15.  EMPLOYEE BENEFITS

The Company has two defined contribution retirement plans covering substantially all of its eligible United States employees.  Employer contributions under the retirement plan amounted to approximately $1,938, $2,757, and $4,325 during 2016, 2015, and 2014, respectively.

The Company provides supplemental pension benefits to its employees of foreign operations in addition to mandatory benefits included in local country payroll tax statutes.  These supplemental pension benefits amounted to approximately $369, $416, and $415 during 2016, 2015, and 2014, respectively.

Sun Hydraulics US and HCT use an Employee Stock Ownership Plan (“ESOP”) as the discretionary match portion of its 401(k) retirement plan for all eligible United States employees.  Under the ESOP, which is 100% company funded, the Company allocates common stock to each participant's account. The allocation is generally a percentage of a participant’s compensation as determined by the Board of Directors on an annual basis as part of the shared distribution.  The shared distribution rewards employees through a contribution into their retirement accounts and concurrently rewards shareholders with a special cash dividend.  Non-US Sun Hydraulic group employees participate in the shared distribution through contributions into local retirement plans.  In 2016, the Company accrued an amount equal to 2.0% of eligible wages in accordance with the shared distribution announced in February 2017.  

The Company contributed 44,509 and 82,269 shares into the ESOP in March 2016 and March 2015, respectively.  The Company incurred retirement benefit expense under the ESOP of approximately $567, $1,432, and $3,021 during 2016, 2015 and 2014, respectively.  These amounts are included in the total employer contributions to the retirement plan noted above.

There are no restrictions on the shares contributed to the ESOP.  This allows participants to sell their shares to enable diversification within their individual 401(k) accounts.  The Company does not have any repurchase obligations under the ESOP.

During 2008, the Company developed plans for international employees to participate in the shared distributions. The Company’s foreign operations recognized total expense of approximately $199, $336, and $673 in 2016, 2015, and 2014, respectively, relating to shared distributions.  The Company’s U.K. employees received 3,547 and 5,516 shares in March 2016 and March 2015, respectively, into a share incentive plan. In Korea, employees received their shared distribution in the form of cash, which was deposited into a Company retirement plan. In Germany, employees received 2,561 and 4,504 shares in March 2016 and March 2015, respectively.  The remainder was paid in cash.

Due to tax provisions in some foreign jurisdictions which make stock awards difficult, the Company sometimes awards deferred cash bonuses to key employees of its foreign operations.  The deferred cash bonuses are similar to phantom stock units, in that such bonuses are tied to the value of the Company’s common stock.  Awards are recognized over the deferral period as variable plan awards.  The Company recognized approximately $10, $17 and $35 of compensation expense in 2016, 2015 and 2014, respectively, related to the awards.