EX-10.20



 Exhibit 10.20 

FORM OF FORTIVE CORPORATION 
 2016
EXECUTIVE INCENTIVE COMPENSATION PLAN 
 Effective as of July 2, 2016 

 

			
	PURPOSE	  	Fortive Corporation, a Delaware corporation (the “Company”), wishes to motivate, reward, and retain executive officers of the Company and its subsidiaries. To further these objectives, the Company hereby sets forth
this Fortive Corporation 2016 Executive Incentive Compensation Plan (the “Plan”), effective as of July 2, 2016, to provide participants with performance-based bonus awards (“Awards”), in accordance with Section
162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986 (the “Code”). (All references to Section 162(m) or any other Code provision include successor provisions, related regulations, and
amendments.)
		
	PARTICIPANTS	  	The Participants in the Plan shall be the Executive Officers of the Company.
		
		  	Executive Officer has the meaning set forth in Rule 3b-7 issued under the Securities Exchange Act of 1934, as amended from time to time, and anyone else the Committee determines to treat as an Executive Officer for purposes
of this Plan.
		
	ADMINISTRATOR	  	The Plan’s Administrator will be the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company.
		
		  	The Committee will include two or more members, each of whom qualifies as an “outside director” within the meaning of Section 162(m), and those outside directors will have exclusive authority under this Plan to make Awards
and determine the attainment of Performance Goals. The Committee may satisfy this requirement through (i) providing that persons who are not “outside directors” cannot vote on an issue, (ii) allowing those persons to abstain from voting,
or (iii) creating a subcommittee of qualifying outside directors to take action with respect to this Plan. If a Committee member intended to qualify as an outside director does not in fact so qualify, the mere fact of such nonqualification will not
invalidate the payment of any Award or other action by the Committee under the Plan that was otherwise valid under the Plan.
		
		  	The Committee is responsible for the general operation and administration of the Plan and for carrying out its provisions and has full discretion in interpreting and administering the provisions of the Plan. Subject to the express
provisions of the Plan, the Committee may exercise such powers and authority of the Board as the Committee may find necessary or appropriate to carry out its functions. The Committee intends to exercise its powers under the Plan in a manner that
preserves the Company’s Federal income tax deduction for payments made under the Plan, in accordance with the requirements of Section 162(m), to the maximum practical extent.









			
	GENERAL RESPONSIBILITIES OF THE COMMITTEE	  	Subject to the terms of the Plan, for each Performance Period the Committee will:
		
		  	 •       establish each Participant’s potential
Award,

		
		  	 •       define Performance Goals and other Award terms and
conditions for each Participant,

		
		  	 •       determine and certify in writing the Award amounts
earned, based on actual performance as compared to the Performance Goals,

		
		  	 •       determine and make permitted Negative Discretion
Adjustments to Awards otherwise earned, and

		
		  	 •       decide whether, under what circumstances, and
subject to what terms, Awards will be paid on a deferred basis (including automatic deferrals at the Committee’s election or elective deferrals at the election of Participants).

		
		  	Unless the Plan otherwise expressly provides, all designations, determinations, interpretations, and other decisions made under or with respect to the Plan and all Awards made under the Plan are within the sole and absolute
discretion of the Committee and will be final, conclusive and binding on all persons, including the Company, Participants, and Beneficiaries or other persons having or claiming any rights under the Plan.
		
	AWARDS	  	For any single Performance Period, the amount payable to a Participant for such Performance Period shall equal the lesser of (i) ten million dollars ($10,000,000.00) (pro-rated for any Performance Period of less than 12 months), or
(ii) the amount earned pursuant to the Performance Goals and other Award terms and conditions established by the Committee with respect to such Performance Period; in each case, subject to any further Negative Discretion Adjustments as the Committee
may determine. The Committee will establish each Participant’s potential Award, including the applicable Performance Goals and related terms and conditions, for each Performance Period within the Applicable Period. A Participant’s
potential Award may be expressed in dollars or may be based on a formula that is consistent with the provisions of the Plan.
		
	PERFORMANCE PERIOD	  	A Performance Period is a period for which Performance Goals are set and during which performance is to be measured to determine whether a Participant is entitled to payment of an Award under the Plan. A Performance Period
may coincide with one or more complete or partial calendar or fiscal years of the Company. Performance Periods may be of varying and overlapping durations. Any Performance Period shall be at least 12 months in duration except as otherwise permitted
by Section 162(m). Unless otherwise designated by the Committee, the Performance Period will be based on the calendar year.
		
	PERFORMANCE GOALS	  	The Committee will have the authority to establish and administer Performance Goals with respect to such Awards as it considers appropriate, which Performance Goals must be satisfied, as the Committee specifies, before a Participant
receives an Award.


  
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		  	Performance Goals will be based exclusively on any one of, or a combination of, the following performance-based measures determined based on the Company and its subsidiaries on a group-wide basis or on the basis of subsidiary,
platform, division, operating unit and/or other business unit results (subject to the Committee’s exercise of negative discretion):
		
		  	 •       earnings per share (on a fully diluted or other
basis);

		
		  	 •       stock price targets or stock price
maintenance;

		
		  	 •       total shareholder return;

		
		  	 •       return on capital, return on invested capital or
return on equity;

		
		  	 •       pretax or after-tax net income;

		
		  	 •       working capital;

		
		  	 •       earnings before interest and taxes;

		
		  	 •       earnings before interest, taxes, depreciation, and
amortization (EBITDA);

		
		  	 •       operating income;

		
		  	 •       free cash flow;

		
		  	 •       cash flow;

		
		  	 •       revenue or core revenue;

		
		  	 •       gross profit margin;

		
		  	 •       operating profit margin, gross or operating margin
improvement or core operating margin improvement; or

		
		  	 •       strategic business criteria, consisting of one or
more objectives based on meeting specified revenue, market penetration, market share or geographic business expansion goals, cost targets, or objective goals relating to acquisitions or divestitures.

		
		  	The Committee shall determine whether such Performance Goals are attained, and such determination will be final and conclusive. Each Performance Goal may be expressed in absolute and/or relative terms or ratios and may be based on
or use comparisons with internal targets, the past performance of the Company (including the performance of one or more subsidiaries, platforms, divisions, operating units and/or other business units) and/or the past or current performance of
unrelated companies. Without limiting the foregoing, in the case of earnings-based measures, Performance Goals may use comparisons relating to capital (including, but not limited to, the cost of capital), cash flow, free cash flow,
shareholders’ equity, shares outstanding, assets and/or net assets.


  
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		  	The measures used in setting Performance Goals under the Plan for any given Performance Period will, to the extent applicable, be determined in accordance with generally accepted accounting principles (“GAAP”) and
in a manner consistent with the methods used in the Company’s audited financial statements, but the Performance Goals will be determined without regard to (1) unusual or infrequently occurring items in accordance with GAAP, (2) the
impact of any change in accounting principles that occurs during the Performance Period (or that occurred during any period that the Performance Period is being compared to) and the cumulative effect thereof (provided that the Committee may
(as specified by the Committee within the Applicable Period) either apply the changed accounting principle to all periods referenced in the Award, or exclude the changed accounting principle from all periods referenced in the Award),
(3) goodwill and other intangible impairment charges, (4) gains or charges associated with discontinued operations or with the obtaining or losing control of a business, (5) gains or charges related to the sale or impairment of
assets, (6) (i) all transaction costs directly related to acquisitions, (ii) all restructuring charges directly related to acquisitions and incurred within two years of the acquisition date, (iii) all charges and gains arising from the
resolution of acquisition-related contingent liabilities identified as of the acquisition date, and (iv) all other charges directly related to acquisitions and incurred within two years of the acquisition date, (7) the impact of any discrete income
tax charges or benefits identified during the Performance Period (or during any period that the Performance Period is being compared to), and (8) other objective income, expense, asset, liability and/or cash flow adjustments as may be consistent
with the purposes of the Performance Goals set for the given Performance Period and specified by the Committee within the Applicable Period, which may include adjustments that would cause one or more of the Performance Goals to be considered
“non-GAAP financial measures” under rules promulgated by the Securities and Exchange Commission; provided, that with respect to the gains and charges referred to in sections (3), (4), (5), (6)(iii), 6(iv) and (7), only gains or
charges that individually or as part of a series of related items exceed $10 million in aggregate during the Performance Period and any period that the Performance Period is being compared to are excluded; and provided further that the
Committee in its sole discretion and within the Applicable Period may determine that any or all of the carve-outs described in subsections (1) through (7) shall not be excluded from the measures used to determine the Performance Goals for a
particular Performance Period or shall be modified, and/or may determine to exclude other items from such measures for such Performance Period.
		
		  	In all cases, Performance Goals are intended to be set in a manner that will satisfy any applicable requirements under Treas. Reg. Sec. 1.162-27(e)(2) (as amended from time to time). Subject to any amendment to such regulation, such
requirements include requirements that achieving Performance Goals be “substantially uncertain” at the time that they are established, that Performance Goals be defined in such a way that a third party with knowledge of the relevant facts
could determine whether and to what extent the Goals have been met, and such a third party could determine the maximum amount of the resulting Award payable (subject to the Committee’s right to make Negative Discretion
Adjustments).


  
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		  	The Applicable Period with respect to any Performance Period for an Award means a period beginning on or before the first day of the Performance Period and ending no later than the earlier of (i) the 90th day of the
Performance Period or (ii) the date on which 25% of the Performance Period has been completed.
		
		  	Any action required under the Plan to be taken within the Applicable Period may be taken at a later date only if the provisions of Section 162(m) or the regulations thereunder are modified, or are interpreted by the Internal Revenue
Service, to permit such later date. In such event, the definition of the Applicable Period under this Plan will be deemed to be amended accordingly.
		
	PAYMENT OF AWARDS	  	Subject to the limitations set forth in this section and unless otherwise determined by the Committee, Awards determined under the Plan for a Performance Period will be paid to Participants either (i) in cash or (ii) in shares or
equity-based awards under the Company’s 2016 Stock Incentive Plan or any successor thereto, in each case no earlier than the January 1st and no later than the March 15th of the calendar year following the end of the Performance Period to which
the Awards apply, unless deferred pursuant to the Plan.
		
	CERTIFICATION	  	No Award will be paid unless and until the Committee has certified in the manner prescribed under applicable regulations the extent to which the Performance Goals for the Performance Period have been attained and has made and
exercised its decisions regarding the extent of any Negative Discretion Adjustment of Awards for Participants for the Performance Period.
		
	DEFERRAL	  	All or any portion of the Award for any given Performance Period may be deferred under the Fortive Corporation Executive Deferred Incentive Program.
		
	CONTINUED EMPLOYMENT	  	The Committee may require that Participants for a Performance Period must still be employed as of the end of the Performance Period and/or as of the later date that the Awards for the Performance Period are communicated or paid to
be eligible for an Award for the Performance Period. Any such requirement must be established and announced within the Applicable Period, and may be subject to such exceptions as the Committee may specify within the Applicable Period.
		
	FORFEITURE OR PRORATION	  	Within the Applicable Period and subject to the Committee certification required for payment of Awards, the Committee may adopt such forfeiture, proration, or other rules as it deems appropriate, in its sole and absolute discretion,
regarding the impact on Awards of a Participant’s death, Disability or other events or situations determined by the Committee to constitute an appropriate exception to attainment of any Performance Goal for purposes of Treas. Reg. Sec.
1.162-27(e)(2) (as amended from time to time).
		
		  	A Participant shall be considered to have a Disability if the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected
to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or that
has lasted or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s
employer.


  
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	NEGATIVE DISCRETION ADJUSTMENTS	  	The Committee’s powers include the power to make Negative Discretion Adjustments, which are adjustments that eliminate or reduce (but not increase) an Award otherwise payable to a Participant for a Performance
Period. No Negative Discretion Adjustment may cause an Award to fail to qualify as “performance based compensation” under Section 162(m).
		
	OTHER PLANS	  	A Participant in this Plan may not also participate in the Company’s general bonus plans during any Performance Period if such participation would cause an Award under this Plan to fail to qualify as “performance
based” under Section 162(m).
		
		  	Awards will not be treated as compensation for purposes of any other compensation or benefit plan, program, or arrangement of the Company or any subsidiary unless and except to the extent that the Board or the Committee determines
in writing.
		
		  	Neither the adoption of this Plan nor the submission of the Plan to the Company’s shareholders for approval will be construed as limiting the power of the Board or the Committee to adopt such other cash or equity incentive
arrangements as either may otherwise deem appropriate.
		
	LEGAL COMPLIANCE	  	The Company will not make payments of Awards until all applicable requirements imposed by Federal, state and foreign laws, rules, and regulations, and by any applicable regulatory agencies, have been fully met. No provision in the
Plan or action taken under it authorizes any action that applicable laws otherwise prohibit.
		
		  	The Plan is intended to conform with all provisions of Section 162(m) and Treas. Reg. § 1.162-27 to the extent necessary to allow the Company a Federal income tax deduction for Awards as “qualified performance-based
compensation.”
		
		  	Notwithstanding anything in the Plan to the contrary, the Committee will administer the Plan, and Awards may be granted and paid, only in a manner that conforms to such laws, rules, and regulations. To the extent permitted by
applicable law, the Plan will be treated as amended to the extent necessary to conform to such laws, rules, and regulations.
		
	TAX WITHHOLDING	  	The Company may make all appropriate provisions for the withholding of Federal, state, foreign and local taxes imposed with respect to Awards, which provisions may vary with the time and manner of payment.
		
	NONTRANSFER OF RIGHTS	  	Except as and to the extent the law requires, or as the Plan expressly provides, a Participant’s rights under the Plan may not be assigned, pledged, or otherwise transferred in any way, whether by operation of law or otherwise
or through any legal or equitable proceedings (including bankruptcy), by the Participant to any person.
		
	AMENDMENT OR TERMINATION OF PLAN	  	Subject to the limitations set forth in this section, the Board may amend, suspend, or terminate the Plan at any time, without the consent of the Participants or their
Beneficiaries.


  
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		  	The Board or the Committee may make any amendments necessary to comply with applicable regulatory requirements, including Section 162(m) and regulations thereunder.
		
		  	The Board must submit any Plan amendment to the Company’s shareholders for their approval if and to the extent such approval is required under Section 162(m).
		
	LIMITATIONS ON LIABILITY	  	No member of the Committee and no other individual acting as a director, officer, other employee or agent of the Company will be liable to any Participant, former Participant, spouse, Beneficiary, or any other person or entity for
any claim, loss, liability, or expense incurred in connection with the Plan. No member of the Committee will be liable for any action or determination (including, but limited to, any decision not to act) made in good faith with respect to the Plan
or any Award under the Plan.
		
	NO EMPLOYMENT CONTRACT	  	Nothing contained in this Plan constitutes an employment contract between the Company and the Participants. The Plan does not give any Participant any right to be retained in the Company’s employ, nor does it enlarge or
diminish the Company’s right to end the Participant’s employment or other relationship with the Company.
		
	APPLICABLE LAW	  	The laws of the State of Delaware (other than its choice of law provisions) govern this Plan and its interpretation.
		
	DURATION OF THE PLAN	  	The Plan will remain effective until terminated by the Board, provided, however, that the continued effectiveness of the Plan will be subject to the approval of the Company’s shareholders at such times and in such
manner as Section 162(m) may require.
		
	DISCLOSURE/APPROVAL	  	The specific terms of the Plan, including the class of employees eligible to be Participants, the Performance Goals, and the terms of payment of Awards, must be disclosed to and approved by the shareholders to the extent Section
162(m) requires.
		
	CODE SECTION 409A REQUIREMENTS	  	The Plan as well as payments under the Plan are intended to be exempt from or, to the extent subject thereto, to comply with, Section 409A of the Code (“Section 409A”), and, accordingly, to the maximum extent
permitted, the Plan shall be interpreted in accordance therewith. Notwithstanding anything contained in the Plan to the contrary, to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A, a Participant shall not
be considered to have terminated employment or service with the Company for purposes of the Plan until the Participant would be considered to have incurred a “separation from service” from the Company and its affiliates within the meaning
of Section 409A. Any payments described in the Plan that are due within the “short term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. Notwithstanding
anything to the contrary in the Plan, to the extent that any Awards (or any other amounts payable under any plan, program or arrangement of the Company or any of its Affiliates) are payable upon a separation from service and such payment would
result in the imposition of any individual tax and


  
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		  	penalty interest charges imposed under Section 409A, the settlement and payment of such awards (or other amounts) shall instead be made on the first business day after the date that is six months following such separation from
service (or death, if earlier). Each amount to be paid or benefit to be provided under the Plan shall be construed as a separate identified payment for purposes of Section 409A. The Company makes no representation that any or all of the payments or
benefits described in the Plan will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to any such payment. Each Participant shall be solely responsible for the payment of any taxes and
penalties incurred under Section 409A.
		
	RECOUPMENT	  	Any Award awarded under the Plan is subject to the terms of the Fortive Corporation Recoupment Policy in the form approved by the Committee (a copy of the Recoupment Policy as it exists from time to time is available on the
Company’s internal website) and to the terms required by applicable law.


  
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