Item 5. Other Information
Item 5. Other Information
Director and Officer Trading Arrangements
A portion of the compensation of our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) is in the form of equity awards and, from time to time, directors and officers may engage in open-market transactions with respect to the securities acquired pursuant to such equity awards or other Company securities, including to satisfy tax withholding obligations when equity awards vest or are exercised and for diversification or other personal reasons.
Transactions in our securities by directors and officers are required to be made in accordance with our insider trading policy, which requires that the transactions be in accordance with applicable U.S. federal securities laws that prohibit trading while in possession of material nonpublic information. Rule 10b5-1 under the Exchange Act provides an affirmative defense that enables directors and officers to prearrange transactions in our securities in a manner that avoids concerns about initiating transactions while in possession of material nonpublic information.
During the quarterly period covered by this report, none of our directors or officers entered into or terminated a Rule 10b5-1 trading arrangement or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) except as follows:
In September 2024, we adopted a policy for awards that will vest in the year ended December 31, 2025 and beyond (unless and until such policy is subsequently terminated or modified by the Company) pursuant to which any participant in our equity incentive plans is required to sell, upon the vesting or settlement of any restricted stock units (“RSUs”) or performance share awards (“PSAs”), a portion of the shares subject to the award sufficient to cover tax withholding obligations and to remit an amount equal to such tax withholding obligations to the Company. In connection with the adoption of the policy, the Management Development and Compensation Committee of our board of directors (the “MDCC”) approved a new form of Restricted Stock Unit Agreement and Performance Share Award Agreement to institute automatic sell-to-cover, and such forms are filed with this Form 10-Q as Exhibits 10.1 and 10.2. Additionally, the MDCC and Thomas Pike amended his current RSU Agreement to implement automatic sell-to-cover, and such amendment to Thomas Pike’s RSU agreement is filed with this Form 10-Q as Exhibit 10.3.
Additionally, on September [16], 2024, Thomas Pike, our Chairman and Chief Executive Officer, Jill McConnell, our Chief Financial Officer, Mark Morais, our Chief Operations Officer and President, Stillman Hanson, our General Counsel, and Robert Parks, our Chief Accounting Officer, entered into trading instructions intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act and to provide for certain sell-to-cover transactions (as described in Rule 10b5-1(c)(1)(ii)(D)(3) of the Exchange Act) with respect to certain RSUs and PSAs (the “Sell-to-Cover Instructions”). The Sell-to-Cover Instructions provide for the pre-arranged sale of shares in amounts necessary to satisfy our tax withholding obligations arising exclusively from the vesting of certain RSUs and PSAs, which will be based on the then fair market value of the shares of our common stock subject to the RSUs or PSAs, as applicable, that are settled on each applicable vesting date. The proceeds of any such sale will be delivered to the Company in satisfaction of such tax withholding obligations.
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The Sell-to-Cover Instructions are subject to applicable “cooling-off periods,” consistent with Rule 10b5-1(c)(1)(ii)(B) of the Exchange Act. Each of the relevant officer’s Sell-to-Cover Instructions apply with respect to the first award of RSUs or PSAs granted by us after the Separation (including any converted equity grants from Former Parent) or the officer’s hire date (if later), and any RSUs or PSAs that may be granted to them by us from time to time following such date, other than any future granted RSUs or PSAs which by the terms of the applicable award agreements or by a policy of the Company then in effect require us to withhold shares to satisfy tax withholding obligations in connection with the vesting and settlement of such RSUs or PSAs or that do not permit sell-to-cover transactions. The amount of shares to be sold to satisfy our tax withholding obligations under these arrangements is dependent on future events which cannot be known at this time, including the future trading price of our shares. The expiration date relating to an officer’s Sell-to-Cover Instructions is dependent on future events which cannot be known at this time, including the final vesting date of certain RSUs and PSAs and such officer’s termination of service.
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Item 6. Exhibits
The exhibits below are filed or furnished as a part of this report and are incorporated herein by reference.
INCORPORATED BY REFERENCE
EXHIBIT NO. DESCRIPTION Filed Herewith FORM File No. Exhibit Filing Date
10.1
Form of Restricted Stock Unit Award .
X
10.2
Form of Performance Share Award Agreement .
X
10.3
First Amendment dated September 13, 2024 to the Restricted Stock Unit Award Agreement dated August 17, 2023 between Fortrea Holdings Inc. and Thomas Pike.
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
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
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
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Fortrea Holdings Inc.
By: /s/ JILL McCONNELL
Name: Jill McConnell
Title: Chief Financial Officer
(On behalf of the Registrant and as Principal Financial Officer)
Date: November 8, 2024
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.