The Brown-Forman 2022 Omnibus Compensation Plan (Plan) is our incentive compensation plan, designed to reward participants (including eligible executive officers, other employees, and non-employee directors) for company performance. Under the Plan, we can grant stock-based incentive awards for up to 12,412,433 shares of common stock to eligible participants until July 28, 2032. As of April 30, 2025, awards for approximately 10,640,000 shares remain available for issuance under the Plan. We try to limit the source of shares delivered to participants under the Plan to treasury shares that we purchase from time to time on the open market (in connection with a publicly announced share repurchase program), in private transactions, or otherwise.

Awards granted under the Plan include stock-settled stock appreciation rights (SSARs), performance-based restricted stock units (PBRSUs), time-based restricted stock units (RSUs), and deferred stock units (DSUs).

SSARs. We grant SSARs at an exercise price equal to the closing market price of the underlying stock on the grant date. SSARs become exercisable after three years from the first day of the fiscal year of grant and generally are exercisable for seven years after that date. The following table presents information about SSARs outstanding as of April 30, 2025, and for the year then ended.


	Number of SSARs (in thousands)	Weighted- Average Exercise Price per SSAR		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at April 30, 2024	3,750	$	55.37
Granted	595	44.97
Exercised	(19)	39.58
Forfeited or expired	(448)	42.98

Outstanding at April 30, 2025	3,878	$	55.29	4.6	$	—
Exercisable at April 30, 2025	2,653	$	53.25	3.1	$	—

We use the Black-Scholes pricing model to calculate the grant-date fair value of a SSAR. The weighted-average grant-date fair values and related valuation assumptions for the SSARS granted during each of the last three years were as follows:


	2023			2024			2025

Grant-date fair value	$	20.67		$	21.69		$	12.86
Valuation assumptions:
Expected term (years)	7.0			7.0			7.0
Risk-free interest rate	2.7		%	4.1		%	4.1		%
Expected volatility	24.8		%	25.0		%	26.1		%
Expected dividend yield	1.0		%	1.2		%	1.9		%

The expected term is based on past exercise experience for similar awards. The risk-free interest rate is based on zero-coupon U.S. Treasury rates as of the date of grant. Expected volatility and dividend yield are based on historical data, with consideration of other factors when applicable.

PBRSUs. The PBRSUs vest at the end of a three-year performance period that begins on the first day of the fiscal year of grant. For PBRSUs granted in fiscal 2023, performance is measured in full by comparing the three-year cumulative total shareholder return (TSR) of our Class B common stock to the three-year cumulative TSR of the companies in the Standard & Poor’s Consumer Staples Index (the peer group). Beginning with PBRSUs granted in fiscal 2024, performance is measured based in part (50%) on our TSR compared to the TSR of a specified peer group and in part (50%) on our adjusted operating income growth compared to the adjusted operating income growth of the peer group over the three-year performance period. At the end of the performance period, the number of PBRSUs is adjusted for performance, and then adjusted upward to account for



	Number of PBRSUs (in thousands)	Weighted- Average Fair Value at Grant Date



























Outstanding at April 30, 2024	413	$	76.53
Granted	356	$	42.09
Adjusted for performance and dividends	(50)	$	70.04
Converted to common shares	(54)	$	70.04
Forfeited	(27)	$	48.81
Outstanding at April 30, 2025	638	$	59.53

For the portion of the PBRSUs based on adjusted operating income performance, we calculate the grant-date fair value using the closing market price on the underlying stock at the date of grant, discounted for dividends that are not paid on the PBRSUs during the first year of the performance period.

For the portion of the PBRSUs based on TSR, we calculate the grant-date fair value using a Monte Carlo simulation model. The following table shows the assumptions used in the Monte Carlo simulation model to value the awards granted during each of the last three fiscal years.


	2023		2024		2025




Valuation assumptions:
Risk-free interest rate	2.8	%	4.6	%	4.3	%
Expected volatility	29.8	%	22.2	%	24.6	%
Expected dividend yield	1.0	%	1.2	%	1.9	%
Remaining performance period (years) as of grant date	2.8		2.8		2.8

RSUs. Beginning in fiscal 2024, we grant time-based restricted stock units (RSUs) to certain non-executive employees. Each RSU represents the right to receive one share of Class B common stock. The RSUs vest in three equal amounts at the end of each of the subsequent three fiscal years. Outstanding RSUs are credited with dividend-equivalent RSUs when dividends are paid on our common stock. The grant-date fair value of an RSU is the closing market price of the underlying stock on the grant date. The following table presents information about RSUs outstanding as of April 30, 2025, and for the year then ended.



	Number of RSUs (in thousands)	Weighted- Average Fair Value at Grant Date



























Outstanding at April 30, 2024	87	$	68.88
Granted	157	$	44.65
Additions for dividend equivalents	4	$	53.38
Converted to common shares	(30)	$	68.28
Forfeited	(10)	$	45.83
Outstanding at April 30, 2025	208	$	51.51

DSUs. DSUs are granted to our non-employee directors. Each DSU represents the right to receive one share of common stock based on the closing price of the shares on the date of grant. Outstanding DSUs are credited with dividend-equivalent DSUs when dividends are paid on our common stock. Each annual grant vests after one year. DSUs are paid out in shares after the completion of a director’s tenure on the board plus a six-month waiting period. The director may elect to receive the distribution either in a single lump sum or in ten equal annual installments. As of April 30, 2025, there were approximately 215,000 outstanding DSUs, of which approximately 180,000 were vested.

The grant-date fair value of a DSU is the closing market price of the underlying stock on the grant date. The weighted average grant-date fair values for these awards granted during each of the last three years were as follows:

Additional information. The pre-tax stock-based compensation expense and related deferred income tax benefits recognized during the last three fiscal years were as follows:

As of April 30, 2025, there was $15 of total unrecognized compensation cost related to non-vested stock-based awards. That cost is expected to be recognized over a weighted-average period of 1.5 years. Further information related to our stock-based awards for the last three years is as follows: