SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 13D
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Under the Securities Exchange Act of 1934
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(Amendment No. )*
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Digital Generation, Inc.
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(Name of Issuer)
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Common Stock, par value $0.001 per share
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(Title of Class of Securities)
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25400B108
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(CUSIP Number)
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Marc Weingarten and David E. Rosewater
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
(212) 756-2000
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(Name, Address and Telephone Number of Person
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Authorized to Receive Notices and Communications)
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January 9, 2013
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(Date of Event Which Requires Filing of This Statement)
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CUSIP No. 25400B108
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SCHEDULE 13D
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Page 2 of 19 Pages
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1
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NAME OF REPORTING PERSON
Clinton Spotlight Master Fund, L.P.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ¨
(b) x
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
WC
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:
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7
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SOLE VOTING POWER
0
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8
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SHARED VOTING POWER
786,023 shares of Common Stock
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9
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SOLE DISPOSITIVE POWER
0
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10
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SHARED DISPOSITIVE POWER
786,023 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
786,023 shares of Common Stock
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.8%
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14
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TYPE OF REPORTING PERSON
CO
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CUSIP No. 25400B108
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SCHEDULE 13D
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Page 3 of 19 Pages
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1
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NAME OF REPORTING PERSON
Clinton Magnolia Master Fund, Ltd.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ¨
(b) x
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
WC
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:
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7
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SOLE VOTING POWER
0
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8
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SHARED VOTING POWER
747,215 shares of Common Stock
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9
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SOLE DISPOSITIVE POWER
0
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10
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SHARED DISPOSITIVE POWER
747,215 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
747,215 shares of Common Stock
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.7%
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14
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TYPE OF REPORTING PERSON
CO
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CUSIP No. 25400B108
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SCHEDULE 13D
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Page 4 of 19 Pages
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1
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NAME OF REPORTING PERSON
Clinton Special Opportunities Master Fund, Ltd.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ¨
(b) x
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
WC
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:
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7
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SOLE VOTING POWER
0
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8
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SHARED VOTING POWER
14,000 shares of Common Stock
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9
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SOLE DISPOSITIVE POWER
0
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10
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SHARED DISPOSITIVE POWER
14,000 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
14,000 shares of Common Stock
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
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14
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TYPE OF REPORTING PERSON
CO
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CUSIP No. 25400B108
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SCHEDULE 13D
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Page 5 of 19 Pages
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1
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NAME OF REPORTING PERSON
Clinton Relational Opportunity Master Fund, L.P.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ¨
(b) x
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
WC
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:
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7
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SOLE VOTING POWER
0
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8
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SHARED VOTING POWER
84,142 shares of Common Stock
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9
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SOLE DISPOSITIVE POWER
0
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10
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SHARED DISPOSITIVE POWER
84,142 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
84,142 shares of Common Stock
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.3%
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14
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TYPE OF REPORTING PERSON
CO
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CUSIP No. 25400B108
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SCHEDULE 13D
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Page 6 of 19 Pages
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1
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NAME OF REPORTING PERSON
Clinton Group, Inc.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ¨
(b) x
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
AF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:
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7
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SOLE VOTING POWER
0
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8
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SHARED VOTING POWER
1,631,380 shares of Common Stock
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9
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SOLE DISPOSITIVE POWER
0
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10
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SHARED DISPOSITIVE POWER
1,631,380 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,631,380 shares of Common Stock
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9%
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14
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TYPE OF REPORTING PERSON
CO; IA
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CUSIP No. 25400B108
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SCHEDULE 13D
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Page 7 of 19 Pages
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1
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NAME OF REPORTING PERSON
George E. Hall
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) ¨
(b) x
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
AF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
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¨
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH:
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7
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SOLE VOTING POWER
0
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8
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SHARED VOTING POWER
1,631,380 shares of Common Stock
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9
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SOLE DISPOSITIVE POWER
0
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|||
10
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SHARED DISPOSITIVE POWER
1,631,380 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,631,380 shares of Common Stock
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9%
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14
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TYPE OF REPORTING PERSON
IN
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CUSIP No. 25400B108
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SCHEDULE 13D
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Page 8 of 19 Pages
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Item 1.
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SECURITY AND ISSUER
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This statement on Schedule 13D (this "Schedule 13D") relates to the common stock, par value $0.001 per share (the "Common Stock") of Digital Generation, Inc., a Delaware corporation (the "Issuer"). The address of the Issuer's principal executive office is 750 West John Carpenter Freeway, Suite 700, Irving, Texas 75039.
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Item 2.
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IDENTITY AND BACKGROUND
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(a) This Schedule 13D is filed by: (i) Clinton Spotlight Master Fund, L.P., a Cayman Islands exempted limited partnership ("SPOT"); (ii) Clinton Magnolia Master Fund, Ltd., a Cayman Islands exempted company ("CMAG"); (iii) Clinton Special Opportunities Master Fund, Ltd., a Cayman Islands exempted company ("CSO"); (iv) Clinton Relational Opportunity Master Fund, L.P., a Cayman Islands exempted limited partnership ("CREL"); (v) Clinton Group, Inc., a Delaware corporation, which serves as the investment manager to SPOT, CMAG, CSO and CREL (“CGI”); and (vi) George E. Hall, a United States citizen, who serves as President of CGI ("Mr. Hall" and together with SPOT, CMAG, CSO, CREL and CGI, “Clinton”).
(b) The principal business address of CGI and Mr. Hall is 9 West 57th Street, 26th Floor, New York, New York 10019. The principal business address of SPOT, CMAG, CSO and CREL is c/o Fortis Fund Services (Cayman) Limited, P.O. Box 2003 GT, Grand Pavilion Commercial Centre, 802 West Bay Road, Grand Cayman, Cayman Islands.
(c) The principal business of CGI is to provide investment management services to private individuals and institutions. The principal business of SPOT, CMAG, CSO and CREL is to invest in securities. The principal business of Mr. Hall is to serve as President of CGI.
(d) None of the Reporting Persons or persons listed on Appendix A has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Persons or persons listed on Appendix A has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceedings was or is subject to a 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.
(f) Mr. Hall is a citizen of the United States.
The name, citizenship, present principal occupation or employment and business address of each director and executive officer or general partner, as applicable, of CGI, SPOT, CMAG, CSO and CREL is set forth in Schedule A attached hereto. To the best of the Reporting Persons' knowledge, except as set forth in this statement on Schedule 13D, none of such individuals owns any shares of Common Stock.
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Item 3.
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SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
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The Reporting Persons used approximately $16,814,000 (including brokerage commissions)
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CUSIP No. 25400B108
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SCHEDULE 13D
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Page 9 of 19 Pages
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in the aggregate to purchase the Common Stock reported in this Schedule 13D.
The source of the funds used to acquire the Common Stock reported herein is the working capital of SPOT, CMAG, CSO and CREL for the shares of Common Stock held by each of them, and margin borrowings described in the following sentence. Such shares of Common Stock are held by the Reporting Persons in commingled margin accounts, which may extend margin credit to the Reporting Persons from time to time, subject to applicable federal margin regulations, stock exchange rules and credit policies. In such instances, the positions held in the margin account are pledged as collateral security for the repayment of debit balances in the account. The margin accounts bear interest at a rate based upon the broker’s call rate from time to time in effect. Because other securities are held in the margin accounts, it is not possible to determine the amounts, if any, of margin used to purchase the Common Stock reported herein.
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Item 4.
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PURPOSE OF TRANSACTION
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The Reporting Persons acquired the Common Stock for investment in the ordinary course of business. The Reporting Persons believe that the Common Stock at current market prices are undervalued and represent an attractive investment opportunity. The Reporting Persons may make further purchases of shares of Common Stock from time to time and may dispose of or sell any or all of the shares of Common Stock held by them at any time.
On August 8, 2012, CMAG, in compliance with the bylaws of the Issuer, submitted its formal notice of intent (the "Notice") to nominate directors at the 2012 annual meeting of stockholders of the Issuer (including any adjournment or postponement thereof or any special meeting held in lieu thereof, the "Annual Meeting"). The Notice stated that, at the Annual Meeting, CMAG intended to nominate for election as directors of the Issuer, (i) Joseph A. DePerio, (ii) Peter Markham and (iii) Melissa B. Fisher (collectively, the "Nominees"), as well as present proposals to adopt certain resolutions at the Annual Meeting, including amendments to the Issuer's bylaws. The foregoing summary of the Notice is qualified in its entirety by reference to the full text of the Notice, a copy of which is attached as Exhibit 1 to this Schedule 13D and is incorporated by reference herein.
On November 1, 2012, the Reporting Persons issued a press release announcing that they intended to nominate the foregoing three individuals to the Board of Directors (“Board”) of the Issuer. The public announcement also indicated that the Reporting Persons understood that the Issuer was exploring a sale of the company and that the Reporting Persons “welcomed” such a sale at a fair price. In the event that a sale of the Issuer is not announced prior to the Annual Meeting, which is currently scheduled to be held on February 21, 2012, the Reporting Persons still intend to nominate and solicit proxies on behalf of Ms. Fisher and Messrs. DePerio and Markham. The foregoing summary of the press release is qualified in its entirety by reference to the full text of the press release, a copy of which is attached as Exhibit 2 to this Schedule 13D.
The Reporting Persons have, from time to time, engaged in discussions with the Board and its representatives regarding the Issuer's Board composition, management, strategic alternatives and direction and related matters. The Reporting Persons may continue to discuss such matters with the Board, or with management of the Issuer, as well as pursue other plans or proposals that relate to or would result in any of the matters set forth in subparagraphs (a)-(j) of Item 4 of Schedule 13D.
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CUSIP No. 25400B108
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SCHEDULE 13D
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Page 10 of 19 Pages
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Except as set forth herein, the Reporting Persons have no present plan or proposal that would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D. The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer's financial position and strategic direction, actions taken by the Board, price levels of the Common Stock, other investment opportunities available to the Reporting Persons, conditions in the securities market and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, purchasing additional shares of Common Stock or selling some or all of their shares of Common Stock, and, alone or with others, pursuing discussions with the management, the Board, other shareholders of the Issuer and third parties with regard to its investment in the Issuer, and/or otherwise changing their intention with respect to any and all matters referred to in Item 4 of Schedule 13D. | |||
Item 5.
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INTEREST IN SECURITIES OF THE ISSUER
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(a) The aggregate number and percentage of shares of Common Stock to which this Schedule 13D relates is 1,631,380 shares of Common Stock, constituting approximately 5.9% of the Issuer’s currently outstanding Common Stock. The aggregate number and percentage of shares of Common Stock reported herein are based upon the 27,634,075 shares of Common Stock outstanding as of November 6, 2012, as reported in the Issuer's Quarterly Report on Form 10-Q for the period ended September 30, 2012, filed with the Securities and Exchange Commission on November 9, 2012.
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(i)
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SPOT:
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(a)
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As of the date hereof, SPOT may be deemed the beneficial owner of 786,023 shares of Common Stock.
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Percentage: Approximately 2.8% as of the date hereof.
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(b)
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1. Sole power to vote or direct vote: 0
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2. Shared power to vote or direct vote: 786,023 shares of Common Stock
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3. Sole power to dispose or direct the disposition: 0
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4. Shared power to dispose or direct the disposition: 786,023 shares of Common Stock
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(ii)
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CMAG:
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(a)
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As of the date hereof, CMAG may be deemed the beneficial owner of 747,215 shares of Common Stock.
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Percentage: Approximately 2.7% as of the date hereof.
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(b)
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1. Sole power to vote or direct vote: 0
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2. Shared power to vote or direct vote: 747,215 shares of Common Stock
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3. Sole power to dispose or direct the disposition: 0
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4. Shared power to dispose or direct the disposition: 747,215 shares of Common Stock
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(iii)
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CSO:
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(a)
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As of the date hereof, CSO may be deemed the beneficial owner of 14,000 shares of Common Stock.
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CUSIP No. 25400B108
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SCHEDULE 13D
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Page 11 of 19 Pages
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Percentage: Approximately 0.1% as of the date hereof.
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(b)
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1. Sole power to vote or direct vote: 0
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2. Shared power to vote or direct vote: 14,000 shares of Common Stock
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3. Sole power to dispose or direct the disposition: 0
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4. Shared power to dispose or direct the disposition: 14,000 shares of Common Stock
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(iv)
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CREL:
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(a)
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As of the date hereof, CREL may be deemed the beneficial owner of 84,142 shares of Common Stock.
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Percentage: Approximately 0.3% as of the date hereof.
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(b)
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1. Sole power to vote or direct vote: 0
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2. Shared power to vote or direct vote: 84,142 shares of Common Stock
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3. Sole power to dispose or direct the disposition: 0
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4. Shared power to dispose or direct the disposition: 84,142 shares of Common Stock
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(v)
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CGI:
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(a)
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As of the date hereof, CGI may be deemed the beneficial owner of 1,631,380 shares of Common Stock.
|
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Percentage: Approximately 5.9% as of the date hereof.
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|||
(b)
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1. Sole power to vote or direct vote: 0
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2. Shared power to vote or direct vote: 1,631,380 shares of Common Stock
|
|||
3. Sole power to dispose or direct the disposition: 0
|
|||
4. Shared power to dispose or direct the disposition: 1,631,380 shares of Common Stock
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|||
(vi)
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Mr. Hall:
|
||
(a)
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As of the date hereof, Mr. Hall may be deemed the beneficial owner of 1,631,380 shares of Common Stock.
|
||
Percentage: Approximately 5.9% as of the date hereof.
|
|||
(b)
|
1. Sole power to vote or direct vote: 0
|
||
2. Shared power to vote or direct vote: 1,631,380 shares of Common Stock
|
|||
3. Sole power to dispose or direct the disposition: 0
|
|||
4. Shared power to dispose or direct the disposition: 1,631,380 shares of Common Stock
|
|||
(b) By virtue of investment management agreements with SPOT, CMAG, CSO and CREL, CGI has the power to vote or direct the voting, and to dispose or direct the disposition, of all of the 1,631,380 shares of Common Stock beneficially owned by SPOT, CMAG, CSO and CREL. By virtue of his direct and indirect control of CGI, Mr. Hall is deemed to have shared voting power and shared dispositive power with respect to all Common Stock as to which CGI has voting power or dispositive power.
|
|||
(c) Information concerning transactions in the Common Stock effected by the Reporting Persons during the past sixty days is set forth in Appendix B hereto and is incorporated herein by reference. Unless otherwise indicated, all of such transactions were effected in the open market.
|
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(d) No person (other than the Reporting Persons) is known to have the right to receive or
|
CUSIP No. 25400B108
|
SCHEDULE 13D
|
Page 12 of 19 Pages
|
the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock reported herein. | |||
(e) Not applicable.
|
Item 6.
|
CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
|
Each of the Nominees (other than Mr. DePerio) has entered into a nominee agreement with CGI (each, a “Nominee Agreement” and collectively, the "Nominee Agreements"), pursuant to which each has agreed to stand for election to the Board and to serve as a director if elected. Pursuant to the Nominee Agreements, CGI and its affiliates have agreed to pay the costs of soliciting proxies in support of the election of the Nominees to the Board, and indemnify such Nominees for claims arising from their role as a nominee for director. This summary of the Nominee Agreements is qualified in its entirety by reference to the full text of the Form of Nominee Agreement, a copy of which is attached as Annex G to the Notice (which is attached as Exhibit 1 to this Schedule 13D) and is incorporated by reference herein.
The Reporting Persons are parties to an agreement with respect to the joint filing of this Schedule 13D and any amendments thereto. A copy of such agreement is attached as Exhibit 3 to this Schedule 13D and is incorporated by reference herein.
Other than the Nominee Agreements and the joint filing agreement, there are no contracts, understandings or relationships among the Reporting Persons or between the Reporting Persons and any other person with respect to securities of the Issuer.
|
Item 7.
|
MATERIAL TO BE FILED AS EXHIBITS
|
|
Exhibit |
Description
|
|
1 | Stockholder Notice of Intent to Nominate Persons for Election as Directors and Present Proposals to Adopt Resolutions at the Annual Meeting, dated August 3, 2012. | |
2 | Press Release, dated November 1, 2012. | |
3 | Joint Filing Agreement, dated January 14, 2013. | |
CUSIP No. 25400B108
|
SCHEDULE 13D
|
Page 13 of 19 Pages
|
CLINTON SPOTLIGHT MASTER FUND, L.P.
|
|
By: Clinton Group, Inc., its investment manager
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/s/ Francis Ruchalski
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Name: Francis Ruchalski
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Title: Chief Financial Officer
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CLINTON MAGNOLIA MASTER FUND, LTD.
|
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By: Clinton Group, Inc., its investment manager
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/s/ Francis Ruchalski
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Name: Francis Ruchalski
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Title: Chief Financial Officer
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CLINTON SPECIAL OPPORTUNITIES MASTER FUND, LTD.
|
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By: Clinton Group, Inc., its investment manager
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/s/ Francis Ruchalski
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Name: Francis Ruchalski
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|
Title: Chief Financial Officer
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CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P.
By: Clinton Group, Inc., its investment manager
|
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/s/ Francis Ruchalski
|
|
Name: Francis Ruchalski
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|
Title: Chief Financial Officer
|
CUSIP No. 25400B108
|
SCHEDULE 13D
|
Page 14 of 19 Pages
|
CLINTON GROUP, INC.
|
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/s/ Francis Ruchalski
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Name: Francis Ruchalski
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|
Title: Chief Financial Officer
|
|
/s/ George E. Hall
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|
George E. Hall
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|
CUSIP No. 25400B108
|
SCHEDULE 13D
|
Page 15 of 19 Pages
|
Name
|
Principal Occupation
|
Business Address
|
Jane Fleming
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Client Accountant of Queensgate Bank & Trust Company Ltd.
|
c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands
|
Dennis Hunter
|
Director of Queensgate Bank & Trust Company Ltd.
|
c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands
|
Roger Hanson
|
Director of dms Management Ltd.
|
c/o dms Management Ltd., P.O. Box 31910 SMB, Ansbacher House, 20 Genesis Close, Grand Cayman, Cayman Islands
|
Name
|
Principal Occupation
|
Business Address
|
Jane Fleming
|
Client Accountant of Queensgate Bank & Trust Company Ltd.
|
c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands
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CUSIP No. 25400B108
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SCHEDULE 13D
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Page 16 of 19 Pages
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Dennis Hunter
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Director of Queensgate Bank & Trust Company Ltd.
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c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands
|
Roger Hanson
|
Director of dms Management Ltd.
|
c/o dms Management Ltd., P.O. Box 31910 SMB, Ansbacher House, 20 Genesis Close, Grand Cayman, Cayman Islands
|
CUSIP No. 25400B108
|
SCHEDULE 13D
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Page 17 of 19 Pages
|
Trade Date
|
Shares Purchased (Sold)
|
Price Per Share ($)
|
11/14/2012
|
12,500
|
10.02
|
11/16/2012
|
52,000
|
10
|
11/20/2012
|
7,500
|
9.6154
|
11/20/2012
|
5,000
|
9.7087
|
11/26/2012
|
2,500
|
9.9695
|
11/26/2012
|
5,000
|
9.871
|
11/26/2012
|
3,254
|
9.9822
|
11/29/2012
|
2,000
|
10.3799
|
11/29/2012
|
2,000
|
10.2408
|
12/4/2012
|
1,650
|
10.6887
|
12/4/2012
|
3,950
|
10.6973
|
12/4/2012
|
5,000
|
10.7476
|
12/10/2012
|
5,000
|
10.8979
|
12/10/2012
|
4,500
|
10.9196
|
12/10/2012
|
2,250
|
10.9188
|
12/11/2012
|
9,000
|
11.3031
|
12/12/2012
|
13,000
|
11.4347
|
12/20/2012
|
2,000
|
11.357
|
12/21/2012
|
(10,400)
|
10
|
12/21/2012
|
7,250
|
11.2753
|
12/26/2012
|
2,900
|
10.815
|
12/26/2012
|
4,600
|
10.7049
|
12/31/2012
|
7,500
|
10.7054
|
12/31/2012
|
7,700
|
10.9805
|
1/2/2013
|
2,500
|
11.2433
|
1/2/2013
|
150
|
11.28
|
1/2/2013
|
2,500
|
11.33
|
1/3/2013
|
2,000
|
11.2816
|
1/7/2013
|
10,000
|
11.3845
|
1/9/2013
|
2,400
|
10.7828
|
1/9/2013
|
49,350
|
10.5951
|
1/10/2013
|
25,000
|
10.3672
|
1/10/2013
|
27,500
|
10.486
|
1/10/2013
|
10,000
|
10.2256
|
1/11/2013
|
2,300
|
10.4963
|
CUSIP No. 25400B108
|
SCHEDULE 13D
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Page 18 of 19 Pages
|
1/11/2013
|
46,000
|
10.544
|
1/11/2013
|
2,300
|
10.66
|
Trade Date
|
Shares Purchased (Sold)
|
Price Per Share ($)
|
11/14/2012
|
12,500
|
10.02
|
11/16/2012
|
52,100
|
10
|
11/20/2012
|
7,500
|
9.6154
|
11/20/2012
|
5,000
|
9.7087
|
11/29/2012
|
2,000
|
10.3799
|
11/29/2012
|
2,000
|
10.2408
|
12/4/2012
|
1,650
|
10.6887
|
12/5/2012
|
346
|
10.81
|
12/5/2012
|
2,254
|
10.8754
|
12/5/2012
|
2,500
|
10.8496
|
12/7/2012
|
15,000
|
10.8119
|
12/7/2012
|
5,000
|
10.8662
|
12/10/2012
|
5,000
|
10.8979
|
12/10/2012
|
4,500
|
10.9196
|
12/10/2012
|
2,250
|
10.9188
|
12/11/2012
|
9,000
|
11.3031
|
12/12/2012
|
12,000
|
11.4347
|
12/20/2012
|
2,000
|
11.357
|
12/21/2012
|
(3,500)
|
10
|
12/21/2012
|
6,750
|
11.2753
|
12/26/2012
|
2,610
|
10.815
|
12/26/2012
|
4,140
|
10.7049
|
12/31/2012
|
6,750
|
10.7054
|
12/31/2012
|
6,930
|
10.9805
|
1/2/2013
|
2,500
|
11.2433
|
1/2/2013
|
120
|
11.28
|
1/2/2013
|
2,000
|
11.33
|
1/3/2013
|
2,000
|
11.2816
|
1/7/2013
|
10,000
|
11.3845
|
1/9/2013
|
2,250
|
10.7828
|
1/9/2013
|
47,250
|
10.5951
|
1/10/2013
|
22,500
|
10.3672
|
1/10/2013
|
9,000
|
10.2256
|
1/10/2013
|
24,750
|
10.486
|
1/11/2013
|
2,200
|
10.4963
|
1/11/2013
|
44,000
|
10.544
|
1/11/2013
|
2,200
|
10.66
|
Trade Date
|
Shares Purchased (Sold)
|
Price Per Share ($)
|
11/26/2012
|
2,500
|
9.9695
|
CUSIP No. 25400B108
|
SCHEDULE 13D
|
Page 19 of 19 Pages
|
11/26/2012
|
2,500
|
9.871
|
12/4/2012
|
3,950
|
10.6973
|
12/4/2012
|
5,000
|
10.7476
|
12/21/2012
|
(3,300)
|
10
|
1/11/2013
|
200
|
10.4963
|
1/11/2013
|
3,000
|
10.544
|
1/11/2013
|
150
|
10.66
|
Trade Date
|
Shares Purchased (Sold)
|
Price Per Share ($)
|
11/26/2012
|
17,500
|
9.871
|
11/26/2012
|
7,592
|
9.9822
|
11/29/2012
|
1,000
|
10.3799
|
11/29/2012
|
1,000
|
10.2408
|
12/4/2012
|
10,000
|
10.7
|
12/5/2012
|
345
|
10.81
|
12/5/2012
|
2,255
|
10.8754
|
12/5/2012
|
2,500
|
10.8496
|
12/10/2012
|
1,000
|
10.9196
|
12/10/2012
|
500
|
10.9188
|
12/11/2012
|
2,000
|
11.3031
|
12/20/2012
|
1,000
|
11.357
|
12/21/2012
|
1,000
|
11.2753
|
12/26/2012
|
290
|
10.815
|
12/26/2012
|
460
|
10.7049
|
12/31/2012
|
750
|
10.7054
|
12/31/2012
|
770
|
10.9805
|
1/2/2013
|
30
|
11.28
|
1/2/2013
|
500
|
11.33
|
1/3/2013
|
1,000
|
11.2816
|
1/4/2013
|
5,000
|
11.4478
|
1/4/2013
|
5,000
|
11.47
|
1/9/2013
|
350
|
10.7828
|
1/9/2013
|
8,400
|
10.595
|
1/10/2013
|
2,500
|
10.3672
|
1/10/2013
|
1,000
|
10.2256
|
1/10/2013
|
2,750
|
10.486
|
1/11/2013
|
300
|
10.4963
|
1/11/2013
|
7,000
|
10.544
|
1/11/2013
|
350
|
10.66
|
Re:
|
Stockholder Notice of Intent to Nominate Persons for Election as Directors and Present Proposals to Adopt Resolutions at the 2012 Annual Meeting of the Stockholders of Digital Generation, Inc. (the "Corporation").
|
(i)
|
each Participant is not, nor was within the past year, a party to any contract, arrangement or understanding with any person with respect to any securities of the Corporation, including, but not limited to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies;
|
(ii)
|
(a) each Participant has no position or office with the Corporation, and has no arrangement or understanding with any other person pursuant to which he was selected to be a nominee, if applicable, other than with respect to the Nominee Agreements described herein; (b) neither such Participant nor any of his "associates" (which term, for purposes of this Notice, shall have the meaning ascribed thereto in Rule 14a-1 of Regulation 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) has any arrangement or understanding with any person with respect to (1) any future employment by the Corporation or its affiliates or (2) any future transactions to which the Corporation or any of its affiliates will or may be a party; (c) there were no transactions since January 1, 2011 nor are there any currently proposed involving
|
such Participant or any of his associates in which the Corporation was or is to be a participant and in which such Participant, any of his associates, or any of their respective immediate family members or any persons sharing their respective households, have or will have a direct or indirect material interest that would require disclosure under Item 404(a) of Regulation S-K under the Securities Act of 1933, as amended ("Regulation S-K"); and (d) there are no material proceedings to which such Participant or any of his associates is a party adverse to the Corporation or any of its subsidiaries or has a material interest adverse to the Corporation or any of its subsidiaries;
|
(iii)
|
none of the entities or organizations referred to in Annex A with which any Participant has been involved during the past five years is a parent, subsidiary or other affiliate of the Corporation;
|
(iv)
|
except as set forth in Annex D or Annex E, as applicable, (a) such Participants and each of his associates is not a record owner or direct or indirect beneficial owner of any securities of the Corporation or any parent or subsidiary of the Corporation; and (b) such Participant has not purchased or sold any securities of the Corporation within the past two years;
|
(v)
|
neither any Participant nor any of his associates has received any fees earned or paid in cash, stock awards, option awards, non-equity incentive plan compensation, changes in pension value or nonqualified deferred compensation earnings or any other compensation from the Corporation during the Corporation's last completed fiscal year, or is subject to any other compensation arrangement described in Item 402 of Regulation S-K;
|
(vi)
|
(a) there are no relationships involving such Participant or any of his associates that would have required disclosure under Item 407(e)(4) of Regulation S-K had that Participant been a director of the Corporation; (b) there are no events required to be disclosed under Item 401(f) of Regulation S-K that have occurred during the past ten years and that are material to an evaluation of the ability or integrity of any Participant; (c) there are no "family relationships" (as defined in Item 401(d) of Regulation S-K) between any Participant and any director or executive officer of the Corporation or person known to the Record Holder to be nominated by the Corporation to become a director or executive officer; and (d) such Participant has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) in the past ten years;
|
(vii)
|
no Participant has (a) engaged in any derivative, swap or other transaction or series of transactions, directly or indirectly, the purpose or effect of which is to give such Participant economic risk similar to ownership of shares of any class or series of the Corporation, including due to the fact that the value of such derivative, swap or other transactions are determined by reference to the price, value or volatility of any shares of any class or series of the Corporation, or which derivative, swap or other transactions provide, directly or indirectly, the opportunity to profit from any increase in the price or value of shares of
|
(vii)
|
any class or series of the Corporation (“Synthetic Equity Interests”), without regard to whether (x) the derivative, swap or other transactions convey any voting rights in such shares to such Participant, (y) the derivative, swap or other transactions are required to be, or are capable of being, settled through delivery of such shares or (z) such Participant may have entered into other transactions that hedge or mitigate the economic effect of such derivative, swap or other transactions;
|
(viii)
|
no Participant has any proxy (other than a revocable proxy or consent given in response to a solicitation made pursuant to and in accordance with, Section 14(a) of the Exchange Act by way of a solicitation statement filed on Schedule 14A), agreement, arrangement, understanding or relationship pursuant to which such Participant has or shares a right to vote any shares of any class or series of the Corporation;
|
(ix)
|
other than certain of the options disclosed in this Notice, no Participant has engaged in, directly or indirectly, any agreement, arrangement, understanding or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of shares of any class or series of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such Participant with respect to the shares of any class or series of the Corporation, or which provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of the shares of any class or series of the Corporation (“Short Interests”);
|
(x)
|
no Participant beneficially owns any rights to dividends on the shares of any class or series of the Corporation that are separated or separable from the underlying shares of the Corporation;
|
(xi)
|
no Participant is entitled to any performance related fees (other than an asset based fee) based on any increase or decrease in the price or value of shares of any class or series of the Corporation, or any Synthetic Equity Interests or Short Interests, if any;
|
(xii)
|
no Participant holds any significant equity interests or any Synthetic Equity Interests or Short Interests in any principal competitor of the Corporation;
|
(xiii)
|
no Participant has any direct or indirect interest in any contract with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement);
|
(xiv)
|
no Participant is a party or material participant in any pending or threatened litigation involving the Corporation or any of its officers or directors, or any affiliate of the Corporation;
|
(xv)
|
no Participant has been party to any material transaction during the prior twelve months with the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation, on the other hand; and
|
(xvi)
|
no Nominee, and no affiliate or associate of any Nominee, has received any direct or indirect compensation from, or has had any other material monetary agreements, arrangements and understandings during the past three years or any other material relationships with, any other Participant, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such Participant were the “registrant” for purposes of such rule and the Nominee were a director or executive officer of such registrant. Joseph De Perio is affiliated with the Record Holder and the Beneficial Owners and accordingly is not independent of such entities.
|
Very truly yours,
|
||
CLINTON MAGNOLIA MASTER FUND, LTD.
|
||
|
By:
|
Clinton Group, Inc., its investment manager
|
By:
|
||
Name: Joseph A. De Perio
|
||
Title: Senior Portfolio Manager
|
CLINTON SPOTLIGHT MASTER FUND, L.P.
|
|
By: Clinton Group, Inc., its investment manager
|
|
/s/ Francis Ruchalski
|
|
Name: Francis Ruchalski
|
|
Title: Chief Financial Officer
|
|
CLINTON MAGNOLIA MASTER FUND, LTD.
|
|
By: Clinton Group, Inc., its investment manager
|
|
/s/ Francis Ruchalski
|
|
Name: Francis Ruchalski
|
|
Title: Chief Financial Officer
|
|
CLINTON SPECIAL OPPORTUNITIES MASTER FUND, LTD.
|
|
By: Clinton Group, Inc., its investment manager
|
|
/s/ Francis Ruchalski
|
|
Name: Francis Ruchalski
|
|
Title: Chief Financial Officer
|
|
CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P.
By: Clinton Group, Inc., its investment manager
|
|
/s/ Francis Ruchalski
|
|
Name: Francis Ruchalski
|
|
Title: Chief Financial Officer
|
|
CLINTON GROUP, INC.
|
|
/s/ Francis Ruchalski
|
|
Name: Francis Ruchalski
|
|
Title: Chief Financial Officer
|
|
/s/ George E. Hall
|
|
George E. Hall
|
|