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Note 15 - Stock Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Text Block]

15. STOCK COMPENSATION

Phantom Shares:

Protexure Insurance Agency, Inc. (“Protexure”), a subsidiary of AmerInst, has employment agreements with two key members of senior management, which grant them phantom shares of the Company. Under these agreements, these employees were initially granted an aggregate of 48,762 phantom shares of the Company on the date of their employment, subject to certain vesting requirements. The phantom shares are eligible for phantom dividends payable at the same rate as regular dividends on the Company’s common shares. The phantom dividends may be used only to purchase additional phantom shares with the purchase price of such phantom shares being the net book value of the Company’s actual common shares as of the end of the previous quarter. During the year, no phantom shares were granted.

For these two employees, the phantom shares initially granted, as well as any additional shares granted from dividends declared, vested on January 1, 2015. The liability payable to each of these employees under the phantom share agreements is equal to the value of the phantom shares based on the net book value of the Company’s actual common shares at the end of the previous quarter less the value of phantom shares initially granted and is payable in cash upon (i) the participant’s death, termination of employment due to disability, retirement at or after age 65 or resignation for good reason, (ii) termination of the participant by the Company without cause, (iii) termination by Participant without good reason or (iv) change in control.

During the third quarter of 2021, the death occurred of one former key member of Protexure’s senior management, who had been granted phantom shares. At the date of his death, this former employee held 13,483 phantom shares, which vested on January 1, 2015. Due to the overall decrease in the net book value of the Company’s common shares since the grant date of his phantom shares, there is no liability payable by the Company to this former employee relating to these phantom shares. The following table provides a reconciliation of the beginning and ending balance of vested phantom shares for the year ended December 31, 2021:

62,920 and 76,403 phantom shares were outstanding at December 31, 2021 and December 31, 2020, respectively. The following table provides a reconciliation of the beginning and ending balance of vested phantom shares for the year ended December 31, 2021:

	Number of Phantom Shares
Outstanding—beginning		76,403
Granted—arising from dividends declared during the year.		-
Forfeited—due to death		(13,483	)
Outstanding—ending		62,920

The liability relating to these phantom shares is recalculated quarterly based on the net book value of our common shares at the end of each quarter. As a result of the overall decrease in the net book value of our common shares since the grant dates, we have not recorded any liability relating to these phantom shares at December 31, 2021.

Stock Option Plan:

A summary of the status of the stock option plan as of December 31, 2021 is as follows:

	Vested Shares		Weighted Average Exercise Price Per Share		Non-vested Shares			Weighted Average Exercise Price Per Share		Total Shares		Weighted Average Exercise Price Per Share
Outstanding—January 1, 2021		25,300	$	28.40		19,700		$	28.71		45,000	$	28.54
Granted		—		—		—			—		—		—
Forfeited		—		—		—			—		—		—
Exercised		—		—		—			—		—		—
Vested		8,900		28.52		(8,900	)		28.52		—		—
Outstanding—December 31, 2021		34,200	$	28.43		10,800		$	28.86		45,000	$	28.54
Options exercisable at year end		—		—		—			—		—		—
Weighted average fair value of options per share granted during the year		—		—	$	—			—	$	—		—
Remaining contractual life (years)		1.2				1.4					1.3

A summary of the status of the stock option plan as of December 31, 2020 is as follows:

	Vested Shares		Weighted Average Exercise Price Per Share		Non-vested Shares			Weighted Average Exercise Price Per Share		Total Shares		Weighted Average Exercise Price Per Share
Outstanding—January 1, 2020		16,400	$	28.34		28,600		$	28.65		45,000	$	28.54
Granted		—		—		—			—		—		—
Forfeited		—		—		—			—		—		—
Exercised		—		—		—			—		—		—
Vested		8,900		28.52		(8,900	)		28.52		—		—
Outstanding—December 31, 2020		25,300	$	28.40		19,700		$	28.71		45,000	$	28.54
Options exercisable at year end		—		—		—			—		—		—
Weighted average fair value of options per share granted during the year		—		—	$	—			—	$	—		—
Remaining contractual life (years)		2.2				2.3					2.3

No options were granted during 2021 and 2020 and 2019.

Information pertaining to options outstanding at December 31, 2021 is as follows:

	Options Outstanding					Options Exercisable
Range of exercise price	Number Outstanding		Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)
$27.99		7,000	1.0	$	27.99		28,000	$	27.99	1.0
$30.58		2,800	2.0	$	30.58		4,200	$	30.58	2.0
$30.14		1,000	2.8	$	30.14		2,000	$	30.14	2.8

Information pertaining to options outstanding at December 31, 2020 is as follows:

	Options Outstanding					Options Exercisable
Range of exercise price	Number Outstanding		Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)
$27.99		14,000	2.0	$	27.99		21,000	$	27.99	2.0
$30.58		4,200	3.0	$	30.58		2,800	$	30.58	3.0
$30.14		1,500	3.8	$	30.14		1,500	$	30.14	3.8

At December 31, 2021, there was no intrinsic value associated with (i) the 35,000 options granted March 3, 2017, (ii) the 7,000 options granted on January 1, 2018 and (iii) the 5,000 optioned granted on October 1, 2018 where the market value of the stock as of the close of business at year end was $5.92 per share as compared with the option exercise prices of $27.99, $30.58 and $30.14, respectively.

The Company accounts for these options in accordance with GAAP, which requires that the fair value of the equity awards be recognized as compensation expense over the period during which the employee is required to provide service in exchange for such an award. The Company is amortizing compensation expense over the vesting period, or five years. The Company recognized $0 and $(178,483) of compensation expense for stock options in the years ended December 31, 2021 and 2020, respectively.