<PAGE>
WIRE ONE TECHNOLOGIES, INC.
225 Long Avenue
Hillside, New Jersey 07205
August 18, 2000
To Our Stockholders:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of Wire One Technologies, Inc., a Delaware corporation (the "Company" or "Wire
One"), to be held at 8:30 a.m. local time, on Friday, September 15, 2000, at the
Holiday Inn, 304 Route 22 West, Springfield, New Jersey 07081.
Information about the meeting and the various matters on which the
stockholders will act is included in the accompanying Notice of Annual Meeting
of Stockholders and Proxy Statement. In addition, as you may know, Wire One was
formed by the merger of All Communications Corporation ("ACC") into View Tech,
Inc. ("VTI") in May 2000. Accordingly, we are enclosing the Form 10-Ks for 1999
for each of ACC and VTI, along with a Form 10-Q for the quarterly period ended
June 30, 2000 for the Company.
We hope you will be able to attend the Annual Meeting. Whether or not you
expect to attend, it is important you complete, date, sign and return the proxy
card in the enclosed envelope in order to make certain that your shares will be
represented at the Annual Meeting.
Sincerely,
/s/ Richard Reiss
Richard Reiss
President and Chief Executive
Officer
<PAGE>
WIRE ONE TECHNOLOGIES, INC.
225 Long Avenue
Hillside, New Jersey 07205
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 15, 2000
------------------------
The Annual Meeting of Stockholders of Wire One Technologies, Inc., a
Delaware corporation (the "Company"), will be held at 8:30 a.m. local time on
Friday, September 15, 2000, at the Holiday Inn, 304 Route 22 West, Springfield,
New Jersey 07081, for the following purposes:
1. To elect two Class I Directors to the Board of Directors to serve a
three year term each;
2. To adopt the 2000 Stock Incentive Plan;
3. To ratify the appointment of BDO Seidman, LLP as independent auditors of
the Company for the fiscal year ending December 31, 2000; and
4. To transact such other business as may properly be brought before the
meeting or any adjournment or postponement thereof.
Stockholders of record of Wire One Technologies, Inc. common stock as of
the close of business on August 15, 2000 are entitled to notice of, and to vote
at, the Annual Meeting or any adjournment or postponement thereof.
By order of the Board of Directors
/s/ Richard Reiss
------------------------------------
Richard Reiss
President and Chief Executive Officer
Hillside, New Jersey
Dated: August 18, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY CARD. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR
ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ATTACHED PROXY
STATEMENT.
<PAGE>
WIRE ONE TECHNOLOGIES, INC.
225 Long Avenue
Hillside, New Jersey 07205
PROXY STATEMENT
2000 ANNUAL MEETING OF STOCKHOLDERS
Wire One Technologies, Inc., a Delaware corporation ("Wire One" or the
"Company"), is furnishing this proxy statement in a solicitation by our Board of
Directors of proxies for use in voting at our 2000 Annual Meeting of
Stockholders or any adjournment or postponement thereof (the "Annual Meeting").
Our Annual Meeting will be held at 8:30 a.m. local time on Friday, September 15,
2000, at the Holiday Inn, 304 Route 22 West, Springfield, New Jersey 07081. This
proxy statement, the accompanying proxy card, the Form 10-Ks for 1999 for All
Communications Corporation ("ACC") and View Tech, Inc. ("VTI") and the
Form 10-Q for the Company for the quarterly period ended June 30, 2000 are first
being mailed to stockholders on or about August 18, 2000.
At the Annual Meeting, stockholders will be asked to consider and vote upon
(1) the election of two directors each to serve a three year term as a Class I
Director; (2) the approval of the 2000 Stock Incentive Plan; and (3) the
ratification of the appointment of BDO Seidman, LLP as our independent auditors.
At the Annual Meeting, stockholders may also be asked to consider and take
action with respect to such other matters as may properly come before the Annual
Meeting.
Record Date; Quorum
Only holders of record of the Company's common stock, par value $.0001 per
share ("Common Stock"), at the close of business on August 15, 2000 (the "Record
Date") are entitled to vote on the matters to be presented at the Annual
Meeting. As of the Record Date, approximately 16,879,716 shares of Common Stock
were issued and outstanding, each of which entitles its holder to cast one vote
on each matter to be presented at the Annual Meeting. A quorum is present at the
Annual Meeting if a majority of shares of Common Stock issued and outstanding
and entitled to vote on the Record Date are represented in person or by proxy.
If a quorum is not present, the Annual Meeting may be adjourned from time to
time until a quorum is obtained.
Voting Procedures
The shares represented by the proxies received, properly dated and executed
and not revoked will be voted at the Annual Meeting in accordance with the
instructions of the stockholders. Properly executed proxies that do not contain
voting instructions will be voted (1) in favor of the nominees for election as
directors named below, (2) FOR adoption of the 2000 Stock Incentive Plan and
(3) FOR ratification of BDO Seidman, LLP as our independent auditors and other
matters which the proxy holders deem advisable during the Annual Meeting.
Abstentions and broker "non-votes" will be treated as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum and as unvoted for purposes of determining the approval of any matter
submitted to the stockholders for a vote. A broker "non-vote" occurs when a
nominee holding shares for a beneficial owner does not vote on a particular
proposal because the nominee does not have discretionary power for that
particular item and has not received instructions from the beneficial owner.
Solicitation and Revocation
Any stockholder who executes a proxy may revoke it at any time before it is
voted by filing with the Secretary of the Company a written statement revoking
such proxy. Stockholders should make such filing to the attention of Andrea
Grasso, Secretary, Wire One Technologies, Inc., 225 Long Avenue, Hillside, New
Jersey 07205. You may also revoke a proxy at any time before it is voted by
executing and delivering a proxy bearing a later date or by voting in person at
the Annual Meeting. Your attendance at the Annual Meeting will not by itself
constitute revocation of a proxy.
Wire One will bear the cost of the solicitation of proxies from its
stockholders, including the cost of preparing, assembling and mailing the proxy
solicitation materials. In addition to solicitation by mail, the directors,
officers and employees of Wire One and its subsidiaries may solicit proxies from
stockholders by
1
<PAGE>
telephone or other electronic means or in person, but any such person will not
be specifically compensated for such services. The Company will cause brokerage
houses and other custodians, nominees and fiduciaries to forward solicitation
materials to the beneficial owners of stock held of record by such persons. The
Company will reimburse such custodians, nominees and fiduciaries for their
reasonable out-of-pocket expenses in doing so. American Stock Transfer and Trust
has been engaged by the Company to aid in the distribution of the proxy
materials and will be reimbursed for reasonable out-of-pocket expenses.
Stockholder Proposals
Proposals of stockholders intended to be presented at the Annual Meeting of
Stockholders to be held in 2001 must be received by the Secretary, Wire One
Technologies, Inc., 225 Long Avenue, Hillside, New Jersey 07205, no later than
April 20, 2001.
In addition, the Company's by-laws provide that, in order for a stockholder
to nominate a person for election to the Board of Directors at an annual meeting
of stockholders or to propose business for consideration at such meeting, such
stockholder must give written notice to the Secretary of the Company not less
than 60 days nor more than 90 days prior to the anniversary date of the
immediately preceding annual meeting of stockholders; provided however, that in
the event the annual meeting is called for a date that is not within 30 days
before or after such anniversary date, notice by the stockholder in order to be
timely must be received not later than the close of business on the 10th day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure of the date the annual meeting was made,
whichever occurs first.
2
<PAGE>
PROPOSAL #1
ELECTION OF DIRECTORS
Our directors are divided into three classes. The number of directors is
determined from time to time by our Board of Directors and currently is fixed at
seven. A single class of directors is elected each year at the annual meeting of
stockholders. Each director elected at an annual meeting will serve for a term
ending at the third annual meeting of stockholders after his or her election and
until his or her successor is elected and duly qualified.
The directors to be elected at the Annual Meeting are Class I directors and
are to serve until the 2003 annual meeting or until their respective successors
are elected and duly qualified. The nominees who will stand for election are
Eric Friedman and Andrea Grasso, both of whom are currently members of our Board
of Directors. The two nominees receiving the highest number of affirmative votes
will be elected as Class I directors. In the event any nominee is unable or
unwilling to serve as a nominee, the Board of Directors may select a substitute
nominee. If a substitute nominee is selected, proxies will be voted in favor of
such nominee. Our Board of Directors has no reason to believe that Mr. Friedman
or Ms. Grasso will be unable or unwilling to serve as a nominee or as a director
if elected.
The following table sets forth information with respect to the current
directors, director nominees and executive officers.
<TABLE>
<CAPTION>
Name Age Position with Company
------------------------------------------------------ --- ------------------------------------------------------
<S> <C> <C>
Director Nominees
-----------------
Eric Friedman (2)(4) 52 Director
Andrea Grasso 40 Secretary and Director
Other Directors
--------------
Richard Reiss (1) 43 Chairman, President and Chief Executive Officer
Robert B. Kroner (1) 70 Vice President and Director
Louis Capolino (1)(2) 57 Director
Dean Hiltzik (1)(3)(4) 46 Director
Peter N. Maluso (1)(2)(3)(4) 45 Director
Non-Director Executive Officers
-------------------------------
Christopher A. Zigmont 38 Chief Financial Officer, Vice President, Finance
Leo Flotron 40 Executive Vice President and General Manager Video
Communications
Joseph Scotti 38 Executive Vice President and General Manager
Enterprise Communications
Scott Tansey 36 Vice President, Controller and Treasurer
</TABLE>
------------------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
(4) Member of the Employee Stock Option Committee.
Biographies
Class I Director Nominees
Eric Friedman, Director. Mr. Friedman serves on our Board of Directors.
From December 1996 until May 2000, Mr. Friedman was a member of ACC's Board of
Directors. He has served as Chief Financial Officer, Vice President and
Treasurer of Chem International, Inc., a publicly held company, since June 1996.
From June 1978 through May 1996, Mr. Friedman was a partner at Shachat and
Simpson, a certified public accounting firm. Mr. Friedman received a B.S. degree
from the University of Bridgeport and is a certified public accountant.
3
<PAGE>
Andrea Grasso, Secretary and Director. Ms. Grasso is Wire One's Secretary
and serves on our Board of Directors. From 1995 until May 2000, Ms. Grasso was
ACC's Secretary and served on ACC's Board of Directors from 1996 until May 2000.
Required Vote
Directors must be elected by a plurality of the shares of our Common Stock
present at the Annual Meeting in person or by proxy entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF EACH NOMINEE FOR DIRECTOR NAMED ABOVE.
Directors whose Terms of Office Continue after the Annual Meeting
Richard Reiss, Chairman of the Board of Directors, President and Chief
Executive Officer. Mr. Reiss is Wire One's Chairman of the Board of Directors,
President and Chief Executive Officer and served as ACC's Chairman of the Board
of Directors, President and Chief Executive Officer from ACC's formation in 1991
until May 2000.
Robert B. Kroner, Vice President and Director. Mr. Kroner is Wire One's
Vice President and serves on our Board of Directors. From 1991 until May 2000,
Mr. Kroner served on ACC's Board of Directors and served as Vice President and
General Counsel of ACC from 1997 until May 2000. Prior to 1997, Mr. Kroner was
self-employed as an attorney. Mr. Kroner received his LLB degree from Harvard
Law School and holds an L.L.M. degree from New York University Graduate School
of Law.
Louis Capolino, Director. Mr. Capolino serves on our Board of Directors.
From November 1999 until May 2000, Mr. Capolino was a member of ACC's Board of
Directors. Since January 1995, Mr. Capolino has served as President of Comcap
Corporation, a communications consulting company. Mr. Capolino received a B.S.
degree in marketing from Montclair State University.
Dean Hiltzik, Director. Mr. Hiltzik serves on our Board of Directors. From
September 1999 until May 2000, Mr. Hiltzik was a member of ACC's Board of
Directors. Mr. Hiltzik, a certified public accountant, is a partner and director
of the securities practice at Schneider & Associates LLP ( "Schneider"), which
he joined in 1979. Schneider provides tax and consulting services to the
Company. Mr. Hiltzik received his B.A. from Columbia University in 1974 and his
M.B.A. in Accounting from Hofstra University in 1979.
Peter N. Maluso, Director. Mr. Maluso serves on our Board of Directors.
From December 1996 until May 2000, Mr. Maluso was a member of ACC's Board of
Directors. Since 1995, Mr. Maluso has been employed as a Principal at
International Business Machines, Inc. ( "IBM "), responsible for IBM's Global
Services Legacy Transformation Consulting practice in the northeastern United
States. Prior thereto, from 1988 to 1995, Mr. Maluso was a Senior Manager for
KPMG Peat Marwick's strategic services practice in New Jersey. Mr. Maluso
received his B.A. degree in Economics from Muhlenberg College and holds an
M.B.A. degree in Finance from Lehigh University. He is a certified public
accountant.
Executive Officers
The following individuals are executive officers of the Company but are not
Directors or Nominees for Director:
Christopher Zigmont, Chief Financial Officer, Vice President, Finance.
Mr. Zigmont is Wire One's Chief Financial Officer and Vice President, Finance.
From June 1999 until May 2000, Mr. Zigmont served as VTI's Chief Financial
Officer. From March 1990 to May 1999, Mr. Zigmont held various positions at
BankBoston Corporation, most recently as Director, Finance. Prior to joining
BankBoston Corporation, Mr. Zigmont was a Senior Audit Manager with the
accounting and auditing firm of KPMG Peat Marwick. He received a B.S. degree in
Business Administration with a double major in Accounting/Finance from Boston
University, Boston, Massachusetts.
Leo Flotron, Executive Vice President and General Manager Video
Communications. Mr. Flotron is Wire One's Executive Vice President and General
Manager Video Communications. From October 1995 until
4
<PAGE>
May 2000, Mr. Flotron served as ACC's Vice President, Sales and Marketing of
Videoconferencing Products, in charge of sales and marketing for
videoconferencing and network products. From 1988 to 1995, Mr. Flotron held
numerous positions with Sony Electronics, Inc., and has served as ACC's liaison
with Sony throughout the United States. Mr. Flotron holds a B.S. degree in
Business from the University of Massachusetts in Amherst, and an M.S. degree in
Finance from Louisiana State University.
Joseph Scotti, Executive Vice President and General Manager Enterprise
Communications. Mr. Scotti is Wire One's Executive Vice President and General
Manager Enterprise Communications. From August 1995 until May 2000, Mr. Scotti
served as ACC's Vice President, Sales and Marketing of Voice Products, dealing
with all aspects of voice communications. From 1990 to 1995, Mr. Scotti held
numerous sales and sales management positions with Northern Telecom. Mr. Scotti
received a B.S. degree in Marketing from St. Peters College.
Scott Tansey, Vice President, Controller and Treasurer. Mr. Tansey is Wire
One's Vice President, Controller and Treasurer. From 1996 until May 2000,
Mr. Tansey held numerous positions at ACC, most recently as Chief Financial
Officer. From 1992 until he joined ACC, Mr. Tansey served as Director, Finance
and Administration, of Data Transmission Services, Inc., a closely-held long
distance wireless data communications provider. Mr. Tansey received a B.S.
degree in Accounting from Rider College, Lawrenceville, New Jersey, and an
M.B.A. degree in Finance from Fairleigh Dickinson University, Madison, New
Jersey. He is a certified public accountant.
Meetings and Committees of the Board of Directors
Our Board of Directors met seven times during the year ended December 31,
1999. The Board has an Executive Committee, Audit Committee, Compensation
Committee and Stock Option Committee. All of the Directors attended each of the
meetings of the Board and the committees thereof on which they served during
1999.
Executive Committee
We currently maintain an Executive Committee consisting of Richard Reiss,
Peter Maluso, Louis Capolino, Robert Kroner and Dean Hiltzik. Each non-employee
member of our Executive Committee receives options to purchase 500 shares of
Common Stock for each meeting attended. The Executive Committee, to the extent
permitted by law, has and may exercise when the Board of Directors is not in
session all powers of the Board in the management of the business and affairs of
the Company, except such committee does not have the power or authority to
approve or recommend to the stockholders any action which must be submitted to
stockholders for approval under the Delaware General Corporation Law. The
Executive Committee did not meet during the year ended December 31, 1999.
Audit Committee
We currently maintain an Audit Committee consisting of Eric Friedman, Peter
Maluso and Louis Capolino. Each member of our Audit Committee is "independent"
as defined under the National Association of Securities Dealers' listing
standards. Each non-employee member of our Audit Committee receives options to
purchase 500 shares of Common Stock for each meeting attended. The Audit
Committee consults and meets with the Company's auditors and its Chief Financial
Officer and accounting personnel, reviews potential conflict of interest
situations, where appropriate, and reports and makes recommendations to the full
Board of Directors regarding such matters. The Audit Committee met two times
during the year ended December 31, 1999, and all members attended the meetings.
Compensation Committee
We currently maintain a Compensation Committee consisting of Dean Hiltzik
and Peter Maluso. Each non-employee member of our Compensation Committee
receives options to purchase 500 shares of Common Stock for each meeting
attended. The Compensation Committee is responsible for supervising the
Company's executive compensation policies, reviewing officers' salaries,
approving significant changes in employee benefits and recommending to the Board
of Directors such other forms of remuneration as it deems appropriate. The
5
<PAGE>
Compensation Committee met one time during the year ended December 31, 1999, and
all members attended the meeting.
Stock Option Committee
We currently maintain an Employee Stock Option Committee consisting of Dean
Hiltzik, Eric Friedman and Peter Maluso. Each non-employee member of our
Employee Stock Option Committee receives options to purchase 500 shares of
Common Stock for each meeting attended. The Stock Option Committee is
responsible for administering Wire One's employee incentive plans and
recommending to the Board of Directors such other forms of remuneration as it
deems appropriate. The Stock Option Committee met three times during the year
ended December 31, 1999, and all members attended the meetings.
Audit Committee Report
In December 1999, the Securities and Exchange Commission approved the
amendments to The Nasdaq Stock Market, Inc.'s rules relating to the structure
and membership on the audit committee of companies whose stock is traded on
Nasdaq. In response to these new requirements, in May 2000, the Board adopted a
charter for the Audit Committee, a copy of which is attached to this Proxy
Statement as Appendix A. Pursuant to the charter, the Audit Committee makes
recommendations as to the engagement and fees of the independent auditors,
reviews the preparations for and the scope of the audit of Wire One's annual
financial statements, reviews drafts of such statements and monitors the
functioning of Wire One's accounting and internal control systems by meeting
with representatives of management, the independent auditors and the internal
auditors.
The Audit Committee met with members of the engagement team of BDO
Seidman, LLP ("BDO") in 2000 to review the results of the 1999 audit and to
discuss the scope of the 2000 audit. During this meeting, the Audit Committee
discussed the matters required to be discussed by Statement on Auditing
Standards No. 1 with BDO. BDO delivered the written disclosures and letter
required by Independence Standards Board Standard No. 1. This Standard requires
auditors to communicate, in writing, at least annually, all relationships
between the auditors and a company that, in the auditor's professional
judgement, may reasonably be thought to affect the auditor's independence. The
Audit Committee has received this disclosure and discussed with BDO its
independence. Based upon its meetings with BDO and its review of the audited
financial statements, the Audit Committee recommended to the Board that the
audited financial statements be included in the Annual Report on Form 10-K.
The Audit Committee plans to meet with BDO again in 2000 to review the
scope of the 2000 audit.
Submitted by the Audit Committee:
Eric Friedman
Peter Maluso
Louis Capolino
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
Executive Compensation
The table below summarizes information concerning the compensation paid by
ACC during 1999 to ACC's Chief Executive Officer and ACC's three other most
highly paid executive officers (collectively, the "Named Executive Officers"),
each of whom are currently Named Executive Officers of Wire One.
<TABLE>
<CAPTION>
Long-term
compensation awards
Annual compensation ---------------------
--------------------- Securities underlying
Name and Principal Position Year Salary($) Bonus($) options
------------------------------------------------------------------ ---- --------- -------- ---------------------
<S> <C> <C> <C> <C>
Richard Reiss, President,
Chief Executive Officer and
Chairman of the Board........................................... 1999 205,000 75,000 --
1998 170,208 -- 80,000
1997 133,000 25,000 850,000
Leo Flotron, Executive Vice President............................. 1999 124,000 119,794 495,000
1998 114,000 82,285 20,000
1997 104,000 54,307 95,000
Joseph Scotti, Executive Vice President........................... 1999 124,000 119,794 495,000
1998 114,000 82,285 20,000
1997 104,000 54,307 95,000
Scott Tansey, Vice President, Controller and Treasurer............ 1999 100,000 25,000 165,000
</TABLE>
Option Grants in 1999
The following table sets forth information regarding stock options granted
pursuant to the ACC stock option plan during 1999 to each of the Named Executive
Officers.
<TABLE>
<CAPTION>
Potential
realized value
at assumed
Percent of annual rates
Number of total options Individual of stock price
underlying granted to Grants Exercise appreciation
options employees in or base price for option
Name granted fiscal 1999 (per share) Expiration Date term
-------------------------------- ---------- ---------------- --------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
5%
--
Richard Reiss................... -- --% $ -- -- $ --
Leo Flotron..................... 495,000 23.5 .568 January 11, 2004 358,763
Joseph Scotti................... 495,000 23.5 .568 January 11, 2004 358,763
Scott Tansey.................... 165,000 7.8 .568 January 11, 2004 119,588
<CAPTION>
Potential
realized value
at assumed
annual rates
of stock price
appreciation
for option
Name term
-------------------------------- --------------
<S> <C>
10%
---
Richard Reiss................... $ --
Leo Flotron..................... 452,714
Joseph Scotti................... 452,714
Scott Tansey.................... 150,905
</TABLE>
Aggregated Option Exercises In Fiscal 1999 And Fiscal Year-End Option Values
The following table sets forth information concerning the value of
unexercised in-the-money options held by the Named Executive Officers as of
December 31, 1999.
<TABLE>
<CAPTION>
Number of securities
Shares underlying Value of unexercised
acquired on Value unexercised options at in-the-money
Name exercise realized fiscal year-end options at fiscal year-end
----------------------------------------- ----------- -------- ----------------------------- -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard Reiss............................ -- -- 1,428,900 105,600 3,103,835 451,080
Leo Flotron.............................. -- -- 391,050 293,700 1,740,765 1,285,306
Joseph Scotti............................ -- -- 391,050 293,700 1,740,765 1,285,306
Scott Tansey............................. -- -- 219,450 143,550 953,490 587,371
</TABLE>
7
<PAGE>
Director Compensation
Directors who are not executive officers or employees of Wire One receive a
director's fee of options to purchase 1,000 shares of Common Stock for each
board meeting attended, whether in person or by telephone, and options to
purchase 4,000 shares of Common Stock for attendance in person at the annual
meeting of stockholders.
Employment Agreements
We entered into employment agreements with each of Messrs. Reiss, Flotron
and Scotti, effective January 1, 1997, pursuant to which Mr. Reiss serves as
President and Chief Executive Officer, Mr. Flotron serves as Executive Vice
President and General Manager Video Communications, and Mr. Scotti serves as
Executive Vice President and General Manager Enterprise Communications. The
following is a summary of the material terms and conditions of such agreements
and is subject to the detailed provisions of the respective agreements attached
as exhibits to the Registration Statement of the Company filed with the
Securities and Exchange Commission (Registration No. 333-21069).
Employment Agreement with Richard Reiss
Mr. Reiss has an employment agreement, effective January 1, 1997, as
amended in March 1997, which provides for a six-year term and an annual salary
of $133,000 in the first year, increasing to $170,000 and $205,000 in the second
and third years, respectively. In years four, five and six of the term,
Mr. Reiss' base salary will be $205,000, but can be increased at the discretion
of the Board's Compensation Committee. The agreement also provides for medical
benefits, the use of an automobile, and grants of 1,237,500 non-qualified stock
options, as well as 174,857 incentive stock options and 122,143 non-qualified
stock options issuable under the ACC Plan, which plan has been assumed by the
Company and is still in effect.
Employment Agreements with Messrs. Flotron and Scotti
Messrs. Flotron and Scotti have employment agreements effective January 1,
1997. Each of these agreements expires on December 31, 2000 and provides for an
annual salary of $175,000. These agreements further provide for an incentive
bonus equal to 1/2 of 1% of net sales payable twice yearly to each of
Mr. Flotron and Mr. Scotti. Each employee is also entitled to a monthly
automobile allowance. In consideration for extending the term of the agreements
through December 31, 2000, ACC granted 352,186 options under the ACC Plan and an
additional 142,814 options outside the ACC Plan to each of Mr. Flotron and
Mr. Scotti to purchase shares of ACC common stock, which options vest over a
twenty-three month period. These agreements may be terminated by the employee
without cause upon written notice to the Company.
Compensation Committee Report on Executive Compensation
Scope of the Committee's Work
The Compensation Committee of Wire One's Board of Directors has the
authority and responsibility to establish the overall compensation strategy for
Wire One, including salary and bonus levels, and to review and make
recommendations to the Board with respect to the compensation of Wire One's
executive officers. The current members of the Compensation Committee are
Messrs. Hiltzik and Maluso, each of whom is a non-employee director within the
meaning of Section 16 of the Exchange Act, and an "outside director" within the
meaning of Section 162(m) of the Code. The Compensation Committee was
established in 1999; prior thereto, compensation decisions and grants of stock
options were made by the Board.
Executive Compensation Philosophy and Policies
Wire One's overall compensation philosophy is to provide a total
compensation package that is competitive and enables Wire One to attract,
motivate, reward and retain key executives and other employees who have the
skills and experience necessary to promote the short and long-term financial
performance and growth of the Company.
8
<PAGE>
The Compensation Committee recognizes the critical role of its executive
officers in the significant growth and success of the Company to date and its
future prospects. Accordingly, Wire One's executive compensation policies are
designed to (1) align the interests of executive officers and stockholders by
encouraging stock ownership by executive officers and by making a significant
portion of executive compensation dependent upon the Company's financial
performance, (2) provide compensation that will attract and retain talented
professionals, (3) reward individual results through base salary, annual cash
bonuses, long-term incentive compensation in the form of stock options and
various other benefits and (4) manage compensation based on skill, knowledge,
effort and responsibility needed to perform a particular job successfully.
In establishing salary, bonuses and long-term incentive compensation for
its executive officers, the Compensation Committee takes into account both the
position and expertise of a particular executive, as well as the Committee's
understanding of competitive compensation for similarly situated executives in
the Company's industry.
Executive Compensation
Base Salary. Salaries for executive officers for 1999 were generally
determined by the Board of Directors on an individual basis at the time of
hiring. The majority of Wire One's executives were hired prior to the formation
of the Compensation Committee. For 2000, the Compensation Committee will review
the base salaries of the executive officers by evaluating each executive's scope
of responsibility, performance, prior experience and salary history, as well as
the salaries for similar positions at comparable companies.
Bonus. The amount of cash bonuses paid to executives was partially based
upon the financial results of ACC and partially based on the decision of the
Chief Executive Officer. Mssrs. Flotron and Scotti each received a bonus of
$119,794 and Mr. Tansey received a bonus of $25,000, each for their services in
1999. Certain executive officers were also paid a bonus in the form of stock
option grants. Pursuant to their employment agreements, Mssrs. Flotron and
Scotti each received options to purchase 495,000 shares of ACC common stock.
Also in 1999, Mr. Tansey received options to purchase 165,000 shares of ACC
common stock.
Long-Term Incentive Awards. The Compensation Committee believes that
equity-based compensation in the form of stock options links the interests of
executives with the long-term interests of Wire One's stockholders and
encourages executives to remain in Wire One's employ. The Company grants stock
options in accordance with its various stock option plans. Grants are awarded
based on a number of factors, including the individual's level of
responsibility, the amount and term of options already held by the individual,
the individual's contributions to the achievement of Wire One's financial and
strategic objectives, and industry practices and norms.
Compensation of the Chief Executive Officer
Mr. Reiss, who served as ACC's Chairman of the Board of Directors,
President and Chief Executive Officer since its formation until May 2000, and
has served as Wire One's President and Chief Executive Officer since its
formation in May 2000, was paid a base salary of $205,000 in 1999. He was paid a
cash bonus of $75,000 for his service to ACC in 1999.
Effective January 1, 1997, we entered into an Employment Agreement with
Mr. Reiss (see "Employment Agreements" above) pursuant to which he serves as
President and Chief Executive Officer. Mr. Reiss' salary and other compensation
and the terms of his employment agreement have been established by reference to
the salaries and equity participations of other chief executive officers of
companies in the Company's industry and in recognition of Mr. Reiss' unique
skills and importance to the Company.
Internal Revenue Code Section 162(m) Limitation
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to publicly held companies for compensation exceeding
$1 million paid to certain of the Company's executive officers. The limitation
applies only to compensation that is not considered to be performance-based. The
non-performance based compensation paid to Wire One's executive officers in 1999
did not exceed the $1 million limit per officer. The 2000 Plan is structured so
that any compensation deemed paid to an executive officer in
9
<PAGE>
connection with the exercise of option grants made under that plan will qualify
as performance-based compensation which will not be subject to the $1 million
limitation. The Compensation Committee currently intends to limit the dollar
amount of all other compensation payable to the Company's executive officers to
no more than $1 million. The Compensation Committee is aware of the limitations
imposed by Section 162(m), and the exemptions available therefrom, and will
address the issue of deductibility when and if circumstances warrant.
Submitted by the Compensation Committee:
Dean Hiltzik
Peter Maluso
Compensation Committee Interlocks and Insider Participation
Dean Hiltzik and Peter Maluso served on the Compensation Committee of the
Board of Directors of ACC during 1999. No member of the Compensation Committee
was at any time during 1999 or at any other time an officer or employee of ACC.
We receive financial and tax services from an accounting firm in which
Mr. Hiltzik is a partner (see "Certain Relationships and Related Transactions"
below). No member of the Compensation Committee served on the board of directors
or compensation committee of any entity which has one or more executive officers
serving as a member of the Board or Compensation Committee.
10
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The landlord for our Hillside, New Jersey office is Vitamin Realty
Associates, L.L.C. of which Eric Friedman, one of our directors, is a member.
These premises consist of 8,491 square feet of office space and 13,730 square
feet of secured warehouse facilities. The lease term is for five years and
expires on May 31, 2002. The base rental for the premises during the term of the
lease is $122,846 per year. In addition, Wire One must pay its share of the
landlord's operating expenses (i.e., those costs or expenses incurred by the
landlord in connection with the ownership, operation, management, maintenance,
repair and replacement of the premises, including, among other things, the cost
of common area electricity, operational services and real estate taxes). For the
years ended December 31, 1999 and 1998, rent expense associated with this lease
was $135,000 and $119,000, respectively. We believe that the lease reflects a
fair rental value for the property and is on terms no less favorable than we
could obtain in an arm's length transaction with an independent third party.
We receive financial and tax services from an accounting firm in which Dean
Hiltzik, one of the Company's directors, is a partner. Since Mr. Hiltzik became
a director of ACC on September 15, 1999, we have incurred fees of approximately
$50,000 in services received from this firm.
11
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of Common Stock as of August 11, 2000 by each of the following:
o each person (or group within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934) known by us to own beneficially 5% or
more of the Common Stock;
o Wire One's directors and Named Executive Officers; and
o all directors and executive officers of Wire One as a group.
As used in this table, "beneficial ownership" means the sole or shared
power to vote or direct the voting or to dispose or direct the disposition of
any security. A person is considered the beneficial owner of securities that can
be acquired within 60 days from the date of this proxy statement through the
exercise of any option, warrant or right. Shares of Common Stock subject to
options, warrants or rights which are currently exercisable or exercisable
within 60 days are considered outstanding for computing the ownership percentage
of the person holding such options, warrants or rights, but are not considered
outstanding for computing the ownership percentage of any other person. The
amounts and percentages are based upon 16,879,716 shares of Common Stock
outstanding as of August 11, 2000.
<TABLE>
<CAPTION>
Percentage
Number of of
Shares Outstanding
Name and address of beneficial owners (1) Owned (2) Shares
---------------------------------------------------------------------------------------- --------- -----------
<S> <C> <C>
Executive Officers and Directors:
Richard Reiss........................................................................... 4,730,550(3) 28.0%
Leo Flotron............................................................................. 734,250(4) 4.3
Joseph Scotti........................................................................... 734,250(4) 4.3
Robert B. Kroner........................................................................ 264,825(5) 1.6
Scott Tansey............................................................................ 237,600(6) 1.4
Peter N. Maluso......................................................................... 119,625(7) *
Dean Hiltzik............................................................................ 104,510(8) *
Eric Friedman........................................................................... 90,725(9) *
Louis Capolino.......................................................................... 74,497(10) *
Andrea Grasso........................................................................... 41,250 *
Christopher A. Zigmont.................................................................. 40,625(11) *
All directors and executive officers as a group (11 people)............................. 7,172,707 42.5
</TABLE>
------------------
* Less than 1%
(1) Unless otherwise noted, the address of each of the persons listed is
c/o Wire One Technologies, Inc., 225 Long Avenue, Hillside, NJ 07205.
(2) Unless otherwise indicated by footnote, the named persons have sole
voting and investment power with respect to the shares of Common Stock
beneficially owned.
(3) Includes 1,455,300 shares subject to presently exercisable stock
options and 82,500 shares held by a trust for the benefit of
Mr. Reiss' children, of which he is the trustee.
(4) Includes 404,250 shares subject to presently exercisable stock options.
(5) Includes 17,325 shares subject to presently exercisable stock options.
(6) Includes 234,300 shares subject to presently exercisable stock options.
(7) Includes 37,625 shares subject to presently exercisable stock options.
(8) Includes 96,200 shares subject to presently exercisable stock options.
(9) Includes 36,800 shares subject to presently exercisable stock options.
(10) Includes 12,375 shares subject to presently exercisable stock options.
(11) Includes 40,625 shares subject to presently exercisable stock options.
12
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers and directors and
persons who beneficially own more than 10% of a registered class of our equity
securities to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Executive officers, directors and greater
than 10% stockholders are required by regulations of the Securities and Exchange
Commission to furnish us with copies of all Section 16(a) reports they file.
Based solely on our review of the copies of reports we received, or written
representations that no such reports were required for those persons, we believe
that, for 1999, all statements of beneficial ownership required to be filed with
the Securities and Exchange Commission were filed on a timely basis.
13
<PAGE>
PROPOSAL #2
ADOPTION OF STOCK INCENTIVE PLAN
The stockholders are being asked to approve the adoption of our 2000 Stock
Incentive Plan (the "2000 Plan"). The 2000 Plan was adopted by the Board of
Directors in June 2000. Under the 2000 Plan, options and other equity rights,
including stock appreciation rights ("SARs"), sales or bonuses of restricted
stock, dividend equivalent rights, performance units or performance shares, or
any combination of these, may be issued from time to time to key employees,
directors and consultants who contribute to the management, growth and financial
success of the Company. The purpose of the 2000 Plan is to attract and retain
the best available personnel, to provide additional incentive to our directors,
officers, employees and consultants and to promote the success of our business.
We currently maintain the plans established by VTI and ACC prior to
consummation of the Merger. The ACC Plan provides for the granting of options to
officers, directors, employees and advisors of Wire One. Options are not
exercisable for a period of one year from the date of grant. Thereafter, options
may be exercised as determined by the Board of Directors at the date of grant,
with maximum terms of ten and five years, respectively, for incentive stock
options ("ISOs") issued to employees who are less than 10% stockholders and
employees who are 10% stockholders. In addition, under the ACC Plan, no
individual will be given the opportunity to exercise ISOs valued in excess of
$100,000 in any calendar year unless and to the extent the options have first
become exercisable in the preceding year. The maximum number of shares with
respect to which options may be granted to an individual during any twelve-month
period is 100,000. The ACC Plan will terminate in 2006. Substantially all
1,500,000 shares available under the ACC Plan are subject to outstanding
options. ACC also issued approximately 1,609,000 non-qualified options.
VTI had an Employee Stock Purchase Plan (the "Purchase Plan") under which
up to 500,000 shares of VTI common stock could be purchased by eligible
employees. Substantially all full-time employees were eligible to participate in
the Purchase Plan. No additional shares may be purchased under this Plan. Wire
One currently maintains five VTI stock option plans which generally require the
exercise price of options to be not less than the estimated fair market value of
the stock at the date of grant. Options vest over a maximum period of four years
and may be exercised in varying amounts over their respective terms. In
accordance with the provisions of such plans, all outstanding options became
immediately exercisable upon the Merger. An aggregate of 1,922,000 shares of
common stock were available under the five VTI stock option plans, all of which
have been issued or are subject to outstanding options.
The Board believes that the adoption of the 2000 Plan is necessary in order
to have a sufficient reserve of Common Stock to provide option grants as an
equity incentive to attract and retain the services of key individuals essential
to the Company's long-term success. A summary of the terms of the 2000 Plan is
provided below. The summary, however, is not intended to be a description of all
the terms of the 2000 Plan. A copy of the 2000 Plan will be furnished by the
Company to any stockholder upon written request to the Secretary of the Company
at the corporate offices in Hillside, New Jersey.
Available Shares
Subject to adjustment to reflect certain corporate events, such as stock
dividends, recapitalizations and business combinations, the maximum aggregate
number of shares which may be issued pursuant to all awards is 3,000,000 shares.
Any shares covered by an award, or portion of an award, which are forfeited or
canceled, expire or are settled in cash, shall be deemed not to have been issued
for purposes of determining the maximum aggregate number of shares which may be
issued under the 2000 Plan.
Administration
Under the 2000 Plan, our Board of Directors, the Stock Option Committee or
such other committee designated by the Board, administers the granting of stock
and options to directors and officers in a way that allows these grants of stock
to be exempt from Section 16(b) of the Securities Exchange Act and determines
the provisions, terms and conditions of each award. When stock or options are
granted to other participants in the 2000 Plan, our Board, the Stock Option
Committee or such other committee designated by our Board administers
14
<PAGE>
these awards and determines the provisions, terms and conditions of each award.
Each entity, whether the Stock Option Committee, the Board or such other
committee designated by the Board, will be referred to herein as the
Administrator, and such Administrator will have complete discretion (subject to
the provisions of the 2000 Plan) to authorize option grants under the 2000 Plan
within the scope of its administrative jurisdiction.
Eligibility
All employees, officers, directors and consultants of the Company or any of
its affiliates are eligible to participate in the 2000 Plan, although incentive
stock options may be granted only to employees. As of July 31, 2000,
approximately 200 employees and consultants would have been eligible to
participate in the 2000 Plan.
Form of Awards
The 2000 Plan permits the grant of options and other equity rights,
including SARs, sales or bonuses of restricted stock, dividend equivalent
rights, performance units or performance shares, or any combination of these.
Options may include nonstatutory stock options ("NSOs") as well as ISOs
intended to qualify for special tax treatment. Options granted under our plans
generally vest 25% per year annually over a four-year period. The term of an
option will be determined by the Administrator, provided, however, that the term
shall be no more than ten and five years, respectively, for ISOs issued to
employees who are less than 10% stockholders and employees who are 10%
stockholders.
The exercise price or purchase price, if any, of 2000 Plan awards that are
not incentive stock options will not be less than 85% of the fair market value
of the stock unless otherwise determined by the Administrator. The exercise
price or purchase price, if any, of 2000 Plan awards that are ISOs (a) granted
to an employee who, at the time of such grant, owns stock representing more than
10% of the voting power of all classes of stock of the Company or any parent or
subsidiary, shall be not less than 110% of the fair market value of the stock on
the date of the grant or (b) granted to any employee other than an employee
described in clause (a) above, shall be not less than 100% of the fair market
value of the stock on the date of the grant. The form of payment for the shares
of common stock when options are exercised or stock is purchased under a 2000
Plan award will be determined by the Administrator and may include cash, check,
shares of common stock or the assignment of part of the proceeds from the sale
of shares acquired upon exercise or purchase of the award.
Where the award agreement permits the exercise or purchase of an award for
a period of time following the recipient's termination of service with us, that
award will terminate to the extent not exercised or purchased on the last day of
the specified period or the last day of the original term of the award,
whichever occurs first.
Change of Control
Subject to any action that may be required by the stockholders of the
Company, the Administrator may proportionately adjust the number and price of
outstanding awards, and the number of shares authorized for issuance under the
2000 Plan, in the event of a stock dividend, stock split, recapitalization or
other corporate action having a similar effect on the capitalization of the
Company. The Administrator may establish programs that provide for the exchange
of awards for one or more other types of awards by certain employees, directors
and consultants. In the event of a Change in Control (as defined in the 2000
Plan), all outstanding options will fully vest unless assumed by the successor
corporation, and all unexercised options will terminate immediately prior to the
closing of that transaction unless assumed by the successor corporation. After
consummation of the transaction, if any employee grantee is terminated without
Cause or quits for Good Reason (as such terms are defined in the 2000 Plan)
within 12 months of the transaction, all of the employee grantee's outstanding
options will immediately vest.
Amendment, Suspension or Termination
Unless terminated sooner, the 2000 Plan will terminate automatically in
2010. The Board has the authority to amend, suspend or terminate the 2000 Plan;
however, to the extent necessary to comply with applicable laws, the Company
will obtain stockholder approval of any amendment to the 2000 Plan in such
manner and to such degree as required.
15
<PAGE>
Transferability
During their lifetime, those who hold ISOs granted under this plan cannot
transfer these options other than by a will or the laws of descent upon the
death of the option holder. No one is allowed to exercise ISOs except the person
to whom the options were first issued while that person is alive. Other awards
may be transferred during the lifetime of the grantee by gift or pursuant to a
domestic relations order to members of the grantee's immediate family to the
extent and in the manner determined by the Administrator.
New Plan Benefits
Because participation and the types of awards granted under the 2000 Plan
are subject to the discretion of the Administrator, the benefits or amounts that
will be received by participants in the future if the 2000 Plan is approved and
the benefits that would have been received by such participants if the 2000 Plan
had been in effect in 1999 are not currently determinable. To date, grants of
339,724 options have been made under the 2000 Plan, subject to stockholder
approval of the 2000 Plan, as set forth below.
<TABLE>
<CAPTION>
Number of
Name and Position Dollar Value(1) Shares
------------------------------------------------------------------ --------------- ---------
<S> <C> <C>
Christopher Zigmont, Chief Financial Officer...................... $ 275,000 100,000
All non-executive employees, as a group........................... $ 659,241 239,724
</TABLE>
------------------
(1) Based on $8.25, the price of our Common Stock on August 11, 2000.
Federal Income Tax Consequences
The following description of the tax consequences of options under the 2000
Plan is based on present Federal tax laws and does not purport to be a complete
description of the tax consequences of the 2000 Plan.
No tax consequences result from the grant of options which are intended to
qualify as ISOs within the meaning of Section 422 of the Code. If an option
holder acquires stock upon the exercise of an ISO, no income will be recognized
by the option holder for ordinary income tax purposes (although the difference
between the option exercise price and the fair market value of the stock subject
to the option may result in alternative minimum tax liability to the option
holder) and we will be allowed no deduction as a result of such exercise
provided that the following conditions are met: (a) at all times during the
period beginning on the date of grant of the ISO and ending on the day three
months before the date of such exercise, the option holder is an employee of the
Company or a subsidiary; and (b) the option holder makes no disposition of the
stock within two years from the date the ISO was granted nor within one year
after the exercise of the ISO. The three-month period in (a), above, is extended
to one year in the event the option holder is disabled or dies. If the holder of
an ISO sells stock after compliance with these conditions, any gain realized
over the exercise price of the ISO ordinarily will be treated as long-term
capital gain, and any loss will be treated as long-term capital loss, in the
year of sale of the shares.
No tax consequences result from the grant of NSOs. An option holder who
exercises an NSO generally will realize compensation taxable as ordinary income
in an amount equal to the difference between the option exercise price and the
fair market value of the shares on the date of exercise, and the Company will be
entitled to a deduction from income in the same amount in the year in which the
exercise occurred. The option holder's basis in shares received in an exercise
of an NSO with cash will be the fair market value of the shares on the date
income was realized, and when the holder disposes of the shares, he or she will
recognize capital gain or loss, either long-term or short-term, depending on the
holding period of the shares.
Although it is anticipated that certain awards under the 2000 Plan will,
pursuant to Section 162(m) of the Code, meet the requirements to avoid a limit
on deductibility, no assurances can be given that all awards will meet such
requirements. Specifically, awards of restricted stock will be subject to the
limitation on deductibility imposed by Section 162(m) of the Code.
Required Vote
An affirmative vote of the holders of a majority of the shares of our
Common Stock present at the Annual Meeting in person or by proxy and entitled to
vote is required for approval of the 2000 Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE 2000
STOCK INCENTIVE PLAN.
16
<PAGE>
PROPOSAL #3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed the firm of BDO
Seidman, LLP as independent auditors to audit the consolidated financial
statements of the Company and its subsidiaries for the fiscal year ending
December 31, 2000, subject to ratification by the stockholders of the Company.
BDO audited both VTI's and ACC's financial statements for the fiscal year ending
December 31, 1999.
A member of BDO is expected to be present at the Annual Meeting, to be
provided with an opportunity to make a statement if such member desires to do so
and to be available to respond to appropriate questions from stockholders.
Change of Auditors
Arthur Andersen LLP ("Andersen") audited the financial statements of VTI
for the fiscal years ended December 31, 1997 and 1998. On or about January 11,
2000, the Board of Directors of VTI, including all members of the Audit
Committee of the Board of Directors of VTI, determined not to appoint Andersen
to audit the financial statements of VTI for the fiscal year ended December 31,
1999 and authorized the retention of BDO to audit the financial statements of
VTI for the fiscal year ended December 31, 1999. BDO was formally engaged by VTI
in an engagement letter dated February 24, 2000. BDO was the independent
accountant of ACC for the fiscal year ended December 31, 1999.
During the two most recent fiscal years and the interim period subsequent
to December 31, 1998, prior to engaging BDO, VTI did not consult with BDO
regarding the application of accounting principles to a specified transaction,
either completed or proposed; or the type of audit opinion that might be
rendered on VTI's financial statements. During the two most recent fiscal years
and the interim period subsequent to December 31, 1998, the reports of Andersen
on VTI's financial statements did not contain any adverse opinions or
disclaimers of opinion, and were not qualified or modified as to uncertainty,
audit scope or accounting principles. During such periods, there have been no
disagreements on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreement, if not
resolved to Andersen's satisfaction, would have caused Andersen to make
reference in connection with its reports to the subject matter of the
disagreement.
Required Vote
Approval of the Independent Auditor Proposal requires the affirmative vote
of a majority of the votes cast by holders of Common Stock present at the Annual
Meeting in person or by proxy entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
APPROVAL OF THE INDEPENDENT AUDITORS PROPOSAL.
17
<PAGE>
Stock Performance Graph
The graph below compares the cumulative total stockholder return on the
Company's Common Stock with the cumulative total return on The Nasdaq National
Market Index and a peer group selected by the Company on an industry and
line-of-business basis. The period shown commences on December 29, 1995 and ends
on December 31, 1999, the end of the Company's last fiscal year. The graph
assumes an investment of $100 on December 29, 1995, and the reinvestment of any
dividends.
The comparisons in the graph below are based upon historical data and are
not indicative of, nor intended to forecast, future performance of the Company's
Common Stock.
[Line Graph]
<TABLE>
<CAPTION>
December December December December December
1995 1996 1997 1998 1999
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Wire One Technologies, Inc.*............................ 100.000 67.187 61.718 29.687 31.640
The Nasdaq National Market Index........................ 100.000 122.706 149.254 208.404 386.768
Nasdaq Telecommunications Index......................... 100.000 103.628 147.156 240.417 487.353
</TABLE>
------------------
* The information provided in this Performance Chart relates to VTI only. Wire
One was formed in May 2000 by the merger of ACC into VTI.
18
<PAGE>
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE
WIRE ONE TECHNOLOGIES, INC.
PURPOSE AND AUTHORITY
The audit committee (the "Committee") for Wire One Technologies, Inc., a
Delaware corporation (the "Company"), is appointed by the Company's Board of
Directors (the "Board") to assist the Board in monitoring (1) the integrity of
the financial statements of the Company, (2) the compliance by the Company with
legal and regulatory requirements and (3) the independence and performance of
the Company's internal and external auditors.
The Committee shall have the authority to retain special legal, accounting
or other consultants to advise the Committee and, if necessary, to institute
special investigations. The Committee may request any officer or employee of the
Company or the Company's outside counsel or independent auditor to attend a
meeting of the Committee or to meet with any members of, or consultants to, the
Committee.
In addition, the Committee shall undertake those specific duties and
responsibilities listed below and such other duties as the Board shall from time
to time prescribe.
COMMITTEE MEMBERSHIP
The Committee members (the "Members") shall be appointed by the Board and
will serve at the discretion of the Board. The Committee will consist of at
least three (3) members of the Board subject to the following requirements:
(i) each of the Members must be able to read and understand fundamental
financial statements, including the Company's balance sheet, income
statement, and cash flow statement or must become able to do so
within a reasonable time period after his or her appointment to the
Committee;
(ii) at least one (1) of the Members must have past employment experience
in finance or accounting, requisite professional certification in
accounting, or other comparable experience or background, including a
current or past position as a chief executive or financial officer or
other senior officer with financial oversight responsibilities; and
(iii) each Member must be either (a) an independent director or (b) the
Board must determine it to be in the best interests of the Company
and its stockholders to have one (1) director who is not independent,
and the Board must disclose the reasons for its determination in the
Company's first annual proxy statement or information statement
subsequent to such determination, as well as the nature of the
relationship between the Company and director. Under such
circumstances the Company may appoint one (1) director who is not
independent to the Committee, so long as the director is not a
current employee or officer, or an immediate family member of a
current employee or officer.
DUTIES AND RESPONSIBILITIES
The Committee shall report, at least annually, to the Board. Further, the
Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval;
2. Review the annual audited financial statements with management,
including a review of major issues regarding accounting and auditing
principles and practices, and evaluate the adequacy of internal
controls that could significantly affect the Company's financial
statements;
3. Review an analysis prepared by management and the independent auditor
of significant financial reporting issues and judgments made in
connection with the preparation of the Company's financial statements;
A-1
<PAGE>
4. Review with management and the independent auditor the Company's
quarterly financial statements prior to the filing of its Form 10-Q;
5. Meet periodically with management to review the Company's major
financial risk exposures and the steps management has taken to monitor
and control such exposures;
6. Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent auditor,
internal auditors or management;
7. Recommend to the Board the appointment of the independent auditor,
which firm is ultimately accountable to the Committee and the Board;
8. Approve the fees to be paid to the independent auditor;
9. Receive periodic reports from the independent auditor regarding the
auditor's independence consistent with Independence Standards Board
Standard 1, discuss such reports with the auditor, and if deemed
necessary by the Committee, take or recommend that the full Board take
appropriate action to oversee the independence of the auditor;
10. Evaluate together with the Board the performance of the independent
auditor and, if deemed necessary by the Committee, recommend that the
Board replace the independent auditor;
11. Review the appointment of, and any replacement of, the senior internal
auditing executive;
12. Review the significant reports to management prepared by the internal
auditing department and management's responses;
13. Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit;
14. Obtain from the independent auditor assurance that Section 10A of the
Securities Exchange Act of 1934 has not been implicated.
15. Obtain reports from management, the Company's senior internal auditing
executive and the independent auditor that the Company's
subsidiary/foreign affiliated entities are in conformity with
applicable legal requirements, including the Foreign Corrupt Practices
Act.
16. Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit.
17. Review with the independent auditor any problems or difficulties the
auditor may have encountered, any management letter provided by the
auditor, and the Company's response to that letter. Such review should
include:
a. Any difficulties encountered in the course of the audit work,
including any restrictions on the scope
of activities or access to required information;
b. Any changes required in the planned scope of the internal audit; and
c. The internal audit department responsibilities, budget and staffing.
18. Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement in
accordance with the requirements of Item 306 of Regulation S-K and
Item 7(e)(3) of Schedule 14A;
19. Advise the Board with respect to the Company's policies and procedures
regarding compliance with applicable laws and regulations;
20. Review with the Company's outside counsel legal matters that may have a
material impact on the financial statements, the Company's compliance
policies and any material reports or inquiries received from regulators
or governmental agencies;
21. Review related party transactions for potential conflict of interest;
and
22. Provide oversight and review of the Company's asset management
policies, including an annual review of the Company's investment
policies and performance for cash and short-term investments.
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Company's financial statements are complete and
A-2
<PAGE>
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditor. Nor is it
the duty of the Committee to conduct investigations, to resolve disagreements,
if any, between management and the independent auditor or to assure compliance
with laws and regulations.
MEETINGS
The Committee will meet at least two times each year. The Committee may
establish its own schedule which it will provide to the Board in advance.
The Committee will meet at least annually with the chief financial officer,
the senior internal auditing executive, and the independent auditor in separate
executive sessions. The Committee will meet with the independent auditors of the
Company, at such times as it deems appropriate, to review the independent
auditor's examination and management report.
MINUTES
The Committee will maintain written minutes of its meetings, which minutes
will be filed with the minutes of the meetings of the Board.
A-3
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
WIRE ONE TECHNOLOGIES, INC.
FOR THE 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 15, 2000
The undersigned stockholder of WIRE ONE TECHNOLOGIES, INC., a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated August 18, 2000, and hereby
appoints Richard Reiss and Christopher Zigmont or any one of them, proxies, with
full power to each of substitution, on behalf and in the name of the
undersigned, to represent the undersigned at the 2000 Annual Meeting of
Stockholders of WIRE ONE TECHNOLOGIES, INC. to be held on September 15, 2000 at
8:30 a.m., Eastern Standard Time, at the Holiday Inn, 304 Route 22 West,
Springfield, New Jersey 07081 and at any adjournment or adjournments thereof,
and to vote all shares of Common Stock which the undersigned would be entitled
to vote if then and there personally present, on the matters set forth on the
reverse side.
(Continued and to be signed on the reverse side)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
WIRE ONE TECHNOLOGIES, INC.
September 15, 2000
Please Detach and Mail in the Envelope Provided
--------------------------------------------------------------------------------
A /X/ Please mark your votes as in this example.
1. PROPOSAL NO. 1: ELECTION OF CLASS I DIRECTORS:
FOR all WITHHOLD Nominees: Eric Friedman
nominees listed AUTHORITY Andrea Grasso
at right (except to vote for all nominees
as indicated) listed at right
/ / / /
If you wish to withhold authority to vote for any individual nominee, write that
nominee's name in the space below.
--------------------------------------------------------------------------------
2. PROPOSAL NO. 2: APPROVAL AND RATIFICATION OF 2000 STOCK INCENTIVE PLAN:
FOR AGAINST ABSTAIN
/ / / / / /
3. PROPOSAL NO. 3: APPROVAL AND RATIFICATION OF BDO SEIDMAN, LLP AS
INDEPENDENT AUDITORS:
FOR AGAINST ABSTAIN
/ / / / / /
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is
made, this Proxy will be voted FOR nominees in Proposal No. 1 and FOR
each of the Proposals Nos. 1, 2 and 3.
Signature Signature Dated: , 2000
----------------- ------------------ -----------
Note: This proxy should be marked, dated and signed by the stockholder(s)
exactly as his or her name appears hereon, and returned promptly in the
enclosed envelope. Persons signing in a fiduciary capacity should so
indicate. If shares are held by joint tenants or as community property,
both should sign.
