DOVER MOTORSPORTS INC (Form: 10-Q, Received: 08/06/2004 09:04:59)

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2004

Commission file number 1-11929

Dover Motorsports, Inc.

(Exact name of registrant as specified in its charter)

Delaware

51-0357525

(State or Other Jurisdiction

of Incorporation)

(I.R.S. Employer

Identification Number)

1131 North DuPont Highway, Dover, Delaware 19901

(Address of principal executive offices)

(302) 674-4600

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

As of July 31, 2004, the number of shares of each class of the registrant’s common stock outstanding is as follows:


Common Stock -		16,806,898 shares
Class A Common Stock -		23,296,185 shares

Part I – Financial Information

Item 1. Financial Statements

DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENT OF EARNINGS

In Thousands, Except Per Share Amounts

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
Revenues:
Admissions	$	20,429		$	20,021		$	20,517		$	21,662
Event-related revenue		17,835			17,324			18,373			19,171
Broadcasting revenue		12,514			10,386			12,514			10,386
Other revenue		110			118			644			597

		50,888			47,849			52,048			51,816

Expenses:
Operating and marketing		31,203			29,483			33,528			35,953
General and administrative		3,716			4,137			7,409			7,748
Depreciation and amortization		2,404			2,698			4,796			5,324

		37,323			36,318			45,733			49,025

Operating earnings		13,565			11,531			6,315			2,791

Interest income		482			3			484			6

Interest expense		(954	)		(1,488	)		(2,093	)		(2,737	)

Earnings before income taxes		13,093			10,046			4,706			60

Income taxes		7,930			5,023			2,729			30

Net earnings	$	5,163		$	5,023		$	1,977		$	30

Net earnings per common share:
Basic	$	0.13		$	0.13		$	0.05		$	—

Diluted	$	0.13		$	0.13		$	0.05		$	—

The Notes to the Consolidated Financial Statements are an integral part of these consolidated statements.

DOVER MOTORSPORTS, INC.

CONSOLIDATED BALANCE SHEET

In Thousands, Except Share and Per Share Amounts

(Unaudited)


	June 30, 2004			December 31, 2003
ASSETS
Current assets:
Cash and cash equivalents	$	4,587		$	3,348
Accounts receivable		15,032			2,643
Inventories		311			259
Prepaid expenses and other		4,347			1,691
Receivable from Dover Downs Gaming & Entertainment, Inc.		—			96
Income taxes receivable		—			5,819
Deferred income taxes		331			548

Total current assets		24,608			14,404

Property and equipment, net		226,565			229,603
Restricted cash		1,857			3,433
Other assets, net		1,515			1,434
Deferred income taxes		90			90
Goodwill		8,521			8,521

Total assets	$	263,156		$	257,485

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,518		$	3,333
Accrued liabilities		6,320			4,587
Payable to Dover Downs Gaming & Entertainment, Inc.		22			—
Income taxes payable		105			—
Current portion of long-term debt		805			745
Deferred revenue		18,861			11,304

Total current liabilities		33,631			19,969

Notes payable to banks		30,600			43,045
Long-term debt		17,683			18,487
Other liabilities		64			85
Deferred income taxes		42,617			38,527

Commitments and contingencies (see Notes to the Consolidated Financial Statements)

Stockholders’ equity:
Preferred stock, $0.10 par value; 1,000,000 shares authorized; issued and outstanding: none		—			—
Common stock, $0.10 par value; 75,000,000 shares authorized; issued and outstanding: June 30, 2004-16,806,898 shares; December 31, 2003-16,557,898 shares		1,681			1,656
Class A common stock, $0.10 par value; 55,000,000 shares authorized; issued and outstanding: June 30, 2004-23,296,185 shares; December 31, 2003-23,436,185 shares		2,330			2,344
Additional paid-in capital		128,225			127,783
Retained earnings		7,175			5,999
Accumulated other comprehensive loss		(410	)		(410	)
Deferred compensation		(440	)		—

Total stockholders’ equity		138,561			137,372

Total liabilities and stockholders’ equity	$	263,156		$	257,485

The Notes to the Consolidated Financial Statements are an integral part of these consolidated statements.

DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

In Thousands

(Unaudited)


	Six Months Ended June 30,
	2004			2003
Operating activities:
Net earnings	$	1,977		$	30
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		4,796			5,324
Amortization and write-off of credit facility fees		154			743
Amortization of deferred compensation		13			—
Tax benefit of options exercised		—			533
Deferred income taxes		1,786			3,220
Changes in assets and liabilities:
Accounts receivable		(12,389	)		(8,384	)
Inventories		(52	)		(255	)
Prepaid expenses and other		(2,616	)		(1,048	)
Accounts payable		4,185			591
Accrued liabilities		1,733			1,777
Payable to/receivable from Dover Downs Gaming & Entertainment, Inc.		118			(155	)
Income taxes payable/receivable		8,445			1,730
Deferred revenue		7,557			7,085
Other liabilities		(21	)		(22	)

Net cash provided by operating activities		15,686			11,169

Investing activities:
Capital expenditures		(1,715	)		(2,604	)
Restricted cash		1,576			1,727
Other		—			70

Net cash used in investing activities		(139	)		(807	)

Financing activities:
Borrowings from revolving debt agreement		55,520			23,050
Repayments on revolving debt agreement		(67,965	)		(31,105	)
Repayments of long-term debt		(744	)		(683	)
Proceeds from stock options exercised		—			132
Credit facility origination and amendment fees		(318	)		(245	)
Dividends paid		(801	)		(798	)

Net cash used in financing activities		(14,308	)		(9,649	)

Net increase in cash and cash equivalents		1,239			713
Cash and cash equivalents, beginning of period		3,348			1,485

Cash and cash equivalents, end of period	$	4,587		$	2,198

Supplemental information:
Interest paid	$	1,800		$	2,081

Income taxes paid, net of (refunds)	$	(7,504	)	$	(6,141	)

The Notes to the Consolidated Financial Statements are an integral part of these consolidated statements.

DOVER MOTORSPORTS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – Basis of Presentation

References in this document to “the Company,” “DVD,” “we,” “us” and “our” mean Dover Motorsports, Inc. and its wholly owned subsidiaries.

The accompanying consolidated financial statements have been prepared in compliance with Rule 10-01 of Regulation S-X and accounting principles generally accepted in the United States of America, but do not include all of the information and disclosures required for audited financial statements. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K filed on March 10, 2004. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows for the interim periods presented. Operating results for the three and six-month periods ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004 due to the seasonal nature of the Company’s business.

NOTE 2 - Business Operations

Dover Motorsports, Inc. is a leading marketer and promoter of motorsports entertainment in the United States. Its motorsports subsidiaries operate five motorsports tracks (four permanent facilities and one temporary circuit) in four states and are scheduled to promote 16 major events during 2004 under the auspices of four of the premier sanctioning bodies in motorsports - the National Association for Stock Car Auto Racing (“NASCAR”), the Indy Racing League (“IRL”), the National Hot Rod Association (“NHRA”) and the Champ Car World Series (“CCWS”). The Company owns and operates Dover International Speedway in Dover, Delaware; Nashville Superspeedway near Nashville, Tennessee; Gateway International Raceway near St. Louis, Missouri; and Memphis Motorsports Park in Memphis, Tennessee. The Company also organizes and promotes the Toyota Grand Prix of Long Beach in California.

On March 25, 2004, the Company’s wholly owned subsidiary, Grand Prix Association of Long Beach, Inc. (“Grand Prix”), reached an agreement with CCWS (f/k/a Open Wheel Racing Series, LLC), the successor to Championship Auto Racing Teams, Inc. (“CART”), to transfer to CCWS certain assets and rights that Grand Prix had relative to the organization and promotion of the Grand Prix of Denver. Grand Prix had a multi-year agreement with the City of Denver pursuant to which it was entitled to stage an annual auto racing event in and around the PepsiCenter in Denver. Grand Prix assigned to CCWS its rights in this agreement and the City consented to the assignment.

NOTE 3 - Summary of Significant Accounting Policies

Basis of consolidation and presentation— The accompanying consolidated financial statements include the accounts of DVD and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated.

Revenue recognition— The Company classifies its revenues as admissions, event-related revenue, broadcasting revenue and other revenue. “Admissions” includes ticket sales for all Company events. “Event-related revenue” includes amounts received from sponsorship fees, which includes tickets provided to sponsors; luxury suite rentals; hospitality tent rentals and catering; concessions and souvenir sales and vendor commissions for the right to sell concessions and souvenirs at our facilities; sales of programs; track rentals and other event-related revenues. “Broadcasting revenue” includes rights fees obtained for television and radio broadcasts of events held at the Company’s speedways and ancillary rights fees. “Other revenue” includes revenues from the Company’s grandstand rental business and other miscellaneous revenues.

Revenues pertaining to specific events are deferred until the event is held. Concession revenue from concession stand sales and sales of souvenirs are recorded at the time of sale. Revenues and related expenses from barter transactions in which the Company receives advertising or other goods or services in exchange for sponsorships of motorsports events are recorded at fair value in accordance with Emerging Issues Task Force (“EITF”) Issue No. 99-17, Accounting for Advertising Barter Transactions . Barter transactions accounted for $955,000 of total revenues for the three and six months ended June 30, 2004, and $931,000 and $1,386,000 of total revenues for the three and six months ended June 30, 2003, respectively.

We derive a substantial portion of our motorsports revenues from admissions and event-related revenue attributable to six NASCAR-sanctioned events at Dover, Delaware which are currently held in June and September.

Under the terms of the Company’s sanction agreements, NASCAR retains 10% of the gross broadcast rights fees allocated to each NASCAR NEXTEL Cup Series (f/k/a Winston Cup) or Busch Series event as a component of its sanction fees and remits the remaining 90% to the event promoter which the Company records as revenue. The event promoter is required to pay 25% of the gross broadcast rights fees to the event as part of the awards to the competitors which the Company records as operating expenses.

Expense recognition— Certain direct expenses pertaining to specific events, including prize and point fund monies and sanction fees paid to various sanctioning bodies, including NASCAR, advertising and other expenses associated with the promotion of our racing events are deferred until the event is held, at which point they are expensed.

The cost of non-event related advertising, promotion and marketing programs are expensed as incurred.

Advertising expenses were $1,885,000 and $1,896,000, for the three and six months ended June 30, 2004, and $1,799,000 and $2,555,000 for the three and six months ended June 30, 2003, respectively.

Earnings per share— Basic and diluted earnings per share (“EPS”) are calculated in accordance with Financial Accounting Standards Board (“FASB”) Statement No. 128, Earnings Per Share . Weighted average shares used in computing basic and diluted EPS are as follows:


	Three months ended June 30,		Six months ended June 30,
	2004	2003	2004	2003
Basic EPS	39,994,000	39,891,000	39,994,000	39,813,000
Effect of dilutive securities	37,000	69,000	20,000	112,000

Diluted EPS	40,031,000	39,960,000	40,014,000	39,925,000

Dilutive securities include stock options and unvested restricted stock awards.

For the three and six months ended June 30, 2004, options to purchase approximately 1,180,000 and 1,305,000 shares of common stock, respectively, were outstanding, but were not included in the computation of diluted EPS because the options’ exercise prices were greater than the average market price of the common stock during the period. For the three and six months ended June 30, 2003, options to purchase approximately 1,507,000 and 1,411,000 shares of common stock, respectively, were excluded from the computation for the same reason.

Accounting for stock-based compensation — The Company has a stock incentive plan which provides for the grant of stock options and/or restricted stock to officers and key employees. The Company accounts for stock options in accordance with FASB Statement No. 123, Accounting for Stock-Based Compensation , as amended by FASB Statement No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure – an Amendment of FASB Statement No. 123 . Statement No. 123 defines a fair-value based method of accounting for stock-based compensation plans; however, it allows the continued use of the intrinsic value method under Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees , and related interpretations. The Company has elected to continue to use the intrinsic value method and based on this method, did not record any stock-based compensation expense related to its stock options during the three and six-month periods ended June 30, 2004 and 2003. The Company’s restricted stock vests based on continued employment with the Company. Restricted stock awards result in compensation expense as discussed in NOTE 6 – Stockholders’ Equity.

The following table illustrates the effect on net earnings and net earnings per common share if the Company had applied the fair-value recognition provisions of Statement No. 123 to stock-based employee compensation:


	Three months ended June 30,						Six months ended June 30,
	2004			2003			2004			2003
Net earnings, as reported	$	5,163,000		$	5,023,000		$	1,977,000		$	30,000
Add: Stock-based employee compensation expense included in reported net earnings, net of related tax effects		5,000			—			5,000			—
Deduct: Total stock-based employee compensation expense determined under fair-value based method for all awards, net of related tax effects		(161,000	)		(175,000	)		(323,000	)		(349,000	)

Pro forma net earnings	$	5,007,000		$	4,848,000		$	1,659,000		$	(319,000	)

Net earnings per common share:
Basic – as reported	$	0.13		$	0.13		$	0.05		$	—
Basic – pro forma	$	0.13		$	0.12		$	0.04		$	(0.01	)

Diluted – as reported	$	0.13		$	0.13		$	0.05		$	—
Diluted – pro forma	$	0.13		$	0.12		$	0.04		$	(0.01	)

Use of estimates— The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications— Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current period presentation. These reclassifications had no effect on net earnings.

NOTE 4 – Indebtedness

Long-term debt consists of the following:


	June 30, 2004			December 31, 2003
Notes payable to banks	$	30,600,000		$	43,045,000
SWIDA bonds		18,488,000			19,232,000

		49,088,000			62,277,000
Less current portion		(805,000	)		(745,000	)

	$	48,283,000		$	61,532,000

Effective February 19, 2004, the Company and all of its wholly owned subsidiaries, as co-borrowers, entered into a new $70,000,000 revolving credit agreement with a bank group that expires February 19, 2007. The facility, which replaced its previous revolving credit facility, provides for seasonal funding needs, capital improvements, letter of credit requirements and other general corporate purposes. Interest is based, at the Company’s option, upon LIBOR plus a margin that varies between 210 and 510 basis points depending on the funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio or the base rate (the greater of the prime rate or the federal funds rate plus 0.5%) plus a margin that varies between 37.5 and 237.5 basis points depending on the funded debt to EBITDA ratio.

Provisions of the credit facility reduce the commitment to $67,000,000 on November 1, 2004, $64,000,000 on November 1, 2005, and $60,000,000 on November 1, 2006. The terms of the credit facility contain certain covenants including minimum tangible net worth, fixed charge coverage and maximum funded debt to EBITDA. The credit facility is secured by a first priority perfected security interest and lien on all available assets owned by the Company and its subsidiaries. The credit facility also provides that a default by the Company or any of its wholly owned subsidiaries under any other loan agreement would constitute a default under this credit facility. At June 30, 2004, the

Company was in compliance with the terms of the facility. Material adverse changes in the Company’s results of operations could impact its ability to maintain financial ratios necessary to satisfy these requirements. There was $30,600,000 outstanding under the facility at June 30, 2004, at a weighted average interest rate of 4.92%. After consideration of stand-by letters of credit outstanding, borrowings of $13,981,000 were available pursuant to the facility at June 30, 2004. Based on operating results to date and expected results for the remainder of the year, the Company expects to be in compliance with the covenants at the quarterly measurement dates through December 31, 2004.

In 1996, the Company’s wholly owned subsidiary, Grand Prix, entered into an agreement (the “SWIDA loan”) with Southwestern Illinois Development Authority (“SWIDA”) to receive the proceeds from the “Taxable Sports Facility Revenue Bonds, Series 1996 (Gateway International Motorsports Corporation Project),” a Municipal Bond Offering, in the aggregate principal amount of $21,500,000, of which $18,488,000 was outstanding at June 30, 2004. SWIDA loaned all of the proceeds from the Municipal Bond Offering to Grand Prix for the purpose of the redevelopment, construction and expansion of Gateway International Raceway (“Gateway”), and the proceeds of the SWIDA loan were irrevocably committed to complete construction of Gateway, to fund interest, to create a debt service reserve fund and to pay for the cost of issuance of the bonds. The repayment terms and debt service reserve requirements of the bonds issued in the Municipal Bond Offering correspond to the terms of the SWIDA loan.

The Company has established certain restricted cash funds to meet debt service as required by the SWIDA loan, which are held by the trustee (BNY Trust Company of Missouri). At June 30, 2004, $1,857,000 of the Company’s cash balance was restricted by the SWIDA loan and is appropriately classified as a non-current asset in the accompanying consolidated balance sheet. The SWIDA loan is secured by a first mortgage lien on all the real property owned and a security interest in all property leased by Gateway. Also, the SWIDA loan is unconditionally guaranteed by Grand Prix. The SWIDA loan bears interest at varying rates ranging from 8.75% to 9.25% with an effective rate of approximately 8.91%. Interest expense related to the SWIDA loan was $423,000 and $851,000 for the three and six months ended June 30, 2004, and $439,000 and $883,000 for the three and six months ended June 30, 2003, respectively. The structure of the bonds permits amortization from February 1997 through February 2017 with debt service beginning in 2000. A stand-by letter of credit for $2,502,000, which is secured by a trust deed on the Company’s facilities in Memphis, Tennessee, also was obtained to satisfy debt service reserve fund obligations. In addition, a portion of the property taxes to be paid by Gateway (if any) to the City of Madison Tax Incremental Fund have been pledged to the annual retirement of debt and payment of interest.

NOTE 5 – Pension Plans

The Company maintains a non-contributory tax qualified defined benefit pension plan. All of DVD’s full time employees are eligible to participate in the plan. Benefits provided by the Dover Motorsports, Inc. pension plan are based on years of service and employees’ remuneration over their employment with the Company. Pension costs are funded in accordance with the provisions of the Internal Revenue Code. The Company also maintains a non-qualified, noncontributory defined benefit pension plan for certain employees to restore pension benefits reduced by federal income tax regulations. The cost associated with the plan is determined using the same actuarial methods and assumptions as those used for the Company’s qualified pension plan.

The components of net periodic pension cost are as follows:


	Three months ended June 30,						Six months ended June 30,
	2004			2003			2004			2003
Service cost	$	61,000		$	57,000		$	122,000		$	114,000
Interest cost		60,000			53,000			120,000			106,000
Expected return on plan assets		(61,000	)		(43,000	)		(122,000	)		(86,000	)
Recognized net actuarial loss		20,000			22,000			40,000			44,000
Net amortization		6,000			6,000			12,000			12,000

	$	86,000		$	95,000		$	172,000		$	190,000

The Company expects to contribute approximately $490,000 to its pension plans in 2004, of which $65,000 and $340,000 was contributed to its pension plans during the three and six months ended June 30, 2004, respectively.

NOTE 6 – Stockholders’ Equity

Changes in the components of stockholders’ equity are as follows:


	Common Stock		Class A Common Stock			Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Deferred Compensation
Balance at Dec. 31, 2003	$	1,656,000	$	2,344,000		$	127,783,000	$	5,999,000		$	(410,000	)	$	—
Net earnings		—		—			—		1,977,000			—			—
Dividends paid, $0.02 per share		—		—			—		(801,000	)		—			—
Issuance of restricted stock		11,000		—			442,000		—			—			(453,000	)
Amortization of deferred compensation		—		—			—		—			—			13,000
Conversion of Class A common stock to common stock		14,000		(14,000	)		—		—			—			—

Balance at June 30, 2004	$	1,681,000	$	2,330,000		$	128,225,000	$	7,175,000		$	(410,000	)	$	(440,000	)

On July 28, 2004, the Company’s Board of Directors declared a quarterly cash dividend on both classes of common stock of $0.01 per share. The dividend is payable on September 10, 2004 to shareholders of record at the close of business on August 10, 2004.

The Company has a 1996 stock option plan (the “1996 Plan”) which provides for the grant of stock options to its officers and key employees. Under the 1996 Plan, option grants must have an exercise price of not less than 100% of the fair market value of the underlying shares of common stock at the date of the grant. Stock options for 1,388,000 shares of common stock are outstanding under the 1996 Plan as of June 30, 2004. The options have eight-year terms and generally vest equally over a period of six years from the date of grant. The Company’s Board of Directors has frozen the 1996 Plan and no additional option grants may be made under the 1996 Plan.

In April 2004, the Company established the 2004 Stock Incentive Plan (the “2004 Plan”) which provides for the grant of up to 1,500,000 shares of our common stock to our officers and key employees through stock options and/or awards, such as restricted stock awards, valued in whole or in part by reference to our common stock. The restricted stock vests an aggregate of twenty percent each year beginning on the second anniversary date of the grant. During the three and six months ended June 30, 2004, the Company issued 109,000 shares of restricted stock to certain officers and key employees. The aggregate market value of the restricted stock at the date of issuance has been recorded as deferred compensation, a separate component of stockholders’ equity, and is being amortized on a straight-line basis over the six-year service period. As of June 30, 2004, there were 1,391,000 shares available for granting options or stock awards under the 2004 Plan.

NOTE 7 - Related Party Transactions

During the three and six months ended June 30, 2004 and 2003, Dover Downs Gaming & Entertainment, Inc. (“Gaming”), a company related through common ownership, allocated costs of $337,000 and $593,000, and $441,000 and $862,000, respectively, to DVD for certain administrative and operations services, including DVD’s use of office space. Additionally, DVD allocated costs of $33,000 and $62,000, respectively, to Gaming for the three and six months ended June 30, 2004. The allocations were based on an analysis of each company’s share of the costs. In connection with the Company’s June 2004 and 2003 NASCAR event weekends, Gaming provided certain catering services for which the Company was invoiced $445,000 and $343,000, respectively. The Company invoiced Gaming $131,000 and $115,000, respectively, for tickets purchased and other services related to the 2004 and 2003 events. As of June 30, 2004, DVD’s consolidated balance sheet includes a $22,000 payable to Gaming for the aforementioned costs and for other payments made by Gaming on DVD’s behalf. DVD has since settled the payable in the third quarter of 2004. The net costs incurred by each company for these services are not necessarily indicative of the costs that would have been incurred if the companies had been unrelated entities and/or had otherwise independently managed these functions; however, management believes that these costs are reasonable.

Use by Gaming of the Company’s 5/8-mile harness racing track is under an easement granted by the Company which does not require the payment of any rent. Under the terms of the easement, Gaming has exclusive use of the harness track during the period beginning November 1 of each year and ending April 30 of the following year, together with set up and tear down rights for the two weeks before and after such period. The harness track is located on property owned by the Company and is on the inside of its one-mile motorsports superspeedway. Gaming’s indoor grandstands are used by the Company at no charge in connection with its motorsports events. The Company also leases its principal executive office space from Gaming. Various easements and agreements relative to access, utilities and parking have also been entered into between the Company and Gaming relative to their respective Dover, Delaware facilities.

NOTE 8 – Commitments and Contingencies

In September 1999, the Sports Authority of the County of Wilson (Tennessee) issued $25,900,000 in Variable Rate Tax Exempt Infrastructure Revenue Bonds, Series 1999, of which $25,000,000 was outstanding at June 30, 2004, to acquire, construct and develop certain public infrastructure improvements which benefit the operation of Nashville Superspeedway. Principal payments range from $400,000 in September 2002 to $1,600,000 in 2029 and are payable solely from sales taxes and incremental property taxes generated from the facility. These bonds are direct obligations of the Sports Authority and are therefore not recorded on the accompanying consolidated balance sheet. If the sales taxes and incremental property taxes are insufficient for the payment of principal and interest on the bonds, payments would become the responsibility of the Company. In the event the Company was unable to make the payments, they would be made pursuant to a $25,419,000 irrevocable direct-pay letter of credit issued by several banks.

The Company believes that the sales taxes and incremental property taxes generated from the facility will satisfy the necessary debt service requirements of the bonds. As of June 30, 2004 and December 31, 2003, $1,692,000 and $1,135,000, respectively, was available in the sales and incremental property tax fund maintained by Wilson County to pay the remaining principal and interest due under the bonds. During 2003, $1,593,000 was paid by the Company into the sales and incremental property tax fund and $1,603,000 was deducted from the fund for debt and interest service. If the debt service is not satisfied from the sales and incremental property taxes generated from the facility, the bonds would become a liability of the Company. If the Company fails to maintain the letter of credit that secures the bonds or allows an uncured event of default to exist under our reimbursement agreement relative to the letter of credit, the bonds would be immediately redeemable.

The Company is a party to ordinary routine litigation incidental to its business. Management does not believe that the resolution of any of these matters is likely to have a serious adverse effect on our results of operations, financial condition or cash flows.

During the three months ended June 30, 2004, the Company entered into employment, severance and noncompete agreements with certain of its officers and directors under which certain change of control, severance and noncompete payments and benefits might become payable but only in the event of a change in control of the Company, defined to include a tender offer or the closing of a merger or similar corporate transactions. In the event of such a change in control of the Company and the subsequent termination of employment of all employees covered under these agreements, the maximum contingent liability would be $5,307,000.

Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

The following discussion is based upon and should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.

Results of Operations

We classify our revenues as admissions, event-related revenue, broadcasting revenue and other revenue. “Admissions” includes ticket sales for all Company events. “Event-related revenue” includes amounts received from sponsorship fees, which includes tickets provided to sponsors; luxury suite rentals; hospitality tent rentals and

catering; concessions and souvenir sales and vendor commissions for the right to sell concessions and souvenirs at our facilities; sales of programs; track rentals and other event-related revenues. “Broadcasting revenue” includes rights fees obtained for television and radio broadcasts of events held at the Company’s speedways and ancillary rights fees. “Other revenue” includes revenues from the Company’s grandstand rental business and other miscellaneous revenues.

Our expenses include prize and point fund monies and sanction fees paid to various sanctioning bodies, including NASCAR, labor, advertising, cost of goods sold for merchandise and souvenirs, and other expenses associated with the promotion of our racing events.

Three Months Ended June 30, 2004 vs. Three Months Ended June 30, 2003

Admissions revenue increased from $20,021,000 in the second quarter of 2003 to $20,429,000 in the second quarter of 2004, primarily due to an increase in attendance at the Company’s June NASCAR event weekend at Dover International Speedway and the Busch Series event at Gateway International Raceway, which more than offset a decrease in attendance at the Grand Prix of Long Beach event.

Event-related revenue was $17,835,000 in the second quarter of 2004 as compared to $17,324,000 in the second quarter of 2003. The $511,000 increase was primarily due to an increase in hospitality tent rentals and catering, concessions sales and vendor commissions for the right to sell concessions, and sponsorship fees at the Company’s June NASCAR event weekend at Dover International Speedway.

Broadcasting revenue was $12,514,000 in the second quarter of 2004 as compared to $10,386,000 in the second quarter of 2003. The $2,128,000 increase resulted primarily from an increase in television broadcasting rights related to the Company’s June NASCAR event weekend at Dover International Speedway.

Other revenue remained consistent between the second quarter of 2004 and 2003 at $110,000 and $118,000, respectively.

Operating and marketing expenses increased by $1,720,000, reflecting the higher revenues. An increase of $956,000 in sanction fees and purse expenses represented the single largest increase in operating and marketing expenses.

General and administrative expenses decreased by $421,000 to $3,716,000 from $4,137,000 in the second quarter of 2003. The second quarter of 2003 included $355,000 related to the settlement of a legal claim at Gateway International Raceway. Additionally, general and administrative expenses from the St. Petersburg and Denver offices, which were closed in April 2004, decreased $197,000 during the second quarter of 2004 as compared to the second quarter of 2003. Partially offsetting these decreases were higher wages and fringe benefits, and legal, audit and consulting expenses related to the Company’s compliance with the Sarbanes-Oxley Act of 2002.

Depreciation and amortization expense decreased by $294,000, primarily due to the reduction in the Company’s depreciable asset base resulting from impairment charges recorded in the fourth quarter of 2003 to write-down the assets used to promote and run the Company’s former Grand Prix of Denver and Grand Prix of St. Petersburg events.

Net interest expense decreased by $1,013,000, primarily as a result of the decrease in the outstanding borrowings on the Company’s credit facilities and lower bank fees in the second quarter of 2004 as compared to the second quarter of 2003 and the receipt in May 2004 of $481,000 of interest from the Internal Revenue Service related to an income tax refund for prior years.

The Company’s effective income tax rates for the second quarter ended June 30, 2004 and 2003 were 60.6% and 50.0%, respectively. The increase in the effective tax rate from the comparable period in the prior year is principally due to an increase in state income tax expense attributable to valuation allowances established on state net operating losses.

The Company reported net earnings of $5,163,000 in the second quarter of 2004 as compared to $5,023,000 in the second quarter of 2003. The $140,000 increase resulted primarily from the improvement in operations principally due to the increase in revenues related to the Company’s June NASCAR event weekend at Dover International Speedway and the aforementioned decreases in general and administrative, depreciation and net interest expenses.

Six Months Ended June 30, 2004 vs. Six Months Ended June 30, 2003

Admissions revenue decreased from $21,662,000 in the first six months of 2003 to $20,517,000 in the first six months of 2004. The decrease resulted from the Company’s decision not to promote the Grand Prix of St. Petersburg event in the first quarter of 2004 which had admissions revenue of $1,569,000 in the first quarter of 2003 and a decrease in attendance at the Grand Prix of Long Beach event. These decreases were partially offset by an increase in attendance at the Company’s June NASCAR event weekend at Dover International Speedway and the Busch Series event at Gateway International Raceway.

Event-related revenue was $18,373,000 in the first six months of 2004 as compared to $19,171,000 in the first six months of 2003. The decrease resulted from the Company’s decision not to promote the Grand Prix of St. Petersburg event in the first quarter of 2004 which had event-related revenue of $1,378,000 in the first quarter of 2003. This decrease was partially offset by an increase in hospitality tent rentals and catering, concessions sales and vendor commissions for the right to sell concessions, and sponsorship fees at the Company’s June NASCAR event weekend at Dover International Speedway.

Broadcasting revenue was $12,514,000 in the first six months of 2004 as compared to $10,386,000 in the first six months of 2003. The $2,128,000 increase resulted primarily from an increase in television broadcasting rights related to the Company’s June NASCAR event weekend at Dover International Speedway.

Other revenue was $644,000 in the first six months of 2004 as compared to $597,000 in the first six months of 2003. The increase primarily relates to additional revenues from the Company’s grandstand rental business.

Operating and marketing expenses decreased by $2,425,000, primarily as a result of the Company’s decision not to promote the St. Petersburg event in 2004, which had operating and marketing expenses of $4,157,000 in the first six months of 2003, partially offset by an increase in sanction fees and purse expenses.

General and administrative expenses decreased by $339,000 to $7,409,000 from $7,748,000 in the first six months of 2003. The first six months of 2003 included $355,000 related to the settlement of a legal claim at Gateway International Raceway. Additionally, general and administrative expenses from the St. Petersburg and Denver offices, which were closed in April 2004, decreased $277,000 during the first six months of 2004 as compared to the first six months of 2003. Partially offsetting these decreases were higher wages and fringe benefits, and legal, audit and consulting expenses related to the Company’s compliance with the Sarbanes-Oxley Act of 2002.

Depreciation and amortization expense decreased by $528,000, primarily due to the reduction in the Company’s depreciable asset base resulting from impairment charges recorded in the fourth quarter of 2003 to write-down the assets used to promote and run the Company’s former Grand Prix of Denver and Grand Prix of St. Petersburg events.

Net interest expense decreased by $1,122,000, primarily as a result of the decrease in the outstanding borrowings on the Company’s credit facilities in the first six months of 2004 as compared to the first six months of 2003 and the receipt in May 2004 of $481,000 of interest from the Internal Revenue Service related to an income tax refund for prior years.

The Company’s effective income tax rates for the six months ended June 30, 2004 and 2003 were 58.0% and 50.0%, respectively. The increase in the effective tax rate from the comparable period in the prior year is principally due to an increase in state income tax expense attributable to valuation allowances established on state net operating losses.

The Company reported net earnings of $1,977,000 in the first six months of 2004 as compared to $30,000 in the first six months of 2003. The $1,947,000 increase resulted primarily from the improvement in operations principally due to the increase in revenues related to the Company’s June NASCAR event weekend at Dover International Speedway, the Company’s decision not to promote the Grand Prix of St. Petersburg event in 2004, and the aforementioned decreases in general and administrative, depreciation and net interest expenses.

Liquidity and Capital Resources

Net cash provided by operating activities was $15,686,000 for the six months ended June 30, 2004 as compared to $11,169,000 for the six months ended June 30, 2003. The increase in the six months ended June 30, 2004 as compared to the six months ended June 30, 2003 was primarily due to the improvement in net earnings before depreciation and amortization from $6,097,000 to $6,940,000, the timing of certain income tax refunds and payments and payments to vendors and greater advance ticket and sponsorship sales to our September event at Dover International Speedway as compared to the same period in the prior year. Offsetting these increases was the impact of the timing of invoicing to and receipts from customers.

Net cash used in investing activities was $139,000 for the six months ended June 30, 2004 as compared to $807,000 for the six months ended June 30, 2003. The change was primarily due to a reduction in capital expenditures.

Net cash used in financing activities was $14,308,000 for the six months ended June 30, 2004 as compared to $9,649,000 for the six months ended June 30, 2003. Net cash used in 2004 and 2003 primarily related to repayments of borrowings under the Company’s revolving credit agreements and long-term debt. Additionally, the Company paid $801,000 in regular quarterly cash dividends for the six months ended June 30, 2004 as compared to $798,000 for the six months ended June 30, 2003.

Provisions of the credit facility reduce the commitment to $67,000,000 on November 1, 2004, to $64,000,000 on November 1, 2005, and to $60,000,000 on November 1, 2006. The terms of the credit facility contain certain covenants including minimum tangible net worth, fixed charge coverage and maximum funded debt to EBITDA. The credit facility is secured by a first priority perfected security interest and lien on all available assets owned by the Company and its subsidiaries. The credit facility also provides that a default by the Company or any of its wholly owned subsidiaries under any other loan agreement would constitute a default under this credit facility. At June 30, 2004, the Company was in compliance with the terms of the facility. Material adverse changes in the Company’s results of operation could impact its ability to maintain financial ratios necessary to satisfy these requirements. There was $30,600,000 outstanding under the facility at June 30, 2004, at a weighted average interest rate of 4.92%. After consideration of stand-by letters of credit outstanding, borrowings of $13,981,000 were available pursuant to the facility at June 30, 2004. Based on operating results to date and expected results for the remainder of the year, the Company expects to be in compliance with the covenants at the quarterly measurement dates through December 31, 2004.

The Company expects to make additional capital expenditures of approximately $2,500,000-$3,000,000 through 2004. These expenditures primarily relate to improvements at our fixed facilities. Additionally, the Company expects to contribute approximately $490,000 to its pension plans in 2004, of which $340,000 was contributed in the first six months of 2004. The Company expects that its net cash flows from operating activities and funds available from its credit facility will be sufficient to provide for its working capital needs and capital

spending requirements at least through 2004, as well as any cash dividends the Board of Directors may declare. The Company expects cash flows from operating activities and funds available from its credit facility to also provide for long-term liquidity.

Related Party Transactions

See NOTE 7 – Related Party Transactions of the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Contractual Obligations

The Company believes that the sales taxes and incremental property taxes generated from the facility will satisfy the necessary debt service requirements of the bonds. As of June 30, 2004 and December 31, 2003, $1,692,000 and $1,135,000, respectively, was available in the sales and incremental property tax fund maintained by Wilson County to pay the remaining principal and interest due under the bonds. During 2003, $1,593,000 was paid by the Company into the sales and incremental property tax fund and $1,603,000 was deducted from the fund for debt and interest service. If the debt service is not satisfied from the sales and incremental property taxes generated from the facility, the bonds would become a liability of the Company. If we fail to maintain the letter of credit that secures the bonds or we allow an uncured event of default to exist under our reimbursement agreement relative to the letter of credit, the bonds would be immediately redeemable.

In 1996, the Company’s wholly owned subsidiary, Grand Prix, entered into an agreement (the “SWIDA loan”) with SWIDA to receive the proceeds from the “Taxable Sports Facility Revenue Bonds, Series 1996 (Gateway International Motorsports Corporation Project),” a Municipal Bond Offering, in the aggregate principal amount of $21,500,000, of which $18,488,000 was outstanding at June 30, 2004. SWIDA loaned all of the proceeds from the Municipal Bond Offering to Grand Prix for the purpose of the redevelopment, construction and expansion of Gateway International Raceway (“Gateway”), and the proceeds of the SWIDA loan were irrevocably committed to complete construction of Gateway, to fund interest, to create a debt service reserve fund and to pay for the cost of issuance of the bonds. The repayment terms and debt service reserve requirements of the bonds issued in the Municipal Bond Offering correspond to the terms of the SWIDA loan.

Memphis, Tennessee, also was obtained to satisfy debt service reserve fund obligations. In addition, a portion of the property taxes to be paid by Gateway (if any) to the City of Madison Tax Incremental Fund have been pledged to the annual retirement of debt and payment of interest.

Critical Accounting Policies

The accounting policies described below are those the Company considers critical in preparing its consolidated financial statements. These policies include significant estimates made by management using information available at the time the estimates are made. However, as described below, these estimates could change materially if different information or assumptions were used. The descriptions below are summarized and have been simplified for clarity.

Goodwill

The Company has made acquisitions in the past that included goodwill. Goodwill is not amortized but is subject to an annual (or under certain circumstances more frequent) impairment test based on its estimated fair value. Estimated fair value is typically less than values based on undiscounted operating earnings because fair value estimates include a discount factor in valuing future cash flows.

The Company completed its 2003 annual assessment of goodwill in November 2003 which resulted in the impairment of $13,362,000 of additional goodwill. Additional impairment losses could be recorded in the future. There are many assumptions and estimates underlying the determination of this impairment loss. Another estimate using different, but still reasonable, assumptions could produce a significantly different result. At June 30, 2004, the remaining balance of goodwill is $8,521,000. Since the majority of our goodwill is associated with Grand Prix, which promotes a CCWS-sanctioned event, any material adverse events impacting CCWS could cause additional impairment losses to be recorded in the future.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. Currently, the Company maintains a valuation allowance, which increased $157,000 in the second quarter of 2004, on deferred tax assets related to certain state net operating loss carry-forwards. The Company has considered ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. In the event the Company were to determine that it would be able to realize all or a portion of these deferred tax assets, an adjustment to the deferred tax asset would increase earnings in the period such determination was made. Likewise, should the Company determine that it would not be able to realize all or a portion of its remaining deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to earnings in the period such determination was made.

Accrued Pension Cost

The benefits provided by the Company’s defined benefit pension plans are based on years of service and employee’s remuneration over their employment with the Company. The Company establishes accrued pension costs in accordance with the provisions of FASB Statement No. 87, Employers’ Accounting for Pensions. Accrued pension costs are developed using actuarial principles and assumptions which consider a number of factors, including estimates for the discount rate, assumed rate of compensation increase and expected long-term rate of return on assets. Changes in these estimates would impact the amounts that the Company records in its consolidated financial statements.

Accounts Receivable Reserves

The Company provides for losses on accounts receivable based upon their current status, historical experience and management’s evaluation of existing economic conditions. Significant changes in customer profitability or general economic conditions may have a significant effect on the Company’s allowance for doubtful accounts.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided for financial reporting purposes using the straight-line method over estimated useful lives ranging from 5 to 10 years for furniture, fixtures and equipment and up to 40 years for facilities. These estimates require assumptions that are believed to be reasonable. Long-lived assets are evaluated for impairment when an event occurs that indicates an impairment may exist.

Factors That May Affect Operating Results; Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, relating to our financial condition, profitability, liquidity, resources, business outlook, proposed acquisitions, market forces, corporate strategies, consumer preferences, contractual commitments, legal matters, capital requirements and other matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. To comply with the terms of the safe harbor, we note that a variety of factors could cause our actual results and experience to differ substantially from the anticipated results or other expectations expressed in our forward-looking statements. When words and expressions such as: “believes,” “expects,” “anticipates,” “estimates,” “plans,” “intends,” “objectives,” “goals,” “aims,” “projects,” “forecasts,” “possible,” “seeks,” “may,” “could,” “should,” “might,” “likely,” “enable” or similar words or expressions are used in this document, as well as statements containing phrases such as “in our view,” “there can be no assurance,” “although no assurance can be given” or “there is no way to anticipate with certainty,” forward-looking statements are being made.

Various risks and uncertainties may affect the operation, performance, development and results of our business and could cause future outcomes to differ materially from those set forth in our forward-looking statements, including the following factors:

•	stability and viability of sanctioning bodies;

•	success of or changes in our growth strategies;

•	development and potential acquisition of new facilities;

•	anticipated trends in the motorsports industry;

•	patron demographics;

•	ability to enter into additional contracts with sponsors, broadcast media and race event sanctioning bodies;

•	relationships with sponsors;

•	general market and economic conditions, including consumer and corporate spending sentiment;

•	ability to finance future business requirements;

•	the availability of adequate levels of insurance;

•	ability to successfully integrate acquired companies and businesses;

•	management retention and development;

•	changes in Federal, state and local laws and regulations, including environmental regulations;

•	the effect of weather conditions on outdoor event attendance;

•	military or other government actions;

•	availability of air travel; and

•	national or local catastrophic events.

We undertake no obligation to publicly update or revise any forward-looking statements as a result of future developments, events or conditions. New risk factors emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ significantly from those forecast in any forward-looking statements. Given these risks and uncertainties, stockholders should not overly rely or attach undue weight to our forward-looking statements as an indication of our actual future results.

Our Relationships With and the Success of Various Sanctioning Bodies Is Vital To Our Success In Motorsports

Our continued success in motorsports is dependent upon the success of various governing bodies of motorsports that sanction national racing events and our ability to maintain a good working relationship with these sanctioning bodies, including NASCAR, IRL, NHRA and CCWS. Sanctioning bodies regularly issue and award sanctioned events and their issuance depends, in large part, on maintaining good working relationships with the sanctioning bodies. Many events are sanctioned on an annual basis with no obligation to renew, including our agreements with NASCAR. By awarding a sanctioned event or a series of sanctioned events, the sanctioning bodies do not warrant, nor are they responsible for, the financial success of any sanctioned event. Our inability to obtain additional sanctioned events in the future and to maintain sanction agreements at current levels would likely result in lower than anticipated revenues from admissions, sponsorships, hospitality, concessions and merchandise, which could have a material adverse effect on our business, financial condition and results of operations. In addition, the success of a particular sanctioning body in attracting drivers and teams, signing series sponsors and negotiating favorable television and/or radio broadcast rights is largely outside of our control. As our success depends on the success of each event or series that we are promoting, a material adverse effect on a sanctioning body, such as the loss or defection of top drivers, the loss of significant series sponsors, or the failure to obtain broadcast coverage or to properly advertise the event or series could result in a reduction in our revenues from admissions, sponsorships, hospitality, concessions and merchandise, which could have a material adverse effect on our business, financial condition and results of operations.

During 2003, the Company’s operating results and cash flows were negatively impacted by the uncertainties surrounding CART. CART filed for bankruptcy in 2003 and in early 2004, various assets of CART were transferred to CCWS (f/k/a Open Wheel Racing Series, LLC), including our sanction agreement with CART relative to the Grand Prix of Long Beach event. CCWS is a newly formed private entity and its ability to successfully continue the Champ Car series cannot be predicted at this time.

We Rely On Sponsorship Contracts To Generate Revenues

We receive a substantial portion of our annual revenues from sponsorship agreements, including the sponsorship of our various events and our permanent venues, such as “title,” “official product” and “promotional partner” sponsorships, billboards, signage and skyboxes. Loss of our title sponsors or other major sponsorship agreements or failure to secure such sponsorship agreements in the future could have a material adverse effect on our business, financial condition and results of operations.

Our Motorsports Events Face Intense Competition For Attendance, Television Viewership And Sponsorship

We compete with other auto speedways for the patronage of motor racing spectators as well as for promotions and sponsorships. Moreover, racing events sanctioned by different organizations are often held on the same dates at different tracks. The quality of the competition, type of racing event, caliber of the event, sight lines, ticket pricing, location and customer conveniences, among other things, distinguish the motorsports facilities. In addition, all of our events compete with other sports and recreational events scheduled on the same dates. As a result, our revenues and operations are affected not only by our ability to compete in the motorsports promotion market, but also by the availability of alternative spectator sports events, forms of entertainment and changing consumer preferences.

Our Long Beach Event Depends On City Permits And Good Relationships With City Officials

In order to conduct the Grand Prix of Long Beach, we must obtain an annual permit from the City of Long Beach to hold the race on city streets. Although Grand Prix has operated a racing event on the streets of Long Beach for thirty years, there can be no assurance that this event will continue to be held or be successful. Our ability to conduct the Grand Prix of Long Beach requires that we maintain excellent relationships with the host city and its officials.

Grand Prix’s Ability To Meet Payment Obligations Under A Loan Agreement With An Illinois Government Agency Depends On Revenues From Gateway

In order to finance the redevelopment of Gateway International Raceway, Grand Prix entered into a loan agreement with the Southwest Illinois Development Authority, which agreed to fund a loan to Grand Prix by issuing municipal bonds in the aggregate principal amount of $21,500,000. The bonds are unconditionally guaranteed by Grand Prix. Grand Prix issued a 20-year $21,500,000 promissory note to SWIDA which bears interest at an effective rate of approximately 8.91% per annum. Payments on the SWIDA loan are intended to be made primarily from the revenues from the operations of Gateway. Although Grand Prix is current on its obligation and expects to meet its future debt payment obligations out of the revenues from Gateway, and although Grand Prix will receive certain assistance from the City of Madison, Illinois in the form of a tax increment finance fund which should assist it in meeting its debt burdens, there can be no assurance that earnings from the future operations of Gateway will be sufficient to meet Grand Prix’s debt service obligations. A default under the SWIDA loan could have a material adverse effect on our business, financial condition and results of operations.

The Sales Tax And Property Tax Revenues To Service The Revenue Bonds For Infrastructure Improvements At Nashville May Be Inadequate

In September 1999, the Sports Authority of the County of Wilson (Tennessee) issued $25,900,000 in revenue bonds, of which $25,000,000 was outstanding on June 30, 2004, to build local infrastructure improvements which benefit the operation of Nashville Superspeedway. Debt service on the bonds is payable solely from sales taxes and incremental property taxes generated from the facility. As of June 30, 2004 and December 31, 2003, $1,692,000 and $1,135,000, respectively, was available in the sales and incremental property tax fund maintained by Wilson County to pay the remaining principal and interest due under the bonds. During 2003, $1,593,000 was paid by the Company into the sales and incremental property tax fund and $1,603,000 was deducted from the fund for debt and interest service. These bonds are direct obligations of the Sports Authority and are therefore not recorded on our consolidated balance sheet. In the event the sales taxes and incremental property taxes are insufficient to cover the payment of principal and interest on the bonds, payments would become the responsibility of the Company. In the event the Company was unable to make the payments, they would be made under a $25,419,000 irrevocable direct-pay letter of credit issued by several banks pursuant to a reimbursement and security agreement under which we have agreed to reimburse the banks for drawings made under the letter of credit. Such an event could have a material adverse effect on our business, financial condition and results of operations.

The Seasonality Of Our Motorsports Events Increases The Variability Of Quarterly Earnings

Our business has been, and is expected to remain, seasonal given that it depends on our outdoor events for a substantial portion of revenues. We derive a substantial portion of our motorsports revenues from admissions and event-related revenue attributable to six NASCAR-sanctioned events at Dover, Delaware which are currently held in June and September. This has been offset to some degree by our other motorsports events, but quarterly earnings will vary.

Our Insurance May Not Be Adequate To Cover Catastrophic Incidents

We maintain insurance policies that provide coverage within limits that are sufficient, in the opinion of management, to protect us from material financial loss incurred in the ordinary course of business. We also purchase special event insurance for motorsports events to protect against race-related liability. However, there can be no assurance that this insurance will be adequate at all times and in all circumstances. If we are held liable for damages beyond the scope of our insurance coverage, including punitive damages, our business, financial condition and results of operations could be materially and adversely affected.

Bad Weather Can Have An Adverse Financial Impact On Our Motorsports Events

We sponsor and promote outdoor motorsports events. Weather conditions affect sales of tickets, concessions and souvenirs, among other things at these events. Although we sell many tickets well in advance of the outdoor events and these tickets are issued on a non-refundable basis, poor weather conditions may adversely affect additional ticket sales and concessions and souvenir sales, which could have an adverse effect on our business, financial condition and results of operations.

We do not currently maintain weather-related insurance for major events. Due to the importance of clear visibility and safe driving conditions to motorsports racing events, outdoor racing events may be significantly affected by weather patterns and seasonal weather changes. Any unanticipated weather changes could impact our ability to stage events. This could have a material adverse effect on our business, financial condition and results of operations.

Postponement And/Or Cancellation Of Major Motorsports Events Could Adversely Affect Us

If one of our events is postponed because of weather or other reasons such as, for example, the general postponement of all major sporting events in this country following the September 11, 2001, terrorism attacks, we could incur increased expenses associated with conducting the rescheduled event, as well as possible decreased revenues from tickets, food, drinks and merchandise at the rescheduled event. If such an event is cancelled, we could incur the expenses associated with preparing to conduct the event as well as losing the revenues, including live broadcast revenues associated with the event.

If a cancelled event is part of the NASCAR NEXTEL Cup Series or NASCAR Busch Series, we could experience a reduction in the amount of money received from television revenues for all of our NASCAR-sanctioned events in the series that experienced the cancellation. This would occur if, as a result of the cancellation, and without regard to whether the cancelled event was scheduled for one of our facilities, NASCAR experienced a reduction in television revenues greater than the amount scheduled to be paid to the promoter of the cancelled event.

Our Goodwill May Become Further Impaired In The Future And Require A Write Down To Comply With Accounting Standards

In June 2001, the FASB issued Statement No. 142, Goodwill and Other Intangible Assets . Statement No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually in accordance with the provisions of Statement No. 142. We adopted the provisions of Statement No. 142 effective January 1, 2002 and as a result recorded a non-cash charge of $28,606,000 associated with the goodwill of Grand Prix as a cumulative effect of accounting change in 2002. Additionally, the Company completed its 2003 annual assessment of goodwill in November 2003 which resulted in the impairment of $13,362,000 of additional goodwill. Even after these charges, $8,521,000, or 3.2%, of our total assets as of June 30,

2004, consists of goodwill. If in the future the application of the test for impairment of goodwill results in a reduction in the carrying value of the goodwill, we will be required to record the amount of the reduction in goodwill as a non-cash charge against operating earnings which would also reduce our stockholders’ equity.

Item 3. Quantitative And Qualitative Disclosures About Market Risk

The Company does not utilize financial instruments for trading purposes and holds no derivative financial instruments which could expose it to market risk. The carrying values of DVD’s long-term debt approximates its fair value at June 30, 2004. DVD is exposed to market risks related to fluctuations in interest rates for its variable rate borrowings of $30,600,000 at June 30, 2004 under its revolving credit facility. A change in interest rates of one percent on the balance outstanding at June 30, 2004 would cause a change in total annual interest costs of $306,000.

In September 1999, the Sports Authority of the County of Wilson (Tennessee) issued $25,900,000 in revenue bonds, of which $25,000,000 was outstanding at June 30, 2004. These bonds are direct obligations of the Sports Authority and are therefore not recorded on the Company’s consolidated balance sheet; however, DVD is exposed to market risks related to fluctuations in interest rates for these bonds. A significant change in interest rates could result in the Company being responsible for debt service payments not covered by the sales and incremental property taxes generated from the facility.

Item 4. Controls and Procedures

(a) Disclosure Controls and Procedures.

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), the Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that material information relating to the Company required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. In designing and evaluating the disclosure controls and procedures, the Company’s management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired control objectives, and management necessarily was required to apply its judgment in designing and evaluating the controls and procedures. The Company currently is in the process of further reviewing and documenting its disclosure controls and procedures, and its internal control over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

(b) Changes in Internal Control Over Financial Reporting.

There were no changes in our internal control over financial reporting during the second quarter of fiscal year 2004 that have materially affected, or that are reasonably likely to materially affect our internal controls over financial reporting.

Part II – Other Information

Item 1. Legal Proceedings

Item 2. Changes In Securities, Use Of Proceeds And Issuer Purchases of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission Of Matters To A Vote Of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits And Reports On Form 8-K

(a) Exhibits


10.1		Employment and Non-Compete Agreement between Dover Motorsports, Inc. and Patrick J. Bagley dated June 16, 2004.

10.2		Employment and Non-Compete Agreement between Dover Motorsports, Inc. and Klaus M. Belohoubek dated June 16, 2004.

10.3		Employment and Non-Compete Agreement between Dover Motorsports, Inc. and Melvin L. Joseph dated June 16, 2004.

10.4		Employment and Non-Compete Agreement between Dover Motorsports, Inc. and Denis McGlynn dated June 16, 2004.

10.5		Employment and Non-Compete Agreement between Dover Motorsports, Inc. and Jerome T. Miraglia dated June 16, 2004.

10.6		Non-Compete Agreement between Dover Motorsports, Inc. and Henry B. Tippie dated June 16, 2004.

10.7		Employment and Non-Compete Agreement between Dover Motorsports, Inc. and Thomas G. Wintermantel dated June 16, 2004.

10.8		Amendment No. 2 to the Credit Agreement between Dover Motorsports, Inc., Dover International Speedway, Inc., Gateway International Motorsports Corporation, Gateway International Services Corporation, Memphis International Motorsports Corporation, M & N Services Corp., Nashville Speedway, USA, Inc. and Grand Prix Association of Long Beach, Inc. and Mercantile-Safe Deposit and Trust Company, as agent, dated as of July 28, 2004.

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)

32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Sec. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Sec. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K

The Company furnished a Form 8-K on April 28, 2004 announcing that it had issued a press release on the same date reporting that the Company’s Board of Directors declared a quarterly cash dividend on both classes of common stock of $0.01 per share.

The Company furnished a Form 8-K on April 29, 2004 announcing that it had issued a press release on the same date regarding its first quarter 2004 financial results.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


DATED: August 6, 2004		Dover Motorsports, Inc.
		Registrant

		/s/ Denis McGlynn
		Denis McGlynn
		President and Chief Executive Officer
		and Director

		/s/ Patrick J. Bagley
		Patrick J. Bagley
		Senior Vice President-Finance
		and Chief Financial Officer

Exhibit 10.1

EMPLOYMENT AND NON-COMPETE AGREEMENT

DOVER MOTORSPORTS, INC.

AND

PATRICK J. BAGLEY

THIS AGREEMENT, is by and between Dover Motorsports, Inc. (the “Company”) and Patrick J. Bagley (the “Executive”) and is effective as of this 16th day of June, 2004 (the “Effective Date”).

W I T N E S S E T H:

WHEREAS, the Executive is currently employed by the Company or an affiliate thereof in an executive position; and

WHEREAS, the Executive has, in the course of his employment, developed relationships with employees and customers of the Company, and learned valuable and sensitive information concerning the Company’s operations, policies and procedures; and

WHEREAS, the Executive has, in the course of his employment, been exposed to valuable and sensitive Company reports, files, memoranda, records, software, and other property; and

WHEREAS, the Company recognizes that the solicitation of its employees and customers, and the use or disclosure of the policies, procedures, information, documents, and property of the Company would be damaging to the Company’s interests; and

WHEREAS, the Company has determined that it is in the best interests of the Company to protect its interests through the use of Employment and Non-Compete Agreements; and

WHEREAS, the Company has determined that it is in the best interests of the Company and its shareholders for the Company to agree to provide benefits under the circumstances described below to the Executive and other executives who agree to such an agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

Section 1

Definitions

“Announcement” shall mean a press release issued by the Company announcing the signing of an agreement whereby the Company will be acquired by or merge with any other entity or a tender offer for the shares of the Company stock will be initiated.

“Board” shall mean the Board of Directors of the Company or the ultimate corporate parent entity which owns the Company if the Company is not public.

“Cause” shall mean a unanimous determination by the Board that the Executive has been convicted of a felony, has embezzled from, or committed fraud against, the Company which embezzlement or fraud has a material adverse financial impact on the Company or gross insubordination which has continued after written notice of such from the Board which determination is upheld by a final, non-appealable arbitration award pursuant to Section 6.

“Change in Control” shall mean the earlier to occur of (a) ten (10) days following the closing of a tender offer for the Company’s stock following the Announcement or (b) the closing of a merger or similar transaction (“Transaction”) of the Company and any other entity; provided, however, a Transaction the result of which is the shareholders of the Company’s voting securities immediately prior to the Transaction own, directly or indirectly in substantially the same proportion, at least 60% of the voting securities of the survivor of such Transaction immediately following such Transaction shall not be a Change in Control.

“Change in Control Fee” shall mean $250, 000.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Company Information” shall mean (i) confidential information including, without limitation, information received from third parties under confidential conditions, (ii) information subject to the Company’s and its affiliates’ attorney-client or work-product privilege; and (iii) other technical, business, legal or financial information (including, without limitation, customer lists), the use or disclosure of which might reasonably be construed to be contrary to the Company’s and its affiliates’ interests.

“Date of Termination” shall mean the date on which the Executive’s employment is terminated.

“Employment Period” shall mean the period of time during the Extension Period the Executive is an employee of the Company.

“Extension Period” shall mean the 24 month period following the Change in Control.

“Good Reason” shall mean a (i) reduction in title, responsibilities, administrative support or support services, (ii) relocation of Executive’s office, (iii) travel at a level that exceeds the travel requirements before the Change in Control, (iv) any breach by the Company of its obligations hereunder, (v) any breach by the purchaser under a merger or acquisition agreement pursuant to which the Change in Control takes place relating to employee benefits or directors’ and officers’ insurance or indemnification provisions, or (vi) any reason whatsoever two months after the Change in Control.

“Monthly Amount” shall be an amount equal to one-twelfth of the sum of (a) the Executive’s then current annual base salary (excluding any incentive or bonus), and (b) the amount of any cash bonus awarded to the Executive for the then most recently concluded fiscal year of the Company.

“Non-Compete Monthly Amount” shall mean the portion of the Monthly Amount which is paid in consideration of the Executive’s agreement to the restrictions and other provisions of Section 7, with the remainder of the Monthly Amount and other benefits under this Agreement paid after the Employment Period to be treated as severance. Executive’s Non-Compete Monthly Amount shall be calculated by multiplying the Monthly Amount by fifty percent.

“Retirement Plan” shall mean the Company’s qualified defined benefit retirement plan(s) in which the Executive participates.

“SERP” shall mean any and all supplemental retirement plans in which the Executive participates (including, but not limited to, any benefit restoration plan(s) maintained by the Company from time to time).

Section 2

Term of Agreement

This Agreement shall be effective as of the Effective Date but shall automatically terminate if no Announcement occurs within two (2) years of the Effective Date or if the Executive’s employment is terminated prior to an Announcement. Renewal of this Agreement for successive two (2) year terms shall require approval of the Company’s Compensation and Stock Incentive Committee.

Section 3

Benefits

(a) On the date of a Change in Control, the Company shall pay to the Executive in cash the Change in Control Fee.

(b) During the Extension Period, the Company shall pay to the Executive the Monthly Amount, payable on the first day of each month, prorated for partial months.

(i) within five business days after the Date of Termination, the Company shall pay to the Executive (or if the Executive dies, to the estate of the Executive) in cash all accrued but unpaid salary, earned but unpaid bonuses, and accrued but unused vacation in accordance with Company policies;

(ii) the Company shall pay to the Executive (or if the Executive dies, to the estate of the Executive) the Monthly Amount on the first day of each month during the remainder of the Extension Period;

(iii) the Company shall pay to the Executive (or if the Executive dies, to his beneficiary, if any, under the Retirement Plan) a lump sum amount equal to the value of the monthly benefit under (x) the Retirement Plan and (y) the SERP, that the Executive or his beneficiary, if any, under the Retirement Plan would have received (1) for payments of the Monthly Amount had Executive been an employee while receiving such payments, and (2) for payment of the Change of Control Fee had such amount been treated as a normal bonus for pension accrual purposes (giving credit for all purposes, including, but not limited to, accrual of benefits, vesting, age and years of service and making the determination without regard to compensation or benefit limitations prescribed by federal law or regulation), which payment shall be paid within 10 days of the Date of Termination and calculated by Buck Consultants (or such other consultant as may be agreed upon) using the actuarial assumptions under the Retirement Plan and the discount rate which would be utilized for purposes of funding a Plan termination;

(iv) on the Date of Termination the Company shall transfer title and ownership to the Executive of his laptop computer, if any, without any payment by the Executive to the Company.

(d) During the Extension Period (whether or not during the Employment Period) the Executive shall be entitled to the following additional benefits:

(i) The Executive and, as applicable, the Executive’s covered dependents shall be entitled to all health, welfare, and fringe benefits provided by the Company to its key employees generally or to the Executive on an individual or group basis (including, but not limited to, any life, accident, health, hospitalization or long-term disability insurance, maintained from time to time by the Company), whether maintained pursuant to a plan, policy or other arrangement (written or unwritten), as if the Executive were still employed during such period, at the same level of benefits and at the same dollar cost to the Executive as is available generally to comparable employees of the Company (but in no instances shall such benefits be at a level less than as in effect on the date of the Change in Control). If the Company reasonably determines that the coverage required under this Section would cause a welfare plan sponsored by the Company to violate any provision of the Code prohibiting discrimination in favor of highly compensated employees or key employees, or if any benefits described in this Section cannot be provided (or the Company determines that it does not wish to provide such benefits) pursuant to the appropriate plan or program maintained for employees of the Company, the Company shall provide such benefits outside such plan or program at no additional cost (on an after tax basis) to the Executive or, if the parties shall so agree, the Company will pay to the Executive the cash equivalent thereof. The health benefits provided in accordance with this Section shall be secondary to any comparable benefits provided by another employer if and only if the Executive chooses to be covered by such other employee plan.

(ii) Executive shall receive continued payment of professional and organizational dues and fees as in effect prior the Change in Control.

(e) (i) If all, or any portion, of the payments and benefits provided under this Agreement, if any, either alone or together with other payments and benefits which the Executive receives or is entitled to receive from the Company, would constitute an excess “parachute payment” within the meaning of Section 280G of the Code (whether or not under an existing plan, arrangement, or other agreement) (each such parachute payment, a “Parachute Payment”), and would result in the imposition on the Executive of an excise tax under Section 4999 of the Code, then, in addition to any other benefits to which the Executive is entitled under this Agreement or otherwise, the Executive shall be paid an amount in cash equal to the sum of the excise taxes payable by the Executive by reason of receiving Parachute Payments plus the amount necessary to place the Executive in the same after-tax position (taking into account any and all applicable federal, state and local excise, income or other taxes at the highest possible applicable rates on such Parachute Payments (including, without limitation, any payments under this Section) as if no excise taxes had been imposed with respect to Parachute Payments (the “Parachute Gross-Up”). Any Parachute Gross-Up otherwise required by this Section shall not be made later than the time of the corresponding payment or benefit hereunder giving rise to the underlying Section 4999 excise tax, even if the payment of the excise tax is not required under the Code until a later time.

(ii) Subject to the provisions of Section 3(d) and except as may otherwise be agreed to by the Company and the Executive, the amount or amounts (if any) payable under this Section 3 shall be as conclusively determined by the KPMG LLP, or such other firm as mutually agreed to by the Company and the Executive (“Independent Tax Counsel”), whose determination or determinations shall be final and binding on all parties. The Executive shall agree to utilize such determination or determinations, as applicable, in filing all of the Executive’s tax returns with respect to the excise tax imposed by Section 4999 of the Code, if any. If such Independent Tax Counsel fails or refuses to make the required determinations for any reason, then such determinations shall be made by a comparable firm or group of national reputation to which the parties reasonably mutually agreed. All fees and expenses of the Independent Tax Counsel or its replacement shall be paid by the Company.

(iii) As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Independent Tax Counsel hereunder, it is possible that Parachute Gross-Up payments, if any, which will not have been made by the Company, should have been made, together with any interest, penalties or taxes of any kind thereon, consistent with the calculations required to be made hereunder (an “Underpayment”). The Company shall pay all such Underpayments to or for the benefit of the Executive. The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment within ten (10) business days after the Executive is informed in writing of such claim. The Company shall notify the Executive within ten (10) business days of receipt of the Executive notice that the Company (x) will pay the Underpayment and do so on or before the date due, or (y) that it desires to contest such claim. The Executive will cooperate with the Company in any such contest; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Furthermore, the Company’s control of the

contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled, at Executive’s expense, to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(iv) References herein to Code sections shall apply to comparable Code sections in the event of any amendment to the Code.

(v) The foregoing provisions of this subsection (f) shall similarly apply to any benefit provided elsewhere in this Agreement where it is expressly provided that the benefit is to be provided on an after tax basis.

(f) In the event of the Executive’s termination of employment under this Agreement, the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment.

In the event that Executive’s employment is terminated by the Company for Cause (and Executive was not capable of voluntarily terminating for Good Reason at or prior to such time) or if Executive voluntarily terminates without Good Reason, the Company shall remain obligated to pay the Non-Compete Monthly Amount but shall not be obligated to pay the balance of the Monthly Amount. Executive is free to terminate his employment for Good Reason.

Section 4

Employment

Following a Change in Control, the Executive will, except as provided below, continue as an employee during the Extension Period. During the Employment Period:

(i) The Executive shall perform services consistent with his past practices,

(ii) The Executive shall not be required to relocate or travel in excess of past practices,

(iii) The Executive shall enjoy the same office, administrative support and support services as he enjoyed prior to the Change in Control.

(iv) The Executive shall not be required to devote more time to Company business than he did prior to the Change in Control and may continue director or officer positions with other private or public entities that do not violate Section 7.

(v) The Executive’s expenses shall be reimbursed consistent with past practices, and

(vi) The Executive shall receive at least the same vacation as he currently enjoys, but not less than four weeks paid vacation.

No breach or alleged breach of this Section 4 shall constitute grounds for, or otherwise entitle, the Company to offset payments otherwise owing to the Executive under this Agreement.

Section 5

Source of Payments

All payments provided for in this Agreement shall be paid in cash from the general funds of the Company; provided, however, that such payments shall be reduced by the amount of any payments made to the Executive or his dependents, beneficiaries or estate from any trust or special or separate fund established by the Company to assure such payments. The Company shall not be required to establish a special or separate fund or other segregation of assets to assure such payments.

Section 6

Litigation Expenses and Arbitration

In addition to the Company’s other obligations under this Agreement, the Company shall pay all legal fees and expenses incurred in a legal proceeding (including arbitration) by the Executive in seeking to obtain or enforce any right or benefit provided by this Agreement (including, without limitation, any rights to a tax gross-up). Such payments are to be made within five days after the Executive’s request for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require; provided, however, that if the Executive institutes a proceeding and the judge or other decision-maker presiding over the proceeding affirmatively finds that the Executive has failed to prevail substantially, he shall pay his own costs and expenses (and, if applicable, return any amounts theretofore paid on his behalf under this Section 6.

All disputes with respect to the subject matter of this Agreement and the enforcement of rights hereunder shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association (the “AAA”). Each party hereto shall designate one arbitrator (who need not be impartial) within fifteen (15) days after notice of the dispute. The two arbitrators so designated shall endeavor to designate promptly a third, neutral arbitrator. If the two arbitrators have not designated the third arbitrator by the fifteenth (15 ^th ) day following the designation of the second arbitrator, or if a second arbitrator has not been designated by the (15 ^th ) day following the designation of the first, either Party may request the AAA to designate the remaining arbitrator(s). The third arbitrator shall take an oath of neutrality. The arbitrators shall not be bound by judicial formalities and may abstain from following the strict rules of evidence and shall interpret this Agreement as an honorable engagement and not merely as a legal obligation. The arbitrators shall have the power to render equitable relief as may be available in accordance with applicable law. Unless otherwise agreed by the parties, any such arbitration shall take place in such City within the United States as Executive may designate, and shall be conducted in accordance with the Rules of the AAA. The determination reached in such arbitration shall be final and binding on both parties without any right of appeal or further dispute. The arbitrators’ award may be confirmed in, and judgment upon the award entered by, any federal or state court having jurisdiction over the parties.

Section 7

Restrictive Covenants

(a) Within a reasonable period of time following his termination of employment, the Executive shall return to the Company all Company Information, reports, files, memoranda, records, credit cards, cardkey passes, door and file keys, computer access codes, and other property which the Executive has received, prepared, or helped to prepare in connection with his employment with the Company, except as provided in Section 3. The Executive acknowledges that in the course of employment with the Company, he has acquired Company Information and that such Company Information has been disclosed to him in confidence and for the Company’s use only. The Executive agrees that, during the Extension Period, he (i) will keep such Company Information confidential at all times, (ii) will not disclose or communicate Company Information to any third party, and (iii) will not make use of Company Information on his own behalf or on behalf of any third party. The Executive further acknowledges and agrees that the Company’s remedy in the form of monetary damages for any breach by him of any of the provisions of this Section may be inadequate and that, in addition to any monetary damages for such breach, the Company shall be entitled to institute and maintain any appropriate proceeding or proceedings, including an action for specific performance and/or injunction.

(b) Executive agrees not to, during the Extension Period, within the Territory, directly or indirectly, individually or on behalf of persons not now parties to this Agreement, or as a director, officer, principal, agent, executive, or in any other capacity or relationship, engage in the motorsports business (except as a passive investor holding not more than 3% of the equity of such business), or aid or endeavor to assist any business or legal entity, that is in the motorsports business and that competes with the Company anywhere in the Territory. The Territory shall consist of the entire State of Delaware and a 100-mile radius around the Company’s facilities in Dover, Delaware, Nashville, Tennessee, Madison, Illinois, Memphis, Tennessee, Long Beach, California, and any other facilities which may be acquired or developed by the Company prior to the Change of Control. The Company and Executive acknowledge the reasonableness of this covenant not to compete and the reasonableness of the geographic area and duration of time which are a part of said covenant.

(c) Unless waived in writing by the Company, Executive further agrees that he will not, directly or indirectly, during the Extension Period, solicit the trade or patronage of any of the customers of the Company, regardless of the location of such customers of the Company with respect to any services, products, or other matters in which the Company is active.

(d) Unless waived in writing by the Company, Executive further agrees that he will not, directly or indirectly, during the Extension Period, solicit or attempt to entice away from the Company any director, agent or employee of the Company.

Executive is required to repay to the Company) a portion or all of the Non-Compete Monthly Amount; provided, however, in all instances the Company shall continue to pay to Executive the Non-Compete Monthly Amount unless and until all appeals have been exhausted or the time for such has expired). Executive further agrees that Executive shall not, in any equity proceeding relating to the enforcement of this Section, raise the defense that the Company has an adequate remedy at law. Nothing in this Agreement shall be construed as prohibiting the Company from pursuing any other remedies at law or in equity that it may have under and in respect of this Agreement or any other agreement.

(f) The Executive agrees to pay to the Company any outstanding amounts owed to the Company; provided, however, that no breach or alleged breach of this subsection (f) or any other provision of this Section shall constitute grounds for, or otherwise entitle, the Company to offset payments otherwise owed to the Executive under this Agreement.

Section 8

Severability

If, for any reason, any one or more of the provisions or part of a provision contained in this Agreement shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement not held so invalid, illegal or unenforceable, and each other provision or part of a provision shall to the fullest extent consistent with law continue in full force and effect.

Section 9

Amendment, Termination, or Modification

Except as provided below, this Agreement may not be terminated, modified or amended other than by an instrument in writing signed by the parties hereto. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument signed by the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

Section 10

Consolidation, Merger, or Sale of Assets; Assignability

The Company shall require (a) any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company and (b) the parent entity owning or controlling such successor expressly to assume and agree to perform under the terms of this Agreement in the same manner and to the same extent that the Company and its affiliates would be required to perform it if no such succession had taken place (provided that such a requirement to perform which arises by operation of law shall be deemed to satisfy the requirements for such an express assumption and agreement). Except as provided herein, the Executive’s rights hereunder shall not be assignable.

Section 11

Tax Withholding

The Company may withhold from any payments made under this Agreement all federal, state or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

Section 12

Entire Understanding

This Agreement contains the entire understanding between the Company and the Executive with respect to the subject matter hereof and supersedes any prior agreement between the Company and the Executive regarding non-compete provisions, except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to the Executive of any kind elsewhere provided and not expressly dealt with in this Agreement.

Section 13

Binding Agreement

This Agreement shall be binding upon, and shall inure to the benefit of, the Executive and the Company and their respective permitted successors and assigns.

Section 14

Employment Status

Nothing herein contained shall be deemed to create an employment agreement between the Company and the Executive providing for the employment of the Executive by the Company for any fixed period of time prior to a Change in Control. The Executive’s employment with the Company is terminable at will by the Company or Executive and each shall have the right to terminate Executive’s employment with the Company at any time, with or without Cause, subject to the Company’s obligation to provide any benefits required hereunder. There are no other agreements or understandings between the Company and the Executive which guarantee continued employment to the Executive or guarantee any level of compensation, including incentive or bonus payments, to the Executive.

Section 15

No Attachment

Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect.

Section 16

Notices

All notices, requests, demands and other communications required or permitted hereunder shall be given in writing and shall be deemed to have been duly given if delivered or mailed, postage prepaid, first class as follows:

(a) to the Company, at its Dover, Delaware address

(b) to the Executive, at the address maintained by the Company for the Executive for payroll purposes;

or to such address as either party shall have previously specified in writing to the other.

Section 17

Revocation and Executive Acknowledgments

The Executive acknowledges that he has read and understands the provisions of this Agreement. The Executive further acknowledges that he has been given an opportunity for his legal counsel to review this Agreement and that the provisions of this Agreement are reasonable and that he has received a copy of this Agreement.

Section 18

Headings of No Effect

The section headings contained in this Agreement are included solely for convenience of reference and shall not in any way affect the meaning or interpretation of any of the provisions of this Agreement.

Section 19

Applicable Law

This Agreement and its validity, interpretation, performance, and enforcement shall be governed by the laws of the State of Delaware.

Section 20

Counterparts

This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.

IN WITNESS WHEREOF, the Company through its officer duly authorized, and the Executive both intending to be legally bound have duly executed and delivered this Agreement, to be effective as of the Effective Date.

Dover Motorsports, Inc.

/S/ Denis McGlynn

Its

EXECUTIVE

/S/ Patrick J. Bagley

Exhibit 10.2

EMPLOYMENT AND NON-COMPETE AGREEMENT

DOVER MOTORSPORTS, INC.

AND

KLAUS M. BELOHOUBEK

THIS AGREEMENT, is by and between Dover Motorsports, Inc. (the “Company”) and Klaus M. Belohoubek (the “Executive”) and is effective as of this 16th day of June, 2004 (the “Effective Date”).

W I T N E S S E T H:

WHEREAS, the Executive is currently employed by the Company or an affiliate thereof in an executive position; and

WHEREAS, the Executive has, in the course of his employment, been exposed to valuable and sensitive Company reports, files, memoranda, records, software, and other property; and

WHEREAS, the Company has determined that it is in the best interests of the Company to protect its interests through the use of Employment and Non-Compete Agreements; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

Section 1

Definitions

“Board” shall mean the Board of Directors of the Company or the ultimate corporate parent entity which owns the Company if the Company is not public.

“Change in Control Fee” shall mean $250, 000.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Date of Termination” shall mean the date on which the Executive’s employment is terminated.

“Employment Period” shall mean the period of time during the Extension Period the Executive is an employee of the Company.

“Extension Period” shall mean the 24 month period following the Change in Control.

“Retirement Plan” shall mean the Company’s qualified defined benefit retirement plan(s) in which the Executive participates.

Section 2

Term of Agreement

Section 3

Benefits

(a) On the date of a Change in Control, the Company shall pay to the Executive in cash the Change in Control Fee.

(b) During the Extension Period, the Company shall pay to the Executive the Monthly Amount, payable on the first day of each month, prorated for partial months.

(ii) the Company shall pay to the Executive (or if the Executive dies, to the estate of the Executive) the Monthly Amount on the first day of each month during the remainder of the Extension Period;

(iv) on the Date of Termination the Company shall transfer title and ownership to the Executive of his laptop computer, if any, without any payment by the Executive to the Company.

(d) During the Extension Period (whether or not during the Employment Period) the Executive shall be entitled to the following additional benefits:

(ii) Executive shall receive continued payment of professional and organizational dues and fees as in effect prior the Change in Control.

(e) Executive shall have exclusive use of the office space identified on the attached Exhibit A for the term set forth thereon, together with all furniture, fixtures, equipment and systems currently therein (or comparable equipment and systems, such as phone, voicemail, email, copiers or computers, if Company wishes to change service providers), all of which shall be provided and maintained (including utilities and janitorial service) at no cost to Executive (on an after tax basis) consistent with past practices, except that for any period of such use which extends past the Employment Period, Executive shall be responsible to reimburse Company for long distance phone charges. Executive shall also be given title to the law library in such offices (including the unexpired term of any subscription series) at no cost to Executive (on an after tax basis).

(f) (i) If all, or any portion, of the payments and benefits provided under this Agreement, if any, either alone or together with other payments and benefits which the Executive receives or is entitled to receive from the Company, would constitute an excess “parachute payment” within the meaning of Section 280G of the Code (whether or not under an existing plan, arrangement, or other agreement) (each such parachute payment, a “Parachute Payment”), and would result in the imposition on the Executive of an excise tax under Section 4999 of the Code, then, in addition to any other benefits to which the Executive is entitled under this Agreement or otherwise, the Executive shall be paid an amount in cash equal to the sum of the excise taxes payable by the Executive by reason of receiving Parachute Payments plus the amount necessary to place the Executive in the same after-tax position (taking into account any and all applicable federal, state and local excise, income or other taxes at the highest possible applicable rates on such Parachute Payments (including, without limitation, any payments under this Section) as if no excise taxes had been imposed with respect to Parachute Payments (the “Parachute Gross-Up”). Any Parachute Gross-Up otherwise required by this Section shall not be made later than the time of the corresponding payment or benefit hereunder giving rise to the underlying Section 4999 excise tax, even if the payment of the excise tax is not required under the Code until a later time.

Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment within ten (10) business days after the Executive is informed in writing of such claim. The Company shall notify the Executive within ten (10) business days of receipt of the Executive notice that the Company (x) will pay the Underpayment and do so on or before the date due, or (y) that it desires to contest such claim. The Executive will cooperate with the Company in any such contest; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled, at Executive’s expense, to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(iv) References herein to Code sections shall apply to comparable Code sections in the event of any amendment to the Code.

(g) In the event of the Executive’s termination of employment under this Agreement, the Executive shall be under no obligation to seek other employment, and there shall be no offset against amounts due the Executive under this Agreement on account of any remuneration attributable to any subsequent employment.

Section 4

Employment

Following a Change in Control, the Executive will, except as provided below, continue as an employee during the Extension Period. During the Employment Period:

(i) The Executive shall perform services consistent with his past practices,

(ii) The Executive shall not be required to relocate or travel in excess of past practices,

(iii) The Executive shall enjoy the same office, administrative support and support services as he enjoyed prior to the Change in Control.

(v) The Executive’s expenses shall be reimbursed consistent with past practices, and

(vi) The Executive shall receive at least the same vacation as he currently enjoys, but not less than four weeks paid vacation.

No breach or alleged breach of this Section 4 shall constitute grounds for, or otherwise entitle, the Company to offset payments otherwise owing to the Executive under this Agreement.

Section 5

Source of Payments

Section 6

Litigation Expenses and Arbitration

obligation. The arbitrators shall have the power to render equitable relief as may be available in accordance with applicable law. Unless otherwise agreed by the parties, any such arbitration shall take place in such City within the United States as Executive may designate, and shall be conducted in accordance with the Rules of the AAA. The determination reached in such arbitration shall be final and binding on both parties without any right of appeal or further dispute. The arbitrators’ award may be confirmed in, and judgment upon the award entered by, any federal or state court having jurisdiction over the parties.

Section 7

Restrictive Covenants

(e) Executive acknowledges that the Company has no adequate remedy at law and would be irreparably harmed if Executive breaches or threatens to breach any of the provisions of this Section and, therefore, agrees that the Company shall be entitled to injunctive relief to prevent any such breach or threatened breach thereof and to specific performance of the terms of this Section (in addition to any other legal or equitable remedy the Company may have, including if so determined by arbitration, that the Company is not obligated to pay to the Executive (or the Executive is required to repay to the Company) a portion or all of the Non-Compete Monthly Amount; provided, however, in all instances the Company shall continue to pay to Executive the Non-Compete Monthly Amount unless and until all appeals have been exhausted or the time for such has expired). Executive further agrees that Executive shall not, in any equity proceeding relating to the enforcement of this Section, raise the defense that the Company has an adequate remedy at law. Nothing in this Agreement shall be construed as prohibiting the Company from pursuing any other remedies at law or in equity that it may have under and in respect of this Agreement or any other agreement.

Section 8

Severability

Section 9

Amendment, Termination, or Modification

Section 10

Consolidation, Merger, or Sale of Assets; Assignability

Section 11

Tax Withholding

The Company may withhold from any payments made under this Agreement all federal, state or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

Section 12

Entire Understanding

Section 13

Binding Agreement

This Agreement shall be binding upon, and shall inure to the benefit of, the Executive and the Company and their respective permitted successors and assigns.

Section 14

Employment Status

Section 15

No Attachment

Section 16

Notices

(a) to the Company, at its Dover, Delaware address

(b) to the Executive, at the address maintained by the Company for the Executive for payroll purposes;

or to such address as either party shall have previously specified in writing to the other.

Section 17

Revocation and Executive Acknowledgments

Section 18

Headings of No Effect

Section 19

Applicable Law

This Agreement and its validity, interpretation, performance, and enforcement shall be governed by the laws of the State of Delaware.

Section 20

Counterparts

This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.

Dover Motorsports, Inc.

/S/ Denis McGlynn

Its

EXECUTIVE

/S/ Klaus M. Belohoubek

Exhibit A – Office Space

Office Space shall be Suite 203

Concord Plaza

3505 Silverside Road

Plaza Centre Bldg.,

Wilmington, DE 19810

Term shall be through initial lease term with Concord Properties expiring January 31, 2008

Exhibit 10.3

EMPLOYMENT AND NON-COMPETE AGREEMENT

DOVER MOTORSPORTS, INC.

AND

MELVIN L. JOSEPH

THIS AGREEMENT, is by and between Dover Motorsports, Inc. (the “Company”) and Melvin L. Joseph (the “Executive”) and is effective as of this 16th day of June, 2004 (the “Effective Date”).

W I T N E S S E T H:

WHEREAS, the Executive is currently employed by the Company or an affiliate thereof in an executive position; and

WHEREAS, the Executive has, in the course of his employment, been exposed to valuable and sensitive Company reports, files, memoranda, records, software, and other property; and

WHEREAS, the Company has determined that it is in the best interests of the Company to protect its interests through the use of Employment and Non-Compete Agreements; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

Section 1

Definitions

“Board” shall mean the Board of Directors of the Company or the ultimate corporate parent entity which owns the Company if the Company is not public.

“Change in Control Fee” shall mean $150, 000.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Date of Termination” shall mean the date on which the Executive’s employment is terminated.

“Employment Period” shall mean the period of time during the Extension Period the Executive is an employee of the Company.

“Extension Period” shall mean the 24 month period following the Change in Control.

“Retirement Plan” shall mean the Company’s qualified defined benefit retirement plan(s) in which the Executive participates.

Section 2

Term of Agreement

Section 3

Benefits

(a) On the date of a Change in Control, the Company shall pay to the Executive in cash the Change in Control Fee.

(b) During the Extension Period, the Company shall pay to the Executive the Monthly Amount, payable on the first day of each month, prorated for partial months.

(ii) the Company shall pay to the Executive (or if the Executive dies, to the estate of the Executive) the Monthly Amount on the first day of each month during the remainder of the Extension Period;

(iv) on the Date of Termination the Company shall transfer title and ownership to the Executive of his laptop computer, if any, without any payment by the Executive to the Company.

(d) During the Extension Period (whether or not during the Employment Period) the Executive shall be entitled to the following additional benefits:

(ii) Executive shall receive continued payment of professional and organizational dues and fees as in effect prior the Change in Control.

(iv) References herein to Code sections shall apply to comparable Code sections in the event of any amendment to the Code.

Section 4

Employment

Following a Change in Control, the Executive will, except as provided below, continue as an employee during the Extension Period. During the Employment Period:

(i) The Executive shall perform services consistent with his past practices,

(ii) The Executive shall not be required to relocate or travel in excess of past practices,

(iii) The Executive shall enjoy the same office, administrative support and support services as he enjoyed prior to the Change in Control.

(v) The Executive’s expenses shall be reimbursed consistent with past practices, and

(vi) The Executive shall receive at least the same vacation as he currently enjoys, but not less than four weeks paid vacation.

No breach or alleged breach of this Section 4 shall constitute grounds for, or otherwise entitle, the Company to offset payments otherwise owing to the Executive under this Agreement.

Section 5

Source of Payments

Section 6

Litigation Expenses and Arbitration

Section 7

Restrictive Covenants

Section 8

Severability

Section 9

Amendment, Termination, or Modification

Section 10

Consolidation, Merger, or Sale of Assets; Assignability

Section 11

Tax Withholding

The Company may withhold from any payments made under this Agreement all federal, state or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

Section 12

Entire Understanding

Section 13

Binding Agreement

This Agreement shall be binding upon, and shall inure to the benefit of, the Executive and the Company and their respective permitted successors and assigns.

Section 14

Employment Status

Section 15

No Attachment

Section 16

Notices

(a) to the Company, at its Dover, Delaware address

(b) to the Executive, at the address maintained by the Company for the Executive for payroll purposes;

or to such address as either party shall have previously specified in writing to the other.

Section 17

Revocation and Executive Acknowledgments

Section 18

Headings of No Effect

Section 19

Applicable Law

This Agreement and its validity, interpretation, performance, and enforcement shall be governed by the laws of the State of Delaware.

Section 20

Counterparts

This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.

Dover Motorsports, Inc.

/S/ Denis McGlynn

Its

EXECUTIVE

/S/ Melvin L. Joseph

Exhibit 10.4

EMPLOYMENT AND NON-COMPETE AGREEMENT

DOVER MOTORSPORTS, INC.

AND

DENIS MCGLYNN

THIS AGREEMENT, is by and between Dover Motorsports, Inc. (the “Company”) and Denis McGlynn (the “Executive”) and is effective as of this 16 ^th day of June 2004 (the “Effective Date”).

W I T N E S S E T H:

WHEREAS, the Executive is currently employed by the Company or an affiliate thereof in an executive position; and

WHEREAS, the Executive has, in the course of his employment, been exposed to valuable and sensitive Company reports, files, memoranda, records, software, and other property; and

WHEREAS, the Company has determined that it is in the best interests of the Company to protect its interests through the use of Employment and Non-Compete Agreements; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

Section 1

Definitions

“Board” shall mean the Board of Directors of the Company or the ultimate corporate parent entity which owns the Company if the Company is not public.

“Change in Control Fee” shall mean $500,000.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Date of Termination” shall mean the date on which the Executive’s employment is terminated.

“Employment Period” shall mean the period of time during the Extension Period the Executive is an employee of the Company.

“Extension Period” shall mean the 60 month period following the Change in Control.

“Retirement Plan” shall mean the Company’s qualified defined benefit retirement plan(s) in which the Executive participates.

Section 2

Term of Agreement

Section 3

Benefits

(a) On the date of a Change in Control, the Company shall pay to the Executive in cash the Change in Control Fee.

(b) During the Extension Period, the Company shall pay to the Executive the Monthly Amount, payable on the first day of each month, prorated for partial months.

(ii) the Company shall pay to the Executive (or if the Executive dies, to the estate of the Executive) the Monthly Amount on the first day of each month during the remainder of the Extension Period;

(iii) the Company shall pay to the Executive (or if the Executive dies, to his beneficiary, if any, under the Retirement Plan) a lump sum amount equal to the value of the monthly benefit under (x) the Retirement Plan and (y) the SERP, that the Executive or his beneficiary, if any, under the Retirement Plan would have received (1) for payments of the Monthly Amount had Executive been an employee while receiving such payments and (2) for payment of the Change of Control Fee had such amount been treated as a normal bonus for pension accrual purposes (giving credit for all purposes, including, but not limited to, accrual of benefits, vesting, age and years of service and making the determination without regard to compensation or benefit limitations prescribed by federal law or regulation), which payment shall be paid within 10 days of the Date of Termination and calculated by Buck Consultants (or such other consultant as may be agreed upon) using the actuarial assumptions under the Retirement Plan and the discount rate which would be utilized for purposes of funding a Plan termination;

(d) During the Extension Period (whether or not during the Employment Period) the Executive shall be entitled to the following additional benefits:

(ii) Executive shall receive continued payment of professional and organizational dues and fees as in effect prior the Change in Control.

payment” within the meaning of Section 280G of the Code (whether or not under an existing plan, arrangement, or other agreement) (each such parachute payment, a “Parachute Payment”), and would result in the imposition on the Executive of an excise tax under Section 4999 of the Code, then, in addition to any other benefits to which the Executive is entitled under this Agreement or otherwise, the Executive shall be paid an amount in cash equal to the sum of the excise taxes payable by the Executive by reason of receiving Parachute Payments plus the amount necessary to place the Executive in the same after-tax position (taking into account any and all applicable federal, state and local excise, income or other taxes at the highest possible applicable rates on such Parachute Payments (including, without limitation, any payments under this Section) as if no excise taxes had been imposed with respect to Parachute Payments (the “Parachute Gross-Up”). Any Parachute Gross-Up otherwise required by this Section shall not be made later than the time of the corresponding payment or benefit hereunder giving rise to the underlying Section 4999 excise tax, even if the payment of the excise tax is not required under the Code until a later time.

(iv) References herein to Code sections shall apply to comparable Code sections in the event of any amendment to the Code.

Section 4

Employment

Following a Change in Control, the Executive will, except as provided below, continue as an employee during the Extension Period. During the Employment Period:

(i) The Executive shall perform services consistent with his past practices,

(ii) The Executive shall not be required to relocate or travel in excess of past practices,

(iii) The Executive shall enjoy the same office, administrative support and support services as he enjoyed prior to the Change in Control.

(v) The Executive’s expenses shall be reimbursed consistent with past practices, and

(vi) The Executive shall receive at least the same vacation as he currently enjoys, but not less than four weeks paid vacation.

Notwithstanding Executive’s ability to voluntarily terminate his employment under clauses (i) and (vi) under the definition of Good Reason, Executive agrees, for a 24 month period following the Change of Control, to assist the Company from time to time, at mutually agreeable

times, with respect to legislative matters within the State of Delaware in terms of sharing his knowledge of the industry, key legislators and regulators and the legislative process in general and in terms of making appropriate introductions within the Delaware community, provided that Executive shall not be required to engage in lobbying activities or assist in day-to-day matters, and further provided that Executive retains the right to completely terminate his employment under any other clause defining Good Reason.

No breach or alleged breach of this Section 4 shall constitute grounds for, or otherwise entitle, the Company to offset payments otherwise owing to the Executive under this Agreement.

Section 5

Source of Payments

Section 6

Litigation Expenses and Arbitration

Section 7

Restrictive Covenants

Section 8

Severability

Section 9

Amendment, Termination, or Modification

Section 10

Consolidation, Merger, or Sale of Assets; Assignability

Section 11

Tax Withholding

The Company may withhold from any payments made under this Agreement all federal, state or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

Section 12

Entire Understanding

Section 13

Binding Agreement

This Agreement shall be binding upon, and shall inure to the benefit of, the Executive and the Company and their respective permitted successors and assigns.

Section 14

Employment Status

Section 15

No Attachment

Section 16

Notices

(a) to the Company, at its Dover, Delaware address

(b) to the Executive, at the address maintained by the Company for the Executive for payroll purposes;

or to such address as either party shall have previously specified in writing to the other.

Section 17

Revocation and Executive Acknowledgments

Section 18

Headings of No Effect

Section 19

Applicable Law

This Agreement and its validity, interpretation, performance, and enforcement shall be governed by the laws of the State of Delaware.

Section 20

Counterparts

This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.


Dover Motorsports, Inc.

/S/ Klaus M. Belohoubek
Its

EXECUTIVE

/S/ Denis McGlynn

Exhibit 10.5

EMPLOYMENT AND NON-COMPETE AGREEMENT

DOVER MOTORSPORTS, INC.

AND

JEROME T. MIRAGLIA

THIS AGREEMENT, is by and between Dover Motorsports, Inc. (the “Company”) and Jerome T. Miraglia (the “Executive”) and is effective as of this 16th day of June, 2004 (the “Effective Date”).

W I T N E S S E T H:

WHEREAS, the Executive is currently employed by the Company or an affiliate thereof in an executive position; and

WHEREAS, the Executive has, in the course of his employment, been exposed to valuable and sensitive Company reports, files, memoranda, records, software, and other property; and

WHEREAS, the Company has determined that it is in the best interests of the Company to protect its interests through the use of Employment and Non-Compete Agreements; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

Section 1

Definitions

“Board” shall mean the Board of Directors of the Company or the ultimate corporate parent entity which owns the Company if the Company is not public.

“Change in Control Fee” shall mean $200, 000.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Date of Termination” shall mean the date on which the Executive’s employment is terminated.

“Employment Period” shall mean the period of time during the Extension Period the Executive is an employee of the Company.

“Extension Period” shall mean the 24 month period following the Change in Control.

“Retirement Plan” shall mean the Company’s qualified defined benefit retirement plan(s) in which the Executive participates.

Section 2

Term of Agreement

Section 3

Benefits

(a) On the date of a Change in Control, the Company shall pay to the Executive in cash the Change in Control Fee.

(b) During the Extension Period, the Company shall pay to the Executive the Monthly Amount, payable on the first day of each month, prorated for partial months.

(ii) the Company shall pay to the Executive (or if the Executive dies, to the estate of the Executive) the Monthly Amount on the first day of each month during the remainder of the Extension Period;

(iv) on the Date of Termination the Company shall transfer title and ownership to the Executive of his laptop computer, if any, without any payment by the Executive to the Company.

(d) During the Extension Period (whether or not during the Employment Period) the Executive shall be entitled to the following additional benefits:

(ii) Executive shall receive continued payment of professional and organizational dues and fees as in effect prior the Change in Control.

(iv) References herein to Code sections shall apply to comparable Code sections in the event of any amendment to the Code.

Section 4

Employment

Following a Change in Control, the Executive will, except as provided below, continue as an employee during the Extension Period. During the Employment Period:

(i) The Executive shall perform services consistent with his past practices,

(ii) The Executive shall not be required to relocate or travel in excess of past practices,

(iii) The Executive shall enjoy the same office, administrative support and support services as he enjoyed prior to the Change in Control.

(v) The Executive’s expenses shall be reimbursed consistent with past practices, and

(vi) The Executive shall receive at least the same vacation as he currently enjoys, but not less than four weeks paid vacation.

No breach or alleged breach of this Section 4 shall constitute grounds for, or otherwise entitle, the Company to offset payments otherwise owing to the Executive under this Agreement.

Section 5

Source of Payments

Section 6

Litigation Expenses and Arbitration

Section 7

Restrictive Covenants

Section 8

Severability

Section 9

Amendment, Termination, or Modification

Section 10

Consolidation, Merger, or Sale of Assets; Assignability

Section 11

Tax Withholding

The Company may withhold from any payments made under this Agreement all federal, state or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

Section 12

Entire Understanding

Section 13

Binding Agreement

This Agreement shall be binding upon, and shall inure to the benefit of, the Executive and the Company and their respective permitted successors and assigns.

Section 14

Employment Status

Section 15

No Attachment

Section 16

Notices

(a) to the Company, at its Dover, Delaware address

(b) to the Executive, at the address maintained by the Company for the Executive for payroll purposes;

or to such address as either party shall have previously specified in writing to the other.

Section 17

Revocation and Executive Acknowledgments

Section 18

Headings of No Effect

Section 19

Applicable Law

This Agreement and its validity, interpretation, performance, and enforcement shall be governed by the laws of the State of Delaware.

Section 20

Counterparts

This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.

Dover Motorsports, Inc.

/S/ Denis McGlynn

Its

EXECUTIVE

/S/ Jerome T. Miraglia

Exhibit 10.6

NON-COMPETE AGREEMENT

DOVER MOTORSPORTS, INC.

AND

HENRY B. TIPPIE

THIS AGREEMENT, is by and between Dover Motorsports, Inc. (the “Company”) and Henry B. Tippie (the “Director”) and is effective as of this 16th day of June 2004 (the “Effective Date”).

W I T N E S S E T H:

WHEREAS, the Director is currently Chairman of the Board of the Company; and

WHEREAS, the Director has, in the course of his tenure as a Director, developed relationships with employees and customers of the Company, and learned valuable and sensitive information concerning the Company’s operations, policies and procedures; and

WHEREAS, the Director has, in the course of his tenure as a Director, been exposed to valuable and sensitive Company reports, files, memoranda, records, software, and other property; and

WHEREAS, the Company has determined that it is in the best interests of the Company to protect its interests through the use of Employment and Non-Compete Agreements; and

WHEREAS, the Company has determined that it is in the best interests of the Company and its shareholders for the Company to agree to provide benefits under the circumstances described below to the Director and other executives and directors who agree to such an agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

Section 1

Definitions

“Change in Control Fee” shall mean $750,000.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

Section 2

Term of Agreement

This Agreement shall be effective as of the Effective Date but shall automatically terminate at such time as Director no longer serves as a director of the Company.

Section 3

Benefits

On the date of a Change in Control, the Company shall pay to the Director in cash the Change in Control Fee. Such amount shall be deemed earned on the date of the Change in Control and not forfeitable.

If all, or any portion, of the payment provided under this Agreement, if any, either alone or together with other payments and benefits which the Director receives or is entitled to receive from the Company, would constitute an excess “parachute payment” within the meaning of Section 280G of the Code (whether or not under an existing plan, arrangement, or other agreement) (each such parachute payment, a “Parachute Payment”), and would result in the imposition on the Director of an excise tax under Section 4999 of the Code, then, in addition to any other benefits to which the Director is entitled under this Agreement or otherwise, the Director shall be paid an amount in cash equal to the sum of the excise taxes payable by the Director by reason of receiving Parachute Payments plus the amount necessary to place the Director in the same after-tax position (taking into account any and all applicable federal, state and local excise, income or other taxes at the highest possible applicable rates on such Parachute Payments (including, without limitation, any payments under this Section) as if no excise taxes had been imposed with respect to Parachute Payments (the “Parachute Gross-Up”). Any Parachute Gross-Up otherwise required by this Section shall not be made later than the time of the corresponding payment or benefit hereunder giving rise to the underlying Section 4999 excise tax, even if the payment of the excise tax is not required under the Code until a later time.

Except as may otherwise be agreed to by the Company and the Director, any gross up payable under this Section shall be as conclusively determined by the KPMG LLP, or such other firm as mutually agreed to by the Company and the Director (“Independent Tax Counsel”), whose determination or determinations shall be final and binding on all parties. The Director shall agree to utilize such determination or determinations, as applicable, in filing all of the Director’s tax returns with respect to the excise tax imposed by Section 4999 of the Code, if any. If such Independent Tax Counsel fails or refuses to make the required determinations for any reason, then such determinations shall be made by a comparable firm or group of national reputation to which the parties reasonably mutually agreed. All fees and expenses of the Independent Tax Counsel or its replacement shall be paid by the Company.

As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Independent Tax Counsel hereunder, it is possible that Parachute Gross-Up payments, if any, which will not have been made by the Company, should have been made, together with any interest, penalties or taxes of any kind thereon, consistent with the calculations required to be made hereunder (an “Underpayment”). The Company shall pay all such Underpayments to or for the benefit of the Director. The Director shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment within ten (10) business days after the Director is informed in writing of such claim. The Company shall notify the Director within ten (10) business days of receipt of the Director notice that the Company (x) will pay the Underpayment and do so on or before the date due, or (y) that it desires to contest such claim. The Director will cooperate with the Company in any such contest; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Director harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Director shall be entitled, at Director’s expense, to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

References herein to Code sections shall apply to comparable Code sections in the event of any amendment to the Code.

Section 4

Litigation Expenses and Arbitration

In addition to the Company’s other obligations under this Agreement, the Company shall pay all legal fees and expenses incurred in a legal proceeding (including arbitration) by the Director in seeking to obtain or enforce any right or benefit provided by this Agreement (including, without limitation, any rights to a tax gross-up). Such payments are to be made within five days after the Director’s request for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require; provided, however, that if the Director institutes a proceeding and the judge or other decision-maker presiding over the

proceeding affirmatively finds that the Director has failed to prevail substantially, he shall pay his own costs and expenses (and, if applicable, return any amounts theretofore paid on his behalf under this Section).

All disputes with respect to the subject matter of this Agreement and the enforcement of rights hereunder shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association (the “AAA”). Each party hereto shall designate one arbitrator (who need not be impartial) within fifteen (15) days after notice of the dispute. The two arbitrators so designated shall endeavor to designate promptly a third, neutral arbitrator. If the two arbitrators have not designated the third arbitrator by the fifteenth (15 ^th ) day following the designation of the second arbitrator, or if a second arbitrator has not been designated by the (15 ^th ) day following the designation of the first, either Party may request the AAA to designate the remaining arbitrator(s). The third arbitrator shall take an oath of neutrality. The arbitrators shall not be bound by judicial formalities and may abstain from following the strict rules of evidence and shall interpret this Agreement as an honorable engagement and not merely as a legal obligation. The arbitrators shall have the power to render equitable relief as may be available in accordance with applicable law. Unless otherwise agreed by the parties, any such arbitration shall take place in such City within the United States as Director may designate, and shall be conducted in accordance with the Rules of the AAA. The determination reached in such arbitration shall be final and binding on both parties without any right of appeal or further dispute. The arbitrators’ award may be confirmed in, and judgment upon the award entered by, any federal or state court having jurisdiction over the parties.

Section 5

Restrictive Covenants

(a) For a period of one year following the Change in Control, whether or not Director continues his engagement with the Company, Director agrees not to, directly or indirectly, individually or on behalf of persons not now parties to this Agreement, or as a director, officer, principal, agent, executive, or in any other capacity or relationship, engage in the motorsports business (except as a passive investor holding not more than 3% of the equity of such business), or aid or endeavor to assist any business or legal entity, that is in the motorsports business and that competes with the Company anywhere in the Territory. The Territory shall consist of the entire State of Delaware and a 100-mile radius around the Company’s facilities in Dover, Delaware, Nashville, Tennessee, Madison, Illinois, Memphis, Tennessee, Long Beach, California, and any other facilities which may be acquired or developed by the Company prior to the Change of Control. The Company and Director acknowledge the reasonableness of this covenant not to compete and the reasonableness of the geographic area and duration of time which are a part of said covenant.

(b) Unless waived in writing by the Company, Director further agrees that he will not, directly or indirectly, during the Extension Period, solicit the trade or patronage of any of the customers of the Company, regardless of the location of such customers of the Company with respect to any services, products, or other matters in which the Company is active.

(c) Unless waived in writing by the Company, Director further agrees that he will not, directly or indirectly, during the Extension Period, solicit or attempt to entice away from the Company any director, agent or employee of the Company.

(d) Director acknowledges that the Company has no adequate remedy at law and would be irreparably harmed if Director breaches or threatens to breach any of the provisions of this Section and, therefore, agrees that the Company shall be entitled to injunctive relief to prevent any such breach or threatened breach thereof and to specific performance of the terms of this Section. Director further agrees that Director shall not, in any equity proceeding relating to the enforcement of this Section, raise the defense that the Company has an adequate remedy at law. Nothing in this Agreement shall be construed as prohibiting the Company from pursuing any other remedies at law or in equity that it may have under and in respect of this Agreement or any other agreement.

Section 6

Severability

Section 7

Amendment, Termination, or Modification

Section 8

Tax Withholding

The Company may withhold from any payments made under this Agreement all federal, state or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

Section 9

Entire Understanding

This Agreement contains the entire understanding between the Company and the Director with respect to the subject matter hereof and supersedes any prior agreement between the Company and the Director regarding non-compete provisions, except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to the Director of any kind elsewhere provided and not expressly dealt with in this Agreement.

Section 10

Binding Agreement

This Agreement shall be binding upon, and shall inure to the benefit of, the Director and the Company and their respective permitted successors and assigns.

Section 11

Director Status

Nothing herein contained shall be deemed to create an agreement between the Company and the Director providing for the Director’s tenure with the Company to continue for any fixed period of time prior to a Change in Control. There are no other agreements or understandings between the Company and the Director which guarantee his continued tenure with the Company or guarantee any level of compensation, including incentive or bonus payments, to the Director.

Section 12

No Attachment

Section 13

Notices

(a) to the Company, at its Dover, Delaware address

(b) to the Director, at the address maintained by the Company for the Director;

or to such address as either party shall have previously specified in writing to the other.

Section 14

Revocation and Director Acknowledgments

The Director acknowledges that he has read and understands the provisions of this Agreement. The Director further acknowledges that he has been given an opportunity for his legal counsel to review this Agreement and that the provisions of this Agreement are reasonable and that he has received a copy of this Agreement.

Section 15

Headings of No Effect

Section 16

Applicable Law

This Agreement and its validity, interpretation, performance, and enforcement shall be governed by the laws of the State of Delaware.

Section 17

Counterparts

This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.

IN WITNESS WHEREOF, the Company through its officer duly authorized, and the Director both intending to be legally bound have duly executed and delivered this Agreement, to be effective as of the Effective Date.

Dover Motorsports, Inc.

/S/ Klaus M. Belohoubek

Its

DIRECTOR

/S/ Henry B. Tippie

Exhibit 10.7

EMPLOYMENT AND NON-COMPETE AGREEMENT

DOVER MOTORSPORTS, INC.

AND

THOMAS G. WINTERMANTEL

THIS AGREEMENT, is by and between Dover Motorsports, Inc. (the “Company”) and Thomas G. Wintermantel (the “Executive”) and is effective as of this 16th day of June, 2004 (the “Effective Date”).

W I T N E S S E T H:

WHEREAS, the Executive is currently employed by the Company or an affiliate thereof in an executive position; and

WHEREAS, the Executive has, in the course of his employment, been exposed to valuable and sensitive Company reports, files, memoranda, records, software, and other property; and

WHEREAS, the Company has determined that it is in the best interests of the Company to protect its interests through the use of Employment and Non-Compete Agreements; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

Section 1

Definitions

“Board” shall mean the Board of Directors of the Company or the ultimate corporate parent entity which owns the Company if the Company is not public.

“Change in Control Fee” shall mean $150, 000.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Date of Termination” shall mean the date on which the Executive’s employment is terminated.

“Employment Period” shall mean the period of time during the Extension Period the Executive is an employee of the Company.

“Extension Period” shall mean the 24 month period following the Change in Control.

“Retirement Plan” shall mean the Company’s qualified defined benefit retirement plan(s) in which the Executive participates.

Section 2

Term of Agreement

Section 3

Benefits

(a) On the date of a Change in Control, the Company shall pay to the Executive in cash the Change in Control Fee.

(b) During the Extension Period, the Company shall pay to the Executive the Monthly Amount, payable on the first day of each month, prorated for partial months.

(ii) the Company shall pay to the Executive (or if the Executive dies, to the estate of the Executive) the Monthly Amount on the first day of each month during the remainder of the Extension Period;

(iv) on the Date of Termination the Company shall transfer title and ownership to the Executive of his laptop computer, if any, without any payment by the Executive to the Company.

(d) During the Extension Period (whether or not during the Employment Period) the Executive shall be entitled to the following additional benefits:

(ii) Executive shall receive continued payment of professional and organizational dues and fees as in effect prior the Change in Control.

(iv) References herein to Code sections shall apply to comparable Code sections in the event of any amendment to the Code.

Section 4

Employment

Following a Change in Control, the Executive will, except as provided below, continue as an employee during the Extension Period. During the Employment Period:

(i) The Executive shall perform services consistent with his past practices,

(ii) The Executive shall not be required to relocate or travel in excess of past practices,

(iii) The Executive shall enjoy the same office, administrative support and support services as he enjoyed prior to the Change in Control.

(v) The Executive’s expenses shall be reimbursed consistent with past practices, and

(vi) The Executive shall receive at least the same vacation as he currently enjoys, but not less than four weeks paid vacation.

No breach or alleged breach of this Section 4 shall constitute grounds for, or otherwise entitle, the Company to offset payments otherwise owing to the Executive under this Agreement.

Section 5

Source of Payments

Section 6

Litigation Expenses and Arbitration

Section 7

Restrictive Covenants

(b) Executive agrees not to, during the Extension Period, within the Territory, directly or indirectly, individually or on behalf of persons not now parties to this Agreement, or as a director, officer, principal, agent, executive, or in any other capacity or relationship, engage in the casino business (except as a passive investor holding not more than 3% of the equity of such business), or aid or endeavor to assist any business or legal entity, that is in the casino business and that competes with the Company anywhere in the Territory. The Territory shall consist of the entire State of Delaware and a 100-mile radius around the Company’s facilities in Dover, Delaware, Nashville, Tennessee, Madison, Illinois, Memphis, Tennessee, Long Beach, California, and any other facilities which may be acquired or developed by the Company prior to the Change of Control. The Company and Executive acknowledge the reasonableness of this covenant not to compete and the reasonableness of the geographic area and duration of time which are a part of said covenant.

Section 8

Severability

Section 9

Amendment, Termination, or Modification

Section 10

Consolidation, Merger, or Sale of Assets; Assignability

Section 11

Tax Withholding

The Company may withhold from any payments made under this Agreement all federal, state or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

Section 12

Entire Understanding

Section 13

Binding Agreement

This Agreement shall be binding upon, and shall inure to the benefit of, the Executive and the Company and their respective permitted successors and assigns.

Section 14

Employment Status

Section 15

No Attachment

Section 16

Notices

(a) to the Company, at its Dover, Delaware address

(b) to the Executive, at the address maintained by the Company for the Executive for payroll purposes;

or to such address as either party shall have previously specified in writing to the other.

Section 17

Revocation and Executive Acknowledgments

Section 18

Headings of No Effect

Section 19

Applicable Law

This Agreement and its validity, interpretation, performance, and enforcement shall be governed by the laws of the State of Delaware.

Section 20

Counterparts

This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which shall be deemed to constitute one and the same instrument.


		Dover Motorsports, Inc.

		/S/ Denis McGlynn
		Its

		EXECUTIVE

		/S/ Thomas G. Wintermantel

Exhibit 10.8

AMENDMENT NO. 2

This AMENDMENT NO. 2 (“AMENDMENT”) is made as of July 28, 2004 by and among DOVER MOTORSPORTS, INC., a Delaware corporation, DOVER INTERNATIONAL SPEEDWAY, INC., a Delaware corporation, GATEWAY INTERNATIONAL MOTORSPORTS CORPORATION, an Illinois corporation, GATEWAY INTERNATIONAL SERVICES CORPORATION, an Illinois corporation, MEMPHIS INTERNATIONAL MOTORSPORTS CORPORATION, a Tennessee corporation, M&N SERVICES CORP., a Tennessee corporation, NASHVILLE SPEEDWAY USA, INC., a Tennessee corporation and GRAND PRIX ASSOCIATION OF LONG BEACH, INC., a California corporation (collectively, “BORROWERS”); MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, a Maryland banking corporation as agent (“AGENT”); MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, a Maryland banking corporation in its capacity as issuer of letters of credit (“ISSUING BANK”); and WILMINGTON TRUST COMPANY, MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, DELAWARE STERLING BANK, a division of Bank of Lancaster County, NA, WILMINGTON SAVINGS FUND SOCIETY, FSB and PNC BANK, DELAWARE (collectively, “LENDERS”).

RECITALS

The BORROWERS, the AGENT, the ISSUING BANK and the LENDERS are parties to that certain Credit Agreement executed February 17, 2004 and effective as of February 19, 2004, as previously amended (“CREDIT AGREEMENT”), pursuant to which the LENDERS and the ISSUING BANK are providing to the BORROWERS certain credit facilities.

The parties hereto have agreed to amend a certain provision of the CREDIT AGREEMENT and are entering into this AMENDMENT in order to accomplish such amendment.

NOW, THEREFORE, in consideration of the premises, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

Section 1. Recitals . The parties acknowledge the accuracy of the above recitals and hereby incorporate the recitals into this AMENDMENT.

Section 2. Amendment to Credit Agreement . Section 6.5 of the CREDIT AGREEMENT is hereby amended by deleting its present language in its entirety and substituting in lieu thereof the following:

Section 6.5. Restricted Payments . None of the BORROWERS shall make any RESTRICTED PAYMENTS except: (a) any BORROWER which is a wholly-owned subsidiary of another BORROWER may pay dividends or other distributions to the BORROWER which is its parent; (b) so long as no DEFAULT or EVENT

OF DEFAULT exists or be caused thereby, DOVER MOTORSPORTS, INC. may declare and pay dividends on its CAPITAL STOCK in the ordinary course of business consistent with past practices; (c) so long as no DEFAULT or EVENT OF DEFAULT exists or is caused thereby, payments to retire or obtain the surrender of outstanding stock options in a BORROWER issued to employees in connection with employee incentive plans, provided that the aggregate amount of all such payments in any FISCAL YEAR does not exceed Five Hundred Thousand Dollars ($500,000.00); and (d) so long as no DEFAULT or EVENT OF DEFAULT exists or is caused thereby, payments to redeem or repurchase shares of stock in one or more BORROWERS provided that the aggregate number of shares repurchased or redeemed does not exceed two million (2,000,000) shares.

Section 3. Other Terms . Except as specifically modified herein, all other terms and provisions of the CREDIT AGREEMENT and all other documents evidencing, securing or otherwise documenting the terms and provisions of the credit facilities being provided by the LENDERS and the ISSUING BANK to the BORROWERS remain in full force and effect and are hereby ratified and confirmed.

Section 4. Choice of Law . The laws of the State of Maryland (excluding, however, conflict of law principals) shall govern and be applied to determine all issues relating to this AMENDMENT and the rights and obligations of the parties hereto, including the validity, construction, interpretation and enforceability of this AMENDMENT.

Section 5. Delivery by Telecopier . This AMENDMENT may be delivered by telecopier and a facsimile of any party’s signature hereto shall constitute an original signature for all purposes.

Section 6. Counterparts . This AMENDMENT may be executed in counterparts each of which shall be binding upon the signatories but all of which shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties have executed this AMENDMENT with the specific intention of creating a document under seal.


BORROWERS:

DOVER MOTORSPORTS, INC.,
A Delaware Corporation

By:	/s/ Thomas G. Wintermantel	(SEAL)
	Name: Thomas G. Wintermantel
	Title: Treasurer



DOVER INTERNATIONAL SPEEDWAY,
INC., A Delaware Corporation

By:	/s/ Thomas G. Wintermantel	(SEAL)
	Name: Thomas G. Wintermantel
	Title: Treasurer

GATEWAY INTERNATIONAL
MOTORSPORTS CORPORATION, An Illinois
Corporation

By:	/s/ Patrick J. Bagley	(SEAL)
	Name: Patrick J. Bagley
	Title: Sr. VP of Finance and CFO

GATEWAY INTERNATIONAL SERVICES
CORPORATION, An Illinois Corporation

By:	/s/ Tony Evans	(SEAL)
	Name: Tony Evans
	Title: Secretary

MEMPHIS INTERNATIONAL
MOTORSPORTS CORPORATION, A
Tennessee Corporation

By:	/s/ Patrick J. Bagley	(SEAL)
	Name: Patrick J. Bagley
	Title: Sr. VP of Finance and CFO


M&N SERVICES CORP.,
A Tennessee Corporation

By:	/s/ Tony Evans	(SEAL)
	Name: Tony Evans
	Title: Secretary

NASHVILLE SPEEDWAY USA, INC.,
A Tennessee Corporation

By:	/s/ Patrick J. Bagley	(SEAL)
	Name: Patrick J. Bagley
	Title: Sr. VP of Finance and CFO

GRAND PRIX ASSOCIATION OF LONG
BEACH, INC., A California Corporation

By:	/s/ Patrick J. Bagley	(SEAL)
	Name: Patrick J. Bagley
	Title: Sr. VP of Finance and CFO

AGENT:

MERCANTILE-SAFE DEPOSIT AND TRUST
COMPANY, A Maryland Banking Corporation

By:	/s/ C. Douglas Sawyer, III	(SEAL)
	Name: C. Douglas Sawyer, III
	Title: Vice President


LENDERS:

WILMINGTON TRUST COMPANY

By:	/s/ Michael B. Gast	(SEAL)
	Name: Michael B. Gast
	Title: Vice President

MERCANTILE-SAFE DEPOSIT AND TRUST
COMPANY

By:	/s/ C. Douglas Sawyer, III	(SEAL)
	Name: C. Douglas Sawyer, III
	Title: Vice President

DELAWARE STERLING BANK, A Division of
Bank of Lancaster County, NA

By:	/s/ David Paul Kenney	(SEAL)
	Name: David Paul Kenney
	Title: Senior Vice President

WILMINGTON SAVINGS FUND SOCIETY, FSB

By:	/s/ M. Scott Baylis	(SEAL)
	Name: M. Scott Baylis
	Title: Vice President


PNC BANK, DELAWARE

By:	/s/ Warren C. Engle	(SEAL)
	Name: Warren C. Engle
	Title: Senior Vice President

ISSUING BANK:

MERCANTILE-SAFE DEPOSIT AND TRUST
COMPANY

By:	/s/ C. Douglas Sawyer, III	(SEAL)
	Name: C. Douglas Sawyer, III
	Title: Vice President

Exhibit 31.1

Certification

I, Denis McGlynn, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Dover Motorsports, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

[intentionally omitted]

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2004

/s/ Denis McGlynn

Denis McGlynn

President and Chief Executive

Officer and Director

Exhibit 31.2

Certification

I, Patrick J. Bagley, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Dover Motorsports, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

[intentionally omitted]

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2004

/s/ Patrick J. Bagley

Patrick J. Bagley

Senior Vice President-Finance

and Chief Financial Officer

Exhibit 32.1

Dover Motorsports, Inc.

Certification Pursuant to 18 U.S.C. Sec. 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Dover Motorsports, Inc., a Delaware corporation (the “Company”), on Form 10-Q for the period ended June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Denis McGlynn, President and Chief Executive Officer and Director of the Company, certify, pursuant to 18 U.S.C. sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 6, 2004

/s/ Denis McGlynn

Denis McGlynn

President and Chief Executive

Officer and Director

This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Exhibit 32.2

Dover Motorsports, Inc.

Certification Pursuant to 18 U.S.C. Sec. 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Dover Motorsports, Inc., a Delaware corporation (the “Company”), on Form 10-Q for the period ended June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Patrick J. Bagley, Senior Vice President-Finance and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 6, 2004

/s/ Patrick J. Bagley

Patrick J. Bagley

Senior Vice President-Finance

and Chief Financial Officer