Select Medical Holdings Corporation ($SEM)

Hello, and welcome to the Annual Meeting of the Stockholders of Select Medical Holdings Corporation. Please note that today's meeting is being recorded. As previously announced, the company has entered into a definitive merger agreement, pursuant to which an entity affiliated with a consortium led by Robert Ortenzio Executive Chairman, Co-Founder and Director of the company; Martin F. Jobson, Senior Executive Vice President of Strategic Finance and Operations of the company; and Welsh, Carson, Anderson and Stowe, will acquire all of the outstanding shares of the common stock of the company not already owned by the consortium on the terms and subject to the conditions set forth in the merger agreement. Additional information will be provided in a proxy statement that will be filed with the SEC. Today, the company will not be commenting further on the proposed merger. During the meeting, we'll have a question-and-answer session. You can submit questions or comments at any time by clicking on the message icon. It is now my pleasure to turn today's meeting over to Mr. Robert Ortenzio, the company's Executive Chairman and Co-Founder; Mr. Ortenzio, the floor is yours.

Thank you, operator. Welcome, everyone. Today's virtual-only meeting is a live webcast. We are pleased that you could join us today. Your interest in the company is appreciated. Select Medical has always sought to prioritize the development and advancement of its people as a cornerstone of future success. In September, Tom Mullen was appointed Chief Executive Officer after serving in various leadership roles with the company since 2008, including President of our Specialty Hospital division. David Curno, who was previously served as CEO transition to Vice Chairman of the Board; and John Sata, 27-year veteran of the company now serves as sole President. These appointments of long tenured leaders with proven track records under score Select Medical's commitment to our values, vision and mission. I will serve as Chairman of this meeting. Before we proceed with the meeting itself, however, I would like to introduce you to Tom Mullen, who's Chief Executive Officer of Select Medical Holdings Corporation; and to John Dugan, Executive Vice President, General Counsel and Secretary of the company. Mr. Dugan will act as Secretary of this meeting. I would now like to introduce you to the directors of the company, who, in addition to me, are participating today, Russell L. Carson, David S. Curno, Catherine R. Davidson; James S. Ely Center William H. Frist, Parisian Kanuga, Thomas A. Scully, Marin B. Tavenner and Daniel J. Thomas. I would also like to introduce you to senior managers of the company who, in addition to Tom Mullen and John Dugan, and me are participating today. David Churno, Vice Chairman; Marty Jackson, Senior Executive Vice President; John Sach, President; Mike Malitessa, Executive Vice President and Chief Financial Officer; Chris Wegel, Senior Vice President and Controller and Chief Accounting Officer; Brian Rosignola, Executive Vice President, Chief Information Officer. The meeting will now come to order. I would like to introduce you again to Mr. John Dugan. John?

Good morning. I would like to introduce you to William Liva of PricewaterhouseCoopers LLP, the company's independent public accountants. In addition, with us today is Andrew Wafford of Computershare, Inc., who will serve as the Inspector of Election for this meeting. I'd like to start by discussing our agenda for today's meeting. First, our Chief Executive Officer, Tom Mullin, will make a few brief remarks. We will then vote on 6 proposals today, which will be followed by a question-and-answer session, during which stockholders may ask questions. Stockholders who have entered the 15-digit control number from their proxy cards in the designated field on the web portal may submit their questions online at any time prior to the question-and-answer session by clicking on the dialogue icon in the upper right corner of the meeting center screen. The polls are open. If you have not voted or wish to change your vote, you may do so now by clicking on the link provided online. Any stockholder who has sent in proxies or has already voted via the Internet or telephone and does not want to change its her, his vote, need not take any further action. The polls will close once the question-and-answer session is finished. I'd now like to introduce to you again, Mr. Tom Mullen.

Thank you, John. This past year has been 1 of significant growth across the Select Medical Care continuum, coupled with important changes in leadership succession. At the same time, we continue to navigate regulatory and reimbursement challenges impacting our lines of business. This year, we grew our strategic footprint through 5 joint venture partnerships with leading health systems, including Ballad Health, Cleveland Clinic, Riverside Health, SSM Health and UPMC. In addition, the company acquired Landmark Hospital in Savannah, Georgia and the assets of Baptist Memorial and Memphis, Tennessee, expanding our critical illness recovery hospital presence in the Southeast region. We also grew our acute rehabilitation units at select specialty hospitals to include Tallahassee, Orlando and Pensacola, Florida, as well as Madison, Wisconsin. Additionally, a new neuro transitional center opened in St. Louis, Missouri under the SSM Health partnership. Looking ahead, the company has announced the future openings of 4 new inpatient rehab hospitals, 2 acute rehab units and 2 new neuro rehab transitional units in 2026. Our independent rehabilitation hospitals continue to demonstrate strong performance in clinical excellence. Aid hospitals across 15 locations were recognized among the nation's best rehabilitation hospitals by U.S. News & World Report for 2025 and 2026. Additionally, Newsweek named 12 of our hospitals across 22 locations to its 2025 list of America's best physical rehab centers. With more than 4,450 critical illness recovery and inpatient rehabilitation beds nationwide, Select Medical admitted over 86,565 patients in our specialty hospitals during 2025. Under our family of 38 outpatient rehabilitation brands, we probably treated 1,217,968 patients across 1,917 centers. We also continued to expand our programs of excellence, focusing on public health, degenerative joint disease, cancer rehabilitation and sports medicine. Across all lines of care, the focus on research remained a priority in 2025. The outpatient rehabilitation division conducted 27 research presentations at national conferences, supported by more than 10 studies and 20 journal articles, clinicians and investigators within our specialty hospitals also contributed to more than 70 research-based journal articles regarding rehabilitative care advancements and outcomes. Select Medical remain committed to recruiting, retaining and developing a workforce through initiatives such as clinical ladders, continuing education, student loan repayment and scholarships. Our uplift initiative designed to cultivate and recruit essential clinicians, signed 10 national college and university affiliations, along with an additional nearly 100 regional institutions. To date, more than 3,600 nursing students have completed clinical rotations in our hospitals. We also welcomed 5,600 aspiring physical therapy students to shadow clinicians across our care settings in 2025. It is a privilege to employ more than 45,000 health care professionals dedicated to delivering compassionate world-class post-acute care that helps patients regain independence and improve quality of life. Thank you for your continued support. We look forward to advancing our mission and delivering exceptional care throughout 2026.

Thank you, Tom. This meeting has been called pursuant to the notice dated March 4, 2026, that was made available to all stockholders of record as of the close of business on February 27, 2026. Proxies were solicited on behalf of the Board of Directors of the company for this meeting. Andrew Wafford of Computershare Inc. has been appointed as Inspector of Election of this meeting and any adjournment or postponement thereof to conduct the vote with respect to the proposals set forth in the company's proxy statement and the other questions that will be voted upon by valid, if any. Mr. Wafford has already delivered to me his oath of office. The bylaws of the company provide that each stockholder of record is entitled to 1 vote for each share of common stock held as of the record date. The Board of Directors set February 27, 2026 as the record date. Computershare Inc, the transfer agent for the company, reports that there were 124,18,300 shares of Select Medical Holdings Corporation common stock outstanding as of the close of business on the record date. The record of this meeting will reflect that the notice of annual meeting, the proxy statement the proxy card and the company's annual report or on Form 10-K were made available to all stockholders entitled to vote this meeting beginning on March 4, 2026, as evidenced by an affidavit of the mailing provided by Computershare Inc. A copy of these materials will be made a permanent part of the company's corporate records. More than half of the shares outstanding as of the record date must be represented at this meeting either by stockholders participating online or by proxy to have a quorum as determined under the bylaws.

A total of 117,850,038 shares of Select Medical Holdings Corporation common stock are represented at today's meeting. which constitutes 95.03% of the total shares outstanding on the record date.

Therefore, I certify that a quorum has been achieved. Thank you, Mr. Walford, Will the Secretary present the notice of meeting and proxy statement. By clicking a tab entitled Meeting Materials, you can access and review copies of the notice of annual meeting, proxy statement, proxy card and the company's annual report on Form 10-K, the copies of the notice of meeting, proxy statement, proxy card, the company's annual report on Form 10-K together with the original affidat of availing of Computershare Inc. and the certificate with respect to the stockholder list will be filed with the minutes of the meeting.

Thank you, John. I now declare this meeting duly convened, properly organized and confident to transact business.

The first order of business on our agenda for a stockholder vote is the election of 3 Class II directors to hold office, subject to the provisions of the bylaws, each for a term of either A, 1 year if the declassification proposal is approved, or b, 3 years if the declassification proposal is not approved and until their successors have been dolly elected and qualified. Each stockholder of record as of February 27, 2026 is entitled to 1 vote for each share of common stock held. As of February 27, 2026, and there were 124,018,300 shares of Select Medical Holdings Corporation common stock outstanding. The 3 nominees for Class II director are Parminder Kanuga, Robert A. Ortenzio, and Daniel Thomas. The second order of business on our agenda is to hold a nonbinding advisory vote on the compensation of the company's named executive officers. The third order of business on our agenda is the proposal to ratify the appointment of PricewaterhouseCoopers LLP certified public accountants as the company's independent registered public accounting firm for the year ending December 31, 2026. The fourth order of business on our agenda is a vote to approve an amendment to the company's amended and restated certificate of incorporation to phase out the classified structure of the Board. The fifth order of business on our agenda is a nonbinding advisory vote on a company proposal to provide stakeholders the right to call a special meeting of stockholders at a 25% ownership threshold. The sixth and final order of business on our agenda is a nonbinding advisory vote on a stockholder proposal to provide stockholders the right to call a special meeting of stockholders at a 10% ownership threshold. We will now allow Mr. John Chevedden or his representative to present his stockholder proposal to provide stockholders the right to call a special meeting of stockholders at a 10% ownership threshold. Operator, please unmute Mr. Chevedden's line. Mr. Chevedden, please present the proposal to the stockholders.

This is John Chevedden. Proposal 6, give shoulders the ability to call for a special shareholder meeting. Shareholders ask our Board of Directors to take the steps necessary to amend the governing documents to give the owners of a combined 10% for outstanding common stock, the power to call a special shareholder meeting. Such a special shareholder meeting can be an online shareholder meeting. There shall be no poise and pill type discriminatory rule to require ownership of shares for a specific period of time or for shares to participate in calling for a special shareholder meeting. Proposal 6 is the special shareholder meeting proposal drafted first and the previous proposal 5 is a water down version of the same topic as proposal 6 to steal votes and create confusion. Management is engaged in a questionable practice. A shareholder proposal cannot duplicate a management proposal, and Select Medical management is taking advantage of a loop where a management proposal can unfortunately duplicate a shareholder proposal and create confusion. This Maryland Tavener, char of the Select Medical Governance Committee is ultimately responsible for this questionable practice by Select Medical. Proposal 6 will give 10% of Select Medical shareholders the right to call for a special shareholder meeting and all select medical shares can formally participate. Proposal 5 is masterating as giving shareholders the right to call for a special shareholder meeting. With Proposal 5, there are 2 major barriers to tort the right to call for a special shareholder meeting. The first barrier is a need for a formal backing of 25% of shares to call for a special sterile meeting instead of 10%, a 25% requirement is too high because in the 100-plus company statements that initially opposed to show the right to call for a special shareholder meeting. There has been even 1 example given of a company where a special meeting shareholder meeting was actually conducted based on the 25% requirement. And the same goes for the proposal 5 disqualification of all shares owned for less than a full year. This qualification, all shares not held for a full year and Proposal 5 is to drastic because in the 100-plus company statements that initial oppose show the right to call for a special shareholder meeting. There ever has there been even 1 example given the company where a special share of the meeting was actually conducted based on us qualifying whole shares not owned for a full year. This proposal 5 is the water down in 2 major ways to the point that Proposal 5 is useless. Please vote for this proposal 6, the original special meeting proposal and the only genuine special meeting proposal on the ballot today.

Thank you, Mr. Chevedden. Operator, please unmute Mr. Chevedden's line. We will now attempt to answer questions post through the virtual meeting web portal by our stockholders. As mentioned earlier, stockholders who have entered a 15-digit control number from the proxy card in the designated field on the web portal may submit their questions through the portal by clicking on the dialogue icon in the upper right corner of the meeting center screen. Brian Rusanow, the company's Executive Vice President and Chief Information Officer, will now provide the questions, if any, submitted by stockholders during the meeting. There are no online questions. Back to you, Bob. Thank you, Brian.

The online voting will now be closed. Based on the review of the votes cast, will the inspector of election please submit his report on the results of the balloting. Having conducted the election and vote at the Annual Meeting of Stockholders of Select Medical Holdings Corporation held on April 23, 2026, and I hereby certify that on each of the 3 nominees for Class II Director received a majority of the votes of the condo cast for the election as a director. The stockholders have approved the compensation of the company's named executive officers the stockholders have ratified the appointment of PricewaterhouseCoopers LLP as the company's registered public accounting firm for the year ending December 31, 2026. The stockholders have approved an amendment to the company's amended and restated certificate of incorporation to phase out classified structure of the Board. The stockholders have approved the company's nonbinding advisory proposal to provide stockholders the right to call a special meeting of stockholders at a 25% ownership threshold. The stockholders have rejected a stockholder nonbinding advisory proposal to provide stockholders the right to call a special meeting of stockholders at a 10% ownership threshold. The report of election prepared by Computershare evidences that all nominees for Class II Director were elected by an affirm not vote of 97.88% or more of the shares voted. The compensation of the company's named executive officers was approved by an affirmative vote of the holders of 110,664,208 shares or 97.04% of the shares voted. 3,339,567 shares were voted against approval and 33,630 shares abstained. The appointment of PricewaterhouseCoopers LLP was ratified by an affirmative vote of the holders of 116,286,685 shares or 98.68 share percentage of the shares voted. 1,534,942 shares were voted against ratification and 28,411 shares abstained. The amendment to the company's amended and restated certificate of incorporation to phase out the classified structure of the Board was approved by an affirmative vote of the holders of 113,798,371 shares or 99.8% of the shares outstanding. 233,759 shares were voted against approval and 5,275 shares abstained. Five, the company's nonbinding advisory proposal to provide stockholders the right to call a meeting of stockholders at a 25% ownership threshold was approved by an affirmative vote of the holders of 96,440,477 shares or 84.57% of the shares voted. 13,333,066 shares were voted against approval and 4,263,862 shares abstained. The stockholders' nonbinding advisory proposal to provide stockholders the right to call a special meeting of stockholders at a 10% ownership threshold was rejected by a negative vote of the holders of 91,191,886 shares or 79.97% of the shares voted, 22,780,354 shares were voted for approval 5,165 shares abstained.

Thank you. Based on the report of the Inspector of Election, I therefore declare that, one, nominees have been duly elected as Class II directors of the company; two, the stockholders have approved the compensation of the company's named executive officer, three, the stockholders have ratified the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the year ending December 31, 2026. Four, the stockholders have approved the amendment to the company's amended and restated certificate of incorporation to phase out the classified structure of the Board. Five, the shareholders have approved the company's nonbinding advisory proposal to provide stockholders with the right to call a special committee of stockholders at a 25% ownership threshold and 6 stockholders have rejected the stockholder nonbinding advisory proposal to provide stockholders the right to call special meeting of stockholders at a 10% ownership threshold. The Inspector of Election will execute a certificate as to the results of the balloting, and the certificates will be filed in the minute book of the company along with the minutes of the meeting. There being no further business to come before the meeting, I hereby adjourn the meeting. Thank you all for your participation.

This concludes for meeting. You may now disconnect.