STOCK-BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2016

STOCK-BASED COMPENSATION PLANS

STOCK-BASED COMPENSATION PLANS

5.STOCK-BASED COMPENSATION PLANS

Stock Incentive Plans

The Company’s Stock Incentive Plans provide for the granting of stock awards, including stock options, stock appreciation rights, and restricted stock, to employees and non-employees, including directors of the Company.

As of December 31, 2016, the Company had 727,107 shares of common stock available for grant under stock incentive plans.

Restricted Stock

The following is a summary of restricted stock grants, fair value and performance based awards:

For the year ended December 31,	Unvested  restricted  stock awards	Weighted  average grant  date fair value		Awards with  performance  vesting  requirements
2016	105,662	$	19.99	60,153
2015	76,714	$	27.37	41,792
2014	168,334	$	11.26	88,566

The value at the date of award is amortized to compensation expense over the related service period, which is generally three years for time vested grants.  Short-term performance based grants can be achieved over a period of one year, and long-term performance grants can be earned through December 31, 2020.  Earned grants are then subject to either a 3 year or 5 year service period.  Shares of non-vested restricted stock are forfeited if a recipient leaves the Company before the vesting date.  Shares that are forfeited become available for future awards.

The following is a summary of restricted stock activity during years 2016, 2015 and 2014:

	Number of Nonvested Restricted Shares
Balance, December 31, 2013	520,195
Awarded	168,334
Forfeited	(42,141	)
Vested	(158,710	)
Balance, December 31, 2014	487,678
Awarded	76,714
Forfeited	(7,066	)
Vested	(190,127	)
Balance, December 31, 2015	367,199
Awarded	105,662
Forfeited	(5,912	)
Vested	(158,407	)
Balance, December 31, 2016	308,542

The following is a summary of performance based restricted stock activity during years 2016, 2015 and 2014:

	Total performance grants
Outstanding, December 31, 2013	15,190
Awarded	88,566
Performance criteria met	(92,583	)
Forfeited	(5,281	)
Outstanding, December 31, 2014	5,892
Awarded	41,792
Performance criteria met	(14,200	)
Forfeited	(4,296	)
Outstanding, December 31, 2015	29,188
Awarded	60,153
Performance criteria met	(38,167	)
Forfeited	(6,302	)
Outstanding, December 31, 2016	44,872

The performance criteria and forfeitures in the above table did not occur until the Board of Directors approved them during the February 2017, 2016 and 2015 meetings.

Share-Based Compensation Expense

Restricted Stock

During 2016, 2015 and 2014 compensation expense net of forfeitures of $1,893, $1,744 and $1,541 was recorded, respectively.  As of December 31, 2016, there was $2,573 of total unrecognized compensation expense related to restricted stock awards, of which approximately $1,326 is expected to be recognized in 2017.

Employee Stock Ownership Plan

The Company sponsors an Employee Stock Ownership Plan (“ESOP”) that covers all non-union U.S. employees who work over 1,000 hours per year.  The terms of the ESOP require the Company to make an annual contribution equal to the greater of i) the Board established percentage of pretax income before the contribution (5% in 2016, 2015 and 2014) or ii) the annual interest payable on any loan outstanding to the Company from the ESOP.  Company contributions to the Plan accrued for 2016, 2015 and 2014, respectively, were $674, $812 and $980.  These amounts are included in general and administrative costs in the consolidated statements of income and comprehensive income.

Defined Contribution Plan

The Company sponsors the Allied Motion 401(k) Tax Advantaged Investment Plan (“401(k)”) which covers substantially all of its U.S. based employees.  The plan provides for the deferral of employee compensation under Section 401(k) and a discretionary Company match.  In 2016, 2015 and 2014 this match was 100% per dollar of the first 3% of participant deferral and 50% per dollar of the next 2% contribution, up to 4% of a total 5% participant deferral.  Net costs related to this defined contribution plan were $1,085, $1,076 and $1,036 in 2016, 2015 and 2014, respectively.

Dividends

For the years ended December 31, 2016, 2015 and 2014 a total of $0.10 per share on all outstanding shares was declared and paid.  Total dividends paid for the years ended December 31, 2016, 2015 and 2014 were $942, $923 and $853, respectively.

Based on the terms of the Company’s Credit Agreement, dividends paid to shareholders are acceptable, subject to the Company’s compliance with the covenants under the Credit Agreement.