Fortive Corporation

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief from prospectus requirements to allow company to spin off shares of its U.S. subsidiary to investors on a pro rata basis and by way of a dividend in specie -- distribution not covered by legislative exemptions -- company is a public company in the U.S. but is not a reporting issuer in Canada -- company has a de minimis presence in Canada -- no investment decision required from Canadian shareholders in order to receive shares of the subsidiary.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 53, 74(1).

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF FORTIVE CORPORATION (Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the Legislation) for an exemption (the Exemption Sought) from the prospectus requirement in section 53 of the Securities Act (Ontario) in connection with the proposed distribution (the Spin-Off) by the Filer of the shares of common stock (Vontier Shares) of Vontier Corporation (Vontier), a wholly-owned subsidiary of the Filer, by way of a distribution in specie to holders (Filer Shareholders) of shares of common stock of the Filer (Filer Shares) resident in Canada (Filer Canadian Shareholders) as of the record date for the distribution.

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) The Ontario Securities Commission is the principal regulator for this application; and

(b) The Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 -- Passport System (MI 11-102) is intended to be relied upon in each of the other provinces and territories of Canada.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer is a Delaware corporation that is a diversified industrial growth company comprised of Professional Instrumentation and Industrial Technologies businesses. The Filer's principal executive office is located at 6920 Seaway Blvd., Everett, Washington 98203.

2. The Filer is not a reporting issuer, and currently has no intention of becoming a reporting issuer, under the securities laws of any jurisdiction of Canada.

3. The authorized share capital of the Filer consists of 2,000,000,000 Filer Shares, par value $0.01 per share, and 15,000,000 shares of preferred stock, par value $0.01 per share, of which 1,380,000 shares have been designated as 5% Mandatory convertible preferred stock, Series A, par value $0.01 per share (Convertible Shares). As of July 21, 2020, 2020, there were 337,071,495 Filer Shares issued and outstanding and 1,380,000 Convertible Shares issued and outstanding. The Filer has no other shares of preferred stock issued and outstanding.

4. The Filer Shares are listed for trading on the New York Stock Exchange (the NYSE) under the symbol "FTV" and the Convertible Shares are listed for trading on the NYSE under the symbol "FTV.PRA". Other than the foregoing listings on the NYSE, no securities of the Filer are listed or posted for trading on any exchange or market in Canada or outside of Canada. The Filer has no current intention of listing its securities on any Canadian exchange.

5. The Filer is subject to the United States Securities Exchange Act of 1934, as amended (the 1934 Act) and the rules, regulations and orders promulgated thereunder.

6. According to a registered shareholder report prepared for the Filer by Broadridge Financial Solutions, Inc., as at September 8, 2020, there were 5 registered holders of Filer Shares resident in Canada, representing approximately 0.23% of the registered shareholders of the Filer worldwide and holding approximately 1,497 Filer Shares, representing approximately 0.18% of the outstanding Filer Shares. The Filer does not expect these numbers to have materially changed since that date.

7. According to a beneficial ownership report prepared for the Filer by Broadridge Financial Solutions, Inc., as at September 8, 2020, there were 10,449 beneficial holders of Filer Shares resident in Canada, representing approximately 4.38% of the beneficial holders of Filer Shares worldwide and holding approximately 2,571,869 Filer Shares, representing approximately 0.75% of the outstanding Filer Shares. The Filer does not expect these numbers to have materially changed since that date.

8. Based on the information above, the number of registered and beneficial Filer Canadian Shareholders and the proportion of Filer Shares held by such shareholders are de minimis.

9. Vontier is a Delaware corporation and a wholly-owned subsidiary of the Filer. Vontier's principal executive office is located at 5420 Wade Park Boulevard, Suite 206, Raleigh, North Carolina 27607.

10. All of the issued and outstanding Vontier Shares are held by the Filer. No other securities of Vontier are issued and outstanding.

11. On September 4, 2019 and, subsequently, on September 1, 2020, the Filer announced its intention to separate the business of Vontier from the remainder of its businesses. This separation will be effected by way of a pro rata distribution of 80.1% of the outstanding Vontier Shares to holders of Filer Shares pursuant to the Spin-Off. The Filer will distribute 80.1% of the Vontier Shares to the holders of Filer Shares as of the record date for the distribution at a rate of two Vontier Shares for every five Filer Shares.

12. The distribution agent for the distribution will distribute to each Filer Shareholder entitled to Vontier Shares in connection with the Spin-Off the number of whole Vontier Shares to which the Filer Shareholder is entitled in the form of a book-entry credit. No fractional Vontier Shares will be issued in connection with the Spin-Off. The distribution agent will aggregate fractional shares into whole shares, sell the whole shares in the open market at prevailing prices and distribute the net cash proceeds from the sales pro rata to each Filer Shareholder who would otherwise have been entitled to receive a fractional share in the distribution. Recipients of cash in lieu of fractional shares will not be entitled to any interest on the amounts of cash payments made in lieu of fractional shares.

13. Filer Shareholders will not be required to pay any cash, deliver any other consideration or surrender or exchange their Filer Shares or take any other action in order to receive Vontier Shares in connection with the Spin-Off. The Spin-Off will occur automatically without any investment decision on the part of Filer Shareholders.

14. Subject to the satisfaction of certain conditions, including the receipt by the Filer of all necessary approvals of the U.S. Securities and Exchange Commission (SEC), it is currently anticipated that the Spin-Off will become effective on or about October 10, 2020.

15. Following completion of the Spin-Off, Filer Shareholders as of the record date for the Spin-Off will own 80.1% of the Vontier Shares, and Vontier will cease to be a subsidiary of the Filer and it is expected that Vontier will become an independent, publicly-traded company.

16. Following completion of the Spin-Off, the Filer Shares will continue to be listed for trading on the NYSE.

17. It is expected that the Vontier Shares will be listed for trading on the NYSE under the symbol "VNT". A complete listing application has been submitted to the NYSE on behalf of Vontier and on September 15, 2020 Vontier received authorization from the NYSE for listing, subject to compliance with all applicable listing standards on the date it begins trading on the NYSE.

18. Vontier is not a reporting issuer in any jurisdiction of Canada nor are its securities listed on any stock exchange in Canada. Vontier has no current intention of becoming a reporting issuer in any jurisdiction of Canada or to list its securities on any stock exchange in Canada after completion of the Spin-Off.

19. The Spin-Off is being effected as a dividend of Vontier Shares to Filer Shareholders in accordance with the laws of Delaware.

20. Because the Spin-Off will be effected by way of a dividend of Vontier Shares to Filer Shareholders, no shareholder approval of the Spin-Off is required or being sought under the laws of Delaware or any applicable United States federal securities laws.

21. On September 1, 2020, Vontier filed a registration statement on Form 10 with the SEC detailing the proposed Spin-Off (the Registration Statement). On September 21, 2020, Vontier filed Amendment No. 1 to the Registration Statement. On September 23, 2020, the SEC declared the Registration Statement, as amended, effective. The Registration Statement can be accessed at https://www.sec.gov/Archives/edgar/data/1786842/000119312520236631/0001193125-20-236631-index.htm and Amendment No. 1 can be accessed at https://www.sec.gov/Archives/edgar/data/?1786842/000119312520249546/0001193125-20-249546-index.htm.

22. Filer Shareholders will receive a notice of internet availability of an information statement (the Information Statement) with respect to Vontier detailing the terms and conditions of the Spin-Off. All materials relating to the Spin-Off sent by or on behalf of the Filer to Filer Shareholders resident in the United States (including the Information Statement) will be sent concurrently to Filer Canadian Shareholders.

23. The Information Statement will contain prospectus-level disclosure about Vontier.

24. Filer Canadian Shareholders who receive Vontier Shares pursuant to the Spin-Off will have the benefit of the same rights and remedies in respect of the disclosure documentation received in connection with the Spin-Off that are available to Filer Shareholders resident in the United States.

25. Following completion of the Spin-Off, Vontier will be subject to the requirements of the 1934 Act and the rules and regulations of the NYSE. Vontier will send concurrently to holders of Vontier Shares resident in Canada the same disclosure materials required to be sent under applicable United States securities laws to holders of Vontier Shares resident in the United States.

26. There will be no active trading market for the Vontier Shares in Canada following the Spin-Off and none is expected to develop. Consequently, it is expected that any resale of Vontier Shares distributed in connection with the Spin-Off will occur through the facilities of the NYSE or any other exchange or market outside of Canada on which the Vontier Shares may be quoted or listed at the time that the trade occurs or to a person or company outside of Canada.

27. The Spin-Off to Filer Canadian Shareholders would be exempt from the prospectus requirement pursuant to subsection 2.31(2) of National Instrument 45-106 Prospectus Exemptions but for the fact that Vontier is not a reporting issuer under the securities legislation of any jurisdiction in Canada.

28. Neither the Filer nor Vontier is in default of any securities legislation in any jurisdiction of Canada.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted provided that the first trade in Vontier Shares acquired pursuant to the Spin-Off will be deemed to be a distribution that is subject to section 2.6 of National Instrument 45-102 Resale of Securities.

DATED at Toronto this 2nd day of October, 2020.

"Heather Zordel"

Commissioner

Ontario Securities Commission

"Mary Anne De Monte-Whelan"

Commissioner

Ontario Securities Commission