Share-Based Compensation | 12 Months Ended |
Dec. 31, 2013 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' |
Share-Based Compensation | ' |
13. Share-Based Compensation |
On August 7, 2012, the Dean Foods Compensation Committee, the Dean Foods board of directors, and our board of directors approved the terms of our 2012 Stock Incentive Plan (the “2012 SIP”). In connection with our initial public offering, 20 million shares of our Class A common stock were reserved for issuance under the 2012 SIP upon the exercise of stock options, restricted stock units (“RSUs”), or restricted stock awards that may be issued to our employees and non-employee directors. The 2012 SIP also includes awards of stock appreciation rights (“SARs”) and phantom shares as part of our long-term incentive compensation program. In general, awards granted under the 2012 SIP vest one-third on the first anniversary of the grant date, one-third on the second anniversary of the grant date, and one-third on the third anniversary of the grant date. Unvested awards vest immediately upon a change of control and in the following additional circumstances: (i) an employee retires after reaching the age of 65, (ii) in certain cases upon death or qualified disability, and (iii) with the exception of the awards granted in connection with the initial public offering, an employee with 10 years of service retires after reaching the age of 55. |
Prior to the Distribution, certain of the Company’s employees participated in share-based compensation plans sponsored by Dean Foods. These plans provided employees with RSUs, options to purchase shares of Dean Foods’ common stock, and other stock-based awards. Given that the Company’s employees directly benefit from participation in these plans, the expense incurred by Dean Foods for stock and options granted specifically to our employees has been reflected in the Company’s consolidated statements of operations. These amounts were based on the awards and terms previously granted to our employees, but may not reflect the equity awards or results that we would have experienced or expect to experience as a stand-alone public company. No new grants of Dean Foods’ equity were made to our employees after completion of our initial public offering. Prior to completion of the initial public offering, expenses related to the corporate employees of Dean Foods were allocated based on the Company’s percentage of Dean Foods’ total sales and totaled $4.3 million and $2.9 million for the years ended December 2012 and 2011, respectively. |
For the Dean Foods plans, the share and unit data presented in the tables below only reflect the costs that were directly attributable to the Company’s employees and none of the allocated expenses of Dean Foods’ corporate employees. On May 23, 2013 and in connection with the Distribution, all Dean Foods equity-based awards held by 162 of our non-employee directors and employees were converted into equity-based awards with respect to our Class A common stock. These Dean Foods equity-based awards included Dean Foods stock options (whether vested or unvested), unvested RSUs and unvested Dean Foods restricted stock awards held by our non-employee directors on the date of the Distribution. The options to purchase Dean Foods common stock held by our directors and employees were converted to options to purchase our Class A common stock in a manner that preserved the life and aggregate intrinsic value in the converted stock option and continued the same proportionate relationship between the exercise price and the value of our Class A common stock as existed with respect to the Dean Foods common stock immediately prior to the Distribution. The adjustment was effected based on a formula using the volume weighted average price of Dean Foods common stock and our Class A common stock during the five trading day period ended on the second trading day preceding the Distribution. The unvested Dean Foods RSUs held by our directors and employees were converted to WhiteWave RSUs in a manner that, on a unit-by-unit basis, preserved the life and intrinsic value of each outstanding Dean Foods RSU (determined using the same volume weighted average values as described above). The unvested Dean Foods phantom shares held by our employees were converted to WhiteWave phantom shares in a manner that, on a unit-by-unit basis, preserved the life and intrinsic value of each outstanding Dean Foods phantom share (determined using the same volume weighted average values as described above). Dean Foods restricted stock awards held by our directors on the date of the Distribution were converted into restricted stock awards with respect to our Class A common stock by (i) applying the same volume weighted average values as described above and (ii) subtracting any shares of our Class A common stock and Class B common stock received by our directors in the Distribution in respect of such Dean Foods restricted stock awards. We did not recognize any incremental expense in connection with the conversion of Dean Foods’ equity-based awards into WhiteWave awards as all other terms remained the same. |
WhiteWave Stock Options |
Under the terms of the 2012 SIP, our employees may be granted options to purchase our common stock at a price equal to the market price on the date the option is granted. Our employee options vest one-third on the first anniversary of the grant date, one-third on the second anniversary of the grant date, and one-third on the third anniversary of the grant date. |
Share-based compensation expense for stock options is recognized ratably over the vesting period. The expense totaled $7.4 million and $0.6 million for the years ended December 31, 2013 and 2012, respectively. The fair value of each option award is estimated on the date of grant using the Black-Scholes valuation model with the following assumptions: |
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| | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | | | | | | | | | | | | | | | |
| | 2013 | | 2012 | | | | | | | | | | | | | | | | |
Expected volatility | | 28% | | 28% | | | | | | | | | | | | | | | | |
Expected dividend yield | | 0% | | 0% | | | | | | | | | | | | | | | | |
Expected option term | | 6 years | | 6 years | | | | | | | | | | | | | | | | |
Risk-free rate of return | | 1.13% to 1.66% | | 1.05% | | | | | | | | | | | | | | | | |
Since the Company’s common stock did not have a long history of being publicly traded at grant date, the expected term was determined under the simplified method, using an average of the contractual term and vesting period of the stock options. The expected volatility assumption was calculated based on a compensation peer group analysis of stock price volatility with a six-year look back period ending on the grant date. The risk-free rates were based on the average implied yield available on five-year and seven-year U.S. Treasury issues. We have not paid, and do not anticipate paying, a cash dividend on our common stock. |
The following table summarizes stock option activity during the year ended December 31, 2013: |
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| | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Weighted | | | Weighted | | | Aggregate | | | | | |
options | average | average | intrinsic | | | | |
| exercise price | contractual life | value | | | | |
Options outstanding at January 1, 2013 | | | 2,445,327 | | | $ | 16.98 | | | | | | | | | | | | | |
Granted | | | 1,254,273 | | | | 15.19 | | | | | | | | | | | | | |
Forfeited, cancelled and expired(1) | | | (112,550 | ) | | | 20.66 | | | | | | | | | | | | | |
Exercised | | | (775,322 | ) | | | 16.58 | | | | | | | | | | | | | |
Converted from Dean Foods at Distribution(2) | | | 8,308,857 | | | | 17.45 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Options outstanding at December 31, 2013 | | | 11,120,585 | | | $ | 17.12 | | | | 6.23 | | | $ | 69,675,057 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Options vested and expected to vest at December 31, 2013 | | | 11,025,166 | | | $ | 17.14 | | | | 6.21 | | | $ | 68,957,640 | | | | | |
Options exercisable at December 31, 2012 | | | — | | | | — | | | | — | | | | — | | | | | |
Options exercisable at December 31, 2013 | | | 6,979,943 | | | $ | 18.69 | | | | 4.82 | | | $ | 34,626,681 | | | | | |
|
-1 | Pursuant to the terms of the SIP, options that are cancelled expired or forfeited may be available for future grants. | | | | | | | | | | | | | | | | | | | |
-2 | On May 23, 2013 and in connection with the Distribution, all Dean Foods equity-based awards held by our non-employee directors and employees were converted into equity-based awards with respect to our Class A common stock. | | | | | | | | | | | | | | | | | | | |
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The following table summarizes information about options outstanding at December 31, 2013: |
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| | | | | | | | | | | | | | | | | | | | |
| | Options outstanding | | | Options exercisable | |
Range of | | Number | | | Weighted- | | | Weighted-average | | | Number | | | Weighted- | |
exercise prices | outstanding | average | exercise price | exercisable | average |
| | remaining | | | exercise price |
| | contractual life | | | |
$6.84 to 9.52 | | | 1,180,557 | | | | 7.07 | | | $ | 9.5 | | | | 832,364 | | | $ | 9.49 | |
11.10 | | | 1,451,962 | | | | 8.13 | | | | 11.1 | | | | 501,150 | | | | 11.1 | |
11.12 to 14.71 | | | 440,593 | | | | 6.22 | | | | 13.41 | | | | 429,765 | | | | 13.4 | |
15.16 | | | 1,230,095 | | | | 9.13 | | | | 15.16 | | | | 53,676 | | | | 15.16 | |
15.17 to 16.91 | | | 677,181 | | | | 1.78 | | | | 16.71 | | | | 633,896 | | | | 16.75 | |
17.00 | | | 2,416,666 | | | | 8.82 | | | | 17 | | | | 805,561 | | | | 17 | |
17.19 to 23.33 | | | 1,861,042 | | | | 4.26 | | | | 20.81 | | | | 1,861,042 | | | | 20.81 | |
23.35 to 27.69 | | | 1,761,502 | | | | 2.51 | | | | 25.29 | | | | 1,761,502 | | | | 25.29 | |
28.18 | | | 84,679 | | | | 3.16 | | | | 28.18 | | | | 84,679 | | | | 28.18 | |
$29.31 | | | 16,308 | | | | 3.5 | | | $ | 29.31 | | | | 16,308 | | | $ | 29.31 | |
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| | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | | | | | | | | | | | |
| | (in thousands, | | | | | | | | | | | | | |
except per share | | | | | | | | | | | | |
amounts) | | | | | | | | | | | | |
Weighted-average grant date fair value per share of options granted | | $ | 4.42 | | | $ | 4.91 | | | | | | | | | | | | | |
Intrinsic value of options exercised | | | 2,616 | | | | — | | | | | | | | | | | | | |
Fair value of shares vested | | | 4,006 | | | | — | | | | | | | | | | | | | |
Tax benefit related to stock option expense | | | 2,769 | | | | 236 | | | | | | | | | | | | | |
During the year ended December 31, 2013, we received $1.3 million of cash from stock option exercises. At December 31, 2013, there was $10.2 million of total unrecognized stock option expense, all of which is related to non-vested awards. This compensation expense is expected to be recognized over the weighted-average remaining vesting period of 1.47 years. |
WhiteWave RSUs |
RSUs are issued to certain senior employees under the 2012 SIP as part of the 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 vest ratably over three years. |
The following table summarizes RSU activity during the year ended December 31, 2013: |
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| | | | | | | | | | | | | | | | | | | | |
RSUs outstanding January 1, 2013 | | | 674,681 | | | | | | | | | | | | | | | | | |
RSUs issued | | | 354,305 | | | | | | | | | | | | | | | | | |
Shares issued upon vesting of RSUs | | | (186,992 | ) | | | | | | | | | | | | | | | | |
RSUs cancelled or forfeited(1) | | | (59,166 | ) | | | | | | | | | | | | | | | | |
RSUs converted from Dean Foods at Distribution(2) | | | 464,768 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
RSUs outstanding at December 31, 2013 | | | 1,247,596 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Weighted average grant date fair value per share | | $ | 10.12 | | | | | | | | | | | | | | | | | |
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-1 | Pursuant to the terms of the SIP, employees have the option of forfeiting RSUs to cover their minimum statutory tax withholding when shares are issued. RSUs that are cancelled or forfeited may be available for future grants. | | | | | | | | | | | | | | | | | | | |
-2 | On May 23, 2013 and in connection with the Distribution, all Dean Foods equity-based awards held by our non-employee directors and employees were converted into equity-based awards with respect to our Class A common stock. | | | | | | | | | | | | | | | | | | | |
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The following table summarizes information about our RSU grants and related tax benefit during the year ended December 31, 2013: |
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| | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | | | | | | | | | | | | |
| | 2013 | | | 2012 | | | | | | | | | | | | | |
| | (in thousands, except per share amounts) | | | | | | | | | | | | | |
Weighted-average grant date fair value per RSU granted | | $ | 15.2 | | | $ | 16.98 | | | | | | | | | | | | | |
Tax benefit related to RSU expense | | | 1,408 | | | | 222 | | | | | | | | | | | | | |
Compensation expense for RSUs is recognized ratably over the vesting period. RSU expense totaled $7.3 million and $0.6 million for the years ended December 31, 2013 and 2012. At December 31, 2013, there was $11.0 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 1.7 years. |
WhiteWave Phantom Shares |
We grant phantom shares under the 2012 SIP as part of our long-term incentive compensation program, which are similar to RSUs in that they are based on the price of WhiteWave stock and vest ratably over a three-year period, but are cash-settled based upon the value of WhiteWave stock at each vesting period. The fair value of the awards is re-measured at each reporting period. Compensation expense is recognized ratably over the vesting period, which is recorded in general and administrative expenses in the consolidated statement of operations. The expense totaled $3.0 and $0.2 million for the years ended December 31, 2013 and 2012, respectively. A corresponding liability has been recorded in current and long-term liabilities in our consolidated balance sheet totaling $4.8 million and $2.7 million as of December 2013 and 2012, respectively. The 2013 cash settlement of WhiteWave phantom shares was $4.1 million. The following table summarizes the phantom share activity during the year ended December 31, 2013: |
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| | | | | | | | | | | | | | | | | | | | |
| | Shares | | | Weighted-average | | | | | | | | | | | | | |
grant date fair value | | | | | | | | | | | | |
per share | | | | | | | | | | | | |
Outstanding at January 1, 2013 | | | 225,771 | | | $ | 17 | | | | | | | | | | | | | |
Granted | | | 214,391 | | | | 15.24 | | | | | | | | | | | | | |
Converted/paid | | | (80,761 | ) | | | 17.17 | | | | | | | | | | | | | |
Forfeited | | | (45,128 | ) | | | 17.12 | | | | | | | | | | | | | |
Converted from Dean Foods at Distribution(1) | | | 256,806 | | | | 18.79 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | | | 571,079 | | | $ | 17.11 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
-1 | On May 23, 2013 and in connection with the Distribution, all Dean Foods phantom awards held by our employees were converted into phantom awards with respect to our Class A common stock. | | | | | | | | | | | | | | | | | | | |
WhiteWave Stock Appreciation Rights (“SARs”) |
We grant SARs under the 2012 SIP as part of our long-term incentive compensation program, which are similar to stock options in that they are based on the price of WhiteWave stock and vest ratably over a three-year period, but are cash-settled based upon the value of WhiteWave stock at the exercise date. |
|
The fair value of each SAR is estimated on the date of grant using the Black-Scholes valuation model with the following assumptions: |
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| | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | | | | | | | | | | | | | | | |
| | 2013 | | 2012 | | | | | | | | | | | | | | | | |
Expected volatility | | 28% | | 28% | | | | | | | | | | | | | | | | |
Expected dividend yield | | 0% | | 0% | | | | | | | | | | | | | | | | |
Expected option term | | 6 years | | 6 years | | | | | | | | | | | | | | | | |
Risk-free rate of return | | 1.13% to 1.66% | | 1.05% | | | | | | | | | | | | | | | | |
Since the Company’s common stock did not have a long history of being publicly traded at grant date, the expected volatility assumption was calculated based on a compensation peer group analysis of stock price volatility with a six-year look back period ending on the grant date. The risk-free rates were based on the average implied yield available on five-year and seven-year U.S. Treasury issues. The Company does not anticipate paying a cash dividend on its common stock. |
The fair value of the awards is re-measured at each reporting period. Compensation expense is recognized over the vesting period, which is recorded in general and administrative expenses in the consolidated statement of operations. The expense totaled $0.9 million and $0.1 million for the years ended December 31, 2013 and 2012, respectively. A corresponding liability has been recorded in current liabilities in our consolidated balance sheet totaling $0.9 million and $0.1 million as of December 2013 and 2012, respectively. The following table summarizes SAR activity during the year ended December 31, 2013: |
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| | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Weighted | | | Weighted | | | Aggregate | | | | | |
SARs | average | average | intrinsic value | | | | |
| exercise price | contractual life | | | | | |
SARs outstanding at January 1, 2013 | | | 211,111 | | | $ | 17 | | | | | | | | | | | | | |
Granted | | | 82,582 | | | | 15.16 | | | | | | | | | | | | | |
Forfeited and cancelled(1) | | | — | | | | — | | | | | | | | | | | | | |
Exercised | | | — | | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
SARs outstanding at December 31, 2013 | | | 293,693 | | | $ | 16.48 | | | | 8.91 | | | $ | 1,896,487 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
SARs vested and expected to vest at December 31, 2013 | | | 287,247 | | | $ | 16.49 | | | | 8.91 | | | $ | 1,853,126 | | | | | |
SARs exercisable at December 31, 2012 | | | — | | | | — | | | | — | | | | — | | | | | |
SARs exercisable at December 31, 2013 | | | 70,375 | | | $ | 17 | | | | 8.82 | | | $ | 418,028 | | | | | |
|
-1 | Pursuant to the terms of the SIP, SARs that are cancelled or forfeited may be available for future grants. | | | | | | | | | | | | | | | | | | | |
Dean Foods Stock Options |
Under the terms of the Dean Foods stock option plan, the Company’s employees were granted options to purchase Dean Foods’ common stock at a price equal to the market price on the date the option was granted. In general, Dean Foods’ employee options vest one-third on the first anniversary of the grant date, one-third on the second anniversary of the grant date, and one-third on the third anniversary of the grant date. All unvested options vest immediately upon a change of control and in the following additional circumstances: (i) an employee with 10 years of service retires after reaching the age of 55, (ii) an employee retires after reaching the age of 65, and (iii) in certain cases upon death or qualified disability. |
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Share-based compensation expense for stock options is recognized ratably over the vesting period. The expense totaled $1.0 million, $1.2 million, and $1.7 million for the years ended December 31, 2013, 2012, and 2011, respectively. The fair value of each option award is estimated on the date of grant using the Black-Scholes valuation model with the following assumptions: |
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| | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | | | | | | | | | | | | | |
| | 2013(1) | | 2012 | | 2011 | | | | | | | | | | | | | | |
Expected volatility | | — | | 44% | | 41% | | | | | | | | | | | | | | |
Expected dividend yield | | — | | 0% | | 0% | | | | | | | | | | | | | | |
Expected option term | | — | | 5 years | | 5 years | | | | | | | | | | | | | | |
Risk-free rate of return | | — | | 0.62% to 0.89% | | 1.32% to 2.30% | | | | | | | | | | | | | | |
|
-1 | Dean Foods did not grant any Dean Foods stock options to WhiteWave non-employee directors, executive officers, and employees during 2013. | | | | | | | | | | | | | | | | | | | |
The expected term of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, giving consideration to contractual terms (generally 10 years), vesting schedules, and expectations of future employee behavior. Expected stock price volatility is based on a consolidation of historical volatility of Dean Foods stock and expectations with regard to future volatility. The risk-free rates are based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. Prior to December 31, 2012, Dean Foods had not historically declared or paid a regular cash dividend on its common stock. |
The following table summarizes stock option activity during the year ended December 31, 2013: |
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| | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Weighted | | | Weighted | | | Aggregate | | | | | |
options | average | average | intrinsic | | | | |
| exercise price | contractual life | value | | | | |
Options outstanding at January 1, 2013 | | | 6,845,250 | | | $ | 18.45 | | | | | | | | | | | | | |
Granted | | | — | | | | — | | | | | | | | | | | | | |
Forfeited and cancelled | | | (227,424 | ) | | | 18.09 | | | | | | | | | | | | | |
Exercised | | | (111,031 | ) | | | 13.04 | | | | | | | | | | | | | |
Transferred(1) | | | 1,135,399 | | | | 21.38 | | | | | | | | | | | | | |
Converted to WhiteWave stock options at Distribution(2) | | | (7,642,194 | ) | | | 18.98 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Options outstanding at December 31, 2013 | | | — | | | $ | — | | | | — | | | $ | — | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Options vested and expected to vest at December 31, 2013 | | | — | | | $ | — | | | | — | | | $ | — | | | | | |
Options exercisable at December 31, 2012 | | | 4,637,867 | | | $ | 21.68 | | | | 4.57 | | | $ | 3,133,148 | | | | | |
Options exercisable at December 31, 2013 | | | — | | | $ | — | | | | — | | | $ | — | | | | | |
|
-1 | Transferred options are attributable to employees that transferred to or from Dean Foods’ divisions. | | | | | | | | | | | | | | | | | | | |
-2 | On May 23, 2013 and in connection with the Distribution, all Dean Foods equity-based awards held by our non-employee directors and employees were converted into equity-based awards with respect to our Class A common stock. | | | | | | | | | | | | | | | | | | | |
|
The following table summarizes additional information regarding stock option activity for our direct participants in the Dean Foods plan: |
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| | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | | | | | | | | |
| | 2013 | | | 2012 | | | 2011 | | | | | | | | | |
| | (in thousands, except per share | | | | | | | | | |
amounts) | | | | | | | | |
Weighted-average grant date fair value per share of options granted(1) | | $ | — | | | $ | 4.72 | | | $ | 4.04 | | | | | | | | | |
Intrinsic value of options exercised | | | 441 | | | | 105 | | | | 13 | | | | | | | | | |
Fair value of shares vested | | | 3,920 | | | | 3,651 | | | | 3,433 | | | | | | | | | |
Tax benefit related to stock option expense | | | 358 | | | | 460 | | | | 646 | | | | | | | | | |
|
-1 | Dean Foods did not grant any Dean Foods stock options to WhiteWave non-employee directors, executive officers, and employees during 2013. | | | | | | | | | | | | | | | | | | | |
During the year ended December 31, 2013, Dean Foods received $1.5 million of cash from stock option exercises by our direct participants in the Dean Foods incentive compensation plans. |
Dean Foods RSUs |
RSUs are issued to certain senior employees as part of the 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. All unvested RSUs vest immediately upon a change in control, and in the following additional circumstances: (i) an employee with 10 years of service retires after reaching the age of 55, (ii) an employee retires after reaching the age of 65, and (iii) in certain cases upon death or qualified disability. |
The following table summarizes RSU activity during the year ended December 31, 2013: |
|
| | | | | | | | | | | | | | | | | | | | |
RSUs outstanding January 1, 2013 | | | 786,710 | | | | | | | | | | | | | | | | | |
RSUs issued | | | 20,235 | | | | | | | | | | | | | | | | | |
RSUs cancelled or forfeited | | | (60,747 | ) | | | | | | | | | | | | | | | | |
Shares issued upon vesting of RSUs | | | (352,352 | ) | | | | | | | | | | | | | | | | |
RSUs transferred(1) | | | 33,636 | | | | | | | | | | | | | | | | | |
RSUs converted to WhiteWave RSUs at Distribution(2) | | | (427,482 | ) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
RSUs outstanding at December 31, 2013 | | | — | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
-1 | Transferred RSUs are attributable to employees that transferred to or from Dean Foods’ divisions. | | | | | | | | | | | | | | | | | | | |
-2 | On May 23, 2013 and in connection with the Distribution, all Dean Foods equity-based awards held by our non-employee directors and employees were converted into equity-based awards with respect to our Class A common stock. | | | | | | | | | | | | | | | | | | | |
The following table summarizes information about our RSU grants and related tax benefit during the years ended December 31, 2013, 2012, and 2011: |
|
| | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | | | | | | | | |
| | 2013 | | | 2012 | | | 2011 | | | | | | | | | |
| | (in thousands, except per share | | | | | | | | | |
amounts) | | | | | | | | |
Weighted-average grant date fair value per RSU granted | | $ | 16.34 | | | $ | 12.07 | | | $ | 10.34 | | | | | | | | | |
Tax benefit related to RSU expense | | | 650 | | | | 1,163 | | | | 1,378 | | | | | | | | | |
RSU expense totaled $1.7 million, $3.1 million, and $3.5 million for the years ended December 31, 2013, 2012, and 2011, respectively. |
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Dean Foods Phantom Shares |
In 2011, Dean Foods began granting phantom shares as part of its long-term incentive compensation program, which are similar to RSUs in that they are based on the price of Dean Foods stock and vest ratably over a three-year period, but are cash-settled based upon the value of Dean Foods stock at each vesting period. All unvested phantom shares vest immediately upon a change of control and in the following additional circumstances: (i) an employee with 10 years of service retires after reaching the age of 55, (ii) an employee retires after reaching the age of 65, and (iii) in certain cases upon death or qualified disability. The fair value of the awards is re-measured at each reporting period. Compensation expense is recognized over the vesting period, which is recorded in general and administrative expenses in the consolidated statements of operations. The expense totaled $3.6 million and $2.4 million for the years ended December 31, 2013 and 2012, respectively. In the period subsequent to completion of our initial public offering, a corresponding liability has been recorded in other current liabilities in our consolidated balance sheet. In periods prior to completion of our initial public offering, a liability related to these units has not been reflected in the consolidated balance sheets as the payout was to be funded by Dean Foods. The following table summarizes the phantom share activity during the year ended December 31, 2013: |
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| | Shares | | | Weighted-average | | | | | | | | | | | | | |
grant date fair value | | | | | | | | | | | | |
per share | | | | | | | | | | | | |
Outstanding at January 1, 2013 | | | 397,618 | | | $ | 11.43 | | | | | | | | | | | | | |
Granted | | | — | | | | — | | | | | | | | | | | | | |
Converted/paid | | | (156,247 | ) | | | 11.09 | | | | | | | | | | | | | |
Forfeited | | | (7,442 | ) | | | 11.45 | | | | | | | | | | | | | |
Transferred(1) | | | 2,360 | | | | 11.9 | | | | | | | | | | | | | |
Converted to WhiteWave phantom shares at Distribution(2) | | | (236,289 | ) | | | 11.31 | | | | | | | | | | | | | |
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Outstanding at December 31, 2013 | | | — | | | $ | — | | | | | | | | | | | | | |
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-1 | Transferred phantom shares are attributable to employees that transferred to or from Dean Foods’ divisions. | | | | | | | | | | | | | | | | | | | |
-2 | On May 23, 2013 and in connection with the Distribution, all Dean Foods phantom awards held by our employees were converted into phantom awards with respect to our Class A common stock. | | | | | | | | | | | | | | | | | | | |
Dean Foods Cash Performance Units |
In 2010, Dean Foods began granting cash performance units (“CPUs”) to employees as part of its long-term incentive compensation program under the terms of the 2007 Plan. The CPU awards are cash-settled awards and are designed to link compensation of certain executive officers and other key employees to Dean Foods’ performance over a three-year period. The performance metric, as defined in the awards, is the performance of the Dean Foods stock price relative to that of a peer group of companies. The range of payout under the awards is between 0% and 200% and is payable in cash at the end of each respective performance period. The fair value of the awards is measured at each reporting period. Compensation expense related to the Company’s direct employees is recognized over the vesting period which is recorded in general and administrative expenses in the consolidated statements of operations. The expense totaled $nil million, $1.3 million and $0.2 million for the years ended December 31, 2013, 2012 and 2011 respectively. In the fourth quarter of 2012, the Company recorded a $0.6 million credit to expense due to a reduction of the payout assumption related to the 2010 awards. In the period subsequent to completion of our initial public offering, a corresponding liability has been recorded in other long-term liabilities in our consolidated balance sheet. In periods prior to completion of our initial public offering, a liability related to these units has not been reflected in the consolidated balance sheets as the payout was to be funded by Dean Foods. |
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In connection with our initial public offering, Dean Foods valued the 2011 and 2012 CPU awards for our executives based on performance as of December 31, 2012, instead of at the end of the originally scheduled 36-month performance periods. The cash value of these awards was paid out on a prorated basis during the year ended December 31, 2013. |
The following table summarizes CPU activity with respect to the 2011 and 2012 CPU during the year ended December 31, 2013. There were no cash awards prior to 2010 related to our employees. |
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| | Units | | | | | | | | | | | | | | | | | |
Outstanding at January 1, 2013 | | | 6,105,000 | | | | | | | | | | | | | | | | | |
Granted | | | — | | | | | | | | | | | | | | | | | |
Converted/paid | | | (6,105,000 | ) | | | | | | | | | | | | | | | | |
Forfeited | | | — | | | | | | | | | | | | | | | | | |
Transferred | | | — | | | | | | | | | | | | | | | | | |
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Outstanding at December 31, 2013 | | | — | | | | | | | | | | | | | | | | | |
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Share-Based Compensation Expense |
The following table summarizes the share-based compensation expense recognized for the Company’s direct participants in the Dean Foods long-term incentive compensation plan in periods prior to completion of our initial public offering: |
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| | Year ended December 31, | | | | | | | | | |
| | 2013 | | | 2012 | | | 2011 | | | | | | | | | |
| | (In thousands) | | | | | | | | | |
Share-based compensation expense funded by Dean Foods | | | | | | | | | | | | | | | | | | | | |
Dean Foods stock options | | $ | — | | | $ | 1,006 | | | $ | 1,708 | | | | | | | | | |
Dean Foods RSUs | | | — | | | | 2,433 | | | | 3,510 | | | | | | | | | |
Dean Foods CPUs | | | — | | | | 2,025 | | | | 204 | | | | | | | | | |
Dean Foods phantom shares | | | — | | | | 2,009 | | | | 824 | | | | | | | | | |
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Total share-based compensation expense funded by Dean Foods | | $ | — | | | $ | 7,473 | | | $ | 6,246 | | | | | | | | | |
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The following table summarizes the share-based compensation expense recognized for the Company’s direct participants in the Dean Foods equity classified plans, as well as expense related to the Company’s equity classified plans, in periods after the completion of our initial public offering: |
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| | Year ended December 31, | | | | | | | | | |
| | 2013 | | | 2012 | | | 2011 | | | | | | | | | |
| | (In thousands) | | | | | | | | | |
Share-based compensation expense | | | | | | | | | | | | | | | | | | | | |
Dean Foods stock options | | $ | 958 | | | $ | 220 | | | $ | — | | | | | | | | | |
Dean Foods RSUs | | | 1,739 | | | | 668 | | | | — | | | | | | | | | |
Dean Foods phantom shares | | | 3,563 | | | | 387 | | | | — | | | | | | | | | |
Dean Foods CPUs | | | — | | | | (637 | ) | | | — | | | | | | | | | |
WhiteWave stock options | | | 7,413 | | | | 602 | | | | — | | | | | | | | | |
WhiteWave RSUs | | | 7,321 | | | | 566 | | | | — | | | | | | | | | |
WhiteWave phantom shares | | | 3,044 | | | | 197 | | | | — | | | | | | | | | |
WhiteWave SARs | | | 859 | | | | 53 | | | | — | | | | | | | | | |
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Total share-based compensation expense | | $ | 24,897 | | | $ | 2,056 | | | $ | — | | | | | | | | | |
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Share-based compensation expense shown above for the Dean Foods equity plans reflect expenses for those legacy plans that have converted to equivalent WhiteWave equity plans upon the spin-off transaction. |