EXECUTIVE EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”), is made and entered into effective as
of the Effective Date of December 16, 2016, by and between Timberline Resources,
Corp., a Delaware corporation with a principal business address of 101 E.
Lakeside Avenue, Coeur d’Alene, Idaho 83814 (the “Company”) and Randal L. Hardy
(the “Executive” or “Employee”).

PRELIMINARY STATEMENT. The Company desires to employ the Executive as Chief
Financial Officer and Corporate Secretary of the Company.

NOW THEREFORE, in consideration of the premises and of the respective covenants
and agreements of the parties herein contained, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending legally to be bound, hereby agree as follows:

1.

Defined Terms. Unless otherwise defined herein, capitalized terms used in this
Agreement shall have the following meanings:

1.1

“ Board ” means the Board of Directors of the Company.

1.2

 “ Cause” means any or all of the following:

a)

any material breach by the Executive of his obligations under this Agreement, if
the Company provided the Executive with written notice of such Cause and the
Executive failed to remedy the situation to the reasonable satisfaction of the
Company within thirty (30) days of the date of such notice;

b)

Executive’s conviction of, or plea of guilty to, any felony charge, or of any
crime involving moral turpitude, fraud or misrepresentation;

c)

intentional fraud, misrepresentation, or embezzlement by the Executive in the
course of his employment; and/or

d)

any material neglect, inability, refusal or failure of the Executive to perform
his duties as an employee of the Company, if the Company provided the Executive
with written notice of such Cause and the Executive failed to remedy the
situation to the reasonable satisfaction of the Company within thirty (30) days
of the date of such notice

1.3

“Change in Control” shall mean the occurrence after the Effective Date hereof of
any of:  

a)

an acquisition after the Effective Date hereof by an individual or legal entity
or “group” (as described in Rule 13d-5(b) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) in excess of 40% of the voting
securities of the Company;

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b)

the Company merges into or consolidates with any other legal entity or Person,
or any legal entity or Person merges into or consolidates with the Company and,
after giving effect to such transaction, the stockholders of the Company
immediately prior to such transaction own less than 50% of the aggregate voting
power of the Company or the successor entity of such transaction;

c)

the Company sells or transfers all or substantially all of its assets to another
legal entity or Person and the stockholders of the Company immediately prior to
such transaction own less than 50% of the aggregate voting power of the
acquiring entity immediately after the transaction;

d)

In any 12-month period, the individuals who, as of the beginning of the 12-month
period, constitute the Board cease for any reason to constitute at least a
majority of the Board; or

e)

the execution by the Company of an agreement to which the Company is a party or
by which it is bound, providing for any of the events set forth in clauses
(a) through (d) above.

1.4

“ Good Reason ” means any or all of the following :

a)

the assignment to the Executive of any duties inconsistent in any material
respect with Executive’s position (including status, offices, titles and
reporting requirements, authority, duties or responsibilities), or any other
action that results in a material diminution in such position, authority,
duties, or responsiblilities, excluding for this purpose an isolated or
inadvertent action not taken in bad faith;

b)

a reduction of greater than 50%, without the Executive’s written consent, by the
Company in the Executive’s base salary as increased from time to time after the
Effective Date hereof.  The Executive’s employment  may be reduced by the
Company up to 50% of the full-time annual basis, along with a pro-rata reduction
in annual salary without evoking Termination of Employment (per Section 7.1);

c)

a requirement, without the Executive’s written consent, that the Executive be
based at any office or location more than 50 miles from the Executive’s
principal office as of the Effective Date;

d)

any failure by the Company to obtain the assumption of the obligations contained
in this Agreement by any successor as contemplated in Section 20 of this
Agreement;

e)

a material breach by the Company of its obligations under this Agreement, if the
Executive provided the Company with written notice of such Good Reason and the
Company failed to remedy the situation within thirty (30) days of the date of
such notice; and/or

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f)

It is the intent of the Company that a termination of employment for Good Reason
will meet the definition of “involuntary separation” set forth in Treasury
Regulation Section 1.409A-1(n), and this Agreement will be interpreted
accordingly.

1.5

 “Permanent Disability” means, with respect to the Executive, that the Executive
has become physically or mentally incapacitated or disabled so that, in the
reasonable judgment of the Board, he is unable to perform the essential
functions of his position under this Agreement, with or without reasonable
accommodation, and such condition has continued for at least six consecutive
calendar months or for 180 working days in any 12 month period.

1.6

“Change of Control Multiplier” means a number that is equal to one (1) plus one
twelfth (1/12) of the number of full years (up to a maximum of twelve (12)
years) of continuous service to the Company as a full-time employee or full-time
contractor since September 2, 2015, the date of termination of the  Executive’s
initial Executive Employment Agreement.  

2.

Employment of Executive. Effective as of the Effective Date, the Company hereby
engages the Executive as a full-time executive employee for the period specified
in Section 3 hereof, and the Executive accepts such employment, on the terms and
subject to the conditions set forth in this Agreement. The Executive’s primary
place of employment will be in Coeur d’Alene, Idaho (the “Area”). The Executive
may be required to travel in the performance of his duties hereunder, but he
shall not be required to relocate.

3.

Term.  Except as otherwise provided in Section 7 hereof, the term of employment
hereunder shall be for an indefinite period beginning on the Effective Date (the
“ E mployment Period”). Specifically, if other than following a Change in
Control of the Company, the Company terminates Executive’s employment without
Cause, or the Executive terminates employment for Good Reason, the Executive
will be entitled to severance in the amount of the total of one (1) years’
salary based upon Executive’s base annual salary immediately preceding his
termination, the Executive’s previous year’s non-equity performance bonus, plus
fringe benefits as defined in Section 6.2 for termination for reasons other than
Cause, as defined in this Agreement.

4.

Duties of Executive. The Executive’s principal duties on behalf of the Company
are and shall be to fulfill the obligations and duties of Chief Financial
Officer and Corporate Secretary, which are all of the duties customarily
involved in such positions.  The Executive shall be responsible for reporting to
the President and Chief Executive Officer.

5.

Extent of Services. The Executive acknowledges that he is serving as an
executive officer of the Company, and as such covenants and agrees that his
principal employment during the Employment Period shall be with the Company, and
that he will not engage in any other business activity, for his own account or
for or on behalf of any other person, firm or corporation, which would hinder
his ability to perform his obligations as Chief Financial Officer and Corporate
Secretary of the Company.

6.

Compensation and General Benefits. The Executive shall be compensated for his
services under this Agreement as follows:

6.1

Salary. During the Employment Period, the Company shall pay the Executive a
salary of not less than $150,000 annually, excepting the condition  of Section
1.4 b)., less required and authorized deductions and withholdings .  Such salary
shall be

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paid in equal semi-monthly payments in the same manner and on the same schedule
as other Company employees.

6.2

Fringe Benefits. During the Employment Period, the Company shall pay for (or
reimburse Employee for the cost of) health, dental, and vision insurance for
Employee and Employee's eligible family members (the “Fringe Benefits”). In
addition, the Company shall pay for health, dental, and vision insurance for
Employee and Employee's eligible family members following the termination of
Employee's employment by the Company (irrespective of whether Employee is then
living), unless such termination is for Cause, as defined in this Agreement,
subject, however, to the following limitations and conditions: (a) the Company
shall not be obligated to pay more than $20,000 per year for such insurance; and
(b) the Company's obligation to pay for such insurance shall commence as of the
expiration of Employee's employment and shall continue for a period of time
equal to one (1) year plus one (1) additional month for each full year that
Employee was employed by the Company, up to a maximum of twelve (12) additional
months, or until such time as insurance benefits are provided to the Executive
by another employer.

6.3

Employee Compensation Plans. The Executive  will be eligible for participation
in such profit-sharing, bonus, stock purchase, incentive and performance award
programs which are available to other employees of the Company with comparable
authority or duties.

6.4

Performance Bonuses and Incentive Compensation. Employee may receive performance
bonuses and other incentive compensation based upon the recommendations and
approval, and subject to the sole discretion, of the Board.

6.5

Business Expenses. During the Employment Period, the Company shall pay or
reimburse the Executive for all reasonable business expenses, including but not
limited to travel and entertainment expenses, in accordance with the policies of
the Company applicable to executive officers. The Executive shall maintain and
provide the Company with records of such expenses in accordance with the rules
and regulations promulgated by the Company. Upon termination, amounts owing to
Executive for expense reimbursement will be paid immediately by Company in
accordance with the severance provisions in Section 10.

6.6

Vacation. During each twelve (12) month period during which the Executive is
employed by the Company, the Executive shall be entitled to six (6) weeks of
paid vacation.  Should Employee have any earned but unused vacation time at the
expiration of such twelve (12) month period in which it was earned, he shall be
entitled to carry a maximum of six (6) weeks (or such lesser amount as was
earned and is unused) into the next calendar year. Upon termination, the value
of earned but unused vacation will be paid immediately by Company in accordance
with the severance provisions in Section 10.

6.7

Taxes. The Company may reduce any payment made to the Executive under this
Agreement by any required federal, state or local government withholdings,
deductions for taxes or similar charges with respect to any actual or
constructive payment or compensation to the Executive under this Agreement.

6.9

No Other Payments. The compensation payable to the Executive pursuant to this
Agreement will be in consideration for all services rendered by the Executive

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under this Agreement, and the Executive will receive no other compensation for
any service provided to the Company, unless the Company in its sole discretion
otherwise determines.

7.

Termination of Employment. The employment of the Executive under this Agreement
will terminate on the earliest of:

7.1

Termination by the Company Without Cause. The 90th calendar day after the
Company gives the Executive written notice of termination without Cause.  

7.2

Termination by the Company With Cause. If an event or circumstance within the
definition of Cause occurs, immediately after the Company gives the Executive
written notice of termination for Cause.

7.3

Termination by the Executive For Good Reason. If an event or circumstance within
the definition of Good Reason occurs, immediately after the Executive gives the
Company written notice of termination for Good Reason.

7.4

Termination by the Executive Without Good Reason. The 30th calendar day after
the Executive gives the Company written notice of termination of his employment
without Good Reason.

7.5

Retirement .  Executive may retire at any time by giving the Company not less
than sixty days written notice of his intent to retire, specifying the date of
retirement. The Company shall not be obligated to pay Executive a monthly
retirement benefit following his retirement, but shall endeavor in good faith
from and after the Effective Date of this Employment Agreement to devise and
implement a retirement plan for Employee and other employees of the Company.
Executive acknowledges and understands that the Company is under no obligation
to devise or implement such a plan. Executive further acknowledges and
understands that, if the Company does devise and implement a retirement plan, it
may make only partial contributions to the plan and may condition such
contributions on the Company's earnings or other benchmarks of financial
performance.

7.6

Permanent Disability. The Permanent Disability of the Executive.

7.7

Death. The death of the Executive.

8.

Notice of Termination. Any notice of termination of the Executive’s employment
under this Agreement shall be communicated in writing and delivered to the other
party as provided in Section 13 and shall specify the termination provision
relied upon by the party giving such notice. The Executive shall have a
reasonable opportunity to be heard by the Board prior to any termination for a
“Cause” described in (a), (c) or (d) of the definition of “Cause”.

9.

Termination of Corporate Office.  In the event that the employment of Executive
is terminated for any reason and Executive, at the time of such termination,
holds office as an officer of the Company, such office shall terminate and
Executive shall be deemed to have resigned the same automatically and without
notice as of the effective date of the termination of employment.

10.

Severance Conditions Upon Termination of Employment Relationship. The employment
shall be subject to the following conditions:

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10.1

Termination by the Company Without Cause or by the Executive for Good Reason
following a Change in Control of the Company. If following a Change in Control
of the Company, the Company terminates Executive’s employment without Cause, or
the Executive terminates employment for Good Reason, the company shall: (a) pay
Executive (or Executive’s spouse or estate, should Executive die), a severance
benefit equal to the product of Executive’s full-time (100%) base annual salary
immediately preceding his termination, inclusive of any non-equity performance
bonus earned in the twelve (12) months preceding his termination, multiplied by
the Change of Control Multiplier; (b) pay for (or reimburse Executive for the
cost of) such Fringe Benefits as the Company is then obligated to pay Executive
pursuant to Section 6.2 of this Agreement; and (c) pay Executive the value of
Executive’s earned but unused vacation days, and unreimbursed business expenses
up to the date of termination of employment.

10.2

Termination by the Company Without Cause or by the Executive for Good Reason not
following a Change in Control of the Company. If other than following a Change
in Control of the Company (which is covered by Section 10.1 above), the Company
terminates Executive’s employment without Cause, or the Executive terminates
employment for Good Reason, the company shall: (a) pay Executive (or Executive’s
spouse or estate, should Executive die), a severance benefit equal to one (1)
years’ salary, based upon Executive’s base annual salary immediately preceding
his termination, plus any non-equity performance bonus earned in the twelve (12)
months preceding his termination; (b) pay for (or reimburse Executive for the
cost of) such Fringe Benefits as the Company is then obligated to pay Executive
pursuant to Section 6.2 of this Agreement; and (c) pay Executive the value of
Executive’s earned but unused vacation days, and unreimbursed business expenses
up to the date of termination of employment.

10.3

Termination by the Company With Cause or by the Executive Without Good Reason .
If the Company terminates the Executive’s employment for Cause or the Executive
terminates his employment without Good Reason, then (a) the Company shall pay to
the Executive, on the date of termination of employment, the Executive’s salary
and earned bonus or other compensation, the value of the Executive’s earned but
unused vacation days, and unreimbursed business expenses up to the date of
termination of employment, and (b) the Executive shall not receive any severance
pay.

10.4

Termination for Permanent Disability or Death. If the Executive’s employment is
terminated due to his Death or Permanent Disability, the Company shall pay the
Executive, or the Executive’s estate, as the case may be, benefits equal to all
of the benefits that are provided in Section 10.1 of this Agreement.  

11.

Conditions to Receipt of Severance.  

11.1

Separation Agreement and Release of Claims.  The receipt of any severance
pursuant to Section 10 will be subject to Executive signing, not revoking and
complying with a separation agreement and release of claims in a form reasonably
satisfactory to the Executive and the Company.  No severance pursuant to such
section will be paid or provided until the separation agreement and release
agreement becomes effective.  

11.2

Section 409A.  If the Company reasonably determines that the imposition of
additional tax under Section 409A of the Internal Revenue Code of 1986, as
amended, will apply to the payment of any cash severance payments otherwise due
to Executive

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pursuant to Section 6, then notwithstanding anything to the contrary in this
Agreement, any cash severance payments otherwise due to Executive pursuant to
Section 6 or otherwise on or within the six-month period following Executive’s
termination will accrue during such six-month period and will become payable in
a lump sum payment on the date six (6) months and one (1) day following the date
of Executive’s termination.  In addition, this Agreement will be deemed amended
to the extent necessary to avoid imposition of any additional tax or income
recognition prior to actual payment to Executive under Code Section 409A and any
temporary, proposed or final Treasury Regulations and guidance promulgated
thereunder and the parties agree to cooperate with each other and to take
reasonably necessary steps in this regard.

12.

Confidentiality and Non-Competition Provisions .

12.1

Confidentiality . The Executive acknowledges that he will be making use of,
acquiring, and/or adding to Confidential Information of the Company of a special
and unique nature and value. The Executive covenants and agrees that he shall
keep and maintain such Confidential Information strictly confidential and shall
not, anywhere in the world, at any time, directly or indirectly, for himself, or
on behalf of any person, firm, partnership or corporation, or otherwise, except
as otherwise directed by the Company, or necessary to perform his obligations
under this Agreement, divulge or disclose for any purpose whatsoever, any
Confidential Information that has been obtained by, or disclosed to, him as a
result of his relationship with the Company. This Agreement specifically
prohibits the Executive from disclosing to any person, firm, partnership or
corporation or otherwise, trade secrets or other Confidential Information
relating to the business of the Company. “ Confidential Information ” as used
herein shall mean any and all information regarding or relating to the business
affairs of the Company, including without limitation any and all financial,
technical, trade secret, and any other proprietary or confidential information
(written or oral); provided however, “Confidential Information” shall not
include information which (i) was or becomes generally available to the public
other than as a result of a disclosure by the Executive in violation of this
Agreement; (ii) was or is developed by the Executive independently of and
without reference to any Confidential Information; or (iii) was, is or becomes
available to the Executive on a non-confidential basis from a third party who is
not prohibited from transmitting such information by a contractual, legal or
fiduciary duty.

12.2

Disclosure of Confidential Information . In the event that the Executive is
requested or becomes legally compelled (by oral questions, interrogatories,
requests for information or documents, subpoenas, civil investigative demand or
similar process) to make any disclosure which is prohibited or otherwise
constrained by Section 12 , the Executive agrees that he will provide the
Company with prompt notice of such request so that the Company may seek an
appropriate protective order or other appropriate remedy and/or waive the
Executive’s compliance with the provisions of Section 12 . In the event that
such protective order or other remedy is not obtained, or the Company grants a
waiver hereunder, the Executive may furnish that portion (and only that portion)
of the information which the Executive is legally compelled to disclose or else
stand liable for contempt or suffer other censure or penalty; provided, however,
that the Executive shall use his reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded any information so disclosed. The
Company may obtain temporary, preliminary or permanent restraining orders,
decrees or injunctions as may be necessary to protect the Company against, or on
account of, any actual or threatened violation of this Section 12 .

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12.3

Solicitation of Employees . As a material inducement to the Company to enter
into this Agreement, the Executive agrees that for a period of one year beyond
the date of Executive’s termination from employment for whatever reason, the
Executive shall not, directly or indirectly, for himself or on behalf of any
person, firm, partnership or corporation, or otherwise, solicit for employment
or as a consultant or independent contractor, enter into an independent contract
or relationship, or employ any person employed by the Company at any time during
the term of such restriction, or otherwise interfere with the employment
relationship between the Company and any such employee

12.4

Interference With Business. As a material inducement to the Company to enter
into this Agreement, the Executive agrees that for a period of one year beyond
the date of Executive’s termination from employment for whatever reason, the
Executive sh all not, directly or indirectly, for himself or on behalf of any
person, firm, partnership or corporation, or otherwise, (a) induce or attempt to
induce any customer, supplier, licensee or business relation to cease doing
business with the Company, or in any way interfere with the relationship between
any customer, supplier, licensee or business entity and the Company; or (b)
disparage the Company.

12.5

Fair and Reasonable . The Executive has carefully read and considered the
provisions of this Section 12 , and having done so, agrees that the restrictions
set forth in this Section 12 are fair and reasonable and are reasonably required
for the protection of the interests of the Company.

12.6

Remedies . The Executive agrees that his violation of any term, provision,
covenant or condition of this Section 12 may result in irreparable injury and
damage to the Company which will not be adequately compensable in money damages,
and that the Company will have no adequate remedy at law therefor. In addition
to any other rights or remedies that the Company may have at law or in equity,
under this Agreement, or otherwise, the Executive agrees that the Company may
obtain temporary, preliminary or permanent restraining orders, decrees or
injunctions as may be necessary to protect the Company against, or on account
of, such violation, without the necessity that the Company post a bond for such
relief. Nothing in this Section shall be construed to limit the Company’s rights
or remedies for or defenses to any action, suit or controversy arising out of
this Agreement.

13.

Severability. If any part of this Agreement is held by a court of competent
jurisdiction to be invalid, unenforceable or in whole or in part, by reason of
any rule of law or public policy, such part shall be deemed to be severed from
the remainder of this Agreement for the purpose only of the particular legal
proceedings in question and all other covenants and provisions of this Agreement
shall in every other respect continue in full force and effect.

14.

Warranty. The Executive represents and warrants that he is not subject to any
agreement, instrument, order, judgment or decree of any kind, or any other
restrictive agreement of any character, which would prevent him from legally
entering into this Agreement, or which would be breached by the Executive upon
execution of this Agreement.

15.

Notices. All notices hereunder shall be in writing and shall be deemed given if
hand-delivered or deposited with a nationally recognized overnight delivery
service such as FedEx for next Business Day delivery, or in the mail, postage
prepaid, registered or certified with a return receipt requested, and addressed
as follows:

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If to Executive:

Randal L. Hardy

9915 N. Strahorn Road

Hayden Lake, ID  83835

If to Company:

Timberline Resources

101 E. Lakeside Avenue

Coeur d’Alene, ID  83814

or to such other addresses as the parties hereto may designate by written notice
pursuant to this paragraph.

16.

Effective Waiver. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any
subsequent breach thereof.

17.

Amendment. This Agreement may be amended or modified only by an agreement in
writing signed by the Company and the Executive.

18.

Entire Agreement. This Agreement is complete, and all promises, representations,
understandings, warranties, and agreements with reference to the subject matter
herein have been fully and finally expressed herein; and this Agreement
supersedes any and all prior agreements with respect to the subject matter
hereof.  

19.

Captions. The titles to the paragraphs herein are not considered part of this
Agreement.

20.

Successors and Assigns. Any successor of the Company or of its assets, business
and goodwill, by purchase, merger or reorganization, shall succeed to all of the
rights and be responsible for the performance of all the obligations of the
Company under the terms of this Agreement, in the same manner and to the same
extent as though such successor were the Company. The rights and
responsibilities of the Executive hereunder are personal and shall not be
transferable by assignment or otherwise.

21.

Attorneys’ Fees And Costs.  In the event that it shall become necessary for
either of the parties to obtain the services of an attorney in order to enforce
the provisions hereof, then, in that event, the defaulting party shall pay the
prevailing party all reasonable attorneys’ fees and all costs incurred in
connection therewith, including the costs of any appeal.

22.

Governing Law. This Agreement shall be construed according to and governed by
the laws of the State of Idaho.

23.

Consent To Jurisdiction, Service of Process, And Venue.  Executive agrees that
any dispute or claim between Executive and the Company shall be adjudicated
exclusively in the in a court in Kootenai County, Idaho, and agrees not to
commence or pursue an action in any other state or federal court.  Employee also
expressly consents to the exclusive jurisdiction of such court and to service of
process in any manner provided under Idaho law with respect to any such legal
action or proceeding involving Executive and the Company.  Claims or disputes
covered by this agreement include, without limitation, any relating to, arising
out of, or resulting from Executive’s relationship with the Company, the
termination of that relationship with the Company, and specifically includes any
claim under any statute (including, without limitation, any claim arising under
or based upon the Age Discrimination Employment Act, Title VII of the Civil
Rights Act, the Americans With Disabilities Act, the Rehabilitation Act of 1973,
or any other federal or state anti-discrimination law, the Fair Labor Standards
Act or any other federal

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or state wage law, the Equal Pay Act, the Employee Retirement Income Security
Act, et cetera) and any claim under contract, quasi-contract, estoppel, or tort.
  

24.

Counterparts. This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed to constitute an original, but all of which
together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto or their duly authorized representatives
have caused this Agreement to be executed as of the date first above written.

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