Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Management of the Company, with the participation of its Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the period ending December 31, 2023. Based upon our evaluation, our CEO and our CFO have concluded that, as of the period ending December 31, 2023, our disclosure controls and procedures were effective and provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our CEO and our CFO, as appropriate, to allow timely decisions regarding required disclosure.
Prior to the quarter ended June 30, 2023, Fortrea relied on certain material processes and internal controls over financial reporting performed by Labcorp.
Management’s Annual Report on Internal Control Over Financial Reporting
This Annual Report on Form 10-K does not include a report of management’s assessment regarding our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or an attestation report of our independent registered accounting firm due to a transition period established by rules of the SEC for newly public companies.
Changes in Internal Control Over Financial Reporting
No changes in our internal controls over financial reporting during the year ended December 31, 2023 have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item will be included in the definitive proxy statement of Fortrea related to its 2024 annual meeting of shareholders to be filed no later than 120 days after December 31, 2023 (the “Proxy Statement”).
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item will be included in the 2024 Proxy Statement under the sections captioned “2023 Director Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation,” “Compensation Committee Interlocks and Insider Participation” and “Report of Compensation Committee,” and is incorporated herein by reference thereto.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item will be included in the 2024 Proxy Statement under the sections captioned “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” and is incorporated herein by reference thereto.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item will be included in the 2024 Proxy Statement under the sections captioned “Certain Relationships and “Director Independence” and is incorporated herein by reference thereto.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this item will be included in the 2024 Proxy Statement under the sections captioned “Independent Registered Public Accounting Firm Fees and Other Matters” and “Audit Committee Pre-Approval Policy and Procedures” and is incorporated herein by reference thereto.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15(a)(1) and (2) Financial Statements and Schedules
See "Index to Consolidated Financial Statements and Financial Statements Schedules" at Item 8 to this Annual Report on Form 10-K. Other financial statement schedules have not been included because they are not applicable or the information is included in the financial statements or notes thereto.
Item 15(a)(3) and Item 15(b) Exhibits
INCORPORATED BY REFERENCE
EXHIBIT NO. DESCRIPTION Filed Herewith FORM File No. Exhibit Filing Date
2.1
Separation and Distribution Agreement, dated June 29, 2023, by and between Laboratory Corporation of America Holdings and Fortrea Holdings Inc.
8-K 001-41704 2.1 3-Jul-23
3.1
Amended and Restated Certificate of Incorporation of Fortrea Holdings Inc.
8-K 001-41704 3.1 3-Jul-23
3.2
Amended and Restated By-Laws of Fortrea Holdings Inc.
8-K 001-41704 3.2 3-Jul-23
4.1
Indenture, dated June 27, 2023, among Fortrea Holdings Inc., as issuer, U.S. Bank Trust Company, National Association, as trustee and U.S. Bank Trust Company, National Association, as collateral agent, relating to Fortrea Holding Inc.’s 7.500% Senior Secured Notes due 2030.
8-K 001-41704 4.1 30-Jun-23
4.2
Form of 7.500% Senior Secured Notes due 2030 (included in Exhibit 4.1).
8-K 001-41704 4.2 30-Jun-23
4.3
Supplemental Indenture, dated June 30, 2023, among Fortrea Holdings Inc., as issuer, the Initial Subsidiary Guarantors (as defined in the Indenture), as guarantors, U.S. Bank Trust Company, National Association, as trustee and U.S. Bank Trust Company, National Association, as collateral agent, relating to Fortrea Holding Inc.’s 7.500% Senior Secured Notes due 2030.
8-K 001-41704 4.1 3-Jul-23
4.4
Description of securities.
X
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10.1
Credit Agreement, dated June 30, 2023, among Fortrea Holdings Inc., as the Parent Borrower, Fortrea UK Holdings Limited, as the Initial English Borrower, certain Subsidiaries (as defined in the Credit Agreement) of the Parent Borrower party thereto pursuant to Section 1.15 of the Credit Agreement, Goldman Sachs Bank USA, as Agent for the several financial institutions from time to time party thereto (collectively, the “Lenders” and individually each a “Lender”) and other Secured Parties (as defined in the Credit Agreement) and for itself as a Lender (including as Swingline Lender (as defined in the Credit Agreement)) and as an L/C Issuer (as defined in the Credit Agreement), and the other Lenders and L/C Issuers from time to time party thereto.
8-K 001-41704 10.1 30-Jun-23
10.2
Tax Matters Agreement, dated June 29, 2023, by and between Laboratory Corporation of America Holdings and Fortrea Holdings Inc.
8-K 001-41704 10.1 3-Jul-23
10.3
Employee Matters Agreement, dated June 29, 2023, by and between Laboratory Corporation of America Holdings and Fortrea Holdings Inc.
8-K 001-41704 10.2 3-Jul-23
10.4
Transition Services Agreement, dated June 29, 2023, by and between Laboratory Corporation of America Holdings and Fortrea Holdings Inc.
8-K 001-41704 10.3 3-Jul-23
10.5
Clinical Development and Laboratory Services Agreement, dated May 1 , 2023, by and between Laboratory Corporation of America Holdings and Fortrea Holdings Inc.
10-12B/A 001-41704 10.4 2-Jun-23
10.6
Fortrea Holdings Inc. 2023 Omnibus Incentive Plan.
8-K 001-41704 10.4 3-Jul-23
10.7
Fortrea Holdings Inc. Employee Stock Purchase Plan.
8-K 001-41704 10.5 3-Jul-23
10.8
Form of Option Agreement.
8-K 001-41704 10.6 3-Jul-23
10.9
Form of 2023 Time Vesting Restricted Stock Unit Award (1 year).
8-K 001-41704 10.7 3-Jul-23
10.10
Form of 2023 Time Vesting Restricted Stock Unit Award (3 year ratable).
8-K 001-41704 10.8 3-Jul-23
10.11
Executive Employment Agreement by and between Thomas H. Pike and Laboratory Corporation of America dated January 4, 2023.
10-12B/A 001-41704 10.5 2-Jun-23
10.12
Restricted Stock Unit Award Agreement dated August 17, 2023 between Fortrea Holdings Inc. and Thomas Pike.
8-K
001-41704
10.1 21-Aug-23
10.13
Non-Qualified Option Agreement dated August 17, 2023 between Fortrea Holdings Inc. and Thomas Pike
8-K
001-41704
10.2 21-Aug-23
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10.14
Master Senior Executive Severance Plan.
10-12B 001-41704
10.6 15-May-23
10.15
Fortrea Inc. Nonqualified Deferred Compensation Plan.
10-12B/A 001-41704
10.9 2-Jun-23
10.16
Letter Agreement, dated May 21, 2023, by and between Laboratory Corporation of America Holdings and Jill McConnell.
X
10.17
Letter Agreement, dated May 21, 2023, by and between Laboratory Corporation of America Holdings and Mark Morais.
X
10.18
Retention Bonus Agreement, dated May 21, 2023 by and between Laboratory Corporation of America Holdings and Jill McConnell
X
10.19
Retention Bonus Agreement, dated May 21, 2023, by and between Laboratory Corporation of America Holdings and Mark Morais
X
10.20
Non-Employee Director Compensation Policy.
X
10. 2 1
Form of Non-Employee Director Restricted Stock Unit Agreement.
X
10.22
Form of 2024 Performance Share Award
X
19
Fortrea Insider Trading Policy
X
21
List of Subsidiaries of the Company
X
23.1
Consent of Deloitte & Touche, an independent registered accounting firm
X
31.1
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .
X
31.2
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
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.
X
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.
X
97
Policy Relating to Recovery of Erroneously Awarded Compensation.
X
101.INS Inline 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. X
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101.SCH Inline XBRL Taxonomy Extension Schema Document. X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X
101.DEF Inline XBRL Taxonomy Extension Definition Document. X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL Instance document included in Exhibit 101. X
X
ITEM 16. FORM 10-K SUMMARY
None.
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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.
FORTREA HOLDINGS INC.
(Registrant)
By: /s/ JILL McCONNELL
Name: Jill McConnell
Chief Financial Officer
(On behalf of the Registrant and as Chief Financial Officer)
Date: March 13, 2024
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENT that the undersigned officers and directors of Fortrea Holdings Inc. do hereby constitute and appoint Thomas Pike and Jill McConnell, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Signature Capacity Date
/s/ THOMAS PIKE President, Chief Executive Officer, Chairman of the Board and Director
(Principal Executive Officer)
March 13, 2024
Thomas Pike
/s/ JILL McCONNELL Chief Financial Officer
(Principal Financial Officer)
March 13, 2024
Jill McConnell
/s/ AMANDA WARREN Chief Accounting Officer
(Principal Accounting Officer)
March 13, 2024
Amanda Warren
/s/ R. ANDREW ECKERT Director March 13, 2024
R. Andrew Eckert
/s/ BETTY LARSON Director March 13, 2024
Betty Larson
/s/ PETER M. NEUPERT Director March 13, 2024
Peter M. Neupert
/s/ EDWARD PESICKA Director March 13, 2024
Edward Pesicka
/s/ AMRIT RAY, M.D. Director March 13, 2024
Amrit Ray, M.D.
/s/ DAVID SMITH Director March 13, 2024
David Smith
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