-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KUnYy8nlW+Bww0+xmF+buiLcPintQCxGqZKmda3ZyDT9ItIu899Ouus/wMYCecBe X+ZSUGWz268CCWPPA07Gwg== 0000928385-00-001075.txt : 20000405 0000928385-00-001075.hdr.sgml : 20000405 ACCESSION NUMBER: 0000928385-00-001075 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20000404 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DIGITAL GENERATION SYSTEMS INC CENTRAL INDEX KEY: 0000934448 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING AGENCIES [7311] IRS NUMBER: 943140772 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-49603 FILM NUMBER: 593309 BUSINESS ADDRESS: STREET 1: 875 BATTERY ST STREET 2: STE 1850 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4155466600 MAIL ADDRESS: STREET 1: 875 BATTERY ST CITY: SAN FRANCISCO STATE: CA ZIP: 94111 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GINSBURG SCOTT K CENTRAL INDEX KEY: 0001013565 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 17340 CLUB HILL DR CITY: DALLAS STATE: TX ZIP: 75248 MAIL ADDRESS: STREET 1: 17340 CLUB HILL DR CITY: DALLAS STATE: TX ZIP: 75248 SC 13D/A 1 SCHEDULE 13D AMENDMENT #3 CUSIP No. 253921100 Page 1 of 9 Pages UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (AMENDMENT NO. 3) DIGITAL GENERATION SYSTEMS, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, no par value per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 253921100 --------- (CUSIP Number) Scott K. Ginsburg Digital Generation Systems, Inc. 875 Battery Street San Francisco, California 94111 (415) 276-6600 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) with a copy to: John D. Watson, Jr. Latham & Watkins 1001 Pennsylvania Avenue, N.W. Suite 1300 Washington, D.C. 20004 (202) 637-2200 April 4, 2000 ----------------- (Date of Event which Requires Filing of this Amendment) 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(e), 13d-1(f) or 13d-1(g), check the following box [ ]. CUSIP No. 253921100 Page 2 of 9 Pages - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Scott K. Ginsburg - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS* PF - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 1,326,418 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 2,920,134 1/ OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 1,326,418 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 2,920,134 1/ - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,246,552 1/2/ - ------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.5% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON* IN - ------------------------------------------------------------------------------ 1/ Consists of 2,920,134 shares held of record by Moon Doggie Family Partnership, a partnership of which Mr. Ginsburg is the sole general partner. Mr. Ginsburg, in such capacity, holds voting and dispositive power over these shares. CUSIP No. 253921100 Page 3 of 9 Pages - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Moon Doggie Family Partnership - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS AF - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF -0- SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 2,920,134 1/2/ OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING -0- PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 2,920,134 1/2/ - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,920,134 3/ - ------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.6% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON* PN - ------------------------------------------------------------------------------ 2/ Does not include an additional 3,008,527 shares of Common Stock which are subject to warrants issued to Moon Doggie Family Partnership. The warrants are not currently exercisable, because their exercisability is subject to certain conditions based on the trading prices of the underlying Common Stock. These conditions have not been satisfied to date. See Item 5. CUSIP No. 253921100 Page 4 of 9 Pages ITEM 1. SECURITY AND ISSUER. This Amendment No. 3 to Schedule 13D relates to the Common Stock, no par value par share (the "Common Stock"), of Digital Generation Systems, Inc., a California corporation (the "Issuer"). The Issuer's principal executive offices are located at 875 Battery Street, San Francisco, California, 94111. ITEM 2. IDENTITY AND BACKGROUND. (a) This statement is filed by Scott K. Ginsburg and by Moon Doggie Family Partnership, L.P., (each a "Reporting Person" and together, the "Reporting Persons"). (b) The address of the Reporting Persons is 17340 Club Hill Drive, Dallas, Texas, 75248. (c) Present Principal Business or Employment: (1) Scott K. Ginsburg: (i) Investor; (ii) Chairman of the Board of Directors of the Issuer; (iii) Chairman of the Board of Directors of StarGuide Digital Networks, Inc. 300 East Second Street Suite 1510 Reno, Nevada 89501 (2) Moon Doggie Family Investment Partnership Partnership, L.P. ("Moon Doggie"):
(d) and (e) During the last five years neither Reporting Person has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) nor (ii) been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction, and is or was, as a result of such proceeding, 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. Ginsburg is a citizen of the United States. Moon Doggie is a Delaware partnership. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. [Not appliable] ITEM 4. PURPOSE OF TRANSACTION Mr. Ginsburg initially acquired shares of Common Stock of the Issuer as a result of his belief that the Common Stock represented an attractive investment. Mr. Ginsburg subsequently concluded that the Issuer could benefit from his radio broadcasting management background and experience and his strategic planning skills. As a result, Mr. Ginsburg entered into negotiations with the Issuer regarding expanding the role to be played by Mr. Ginsburg in the Issuer and its business. Pursuant to these negotiations, Mr. Ginsburg caused Moon Doggie to CUSIP No. 253921100 Page 5 of 9 Pages purchase the Common Stock of the Issuer that it presently owns with the intent that Mr. Ginsburg, directly and through Moon Doggie, would effect the control and management of the Issuer. Substantially contemporaneously with such purchase, Mr. Ginsburg was named Chairman and CEO of the Issuer. Mr. Ginsburg believes that his holding or controlling a significant interest in the Issuer assists in aligning the interests of management and shareholders. While he no longer serves as CEO, in his role as Chairman, Mr. Ginsburg remains responsible for the strategic direction of the Issuer, the development and implementation of its consolidation strategy and developing and maintaining financial community relationships. In a separate transaction, Mr. Ginsburg also acquired voting control of StarGuide Digital Networks, Inc. ("StarGuide"), a privately held company that, through an affiliated partnership, is engaged in businesses that may be complementary to business conducted or proposed to be conducted by the Issuer. On April 4, 2000, with Mr. Ginsburg's approval, StarGuide submitted a written, non-binding indication of interest regarding a possible combination of StarGuide and the Issuer in a tax-free, stock-for-stock reorganization. See Exhibit 11. The indication of interest was submitted in response to a solicitation by the financial advisor to a special committee of the Issuer's board of directors. The indication of interest proposes that representatives of the Issuer and StarGuide promptly commence discussions regarding the structure and terms of such a combination. The Reporting Persons review their investment on an ongoing basis. Such continuing review may result in the Reporting Persons acquiring additional shares of Common Stock of the Issuer, or selling all or a portion of their shares of Common Stock, in the open market or in privately negotiated transactions with the Issuer or third parties or maintaining their holdings at current levels. Such review also may result in the Reporting Persons formulating plans or making proposals regarding actions set forth in Item 4 of Schedule 13D (which are listed in clauses (i) through (x) below). Any action taken by the Reporting Persons will be dependent upon a review of numerous factors, including, among other things, the availability of shares of the Common Stock for purchase and the price levels of such shares; general market and economic conditions; ongoing evaluation of the Issuer's business operations and investment opportunities; the actions of others in management and the Board of Directors of the Issuer; and other future developments. Such transactions or actions, if any, would be made at such times and in such manner as the Reporting Persons, in their discretion, deem advisable. Other than described above, neither Mr. Ginsburg nor Moon Doggie has any present plans or proposals which relate to or would result in: (i) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; (ii) an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the Issuer; (iii) a sale or transfer of a material amount of assets of the Issuer; (iv) any change in the present Board of Directors or management of the Issuer, including any plans or proposals to change the number or terms of Directors or to fill any existing vacancies on the Board; (v) any material change in the present capitalization or dividend policy of the Issuer; (vi) any other material change in the Issuer's business or corporate structure; (vii) changes in the Issuer's certificate of incorporation or by-laws or other actions which may impede the acquisition of control of the Issuer by any persons; (viii) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (ix) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (x) any action similar to those enumerated above. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) Scott K. Ginsburg: 4,246,552 shares of Common Stock representing approximately 15.5% of the outstanding Common Stock. See Item 6. It also does not include 3,008,527 shares of Common Stock which are subject to warrants issued to Moon Doggie, which warrants are not currently exercisable, because their exercisability is subject to certain conditions based on the trading prices of the underlying Common Stock. These conditions have not been satisfied to date. This amount does include 2,920,134 shares of Common Stock held of record by Moon Doggie, of which Mr. Ginsburg is the sole general partner. Mr. Ginsburg, in his capacity as sole general partner, holds voting and dispositive power over these shares. By virtue of Mr. Ginsburg's control of Moon Doggie, Mr. Ginsburg may be deemed to have beneficial ownership of the shares held of record by Moon Doggie. By agreement of all of the investors, the warrants to purchase 120,867 shares of Common Stock of the Issuer, which were issued to Mr. Ginsburg on December 17, 1999, were rescinded and are not outstanding. Moon Doggie: 2,920,134 shares of Common Stock of the Issuer representing approximately 10.6% of the outstanding Common Stock. This amount does not include 3,008,527 shares of Common Stock which are subject to warrants issued to Moon Doggie, which warrants are not currently exercisable, because their exercisability CUSIP No. 253921100 Page 6 of 9 Pages is subject to certain conditions based on the trading prices of the underlying Common Stock. These conditions have not been satisfied to date. See Item 6. (b) Scott K. Ginsburg has sole voting and dispositive power over 1,326,418 shares of Common Stock, representing approximately 4.8% of the outstanding Common Stock. Mr. Ginsburg, as sole general partner of Moon Doggie, has voting and dispositive power over 2,920,134 shares of Common Stock, representing approximately 10.6% of the outstanding Common Stock. Mr. Ginsburg may be deemed to have beneficial ownership of the shares held of record by Moon Doggie. See response to Item 5(a) above for additional information. Moon Doggie has voting and dispositive power over 2,920,134 shares of Common Stock, representing approximately 10.6% of the outstanding Common Stock. Because Mr. Ginsburg is the sole general partner of Moon Doggie and, as such, controls Moon Doggie, Moon Doggie may be deemed to share such voting and dispositive power over these shares of Common Stock with Mr. Ginsburg. See response to Item 5(a) for additional information. (c) On December 17, 1999, Mr. Ginsburg purchased 241,733 shares of Common Stock of the Issuer for an aggregate purchase price of approximately $1,250,000, or approximately $5.171 per share, pursuant to the Common Stock Purchase Agreement. (d) No person other than Mr. Ginsburg or Moon Doggie has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock of the Issuer owned by Mr. Ginsburg or Moon Doggie. (e) [Not applicable.] ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS, OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. (a) On August 12, 1998, the Issuer and Mr. Ginsburg entered into the First Common Stock Subscription Agreement for the purchase of 714,285 shares of Common Stock at a purchase price of $2.80 per share. In connection with such purchase, the Issuer granted Mr. Ginsburg certain registration rights with respect to the purchased shares. The foregoing summary of such agreement is qualified in its entirety by reference to Exhibit 1 which is hereby incorporated by reference. (b) On September 25, 1998, the Issuer and Mr. Ginsburg entered into the Second Common Stock Subscription Agreement for the purchase of shares of Common Stock with an aggregate purchase price not to exceed $8 million, nor to be less than $6 million. This agreement was amended by that certain letter agreement dated December 9, 1998 by and between the Issuer and Moon Doggie. In connection with such purchase, the Issuer has granted to Moon Doggie certain demand registration rights which may not be exercised for a period of sixty days following Moon Doggie's purchase of such shares. The foregoing summary of such agreement is qualified in its entirety by reference to Exhibit 2 and Exhibit 3, each of which is hereby incorporated by reference. (c) In connection with the purchase of shares of Common Stock by Moon Doggie pursuant to the Second Common Stock Subscription Agreement, the Issuer and Moon Doggie entered into that certain Warrant Purchase Agreement dated December 9, 1998, pursuant to which the Issuer has issued to Moon Doggie (i) a warrant to purchase up to 1,460,067 shares of Common Stock at a purchase price of $3.25 per share (subject to certain adjustments) (the "First Warrant") and (ii) a warrant to purchase up to 1,548,460 shares of Common Stock at a purchase price of $3.25 per share (subject to certain adjustments) (the "Second Warrant). The First Warrant is void after December 9, 2001 and is currently exercisable with respect to 50% of the shares, in whole or in part with respect to such shares, during the term commencing on the date that the closing price of the Common Stock of the Issuer on the Nasdaq National Market has exceed $10.00 per share for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending at 5:00 p.m. on December 9, 2001. The remaining shares shall be exercisable, in whole or in part, during the term commencing on the date that the closing price of the Common Stock of the Issuer on the Nasdaq national Market has exceeded $15.00 per share for at least twenty (20) of the preceding CUSIP No. 253921100 Page 7 of Pages --- thirty (30) consecutive trading days and ending at 5:00 p.m. on December 9, 2001. The Second Warrant is void after December 9, 2003 and is currently exercisable only with respect to that portion of the shares that have vested. Shares shall vest in equal monthly installments upon Mr. Ginsburg's completion of each of the twenty-four (24) months of continuous service measured from and after the date of issuance of the Second Warrant. The Second Warrant shall be exercisable for up to 50% of the vested shares, in whole or in part with respect to such vested shares, during the term commencing on the date that the closing price of the Common Stock of the Issuer on the Nasdaq National Market has exceeded $10.00 per share for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending at 5:00 p.m. on December 9, 2003. The remaining vested shares shall become exercisable in whole or in part, during the term commencing on the date that the closing price of the Common Stock of the Issuer on the Nasdaq National Market has exceeded $15.00 per share for at least twenty (20) of the preceding thirty (30) consecutive trading days and ending at 5:00 p.m. on December 9, 2003. The foregoing summary of such agreements is qualified in its entirety by such references to Exhibit 4, Exhibit 5 and Exhibit 6, each of which is hereby incorporated by reference. (d) On December 17, 1999, the Issuer, Mr. Ginsburg, and certain other investors entered into the Common Stock Purchase Agreement, pursuant to which Mr. Ginsburg agreed to purchase 241,733 shares of Common Stock at a purchase price of approximately $5.171 per share. The foregoing summary of such agreement is qualified in its entirety by reference to Exhibit 9, which is hereby incorporated by reference. By agreement of all of the investors, the warrants to purchase 120,867 shares of Common Stock of the Issuer, which were issued to Mr. Ginsburg on December 17, 1999, were rescinded and are not outstanding. (e) On December 17, 1999, the Issuer, Mr. Ginsburg, and certain other investors entered into a Registration Rights Agreement, granting Mr. Ginsburg certain registration rights with respect to the shares purchased by Mr. Ginsburg pursuant to the Common Stock Purchase Agreement. The foregoing summary of such agreement is qualified in its entirety by reference to Exhibit 10, which is hereby incorporated by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 11 Letter from StarGuide Digital Networks, Inc. to Digital Generation Systems, Inc. dated April 4, 2000 regarding a non-binding indication of interest in a possible combination of StarGuide and the Issuer. CUSIP No. 253921100 Page 8 of 9 Pages SIGNATURE After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Scott K. Ginsburg /s/ Scott K. Ginsburg ---------------------- Dated: April 4, 2000 CUSIP No. 253921100 Page 9 of 9 Pages SIGNATURE After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Moon Doggie Family Partnership By: /s/ Scott K. Ginsburg -------------------------- Name: Scott K. Ginsburg Title: General Partner Dated: April 4, 2000 EX-11 2 STARGUIDE LETTER EXHIBIT 11 [LETTERHEAD OF STARGUIDE DIGITAL NETWORKS, INC.] April 4, 2000 Daniel J. Goggins Managing Director Chase, Hambrecht & Quist One Bush Street San Francisco, CA 94104 Dear Mr. Goggins: We are pleased to submit this non-binding indication of interest to combine StarGuide Digital Networks, Inc. ("StarGuide"), a private company controlled by Scott K. Ginsburg, with Digital Generation Systems, Inc. ("DG") in a tax-free stock-for-stock reorganization. We propose that representatives of StarGuide and DG promptly commence discussions regarding the structure and specific terms of such a combination. Although this transaction would require the approval of both parties' shareholders and board of directors, we advise you that all voting shares of StarGuide are currently subject to a Voting Trust Agreement under which such shares are voted by Mr. Ginsburg. Mr. Ginsburg has approved the commencement of these discussions and will support such a transaction on mutually agreeable terms. Consummation of the transaction will be subject to the expiration of the appropriate waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. We, together with our legal counsel and financial advisors, are prepared to begin negotiating definitive documents immediately, and to complete our business due diligence promptly. This proposal will expire at the close of business on Friday, April 14, 2000. We ask that you respond to this proposal by contacting our legal counsel, Eric Bernthal (202-637-2236), Raymond Grochowski (202-637-2189), or Randall Bassett (212-891-8383) or Latham & Watkins. Very truly yours, StarGuide Digital Networks, Inc. By: /s/ Jeffrey A. Dankworth ----------------------------- Jeffrey A. Dankworth President -----END PRIVACY-ENHANCED MESSAGE-----