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New Alliance to Consider Value Enhancement Opportunities

In an SEC Form 13D filing late yesterday, Mario Cibelli of Marathon Partners, LP, reported establishing an understanding with H.A. ("Humpy") Wheeler, the prominent Nascar racetrack manager, to address value enhancement opportunities related to Dover Motorsports, Inc.  The text of a letter defining their relationship, included as an exhibit to the filing, is copied below.

GL – March 2, 2010

Gary Lutin, Forum chairman

c/o Lutin & Company

575 Madison Avenue, 10th Floor

New York, New York 10022

Tel: 212-605-0335

Email: gl@shareholderforum.com

 

 

 

Exhibit: March 1, 2010, Mario Cibelli, c/o Cibelli Capital Management, L.L.C., SEC Form 13D/A No.19 (8 pages, 29 KB, in PDF format)

 

 
Exhibit 99.2
March 1, 2010

 
Mr. H.A. (Humpy) Wheeler
The Wheeler Company
10950 Arthur Auten Rd.
Huntersville, N.C. 28078

Dear Humpy:
 
Following up on our discussions, I’m very enthusiastic about working with you to address value enhancement opportunities related to Dover Motorsports, Inc. (“Dover”).
 
To provide a foundation for our relationship in the current situation, as well as how it might evolve in response to possible future developments, I’d suggest the following understandings:
 
 
1.
Objectives – The essential objective is for Marathon and its affiliated investors to be able to rely on your management expertise in considering track-related investment decisions, and also to know that you will be available for management duties if it becomes appropriate to do so. In this context, we need to establish provisions to assure that you share fairly in the benefits you help generate for Marathon, based on marketplace standards for whatever happens, and we should do so in separate agreements as we progress.
 
 
2.
Parties – As you may know from public SEC reports, I currently control approximately 3,000,000 Common Shares of Dover, owned primarily by Marathon Partners, L.P. and other funds or accounts I advise. I have the authority to act on behalf of all these holders, including for the purposes of establishing agreements relating to the contemplated relationship or organizing a special fund or account to manage the Dover investments of the affiliated funds.
 
For now, I will assume that you are acting as an individual. Please let me know if you decide to act through or on behalf of an entity you control.
 
 
3.
Responsibilities – On a simple level, I will be responsible for managing the Marathon affiliate investments in Dover, including their administration as well as any decisions about buying and selling or voting. You will be expected to offer advice based on your management expertise relating to the company and its industry. It should be clearly understood that you will not be considered responsible for any investment decisions or other duties of an investment manager, or any of the costs of those responsibilities.
 
 
4.
Advisory relationship – If appropriate at some point, we may both agree to start an advisory relationship.  A retainer, if any, should of course be set fairly at a market rate.  It should be understood that any advisory engagement should not restrict our consideration of other advisory, agency, participation, management or other opportunities that might develop as we progress.
 
 
5.
Opportunities to invest – You will have the right to participate in any of the funds I manage that hold investments in Dover, including any special funds or accounts that may be established during the course of our relationship, on the same terms that participation is available to existing Marathon investors, including me.
 
 
6.
Exclusivity – It should be understood that both of us expect to benefit from combining the advantage of my investment position with the advantage of your management expertise. Our agreement to share the benefits naturally requires your advising us exclusively.  In addition, there are presently no non-compete agreements in force that preclude you from working with us in an advisory or other role.
 
 
7.
Duration – Our relationship should continue for as long as my funds continue to hold investments in Dover, but either of us may terminate the relationship earlier upon 30 days notice.

 

I look forward to working together. 


Yours truly,                                                                Accepted by:

__________________                                                 __________________
Mario D. Cibelli                                                                H.A. (Humpy) Wheeler
Managing Member                                                         The Wheeler Company
 

 

 

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