DEF 14A 1 a2228005zdef14a.htm DEF 14A

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.      )

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Definitive Proxy Statement

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Soliciting Material under §240.14a-12

 

Dean Foods Company

(Name of Registrant as Specified In Its Charter)

 

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GRAPHIC


NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
OF DEAN FOODS COMPANY

Date: May 11, 2016
Time: 10:00 a.m. Central time
Location: Dallas Museum of Art, 1717 North Harwood, Dallas, Texas 75201

Items of
Business:


1.    To elect as directors the eight nominees named in the attached Proxy Statement.

2.    To ratify the selection of Deloitte & Touche LLP as our independent auditor for 2016.

3.    To approve, on an advisory basis, an amendment to our bylaws to add a forum selection provision.

4.    To hold a non-binding advisory vote to approve our executive compensation.

5.    To approve the 2016 Stock Incentive Plan.

6.    To vote on a stockholder proposal, if properly presented at the meeting.

7.    To transact any other business that is properly brought before the meeting.


Webcast:


If you cannot attend the 2016 Annual Meeting in person, we invite you to join a live webcast of the meeting at www.deanfoods.com.

Who May Vote:


You are eligible to vote at the 2016 Annual Meeting and at any postponements or adjournments thereof only if you were a Dean Foods stockholder as of the close of business on March 17, 2016, the record date for the 2016 Annual Meeting.

How to Vote:


Please cast your vote by telephone or over the Internet as described in our Proxy Statement and in the Notice of Internet Availability of Proxy Materials. If you requested a copy of the proxy/voting instruction card by mail, you may mark, sign, date and return the proxy/voting instruction card in the envelope provided.

Date of
Distribution:


On or about March 30, 2016, we will begin mailing our Notice of Internet Availability of Proxy Materials and any paper copies of our Proxy Statement with related proxy/voting instruction cards.

Electronic
Availability
of Materials:


The Company's Proxy Statement and Annual Report to Stockholders for the fiscal year ended December 31, 2015, are available at www.viewproxy.com/deanfoods/2016. These documents are also posted on our website at www.deanfoods.com.

Date: March 30, 2016 By order of the Board of Directors,

 


 



GRAPHIC

Kristy N. Waterman
Vice President, Chief Counsel – Corporate
and Deputy Corporate Secretary

Your vote is very important to us. Whether or not you plan to attend
the meeting in person, we encourage you to vote promptly so that
your shares will be represented at the Annual Meeting.


TABLE OF CONTENTS

INVITATION

1

PROXY SUMMARY

2

2016 Annual Meeting of Stockholders

2

Voting Matters and Board Recommendations

2

Governance of the Company

2

Director Nominees

4

Executive Compensation

4

GENERAL INFORMATION ABOUT THE MEETING AND VOTING

6

The Purpose of this Proxy Statement

6

Who May Vote

6

Stockholder of Record

 

Beneficial Owner

 

Delivery of Proxy Materials

6

Establishing a Quorum

7

Matters to be Presented at the 2016 Annual Meeting

8

Votes Required; Effect of Broker Non-Votes and Abstentions

8

Voting Procedures

9

Voting By Proxy

 

Voting Methods

 

Revoking your Proxy

 

Failure to Vote in Person or by Proxy

 

Voting Results of the 2016 Annual Meeting

10

Stockholder Proposals for Consideration at the 2017 Annual Meeting

11

For Consideration at the 2017 Annual Meeting

11

For Inclusion in the 2017 Proxy Statement

11

Proxy Solicitation and Related Costs

11

STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

12

Beneficial Ownership of Management

 

Beneficial Owners Who Hold More than 5% of our Common Stock

 

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

14

PROPOSAL 1 – ELECTION OF DIRECTORS

15

Qualifications and Biographical Information of Director Nominees

16

DIRECTOR COMPENSATION

24

Structure of Non-Employee Director Compensation for 2015

24

Payment of Non-Employee Director Compensation in 2015

25

Director Stock Ownership Guidelines

26

CORPORATE GOVERNANCE

27

Independent Directors

27

Responsibilities of the Board

28

Board Leadership Structure

28

Board Composition

29

Standing Committees of the Board – Responsibilities and Membership

29

Responsibilities of the Board's Standing Committees

30

Audit Committee

 

Nominating/Corporate Governance Committee

 

Compensation Committee

 

Compensation Committee Consultant

33

Compensation Committee Interlocks and Insider Participation

34

Communications with the Board of Directors

35

Risk Oversight

35

Policies Regarding Transactions with Related Parties;
Relationships with our Executive Officers and Directors

36

Nominating Directors

37

Nominations by the Board of Directors

 

Nominations by Stockholders

 

Code of Ethics

38

Ethics and Compliance Oversight

38

PROPOSAL 2 – RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR

39

Independent Auditor Information

39

AUDIT COMMITTEE REPORT

42

PROPOSAL 3 – APPROVAL, ON AN ADVISORY BASIS, OF AMENDMENT TO AMENDED AND RESTATED BYLAWS ("FORUM SELECTION PROVISION")

43

PROPOSAL 4 – NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION ("SAY-ON-PAY")

44

Executive Officers of the Company

45

EXECUTIVE COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS

48

Executive Summary

48

Our 2015 Financial Performance

49

Our Pay Practices

50

Stockholder Engagement

50

Governance Practices Related to Executive Compensation

51

NEO Pay Mix

53

Components of our Executive Compensation and Benefits Programs

53

How Executive Pay Levels are Determined

60

Agreements with Named Executive Officers

61

Tax Deductibility Policy and Accounting Treatment Considerations

62

2016 Compensation Actions

63

COMPENSATION COMMITTEE REPORT

64

COMPENSATION TABLES FOR NAMED EXECUTIVE OFFICERS

65

Summary Compensation Table for Fiscal Year 2015

65

All Other Compensation

67

Grants of Plan-Based Awards in Fiscal Year 2015

68

Outstanding Equity Awards at 2015 Fiscal Year-End

70

Option Exercises and Stock Vested in Fiscal Year 2015

71

Deferred Compensation Plan

71

Executive Officer Severance

71

Potential Benefits Upon a Change in Control

72

Estimated Payments upon Termination Following a Change in Control

73

Executive Severance Pay Plan

74

Estimated Payments Upon a Qualified Termination

75

Agreements with our Named Executive Officers

76

PROPOSAL 5 – APPROVAL OF 2016 STOCK INCENTIVE PLAN

78

Description of the 2016 Stock Incentive Plan

78

Summary of Federal Tax Consequences

86

Plan Benefits

88

Equity Compensation Plan Information

89

PROPOSAL 6 – STOCKHOLDER PROPOSAL – GMO REPORTING

90

OTHER INFORMATION

93

Committee Charters/Form 10-K

93

DEFINITIONS

94

ANNEX A – Reconciliation to Non-GAAP Financial Measures

A-1

ANNEX B – Proposed 2016 Stock Incentive Plan

B-1

Unless otherwise noted, all numbers of shares or share prices relating to our common stock in this Proxy Statement reflect the August 2013 Reverse Stock Split and all numbers of shares or units and corresponding prices related to equity awards granted prior to the WhiteWave Spin-Off have been adjusted to preserve the pre-spin intrinsic value of the award.


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GRAPHIC

YOU ARE INVITED

March 30, 2016

Dear Fellow Stockholders,

We hope that you will attend our Annual Meeting of Stockholders on May 11, 2016. At the Annual Meeting, after we vote on the proposals described in this Proxy Statement, we will present a brief report on our 2015 results and an update on our business. As always, we will conclude the meeting with a brief period for questions and comments. For your convenience, we will present a live webcast of the meeting, which you can access through our website at www.deanfoods.com under Investor Relations.

If you have questions regarding any of the matters contained in this Proxy Statement, please contact our Investor Relations Department at 800.431.9214. We thank you for your continued support of Dean Foods, and we look forward to seeing you at the 2016 Annual Meeting.

  Sincerely,

 



GRAPHIC
  Gregg A. Tanner
Chief Executive Officer and Director

 



GRAPHIC

 


Jim L. Turner
Non-Executive Chairman of the Board

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PROXY SUMMARY

Below is a summary that highlights information contained elsewhere in this Proxy Statement. Please refer to the complete Proxy Statement before you cast your vote.

Please refer to the Definitions on pages 94 and 95 for the meaning of certain terms used in this summary and the rest of this Proxy Statement.

2016 ANNUAL MEETING OF STOCKHOLDERS

Date and Time: May 11, 2016 at 10:00 a.m. Central time

Location:


Dallas Museum of Art, 1717 North Harwood, Dallas, Texas 75201

Record Date:


March 17, 2016
  If you were a stockholder of record of the Company as of the close of business on March 17, 2016, you are entitled to vote at the 2016 Annual Meeting and any adjournments or postponements of the meeting.

VOTING MATTERS AND BOARD RECOMMENDATIONS

 
Board
Recommendation

Page
Reference

Election of Directors

FOR each Director Nominee 15

Ratification of Selection of Independent Auditor

FOR 39

Approval, on an Advisory Basis, of Bylaw Amendment ("Forum Selection Provision")

FOR 43

Non-Binding Advisory Vote on Executive Compensation

FOR 44

Approval of 2016 Stock Incentive Plan

FOR 78

Stockholder Proposal on GMO Reporting

AGAINST 90

GOVERNANCE OF THE COMPANY (page 27)

Recent Initiatives

Stakeholder Engagement Efforts.   We strongly believe that regular engagement with all of our stakeholders – including stockholders, customers, consumers, suppliers and advocacy groups – is critical to our long-term success. Our engagement activities have provided us with valuable feedback from stockholders and other stakeholders, who have contributed important external viewpoints that inform our decisions and our strategy. In 2015, members of our management team met with a significant number of our stockholders to discuss corporate governance practices, executive compensation and board composition, and to solicit feedback on these and a variety of other topics. We also engaged with a number of advocacy groups regarding our animal welfare efforts, water reporting and sustainability

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goals. Please see page 50 of this Proxy Statement for more information about our recent engagement efforts.

Proposed Forum Selection Bylaw Amendment.   Our Board of Directors is proposing, for approval by our stockholders, on an advisory basis, an amendment to our Bylaws to establish Delaware as the exclusive forum for the adjudication of certain types of specified corporate disputes. Although our Bylaws allow the Board of Directors to unilaterally adopt amendments to the Bylaws, our Board of Directors believes, as a matter of good corporate governance, that it is important to give our stockholders an opportunity to voice their position regarding whether this amendment is appropriate. The Board believes that the proposed provision provides substantial benefits to the Company and its stockholders as a whole. For example, the Delaware Chancery Court offers a specialized system to deal with corporate law questions, with streamlined procedures and processes that help provide relatively quick decisions, and the adoption of the provision would reduce the risk that we could be involved in costly duplicative litigation in more than one forum, which has become increasingly common. For more information, please see Proposal 4 – Approval, on an Advisory Basis, of Amendment to Amended and Restated Bylaws ("Forum Selection Provision") on page 43 of this Proxy Statement.

Proposed 2016 Stock Incentive Plan.   The Dean Foods Company 2007 Stock Incentive Plan will expire by its terms on April 2, 2017. Our Board has approved the Dean Foods Company 2016 Stock Incentive Plan, subject to stockholder approval, so that a sufficient amount of shares of Company common stock will be available for appropriate compensation to employees, consultants and directors. Equity awards are an important part of our compensation program and align the interests of our employees, consultants and directors with the long-term interests of our stockholders. Please see Proposal 5 – Approval of 2016 Stock Incentive Plan on page 78 of this Proxy Statement for more information.

  Governance Features

  Size of Board   9  
  Number of Independent Directors   8 of 9  
  Committee Independence – Independent Directors on Audit, Compensation, Nominating/Corporate Governance   100%  
  Separate Chairman and CEO Roles   GRAPHIC  
  Independent Chairman or Lead Director   GRAPHIC  
  Annual Election of All Directors   GRAPHIC  
  Majority Voting for Directors in Uncontested Elections   GRAPHIC  
  Executive Sessions of Independent Directors at Each Regularly Scheduled Board Meeting   GRAPHIC  
  Annual Board, Committee and Director Evaluations   GRAPHIC  
  Formal Code of Ethics, Ethics Hotline and Ethics Training and Communications to All Employees   GRAPHIC  
  Robust Stock Ownership Guidelines for Directors and Executive Officers   GRAPHIC  
  Directors and Executive Officers Prohibited from Pledging/Hedging Company Shares   GRAPHIC  
  Stockholders May Act by Written Consent   GRAPHIC  

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DIRECTOR NOMINEES(page 15)

Our Board of Directors has nominated eight directors for election at the Annual Meeting. Please see Proposal 1 – Election of Directors on page 15 of this Proxy Statement for additional information about each nominee. The table below is a summary of key information regarding the nominees.

      Committee Membership
Director Nominee
Principal Role

DFC
Director
Since


Age* Independent** Audit Compensation Nominating /
Corporate
Governance
Janet Hill
Principal, Hill Family Advisors
2001 68 GRAPHIC · $   GRAPHIC
J. Wayne Mailloux
Owner, Stonehill Partners Limited
2009 67 GRAPHIC GRAPHIC $ ·  
Helen E. McCluskey
Former CEO, The Warnaco Group, Inc.
2015 60 GRAPHIC · $ ·  
John R. Muse
Chairman, Kainos Capital, LLC
1997 65 GRAPHIC   ·  
B. Craig Owens
Former CFO, Campbell Soup Company
2015 61 GRAPHIC · $   ·
Gregg A. Tanner
CEO, Dean Foods Company
2012 59        
Jim L. Turner (Non-Executive Chairman)
Principal, JLT Beverages L.P.
1997 70 GRAPHIC   GRAPHIC ·
Robert T. Wiseman
Former Chairman and CEO, Robert Wiseman Dairies Limited
2013 61 GRAPHIC     ·

GRAPHIC Committee chair
$   "Audit committee financial expert" under SEC rules and "financially literate" under NYSE Rules
* Our directors may not stand for reelection after reaching age 72 without a determination by our Nominating / Corporate Governance Committee that such director's election is in the best interest of our stockholders.
** Independent under NYSE Rules, our Corporate Governance Principles and, if a member of our Audit Committee, under Exchange Act Rule 10A-3, and, if a member of the Compensation Committee, under Exchange Act Rule 10C-1.

EXECUTIVE COMPENSATION(page 48)

This Proxy Statement contains information about the Company's executive compensation programs. Detailed information regarding our compensation programs, practices and philosophy can be found in the Compensation Discussion and Analysis beginning on page 48 and the compensation tables starting on page 65.

To ensure that management's interests are aligned with those of our stockholders and to motivate and reward individual initiative and effort, we emphasize a pay-for-performance compensation philosophy so that attainment of Company and individual performance goals is rewarded. Through the use of performance-based plans that emphasize attainment of Company goals, we seek to foster teamwork and a commitment to performance. The use of tools such as equity ownership and long-term incentive compensation programs is important to ensure that the efforts of management are consistent with the objectives of our stockholders.

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We believe that a significant portion of each senior executive's compensation should be dependent on value created for our stockholders. Our incentive compensation programs are designed to align the results achieved for stockholders with the rewards provided to our senior executives. In 2015, variable compensation represented 83% of our CEO's 2015 target total compensation opportunity and, on average, 72% of our other current NEOs' target total compensation opportunity. Variable compensation includes the NEO's annual target bonus and LTI awards. Fixed compensation (in the form of base salary) represented 17% of our CEO's 2015 target total compensation and, on average, 28% of the 2015 target total compensation of our other current NEOs. In addition, the 2015 short-term incentive bonus targets were revised from 2014 to increase the weighting of the financial objectives component from 60% to 75% and to decrease the weighting of the individual objectives component from 40% to 25%. To further align executive and stockholder interests, we require stock ownership levels equal to at least five times base salary for our CEO and two times base salary for the other executive officers.

In 2015, adjusted operating income and Bank EBITDA, the performance measures for the financial component of the 2015 STI Plan and 2015 CPU Plan, respectively, exceeded maximum performance levels approved by the Compensation Committee at the beginning of the year and resulted in payouts of 200% of target for the financial component under such plans. In contrast, in fiscal year 2014, when our performance fell below target and we did not meet target thresholds, none of our executive officers received any payments under our 2014 STI Plan relating to 2014 financial performance or any CPU accruals for the 2014 performance period.

The "say-on-pay" proposal received strong stockholder support at our 2015 Annual Meeting, with 94% of shares voted in favor of the proposal. As a result, the Compensation Committee continued to apply the same effective principles and philosophy it has used in prior years to determine executive compensation and will continue to consider stockholder concerns and feedback in the future.

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GENERAL INFORMATION ABOUT THE MEETING AND VOTING

The Purpose of this Proxy Statement

Our Board of Directors is soliciting your proxy to vote your shares at the Company's 2016 Annual Meeting of Stockholders to be held on May 11, 2016 and at any adjournments or postponements of the meeting. A proxy is your legal designation of another person to vote the stock that you own. This Proxy Statement includes detailed information about the matters that will be discussed and voted on at the meeting and provides updated information about our Company that you should consider in order to make an informed voting decision.

Who May Vote

Only stockholders who owned shares of the common stock of Dean Foods Company at the close of business on the Record Date are entitled to vote at the 2016 Annual Meeting or any postponement or adjournment of the meeting. The Board established March 17, 2016 as the Record Date, on which date there were 91,729,182 shares of Dean Foods common stock issued and outstanding. Dean Foods common stock was the only class of our stock outstanding on that date.

Stockholder of Record.    If you are a stockholder of record, meaning your shares are registered in your own name, you may vote in person at the Annual Meeting or you may provide your proxy via the Internet or by telephone or mail in accordance with the instructions provided on the Notice of Internet Availability or, if you requested printed copies of the proxy materials, your proxy or voting instruction card.

Beneficial Owner.    If you are a beneficial owner of shares held in street name, meaning you hold your shares through a broker, bank or other nominee, you may provide your proxy via the Internet or by telephone or mail in accordance with the instructions provided on the Notice of Internet Availability or, if you requested printed copies of the proxy materials, your proxy or voting instruction card. To vote in person at the Annual Meeting you must obtain a legal proxy, executed in your favor, from the broker, bank or other nominee of your shares as of that time.

Your broker, bank or other nominee has discretionary voting power with respect to the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accountants for the 2016 fiscal year and may vote your shares on that proposal if he or she has not received voting instructions from you. However, your broker, bank or other nominee does not have discretionary voting power with respect to any of the other proposals discussed in this Proxy Statement and cannot vote your shares on those proposals unless he or she has received your instruction.

Delivery of Proxy Materials

Internet Availability of Proxy Materials.    In accordance with SEC rules, rather than mailing a full paper set of the proxy materials to each stockholder, many stockholders will receive a

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single-page notice advising the recipient of the availability of the proxy materials on the Internet. This Notice of Internet Availability includes instructions on how to access our proxy materials and vote on the Internet. It also includes instructions on how stockholders may obtain a paper copy of the proxy materials by mail or a printable copy electronically. Stockholders who have affirmatively requested electronic delivery of our proxy materials will receive instructions via e-mail regarding how to access these materials electronically. All other requesting stockholders, including stockholders who have previously requested to receive a paper copy of the materials, will receive a full paper set of the proxy materials by mail. This distribution process contributes to our sustainability efforts and reduces the costs of printing and distributing our proxy materials.

Duplicate Sets.    If you received more than one set of printed proxy materials or more than one notification regarding the availability of proxy materials on the Internet, your shares are likely registered differently or are held in more than one account. To vote your shares, please follow the instructions on each notification, proxy card or voting instruction card that you received.

Eliminating Duplicate Sets.    If, for any reason, you and members of your household are receiving multiple copies and you want to eliminate duplications, please contact our Investor Relations Department by telephone at 800.431.9214 or by mail at: Dean Foods Company, 2711 North Haskell Avenue, Suite 3400, Dallas, Texas 75204, Attention: Investor Relations. That request must be made by each stockholder of record in the household.

Obtaining Separate Proxy Materials and Other Mailings.    Stockholders who are registered owners of our stock and who live in the same household generally receive only one copy per household of the 2015 Annual Report, Proxy Statement and most other mailings. If you would like to start receiving a separate set of printed proxy materials in your name, apart from others in your household, please contact our Investor Relations Department at the mailing address or phone number provided above and request that action. Within 30 days after your request is received, we will start sending you separate mailings.

Obtaining Paper Copies of Materials for the 2016 Annual Meeting.    Instructions about how to obtain a paper copy of the proxy materials and the 2015 Annual Report are included on each proxy card, voting instruction card, and the Notice of Internet Availability of proxy materials. The instructions are included in e-mail notifications as to the availability of the proxy materials as well. We will also have materials available at the meeting. If you want paper copies of your materials and hold your shares in Street Name, you must request them from your broker, bank or other nominee. The materials will be mailed promptly but we cannot guarantee you will receive mailed copies before the meeting.

Electronic Access to Proxy Statement and 2015 Annual Report.    This Proxy Statement and the 2015 Annual Report are available online at www.viewproxy.com/deanfoods/2016. Most stockholders can elect to view future proxy statements and annual reports over the Internet instead of receiving hard copies in the mail. You can choose this option by following the instructions when you vote over the Internet.

Establishing a Quorum

A quorum is the minimum number of votes that must be present at the Annual Meeting in order to transact business. Our Bylaws provide that to establish a quorum a majority of the shares of our common stock that were issued and outstanding and entitled to vote at the Annual Meeting must be present in person or represented by proxy. For purposes of a

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quorum, shares represented (a) in person at the meeting, (b) by proxy submitted via the Internet or by telephone or mail prior to the meeting, (c) Abstentions and (d) Broker Non-Votes are counted as present and entitled to vote.

If a quorum is not established, we will adjourn the meeting and reschedule it.

Matters to be Presented at the 2016 Annual Meeting

If enough stockholders are present at the meeting to conduct business, then we will vote on:

    Proposal  1:  A proposal to elect the eight nominees as members of our Board of Directors, each for a one-year term.

    Proposal  2:  A proposal to ratify the selection of Deloitte & Touche LLP as our independent auditor for 2016.

    Proposal  3:  A proposal to approve, on an advisory basis, an amendment to the Company's Bylaws to include a forum selection provision.

    Proposal  4:  A proposal to approve, on an advisory basis, our executive compensation.

    Proposal  5:  A proposal to approve the 2016 Stock Incentive Plan, a new equity incentive plan.

    Proposal  6:  A stockholder proposal related to GMO reporting.

The Board of Directors is now soliciting your vote on these proposals. Proposals 1, 2, 3, 4 and 5 have been approved by our Board of Directors, and the Board of Directors recommends that you vote FOR each of the nominees named in Proposal 1 and FOR Proposals 2, 3, 4 and 5. The Board of Directors recommends that you vote AGAINST Proposal 6.

After all of the proposals have been voted on at the meeting, we will discuss and take action on any other matter that is properly brought before the meeting. Finally, our management team will present a brief report on our 2015 operating and financial results and an update on our business.

Votes Required; Effect of Broker Non-Votes and Abstentions

On each proposal, you are entitled to one vote for each share of stock that you owned at the close of business on the Record Date. Cumulative voting is not permitted. Alliance Advisors LLC will count the votes and act as inspector of election.

Abstentions (a) will be considered as present for purposes of determining a quorum, (b) will have no effect on Proposal 1, regarding the election of directors, and Proposal 3, the advisory vote on the bylaw amendment, and (c) will be the same as a vote against a proposal other than Proposals 1 and 3.

Broker Non-Votes (a) will be considered as present for purposes of determining a quorum but (b) will not be considered present and entitled to vote on any matter for which a broker, bank or other nominee does not have authority. For the 2016 Annual Meeting, pursuant to the rules of the NYSE, your broker, bank or other nominee will be permitted to vote for you without

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instruction only with respect to Proposal 2 regarding the ratification of Deloitte & Touche LLP. A Broker Non-Vote will not have any impact on the outcome of Proposals 1, 3, 4, 5, and 6.

  Proposal Number

Item

Votes Required for Approval

Abstentions

Signed But Unmarked Proxy Cards

  1   Election of Directors   Majority of votes cast   No effect   Count as votes FOR  
  2   Ratification of Independent Auditor   Majority of the voting power of the shares present in person or represented by proxy and entitled to vote   Count as votes AGAINST   Count as votes FOR  
  3   Approval of Bylaw Amendment on an Advisory Basis   Majority of votes cast   No effect   Count as votes FOR  
  4   Advisory Vote to Approve Executive Compensation   Majority of the voting power of the shares present in person or represented by proxy and entitled to vote   Count as votes AGAINST   Count as votes FOR  
  5   Approval of 2016 Stock Incentive Plan   Majority of the voting power of the shares present in person or represented by proxy and entitled to vote   Count as votes AGAINST   Count as votes FOR  
  6   Stockholder Proposal – GMO Reporting   Majority of the voting power of the shares present in person or represented by proxy and entitled to vote   Count as votes AGAINST   Count as votes AGAINST  

Voting Procedures

Voting by Proxy.    Voting by any means other than voting in person at the meeting has the effect of appointing Gregg A. Tanner, our CEO, and Kristy N. Waterman, Vice President, Chief Counsel – Corporate and Deputy Corporate Secretary, as your proxies. They will be required to vote on the proposals described in this Proxy Statement exactly as you have directed. If any other matter requiring a stockholder vote is properly raised at the meeting, then Mr. Tanner and Ms. Waterman will be authorized to use their discretion to vote on such matters on your behalf. Also, if you sign your proxy card but do not specify how you want to vote on a proposal, your shares will be voted FOR Proposals 1, 2, 3, 4, and 5 and AGAINST Proposal 6.

Whether you hold your shares directly as the Stockholder of Record or beneficially in Street Name, you may vote your shares by proxy without attending the 2016 Annual Meeting.

Voting Methods.    Depending on how you hold your shares, you may vote your shares in one of the following ways:

    Via the Internet.  If you received a Notice of Internet Availability, you may vote by proxy via the Internet by visiting the website indicated in the Notice of Internet Availability and following the instructions on the website using the control number found in the Notice of Internet Availability. If you received or requested printed copies of the proxy materials by mail, you may vote via the Internet by following the instructions on each proxy or voting instruction card. If you vote via the Internet, you do not need to return a card by mail.

    By Telephone.  If you received or requested printed copies of the proxy materials by mail, you may vote by proxy by calling the toll-free number found on each proxy or voting instruction card. If you vote by telephone, you do not need to return a card by mail.

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    By Mail.  If you received or requested printed copies of the proxy materials by mail, you may vote by completing, signing and dating each proxy or voting instruction card you received and returning it in the prepaid envelope. Sign your name exactly as it appears on the proxy or voting instruction card.

    In Person at the Annual Meeting.  You may vote your shares in person at the Annual Meeting. If you are the Stockholder of Record, you may bring your printed proxy card if you received one by mail or the Company will give you a ballot at the Annual Meeting. If you are the beneficial owner of shares held in Street Name, you must obtain a legal proxy from the organization that holds your shares if you wish to vote in person at the Annual Meeting.

When you vote via the Internet or by telephone, your vote is recorded immediately and there is no risk that postal delays will cause your vote to arrive late and not be counted.

Even if you plan to attend the 2016 Annual Meeting in person, we recommend that you also submit your vote (via Internet, telephone or mail) by the applicable deadline so that your vote will be counted if you later decide not to attend the meeting.

Revoking your Proxy.    You can revoke your proxy at any time before the meeting for any reason. To revoke your proxy before the meeting, either:

    write to our Corporate Secretary at 2711 North Haskell Avenue, Suite 3400, Dallas, Texas 75204, or

    submit a later-dated proxy, either via the Internet or by telephone (the last vote you cast before the meeting begins is the one that will be counted), or

    come to the meeting and change your vote in writing (as noted above, if your shares are held in Street Name, you will need a proper legal proxy from the Stockholder of Record in order to vote your shares in person at the meeting). Attendance at the meeting will not itself be deemed to revoke a proxy unless you give affirmative notice at the meeting that you intend to revoke your proxy and vote in person.

Failure to Vote in Person or by Proxy.    If you do not submit a proxy or vote at the meeting, your failure to do so could affect whether there are enough stockholders present at the meeting to transact any business.

If your shares are held in Street Name and you do not instruct your broker, bank or other nominee how to vote your shares, such nominee will leave your shares unvoted (a Broker Non-Vote) with respect to all proposals other than Proposal 2.

Voting Results of the 2016 Annual Meeting

We will announce preliminary voting results at the meeting. We will publish the final results in a Current Report on Form 8-K filed with the SEC within four business days following the 2016 Annual Meeting. You can also obtain a copy on our website at www.deanfoods.com, on the SEC's website at www.sec.gov or by contacting our Investor Relations Department at 800.431.9214.

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Stockholder Proposals for Consideration at the 2017 Annual Meeting

For Consideration at the 2017 Annual Meeting.    According to our Bylaws, if a stockholder wishes to present a proposal at the 2017 Annual Meeting, we must receive proper written notice of any such proposal no earlier than January 11, 2017, and no later than February 10, 2017. In the event that the date of the 2017 Annual Meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the 2016 Annual Meeting, we must receive notice no earlier than the 120th day prior to the date of such annual meeting and not later than 5:00 P.M., Central Time, on the later of the 90th day prior to the date of such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. Any notice must include the information specified in our Bylaws and must be addressed to the Corporate Secretary of Dean Foods at 2711 North Haskell Avenue, Suite 3400, Dallas, Texas 75204. Instructions for nominating directors are provided in the section captioned "Corporate Governance – Nominating Directors" on page 37 of this Proxy Statement.

For Inclusion in the 2017 Proxy Statement.    Under our Bylaws, if a stockholder wants to have a proposal formally considered at the 2017 Annual Meeting, and included in the Proxy Statement for that meeting, we must receive the proposal in writing no later than November 30, 2016, and the proposal must otherwise comply with Rule 14a-8 under the Exchange Act. Proposals must be addressed to the Corporate Secretary of Dean Foods at 2711 North Haskell Avenue, Suite 3400, Dallas, Texas 75204.

Proxy Solicitation and Related Costs

We will pay all costs associated with this Proxy Statement and the solicitation of proxies. Upon request, we will reimburse stockbrokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding proxy materials to beneficial owners of shares of our common stock. We have engaged Alliance Advisors, LLC to assist in the distribution of proxy materials and the solicitation of votes. In addition, certain of our officers may solicit proxies by mail, telephone, fax, e-mail or in person. We will pay Alliance a fee of $18,000, plus certain out-of-pocket expenses.

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STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Beneficial Ownership of Management

The following table presents information, as of March 17, 2016, concerning the beneficial ownership of Dean Foods Common Stock of:

    each of our directors;

    each NEO included in the Summary Compensation Table on page 65; and

    all directors and executive officers as a group, including executive officers not named in the Summary Compensation Table.

Beneficial ownership is determined under the rules of the SEC and includes any shares that the individual has sole or shared authority to vote or invest and any shares that the individual has the right to acquire within 60 days after March 17, 2016, through the exercise of any stock option, vesting of any RSU or other right. Beneficial ownership is not indicative of ownership for any other purpose. Unless stated otherwise in the footnotes to the table, each person named in the table owns his or her shares directly and has sole voting and investment power over such shares.

Beneficial Owner



​Number of Shares
Common Stock




​Equity
Awards(1)




​Amount and
Nature of
Beneficial
Ownership






​Percent of
Class(2)




Chris Bellairs

69,819 81,106 150,925   *  

Janet Hill

46,089 88,703 134,792   *  

Marc L. Kesselman(3)

0 0 0   *  

J. Wayne Mailloux

104,477 0 104,477   *  

Helen E. McCluskey

0 0 0   *  

John R. Muse(4)

204,093 21,393 225,486   *  

Hector M. Nevares

103,252 88,703 191,955   *  

B. Craig Owens

1,182 0 1,182   *  

Ralph P. Scozzafava

16,395 0 16,395   *  

Gregg A. Tanner

354,614 578,666 933,280 1.0 %  

Jim L. Turner(5)

226,023 44,413 270,436   *  

Kimberly Warmbier

36,997 16,068 53,065   *  

Robert T. Wiseman

31,124 0 31,124   *  

Executive Officers and Directors as a Group, including three executive officers not named in the table (16 persons total)

1,211,025 934,081 2,145,106 2.3 %  

*
Less than 1%

(1)
If a director is 65 years of age or older, all unvested options and RSUs immediately vest upon retirement from the Board. Ms. Hill and Messrs. Mailloux, Muse, Nevares and Turner each meet this criteria. This table does not reflect shares underlying equity awards that would vest and become exercisable by each of these directors should they elect to retire, as follows: 7,096 shares with

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    respect to Mr. Nevares and 13,317 shares with respect to each of directors Hill, Mailloux, Muse and Turner.

(2)
Shares of Dean Foods common stock that the individual has the right to acquire as of March 17, 2016, and within the 60-day period thereafter through the exercise of options or the vesting and payment of other equity awards, as applicable, are treated as outstanding shares and are included in the denominator for purposes of this percentage calculation.

(3)
Mr. Kesselman resigned effective January 15, 2016.

(4)
Includes 1,275 shares owned by Mr. Muse's spouse; Mr. Muse disclaims ownership of such shares.

(5)
Includes 37,017 shares held by Mr. Turner's spouse; Mr. Turner disclaims ownership of such shares.

Beneficial Owners Who Hold More than 5% of our Common Stock

The following table presents information concerning the beneficial ownership of Dean Foods common stock of each other stockholder known by the Company, based on the stockholder's filings with the SEC, to beneficially own more than 5% of the outstanding shares of Dean Foods common stock as of December 31, 2015.

Name and Address
of Beneficial Owner




​Amount and Nature
of Beneficial
Ownership





​Percent of
Class(1)




The Vanguard Group(2)
100 Vanguard Blvd., Malvern, PA 19355

9,146,800 10.0 %  

BlackRock, Inc.(3)
55 East 52nd Street, New York, NY 10022


8,414,045 9.2  

Dmitry Balyasny; Balyasny Asset Management, L.P.(4)
181 W. Madison, Suite 360, Chicago, IL 60602

4,861,355 5.3 %  

(1)
Based on 91,729,182 shares of common stock issued and outstanding as of March 17, 2016.

(2)
Based on a Schedule 13G/A filed with the SEC on February 10, 2016, The Vanguard Group, Inc., through its subsidiaries, Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd., beneficially owns 9,146,800 shares of our common stock and reported sole dispositive power with respect to 8,986,592 of such shares and shared dispositive power with respect to 160,208 of such shares, and sole voting power with respect to 159,008 of such shares and shared voting power with respect to 6,900 of such shares.

(3)
Based on a Schedule 13G/A filed with the SEC on January 26, 2016, BlackRock, Inc., through its subsidiaries, BlackRock Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Asset Management Ireland Limited, BlackRock Asset Management Schweiz AG, BlackRock Financial Management, Inc., BlackRock Fund Advisors, BlackRock Institutional Trust Company, N.A., BlackRock Investment Management (Australia) Limited, BlackRock Investment Management (UK) Ltd, BlackRock Investment Management, LLC and BlackRock Life Limited, beneficially owns 8,414,045 shares of our common stock and reported sole dispositive power with respect to all of such shares and sole voting power with respect to 8,201,457 of such shares.

(4)
Based on a Schedule 13G filed with the SEC on February 12, 2016, Dmitry Balyasny, as the sole managing member of the general partner of Balyasny Asset Management, L.P. ("BAM"), and BAM, by virtue of its role as investment manager to the following entities, Atlas Master Fund, Ltd., Atlas Global, LLC, Atlas Global Investments, Ltd., Atlas Institutional Fund, LLC, Atlas Institutional Fund, Ltd, Atlas Institutional Fund II, LLC, Atlas Institutional Fund II, Ltd, Atlas Global Japan Unit Trust, Atlas Enhanced Master Fund, Ltd., Atlas Enhanced Fund, L.P., Atlas Enhanced Fund, Ltd., Atlas Fundamental Trading Master Fund, Ltd., Atlas Fundamental Trading Fund, Ltd., Atlas Fundamental Trading Fund, L.P., Lyxor/Balyasny Atlas Enhanced Fund Limited, and Atlas Quantitative Trading Fund, Ltd., beneficially owns 4,861,355 shares our common stock and reported sole voting and sole dispositive power with respect to all of such shares.

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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our executive officers, directors and persons who own more than 10% of our common stock to file reports of ownership and changes in ownership with the SEC and further requires us to identify in this Proxy Statement those executive officers, directors and persons who failed to timely file such a report. Due to a technical error, the Company was one day late in filing a Form 4 for C. Shay Braun, a former NEO, to report the vesting on October 15, 2015, of 58 shares of Dean Foods common stock pursuant to a prior award of restricted stock units. Excepting the late filing disclosed above, and based solely on our review of these forms or written representations from the executive officers, directors and persons who own more than 10% of our common stock, we believe that all Section 16(a) filing requirements were met during fiscal year 2015.

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PROPOSAL 1

Election of Directors

Pursuant to the Company's Bylaws, the Board of Directors has the ability to determine the appropriate number of directors in order to maximize the Board's effectiveness and efficiency. Our Board of Directors has set the number of directors constituting the full Board at nine and we currently have nine directors. The term of each incumbent director expires concurrent with the 2016 Annual Meeting. As previously reported in March 2016, director Hector Nevares will retire upon the expiration of his term at the 2016 Annual Meeting. The Board has determined not to fill the vacancy created by Mr. Nevares' retirement, and will, in accordance with our Bylaws, reduce the number of directors to eight members effective immediately following the 2016 Annual Meeting. Accordingly, only eight directors will stand for election by the Company's stockholders at the 2016 Annual Meeting, each to serve a one-year term until our 2017 Annual Meeting, or until such director's earlier death, resignation or removal.

Each of the nominees listed below is currently a member of our Board of Directors. With the exception of Ms. McCluskey and Mr. Owens, who were elected by the Board effective November 10, 2015, each nominee has been previously elected by our stockholders. Both Ms. McCluskey and Mr. Owens were initially identified and recommended to become members of our Board of Directors by a third party search firm.

There are no family relationships among our directors or executive officers.

Each of the persons nominated for election has agreed to stand for election. If any nominee becomes unwilling or unable to stand for election then the Board may vote to reduce the size of the Board of Directors or may nominate another person to serve as director and the person(s) to whom you have given your proxy will be able to use his or her discretion to vote on your behalf for such other person.

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Qualifications and Biographical Information of Director Nominees

Janet Hill

Age: 68

Director since:

December 2001

Committees:

Audit

Nominating/Corporate

Governance (Chair)

Ms. Hill currently serves as principal at Hill Family Advisors and has served in such position since 2010. Prior to that, Ms. Hill served as Vice President of Alexander & Associates, a corporate consulting firm which she owned, from 1981 until her retirement in 2010. She was originally elected to our Board of Directors in connection with our acquisition of Dean Holding Company (formerly known as Dean Foods Company) ("Legacy Dean") in December 2001. Ms. Hill had served on the Board of Directors of Legacy Dean since 1997. In addition to our Board, Ms. Hill also serves on the Boards of Directors of The Wendy's Company, where she serves on the Compensation Committee; Carlyle Group Management L.L.C., the general partner of The Carlyle Group L.P.; Esquire Bank, N.A., a private company, and Echo 360, Inc., a private company that is a global leader in active and distance learning solutions for higher education. She also serves as a trustee of Duke University and serves on the boards of the following non-profit entities: Knight Commission on Intercollegiate Athletics, Kennedy Center, and Wolf Trap Foundation for the Performing Arts. From 2005 until its merger with a subsidiary of Softbank Corp. in July 2013, Ms. Hill served on the Board of Directors of Sprint Nextel Corporation, where she served on the Compensation and Nominating/Corporate Governance committees.

 


Skills & Expertise:

Ms. Hill brings valuable insight to our Board as a human resources and corporate governance specialist, having co-founded Alexander & Associates where she provided corporate planning advice and analysis to directors, executives and managers in the areas of human resource planning, corporate responsibility, corporate communications and government consultation. In addition, Ms. Hill has extensive experience serving as a director on several other Boards of Directors over the past 20 years, including Nextel (pre-merger), Wendy's (pre-merger), Sprint Nextel Corporation and Wendy's/Arby's Group, Inc. (post-merger).

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J. Wayne Mailloux

Age: 67

Director since:

May 2009

Committees:

Audit (Chair)

Compensation

Mr. Mailloux is the owner of Stonehill Partners Limited, a company engaged in strategy development and business consulting, and has owned this company since 2011 and, since September 2015, he has served as principal and Chief Executive Manager of iDriver Solutions, LLC, a distributor of environmentally friendly technology solutions to the trucking industry. Until January 2014, Mr. Mailloux served as the secretary and Chairman of the Board of Directors of SCQuARE International USA inc., a private company formed in 2012 that provides consulting services to companies across a broad spectrum of industries. He previously served as Senior Vice President of PepsiCo, Inc. from 2000 through 2004. Mr. Mailloux joined PepsiCo in 1986 and held positions of increasing responsibility, including President, Pepsi Cola Europe/Africa Beverages from 1996 through 2000, President, Pepsi Cola Europe Beverage Group from 1994 through 1996 and President, Pepsi Cola Canada Beverages from 1989 through 1994. Mr. Mailloux is also a member of the Board of Directors of Beso del Sol, Inc., a privately-held maker of alcoholic beverages.

 


Skills & Expertise:

Mr. Mailloux's 18-year career with PepsiCo spanned a wide variety of senior management roles and included extensive general management, sales and marketing experience in both company operations and franchise environments globally. Mr. Mailloux also previously served on the Board of Directors of Ault Dairies Inc., then Canada's largest dairy, prior to its acquisition by Parmalat. His experience in the beverage industry, combined with his global business experience, make him well-qualified to advise our Company as we continue to execute our business strategies.

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Helen E. McCluskey

Age: 60

Director since:

November 2015

Committees:

Audit

Compensation

Ms. McCluskey was President, Chief Executive Officer and a member of the Board of Directors of The Warnaco Group, Inc. from February 2012 until its acquisition in February 2013 by PVH Corporation. She served as a director of PVH Corporation from February 2013 until June 2014. Ms. McCluskey joined The Warnaco Group, Inc. in July 2004, serving as its Chief Operating Officer from September 2010 to February 2012 and as Group President from July 2004 to September 2010. Prior to joining The Warnaco Group, Inc., Ms. McCluskey held various positions of increasing responsibility with Firestone Tire & Rubber Company (1977 to 1983), Playtex Apparel, Inc. (1983 to 2001) (which was acquired by Sara Lee Corporation in 1991) and Liz Claiborne Inc. (2001 to 2004). During her 18-year tenure with Sara Lee Corporation's intimate apparel units, she held executive positions in marketing, operations and general management, including President of Playtex Apparel from 1999 to 2001. Ms. McCluskey has served as member of the Board of Directors of Avon Products, Inc. since July 2014 and is a member of its Compensation and Management Development Committee and, since August 2013, has served as a director of Signet Jewelers Limited and as a member of its Audit Committee and Nomination and Corporate Governance Committee.

 


Skills & Expertise:

With her broad background in strategy, business planning and operations derived from her career in consumer businesses, Ms. McCluskey brings valuable skills and insight to the Company. Her experience as a Chief Executive Officer of a global public company provides her with significant expertise in global business matters, corporate leadership and management, allowing her to bring valuable insight to the management of the Company's strategic direction and growth. Additionally, having built women's brands globally, she contributes a valuable blend of branding, merchandising, and marketing expertise to the Company.

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John R. Muse

Age: 65

Director since:

November 1997

Committees:

Compensation

Executive

Mr. Muse is Chairman of a private equity firm, Kainos Capital, LLC (formerly known as HM Capital Partners LLC and prior to that known as Hicks, Muse, Tate & Furst Incorporated, which he co-founded in 1989). He also serves as Chairman of Lucchese Boot Company, Inc. a privately-held boot manufacturer, and, since December 2014, as a director of Media General, Inc., one of the nation's largest multimedia companies, where he serves on the Finance Committee. From 1984 to 1989, he was employed at Prudential Securities Inc., where Mr. Muse headed the investment banking operations for the Southwestern region of the United States. Mr. Muse also serves on the Board of Visitors of the UCLA Anderson School of Management and Klyde Warren Park Foundation. Mr. Muse was a member of the Board of Directors of The Morningstar Group Inc. prior to our acquisition of that company in November 1997.

 


Skills & Expertise:

Mr. Muse has more than 30 years of experience in private equity and investment banking, including experience in the food and beverage, energy and media sectors. In addition to his industry knowledge, Mr. Muse has extensive knowledge of acquisitions, capital markets and finance, which is invaluable to our Board's strategic planning for the Company's capital and liquidity needs.

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B. Craig Owens

Age: 61

Director since:

November 2015

Committees:

Audit

Nominating/Corporate

Governance

Mr. Owens was the Chief Financial Officer, Chief Administrative Officer and Senior Vice President of Campbell Soup Company from 2008 until his retirement in April 2014. From 2001 to 2008, Mr. Owens served as the Chief Financial Officer and Executive Vice President of Delhaize Group, an international food retailer headquartered in Belgium. Prior, he was employed by The Coca-Cola Company and its key franchisees from 1981 to 2001 and served in various management roles of increasing importance, including as Finance Director (CFO) for Coca-Cola Beverages plc from 1998 to 2000. Mr. Owens has served on the Board of Directors of J.C. Penney Company, Inc. since October 2014, where he is a member of its Audit Committee, Finance and Planning Committee and the Committee of the Whole. From December 2011 through August 2015, he served as a director of Pall Corporation and chaired its Audit Committee from January 2013 through August 2015. Additionally, Mr. Owens has served as a director of United States Cold Storage, Inc., a private company, since June 2014, and, since 2013, has served on the Board of Trustees of Washington & Lee University and the Board of Directors of Friends' Central School (Philadelphia).

 


Skills & Expertise:

Mr. Owens has extensive experience in the consumer food and beverage industries and considerable knowledge of the retail industry. He brings significant financial expertise to the Board, including all aspects of financial reporting, accounting, corporate finance and capital markets, as well as significant experience in strategic planning, business integration and operations, and in managing supply chain organizations.

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Gregg A. Tanner

Chief Executive Officer

Age: 59

Director since:

November 2012

Committees:

Executive (Chair)

Mr. Tanner has served as our Chief Executive Officer since October 31, 2012, and as a member of our Board of Directors since November 2012. He joined the Company in November 2007 as Executive Vice President and Chief Supply Chain Officer and served as the President, Fresh Dairy Direct and Chief Supply Chain Officer from January 2012 until becoming our Chief Executive Officer. Prior to joining the Company, Mr. Tanner was Senior Vice President, Global Operations at The Hershey Company from 2006 to 2007. Before joining The Hershey Company, Mr. Tanner was Senior Vice President, Retail Supply Chain at ConAgra Foods, Inc. from 2001 to 2005, where he directed the entire supply chain for retail products. Previously, Mr. Tanner held positions of increasing responsibility at the Quaker Oats Company and Ralston Purina Company. Mr. Tanner serves on the Board of Directors of The Boston Beer Company, Inc. and as Chairman of its Audit Committee. He also serves as Chair of the Board of Directors of the Milk Industry Foundation, as Vice Chair of the Board of Directors of the International Dairy Foods Association, as a director for the Grocery Manufacturers Association and on the Board of Directors of Children's Health.

 


Skills & Expertise:

Mr. Tanner's extensive experience in supply chain management and his role as our Chief Executive Officer provide our Board with invaluable insight regarding the Company's operations.

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Jim L. Turner

Non-Executive

Chairman of the Board

Age: 70

Director since:

November 1997

Committees:

Compensation (Chair)

Executive

Nominating/Corporate

Governance

Mr. Turner currently serves as Principal of JLT Beverages L.P., a position he has held since 1996, and, since January 2015, has served as the Owner/CEO of JLT Automotive Inc. Mr. Turner served as President and Chief Executive Officer of Dr. Pepper/Seven Up Bottling Group, Inc. from its formation in 1999 through June 2005 when he sold his interest in that company. Prior to that, Mr. Turner served as Owner/Chairman of the Board and Chief Executive Officer of the Turner Beverage Group, the largest privately-owned independent bottler in the United States. Mr. Turner was a member of the Board of Directors of The Morningstar Group Inc. prior to our acquisition of that company in November 1997. Mr. Turner has served on the Board of Trustees of Baylor Scott & White Health, the largest not-for-profit healthcare system in the State of Texas, since September 2013 and has served as its Chair since July 2015. He also serves as Chair of its Finance Committee and as Vice Chair of its Executive Committee. In addition, Mr. Turner serves on the Boards of Directors of Crown Holdings, Inc., a manufacturer of consumer packaging products, where he serves on the Compensation Committee; Comstock Resources, Inc., an energy company engaged in oil and gas exploration and development, where he serves on the Compensation Committee; INSURICA, a full service insurance agency; and Davaco, Inc., a leading provider of retail services. Mr. Turner previously served on the Board of Directors of Majesty Hospitality Staffing through 2012, where he served as the Chairman, and he served as the Chair of the Board of Trustees of Baylor Health Care System until its merger with Scott & White Healthcare in September 2013. He also served on the Board of Directors of Advanced H2O, LLC, from December 2007 through May 2014 and served as a director and member of the Compensation Committee of DS Services,  Inc. from July 2012 through December 2014. In addition, Mr. Turner is a member of the Texas Rangers Baseball Club ownership group.

 


Skills & Expertise:

Mr. Turner's ownership and chairman/CEO experience with various businesses, especially beverage and bottling companies, translates well into our Company's profile as a leading food and beverage company. In addition, Mr. Turner's varied board experiences, including with Morningstar and other consumer packaged goods companies, offer helpful insight into both the challenges and growth opportunities facing our business.

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Robert T. Wiseman

Age: 61

Director since:

February 2013

Committees:

Nominating/Corporate

Governance

Mr. Wiseman is a private investor who previously served as the Chief Executive of Robert Wiseman & Sons PLC from 2002 until its sale to the Müller Group in February 2012. Following the sale, he served as Non-Executive Director of Robert Wiseman Dairies Limited, Great Britain's largest fresh liquid milk processor, from February 2012 to August 2013. Mr. Wiseman joined Robert Wiseman & Sons Limited, in 1975 and held positions of increasing responsibility, including Managing Director, from 1994, after the company began trading on the London Stock Exchange, to 2002. Since November 2014, Mr. Wiseman has served on the Board of Directors of Ingleby Farms & Forests A/S, a privately-held company that manages mixed farms worldwide.

 


Skills & Expertise:

Mr. Wiseman's extensive experience in the international dairy industry is invaluable to understanding the operations of our Company, including identifying efficiencies with our assets and potential growth opportunities.

Our Board of Directors unanimously recommends that you vote FOR the election of each of the eight director nominees.

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DIRECTOR COMPENSATION

Our objectives for non-employee director compensation are twofold: first, to remain competitive with the compensation paid to directors of comparable companies so that we may attract and retain qualified candidates; second, to align the interests of non-employee directors with those of our stockholders by paying a portion of their compensation in units representing shares of our stock.

Pursuant to these objectives, and based on recommendations from the Compensation Committee, our Board determined the amount and manner of non-employee director compensation for 2015 as set forth below. Because he is an employee of the Company, Mr. Tanner did not receive separate compensation for his Board service.

The Board has made no changes to non-employee director compensation for 2016.

Structure of Non-Employee Director Compensation for 2015

The compensation structure for non-employee directors during 2015 is set forth below:

Cash Compensation. In 2015, non-employee directors were entitled to receive the following cash compensation:

    $100,000 per year annual base cash director retainer;
    $165,000 per year for serving as Non-Executive Chairman of the Board;
    $   25,000 per year for serving as Lead Director;
    $   15,000 per year for chairing the Audit Committee or Compensation Committee; and
    $   10,000 per year for chairing any other Board Committee.

Cash compensation is paid quarterly in arrears on a pro rata basis. Additionally, if the number of meetings of the Board exceeds eight meetings or if the number of meetings of any committee of the Board to which a director is appointed exceeds eight meetings, in each case during any fiscal year, then the Board may award additional fees for each additional meeting in an amount to be determined by the Board. In 2015, the Board determined that non-employee directors would receive $2,000 for each additional meeting in excess of eight meetings. During 2015, the Audit Committee met nine times; therefore, each member of such Committee received $2,000 for the additional meeting.

Directors may elect to receive all or any portion of their cash fees as restricted stock awards ("RSAs") rather than in cash (other than fees for serving as the Non-Executive Chairman of the Board). If a director makes this election, he or she will receive an award of RSAs with a value equal to 150% of the cash amount owed to him or her, determined as of the last day of the applicable quarter based on the average closing price of Dean Foods common stock over the last 30 trading days of the quarter. One-third of the RSAs vest on the grant date; one-third vest on the first anniversary of the grant date; and the final one-third vest on the second anniversary of the grant date. In 2015, former director Tom Davis and current directors Janet Hill, Helen McCluskey and Hector Nevares elected to receive all of their fees in cash. All other directors elected to receive their cash fees as RSAs. We refer to directors who elect RSAs in lieu of cash as "Exchanging Directors." In the table set forth below, the amount that an Exchanging Director would have received as cash fees (the "Exchanged Cash Fees") if they had elected cash is included in the column entitled "Fees Earned or Paid in Cash." The value of

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the RSAs actually received in excess of such Exchanged Cash Fees is included in the Stock Award column.

Equity Compensation. In addition to the cash compensation described above, during 2015 each non-employee director received an annual grant of RSUs. The number of units granted was determined based on a value of $120,000 divided by the average of the Company's closing stock price prices over the first 15 trading days in January 2015. The non-employee directors received their awards at the same time our executive officers and other key employees received their annual LTI grants. The RSUs vest pro rata over a 3-year term.

Benefits and Reimbursement Practice. In addition, non-employee directors are eligible to participate in the medical, dental and vision benefit plans maintained by the Company; provided that such non-employee directors are responsible for payment of 100% of the applicable premiums without any Company contribution. The Company also reimburses them for travel expenses and other out-of-pocket expenses incurred in connection with Company business.

Payment of Non-Employee Director Compensation in 2015

The following table summarizes the compensation paid to our non-employee directors for Board service in the fiscal year ended December 31, 2015. No options to purchase Dean Foods common stock were awarded to our non-employee directors in 2015.

2015 Non-Employee Director Compensation

Name



Fees Earned or
Paid in Cash
($)(1)





Stock
Awards
($)(2)(3)





Total
($)

Janet Hill

107,000 103,665 210,665

J. Wayne Mailloux

117,000 156,372 273,372

Helen E. McCluskey

14,167 16,769 30,936

John R. Muse

100,000 148,777 248,777

Hector M. Nevares

107,000 103,665 210,665

B. Craig Owens

14,167 22,874 37,041

Jim L. Turner

180,588 155,525 336,113

Robert T. Wiseman

100,000 148,777 248,777

Tom C. Davis(4)

159,663 103,665 263,328

(1)
This column includes the value of earned cash compensation, whether paid in cash or RSAs. With respect to our Exchanging Directors Mailloux, Muse, Owens, Turner and Wiseman, this column also includes their Exchanged Cash Fees. Such amounts were $117,000 for Mr. Mailloux, $100,000 for Mr. Muse, $14,167 for Mr. Owens, $115,000 for Mr. Turner, and $100,000 for Mr. Wiseman.

(2)
This column represents the aggregate grant date fair value of the annual equity grants to directors paid in the form of RSUs. The aggregate grant date fair value is computed in accordance with FAS ASC Topic 718. Except with respect to Ms. McCluskey and Mr. Owens, the aggregate grant date fair value of the RSUs is equal to the closing price of the Company's stock on February 16, 2015, the date of grant, multiplied by the number of RSUs awarded. The aggregate grant date fair value of the RSUs awarded to Ms. McCluskey and Mr. Owens is equal to the closing price of the Company's stock on November 10, 2015, the date of grant, multiplied by the number of RSUs awarded.


In accordance with their election to receive RSAs in lieu of all or part of their 2015 cash compensation, Exchanging Directors Mailloux, Muse, Owens, Turner, and Wiseman received RSAs with a value equal to 150% of such director's Exchanged Cash Fees, determined as described

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    above. With respect to Exchanging Directors, this column also includes the grant date fair value of the RSAs net of the director's Exchanged Cash Fees, as follows: $52,707 for Mr. Mailloux, $45,113 for Mr. Muse, $6,105 for Mr. Owens, $51,860 for Mr. Turner, and $45,113 for Mr. Wiseman. RSAs in lieu of cash compensation are granted quarterly as of the last day of the applicable quarter. The aggregate grant date fair value of the RSAs is equal to the closing price of Dean Foods common stock on the date of grant.

(3)
The following table shows the aggregate number of outstanding RSAs, RSUs and exercisable stock options held by our non-employee directors as of December 31, 2015, including any shares for which beneficial ownership has been disclaimed:

Name



​RSAs



​RSU
Awards




​Option
Awards

Janet Hill

14,654 88,703

J. Wayne Mailloux

10,428 14,654

Helen E. McCluskey

884

John R. Muse

8,924 14,654 88,703

Hector M. Nevares

14,654 88,703

B. Craig Owens

788 884

Jim L. Turner

10,261 14,654 44,413

Robert T. Wiseman

8,924 14,654

Tom C. Davis

44,413
(4)
Mr. Davis resigned effective August 7, 2015.

Director Stock Ownership Guidelines

Our Corporate Governance Principles provide that within three years of joining the Board, each non-employee director is expected to own stock of the Company having a value of at least three times the director's annual base cash retainer paid for service on our Board of Directors. For purposes of these guidelines, a director is deemed to "own" beneficially-owned shares, as well as RSAs and RSUs, whether or not any applicable restrictions have lapsed, but not stock options, whether vested or unvested. As of March 17, 2016, all directors had at least the minimum expected level of share ownership, with the exception of Ms. McCluskey and Mr. Owens, who joined the Board in November 2015 and have until November 2018 to satisfy the required ownership level.

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CORPORATE GOVERNANCE

Independent Directors

Under applicable NYSE Rules, a director qualifies as "independent" only if the Board of Directors affirmatively determines that he or she has no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a material relationship with the Company). Our Board of Directors conducts an annual assessment of the independence of each member of our Board of Directors, taking into consideration all relationships between our Company and/or our officers, on the one hand, and each director on the other, including the director's commercial, economic, charitable and family relationships and such other criteria as our Board of Directors may determine from time to time. The guidelines established by our Board of Directors to determine director independence are included in our Corporate Governance Principles, which are available on our website at www.deanfoods.com.

In 2016, our Board determined that the following members of our Board of Directors are "independent," as that term is used in the NYSE Rules and our Corporate Governance Principles:

Janet Hill Hector M. Nevares
J. Wayne Mailloux B. Craig Owens
Helen E. McCluskey Jim L. Turner
John R. Muse Robert T. Wiseman

Our Board previously made a similar determination with respect to Tom C. Davis, who served as a director until August 7, 2015.

In making its independence determinations, the Board considered certain relationships and transactions, which are described below, and which are in addition to those described under "Policies Regarding Transactions with Related Parties; Relationships with our Executive Officers and Directors" on page 36 of this Proxy Statement. Ms. Hill serves on the Board of Directors of The Wendy's Company and as a trustee for Duke University and as a director of the Kennedy Center. We sell products to The Wendy's Company, Duke University and the Kennedy Center, all in the ordinary course of our business. In 2015, The Wendy's Company paid approximately $20 million for our products, Duke University paid approximately $120,635 for our products, and the Kennedy Center paid approximately $61,258 for our products. Mr. Turner serves on the Board of Baylor Scott & White Health. We sold products to Baylor Scott & White Health in 2015, primarily through third-party managed food service companies. In 2015, Baylor Scott & White Health paid approximately $345,523 for our products, all in the ordinary course of our business. Mr. Owens serves as a director of United States Cold Storage, Inc., a private company. In 2015, we paid United States Cold Storage, Inc. approximately $708,555 for cold storage warehousing and handling services, all in the ordinary course of our business. These amounts are not material either to us or to the other parties. Our Board of Directors has determined, considering all relevant facts and circumstances, that these relationships were not material and did not impact Ms. Hill's, Mr. Turner's or Mr. Owens' status as independent directors, as defined by the rules of the NYSE and our Corporate Governance Principles.

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Responsibilities of the Board

Our Board of Directors is responsible for overseeing and interacting with senior management with respect to key aspects of our business, including strategic planning, management development and succession, operating performance, compliance and stockholder returns. It is the responsibility of the Board of Directors to select and evaluate a well-qualified chief executive officer of high integrity and to approve the appointment of other members of the senior management team. The Board of Directors provides general advice and counsel to our CEO and other senior executives.

All directors are expected to avoid conflicts of interest and to represent the best interests of our stockholders in maintaining and enhancing the success of our business. The Board conducts a self-evaluation annually to ensure that it is functioning effectively.

Members of our Board of Directors are required to regularly attend Board meetings and to attend our Annual Meeting of Stockholders, unless unforeseen circumstances prevent them from doing so.

Our Board of Directors meets according to a set quarterly schedule and also holds special meetings and acts by unanimous written consent from time to time as appropriate. The Board met six times during 2015, including four regular meetings and two special meetings. In 2015, average director attendance at Board and applicable Committee meetings was 93%. No director attended fewer than 75% of the total number of Board and applicable Committee meetings in 2015. All of our directors then serving attended the 2015 Annual Meeting of Stockholders.

Board Leadership Structure

Our Company adheres to high standards of corporate governance. Our Board of Directors is composed primarily of independent directors, as that term is defined in the NYSE Rules and our Corporate Governance Principles. We have a strong and active Board of Directors that understands our business and works closely with our CEO and other senior management.

The Board may in its discretion combine or separate the roles of Chairman of the Board and CEO if it deems it advisable and in the best interests of the Company to do so. The Board has currently elected to separate the roles of Chairman of the Board and CEO with Mr. Turner serving as our Non-Executive Chairman of the Board and Mr. Tanner serving as our CEO. We believe this structure represents the appropriate allocation of roles and responsibilities at this time. With Mr. Turner's extensive experience with companies involved in businesses similar to the Company's business, combined with his leadership qualities, Mr. Turner is positioned to lead the Board in its fundamental role of providing advice to and oversight of management. Mr. Tanner is then better able to focus on our day-to-day business and strategy, meet with investors and convey the management perspective to other members of the Board.

The Company's Corporate Governance Principles provide for the annual election of the Chairman of the Board or, if the Chairman of the Board is not independent, a Lead Director. Mr. Turner was first elected as the Non-Executive Chairman of the Board in August 2015. He succeeded Mr. Davis, who had served as Non-Executive Chairman of the Board from May 2013 until his resignation in August 2015.

The independent directors on our Board meet in executive session at each regularly-scheduled Board meeting and following special meetings from time to time. Mr. Turner

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presides at such executive sessions. Mr. Tanner works closely with Mr. Turner to identify appropriate topics of consideration for the Board and to plan effective and informative meetings.

All members of the Audit, Nominating/Corporate Governance and Compensation Committees of our Board of Directors are independent. Therefore, oversight of critical matters such as the integrity of our financial statements, executive compensation (including the compensation of the CEO), the nomination of directors, and evaluation of the Board of Directors and its Committees and the CEO is entrusted solely to independent directors.

Board Composition

The Nominating/Corporate Governance Committee evaluates the composition of the Board annually and takes director tenure into account as part of its review. The Nominating/Corporate Governance Committee believes that Board continuity facilitates effective leadership, risk management, and oversight; further, a detailed understanding of the Company's business – particularly the core dairy business – gained over years of service is an important attribute to consider when determining whether to recommend director nominees for the Board. Notwithstanding the value of experience, the Company's Corporate Governance Principles provide that a director may not stand for reelection after reaching the age of 72 without an explicit determination by the Nominating/Corporate Governance Committee that such director's election is in the best interests of stockholders.

Standing Committees of the Board – Responsibilities and Membership

Our Board of Directors has established certain committees to assist in the performance of its various functions. Each of the Board's committees:

    is composed exclusively of directors determined by the Board to be independent as defined under the rules of the NYSE and in accordance with our Corporate Governance Principles, including, in the case of all members of the Audit Committee, the independence requirements contemplated by Rule 10A-3 under the Exchange Act, and, in the case of all members of the Compensation Committee, the independence requirements contemplated by Rule 10C-1 under the Exchange Act;

    is composed of members who are appointed by our Board upon recommendation of the Nominating/Corporate Governance Committee;

    makes regular reports to the Board and reviews its own performance annually;

    meets at least quarterly; and

    operates under a charter.

Each committee charter is available on the Company's web site at www.deanfoods.com. Stockholders may also contact our Investor Relations Department at 800.431.9214 to obtain a copy free of charge.

In addition, the Board has established the Executive Committee to act on behalf of the Board when the Board is not in session. The Executive Committee meets only as needed. In addition to the standing committees, the Board may from time to time establish ad hoc or special committees to assist in various matters.

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The chart below lists the standing Committees of our Board of Directors and indicates who currently serves on those Committees and how many times each Board Committee met during 2015.

Board Member
Audit(1)(2)

Compensation(1)

Executive

Nominating/Corporate
Governance(1)

Janet Hill

M     C

J. Wayne Mailloux

C M

Helen E. McCluskey

M M    

John R. Muse

M M

Hector M. Nevares

M     M

B. Craig Owens

M M

Gregg A. Tanner

    C  

Jim L. Turner

C M M

Robert T. Wiseman

      M

Meetings in 2015

9 6 2 5

M    Committee Member

C    Committee Member/Chair

(1)
Our Board of Directors has determined, upon recommendation of the Nominating/Corporate Governance Committee, that all of the members of our Audit, Compensation and Nominating/Corporate Governance Committees are independent as defined under the rules of the NYSE and in accordance with our Corporate Governance Principles, including, in the case of all members of the Audit Committee, the independence requirements contemplated by Rule 10A-3 under the Exchange Act, and, in the case of all members of the Compensation Committee, the independence requirements contemplated by Rule 10C-1 under the Exchange Act. All Committee members are appointed by our Board of Directors upon recommendation of the Nominating/Corporate Governance Committee.

(2)
Our Board of Directors has determined, based upon recommendation of the Nominating/Corporate Governance Committee, that Ms. Hill, Mr. Mailloux, Ms. McCluskey, Mr. Nevares and Mr. Owens are "audit committee financial experts," as that term is defined by the SEC and that each of the members of the Audit Committee is "financially literate" as that term is used in the NYSE Rules.

Responsibilities of the Board's Standing Committees

Audit Committee. The Audit Committee's responsibilities include:

    appointing, approving the compensation of and assessing the independence of our independent auditor;

    overseeing the work of our independent auditor for the purpose of preparing or issuing an audit report or related work;

    reviewing and discussing our annual and quarterly financial statements with management and our independent auditor;

    meeting regularly with members of our management and with our independent auditor outside the presence of management;

    overseeing our internal audit function;

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    monitoring and discussing our major financial risk exposures, including our risk assessment and risk management policies;

    recommending policies regarding the hiring of current or former employees of our independent auditor;

    establishing procedures for the receipt, retention and treatment of accounting-related complaints and concerns;

    monitoring our compliance with applicable legal and regulatory requirements that may have a material impact on our financial statements or compliance policies;

    providing oversight of our Insider Trading Policy, Code of Ethics and our Corporate Ethics and Compliance program;

    overseeing our policies and practices with respect to corporate social responsibility, including environmentally sustainable solutions, ethics and compliance and the management of reputation risk;

    pre-approving all audit services and permitted non-audit services to be performed by our independent auditor; and

    preparing the Audit Committee report required by SEC rules, which is included in this Proxy Statement.

The Audit Committee has the authority to retain independent legal, accounting and other advisors, at our expense.

Nominating/Corporate Governance Committee. The purpose of the Nominating/Corporate Governance Committee is to consider, develop and make recommendations to the Board of Directors regarding corporate governance principles generally and with respect to the appropriate size, function and operation of the Board and its Committees to optimize the effectiveness of the Board. The Nominating/Corporate Governance Committee's responsibilities include:

    establishing the criteria for membership on the Board of Directors;

    reviewing periodically our Corporate Governance Principles;

    reviewing and making recommendations to the Board of Directors with respect to management succession planning and management development;

    considering, recommending and recruiting candidates to fill new or open positions on the Board of Directors;

    reviewing candidates recommended by stockholders;

    conducting the appropriate inquiry into the backgrounds and qualifications of potential candidates;

    recommending director nominees for approval by the Board of Directors and our stockholders;

    considering possible conflicts of interest of Board members and executive officers;

    recommending Board Committee members and director development;

    overseeing the annual evaluation of the Board and its committees and the evaluation of management; and

    reviewing transactions under our Related Party Transaction Policy (as defined below).

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The processes and procedures followed by the Nominating/Corporate Governance Committee in identifying and evaluating director candidates are described below under the heading "Corporate Governance – Nominating Directors."

Compensation Committee.    The Compensation Committee's responsibilities include:

    reviewing and evaluating the performance of the CEO;

    determining the CEO's compensation;

    reviewing and approving the compensation of our other executive officers and certain other key employees and acting in an advisory role on non-executive employee compensation;

    setting our executive compensation policies and objectives and administering our executive compensation programs;

    overseeing our long-term incentive compensation programs and making final determinations regarding grants under such programs;

    retaining, overseeing, approving the compensation of and terminating compensation consultants and other outside advisors;

    reviewing and making recommendations to the Board regarding director compensation;

    reviewing and discussing annually with management our "Compensation Discussion and Analysis," which is included in this Proxy Statement; and

    preparing the Compensation Committee report required by SEC and NYSE rules, which is included in this Proxy Statement.

Additional information regarding the processes and procedures followed by the Compensation Committee in considering and determining executive and director compensation is provided below under the heading "Compensation Discussion and Analysis" beginning on page 48 of this Proxy Statement.

The Compensation Committee reviews and approves the compensation for our executive officers, including the CEO. Our CEO makes recommendations to the Compensation Committee each year on the appropriate compensation to be paid to our executive officers, excluding himself. The Compensation Committee makes the final determination of the amount of compensation to be awarded to each executive officer, including the CEO, based on the Compensation Committee's determination of how that compensation reflects the objectives of our compensation policies. The Compensation Committee has delegated limited authority to the CEO and two designated Executive Vice Presidents to grant stock options, RSUs, CPUs and other long-term incentive awards in connection with the hiring of certain new employees or the promotion or special recognition of selected employees.

The Compensation Committee meets several times each year to discuss setting individual compensation levels. The Compensation Committee seeks to establish compensation policies that will align management's interests with those of the stockholders while also motivating and rewarding individual initiative and effort. The Compensation Committee also determines and establishes our short-term and long-term incentive plans and other executive benefits as needed throughout each year. In addition, the Compensation Committee evaluates any advisors to such committee for potential conflicts of interest and considers such conflicts in connection with any engagement of such advisors. For more information regarding the actions of our Compensation Committee, see the Compensation Discussion and Analysis section of this Proxy Statement.

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Compensation Committee Consultant

The Compensation Committee has the authority to retain compensation consultants and other outside advisors to assist in the evaluation of executive officer compensation. The Compensation Committee has retained a compensation consultant, Mercer (US), LLC ("Mercer"), a wholly-owned subsidiary of Marsh & McLennan Companies, Inc., to assist in connection with setting compensation. The Compensation Committee relies on Mercer to collect and analyze market compensation data. The Compensation Committee works with Mercer to ensure that position descriptions are appropriately comparable between our Company and those companies in our peer group and to properly adjust the raw data so that it is appropriate for a company of our size. Using this data, Mercer makes preliminary compensation recommendations based on our Compensation Committee's compensation philosophy.

Although the Compensation Committee approves the scope of Mercer's work for the Compensation Committee and its fees for those services, Mercer works with management as well to ensure that its advice and recommendations reinforce the Company's business strategy and are consistent with the Company's pay-for-performance philosophy.

Examples of executive compensation services provided by Mercer during 2015 include the following:

    participation in Compensation Committee meetings as advisor to the Committee;

    market assessments of executive total compensation;

    consultations with management and the Compensation Committee on the design of short-term and long-term incentive plans;

    periodic updates on market trends;

    assessment of compensation of the Board of Directors;

    preparation of tally sheets for executive compensation; and

    assistance in evaluation and selection or peer group.

Mercer provides advice and assistance to the Company in several areas outside of executive compensation, including the following:

    retirement consulting, which includes actuarial valuations;

    consulting on multiemployer plans and collective bargaining agreements, plan consolidations and government forms;

    defined benefit plan consulting and administration outsourcing;

    internal job grading and benchmarking for executive employees;

    health and benefit consulting and administration;

    human resources and compensation management software; and

    due diligence and consulting services related to acquisitions and dispositions.

In addition, we have engaged affiliates of Marsh & McLennan Companies, Inc., the parent company of Mercer, to provide certain group insurance, risk management services and actuarial services.

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The aggregate fees billed by Mercer in 2015 were approximately $4.7 million:

    $349,549 for consulting services related to executive compensation that were provided to management and the Compensation Committee; and

    $4,340,083 for other services provided to the Company, as set forth above, including approximately $483,869 for services provided by affiliates of Mercer; the Mercer employees advising the Compensation Committee were not involved in the provision of services by Mercer's affiliates.

Mercer operates its compensation practice as a separate business unit from its other services, and we have been advised by Mercer that the compensation of its compensation consultants is based solely on the fees generated by the executive compensation practice. The Compensation Committee has adopted the following policy with respect to the compensation consultant:

    The Compensation Committee directly engages the compensation consultant.

    The executive compensation services provided by the compensation consultant to management and the Compensation Committee are approved in advance by the Compensation Committee.

    The Compensation Committee reviews all other support services provided by the compensation consultant or its affiliates to the Company on a quarterly basis.

Although the Compensation Committee does not approve in advance the engagement of Mercer by management for services other than those related to executive compensation, the Compensation Committee reviews, on a quarterly basis, all other services provided by Mercer and considers on an ongoing basis whether such services compromise Mercer's independence in providing services to the Compensation Committee. The other services were approved by management in the normal course of business.

In addition, the Compensation Committee considered the independence of Mercer in light of SEC rules and NYSE listing standards. The Compensation Committee received a letter from Mercer addressing its independence, including the following factors: (i) other services provided to the Company by Mercer; (ii) fees paid by the Company as a percentage of Mercer's total revenue; (iii) policies or procedures maintained by Mercer that are designed to prevent a conflict of interest; (iv) any business or personal relationships between the individual consultants involved in the engagement and any member of the Compensation Committee; (v) any Company stock owned by the individual consultants involved in the engagement; and (vi) any business or personal relationship between the Company's executive officers and Mercer or the individual consultants involved in the engagement. The Compensation Committee concluded that the work of Mercer did not raise any conflict of interest.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee is comprised entirely of independent directors and its current members are set forth in the chart of committee information on page 30. In addition, Tom C. Davis was a member of the Compensation Committee between January 2015 and August 2015. None of our executive officers has served as a director or member of the Compensation Committee (or other committee serving an equivalent function) of any other entity whose executive officers served as a director or member of the Compensation Committee.

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Communications with the Board of Directors

Should you wish to contact our Non-Executive Chairman of the Board or any other member of our Board of Directors on a Board-related issue, you may write to him or her in care of our Corporate Secretary at 2711 North Haskell Avenue, Suite 3400, Dallas, Texas 75204. Relevant communications will be distributed to the Board, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communication. Communications that are unrelated to the duties and responsibilities of the Board will not be forwarded, such as: business solicitations or advertisements, junk mail and mass mailings, new product suggestions, product complaints, product inquiries, resumes and other forms of job inquiries, spam and surveys. In addition, material that is threatening, illegal or similarly unsuitable will be excluded. Any communication that is screened as described above will be made available to any director upon his or her request.

Risk Oversight

The Board has an active role, as a whole and also at the committee level, in overseeing management of the Company's risk. While the Board is ultimately responsible for overall risk oversight at our Company, our three primary Board Committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. Pursuant to its charter, the Audit Committee has primary responsibility for monitoring the Company's major financial risk exposures and the steps the Company has taken to control such exposures, including the Company's risk assessment and risk management guidelines and policies. The Company has also established a Financial Disclosure Committee composed of members of management to assist in fulfilling our obligations to maintain effective disclosure controls and procedures and to coordinate and oversee the process of preparing our securities filings with the SEC. In addition, our management team has implemented an enterprise risk management program to conduct an annual business risk assessment and present its findings and progress toward mitigating such risks to the Audit Committee throughout the year. The business risk assessment includes an action plan to address such risks, and the Audit Committee discusses with management the appropriateness of such strategies. The Compensation Committee is charged with ensuring that our compensation policies and procedures do not encourage risk taking in a manner that would have a material adverse impact on the Company. The Nominating/Corporate Governance Committee is charged with overseeing risks with respect to our Related Party Transaction Policy and with respect to issues arising with directors and director nominees. Each Committee reports its findings to the full Board on a quarterly basis for consideration. In addition, the Board receives updates from senior management on other areas of material risk at each regularly scheduled quarterly meeting, including operational, financial, legal and regulatory, and strategic and reputational risks. These measures are designed to allow the Board to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.

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Policies Regarding Transactions with Related Parties; Relationships with our Executive Officers and Directors

Under our Code of Ethics, directors, officers and employees are expected to make business decisions and take actions based upon the best interests of the Company and not based upon personal relationships or benefits.

The Board of Directors has recognized that some transactions, arrangements and relationships present a heightened risk of an actual or perceived conflict of interest and has adopted a written policy governing these transactions (the "Related Party Transaction Policy"). The Related Party Transaction Policy governs any transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which our Company was, is or will be a participant and the amount involved exceeds $120,000, and in which any of the following persons had, has or will have a direct or indirect material interest:

    our directors, nominees for director or executive officers;

    any person who is known to be the beneficial owner of more than 5% of any class of our voting securities;

    any immediate family member of any of the foregoing persons; and

    any entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest.

The Nominating/Corporate Governance Committee of the Board of Directors is responsible for reviewing and approving these transactions.

Any transaction proposed to be entered into by the Company with a related party must be reported to our General Counsel and reviewed and approved by the Nominating/Corporate Governance Committee in accordance with the terms of the Related Party Transaction Policy, prior to effectiveness or consummation of the transaction, whenever practicable. If advance approval is not practicable under the circumstances, the Nominating/Corporate Governance Committee will review and, in its discretion, may ratify the related party transaction at the next meeting of the Nominating/Corporate Governance Committee. In the event management becomes aware of any further related party transactions subsequent to that meeting, such transactions may be presented to the Nominating/Corporate Governance Committee for approval at the next Nominating/Corporate Governance Committee meeting, or where it is not practicable or desirable to wait until the next Nominating/Corporate Governance Committee meeting, to the Chair of the Nominating/Corporate Governance Committee (to whom authority has been delegated to act between Committee meetings) subject to ratification by the Nominating/Corporate Governance Committee at its next meeting.

Any transaction with a related party previously approved by the Nominating/Corporate Governance Committee or otherwise already existing that is ongoing in nature shall be reviewed by the Nominating/Corporate Governance Committee annually.

The Nominating/Corporate Governance Committee (or the Chair) will approve only those related party transactions that are in, or are not inconsistent with, the best interests of the Company and our stockholders, as the Nominating/Corporate Governance Committee (or the Chair) determines in good faith in accordance with its business judgment. In addition, the transaction must be on terms comparable to those that could be obtained in arm's length

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dealings with an unrelated third party. The Company did not enter into any related party transaction of the type required to be disclosed under Item 404 of Regulation S-K under the Exchange Act.

Other transactions considered by our Board in assessing director independence, but which do not involve a direct or indirect material interest for the related person, are described in this Proxy Statement under the heading "Corporate Governance – Independent Directors."

Nominating Directors

Nominations by the Board of Directors. The Nominating/Corporate Governance Committee, with the input of the CEO, is responsible for recommending to the Board (1) nominees for Board membership to fill vacancies or newly created positions and (2) the persons to be nominated by the Board for election at the Company's Annual Meeting of Stockholders. In connection with the selection and nomination process, the Nominating/Corporate Governance Committee reviews the desired experience, skills and other qualities to assure appropriate Board composition, taking into account the current Board members and the specific needs of the Company and the Board. In considering whether to recommend any candidate to the Board, the Nominating/Corporate Governance Committee will apply the criteria set forth in our Corporate Governance Principles.

The Nominating/Corporate Governance Committee may, from time to time, as appropriate, retain search firms to assist in identifying qualified director candidates. The Nominating/Corporate Governance Committee looks for individuals who have displayed high ethical standards, integrity, sound business judgment and a willingness to devote adequate time to Board duties. This process is designed to ensure that the Board includes members with diverse backgrounds, skills and experience, including appropriate financial and other expertise relevant to the business of the Company. The Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. Our Board believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge and abilities that will allow the Board to fulfill its responsibilities. Nominees are not discriminated against on the basis of race, religion, national origin, disability or sexual orientation.

Nominations by Stockholders. Stockholders may recommend individuals to the Nominating/Corporate Governance Committee for consideration as potential director candidates by submitting their names, together with appropriate biographical information and the number of shares of our common stock beneficially owned by the nominee, to the Nominating/Corporate Governance Committee, c/o Corporate Secretary, 2711 North Haskell Avenue, Suite 3400, Dallas, Texas 75204. Assuming the appropriate information has been provided on a timely basis, the Nominating/Corporate Governance Committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others. If the Board of Directors determines to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included in the Proxy Statement for the next annual meeting of stockholders.

Stockholders also have the right under our Bylaws to directly nominate candidates, without any action or recommendation on the part of the Nominating/Corporate Governance Committee or the Board of Directors. Our Bylaws require that the Company be given advance written notice of stockholder nominations for election to the Board of Directors. Such

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nomination must contain the information required by our Bylaws with respect to the nominee and the stockholder. To be timely, a stockholder's notice must be delivered to the Corporate Secretary (i) in the case of an annual meeting, not earlier than the 120th day and no later than 5:00 P.M., Central Time, on the 90th day prior to the first anniversary of the date of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year's annual meeting, notice by the stockholder must be delivered not earlier than the 120th day prior to the date of such annual meeting and not later than 5:00 P.M., Central Time, on the later of the 90th day prior to the date of such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made by the Company; or (ii) in the case of a special meeting at which the Board of Directors gives notice that directors are to be elected, not earlier than the 120th day prior to the date of such special meeting and not later than the close of business on the later of the 90th day prior to the date of such special meeting or, if the first public announcement of the date such special meeting is less than 100 days prior to the date of such special meeting, the tenth day following the day on which public announcement of the date of the meeting and of the nominees proposed by the Board of Directors to be elected at such meeting is first made. For our 2017 Annual Meeting of Stockholders, assuming no advancement or delay by more than 30 days from the first anniversary of the date of our 2016 Annual Meeting of Stockholders, such notice must be received no earlier than January 11, 2017 and no later than February 10, 2017.

Code of Ethics

We have adopted a Code of Ethics that applies to all of our directors, executive officers and employees. Our Code of Ethics is posted on our corporate website at www.deanfoods.com. Any amendments to or waivers of our Code of Ethics for directors or executive officers will also be posted on our website. If you would like a copy of our Code of Ethics, please request one by writing or calling our Investor Relations Department at:


Dean Foods Company
Attention: Investor Relations
2711 North Haskell Avenue, Suite 3400
Dallas, Texas 75204
800.431.9214

Ethics and Compliance Oversight

We have a designated Chief Compliance Officer who oversees our ethics and compliance program. He provides quarterly reports to the Audit Committee on the program's effectiveness and works closely with various compliance functions to coordinate the sharing of best practices across our Company.

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PROPOSAL 2

Ratification of Selection of Independent Auditor

The Audit Committee of our Board of Directors has selected Deloitte & Touche LLP to serve as our independent auditor for the 2016 fiscal year and is soliciting your ratification of that selection.

The Audit Committee has responsibility for the selection of our independent auditor and stockholder ratification is not required. However, as a matter of good corporate governance, the Audit Committee is soliciting your vote on this proposal and will take your vote into consideration when selecting our independent auditor in the future.

The Audit Committee has responsibility for overseeing our financial reporting and various other matters. See page 30 of this Proxy Statement for further information about the responsibilities of our Audit Committee and page 42 for the Audit Committee Report.

Our Board of Directors unanimously recommends that you vote FOR Proposal 2.

Independent Auditor information

Deloitte & Touche LLP has served as independent auditor for the Company since its formation. In addition to performing the audit of the Company's consolidated financial statements, Deloitte & Touche also provides various other services to the Company. All of the services provided for the Company by Deloitte & Touche in 2015 were approved by the Audit Committee. The following table presents aggregate fees and reimbursable expenses billed to the Company and its consolidated subsidiaries by Deloitte & Touche in 2015 and 2014.

2015

2014

Audit Fees(1)

$ 4,333,000 $ 4,185,000

Audit-Related Fees(2)

90,000 93,000

Tax Fees(3)

353,000 75,000

All Other Fees(4)

56,000 50,000

Total

$ 4,832,000 $ 4,403,000

(1)
"Audit Fees" includes fees and expenses billed for the audit of the Company's annual financial statements, review of financial statements included in the Company's Quarterly Reports on Form 10-Q and services provided in connection with statutory and regulatory filings. Also included in this caption is the audit of the Company's internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002.

(2)
"Audit-Related Fees" includes fees billed for services that are reasonably related to the performance of the audit or review of the Company's financial statements and are not reported above under the caption "Audit Fees." These fees include due diligence on acquisitions and divestitures.

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(3)
"Tax Fees" includes fees billed for services that are related to tax compliance and advice.

(4)
"All Other Fees" includes fees and expenses not related to audit or tax services, including advice regarding various sustainability analyses and disclosure.

The Audit Committee has recommended ratification of its engagement of Deloitte & Touche as the Company's independent auditor for 2016.

The Audit Committee has sole authority to engage and determine the compensation of the Company's independent auditor. The Audit Committee's pre-approval is required for any engagement of Deloitte & Touche. Annually, the Audit Committee pre-approves certain services to be provided by Deloitte & Touche. The Audit Committee also considers the engagement of Deloitte & Touche for the provision of other services during the year. In addition to conducting the Company's 2016 audit, the Audit Committee has pre-authorized Deloitte & Touche to provide services to the Company in connection with the following types of audit-related and tax matters:

Audit-Related Engagements

    audit of the financial statements for any subsidiary or other combined financial statements of the Company as requested;

    work performed in connection with registration statements such as due diligence procedures, issuance of comfort letters, consents and assistance responding to SEC comment letters;

    due diligence services related to potential acquisitions and divestitures of businesses, including tax structuring, consultation on post-transaction agreement provisions and related advice;

    post-acquisition review of acquired business financial statements (including purchase accounting issues); and

    closing balance sheet audits pertaining to dispositions.

Tax Engagements

    U.S. federal, state, local and international tax planning and advice regarding the tax consequences of proposed or actual transactions;

    assistance with U.S. federal, state, local and international income, franchise and other tax filings (such as preparation of returns and related matters);

    advice on tax audits;

    tax structuring and related advice in connection with potential restructurings and business and legal entity realignment;

    transfer pricing and cost segregation studies; and

    tax advice regarding new statutory, regulatory or administrative developments.

Other

    participation in Deloitte & Touche-sponsored benchmarking surveys, educational, informational or other activities;

    use of Deloitte & Touche financial reporting compliance checklists; and

    subscription service for use of Deloitte & Touche's accounting research tool.

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The pre-approval described above will expire in the first quarter of 2017. In the event a matter of a type listed above arises before the first quarter of 2017, the Audit Committee has authorized management, if necessary, to negotiate, for the Audit Committee's approval and execution, an engagement agreement related to that matter. For each such matter, management is required to provide the Audit Committee, at its next regularly scheduled meeting, with documentation about the services provided or to be provided. Any service that management requests Deloitte & Touche to provide that is of a type that has not been pre-approved must be considered at a meeting of the Audit Committee before the service is provided, or may be pre-approved by the Chair of the Audit Committee pursuant to a delegation by the Audit Committee. In determining whether to approve the engagement of Deloitte & Touche, the Audit Committee considers whether such engagement is consistent with Deloitte & Touche's independence. The Audit Committee also considers the amount of audit and audit-related fees in comparison to all other fees paid to Deloitte & Touche and the Audit Committee reviews such comparisons regularly.

Representatives of Deloitte & Touche will be present at the 2016 Annual Meeting of Stockholders to make a statement, if they choose, and to answer any appropriate questions you may have.

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AUDIT COMMITTEE REPORT

We have reviewed and discussed the Company's audited consolidated financial statements for the year ended December 31, 2015 and the assessment of the Company's internal control over financial reporting with representatives of Deloitte & Touche LLP and Company management. We have discussed significant accounting policies applied by the Company in its financial statements, as well as alternative treatments. We discussed with the Company's Chief Audit Executive and with Deloitte & Touche the overall scope and plans for their respective audits. We met with the Company's Chief Audit Executive and with Deloitte & Touche, with and without management present, to discuss the results of their examinations, the evaluations of the Company's internal controls and the overall quality of the Company's financial reporting. We have also regularly reviewed and discussed the Company's activities with respect to risk assessment and risk management and received regular reports regarding the Company's compliance program.

We have discussed with Deloitte & Touche the matters that are required to be discussed by the Statement on Auditing Standards No. 16, as adopted by the Public Company Accounting Oversight Board.

We have received from Deloitte & Touche the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte & Touche's communications with the Audit Committee concerning independence, and we have discussed with Deloitte & Touche their independence.

We have considered whether the services performed by Deloitte & Touche, other than audit services or services related to the audit, are compatible with maintaining the independence of Deloitte & Touche, and we have concluded that they are. Based on our reviews and discussions with management and Deloitte & Touche, as described above, we recommended to the Board of Directors that the audited consolidated financial statements be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

This report is presented by:

The members of the Audit Committee
J. Wayne Mailloux (Chairman)
Janet Hill
Helen E. McCluskey
Hector M. Nevares
B. Craig Owens

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PROPOSAL 3

APPROVAL, ON AN ADVISORY BASIS, OF AMENDMENT TO AMENDED AND RESTATED BYLAWS ("Forum Selection Provision")

Our Board of Directors is proposing, for approval by our stockholders, on an advisory basis, an amendment to our Amended and Restated Bylaws (the "Bylaws Amendment") to establish Delaware as the exclusive forum for the adjudication of certain types of specified corporate disputes. Currently, there is no forum selection provision in our Bylaws or in our charter. Although our Bylaws allow the Board of Directors to unilaterally adopt amendments to the Bylaws without a stockholder vote, our Board of Directors believes, as a matter of good corporate governance, that it is important for our stockholders to be given an opportunity to voice their position as to whether this amendment is appropriate for Dean Foods. If the Bylaws Amendment is approved, on an advisory basis, the Board intends to adopt the Bylaw Amendment to be effective immediately following the 2016 Annual Meeting.

Under the Bylaws Amendment a new Article XIII (Forum Selection) will be added to the Bylaws that provides as follows:  

Unless the corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the corporation, (2) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the corporation to the corporation or the corporation's stockholders, (3) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, or (4) any action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the corporation shall be deemed to have notice of and consented to the provisions of this Article XIII.

 

Our Board of Directors believes that our stockholders will benefit from having disputes of this nature litigated in the Delaware Chancery Court. Although some plaintiffs could prefer to litigate matters in a forum outside of Delaware because another court may be more convenient to them (among other reasons), the Board of Directors believes that the proposed provision provides substantial benefits to the Company and its stockholders as a whole. The Delaware Chancery Court offers a specialized system to deal with corporate law questions, with streamlined procedures and processes that help provide relatively quick decisions. This accelerated schedule can limit the time, cost and uncertainty of litigation for all parties. The Delaware Chancery Court has developed considerable expertise in dealing with corporate law issues, as well as a substantial and influential body of case law construing Delaware's corporate law and long-standing precedent regarding corporate governance. This provides stockholders and the Company with more certainty with respect to the outcome of intra-corporate disputes. The filing of duplicative litigation in more than one forum has become increasingly common especially in connection with acquisition and divestiture activity. Adoption of the provision also would likely reduce the risk that the Company could be involved in costly multi-forum litigation as well as the risk that the outcome of cases in multiple forums could be inconsistent with Delaware law.

Our Board of Directors unanimously recommends that you vote FOR Proposal 3.

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PROPOSAL 4

Non-Binding Advisory Vote on Executive Compensation ("Say-on-Pay")

Pursuant to Section 14A of the Exchange Act, the Company asks stockholders to cast an advisory vote to approve the compensation paid to our Named Executive Officers in 2015 as disclosed in this Proxy Statement. The executive officers named in the Summary Compensation Table on page 65 and deemed to be Named Executive Officers or NEOs are Gregg A. Tanner, Chris Bellairs, Ralph P. Scozzafava and Kimberly Warmbier as well as former executive officer Marc L. Kesselman. This vote is not intended to address any specific item of compensation, but rather the overall compensation of such officers as described in this Proxy Statement. While this vote is non-binding, the Company values the opinions of its stockholders and will consider the outcome of the vote when making future compensation decisions.

Our compensation policies and practices are described in the Compensation Discussion and Analysis section beginning on page 48 of this Proxy Statement and in the related compensation tables, notes and narrative disclosure included in this Proxy Statement. The Compensation Discussion and Analysis discusses in detail how our compensation policies and procedures implement our compensation philosophy of directly linking executive compensation to the Company's performance and strongly aligning the interests of our executive officers with our stockholders.

Our Board of Directors is asking stockholders to approve, on an advisory basis, the following resolution:


RESOLVED, the stockholders of Dean Foods Company hereby approve, on an advisory basis, the compensation paid to the Company's Named Executive Officers (as defined below in "Compensation Discussion and Analysis"), as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the 2015 Summary Compensation Table, other compensation tables and any related material disclosed in this Proxy Statement.

The Board has adopted a policy of providing annual advisory votes on the compensation of our NEOs. The next advisory vote to approve our executive compensation will occur at the 2017 Annual Meeting of Stockholders, unless the Board modifies its policy on the frequency of holding such advisory votes.

Our Board of Directors unanimously recommends that you vote FOR
Proposal 4.

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Executive Officers of the Company

The term "executive officer" is defined by applicable securities law as a company's president, any vice president in charge of a principal business unit, division or function (such as sales, administration or finance), any other officer who performs a policy-making function or any other person who performs similar policy-making functions for the company. According to that definition, as of the date of this Proxy Statement, our Board of Directors has determined that our "executive officers" are:

Gregg A. Tanner
Chief Executive Officer and Director

See Mr. Tanner's biography on page 21 of this Proxy Statement.

Chris Bellairs
Executive Vice President, Chief Financial Officer

Mr. Bellairs, age 55, has served as our Executive Vice President and Chief Financial Officer since March 1, 2013. Prior to being promoted to such position he served in various capacities including as our Executive Vice President, Chief Financial Officer Designate from November 2012 to March 2013; as Chief Financial Officer of our Fresh Dairy Direct business from January 2012 until November 2012; and as our Vice President—Supply Chain Finance from 2008 through 2011. Prior to joining Dean Foods, Mr. Bellairs worked at PepsiCo, Inc., a global food and beverage company, from 1996 to 2004, where he most recently served as Vice President and Chief Financial Officer for the Foodservice and Vending division and led the financial integration of the Quaker Oats, Gatorade and Tropicana brands. Prior to joining PepsiCo, he worked at Procter & Gamble in various finance management roles and served as divisional Chief Financial Officer at Expedia, Inc. and Iron Mountain Incorporated and in a senior leadership role at The University of Notre Dame. Mr. Bellairs was an intelligence officer in the U.S. Army for six years.

Brad Cashaw
Executive Vice President, Supply Chain

Mr. Cashaw, age 52, joined Dean Foods in March 2016 as Executive Vice President, Supply Chain and is responsible for oversight of both the Operations and Logistics functions of the Company. He has over 25 years of supply chain experience in the consumer packaged goods industry. Prior to joining Dean Foods, Mr. Cashaw served as Vice President, Integrated Supply Chain of Kraft Foods Group, Inc. from October 2013 to August 2015 and as Senior Vice President, Supply Chain of Kellogg Company from April 2012 to October 2013. Prior to that, he held positions of increasing responsibility with PepsiCo, Inc. where he last served as its Vice President, Supply Chain and NA Operations, Quaker Foods and Snacks from 2008 to 2012.

S. Craig McCutcheon
Senior Vice President, Logistics

Mr. McCutcheon, age 55, assumed his current role as Senior Vice President, Logistics in August 2014. Mr. McCutcheon leads all transportation and logistics operations for our nationwide distribution network. Prior to that, he led our Continuous Improvement and Business Optimization activities as Vice President, Continuous Improvement from 2006 to 2014. Mr. McCutcheon is one of Dean Foods' most seasoned veterans with more than 34 years

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of experience in various locations, functions and roles. He began his career in 1980 with Flav-O-Rich Dairy in Georgia, and later joined Mayfield Dairy, which was acquired by Dean Foods. During his time with Dean Foods, he has served as a Distribution Supervisor, Branch Manager, Sales and Operations Manager, and General Manager in various locations in the Southeast and in Ohio.

Brian Murphy
Senior Vice President, Chief Information Officer

Mr. Murphy, age 49, has served as Senior Vice President, Chief Information Officer of Dean Foods since September 2013. In his current role, he is responsible for the Company's information technology solutions. Mr. Murphy first joined Dean Foods in 2010 as Vice President, Supply Chain IT. He later served as Chief Information Officer for the Company's Morningstar business unit, and continued in that role after Dean Foods sold Morningstar to Saputo Inc. in early 2013. He returned to Dean Foods in his current role in September 2013. Prior to Dean Foods, Mr. Murphy served as Senior Manager Shared Service of T-Mobile (USA) from 2008 to 2010, where he was responsible for the creation of a shared service organization to implement and support an order revenue stream as well as core operations. He also served in various IT, supply chain, logistics and engineering roles, both in the U.S. and internationally, at Whirlpool Corporation from 2002 to 2008 and at Colgate Palmolive Limited from 1994 to 2002. He also serves on the Board of Directors of Momentx Corporation, the parent company of Dairy.com, a leading provider of market intelligence and software-as-a-service solutions for the dairy industry.

Ralph P. Scozzafava
Executive Vice President, Chief Operating Officer

Mr. Scozzafava, age 57, has served as Executive Vice President, Chief Operating Officer of Dean Foods since October 2015. In this role, he oversees all commercial operations for Dean Foods, with responsibility for the Company's geographically diverse selling, marketing, and research and development activities. He also oversees the Company's Procurement area. Mr. Scozzafava joined Dean Foods in October 2014 as Executive Vice President and Chief Commercial Officer. From May 2008 to November 2013, Mr. Scozzafava served as the Chairman of the Board of Directors and Chief Executive Officer of Furniture Brands International, Inc. and as its Vice Chairman and Chief Executive Officer -designate from June 2007 to May 2008. Furniture Brands filed a petition under Chapter 11 in the United States Bankruptcy Court for the District of Delaware in September 2013, culminating with the sale of the assets of the company in November 2013. Prior to that, he was employed at Wm. Wrigley Jr. Company, where he held several positions, including serving as Vice President—Worldwide Commercial Operations from March 2006 to June 2007, and as Vice President & Managing Director—North America/Pacific from January 2004 to March 2006. Prior to joining Wrigley, Mr. Scozzafava served in sales, marketing and merchandising positions at Campbell Soup Company, Clorox Company, and Johnson & Johnson. Mr. Scozzafava also serves on the Board of Directors of Stage Stores, Inc., where he is a member of the Compensation Committee and the Audit Committee.

Kimberly Warmbier
Executive Vice President, Chief Human Resources Officer

Ms. Warmbier, age 54, joined Dean Foods in May 2012 as Senior Vice President of Human Resources for Fresh Dairy Direct. She was promoted to her current position in November 2012. Prior to Dean Foods, Ms. Warmbier served as the Senior Vice President, Human

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Resources, for J.C. Penney Company, Inc. from November 2009 to December 2011 where she led human resource professionals supporting more than 150,000 associates in supply chain, stores and corporate. Her experience also includes more than 20 years in the consumer packaged goods industry with PepsiCo, Inc. where she led the HR PepsiCo Customer teams for the company's five North American sales divisions including Frito-Lay, Pepsi, Tropicana, Quaker Oats and Gatorade. Ms. Warmbier currently serves on the North Texas Food Bank Board of Directors and is a member of their NTFB Finance and Executive Committees. She is a former member of the Board of Directors of Girl Scouts Northeast Texas, a nonprofit organization, where she served on the CEO Selection Committee.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis is intended to provide our stockholders with an understanding of our compensation policies and practices during 2015 for our Chief Executive Officer, our Executive Vice President and Chief Financial Officer and the three other most highly compensated executive officers serving as of December 31, 2015. These individuals, collectively referred to herein as the "Named Executive Officers" or "NEOs," are:

    Gregg A. Tanner, our Chief Executive Officer ("CEO") and a director;

    Chris Bellairs, our Executive Vice President and Chief Financial Officer;

    Ralph P. Scozzafava, our Executive Vice President and Chief Operating Officer;

    Kimberly Warmbier, our Executive Vice President, Chief Human Resources Officer; and

    Marc L. Kesselman, our former Executive Vice President, General Counsel, Corporate Secretary and Government Affairs.

To further illustrate the concepts in this Compensation Discussion and Analysis, we have included charts and tables where we believe appropriate to enhance our stockholders' understanding of our NEOs' compensation. These tables and charts are meant to be in addition to, and not an alternative to, the charts and tables provided under the heading "Compensation Tables for Named Executive Officers" beginning on page 65 of this Proxy Statement.

Executive Summary

Our executive compensation program is intended to:

    attract and retain top talent;

    motivate and reward the performance of executive officers to achieve the Company's strategic, financial and operating performance objectives;

    ensure that our total compensation is competitive with our peers; and

    align our executive officers' interests with the long-term interests of our stockholders with the ultimate goal of driving long-term stockholder value.

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In 2015, the three primary components of the NEOs' total target direct compensation were salary, short-term incentives and long-term incentives, as described below:

  Program Component Type Form Description
  Salary   Base Salary   Fixed   Cash  

Relatively small portion of NEO
compensation

Peer group target: 60th percentile

 
  Short-Term Incentives   Financial Performance   Performance
(Company)
  Cash  

75% of total short-term incentive award

Based on adjusted operating income
target approved by Compensation
Committee

Peer group target: 50th percentile

 
 
  (2015 STI Plan)   Individual Objectives   Performance
(Individual)
  Cash  

25% of total short-term incentive award

Based on individual objectives approved
by Compensation Committee

Peer group target: 50th percentile

 
      Restricted Stock Units ("RSUs")   Fixed   Equity  

50% of total long-term incentive award

Vest ratably over three years

Peer group target: 50th percentile

 
 
  Long-Term Incentives
(2007 Stock Incentive
Plan)
  Cash Performance Units ("CPUs")   Performance
(Company)
  Cash  

50% of total long-term incentive award

CPU awards are potentially earned
following a 3-year performance cycle

Any earned awards are based on
performance against annual Bank
EBITDA (as defined below) targets in
each year of 3-year cycle

Bank EBITDA targets approved by
Compensation Committee

Peer group target: 50th percentile

 

Our 2015 Financial Performance

2015 was a strong year for Dean Foods Company. Some highlights of our financial and other achievements in 2015 include:

    Consolidated adjusted operating income of approximately $248 million;

    Adjusted EBITDA of $404 million;

    Adjusted diluted earnings per share of $1.23;

    Free cash flow of $246 million;

    Returned $79 million in cash to our stockholders through cash dividends and share repurchases; and

    Successfully launched DairyPure®, the first and largest fresh, white milk national brand.

Consolidated adjusted operating income, Adjusted EBITDA, Bank EBITDA, adjusted diluted earnings per share and free cash flow are non-GAAP financial measures. Please see Annex A for more information and for reconciliations of the foregoing measures with the most directly comparable financial measure calculated in accordance with GAAP.

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Our Pay Practices

Our Board of Directors and the Compensation Committee have adopted compensation practices that are intended to emphasize our pay-for-performance compensation philosophy and to ensure that the efforts of our executive officers are consistent with the objectives of our stockholders.

  What We Do

What We Don't Do

  LOGO Emphasize pay-for-performance. A substantial portion of our executive officers' compensation is at-risk and subject to either Company or individual performance goals.   LOGO No hedging/pledging transactions. We do not allow our directors, officers or other employees to hedge or otherwise enter into derivative transactions relating to our common stock and we prohibit future pledges of our common stock.  
  LOGO Challenging performance goals. Our Compensation Committee sets rigorous performance targets. We believe these targets motivate our executives to deliver value to our stockholders.   LOGO No Uncapped incentive plans. Each of our incentive awards has a limit on the amount an executive can earn to ensure that our incentive programs reward positive performance without offering a windfall opportunity.  
  LOGO Require stock ownership. Our executive officers share the interests of our stockholders through our stock ownership guidelines.   LOGO No repricing of options. We do not allow repricing of underwater stock options unless approved by our stockholders.  
  LOGO Provide double-trigger provisions. Our change in control agreements and equity awards contain modified double-trigger provisions.   LOGO No tax gross-ups. We do not provide for tax gross-up provisions in change in control agreements with our NEOs.  
  LOGO Maintain a clawback policy. Our clawback policy protects the Company in the event of fiscal mismanagement.   LOGO No defined benefit pension. We do not maintain a defined benefit pension plan for our executive officers.  

Stockholder Engagement

Our Board strives to align our compensation practices with our stockholders' interests, and we conduct significant outreach efforts to stockholders regarding our executive compensation programs and corporate governance practices with a view toward understanding our stockholders' concerns and strengthening our compensation practices. In 2015, we reached out to stockholders representing approximately 60% of the outstanding common stock of the Company and invited them to speak with us regarding our corporate governance and compensation practices. In response, we spoke with or received input from a number of stockholders (representing approximately 25% of our outstanding equity). Our stockholders are generally supportive of our corporate governance practices, including our executive compensation programs, and we strive to keep and build on that support through continued dialogue and stockholder engagement going forward.

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The Compensation Committee also takes into account stockholders' feedback regarding our executive compensation programs through the annual "say-on-pay" vote on executive compensation. This feedback is an important consideration when reviewing potential changes to our executive compensation programs and policies. Approximately 94% of the votes cast on the "say-on-pay" proposal at our 2015 Annual Meeting of Stockholders supported the Company's executive compensation program.

Governance Practices Related to Executive Compensation

In addition to designing our compensation plans to achieve the objectives outlined above, the Compensation Committee seeks to employ corporate governance best practices to align the interests of our executives with the interests of our stockholders, as evidenced by the following compensation policies.

  Clawback Policy   Our clawback policy is applicable to both our short-term and long-term incentive compensation plans and provides the Company with the right to recover all or part of an employee's cash bonus or equity-based compensation award, or to cancel any equity-based compensation award granted on or after February 1, 2010, if there is any restatement of our audited financial statements resulting from such employee's fraud, intentional misconduct, gross negligence or other misfeasance or nonfeasance, which results in an employee's award being greater than the amount that should have been awarded, paid or accrued.  
  Stock Ownership Guidelines Our stock ownership guidelines apply to our executive officers and require our CEO to own, at a minimum, common stock of the Company equal in value to five times his annual base salary and require our other executive officers to own, at a minimum, common stock of the Company equal in value to two times their annual base salaries.
  No Tax Gross-Ups in Our Change in Control Agreements   None of the change in control agreements with our executive officers contain excise tax gross-up provisions.  
  Double Trigger Provisions in Our Change in Control Agreements We have entered into change in control agreements with each of our executive officers pursuant to which we would provide certain payments in the event of a qualified termination following a change in control (i.e. double trigger) as described under the heading "Potential Benefits Upon a Change in Control."

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  Double Trigger Provisions in Our Equity Plan   Our 2007 Stock Incentive Plan provides that any awards granted after December 31, 2014 will not automatically vest upon the occurrence of a change in control so long as they continue in effect on terms that are no less favorable than were applicable immediately prior to the change in control. However, such awards will vest in full if the Company or its successor terminates the employee's employment involuntarily (other than for cause) or constructively within 24 months after the change in control. If these post-2014 awards will not continue in effect on terms which are at least as favorable as those that applied immediately prior to the change in control, whether because the acquiring entity decides not to provide appropriate substitute awards, or because the requisite conditions to preserve the existing terms of these awards are not met, the effected awards will vest in full, and generally become payable, upon the change in control.  
  Prohibition on Hedging and Other Derivative Activities Our insider trading policy prohibits the hedging of our common stock or entering into other derivative transactions relating to our common stock by our directors, executive officers and other employees.
  Prohibition on Pledges   Our insider trading policy prohibits pledges of our common stock by directors and executive officers. While the Chair of our Nominating/Corporate Governance Committee, in consultation with our general counsel, may grant an exception to the prohibition on pledging in certain extraordinary circumstances, no such exception has been granted.  

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NEO Pay Mix

Total potential compensation of our executive officers is substantially weighted toward performance-based short-term incentive ("STI") and long-term incentive ("LTI") programs. Our 2015 target total direct compensation (excluding any promotional, inducement or special incentive grants) for the NEOs was composed of the following:

GRAPHIC

Components of Our Executive Compensation and Benefits Programs

Base Salary

The base salary component of our compensation program is designed to attract and retain key talent and reward executive officers for their experience and contributions. The Compensation Committee targets the 60th percentile of the peer group for base salary because it positions the Company to effectively attract and retain valuable resources from key consumer packaged goods companies with whom we compete for talent. A competitive base salary is also critical because, unlike a number of our peer companies, our executive officers are not eligible for defined benefit pension plans. Base salaries may be above or below this target for certain executive officers for a variety of reasons, including salary at a previous employer, internal promotions, or his or her unique talent and contributions.

The Compensation Committee reviews base salary annually and may make adjustments based on changes in the peer group, the performance of the Company and the individual, changes in job responsibility, or recommendations from the CEO for all executives except himself. The Compensation Committee separately reviews the performance of the CEO, as described below, and makes salary adjustments as warranted.

The table below discloses base salary for each NEO in 2015. During the Compensation Committee's annual review of base salaries in 2015, the Compensation Committee determined that Mr. Tanner, Mr. Bellairs and Ms. Warmbier would each receive an increase in his or her base salary in 2015 due to the importance of each to the Company's ongoing success and their strong performance. This follows two years of no base salary increases for

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Mr. Tanner or Mr. Bellairs in 2014 or 2013. In addition, the increase in Mr. Scozzafava's base salary was due to his promotion from Executive Vice President, Chief Commercial Officer to Executive Vice President, Chief Operating Officer during 2015 and recognizes the additional responsibilities of the Chief Operating Officer role.

Named Executive Officer



​ Fiscal Year
2015 Base
Salary(1)





​ Salary Increase
Over Previous
Year

Gregg A. Tanner

$ 1,080,000 8.0 %

Chris Bellairs

$ 500,000 7.5 %

Marc L. Kesselman

$ 450,000 (2)

Ralph P. Scozzafava

$ 825,000 3.1 %

Kimberly Warmbier

$ 400,000 6.7 %

(1)
Reflects annual base salary as of December 31 of the year presented. Actual base salary earned and paid during the fiscal year may differ due to the timing of increases as noted below. See "Compensation Tables for Named Executive Officers—Summary Compensation Table for Fiscal Year 2015."

(2)
Mr. Kesselman was not employed by the Company in 2014.

Short-Term Incentive Compensation

The short-term incentive component of compensation is designed to motivate senior executives to achieve annual financial and other goals based on our short-term strategic, financial and operating performance objectives. In 2015, in connection with our review of our strategic and operating plans, we established target short-term incentive payout targets competitive with the peer group for each NEO, the achievement of which is based on a combination of the Company's financial performance (75%) and individual objectives (25%) aligned with the executive's area of business responsibility. This reflects an increase from the 60% weighting applied to financial performance last year and a decrease to the individual objectives weighting, which was 40% in 2014.

The following are the 2015 annual short-term incentive target award opportunities for the NEOs:

Named Executive Officer



​ 2015 Annual
Short-Term Incentive Target
as a % of Base Salary

Gregg A. Tanner

140 %

Chris Bellairs

90 %

Marc L. Kesselman(1)

70 %

Ralph P. Scozzafava

100 %

Kimberly Warmbier

60 %

(1)
Mr. Kesselman resigned effective January 15, 2016.

Our executive officers' efforts during 2015 significantly contributed to the achievement by the Company of adjusted operating income in excess of the target established by the Compensation Committee under the 2015 STI Plan. Thus, due to our improved operating performance, the NEOs' contribution to achieving such operating results, and our pay-for-performance philosophy that seeks to align the interests of our executive officers with the interests of our stockholders, our NEOs received above-target payments under the

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financial performance portion of our 2015 STI Plan. As discussed below, certain NEOs also received a payment under the 2015 STI Plan due to their achievement of individual objectives.

Short-term incentive awards, if any, are calculated using the base salary of the NEO as of the last day of the year with any change to an executive officer's target short-term incentive payout percentage being applied on a pro rata basis. In addition, to meet the requirements of the performance-based exception from the application of Section 162(m) of the Internal Revenue Code, the Compensation Committee established performance criteria for specified executive officers based on annual adjusted operating income that established a maximum bonus amount that could be paid to such executive officers for performance during 2015.

Financial Objectives. The 2015 STI Plan placed 75% of the overall weight on the achievement of financial objectives, which is aligned with the market as defined by our peer group. The 2015 STI Plan used consolidated adjusted operating income as its key performance measure. In establishing the 2015 STI Plan, the Compensation Committee considered adjusted operating income an appropriate performance criterion to measure the achievement of the Company's objectives because it is representative of the profitability and operating efficiency of the Company as a whole. The achievement of objectives under the 2015 STI Plan was reviewed and approved by our Compensation Committee.

In February 2016, the Compensation Committee assessed the Company's performance against the financial goals that had been established at the beginning of 2015. The target adjusted operating income for 2015 was $155.4 million, with threshold and maximum performance and payout levels as a percent of target as set forth below. The payout factor for the financial component of short-term incentive compensation for each executive officer ranged from 0% to 200% of that executive officer's financial component target payment, depending on actual performance in 2015 against the financial objectives established by the Compensation Committee. Our consolidated adjusted operating income for 2015 was $247.7 million, which was 159.4% of the $155.4 million target adjusted operating income for 2015 and resulted in an earned award of 200% of the target opportunity.

 
 
 
 
 
  2015 Adjusted Operating Income
(Non-GAAP)% to Plan


Percentage of Target
Award Opportunity Earned


  110 % +   200 %  
  105 % 150 %
  100 %   100 %  
  95 % 50 %
  90 %   0 %  

Individual Objectives. In addition to the financial performance measure described above, 25% of each NEO's short-term incentive payout under the 2015 STI Plan was based on individual objectives approved by the Compensation Committee. Our Compensation Committee determined that Messrs. Tanner, Bellairs, Kesselman and Scozzafava and Ms. Warmbier met or exceeded individual objectives.

The payout factor for the individual objective component of short-term incentive compensation ranged from 0% to 200% of that executive officer's individual objective target payment, depending on the executive officer's performance in 2015 against the individual objectives established by the Compensation Committee. Performance was measured against each executive officer's leadership and execution of strategic and organizational objectives

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established at the beginning of 2015. An overview of key objectives achieved by the NEOs is set forth below.

Name Individual Objectives
Gregg A. Tanner

Developed and obtained Board approval of new strategic plan

Successfully executed specified productivity initiatives

Improved quality and safety performance, including reducing recalls/withdrawals to the lowest level in Company history

Successfully oversaw completion of numerous Company transactions, including debt restructuring, stock repurchase, and acquisitions

Significantly increased outreach to investors and investment community

Further deepened working relationship with the Board

Chris Bellairs

Completed balance sheet restructuring (including significant debt refinancing)

Returned $79 million in cash to stockholders through dividends and repurchases

Achieved 31% reduction in voluntary turnover in finance team versus 2014

Completed significant updates to our strategic growth plan

Oversaw significant training and mentoring programs for finance personnel

Marc L. Kesselman

Counseled our CEO, senior management and our Board of Directors with respect to securities laws, executive compensation, corporate governance and mitigation of business and legal risks

Provided legal support for debt restructuring efforts

Managed antitrust litigation and other significant legal proceedings

Ralph P. Scozzafava

Launched DairyPure – national white milk brand

Delivered above target operating income

Exceeded contribution margin and net contribution margin rate targets

Developed pricing governance process/decision rights

Kimberly Warmbier

Achieved 7% reduction in Company-wide voluntary turnover versus 2014

Trained over 650 employees in leadership courses

Completed commercial restructure for field and national accounts

Mentor/mentee training successfully implemented on schedule

Significant amount of labor contracts negotiated within economic targets

With respect to the individual objective component of the 2015 STI Plan, the Compensation Committee determined that Messrs. Tanner, Bellairs, and Scozzafava and Ms. Warmbier would receive an "above target" rating, and that Mr. Kesselman would receive an "on target" rating, with respect to their individual objectives described above. Pursuant to the 2015 STI Plan, payout for an "above target" rating ranges from 140% to 180% of that portion of the

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short-term incentive payout, and payout for the "on target" rating was 90% of that portion of the short-term incentive payout.

The following tables shows the STI payout targets for fiscal year 2015 and the actual payouts for each NEO based on the achievement of financial objectives and individual objectives:

Named
Executive Officer




2015 Annual
STI Target as a
% of Base
Salary






2015 STI
Target Payouts
($)





2015 STI
Actual Payout –
Financial Objectives
($)






2015 STI
Actual Payout –
Individual Objectives
($)






2015 STI
Total
Actual Payout
($)

Gregg A. Tanner

140 % 1,512,000 2,268,000 680,400 2,948,400

Chris Bellairs

90 % 450,000 675,000 213,750 888,750

Marc L. Kesselman(1)

70 % 315,000 433,125 64,969 498,094

Ralph P. Scozzafava

100 % 825,000 1,237,500 371,250 1,608,750

Kimberly Warmbier

60 % 240,000 360,000 108,000 468,000

(1)
Mr. Kesselman resigned effective January 15, 2016; his STI payout was prorated for 11 months of service.

Long-Term Incentive Compensation

We believe that a significant portion of each executive officer's compensation should be dependent on long-term value created for our stockholders. Our long-term incentive compensation program, which is administered under the 2007 Stock Incentive Plan, is designed to align the results achieved for stockholders with the rewards provided to our executive officers. In 2015, the Compensation Committee granted the following mix of awards to the NEOs: 50% of long-term incentive compensation was in the form of RSUs and 50% of long-term incentive compensation was in the form of CPUs. The Compensation Committee annually reviews market practices and trends, as well as the availability of shares in our incentive program, in determining the mix of awards. Our Compensation Committee has determined that performance stock units (PSUs) instead of CPUs will be granted in 2016. See "2016 Compensation Actions" below.

Awards in 2015 were granted at the dollar amount representing the 50th percentile of long-term incentive grants made to executive officers with similar positions in our peer group.

Restricted Stock Units ("RSUs"). An RSU represents the right to receive one share of our common stock in the future. RSUs are used to provide an ongoing retention element and a continuing link to stockholder value. Historically, annual awards were valued based on an average of the Company's closing stock price during the first fifteen trading days of the year in order to align valuation periods with the annual grant date; off-cycle awards are made on the first business day of each month for all employees selected for such awards and are valued based on the Company's closing stock price on the date of the grant. The 2015 annual grants of RSUs were determined using the intrinsic value as of the determination date, valued based on an average of the Company's closing stock price during the first fifteen trading days of January 2015. The price used for determining the number of shares underlying the annual RSU awards granted on February 16, 2015, was $16.19. Beginning in 2016, annual awards will be valued based on the Company's closing stock price on the day the Compensation Committee approves the grants. Generally, RSUs granted by the Compensation Committee vest ratably over three years, and employment as of the vesting date is required in order to qualify for receipt of the vested portion of the award. All RSU awards granted in 2015 or later provide for cash dividend equivalents which will vest on the same schedule as the corresponding RSU awards. The Compensation Committee determined this change was

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warranted because cash dividend equivalents are commonly provided by our peer group companies.

Cash Performance Units ("CPUs"). In 2015, the Compensation Committee awarded CPUs to our NEOs and certain other senior executives. CPUs are designed to link compensation to the Company's performance over a 3-year period. During 2015, the Committee reviewed current market practice with the assistance of Mercer (US), LLC ("Mercer"), the Compensation Committee's independent external advisor (see "How Executive Pay Levels are Determined – Independent External Advisor"), and determined to continue to use the performance metric of "Bank EBITDA," which is calculated as adjusted operating income plus depreciation and amortization plus all non-cash expenses as determined under the Company's revolving credit facilities.

The Compensation Committee believes Bank EBITDA is the appropriate measurement for long-term performance rather than a relative metric based on peer companies, such as "Total Shareholder Return," because the Compensation Committee could not identify an adequate number of sufficiently similar publicly traded companies (based on critical factors such as size, geographic scope, mix of products, impact of dairy commodities, and other factors) to have a meaningful peer group against which to compare performance, and the Compensation Committee was presented with insufficient evidence that the inclusion of such a relative metric in the long-term compensation programs of other public companies has led to the improved financial performance of those companies.

Pursuant to the terms of the CPUs granted in 2013, 2014 and 2015, the Compensation Committee established performance goals for each calendar year in the 3-year performance cycle (the "CPU Performance Cycle"). The "2013 CPU Performance Cycle" commenced January 1, 2013, and ended December 31, 2015; the "2014 CPU Performance Cycle" commenced January 1, 2014, and ends December 31, 2016; and the "2015 CPU Performance Cycle" commenced January 1, 2015, and ends December 31, 2017. The Compensation Committee will annually set the performance target for Bank EBITDA or decide on a different performance measure for each calendar year during the CPU Performance Cycles. The target Bank EBITDA for the 2015 calendar year was $324.7 million, with threshold and maximum performance payout levels as a percent of target relating to the 2015 calendar year as follows:

 
 
 
 
 
  2015 Bank EBITDA
% to Plan


Percentage of Target
Award Opportunity Earned


  120 %   200 %  
  110 % 150 %
  100 %   100 %  
  90 % 50 %
  80 %   0 %  

In February 2016, the Compensation Committee determined that the Bank EBITDA actually achieved by the Company during the calendar year 2015 was $412.7 million, which was 127.1% of the target Bank EBITDA for the 2015 calendar year and resulted in a 200% of target accrual for the 2015 performance period. Accordingly, one-third of the value of the 2013 CPUs, one-third of the value of the 2014 CPUs, and one-third of the value of the 2015 CPUs has been accrued at 200% of target. No payments are made until after completion of the entire applicable CPU Performance Cycle, and to receive a payout of the CPU award the participant must remain employed by the Company through the end of the 3-year CPU

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Performance Cycle. The payments with respect to the 2013 CPUs were calculated based on results achieved during 2013, 2014 and 2015. The payments with respect to the 2014 CPUs will be calculated at the end of 2016 based on results achieved during 2014, 2015 and 2016. The payments with respect to the 2015 CPUs will be calculated at the end of 2017 based on results achieved during 2015, 2016 and 2017.

      Calendar Year: Metrics

 
Plan
2013: 2014: 2015: 2016: 2017:
    Bank EBITDA Bank EBITDA Bank EBITDA Bank EBITDA TBD
 

 


2013 CPU Plan




Year 1




Year 2




Year 3


 


 


 


 


 
 
  2014 CPU Plan     Year 1 Year 2 Year 3      
 
  2015 CPU Plan         Year 1 Year 2 Year 3
 

Deferred Compensation Plan and Supplemental Executive Retirement Plan

Our current NEOs may defer a portion of their salary and bonus each year into the Company's non-qualified deferred compensation plan. We believe a deferred salary and bonus plan is a potential retention tool for our eligible executives, and that this program is similar to that offered at most of the companies in our peer group. For more information on amounts deferred pursuant to the deferred compensation plan, see "Compensation Tables for Named Executive Officers – Deferred Compensation Plan."

In addition, we maintain the Dean Foods Company Supplemental Executive Retirement Plan (the "SERP"), which is a nonqualified deferred compensation arrangement for our executive officers and other employees earning compensation in excess of the maximum compensation that can be taken into account with respect to our 401(k) plan, as set forth in the Internal Revenue Code. The SERP is designed to provide these employees with retirement benefits from the Company that are equivalent, as a percentage of total compensation, to the benefits provided to other employees under our 401(k) plan. The Company credits to each eligible employee's account an amount equal to 4% of his or her covered compensation in excess of the maximum described above, and, through April 30 2015, credited interest on those balances at the mid-term applicable federal rate set by the Internal Revenue Service, plus 1%. Effective May 1, 2015, the Company transferred responsibility for the administration of the SERP accounts to Fidelity Workplace Services, LLC, which allows each accountholder to manage investment decisions with respect to his or her SERP account balances. Each employee's plan balance will be paid to him or her upon termination of employment, a change in control or the employee's death or qualifying disability.

Under both the Deferred Compensation Plan and the SERP, upon a termination that is not in connection with a change in control, death or disability, specified employees (including the NEOs) must wait until the seventh month following termination before they are eligible to receive a distribution.

Other Compensation

We provide our executive officers with a limited number of perquisites. The perquisites include:

    an annual executive physical exam;

    a long-term disability benefit;

    financial counseling;

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    occasional personal use of event tickets that would not otherwise be used for business purposes; and

    personal use of the company aircraft (CEO only).

The perquisites are designed to minimize the amount of time the executive officers devote to administrative matters other than the Company's business, promote a healthy work/life balance and provide opportunities for developing business relationships.

Our senior executives, including our current NEOs, participate in the Company's broad-based programs generally available to all employees or other key employees, including our 401(k) plan, health and dental plans and various other insurance plans, including disability and life insurance. For additional information regarding perquisites and other compensation, see "Compensation Tables for Named Executive Officers – All Other Compensation."

How Executive Pay Levels Are Determined

Compensation Committee

The Compensation Committee oversees the design and administration of our executive compensation programs and evaluates these programs against competitive practices, legal and regulatory developments and corporate governance trends. As part of its processes and procedures for determining executive compensation, the Compensation Committee:

    reviews and approves the compensation-related performance goals and other objectives for our CEO and recommends CEO compensation to the independent members of the Board based on performance;

    reviews and approves, with input from the CEO, the compensation of the Company's executives officers (other than the CEO);

    reviews and establishes the peer group companies used as a reference to benchmark executive officer compensation;

    reviews and approves the executive compensation policies, such as share ownership guidelines and prohibitions against pledging and hedging of the Company's stock;

    sets the specific performance targets for performance-based incentive awards to our executive officers; and

    approves payouts based on performance achieved relative to the pre-established performance targets.

Independent External Advisor

The Compensation Committee has engaged Mercer as its independent external advisor. The Compensation Committee considers analysis and advice from Mercer when making compensation decisions and recommendations for the CEO and the executive officers, and when making decisions on incentive plan design. Mercer provides recommendations on CEO pay directly to the Compensation Committee without consulting with the CEO or management. The Compensation Committee has the sole authority to hire and terminate Mercer, and the Compensation Committee members have direct access to Mercer.

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Role of Management

The Compensation Committee and independent members of the Board of Directors determine the compensation of the CEO without management input. The Compensation Committee meets with the CEO at the beginning of the year to discuss and establish his performance objectives for the year. At the end of the year, the CEO provides the Compensation Committee with a self-assessment based on his performance and achievement of the pre-established objectives. This self-assessment, in addition to Company performance, is used by the Compensation Committee in their overall determination of CEO compensation.

The Compensation Committee solicits input from the CEO regarding his evaluation of performance and compensation recommendations for other executive officers, before they make their final pay decisions related to the executive officers compensation. No executive officer is present when his or her compensation is discussed by the Compensation Committee.

Peer Group

The Compensation Committee utilizes a comparison group, or peer group, to evaluate whether executive officer pay levels are aligned with Company performance on a relative basis and to compare the Company's compensation design and governance features. The Compensation Committee primarily identifies companies that are of comparable size, operate within the Company's industry category, have product lines that are impacted by commodity prices and/or generate the majority of their revenue domestically. For 2015, with input from Mercer, the Compensation Committee determined to revise and expand the peer group from 12 to 18 companies and used the following group of peer companies:

 
 
2015 Compensation Peer Group
Campbell Soup Company Ingredion Incorporated
The Clorox Company The J. M. Smucker Company
ConAgra Foods, Inc. Kellogg Company
Dr Pepper Snapple Group, Inc. McCormick & Company, Incorporated
Flowers Foods, Inc. Pilgrim's Pride Corporation
Fresh Del Monte Produce Inc. Pinnacle Foods Inc.
General Mills, Inc. Post Holdings, Inc.
The Hershey Company Sanderson Farms, Inc.
Hormel Foods Corporation TreeHouse Foods, Inc.

Agreements with Named Executive Officers

Letter Agreements

In general, we enter into letter agreements with each of our executive officers that govern the terms of his or her employment. Such letter agreements generally state the executive's base salary, signing bonus, if any, annual STI compensation opportunity, LTI awards to be granted upon hire or in the future, if applicable, and any other benefits, such as relocation benefits, COBRA reimbursement, and eligibility to participate in the Executive Severance Plan.

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Severance and Change in Control Agreements

We have entered into Change in Control ("CIC") Agreements with each of our executive officers pursuant to which we would provide certain payments in the event of a qualified termination following a change in control (i.e. double trigger) as described under the heading "Executive Officer Severance" and "Potential Benefits Upon a Change in Control." Pursuant to these agreements, our current NEOs generally would be paid a sum of cash equal to up to three times his or her base salary and target short-term incentive compensation for the year, plus his or her target short-term incentive compensation prorated to the month in which a qualified termination occurred following a change in control along with insurance benefits, outplacement services and certain other benefits. As of December 31, 2015, none of our NEOs were entitled to receive excise tax gross-up payments pursuant to their respective CIC Agreements. Additionally, all CIC Agreements provide that unvested awards under the 1997 Plan and 2007 Plan automatically vest upon the change in control.

The Compensation Committee believes that change in control benefits are important for attracting and retaining executive talent and help to ensure that executive officers can remain focused during periods of uncertainty. These are particularly important in an environment where merger and acquisition activity is high. We believe that our change in control benefits are consistent with those maintained by comparable companies.

We also maintain the Executive Severance Plan for our executive officers, which provides certain severance benefits in the event of a qualified termination defined as a termination other than for "cause" or if the executive officer terminates his or her employment due to a material reduction in compensation or scope of duties or relocation (as described under "Estimated Payments Upon a Qualified Termination").

Generally, upon a qualified termination, our current NEOs would receive a cash payment equal to up to two times his or her annual base salary plus his or her target bonus, a payment in the amount of the officer's prorated bonus for the year of termination, a cash payment for the in-the-money value of any long-term incentive awards that would vest during a specified period following the date of severance (24 months for EVPs and 36 months for the CEO), and cash payments for certain health benefits and outplacement services. We believe this plan helps create stability during periods of significant change, aids in recruiting and retaining executive talent and enables us to avoid negotiating individual severance arrangements. We also believe this plan reduces the likelihood and extent of litigation from executive separation. In addition, we require each executive to sign non-competition and non-solicitation agreements effective for two years after termination and release the Company from all claims. We believe that our severance benefits are generally consistent with those maintained by comparable companies.

Tax Deductibility Policy and Accounting Treatment Considerations

The United States income tax laws generally limit the deductibility of compensation paid to each NEO to $1 million per year. An exception to this general rule exists for performance-based compensation that meets certain requirements. The Company has sought and received approval from its stockholders to grant performance-based awards that would, and has granted certain long-term incentive awards that should, qualify for the exception from this deduction limit. As and when appropriate in light of its business objectives, the Company intends to design incentive compensation awards and programs in a manner that satisfies the conditions to this performance-based exception to the otherwise

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applicable deduction limits. The Company has structured its annual short-term and long-term performance-based incentive plans so that each should qualify for the exemption.

Although deductibility of compensation is preferred, tax deductibility is not a primary objective of our compensation programs. We believe it is important to retain the flexibility to compensate executive officers competitively. We will continue to monitor our compensation practices and consider additional opportunities to take advantage of the Section 162(m) exemption when we believe it is in the best interests of the Company and our stockholders.

The Company considers the financial accounting effects of the long-term incentive awards it grants to our executives, but such effects do not materially impact the types of awards that are granted as part of our compensation program.

2016 Compensation Actions

The Compensation Committee regularly reviews the design of our executive compensation program to ensure that it continues to serve our objectives. For 2016, the Compensation Committee has made the following changes to our executive compensation program:

    Performance Stock Units ("PSUs").    The Compensation Committee determined that in 2016 executive officers will receive PSUs rather than CPUs as part of our long-term incentive compensation program. The PSUs would award shares of our common stock at the end of a 3-year performance period contingent upon the achievement of specific Bank EBITDA targets. The 2016 performance period will begin January 1, 2016, and end December 31, 2018. An executive officer will be required to be employed on December 31, 2018, in order to receive any earned shares.

    Merit/Market Changes.    Base salaries for our current NEOs in 2016 will increase to reflect their contributions and maintain competitiveness with our peers. These increases will range from 3% to 3.5% for merit increases based on the individual's performance and 0% to 12.4% for salary adjustments to provide market-competitive base salaries.

    2016 Stock Incentive Plan.    The Committee reviewed and recommended that the Board adopt a new stock incentive plan to allow for continued equity grants to employees and non-employee directors. See "Proposal 5 – Approval of 2016 Stock Incentive Plan" for additional information.

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with our management. Based on this review and discussion, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

This report is presented by:

The members of the Compensation Committee
Jim L. Turner (Chairman)
J. Wayne Mailloux
Helen E. McCluskey
John R. Muse

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COMPENSATION TABLES FOR NAMED EXECUTIVE OFFICERS

The charts presented below should be read in conjunction with the Compensation Discussion and Analysis set forth above. The following chart shows the compensation earned during fiscal years 2015, 2014, and 2013, as applicable, by our NEOs.

Summary Compensation Table for Fiscal Year 2015

NEOs -
Name and Principal
Position
Year Salary
($)(1)
Bonus
($)(2)
Stock
Awards
($)(3)
Option
Awards
($)(4)
Non-Equity
Incentive Plan
Compensation
($)(5)
All Other
Compensation
($)(6)
Total
($)(7)
 

Gregg A. Tanner

2015 1,080,000 1,851,753 6,520,066 95,477 9,547,296  

CEO and Director

2014 1,000,000 1,909,483 195,000 83,630 3,188,113  

2013 1,000,000 2,123,752 444,000 149,438 3,717,190  

Chris Bellairs


2015

500,000


323,978


1,672,082

32,899

2,528,959

 

EVP, CFO

2014 465,000 770,662 148,825 33,698 1,418,185  

2013 465,000 390,363 153,106 46,609 1,055,078  

Marc L. Kesselman(8)(9)


2015


450,000


302,500


642,387







731,426




38,583

</