Amounts related to pension and postretirement medical adjustments are reclassified to pension cost, which is allocated to cost of products sold and operating expenses based on salaries and wages, approximately as follows (in thousands):
Cost of products sold
Selling, marketing and distribution
General and administrative
Total before tax
Income tax (benefit)
Total after tax
Subsequent event: On February 21, 2017, the Company entered into an accelerated share repurchase program with a financial institution. In exchange for an up-front payment of $90 million, the financial institution will deliver 850,000 shares of Company common stock. The total number of shares ultimately delivered will be determined at the end of the purchase period (up to five months, but not less than two months) based on the volume weighted average price of the Company’s common stock during that period. The up-front payment will reduce shareholders' equity, and shares received will be retired and reflected as a reduction of outstanding shares on the date delivered for purposes of calculating earnings per share.
H. Share-Based Awards, Purchase Plans and Compensation Cost
Stock Option and Award Plan. The Company has a stock incentive plan under which it grants stock options and share awards to directors, officers and other employees. Option price is the market price on the date of grant. Options become exercisable at such time, generally over three or four years, and in such installments as set by the Company, and expire ten years from the date of grant.
Restricted share awards have been made to certain key employees under the plan. The market value of restricted stock at the date of grant is charged to operations over the vesting period. The Company has a stock appreciation plan that provides for payments of cash to eligible foreign employees based on the change in the market price of the Company’s common stock over a period of time. Compensation cost for restricted shares and the stock appreciation plan is not significant.
Individual nonemployee directors of the Company may elect to receive, either currently or deferred, all or part of their retainer in the form of shares of the Company’s common stock instead of cash. Under this arrangement, the Company issued 6,882 shares in 2016, 5,963 shares in 2015 and 4,867 shares in 2014. The expense related to this arrangement is not significant.
Options on common shares granted and outstanding, as well as the weighted average exercise price, are shown below (in thousands, except exercise prices):
Outstanding, December 27, 2013
Outstanding, December 26, 2014
Outstanding, December 25, 2015
Outstanding, December 30, 2016