--------------------------
OMB Number: 3235-0145
Expires: August 31, 1991
Estimated average burden
hours per response...14.90
--------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ________)*
GRAND PRIX ASSOCIATION OF LONG BEACH, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
- --------------------------------------------------------------------------------
(Title of Class of Securities)
3861761101
- --------------------------------------------------------------------------------
(CUSIP Number)
Klaus M. Belohoubek, Dover Downs Entertainment, Inc.,
2200 Concord Pike, Wilmington, DE 19803 - 302-426-2806
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
March 26, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. / /
Check the following box if a fee is being paid with the statement /X/. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
- ------------------------- --------------------------
CUSIP No. 3861761101 Page 2 of 7 Pages
- ------------------------- --------------------------
- -------------------------------------------------------------------------------
1 | NAME OF REPORTING PERSON
| S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
|
| DOVER DOWNS ENTERTAINMENT, INC.
| E.I.N.: 51-0357525
- -------------------------------------------------------------------------------
|
2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
| (b) |_|
| N/A
- --------------------------------------------------------------------------------
3 | SEC USE ONLY
|
- --------------------------------------------------------------------------------
4 | SOURCE OF FUNDS*
|
| WC
- --------------------------------------------------------------------------------
5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
| TO ITEMS 2(d) OR 2(e)
| |_|
| N/A
- --------------------------------------------------------------------------------
6 | CITIZENSHIP OR PLACE OF ORGANIZATION
|
| DELAWARE
- --------------------------------------------------------------------------------
| 7 | SOLE VOTING POWER
| |
| | 680,000
NUMBER OF SHARES |-----|--------------------------------------
BENEFICIALLY | 8 | SHARED VOTING POWER
OWNED BY EACH | |
REPORTING PERSON | |
WITH |-----|--------------------------------------
| 9 | SOLE DISPOSITIVE POWER
| |
| | 680,000
|-----|--------------------------------------
| 10 | SHARED DISPOSITIVE POWER
| |
| |
- --------------------------------------------------------------------------------
11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
| 2,631,025
- --------------------------------------------------------------------------------
12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
| SHARES*
| N/A |_|
- --------------------------------------------------------------------------------
13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
| 51.4%
|
- --------------------------------------------------------------------------------
14 | TYPE OF REPORTING PERSON*
| COMPANY
|
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
GRAND PRIX ASSOCIATION OF LONG BEACH, INC.
- ------------------------- --------------------------
CUSIP No. 3861761101 Page 3 of 7 Pages
- ------------------------- --------------------------
Item 1. Security and Issuer.
This statement relates to the no par value common stock (the
"Common Stock") of Grand Prix Association of Long Beach, Inc.
("Grand Prix"). The principal office of the Company is located
at 3000 Pacific Avenue, Long Beach, California 90806.
Item 2. Identity and Background.
(a) This statement is filed by Dover Downs Entertainment, Inc., a
Delaware corporation ("Dover"). Dover is engaged in the
entertainment business, including gaming and motorsports, and has
its principal offices at 1131 North DuPont Highway, Dover,
Delaware 19901.
(d) During the last five years, Dover was not convicted in a criminal
proceeding (nor was any director or officer).
(e) During the past five years, Dover was not a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction in which as a result of such proceeding, he was or
is subject to any judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws (nor was any director or
officer).
Item 3. Source and Amount of Funds or Other Consideration.
The 680,000 shares of Common Stock purchased on March 26, 1998 were
purchased for $10,540,000.00 cash out of available funds. The
remaining shares of Common Stock to be acquired in the Merger
described in Item 4 below are to be acquired with shares of common
stock of Dover.
Item 4. Purpose of Transaction
Dover Downs Entertainment, Inc. ("Dover"), FOG Acquisition Corporation,
a wholly-owned newly formed subsidiary of Dover ("Acquisition Sub") and
Grand Prix Association of Long Beach, Inc. ("Grand Prix") entered into
an Agreement and Plan of Merger dated March 26, 1998 (the "Agreement")
pursuant to which at the Effective Time under and as defined in the
Agreement, Grand Prix shall be merged with Acquisition Sub (the
"Merger"). As a result, Grand Prix shall become a wholly-owned
subsidiary of Dover.
The Merger contemplates that each shareholder of Grand Prix will
receive .63 shares of common stock, par value $.10 per share, of Dover
(the "Dover Common Stock") for each share of common stock, no par
value, of Grand Prix (the "Grand Prix Common Stock") owned by such
shareholder immediately prior to the Effective Time, subject to certain
adjustments if the fifteen consecutive business day average closing
sales price of Dover Common Stock prior to the Effective Time is
greater than $32.00 per share or less than $21.00 per share, provided
that the exchange ratio shall not be greater than .6963 nor less than
.5929.
<PAGE>
SCHEDULE 13D
GRAND PRIX ASSOCIATION OF LONG BEACH, INC.
- ------------------------- --------------------------
CUSIP No. 3861761101 Page 4 of 7 Pages
- ------------------------- --------------------------
Certain shareholders of Grand Prix, representing approximately 38
percent of the outstanding Grand Prix Common Stock on a fully diluted
basis, have entered into support agreements with Dover pursuant to
which they have granted to Dover a proxy to vote their shares in favor
of the Merger, in favor of the election of up to three nominees of
Dover to the Board of Directors of Grand Prix and against certain
transactions. In addition, such shareholders have granted an option to
Dover to purchase their shares upon termination of the Agreement under
certain circumstances specified in the support agreements. Certain
holders of the capital stock of Dover, representing more than a
majority of its voting power, have similarly granted Grand Prix a proxy
to vote their shares in favor of the Merger, in favor of the election
of Christopher R. Pook, the Chairman and Chief Executive Officer of
Grand Prix, as a director of Dover and against certain transactions.
The Merger has been approved by the Board of Directors of both Dover
and Grand Prix, and is expected to be consummated in June 1998. It is
subject to approval of the shareholders of both Dover and Grand Prix,
expiration of the Hart-Scott-Rodino waiting period and certain other
customary conditions.
Pursuant to the Agreement, Grand Prix makes certain customary
representations and warranties to Dover and Dover makes certain
customary representations and warranties to Grand Prix. The
representations and warranties will not survive consummation of the
Merger.
The Agreement provides that the obligations of Dover to close the
Merger are conditioned upon, among other things: (i) the accuracy of
the representations and warranties made by Grand Prix at the Effective
Time and compliance with covenants made by Grand Prix prior to the
Effective Time, subject to certain threshold levels with respect to
materiality; and (ii) the absence of any material adverse change in the
financial condition or operations of Grand Prix prior to the Effective
Time.
The Agreement provides that the obligations of Grand Prix to close the
Merger is conditioned upon, among other things: (i) the accuracy of the
representations and warranties made by Dover at the Effective Time and
compliance with covenants made by Dover prior to the Effective Time,
subject to certain threshold levels with respect to materiality; and
(ii) the absence of any material adverse change in the financial
condition or operations of Dover prior to the Effective Time.
The Agreement provides that Grand Prix shall take all corporate action
necessary to appoint three nominees of Dover to the Board of Directors
of Grand Prix and to nominate three nominees of Dover to the Board of
Directors of Grand Prix for the period commencing upon the execution of
the Agreement and terminating upon the earlier of one year after the
date of the Agreement or the date upon which Dover ceases to
beneficially own at least eighty percent of the shares of Common Stock
it acquired from Midwest Facility Investments, Inc. and Penske
Motorsports, Inc., as described below.
The Agreement provides that Dover will increase its Board of Directors
to ten (10) members and that Dover will use its best efforts to
nominate Christopher R. Pook for election as a Class I Director of
Dover for the remainder of a three year term, all subject to the
approval of Dover's stockholders. If Mr. Pook is employed at the end of
such three year term, Dover has agreed to use its best efforts to
nominate Mr. Pook for re-election as a director for an additional three
year term, subject to the approval of Dover's stockholders.
Each party will pay its own costs and expenses incurred relative to the
Agreement. The Agreement includes a termination fee of $3,000,000
payable to Dover upon the occurrence of certain events.
Prior to the Effective Time, Dover contemplates seeking shareholder
approval to amend its Certificate of Incorporation to increase the
number of shares of Common Stock authorized for issuance from
35,000,000 shares to 75,000,000 shares and the number of shares of
Class A Common Stock authorized for issuance from 30,000,000 shares to
55,000,000 shares. After consummation of the Merger, the authorized but
unissued shares of capital stock of Dover will be available for
issuance by the Company from time to time, as determined by the Board
of Directors, for any proper corporate purpose, which could include
raising capital, paying stock dividends, providing compensation or
benefits to employees or acquiring other companies or businesses.
Prior to execution of the Agreement, Dover entered into stock purchase
agreements with Penske Motorsports, Inc. and Midwest Facility
Investments, Inc. pursuant to which, on March 26, 1998, Dover acquired
680,000 shares of Grand Prix Common Stock at $15.50 per share (340,000
from Penske Motorsports, Inc. and 340,000 from Midwest Facility
Investments, Inc.). The 680,000 shares of Grand Prix Common Stock were
purchased for $10,540,000.00 out of available cash.
<PAGE>
SCHEDULE 13D
GRAND PRIX ASSOCIATION OF LONG BEACH, INC.
- ------------------------- --------------------------
CUSIP No. 3861761101 Page 5 of 7 Pages
- ------------------------- --------------------------
A Registration Rights Agreement dated March 26, 1998 (the "Registration
Agreement") has also been entered into between Dover and Grand Prix.
The Registration Agreement provides that Dover shall have certain
rights (the "Registration Rights") to cause the 680,000 shares of Grand
Prix Common Stock acquired pursuant to the above referenced stock
purchase agreements, or any additional shares of Grand Prix Common
Stock acquired by Dover, to be registered under the Securities Act of
1933, as amended (the "Securities Act"), for the three year period
after the date of such agreement. Not later than sixty days after
termination of the Agreement pursuant to certain specified provisions,
Dover has the right, subject to certain limitations, to cause Grand
Prix to file a shelf registration statement under the Securities Act
registering such securities for up to three (3) years. Grand Prix has
the right to prohibit sales pursuant to such shelf registration in
certain circumstances. Pursuant to the Registration Agreement, Dover
also has the right, subject to certain limitations, to cause
registrable securities to be included in any registration statement
under the Securities Act filed by Grand Prix, other than a Registration
Statement on Form S-4 or S-8.
The above provides a brief description of certain terms of the Merger
and the related transactions and is qualified in its entirety by
reference to the Agreement and Plan of Merger and other exhibits
attached to this Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) Dover owns 680,000 shares of Common Stock representing 14.6% of
the securities of that class issued and outstanding as of the
date of this report. Upon termination of the agreement under
certain circumstances specified in the Support Agreements, Dover
has the right to acquire an additional 1,951,025 shares of Common
Stock representing 38.1% of securities of that class on a fully
diluted basis assuming the exercise of all outstanding warrants
and vested stock options.
(b) Dover has sole voting power and sole power to dispose of 680,000
shares of
<PAGE>
SCHEDULE 13D
GRAND PRIX ASSOCIATION OF LONG BEACH, INC.
- ------------------------- --------------------------
CUSIP No. 3861761101 Page 6 of 7 Pages
- ------------------------- --------------------------
Common Stock. Pursuant to the Support Agreement, Dover has the
right to vote up to an additional 1,951,025 shares of Common
Stock in favor of the Merger, in favor of the election of up to
three nominees of Dover to the Board of Directors of Grand Prix
and against certain transactions.
(c) Trading activity within the past sixty days involves 680,000
shares of Common Stock purchased as follows:
Date of Transaction Number of Shares Price per Share
------------------- ---------------- ---------------
3/26/98 680,000 $15.50
(d) No person other than Dover has the right to receive dividends or
the proceeds from the sale of the securities listed under (b) of
this Item 5.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Please refer to Item 4.
Item 7. Material to be filed as Exhibits.
2.1 Agreement and Plan of Merger dated March 26, 1998 between Dover
Downs Entertainment, Inc., FOG Acquisition Corporation, a
wholly-owned subsidiary of Dover Downs Entertainment, Inc. and
Grand Prix Association of Long Beach, Inc., as filed with the
Company's Current Report on Form 8-K dated April 3, 1998, is
incorporated herein by reference.
2.2 Support Agreement dated March 26, 1998 between Grand Prix
Association of Long Beach, Inc. and two (2) stockholders of Dover
Downs Entertainment, Inc., as filed with the Company's Current
Report on Form 8-K dated April 3, 1998, is incorporated herein by
reference.
2.3 Support Agreement dated March 26, 1998 between Dover Downs
Entertainment, Inc. and numerous stockholders of Grand Prix
Association of Long Beach, Inc., as filed with the Company's
Current Report on Form 8-K dated April 3, 1998, is incorporated
herein by reference.
2.4 Registration Rights Agreement dated March 26, 1998 between Grand
Prix Association of Long Beach, Inc. and Dover Downs
Entertainment, Inc., as filed with the Company's Current Report on
Form 8-K dated April 3, 1998, is incorporated herein by reference.
2.5 Stock Purchase Agreement dated March 25, 1998, between Dover
Downs Entertainment, Inc. and Penske Motorsports, Inc., as filed
with the Company's Current Report on Form 8-K dated April 3, 1998,
is incorporated herein by reference.
2.6 Stock Purchase Agreement dated March 25, 1998, between Dover
Downs Entertainment, Inc. and Midwest Facility Investments, Inc.,
as filed with the Company's Current Report on Form 8-K dated April
3, 1998, is incorporated herein by reference.
99.1 Press Release dated March 27, 1998, as filed with the Company's
Current Report on Form 8-K dated April 3, 1998, is incorporated
herein by reference.
99.2 Press Release dated March 27, 1998, as filed with the Company's
Current Report on Form 8-K dated April 3, 1998, is incorporated
herein by reference.
<PAGE>
SCHEDULE 13D
GRAND PRIX ASSOCIATION OF LONG BEACH, INC.
- ------------------------- --------------------------
CUSIP No. 3861761101 Page 7 of 7 Pages
- ------------------------- --------------------------
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date:
---------------------- ---------------------------
Denis McGlynn
Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001)
