UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934


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TIMBERLINE RESOURCES CORPORATION

(Exact Name of Registrant as Specified in its Charter)

(Name of Person(a) Filing Proxy Statement, if other than the Registrant)


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TIMBERLINE RESOURCES CORPORATION
101 East Lakeside Avenue
Coeur d’Alene,d'Alene, Idaho 83814

Notice of AnnualSpecial Meeting of Stockholders
September 25, 2017

November 29, 2018

To all Stockholders of Timberline Resources Corporation:

You are invited to attend the AnnualSpecial Meeting (the “"Meeting”") of Stockholders (“("Stockholders”") of Timberline Resources Corporation (the “"Company”" or “"Timberline”").  The Meeting will be held at 10:00 a.m. local time on September 25, 2017November 29, 2018 at Timberline’sTimberline's corporate office, 101 East Lakeside Avenue, Coeur d’Alene,d'Alene, Idaho, 83814.  The purposes of the Meeting are:

1.

To elect the nominees to Timberline’s board of directors (the “Board”) to serve until Timberline’s 2018 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, 2017;

3.

To conduct an advisory vote on executive compensation;

4.

To conduct an advisory vote to determine the frequency of conducting future advisory votes on executive compensation; and

5.

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.
The Board has fixed July 31, 2017October 3, 2018 as the record date for the Meeting.  Only Stockholders of record at the close of business on that date will be entitled to notice of, and to vote at, the Meeting.  A list of Stockholders as of July 31, 2017,October 3, 2018, will be available at the Meeting for inspection by any Stockholder.  Stockholders will need to register at the Meeting to attend the Meeting.  If your shares of Timberline common stock (“("Timberline Shares”") are not registered in your name, you will need to bring proof of your ownership of those Timberline Shares to the meeting in order to register to attend and vote.  You should ask the broker, bank or other institution that holds your Timberline Shares to provide you with proper proxy documentation that shows your ownership of Timberline Shares as of July 31, 2017October 3, 2018 and your right to vote such Timberline Shares at the Meeting.  Please bring that documentation to the Meeting.

IMPORTANT

Whether or not you expect to attend the Meeting, please sign and return the enclosed proxy promptly.  If you decide to attend the meeting, you may, if you wish, revoke the proxy and vote your Timberline Shares in person.

By Order of the Board of Directors

/s/ Steven Osterberg

Steven Osterberg, Chief Executive Officer

Dated: August 10, 2017

October 19, 2018



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TIMBERLINE RESOURCES CORPORATION
101 East Lakeside Avenue
Coeur d’Alene,d'Alene, Idaho 83814

Proxy Statement
for
AnnualSpecial Meeting of Stockholders

To Be Held September 25, 2017,November 29, 2018, 10:00 A.M. Local Time

Timberline Resources Corporate Office

101 East Lakeside Avenue, Coeur d’Alene,d'Alene, Idaho 83814


Unless the context requires otherwise, references in this Proxy Statement to “"Timberline Resources,” “" "Timberline,” “" "we,” “" "us,” “" "Company”" or “"our”" refers to Timberline Resources Corporation.

The AnnualSpecial Meeting (the “"Meeting”") of Stockholders of Timberline Resources (the “"Stockholders”" or “"stockholders”") will be held on September 25, 2017,November 29, 2018, at Timberline’sTimberline's corporate office, 101 East Lakeside Avenue, Coeur d’Alene,d'Alene, Idaho, 83814, at 10:00 a.m. local time.  The purposes of the Meeting are:

1.

To elect the following nominees to Timberline’s board of directors (the “Board”) to serve until Timberline’s 2018 annual meeting of Stockholders or until successors are duly elected and qualified: Steven Osterberg, Leigh Freeman, Paul Dircksen, Giulio Bonifacio, and Paul Zink;

2.

To ratify the appointment of DeCoria, Maichel & Teague P.S. as Timberline’s independent registered public accounting firm for the fiscal year ended September 30, 2017;

3.

To conduct an advisory vote on executive compensation;

4.

To conduct an advisory vote to determine the frequency of conducting future advisory votes on executive compensation; and

5.

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.
We are providing the enclosed proxy materials and form of proxy in connection with the solicitation by the Board of Directors of proxies for the Meeting.  Timberline anticipates that this Proxy Statement and the form of proxy, attached to this Proxy Statement asAppendix A, will first be made available to holders of shares of the Timberline common stock (“("Timberline Shares”") on or before August 15, 2017.

October 19, 2018.

You are invited to attend the Meeting at the above stated time and location.  If you plan to attend and your Timberline Shares are held in “street name”"street name" – in an account with a bank, broker, or other nominee – you must obtain a proxy issued in your name from such broker, bank or other nominee.

You can vote your Timberline Shares by completing a proxy card online, completing and returning a proxy card provided to you by mail or e-mail or, if you hold shares in “street"street name,”" by completing the voting form provided by the broker, bank or other nominee.

nominee.

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The Timberline Shares are the only type of security entitled to vote at the Meeting.  Our corporate bylaws define a quorum as the presence in person or by proxy of one-third of the issued and outstanding Timberline Shares.  The approval of a majority of the votes actually cast for each matter at the Meeting, whether in person or by proxy, is required to ratify the appointment of Timberline’sTimberline's independent registered public accounting firm.  firm, approve the adoption of the 2018 Incentive Plan, and approve the AEGI Stock Purchase. The approval on an advisory, non-binding basis, of the Stockholders resolution regarding the compensation of Timberline’s named



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executive officers as described in this Proxy Statement will be approved if passed by an affirmative vote of a simple majority of the votes cast, either in person or by proxy, at the Meeting.  The option of three years, two years or one year that receives the highest number of votes cast by Stockholders will be the frequency for the advisory vote on the compensation of our named executive officers that has been selected by Stockholders. With respect to the election of directors, a plurality of the votes castissued and outstanding Timberline Shares is required to elect a nominee.

approve the Name Change.


Proxy Solicitation

The proxy solicitation is being made primarily over the internet and by mail, although proxies may be solicited by personal interview, telephone, internet, letter, e-mail or otherwise. Certain of our directors, officers and other employees, without additional compensation, may participate in the solicitation of proxies. We will pay the cost of this solicitation, including the reasonable charges and expenses of brokerage firms and others who forward solicitation materials to beneficial owners of Timberline Shares.


Important Notice Regarding the Availability of Proxy Materials for the Special Shareholder Meeting to Be Held at  101 East Lakeside Avenue, Coeur d’Alene,d'Alene, Idaho, 83814 on September 25, 2017

November 29, 2018


Under rules adopted by the United States Securities and Exchange Commission (the “"SEC”"), we are now furnishing proxy materials on the Internet pursuant to so-called “notice"notice and access rules.”" Instructions on how to access and review the proxy materials, which include this Proxy Statement our Annual Report to Stockholders (2016 Form 10-K) and the accompanying form of proxy, on the Internet can be found on the notice of access card sent to shareholders by the Company or in the voting instructions form you receive from your intermediary. These materials can also be accessed on the Internet at www.timberlineresources.co/meetings/. Directions for attending the Annual Meeting can also be found at this website.

The Company will provide to any Stockholders, upon request, one copy of any of the following documents:

(a)

the Company’s Annual Report to Stockholders, 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.
Copies of the foregoing documents are also available on the Corporation’sCorporation's website atwww.timberlineresources.co/meetings/and copies of the above documents will be provided by the Corporate Secretary, upon request, by mail at 101 East Lakeside Avenue, Coeur d’Alene,d'Alene, Idaho, 83814; by phone at (208) 664-4859; or by email at proxy@timberline-resources.com, free of charge to Stockholders of the Corporation.Company.  The Company may require the payment of a reasonable charge from any person or corporation who is not a Stockholder of the Company and who requests a copy of any such document.

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TABLE OF CONTENTS

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



INFORMATION CONTAINED IN THIS PROXY STATEMENT

5

QUESTIONS AND ANSWERS ABOUT PROXY MATERIALS AND VOTING

6

PROPOSAL 1 — ELECTION OF DIRECTORS

11

INFORMATION ON THE BOARD OF DIRECTORS, EXECUTIVE OFFICERS, AND KEY EMPLOYEES

12

CORPORATE GOVERNANCE

15

EXECUTIVE COMPENSATION

20

OTHER GOVERNANCE MATTERS

27

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND

RELATED STOCKHOLDER MATTERS

28

PROPOSAL 2 — RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

33

PROPOSAL 3 — ADVISORY VOTE REGARDING EXECUTIVE COMPENSATION

35

PROPOSAL 4 — ADVISORY VOTE ON EXECUTIVE COMPENSATION FREQUENCY PROPOSAL

36

OTHER MATTERS

38

APPENDICES

38





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INFORMATION CONTAINED IN THIS PROXY STATEMENT

The information contained in this Proxy Statement, unless otherwise indicated, is given as of July 31, 2017.  

October 5, 2018.


No person has been authorized to give any information or to make any representation in connection with the matters being considered herein on behalf of Timberline other than those contained in this Proxy Statement and, if given or made, such information or representation should not be considered or relied upon as having been authorized.  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.




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QUESTIONS AND ANSWERS ABOUT PROXY MATERIALS AND VOTING

Why am I receiving this Proxy Statement and proxy card?

You are receiving this Proxy Statement and proxy card because you were a Stockholder of record at the close of business on July 31, 2017October 3, 2018 and are entitled to vote at the Meeting.  This Proxy Statement describes issues on which Timberline would like you, as a Stockholder, to vote.  It provides information on these issues so that you can make an informed decision.  You do not need to attend the Meeting to vote your Timberline Shares.

When you sign the proxy card you appoint Steven Osterberg, President and Chief Executive Officer toof Timberline, and Randal Hardy,Ted Sharp, Chief Financial Officer of Timberline, as your representatives at the Meeting.  As your representatives, they will vote your Timberline Shares at the Meeting (or any adjournments or postponements) as you have instructed on your proxy card.  With proxy voting, your Timberline Shares will be voted whether or not you attend the Meeting.  Even if you plan to attend the Meeting, it is a good idea to complete, sign and return your proxy card in advance of the Meeting, just in case your plans change.

If an issue properly comes up for vote at the Meeting (or any adjournments or postponements) that is not described in this Proxy Statement, your representative will vote your Timberline Shares, under your proxy, at their discretion, subject to any limitations imposed by law.

When is the record date?

The Board has fixed July 31, 2017October 3, 2018 as the record date for the Meeting.  Only holders of Timberline Shares as of the close of business on that date will be entitled to vote at the Meeting.

How many Timberline Shares are outstanding?

As of July 31, 2017,October 5, 2018, Timberline had 33,146,95253,527,819 Timberline Shares issued and outstanding.

What am I voting on?

You are being asked to vote on the following:

1.

To elect the following nominees to Timberline’s board of directors (the “Board”) to serve until Timberline’s 2018 annual meeting of Stockholders or until successors are duly elected and qualified: Steven Osterberg, Leigh Freeman, Paul Dircksen, Giulio Bonifacio, and Paul Zink;

2.

To ratify the appointment of DeCoria, Maichel & Teague P.S. as Timberline’s independent registered public accounting firm for the fiscal year ended September 30, 2017;

3.

To conduct an advisory vote on executive compensation;

4.

To conduct an advisory vote to determine the frequency of conducting future advisory votes on executive compensation; and

5.

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.
How many votes do I get?

Each Timberline Share is entitled to one vote.  Dissenters’Dissenters' rights are not applicable to any of the matters being voted upon.

The Board recommends a voteFOReach of the nominees to the Board,FOR the ratification of the appointment of our independent registered public accounting firm,FORthe approval on a non-binding, advisory basis of the executive compensation described in this Proxy Statement,2018 Incentive Plan, FOR the approval of the AGEI Stock Purchase andFOR 3 years as the non-binding, advisory recommendation onapproval of the frequency of conducting future advisory votes on executive compensation.



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name change.

How do I vote?

You have several voting options. You may vote by:

–

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.

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–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.
If your Timberline Shares are held in an account with a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of Timberline Shares held in a “street name”"street name" and these proxy materials are being forwarded to you by that organization.  The organization holding your account is considered the stockholder of record for purposes of voting at the Meeting.  As a beneficial owner, you have the right to direct your broker, bank or other nominee on how to vote the Timberline Shares in your account.  You are also invited to attend the Meeting.  However, since you are not the stockholder of record, you may not vote your Timberline Shares in person at the Meeting unless you request and obtain a valid proxy card from your broker, bank, or other nominee.

Can Stockholders vote in person at the Meeting?

Timberline will pass out written ballots to anyone who wants to vote at the Meeting.  If you hold your Timberline Shares through a brokerage account but do not have a physical share certificate, or the Timberline Shares are registered in someone else’selse's name, you must request a legal proxy from your stockbroker or the registered owner to vote at the Meeting.

What if I want a paper copy of these proxy materials?

Please send a written request to our offices at the address below, email us at proxy@timberline-resources.com or call us toll free at (866) 513-4859 to request a copy of the proxy materials.

Send requests to:

Timberline Resources Corporation

101 East Lakeside Avenue

Coeur d’Alene,d'Alene, Idaho 83814


Attention:  Randal HardySteven Osterberg
Secretary

Chief Executive Officer

What if I change my mind after I return my proxy?

You may revoke your proxy and change your vote at any time before the polls close at the Meeting.  You may do this by:

–

Signing another proxy with a later date and mailing it to the attention of: Randal Hardy, Secretary, 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 24, 2017;

–

Delivering a written notice of the revocation of your proxy to the attention of: Randal Hardy, Secretary, 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 24, 2017; or

–

Voting in person at the Meeting.



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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 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.
Beneficial stockholders should refer to the instructions received from their stockbroker or the registered holder of the Timberline Shares if they wish to change their vote.

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How many votes do you need to hold the Meeting?

To conduct the Meeting, Timberline must have a quorum, which means one-third of the outstanding voting shares of Timberline as of the record date must be present at the Meeting.  Timberline Shares are the only type of security entitled to vote at the Meeting.  Based on 33,146,95253,527,819 voting shares outstanding as of the record date of July 31, 2017, 11,048,984October 3, 2018, 17,842,607 Timberline Shares must be present at the Meeting, in person or by proxy, for there to be a quorum.  Your Timberline Shares will be counted as present at the Meeting if you:

–

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.
What if I abstain from voting?

Abstentions with respect to a proposal are counted for the purposes of establishing a quorum. Timberline’sTimberline's bylaws state that abstentions are not considered as votes cast for or against a proposal or as a vote withheld for any director nominee.

What effect does a broker non-vote have?

Brokers and other intermediaries, holding Timberline Shares in street name for their customers, are generally required to vote the Timberline Shares in the manner directed by their customers. If their customers do not give any direction, brokers may vote the Timberline Shares on routine matters but not on non-routine matters.  The election of directors to the Board is a non-routine matter.  Consequently, if customers do not give any direction, brokers will not be permitted to vote such Timberline Shares at the Meeting in relation to this matter. The ratification of the appointment of Timberline’sTimberline's independent registered public accounting firm for the fiscal year of 20172019 is considered a routine matter and brokers will be permitted to vote shares held in street name for their customers.

The absence of a vote on a non-routine matter is referred to as a broker non-vote.  Any Timberline Shares represented at the Meeting but not voted (whether by abstention, broker non-vote or otherwise) are not considered votes cast for or against a proposal or as a vote withheld for any director nominee and will not affect the outcome of any proposal.

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.

How many votes are needed to ratify the appointment of the independent registered public accountant?

The ratification of the appointment of the independent registered public accountant will be approved if a majority of the votes cast, either in person or by proxy, at the Meeting on this proposal voteFOR the proposal.  A properly executed proxy card markedABSTAIN will not count as a vote cast for or againstthisagainst this proposal.

How many votes are needed to approve on an advisory, non-binding basis, the executive compensation described in this Proxy Statement?

The approval, on an advisory, non-binding basis,adoption of the Stockholders resolution regarding2018 Incentive Plan?

The adoption of the compensation of Timberline’s named executive officers as described in this Proxy Statement2018 Incentive Plan will be approved if a majority of the votes cast, either in person or by proxy, at the Meeting on this proposal voteFORthe proposal.  A properly executed proxy card markedABSTAIN will not count as a vote cast for or againstthisagainst this proposal.




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How many votes are needed approve the AGEI Stock Purchase?
The AGEI Stock Purchase will the non-binding, advisory recommendationbe approved if a majority of the Stockholders on the frequency of conducting advisory votes on executive compensation be determined?

The option of three years, two years or one year that receives the highest number of votes cast, either in person or by Stockholders will beproxy, at the frequency forMeeting on this proposal vote FOR the advisory vote on the compensation of our named executive officers that has been selected by Stockholders.Aproposal.  A properly executed proxy card markedABSTAIN will not count as a vote cast onthisfor or against this proposal.

How many votes are needed approve the Name Change?
The Name Change will be approved if a majority of the issued and outstanding Timberline Shares vote FOR the proposal.  A properly executed proxy card marked ABSTAIN will count the same as a vote AGAINST this proposal.
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Will my Timberline Shares be voted if I do not sign and return my Proxy Card?

If your Timberline Shares are held through a brokerage account, your brokerage firm, under certain circumstances, may vote your shares; otherwise your Timberline Shares will not be voted at the meeting.  See “What"What effect does a broker non-vote have?”" above for a discussion of the matters on which your brokerage firm may vote your Timberline Shares.

If your Timberline Shares are registered in your name, and you do not complete your proxy card over the internet or sign and return your proxy card, your Timberline Shares will not be voted at the Meeting unless you attend the Meeting and vote your Timberline Shares in person.

Where can I find the voting results of the Meeting?

Timberline will publish the final results in a Current Report on Form 8-K with the SEC within four (4) business days of the Meeting.

Who will pay for the costs of soliciting proxies?

Timberline will bear the cost of soliciting proxies.  In an effort to have as large a representation at the meeting as possible, Timberline’sTimberline's directors, officers and employees may solicit proxies by telephone or in person in certain 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.

When are stockholder proposals due for the 20182019 annual meeting of Stockholders?

In order to be considered for inclusion in next year’sthe proxy statement for the 2019 annual meeting of stockholders, stockholder proposals must be submitted in writing to Timberline’s Secretary, Randal Hardy,Timberline's Chief Executive Officer, Steven Osterberg, at Timberline Resources Corporation, 101 East Lakeside Avenue, Coeur d’Alene,d'Alene, Idaho 83814, and83814.  Since the Company did not hold an annual meeting in fiscal year 2018, shareholder proposals must be received no later than May 28, 2018, provided that thisa reasonable time before the Company mails its proxies for the 2019 annual meeting of shareholders.  Since the Company has not selected a date may be changedfor the 2019 annual meeting of shareholders, it is not currently known what date will constitute a reasonable time before the Company mails its proxies.  The Company anticipates filing a Form 8-K or disclosing in its quarterly reports on Form 10-Q the event thatdeadline for shareholder proposals, including nominations to the Company's Board once the date of the 2019 annual meeting of stockholders to be held in calendar year 2018 is changed by more than 30 days from the date of the annual meeting of stockholders to be held in calendar year 2017.determined.  Such proposals must also comply with the requirements as to form and substance established by the SEC if such proposals are to be included in our proxy statement and form of proxy.

Similarly, since the Company did not hold an annual meeting in fiscal year 2018, stockholder proposals not submitted for inclusion in the proxy statement and received after August 10, 2018 will be considered untimely pursuant to Rule 14a-5(e)(2) of the U.S. Exchange Act provided that this date may be changedif not received a reasonable time before the Company mails its proxy materials for the 2019 annual meeting. The Company anticipates filing a Form 8-K or disclosing in its quarterly reports on Form 10-Q the event thatdeadline for shareholder proposals once the date of the 2019 annual meeting of stockholders to be held calendar year 2018 is changed by more than 30 days from the date of the annual meeting of stockholders to be held in calendar year 2017.

determined.

How can I obtain a copy of the 20162017 Annual Report on Form 10-K?

Timberline’s 2016

Timberline's 2017 Annual Report on Form 10-K, including amendments thereto and financial statements, is available on the internet with this Proxy Statement at www.timberlineresources.co/meetings/.The. The Form is also available through the SEC’sSEC's website at http://www.sec.gov.

At the written request of any Stockholder who owns Timberline Shares on the record date, Timberline will provide to such Stockholder, without charge, a paper copy of Timberline’s 2016Timberline's 2017 Annual Report on Form 10-K as filed with the SEC, including the financial statements, but not including exhibits.




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If requested, Timberline will provide copies of the exhibits for a reasonable fee.

Requests for additional paper copies of the 20162017 Annual Report on Form 10-K should be mailed to:


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Timberline Resources Corporation

101 East Lakeside Avenue

Coeur d’Alene,d'Alene, Idaho 83814


Attention: Randal Hardy

Steven Osterberg

Corporate Secretary

Chief Financial Officer

What materials accompany or are attached to this Proxy Statement?

The following materials accompany or are attached to this Proxy Statement:


Annual Report to Stockholders


APPENDIX A

Form of Proxy Card




APPENDIX B2018 Incentive Plan

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PROPOSAL 1 — ELECTION

SECURITY OWNERSHIP OF DIRECTORS

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 five (5), current Board Members for election at the Meeting, to hold office until the 2018 annual meeting:


Leigh Freeman

Steven A. Osterberg

Giulio T. Bonifacio

Paul E. Dircksen

Paul H. Zink

Robert Martinez, who is currently a member of the Board of Directors, has indicated to the Board his desire not to stand for re-election at the Meeting. Therefore, immediately following the Meeting, the size of the Board of Directors will be reduced to five (5) directors. Although the size of the Board will be six (6) directors at the time of Meeting and only five (5) directors have been nominated, Stockholders may not vote their proxies for a greater number of persons than the nominees named above.

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.



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INFORMATION ON THE BOARD OF DIRECTORS, EXECUTIVE OFFICERS,CERTAIN BENEFICIAL OWNERS AND KEY EMPLOYEES

Directors and Executive Officers

MANAGEMENT AND
RELATED STOCKHOLDER MATTERS


The following table sets forth certain information with respect to our current directors and nominees, executive officers and key employees.  The term for each director expires at our next Annual Meeting or until his or her successor is appointed and qualified.  The ages of the directors and officers are shown as of July 31, 2017.

Name

Current Office

Principal Occupation

Director/Officer Since

Age

Steven Osterberg(1)

President & Chief Executive Officer and Director

 President & Chief Executive Officer and Director

February 1, 2012

56

Randal Hardy(2)

Chief Financial Officer, Principal Financial Officer

Chief Financial Officer, Principal Financial Officer

September 8, 2016

56

Leigh Freeman(3)

Director

Principal, Leigh Freeman Consultancy

January 18, 2013

68

Paul Dircksen

Director

Director

September 22, 2006

72

Robert Martinez(3)

Director

Management Consultant

January 22, 2010

71

Giulio Bonifacio(3)

Director

President and CEO, Nevada Copper Corp.

July 6, 2016

56

Paul Zink(3)

Director

Chief Financial Officer, Pure Energy Minerals Ltd.

July 6, 2016

62

(1) Mr. Osterberg was appointed President and Chief Executive Officer on January 19, 2016.

(2) Mr. Hardy was re-appointed Chief Financial Officer on September 8, 2016.

(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:

Leigh Freeman – Chairman of the Board of Directors

Mr. Freeman was appointed to the Board of Directors (the “Board) in January 2013. 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 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 of Mining Engineers.  

For the following reasons the Board concluded that Mr. Freeman should serve as a Director and Chairman of the Board of Directors 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 and management 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 were determined by the Board to be valuable to the Board at the time the Board recommended Mr. Freeman to stand for re-election to the Board at the Company’s last annual meeting, as the Company’s primary assets are exploration stage properties.



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Paul Dircksen – Director

Mr. Dircksen has over 35 years of experience in the mining and exploration industry, serving in executive, managerial, and technical roles at several companies.  He has been a director since January 2005 and was our Vice President of Business Development and Technical Services from January 1, 2015 through December 2016.  Mr. Dircksen was our Vice President of Exploration from May 2006 to January 2012, our Executive Chairman from September 2009 to August 2014.  He was our President and Chief Executive Officer from March 2011 to December 2014.  Working in the United States and internationally, he has a strong technical background, serving as a team member on approximately nine 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.  Mr. Dircksen was the president of Brett Resources from January 2004 to December 2004, and prior to that, from January 2003 to December 2003, he was President of Bravo Venture Group, a junior exploration company.  During 2002, he was self-employed as an independent mineral geologist.  Between 1987 and 2001, Mr. Dircksen was Senior Vice-President of Exploration for Orvana Minerals Corp.  He holds an M.S. in Geology from the Mackay School of Mines at 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 a director.  Further, his training and experience as a geologist allow him to bring technical expertise in regard to mineral exploration to the Company.   These skills were determined by the Board to be valuable to the Board at the time the Board recommended Mr. Dircksen to stand for re-election to the Board at the Company’s last annual meeting, 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 43 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 were determined by the Board to be valuable to the Board at the time the Board recommended Mr. Martinez to stand for re-election to the Board at the Company’s last annual meeting as the Company’s primary assets are exploration stage properties.

Giulio Bonifacio – Director

Mr. Giulio T. Bonifacio has over 30 years in senior executive positions in the mining industry including as the founder, President & CEO of Nevada Copper Corp. since 2006 which has advanced the Pumpkin Hollow Copper Project located in Nevada 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 US$425 million in equity and project debt financings for advanced stage development projects.  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



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roles primarily in the precious metal sector with Getty Resources Limited, TOTAL S.A., and Vengold Inc.  Mr. Bonifacio has been a senior or lead director of several publicly traded companies in the mining industry and most recently was with Goldrock Mines Corp. which was acquired in July 2016.


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 technical, financial and management experience in mining and mineral exploration enables him to provide financial, market, and technical insight to the Board.  Further, his training and experience as an accountant and mining executive allow him to bring technical, financial, capital markets and managerial expertise to the Board as a director. These skills were determined by the Board to be valuable to the Board at the time the Board recommended Mr. Bonifacio to be appointed to the Board and to stand for election to the Board at the Company’s next annual meeting, as the Company requires ongoing financing and the Company’s primary assets are exploration stage properties.

Paul Zink – Director

Mr. Zink has over 35 years as a natural resource professional.  At present, he is Chief Financial Officer of Pure Energy Minerals Limited, since June 2017.  He remains principal at Mining Financial Consulting LLC, and was Sr. VP and CFO at Rare Element Resources, Ltd. from December 2013 through March 2016 where he managed the financial, investor relations and business development functions for the company. He previously served as Chief Executive Officer, Chief Investment Officer and Director for Americas Bullion Royalty Corp. from March 2013 to November 2013 and as President of Eurasian Capital from July 2010 to January 2013.  Mr. Zink also served as President and Director of International Royalty Corporation from 2008 until its sale to Royal Gold in 2010.  Over his career in mining, he has also held high level positions with Pegasus Gold, Inc. and Koch Industries. 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. He holds a B.A. in Economics & International Relations from Lehigh University.


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 financial and management experience in mining and mineral exploration enables him to provide financial, market, and management insight to the Board.  Further, his training and experience as a banker, analyst and mining executive allow him to bring financial, capital markets and managerial expertise to the Board as a director. These skills were determined by the Board to be valuable to the Board at the time the Board recommended Mr. Zink to be appointed to the Board and to stand for election to the Board at the Company’s next annual meeting, as the Company requires ongoing financing and the Company’s primary assets are exploration stage properties.

Steven Osterberg – President, Chief Executive Officer and Director

Dr. Osterberg was appointed as our President and Chief Executive Officer and a Director effective January 19, 2016, and prior to that was our Vice-President, Exploration since February 1, 2012.  Previously, 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.  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 of Mining and Metallurgy (SME). Mr. Osterberg is employed on a full-time basis with Timberline Resources.

For the following reasons the Board concluded that Mr. Osterberg should serve as a Director of the Company, in light of its business and structure. Mr. Osterberg has extensive knowledge of the Company’s properties having served and continuing to serve as the Company’s Vice-President, Exploration.  Further, Mr. 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 Mr. Osterberg to the Board as the Company’s primary assets are exploration stage properties.




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Randal Hardy – Chief Financial Officer

Mr. Hardy was re-appointed as our Chief Financial Officer on September 8, 2016.  From January 2016 through September 8, 2016, Mr. Hardy served as a consultant to the Company performing accounting and other duties for the Company and assisting Mr. Osterberg who was serving as the Company’s principal financial officer.  Mr. Hardy served as Chief Financial Officer from March 2011 through January 2016 and previously served as the Company’s Chief Executive Officer, Chief Financial Officer and as a Director beginning in August 2007 through March 2011, when Paul Dircksen was appointed Chief Executive Officer, and Mr. Hardy continued as the Chief Financial Officer and a Director of the Company.  He was a Director until August 2014.  Prior to his appointment by us, since September 2006, Mr. Hardy was the President of HuntMountain Resources, a publicly held U.S.-based junior exploration company.  Prior to that, from August 2005, he was HuntMountain’s Chief Financial Officer.  Previously, from 1997 to 2005, he held positions as President and CEO of Sunshine Minting, Inc. a privately held, precious metal custom minting and manufacturing firm.  Prior to his tenure at Sunshine Minting, Inc., Mr. Hardy has served as Treasurer of the NYSE-listed Sunshine Mining and Refining Company.  Mr. Hardy has a Business Administration degree from Boise State University and has attained certifications as a Certified Management Accountant and a Certified Cash Manager.  Mr. Hardy currently serves as a director of Rae-Wallace Mining Company and is employed on a full-time basis with Timberline Resources.

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.  

Other Directorships

None of the Directors of the Company are also directors of issuers with a class of securities registered under Section 12 of the Exchange Act (or which otherwise are required to file periodic reports under the Exchange Act).


Legal Proceedings

Other than as noted below, we are not aware of any of our 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.

One of our directors, Paul Zink, was a director of Atna Resources Ltd. (“Atna”) from April 2011 until May 2016.  Atna and subsidiaries filed a petition for bankruptcy in the U.S. Bankruptcy Court in Colorado in October 2015 and filed an associated action in Canada.  Mr. Zink is no longer a director of Atna, and Atna was liquidated in the bankruptcy.

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 July 31, 2017, including four independent directors, as follows:

Giulio Bonifacio

Paul Zink



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Robert Martinez

Leigh Freeman

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 at the Meetings

During the fiscal year ending September 30, 2016, the Board held fourteen (14) 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 Financial Officer, Randal Hardy, at Timberline Resources Corporation, 101 East Lakeside Avenue, Coeur d’Alene, Idaho 83814.  Our Chief Financial 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 Financial Officer will review all communications before forwarding them to the appropriate Board member.

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 three (3) directors each of whom, in the opinion of the Board, are 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): Paul Zink (Chairman), Leigh Freeman and Giulio Bonifacio.  Paul Zink 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, 2016, the Audit Committee met four (4) times. A copy of the Audit Committee charter is available on our website at www.timberline-resources.com.  



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Audit Committee Report

Our Audit Committee oversees our financial reporting process on behalf of the Board.  The Audit Committee has three (3) members, each of whom 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 2016 financial statements, the Committee reviewed the 2016 audited financial statements, which appear in the 2016 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 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, 2016. 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 2017.

USubmitted by the Audit Committee Members

Paul Zink (Chairman)

Leigh Freeman

Giulio Bonifacio

Compensation Committee

We have a Compensation Committee composed of three (3) directors, all of whom, in the opinion of our Board of Directors, are independent (under Section 803A of the NYSE-MKT Company Guide): Leigh Freeman, Giulio Bonifacio, and Paul Zink.

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 proposes 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.  



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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 2016.

During the fiscal year ended September 30, 2016, 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 composed of three (3) directors, two of whom, in the opinion of our Board of Directors, are independent (under Section 803A of the NYSE-MKT Company Guide): Robert Martinez (independent), Leigh Freeman (independent), and Paul Dircksen.  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.  Mr. Dircksen retired effective December 31, 2015.  Our Board of Directors concluded that it was in the best interest of our shareholders for Mr. Dircksen to serve on the Corporate Governance and Nominating Committee, despite not being considered independent, due to his extensive executive management experience and his extensive relationships with industry leaders which enable him to provide valuable input to the committee.  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 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, 2016, 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.  



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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:

•

The Board acts efficiently and effectively under its current structure.

•

A structure of a separate Chief Executive Officer and Chairman of the Board allows the Board to provide independent oversight and guidance on the major issues facing the Company on a long-term basis, while having a dedicated executive officer that oversees the day-to-day operations and implementation of the long-term vision of the Company;

•

This structure allows us to best utilize our limited resources by enabling the skill sets and expertise of our independent directors, and in particular, our Chairman, to the greatest extent and puts us in the best position to identify key risks and developments facing us to be brought to the Board’s attention;

•

Companies within our peer group utilize similar Board structures.

The Board of Director’s 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 Paul Zink (Chairman), Leigh Freeman and Giulio Bonifacio, each 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.

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.




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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, 2016 of those persons who were, at September 30, 2016 (i) the chief executive officer (Steven Osterberg) (ii) the chief financial officer (Randal Hardy) and (iii) any other highly compensated executive officers of the Company, whose annual base salary and bonus compensation was in excess of $100,000:

 

 

 

 

 

 

 

SUMMARY COMPENSATION TABLE

Name and principal Position

Fiscal

Year

Salary

($)

Bonus

($)


Stock Unit and

Stock Option

Awards(17)

($)

All Other

Compensation

($)

Total

($)

Steven Osterberg, President, Chief Executive Officer(1)

2016

150,000

0

75,000(2)

17,308(3)

242,308

 

2015

173,958

0

12,000(4)

0

185,958

Randal Hardy, Chief Financial Officer(5)

2016

59,680

0

191,500(6)

154,405(7)

405,585

 

2015

214,771

0

15,000(8)

0

229,771

Paul Dircksen, Past Vice—President, Business Development and Technical Services(9)

2016

21,438

0

235,000(10)

0

256,438

 

2015

116,375

0

13,500(11)

0

129,875

Kiran Patankar, Past President and Chief Executive Officer(12)

2016

76,731

0

14,466(13)

6,923(14)

98,120

 

2015

159,375

50,000

16,411(15)

69,000(16)

294,786

 

 

 

 

 

 

 


(1) Mr. Osterberg was appointed President & Chief Executive Officer on January 19, 2016.

(2) 250,000 stock option awards, with an exercise price of $0.40 per share.  The option awards vested immediately.

(3) Payment for earned but unused vacation time.

(4) 40,000 stock option awards, with an exercise price of $0.48 per share.  The option awards vested immediately.

(5) Mr. Hardy was Chief Financial Officer until his resignation on January 20, 2016.  He continued to serve as a consultant to the Company and was re-appointed as Chief Financial Officer on September 8, 2016.

(6) 50,000 stock option awards, with an exercise price of $0.40 per share, 325,000 stock unit awards valued at $0.50 per share, and 100,000 stock unit awards valued at $0.14 per share.  The awards vested immediately.

(7) Payment for earned but unused vacation time, and consulting fees paid to Mr. Hardy while serving as a consultant to the Company.

(8) 50,000 stock option awards, with an exercise price of $0.48 per share.  The option awards vested immediately.

(9) 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.  Mr. Dircksen retired effective December 31, 2015.

(10) 200,000 stock option awards, with an exercise price of $0.40 per share and 350,000 stock unit awards valued at $0.50 per share.  The awards vested immediately.

(11) 45,000 stock option awards, with an exercise price of $0.48 per share.  The option awards vested immediately.

(12) Mr. Patankar was President & Chief Executive Officer from January 1, 2015 until January 19, 2016.

(13) 43,837 stock option awards, with an exercise price of $0.50 per share.  The option awards vested immediately.

(14) Payment for earned but unused vacation time.

(15) 34,189 stock option awards, with an exercise price of $0.74 per share.  The option awards vested immediately.

(16) Stock grant 100,000 common stock shares valued at $0.69.

(17) Stock Option awards are valued using the Black-Scholes method in accordance with FASB ASC Topic 718 and stock unit awards are valued at the market price of the stock on the date of grant.  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-based awards, please refer to Note 14 of the Company’s consolidated financial statements included in its Annual Report on Form 10-K filed on December 20, 2016.






16


Executive Compensation Agreements

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 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 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, 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,ownership 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.


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.


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.




17


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 Arrangements and Agreement

On January 6, 2017, Timberline Resources Corporation (the “Company”) entered into an employment offer letter (the “Offer Letter”) with Mr. Hardy, effective December 16, 2016, regarding the terms and compensation of Mr. Hardy’s employment as Chief Financial Officer of the Company.  Pursuant to the terms of the Offer Letter, Mr. Hardy became an employee of the Company on December 16, 2016 with a deemed employment start date of August 27, 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,common 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.

by:


Previously, on January 19, 2016, Mr. Hardy resigned as Chief Financial Officer. In connection with Mr. Hardy’s resignation, the Registrant agreed to 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. Additionally, the Company agreed to hire Mr. Hardy as a consultant to the Company to assist in the transition to a new Chief Financial Officer at a rate of $85 per hour.


On September 8, 2016, the Company’s re-appointed Mr. Hardy as Chief Financial Officer of the Company without any amendment in his compensation under the consulting arrangement until January 6, 2017, as described above.


Previously, on September 2, 2015, Randal Hardy, our then Chief Financial Officer who subsequently resigned effective January 19, 2016, entered into a letter agreement regarding Mr. Hardy’s continued employment (the “Hardy Agreement”).  


Pursuant to the terms of 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 detailed Mr. Hardy’s duties pursuant to his employment were 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 was to be compensated with an annual salary of not less than $175,000, less required and authorized deductions and



18


withholdings, payable in semi-monthly payments consistent with the Company’s normal payroll practices. The Company would 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 provided for the reimbursement of all reasonable business expenses of Mr. Hardy.


The Hardy Agreement also provided that Mr. Hardy was 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 provided that Mr. Hardy 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 Hardy Agreement provided that Mr. Hardy could 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” was defined in the Hardy Agreement and included:  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” was defined in the Hardy Agreement and included 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 obligations under the Hardy Agreement by any successor or breach of the Hardy Agreement by the Company. The Hardy 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 Registrant (as defined in the Hardy Agreement) or upon termination due to death or permanent disability, the Registrant was required to: (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 was required to: (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 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 Registrant was required on the date of termination to 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 provided that the Registrant was 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 provided for Mr. Hardy to maintain the confidentiality of the Registrant’s confidential information and contained a non-competition provision pursuant to which Mr. Hardy agreed for a one year period



19


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 contained standard provisions regarding notices, amendments, governing law and jurisdiction.  

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.  On January 19, 2016, Mr. Patankar’s employment with Timberline Resources as its President and Chief Executive Officer ended.


Pursuant to the terms of the terms of the Patankar Agreement, Mr. Patankar was a full-time executive employee for an indefinite period of time.  The Patankar Agreement detailed Mr. Patankar’s duties pursuant to his employment are 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 was to 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 which 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, 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 was permitted to carry-over up to six (6) weeks of unused vacation into the next calendar year.


The Patankar Agreement provided that Mr. Patankar’s Agreement 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 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 defined in the Patankar Agreement and included assignment of duties inconsistent with Mr. Patankar’s position, a reduction without written 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, a breach of the Patankar Agreement by the Company, or any other circumstances meeting the definitions of “involuntary separation” in Treasury Regulation Section 1.409A-1(n). 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 was required to: (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 are paid for by another employer, and (c) pay Mr. Patankar the value of his earned but unused vacation days.



20



Upon termination without Cause or resignation for Good Reason not following a Change in Control of the Company, the Company was required to: (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 and unreimbursed business expenses.


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 was required on the date of termination to 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 was to 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.  

Dircksen Employment Agreement

On September 22, 2015, Mr. Paul Dircksen, current director of the Company and the former Vice President Business Development & Technical Services and 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



21


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.

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 each case in the event that such termination or resignation is in relation to a change in control transaction.

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, 2016. No stock appreciation rights were awarded.  


·

Name

Numbereach named executive officer, each director and all of Securities

Underlying Unexercised

Options  (#) Exercisable(1)

Option

Exercise

Price ($)(1)

Option

Expiration

Date

Steven Osterberg

8,334

8,334

40,000

250,000

$6.48

$5.88

$0.48

$0.40

2/1/2017

4/11/2017

12/17/2019

7/6/2021

Randal Hardy


12,500

50,000

50,000


$5.88

$0.48

$0.40


4/11/2017

12/17/2019

7/6/2021

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

 (1)   

Subsequent to September 30, 2014 our board of directors and stockholders approved a one-for-twelve reverse stock split of our common stock.  After the reverse stock split, effective October 31, 2014, each holder of record held one share of common stock for every 12 shares held immediately prior to the effective date.  As a result of the reverse stock split, the number of shares underlying outstanding stock options and warrants and the related exercise prices were adjusted to reflect the change in the share price and outstanding shares on the date of the reverse stock split.  The effect of fractional shares was not material.  All share and per-share amounts and related disclosures have been retroactively adjusted for all periods to reflect the on-for-twelve reverse stock split.


Directors

The following table sets forth the compensation granted to our directors during the fiscal year ended September 30, 2016.  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

 ($)

Stock

Awards

 ($)

Option

Awards

 ($)

Non-Equity

Incentive Plan

Compensation

($)

Non-Qualified

Compensation

Earnings

($)

All Other

Compensation

 ($)

Total

($)

Leigh Freeman

0

0

75,000(1)

0

0

0

75,000

Robert Martinez

0

0

60,000(2)

0

0

0

60,000

Giulio Bonifacio

0

0

180,000(3)

0

0

0

180,000

Paul Zink

0

0

60,000(4)

0

0

0

60,000





































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(1)   (1) 250,000 stock option awards, with an exercise price of $0.40 per share.  The option awards vested immediately.

(2)   (2) 200,000 stock option awards, with an exercise price of $0.40 per share.  The option awards vested immediately.

(3)   (3) 600,000 stock option awards, with an exercise price of $0.40 per share.  The option awards vested immediately.

(4)   (4) 200,000 stock option awards, with an exercise price of $0.40 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 as compensation.  Such stock option 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 that are reasonably designed to deter wrongdoing and to promote:


·

Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

·

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;

·

Compliance with applicable governmental laws, rules and regulations;

·

The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and

·

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 requirements of our Code of Business and Ethical Conduct during the year ended September 30, 2016, or during the subsequent period from October 1, 2016 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, 2016 all filing requirements applicable to our officers, directors and greater-than-10%-beneficial owners were complied with.




23


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following tables set forth information as of July 31, 2017, regarding the ownership of our common stock by:


·

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


Subsequent to September 30, 2014, our board of directors and stockholders approved a one-for-twelve reverse stock split of our common stock.  After the reverse stock split, effective October 31, 2014, each holder of record held one share of common stock for every 12 shares held immediately prior to the effective date.  As a result of the reverse stock split, the number of shares underlying outstanding stock options and warrants and the related exercise prices were adjusted to reflect the change in the share price and outstanding shares on the date of the reverse stock split.  The effect of fractional shares was not material.  All share and per-share amounts and related disclosures have been retroactively adjusted for all periods to reflect the on-for-twelve reverse stock split.


The number of shares beneficially owned and the percentage of shares beneficially owned are based on 33,146,95253,527,819 shares of common stock outstanding as of July 31, 2017.October 5, 2018. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Shares subject to options that are exercisable within 60 days following July 31, 2017October 5, 2018 are deemed to be outstanding and beneficially owned by the optionee for the purpose of computing share and percentage ownership of that optionee but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnotes to this table, and as affected by applicable community property laws, all persons listed have sole voting and investment power for all shares shown as beneficially owned by them.


DIRECTORS AND EXECUTIVE OFFICERS


Title of Class

Name of Beneficial Owner

Number of Shares of Common
Stock/Common Shares Underlying
Derivative Securities Beneficially
Owned

Percentage of
Common
Shares**


Common Stock

Leigh Freeman (a)(1)

Chairman of the Board, Director

65,066 / 368,400  

65,066/560,066

1.29%

1.16%


Common Stock

Steve Osterberg (b)(2)

President & Chief Executive Officer,

Director

334,160 / 621,667  

459,160/1,246,667

2.83%

3.11%


Common Stock

Randal Hardy (b)(3)

Former Chief Financial Officer

330,601 / 140,000  

455,602/765,000

1.41%

2.25%


Common Stock

Giulio Bonifacio

Donald McDowell (a)(4)

Director

800,000 / 1,700,000

150,100/100,000

7.17%

*


Common Stock

Paul Dircksen(a)(5)

Director

394,225 / 245,000

394,228/445,000

1.91%

1.55%


Common Stock

Robert Martinez

Dave Mathewson (a)(6)

Director

- / 245,000  

625,000/725,000

*

2.49%

Common Stock

Paul Zink

Steven Gilbertson (a)(7)

Director

-/ 200,000  

100,000

*


Common Stock

Total Directors and Executive

Officers as a group (6(7 persons)

1,924,052 / 3,520,067

2,149,156/3,941,733

14.85%

10.60%



7


24




5% STOCKHOLDERS

Title of Class

Name and Address of Beneficial
Owner

Number of Shares of Common
Stock/Common Shares
Underlying Derivative
Securities Beneficially Owned

Percentage of
Common
Shares**

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

3,000,000 / 3,000,000/-

9.05%

5.60%

Common Stock


Eric Muschinski

221 W. Jefferson Avenue

Miami Beach, FL  33139

Palisade Global Investments

1,366,667 / 1,366,667(8)

1,666,667/1,666,667(10)

7.92%

6.04%

Common Stock


Belmont Capital Corp

#303-750 Pender Street

Vancouver, BC  V6C 1T7

Canada

Eric Muschinski

1,200,000 / 1,233,333(9)

1,741,667/1,741,667(11)

7.11%

6.30%

Common Stock


Nicholas Stuart Bryant

The Manor House

South Warnborough

Hook, Hampshire

RG29 1RR

United Kingdom

1,200,000 / 1,200,000 (10)

2,450,000/2,450,000(12)

6.99%

8.75%


* less than 1%.

** The percentages listed for each shareholder are based on 33,146,95253,527,819 shares outstanding as of July 31, 2017October 5, 2018 and assume the exercise by that shareholder only of his entire option or warrant, exercisable within 60 days of July 31, 2017.

October 5, 2018.

(a) Director only

(b) Officer and Director


(1) 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 acquired units on June 30, 2016 which included 65,066 shares of common stock and 65,066 warrants to acquire one share of common stock with an exercise price of $0.25 and an expiration date of May 31, 2019.

(2)  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 acquired units on June 30, 2016 which included 266,667 shares of common stock and 266,667 warrants to acquire one share of common stock with an exercise price of $0.25 and 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.


8
(3)  A vested option to purchase 50,000 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.  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 acquired units on April 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.

(4)  A vested option to purchase 600,000 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 acquired units on June 30, 2016May 4, 2018 which included 1,100,000125,000 shares of common stock and 1,100,000125,000 warrants to acquire one share of common stock with an exercise price of $0.25$0.08 and an expiration date of May 31, 2019.



25


April 30, 2021.

(4)  A vested option to purchase 100,000 shares was granted to this stockholder on June 21, 2018 with an exercise price of $0.10 per share and an expiration date of June 21, 2023.
(5)  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, 2016 with an exercise price of $0.40 per share and an expiration date of July 6, 2021.

(6)  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 100,000 shares was granted to this stockholder on June 21, 2018 with an exercise price of $0.10 per share and an expiration date of June 21, 2023.
(7)  A vested option to purchase 100,000 shares was granted to this stockholder on July 18, 2018 with an exercise price of $0.10 per share and an expiration date of July 6, 2021.

(7) A vested option to purchase 200,00018, 2023.

(8)  Includes 5,000,000 shares was granted to this stockholder on July 6, 2016 with anacquirable upon exercise of warrants exercisable at a price of $0.40$0.24 per share that expire on August 14, 2021.  Donald McDowell, a director of the Company, is the principal holder of shares of this entity, owning approximately 75% of the voting securities.
(9)  Includes 2,025,000 shares acquirable upon exercise of warrants exercisable at a price of $0.14 per share that expire on April 30, 2021, and an expiration date3,265,500 shares acquirable upon exercise of July 6,warrants exercisable at a price of $0.09 per share that expire on February 1, 2021.

(8)

(10) Includes 1,666,667 shares acquirable upon exercise of warrants exercisable at a price of $0.45 per share that expire on October 31, 2022.
(11) Includes 866,667 shares acquirable upon exercise of warrants exercisable at a price of $0.25 per share that expire on May 31, 2019 and 500,000 shares acquirable upon exercise of warrants exercisable at a price of $0.40 per share that expire on January 31, 2020.

(9)  Includes 833,3332020 and 375,000 shares acquirable upon exercise of warrants exercisable at a price of $0.25$0.14 per share that expire on May 31, 2019 and 400,000 shares acquirable upon exercise of warrants exercisable at a price of $0.40 per share that expire on January 31, 2020.

 (10)April 30, 2021.

(12) Includes 500,000 shares acquirable upon exercise of warrants exercisable at a price of $0.25 per share that expire on May 31, 2019 and 700,000 shares acquirable upon exercise of warrants exercisable at a price of $0.40 per share that expire on January 31, 2020.

2020 and 1,250,000 shares acquirable upon exercise of warrants exercisable at a price of $0.14 per share that expire on April 30, 2021.




It is believed by us that all persons named have full voting and investment power with respect to the shares indicated, unless otherwise noted in the table and the footnotes thereto. Under the rules of the Securities and Exchange Commission, a person (or group of persons) is deemed to be a “beneficial owner”"beneficial owner" of a security if he or she, directly or indirectly, has or shares the power to vote or to direct the voting of such security, or the power to dispose of or to direct the disposition of such security.


Accordingly, more than one person may be deemed to be a beneficial owner of the same security. A person is also deemed to be a beneficial owner of any security, which that person has the right to acquire within 60 days, such as options or warrants to purchase our common stock.


We are not, to the best of our knowledge, directly or indirectly owned or controlled by another corporation or foreign government.


Change in Control


The Company is not aware of any arrangement that might result in a change in control in the future. The Company has no knowledge of any arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in the Company’sCompany's control.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE


Transactions with Related Persons


There were no reportable transactions with related parties, including 5% or greater security holders, during the fiscal year ended September 30, 2016.


During the year ended September 30, 2016, an executive officer, Steven Osterberg, and two directors, Giulio Bonifacio and Leigh Freeman, participated in a private placement offering of units of the Company purchasing, in the aggregate, 1,431,733 units for proceeds of $214,760.  Mr. Osterberg purchased 266,667 units, Mr. Bonifacio purchased 1,100,000 units and Mr. Freeman purchased 65,066 units. We sold each unit at a price of $0.15 per unit, the same price as the units sold to other investors in the placement.  Each unit consisted of one share of common stock of the Company and one common share purchase warrant, with each warrant exercisable to acquire an additional share of common stock of the Company at a price of $0.25 per share until May 31, 2019.  The Audit Committee of the Board of Directors approved the insiders’ participation in the private placement.    


On May 26, 2016, the Company entered into three loan and securities purchase agreements (collectively, the “Loan Agreements”) whereby the Company agreed to issue certain unsecured promissory notes (collectively, the “Notes”) in the aggregate amount of $57,200. One Note was issued in favor of Steven Osterberg (the “Osterberg Note”), the Company’s President & Chief Executive Officer, one Note in favor of Robert Martinez (the “Martinez Note”), a member of the Company’s Board of Directors, and one Note in favor of Randal Hardy (the “Hardy Note”), an advisor to the Company.  The Osterberg Note had an original principal amount of $22,000, the Martinez Note had



26


9

an original principal amount of $13,200 and the Hardy Note had an original principal amount of $22,000.  Each Note did not bear interest but was subject to an original issue discount equal to 9.1% of the principal amount of such Note.  Each Note was unsecured, and matured on May 31, 2016.  A total amount of $57,200 was re-paid to the note holders, including financing fees of $5,200 as consideration for providing the loans.  The issuance of the Notes was approved by a majority of the disinterested members of the Company’s Board of Directors on May 20, 2016.


During the period subsequent to the year ended September 30, 2016 through May 26, 2017, two executive officers, Steven Osterberg, and Randal Hardy, participated in a private placement offering of units of the Company purchasing, in the aggregate, 105,000 units for proceeds of $26,250.  Mr. Osterberg purchased 65,000 units and Mr. Hardy purchased 40,000 units. We sold each unit at a price of $0.25 per unit, the same price as the units sold to other investors in the placement.  Each unit consisted of one share of common stock of the Company and one common share purchase warrant, with each warrant exercisable to acquire an additional share of common stock of the Company at a price of $0.40 per share until January 31, 2020.  The Audit Committee of the Board of Directors approved the insiders’ participation in the private placement.  


Additionally, Belmont Capital, which owned 6.59% of the Company at the time of the placement, purchased 400,000 units in the offering at $0.25 per unit, the same price as the units sold to other investors in the placement.

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.


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.    


STOCK INCENTIVE PLANS


In February 2005, our Board adopted the 2005 Stock Incentive Plan, which was approved by a vote of shareholders at our Annual Meeting of Shareholders on September 23, 2005. This plan authorized the granting of up to 62,500 non-qualified stock options to our officers, directors, and consultants.


On August 31, 2006, our Board of Directors approved an amendment to the Timberline Resources Corporation 2005 Equity Incentive Plan (the “Amended 2005 Plan”) for the purposes of increasing the total number of shares of common stock that may be issued pursuant to awards granted under the original 2005 plan from 62,500 shares to 229,167 shares and allowing “Ten Percent Shareholders” (as defined in the Amended 2005 Plan) to participate in the



27


plan on the same basis of any other participant. The Amended 2005 Plan was approved by a vote of shareholders at our Annual Meeting of Shareholders on September 22, 2006.


On August 22, 2008, our shareholders 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 583,334 shares of common stock for awards under the plan.


On May 28, 2010, our shareholders 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 provides for 833,334 shares of common stock for awards under the plan.  


All share amounts included in this section have been revised to reflect a one-for-twelve reverse stock split that was approved by our stockholders and implemented on October 31, 2014.


On August 24, 2015, our Board of Directors approved the 2015 Stock and Incentive Plan, subject to our Stockholders’ approval. The purpose of the 2015 Stock and Incentive Plan is to promote our interests and our Stockholders’ interests by aiding us in attracting and retaining employees, officers, consultants, advisors and non-employee directors capable of ensuring the future success of our Company. On September 24, 2015, our stockholders approved the adoption of the Company’s 2015 Stock and Incentive Plan in which the Company’s executive officers and directors are participants. This plan replaces our 2005 Equity Incentive Plan, as amended. The aggregate number of shares that may be issued under all stock-based awards made under the 2015 Stock and Incentive Plan will be 4 million shares of our common stock.


Equity Compensation Plans


The following summary information is presented as of September 30, 2016


 

 

 

 

 


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)

2,055,419(1)

$0.56

1,169,581

Equity compensation plans not approved by security holders

Not Applicable

Not Applicable

Not Applicable

TOTAL

2,055,419(1)

$0.56

1,169,581


(1)   See “Stock Incentive Plans” above.


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 years ended September 30, 2016.



28


PROPOSAL 21 — RATIFICATION OF THE APPOINTMENT OF THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

What am I voting on?

The Audit Committee has selected DeCoria, Maichel & Teague P.S. to be our Independent Registered Public Accounting Firm for the current fiscal year ending September 30, 2017.

2019.

This proposal seeks stockholder ratification of the appointment of DeCoria, Maichel & Teague P.S.

Will a representative of DeCoria, Maichel & Teague P.S. be present at the Meeting?

We do not expect that a representative of DeCoria, Maichel & Teague P.S. will be present at the Meeting.


Information of Independent Registered Public Accounting Firm


DeCoria, Maichel & Teague P.S. was the Independent Registered Public Accounting Firm for the Company in the fiscal yearyears ended September 30, 2016.

2018.


Our financial statements have been audited by DeCoria, Maichel & Teague P.S., independent registered public accounting firm, for the years ended September 30, 20162006 through September 30, 2006.  

2017.  


The following table sets forth information regarding the amount billed to us by our independent auditor, DeCoria, Maichel & Teague P.S. for our two fiscal years ended September 30, 20162018 and 2015,2017, respectively:

 Years Ended September 30, 
 20182017    
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    

 

Years Ended September 30,

 

 

2016

2015

 

 

 

Audit Fees

$41,155

$50,720

 

 

 

Audit Related Fees

$0

$3,602

 

 

 

Tax Fees

$3,378

$12,019

 

 

 

All Other Fees

$0

$0

 

 

 

Total

$44,533

$66,341

 

 

 


Audit Fees


Consist of fees billed for professional services rendered for the audit of our financial statements and review of interim consolidated financial statements included in quarterly reports and services that are normally provided by the principal accountants in connection with statutory and regulatory filings or engagements.


Audit Related Fees


Consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees”"Audit Fees".


Tax Fees


Consist of fees billed for professional services for tax compliance, tax advice and tax planning. These services include preparation of federal and state income tax returns.  


All Other Fees


Consist of fees for product and services other than the services reported above.







29


10

Policy on Pre-Approval by Audit Committee of Services Performed by Independent Auditors


The Audit Committee has adopted procedures requiring the Audit Committee to review and approve in advance, all particular engagements for services provided by the Company’sCompany's independent auditor. Consistent with applicable laws, the procedures permit limited amounts of services, other than audit, review or attest services, to be approved by one or more members of the Audit Committee pursuant to authority delegated by the Audit Committee, provided the Audit Committee is informed of each particular service. All of the engagements and fees for 20162018 were pre-approved by the Audit Committee. The Audit Committee reviews with DeCoria, Maichel & Teague P.S. whether the non-audit services to be provided are compatible with maintaining the auditor's independence.  


THE BOARD RECOMMENDS A VOTE “FOR”"FOR" THE RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.



30


11

PROPOSAL 32 — ADVISORY VOTE REGARDING EXECUTIVE COMPENSATION


APPROVAL OF THE ADOPTION OF THE 2018 INCENTIVE PLAN

What am I voting on?
Background
On October [●], 2018, the Board approved the 2018 Incentive Plan, subject to our shareholders approval at the Meeting.  TheDodd-Frank Wall Street Reform purpose of the 2018 Incentive Plan is to promote our interests and Consumer Protectionour Stockholders interests by aiding us in attracting and retaining employees, officers, consultants, advisors and non-employee directors capable of assuring the future success of our Company, to offer such persons incentives to put forth maximum efforts for the success of our business and to compensate such persons through various stock-based arrangements and provide them with opportunities for stock ownership in our Company, thereby aligning the interests of such persons with our Stockholders.
If approved, the 2018 Incentive Plan is intended to replace our 2015 Stock and Incentive Plan.  As of October 5, 2018, there were 125,000 Timberline Shares issuable under issued and outstanding options under our 2015 Stock and Incentive Plan. The 2015 Stock and Incentive Plan will be withdrawn for the purposes of issuing new options or equity incentives, and therefore, no further options or equity incentives will be granted under our 2015 Stock and Incentive Plan after adoption and approval of the 2018 Stock and Incentive Plan.
The Board believes that the following factors should be considered in connection with the adoption of the 2018 Stock and Incentive Plan:
·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.
Participation and Current Reservation of Options and Equity Awards
The 2018 Incentive Plan will be available to our directors, executive officers employees and natural person consultants on the same basis of participation – the discretion of our Compensation Committee in determining the grant of options and equity awards (collectively, "Awards") under the plan on the basis of their judgment as to the best interests of the Company and the Stockholders.
There are currently no Awards reserved or otherwise set aside to be granted under the 2018 Incentive Plan, including any Awards to be granted to any executive officer (including any named executive officer), director, nominee for director, employee or any associate of any of the foregoing.  Since Awards are to be granted at the discretion of the Compensation Committee and those grants have not been conducted on a consistent basis in the past, it is not possible to determine at this time the number of Awards that would likely have been granted had the 2018 Incentive Plan been in effect during the prior fiscal year.
The following is a brief summary of the material terms of the 2018 Incentive Plan.  This summary is qualified in its entirety by the full text of the 2018 Incentive Plan which is set out in Appendix "B"
12
Description of the 2018 Incentive Plan

Administration
The Compensation Committee administers the 2018 Incentive Plan and has full power and authority to determine when and to whom Awards will be granted, and the type, amount and other terms and conditions of each Award, consistent with the provisions of the 2018 Incentive Plan. Subject to the provisions of the 2018 Incentive Plan, the Compensation Committee may amend the terms of, or accelerate the exercisability of, an outstanding Award. The Compensation Committee has authority to interpret the 2018 Incentive Plan and establish rules and regulations for the administration of the 2018 Incentive Plan.

The Compensation Committee may delegate its powers under the 2018 Incentive Plan to one or more officers, except that such delegated officers will not be permitted to grant Awards to any members of the Board or executive officers who are subject to Section 16 of the United States Exchange Act of 2010 (the “Dodd-Frank Act”) was enacted on July 21, 2010.  The Dodd-Frank Act requires that1934, as amended, or in a manner as would cause the 2018 Incentive Plan not to comply with applicable exchange rules or applicable corporate law.

Eligibility

Any employee, officer, non-employee director, employee, consultant, independent contractor or advisor providing services to the Company provide its Stockholdersor an affiliate, or any person to whom an offer of employment has been made, and who is selected by the Compensation Committee to participate, is eligible to receive an Award under the 2018 Incentive Plan. As of October 5, 2018, 10 persons were eligible as a class to be selected by the Compensation Committee to receive Awards under the 2018 Incentive Plan.

Shares Available for Awards

The aggregate number of Timberline Shares that may be issued under all stock-based Awards made under the 2018 Incentive Plan will be [●] Timberline Shares.  In addition, no greater than [●] Timberline Shares may be issued pursuant to the exercise of options under the 2018 Incentive Plan. If Awards under the 2018 Incentive Plan expire or otherwise terminate without being exercised, the Timberline Shares not acquired pursuant to such Awards shall again become available for issuance under the 2018 Incentive Plan. However, under the following circumstances, shares will not again be available for issuance under the 2018 Incentive Plan: (i) shares unissued due to a "net exercise" of a stock option, (ii) any shares withheld or shares tendered to satisfy tax withholding obligations with respect to a stock option or SAR, (iii) shares covered by a SAR that is not settled in shares upon exercise and (iv) shares repurchased using stock option exercise proceeds.  In addition, Awards that do not entitle the opportunityrecipient to votereceive or purchase shares shall not be counted against the number of shares available for issuance under the 2018 Incentive Plan.

Certain Awards under the 2018 Incentive Plan are subject to approve, on an advisory (non-binding) basis,limitations. No person may be granted Awards under the compensation2018 Incentive Plan for more than 1,000,000 Timberline Shares in any calendar year.  The maximum amount payable to a participant within any taxable year under all performance Awards denominated in cash may not exceed $1,000,000.  Non-employee directors may not be granted awards in any calendar year of more than 500,000 shares. The aggregate number of options granted to any one person (and companies wholly owned by that person) in a 12 month period must not exceed 5% of the Company’s named executive officers as disclosedissued shares of the Company, calculated on the date an option is granted to the person (unless the Company has obtained requisite disinterested Stockholder approval). The aggregate number of options granted to any one consultant in this Proxy Statementa 12-month period must not exceed 2% of the issued shares of the Company, calculated at the date an option is granted to the consultant. The aggregate number of options granted to all persons retained to provide investor relations activities must not exceed 2% of the issued shares of the Company in accordance with applicable SEC rules.

any 12-month period, calculated at the date an option is granted to any such person.


As described in greater detail below

The Compensation Committee will adjust (i) the number of shares available under the heading “Executive Compensation”2018 Incentive Plan, (ii) the number and type of shares subject to outstanding Awards and (iii) the share limits described above in the case of a dividend (other than a regular cash dividend), the Company’s goal for its executive compensation programrecapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-off, repurchase or exchange of shares, or other similar corporate transaction where such an adjustment is necessary to attract, motivate and retain a talented team of executives who will provide leadership for its success, and thereby increase Stockholder value. The Company believes that its executive compensation program satisfies this goal and is strongly aligned with the long-term interests of its Stockholders. Please see the section “Executive Compensation” and the related compensation tables below for additional details about the Company’s executive compensation programs, including information about the fiscal 2016 compensationprevent dilution or enlargement of the Company’s named executive officers.


At our annual general meeting of Stockholders held August 5, 2014,benefits available under the Stockholders approved the compensation of the Company’s named executive officers for the fiscal year 2013 ( “Say-on-Pay Vote”).  Stockholders are being asked to vote on executive compensation again at this Meeting.


The Company is asking its Stockholders to indicate their support for its named executive officer compensation as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives shareholders the opportunity to express their views on the Company’s named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company’s named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, the Company is asking Stockholders to vote “FOR” the following resolution at the Meeting:


“BE IT RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion is hereby approved.”


This say-on-pay vote is advisory, and therefore, is not binding on the Company,2018 Incentive

13
Plan. Any adjustment determination made by the Compensation Committee or the Board shall be final, binding and conclusive.

Dilution Discussion
In setting the amount of shares authorized under the 2018 Incentive Plan for which Stockholder approval is being sought, the Compensation Committee and the Board considered, among other factors, the historical amounts of equity awards granted by the Company, and the potential future grants over the next several years. The Committee and the Board also consider recommendations by the CEO for the other named executive officers. Neither the Committee nor the Board has authorized specific grants of awards to be made under the 2018 Incentive Plan, subject to Stockholder approval. However, the Compensation Committee and the Board believe that the shares being requested should be sufficient for Awards under the 2018 Incentive Plan for approximately the next three years.

To reduce the dilutive impact of our equity award grants on our Stockholders' interests, we actively administer our equity grant program to make use of our resources as effective as possible.  Equity awards are generally limited to (1) those positions deemed critical to our future success, (2) individuals whose personal performance makes them highly valuable to us, and (3) essential new hires.

Type of Awards and Terms and Conditions
The 2018 Incentive Plan provides that the Compensation Committee may grant awards to eligible participants in any of the following forms, subject to such terms, conditions and provisions as the Compensation Committee may determine to be necessary or desirable:

·
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.
Options and SARs
The holder of an option is entitled to purchase a number of shares of our common stock at a specified exercise price during a specified time period, all as determined by the Compensation Committee. The holder of a SAR is entitled to receive the excess of the fair market value (calculated as of the exercise date) of a specified number of shares of our common stock over the grant price of the SAR.

Exercise Price. The Compensation Committee has the discretion to determine the exercise price and other terms of options and SARs, except that the exercise price will in no event be less than 100% of the fair market value per share of our common stock underlying the Award on the date of grant, unless such option or SAR is granted in substitution for an option or SAR previously granted by a merged or acquired entity. Without the approval of stockholders, we will not amend or replace previously granted options or SARs in a transaction that constitutes a "repricing" as discussed in the 2018 Incentive Plan.

Vesting. The Compensation Committee has the discretion to determine when and under what circumstances an option or SAR will vest.

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Exercise. The Compensation Committee has the discretion to determine the method or methods by which an option or SAR may be exercised, which methods may include a net exercise. The Compensation Committee is not authorized under the 2018 Incentive Plan to accept a promissory note as consideration.

Expiration. Options and SARs will expire at such time as the Compensation Committee determines; provided, however, that no option or SAR may be exercised more than ten years from the date of grant, except that, in the case of an ISO held by a 10% stockholder, the option may not be exercised more than five years from the date of grant.

Special Limitations on ISOs. In the case of a grant of an option intended to qualify as an ISO, no such option may be granted to a participant who owns, at the time of the grant, stock representing more than 10% of the total combined voting power of all classes of our stock or our subsidiaries unless the exercise price per share of our common stock subject to such ISO is at least 110% of the fair market value per share of our common stock on the date of grant, and such ISO award is not exercisable more than five years after its date of grant. In addition, options designated as ISOs shall not be eligible for treatment under the Internal Revenue Code as ISOs to the extent that either: (i) the aggregate fair market value of shares of common stock (determined as of the time of grant) with respect to which such ISOs are exercisable for the first time by the participant during any calendar year exceeds $100,000 or (ii) such ISOs otherwise remain exercisable but are not exercised within three months after termination of employment (or such other period of time provided in Section 422 of the Internal Revenue Code).

Restricted Stock and Restricted Stock Units
The holder of restricted stock will own shares of our common stock subject to restrictions imposed by the Compensation Committee for a specified time period determined by the Compensation Committee. The holder of restricted stock units will have the right, subject to restrictions imposed by the Compensation Committee, to receive shares of our common stock at some future date determined by the Compensation Committee. The grant, issuance, retention, vesting and/or settlement of restricted stock and restricted stock units will occur at such times and in such installments as determined by the Compensation Committee. The Compensation Committee will have the right to make the timing of the grant and/or the issuance, ability to retain, vesting and/or settlement of restricted stock and restricted stock units subject to continued employment, passage of time and/or such performance conditions as are deemed appropriate by the Compensation Committee.  Unless otherwise specified by the Compensation Committee, upon a participant ceasing to provide service as an employee or a non-employee director, all unvested shares of restricted stock and restricted stock units shall be forfeited and reacquired by us.

Dividend Equivalents
The holder of a dividend equivalent will be entitled to receive payments (in cash, shares of our common stock, other securities or other property) equivalent to the amount of cash dividends paid by us to our stockholders, with respect to the number of shares determined by the Compensation Committee. Dividend equivalents will be subject to other terms and conditions determined by the Compensation Committee, but the Compensation Committee may not (i) grant dividend equivalents in connection with options or SARs or (ii) pay a dividend equivalent with respect to an award prior to the date on which all performance-based conditions or restrictions on such award have been satisfied, waived or lapsed.

Performance Awards

Option and SAR awards under the 2018 Incentive Plan qualify as "performance-based compensation" within the meaning of Section 162(m) of the Internal Revenue Code ("Section 162(m)"). In addition, the Compensation Committee may grant performance awards denominated or payable in cash, shares (including restricted stock and restricted stock unit awards),  other securities, other awards or other property under the 2018 Incentive Plan that are intended to qualify as "performance-based compensation" within the meaning of Section 162(m) ("performance awards"). A performance award will be conditioned solely upon the achievement of one or more objective performance goals established by the Compensation Committee in compliance with Section 162(m). The Compensation Committee must determine the length of the performance period, establish the performance goals for the performance period, and determine the amounts of the performance awards for each participant no later than 90 days after the beginning of each performance period according to the requirements of Section 162(m).

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Performance goals must be based solely on one or more of the following, either individually, alternatively or in any combination, applied on a corporate, subsidiary, business unit, channel, merchandise category or line of business basis: economic value added (EVA); sales or revenue; costs or expenses; net profit after tax; gross profit; income; cash flow; earnings; earnings per share (EPS); earnings per share from continuing operations; returns; margins; ratios; budget comparisons; unit volume; stock price; net working capital; value creation; market share; market capitalization; workforce satisfaction and diversity goals; safety metrics; employee retention; production metrics; exploration programs; permitting milestones; development; commercial production; implementation or completion of key projects; or strategic plan development and implementation. Such goals may reflect absolute results of individual performance or that of the Company or a subsidiary, division, business segment or business unit performance.  When establishing performance criteria, the Compensation Committee may allow the exclusion of charges related to an event or occurrence that the Compensation Committee determines should properly be excluded.

Under the 2018 Plan, following the close of each performance period, the Compensation Committee is required to certify that the applicable performance goals have been met prior to payment of any performance awards to participants.

Other Stock-Based Awards

The Compensation Committee is also authorized to grant other types of Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to shares of our common stock, subject to terms and conditions determined by the Compensation Committee and the limitations in the 2018 Incentive Plan. No other stock-based awards shall contain a purchase right or option-like exercise feature.

Duration, Termination and Amendment

The 2018 Incentive Plan has a term of ten years expiring on [●], unless terminated earlier by the Board. The Board may at any time and from time to time and in any respect amend or modify the 2018 Incentive Plan. The Board shall require the approval of any amendment or modification of the 2018 Incentive Plan that would:  (i) be required under the listing requirements of the TSX Venture Exchange or another exchange or securities market on which our shares are then listed for trading, (ii) increase the number of shares authorized under the 2018 Incentive Plan, (iii) increase the annual participant share limits or annual cash award limits, (iv) permit a repricing of options or SARs, (v) permit the award of options or SARs with an exercise price less than 100% of the fair market value of a share on the date of grant, or (vi) increase the maximum term of options or SARs. No amendment or modification of the 2018 Incentive Plan may be made that would adversely affect any outstanding award without the consent of the participant or the current holder of the award.

Effect of Corporate Transaction

Awards under the 2018 Incentive Plan are generally subject to special provisions upon the occurrence of any reorganization, merger, consolidation, split-up, spin-off, combination, plan of arrangement, take-over bid or tender offer, repurchase or exchange of Shares, or any other similar corporate transaction with respect to us. In the event of such a corporate transaction, the Compensation Committee or the Board may provide for one or more of the following to occur upon the occurrence of the event (or immediately prior to such event, provided the event is consummated):

·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;
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·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.
Clawback or Recoupment

All Awards under the 2018 Incentive Plan will be subject to forfeiture or other penalties pursuant to any clawback policy we may adopt or amend from time to time, as determined by the Compensation Committee.

Income Tax Withholding

In order to comply with all applicable income tax laws and regulations, we may take appropriate action to ensure that all applicable taxes, which are the sole responsibility of the participant, are withheld or collected.  The Compensation Committee may allow the participant to satisfy any tax obligation by (a) electing to have a portion of the shares withheld that otherwise would be delivered upon exercise, receipt or the lapse of restrictions with respect to the award, or (b) electing to deliver to us shares of the Company other than shares received pursuant to the award with a fair market value equal to the amount of the tax obligation.  Any election, if allowed, must be made on or before the date that the amount of tax to be withheld is determined.

Limited Transferability of Awards

Except as otherwise provided by the Compensation Committee, no Award or other right or interest of a participant under the 2018 Incentive Plan (other than fully vested and unrestricted shares issued pursuant to an Award) shall be transferable by a participant other than by will or by the laws of descent and distribution, and no right or Award may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance shall be void and unenforceable. If a transfer is allowed by the Compensation Committee (other than for fully vested and unrestricted shares), the transfer will be for no value and shall comply with the Form S-8 rules. The Compensation Committee may establish procedures to allow a named beneficiary to exercise the rights of the participant and receive any property distributable with respect to any Award upon the participant's death.  If a provision is included that a participant's heirs or administrators can exercise any portion of an outstanding option, the period in which they can do so must not exceed one year from the participant's death.  Any options granted to any participant who is a director, employee, consultant or management company employee must expire within a reasonable period following the date the participant ceases to be in that role, which period may not exceed 12 months.

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES APPLICABLE TO THE 2018 INCENTIVE PLAN
The following is a summary of the principal U.S. federal income tax consequences generally applicable to awards under the 2018 Incentive Plan
Grant of Options and SARs.  The grant of a stock option (either an incentive stock option or a non-qualified stock option) or SAR is not expected to result in any taxable income for the recipient.
Exercise of Incentive Stock Options.  Upon the exercise of an incentive stock option, no taxable income is realized by the optionee for purposes of regular federal income tax.  However, the optionee may be required to recognize income for purposes of the alternative minimum tax ("AMT").  If stock is issued to the optionee pursuant to the exercise of an incentive stock option, and if no disqualifying disposition of such shares is made by such optionee within two years after the date of grant or within one year after the transfer of such shares to such optionee, then (1) upon the sale of such shares, any amount realized in excess of the option price will be taxed to such optionee as a long-term capital gain and any loss sustained will be a long-term capital loss, and (2) the Company will not be entitled to a deduction for federal income tax purposes.
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If the stock acquired upon the exercise of an incentive stock option is disposed of prior to the expiration of either holding period described above, generally (1) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at exercise (or, if less, the amount realized on the disposition of such shares) over the option price paid for such shares, and (2) the Company will be entitled to deduct such amount for federal income tax purposes if the amount represents an ordinary and necessary business expense.  Any further gain (or loss) realized by the optionee will be taxed as short-term or long-term capital gain (or loss), as the case may be, and will not result in any deduction by the Company.
Exercise of Non-Qualified Stock Options and SARs.  Upon exercising a non-qualified stock option, the optionee must recognize ordinary income equal to the excess of the fair market value of the shares of common stock acquired on the date of exercise over the exercise price, and the Company’s Compensation CommitteeCompany generally will be entitled at that time to an income tax deduction for the same amount.  Upon exercising a SAR, the amount of any cash received and the fair market value on the opinionsexercise date of any shares of common stock received are taxable to the recipient as ordinary income and generally are deductible by the Company.
The tax consequence upon a disposition of shares acquired through the exercise of a non-qualified stock option or SAR will depend on how long the shares have been held.  Generally, there will be no tax consequence to the Company in connection with the disposition of shares acquired under a non-qualified stock option or SAR.
Restricted Stock.  Recipients of grants of restricted stock generally will be required to include as taxable ordinary income the fair market value of the Company’s Stockholders,restricted stock at the time it is no longer subject to a substantial risk of forfeiture.  However, an award holder who makes an 83(b) election within 30 days of the date of grant of the restricted stock will incur taxable ordinary income on the date of grant equal to the fair market value of such shares of restricted stock (determined without regard to forfeiture restrictions).  With respect to the sale of shares after the forfeiture restrictions have expired, the holding period to determine whether the award recipient has long-term or short-term capital gain or loss generally begins when the restrictions expire, and the tax basis for such shares will generally be based on the fair market value of the shares on that date.  However, if the award holder made an 83(b) election as described above, the holding period commences on the date of such election, and the tax basis will be equal to the fair market value of the shares on the date of the election (determined without regard to the forfeiture restrictions on the shares).  Dividends, if any, that are paid or accrued while the restricted stock is subject to a substantial risk of forfeiture will also be taxed as ordinary income.  The Company will be entitled to an income tax deduction equal to amounts the award holder includes in ordinary income at the time of such income inclusion.
Restricted Stock Units, Performance Awards and Dividend Equivalents.  Recipients of grants of restricted stock units, performance awards or dividend equivalents (collectively, "deferred awards") will not incur any federal income tax liability at the time the deferred awards are granted.  Deferred award holders will recognize ordinary income equal to (a) the amount of cash received under the terms of the deferred award or, as applicable, (b) the fair market value of the shares received (determined as of the date of receipt) under the terms of the deferred award.  Dividend equivalents received with respect to any deferred award will also be taxed as ordinary income.  Cash or shares to be received pursuant to a deferred award generally become payable when applicable forfeiture restrictions lapse; provided, however, that, if the terms of the deferred award so provide, payment may be delayed until a later date to the extent therepermitted under applicable tax laws.  The Company will be entitled to an income tax deduction for any amounts included by the deferred award holder as ordinary income.  For deferred awards that are payable in shares, the participant's tax basis in the shares received pursuant thereto will be equal to the fair market value of the shares at the time the shares become payable.  Upon the sale of the shares, appreciation (or depreciation) after the shares are paid is any significant vote againsttreated as either short-term or long-term capital gain (or loss) depending on how long the namedshares have been held.
Income Tax Deduction.  Subject to the usual rules concerning reasonable compensation, including our obligation to withhold or otherwise collect certain income and payroll taxes, and assuming that, as expected, stock options, SARs and other performance awards paid under the 2018 Incentive Plan are "qualified performance-based compensation" within the meaning of Section 162(m) of the Internal Revenue Code, our Company generally will be entitled to a corresponding income tax deduction at the time a participant recognizes ordinary income from awards made under the 2018 Incentive Plan.   Section 162(m) of the Code generally limits to $1,000,000 the amount that a publicly-held corporation is allowed each year to deduct for the compensation paid to each of the corporation's chief executive officer compensation as disclosed in this Proxy Statement, the Company, the Board and the Compensation Committee will considercorporation's other three most highly compensated executive officers (excluding the results ofchief financial officer). However, "qualified performance-based compensation" is not subject to the vote in future$1,000,000 deduction limit.  In
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general, to qualify as performance-based compensation, deliberations.


The approval,the following requirements need to be satisfied: (1) payments must be computed on an advisory, non-bindingthe basis of an objective, performance-based compensation standard determined by a committee consisting solely of two or more "outside directors," (2) the Stockholder resolution regardingmaterial terms under which the compensation ofis to be paid, including the Company’s named executive officers as described in this Proxy Statement willbusiness criteria upon which the performance goals are based, and a limit on the maximum bonus amount which may be paid to any participant pursuant to any performance period, must be approved if passed by an affirmative vote of a majority of the votes cast, eithercorporation's shareholders and (3) the committee must certify that the applicable performance goals were satisfied before payment of any performance-based compensation.

Delivery of Shares for Tax Obligation.  Under the 2018 Incentive Plan, the Committee may permit participants receiving or exercising awards, subject to the discretion of the Committee and upon such terms and conditions as it may impose, to deliver shares of common stock (either shares received upon the receipt or exercise of the award or shares previously owned by the participant) to the Company to satisfy federal and state tax obligations.
Section 409A of the Internal Revenue Code.  The Committee will administer and interpret the 2018 Incentive Plan and all award agreements in a manner consistent with the intent to satisfy the requirements of Section 409A of the Internal Revenue Code to avoid any adverse tax results thereunder to a holder of an award.  If any provision of the 2018 Incentive Plan or any award agreement would result in such adverse consequences, the Committee may amend that provision or take other necessary action to avoid any adverse tax results, and no such action will be deemed to impair or otherwise adversely affect the rights of any holder of an award under the 2018 Incentive Plan.
Special Rules for Executive Officers and Directors Subject to Section 16 of the Exchange Act.  Special rules may apply to individuals subject to Section 16 of the Exchange Act. In particular, shares received through exercise or payout of a non-qualified option, an incentive stock option (for purposes of the AMT only), an SAR or a restricted stock unit, and any shares of restricted stock that vest, may be treated as restricted property for purposes of Section 83 of the Internal Revenue Code if the recipient has had a non-exempt acquisition of shares of Company stock within the six months prior to the exercise, payout or vesting. Accordingly, the amount of any ordinary income recognized and the amount of the Company's income tax deduction will be determined as of the end of that period unless a special election is made by the recipient pursuant to Section 83(b) of the Internal Revenue Code to recognize income as of the date the shares are received.
THE BOARD RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE 2018 INCENTIVE PLAN.

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EXECUTIVE COMPENSATION

The following summary compensation tables set forth information concerning the annual and long-term compensation for services in all capacities to the Company for the fiscal year ended September 30, 2018 of those persons who were, at September 30, 2018 (i) the chief executive officer (Steven Osterberg) (ii) the chief financial officer (Ted Sharp) and (iii) any other highly compensated executive officers of the Company, whose annual compensation was in excess of $100,000, and for whom disclosure would have been required except for the fact that they weren't serving as an executive officer at the end of the fiscal year ended September 30, 2018 (Randal Hardy):
SUMMARY COMPENSATION TABLE
Name and principal Position
Fiscal
Year
Salary
($)
Bonus
($)
Stock Option
Awards(9)
($)
All Other
Compensation
($)
Total
($)
Steven Osterberg, President, Chief Executive Officer(1)
2018156,250-
60,000(4)
11,538(5)
227,788
 2017131,2500-
17,885(5)
149,135
Ted Sharp, Chief Financial Officer(2)
2018-----
 2017-----
Randal Hardy, Former Chief Financial Officer(3)
2018160,288-
60,000(6)
16,154(7)
236,442
 201793,7500-
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%.

Executive Compensation Agreements
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, as amended on February 28, 2018, ("Osterberg Agreement") setting forth the material terms of his employment with the Company.  

Pursuant to the terms of 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 Mr. Osterberg's duties pursuant to his employment are to fulfill the obligations and duties of the President and Chief Executive Officer and report to the Board of Directors 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.

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The Osterberg Agreement also provides that Mr. Osterberg 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. 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.

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.

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.

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,
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(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 Arrangements and Agreement
On January 6, 2017, Timberline Resources Corporation (the "Company") entered into an employment offer letter (the "Offer Letter") with Mr. Hardy, effective December 16, 2016, regarding the terms and compensation of Mr. Hardy's employment as Chief Financial Officer of the Company.  Pursuant to the terms of the Offer Letter, Mr. Hardy became an employee of the Company on December 16, 2016 with a deemed employment start date of August 27, 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.

Previously, on January 19, 2016, Mr. Hardy resigned as Chief Financial Officer. In connection with Mr. Hardy's resignation, the Registrant agreed to 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. Additionally, the Company agreed to hire Mr. Hardy as a consultant to the Company to assist in the transition to a new Chief Financial Officer at a rate of $85 per hour.

On September 8, 2016, the Company's re-appointed Mr. Hardy as Chief Financial Officer of the Company without any amendment in his compensation under the consulting arrangement until January 6, 2017, as described above.

Previously, on September 2, 2015, Randal Hardy, our then Chief Financial Officer who subsequently resigned effective January 19, 2016, entered into a letter agreement regarding Mr. Hardy's continued employment (the "Hardy Agreement").  

Pursuant to the terms of 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 detailed Mr. Hardy's duties pursuant to his employment were 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 was to 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 would 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 provided for the reimbursement of all reasonable business expenses of Mr. Hardy.

The Hardy Agreement also provided that Mr. Hardy was 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 provided that Mr. Hardy 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 Hardy Agreement provided that Mr. Hardy could 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" was defined
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in the Hardy Agreement and included:  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" was defined in the Hardy Agreement and included 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 obligations under the Hardy Agreement by any successor or breach of the Hardy Agreement by the Company. The Hardy 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 Registrant (as defined in the Hardy Agreement) or upon termination due to death or permanent disability, the Registrant was required to: (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 was required to: (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 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 Registrant was required on the date of termination to 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 provided that the Registrant was 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 provided for Mr. Hardy to maintain the confidentiality of the Registrant's confidential information and contained a non-competition provision pursuant to which Mr. Hardy 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 Hardy Agreement also contained standard provisions regarding notices, amendments, governing law and jurisdiction.  

Mr. Hardy resigned as Chief Financial Officer and Corporate Secretary of the Company effective August 27, 2018.
Sharp Employment Agreement
The Company has not entered into a formal employment agreement with Mr. Sharp.  The Company has agreed to pay Mr. Sharp for Chief Financial Officer services and any related services needed by the Company at a rate of $150 per hour.

23
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 that if the executive's employment is terminated by the Company without Cause or by proxy, at the Meeting on this matter.


Where no choice is so specified with respectexecutive for Good Reason, as such terms are defined in their respective employment agreements, the executive will be entitled to any resolution orreceive payments as set forth in the absence of certain instructions,above discussions, which payments are greater in each case in the proxies given pursuantevent that such termination or resignation is in relation to this solicitation will be voted “FOR”a change in control transaction.

Outstanding Equity Awards At Fiscal Year-End
The following table sets forth the resolution approving the compensation ofstock options granted to our named executive officers as disclosedof September 30, 2018. No stock appreciation rights were awarded.  
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---

Directors
The following table sets forth the compensation granted to our directors during the fiscal year ended September 30, 2018.  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
 ($)
Stock
Awards
 ($)
Option
Awards
 ($)
Non-Equity
Incentive Plan
Compensation
($)
Non-Qualified
Compensation
Earnings
($)
All Other
Compensation
 ($)
Total
($)
Leigh Freeman00
24,000(1)
00024,000
Paul Dircksen00
24,000(2)
00024,000
Donald McDowell00
8,000(3)
0008,000
Dave Mathewson00
8,000(4)
0008,000
Steven Gilbertson00
8,000(5)
0008,000
(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.
 
.
24
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 as compensation.  Such stock option awards are determined at the sole discretion of the Company's Compensation Committee.

OTHER STOCK INCENTIVE PLANS

In February 2005, our Board adopted the 2005 Stock Incentive Plan, which was approved by a vote of shareholders at our Annual Meeting of Shareholders on September 23, 2005. This plan authorized the granting of up to 62,500 non-qualified stock options to our officers, directors, and consultants.

On August 31, 2006, our Board of Directors approved an amendment to the Timberline Resources Corporation 2005 Equity Incentive Plan (the "Amended 2005 Plan") for the purposes of increasing the total number of shares of common stock that may be issued pursuant to Awards granted under the original 2005 plan from 62,500 shares to 229,167 shares and allowing "Ten Percent Shareholders" (as defined in the Amended 2005 Plan) to participate in the plan on the same basis of any other participant. The Amended 2005 Plan was approved by a vote of shareholders at our Annual Meeting of Shareholders on September 22, 2006.

On August 22, 2008, our shareholders 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 583,334 shares of common stock for awards under the plan.

On May 28, 2010, our shareholders 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 provides for 833,334 shares of common stock for awards under the plan.  

All share amounts included in this section have been revised to reflect a one-for-twelve reverse stock split that was approved by our stockholders and implemented on October 31, 2014.

On August 24, 2015, our Board of Directors approved the 2015 Stock and Incentive Plan, subject to our Stockholders' approval. The purpose of the 2015 Stock and Incentive Plan is to promote our interests and our Stockholders' interests by aiding us in attracting and retaining employees, officers, consultants, advisors and nonemployee directors capable of ensuring the future success of our Company. On September 24, 2015, our stockholders approved the adoption of the Company's 2015 Stock and Incentive Plan in which the Company's executive officers and directors are participants. This plan replaces our 2005 Equity Incentive Plan, as amended. The aggregate number of shares that may be issued under all stock-based awards made under the 2015 Stock and Incentive Plan will be 4 million shares of our common stock.

Equity Compensation Plans

The following summary information is presented as of September 30, 2018.

25

    
 
 
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)
$0.26125,000
Equity compensation plans not approved by security holdersNot ApplicableNot ApplicableNot Applicable
TOTAL
3,280,000(1)
$0.26125,000

(1)   See "Other Stock Incentive Plans" above.

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 year ended September 30, 2018.
26
 PROPOSAL 3 — AGEI  STOCK PURCHASE PROPOSAL

The Company and AGEI have been discussing a possible securities purchase transaction on a private placement basis whereby AGEI would purchase from the Company (the "AGEI Stock Purchase") approximately $500,000 worth on units of the Company ("Units"), with each Unit consisting of one Timberline Share and one common stock purchase warrant of the Company (a "Warrant"), with each warrant exercisable for a period of three years from the closing date of the AGEI Stock Purchase to acquire one Timberline Share.  AGEI currently anticipates paying the purchase price of the Units by delivering to the Company shares of First Vanadium Corp. (formerly, Conerstone Metals Inc.) a company listed on the TSX Venture Exchange ("First Vanadium").

The pricing of the Units and the price per share to be attributed to the First Vanadium shares to be delivered to the Company as payment for the Units will be determined through arms-length negotiations between the Company and AGEI taking into account the market price of the Timberline Shares and the First Vanadium shares, the restricted nature of the securities and other factors deemed relevant by the parties.

The Company anticipates that the AGEI Stock Purchase may be part of a larger private placement offering of the Company on terms to be determined.  The Company anticipates that the AGEI Stock Purchase, if approved by the Stockholders, will close in early December.

TSX Venture Exchange requires Stockholder approval of a transaction that results in the creation of a new "Control Person," which means any person who holds or is one of a combination of persons who hold a sufficient number of any of the securities of an issuer so as to affect materially the control of that issuer, or who holds more than 20% of the outstanding voting shares of an issuer except where there is evidence showing that the holder of those securities does not materially affect the control of the issuer

As of the date of this Proxy, Statement.UnderAGEI holds 10,000,000 Timberline Shares, representing 18.7% of the Company's issued and outstanding voting shares based on 53,527,819 shares outstanding as of October 5, 2018.  See "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" above for further information on the securities of the Company beneficially owned by AGEI.  Donald McDowell, a director of the Company, is the principal shareholder of AGEI, owning approximately 75% of the issued and outstanding voting shares of AGEI.

If the Units are priced at $0.10 per Unit, an slight discount to the closing price of the Timberline Shares on October 5, 2018 of $0.12 per Timberline Share, AGEI would acquire an additional 5,000,000 Timberline Shares as part of the AGEI Stock Purchase putting its ownership of voting shares of the Company at 15,000,000 Timberline Shares or approximately 25.6% of the Company's voting shares following the closing of the AGEI Stock Purchase.  Further, AGEI will hold common stock purchase warrants to purchase 10,000,000 Timberline Shares (5,000,000 of which are currently held by AGEI and 5,000,000 of which would be acquired as a result of the AGEI Stock Purchase). If AGEI exercised all of these warrants, AGEI would hold 25,000,000 Timberline Shares or approximately 36.5% of the issued and outstanding voting shares of the Company.

If this proposal is approved by the Stockholders the Company will proceed with the AGEI Stock Purchase on the basis of terms to be negotiated by the Board in the context of the market at the time of the securities purchase and AGEI will become a "control person" of the Company pursuant to the rules of the New York StockTSX Venture Exchange (“NYSE”), brokers are prohibited from giving proxies to vote on executive compensation matters unlessowning more than 20% of the beneficial owner of such shares has givenCompany's issued and outstanding voting instructions on the matter. This means that if your broker is the record holder of your shares, you must give voting instructions to your broker with respect to this proposal if you want your broker to vote your shares on the matter.

shares.


The Board recommends that the Stockholders vote “FOR” the resolution approving the compensation of our named executive officers as disclosed in this Proxy Statement.

THE BOARD RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AGEI STOCK PURCHASE PROPOSAL.


31


27

PROPOSAL 4 — ADVISORY VOTE ON EXECUTIVE COMPENSATION FREQUENCY PROPOSAL

APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION TO

UnderEFFECT NAME CHANGE

On October [●], 2018, the Dodd-Frank Act, public companies are generally requiredBoard of Directors unanimously adopted a resolution setting forth a proposed amendment to include in their proxy solicitations at least once every six years, an advisory, non-binding vote on whether an advisory vote on executive compensation (such asArticle I of the say-on-pay proposal that is included above) should occur every one, two or three years. The Company previously held an advisory vote onCompany's Certificate of Incorporation, subject to Stockholder approval, to change the frequencyname of an advisory vote on executive compensation at its annual general meeting on March 21, 2011.  Therefore, the Company is required from "Timberline Resources Corporation" to hold another advisory vote on frequency again this year.  It is management’s belief, anda name to be selected by the Board’s recommendation, that this advisory vote should occur every three yearsBoard of Directors of the Company.


The Company believes it has effective executive compensation practices, as described in more detail elsewhere in this Proxy Statement.  The Board believesof Directors has determined that providing the Company’s Stockholders with an advisory vote on executive compensation every three years will encourage a long-term approach to evaluating the Company’s executive compensation policies and practices, consistent with the Compensation Committee’s long-term philosophy on executive compensation. In contrast, focusing on executive compensation over an annual or biennial period may increase the focus on short-term results rather than long-term value creation, which is inconsistent with the Company’s current compensation philosophy.


Moreover, the Board does not believe that a short review cycle will allow for a meaningful evaluation of the Company’s performance against its compensation practices, as any adjustment in pay practicesit would take time to implement and be reflected in the Company’s financial performance and in the pricebest interests of the Company’s stock.  As a result, an advisory vote on executive compensation more frequently than every three years would reduce, in the Board’s judgment, shareholders’ ability to compare executive compensation to the Company’s performance.


The Board believes that conducting an advisory vote on executive compensation every three years would allow the Company adequate time to compile meaningful input from Stockholders on its pay practices and respond appropriately. This would be more difficult to do on an annual or biennial basis, and the Board believes that both the Company and its Stockholders would benefit from having more timeto seek approval for this name change, including the corresponding amendment to the Company's Certificate of Incorporation.

The Company's current corporate name as reflected in the Certificate of Incorporation is "Timberline Resources Corporation" and is consistent with the Company's original plan to focus a thoughtfulpurchasing timber lands and constructive analysisselling the timber to generate cash to fund exploration for gold and review of the Company’s compensation policy. For the above reasons,potentially other non-mineral resources. The Company's focus has become exploration for gold and copper mineral resources located within Nevada and the Board recommends that Stockholders vote to hold an advisory vote on executive compensation every three years.


You may cast your vote on your preferred voting frequency by choosing the option of three years, two years, one year, when you vote in response to the resolution set forth below.


“BE IT RESOLVED that the option of once every three years, two years, or one year, that receives the highest number of votes cast for this resolution will be determined to be the Stockholders’ preferred frequency with which Timberline Resources Corporation is to hold a Stockholder advisory vote regarding the executive compensation of the Company’s named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules.”


The option of three years, two years or one year that receives the highest number of votes cast by Stockholders will be the frequency for the advisory vote on the compensation of our named executive officers that has been selected by Stockholders.  The vote on this proposal is only advisory in nature and is not binding on the Board or the Company.  The Board of Directors and the Compensation Committee will take into account the outcome of the vote; however, the Board may decidebelieves that it is in the best interests of the Company’sCompany and its Stockholders andto change the name of the Company to holdbetter reflect its business purpose.  At this time, the Board of Directors has not determined a specific name that would be more reflective of the Company's proposed future business pursuits.  Accordingly, the Board is seeking the authorization of the Stockholders to determine whether to change the name of the Company, to select a new name in the future and subsequently file an advisoryamendment to the Company's Certificate of Incorporation to effect such name change without further approval of the Stockholders.


By voting FOR this proposal you are authorizing the Board to determine whether to change the name of the Company, the new name of the Company, if the determination is made to change the name, and to file a Certificate of Amendment to the Company's Certificate of Incorporation to effect such name change without further approval by the shareholders.

You will not receive another opportunity to vote on the compensationName Change following this authorization and approval to grant discretion to the Board.

The Board will determine whether to change the name of the Company’s named executive officers more or less frequently thanCompany and file a Certificate of Amendment to make such name change within six months of the option approved by Stockholders.


Unless otherwise instructed,grant of approval from the proxies givenStockholders hereunder.  Thereafter, the authorization of the Stockholders granted pursuant to this solicitationproposal shall expire.  The Board may abandon the name change in its discretion at any time following approval by the Stockholders but prior to the filing of a Certificate of Amendment with the Secretary of State of the State of Delaware.


Any amendment to the Certificate of Incorporation shall only have the substantive effect of changing the name of the Company in all places where such name appears in the Certificate of Incorporation.  No change will be votedmade to hold an advisory votethe other provisions of the Company's Certificate of Incorporation on the compensation our named executive officers every three years.  Underbasis of this proposal.

If the rulesproposal to amend the Company's Certificate of Incorporation to change its name is approved by the Stockholders at the Meeting, a Certificate of Amendment to the Company's Certificate of Incorporation will be filed with the Secretary of State of the NYSE, brokers are prohibitedState of Delaware to effect the name change as soon as practicable after the Board has determined to proceed with the name change, subject to receipt of any necessary regulatory approvals.

Approval of the Name Change requires the affirmative vote of a majority of the outstanding shares of common stock.  If a Stockholder abstains from giving proxiesvoting or directs the Stockholder's proxy to vote on executive compensation matters unless the beneficial owner ofabstain from voting, such shares has given voting instructions onare considered present at the matter. This means that if your broker isMeeting for purposes a quorum, but, because they are not affirmative votes for the record holder of your shares, you must give voting instructions to your broker with respect to this proposal, if you want your broker to vote your shares onthey will have the matter.




32


The Board of Directors recommends that Stockholders vote to hold an advisory vote onsame effect as votes against the compensation our named executive officers EVERY THREE YEARS.

proposal.

THE BOARD RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE NAME CHANGE PROPOSAL.


33


28

OTHER MATTERS

As of the date of this Proxy Statement, management does not know of any other matter that will come before the meeting.

APPENDICES

APPENDIX A

Form of Proxy Card


APPENDIX B2018 Incentive Plan




By Order of the Board of Directors,

/s/ Steven Osterberg

Steven Osterberg

Chief Executive Officer



Timberline Resources Corporation

101 East Lakeside Avenue

Coeur d’Alene,d'Alene, Idaho 83814

August 10, 2017

October 19, 2018

Please sign and return the enclosed form of proxy promptly.  If you decide to attend the meeting, you may, if you wish, revoke the proxy and vote your shares in person.





34


29

APPENDIX A

ANNUAL MEETING


[INSERT FORM OF STOCKHOLDERS OF

TIMBERLINE RESOURCES CORPORATION

The undersigned appointsSteven Osterberg, Chief Executive Officer of Timberline Resources Corporation andRandal Hardy, Chief Financial Officer of Timberline Resources Corporation, with full power of substitution, the attorney and proxy of the undersigned, to attend the annual meeting of stockholders of Timberline Resources Corporation, to be held September 25, 2017 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]

A-1
APPENDIX B

PROXY SOLICITED BY THE BOARD OF DIRECTORS

MAIL – Sign, date and mail your proxy card

in the envelope provided as soon as possible

COMPANY NUMBER


INTERNET – Cast your vote atwww.proxyvote.com

ACCOUNT NUMBER

8871331205

CUSIP NUMBER

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.

[INSERT 2018 INCENTIVE PLAN]

PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREx


The Board of Directors Recommends
a Vote “FOR ALL NOMINEES” in Item 1.

The Board of Directors Recommends
a Vote “FOR” Items 2 and 3 and “EVERY 3 YEARS” for Item 4.

o FOR ALL NOMINEES

o WITHHOLD AUTHORITY

FOR ALL NOMINEES*

NOMINEES

™ Leigh Freeman

™ Steve Osterberg

™ Giulio Bonifacio

™ Paul Dircksen

™ Paul Zink




Item 2. To ratify the appointment of the Company’s Independent Registered Public Accounting Firm.


Item 3.   Advisory (non-binding) vote on the compensation of named executive officers.


Item 4.   Advisory (non-binding) vote on the frequency of future advisory votes on the compensation of named executive officers



FOR      AGAINST       ABSTAIN


o  o   o



o  o   o



EVERY ONE YEAR         o

EVERY TWO YEARS      o

EVERY THREE YEARS  o

ABSTAIN                           o



Vote FOR an individual nominee by filling in the appropriate circle above

INSTRUCTION: By marking “Withhold Authority for All Nominees” your shares will not be voted FOR or AGAINST any Nominee. However, your shares will still be counted for the purposes of establishing quorum at the annual meeting.


INSTRUCTION:To withhold authority to vote for any individual nominee(s), strike through the name of the individual nominee(s).

______________________________________________
To change the address on your account, please check this boxoand indicate your new address in the space below. Please note that changes to the registered name(s) on the account may not be submitted via this method.

If this proxy is properly executed and returned, the shares represented hereby will be voted in accordance with the votes marked hereon.

A vote to ABSTAIN will be counted for the purposes of establishing a quorum at the annual meeting but is not considered a vote cast for or against a proposal or as a vote withheld for any director nominee and will not affect the outcome of any proposal.

If votes are not specified on a returned proxy, a vote FOR ALL NOMINEES in Item 1, FOR Item 2, FOR Item 3 and EVERY 3 YEARS for Item 4 will be voted at the annual meeting.

Cumulative voting rights are not authorized for the election of directors.


MARK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING:o



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B-1



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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