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Our NEOs participate in a short-term (annual) cash incentive opportunity. Payouts are dependent on the achievement of certain performance goals for the Company and the individual during the fiscal year.

For fiscal 2015, 80% of the target award was tied to Company performance and 20% was tied to individual perform- ance. We believe that basing the majority of short-term incentive awards for NEOs on Company performance appropri- ately reflects the collective accountability of our most senior executives for the performance of the enterprise. We also believe that basing a lesser but meaningful portion of the short-term incentive on individual performance provides flexi- bility to differentiate awards among NEOs based on their individual achievements during the year.

Both the corporate and individual portions of our short-term incentive compensation are subject to an adjustment factor of 0% to 200% based on performance against the relevant criteria. After adjustment, the two components are added together to determine the total short-term incentive payment. Therefore, the total value of short-term incentives may vary between 0% and 200% of target, a range we believe to be sufficient to recognize our varying levels of performance while not encouraging excessive risk-taking.

Company Performance (80% of Target Award)

For fiscal 2015, the Company performance goal for the NEOs (and other participants in the short-term incentive com- pensation plan) was based on the Company’s underlying operating income growth. In establishing this goal, the primary consideration was how we expected our industry competitors to perform on this metric, as it is our goal to consistently and sustainably outperform our industry peers. We also considered our historical underlying operating income growth trends and outlook for fiscal 2015 performance.

The Committee determined that, for purposes of the short-term incentive compensation plan, the Company achieved underlying operating income of $1,064 million for fiscal 2015. (On an as-reported basis, fiscal 2015 operating income was $1,027 million.) This resulted in a payout of 157% of target.

The fiscal 2015 short-term performance goal, our actual performance, and the resulting payout are shown in the chart below:

Fiscal 2015 Short-Term Incentive Compensation Performance Goal (in $MM) Underlying Operating Income

Threshold 0% Payout Target 100% Payout Maximum 200% Payout Actual Result: $1,064 157% Payout $973 $1,089 0% 6% 12% $1,031

Underlying Operating Income Growth Over Prior Year

COMPENSATION DISCUSSION AND ANALYSIS—AWARDS AND PAYOUTS IN FISCAL 2015: FIXED AND SHORT-TERM COMPENSATION

Individual Performance (20% of Target Award)

For fiscal 2015, individual performance objectives for the NEOs consisted of qualitative and quantitative goals that support the achievement of our strategic priorities. Final individual scores were adjusted to ensure a weighted average reflecting overall Company performance, as we believe the performance of our Company is a reflection of the perform- ance of our people. Payout levels for the individual portion of the short-term incentive are based on the following guide- lines for aligning performance and compensation:

Performance Payout as a Percentage of Target

Superior 176%–200%

Above Target 126%–175%

On Target 76%–125%

Below Target Up to 75%

Immediate Improvement Required No incentive paid

Fiscal 2015 Individual Performance Objectives for the NEOs. For fiscal 2015, individual performance objectives for our NEOs included those described below. (Objectives for Mr. Varga were established by the Compensation Committee.) In addition to these objectives, which primarily emphasize individual job responsibilities, all NEOs shared three areas of evaluation: individual diversity leadership, development of profit-driving ideas, and overall contributions to Brown- Forman as a senior leader.

» Paul C. Varga. Objectives pertaining to the Company’s performance in relation to our annual plan, our strategic development and positioning, the ongoing development of our leadership team, and effective communication with our Board and external stakeholders.

» Jane C. Morreau. Development of talent in the finance and IT organizations, implementation of certain B-F 150 strategies, leading finance role in financial controls, oversight, compliance, and reporting efficiencies and develop- ment and implementation of a strategic tax plan.

» James S. Welch, Jr..Leading our B-F 150 corporate strategy process, civic leadership on behalf of the Company, leading our social responsibility efforts encompassing both alcohol responsibility and environmental strategy, and leading our efforts to continually improve the diversity and inclusion of our workforce and suppliers.

» Mark I. McCallum.Leading regional performance (including India, China, and Russia), talent development of our regional teams and organizations, and assisting with our regional compliance efforts.

» Jill A. Jones. Regional performance and leadership of our North America and Latin America regions, partnering with other leaders to develop brand and regional strategies, driving talent and organizational development, and assisting with the Company’s compliance efforts throughout the regions.

Please see the “Non-Equity Incentive Plan Compensation” column of the Fiscal 2015 Summary Compensation Table on page 39 for the amounts paid to NEOs in short-term incentive compensation for fiscal 2015.

COMPENSATION DISCUSSION AND ANALYSIS—AWARDS AND PAYOUTS IN FISCAL 2015: LONG-TERM COMPENSATION