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Item 9A. Controls and Procedures

2025-02-25 compared with 2024-02-27 · 44 added, 30 removed, 158 unchanged (32% of the section changed)

4 unchanged sentences

Financial Statements and Supplementary Data, under the headings “Report of Management on Fortive Corporation’s Internal Control Over Financial Reporting” and “Report of Independent Registered Public Accounting Firm,” respectively, and are incorporated herein by reference.

The Company completed four acquisitions in the IOS Segment during the year ended December 31, 2023, collectively “the IOS Acquisitions”.

The Company has not yet fully incorporated the internal controls and procedures of the IOS Acquisitions into the Company’s internal control over financial reporting, and as such, management excluded the IOS Acquisitions from its assessment.

The assets and revenues of the IOS Acquisitions excluded from management’s assessment of internal controls constituted less than 1% of the Company’s total assets as of December 31, 2023 and less than 1% of the Company’s total revenues for the year ended December 31, 2023, respectively.

The Company acquired EA Elektro-Automatik Holding GmbH (“EA”) during the year ended December 31, 2024.

The Company has not yet fully incorporated the internal controls and procedures of the EA acquisition into the Company’s internal control over financial reporting, and as such, management excluded the EA acquisition from its assessment.

The assets and revenues of the EA acquisition excluded from management’s assessment of internal controls constituted approximately 12% of the Company’s total assets as of December 31, 2024 and less than 2% of the Company’s total revenues for the year ended December 31, 2024, respectively.

There have been no changes in our internal control over financial reporting that occurred during the most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934

Section 13(r) of the Exchange Act requires an issuer to disclose certain information in its periodic reports if it or any of its affiliates knowingly engaged in certain activities, transactions or dealings with individuals or entities subject to specific U.S.

economic sanctions during the reporting period, even when the activities, transactions, or dealings are conducted in compliance with applicable law.

On March 2, 2021, the U.S.

government designated the Russian Federal Security Service (the “FSB”) as a blocked party under Executive Order 13382.

On the same day, the U.S.

Department of the Treasury’s Office of Foreign Assets Control issued General License No.

1B (the “OFAC General License”), which generally authorizes U.S.

companies to engage in certain transactions and dealings with the FSB necessary and ordinarily incident to requesting or obtaining licenses, permits, certifications or notifications issued or registered by the FSB for the importation, distribution or use of information technology products in Russia.

As a result, Section 13(r) of the Exchange Act now requires disclosure of dealings with FSB, even where the activities were conducted in compliance with applicable laws and regulations.

As permitted and authorized by the OFAC General License with respect to ASP's sterilization products that are exempt from international sanctions as humanitarian products, certain of the Company's subsidiaries for the ASP operations may file notifications with, or apply for import licenses and permits from, the FSB as required pursuant to Russian encryption product import controls for the purpose of enabling such subsidiaries or their channel partners to import and distribute ASP's sterilization products in the Russian Federation.

There are no gross revenues or net profits directly associated with these activities with the FSB, and neither the Company nor any of its subsidiaries distribute or sell products or provide services to the FSB.

Compensatory Arrangements of Certain Officers

As previously announced by Fortive Corporation (the “Company”), upon consummation of the proposed spin-off (the “Proposed Spin-Off”) of Ralliant Corporation (“Ralliant”) into a separate, publicly-traded company, (i) Olumide Soroye, the Company’s current President and Chief Executive Officer of the Company’s Intelligent Operating Solutions and Advanced Healthcare Solutions segments, will be appointed as the President and Chief Executive Officer of the Company and (ii) Tamara Newcombe, the Company’s current President and Chief Executive Officer of the Company’s Precision Technologies segment, will be appointed as the President and Chief Executive Officer of Ralliant.

In connection with such anticipated appointments, the Company entered into offer letters with each of Mr.

Soroye (the “Soroye Offer Letter”) and Ms.

Newcombe (the “Newcombe Offer Letter”), in each case, dated as of February 24, 2025.

Pursuant to the Soroye Offer Letter, Mr.

Soroye will receive the following changes in his compensation:

• Effective April 1, 2025, an annual base salary of $1.0 million, reflecting a $250,000 increase from his annual base salary in 2024;

• Beginning in 2025, eligibility to participate in the Company’s annual incentive compensation plan with a target bonus of 135% of his base salary, reflecting a percentage decrease from 150% of his base salary in 2024;

• A target equity award of $8.5 million for 2025, comprised of a $5.5 million annual target equity award to be granted by the Company in March 2025, which is a continuation of his target equity award level in March 2024, and a $3.0 million one-time incremental equity award to be granted by the Company at the time of the Proposed Spin-Off;

• A one-time promotional target equity award of $2.0 million granted at the time of the Proposed Spin-Off;

• Personal use of the corporate aircraft with a personal allowance of $150,000 annually.

Pursuant to the Newcombe Offer Letter, which will be assigned to Ralliant at the time of the Proposed Spin-Off, Ms.

Newcombe will receive the following changes in her compensation:

• Effective April 1, 2025, an annual base salary of $1.0 million, reflecting a $275,000 increase from her annual base salary in 2024;

• Beginning in 2025, eligibility to participate in the Company’s annual incentive compensation plan with a target bonus of 125% of her base salary, reflecting a percentage decrease from 150% of her base salary in 2024;

provided, however, that following the Proposed Spin-Off, Ms.

Newcombe’s participation in the Company’s annual incentive compensation plan will terminate and she will instead become a participant in Ralliant’s annual incentive compensation plan with an expected target bonus of 125% of her base salary, including with respect to her service for the portion of 2025 prior to the Proposed Spin-Off;

• A target equity award of $5.5 million for 2025, comprised of a $4.5 million annual target equity award to be granted by the Company in March 2025, which is a continuation of her target equity award level in March 2024, and a $1 million one-time incremental equity award to be granted by Ralliant after the Proposed Spin-Off;

• A one-time equity award of $4.125 million to be granted by Ralliant following the Proposed Spin-Off, comprised of $2.125 million one-time founder’s equity award and $2.0 million one-time equity award in recognition of the equity opportunity forgone with respect to prior Fortive equity awards in connection with the Proposed Separation.

The above description of the Newcombe Offer Letter and the Soroye Offer Letter is not complete and is qualified in its entirety by reference to the text of the offer letters, which are filed with this Annual Report on Form 10-K as Exhibits 10.21, and 10.22, respectively.

Disclosures Pursuant to Section 10(b) of the Securities Exchange Act of 1934

3 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Other than the information below, the information required by this Item is incorporated by reference from the sections entitled Directors and Corporate Governance and Delinquent Section 16(a) Reports in the Proxy Statement for our 2024 annual meeting and to the information under the caption “Information about our Executive Officers” in Part I hereof.

Other than the information below, the information required by this Item is incorporated by reference from the sections entitled Directors and Corporate Governance in the Proxy Statement for our 2025 annual meeting and to the information under the caption “Information about our Executive Officers” in Part I hereof.

No nominee for director was selected pursuant to any arrangement or understanding between the nominee and any person other than the Company pursuant to which such person is or was to be selected as a director or nominee.

3 unchanged sentences

We intend to disclose any amendment to the Fortive Code that relates to any element of the code of ethics definition enumerated in Item 406(b) of Regulation S-K, and any waiver from a provision of the Fortive Code granted to any director, principal executive officer, principal financial officer, principal accounting officer, or any of our other executive officers, in the “Our Culture-Integrity & Compliance” section of our website, at www.fortive.com, within four business days following the date of such amendment or waiver.

Insider Trading Arrangements and Policies

The Company has an insider trading policy governing the purchase, sale and other dispositions of the Company’s securities that applies to all Company personnel, including directors, officers, employees, and other covered persons, and the Company itself.

The Company believes that its insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and any applicable listing standards.

A copy of the Company’s insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

EXECUTIVE COMPENSATION

26 unchanged sentences

3.1 Restated Certificate of Incorporation of Fortive Corporation

Incorporated by reference from Exhibit 3.1 to Fortive Corporation’s Quarterly Report on Form10-Q for the quarter ended July 1, 2022 (Commission File Number:

Incorporated by reference from Exhibit 3.1 to Fortive Corporation’s Quarterly Report on Form10-Q for the quarter ended June 28, 2024 (Commission File Number:

3.2 Amended and Restated Bylaws of Fortive Corporation

Incorporated by reference from Exhibit 3.1 to Fortive Corporation’s Current Report on Form 8-K filed on November 8, 2022 (Commission File Number:

4.1 Indenture, dated as of June 20, 2016, between Fortive Corporation, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee

Incorporated by reference from Exhibit 4.1 to Fortive Corporation’s Current Report on Form 8-K filed on June 21, 2016 (Commission File Number:

4.1 Description of Securities

Incorporated by reference from Exhibit 4.2 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022 (Commission File Number:

4.2 Indenture, dated as of June 20, 2016, between Fortive Corporation, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee

Incorporated by reference from Exhibit 4.1 to Fortive Corporation’s Current Report on Form 8-K filed on June 21, 2016 (Commission File Number:

4.3 I ndenture, dated as of February 13, 2024, between Fortive Corporation, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trust ee

11 unchanged sentences

10.5 Form of Fortive Corporation Non-Employee Directors Restricted Stock Unit Agreement *

Incorporated by reference from Exhibit 10.9 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number:

10.6 Form of Fortive Corporation Restricted Stock Grant Agreement*

Incorporated by reference from Exhibit 10.13 to Amendment No.

2 to Fortive Corporation’s Registration Statement on Form 10, filed on April 7, 2016 (Commission File Number:

Incorporated by reference from Exhibit 10.1 to Fortive Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2024 (Commission File Number:

10.6 F orm of Fortive Corporation Non-Employee Directors Deferred Compensation Restricted Stock Unit Agreement *

Incorporated by reference from Exhibit 10.2 to Fortive Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2024 (Commission File Number:

10.7 Form of Fortive Corporation Restricted Stock Unit Agreement*

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10.16 Description of C ompensation A rrangements for N on-management D irectors*

10.17 Fortive Corporation Non-Employee Directors’ Deferred Compensation Plan *

Incorporated by reference from Exhibit 10.16 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 (Commission File Number:

10.17 Fortive Corporation Amended and Restated Non-Employee Directors’ Deferred Compensation Plan*

Incorporated by reference from Exhibit 10.1 to Fortive Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 27, 2024 (Commission File Number:

10.18 Fortive Corporation Non-Employee Directors’ Deferred Compensation Plan Election Form *

10.18 Fortive Corporation Amended and Restated Non-Employee Directors’ Deferred Compensation Plan Election Form*

Incorporated by reference from Exhibit 10.2 to Fortive Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 27, 2024 (Commission File Number:

4 unchanged sentences

Incorporated by reference from Exhibit 10.34 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2020 (Commission File Number:

10.21 Offer of Employment Letter, dated October 8, 2021 between TGA Employment Services LLC and Tamara Newcombe *

10.22 Offer of Employment Letter, dated July 12, 2021 between TGA Employment Services LLC and Olumide Soroye*

Incorporated by reference from Exhibit 10.26 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 (Commission File Number:

10.21 Offer Letter, dated February 24, 2025, between Fortive Corporation and Tamara Newcombe* †

10.22 Offer Letter, dated February 24, 2025, between Fortive Corporation and Olumide Soroye* †

10.23 Form of Fortive Corporation and its Affiliated Entities Agreement Regarding Competition and Protection of Proprietary Interests*

2 unchanged sentences

Incorporated by reference from Exhibit 10.1 to Fortive Corporation’s current report on Form 8-K, filed on March 2, 2023 (Commission File No.

10.25 Aircr aft Time Sharing Agreement , dated February 23, 2025, between Fortive Corporation and Olumide Soroye * †

19.1 Fortive Corporation Insider Trading Policy †

21.1 Subsidiaries of Registrant †

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97 Fortive Corporation Clawback Policy

Incorporated by reference from Exhibit 97 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 (Commission File Number:

101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document †

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* Indicates management contract or compensatory plan, contract or arrangement.

(1) Exhibit 101 to this report includes the following documents formatted in XBRL (Extensible Business Reporting Language):

(i) Consolidated Balance Sheets as of December 31, 2023 and 2022, (ii) Consolidated Statements of Earnings for the years ended December 31, 2023, 2022, and 2021, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021, (iv) Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2022, and 2021, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021 and (vi) Notes to Consolidated Financial Statements.

Filed electronically herewith.

The registrant agrees to furnish to the Commission supplementally upon request a copy of (i) any instrument with respect to long-term debt not filed herewith as to which the total amount of securities authorized thereunder does not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis and (ii) schedules or similar attachments omitted pursuant to Item 601(a)(5) of Regulation S-K.

47 unchanged sentences

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