITY COMPENSATION PLANS
The following summary information is presented as of September 30, 2015.
| Number of securities to be issued upon exercise of outstanding options, warrants, and rights(2) (a) | Weighted-average exercise price of outstanding options, warrants, and rights(2) (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (2) (c) |
Equity compensation plans approved by security holders(1) | 533,778 | $2.48 | 4,000,000 |
Equity compensation plans not approved by security holders | Not applicable | Not applicable | Not applicable |
TOTAL | 533,778(1) | $2.48 | 4,000,000 |
(1)
In February 2005, our Board adopted the 2005 Equity Incentive Plan which was approved by stockholders on September 23, 2005. This plan authorized the granting of up to 750,000 non-qualified 10 year stock options to Officers, Directors and consultants. In August 2006, the Board adopted the Amended 2005 Equity Incentive Plan which was approved by stockholders on September 22, 2006. This amended plan increased the number of non-qualified 10 year stock options that were authorized to be issued to Officers, Directors and consultants to 2,750,000. On August 22, 2008, our stockholders approved a proposal for the increase in the total number of shares of common stock that may be issued pursuant to awards granted under the original 2005 Plan as previously amended. Following the increase, the plan provided for 7,000,000 shares of common stock for awards under the plan. On May 28, 2010, our stockholders approved a proposal for the increase in the total number of shares of common stock that may be issued pursuant to awards granted under the original 2005 Plan as previously amended. Following the increase, the plan provided for 10,000,000 shares of common stock for awards under the plan. The 2005 Equity Incentive Plan as previously amended terminated on May 28, 2015 and no awards were or may be issued under this plan after its termination. On August 25, 2015, our Board adopted and approved the Company’s 2015 Stock and Incentive Plan which was approved by stockholders on September 24, 2015. This plan authorizes the issuance of up to 4,000,000 shares of common stock pursuant to awards granted under the plan to employees, directors, and consultants.
(2)
On October 31, 2014 we completed a one-for-twelve reverse stock split, and proportional adjustments were made to the number of securities to be issued upon exercise of outstanding options, and prices of our outstanding options.
As to the options granted to date, there were no options exercised during the fiscal year ended September 30, 2015.
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
2019.
2018.
2017.
| Years Ended September 30, | |
| 2015 | 2014 |
Audit Fees | $50,720 | $49,619 |
Audit Related Fees | $3,602 | $16,985 |
Tax Fees | $12,019 | $4,275 |
All Other Fees | $0 | $0 |
Total | $66,341 | $70,879 |
| Years Ended September 30, | ||||||
| 2018 | 2017 | |||||
| Audit Fees | $43,053 | $37,037 | ||||
| Audit Related Fees | $0 | $0 | ||||
| Tax Fees | $9,575 | $7,421 | ||||
| All Other Fees | $0 | $0 | ||||
| Total | $52,628 | $44,458 | ||||
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| · | Equity compensation remains a key component of a competitive compensation package of our industry and we believe it effectively rewards employees for the success of our Company over time. |
| · | The 2015 Stock and Incentive Plan contained multiple provisions which were not in compliance with the rules and regulations of the TSX Venture Exchange since the Company voluntarily de-listed from the NYSE American Exchange, and the TSX Venture Exchange required a number of the changes between the 2015 Stock and Incentive Plan and the 2018 Incentive Plan. |
| · | The 2015 Stock and Incentive Plan will no longer be utilized by the Company and new stock options and equity incentives would no longer be granted under its terms. |
| · | The 2018 Incentive Plan would enable us in addition to granting stock options, the flexibility to grant other forms of equity incentives, such as restricted stock, restricted stock units and other stock-based awards. |
| · | The Compensation Committee is designated as the body responsible for the administration of the 2018 Incentive Plan and generally has broad authority to determine the recipients of awards and the terms and conditions of such awards. |
| · | Approval of [●] Timberline Shares minus the Timberline Shares issuable under outstanding options and awards under the 2015 Stock and Incentive Plan. |
| · | stock options, including both incentive stock options ("ISOs") and non-qualified stock options (together with ISOs, "options"); |
| · | stock appreciation rights; |
| · | restricted stock; |
| · | restricted stock units; |
| · | performance awards; |
| · | dividend equivalents; and |
| · | other stock-based awards. |
| · | termination of any Award, whether vested or not, in exchange for an amount of cash and/or other property equal to the amount that would have been received upon exercise of the Award or the realization of the participant's rights under the Award. Awards may be terminated without payment if the Compensation Committee or Board determines that no amount is realizable under the Award as of the time of the transaction; |
| · | replacement of any Award with other rights or property selected by the Compensation Committee or the Board; |
| · | the assumption of any Award by the successor entity (or its parent or subsidiary) or the arrangement for the substitution for similar Awards covering the stock of such successor entity; |
| · | acceleration of the exercisability or vesting of any Award, notwithstanding the language in the participant's award agreement; or |
| · | require that the Award cannot vest, be exercised or become payable until after a future date, which may be the effective date of the corporate transaction. |
| SUMMARY COMPENSATION TABLE | ||||||
| Name and principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Option Awards(9) ($) | All Other Compensation ($) | Total ($) |
Steven Osterberg, President, Chief Executive Officer(1) | 2018 | 156,250 | - | 60,000(4) | 11,538(5) | 227,788 |
| 2017 | 131,250 | 0 | - | 17,885(5) | 149,135 | |
Ted Sharp, Chief Financial Officer(2) | 2018 | - | - | - | - | - |
| 2017 | - | - | - | - | - | |
Randal Hardy, Former Chief Financial Officer(3) | 2018 | 160,288 | - | 60,000(6) | 16,154(7) | 236,442 |
| 2017 | 93,750 | 0 | - | 61,795(8) | 155,545 | |
(1) Mr. Osterberg was appointed President & Chief Executive Officer on January 19, 2016. (2) Mr. Hardy resigned on August 27, 2018 (3) Mr. Sharp was appointed Chief Financial Officer of September 10, 2018 (4) 500,000 stock option awards, with an exercise price of $0.17 per share. The option awards vested immediately. (5) Payment for earned but unused vacation time (6) 500,000 stock option awards, with an exercise price of $0.17 per share. The option awards vested immediately. (7) Payment for earned but unused vacation time (8) Payment for earned but unused vacation time, and consulting fees paid to Mr. Hardy while serving as a consultant to the Company. (9) Stock Option awards are valued using the Black-Scholes method in accordance with FASB ASC Topic 718. These amounts reflect the Company's accounting expense for these awards, and do not correspond to the actual value that may be recognized by the named executive officers. The assumptions underlying the valuation of the Company's 2017 stock option awards, were as follows: Stock price on date of grant: $0.33; expected volatility: 128.2%; expected dividends: 0; expected term (in years): 3; risk free rate: 1.68%; expected forfeiture rate: 0%. The assumptions underlying the valuation of the Company's 2018 stock option awards, were as follows: Stock price on date of grant: $0.17; expected volatility: 121.6%; expected dividends: 0; expected term (in years): 3; risk free rate: 2.33%; expected forfeiture rate: 0%. | ||||||
2007, due to Mr. Hardy's continual role with the Company as a former employee and consultant. During the term of his employment, Mr. Hardy will serve as Chief Financial Officer and Corporate Secretary of the Company. Mr. Hardy will receive an annual salary of $150,000, accrue six weeks of paid vacation annually, and, in accordance with normal practices of the Company, be eligible to participate in the Company's health and group life insurance plans, retirement plans, stock option and incentive plans, incentive and performance award programs, performance bonuses, salary increases, etc. at the discretion of the Company's management and Board of Directors.
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Option Exercise Price ($) | Option Expiration Date |
| Steven Osterberg | 40,000 250,000 500,000 | $0.48 $0.40 $0.17 | 12/17/2019 7/6/2021 2/2/23 |
Randal Hardy (Former Chief Financial Officer) | 50,000 50,000 500,000 | $0.48 $0.40 $0.17 | 12/17/2019 7/6/2021 2/2/23 |
| Ted Sharp | - | - | - |
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Compensation Earnings ($) | All Other Compensation ($) | Total ($) |
| Leigh Freeman | 0 | 0 | 24,000(1) | 0 | 0 | 0 | 24,000 |
| Paul Dircksen | 0 | 0 | 24,000(2) | 0 | 0 | 0 | 24,000 |
| Donald McDowell | 0 | 0 | 8,000(3) | 0 | 0 | 0 | 8,000 |
| Dave Mathewson | 0 | 0 | 8,000(4) | 0 | 0 | 0 | 8,000 |
| Steven Gilbertson | 0 | 0 | 8,000(5) | 0 | 0 | 0 | 8,000 |
(1) 200,000 stock option awards, with an exercise price of $0.17 per share. The option awards vested immediately. (2) 200,000 stock option awards, with an exercise price of $0.17 per share. The option awards vested immediately. (3) 100,000 stock option awards, with an exercise price of $0.10 per share. The option awards vested immediately. (4) 100,000 stock option awards, with an exercise price of $0.10 per share. The option awards vested immediately. (5) 100,000 stock option awards, with an exercise price of $0.10 per share. The option awards vested immediately. . | |||||||
Number of securities to be issued upon exercise of outstanding options, warrants, and rights (a) | Weighted-average exercise price of outstanding options, warrants, and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |
| Equity compensation plans approved by security holders(1) | 3,280,000(1) | $0.26 | 125,000 |
| Equity compensation plans not approved by security holders | Not Applicable | Not Applicable | Not Applicable |
| TOTAL | 3,280,000(1) | $0.26 | 125,000 |
EFFECT NAME CHANGE
By Order of the Board of Directors, | |
/s/ Steven Osterberg | |
Steven Osterberg | |
Chief Executive Officer |
August 12, 2016
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ANNUAL AND SPECIAL MEETING
TIMBERLINE RESOURCES CORPORATION
The undersigned appointsSteven Osterberg, Chief Executive Officer of Timberline Resources Corporation with full power of substitution, the attorney and proxy of the undersigned, to attend the annual and special meeting of shareholders of Timberline Resources Corporation, to be held September 29, 2016 beginning at 10:00 A.M., Pacific Daylight Time, at 101 East Lakeside Avenue, Coeur d’Alene, Idaho 83814, and at any adjournment thereof, and to vote the stock the undersigned would be entitled to vote if personally present, on all matters set forth in the proxy statement sent to stockholders, a copy of which has been received by the undersigned, as follows:
PROXY]
PROXY SOLICITED BY THE BOARD OF DIRECTORS
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
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OUR RECORDS STATE THAT YOUR NAME AND SHAREHOLDINGS ARE AS FOLLOWS:
[PASTE LABEL HERE]
PLEASE SIGN YOUR PROXY BELOW (JOINT HOLDERS MUST BOTH SIGN):
Signature of Stockholder: _____________________________________________________________________ Date: ________
Print Name: ________________________________________________________________________________
Title: _____________________________________________________________________________________
Signature of Stockholder: _____________________________________________________________________ Date: ________
Print Name: ________________________________________________________________________________
Title: ___________________________________________________________________________
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
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