Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Our management, with the participation of the President and Chief Executive Officer, and Senior Vice President and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the President and Chief Executive Officer, and Senior Vice President and Chief Financial Officer, have concluded that, as of the end of such period, these disclosure controls and procedures were effective.
Management’s annual report on its internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) and the independent registered public accounting firm’s audit report on the effectiveness of the Company’s internal control over financial reporting are included in Item 8. 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 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.
ITEM 9B. OTHER INFORMATION
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; and
• 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:
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• 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; and
• 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
During the fourth quarter ended December 31, 2024, no directors or Section 16 officers adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. 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 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.
Code of Ethics
We have adopted a code of business conduct and ethics for directors, officers (including Fortive’s principal executive officer, principal financial officer and principal accounting officer) and employees, known as the Fortive Code. The Fortive Code is available in the “Our Culture-Integrity & Compliance” section of our website at www.fortive.com.
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.
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ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated by reference from the sections entitled Compensation Discussion and Analysis, Compensation Committee Report, Executive Compensation Tables, Pay Ratio Disclosure, Pay versus Performance Disclosure and Director Compensation in the Proxy Statement for our 2025 annual meeting (other than the Compensation Committee Report, which shall not be deemed to be “filed”).
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item is incorporated by reference from the sections entitled Ownership of Our Stock, and Equity Compensation Plan Information in the Proxy Statement for our 2025 annual meeting.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item is incorporated by reference from the sections entitled Corporate Governance - Director Independence and Certain Relationships and Related Transactions in the Proxy Statement for our 2025 annual meeting.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item is incorporated by reference from the section entitled Ratification of Independent Registered Public Accounting Firm in the Proxy Statement for our 2025 annual meeting.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
a) The following documents are filed as part of this report.
(1) Financial Statements. The financial statements, including the report of independent registered public accounting firm (PCAOB ID: 42 ), are set forth under “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
(2) Schedules. An index of Exhibits and Schedules is on page 92 of this report. Schedules other than those listed below have been omitted from this Annual Report on Form 10-K because they are not required, are not applicable or the required information is included in the financial statements or the notes thereto.
(3) Exhibits. The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this Annual Report on Form 10-K.
ITEM 16. FORM 10-K SUMMARY
Not applicable.
FORTIVE CORPORATION
INDEX TO FINANCIAL STATEMENTS, SUPPLEMENTARY DATA AND FINANCIAL STATEMENT SCHEDULE
Page Number in
Form 10-K
Schedule:
Valuation and Qualifying Accounts 102
EXHIBIT INDEX
Exhibit Number Description
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 June 28, 2024 (Commission File Number: 1-37654)
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: 1-37654)
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: 1-37654)
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: 1-37654)
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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
Incorporated by reference from Exhibit 4.1 to Fortive Corporation’s Current Report on Form 8-K filed on February 13, 2024 (Commission File Number: 1-37654)
4.4 Supplemental Indenture No.1 , dated as of February 13, 2024, between Fortive Corporation, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee
Incorporated by reference from Exhibit 4.2 to Fortive Corporation’s Current Report on Form 8-K filed on February 13, 2024 (Commission File Number: 1-37654)
10.1 Second Amended and Restated Credit Agreement, dated as of October 18, 2022, among Fortive Corporation, Bank of America, N.A., as Administrative Agent and USD Swing Line Lender, Bank of America, N.A., London Branch, as Alternative Currency Swing Line Lender, and the lenders referred to therein
Incorporated by reference from Exhibit 10.1 to Fortive Corporation’s Current Report on Form 8-K filed on October 20, 2022 (Commission File Number: 1-37654)
10.2 Term Loan Credit Agreement, dated as of December 7, 2023 , among Fortive Corporation, Sumitomo Mitsui Banking Corporation , as Administrative Agent, and the lenders referred to therein.
Incorporated by reference to Exhibit 10.1 to Fortive Corporation’s Current Report on Form 8-K filed on December 12, 2023 (Commission File Number: 1-37654)
10.3 Fortive Corporation 2016 Stock Incentive Plan, as amended and restated*
Incorporated by reference from Exhibit 10.15 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2020 (Commission File Number: 1-37654)
10.4 Form of Fortive Corporation Performance Stock Unit Agreement*
Incorporated by reference from Exhibit 10.1 to Fortive Corporation’s Quarterly Report on Form 10-Q for the year ended April 1, 2022 (Commission File Number: 1-37654)
10.5 Form of Fortive Corporation Non-Employee Directors Restricted Stock Unit Agreement *
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: 1-37654)
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: 1-37654)
10.7 Form of Fortive Corporation Restricted Stock Unit Agreement*
Incorporated by reference from Exhibit 10.11 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654)
10.8 Form of Fortive Corporation Non-Employee Directors Stock Option Agreement*
Incorporated by reference from Exhibit 10.12 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654)
10.9 Form of Fortive Corporation Stock Option Agreement*
Incorporated by reference from Exhibit 10.13 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654)
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10.10 Fortive Corporation Amended and Restated 2016 Executive Incentive Compensation Plan*
Incorporated by reference from Exhibit 10.18 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018 (Commission File Number: 1-37654)
10.11 Fortive Corporation Severance and Change in Control Plan for Officers*
Incorporated by reference from Exhibit 10.1 to Fortive Corporation’s Current Report on Form 8-K, filed on March 31, 2017 (Commission File Number: 1-37654)
10.12 Fortive Executive Deferred Incentive Program*
Incorporated by reference from Exhibit 10.10 to Fortive Corporation’s Current Report on Form 8-K filed on June 1, 2016 (Commission File Number: 1-37654)
10.13 Form of D&O Indemnification Agreement*
Incorporated by reference from Exhibit 10.10 to Amendment No. 2 to Fortive Corporation’s Registration Statement on Form 10, filed on April 7, 2016 (Commission File Number: 1-37654)
10.14 Aircraft Time Sharing Agreement, dated July 18, 2016, between Fortive Corporation and James Lico*
Incorporated by reference from Exhibit 10.18 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654)
10.15 Aircraft Time Sharing Agreement, dated July 18, 2016, between Fortive Corporation and Charles McLaughlin*
Incorporated by reference from Exhibit 10.19 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017 (Commission File Number: 1-37654)
10.16 Description of C ompensation A rrangements for N on-management D irectors*
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: 1-37654)
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: 1-37654)
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: 1-37654)
10.19 Offer of Employment Letter, dated November 16, 2015, between TGA Employment Services LLC and Chuck McLaughlin*
Incorporated by reference from Exhibit 10.6 to Amendment No. 1 to Fortive Corporation’s Registration Statement on Form 10, filed on March 3, 2016 (Commission File Number: 1-37654)
10.20 Offer of Employment Letter, dated February 1, 2016, between TGA Employment Services LLC and Stacey Walker*
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: 1-37654)
10.21 Offer Letter, dated February 24, 2025, between Fortive Corporation and Tamara Newcombe* †
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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*
Incorporated by reference from Exhibit 10.23 to Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022 (Commission File Number: 1-37654)
10.24 Fortive Corporate Executive Officer Cash Severance Policy*
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. 1-37654)
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 †
23.1 Consent of Independent Registered Public Accounting Firm †
31.1 Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 †
31.2 Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 †
32.1 Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 †
32.2 Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 †
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: 1-37654)
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 †
101.SCH Inline XBRL Taxonomy Extension Schema Document †
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101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document †
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document †
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document †
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document †
104 Inline Cover page formatted as Inline XBRL and contained in Exhibit 101
* Indicates management contract or compensatory plan, contract or arrangement.
†
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.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FORTIVE CORPORATION
Date: February 25, 2025 By: /s/ JAMES A. LICO
James A. Lico
President and Chief Executive Officer
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Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated:
Name, Title and Signature Date
/s/ ALAN G. SPOON February 25, 2025
Alan G. Spoon
Chairman of the Board
/s/ ERIC BRANDERIZ February 25, 2025
Eric Branderiz
Director
/s/ DANIEL L. COMAS February 25, 2025
Daniel L. Comas
Director
/s/ SHARMISTHA DUBEY February 25, 2025
Sharmistha Dubey
Director
/s/ REJJI P. HAYES February 25, 2025
Rejji P. Hayes
Director
/s/ WRIGHT LASSITER III February 25, 2025
Wright Lassiter III
Director
/s/ JAMES A. LICO February 25, 2025
James A. Lico
President, Chief Executive Officer and Director
/s/ KATE D. MITCHELL February 25, 2025
Kate D. Mitchell
Director
/s/ JEANNINE P. SARGENT February 25, 2025
Jeannine P. Sargent
Director
/s/ CHARLES E. MCLAUGHLIN February 25, 2025
Charles E. McLaughlin
Senior Vice President and Chief Financial Officer
/s/ CHRISTOPHER M. MULHALL February 25, 2025
Christopher M. Mulhall
Chief Accounting Officer
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FORTIVE CORPORATION AND SUBSIDIARIES
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
($ in millions)
Classification Balance at
Beginning of
Period Charged to
Costs &
Expenses Impact of
Currency Charged
to Other
Accounts
Write Offs,
Write Downs &
Deductions Balance at
End
of Period
Year Ended December 31, 2024:
Allowances deducted from asset accounts
Allowance for credit losses $ 39.2 $ 4.4 $ ( 0.6 ) $ ( 3.8 ) $ ( 8.5 ) $ 30.7
Year Ended December 31, 2023:
Allowances deducted from asset accounts
Allowance for credit losses $ 43.9 $ 5.0 $ 0.3 $ 0.7 $ ( 10.7 ) $ 39.2
Year Ended December 31, 2022:
Allowances deducted from asset accounts
Allowance for credit losses $ 39.7 $ 14.0 $ ( 0.7 ) $ — $ ( 9.1 ) $ 43.9
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