Restricted net assets

[Table of Contents](#ic55317410763413da1d4be4008f977bd_658)Globe Life Inc.Notes to Consolidated Financial Statements(Dollar amounts in thousands, except per share data)Restrictions: Restrictions exist on the flow of funds to Globe Life Inc. from its insurance subsidiaries. Statutory regulations require life insurance subsidiaries to maintain certain minimum amounts of capital and surplus. Dividends from insurance subsidiaries of Globe Life Inc. are restricted based on regulations by their states of domicile. Additionally, insurance company distributions are generally not permitted in excess of statutory surplus. Subsidiaries are also subject to certain minimum capital requirements. Subsidiaries of Globe Life paid cash dividends to the Parent Company in the amount of $479 million in 2021, $486 million in 2020, and $480 million in 2019. As of December 31, 2021, dividends from insurance subsidiaries to the Parent Company available to be paid in 2022 are limited to the amount of $347 million without regulatory approval, such that $1.2 billion was considered restricted net assets of the subsidiaries. Dividends exceeding these limitations may be available during the year pending regulatory approval. While there are no legal restrictions on the payment of dividends to shareholders from Globe Life's retained earnings, retained earnings as of December 31, 2021, were restricted by lenders’ covenants which require the Company to maintain and not distribute $4.3 billion from its total consolidated retained earnings of $6.2 billion.   
Earnings per Share: A reconciliation of basic and diluted weighted-average shares outstanding used in the computation of basic and diluted earnings per share is as follows:

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|  | Year Ended December 31, |
|  | 2021 |  | 2020 |  | 2019 |
| Basic weighted average shares outstanding | 102,069,781  |  |  | 106,075,267  |  |  | 109,213,524  |  |
| Weighted average dilutive options outstanding | 1,100,351  |  |  | 1,149,327  |  |  | 2,167,726  |  |
| Diluted weighted average shares outstanding | 103,170,132  |  |  | 107,224,594  |  |  | 111,381,250  |  |
|  |  |  |  |  |  |
| Antidilutive shares | 2,412,884  |  |  | 2,476,019  |  |  | 21,556  |  |

  
Antidilutive shares are excluded from the calculation of diluted earnings per share. All antidilutive shares noted above result from outstanding out of the money employee and Director stock options.  
  
Note 13—Stock-Based Compensation  Globe Life's stock-based compensation consists of stock options, restricted stock, restricted stock units, and performance shares. Certain employees and members of the board of directors (directors) have been granted fixed equity options to buy shares of Globe Life stock at the market value of the stock on the date of grant, under the provisions of the Globe Life stock option plans. The options are exercisable during the period commencing from the date they vest until expiring according to the terms of the grant. Options generally expire the earlier of employee termination or option contract term, which are either seven-year or ten-year terms. Options generally vest in accordance with the following schedule: 

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|  |  |  | Shares vested by period |
|  | Contract Period |  | 6 Months |  | Year 1 |  | Year 2 |  | Year 3 |  | Year 4 |  | Year 5 |
| Directors  | 7 years |  | 100% |  | —% |  | —% |  | —% |  | —% |  | —% |
| Employees  | 7 years |  | —% |  | —% |  | 50% |  | 50% |  | —% |  | —% |
| Employees  | 10 years |  | —% |  | —% |  | 25% |  | 25% |  | 25% |  | 25% |

  
All employee options vest immediately upon retirement on or after the attainment of age 65, upon death, or disability. Globe Life generally issues shares for the exercise of stock options from treasury stock. The Company generally uses the proceeds from option exercises to buy shares of Globe Life common stock in the open market to reduce the dilution from option exercises.  
107 GL 2021 FORM 10-K
