Common Stock and Earnings per Share

12 Months Ended

Dec. 31, 2020

Common Stock and Earnings per Share

The Company's Class A common stock is traded on the New York Stock Exchange under the ticker symbol “HY.” Because of transfer restrictions on Class B common stock, no trading market has developed, or is expected to develop, for the Company's Class B common stock. The Class B common stock is convertible into Class A common stock on a one-for-one basis at any time at the request of the holder. The Company's Class A common stock and Class B common stock have the same cash dividend rights per share. The Class A common stock has one vote per share and the Class B common stock has ten votes per share. The total number of authorized shares of Class A common stock and Class B common stock at December 31, 2020 was 125 million shares and 35 million shares, respectively. Treasury shares of Class A common stock totaling 82,670 and 221,190 at December 31, 2020 and 2019, respectively, have been deducted from shares outstanding.

Stock Compensation: The Company has stock compensation plans for certain employees in the U.S. that allow the grant of shares of Class A common stock, subject to restrictions, as a means of retaining and rewarding them for long-term performance and to increase ownership in the Company. Shares awarded under the plans are fully vested and entitle the stockholder to all rights of common stock ownership except that shares may not be assigned, pledged or otherwise transferred during the restriction period. In general, the restriction period ends at the earliest of (i) five years after the participant's retirement date, (ii) four, seven or ten years from the award date, as defined in the award, or (iii) the participant's death or permanent disability. Pursuant to the plans, the Company issued 111,148 and 88,172 shares related to the years ended December 31, 2019 and 2018, respectively. There were no shares issued related to 2020. After the issuance of these shares, there were 208,570 shares of Class A common stock available for issuance under these plans. Compensation expense related to these share awards was $7.0 million ($5.5 million net of tax) and $4.5 million ($3.6 million net of tax) for the years ended 2019 and 2018, respectively. Compensation expense at the grant date represents fair value based on the market price of the shares of Class A common stock. The Company also has a stock compensation plan for non-employee directors of the Company under which a portion of the non-employee directors’ annual retainer is paid in restricted shares of Class A common stock. For the year ended December 31, 2020, $124,000 of each non-employee director's retainer of $184,000 was to be paid in restricted shares of Class A common stock. The non-employee directors' retainer was reduced by 10% from May through December of 2020. For the year ended December 31, 2019, $118,000 of $178,000 was paid in restricted shares of Class A common stock. For the year ended December 31, 2018, $113,000 of $173,000 was paid in restricted shares of Class A common stock. Shares awarded under the

plan are fully vested and entitle the stockholder to all rights of common stock ownership except that shares may not be assigned, pledged or otherwise transferred during the restriction period. In general, the restriction period ends at the earliest of (i) ten years from the award date, (ii) the date of the director's death or permanent disability, (iii) five years (or earlier with the approval of the Board of Directors) after the director's date of retirement from the Board of Directors, or (iv) the date on which the director has both retired from the Board of Directors and reached 70 years of age. Pursuant to this plan, the Company issued 28,323, 18,954 and 16,196 shares related to the years ended December 31, 2020, 2019 and 2018, respectively. In addition to the mandatory retainer fee received in restricted stock, directors may elect to receive shares of Class A common stock in lieu of cash for up to 100% of the balance of their annual retainer, meeting attendance fees, committee retainer and any committee chairman's fees. These voluntary shares are not subject to any restrictions. Total shares issued under voluntary elections were 1,610, 1,711 and 2,182 in 2020, 2019 and 2018, respectively. After the issuance of these shares, there were 54,320 shares of Class A common stock available for issuance under this directors' plan. Compensation expense related to these awards was $1.3 million ($1.0 million net of tax), $1.2 million ($0.9 million net of tax) and $1.2 million ($0.9 million net of tax) for the years ended December 31, 2020, 2019 and 2018, respectively. Compensation expense at the grant date represents fair value based on the market price of the shares of Class A common stock.

Earnings per Share: For purposes of calculating earnings per share, no adjustments have been made to the reported amounts of net income attributable to stockholders. In addition, basic and diluted earnings per share for Class A common stock are the same as Class B common stock. The weighted average number of shares of Class A common stock and Class B common stock outstanding used to calculate basic and diluted earnings per share were as follows:


	2020		2019		2018
Basic weighted average shares outstanding	16.775		16.645		16.540
Dilutive effect of restricted stock awards	0.024		0.081		0.062
Diluted weighted average shares outstanding	16.799		16.726		16.602
Basic earnings per share	$	2.21	$	2.15	$	2.10
Diluted earnings per share	$	2.21	$	2.14	$	2.09
Cash dividends per share	$	1.2700	$	1.2625	$	1.2325