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Item 9A. Controls and Procedures

2025-02-21 compared with 2024-02-26 · 72 added, 25 removed, 161 unchanged (38% of the section changed)

8 unchanged sentences

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) set forth by the Committee of Sponsoring Organizations of the Treadway Commission.

As permitted by applicable SEC guidance, management has excluded Lacework, a privately held data-driven cloud security company, Next DLP, a privately held data security company, and Perception Point, a privately held advanced collaboration and email security company from its assessment of internal control over financial reporting as of December 31, 2024, because Lacework, Next DLP and Perception Point were acquired by us in business combinations during the fiscal year ended December 31, 2024.

Lacework, Next DLP and Perception Point revenues represented approximately 0.5%, less than 0.1% and less than 0.1% of our consolidated total revenue, respectively, for the year ended December 31, 2024.

Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2024.

2 unchanged sentences

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during 2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

There were no other changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

5 unchanged sentences

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 21, 2025, expressed an unqualified opinion on those financial statements.

As described in “Management’s Report on Internal Control over Financial Reporting”, management excluded from its assessment the internal control over financial reporting at Lacework, Inc.

(“Lacework”), a privately held data-driven cloud security company, Next DLP Holdings Limited (“Next DLP”), a privately held data security company, and Perception Point, Ltd.

(“Perception Point”), a privately held advanced collaboration and email security company from its assessment of internal control over financial reporting as of December 31, 2024.

Lacework, Next DLP, and Perception Point revenues represented approximately 0.5%, less than 0.1%, and less than 0.1%, respectively, of the Company’s consolidated total revenue for the year ended December 31, 2024.

Basis for Opinion

19 unchanged sentences

Rule 10b5-1 Trading Plans

On November 13, 2023 , Patrice Perche , our Chief Revenue Officer and Executive Vice President of Support , entered into a pre-arranged written stock sale plan in accordance with Rule 10b5-1 (the “Perche Plan”) under the Exchange Act for the sale of shares of our common stock.

The Perche Plan was entered into during an open trading window in accordance with our insider trading policy and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.

The Perche Plan provides for the potential sale by Patrice Perche of up to (a) 141,981 shares of our common stock, including upon the vesting and settlement of RSUs and PSUs for shares of our common stock, and (b) the net shares (which are not yet determinable) after shares are withheld to satisfy tax obligations upon such vesting and settlement, in each case, at the market price, all between March 4, 2024 and June 1, 2025.

On December 6, 2023 , Judith Sim , one of director s, entered into a pre-arranged written stock sale plan in accordance with Rule 10b5-1 (the “Sim Plan”) under the Exchange Act for the sale of shares of our common stock.

The Sim Plan was entered into during an open trading window in accordance with our insider trading policy and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.

The Sim Plan provides for the potential sale by Judith Sim of up to 20,637 shares of our common stock between March 6, 2024 and March 8, 2025.

Each of the Perche Plan and the Sim Plan (together, the “10b5-1 Plans”) includes a representation from Patrice Perche and Judith Sim (as applicable) to the broker administering the plan that none of them were in possession of any material nonpublic information regarding us or the securities subject to the 10b5-1 Plans at the time the 10b5-1 Plans were entered into.

A similar representation was made to us in connection with the adoption of the 10b5-1 Plans under our insider trading policy.

On December 9, 2024 , William H.

Neukom , one of our directors , entered into a pre-arranged written stock sale plan in accordance with Rule 10b5-1 under the Exchange Act for the purchase of shares of our common stock (the “Neukom Plan”) during an open trading window in accordance with our insider trading policy.

The Neukom Plan is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.

The Neukom Plan provides for the potential purchase by Mr.

Neukom of up to $35,000 worth of shares of our common stock per at the market price, on five dates between March 6, 2025 and March 6, 2026, as specified in the Neukom Plan.

On December 9, 2024 , Kenneth A.

Goldman , one of our directors , entered into a pre-arranged written stock sale plan in accordance with Rule 10b5-1 under the Exchange Act for the sale of shares of our common stock (the “Goldman Plan”) during an open trading window in accordance with our insider trading policy.

The Goldman Plan is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.

The Goldman Plan provides for the potential sale by Mr.

Goldman of up to 3,000 shares of our common stock, issued upon the exercise of vested options to purchase shares of our common stock, at the market price, so long as the market price is equal to or greater than $95.00 per share, between March 10, 2025 and March 10, 2026.

On December 9, 2024 , Ken Xie , our Chief Executive Officer and one of our directors , entered into a pre-arranged written stock sale plan in accordance with Rule 10b5-1 under the Exchange Act for the sale of shares of our common stock (the “Ken Xie Plan”) during an open trading window in accordance with our insider trading policy.

The Ken Xie Plan is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.

The Ken Xie Plan provides for the potential sale by Mr.

Xie of up to (a) 734,880 shares of our common stock, issued upon the vesting and settlement of RSUs and PSUs for shares of our common stock and the exercise of vested options to purchase shares of our common stock and (b) the net shares (which are not yet determinable) after shares are withheld to satisfy tax obligations upon such vesting and settlement of RSUs and PSUs, in each case, at the market price, all between March 10, 2025 and May 6, 2026.

On December 10, 2024 , Michael Xie , our Chief Technology Officer and one of our directors, entered into a pre-arranged written stock sale plan in accordance with Rule 10b5-1 under the Exchange Act for the sale of shares of our common stock (the “Michael Xie Plan”) during an open trading window in accordance with our insider trading policy.

The Michael Xie Plan is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.

The Michael Xie Plan provides for the potential sale by Mr.

Xie of up to (a) 624,285 shares of our common stock, issued upon the vesting and settlement of RSUs for shares of our common stock and the exercise of vested options to purchase shares of our common stock and (b) the net shares (which are not yet determinable) after shares are withheld to satisfy tax obligations upon such vesting and settlement of RSUs and PSUs, in each case, at the market price, all between March 11, 2025 and May 6, 2026.

Each of the Neukom Plan, Goldman Plan, Ken Xie Plan and Michael Xie Plan (each, a “10b5-1 Plan,” and together, the “10b5-1 Plans”) includes a representation from each of Mr.

Ken Xie and Mr.

Michael Xie, respectively, to the broker administering the plan that they were not in possession of any material nonpublic information regarding us or the securities subject to the respective 10b5-1 Plan at the time the respective 10b5-1 Plan were entered into.

A similar representation was made to us in connection with the adoption of each 10b5-1 Plan under our insider trading policy.

Those representations for each 10b5-1 Plan were made as of the respective date of adoption of the applicable 10b5-1 Plan, and speak only as of that date.

In making those representations, there is no assurance with respect to any material nonpublic information of which Patrice Perche and Judith Sim were unaware, or with respect to any material nonpublic information acquired by Patrice Perche and Judith Sim or us after the date of each such representation.

Once executed, transactions under the Sim Plan will be disclosed publicly through Form 4 and/or Form 144 filings with the SEC in accordance with applicable securities laws, rules and regulations.

Except as may be required by law, we do not undertake any obligation to update or report any modification, termination, or other activity under current or future Rule 10b5-1 plans that may be adopted by Patrice Perche or Judith Sim or our other officers or directors, or their affiliated entities.

In making those representations, there is no assurance with respect to any material nonpublic information of which Mr.

Ken Xie and Mr.

Michael Xie, as applicable, were unaware, or with respect to any material nonpublic information acquired by Mr.

Ken Xie and Mr.

Michael Xie or us, as applicable, after the date of each such representation.

Once executed, transactions under the 10b5-1 Plans will be disclosed publicly through Form 4 and/or Form 144 filings with the SEC in accordance with applicable securities laws, rules and regulations.

Ken Xie or Mr.

Michael Xie or our other officers or directors, or their affiliated entities.

Disclosure Regarding Foreign Jurisdictions that Prevents Inspections

5 unchanged sentences

Our code of business conduct and ethics is available on our website at www.fortinet.com under “Corporate—Investor Relations—Corporate Governance.” We will post on this section of our website any amendment to our code of business conduct and ethics, as well as any waivers of our code of business conduct and ethics, which are required to be disclosed by the rules of the SEC or the Nasdaq Stock Market.

Insider Trading Policy

We have adopted an Insider Trading Policy that governs the purchase, sale and/or other dispositions of our securities by directors, officers and employees.

Our Insider Trading Policy also provides that we will not transact in any of our own securities unless in compliance with U.S.

securities laws.

We believe that our Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the Nasdaq listing standards applicable to us.

A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

Executive Compensation

50 unchanged sentences

001-34511) August 4, 2015 10.1

Amended and Restated Change of Control Severance Agreement, effective as of August 7, 2019, between the Company and Ken Xie Quarterly Report on Form 10-Q (File No.

Amended and Restated Change of Control Severance Agreement, effective as of August 7, 2024, between the Company and Ken Xie

Quarterly Report on Form 10-Q (File No.

001-34511) August 8, 2024

Amended and Restated Change of Control Severance Agreement, effective as of August 7, 2019, between the Company and Michael Xie Quarterly Report on Form 10-Q (File No.

Amended and Restated Change of Control Severance Agreement, effective as of August 7, 2024, between the Company and Michael Xie

Quarterly Report on Form 10-Q (File No.

001-34511) August 8, 2024

Amended and Restated Change of Control Severance Agreement, effective as of August 7, 2019, between the Company and John Whittle Quarterly Report on Form 10-Q (File No.

Amended and Restated Change of Control Severance Agreement, effective as of August 7, 2024, between the Company and John Whittle

Quarterly Report on Form 10-Q (File No.

001-34511) August 8, 2024

3 unchanged sentences

001-34511) February 26, 2018 10.22

Amended and Restated Change of Control Severance Agreement, effective as of August 7, 2019, between the Company and Keith Jensen Quarterly Report on Form 10-Q (File No.

Amended and Restated Change of Control Severance Agreement, effective as of August 7, 2024, between the Company and Keith Jensen

Quarterly Report on Form 10-Q (File No.

001-34511) August 8, 2024

Employment Agreement, dated as of January 24, 2018, between Fortinet UK Limited and Patrice Perche

Annual Report on Form 10-K (File No.

February 24, 2023 10.17

Change of Control Severance Agreement, effective as of February 21, 2023, between the Company and Patrice Perche

Annual Report on Form 10-K (File No.

February 24, 2023 10.18

Form of performance stock unit award agreement under Amended and Restated 2009 Equity Incentive Plan

4 unchanged sentences

May 8, 2023 10.2

Insider Trading Policy

List of subsidiaries

5 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Compensation Recovery Policy

Compensation Recovery Policy Annual Report on Form 10-K (File No.

001-34511) February 6, 2024

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20 unchanged sentences

Keith Jensen, Chief Financial Officer

(Duly Authorized Officer and Principal Financial Officer and Principal Accounting Officer)

(Duly Authorized Officer and Principal Financial Officer)

February 21, 2025

FORTINET, INC.

/s/ Christiane Ohlgart

Christiane Ohlgart, Chief Accounting Officer

(Duly Authorized Officer and Principal Accounting Officer)

POWER OF ATTORNEY

5 unchanged sentences

/s/ Keith Jensen Chief Financial Officer February 21, 2025

Keith Jensen (Principal Financial Officer and Principal Accounting Officer)

Keith Jensen (Principal Financial Officer)

/s/ Michael Xie President, Chief Technology Officer and Director February 21, 2025

/s/ Christiane Ohlgart

Principal Accounting Officer

February 21, 2025

Christiane Ohlgart

/s/ Kenneth A.

2 unchanged sentences

/s/ Jean Hu Director February 21, 2025

/s/ Janet Napolitano

Director February 21, 2025

Janet Napolitano

/s/ William H.

3 unchanged sentences

Admiral James Stavridis

/s/ Maggie Wilderotter

Director February 21, 2025

Maggie Wilderotter

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures