Exhibit 10.16

EMPLOYMENT AGREEMENT

between

AmerInst Professional Services, Limited

and

F. Kyle Nieman III

This Employment Agreement (“Agreement”) is effective the 24th day of November,
2009, by and between AmerInst Professional Services, Limited (“Employer”), and
F. Kyle Nieman III (“Employee”).

WHEREAS, Employer is a new venture which requires the services of Employee to
develop and manage its operations; and

WHEREAS, the parties desire to enter this Agreement to provide Employee with a
term of employment and to memorialize the terms of the parties’ employment
relationship,

NOW THEREFORE, the parties mutually agree as follows:

 

1. Employee will perform the duties of President of Employer during the “Term”
or any “Renewal Term” (as defined below) of this Agreement and respond to any
reasonable directives of Employer relating to the position of President and
Chief Executive Officer. Employee shall devote his full time, efforts, and
energies to the position of President and Chief Executive Officer and will not
accept, or engage in, any other business, employment, or occupation without the
express prior written consent of Employer, which may be denied. Employee shall
report to the Board of Directors of Employer.

 

2. Employee shall have an initial term of employment with Employer from the date
of execution of this Agreement until December 31, 2011 (“the Term”).

 

3. The Term and this Agreement shall be automatically renewed for successive one
year terms (“Renewal Term”) concluding December 31, 2012, and each December 31st
thereafter unless either Employer or Employee provides notice to the other, in
writing, at least sixty (60) days prior to the expiration of the Term or any
Renewal Term, of intent to terminate. Either party may exercise such right, with
or without cause.

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4. For purposes of defining termination by Employer, “Cause” shall constitute
only the following: gross negligence, or willful misconduct, or fraud involving
the Company, the conviction of felonious criminal acts, or the inability to
perform Employee’s duties as President due to physical or mental disability or
incapacity as may be determined by a physician licensed to practice medicine in
the State of Illinois.

 

5.

During the Term, Employer shall pay Employee an annual salary of no less than
$250,000, paid on a semi-monthly basis. During any Renewal Term, Employer shall
pay Employee an annual salary pursuant to an Exhibit A which will be attached to
this Agreement no later than seventy-five (75) days prior to the end of the Term
or any Renewal Term. The attachment of any such exhibit to this Agreement does
not impair the right of either party to terminate this Agreement in accordance
with Paragraph 3. Salary payments will be less all applicable and usual
deductions and subject to such increases which may be made to such salary at the
discretion of Employer. During the Term or any Renewal Term, in addition to the
receipt of salary, and subject to (i) meeting or exceeding Employer’s revenue
target specified in each Exhibit A and (ii.a.) during the Term, profitable
operations of AmerInst Insurance Company, Ltd. (“AIC”), or (ii.b.) during any
Renewal term, a combined ratio of AIC as respects its reinsurance of the
policies solicited and underwritten by Employer not exceeding the target
specified in each Exhibit A, Employee shall be eligible to receive annual
bonuses calculated as a percentage of annual salary based on profitability of
Employer. Employee’s annual bonus will be calculated as his salary times the
percentage by which Employer’s actual profitability exceeds the

 

Employment Agreement between

AmerInst Professional Services, Limited and Kyle Nieman

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target value specified in the applicable Exhibit A. In no event may an annual
bonus exceed 100% of salary specified in any Exhibit A. Any such annual bonus
will be paid on the March 31st following the close of the annual period
reflected in each Exhibit A. All payments to Employee described in this
Paragraph 5 during any calendar year may hereafter be referred to as “Annual
Compensation”.

 

6. During the Term or any Renewal Term, Employee shall be entitled to full
participation in all benefit plans and programs for which Employer’s senior
officers are or shall become eligible (“Benefits”).

 

7. After completion of the first full calendar year of operations and
thereafter, and contingent upon Employee qualifying for an annual bonus as
provided by Paragraph 5, Employee will be eligible to receive options under a
non-qualified plan which will allow Employee to purchase up to the number of
shares of AmerInst Insurance Group (“AMIG”) stated in Exhibit A, over a five
(5) year time period, at the cost of the net book value of the shares as of the
date each option is granted. Terms of stock options will be negotiated between
Employee and Employer at the time of eligibility. Employer will endeavor to
assure that the stock option awards shall be in compliance with all U.S. tax
laws applicable to Employee in effect at the time of the granting of stock
options.

 

8.

Effective January 1, 2010, Employer will create an account on behalf of Employee
comprised of a number of phantom shares of AMIG common stock calculated as
$1,500,000 divided by the net book value of each share of such common stock at
December 31, 2009. The phantom shares will be maintained in a separate account
by Employer, which will be eligible for phantom dividends, at the same rate paid
on regular shares. The phantom dividends may be used only to purchase additional
phantom shares

 

Employment Agreement between

AmerInst Professional Services, Limited and Kyle Nieman

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with the purchase price of such phantom shares to be the then current net book
value of actual shares. Employee’s interest in phantom shares initially
deposited and those phantom shares purchased with phantom dividends prior to
January 1, 2015, will vest on January 1, 2015, unless one of the following
events occurs, which will cause the phantom shares to vest immediately:
(i) termination of this Agreement by Employer at the expiration of the Term or
any Renewal Term, (ii) termination by Employer of Employee other than for Cause,
(iii) material diminishment by Employer of Employee’s duties as President and
Chief Executive Officer or significant reduction by Employer of Employee’s
Annual Compensation or Benefits, including at the expiration of the Term or any
Renewal Term, or (iv) change in control of Employer, other than a transaction
between AMIG and/or any of its affiliates or subsidiaries. Employee’s interest
in any phantom shares purchased with phantom dividends on or after January 1,
2015, will vest immediately. The proceeds of the phantom share account, less the
initial value of $1,500,000, will be paid in cash to Employee at age sixty-five
(65), if retired, or within sixty (60) days in the event of Employee’s death or
permanent disability including if such death or permanent disability occurs
prior to January 1, 2015. If Employee is terminated other than for Cause, the
value of the phantom share account, less the initial value of $1,500,000, will
be paid in cash at termination. If Employee chooses to resign, or is terminated
for Cause, the value of the phantom share account, if vested, less the initial
value of $1,500,000, will be paid in cash in five (5) equal annual installments
on the anniversaries of the date of termination or resignation. If there is a
change in control of Employer, other than a transaction between AMIG and/or any
of its affiliates or subsidiaries, Employee will have the right to receive the
proceeds immediately. In the

 

Employment Agreement between

AmerInst Professional Services, Limited and Kyle Nieman

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event of a sale or merger of AMIG, for each share of phantom stock held,
Employee will be paid the per share value used in the sale or merger. Employer
will endeavor to assure that the phantom share awards shall be in compliance
with all U.S. tax laws applicable to Employee in effect at the time of the
granting or purchase of phantom shares.

 

9. In the event that Employer terminates the employment of Employee other than
for Cause, as defined in Paragraph 4 above, during the Term or any Renewal Term,
Employer shall pay Employee the sum equivalent to six (6) months’ Annual
Compensation, less all applicable and usual deductions. However, in the event
that revenue goals set forth in the then-current annual budget and business plan
are met for the annual period preceding termination, Employer shall pay Employee
the sum equivalent to one (1) year’s Annual Compensation, less all applicable
and usual deductions. Employer shall pay the sums due Employee under this
Paragraph 9 within thirty (30) days of termination. In the event that Employer
terminates the employment of Employee for Cause, as defined in Paragraph 4
above, during the Term or any Renewal Term, Employer shall have no further
Annual Compensation obligation to Employee beyond those sums actually paid to
Employee as of the effective date of termination for Cause.

 

10. In the event Employee is terminated for Cause, Employer shall have no
further obligations to Employee under this Agreement, other than as described in
Paragraphs 8 and 9 above, including with respect to the payment of Annual
Compensation, Benefits or any other sums, except those imposed by the terms of
any plans under which Employee was receiving any Benefits during the Term or any
Renewal Term, or as otherwise provided by law.

 

Employment Agreement between

AmerInst Professional Services, Limited and Kyle Nieman

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11.

In the event that Employee terminates his employment with Employer, Employer
shall have no further obligations to Employee, including with respect to the
payment of Annual Compensation, Benefits, or any other sums, except those
imposed by the terms of any plans under which Employee was receiving any
Benefits during the Term or any Renewal Term, or as otherwise provided by law
and the vested portion of phantom shares awarded to Employee pursuant to
Paragraph 8, the proceeds of which will be paid to Employee in five (5) equal
installments, the first of which would be paid thirty (30) days after the
effective date of termination with the remaining installments paid on the first
(1st) through fourth (4th) anniversaries of the effective date of termination.
However, Employee shall be entitled to all rights and benefits under the terms
of this Agreement in the event that Employer materially diminishes Employee’s
duties as President and Chief Executive Officer or significantly reduces
Employee’s Annual Compensation or Benefits. Under such circumstances, Employee
will retain all rights under this Agreement, and Employer shall be subject to
all of its obligations under this Agreement, including with respect to the
payment of severance to Employee as set forth in Paragraph 9 above.

 

12.

In the event that Employee terminates his employment with Employer in
circumstances other than those where Employer has materially diminished
Employee’s duties or compensation, Employee expressly agrees that, during the
twenty-four (24) month time period immediately following such termination,
Employee will not work within the State of Illinois in a managerial or executive
capacity for any insurance business that is or could be competitive with
Employer. In addition, during that same twenty-four (24) month time period,
Employee agrees that he will not solicit any then current employees of Employer
to work for any insurance business by which Employee is then employed or

 

Employment Agreement between

AmerInst Professional Services, Limited and Kyle Nieman

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in which Employee otherwise holds an ownership interest. Should Employee be
found to be in breach the provisions of this Paragraph 12 by a court of
competent jurisdiction, Employer will be relieved of all unpaid obligations due
Employee at the time of such breach.

 

13. Employee agrees to Employer’s purchase, at Employer’s sole cost, of a keyman
life insurance policy on Employee’s life. Employer shall be the sole beneficiary
of such policy.

 

14. This Agreement, including exhibits, contains the entire Agreement between
Employer and Employee, and expressly supersedes any and all prior agreements
between these parties with respect to Employee’s employment and his employment
relationship with Employer.

 

15. No modifications shall be made to this Agreement, including during the Term
or any Renewal Term, unless and until agreed to and accepted by a writing signed
by both Employee and an authorized representative of Employer.

 

16. This Agreement shall be binding upon any and all successors and assigns of
Employer. This Agreement, including during the Term and any Renewal Term, shall
survive any sale of assets, merger, consolidation, or other change in control of
Employer.

 

17. If any term, condition, or provision shall be found to be illegal or
unenforceable by a court of competent jurisdiction, all other provisions of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

18. This Agreement shall be construed and interpreted under the laws of the
State of Illinois, without regard to any conflicts of laws analysis.

 

Employment Agreement between

AmerInst Professional Services, Limited and Kyle Nieman

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19. Employer and Employee each represent and acknowledge that this Agreement:
was negotiated by the parties; that each has read its terms and provisions and
understands them; that each has had ample time to review and consider its terms
and conditions prior to execution; that each has had the opportunity to consult
with counsel of its choice; and that each enters this Agreement freely and
voluntarily.

SIGNATURES ON FOLLOWING PAGE

 

Employment Agreement between

AmerInst Professional Services, Limited and Kyle Nieman

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By F. Kyle Nieman III (“Employee”):     By AmerInst Professional Services,
Limited (“Employer”):

/s/ F. Kyle Nieman III

   

/s/ Irvin F. Diamond, Chairman

    NAME / TITLE Dated: 11/24/2009     Dated: 11/24/2009

 

Employment Agreement between

AmerInst Professional Services, Limited and Kyle Nieman

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Exhibit A

This Exhibit is attached to and made part of the Employment Agreement between
AmerInst Professional Services, Limited and Kyle Nieman pursuant to Paragraph 5
of the Agreement. Notwithstanding any contrary language of Paragraph 5,
Employee’s bonus will be a function of actual revenue and operating income
compared to the target values in this Exhibit A. Bonus components will be
determined separately by revenue and operating income, subject to interpolation
should actual revenue and operating income fall within the ranges specified
below. Employee’s bonus will be calculated as the arithmetic mean of the two
bonus components multiplied by Employee’s salary. In no event may a bonus exceed
100% of salary specified in this Exhibit A.

 

Period:

   January 1 to December 31, 2010

Salary:

   $250,000 AmerInst Insurance Company Target Combined Ratio:    N/A APSL Gross
Commission Revenue (000):    Bonus Percentage < 2,564    0% 3,205    25% 3,846
   50% 4,487    75% 5,128    100% APSL Net Income before taxes, intercompany
charges, bonus calculations and other incentive compensation (000):    Bonus
Percentage

< -0-

  

215

   0

642

   25%

1,069

   50%

1,496

   75%    100%

Maximum shares eligible for stock option:

   5,000

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Accepted and Agreed:     By F. Kyle Nieman III (“Employee”):     By AmerInst
Professional Services, Limited (“Employer”):

/s/ F. Kyle Nieman III

   

/s/ Irvin F. Diamond, Chairman

    NAME / TITLE Dated: 11/24/2009     Dated: 11/24/2009