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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. ___)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ x ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-
12
SOUTHSHORE CORPORATION
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(Name of Registrant as Specified In Its Charter)
Neuman & Drennen, LLC, 1507 Pine Street, Boulder, Colorado 80302
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(Name of Person Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
1) Title of each class of securities to which transaction applies:_____
2) Aggregate number of securities to which transaction applies:________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):______
4) Proposed maximum aggregate value of transaction:____________________
5) Total fee paid:_____________________________________________________
[ ] Fee Paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:_____________________________________________
2) Form, Schedule or Registration Statement No.:_______________________
3) Filing Party:_______________________________________________________
4) Date Filed:_________________________________________________________
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SOUTHSHORE CORPORATION
422 East Vermijo, Suite 216
Colorado Spring, Colorado 80903
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished to the Shareholders of Southshore
Corporation (respectively, the "Shareholders" and the "Company") in connection
with the solicitation by the Company of proxies to be used at the Special
Meeting of Shareholders on March [24], 2000 (the "Meeting"), at the time,
place and for the purposes set forth in the accompanying Notice of Special
Meeting of Shareholders and at any adjournment thereof. When the accompanying
proxy is properly executed and returned, the shares of common stock it
represents will be voted at the Meeting and, where a choice has been specified
on a proxy, will be voted in accordance with such specification. If no choice
is specified on a proxy, the shares it represents will be voted FOR the
adoption and approval of the Company's 2000 Equity Incentive Plan; and FOR the
authorization of the Board of Directors to amend the Company's Articles of
Incorporation to change the name of the Company to "iRV, Inc.;" and according
to the judgment of the persons named in the enclosed proxies as to any other
action which may properly come before the Meeting or any adjournment thereof.
ANY PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED BY WRITTEN NOTICE
MAILED OR DELIVERED TO THE SECRETARY, BY RECEIPT OF A PROXY PROPERLY SIGNED
AND DATED SUBSEQUENT TO AN EARLIER PROXY, AND BY REVOCATION OF A WRITTEN PROXY
BY REQUEST IN PERSON AT THE SPECIAL MEETING OF SHAREHOLDERS. IF NOT SO
REVOKED, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN ACCORDANCE WITH
THE INSTRUCTIONS ON THE PROXY FORM.
This Statement is being mailed on or about ________________, 2000, to
Shareholders eligible to vote at the Meeting.
The Company is bearing all costs of soliciting proxies, and expressly
reserves the right to solicit proxies otherwise than by mail. The
solicitation of proxies by mail may be followed by telephone, telegraph or
other personal solicitations of certain Shareholders and brokers by one or
more of the Directors or by Officers or employees of the Company. The Company
may request banks and brokers or other similar agents or fiduciaries for the
voting instructions of beneficial owners and reimburse the expenses incurred
by such agents or fiduciaries in obtaining such instructions. As of the date
of this mailing, however, the Company has not made any contracts or
arrangements for such solicitations, hence it cannot identify any parties or
estimate the cost of such solicitation.
Only Shareholders of record as of the close of business on ____________,
2000 (the "Record Date"), will be entitled to vote at the Meeting.
Representation of a majority of the Company's shares of common stock
outstanding on such date, either in person or by proxy, constitutes a quorum
for the Meeting. When a quorum is present, the vote by the holders of a
majority of the shares represented at the Meeting shall decide the proposals
to be voted upon at the Meeting. As of the Record Date, the Company had
outstanding __________ shares of common stock ("shares"), with each share
being entitled to one vote. Unless otherwise stated, provided a quorum is
present at the Meeting, each matter presented to the Shareholders to be voted
upon will be approved if the votes in favor of such matter are greater than
the votes against such matter (an "Affirmative Vote").
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1. SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS.
The following table sets forth, as of the date of this Proxy Statement,
and as adjusted for the sale of Option Stock, the stock ownership of each
person known by the Company to be the beneficial owner of five (5%) percent or
more of the Company's common stock, each Executive Officer and each Director
individually and all Directors and Officers of the Company as a group. Each
person has sole voting and investment power with respect to the shares shown,
except as noted.(8)
<TABLE>
<CAPTION>
Title of Name of Percent
Class Beneficial Owner(1) Number of Shares of Class
- -------- -------------------- ----------------- --------
<S> <C> <C> <C>
Common John Deufel(2) 550,000 6.7%
Stock
" Clifford L. Neuman(3) 136,000 1.7%
" Robert Scott(3) 25,000 0.3%
" Wayne Kirschling(3) 25,000 0.3%
" Bradley Smith(4) 120,000 1.5%
" Windy Haddad(5) 20,000 0.3%
" Stephen G. Calandrella(6)500,000 6.2%
" Nannette Goldberg 1,850,000 22.8%
" Kenneth M. Dalton 670,358 8.3%
" Dorothy Calandrella(7) 1,264,000 15.6%
" All other officers 876,000 10.6%
and directors as a
group (6 persons)
____________________
</TABLE>
(1) The address of all persons listed is 422 East Vermijo, Suite 216,
Colorado Springs, Colorado 80903.
(2) Includes Incentive Stock Options exercisable to purchase 50,000 shares of
the Company's common stock at an exercise price of $1.00 per share.
(3) Includes 111,000 shares of Common Stock owned of record by Ratna
Enterprises, LLC, a limited liability company, of which Mr. Neuman is a
manager. Also includes Non-qualified Stock Options exercisable to
purchase 25,000 shares of the Company's common stock at an exercise price
of $3.75 per share granted as compensation for services as an outside
director.
(4) Includes Incentive Stock Options exercisable to purchase 20,000 shares of
the Company's common stock at an exercise price of $1.00 per share. Also
includes 100,000 shares of Common Stock held of record by Mark Smith,
Bradley Smith's husband.
(5) Consists of Incentive Stock Options exercisable to purchase 20,000 of the
Company's common stock at an exercise price of $1.00 per share.
(6) Includes 200,000 shares of Common Stock held of record by the Calandrella
Family Foundation, as to which Mr. Calandrella serves as a member of the
Board of Directors.
(7) Includes 1,064,000 shares of Common Stock held of record by Triumph
Capital, Inc., a Colorado corporation, of which Mrs. Calandrella is the
sole director, executive officer and shareholder.
(8) Beneficial ownership is based on information provided to us, and the
beneficial owner has no obligation to inform us of or otherwise report
any changes in beneficial ownership. In calculating the percentage of
ownership, unless otherwise indicated, all shares of Common Stock that
the identified person or group had the right to acquire within sixty (60)
days of the date of this Proxy Statement upon exercise of options and
warrants are deemed to be outstanding for the purpose of computing the
shares of Common Stock owned by such person or group, but are not deemed
to be outstanding for the purpose of computing the percentage of the
shares of Common Stock owned by any other person.
2. 2000 EQUITY INCENTIVE PLAN
The Company's 2000 Equity Incentive Plan (the "2000 Plan") was adopted by
the Board of Directors on February 7, 2000.
The essential features of the 2000 Plan, as amended, are outlined below:
The 2000 Plan provides for the grant of (1) both incentive and
nonstatutory stock options, (2) stock bonuses, (3) rights to purchase
restricted stock and(4) stock appreciation rights (collectively, "Stock
Awards"). Incentive stock options granted under the 2000 Plan are intended to
qualify as "incentive stock options" within the meaning of Section 422 of the
Code. Nonstatutory stock options granted under the 2000 Plan are intended not
to qualify as incentive stock options under the Code. See "Federal Income Tax
Information" for a discussion of the tax treatment of Stock Awards.
The 2000 Plan was adopted by the Board of Directors on February 7, 2000.
The 2000 Plan provides a means by which selected officers and employees of and
consultants to the Company and its affiliates could be given an opportunity to
purchase stock in the Company, to assist in retaining the services of
employees holding key positions, to secure and retain the services of persons
capable of filling such positions and to provide incentives for such persons
to exert maximum efforts for the success of the Company.
The 2000 Plan is administered by the Board of Directors of the Company.
The Board has the power to construe and interpret the 2000 Plan and, subject
to the provisions of the 2000 Plan, to determine the persons to whom and the
dates on which Stock Awards will be granted; whether a Stock Award will be an
incentive stock option, a nonstatutory stock option, a stock bonus, a right to
purchase restricted stock, a stock appreciation right or a combination of the
foregoing; the provisions of each Stock Award granted (which need not be
identical),including the time or times when a person shall be permitted to
receive stock pursuant to a Stock Award; whether a person shall be permitted
to receive stock upon exercise of an independent stock appreciation right; and
the number of shares with respect to which a Stock Award shall be granted to
each such person. The Board of Directors is authorized to delegate
administration of the 2000 Plan to a committee composed of not fewer than two
members of the Board. The Board has delegated administration of the 2000 Plan
to the Compensation Committee of the Board. As used herein with respect to the
2000 Plan, the "Board" refers to the Compensation Committee as well as to the
Board of Directors itself.
Incentive stock options and stock appreciation rights related to
incentive stock options may be granted under the 2000 Plan only to selected
employees(including officers and directors who are employees) of the Company
and its affiliates. Selected employees, non-employee directors and consultants
are eligible to receive Stock Awards other than incentive stock options and
such stock appreciation rights under the 2000 Plan. Non-employee directors are
eligible only for nonstatutory stock options. No incentive stock option may
be granted under the 2000 Plan to any person who, at the time of the grant,
owns (or is deemed to own) stock possessing more than 10% of the total
combined voting power of the Company or any affiliate of the Company, unless
the incentive stock option exercise price is at least 110% of the fair market
value of the stock subject to the incentive stock option on the date of grant,
and the term of the option does not exceed five years from the date of grant.
For incentive stock options granted under the 2000 Plan, the aggregate fair
market value, determined at the time of grant, of the shares of Common Stock
with respect to which such options are exercisable for the first time by an
optionee during any calendar year (under all such plans of the Company and its
affiliates) may not exceed $100,000. Non-employee directors are eligible only
for nonstatutory stock options. Each person who becomes a non-employee
director will automatically be granted an option to purchase 50,000 shares of
Common Stock on the date of his or her election to the Board. Such options
will be vested one-half when granted and one-half on the first anniversary of
the date of the grant. On the date of each Annual Meeting of the Stockholders
of the Company, each non-employee director who has continuously served as a
non-employee director for more than two (2) years will be granted an option to
purchase 25,000 shares of Common Stock, and each other person who is then a
non-employee director will be granted an option to purchase a prorated number
of shares of Common Stock based on the number of days such person has
continuously served as a non-employee director since the last annual meeting.
These options will be fully vested when granted.
The Company has reserved a total of 3,000,000 shares of Common Stock for
issuance under the 2000 Plan. If any Stock Award granted under the 2000 Plan
expires or otherwise terminates without being exercised, the Common Stock not
purchased pursuant to such Stock Awards again becomes available for issuance
under the 2000 Plan.
The following is a description of the permissible terms of options under
the 2000 Plan. Individual option grants may be more restrictive as to any or
all of the permissible terms described below.
Exercise Price; Payment
The exercise price of incentive stock options under the 2000 Plan may not
be less than the fair market value of the Common Stock subject to the option
on the date of the option grant, and in some cases(see "Eligibility" above),
may not be less than 110% of such fair market value. The exercise price of
nonstatutory options under the 2000 Plan may not be less than 85% of the fair
market value of the Common Stock subject to the option on the date of the
option grant. However, if options were granted with exercise prices below fair
market value, deductions for compensation attributable to the exercise of such
options could be limited by Section 162(m). See "Federal Income Tax
Information." At February ____, 2000, the closing price of the Company's
Common Stock as reported on the OTC Electronic Bulletin Board was $________
per share. In the event of a decline in the value of the Company's Common
Stock, The Board has the authority to offer employees the opportunity to
replace outstanding higher priced options, whether incentive or nonstatutory,
with new lower priced options. To date, the Board has not exercised such
authority. To the extent required by Section 162(m), an option repriced under
the 2000 Plan is deemed to be canceled and a new option granted. Both the
options deemed to be canceled and the new options deemed to be granted will be
counted against the2000 Plan share limitation. The exercise price of
options granted under the 2000 Plan must be paid either: (a) in cash at the
time the option is exercised; or (b) at the discretion of the Board, (i) by
delivery of other Common Stock of the Company,(ii) pursuant to a deferred
payment arrangement or (c) in any other form of legal consideration acceptable
to the Board.
Option Exercise
Options granted under the 2000 Plan may become exercisable ("vest") in
cumulative increments as determined by the Board. Shares covered by options
granted in the future under the 2000 Plan may be subject to different vesting
terms. The Board has the power to accelerate the time during which an option
may be exercised. In addition, options granted under the 2000 Plan may permit
exercise prior to vesting, but in such event the optionee may be required to
enter into an early exercise stock purchase agreement that allows the Company
to repurchase shares not yet vested at their exercise price should the
optionee leave the employ of the Company before vesting. To the extent
provided by the terms of an option, an optionee may satisfy any federal, state
or local tax withholding obligation relating to the exercise of such option by
a cash payment upon exercise, by authorizing the Company to withhold a portion
of the stock otherwise issuable to the optionee, by delivering already-owned
stock of the Company or by a combination of these means.
Term
The maximum term of options under the 2000 Plan is 10 years. Options
under the 2000 Plan terminate three months after termination of the optionee's
employment or relationship as a consultant or director of the Company or any
affiliate of the Company, unless (a) such termination is due to such person's
permanent and total disability (as defined in the Code), in which case the
option may, but need not, provide that it may be exercised at any time not
exceeding twelve months following such termination; (b) the optionee dies
while employed by or serving as a consultant or director of the Company or any
affiliate of the Company, or within three months after termination of such
relationship, in which case the option may be exercised (to the extent the
option was exercisable at the time of the optionee's death) within twelve
months of the optionee's death by the person or persons to whom the rights to
such option pass by will or by the laws of descent and distribution; or (c)
the option by its terms specifically provides otherwise. Individual options by
their terms may provide for exercise within a longer period of time following
termination of employment or the consulting relationship. The option term may
also be extended in the event that exercise of the option within these periods
is prohibited for specified reasons.
The following is a description of the permissible terms of stock bonuses
and restricted stock purchase agreements under the 2000 Plan. The terms and
conditions of stock bonus or restricted stock purchase agreements may change
from time to time, and the terms and conditions of separate agreements need
not be identical, but each stock bonus or restricted stock purchase agreement
includes the substance of each of the following provisions as appropriate:
Purchase Price
The purchase price under each restricted stock purchase agreement is such
amount as the Board may determine and designate in such agreement, but in no
event may the purchase price be less than eighty-five percent (85%) of the
stock's fair market value on the date such award is made. Notwithstanding the
foregoing, the Board may determine that eligible participants in the 2000 Plan
may be awarded stock pursuant to a stock bonus agreement in consideration for
past services actually rendered to the Company for its benefit.
Consideration
The purchase price of stock acquired pursuant to a stock purchase
agreement must be paid either: (i) in cash at the time of purchase;(ii) at the
discretion of the Board or the Committee, according to a deferred payment or
other arrangement with the person to whom the stock is sold; or (iii)in any
other form of legal consideration that may be acceptable to the Board in its
discretion. Notwithstanding the foregoing, the Board may award stock pursuant
to a stock bonus agreement in consideration for past services actually
rendered to the Company or for its benefit.
Vesting
Shares of stock sold or awarded under the Plan may, but need not, be
subject to a repurchase option in favor of the Company in accordance with a
vesting schedule to be determined by the Board.
Termination of Employment or Relationship as a Director or Consultant
In the event a participant's continuous status as an employee, director
or consultant terminates, the Company may repurchase or otherwise re-acquire
any or all of the shares of stock held by that person which have not vested as
of the date of termination under the terms of the stock bonus or restricted
stock purchase agreement between the Company and such person.
Stock Appreciation Rights
The three types of Stock Appreciation Rights that are authorized for
issuance under the 2000 Plan are as follows:
Tandem Stock Appreciation Rights. Tandem stock appreciation rights may
be granted appurtenant to an option, and are generally subject to the same
terms and conditions applicable to the particular option grant to which they
pertain. Tandem stock appreciation rights require the holder to elect between
the exercise of the underlying option for shares of stock and the surrender,
in whole or in part, of such option for an appreciation distribution. The
appreciation distribution payable on the exercised tandem right is in cash
(or, if so provided, in an equivalent number of shares of stock based on fair
market value on the date of the option surrender) in an amount up to the
excess of (i)the fair market value (on the date of the option surrender) of
the number of shares of stock covered by that portion of the surrendered
option in which the optionee is vested over (ii) the aggregate exercise price
payable for such vested shares.
Concurrent Stock Appreciation Rights. Concurrent stock appreciation
rights may be granted appurtenant to an option and may apply to all or any
portion of the shares of stock subject to the underlying option and are
generally subject to the same terms and conditions applicable to the
particular option grant to which they pertain. A concurrent right is exercised
automatically at the same time the underlying option is exercised with respect
to the particular shares of stock to which the concurrent right pertains. The
appreciation distribution payable on an exercised concurrent right is in cash
(or, if so provided, in an equivalent number of shares of stock based on fair
market value on the date of the exercise of the concurrent right) in an amount
equal to such portion as shall be determined by the Board at the time of the
grant of the excess of (i)the aggregate fair market value (on the date of the
exercise of the concurrent right) of the vested shares of stock purchased
under the underlying option which have concurrent rights appurtenant to them
over (ii) the aggregate exercise price paid for such shares.
Independent Stock Appreciation Rights. Independent stock appreciation
rights may be granted independently of any option and are generally subject to
the same terms and conditions applicable to nonstatutory stock options. The
appreciation distribution payable on an exercised independent right may not be
greater than an amount equal to the excess of (i) the aggregate fair market
value (on the date of the exercise of the independent right) of a number of
shares of Company stock equal to the number of share equivalents in which the
holder is vested under such independent right, and with respect to which the
holder is exercising the independent right on such date, over (ii) the
aggregate fair market value (on the date of the grant of the independent
right) of such number of shares of Company stock. The appreciation
distribution payable on the exercised independent right is in cash or, if so
provided, in an equivalent number of shares of stock based on fair market
value on the date of the exercise of the independent right.
If there is any change in the stock subject to the 2000 Plan or subject
to any Stock Award granted under the 2000 Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or otherwise), the 2000 Plan and
Stock Awards outstanding thereunder will be appropriately adjusted as to the
class and the maximum number of shares subject to such plan, and the class,
number of shares and price per share of stock subject to such outstanding
options.
The 2000 Plan provides that, in the event of a dissolution or liquidation
of the Company, specified type of merger or other corporate reorganization (a
"Change-in-Control"), to the extent permitted by law, any surviving
corporation will be required to either assume Stock Awards outstanding under
the 2000 Plan or substitute similar options for those outstanding under such
plan, or such outstanding options will continue in full force and effect. In
the event that any surviving corporation declines to assume or continue Stock
Awards outstanding under the 2000 Plan, or to substitute similar Stock Awards,
then the time during which such Stock Awards may be exercised shall be
accelerated and the Stock Awards terminated if not exercised during such time.
Individual options may contain more liberal vesting acceleration provisions.
The acceleration of a Stock Award in the event of a Change-in-Control may be
viewed as an anti-takeover provision, which may have the effect of
discouraging a proposal to acquire or otherwise obtain control of the Company.
The Board may suspend or terminate the 2000 Plan without stockholder
approval or ratification at any time or from time to time. Unless sooner
terminated, the 2000 Plan will terminate on January 9, 2008. The Board may
also amend the 2000 Plan at any time or from time to time. However, no
amendment will be effective unless approved by the stockholders of the Company
within twelve months before or after its adoption by the Board if the
amendment would: (a) modify the requirements as to eligibility for
participation (to the extent such modification requires stockholder approval
in order for the Plan to satisfy Section 422 of the Code, if applicable, or
Rule16b-3 ("Rule 16b-3") of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")); (b) increase the number of shares reserved for issuance
upon exercise of options; or (c) change any other provision of the Plan in any
other way if such modification requires stockholder approval in order to
comply with Rule 16b-3 or satisfy the requirements of Section 422 of the Code.
The Board may submit any other amendment to the 2000 Plan for stockholder
approval, including, but not limited to, amendments intended to satisfy the
requirements of Section 162(m) of the Code regarding the exclusion of
performance-based compensation from the limitation on the deductibility of
compensation paid to certain employees.
Under the 2000 Plan, an incentive stock option may not be transferred by
the optionee otherwise than by will or by the laws of descent and distribution
and during the lifetime of the optionee, may be exercised only by the
optionee. A nonstatutory stock option may not be transferred except by will
or by the laws of descent and distribution unless otherwise specified in the
option agreement, in which case the nonstatutory stock option may be
transferred upon such terms and conditions as set forth in the option,
including pursuant to a domestic relations order. In any case, the optionee
may designate in writing a third party who may exercise the option in the
event of the optionee's death. In addition, shares subject to repurchase by
the Company under an early exercise stock purchase agreement may be subject to
restrictions on transfer which The Board deems appropriate.
Federal Income Tax Considerations
Incentive Stock Options. Incentive stock options under the 2000 Plan are
intended to be eligible for the favorable federal income tax treatment
accorded "incentive stock options" under the Code. There generally are no
federal income tax consequences to the optionee or the. Company by reason of
the grant or exercise of an incentive stock option. However, the exercise of
an incentive stock option may increase the optionee's alternative minimum tax
liability, if any. If an optionee holds stock acquired through exercise of an
incentive stock option for at least two years from the date on which the
option is granted and at least one year from the date on which the shares are
transferred to the optionee upon exercise of the option, any gain or loss on a
disposition of such stock will be long-term capital gain or loss. Generally,
if the optionee disposes of the stock before the expiration of either of these
holding periods(a "disqualifying disposition"), at the time of disposition,
the optionee will realize taxable ordinary income equal to the lesser of (a)
the excess of the stock's fair market value on the date of exercise over the
exercise price, or (b) the optionee's actual gain, if any, on the purchase and
sale. The optionee's additional gain, or any loss, upon the disqualifying
disposition will be a capital gain or loss, which will be long-term or
short-term depending on how long the stock was held. Long-term capital gains
currently are generally subject to lower tax rates than short-term capital
gains (which are taxed at the ordinary income rate). The maximum long-term
capital gains rate for federal income tax purposes is currently 20% while the
maximum ordinary income rate is effectively 39.6% at the present time.
Slightly different rules may apply to optionees who acquire stock subject to
certain repurchase options or who are subject to Section 16(b) of the Exchange
Act. To the extent the optionee recognizes ordinary income by reason of a
disqualifying disposition, the Company will generally be entitled (subject to
the requirement of reasonableness, the provisions of Section 162(m) of the
Code and the satisfaction of a tax reporting obligation) to a corresponding
business expense deduction in the tax year in which the disqualifying
disposition occurs.
Nonstatutory Stock Options. Nonstatutory stock options granted under the
2000 Plan generally have the following federal income tax consequences:
There are no tax consequences to the optionee or the Company by reason of
the grant of a nonstatutory stock option. Upon exercise of a nonstatutory
stock option, the optionee normally will recognize taxable ordinary income
equal to the excess of the stock's fair market value on the date of exercise
over the option exercise price. Generally, with respect to employees, the
Company is required to withhold from regular wages or supplemental wage
payments an amount based on the ordinary income recognized. Subject to the
requirement of reasonableness, the provisions of Section 162(m) of the Code
and the satisfaction of a tax reporting obligation, the Company will generally
be entitled to a business expense deduction equal to the taxable ordinary
income realized by the optionee. Upon disposition of the stock, the optionee
will recognize a capital gain or loss equal to the difference between the
selling price and the sum of the amount paid for such stock plus any amount
recognized as ordinary income upon exercise of the option. Such gain or loss
will be long or short-term depending on how long the stock was held. Slightly
different rules may apply to optionees who acquire stock subject to certain
repurchase options or who are subject to Section 16(b) of the Exchange Act.
Restricted Stock and Stock Bonuses. Restricted stock and stock bonuses
granted under the 2000 Plan generally have the following federal income tax
consequences:
Upon acquisition of stock under a restricted stock or stock bonus award,
the recipient normally will recognize taxable ordinary income equal to the
excess of the stock's fair market value over the purchase price, if any.
However, to the extent the stock is subject to certain types of vesting
restrictions, the taxable event will be delayed until the vesting restrictions
lapse unless the recipient elects to be taxed on receipt of the stock.
Generally, with respect to employees, the Company is required to withhold from
regular wages or supplemental wage payments an amount based on the ordinary
income recognized. Subject to the requirement of reasonableness, Section
162(m) of the Code and the satisfaction of a tax reporting obligation, the
Company will generally be entitled to a business expense deduction equal to
the taxable ordinary income realized by the recipient. Upon disposition of the
stock, the recipient will recognize a capital gain or loss equal to the
difference between the selling price and the sum of the amount paid for such
stock, if any, plus any amount recognized as ordinary income upon acquisition
(or vesting) of the stock. Such gain or loss will be long or short-term
depending on how long the stock was held from the date ordinary income is
measured. Slightly different rules may apply to persons who acquire stock
subject to forfeiture.
Stock Appreciation Rights. No taxable income is realized upon the receipt
of a stock appreciation right, but upon exercise of the stock appreciation
right, the fair market value of the shares (or cash in lieu of shares)
received must be treated as compensation taxable as ordinary income to the
recipient in the year of such exercise. Generally, with respect to employees,
the Company is required to withhold from the payment made on exercise of the
stock appreciation right or from regular wages or supplemental wage payments
an amount based on the ordinary income recognized. Subject to the requirement
of reasonableness, Section 162(m) of the Code and the satisfaction of a
reporting obligation, the Company will be entitled to a business expense
deduction equal to the taxable ordinary income recognized by the recipient.
Potential Limitation on Company Deductions. As part of the Omnibus
Budget Reconciliation Act of 1993, the U.S. Congress amended the Code to add
Section 162(m), which denies a deduction to any publicly held corporation for
compensation paid to certain employees in a taxable year to the extent that
compensation exceeds $1 million for a covered employee. It is possible that
compensation attributable to awards under the 2000 Plan, when combined with
all other types of compensation received by a covered employee from the
Company, may cause this limitation to be exceeded in any particular year.
Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with Treasury regulations issued under Section 162(m), compensation
attributable to stock options will qualify as performance-based compensation,
provided that: (i) the stock award plan contains a per-employee limitation on
the number of shares for which stock options and stock appreciation rights
maybe granted during a specified period; (ii) the per-employee limitation is
approved by the stockholders; (iii) the award is granted by a compensation
committee comprised solely of "outside directors"; and (iv) the exercise price
of the award is no less than the fair market value of the stock on the date of
grant. Compensation attributable to restricted stock will qualify as
performance-based compensation, provided that: (i) the award is granted by a
compensation committee comprised solely of "outside directors"; and (ii) the
purchase price of the award is no less than the fair market value of the stock
on the date of grant. Stock bonuses qualify as performance-based compensation
under the Treasury regulations only if: (i) the award is granted by a
compensation committee comprised solely of "outside directors"; (ii) the award
is granted (or exercisable) only upon the achievement of an objective
performance goal established in writing by the compensation committee while
the outcome is substantially uncertain; (iii) the compensation committee
certifies in writing prior to the granting (or exercisability) of the award
that the performance goal has been satisfied; and (iv) prior to the granting
(or exercisability) of the award, stockholders have approved the material
terms of the award (including the class of employees eligible for such award,
the business criteria on which the performance goal is based, and the maximum
amount(or formula used to calculate the amount) payable upon attainment of the
performance goal).
No options have been granted on the basis of the proposed share increase.
Because grants to the Company's employees under the 2000 Plan are
discretionary, benefits received by such individual optionees are not
determinable. The Company's non-employee directors, however, are entitled to a
non-discretionary grant of a specified number of options under the 2000 Plan
each year. All or a portion of the future non-discretionary option grants to
non-employee directors may be made from the addition to the 2000 Plan shares
being submitted to for stockholder approval at the Special Meeting. In
accordance with the 2000 Plan, on the date of each Annual Meeting of the
Stockholders of the Company each non-employee director who has served more
than two (2) years will be granted an option to purchase 25,000 shares of
Common Stock under the 2000 Plan.
3. TRANSACTIONS WITH MANAGEMENT AND OTHERS.
Acquisition
Effective February 1, 2000, the Company acquired 100% of the outstanding
Common Stock of iRV, Inc., a Colorado corporation. In the transaction, the
Company issued to the iRV shareholders a total of 5,500,000 shares of Common
Stock. As a result of their prior ownership of shares of Common Stock of iRV,
Inc. and the subsequent merger, John Deufel received 500,000 shares of Common
Stock, Bradley Smith (through her husband Mark Smith) received 100,000 shares
of Common Stock and Clifford L. Neuman (through a limited liability company in
which he is a manager) received 111,000 shares of Common Stock of the Company.
iRV, Inc. Private Placement
Prior to its acquisition by the Company, iRV, Inc. completed a private
offering of its Common Stock in which it sold a total of 5,500,000 shares of
Common Stock for a total consideration of $600,000. When the Company acquired
iRV, Inc., the iRV shareholders exchanged each outstanding share of iRV, Inc.
for one share of the Company's Common Stock.
Restricted Stock Award
In connection with iRV's hiring of John Deufel as President, Mr. Deufel
received a Restricted Stock Award of 500,000 shares, of which 100,000 shares
are fully vested, and the remaining 400,000 shares vest ratably over the next
four (4) years.
4. NAME CHANGE.
As a result of the Company's acquisition of iRV, Inc., iRV, Inc. became
the Company's wholly-owned subsidiary. The Company's Board of Directors has
decided to simplify our corporate organization by merging iRV, Inc. into the
Company, with the Company to be the surviving corporation, but with the
Company changing its name to "iRV, Inc."
Other applicable provisions of the Colorado Business Corporation Act, the
Company's Board of Directors is able to complete the merger of iRV, Inc. as
its wholly-owned subsidiary without the necessity of shareholder approval.
However, in order to change the Company's name, shareholder approval is
required by state law.
As a result of the foregoing, the Company's Board of Directors has
proposed that it change its name to "iRV, Inc." as part of the merger of the
subsidiary into the Company.
Management's Recommendation
Management believes that the foregoing proposal to authorize the Board of
Directors to adopt a change of name to "iRV, Inc." is in the Company's best
interest, and recommends that the Shareholders approve such proposal.
OTHER MATTERS
The Company's management is not aware of other matters which may come
before the Meeting. The Directors' designees or other persons named in the
accompanying form of proxy will vote said proxy in accordance with their
judgment if any other matter does properly come before the Meeting. A
majority of those votes present at the Meeting cast in favor of any such
matter will result in the passage of such matter.
SOUTHSHORE CORPORATION
By:
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Windy Haddad, Secretary
<PAGE>
<PAGE>
SOUTHSHORE CORPORATION
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH ____, 2000
A Special Meeting of Shareholders of Southshore Corporation ("Southshore" or
the "Company") will be held at 422 East Vermijo, Suite 216, Colorado Springs,
Colorado on March ____, 2000 at ____ o'clock __.m. Mountain Time for the
purpose of considering and voting upon the following:
1. To approve the 2000 Equity Incentive Plan adopted by the Board of
Directors on February 7, 2000.
2. To approve the change of name of the Company to "iRV, Inc."
3. Any other matters properly brought before said meeting or any
adjournment thereof.
Information relating to the above matters is set forth in the accompanying
Proxy Statement. Only holders of outstanding shares of the Company's common
stock of record at the close of business on __________, 2000 will be entitled
to vote at the meeting or any adjournment thereof.
Shareholders are cordially invited to attend the meeting in person.
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, IT WOULD BE
APPRECIATED IF YOU WOULD PROMPTLY FILL IN, SIGN AND DATE THE ENCLOSED PROXY
STATEMENT AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE. Any proxy may be
revoked at any time before it is voted by written notice mailed or delivered
to the Secretary, by receipt or a proxy properly signed and dated subsequent
to an earlier proxy, and by revocation of a written proxy by request in person
at the Special Meeting of Shareholders. If not so revoked, the shares
represented by the proxy will be voted in accordance with your instruction on
the proxy form.
SOUTHSHORE CORPORATION
By:
-------------------------------
Windy Haddad, Secretary
<PAGE>
<PAGE>
SOUTHSHORE CORPORATION
PROXY SOLICITED ON BEHALF OF THE COMPANY
The undersigned hereby constitutes and appoints John Deufel or Windy Haddad
or either of them acting in the absence of the other, with full power of
substitution the true and lawful attorneys or attorney and proxies of the
undersigned to attend a Special Meeting of the Shareholders of Southshore
Corporation ("Southshore") to be held at 422 East Vermijo, Suite 216, Colorado
Springs, Colorado on March ___, 2000 at __:00 _.m. Mountain Time, or any
adjournment or adjournments thereof, and vote all the shares of Southshore
standing in the name of the undersigned with all the powers the undersigned
would possess if present at said meeting.
(1) FOR AGAINST ABSTAIN
------------ ------------ ------------
To approve the 2000 Equity Incentive Plan adopted by the Board of
Directors on February 7, 2000.
(2) FOR AGAINST ABSTAIN
------------ ------------ ------------
To change the name of the Company to "iRV, Inc."
(3) Upon such other matters as may properly come before the meeting.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2 IN THE
DISCRETION OF THE PERSON HOLDING THE PROXY FOR ANY OTHER BUSINESS.
(NOTE: Should you desire to appoint a proxy other than the management
designees named above, strike out the names of the management designees and
insert the name of your proxy in the space provided above. Should you do
this, give this proxy card to the person you appoint instead of returning the
proxy card to the Company.)
(PLEASE DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.)
Receipt is acknowledged of Notice of Special Meeting and Proxy Statement for
the meeting.
Date , 2000
--------------------
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Name (please type or print)
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Signature
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Signature, if held jointly
Please sign exactly as name appears to the left. When
shares are held by joint tenants, both should sign. When
signing as executor, administrator, attorney, trustee, or
guardian, please give full title as such. If a
corporation, please sign in full corporation name by
President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
