ISS Recommends Stockholders Vote “FOR” a Majority of Enhabit Home Health & Hospice Director Nominees - Seite 2

Further, the board has exhibited a willingness to engage with its shareholders, as evidenced by the March 2023 settlement with Cruiser Capital and Harbour Point which expanded the board by two members, and the fact that it ran a publicly announced sales process in response to demands from the dissident in August 2023. … Though the dissident expressed disappointment in the outcome of the sales process and stated that it was "profoundly skeptical of the integrity and effectiveness of the Company’s strategic review process," there has been no evidence presented that the process was improperly run or that specific bidders may have been discouraged from making a formal offer. Ultimately, given the disclosures to date, the sales process appears to have been sufficiently broad and thorough and provides evidence of the board's openness to a potential sale.

Enhabit issued the following statement:

Enhabit has just passed its two-year anniversary as a public company following its separation from Encompass Health Corporation. During that period, in the face of substantial industry and company-specific headwinds, our Board and management team stabilized Enhabit’s business and built the necessary infrastructure to enable stockholder value creation as a separate public company.

We are pleased that ISS recognizes our performance over the last two quarters and agrees with the Company that shifting course now and handing control of the Board to AREX is not in the best interests of the Company’s stockholders.

Enhabit’s Board was intentionally designed to have the right mix of expertise to understand the key drivers of the business, as well as the functions that are necessary to oversee the management of a stand-alone, public company. We believe Enhabit’s nine nominees are best positioned to oversee our value creation initiatives and deliver enhanced stockholder value.

We disagree with ISS’s recommendation as it relates to Enhabit’s highly experienced nominees Gregory Rush, Erin Hoeflinger and Susan La Monica. We believe that critical experience would be lost by replacing these directors with AREX’s nominees, including (1) public company accounting, internal control and compensation expertise needed to form well-functioning Audit and Human Capital Committees, (2) deep experience with key payors most relevant to Enhabit, and (3) C-suite level public company human resources perspective.