UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.___ )
Filed
by the Registrant
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Filed
by a Party other than the Registrant
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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SITESTAR
CORPORATION
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(Name of Registrant as
Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed
maximum aggregate value of transaction:
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Fee
paid previously with preliminary materials.
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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.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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SITESTAR
CORPORATION
4026
Wards Road, Suite G1 #271
Lynchburg,
VA 24502
(434)
382-7366
Dear
Stockholder:
You
are cordially invited to the Annual Meeting of Stockholders (the “Annual Meeting”) of Sitestar Corporation, a Nevada
corporation (the “Company”), to be held at 10:00 a.m. local time, on Monday, May 22, 2017, at the offices of our legal
counsel, Alston & Bird LLP, located at 101 South Tryon Street, Suite 4000, Charlotte, NC 28280. At the meeting, the stockholders
will be asked to consider and act on the following items:
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1.
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The
re-election of five members of the board of directors of the Company, each for a term
of one year;
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2.
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Ratification
of the appointment of Cherry Bekaert, LLP as our independent registered public accounting
firm for the year ending December 31, 2017; and
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3.
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The
transaction of any other business that may properly come before the Annual Meeting or
any adjournment of the Annual Meeting.
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You
will also have the opportunity to ask questions and make comments at the meeting.
In
accordance with the rules and regulations of the Securities and Exchange Commission, we are furnishing our Proxy Statement and
Annual Report to stockholders for the year ended December 31, 2016. If you are receiving this notice electronically, you can also
receive paper copies of our Proxy Statement and Annual Report upon request by writing to our President, Chief Executive Officer
and Chief Financial Officer, Steven L. Kiel at 4026 Wards Road, Suite G1 #271, Lynchburg, VA 24502, or by email at investorrelations@sitestar.com.
It
is important that your stock be represented at the meeting regardless of the number of shares you hold. You are encouraged to
specify your voting preferences by marking our proxy card and returning it as directed. If you do attend the meeting and wish
to vote in person, you may revoke your proxy at the meeting.
If
you have any questions about the Proxy Statement or the accompanying 2016 Annual Report, please contact Steven L. Kiel, our President,
Chief Executive Officer and Chief Financial Officer at (434) 382-7366.
We
look forward to seeing you at the Annual Meeting.
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Sincerely,
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Steven L. Kiel
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President, Chief
Executive Officer and Chief Financial Officer
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April
21, 2017
SITESTAR
CORPORATION
4026
Wards Road, Suite G1 #271
Lynchburg,
VA 24502
(434)
382-7366
NOTICE
OF Annual Meeting OF STOCKHOLDERS
The
Annual Meeting of Stockholders (the “Annual Meeting”) of Sitestar Corporation, a Nevada corporation (the “Company”)
will be held at the offices of our legal counsel, Alston & Bird LLP, located at 101 South Tryon Street, Suite 4000, Charlotte,
NC 28280, on Monday, May 22, 2017, at 10:00 a.m., local time. At the meeting, stockholders will consider and act on the following
items:
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1.
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The
re-election of five members of the board of directors of the Company, each for a term
of one year;
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2.
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Ratification
of the appointment of Cherry Bekaert, LLP as our independent registered public accounting
firm for the year ending December 31, 2017; and
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3.
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The
transaction of any other business that may properly come before the Annual Meeting or
any adjournment of the Annual Meeting.
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The
foregoing items of business are more fully described in the Proxy Statement accompanying this Notice.
Only
those stockholders of record as of the close of business on April 17, 2017, are entitled to vote at the Annual Meeting or any
postponements or adjournments thereof. A complete list of stockholders entitled to vote at the Annual Meeting will be available
for your inspection beginning April 21, 2017 and may be provided electronically.
YOUR
VOTE IS IMPORTANT!
Instructions
on how to vote your shares are contained in the Proxy Statement and your proxy card. You may obtain, free of charge, a paper copy
of our Annual Report on Form 10-K, including financial statements and exhibits, by writing to our President, Chief Executive Officer
and Chief Financial Officer, Steven L. Kiel at 4026 Wards Road, Suite G1 #271, Lynchburg, VA 24502, or by email at investorrelations@sitestar.com.
As of the date of the Notice of Annual Meeting of Stockholders and the Proxy Statement, such materials are also available online
at
www.sitestar.com
.
Submitting
your proxy does not affect your right to vote in person if you decide to attend the Annual Meeting. You are urged to submit your
proxy as soon as possible, regardless of whether or not you expect to attend the Annual Meeting. You may revoke your proxy at
any time before it is exercised at the Annual Meeting by (i) delivering written notice to our President, Chief Executive Officer
and Chief Financial Officer, Steven L. Kiel, at Sitestar’s address above, (ii) submitting a later dated proxy card, (iii)
voting again via the Internet as described on your proxy card, or (iv) attending the Annual Meeting and voting in person. No revocation
under (i) or (ii) will be effective unless written notice or the proxy card is received by our President, Chief Executive Officer
and Chief Financial Officer, Steven L. Kiel, at or before the Annual Meeting.
When
you submit your proxy, you authorize Steven L. Kiel to vote your shares at the Annual Meeting and on any adjournments of the Annual
Meeting in accordance with your instructions.
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By Order of the Board of
Directors,
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Steven L. Kiel
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President, Chief Executive Officer and Chief Financial Officer
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SITESTAR CORPORATION
4026 Wards Road, Suite G1 #271
Lynchburg, VA 24502
(434) 382-7366
PROXY STATEMENT
This Proxy Statement
and the accompanying proxy card are being made available via Internet access, beginning on or about April 21, 2017, to the owners
of shares of common stock of Sitestar Corporation, a Nevada corporation (the “Company,” “our,” “we”
or “Sitestar”) as of April 17, 2017, in connection with the solicitation of proxies by our Board of Directors (“Board”
or “Board of Directors”) for our 2017 Annual Meeting of Stockholders (the “Annual Meeting”). On or about
April 21, 2017, we made available the Notice of Annual Meeting of Stockholders. If you received the Notice electronically and
not by mail, you will not automatically receive by mail this Proxy Statement or our Annual Report to stockholders for the year
ended December 31, 2016. If you would like to receive a printed copy of our Proxy Statement, Annual Report and proxy card, please
follow the instructions for requesting such materials in the Notice. Upon request, we will promptly mail you paper copies of such
materials free of charge.
The Annual Meeting
will take place at the offices of our legal counsel, Alston & Bird LLP, located at 101 South Tryon Street, Suite 4000, Charlotte,
NC 28280 on Monday, May 22, 2017, at 10:00 a.m., local time. Our Board of Directors encourages you to read this document thoroughly
and take this opportunity to vote, via proxy, on the matters to be decided at the Annual Meeting. As discussed below, you may
revoke your proxy at any time before your shares are voted at the Annual Meeting.
Table of Contents
QUESTIONS AND ANSWERS
Q.
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How will proxy materials be delivered?
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A.
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Stockholders who hold certificated shares of the Company’s
common stock entitled to vote at the Annual Meeting will receive a printed copy of our proxy materials via mail. For
stockholders who hold such shares electronically through a broker, proxy materials will be delivered to such stockholders
electronically in accordance with Securities and Exchange Commission rules. However, all stockholders will have the ability
to access the proxy materials on a website referred to on the proxy card or to request a printed set of these materials at
no charge.
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Q.
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What is the purpose of the Annual Meeting?
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A.
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At the Annual Meeting, our stockholders will act upon the matters
outlined in the Notice of Annual Meeting of Stockholders accompanying this Proxy Statement, which are to (i) re-elect five
members of the board of directors of the Company, each for a term of one year, (ii) consider the ratification of the appointment
of Cherry Bekaert, LLP as our independent registered public accounting firm for the year ending December 31, 2017, and (iii)
to transact any other business that may properly come before the 2017 Annual Meeting or any adjournment thereof.
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Q.
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Who is entitled to vote at our Annual Meeting?
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A.
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The record holders of our common stock at the close of business
on the record date, April 17, 2017, may vote at the Annual Meeting. Each share of Common Stock is entitled to one vote. There
were 282,830,163 shares of common stock outstanding on the record date and entitled to vote at the Annual Meeting. A complete
list of stockholders entitled to vote at the Annual Meeting will be available for your inspection beginning April 21, 2017
and may be provided electronically.
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A.
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You may vote in person at the Annual Meeting, by use of a proxy
card if you receive a printed copy of our proxy materials, or via Internet or telephone as indicated on the proxy card.
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A proxy is a person you appoint to vote your shares on your
behalf. If you are unable to attend the Annual Meeting, our Board of Directors is seeking your appointment of a proxy so that
your shares may be voted. If you vote by proxy, you will be designating our President, Chief Executive Officer and Chief Financial
Officer, Steven L. Kiel, as your proxy. Such person may act on your behalf and have the authority to appoint a substitute
to act as your proxy.
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Q.
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How will my shares be voted if I vote by proxy?
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A.
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Your proxy will be voted according to the instructions you provide.
If you complete and submit your proxy but do not otherwise provide instructions on how to vote your shares, your shares
will be voted (i) “FOR” the individuals nominated to serve as members of our Board of Directors, (ii) “FOR”
the ratification of the appointment of Cherry Bekaert, LLP as our independent registered public accounting firm for the year
ending December 31, 2017. Presently, our Board does not know of any other matter that may come before the Annual Meeting.
However, your proxies are authorized to vote on your behalf, using their discretion, on any other business that properly comes
before the Annual Meeting.
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Q.
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How do I revoke my proxy?
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A.
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You may revoke your proxy at any time before your shares are
voted at the Annual Meeting by:
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delivering written notice to our President, Chief Executive
Officer and Chief Financial Officer, Steven L. Kiel, at our address above;*
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submitting a later dated proxy card;*
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voting again via the Internet as described on the proxy card;
or
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attending the Annual Meeting and voting in person.
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* Your revocation will be effective
unless written notice or the proxy card is received by our President, Chief Executive Officer and Chief Financial Officer, Steven
L. Kiel at or before the Annual Meeting.
Q.
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Is my vote confidential?
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Yes. All votes remain confidential, unless you provide otherwise.
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Q.
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How is voting conducted?
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Before the Annual Meeting, our
Board of Directors will appoint one or more inspectors of election for the meeting. The inspector(s) will determine the
number of shares represented at the meeting, the existence of a quorum and the validity and effect of proxies. The inspector(s)
will also receive, count, and tabulate ballots and votes and determine the results of the voting on each matter that comes
before the Annual Meeting.
See “Q. What vote is required
to elect our directors for a one-year term?”, for how abstentions, votes withheld and broker or nominee non-votes are treated
by the Company during the Annual Meeting.
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Q.
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What constitutes a quorum at the Annual Meeting?
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A.
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In accordance with Nevada law
(the law under which we are incorporated) and our bylaws, as the same may be amended or restated from time to time (“Bylaws”),
the presence at the Annual Meeting, by proxy or in person, of the holders of a majority of the outstanding shares of the capital
stock entitled to vote at the Annual Meeting constitutes a quorum, thereby permitting the stockholders to conduct business at
the Annual Meeting.
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Abstentions and votes withheld,
and shares represented by proxies reflecting abstentions or votes withheld, will be treated as present for purposes of determining
the existence of a quorum at the Annual Meeting. Broker or nominee non-votes, which occur when shares held in “street name”
by brokers or nominees who indicate that they do not have discretionary authority to vote on a particular matter, will be treated
as present for purposes of determining the existence of a quorum, and may be entitled to vote on certain matters at the Annual
Meeting.
If a quorum
is not present at the Annual Meeting, a majority of the stockholders present in person and by proxy may adjourn the meeting to
another date. At any adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted
at the originally called meeting.
Q.
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What vote is required to elect our directors for
a one-year term?
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A.
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The affirmative vote of a majority of the votes cast, by the
holders of common stock present in person or by proxy, entitled to vote in the election. Abstentions, votes withheld,
and broker or nominee non-votes will not affect the outcome of director elections.
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Q:
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How will the outcome of the ratification of the
appointment of Cherry Bekaert, LLP as our independent registered public accounting firm for the year ending December 31, 2017
be determined?
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A.
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The affirmative vote of a majority of the votes cast,
by the holders of common stock present in person or by proxy, entitled to vote at the Annual Meeting is required to ratify the
appointment of Cherry Bekaert, LLP as our independent registered public accounting firm for the year ending December 31, 2017.
Abstentions and votes withheld will have the same effect as a negative vote. However, broker or nominee non-votes, and shares
represented by proxies reflecting broker or nominee non-votes, will not have the effect of a vote “for” or “against”
this proposal.
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Q.
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What percentage of our outstanding common stock
do our directors and executive officers own?
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A.
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As of April 17, 2017, our directors and executive officers owned,
or have the right to acquire, approximately 53.04% of our outstanding common stock. See the discussion under the heading “Stock
Ownership of Our Directors, Executive Officers, and 5% Beneficial Owners” on page 13 for more details.
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Q.
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How can I obtain a copy of our Annual Report on
Form 10-K?
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A.
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We have filed our Annual Report on Form 10-K for
the year ended December 31, 2016, with the Securities and Exchange Commission (“SEC”). The Annual Report on Form
10-
K is also included in the 2016 Annual Report to Stockholders.
You may
obtain, free of charge, a paper copy of our Annual Report on Form 10-K, including financial statements and exhibits, by writing
to our President, Chief Executive Officer and Chief Financial Officer, Steven L. Kiel, or by email at investorrelations@sitestar.com.
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CORPORATE
GOVERNANCE
Our Board of Directors
The Company approved
the appointment of the Governance, Compensation, and Nomination Committee on September 19, 2016. The Governance, Compensation,
and Nomination Committee Charter was approved by the Board of Directors on September 19, 2016.
Our Bylaws provide
that the business and affairs of the Company shall be managed and all corporate powers shall be exercised by or under the direction
of the Board of Directors. Our Bylaws provide further that the Board of Directors shall consist of not less than one and not more
than nine members unless changed by a duly adopted amendment to the articles of incorporation or by an amendment to the Bylaws
adopted by the vote or written consent of holders of a majority of the outstanding shares entitled to vote. Our Board of Directors
has passed a resolution setting the number of members at five, which is the current number of members. Our Bylaws allow for the
Board to appoint a Chairman of the Board. On February 17, 2016, the Board elected Jeffrey I. Moore as Chairman of the Board.
The following individuals
are being nominated for re-election to the Board (See “Election of Directors; Nominees”):
Name
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Age
(1)
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Position
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Director
Since
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Independent
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Current
Committee
Membership
(2)
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Jeffrey I. Moore
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31
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Chairman of the Board
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2013
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Yes
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AC, GCN
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Steven L. Kiel
(3)
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38
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President, Chief Executive Officer, Chief Financial Officer and Director
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2015
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No
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Jeremy K. Gold
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24
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Director
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2015
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Yes
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AC
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Christopher
T. Payne
(4)
Keith D. Smith
(5)
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46
53
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Director
Director
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2016
2016
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Yes
Yes
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AC,
GCN
GCN
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(1)
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As of the 2017 Annual Meeting.
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(2)
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AC = Audit Committee GCN = Governance,
Compensation and Nominating Committee
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(3)
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On February 17, 2016, the Board elected
Steven L. Kiel as the President and Chief Executive Officer of the Company. Mr. Kiel
had served as the interim President and Chief Executive Officer of the Company since
December 14, 2015. On March 3, 2016, the Board elected Mr. Kiel as the Chief Financial
Officer.
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(4)
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On February 23, 2016, the Company announced
that it appointed Christopher T. Payne as a member of the Board. Mr. Payne was appointed
by the Board at its meeting on February 17, 2016 and the appointment was effective on
February 22, 2016.
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(5)
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On September 19, 2016, Keith D. Smith
was elected by shareholders as a member of the Board.
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The following biographies
set forth the names of our director nominees, their ages, their principal occupations and employers for at least the past five
years, any other directorships held by them during the past five years in companies that are subject to the reporting requirements
of the Securities Exchange Act of 1934 (the “Exchange Act”), or any company registered as an investment company under
the Investment Company Act of 1940, as well as additional information, all of which we believe sets forth each director nominee’s
qualifications to serve on the Board.
Jeffrey I. Moore
,
31, was appointed as the Chairman of the Board on February 17, 2016. He has served as a Director since 2013. Mr. Moore is a founder
and Presiding Partner of M & M Investments, a value based investment partnership investing in common stocks. He is also owner
and operator of Mt Melrose LLC, a company investing in real estate in Central Kentucky. Mr. Moore earned a Bachelor of Arts in
General Studies at Eastern Kentucky University. The Company believes that Mr. Moore’s experience in real estate investment
and management, his experience with other investments, as well as his familiarity with Sitestar’s holdings, make him qualified
to serve on the Board.
Steven L.
Kiel
, 38, was appointed as President and Chief Executive Officer of the Company on December 14, 2015. He has served as a Director
since 2015. Mr. Kiel is the President of Arquitos Capital Management LLC and portfolio manager of Arquitos Capital Partners, LP.
He is also a co-portfolio manager to Santa Monica Partners, L.P. a New York-based investment partnership. Mr. Kiel is a judge
advocate in the Army Reserves, a veteran of Operation Iraqi Freedom, and currently holds the rank of Major. Previously, Steven
was an attorney in private practice. He is a graduate of George Mason School of Law and Illinois State University and is a member
of the bar in Illinois (inactive) and Washington, DC. The Company believes that Mr. Kiel’s financial, leadership, and legal
experience makes him qualified to serve on the Board.
Jeremy K. Gold
,
24, has been a Director since 2015. Mr. Gold has served as the Chairman of Sitestar’s Audit Committee since 2015. Mr. Gold is
a Research Analyst at Oberndorf Enterprises LLC. He has previously worked at Alesia Asset Management, CloudPlus Inc, Western Asset
Management and Camden Asset Management. Mr. Gold holds a Bachelor of Arts in Physics from Williams College. The Company believes
that Mr. Gold’s experience in evaluating investment decisions, as well as his familiarity with the Company’s holdings,
make him qualified to serve on the Board.
Christopher T.
Payne,
46, has been a Director since 2016. Mr. Payne is a financial professional with more than 15 years of consulting, corporate
finance and Big Four experience. In his current role, Mr. Payne manages and performs valuations involving various classes of equity
and debt securities. He advises clients in both private and public companies and provides valuation and corporate advisory services
for purposes including mergers and acquisitions, fairness opinions, buy-sell agreements, Internal Revenue Service and Securities
and Exchange Commission compliance matters, and corporate planning and reorganizations. Mr. Payne is a graduate from the George
Mason University’s School of Business (MBA) and holds a Bachelor’s degree from the University of North Carolina at
Charlotte. The Company believes that Mr. Payne’s experience in evaluating investment decisions and dedication to improving
the corporate governance at Sitestar make him qualified to be a member of the Board.
Keith D. Smith,
53, has been a Director since 2016. Mr. Smith has been the Chairman of the Company’s Governance, Compensation and Nominating
Committee since 2016. Mr. Smith is a managing director at a private business valuation / consulting firm in Rochester, New York.
He is a valuation professional with more than 20 years of consulting, corporate finance and “Big Four” accounting
and auditing experience. Mr. Smith originates, manages and performs valuations involving equity, debt, derivatives, liabilities,
intangible assets, intellectual property and net operating losses of publicly and privately held businesses for acquisitions,
divestitures, estate & gift tax reporting, liquidation, financial reporting, and general corporate planning. Previously, Mr.
Smith worked in the valuation practice of a Big Four accounting firm and was an Air Force officer involved in the acquisition
of space systems for the federal government. Mr. Smith holds an MBA from University California - Los Angeles and a Bachelor of
Science in Electrical Engineering from the Union College. The Company believes that Mr. Smith’s experience in evaluating
investment decisions make him qualified to serve on the Board.
There is no family
relationship between and among any of our executive officers or directors.
There are no legal
or regulatory proceedings involving any director, director nominee or officer of the Company for the past ten years, except for
the complaint filed by Sitestar on April 12, 2016 against its former President and Chief Executive Officer and current stockholder,
Frank Erhartic, Jr., alleging monetary damages in excess of $350,000. This matter is currently pending with the Circuit Court
for the City of Lynchburg.
During 2016, the
Board held six meetings, our audit committee held four meetings, and our governance, compensation and nominating committee did
not hold a meeting. During the period served, no Director attended fewer than 75% of the total number of meetings of the Board
held during the year with the exception of former director Daniel A. Judd. Our directors are expected to attend each annual
meeting of Stockholders, and it is our expectation that all director nominees will attend this year’s Annual Meeting. All
directors attended the Annual Meeting of Shareholders in 2016, which was held on September 19, 2016.
Group and Voting
Agreement
. In connection with a private placement of our common stock on August 10, 2016, Arquitos Capital Partners, LP, Santa
Monica Partners, L.P. and Steven L. Kiel entered into a Group and Voting Agreement, pursuant to which Mr. Kiel will until August
10, 2018, have sole and exclusive authority to vote the shares acquired by Arquitos Capital Partners, LP and Santa Monica Partners,
L.P. through such private placement.
Communicating with the Board of Directors
Our Board has established
a process by which stockholders can send communications to the Board. You may communicate with the Board as a group, or to specific
directors, by writing to Steven L. Kiel, our President, Chief Executive Officer and Chief Financial Officer, at our offices located
at 4026 Wards Road, Suite G1 #271, Lynchburg, VA 24502. Mr. Kiel will review all such correspondence and regularly forward to
the Board a summary of all correspondence and copies of all correspondence that deals with the functions of the Board or committees
thereof or that otherwise requires their attention. Directors may at any time review a log of all correspondence we receive that
is addressed to members of our Board and request copies of any such correspondence. Concerns relating to accounting, internal
controls, or auditing matters may be communicated in this manner, or may be submitted on an anonymous basis via e-mail investorrelations@sitestar.com.
These concerns will be immediately brought to the attention of our Audit Committee and resolved in accordance with procedures
established by our Audit Committee.
Risk Oversight
Sitestar has a risk
management program overseen by Steven L. Kiel, our President, Chief Executive Officer, Chief Financial Officer and Director. Mr.
Kiel identifies material risks and prioritizes them for our Board. Our Board regularly reviews information regarding our credit,
liquidity, cybersecurity, operations, as well as the risks associated with each.
Code of Ethics
The Company has adopted
a code of ethics and it is available on the Company’s website
www.sitestar.com
under Investor Relations.
Audit Committee
The Company approved
the creation of an Audit Committee on December 14, 2015. The Audit Committee Charter was approved by the Board of Directors on
January 5, 2016. The Audit Committee assists the Board of Directors in fulfilling its responsibility to the shareholders, potential
shareholders, and investment community relating to corporate accounting, reporting practices of the Company and the quality and
integrity of the Company’s financial reporting. To fulfill its purposes, the Committee’s duties include the following:
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Appoint,
evaluate, compensate, oversee the work of and, if appropriate, terminate, the independent
auditor, who shall report directly to the Committee.
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Approve
in advance all audit engagement fees and terms of engagement as well as all audit and
non-audit services to be provided by the independent auditor.
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Engage
independent counsel and other advisors, as it deems necessary to carry out its duties.
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In performing these
functions, the Audit Committee meets periodically with the independent auditors and management to review their work and confirm
that they are properly discharging their respective responsibilities.
The Audit Committee
currently consists of Jeremy K. Gold (Chairman of the Audit Committee), Jeffrey I. Moore, and Christopher T. Payne. Each member
is considered to be independent as defined by the Securities and Exchange Commission. Mr. Payne is considered to be an audit committee
financial expert. Please see Mr. Payne’s biography on page 6 for a description of his relevant experience.
The Audit Committee
has reviewed and discussed the audited financial statements for the year ended December 31, 2016 with the Company’s management
and the Company’s independent registered public accounting firm. The Audit Committee has also discussed with the Company’s
independent registered public accounting firm the matters required to be discussed by the Statement on Auditing Standards No.
61, as amended (AICPA, Professional Standards, Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight
Board (United States) in Rule 3200T regarding “Communication with Audit Committees.”
The Audit Committee
also has received and reviewed the written disclosures and the letter from the Company’s independent registered public accounting
firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the Company’s independent
registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with
the Company’s independent registered public accounting firm its independence from the Company.
Based on the reviews
and discussions referred to above, the Audit Committee recommended to the Board that the financial statements referred to above
be included in the Annual Report.
Governance, Compensation, and Nominating
Committee
The Company approved
the appointment of the Governance, Compensation, and Nomination Committee on September 19, 2016. The Governance, Compensation,
and Nomination Committee Charter was approved by the Board of Directors on September 19, 2016. A copy of the Governance, Compensation,
and Nomination Committee Charter is available on the Company’s website www.sitestar.com under the Corporate Governance tab.
The Governance, Compensation, and Nomination Committee assists the Board of Directors in fulfilling its responsibility to the
shareholders, potential shareholders, and investment community relating to corporate governance, compensation and nomination oversight
and Director effectiveness and performance. To fulfill its purposes, the committee’s duties include the following:
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●
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Recommending
to the Board corporate governance guidelines applicable to the Company.
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●
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Identifying,
reviewing, evaluating, and recommending individuals qualified to become members of the
Board and its committees.
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Evaluating
and recommending to the Board the compensation of the Board and its committees.
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Reviewing
the effectiveness and performance of the Board and its members.
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Assessing
and reviewing risks associated with the Company and if necessary recommending mitigation
actions to the Board.
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Setting
the compensation of the Chief Executive Officer and performing other compensation and
oversight.
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We believe that our
Board of Directors as a whole should encompass a range of talent, skill, and expertise enabling it to provide sound guidance with
respect to our operations and interests. The committee evaluates all candidates to our Board of Directors by reviewing their biographical
information and qualifications. If the independent directors determine that a candidate is qualified to serve on our Board of
Directors, such candidate is interviewed by at least one of the independent directors and our Chief Executive Officer. Other members
of the Board of Directors also have an opportunity to interview qualified candidates. The independent directors then determine,
based on the background information and the information obtained in the interviews, whether to recommend to the Board of Directors
that the candidate be nominated for approval by the stockholders to fill a directorship. With respect to an incumbent director
whom the independent directors are considering as a potential nominee for reelection, the independent directors review and consider
the incumbent director’s service during his or her term, including the number of meetings attended, level of participation,
and overall contribution to the Board of Directors. The manner in which the independent directors evaluate a potential nominee
will not differ based on whether the candidate is recommended by our directors or stockholders.
Nasdaq has established
rules and regulations regarding the composition of nominating committees and the qualifications of the committee’s members.
Our Board of Directors has examined the composition of our Governance, Compensation, and Nominating Committee and the qualifications
of the committee members in light of the current rules and regulations governing nominating committees. Based upon this examination,
our Board of Directors has determined that each member of our Governance, Compensation, and Nominating Committee is independent
and is otherwise qualified to be a member of our Governance, Compensation, and Nominating Committee in accordance with such rules.
We do not have a
formal policy in place with regard to the consideration of diversity in considering candidates for our Board of Directors, but
the Board of Directors strives to nominate candidates with a variety of complementary skills so that, as a group, the Board of
Directors will possess the appropriate talent, skills and expertise to oversee our business.
The Governance, Compensation,
and Nominating Committee currently consists of Keith D. Smith (Chairman of the Governance, Compensation and Nomination Committee),
Jeffrey I. Moore and Christopher T. Payne. Each member is considered to be independent as defined by the Securities and Exchange
Commission.
Nominating Process
Until the charter
for the Governance, Compensation, and Nominating Committee is created and approved, all nomination decisions are discussed and
approved among the entire the entire Board of Directors.
With respect to an
incumbent director whom the other directors are considering as a potential nominee for re-election, such directors review and
consider the incumbent director’s service during his or her term, including the number of meetings attended, level of participation,
and overall contribution to the Board.
Our Board will also
consider candidates recommended by stockholders for nomination to our Board of Directors. A stockholder who wishes to recommend
a candidate for nomination to our Board of Directors must submit such recommendation to our Corporate Secretary, Rodney Lake,
at Sitestar Corporation, 4026 Wards Road, Suite G1 #271, Lynchburg, VA 24502. Any recommendation must be received not less than
90 calendar days nor more than 120 calendar days before the anniversary date of the previous year’s annual meeting. All
stockholder recommendations of candidates for nomination for election to our Board of Directors must be in writing and must set
forth the following: (i) the candidate’s name, age, business address, and other contact information, (ii) the number of
shares of the Company’s common stock beneficially owned by the candidate, (iii) a complete description of the candidate’s
qualifications, experience, background and affiliations, as would be required to be disclosed in the proxy statement pursuant
to Schedule 14A under the Exchange Act, (iv) a sworn or certified statement by the candidate in which he or she consents to being
named in the proxy statement as a nominee and to serve as director if elected, and (v) the name and address of the stockholder(s)
of record making such a recommendation and the number of shares owned by the recommending stockholders.
Vacancies in the
Board may be filled by a majority of the remaining directors, though less than a quorum, by (1) the unanimous written consent
of the directors then in office, (2) the affirmative vote of a majority of the directors then in office at a meeting held pursuant
to notice or waivers of notice complying with Nevada corporations law, or (3) a sole remaining director. Each director so
elected shall hold office until the next annual meeting of the stockholders and until a successor has been elected and qualified,
or until such director resigns or is removed from office. A vacancy in the Board of Directors created by the removal of a director
may only be filled by the vote of a majority of the shares entitled to vote represented at a duly held meeting at which a quorum
is present, or by the written consent of the holders of a majority of the outstanding shares.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FEES AND OTHER MATTERS
Cherry Bekaert, LLP,
the independent registered public accounting firm that audited our financial statements for the years ended December 31, 2016
and December 31, 2015, has served as our independent registered public accounting firm since 2016.
Our Board of Directors
has asked the stockholders to ratify the selection of Cherry Bekaert, LLP as our independent registered public accounting firm.
See Proposal Two: Ratification of Appointment of Cherry Bekaert,
LLP as Our Independent Registered Public Accounting Firm on page [18] of this proxy statement. The Audit Committee has reviewed
the fees described below and concluded that the payment of such fees is compatible with maintaining Cherry Bekaert, LLP’s
independence. All proposed engagements of Cherry Bekaert, LLP, whether for audit services, audit related services, tax services,
or permissible non audit services, were pre-approved by our Audit Committee.
Registered Public
Accounting Firm Fees and Other Matters
The following table
summarizes the fees of Cherry Bekaert, LLP, our current registered public accounting firm, for 2016 and 2015:
|
|
2016
|
|
2015
|
Audit fees
(1)
|
|
$
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167,125
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|
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$
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54,712
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Audit related fees
(2)
|
|
|
—
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|
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|
—
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Tax fees
(3)
|
|
|
3,222
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|
|
|
—
|
|
All other fees
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
170,347
|
|
|
$
|
54,712
|
|
(1) Consists of fees for services provided
in connection with the audit of the Company’s financial statements and review of the Company’s quarterly financial
statements.
(2) Consists of fees for assurance and
related services that are reasonably related to the performance of the audit or review of the Company’s financial statements
and are not reported under “Audit fees.”
(3) Consists of fees for preparation of
Federal and state income tax returns.
Management notes
that all audit fees paid during the year ended December 31, 2016 were paid to Cherry Bekaert, LLP and were related to audit services
for the years ended December 31, 2016, December 31, 2015, and December 31, 2014. All audit fees paid during the year ended December
31, 2015 were paid to Ciro E. Adams, CPA, LLC. All tax fees paid during the year ended December 31, 2016 were paid to Davidson,
Doyle, & Hilton, LLP.
The engagement of
Cherry Bekaert, LLP for the 2016 and 2015 fiscal years and the scope of audit-related services, including the audits and reviews
described above, were all pre-approved by the Audit Committee.
The policy of the
Audit Committee is to pre-approve the engagement of the Company’s independent auditors and the furnishings of all audit
and non-audit services.
Pre-Approval of
Services
Our Audit Committee
sets forth the procedures under which services provided by our independent registered public accounting firm will be pre-approved
by our Audit Committee. The potential services that might be provided by our independent registered public accounting firm fall
into two categories:
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Services that are permitted,
including the audit of our annual financial statements, the review of our quarterly financial
statements, related attestations, benefit plan audits and similar audit reports, financial
and other due diligence on acquisitions, and federal, state, and non US tax services;
and
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Services that may be permitted,
subject to individual pre approval, including compliance and internal control reviews,
indirect tax services such as transfer pricing and customs and duties, and forensic auditing.
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Services that our
independent registered public accounting firm may not legally provide include such services as bookkeeping, certain human resources
services, internal audit outsourcing, and investment or investment banking advice.
All proposed engagements
of our independent registered public accounting firm, whether for audit services or permissible non audit services, are pre-approved
by the Audit Committee. We jointly prepare a schedule with our independent registered public accounting firm that outlines services
that we reasonably expect we will need from our independent registered public accounting firm, and categorize them according to
the classifications described above. Each service identified is reviewed and approved or rejected by the Audit Committee.
OUR EXECUTIVE OFFICER
Executive Officer
Our only current
executive officer is:
Name
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Age
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Position
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Steven L. Kiel
(1)
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38
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President, Chief Executive Officer, Chief Financial Officer and Director
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(1)
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On February 17, 2016, the Board elected
Steven L. Kiel as the President and Chief Executive Officer of the Company. Mr. Kiel
had served as the interim President and Chief Executive Officer of the Company since
December 14, 2015. On March 3, 2016, the Board elected Mr. Kiel as the Chief Financial
Officer.
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Mr. Kiel is not related
by blood, marriage or adoption to any other director or executive officer. The biography of Mr. Kiel is presented in connection
with “Corporate Governance” beginning on page 6 of this Proxy Statement.
EXECUTIVE COMPENSATION
Compensation Philosophy and Objectives
Our compensation programs are designed
to motivate our employees to work toward achievement of our corporate mission to create sustained stockholder value by generating
attractive returns, when measured over the long term. In order to achieve our key business and strategic goals, we must be able
to attract, retain and motivate quality employees in an exceptionally competitive environment. Our industry is highly regulated,
scrutinized and dynamic, and as a result, we require employees that are highly educated, dedicated and experienced. The primary
objectives of our executive compensation program are to:
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attract, retain
and motivate experienced and talented executives;
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ensure executive
compensation is aligned with our corporate strategies, research and development programs
and business goals;
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●
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recognize the
individual contributions of executives while fostering a shared commitment among executives;
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promote the
achievement of key strategic, development and operational performance measures by linking
compensation to the achievement of measurable corporate performance goals; and
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align the interests
of our executives with our stockholders by rewarding performance that leads to the creation
of stockholder value.
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Summary Compensation Table
The following table
sets forth the cash and other compensation that we paid to the named executive officers (“NEOs”) below or that was
otherwise earned by such NEOs for their services in all capacities for the two fiscal years ended December 31st.
Name
and Principal Position
|
Year
|
Salary
($)
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Bonus
($)
|
Option
Awards ($)
|
All Other Compensation
($)
|
Total
($)
|
Steven
L. Kiel, Chief Executive Officer, Chief Financial Officer
(1)
|
2016
2015
|
82,308
|
|
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82,308
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Rodney
Lake, Chief Operating Officer, Corporate Secretary
(2)
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2016
2015
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10,000
|
|
|
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10,000
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Daniel
A. Judd, Chief Financial Officer
(3)
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2016
2015
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9,084
48,200
|
|
|
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9,084
48,200
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Frank
R. Erhartic, Jr., Chief Executive Officer
(4)
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2016
2015
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48,269
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|
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48,269
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(1) Appointed Chief Executive Officer on December 14, 2015
and Chief Financial Officer on March 3, 2016. As previously reported in our Current Report on Form 8-K filed with the SEC on January
26, 2017, on January 20, 2017 the Company entered into an employment agreement with Steven L. Kiel. Pursuant to the terms
of the employment agreement, Mr. Kiel will be entitled to a base salary at the annualized rate of $100,000 ($8,333.33 monthly)
and will be eligible to receive an annual performance bonus, in cash, upon meeting certain requirements and to participate in
employee benefit plans as the Company may maintain from time to time. The annual performance bonus that Mr. Kiel will be eligible
to receive is based on the percentage growth in the Company’s book value per share during each calendar year, subject to
a 5% hurdle.
(2) Appointed Chief Operating Officer and Corporate Secretary
on November 1, 2016. Mr. Lake is compensated through a consulting agreement with The Benval Group.
(3) Terminated as Chief Financial Officer on March 3, 2016
(4) Terminated as Chief Executive Officer on December 14, 2015
Employment Agreements
There is currently no employment agreement
or arrangement, written or unwritten, with any NEO.
DIRECTOR COMPENSATION
The following table
sets forth the cash and other compensation paid by the Company to the non-employee members of the Board for all services in all
capacities during 2016.
Summary Director Compensation Table
Directors receive $1,000 for each board and committee
meeting attended up to $10,000 annually.
Name
|
Fees
earned or paid in cash ($)
|
Stock
awards ($)
|
Option
awards ($)
|
Non-equity
incentive plan compensation ($)
|
Nonqualified
deferred compensation earnings ($)
|
All
other compensation ($)
|
Total
($)
|
Jeffrey
I. Moore
|
10,000
|
|
|
|
|
|
10,000
|
Jeremy
K. Gold
|
10,000
|
|
|
|
|
|
10,000
|
Christopher
T. Payne
|
6,000
|
|
|
|
|
|
6,000
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Keith
D. Smith
|
2,000
|
|
|
|
|
|
2,000
|
Roger
D. Malouf
|
2,000
|
|
|
|
|
|
2,000
|
(1) Mr. Gold was personally compensated in the amount of $5,000
for meeting attendance and Alesia Value Fund LLC was compensated in the amount of $5,000 for Mr. Gold’s meeting attendance.
(2) Mr. Malouf resigned as a director effective February 22,
2017.
OUTSTANDING EQUITY AWARDS AT FISCAL
YEAR-END
There were no Equity
Incentive Plans, Non-Equity Incentive Plans, or Stock Awards for the years ended December 31, 2016 and 2015.
There were no outstanding
equity awards as of December 31, 2016.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) Beneficial
Ownership Reporting Compliance Pursuant to Section 16(a) of the Exchange Act, and the rules issued there under, our directors
and executive officers are required to file with the Securities and Exchange Commission and the National Association of Securities
Dealers, Inc. ownership and changes in ownership of common stock and other equity securities of the Company. Copies of such reports
are required to be furnished to us. Based solely on a review of the copies of such reports furnished to us, or written representations
that no other reports were required, we believe that, during our fiscal year ended December 31, 2016 all of our executive officers
and directors complied with the requirements of Section 16 (a).
RELATED-PERSON TRANSACTIONS
Prior to January
15, 2016, the Company leased its former corporate headquarters located at 7109 Timberlake Road, Lynchburg, Virginia from Frank
Erhartic, Jr., a stockholder of the Company and the Company’s former CEO. The terms of the lease directed the Company to
pay Mr. Erhartic $48,000 per year. The Company now believes that Mr. Erhartic was not the legal owner of the property. This related
party matter is described in more detail in Note 13 to the Company’s Consolidated Financial Statements included in our Annual
Report on Form 10-K for the year ended December 31, 2016.
The Company abandoned
the corporate headquarters listed above on January 15, 2016. On April 12, 2016, the Company filed a complaint against Mr. Erhartic
alleging, among other things, that at his direction the Company made improper payments involving the property listed above. This
litigation matter is described in more detail in Note 10 to the Company’s Consolidated Financial Statements included in
our Annual Report on Form 10-K for the year ended December 31, 2016.
STOCK OWNERSHIP OF OUR DIRECTORS, EXECUTIVE
OFFICERS,
AND 5% BENEFICIAL OWNERS
The following table sets forth as of April 17, 2017 information
regarding the beneficial ownership of the Company’s voting securities (i) by each person or group known by the Company to
be the owner of record or beneficially of more than five percent of the Company’s voting securities; (ii) by each of the
Company’s Directors and executive officers; and (iii) by all Directors and executive officers of the Company as a group.
Except as indicated in the following notes, the owners have sole voting and investment power with respect to the shares. Unless
otherwise noted, each owner’s mailing address is c/o Sitestar Corporation, 4026 Wards Rd. Suite G1 #271, Lynchburg, VA 24502.
Name
of
Beneficial
Owner
|
Number of
Shares
Beneficially Owned
|
Percent
of Class
(1)
|
|
|
|
Jeffrey
I. Moore
(2)
|
9,923,373
|
3.51%
|
Steven
L. Kiel
(3)
|
127,080,260
|
44.93%
|
Jeremy
K. Gold
|
1,677,251
|
*
|
Christopher
T. Payne
|
2,278,000
|
*
|
Keith
D. Smith
|
9,000,000
|
3.18%
|
Rodney
Lake
|
—
|
—
|
Frank R. Erhartic, Jr.
(4)
7109 Timberlake Road
Lynchburg, VA 24502
|
24,883,980
|
8.80%
|
All directors and officers
As a group (6 persons)
|
149,958,884
|
53.02%
|
*Less than 1%
(1) Percent of class is based on 282,830,163
shares of Common Stock outstanding as of April 17, 2017.
(2) Includes 4,110,849 shares owned directly
by Mr. Moore, 758,489 shares beneficially owned by Julia H. Moore, 648,675 shares beneficially owned by Jay B. Moore beneficially,
218,000 shares beneficially owned by William T. May, and 4,187,360 shares beneficially owned by M & M Investments. The 9,923,373
shares may be deemed to be owned, beneficially and collectively, by Jeffrey I. Moore, as a “group” within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
(3) Includes 85,413,593 shares owned by
Arquitos Capital Partners, LP. Arquitos Capital Management LLC acts as the General Partner to Arquitos Capital Partners, LP. Steven
L. Kiel is the Managing Member of Arquitos Capital Management LLC and is deemed to have beneficial ownership over the Common Stock
owned. Also includes 41,666,667 shares owned by Santa Monica Partners, L.P. SMP Asset Management, LLC is the general partner of
Santa Monica Partners, L.P. and Steven L. Kiel is an advisor of SMP Asset Management, LLC and is deemed to have beneficial ownership
over the Issuer’s Common Stock owned by Santa Monica Partners, L.P.
(4) Based on the information contained
in a Schedule 13D filed February 13, 2015.
PROPOSAL
ONE
ELECTION OF DIRECTORS; NOMINEES
Our Bylaws provide
that the Board of Directors shall consist of not less than one and not more than nine members unless changed by a duly adopted
amendment to the articles of incorporation or by an amendment to the Bylaws adopted by the vote or written consent of holders
of a majority of the outstanding shares entitled to vote. Our Board of Directors has passed a resolution setting the number of
members at five, which is the current number of members. Five directors have been nominated for re-election at the Annual Meeting.
Those individuals are Jeffrey I. Moore (Independent), Steven L. Kiel, Jeremy K. Gold (Independent), Christopher T. Payne (Independent)
and Keith D. Smith (Independent). For information about each of the nominees and our Board generally, please see “Corporate
Governance-Our Board of Directors” beginning on page _. If elected, the nominees will hold office until the next annual
meeting and until a respective successor is elected and has been qualified, or until such director resigns or is removed from
office. Management expects that each of the nominees will be available for election, but if any of them is unable to serve at
the time the election occurs, your proxy will be voted for the election of another nominee to be designated by the available members
of our Board.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE “FOR” THE ELECTION OF ALL OF THE NOMINEES FOR DIRECTOR. IF A CHOICE IS SPECIFIED ON THE PROXY BY
THE STOCKHOLDER, THE SHARES WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED “FOR”
ALL OF THE NOMINEES. THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST, BY THE HOLDERS OF COMMON STOCK PRESENT IN PERSON OR
BY PROXY, ENTITLED TO VOTE AT THE ANNUAL MEETING AT WHICH A QUORUM IS PRESENT IS REQUIRED FOR THE ELECTION OF THE NOMINEES.
PROPOSAL TWO
RATIFICATION
OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Board of Directors
(and the Audit Committee of the Board of Directors for fiscal years 2017 and beyond) annually considers and selects our independent
registered public accountants. The Board has selected Cherry Bekaert, LLP to act as our independent registered public accountants
for fiscal 2017.
Stockholder ratification
of Cherry Bekaert, LLP as our independent registered public accountants is not required by our Bylaws, or otherwise. However,
we are submitting the selection of Cherry Bekaert, LLP to the stockholders for ratification as a matter of good corporate practice.
If the stockholders do not ratify the selection of Cherry Bekaert, LLP as our independent registered public accountants, the Board
will reconsider the selection of such independent registered public accountants. Even if the selection is ratified, the Board
may, in its discretion, direct the appointment of a different independent registered public accountant at any time during the
year if it determines that such a change would be in the best interest of the Company and its stockholders.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF CHERRY BEKAERT, LLP AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2017. IF A CHOICE IS SPECIFIED ON THE PROXY BY THE STOCKHOLDER, THE SHARES
WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED “FOR” THE RATIFICATION OF THE APPOINTMENT
OF CHERRY BEKAERT, LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2016. THE AFFIRMATIVE
VOTE OF A MAJORITY OF THE VOTES CAST, BY THE HOLDERS OF COMMON STOCK PRESENT IN PERSON OR BY PROXY, ENTITLED TO VOTE AT THE ANNUAL
MEETING AT WHICH A QUORUM IS PRESENT IS REQUIRED TO SUPPORT THE PROPOSAL.
ADDITIONAL INFORMATION
Delivery of Documents to Security Holders Sharing an Address
Only one information
statement is being delivered to multiple security holders sharing an address unless the Company has received contrary instructions
from one or more of its security holders. The Company undertakes to deliver promptly upon written or oral request a separate copy
of the information statement to a security holder at a shared address to which a single copy of the documents was delivered and
provide instructions as to how a security holder can notify the Company that the security holder wishes to receive a separate
copy of an information statement.
Security holders
sharing an address and receiving a single copy may request to receive a separate information statement at Sitestar Corporation,
4026 Wards Road, Suite G1 #271, Lynchburg, VA 24502. Security holders sharing an address can request delivery of a single copy
of information statements if they are receiving multiple copies may also request to receive a separate information statement at
Sitestar Corporation, 4026 Wards Road, Suite G1 #271, Lynchburg, VA 24502, telephone: (434) 382-7366.
Stockholder Proposals for Our 2018
Annual Meeting
Only proper proposals
under Rule 14a-8 of the Exchange Act which are timely received will be included in the proxy materials for our next annual meeting.
In order to be considered timely, such proposal must be received by our Corporate Secretary, Rodney Lake, at Sitestar Corporation,
4026 Wards Road, Suite G1 #271, Lynchburg, VA 24502, no later than December 31, 2017. We suggest that stockholders submit any
stockholder proposal by certified mail, return receipt requested.
Our Bylaws require
stockholders to provide advance notice to the Company of any stockholder director nomination(s) and any other matter a stockholder
wishes to present for action at an annual meeting of stockholders (other than matters to be included in our proxy statement, which
are discussed in the previous paragraph). In order to properly bring business before an annual meeting, our Bylaws require, among
other things, that the stockholder submit written notice thereof complying with our Bylaws to Rodney Lake, our Corporate Secretary,
at the above address, not less than 90 days nor more than 120 days prior to the anniversary of the preceding year’s annual
meeting. Therefore, the Company must receive notice of a stockholder proposal submitted other than pursuant to Rule 14a-8 (as
discussed above) no sooner than January 22, 2018, and no later than February 21, 2018. If a stockholder fails to provide timely
notice of a proposal to be presented at our 2018 Annual Meeting of Stockholders, the proxy designated by our Board of Directors
will have discretionary authority to vote on any such proposal that may come before the meeting.
Other Matters
Our Board does not
know of any other matters that may come before the meeting. However, if any other matters are properly presented to the meeting,
it is the intention of the person or persons named in the accompanying proxy card to vote, or otherwise act, in accordance with
their judgment on such matters.
Solicitation of Proxies
The Company will
bear the cost of solicitation of proxies. In addition to the solicitation of proxies by mail, our officers and employees may solicit
proxies in person or by telephone. The Company may reimburse brokers or persons holding stock in their names, or in the names
of their nominees, for their expenses in sending proxies and proxy material to beneficial owners.
Incorporation of Information by Reference
The Audit Committee
Report contained in this Proxy Statement is not deemed filed with the SEC and shall not be deemed incorporated by reference into
any prior or future filings made by us under the Securities Act of 1933, as amended or the Exchange Act, except to the extent
that we specifically incorporate such information by reference. Our Annual Report on Form 10-K for the year ended December 31,
2016, delivered to you together with this Proxy Statement, is hereby incorporated by reference.
SITESTAR CORPORATION
4026 WARDS ROAD, SUITE G1 #271
LYNCHBURG, VA 24502
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VOTE BY INTERNET - www.proxyvote.com
Use
the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time
the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions
to obtain your records and to create an electronic voting instruction form.
ELECTRONIC
DELIVERY OF FUTURE PROXY MATERIALS
If
you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future
proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery,
please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access
proxy materials electronically in future years.
VOTE
BY PHONE - 1-800-690-6903
Use
any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date
or meeting date. Have your proxy card in hand when you call and then follow the instructions.
VOTE
BY MAIL
Mark,
sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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For
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Withhold
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For All
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To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of
the nominee(s) on the line below.
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The Board of Directors recommends
you vote FOR
the following:
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All
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All
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Except
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☐
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☐
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☐
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1.
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Election of Directors
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Nominees
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01
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Jeffrey I. Moore 02 Steven L. Kiel 03 Jeremy K. Gold 04 Christopher T. Payne 05 Keith D. Smith
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The Board of Directors recommends you vote FOR the following proposal:
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For
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Against
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Abstain
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2.
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RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
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☐
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☐
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☐
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NOTE:
Such other business as may properly come before the meeting or any adjournment thereof.
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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0000334483_1 R1.0.1.15
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice & Proxy Statement and Form 10-K are available
at
www.proxyvote.com
SITESTAR CORPORATION
Annual Meeting of Shareholders
May 22, 2017 10:00 AM Local Time
This
proxy is solicited by the Board of Directors
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The
shareholder(s) hereby appoint(s) Steven L. Kiel as proxy, with the power to appoint his substitute, and hereby authorizes them
to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of Sitestar Corporation
that the shareholder(s) is/are entitled to vote at the Annual Meeting of shareholder(s) to be held at 10:00 AM, Local Time on
May 22, 2017, at the offices of our legal counsel, Alston & Bird LLP, located at 101 South Tryon Street, Suite 4000, Charlotte,
NC 28280, and any adjournment or postponement thereof.
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This
proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted
in accordance with the Board of Directors’ recommendations.
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Continued and to be signed on reverse side
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0000334483_2 R1.0.1.15
Enterprise Diversified (QB) (USOTC:SYTE)
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