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Forum Report: Dover Motorsports, Inc.
Proposal for Shareholder Vote to
Eliminate Restrictions on Stock Sales
It was reported in an SEC filing this morning that Mario Cibelli of
Marathon Partners, LP, the largest public shareholder of Dover Motorsports,
has submitted a proposal for an amendment of the corporate bylaws to
eliminate restrictions on transfers of the company's Class A
"super-voting" shares, and has asked that the company include the proposal
in its proxy statement as required by
SEC rules
for voting at the next shareholders meeting.
The restriction of Class A stock transfers was referred to by the trustee
of RMT Trust, which owns 8 million of the 18.5 million outstanding Class A
shares, as a reason for rejecting a Cibelli
offer to buy the Trust's holdings of Dover Motorsports stock. The
company's management has not yet responded to the Forum's request for
clarifications of the trustee's statements.
It should be noted, in the context of the trustee's recent actions on
behalf of the RMT Trust and as chairman of the company's board of
directors, that SEC filings
report Henry Tippie's personal purchases of the publicly traded common
stock of Dover Motorsports on twelve days from November 4 to November 30,
2009, aggregating 141,900 shares. Another member of the board disclosed
personal purchases last week of 5,000 shares. There had been no reports of
open market or private transaction purchases of stock by directors during
the previous six months.
GL – December 1, 2009
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
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SHAREHOLDER PROPOSAL
RESOLVED, that Section 8.7 (Restrictions on Transfer of Class A
Common Stock) of the Bylaws of Dover Motorsports, Inc. (“Company”)
is repealed in its entirety; and further, the following new section
of the Bylaws is adopted:
Section 8.7 Restrictions on Transfer of Stock
(a) The Company may not impose any restrictions on the lawful
sale, transfer or disposal of any class of its stock or amend this
section other than by the affirmative vote of the holders of 75% or
more of the outstanding shares of capital stock of the Company
entitled to vote generally in the election of directors.
(b) The Company shall upon request replace certificates of
shares bearing legends referring to repealed or otherwise invalid
Bylaw provisions.
PROPONENT’S SUPPORTING STATEMENT: The proponent, a holder of over
2.9 million shares of Common Stock of Dover Motorsports, believes
that every shareholder should be able to freely sell, transfer or
dispose of any class of Company stock as permitted by law.
Presently, the Company Bylaws prohibit shares of Class A Common
Stock to be sold, disposed of, or transferred to anyone other than
existing Class A shareholders or members of their immediate family.
We do not believe the existing restrictions on the Class A Common
Stock are fair to either existing Class A holders or prospective
buyers of Class A shares, as these restrictions regarding
transferability could serve to impair the value of those shares.
Class A shares that have less restrictive sale, transfer or disposal
provisions would inherently have more value. Removing
transferability restrictions would allow outside investors,
including institutional investors, to accumulate shares in the Class
A Common Stock.
In addition, we do not believe the current restrictions serve any
apparent corporate purpose or benefit to shareholders.
We urge all stockholders to vote FOR this proposal.
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