Item 1.01. Entry into a Material Definitive
Agreement.
Agreement and Plan of Merger
On November 8, 2021, Dover Motorsports, Inc.
(the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Speedway Motorsports,
LLC (“Speedway”) and Speedco II, Inc., a wholly owned subsidiary of Speedway (“Purchaser”).
Pursuant to the Merger Agreement, and upon
the terms and subject to the conditions described therein, Purchaser will commence a tender offer (the “Offer”) to purchase
all of the outstanding shares of Common Stock of the Company, par value $0.10 per share, and all of the outstanding shares of Class A
common stock, par value $0.10 per share (collectively, the “Shares”) in exchange for $3.61 per share in cash without interest
and less any applicable taxes required to be deducted or withheld in respect thereof (the “Offer Price”).
Following the consummation of the Offer and
subject to the terms and conditions of the Merger Agreement, Purchaser will be merged with and into the Company (the “Merger”
and, together with the Offer, the “Transactions”) pursuant to Section 251(h) of the General Corporation Law of the
State of Delaware (the “DGCL”), with the Company continuing as the surviving corporation in the Merger and a wholly owned
subsidiary of Speedway. At the effective time of the Merger, each Share that was not tendered in the Offer, other than Excluded Shares
and Dissenting Shares (each as defined in the Merger Agreement), will be converted into the right to receive the Offer Price, less any
applicable withholding taxes and without interest (the “Merger Consideration”). In addition, as of the effective time of the
Merger (the “Effective Time”), each Company Equity Award (as defined in the Merger Agreement) that is outstanding immediately
prior to the Effective Time, whether or not vested, shall be vested and all restrictions thereon shall lapse in full as of immediately
before the Effective Time.
The board of directors of the Company, acting
on the unanimous recommendation of a special committee (the “Special Committee”) consisting solely of independent and disinterested
directors of the Company and formed to negotiate and evaluate a potential transaction, has unanimously (i) determined that the Merger
Agreement and the Transactions are fair to, and in the best interest of, the Company and its stockholders, (ii) approved the execution,
delivery and performance by the Company of the Merger Agreement and the consummation of the Transactions, (iii) resolved that the
Merger shall be effected under Section 251(h) of the DGCL and (iv) resolved to recommend that the stockholders of the Company
tender their Shares to Purchaser pursuant to the Offer.
The Offer will initially remain open for 20
business days following commencement of the Offer. If, at the scheduled expiration time of the Offer, any of the conditions to the Offer
have not been satisfied (unless such condition is waivable by the Company or Purchaser and has been waived), Purchaser may extend the
Offer for subsequent periods of at least five business days each. Additionally, Purchaser must extend the Offer (i) for any period
required by applicable law (including any applicable interpretations or positions of the U.S. Securities and Exchange Commission (the
“SEC”), the SEC staff and the New York Stock Exchange), and (ii) if, at the then-scheduled Expiration Time, any of conditions
to the Offer have not been satisfied or waived, for periods of at least five business days each, in order to permit the satisfaction of
such condition; provided, however, that (A) in no event shall the Offer be extended to a date later than March 8, 2022, (B) any
such extension shall not be deemed to impair, limit or otherwise restrict the parties’ rights to terminate the Merger Agreement,
and (C) with respect to clause (ii) above, if, at any such scheduled Expiration Time, the only condition that has not been satisfied
is the Minimum Condition, then Purchaser is not required to extend the Offer for more than one additional five business day increment.
The obligation of Purchaser to accept for
payment, and pay for, Shares validly tendered (and not properly withdrawn) pursuant to the Offer is subject to satisfaction or waiver,
to the extent permitted under applicable legal requirements, of certain conditions, including (i) there being validly tendered and
not properly withdrawn Shares that, considered together with all other Shares (if any) beneficially owned by Purchaser and its affiliates,
represent one more Share than 50% of the aggregate voting power of the then-issued and outstanding Shares at the expiration of the Offer
(the “Minimum Condition”), (ii) the accuracy of the Company’s representations and warranties (subject to certain
materiality and “material adverse effect” thresholds), (iii) the Company’s compliance or performance in all material
respects of the obligations, covenants and agreements it is required to comply with or perform at or prior to the expiration of the Offer,
(iv) the absence, since the date of the Merger Agreement, of a Material Adverse Effect (as defined in the Merger Agreement) that
is continuing as of the time the Purchaser accepts Shares for purchase pursuant to the Offer, (v) the expiration or termination
of the waiting period (or any extension thereof) applicable to the Transactions under the HSR Act, (vi) the absence of any law or
order prohibiting the consummation of the Offer or the Merger, and (vii) the Merger Agreement not having been terminated in accordance
with its terms. If the conditions to the Offer are satisfied or waived (other than conditions that by their nature are to be satisfied
or waived at the expiration of the Offer), then Purchaser must (i) irrevocably accept for payment all of the Shares tendered pursuant
to the Offer and (ii) pay the Offer Price in respect of each such Share.
The Merger Agreement includes certain representations,
warranties and covenants of the Company, on one hand, and Purchaser and Speedway on the other, including certain restrictions with respect
to the Company’s business between the date of the Merger Agreement and the consummation of the Merger. The Company, Purchaser and
Speedway also agreed to use their respective reasonable best efforts to take all actions, to file all documents and to do all things necessary,
proper or advisable under applicable antitrust laws to consummate and make effective the Offer and the Merger as soon as reasonably practicable.
However, Parent is not required to make divestitures, commit to any licenses or hold separate requirements or litigate or defend the Transactions
in connection with any applicable antitrust laws. None of the Company, Speedway or Purchaser may take any action that would reasonably
be expected to prevent or materially delay consummation of the Offer and the Merger.
The Company has agreed to “no-shop”
restrictions on its ability to solicit alternative transaction proposals from third parties and engage in discussions or negotiations
with third parties regarding transaction proposals. Notwithstanding these restrictions, the Company may under certain circumstances provide
information to and engage in or otherwise participate in discussions or negotiations with third parties with respect to a bona fide written
alternative acquisition proposal that the board of directors of the Company (the “Board”) has determined in good faith constitutes
or could reasonably be expected to result in a Superior Offer (as defined in the Merger Agreement) and that failure to take such action
would reasonably be expected to constitute a breach of the Board’s fiduciary duties under applicable legal requirements. Pursuant
to the Merger Agreement, the Company has agreed that the Board will (x) recommend that the Company’s stockholders accept the
Offer and tender their Shares to Purchaser pursuant to the Offer (the “Board Recommendation”) and (y) include the Board
Recommendation in the Company’s Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”)
when filed with the SEC and when disseminated to the Company’s stockholders. The Board will also not (i) withdraw (or modify
in a manner adverse to the Company or Purchaser), or publicly propose to withdraw (or modify in a manner adverse to the Speedway or Purchaser),
the Board Recommendation, (ii) approve, recommend or endorse, or publicly propose to approve, recommend or declare advisable, any
alternative Takeover Proposal (as defined in the Merger Agreement) or (iii) approve, recommend or declare advisable, or propose to
approve, recommend or declare advisable, or allow the Company to execute or enter into any letter of intent, agreement in principle, or
contract relating to a Takeover Proposal, (other than a customary confidentiality agreement). Notwithstanding these restrictions, the
Board is permitted, subject to the terms and conditions set forth in the Merger Agreement, to change the Board Recommendation in certain
instances, subject to matching rights in favor of the Purchaser. The Board has also waived the application of its rights agreements with
Computershare Inc. to the Transactions.
The Merger Agreement contains certain termination
rights for both the Company and Speedway, including, (i) if the consummation of the Transactions has not occurred on or before March 8,
2022 (the “End Date”), (ii) if consummation of the Offer or the Merger is legally prohibited or permanently enjoined,
(iii) if the Offer has expired and the Minimum Condition has not been satisfied without the acceptance for payment of Shares pursuant
to the Offer, provided that the terminating party’s material breach of any provision of the Merger Agreement is not the cause of
the events specified in the foregoing clauses (i) through (iii) occurring. The Merger Agreement may also be terminated
by Speedway if (i) the Board has failed to include the Board Recommendation in the Schedule 14D-9 when mailed or has effected
a Company Adverse Change Recommendation (as defined in the Merger Agreement), (ii) the Company has entered into an agreement with
respect to a Superior Offer, (iii) the Board fails to publicly reaffirm the Board Recommendation upon request by the Speedway or
Purchaser (subject to certain limitations), (iv) the Company has breached any representation, warranty or covenant that cannot be
cured by the End Date or, if capable of being cured, has not been cured within 20 business days following written notice, if such breach
would cause certain of the conditions to closing to not be able to be satisfied, and (v) if the NASCAR Approval is not obtained;
provided, that the termination right in this clause (v) expires five business days after the date of the Merger Agreement. The Merger
Agreement may also be terminated by the Company (i) subject to the terms and conditions set forth in the Merger Agreement, to accept
a Superior Offer, (ii) if Speedway or Purchaser has breached any representation, warranty or covenant that cannot be cured by the
End Date or, if capable of being cured, has not been cured within 20 business days following written notice, if such breach would reasonably
be expected to prevent the Company or Purchaser from consummating the transactions, or (iii) in the event that Purchaser fails to
purchase all Shares validly tendered (and not validly withdrawn) when required to do so under the Merger Agreement. Upon termination of
the Merger Agreement (i) by the Company to accept a Superior Offer or (ii) by Speedway following a Company Adverse Change Recommendation,
the Company will be required to pay the Company a termination fee $5,100,000 (the “Termination Fee”).
The foregoing description of the Merger Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached
hereto as Exhibit 2.1, and the terms of the Merger Agreement is incorporated herein by reference. The Merger Agreement contains
representations, warranties and covenants that the respective parties made to each other as of the dates specified therein. The assertions
embodied in those representations, warranties and covenants were made, or will be made, for purposes of the contracts among the respective
parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreements.
The representations, warranties and covenants in the Merger Agreement are also modified in important part by the related schedules thereto
which are not filed publicly and which may be subject to a contractual standard of materiality different from that generally applicable
to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. The Company
does not believe that these schedules contain information that is material to an investment decision. Investors are not third-party beneficiaries
under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations
of the actual state of facts or condition of the parties thereto or any of their respective affiliates.
Tender and Support Agreement
On November 8, 2021, in connection with the execution of the Merger Agreement, certain of the
Company’s stockholders (together, the “Supporting Stockholders”), entered into Tender and Support Agreements with Speedway
and Purchaser (the “Support Agreements”). Under the terms of the Support Agreements, the Supporting Stockholders have agreed,
with certain termination rights, to tender, pursuant to the Offer, their Shares in the Offer, vote their Shares in favor of the Merger,
as applicable, and, subject to certain exceptions, not to transfer any of the Shares that are subject to the Support Agreements. As of
November 8, 2021, the shares owned by the Supporting Stockholders represent approximately 57.5% of the total outstanding shares,
or 92% of the aggregate voting power of the Company stockholders.
The
Support Agreement terminates automatically upon any valid termination of the Merger Agreement in accordance with its terms. If the board
of directors of Dover effects an Adverse Recommendation Change (as defined in the Merger Agreement) with respect to the tender offer provided
for in the Merger Agreement, in connection with any Intervening Event (as defined in the Merger Agreement), the tender and voting obligations
of the Stockholders under the Support Agreement will only apply to a number of shares owned by the Stockholders representing approximately
25.6% of the total outstanding shares, or approximately 40.4% of the aggregate voting power of the Company stockholders.
The
foregoing description of the Support Agreements is not complete and is qualified in its entirety by reference to the Support Agreement,
which is attached as Exhibit 10.1 to this report and incorporated by reference herein.