The Brown-Forman 2022 Omnibus Compensation Plan (Plan) is our incentive compensation plan, designed to reward participants (including eligible officers, 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, 2023, awards for approximately 11,844,000 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), 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, 2023, 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, 2022	4,232	$	47.54
Granted	387	73.61
Exercised	(579)	34.58
Forfeited or expired	(30)	70.63

Outstanding at April 30, 2023	4,010	$	51.76	4.8	$	60
Exercisable at April 30, 2023	2,758	$	43.23	3.5	$	60

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:


	2021		2022			2023

Grant-date fair value	$	14.61	$	16.61		$	20.67
Valuation assumptions:
Expected term (years)	7.0		7.0			7.0
Risk-free interest rate	0.4 %		1.0		%	2.7		%
Expected volatility	23.3 %		24.1		%	24.8		%
Expected dividend yield	1.0 %		1.0		%	1.0		%

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. Performance is measured by comparing the three-year cumulative total shareholder return of our Class B common stock to the three-year cumulative total shareholder return of the companies in the Standard & Poor's Consumer Staples Index, with specific payout levels ranging from 50% to 150%. At the end of the performance period, the number of PBRSUs is adjusted for performance, and then adjusted upward to account for dividends paid during the second and third years of the performance period. The resulting PBRSUs are then converted to common shares.



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



























Outstanding at April 30, 2022	270	$	67.02
Granted	110	$	84.75
Adjusted for performance and dividends	(14)	$	56.98
Converted to common shares	(70)	$	56.98
Forfeited	(7)	$	82.42
Outstanding at April 30, 2023	289	$	76.33

We calculate the grant-date fair value of a PBRSU using a Monte Carlo simulation technique. The weighted average grant-date fair values and related valuation assumptions for these awards granted during each of the last three years were as follows:


	2021			2022			2023
Grant-date fair value	$	73.68		$	70.11		$	84.75
Valuation assumptions:
Risk-free interest rate	0.1		%	0.3		%	2.8		%
Expected volatility	29.9		%	29.1		%	29.8		%
Expected dividend yield	1.1		%	1.0		%	1.0		%
Remaining performance period (years) as of grant date	2.8			2.8			2.8

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, 2023, there were approximately 185,000 outstanding DSUs, of which approximately 168,000 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, 2023, there was $9 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 1.4 years. Further information related to our stock-based awards for the last three years is as follows:


	2021		2022		2023






Intrinsic value of SSARs exercised	$	47	$	23	$	19



Fair value of shares vested	13		7		6
Excess tax benefit from exercise / vesting of awards	10		6		4