14.  EMPLOYEE BENEFITS

The Company has two defined contribution retirement plans covering substantially all of its eligible United States employees.  Employer contribution costs recognized under the retirement plan amounted to approximately $3,290, $1,938, and $2,757 during 2017, 2016, and 2015, 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 $328, $369, and $416 during 2017, 2016, and 2015, respectively.

Sun Hydraulics US uses 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 Hydraulics group employees participate in the shared distribution through contributions into local retirement plans.    

The Company contributed 16,241 and 44,509 shares into the ESOP in March 2017 and March 2016, respectively.  The Company incurred retirement benefit expense under the ESOP of approximately $1,016, $567, and $1,432 during 2017, 2016 and 2015, 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 $166, $199, and $336 in 2017, 2016, and 2015, respectively, relating to shared distributions.  The Company’s U.K. employees received 775 and 3,547 shares in March 2017 and March 2016, 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 their shared distribution in the form of cash in March 2017, and in March 2016 a portion was paid in cash and for the remainder the employees received 2,561 shares.