SEB Smart Employee Benefits Inc

Smart Employee Benefits Inc. (TSXV: SEB) (OTCQB: SEBFF) (“SEB” or the “Company”) would like to remind the Company’s shareholders (the “Shareholders”) to vote at the previously announced special meeting of Shareholders (the “Meeting”) that will be held on February 21, 2023 in connection with the proposed plan of arrangement transaction pursuant to which Co-operators Financial Services Limited (“Co-operators”) will, indirectly through its wholly-owned subsidiary 1000391399 Ontario Inc., acquire all of the issued and outstanding common shares of SEB (the “SEB Shares”) for $0.30 in cash per SEB Share by way of a statutory plan of arrangement (the “Plan of Arrangement”) under the Business Corporations Act (Ontario) (the “Transaction”).  

The Meeting

The Meeting will be held on Tuesday, February 21, 2023 at 10:00 a.m. (Toronto time), in a virtual-only format at https://meetnow.global/MKPHQJK. Shareholders, regardless of geographic location, will have an equal opportunity to participate in the Meeting and ask questions. For details as to how to access and vote at the Meeting, Shareholders should refer to the detailed instructions set out in the management information circular (the “Circular”) and related materials (collectively, the “Meeting Materials”) that have been filed under the Company’s profile at www.sedar.com.

In particular, beneficial Shareholders (i.e., Shareholders whose SEB Shares are not registered in their own name but rather in the name of an intermediary, such as a broker or depository) must take certain additional steps in order to vote and ask questions at the Meeting.

Shareholders of record at the close of business on January 20, 2023 are entitled to receive notice of and vote at the Meeting. Shareholders may vote online, by telephone, by mail, or by any other methods listed in the form of proxy or voting instruction form included with the Meeting Materials.

To ensure that SEB Shares will be represented at the Meeting, Shareholders should carefully follow the voting instructions provided in the Meeting Materials. The deadline for receipt of proxies is 10:00 a.m. (Toronto time) on February 16, 2023 or at least two days (excluding Saturdays, Sundays and holidays in the Province of Ontario) before the Meeting or any adjournment or postponement of the Meeting. Non-registered Shareholders will need to submit their voting instructions prior to that time in accordance with the instructions received from their brokers or other intermediaries.

Shareholder Questions and Assistance

If Shareholders have any questions or require more information with regard to the procedures for voting or completing the form of proxy or voting instruction form, please contact the Company’s transfer agent, Computershare Trust Company of Canada, by telephone at 1-800-564-6253 (toll free in North America) or at 1-514-982-7555.

Conditions and Approval of the Transaction

The consummation of the Transaction will be subject to conditions customary for transactions of this nature, including, among others: (i) the approval of 66.67% of votes cast by Shareholders (including Co-operators and its affiliates) at the Meeting (“Shareholder Approval”); (ii) the approval of a simple majority of the votes cast by Shareholders excluding Co-operators, its affiliates and any other “interested party” (as defined in Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”)) at the Meeting (“Minority Approval”); (iii) approval of the Ontario Superior Court of Justice (Commercial List); and (iv) approval of the TSX Venture Exchange.

By way of update, an interim court order was obtained from the Ontario Superior Court of Justice (Commercial List) on January 18, 2023 and conditional approval was obtained from the TSX Venture Exchange on January 23, 2023. The Minority Approval to be obtained at the Meeting pursuant to MI 61-101 will exclude the SEB Shares held by Co-operators, its affiliates and certain directors and officers of SEB, as follows:

Name	Number of SEB Shares	Percentage of SEB Shares1
Co-operators	3,555,467	2.0%
John McKimm, Director and Officer	22,550,901	12.9%
Mohamad El Chayah, Director and Officer	826,554	0.5%
Carl Nappert, Officer	2,000,000	1.1%
Philip Armstrong, Director	1,192,196	0.7%
Nancy Elliott, Director	1,163,455	0.7%
Stephen Peacock, Director	1,701,007	1.0%
Barry Walsh, Director	9,166,667	5.2%
Total	42,156,247	24.0%

1  Based on a total of 175,423,557 SEB Shares issued and outstanding on a non-diluted basis.

Subject to obtaining the required approvals (including Shareholder Approval, Minority Approval, the final order from the Ontario Superior Court of Justice (Commercial List) and final approval from the TSX Venture Exchange) and satisfying all required conditions, the Transaction is expected to close on or about February 28, 2023.

Benefits of the Transaction to Shareholders

In addition to the more detailed information in the Circular, certain of the benefits of the Transaction to Shareholders include:

• Immediate and significant premium of approximately 80.9% to the 20-day volume-weighted average closing price on the TSX Venture Exchange prior to the announcement of the Transaction on January 3, 2023.
• All-cash offer that is not subject to a financing condition and that provides Shareholders with immediate liquidity.
• Strong deal certainty with a highly credible and leading Canadian insurance company as purchaser with the financial resources necessary to complete the Transaction.

Board Recommendation

SEB appointed a special committee of independent directors (the “SEB Special Committee”) to consider the Transaction, as well as other alternatives available to SEB, and to make a recommendation with respect to the Transaction. Based on the fairness opinion received from Echelon Capital Markets (a division of Echelon Wealth Partners Inc.) and the unanimous recommendation of the SEB Special Committee, and after consultation with its outside financial and legal advisors, the board of directors of SEB (with interested directors abstaining) unanimously determined that the Transaction is in the best interest of SEB and fair to Shareholders and recommends that Shareholders vote FOR the Transaction.

About SEB

SEB is an Insurtech company focused on Benefits Administration Technology driving two interrelated revenue streams – Benefits Solutions and Technology Services. SEB is a proven provider of leading-edge IT and benefits processing software, solutions and services for the Life and Group benefits marketplace and government. SEB designs, customizes, builds and manages mission critical, end-to-end technology, people and infrastructure solutions using SEB’s proprietary technologies and expertise and partner technologies. SEB manages mission critical business processes for over 150 blue chip and government accounts, nationally and globally. Over 90% of SEB’s revenue and contracts are multi-year recurring revenue streams contracts related to government, insurance, healthcare, benefits and e-commerce. SEB’s solutions are supported nationally and globally by over 600 multi-certified technical professionals in a multi-lingual infrastructure, from multiple offices across Canada and globally.

SEB’s solutions include both software and services driven ecosystems including multiple SaaS solutions, cloud solutions & services, managed services offering smart sourcing (near shore/offshore), managed security services, custom software development and support, professional services, deep systems integration expertise and multiple specialty practice areas including AI, CRM, BI, Portals, EDI, e-commerce, digital transformation, analytics, project management to mention a few. SEB has more than 20 strategic partnerships/relationships with leading global and regional technology and consulting organizations.

For more information, please visit: www.seb-inc.com

Media and Investor Contact:

John McKimm President, CEO & CIO of SEBOffice: (888) 939-8885 x 2354 Cell: (416) 460-2817 john.mckimm@seb-inc.com www.seb-inc.com

Mohamad El Chayah COO of SEB President & CEO of SEB Admin Cell: (416) 418-0619 mohamad.elchayah@seb-admin.comwww.seb-admin.com

Cautionary Note Regarding Forward‐Looking Information

Certain information in this news release constitutes “forward‐looking information” within the meaning of applicable Canadian securities laws. All forward‐looking information in this news release is expressly qualified by this cautionary statement. Any information or statements that are contained in this news release that are not statements of historical fact may be deemed to be forward‐looking information, including, but not limited to, statements in this news release with regards to: statements relating to the Transaction and the expected terms, timing and closing of the Transaction; the acquisition by Co-operators, indirectly through its wholly-owned subsidiary, of all of the issued and outstanding SEB Shares; and timing of the Meeting. SEB uses words such as “will”, “plan”, “may”, “expect”, “intend”, “believe”, “would”, “should”, “could”, “anticipate”, “estimate”, “future”, “enable”, “potential”, “contemplate” and the negative of these terms or similar expressions to identify forward‐looking information, although not all forward‐looking information contains these identifying words. Various assumptions were used in drawing the conclusions contained in forward‐looking information throughout this news release. Forward‐looking information reflects current beliefs of management of SEB with respect to future events and are based on information currently available to management including based on reasonable assumptions, estimates, internal and external analysis and opinions of management considering their experience, perception of trends, current conditions and expected developments as well as other factors that each respective management believes to be relevant as at the date such statements are made.

With respect to the forward-looking information contained in this news release, SEB has made assumptions regarding, among other things: that the Transaction will be completed on the terms contemplated by the arrangement agreement relating to the Plan of Arrangement; the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory, court, shareholder, stock exchange and other third party approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Transaction; and other expectations and assumptions concerning the Transaction. Although SEB believes that the expectations reflected in the forward-looking information contained in this news release, and the assumptions on which such forward-looking information is made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions, or expectations upon which the forward-looking information is based will occur.

Forward‐looking information involves significant known and unknown risks and uncertainties. Many factors could cause actual results, performance, or achievement to be materially different from any forward‐looking information. Factors that may cause such differences include, but are not limited to: the possibility that the Transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all due to a failure to obtain or satisfy, in a timely manner or otherwise, required shareholder and regulatory approvals and other conditions of closing necessary to complete the Transaction or for other reasons; the possibility of adverse reactions or changes in business relationships resulting from the announcement or completion of the Transaction; risks relating to employee retention; the possibility of litigation relating to the Transaction; risks related to the diversion of management time and attention; unanticipated difficulties or expenditures relating to the Transaction; and other factors beyond the control of SEB which could have a material adverse effect SEB or its ability to consummate the Transaction. Readers are cautioned that the forgoing lists of factors are not exhaustive.

For a more detailed discussion of risks and other factors that could affect SEB’s business, operations and financial results, see the Circular, SEB’s interim management discussion and analysis for the three and nine months ended August 31, 2022, and annual management discussion and analysis for the year ended November 30, 2021, filed with the Canadian securities regulatory authorities and available on SEDAR. Forward‐looking information included in this news release is made as of the date of this news release and SEB does not undertake any obligation to publicly update such forward‐looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.

This news release does not constitute an offer to purchase or a solicitation of an offer to sell securities. Shareholders are advised to review any documents that may be filed with securities regulatory authorities and any subsequent announcements because they will contain important information regarding the Transaction and the terms and conditions thereof.

Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

All figures are in Canadian dollars unless otherwise stated.