Exhibit 10.3

  

   

    

  
    
      

      

      TIMBERLAND BANCORP, INC.

      2019 EQUITY INCENTIVE PLAN

      

      

      NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

      

      

      
        	
                 NQSO No. _______________ 

                  

              	
                Grant Date: _______________ 

                

              


      

      

      

      

      

      This Non-Qualified Stock Option Award (“NQSO”) is granted by Timberland Bancorp, Inc. (“Corporation”) to _____________________ (“Option Holder”) in accordance with the terms of this Non-Qualified
        Stock Option Award Agreement (“Agreement”) and subject to the provisions of the Timberland Bancorp, Inc. 2019 Equity Incentive Plan, as amended from time to time (“Plan”).  The Plan is incorporated herein by reference.

      

      

      
        	
                1.

              	
                NQSO Award.  The Corporation grants to Option Holder NQSOs to purchase _______ Shares at an
                    Exercise Price of $____ per Share.  These NQSOs are subject to forfeiture and to limits on transferability until they vest, as provided in Sections 5 and 6 of this Agreement and in Article V of
                    the Plan.

              


      

      
        	
                2.

              	
                Vesting Dates.  The NQSOs shall vest as follows, subject to earlier vesting in the event of a
                    termination of Service as provided in Section 6 or a Change in Control as provided in Section 7:

              


      

      
        	
                Vesting Date 

                

              	
                NQSOs for

                  Number of Shares Vesting 

                

              


      

      
        	
                3.

              	
                Exercise.  The Option Holder (or in the case of the death of the Option Holder, the
                    designated legal representative or heir of the Option Holder) may exercise the NQSOs during the Exercise Period by giving written notice to the Corporate Secretary in the form required by the Committee (“Exercise Notice”).  The Exercise
                    Notice must specify the number of Shares to be purchased, which shall be at least 100 unless fewer shares remain unexercised.  The exercise date is the date the Exercise Notice is received by the Corporation.  The Exercise Period
                    commences on the Vesting Date and expires at 5:00 p.m., EST, on the date 10 years after the Grant Date, such later time and date being hereinafter referred to as the “Expiration Date,” subject to earlier expiration in the event of a
                    termination of Service as provided in Section 6.  Any NQSOs not exercised as of the close of business on the last day of the Exercise Period shall be cancelled without consideration at that time.

              


      

      The Exercise Notice shall be accompanied by payment in full of the Exercise Price for the Shares being purchased.  Payment shall be made: (a) in cash, which may be in the form
        of a check, money order, cashier's check or certified check, payable to the Corporation, or (b) by delivering Shares of the Corporation already owned by the Option Holder having a Fair Market Value on the exercise date equal to the aggregate
        Exercise 

       

         

      
        
          


      

      
      Price to be paid, or (c) by instructing the Corporation to withhold Shares otherwise issuable upon the exercise having an aggregate Fair Market Value on the exercise date equal
        to the aggregate Exercise Price to be paid or (d) by a combination thereof.  Payment for the Shares being purchased upon exercise of the Option may also be made by delivering a properly executed Exercise Notice to the Corporation, together with a
        copy of irrevocable instructions to a broker to deliver promptly to the Corporation the amount of sale or loan proceeds to pay the aggregate Exercise Price and applicable tax withholding amounts (if any), in which event the Shares acquired shall be
        delivered to the broker promptly following receipt of payment.

      
        	
                4.

              	
                Related Awards:  These NQSOs are not related to any other Award under the Plan.

              


      

      
        	
                5.

              	
                Transferability.  The Option Holder may not sell, assign, transfer, pledge or otherwise
                    encumber any NQSOs, except in the event of the Option Holder’s death, by will or by the laws of descent and distribution or pursuant to a Domestic Relations Order.  The Committee, in its sole and absolute discretion, may allow the
                    Option Holder to transfer one or more NQSOs to the Option Holder’s Family Members, as provided in the Plan.

              


      

      
        	
                6.

              	
                Termination of Service.  If the Option
                    Holder terminates Service for any reason other than in connection with a Change in Control or the death or Disability of the Option Holder, any NQSOs that have not vested as of the date of that termination shall be forfeited to the
                    Corporation, and the Exercise Period of any vested NQSOs shall expire three months after that termination of Service (but in no event after the Expiration Date), except where that termination of Service is due to Retirement, in which
                    case the Exercise Period of any vested NQSOs shall expire one year after that termination of Service (but in no event after the Expiration Date), or in the case of a Termination for Cause, in which case all NQSOs held by the Option
                    Holder shall expire immediately.  If the Option Holder’s Service terminates on account of the Option Holder’s death or Disability, the Vesting Date for all NQSOs that have not vested or been forfeited shall be accelerated to the date of
                    that termination of Service, and the Exercise Period of all NQSOs shall expire one year after that termination of Service (but in no event after the Expiration Date). [Post-termination


                      exercise period may be modified at Committee’s election except with respect to a Termination for Cause.]

              


      

      
        	
                7.

              	
                Effect of Change in Control.  In accordance with Plan Section 5.5(b)(iii), if a Change in
                    Control occurs and the Participant experiences an Involuntary Separation from Service other than a Termination for Cause during the 365-day period following the date of such Change in Control, then the Vesting Date for any non-vested
                    NQSO will be accelerated to the date of the Participant’s Involuntary Separation from Service (unless the acquirer does not assume the outstanding NQSOs or replaces them with a benefit that the Committee determines to be of equivalent
                    value, in which case any nonvested NQSOs will be become vested upon the effective date of the Change in Control).

              


      

      
        	
                8.

              	
                Option Holder’s Rights.  The NQSOs awarded hereby do not entitle the Option Holder to any
                    rights of a stockholder of the Corporation.

              


      

       

         

       

         

      
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                9.

              	
                Delivery of Shares to Option Holder.  Promptly after receipt of an Exercise Notice and full
                    payment of the Exercise Price for the Shares being acquired, the Corporation shall issue and deliver to the Option Holder (or other person validly exercising the NQSO) a certificate or certificates representing the Shares of Common
                    Stock being purchased, or evidence of the issuance of such Shares in book-entry form, registered in the name of the Option Holder (or such other person), or, upon request, in the name of the Option Holder (or such other person) and in
                    the name of another person in such form of joint ownership as requested by the Option Holder (or such other person) pursuant to applicable state law.  The Corporation’s obligation to deliver a stock certificate or evidence of the
                    issuance of Shares in book-entry form for Shares purchased upon the exercise of an NQSO can be conditioned upon the receipt of a representation of investment intent from the Option Holder (or the Option Holder’s Beneficiary) in such
                    form as the Committee requires.  The Corporation shall not be required to deliver stock certificates or evidence of the issuance of Shares in book-entry form for Shares purchased prior to: (a) the listing of those Shares on the Nasdaq;
                    or (b) the completion of any registration or qualification of those Shares required under applicable law.

              


        
          	
                  10.

                	
                  Adjustments in Shares.  In the event of any recapitalization, forward or reverse stock
                      split, reorganization, merger, consolidation, spin-off, combination, exchange of Shares or other securities, stock dividend, special or recurring dividend or distribution, liquidation, dissolution or other similar corporate
                      transaction or event, the Committee, in its sole discretion, shall adjust the number of Shares or class of securities of the Corporation covered by the NQSOs or the Exercise Price of the NQSOs.  The Option Holder agrees to execute any
                      documents required by the Committee in connection with an adjustment under this Section 10.

                


        

        
          	
                  11.

                	
                  Tax Withholding.  The Corporation shall have the right to require the Option Holder to pay
                      to the Corporation the amount of any tax that the Corporation is required to withhold with respect to such Shares, or in lieu thereof, to retain or sell without notice, a sufficient number of Shares to cover the minimum amount
                      required to be withheld , provided, however, that (a) no Shares are withheld with a value exceeding the maximum amount of
                        tax that may be required to be withheld by law (or such other amount as may be permitted while still avoiding classification of the NQSO as a liability for financial accounting purposes), and (b) with respect to an NQSO held by any
                        Participant who is subject to the filing requirements of Section 16 of the Exchange Act, any such share withholding must be specifically approved by the Compensation Committee as the applicable method that must be used to satisfy
                        the tax withholding obligation or such share withholding procedure must otherwise satisfy the requirements for an exempt transaction under Section 16(b) of the Exchange Act.  The Corporation shall have the right to deduct
                      from all dividends paid with respect to the Shares the amount of any taxes that the Corporation is required to withhold with respect to such dividend payments.

                


        

        
          	
                  12.

                	
                  Plan and Committee Decisions are Controlling.  This Agreement, the award of NQSOs to the
                      Option Holder and the issuance of Shares upon the exercise of the NQSOs are subject in all respects to the provisions of the Plan, which are controlling.  Capitalized terms herein not defined in this Agreement shall have the meaning
                      ascribed to them in the Plan.  All decisions, determinations and interpretations by the Committee respecting the 

                     

                


        

         

           

         

           

        
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                  Plan, this Agreement, the award of NQSOs or the issuance of Shares upon the exercise of the NQSOs shall be binding and conclusive upon the Option Holder, any Beneficiary of the Option
                    Holder or the legal representative thereof.

                


        

        
          	
                  13.

                	
                  Option Holder’s Employment.  Nothing in this Agreement shall limit the
                      right of the Corporation or any of its Affiliates to terminate the Option Holder’s service or employment as a director, advisory director, director emeritus, officer or employee, or otherwise impose upon the Corporation or any of its
                      Affiliates any obligation to employ or accept the services or employment of the Option Holder.

                


        

        
          	
                  14.

                	
                  Amendment.  The Committee may waive any conditions of or rights of the
                      Corporation or modify or amend the terms of this Agreement; provided, however, that the Committee may not amend, alter, suspend, discontinue or terminate any provision of this Agreement if such action may adversely affect the Option
                      Holder without the Option Holder’s written consent.  To the extent permitted by applicable laws and regulations, the Committee shall have the authority, in its sole discretion but with the permission of the Option Holder, to
                      accelerate the vesting of the Shares or remove any other restrictions imposed on the Option Holder with respect to the Shares, whenever the Committee may determine that such action is appropriate.

                


        

        
          	
                  15.

                	
                  Option Holder Acceptance.  The Option Holder shall signify acceptance of
                      the terms and conditions of this Agreement and acknowledge receipt of a copy of the Plan by signing in the space provided below and returning the signed copy to the Corporation.

                


        

      

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

      
        	
                 

              	
                
                  TIMBERLAND BANCORP, INC.

                  

                  

                  

                  

                  By ________________________________

                  Its ________________________________

                  

                  

                  ACCEPTED BY OPTION HOLDER

                  ___________________________________

                  (Signature)

                  

                  

                  ___________________________________

                  (Print Name)

                  

                  

                  ___________________________________

                  (Street Address)

                  ___________________________________

                  (City, State and Zip Code)

                   

              


      

      

    

  

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