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Forum Report: Dover Motorsports, Inc.
Letter Urging Clarifications of Proxy Statement
In the letter copied below from an exhibit to
an SEC Form 13D report
filed
late yesterday, Mario Cibelli of
Marathon Partners, LP, urges the management of Dover Motorsports, Inc. to
clarify its confusing and potentially misleading presentations of voting
decisions in the company's
proxy statement for the April 28, 2010 annual meeting of shareholders.
The three cited issues relate to management's statements
concerning Proposal Number Two, submitted by Cibelli to eliminate
restrictions on transfers of the company's Class A Common Stock. As
indicated in the letter, two of
the issues had been raised previously by Cibelli in response to the company's
required presentation to a proponent of a draft of management's
planned recommendation, and a third relates to a section of the proxy
statement that had not been previously disclosed.
GL – April 8, 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: April 7, 2010, Mario Cibelli, c/o Cibelli Capital Management, L.L.C., SEC Form 13D/A No.20. (9 pages,
34
KB, in
PDF format)
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Via Facsimile & First Class Mail
April 7, 2010
Mr. Klaus M. Belohoubek
Senior Vice President – General Counsel
Dover Motorsports, Inc.
3505 Silverside Road
Plaza Centre Building, Suite 203
Wilmington, DE 19810
RE: Statement of the board of directors and management
in opposition to Marathon's stockholder proposal
Dear Klaus:
In my letter to you dated March 8, 2010, I encouraged you to make
appropriate revisions to the opposition statement of the board of
directors and management related to our stockholder proposal.
We
appreciate the fact that the company amended the statement to
clarify that members of the board of directors control the
company, rather than the board itself. However, we continue to be
concerned that two items in the opposition statement as well as
one additional issue in the proxy statement may confuse the
company's stockholders.
The first is the statement that our proposal would require a
separate affirmative vote of seventy-five (75%) of the Class A
Common Stock. Although we are aware of a reference to such a
condition in the company's bylaws, we could not find anything in
the certificate of incorporation or in any other document that
could effectively modify the rights of stockholders. We therefore
encourage you to modify this statement with an explanation and
reference to the relevant document.
The second is the reference to pre-public shareholder interests in
1996 as a basis for the recommendation of a vote against the
proposal. We suggest that you either explain how those
shareholder interests relate to the interests of all of today's
shareholders, or eliminate the reference to past interests as an
explanation for the board's opposition to our proposal. The
company's management and board should be addressing the interests
of all the company's current shareholders, and should understand
its responsibility to do so.
In addition, the proxy statement clearly states on page 2 that Mr.
Tippie will vote in favor of the two board members who stand for
re-election (Proposal Number One). In the next section regarding
the shareholder proposal (Proposal Number Two), though, the proxy
includes only a general statement suggesting that the controlling
vote may be negative: "Members of our board of directors own or
control in excess of a majority of the voting power of our Class A
Common Stock. This means that without their vote, this proposal
cannot be adopted." Whether Mr. Tippie intends to vote for or
against this proposal should be presented with the same clarity as
in his vote for the directors. Shareholders should not be
confused about whether their vote will matter.
We look forward to attending the 2010 Annual Meeting of
Stockholders in Dover, Delaware on April 28, 2010.
Sincerely,
Mario D. Cibelli
Managing Member
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