COMMON STOCK AND SHARE-BASED COMPENSATION

Our authorized shares of capital stock include one million shares of preferred stock and 250 million shares of common stock with a par value of $0.01 per share.

Cash Dividends — In November 2013, we announced that our Board of Directors had adopted a cash dividend policy. Under the policy, holders of our common stock will receive dividends when and as declared by our Board of Directors. Beginning in 2015, all awards of restricted stock units, performance stock units and phantom shares provide for cash dividend equivalent units, which vest in cash at the same time as the underlying award. On March 3, 2016, we announced that our Board of Directors declared an increased quarterly dividend of $0.09 per share of common stock, from the $0.07 per share quarterly dividend paid in each quarter of 2015. Pursuant to the policy, we paid quarterly dividends of $0.09 per share ($0.36 per share annually) in March, June, September and December of 2016, totaling approximately $32.8 million. Quarterly dividends of $0.07 per share were paid in March, June, September and December of 2014 and 2015, totaling approximately $26.2 million for each of the years ended December 31, 2015 and 2014. Dividends are presented as a reduction to retained earnings in our Consolidated Statement of Stockholders’ Equity unless we have an accumulated deficit as of the end of the period, in which case they are reflected as a reduction to additional paid-in capital.

Stock Repurchases — Since 1998, our Board of Directors has from time to time authorized the repurchase of our common stock up to an aggregate of $2.38 billion (excluding fees and expenses), of which approximately $197.1 million remained available under this program as of December 31, 2016. Our management is authorized to purchase shares from time to time through open market transactions at prevailing prices or in privately-negotiated transactions, subject to market conditions and other factors. Shares, when repurchased, are retired. We will continue to evaluate opportunities for share repurchases in a strategic manner as a mechanism for generating additional shareholder value.

The following table summarizes the share repurchase activity for the years ended (in thousands, except per share data):



	2016		2015
Number of shares repurchased	1,371		3,166
Weighted average purchase price per share	$18.21		$16.73
Amount of share repurchases	$	25,000	$	53,010

Stock Award Plans — The Dean Foods Company 2016 Stock Incentive Plan (the “2016 Plan”), approved on May 11, 2016, allows grant awards of various types of equity-based compensation, including stock options, stock appreciation rights (‘‘SARs’’), restricted stock and restricted stock units, performance shares and performance units and other types of stock-based awards as compensation to employees, consultants and directors. The maximum number of shares that are available to be awarded under the 2016 Plan is 11,750,000 shares of common stock of the Company and is inclusive of the shares remaining available for issuance under the 2007 Stock Incentive Plan (the "2007 Plan"), which expired upon the 2016 Plan approval.

Any shares subject to any award granted under the 2016 Plan or the 2007 Plan which for any reason expires after the effective date of the 2016 Plan without having been exercised, or is canceled, terminated or otherwise settled without the issuance of stock will again be available for grant under the 2016 Plan. However, to the extent that any options or SARs are exercised by delivering the net value of such award in shares (a so-called ‘‘net exercise’’), the total number of shares for which the option or SAR is exercised, and not just the net number of shares delivered upon such exercise, will be counted as though issued under the 2016 Plan. Additionally, any shares that are canceled or surrendered to satisfy a participant’s applicable tax withholding obligations in respect of any award granted under the 2016 Plan or the 2007 Plan will not again become available for issuance. If any full-value award granted under the 2016 Plan or granted under the 2007 Plan expires without having been exercised, or is canceled, terminated or otherwise settled without the issuance of stock, that number of shares equal to (x) the number of shares subject to such award multiplied by (y) the multiplier applicable under the applicable plan (that is, two shares for each share subject to each such full-value award granted under the 2016 Plan and 1.67 for each full-value award granted under the 2007 Plan) will become available for issuance under the 2016 Plan. If any stock option award granted under the 2016 Plan or the 2007 Plan expires without having been exercised, or is canceled, terminated or otherwise settled without the issuance of stock, there will become available for issuance under the 2016 Plan one share of our common stock for each share of our common stock subject to such stock option award.

As of December 31, 2016, we had approximately 11.6 million shares, in the aggregate, available for grant under the 2016 Plan.

Stock Options — We did not grant any stock options during 2014, 2015 or 2016, nor do we plan to in 2017. At December 31, 2016, there was no remaining unrecognized stock option expense related to unvested awards.

Under the terms of our stock option plans, employees and non-employee directors may be granted options to purchase our stock at a price equal to the market price on the date the option is granted.

Prior to 2014, we did not historically declare or pay a regular cash dividend on our common stock. Stock option awards are not impacted by our decision in 2013 to begin paying dividends in 2014.

The following table summarizes stock option activity during the year ended December 31, 2016:



	Options		Weighted Average Exercise Price		Weighted Average Contractual Life	Aggregate Intrinsic Value
Options outstanding at January 1, 2016	3,204,925		$	20.07
Forfeited and canceled(1)	(921,142	)	22.24
Exercised	(244,954	)	14.29
Options outstanding and exercisable at December 31, 2016(2)	2,038,829		19.78		1.73	$	6,923,656
Options exercisable at December 31, 2015	3,204,925		20.07


(1)	Pursuant to the terms of our stock option plans, options that are forfeited or canceled may be available for future grants. Effective May 15, 2013, any stock options surrendered or canceled in satisfaction of participants' exercise proceeds or tax withholding obligation will no longer become available for future grants under the plans.


(2)	As of December 31, 2016, there were no remaining unvested stock options.

The following table summarizes information about options outstanding and exercisable at December 31, 2016:



	Options Outstanding and Exercisable
Range of Exercise Prices	Number Outstanding	Weighted- Average Remaining Contractual Life (in years)	Weighted- Average Exercise Price
$8.96 to 10.44	302,704	4.73	$	9.84
12.60	112,643	3.12	12.60
13.30 to 16.98	103,961	2.89	15.56
17.36	352,742	2.12	17.36
17.48 to 21.14	23,563	1.61	18.82
21.96	341,142	1.04	21.96
23.08 to 24.60	255,255	0.85	23.11
26.06	463,532	0.12	26.06
26.52 to 27.60	83,287	0.39	27.29

The following table summarizes additional information regarding our stock option activity (in thousands):



	Year Ended December 31
	2016		2015		2014
Intrinsic value of options exercised	$	1,372	$	336	$	2,078
Fair value of shares vested	—		453		4,717
Tax benefit related to stock option expense	—		34		169

During the year ended December 31, 2016, net cash received from stock option exercises was $2.2 million and the total cash benefit for tax deductions to be realized for these option exercises was $0.5 million.

Restricted Stock Units — We issue restricted stock units ("RSUs") to certain senior employees and non-employee directors as part of our long-term incentive program. An RSU represents the right to receive one share of common stock in the future. RSUs have no exercise price. RSUs granted to employees generally vest ratably over three years, subject to certain accelerated vesting provisions based primarily on a change of control, or in certain cases upon death or qualified disability. RSUs granted to non-employee directors vest ratably over three years.

The following table summarizes RSU activity during the year ended December 31, 2016:



	Employees			Directors			Total
RSUs outstanding January 1, 2016	871,876			94,816			966,692
RSUs issued	480,117			43,547			523,664
Shares issued upon vesting	(257,269		)	(55,886		)	(313,155		)
RSUs canceled or forfeited(1)	(221,939		)	(2,270		)	(224,209		)
RSUs outstanding at December 31, 2016	872,785			80,207			952,992
Weighted-average per share grant date fair value	$	17.46		$	17.55		$	17.47


(1)	Pursuant to the terms of our stock unit plans, employees have the option of forfeiting stock units to cover their minimum statutory tax withholding when shares are issued. Any stock units surrendered or canceled in satisfaction of participants’ tax withholding obligations are not available for future grants under the plans.

The following table summarizes information about our RSU grants and RSU expense during the years ended December 31, 2016, 2015 and 2014 (in thousands, except per share amounts):



	Year Ended December 31
	2016		2015		2014
Total intrinsic value of RSUs vested/distributed during the period	$	8,920	$	7,958	$	5,459
Weighted-average grant date fair value of RSUs granted	19.13		16.41		14.62
Tax benefit related to RSU expense	1,694		2,303		990

At December 31, 2016, there was $8.2 million of total unrecognized RSU expense, all of which is related to unvested awards. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 0.89 years.

Restricted Stock — We offer our non-employee directors the option to receive certain compensation for services rendered in either cash or shares of restricted stock equal to 150% of the fee amount. Shares of restricted stock vest one-third on grant, one-third on the first anniversary of grant and one-third on the second anniversary of grant. The following table summarizes restricted stock activity during the year ended December 31, 2016:



	Shares		Weighted- Average Grant Date Fair Value
Unvested at January 1, 2016	39,325		$	16.36
Restricted shares granted	43,124		18.25
Restricted shares vested	(40,699	)	17.08
Unvested at December 31, 2016	41,750		$	17.61

Performance Stock Units — Beginning in 2016, performance stock units ("PSUs") were granted as part of our long-term incentive compensation program. PSUs cliff vest and settle in shares of our common stock at the end of a three-year performance period contingent upon the achievement of specific performance goals established for each calendar year during the performance period. The number of shares that may be earned at the end of the vesting period may range from zero to 200 percent of the target award amount based on the achievement of the performance goals. The fair value of PSUs is estimated using the market price of our common stock on the date of grant, and we recognize compensation expense ratably over the vesting period for the portion of the award that is expected to vest. The fair value of the PSUs is remeasured at each reporting period. The following table summarizes PSU activity during year ended December 31, 2016:



	PSUs	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2016	—	$	—
Granted	90,583	19.13
Vested	—	—
Forfeited	—	—
Outstanding at December 31, 2016	90,583	$	19.13

Phantom Shares — We grant phantom shares as part of our long-term incentive compensation program, which are similar to RSUs in that they are based on the price of our stock and vest ratably over a three-year period, but are cash-settled based upon the value of our stock at each vesting period. The fair value of the awards is remeasured at each reporting period. Compensation expense, which is variable, is recognized over the vesting period with a corresponding liability, which is recorded in accounts payable and accrued expenses in our Consolidated Balance Sheets. The following table summarizes the phantom share activity during the year ended December 31, 2016:



	Shares		Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2016	1,159,519		$	15.94
Granted	818,407		19.20
Converted/paid	(560,712	)	16.07
Forfeited	(56,152	)	17.47
Outstanding at December 31, 2016	1,361,062		$	17.78

Share-Based Compensation Expense — The following table summarizes the share-based compensation expense related to Dean Foods equity-based awards recognized during the years ended December 31, 2016, 2015 and 2014 (in thousands):



	Year Ended December 31
	2016			2015		2014
Stock options	$	—		$	88	$	438
RSUs	11,053		⁽¹⁾	8,407		4,521
PSUs	3,601		⁽¹⁾	—		—
Phantom shares	15,176			7,882		7,317
Total	$	29,830		$	16,377	$	12,276


(1)	Share-based compensation expense for the year ended December 31, 2016 includes an aggregate of approximately $6.0 million of RSU and PSU compensation expense associated with separation charges in connection with our CEO succession plan. See “Part I — Item 1. Business — Developments Since January 1, 2016.”