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Common Stock and Share-Based Compensation
 12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
Common Stock and Share-Based Compensation 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 accordance with our cash dividend policy, holders of our common stock will receive dividends when and as declared by our Board of Directors. From 2015 through 2018, all awards of restricted stock units, performance stock units and phantom shares provided for cash dividend equivalent units, which vested in cash at the same time as the underlying award. In February 2019, our Board of Directors reviewed the Company’s dividend policy and determined that it would be in the best interest of the stockholders to suspend dividend payments. As a result, no dividends were paid in the year ended December 31, 2019. Quarterly dividends of $0.09 per share were paid in each quarter of 2018 through September 30, 2018, and a quarterly dividend of $0.03 per share was paid in December 2018, totaling approximately $27.4 million for the year ended December 31, 2018. Quarterly dividends of $0.09 per share were paid in each quarter of 2017, totaling approximately $32.7 million for the year ended December 31, 2017. 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 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.
As of December 31, 2019, we had approximately 8.5 million shares, in the aggregate, available for grant under the 2016 Plan.
On February 23, 2020, the Compensation Committee of the Company's Board of Directors approved the cancellation of all outstanding awards under the 2016 Plan, excluding restricted stock awards to non-employee directors, effective as of November 12, 2019. These outstanding awards include all outstanding restricted stock units, performance stock units, phantom shares and stock options discussed below. The restricted stock awards to non-employee directors now have an accelerated vesting date of March 31, 2020. All canceled awards will be returned to the aggregate shares available for grant under the 2016 Plan.
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, 2019:
 
Employees
 
Non-Employee Directors
 
Total
RSUs outstanding at January 1, 2019
840,431

 
140,539

 
980,970

RSUs granted
1,664,256

 
268,373

 
1,932,629

Shares issued upon vesting of RSUs
(239,509
)
 
(93,670
)
 
(333,179
)
RSUs canceled or forfeited(1)
(1,717,354
)
 
(17,528
)
 
(1,734,882
)
RSUs outstanding at December 31, 2019
547,824

 
297,714

 
845,538

Weighted-average per share grant date fair value
$
3.09

 
$
4.84

 
$
3.71

(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, 2019, 2018 and 2017 (in thousands, except per share amounts):
 
Year Ended December 31
 
2019
 
2018
 
2017
Total intrinsic value of RSUs vested/distributed during the period
$
1,565

 
$
2,496

 
$
7,960

Weighted-average grant date fair value of RSUs granted
2.82

 
8.92

 
17.91

Tax benefit related to RSU expense
516

 
972

 
2,071


At December 31, 2019, there was $1.9 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 1.24 years.
Performance Stock Units — In 2016, we began granting performance stock units ("PSUs") 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 PSUs are deemed granted in three separate one year tranches on the dates in which our Compensation Committee establishes the applicable annual performance goals. 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 the year ended December 31, 2019:
 
PSUs
 
Weighted Average Grant Date Fair Value
Outstanding at January 1, 2019
291,773

 
$
9.94

Granted
761,335

 
3.06

Vested
(26,734
)
 
18.93

Forfeited
(472,891
)
 
3.37

Performance adjustment(1)
(240,761
)
 
8.92

Outstanding at December 31, 2019
312,722

 
$
3.15


(1)
Represents an adjustment to the 2018 tranche of the 2016, 2017 and 2018 PSU awards based on actual performance during the 2018 annual performance period in relation to the established performance goal for that period. The actual performance for the 2018 annual performance period was certified by the Compensation Committee of our Board of Directors in the first quarter of 2019.
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, 2019:
 
Shares
 
Weighted-
Average Grant
Date Fair Value
Outstanding at January 1, 2019
2,007,427

 
$
11.35

Granted
5,102,334

 
2.84

Converted/paid
(864,364
)
 
12.14

Forfeited
(1,526,346
)
 
4.72

Outstanding at December 31, 2019
4,719,051

 
$
4.15


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, 2019:
 
Shares
 
Weighted-
Average Grant
Date Fair Value
Unvested at January 1, 2019
87,526

 
$
8.44

Restricted shares granted
156,961

 
1.42

Restricted shares vested
(88,164
)
 
4.59

Unvested at December 31, 2019
156,323

 
$
3.56


Stock Options — We did not grant any stock options during 2017, 2018 or 2019. At December 31, 2019, 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.
The following table summarizes stock option activity during the year ended December 31, 2019:
 
Options
 
Weighted
Average
Exercise Price
 
Weighted
Average
Contractual Life (Years)
 
Aggregate
Intrinsic
Value
Options outstanding and exercisable at January 1, 2019
385,538

 
$
14.55

 
 
 
 
Forfeited and canceled(1)
(244,144
)
 
16.36

 
 
 
 
Options outstanding and exercisable at December 31, 2019(2)
141,394

 
11.43

 
0.84
 
$
—

(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, 2019, there were no remaining unvested stock options.
The following table summarizes information about options outstanding and exercisable at December 31, 2019:
 
Options Outstanding and Exercisable
Range of
Exercise Prices
Number
Outstanding
 
Weighted-
Average
Remaining
Contractual Life (in years)
 
Weighted-
Average
Exercise Price
$ 8.96
34,706

 
1.14
 
$
8.96

10.44
33,426

 
2.13
 
10.44

12.60
61,711

 
0.12
 
12.60

15.42
11,551

 
0.09
 
15.42


The following table summarizes additional information regarding our stock option activity (in thousands):
 
Year Ended December 31
 
2019
 
2018
 
2017
Intrinsic value of options exercised
$
—

 
$
—

 
$
427

Fair value of shares vested
—

 
—

 
—

Tax benefit related to stock option expense
—

 
—

 
—


During the years ended December 31, 2019 and 2018, there were no stock option exercises.
Share-Based Compensation Expense — The following table summarizes the share-based compensation expense related to equity-based awards recognized during the years ended December 31, 2019, 2018 and 2017 (in thousands):
 
Year Ended December 31
 
 
2019
 
2018
 
2017
 
RSUs
$
2,063

 
$
4,935

 
$
5,969

 
PSUs
(287
)
(1) 
(68
)
(1) 
(2,395
)
(1) 
Phantom shares
607

  
3,028

 
7,447

 
Total
$
2,383

  
$
7,895

 
$
11,021

 

(1)
The net credit to PSU expense for the years ended December 31, 2019, 2018 and 2017 is primarily the result of lower expected performance (relative to the established performance metric) associated with the 2019, 2018 and 2017 tranches of these awards, respectively.