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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)

 

 
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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