<PAGE> 1
REGISTRATION NO.__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------------------
BROWN-FORMAN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 61-0143150
(State of Incorporation) (I.R.S. Employer Identification No.)
850 DIXIE HIGHWAY, LOUISVILLE, KENTUCKY 40210
(Address of Principal Executive Offices and Zip Code)
- --------------------------------------------------------------------------------
BROWN-FORMAN OMNIBUS COMPENSATION PLAN
- --------------------------------------------------------------------------------
MICHAEL B. CRUTCHER
Senior Vice President
General Counsel and Secretary
Brown-Forman Corporation
850 Dixie Highway
Louisville, Kentucky 40210
(502) 585-1100
OGDEN NEWELL & WELCH
Attention: James S. Welch
1700 Citizens Plaza
500 West Jefferson Street
Louisville, Kentucky 40202-2874
(502) 582-1601
(Names, addresses and telephone numbers of agents for service)
Exhibit Index appears on Page II-8
Approximate date of commencement of proposed sale to public:
From time to time following the effectiveness of the Registration Statement.
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Title of Securities Amount Proposed Proposed Amount Of
To Be Registered To Be Maximum Maximum Registration
Registered Offering Aggregate Fee
(1)(2) Price Offering
Per Share (3) Price Fee
<S> <C> <C> <C> <C>
Class B Common 1,900,000 $61.81 $117,443,750.00 $34,647.75
Stock (non voting)
par value $0.15
per share
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(a) of the Securities Act, includes an
indeterminate number of additional shares that may be offered
and issued to prevent dilution resulting from stock splits,
stock dividends or similar transactions.
(2) This Registration Statement registers 1,900,000 shares and
the underlying options. Registration Statement No. 333-77903
(filed May 6, 1999) registered 1,500,000 shares and the
underlying options. This Registration Statement and
Registration Statement No. 333-77903 collectively register
3,400,000 shares and the underlying options.
(3) Estimated solely for purpose of calculating amount of
registration fee which, calculated pursuant to Rule 457(h)(1)
and (2) of the Securities Act, is based on the average of the
high and low prices for shares of Class B Common Stock of
Brown-Forman Corporation on the New York Stock Exchange
consolidated tape on October 6, 1999.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
*As allowed by Rule 428(b)(1) under the Securities Act and the Note to Part l
of Form S-8, the information specified in Items 1 and 2 of Form S-8 will be
contained in a document sent or given to plan participants. This information is
not filed as part of this Registration Statement.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Brown-Forman Corporation (the "Registrant"), by this reference hereby
incorporate into this Registration Statement the following documents filed by
the Registrant:
(a) Annual Report of the Registrant on Form 10-K for the year ended April
30, 1999, filed on July 21, 1999;
(b) Quarterly Report of the Registrant on Form 10-Q for the fiscal quarter
ended July 31, 1999, filed on September 9, 1999;
(c) The description of the Registrant's Class B Common Stock, $0.15 par
value per share, contained in the Registrant's Registration Statement
on Form 8-A, filed on April 11, 1991, including any amendment or report
filed for the purpose of updating such description.
In addition, all documents filed by the Registrant with the Securities and
Exchange Commission pursuant to Sections 13(a), 13(d), 14 or 15(d) of the
Securities Exchange Act of 1934 after the effective date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference in this
Registration Statement and shall be deemed to be a part hereof from the date of
filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein, or
in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
statement contained in this Registration Statement shall be deemed to be
modified or superseded to the extent that a statement contained in a
subsequently filed document which is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
II-1
<PAGE> 4
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
One of the directors of the Registrant, James S. Welch, is of counsel to and a
former partner in Ogden Newell & Welch, the Louisville, Kentucky law firm
providing the legal opinion upon the validity of the securities being registered
pursuant to this Registration Statement. Mr. Welch has sole or shared voting and
investment power over 6,600 shares of the Class A Common Stock of the
Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Restated Certificate of Incorporation limits directors'
liability for monetary damages to the extent permitted by the Delaware General
Corporation Law, and reads as follows:
A director shall not be personally liable to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director, except that he
may be liable (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
The provision affects only claims against directors for acts they perform as
directors; it does not apply to acts they perform as officers of the Registrant
or in other capacities.
In addition, the Board of Directors has adopted a resolution which provides that
the Registrant shall indemnify any person who was, is, or is threatened to be
made a party to an action, suit, or proceeding, whether civil, criminal,
administrative, or investigative by reason of the fact that he is a director,
officer, employee, or agent of the Registrant, or is or was serving at the
Registrant's request as a director, officer, employee, or agent of another
entity. Indemnification of a person under this resolution is against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit, or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the Registrant's best interests (with respect to a
criminal proceeding, the person must have had no reasonable cause to believe his
conduct was unlawful). In any proceeding by or in the right of the Registrant,
no indemnification may be made if the person is found to be liable for
negligence or misconduct in the performance of his duty, and only to the extent
of the Court of Chancery or such other court deems proper.
II-2
<PAGE> 5
An insurance policy insures the Registrant's directors and officers against
certain liabilities, including certain liabilities arising under the Act, which
might be incurred by them in such capacities and against which they cannot be
indemnified by the Registrant.
Insofar as indemnification for liabilities under the Act may be permitted to
directors, officers, and controlling persons of the Registrant pursuant to the
foregoing provisions or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of such Registrant in the successful defense of
any action, suit, or proceeding) is asserted against the Registrant by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENTS
- ------- ------------------------
<S> <C>
5 Opinion of Counsel, Ogden Newell & Welch, counsel to Registrant
23(a) Consent of PricewaterhouseCoopers LLP, independent accountants
of Registrant
23(b) Consent of Ogden Newell & Welch, counsel to Registrant (included
in Exhibit 5)
24(a) Power of attorney authorizing Steven B. Ratoff, Michael B.
Crutcher or Nelea A. Absher to sign the Registration Statement
in any and all capacities on behalf of Jerry A. Abramson,
Barry D. Bramley, George Garvin Brown III, Owsley Brown II,
Donald G. Calder, Owsley Brown Frazier, Richard P. Mayer,
Stephen E. O'Neil, William M. Street, Dace Brown Stubbs and
James S. Welch
</TABLE>
II-3
<PAGE> 6
<TABLE>
<S> <C>
24(b) Certified resolution of Registrant's Board of Directors authorizing
the execution of Powers of Attorney
99 The Brown-Forman Corporation Omnibus Compensation Plan, as
amended through September 23, 1999
</TABLE>
The following items were filed previously:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
<S> <C>
4(h) Restated Certificate of Incorporation of the Registrant,
incorporated by reference to Exhibit 3(i)(b) of Registrant's
10-Q, filed on December 10, 1998
4(i) Certificate of Ownership and Merger of Brown-Forman
Corporation into Brown-Forman, Inc., incorporated by reference
to Registrant's 10-K, filed on July 19, 1994
4(j) Registrant's By-Laws, as amended and restated on May 25, 1988,
incorporated by reference to Registrant's 10-K, filed on July
26, 1993, as further amended and currently in effect,
incorporated by reference to Registrant's Current Report on
Form 8-K, filed June 3, 1998
4(k) Form of Indenture dated as of March 1, 1994, between the
Registrant and The First National Bank of Chicago, as Trustee,
incorporated by reference to Registrant's Form S-3
(Registration No. 33-52551), filed on March 8, 1994
</TABLE>
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to
II-4
<PAGE> 7
such information in the Registration Statement; PROVIDED, HOWEVER, that (i)
and (ii) do not apply if the Registration Statement is on Form S-3 or Form
S-8 and the information required to be included in a post-effective
amendment by (i) or (ii) is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement;
(2) that, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof;
(3) to remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering; and
(4) that, for purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual reports pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
If a director, officer or controlling person of the Registrant asserts a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will
be governed by the final adjudication of such issue.
II-5
<PAGE> 8
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Brown-Forman Corporation, certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Louisville, Commonwealth
of Kentucky, on October 13, 1999.
BROWN-FORMAN CORPORATION
*By: /s/ Owsley Brown II
---------------------
Owsley Brown II
Chairman and Chief Executive Officer
Director
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
Signature Title
/s/ Steven B. Ratoff Executive Vice President and Chief
- ----------------------------- Financial Officer (Principal Financial
Steven B. Ratoff Officer and Principal Accounting
Officer)
/s/ Jerry A. Abramson
- -----------------------------
*Jerry A. Abramson Director
/s/ Barry D. Bramley
- -----------------------------
*Barry D. Bramley Director
/s/ George Garvin Brown III
- -----------------------------
*George Garvin Brown III Director
II-6
<PAGE> 9
/s/ Owsley Brown II
- ------------------------------
*Owsley Brown II Director
/s/ Donald G. Calder
- ------------------------------
*Donald G. Calder Director
/s/ Owsley Brown Frazier
- ------------------------------
*Owsley Brown Frazier Director
/s/ Richard P. Mayer
- ------------------------------
*Richard P. Mayer Director
/s/ Stephen E. O'Neil
- ------------------------------
*Stephen E. O'Neil Director
/s/ William M. Street
- ------------------------------
*William M. Street Director
/s/ Dace Brown Stubbs
- ------------------------------
*Dace Brown Stubbs Director
/s/ James S. Welch
- ------------------------------
*James S. Welch Director
*By: /s/ Nelea A. Absher
-------------------------
Nelea A. Absher
Assistant Vice President
and Assistant Secretary
Attorney-in-Fact For Each
October 12, 1999
II-7
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
5 Opinion of Counsel, Ogden Newell & Welch
23(a) Consent of PricewaterhouseCoopers LLP, independent
accountants of Registrant
23(b) Consent of Ogden Newell & Welch, counsel to Registrant
(included in Exhibit 5)
24(a) Power of attorney authorizing Steven B. Ratoff,
Michael B. Crutcher or Nelea A. Absher to sign the
Registration Statement in any and all capacities on
behalf of Jerry E. Abramson, Barry D. Bramley, Geo.
Garvin Brown III, Owsley Brown II, Donald G. Calder,
Owsley Brown Frazier, Richard P. Mayer, Stephen E.
O'Neil, William M. Street, Dace Brown Stubbs and
James S. Welch
24(b) Certified resolution of Registrant's Board of Directors
authorizing the execution of powers of attorney
99 Brown-Forman Corporation Omnibus Compensation Plan, as
amended through September 23, 1999
</TABLE>
II-8
<PAGE> 1
EXHIBIT 5
[Letterhead of Ogden Newell & Welch]
October 13, 1999
Brown-Forman Corporation
850 Dixie Highway
Louisville, Kentucky 40210
RE: BROWN-FORMAN CORPORATION OMNIBUS COMPENSATION PLAN REGISTRATION
STATEMENT ON FORM S-8 FOR SHARES AND ASSOCIATED OPTIONS
Ladies and Gentlemen:
We are acting as counsel for Brown-Forman Corporation, a Delaware
corporation (the "Company") in connection with its registration under the
Securities Act of 1933, as amended, of certain shares of, and associated options
for, Class B Common Stock (the "Shares"), which are proposed to be issued
pursuant to the Company's Omnibus Compensation Plan (the "Plan"). The Shares
shall be registered on the Company's Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission (the "Commission") with respect to the Shares.
In rendering this opinion, we have examined instruments, documents, and
records which we deemed relevant and necessary for the basis of our opinion
hereinafter expressed. In such examination, we have assumed the following: (a)
the authenticity of original documents and the genuineness of all signatures;
(b) the conformity to the originals of all documents submitted to us as copies;
and (c) the truth, accuracy and completeness of the information, representations
and warranties contained in the documents.
It is our opinion that:
(a) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware;
<PAGE> 2
(b) the Shares are duly authorized by the Restated Certificate
of Incorporation of the Company; and
(c) upon the effectiveness of the Registration Statement and
when issued, the Shares will be legally and validly issued,
fully paid and non-assessable.
Insofar as this opinion relates to securities to be issued in the
future, we have assumed that all applicable laws, rules and regulations in
effect at the time of such issuance shall be the same as such laws, rules and
regulations as are in effect on the date hereof.
Nothing in this opinion is intended to apply to any disposition of the
Shares which any recipient thereof may propose to make.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and as an exhibit to any filing made by the Company under
the Securities or "Blue Sky" laws of any state or jurisdiction.
This opinion is furnished to you in connection with the filing of the
Registration Statement and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose, except as expressly provided in the preceding
paragraph, without our express written consent, and no party other than you is
entitled to rely upon it. This opinion is rendered to you as of the date hereof,
and we undertake no obligation to advise you of any change, whether legal or
factual.
Very truly yours,
/s/ OGDEN NEWELL & WELCH
---------------------------
OGDEN NEWELL & WELCH
2
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Brown-Forman Corporation of our report dated May 26, 1999 relating
to our audits of the consolidated financial statements and financial statement
schedule of Brown-Forman Corporation as of April 30, 1999, 1998, and 1997, and
for the years ended April 30, 1999, 1998, and 1997, which report is included in
the Company's Annual Report on Form 10-K filed July 21, 1999.
/s/ PricewaterhouseCoopers LLP
Louisville, Kentucky
October 13, 1999
<PAGE> 1
EXHIBIT 24(a)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, as of the 15th day of June, 1999, the
undersigned each constitutes and appoints Steven B. Ratoff, Michael B. Crutcher,
and Nelea A. Absher, and each of them, his or her true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities:
(a) to sign and file with the Securities and Exchange Commission one
or more Registration Statements under the Securities Act of 1933,
as amended, on Form S-8 or such other form as such
attorneys-in-fact, or any of them, may deem necessary or
desirable, and any and all related amendments, exhibits, or
appendices (including post-effective amendments) in connection
with the Brown-Forman Omnibus Compensation Plan, as amended (the
"Plan") and the shares of common stock of Brown-Forman
Corporation to be used for awards pursuant to the Plan; and
(b) to prepare, execute and file with the appropriate securities
commissions in states or other jurisdictions any forms or filings
(including any amendments or exhibits) necessary or useful in
complying with state or foreign securities laws in connection
with the Plan and share of Common Stock to be used for awards
under the Plan,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done to the end that such Registration Statement(s) shall comply
with the Securities Act of 1933, as amended, and the applicable rules and
regulations adopted or issued pursuant thereto, as fully and to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his or her substitute(s), may lawfully do or cause to be done by virtue of
this power of attorney.
This power of attorney may be signed in one or more counterparts, which
counterparts together shall constitute one instrument.
<PAGE> 2
BROWN-FORMAN CORPORATION
By: /s/ Owsley Brown II
------------------------------------
Owsley Brown II
Chairman & Chief Executive Officer
/s/ Jerry E. Abramson /s/ Barry D. Bramley
- --------------------------------------- ---------------------------------
Jerry E. Abramson, Director Barry D. Bramley, Director
/s/ George Garvin Brown, III /s/ Owsley Brown II
- --------------------------------------- ---------------------------------
George Garvin Brown III, Director Owsley Brown II, Director
/s/ Donald G. Calder /s/ Owsley Brown Frazier
- --------------------------------------- ---------------------------------
Donald G. Calder, Director Owsley Brown Frazier, Director
/s/ Richard P. Mayer /s/ Stephen E. O'Neil
- --------------------------------------- ---------------------------------
Richard P. Mayer, Director Stephen E. O'Neil, Director
/s/ William M. Street /s/ Dace Brown Stubbs
- --------------------------------------- ---------------------------------
William M. Street, Director Dace Brown Stubbs, Director
/s/ James S. Welch
- ---------------------------------------
James S. Welch, Director
2
<PAGE> 1
EXHIBIT 24(b)
CERTIFIED COPY OF RESOLUTIONS ADOPTED BY
UNANIMOUS WRITTEN CONSENT TO ACTION
BY THE BOARD OF DIRECTORS OF
BROWN-FORMAN CORPORATION
Following are excerpts of resolutions adopted by the Board of Directors
of Brown-Forman Corporation on June 15, 1999 by unanimous written consent.
WHEREAS, in connection with the increase in the number of shares that
may be used for awards under the Plan, the Securities Act of 1933
requires the Company to file a new registration statement on Form S-8
relating to the additional shares that would be used for awards under
the Plan (the "Registration Statement");
NOW, THEREFORE, BE IT:
RESOLVED, that following the stockholders' approval of the proposed
share increase and reapproval of the performance measures, the
appropriate officers of the Company, with the assistance of its
accountants and counsel, are hereby authorized to prepare, execute, and
file the Registration Statement with the Securities and Exchange
Commission on behalf of the Company; and
RESOLVED FURTHER, that Michael B. Crutcher, Senior Vice President,
General Counsel, and Secretary of the Company, be and hereby is
appointed and designated as a person duly authorized to receive
communications and notices from the Securities and Exchange Commission
with respect to any documents relating to the Registration Statement;
and
RESOLVED FURTHER, that the Company, and each director and officer who
may be required to execute any filings or documents relating to the
Registration Statement and any amendments thereof or appendices thereto
be, and hereby is, authorized to execute a power of attorney appointing
Steven B. Ratoff, Michael B. Crutcher, and Nelea A. Absher, and each of
them, his or her true and lawful attorneys and agents:
(a) to execute in his or her name, and on behalf of the Company, any
and all documents relating to the Amended Plan, and to
<PAGE> 2
file the same with the Securities and Exchange Commission; and
(b) to execute in his or her name, and on behalf of the Company, any
and all documents relating to the Amended Plan, and to file the
same with any state or foreign securities commissions.
I, Nelea A. Absher, being duly elected and acting Assistant Vice President
and Assistant Secretary of Brown-Forman Corporation, do hereby certify that the
above is a true and complete copy of certain resolutions adopted by unanimous
written consent of the Board of Directors of said corporation, pursuant to
section 141(f) of the Delaware Corporation Code, and that said resolutions are
still in full force and effect.
In testimony whereof, witness my hand this the 12th day of October, 1999.
/s/ Nelea A. Absher
-----------------------------------
Nelea A. Absher
Assistant Vice President and
Assistant Secretary
Brown-Forman Corporation
2
<PAGE> 1
EXHIBIT 99
BROWN-FORMAN OMNIBUS COMPENSATION PLAN
Brown-Forman Corporation
May 1, 1994
(As Amended July 24, 1995, June 15, 1999 and September 23, 1999)
<PAGE> 2
BROWN-FORMAN OMNIBUS COMPENSATION PLAN
Unless the context clearly requires otherwise, references to "Sections" and
"Articles" are to sections and articles of this plan, and capitalized terms have
the meaning assigned to them below. All references to statutes or regulations
mean those statutes or regulations as amended from time to time, and any
successors to those statutes or regulations.
ARTICLE 1 - ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1 ESTABLISHMENT: Brown-Forman Corporation, a Delaware corporation (the
"Company"), hereby establishes an incentive compensation plan to be known as the
"Brown-Forman Omnibus Compensation Plan" (the "Plan"), as set out in this
document. The Plan permits the Plan Administrator to grant Awards (as defined
below).
1.2 OBJECTIVES: The Plan's objectives are:
(a) to optimize the Company's profitability and growth through
incentives which are consistent with the Company's goals and which link the
personal interests of Participants to those of the Company's shareholders;
(b) to provide Participants with an incentive for excellence in
individual performance;
(c) to promote teamwork among Participants;
(d) to provide flexibility to the Company in its ability to motivate,
attract, and retain the services of Participants who make significant
contributions to the Company's success; and
(e) to allow Participants to share in the Company's success.
1.3 DURATION: Subject to:
(a) approval by the Company's shareholders; and
(b) the Board's right to amend or terminate the Plan at any
time pursuant to Article 12, the Plan shall take effect as of the Effective
Date, and remain in effect until Participants have bought or acquired all Shares
subject to the Plan. The Plan Administrator may not, however, grant any Awards
under the Plan on or after April 30, 2005.
<PAGE> 3
ARTICLE 2 - DEFINITIONS
Whenever used in the Plan, the following terms shall have the following
meanings:
2.1 "ADJUSTED MARKET VALUE" is defined in Section 11.3(b).
2.2 "ANNUAL INCENTIVE AWARD" means a short-term incentive Award granted
under Article 6.
2.3 "AWARD" means, individually or collectively, a grant under this
Plan of Annual Incentive Awards and/or Long Term Incentive Awards.
2.4 "AWARD AGREEMENT" means an agreement entered into by the Company
and a Participant setting forth the terms applicable to Awards granted under
this Plan.
2.5 "AWARD OPPORTUNITY" means the total Award that a Participant may
earn under the Plan, as established by the Plan Administrator.
2.6 "BASE PERIOD" means the three-month period ending three months
prior to the first date on which a Potential Change in Control occurs.
2.7 "BASE PERIOD FAIR MARKET VALUE" means, with respect to an Option
(or SAR), the average Fair Market Value per Share for each date on which Shares
were traded during the Base Period, or portion of the Base Period, during which
the Option (or SAR) was outstanding. If an Option (or SAR) is granted during the
Restricted Period prior to a Change in Control, the Base Period Fair Market
Value for the Option (or SAR) shall be its exercise price (or grant price).
2.8 "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in Rule 13d-3 under the Exchange Act.
2.9 "BOARD" means the Company's board of directors.
2.10 "BOARD COMPENSATION COMMITTEE" means the members of the Board who
are serving as its Compensation Committee at the time of the action to be taken,
as that Committee is described in the Company's then-latest proxy statement.
2.11 "CAUSE" means with respect to any Participant:
(a) the willful and continued failure of the Participant to
perform substantially the Participant's duties with the Company (other than any
such failure resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to the Participant by
the Board, the chief executive officer of the Company or the senior officer of
the Company supervising the Participant, which demand specifically identifies
the manner in which the Board, the chief executive officer of the Company or the
senior officer of the Company supervising the Participant believes that the
Participant has not substantially performed the Participant's duties, or
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(b) the engaging by the Participant in illegal conduct or gross
misconduct that is materially and demonstrably injurious to the Company.
For purposes of this definition, no act or failure to act on the part of the
Participant shall be considered "willful" unless it is done, or omitted to be
done, by the Participant in bad faith or without reasonable belief that the
Participant's action or omission was in the best interests of the Company. Any
act or failure to act based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the chief executive officer or
a senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Participant in good faith and in the best interests of the Company.
2.12 "CHANGE IN CONTROL" of the Company means, and shall be deemed to
have occurred upon, any of the following events:
(a) individuals who, as of June 30, 1999, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director after
June 30, 1999 and whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the Directors
then comprising the Incumbent Board shall be considered a member of the
Incumbent Board, but excluding, for this purpose, any individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of Directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board;
(b) consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of assets or stock of another entity
(a "Business Combination"), in each case, unless, following the Business
Combination,
(1) all or substantially all of the Beneficial Owners of the
combined voting power of the then Outstanding Voting Securities of the Company
immediately before the Business Combination beneficially own, directly or
indirectly, more than 50% of the combined voting power of the Outstanding Voting
Securities of the corporation resulting from the Business Combination
(including, without limitation, an entity that as a result of such transaction
owns the Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the same
proportions that they owned the Outstanding Voting Securities of the Company
immediately before the Business Combination,
(2) no Person, excluding any employee benefit plan (or related
trust) of the Company or such corporation resulting from the Business
Combination, beneficially owns, directly or indirectly, 20% or more of the
combined voting power of the Outstanding Voting Securities of the corporation
resulting from the Business Combination except to the extent that such ownership
existed before the Business Combination, and
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(3) at least a majority of the directors of the corporation
resulting from the Business Combination were Directors on the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for the Business Combination; or
(4) the approval by the Company's shareholders of a plan of
liquidation and dissolution.
2.13 "CODE" means the Internal Revenue Code of 1986, as amended.
2.14 "COMPANY" means Brown-Forman Corporation, a Delaware corporation,
and to the extent it is appropriate in the context of the Plan provision, the
Company's Subsidiaries, as well as any successor to any of such entities as
provided in Section 15.4.
2.15 "CONSTRUCTIVE DISCHARGE" means, with respect to any Participant,
without the Participant's written consent:
(a) a reduction by more than 25%, in the aggregate, in the
Participant's annual salary and bonus opportunity, as in effect as of the 120th
day immediately preceding the Change in Control; or
(b) the failure to pay the Participant his salary or bonus (if
any) according to the regular practices of the Company in effect for its
employees at the time.
provided, however, that any of the foregoing events that is a result of an
isolated and inadvertent action not taken in bad faith and which is remedied by
the Company promptly after receipt of notice thereof given by the Participant
shall not constitute a Constructive Discharge.
2.16 "DESIGNATED EXECUTIVE OFFICERS" means those Executive Officers
designated by the Plan Administrator whose Awards will comply with Code Section
162(m).
2.17 "DIRECTOR" means any individual who is a Board member.
2.18 "DISABILITY" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan.
2.19 "EFFECTIVE DATE" means May 1, 1994.
2.20 "EMPLOYEE" means any employee of the Company.
2.21 "EXCHANGE ACT" means the Securities Exchange Act of 1934.
2.22 "EXECUTIVE OFFICER" means an Employee whom the Board has
determined is an "officer" as defined in Rule 16a-1(f) under the Exchange Act,
as of the date of vesting and/or payout of an Award, as applicable. Executive
Officers are those Employees who are required to file reports of
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changes in beneficial ownership of Shares with the Securities and Exchange
Commission on Forms 4 and 5.
2.23 "FAIR MARKET VALUE" means the closing sale price on the principal
securities exchange on which the Shares are traded on the relevant date (or, if
no Shares are traded on the relevant date, the last previous day on which a sale
was reported).
2.24 "FREESTANDING SAR" means an SAR granted independently of any
Options, as described in Section 7.5.
2.25 "INCENTIVE STOCK OPTION" or "ISO" means an option to buy Shares
granted under Section 7.4 which is designated an Incentive Stock Option and
which is intended to meet the requirements of Code Section 422.
2.26 "INDEXED OPTION" means an Option with an exercise price which
either increases by a fixed percentage over time or changes by reference to a
published index.
2.27 "INSIDER" means an individual who is, on the relevant date, an
officer, Director or 10% Beneficial Owner of any class of the Company's equity
securities that is registered pursuant to Section 12 of the Exchange Act, all as
defined under Section 16 of the Exchange Act.
2.28 "KEY EMPLOYEE POOL" is defined in Section 4.1.
2.29 "KEY EMPLOYEES" means all officers and other key Employees of the
Company.
2.30 "LONG TERM INCENTIVE AWARD" means a long term incentive Award
granted under Article 7.
2.31 "MARKET VALUE UNIT" or "MVU" means an Award, designated as an MVU,
granted pursuant to Section 7.3.
2.32 "NON-EMPLOYEE DIRECTOR" means a Director who is not an Employee.
2.33 "NON-QUALIFIED STOCK OPTION" or "NQSO" means an option to buy
Shares granted under Section 7.4 which is not intended to meet the requirements
of Code Section 422.
2.34 "OPTION" means an Incentive Stock Option, Indexed Option or a
Non-qualified Stock Option, as described in Section 7.4.
2.35 "OPTION PRICE" means the price at which a Participant may buy a
Share under an Option.
2.36 "OTHER EMPLOYEE POOL" is defined in Section 4.1.
2.37 "OTHER EMPLOYEES" means all Employees who are not Key Employees.
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2.38 "OUTSTANDING VOTING SECURITIES" means, with respect to a
corporation, the then outstanding voting securities entitled to vote generally
in the election of directors of the corporation.
2.39 "PARTICIPANT" means an Employee who has outstanding an Award
granted under the Plan. The term "PARTICIPANT" shall not include Non-employee
Directors other than a Non-employee Director who has an outstanding Award
granted while an Employee.
2.40 "PERFORMANCE-BASED EXCEPTION" means the performance-based
exception from the tax deductibility limitations of Code Section 162(m).
2.41 "PERFORMANCE PERIOD" means such period of time as determined by
the Plan Administrator.
2.42 "PERFORMANCE UNIT" means an Award granted to a Participant as
described in Section 7.6.
2.43 "PERIOD OF RESTRICTION" means the period during which the transfer
of Shares of Restricted Stock is limited in some way (based on the passage of
time, the achievement of performance goals, or upon the occurrence of other
events as determined by the Plan Administrator), and during which the Shares are
subject to a substantial risk of forfeiture, as provided in Section 7.2.
2.44 "PERSON" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) thereof.
2.45 "PLAN ADMINISTRATOR" means:
(a) for Designated Executive Officers, the Board Compensation
Committee; and
(b) for all other Participants, such other persons or
committees appointed by the Board or the Compensation Committee, to administer
the Plan with respect to grants of Awards.
2.46 "PLAN YEAR" means the Company's Fiscal Year.
2.47 "POTENTIAL CHANGE IN CONTROL" of the Company means, and shall be
deemed to have occurred upon, any of the following events:
(a) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control of the Company;
(b) any Person (including the Company) publicly announces an
intention to take or to consider taking actions which if consummated would
constitute a Change in Control of the Company;
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(c) any Person (other than the Company, a Person who as of July
1, 1999 is reporting its Outstanding Voting Securities on Schedule 13D or who
subsequently files a Schedule 13D solely by virtue of acquiring Outstanding
Voting Securities from such a Person under the laws of descent and distribution
or upon liquidation of a trust, or a Person reporting its acquisition of
Outstanding Voting Securities on Schedule 13G) becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing 5% or more of
the combined voting power of the Outstanding Voting Securities of the Company;
or
(d) the Board adopts a resolution to the effect that, for purposes
of this Plan, a potential Change in Control of the Company has occurred.
2.48 "RESTRICTED PERIOD" shall mean the period beginning upon the
occurrence of a Potential Change in Control and ending at the end of the twelfth
month following the month in which the Potential Change in Control occurs, if a
Change in Control has not occurred prior to the end of such month.
Notwithstanding the foregoing, in the event of a Potential Change in Control
described in Section 2.47(a), the Restricted Period shall end upon the first to
occur of the end of the period described in the immediately preceding sentence
or the sixtieth day following the termination of the agreement described in
Section 2.47(a). If a Change in Control occurs before the end of the twelfth
month following the Potential Change in Control, the Restricted Period shall
continue until all Options (and SAR's) granted after June 30, 1999 have been
exercised or canceled.
2.49 "RESTRICTED STOCK" means an Award granted to a Participant
pursuant to Section 7.2.
2.50 "RETIREMENT" shall have the meaning ascribed to such term in the
Participant's governing Company sponsored retirement plan.
2.51 "SHARES" means the shares of the Company's Class A or Class B
Common Stock, or any combination of Class A or Class B Common Stock, as the Plan
Administrator determines.
2.52 "STOCK APPRECIATION RIGHT" or "SAR" means an Award, granted alone
or in connection with a related Option, designated as an SAR, pursuant to
Section 7.5.
2.53 "SUBSIDIARY" means any corporation, partnership, joint venture,
affiliate, or other entity in which the Company has an ownership voting
interest, and which the Plan Administrator designates as a participating entity
in the Plan.
2.54 "TANDEM SAR" means an SAR granted in connection with a related
Option pursuant to Section 7.5. A holder exercising a Tandem SAR must forfeit
the right to buy a Share under the related Option; conversely, a holder of a
Tandem SAR buying a Share under the Option will have the Tandem SAR canceled
proportionately.
2.55 "TARGET INCENTIVE AWARD" is defined in Section 5.7(c).
Additional definitions related to performance measures appear in Section 8.4.
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ARTICLE 3 - ADMINISTRATION
3.1 THE PLAN ADMINISTRATOR:
(a) Disinterested Administration: For Executive Officers, the Plan
Administrator shall be a committee comprising Directors who are eligible to
administer the Plan pursuant to Rule 16b-3(c)(2) under the Exchange Act. If for
any reason such committee does not qualify to administer the Plan as
contemplated by Rule 16b-3(c)(2) of the Exchange Act, however, the Board may
appoint a new committee so as to comply with Rule 16b-3(c)(2).
(b) Code Compliance: Awards to Designated Executive Officers must be
administered by a committee that consists of members who are "outside directors"
under Code Section 162(m).
(c) Awards to Participants other than Executive Officers: For
Participants other than Executive Officers, the Plan Administrator shall be the
Board's Management Compensation Review Committee, with the assistance of the
Corporate Compensation Department, or such other committees, corporate
departments, or persons as the Board may from time to time determine.
3.2 AUTHORITY: Except as limited by law or by the Company's Certificate of
Incorporation or By-laws, and subject to the Plan's terms, the Plan
Administrator shall have full power to:
(a) select Participants;
(b) name Designated Executive Officers;
(c) determine the sizes and types of Awards;
(d) determine the terms and conditions of Awards in a manner consistent
with the Plan;
(e) construe and interpret the Plan and any agreement or instrument
entered into under the Plan as they apply to Employees;
(f) establish, amend, or waive rules and regulations for the Plan's
administration as they apply to Employees;
(g) (subject to Article 11 and Article 12) amend the terms and
conditions of any outstanding Award to the extent such terms and conditions are
within the Plan Administrator's discretion;
(h) determine the length of the Performance Period for Executive
Officers;
(i) determine the length of the Performance Period(s); and
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(j) make all other determinations which may be necessary or
advisable to administer the Plan as it applies to Employees.
3.3 DECISIONS BINDING: All determinations and decisions made by the
Plan Administrator pursuant to the Plan and all related Board orders and
resolutions shall be final, conclusive, and binding on all persons, including
the Company, its shareholders, Employees, Participants, and their estates and
beneficiaries.
ARTICLE 4 - SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 SHARES AVAILABLE FOR GRANTS: Subject to adjustment as provided in
Section 4.4, the number of Shares or share equivalents (Award units whose
underlying value is based on Shares) reserved for issuance to Participants under
the Plan shall be 3,400,000. The Shares and share equivalents available for
issuance to Participants as of September 1, 1999, shall be divided into a pool
of 2,750,000 available for awards granted on or after that date to Key Employees
(the "Key Employee Pool") and a pool of 650,000 available for awards granted on
or after that date to Other Employees (the "Other Employee Pool"), subject in
each case to adjustment pursuant to Section 4.4 after September 1, 1999.
4.2 DESIGNATED EXECUTIVE OFFICER MAXIMUMS: Unless and until the Plan
Administrator determines that an Award to a Designated Executive Officer shall
not be designed to comply with the Performance-Based Exception, the following
rules shall apply to grants of such Awards:
(a) Shares: For any Plan Year, any Designated Executive Officer may
receive, pursuant to an Award, Shares, MVU's, stock Options and/or SAR's for no
more than 110,000 Shares in the aggregate.
(b) Cash: The maximum aggregate cash award with respect to Annual
Incentive Awards in any Plan Year which may be made to any Designated Executive
Officer shall be $1,200,000. The maximum aggregate cash award with respect to
cash pay-outs of long term Awards in any Plan Year which may be made to any
Designated Executive Officer shall be $700,000.
4.3 LAPSED AWARDS: If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason (except the termination of a
Tandem SAR upon exercise of the related Option, or the termination of a related
Option upon exercise of the corresponding Tandem SAR), any Shares subject to
such Award shall be available for the grant of another Award under the Plan,
except that this provision shall not be executed to increase the maximum number
of authorized shares under Section 4.2(a). Without limiting the generality of
the foregoing, if such cancellation, termination, expiration or lapse occurs on
or after September 1, 1999, then; (i) if such Award was granted before September
1, 1999, or was granted on or after that date to a Key Employee, such Shares
shall be added back to the Key Employee Pool and (ii) if such Award was granted
on or after September 1, 1999, to an Other Employee, such Shares shall be added
back to the Other Employee Pool.
4.4 ADJUSTMENTS IN SHARES AUTHORIZED: If the Company's capitalization
changes for a reason such as:
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(a) a stock split;
(b) a corporate transaction such as a merger, consolidation,
separation (including a spin-off), or other distribution of the Company's stock
or property;
(c) a reorganization (whether or not such reorganization comes within
the definition of such term in Code Section 368); or
(d) a partial or complete liquidation of the Company,
the Plan Administrator shall then adjust the number and class of Shares which
may be delivered under Sections 4.1 and 4.2 and the number and class of and/or
price of Shares subject to outstanding Awards granted under the Plan, as it
deems appropriate and equitable to prevent dilution or enlargement of rights --
but the number of Shares subject to any Award shall always be a whole number.
ARTICLE 5 - ELIGIBILITY AND PARTICIPATION
5.1 EMPLOYEE ELIGIBILITY: Participation in this Plan is open to all Key
Employees and Other Employees of the Company, as the Plan Administrator
determines, including Employees who are Directors and Employees who reside in
countries other than the United States of America.
5.2 NON-EMPLOYEE ELIGIBILITY: Directors who are not Employees may elect to
defer compensation as described in Section 10.2, but may not otherwise
participate in the Plan.
5.3 ACTUAL PARTICIPATION: The Plan Administrator may from time to time
select, from all eligible Employees, those to whom Awards shall be granted and
shall determine the nature and amount of each Award Opportunity and Award.
5.4 EMPLOYMENT:
(a) Rights Not Affected: Nothing in the Plan shall interfere with or
limit in any way the Company's right to terminate any Participant's employment
at any time, nor confer upon any Participant any right to continue in the
Company's employ.
(b) Transfer Not Termination: A transfer of a Participant's employment
between the Company and a Subsidiary, or between Subsidiaries, shall not be
deemed to be a termination of employment. Upon such a transfer, the Plan
Administrator may, subject to Section 12.3, make such adjustments to outstanding
Awards as it deems appropriate to reflect the changed reporting relationships.
(c) Transfer Between Key and Other Employee: A transfer of a
Participant from a Key to an Other or Other to Key, position, shall not be
deemed to be a termination of employment. Upon such transfer, the Plan
Administrator may, subject to Section 12.3, make such adjustments to outstanding
Awards as it deems appropriate to reflect the changed reporting relationships.
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(d) No Right to Award: An Employee's status as an Employee confers
no right on that Employee to receive an Award under this Plan, or, having
received any Award, to receive a future Award.
5.5 PRO RATA PLAN YEAR OR PERFORMANCE PERIOD PARTICIPATION: The Plan
Administrator may allow Employees other than Designated Executive Officers who
become eligible after the Plan Year or Performance Period begins to participate
under this Article on a pro rata basis. Such situations include, but are not
limited to:
(a) new hires;
(b) the promotion of an Employee from a position which did not
previously meet the eligibility criteria; or
(c) the transfer of an Employee from an affiliate which does not
participate in the Plan.
5.6 CHANGE IN POSITION:
(a) If, during a Plan Year or Performance Period, a Participant
other than a Designated Executive Officer changes employment positions to one
which corresponds to a level of Award Opportunity different than that existing
on the first day of such Plan Year or Performance Period, the Participant's
Award Opportunity may be adjusted by the Plan Administrator to reasonably
reflect the appropriate level of the Participant's Award Opportunity for the
entire Plan Year or Performance Period.
(b) Except as provided in Section 12.3, the Plan Administrator
may not adjust the Award Opportunity of a Designated Executive Officer.
5.7 AWARD OPPORTUNITIES:
(a) Timing: As soon as practicable in each Plan Year or Performance
Period, the Plan Administrator shall establish an Award Opportunity for each
Participant. As soon as is necessary to comply with Code Section 162(m), the
Plan Administrator shall establish an Award Opportunity for each Designated
Executive Officer.
(b) Measures: An Award Opportunity shall be a function of one or
more performance measures and goals selected by the Plan Administrator, and
shall reflect the Participant's job responsibilities and opportunity and
authority to affect overall financial results. For Designated Executive
Officers, the Plan Administrator can apply performance measures only as set out
in Article 8.
(c) Alignment: Except as provided by Section 12.3, the Plan
Administrator shall align the potential levels of achievement of the performance
goals with the Award Opportunities (the "Target Incentive Award"), such that the
level of achievement of the pre-established performance goals at the end of the
Plan Year or Performance Period will determine the final Award amounts.
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5.8 AWARD DETERMINATIONS:
(a) At the end of each Plan Year or Performance Period, the Plan
Administrator shall certify, in writing, the extent to which the performance
goals have been achieved for Designated Executive Officers.
(b) After that, the final Award shall be computed for each
Participant as determined by the Plan Administrator according to the
pre-established performance measures and goals and the requirements of this
Plan.
(c) Award amounts may vary above or below the Target Incentive
Award based on the level of achievement of the applicable pre-established
corporate, division, business unit, and/or individual goals or financial
measures, or such other measures as the Plan Administrator shall, from time to
time, determine, unless otherwise limited by the Plan.
(d) For Designated Executive Officers, the final Award
determination shall be solely a function of the degree to which the
pre-established performance measures and goals have been achieved -- but the
Plan Administrator may adjust such final Award determinations downward.
ARTICLE 6 - ANNUAL INCENTIVE AWARDS
6.1 PAYMENT OF AWARDS:
(a) Awards shall be paid in cash within 90 calendar days after the
end of each Plan Year.
(b) No Participant or any other party claiming an interest in
amounts earned under the Plan shall have any interest whatsoever in any specific
Company asset. To the extent that any party acquires a right to receive payments
under the Plan, such right shall be equivalent to that of an unsecured general
creditor of the Company.
6.2 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT:
(a) If a Participant's employment is terminated by reason of
Disability, Retirement, involuntary termination other than for Cause, or death,
the Plan Administrator may prorate the final Award determination made pursuant
to Section 5.8. The prorated payout shall be based upon the length of time that
the Participant participated in the Plan during the Plan Year and the level of
achievement of applicable performance goals. Such prorated Award shall be
permitted for Designated Executive Officers only to the extent permitted in
Section 12.3.
(b) The final Award determined pursuant to this Section shall be
paid in cash, within 90 calendar days following the end of the Plan Year in
which employment termination occurs or such other date as determined by the Plan
Administrator.
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6.3 TERMINATION OF EMPLOYMENT FOR OTHER REASONS: If a Participant's
employment is terminated before the end of the Plan Year for any reason other
than those reasons described in Section 6.2 (including for reason of a leave of
absence granted by the Company), the Participant shall forfeit all of the
Participant's rights to a final Award for the Plan Year then in progress. The
Plan Administrator may, however, pay a prorated final Award for the portion of
the Plan Year that the Participant was employed by the Company, computed as
determined by the Plan Administrator. Such prorated Award shall be permitted for
Designated Executive Officers only to the extent permitted in Section 12.3.
ARTICLE 7 - LONG TERM INCENTIVE AWARDS
7.1 GENERALLY:
(a) Grant of Awards: Subject to Article 4, the Plan Administrator,
at any time and from time to time, may, in its discretion, grant or award
Options, MVU's, Restricted Stock, Freestanding SAR's, Tandem SAR's, Performance
Units, cash, or any combination thereof to Participants in such amounts as the
Plan Administrator shall determine. The Plan Administrator may apply Performance
Periods and performance measures, and may set threshold, target, and maximum
goals for each type of Award, as it chooses.
(b) Source of Shares: The source of Shares delivered to
Participants under this Plan shall be limited to Shares purchased by the Company
from time to time for the purpose of funding the operation of this Plan. The
Company shall maintain a separate accounting of Shares purchased for this
purpose.
(c) Termination of Employment: Each Participant's Award Agreement
shall set out the extent to which the Participant may (as the case may be):
(1) receive unvested Restricted Shares;
(2) receive the value of MVU's or Performance Units;
(3) exercise Options;
(4) exercise SAR's; or
(5) receive payment in cash;
following termination of employment with the Company and/or its Subsidiaries. If
a Designated Executive Officer retires holding Shares of Restricted Stock which
qualify for the Performance-Based Exception, however, those Shares shall vest on
the schedule set when they were granted and not sooner.
Such provisions shall be determined in the Plan Administrator's sole
discretion, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Awards
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granted or issued pursuant to this Article, and may reflect distinctions based
on the reasons for termination of employment.
(d) Other Restrictions: Subject to Article 8, the Plan
Administrator may impose such other conditions and/or restrictions on any
Long-Term Incentive Awards granted pursuant to the Plan as the Plan
Administrator deems advisable, including time-based restrictions on vesting
following the attainment of the performance goals, and/or restrictions under
applicable Federal or state securities laws.
7.2 RESTRICTED STOCK:
(a) Award Agreement: Each Restricted Stock grant shall be evidenced
by an Award Agreement that shall specify the Period(s) of Restriction, the
number of Shares of Restricted Stock granted, and such other terms as the Plan
Administrator shall determine.
(b) Non-Transferability: Except as provided in this Article, the
Shares of Restricted Stock granted herein may not be sold, transferred, pledged,
assigned, or otherwise alienated until the end of the applicable Period of
Restriction established by the Plan Administrator and specified in the Award
Agreement, or upon earlier satisfaction of any other conditions, as specified by
the Plan Administrator and set out in the Award Agreement. During a
Participant's lifetime, only that Participant may exercise any rights with
respect to the Restricted Stock granted to that Participant.
(c) Other Restrictions on Restricted Stock:
(1) The Company shall keep custody of the certificates
representing Shares of Restricted Stock until all conditions and/or restrictions
applicable to such Shares have been satisfied.
(2) Except as otherwise provided in this Article, Shares of
Restricted Stock covered by each Restricted Stock grant made under the Plan
shall become freely transferable by the Participant after the last day of the
applicable Period of Restriction.
(3) For the Plan Year ending April 30, 1995, the number of
shares of Restricted Stock to be awarded under this Section shall not exceed the
maximum number that could have been awarded under the Brown-Forman Corporation
Restricted Stock Plan in effect on April 30, 1994, and the conditions imposed
with respect to such shares shall not result in compensation payable under any
Award that exceeds the compensation that would have been payable under the terms
of the Brown-Forman Corporation Restricted Stock Plan in effect on April 30,
1994.
(d) Voting Rights: During the Period of Restriction, Participants
holding Shares of Restricted Stock may exercise full voting rights with respect
to those Shares.
(e) Dividends and Other Distributions:
(1) During the Period of Restriction, Participants holding
Shares of Restricted Stock may be credited with regular cash dividends paid with
respect to the underlying Shares
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while they are so held. The Plan Administrator may apply any restrictions to the
dividends that it deems appropriate.
(2) Without limiting the generality of the preceding paragraph,
if the grant or vesting of Restricted Shares granted to a Designated Executive
Officer is designed to comply with the requirements of the Performance-Based
Exception, the Plan Administrator may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to such Restricted
Shares, such that the dividends and/or the Restricted Shares maintain
eligibility for the Performance-Based Exception.
(3) If any dividend constitutes a "derivative security" or an
"equity security" pursuant to Rule 16(a) under the Exchange Act, such dividend
shall be subject to a vesting period equal to the remaining vesting period of
the Shares of Restricted Stock with respect to which the dividend is paid.
7.3 MARKET VALUE UNITS ("MVU'S"):
(a) Award Agreement: Each MVU grant shall be evidenced by an
Award Agreement that shall specify the duration of the MVU, the number of Shares
on which the MVU grant is based, and such other terms as the Plan Administrator
shall determine.
(b) Non-Transferability: Except as provided in this Article, the
MVU's granted herein may not be sold, transferred, pledged, assigned, or
otherwise alienated until specified in the Award Agreement, or upon earlier
satisfaction of any other conditions, as specified by the Plan Administrator and
set out in the Award Agreement. During a Participant's lifetime, only that
Participant may exercise any rights with respect to the MVU's granted to that
Participant.
(c) Dividends and Other Distributions:
(1) During the MVU's duration, Participants holding MVU's may
be credited with regular cash dividends paid with respect to the underlying
Shares while they are so held. The Plan Administrator may apply any restrictions
to the dividends that it deems appropriate.
(2) Without limiting the generality of the preceding paragraph,
if the grant or vesting of MVU's granted to a Designated Executive Officer is
designed to comply with the requirements of the Performance-Based Exception, the
Plan Administrator may apply any restrictions it deems appropriate to the
payment of dividends declared with respect to such MVU's, such that the
dividends and/or the MVU's maintain eligibility for the Performance-Based
Exception.
(3) If any dividend constitutes a "derivative security" or an
"equity security" pursuant to Rule 16(a) under the Exchange Act, such dividend
shall be subject to a vesting period equal to the duration of the MVU's with
respect to which the dividend is paid.
(d) Payment of MVU Amount:
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(1) Upon vesting of MVU's, a Participant shall be entitled to
receive payment from the Company for the Fair Market Value of a Share multiplied
by the number of MVU's vesting.
(2) The Plan Administrator may allow for payment upon MVU
vesting to be in cash, in Shares of equivalent value, or in some combination of
cash and Shares.
7.4 STOCK OPTIONS:
(a) Award Agreement: Each Option grant shall be evidenced by
an Award Agreement that shall specify the Option Price, the Option's duration,
the number of Shares to which the Option pertains, and such other terms as the
Plan Administrator shall determine. The Award Agreement shall also specify
whether the Option is intended to be an ISO, Indexed Option, or an NQSO, and
what Performance Period (if any) applies. Even if an Option is designated as an
ISO, it shall be treated as an NQSO to the extent the Fair Market Value of the
Shares with respect to which ISO's are exercisable for the first time by any
Participant exceeds $100,000.
(b) Option Price and Duration: The Option Price for each grant
of an Option under this Plan shall be at least 100% of the Fair Market Value of
a Share on the date the Option is granted. Options may be Indexed Options. Each
Option granted to an Employee shall expire as the Plan Administrator shall
determine at the time of grant -- but no Option shall be exercisable later than
the tenth anniversary of its grant.
(c) Exercise of Options: Options granted under this Section shall
be exercisable at such times and be subject to such restrictions and conditions
as the Plan Administrator shall in each instance approve, which need not be the
same for each grant or for each Participant.
(d) Payment:
(1) Options granted under this Section shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
(2) The Option Price upon exercise of any Option shall be
payable to the Company in full either:
(A) in cash or its equivalent, or
(B) by tendering previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the total Option
Price (but only if the Shares which are tendered have been held by the
Participant for at least six months before their tender to satisfy the Option
Price); or
(C) by a combination of (A) and (B).
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(3) The Plan Administrator also may allow cashless exercise as
permitted under Federal Reserve Board's Regulation T, subject to applicable
securities law restrictions, or by any other means which the Plan Administrator
determines to be consistent with the Plan's purpose and applicable law.
(4) As soon as practicable after receipt of a written
notification of exercise and full payment, the Company shall deliver to the
Participant, in the Participant's name, Share certificates in an appropriate
amount based upon the number of Shares bought under the Option(s).
(e) Restrictions on Share Transferability: The Plan Administrator
may impose such restrictions on any Shares acquired pursuant to the exercise of
an Option granted under this Section as it may deem advisable, including,
without limitation, restrictions under applicable Federal securities laws, under
the requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.
(f) Non-transferability: Except as otherwise provided in an Award
Agreement, (1) During a Participant's lifetime, only the Participant may
exercise any Option granted to such Participant, (2) Participants may not sell,
pledge, assign, or otherwise alienate their Options, and (3) Participants may
transfer Options only by will or by the laws of descent and distribution.
7.5 STOCK APPRECIATION RIGHTS ("SAR'S"):
(a) Award Agreement: Each SAR grant shall be evidenced by an Award
Agreement specifying the grant price, the SAR's duration, and such other terms
as the Plan Administrator shall determine.
(b) Grant Prices and Duration of SAR's: The grant price of a
Freestanding SAR shall equal the Fair Market Value of a Share on the date of the
SAR grant. The grant price of Tandem SAR's shall equal the Option Price of the
related Option. The term of an SAR granted under the Plan shall be determined by
the Plan Administrator -- but such term shall not exceed ten years.
(c) Exercise of Tandem SAR's:
(1) Tandem SAR's may be exercised for all or part of the Shares
subject to the related Option upon the surrender of the right to exercise the
equivalent portion of the related Option. A Tandem SAR may be exercised only
with respect to the Shares for which its related Option is then exercisable.
(2) Notwithstanding any other contrary Plan provision, with
respect to a Tandem SAR granted in connection with an ISO:
(A) the Tandem SAR will expire no later than the expiration
of the underlying ISO;
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(B) the payout value with respect to the Tandem SAR may
not exceed 100% of the difference between the Option Price of the underlying ISO
and the Fair Market Value of the Shares subject to the underlying ISO at the
time the Tandem SAR is exercised; and
(C) the Tandem SAR may be exercised only when the Fair
Market Value of the Shares subject to the ISO exceeds the Option Price of the
ISO.
(d) Exercise of Freestanding SAR's: Freestanding SAR's may be
exercised upon whatever terms and conditions the Plan Administrator imposes upon
them.
(e) Payment of SAR Amount:
(1) Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(A) the difference between the Fair Market Value of a
Share on the date of exercise and the grant price; by
(B) the number of Shares with respect to which the SAR
is exercised.
(2) The Plan Administrator may allow for payment upon SAR
exercise to be in cash, in Shares of equivalent value, or in some combination of
cash and Shares.
(f) Rule 16b-3 Requirements: Notwithstanding any other Plan
term, the Plan Administrator may impose such conditions on exercise of an SAR
(including limiting the exercise to specified periods) as may be required to
comply with Section 16 of the Exchange Act.
(g) Non-transferability: Except as otherwise provided in an
Award Agreement:
(1) During a Participant's lifetime, only the Participant
may exercise any SAR granted to such Participant.
(2) Participants may not sell, pledge, assign, or otherwise
alienate their SAR's.
(3) Participants may transfer SAR's only by will or by the
laws of descent and distribution.
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7.6 PERFORMANCE UNITS:
(a) Award Agreement: Each Performance Unit grant shall be evidenced
by an Award Agreement specifying an initial value for each Performance Unit as
of its grant date, as well as performance goals which will determine the number
and/or value of Performance Units that will be paid out to the Participant at
the end of the Performance Period. Performance goals may be based on the
performance of: the Company; its Shares; any of its divisions, subsidiaries, or
other business units; or any combination of such performance measures.
(b) Form and Timing of Payment of Performance Units:
(1) The Plan Administrator may allow for payment of Performance
Units to be in cash, in Shares of equivalent value, or in some combination of
cash and Shares.
(2) Payment of earned Performance Units shall be made as soon
as practicable following the close of the applicable Performance Period.
(3) The Plan Administrator may allow Participants to elect to
defer the receipt of Performance Unit pay-outs upon such terms as the Plan
Administrator deems appropriate, as long as Participants make such deferral
elections before the relevant Performance Period begins.
(c) Non-transferability: Except as otherwise provided in an Award
Agreement:
(1) During a Participant's lifetime, only the Participant or
the Participant's legal representative may exercise any Plan rights related to
Performance Units.
(2) Participants may not sell, pledge, assign, or otherwise
alienate their Performance Units.
(3) Participants may transfer Performance Units only by will or
by the laws of descent and distribution.
7.7 CASH PAYMENT OF AWARDS OTHERWISE PAYABLE IN SHARES: The Plan
Administrator may allow for payment of a Long Term Incentive Award otherwise
payable in Shares to be paid in cash. Such a cash equivalent Award shall be:
(a) computed as the value of the Participant's long-term bonus
opportunity at the end of the Performance Period, adjusted for the actual
performance results; and
(b) paid to the Participant upon vesting after the end of the
Performance Period.
ARTICLE 8 - PERFORMANCE MEASURES
8.1 GENERALLY: As soon in each Fiscal Year as is necessary to comply
with Code Section 162(m), the Plan Administrator shall establish performance
goals for each Plan Year and Performance Period for each type of Award to be
awarded or granted under this Plan. The goals may be expressed as a percentage
of corporate, division, business unit, and/or individual goals or financial
measures, or such other measures as the Plan Administrator shall, from time to
time, determine, unless otherwise limited by the Plan -- but all such goals
applicable to Designated Executive Officers shall qualify for the
Performance-Based Exception under Code Section 162(m) unless and until the Plan
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Administrator determines that, pursuant to Section 12.3, one or more Award need
not qualify for the Performance-Based Exception.
8.2 PERFORMANCE THRESHOLD: The Plan Administrator may establish minimum
levels of performance which must be achieved during a Plan Year or Performance
Period before any Awards shall be paid to Participants. Such minimum levels of
performance may be expressed as a percentage of corporate, division, business
unit, and/or individual goals or financial measures, or such other measures as
the Plan Administrator shall, from time to time, determine, unless otherwise
limited by the Plan. The Plan Administrator will certify in writing prior to
grant or payment of any Award to a Designated Executive Officer that the
performance goals and other material terms of the Award were satisfied, to the
extent such certification is required by the Performance-Based Exception.
8.3 MAXIMUM AWARDS: Subject to Section 4.1, the Plan Administrator may
establish guidelines governing the maximum Awards that Participants may earn
(either in the aggregate, by employee class, or among individual Participants)
during each Plan Year or Performance Period. Such guidelines may be expressed as
a percentage of corporate, division, business unit, and/or individual goals or
financial measures, or such other measures as the Plan Administrator shall, from
time to time, determine, unless otherwise limited by the Plan. Subject to
Sections 4.1 and 4.2, the Plan Administrator will establish a Maximum Award for
each type of Award granted to a Designated Executive Officer for each Plan Year
or Performance Period.
8.4 PERFORMANCE MEASURES FOR DESIGNATED EXECUTIVE OFFICERS: Unless and
until the Plan Administrator proposes for shareholder vote and shareholders
approve a change in the general performance measures set out in this Article,
the attainment of which may determine the degree of payout and/or vesting with
respect to Awards to Designated Executive Officers which are designed to qualify
for the Performance-Based Exception, the performance measure(s) to be used for
purposes of such grants shall be based on one or more of the following
alternatives, as chosen by the Plan Administrator, except that, unless otherwise
required to satisfy the Performance-Based Exception, the Plan Administrator
shall not be required to establish performance measures with respect to the
grant of a stock Option or SAR if the exercise price equals or exceeds the Fair
Market Value of the underlying Shares on the date of grant:
(a) "EARNINGS PER SHARE," as reported in the Company's annual
report, adjusted to reflect predetermined excluded items pre-established
pursuant to Code Section 162(m).
(b) "BUSINESS VALUE ADDED" is a measure based on Adjusted Net
Income, for the Plan Year or Performance Period, minus the cost of Average
Capital Employed. For the purposes of this definition:
(1) Adjusted Net Income is defined to mean after-tax net income
adjusted for after-tax interest income and expense and any other predetermined
excluded items pre-established pursuant to Code Section 162(m); and
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(2) Average Capital Employed is defined to mean total assets,
reduced by non-interest bearing liabilities and any other predetermined excluded
items pre-established pursuant to Code Section 162(m), averaged over an
appropriate period.
(c) "RETURN ON INVESTMENT" is a measure based on Bonus Operating
Income, after tax, divided by Average Invested Capital. For the purposes of this
definition:
(1) Bonus Operating Income is defined to mean operating income
adjusted for managerial bonus expense and any other predetermined excluded items
pre-established pursuant to Code Section 162(m); and
(2) Average Invested Capital is defined to mean total assets
reduced by non-interest bearing liabilities and any other predetermined
excluded items pre-established pursuant to Code Section 162(m), averaged over an
appropriate period.
Business Value Added and Return on Investment may be based on the
performance of the Company or on one or more of its Subsidiaries, divisions, or
other business units.
8.5 PERFORMANCE MEASURES FOR OTHER PARTICIPANTS: For Participants other
than Designated Executive Officers, the Plan Administrator may approve and adopt
either the performance measures set out in Section 8.4 or other performance
measures without obtaining shareholder approval.
8.6 ADJUSTMENTS: The Plan Administrator may adjust the compensation
payable upon the attainment of the pre-established performance goals, but the
Plan Administrator may not adjust upward any Awards which are designed to
qualify for the Performance-Based Exception, and which are held by Designated
Executive Officers.
8.7 OTHER CHANGES: If applicable tax and/or securities laws change to
permit Plan Administrator discretion to change the governing performance
measures without obtaining share-holder approval of such changes, the Plan
Administrator may make such changes without obtaining shareholder approval. In
addition, if the Plan Administrator determines that it is advisable to grant
Awards which shall not qualify for the Performance-Based Exception, the Plan
Administrator may make such grants without satisfying the requirements of Code
Section 162(m).
ARTICLE 9 - BENEFICIARY DESIGNATION
9.1 Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid if the Participant dies before
receiving any or all of such benefit.
9.2 Each such designation shall revoke all prior designations by the
same Participant, shall be in a form prescribed by the Company, and will be
effective only when filed by the Participant in writing with the Company during
the Participant's lifetime.
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9.3 Absent such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
ARTICLE 10 - DEFERRALS AND SPECIAL AWARDS/GRANTS
10.1 BY EMPLOYEES: The Plan Administrator may permit a Participant to
defer receipt of the payment of cash or the delivery of Shares that would
otherwise be due to such Participant by virtue of the satisfaction of any
requirements or goals with respect to Awards, the exercise of an Option or SAR,
or the lapse or waiver of restrictions with respect to Restricted Stock or
MVU's. If any such deferral election is required or permitted, the Plan
Administrator shall establish rules and procedures for such payment deferrals.
Such rules and procedures shall be consistent with the provisions of Code
Section 162(m) where applicable.
10.2 BY NON-EMPLOYEE DIRECTORS: Each non-Employee Director may elect to
receive payment in Shares for all or any part of Director's retainer and/or
committee fees for service on the Board and any of its committees. The amount of
Shares then issuable shall be based on their Fair Market Value on the dates such
retainer fees are otherwise due and payable to the Non-Employee Director. The
Company shall deliver certificates evidencing such Shares promptly following
such date. An election under this Section must be delivered in writing to the
Company's Secretary at least six months before the payment date, and must be
irrevocable.
10.3 SPECIAL AWARDS/GRANTS: The Plan Administrator may, in its
discretion, approve a grant of Options, MVU's, Restricted Stock, Freestanding
SAR's, cash and/or Tandem SAR's to an employee as may be recommended, from time
to time.
ARTICLE 11 - CHANGE IN CONTROL
11.1 TREATMENT OF OUTSTANDING AWARDS MADE BEFORE JULY 1, 1999: Upon the
occurrence of a Change in Control, unless otherwise specifically prohibited
under applicable laws, or by the rules and regulations of any governing
governmental agencies or national securities exchanges:
(a) Any and all Options and SAR's granted shall become immediately
exercisable, and shall remain exercisable throughout their entire term.
(b) Any restriction periods and restrictions imposed on Restricted
Shares or MVU's shall lapse.
(c) The target payout opportunities attainable under all
outstanding Awards shall be deemed to have been earned through the effective
date of the Change in Control. The vesting of all Awards shall be accelerated as
of the effective date of the Change in Control, and the Company shall pay out in
cash to Participants within 30 days following the effective date of the Change
in Control a pro rata portion of all targeted cash payout opportunities
associated with outstanding Awards, based on the number of complete and partial
calendar months within the Performance Period which had elapsed as
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of such effective date; provided, however, that no pay-outs will be accelerated
based on Awards granted less than six months before the effective date of the
Change in Control.
(d) Subject to Article 12, the Plan Administrator may modify the
Awards as determined by the Plan Administrator to be appropriate before the
effective date of the Change in Control.
11.2 TREATMENT OF OUTSTANDING AWARDS MADE AFTER JUNE 30, 1999:
Notwithstanding anything in this Plan to the contrary, with respect to Awards
granted after June 30, 1999, upon the occurrence of a Change in Control, unless
otherwise specifically prohibited under applicable laws, or by the rules and
regulations of any governing governmental agencies or national securities
exchanges:
(a) Any and all Options and SAR's granted shall become immediately
vested and non-forfeitable upon the occurrence of the Change in Control;
provided, that such Options and SAR's shall become exercisable pursuant to their
original vesting schedule, notwithstanding any earlier termination of employment
of a Participant, except that if within one year following a Change in Control,
a Participant's employment is terminated by the Company without Cause or by the
Participant within 60 days after the Participant becomes aware of an event
constituting a Constructive Discharge, upon the effective date of such
employment termination, the Participant's Options and SAR's shall become
immediately exercisable and shall remain exercisable until 30 days following the
original scheduled vesting date of such Options and SAR's. If a Participant is
no longer an Employee as of the original vesting date under the vesting schedule
for an Option or SAR, and has not terminated employment under one of the
circumstances described in the immediately preceding sentence, the Participant's
Option and SAR shall nonetheless become exercisable on the original vesting date
and remain exercisable for 30 days following the original vesting date.
(b) If within one year following a Change in Control, a
Participant's employment is terminated by the Company without Cause or by the
Participant within 60 days after the Participant becomes aware of an event
constituting a Constructive Discharge, upon the effective date of such
employment termination:
(1) any restriction periods and restrictions imposed on
Restricted Shares or MVU's granted to a Participant shall lapse,
(2) the Target Incentive Awards attainable under all
outstanding Awards of the Participant shall be deemed to have been earned, and
(3) the vesting of all outstanding Awards of the Participant
shall be accelerated, and the Company shall pay out in cash to the Participant
within 30 days following the effective date of the employment termination a pro
rata portion of all Target Incentive Award cash payout opportunities associated
with outstanding Awards, based on the number of complete and partial calendar
months within the Performance Period which had elapsed as of such effective
date. This subparagraph (b) shall not apply to Options and SAR's.
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11.3 TREATMENT OF OUTSTANDING OPTION AND SAR AWARDS MADE AFTER JUNE 30,
1999 UPON A POTENTIAL CHANGE IN CONTROL. Notwithstanding anything in this Plan
to the contrary, with respect to Options and SAR's granted after June 30, 1999,
in the event of a Potential Change in Control, the following restrictions shall
apply to any such outstanding Options and SAR's:
(a) Except as otherwise provided in this Section 11.3, any Option
(or SAR) exercised by a Participant during a Restricted Period shall be
exercisable solely for a lump sum cash payment from the Company equal to the
product of (i) the number of Shares for which the Option (or SAR) is being
exercised, times (ii) the excess, if any, of (A) the "Adjusted Market Value" per
Share of the Shares subject to the Option (or SAR), over (B) the exercise (or
grant price) per Share of such Option (or SAR). The Board Compensation Committee
may, in its discretion, provide the Participant with Shares with a Fair Market
Value equal to the cash payment otherwise due upon exercise pursuant to the
immediately preceding sentence, in lieu of the cash payment. This Section
11.3(a) shall not be applicable if the Fair Market Value per Share is less than
the Adjusted Market Value per Share of the Shares subject to an Option (or SAR)
upon the date a Participant exercises a Stock Option (or SAR), unless the Board
Compensation Committee specifically determines it to be applicable in its sole
discretion.
(b) For purposes of this Section 11.3, "Adjusted Market Value"
shall mean the Base Period Fair Market Value as adjusted, on a pro rata monthly
basis at the beginning of each month, from the end of the Base Period (the date
of grant for Options (and SAR's) granted during the Restricted Period prior to a
Change in Control shall be the end of the Base Period for such Options and
SAR's) until the exercise date of the Option (or SAR), by the greater of (i) 5%
per year or (ii) the percentage increase (or decrease) in the S&P 500 composite
index for the previous calendar month.
(c) This Section 11.3 shall continue to apply following a Change
in Control; provided, that in the event that in connection with a Change in
Control, Shares are converted into or exchanged for cash, or for securities that
are not publicly traded, the Company shall, immediately before such Change in
Control, set aside in an escrow account for the benefit of each Participant an
amount equal to the potential cash payment (under subparagraph (a) above) for
the Participant, with such escrow amount to be adjusted on a quarterly basis
following the Change in Control to provide for sufficient funding to pay such
amounts to Participants.
11.4 ACCELERATION OF AWARD VESTING: Notwithstanding any provision of
this Plan or any Award Agreement provision to the contrary, other than during a
Restricted Period or in anticipation of the occurrence of a Potential Change in
Control or of a Change in Control, the Plan Administrator may at any time
accelerate the vesting of any Award granted under the Plan to a Participant,
including without limitation acceleration to such a date that would result in
said Awards becoming immediately vested.
11.5 TERMINATION, AMENDMENT, AND MODIFICATIONS OF CHANGE IN CONTROL
PROVISIONS: Sections 11.2, 11.3, 11.4, 11.5, and any other provisions of the
Plan that would materially impact the operation or intent of Sections 11.2,
11.3, 11.4 and 11.5, shall not be amended by the Board or waived by the Company
in a manner favorable to Participants without approval by more than 75 percent
of the combined voting power of the Outstanding Voting Securities of
Brown-Forman Corporation; provided, that if following a Change in Control,
Brown-Forman Corporation (or its successor corporation) is not a publicly-traded
corporation, and is a direct or indirect subsidiary of a publicly-traded
corporation, the
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shareholder approval required by this Section 11.5 must be approval by more than
75 percent of the combined voting power of the Outstanding Voting Securities of
the publicly-traded corporation that is the direct or indirect parent of
Brown-Forman Corporation (or its successor corporation). Notwithstanding the
foregoing, the Board Compensation Committee may, in its discretion, waive the
effect of Section 11.3 following a Potential Change in Control described in
Section 2.47; provided, that, the waiver must by approved by the Board
Compensation Committee prior to the occurrence of a Change in Control.
Notwithstanding any other Plan term or any Award Agreement term, this Article
may not be terminated, amended, or modified on or after the date of a Change in
Control to affect adversely any Award already granted under the Plan without the
prior written consent of the Participant with respect to said Participant's
outstanding Awards.
11.6 OPTIONAL GROSS-UP FOR EXCISE TAXES: If, for any reason, any part or
all of the amounts payable to a Participant pursuant to this Plan (or otherwise,
if the Company or any of its Subsidiaries pays amounts after there has been a
Change in Control) are deemed to be "excess parachute payments" within the
meaning of Code Section 280G(b)(1), the Plan Administrator may, in its sole
discretion, provide in the Award Agreement that the Company shall pay to such
Participant, in addition to any other amounts the Participant may be entitled to
receive pursuant to this Plan, an amount which after all Federal, state, and
local taxes (of whatever kind) imposed on the Participant with respect to such
amount are subtracted therefrom, equals the excise taxes imposed on such excess
parachute payments under Code Section 4999.
ARTICLE 12 - AMENDMENT, MODIFICATION, AND TERMINATION
12.1 GENERALLY:
(a) Except as limited by the provisions of Section 11.5 above, the
Board may at any time and from time to time, alter, amend, suspend, or terminate
the Plan in whole or in part -- but no amendment needing shareholder approval in
order for the Plan to continue to comply with Rule 16b-3 under the Exchange Act
shall be effective unless such amendment shall be approved by the requisite vote
of Company shareholders entitled to vote on it.
(b) Except as provided by the Plan or by the terms of an Award, the
Plan Administrator may not cancel outstanding Awards and issue substitute Awards
without the written consent of the Participant holding such Award.
12.2 OUTSTANDING AWARDS: No termination, amendment, or modification of the
Plan shall adversely affect in any material way any outstanding Award under the
Plan without the written consent of the Participant holding such Award.
12.3 COMPLIANCE WITH CODE SECTION 162(M): At all times when Code Section
162(m) applies, all Awards granted to Designated Executive Officers under this
Plan shall comply with its requirements, unless the Plan Administrator expressly
determines that compliance is not desired with respect to any Award or Awards
available for grant under the Plan. In addition, such Award(s) need not comply
if changes are made to Code Section 162(m) to permit greater flexibility with
respect to any Award or Awards available under the Plan, in which case the Plan
Administrator may, subject to this Article, make any adjustments it deems
appropriate. However, an Award made available for grant to a
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Designated Executive Officer as performance-based cannot be replaced by a
non-performance-based Award if performance goals are not achieved, nor can the
characterization of an Executive Officer as a Designated Executive Officer, once
made, be changed for a given Performance Period.
ARTICLE 13 - WITHHOLDING
13.1 TAX WITHHOLDING: The Company may deduct or withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy Federal,
state, and local taxes, domestic or foreign, required by law or regulation to be
withheld with respect to any taxable event arising as a result of this Plan.
13.2 SHARE WITHHOLDING: With respect to withholding required upon the
exercise of Options or SAR's, upon the lapse of restrictions on Restricted
Stock, the payment of MVU's, or upon any other taxable event arising as a result
of Awards granted hereunder, Participants may elect, subject to the approval of
the Plan Administrator, to satisfy the withholding requirement, in whole or in
part, by having the Company withhold Shares having a Fair Market Value on the
date the tax is to be determined equal to the statutory total tax which could be
imposed on the transaction. All such elections shall be irrevocable, shall be
made in writing, shall be signed by the Participant, and shall be subject to any
restrictions or limitations that the Plan Administrator deems appropriate.
ARTICLE 14 - INDEMNIFICATION
14.1 GENERALLY: The Company shall indemnify and hold harmless each current
and former Director against and from any loss, cost, liability, or expense that
may be imposed upon or reasonably incurred by such Director in connection with
or resulting from any claim, action, suit, or proceeding to which such Director
may be a party or in which such Director may be involved by reason of any action
taken or failure to act under the Plan and against and from any and all amounts
paid by such Director in settlement thereof, with the Company's approval, or
paid by such Director in satisfaction of any judgment in any such action, suit,
or proceeding against such Director -- but only if such Director gives the
Company an opportunity, at its own expense, to handle and defend the same before
such Director undertakes to handle and defend it personally.
14.2 NON-EXCLUSIVITY: This right of indemnification shall not exclude any
other indemnification rights to which such persons may be entitled under the
Company's Certificate of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
ARTICLE 15 - LEGAL CONSTRUCTION
15.1 SEVERABILITY: If any Plan section is held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.
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15.2 REQUIREMENTS OF LAW: The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
15.3 SECURITIES LAW COMPLIANCE: With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions or Rule
16b-3. To the extent any Plan provision or action by the Plan Administrator
fails to so comply, it shall be deemed void, to the extent permitted by law and
deemed advisable by the Plan Administrator.
15.4 SUCCESSORS: All Company obligations under the Plan with respect to
Awards granted shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the
Company's business and/or assets.
15.5 GOVERNING LAW: To the extent not preempted by Federal law, the Plan,
and all agreements made under it, shall be construed in accordance with and
governed by the laws of the State of Delaware.
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