Business Context and Reporting Period
Company: Brown-Forman Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: October 31, 2025
Event: Adoption of the Executive Change in Control Severance Plan.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document is a corporate governance report regarding executive compensation policies.
Material Changes
On October 31, 2025, the Board of Directors adopted and approved the Executive Change in Control Severance Plan, effective immediately. This Plan supersedes all prior agreements, practices, and policies regarding severance benefits for eligible participants in the event of a Qualifying Termination during a Change in Control Protection Period.
Guidance, Outlook, and Management Commentary
Purpose of Plan: To attract and retain key talent and ensure continued dedication of executive leadership during potential Change in Control scenarios.
Eligible Participants: Executive leadership team, including all Named Executive Officers (NEOs), and other select key employees.
Triggering Event: Involuntary termination due to a Qualifying Termination occurring within 30 days prior to a Change in Control and up to 24 months following its consummation.
Severance Benefits Structure
- Unpaid Bonuses: Any earned but unpaid annual cash bonus for the prior fiscal year.
- Severance Multiple:
- CEO: 3.0x the sum of annual base salary and the greater of the target bonus or earned bonus opportunity.
- Other Executives: 2.0x the sum of annual base salary and the greater of the target bonus or earned bonus opportunity.
- Pro-Rata Bonus: Portion of the annual bonus for the fiscal year of termination based on actual or target results.
- Health Coverage: 18 months of COBRA premiums for the participant and eligible dependents.
- Equity and Deferred Comp: Full vesting of unvested nonqualified deferred compensation and unvested equity awards.
- Outplacement: Counseling services for up to 12 months.
- Tax Payment: $10,000 lump sum for tax preparation.
Conditions: Payment is contingent upon the execution and non-revocation of a general release of claims, which may include confidentiality and non-disparagement obligations.
Investor Verification Checklist
- Review the full text of the Executive Change in Control Severance Plan attached as Exhibit 10.1 for specific definitions of "Qualifying Termination" and "Change in Control."
- Verify the specific list of "select key employees" eligible under the Plan beyond the Named Executive Officers.
- Assess the potential financial impact of the 3.0x and 2.0x severance multiples on the company's liabilities in the event of a merger or acquisition.
- Confirm the status of any prior individual severance agreements that are now superseded by this Plan.