SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 13D/A
(Rule 13d-101)
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INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Under the Securities Exchange Act of 1934
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(Amendment No. 1)*
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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 16, 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/A
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Page 2 of 16 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
812,773 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
812,773 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
812,773 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)
2.9%
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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/A
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Page 3 of 16 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
773,265 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
773,265 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
773,265 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/A
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Page 4 of 16 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
15,400 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
15,400 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
15,400 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/A
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Page 5 of 16 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
86,942 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
86,942 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
86,942 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/A
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Page 6 of 16 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
1,688,380 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
1,688,380 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,688,380 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)
6.1%
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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/A
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Page 7 of 16 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
1,688,380 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
1,688,380 shares of Common Stock
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,688,380 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)
6.1%
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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/A
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Page 8 of 16 Pages
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This Amendment No. 1 ("Amendment No. 1") amends and supplements the statement on Schedule 13D filed with the Securities and Exchange Commission (the "SEC") on January 14, 2013 (the "Original Schedule 13D" and together with this Amendment No. 1, the "Schedule 13D") with respect to the common stock, par value $0.001 per share (the "Common Stock") of Digital Generation, Inc., a Delaware corporation (the "Issuer"). Capitalized terms used herein and not otherwise defined in this Amendment No. 1 have the meanings set forth in the Schedule 13D. This Amendment No. 1 amends Items 3, 4, 5, 6 and 7 as set forth below.
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Item 3.
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SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
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Item 3 of the Schedule 13D is hereby amended and restated in its entirety as follows:
The Reporting Persons used a total of approximately $17,426,000 (including brokerage commissions) in the aggregate to acquire the shares of Common Stock reported herein as beneficially owned.
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
Item 4 of the Schedule 13D is hereby amended and supplemented by the addition of the following:
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CUSIP No. 25400B108
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SCHEDULE 13D/A
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Page 9 of 16 Pages
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On January 16, 2013, Clinton entered into an agreement with the Issuer (the "Settlement Agreement") regarding the composition of the Issuer's board of directors (the "Board"). Under the terms of the Settlement Agreement, the Issuer shall (i) take all actions necessary to increase the size of the Board from seven to eight directors, (ii) include Peter Markham and Melissa Fisher (the "Clinton Suggested Nominees") in the Board's slate of nominees for election as directors of the Issuer at the Issuer's 2012 annual meeting of stockholders, scheduled to be held on February 21, 2013 (the "2012 Annual Meeting"), with such directors, if elected, to serve in the class of Board members whose terms expire at the Issuer's 2015 annual meeting of the stockholders, (iii) use its reasonable best efforts to cause the election of the Clinton Suggested Nominees to the Board at the 2012 Annual Meeting, and (iv) appoint the Clinton Suggested Nominees to serve, as qualified, to either the Audit Committee or Compensation and Nominating Committee, with the choice of such committee to be determined by the Board.
Under the terms of the Settlement Agreement, Clinton agreed to certain standstill provisions, such provisions to last until the earlier to occur of (i) the 61st day prior to the date set by the Board for the Issuer's 2013 annual meeting of stockholders, (the "2013 Annual Meeting"), (ii) 15 days prior to the last day upon which a notice to the Secretary of the Issuer of nominations of persons for election to the Board or the proposal of other business at the 2013 Annual Meeting would be considered timely under the Issuer's then-current bylaws, (iii) in the event of material breach by the Issuer of its obligations under this Agreement, 10 days after Clinton delivers notice of such breach unless such breach is cured during such 10-day period, or (iv) September 1, 2013 (such period, the "Support Period"). In addition, Clinton agreed that, during the Support Period, it would (i) cause all of the shares of Common Stock of which Clinton is the direct or beneficial owner to be present for quorum purposes and to be voted in favor of any and all directors nominated by the Board for election at any meeting so long as the Clinton Suggested Nominees are included in the directors nominated by the Board, (ii) cause such shares not to be voted for the removal of any director serving on the Board who has previously been nominated by the Board at the 2012 Annual Meeting or at any special meeting of the stockholders of the Issuer, and (iii) cause such shares to be voted against, or to abstain from voting on, any amendments to the Issuer's bylaws or Certificate of Incorporation that have not been recommended by the Board for adoption by the stockholders of the Issuer.
The foregoing summary is qualified in its entirety by reference to the full text of the Settlement Agreement, a copy of which is attached as Exhibit 4 to this Schedule 13D and is incorporated by reference herein.
On January 16, 2013, the Issuer issued a press release relating to the Settlement Agreement, a copy of which is attached as Exhibit B to the Settlement Agreement (attached as Exhibit 4 hereto) and incorporated by reference herein.
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CUSIP No. 25400B108
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SCHEDULE 13D/A
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Page 10 of 16 Pages
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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 1,688,380 shares of Common Stock, constituting approximately 6.1% 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 812,773 shares of Common Stock.
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Percentage: Approximately 2.9% 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: 812,773 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: 812,773 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 773,265 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: 773,265 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: 773,265 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 15,400 shares of Common Stock.
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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: 15,400 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: 15,400 shares of Common Stock
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CUSIP No. 25400B108
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SCHEDULE 13D/A
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Page 11 of 16 Pages
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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 86,942 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: 86,942 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: 86,942 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 1,688,380 shares of Common Stock.
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Percentage: Approximately 6.1% 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: 1,688,380 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: 1,688,380 shares of Common Stock
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(vi)
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Mr. Hall:
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(a)
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As of the date hereof, Mr. Hall may be deemed the beneficial owner of 1,688,380 shares of Common Stock.
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Percentage: Approximately 6.1% 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: 1,688,380 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: 1,688,380 shares of Common Stock
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(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 1,688,380 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.
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(c) Information concerning transactions in the Common Stock effected by the Reporting Persons since the filing of the Original Schedule 13D is set forth in Appendix A hereto and is incorporated herein by reference. Unless otherwise indicated, all of such transactions were effected in the open market.
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CUSIP No. 25400B108
|
SCHEDULE 13D/A
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Page 12 of 16 Pages
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Item 6.
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CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
Item 6 of this Schedule 13D is hereby amended and supplemented by the addition of the following:
On January 16, 2013, the Issuer and Clinton entered into the Settlement Agreement, the terms of which are described in Item 4 of this Schedule 13D.
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Item 7.
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MATERIAL TO BE FILED AS EXHIBITS
|
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Item 7 of the Schedule 13D is hereby amended and supplemented by the addition of the following:
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Exhibit
|
Description
|
4
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Agreement between Clinton Magnolia Master Fund, Ltd., Clinton Spotlight Master Fund, L.P., Clinton Group, Inc., Clinton Special Opportunities Master Fund Ltd., Clinton Relational Opportunity Master Fund, L.P. and Digital Generation, Inc., dated January 16, 2013.
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CUSIP No. 25400B108
|
SCHEDULE 13D/A
|
Page 13 of 16 Pages
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CLINTON SPOTLIGHT MASTER FUND, L.P.
|
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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 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
|
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Name: Francis Ruchalski
|
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Title: Chief Financial Officer
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CUSIP No. 25400B108
|
SCHEDULE 13D/A
|
Page 14 of 16 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
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CUSIP No. 25400B108
|
SCHEDULE 13D/A
|
Page 15 of 16 Pages
|
/s/ George E. Hall
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George E. Hall
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CUSIP No. 25400B108
|
SCHEDULE 13D/A
|
Page 16 of 16 Pages
|
Trade Date
|
Shares Purchased (Sold)
|
Price Per Share ($)
|
1/14/2013
|
7,500
|
10.8003
|
1/14/2013
|
6,750
|
10.9233
|
1/14/2013
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9,000
|
10.7053
|
1/17/2013
|
3,500
|
10.1923
|
Trade Date
|
Shares Purchased (Sold)
|
Price Per Share ($)
|
1/14/2013
|
7,500
|
10.8003
|
1/14/2013
|
6,600
|
10.9233
|
1/14/2013
|
8,800
|
10.7053
|
1/17/2013
|
3,150
|
10.1923
|
Trade Date
|
Shares Purchased (Sold)
|
Price Per Share ($)
|
1/14/2013
|
600
|
10.9233
|
1/14/2013
|
800
|
10.7053
|
Trade Date
|
Shares Purchased (Sold)
|
Price Per Share ($)
|
1/14/2013
|
1,050
|
10.9233
|
1/14/2013
|
1,400
|
10.7053
|
1/17/2013
|
350
|
10.1923
|
(a)
|
"2012 Annual Meeting" shall mean the Company's 2012 annual meeting of stockholders, scheduled to be held on February 21, 2013.
|
(b)
|
"2013 Annual Meeting" shall mean the Company's 2013 annual meeting of stockholders.
|
(c)
|
"2013 Class" shall mean the class of DG Board members whose term expires at the 2013 Annual Meeting or when his or her successor has been elected.
|
(d)
|
"2014 Class" shall mean the class of DG Board members whose term expires at the Company's 2014 annual meeting of stockholders or when his or her successor has been elected.
|
(e)
|
"2015 Class" shall mean the class of DG Board members whose term expires at the Company's 2015 annual meeting of stockholders or when his or her successor has been elected and that will be nominated to the Board at the 2012 Annual Meeting.
|
(f)
|
"Affiliate" or "Affiliates" shall have the meaning set forth in Rule 12b-2 promulgated by the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
|
(g)
|
"Beneficial Owner" or "Beneficial Ownership" shall have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act.
|
(h)
|
"Board" shall mean the board of directors of DG.
|
(i)
|
"Group" shall have the same meanings as set forth in Rule 13d-5 promulgated by the SEC under the Exchange Act.
|
(j)
|
The "Clinton Suggested Nominees" shall refer to Peter Markham and Melissa Fisher.
|
(k)
|
"Person" shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature.
|
(l)
|
"Support Period" shall mean the earliest of (i) the 61st day prior to the date set by the Board for the 2013 Annual Meeting, (ii) 15 days prior to the last day upon which a notice to the Secretary of the Company of nominations of persons for election to the Board or the proposal of other business at the 2013 Annual Meeting would be considered timely under the Company's then-current bylaws, (iii) in the event of material breach by the Company of its obligations under this Agreement, 10 days after the Clinton Stockholders deliver notice of such breach unless such breach is cured during such 10-day period, or (iv) September 1, 2013.
|
(m)
|
"Transaction" shall mean any material tender or exchange offer, merger, consolidation, acquisition, scheme, arrangement, business combination, recapitalization, reorganization, sale or acquisition of material assets, liquidation, dissolution or other extraordinary transaction (or series of related transactions) involving the Company or any of its material subsidiaries or joint ventures or any of their respective securities, in each case that requires a vote of the Company's stockholders.
|
|
(a)
|
The Company hereby represents and warrants that this Agreement and the performance by the Company of its obligations hereunder (i) has been duly authorized, executed and delivered by it, and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws relating to or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding in equity or at law), in each case now or hereafter in effect, (ii) does not require the approval of the shareholders of the Company and (iii) does not and will not violate any law, any order of any court or other agency of government, the Certificate of Incorporation of the Company or the Bylaws of the Company (as amended and restated, the "Bylaws") or any provision of any indenture, agreement or other instrument to which the Company or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument, or result in the creation or imposition of, or give rise to, any lien, charge, restriction, claim, encumbrance or adverse penalty of any nature whatsoever pursuant to any such indenture, agreement or other instrument except to the extent with respect to this Section 2.1(a)(iii), such breach, default, lien, charge, restriction, claim, encumbrance or penalty would not have an adverse effect on the ability of the Company to perform its obligations under this Agreement.
|
|
(b)
|
Each of the Clinton Stockholders represents and warrants, severally and not jointly, that this Agreement and the performance by such Clinton Stockholders of its obligations hereunder (i) has been duly authorized, executed and delivered by such Clinton Stockholders, and is a valid and binding obligation of such Clinton Stockholders, enforceable against such Clinton Stockholders in accordance with its terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws relating to or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding in equity or at law), in each case now or hereafter in effect, (ii) does not require approval by any owners or holders of any equity interest in such Clinton Stockholders (except as has already been obtained) and (iii) does not and will not violate any law, any order of any court or other agency of government, the charter or other organizational documents of such Clinton Stockholders, as amended, or any provision of any agreement or other instrument to which such Clinton Stockholders or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such agreement or other instrument, or result in the creation or imposition of, or give rise to, any lien, charge, restriction, claim, encumbrance or adverse penalty of any nature whatsoever pursuant to any such agreement or instrument except to the extent with respect to this Section 2.1(b)(iii), such breach, default, lien, charge, restriction, claim, encumbrance or penalty would not have an adverse effect on the ability of the Clinton Stockholders to perform their obligations under this Agreement.
|
David M. Kantor
|
2012
|
||
Lisa C. Gallagher
|
2012
|
||
Scott K. Ginsburg
|
2013
|
||
Neil H. Nguyen
|
2013
|
||
Cecil H. Moore
|
2014
|
||
Jeffrey A. Rich
|
2014
|
||
John R. Harris
|
2014
|
||
|
III. COVENANTS
|
|
(a)
|
Clinton Magnolia Master Fund, Ltd., Clinton Spotlight Master Fund, L.P., Clinton Group, Inc., Clinton Special Opportunities Master Fund, Ltd., Clinton Relational Opportunity Master Fund, L.P., and George Hall shall promptly amend their Schedule 13D to report the entry into this Agreement and amending applicable items to conform to their obligations hereunder and shall, upon issuance of the press release attached hereto, withdraw all proposals and nominations previously made with respect to the 2012 Annual Meeting.
|
|
(a)
|
The Company agrees to use its reasonable best efforts to hold the 2012 Annual Meeting on February 21, 2013.
|
|
(b)
|
The Company agrees to use its reasonable best efforts to hold the 2013 Annual Meeting on or before November 15, 2013.
|
(a)
|
As promptly as practicable following the date of this Agreement (but in no event later than the date of the 2012 Annual Meeting), the Company and the Board, at a duly convened meeting of directors, shall take all actions necessary to increase the size of the Board from seven (7) to eight (8) directors. The new Board seat will be added to the 2015 Class.
|
(b)
|
To include the two Clinton Suggested Nominees or their Replacement (as defined herein) in the Board of Directors' slate of nominees for election as directors of the Company at the 2012 Annual Meeting, with such directors, if elected, to become members of the 2015 Class.
|
(c)
|
To use its reasonable best efforts to cause the election of the Clinton Suggested Nominees or their Replacements (as defined herein) to the Board at the 2012 Annual Meeting (including recommending that the Company's stockholders vote in favor of the election of the Clinton Suggested Nominees, soliciting proxies in favor of such election and otherwise supporting them for election in a manner no less rigorous and favorable than the manner in which the Company supports its other nominees in the aggregate).
|
(d)
|
During the Support Period, to the extent a Clinton Suggested Nominee is unable to serve as a nominee for election as director or to serve as a director, for any reason, the Clinton Stockholders shall have the right to submit the name of a replacement (the "Replacement") to the Company for its reasonable approval and who shall serve as the nominee for election as director or serve as director. If the proposed Replacement is not approved by the Company, the Clinton Stockholders shall have the right to submit another proposed Replacement to the Company for its reasonable approval. The Clinton Stockholders shall have the right to continue submitting the name of a proposed Replacement to the Company for its reasonable approval until the Company approves that such Replacement may serve as a nominee for election as director or to serve as a director whereupon such person is appointed as the Replacement.
|
(e)
|
At any time, for any reason or for no reason, either Clinton Suggested Nominee may immediately resign from the Board by providing written notice to the Chairman of the Board.
|
(f)
|
Notwithstanding the foregoing, the parties agree that the Company may elect to appoint one or both of the Clinton Suggested Nominees to the Board prior to the 2012 Annual Meeting and the Clinton Stockholders shall use their reasonable best efforts to cause the Clinton Suggested Nominees to accept any such appointment.
|
(g)
|
Promptly following becoming a member of the Board, each Clinton Suggested Nominee shall be appointed to serve, as qualified, to one of the following committees of the Board: Audit, Compensation and Nominating, with the choice of such committee determined by the Board.
|
|
(a)
|
During the Support Period:
|
(i)
|
The Clinton Stockholders and their Affiliates will cause all of the shares of DG stock of which the Clinton Stockholders are the direct or Beneficial Owner to be present for quorum purposes and to be voted in favor of any and all directors nominated by the Board for election at any meeting of the Company's stockholders so long as the Clinton Suggested Nominees are included in the directors nominated by the Board;
|
(ii)
|
The Clinton Stockholders and their Affiliates will cause such shares not to be voted for the removal of any director serving on the Board who has previously been nominated by the Board at the 2012 Annual Meeting or at any special meeting of the stockholders of DG (or any adjournments or postponements thereof); and
|
(iii)
|
The Clinton Stockholders and their Affiliates will cause such shares to be voted against, or abstain from voting on, any amendments to the Company's Bylaws or Certificate of Incorporation that have not been recommended by the Board for adoption by the stockholders of DG; provided, however, that the Clinton Stockholders may, in their sole discretion, choose how to vote in connection with approval of any Transaction.
|
(b)
|
At all times during the Support Period, the Clinton Stockholders and their Affiliates shall not, directly or indirectly, alone or with others, without the prior written consent of the Company as approved by the Board:
|
(i)
|
solicit, or participate in any solicitation of, proxies (as such term is defined in Rule 14a-1 promulgated under the Exchange Act) with respect to any shares of DG stock or become a participant in any election contest relating to the election of directors of the Company;
|
(ii)
|
propose or otherwise solicit stockholders of the Company for the approval of one or more stockholder proposals (whether made pursuant to Rule 14a-8 under the Exchange Act or otherwise) or attempt to call a special meeting of stockholders;
|
(iii)
|
deposit any shares of DG stock in a voting trust or similar arrangement;
|
(iv)
|
take any action to form, join or in any way participate in any partnership, limited partnership, syndicate or other Group with respect to the DG stock or otherwise act in concert with any Person for the purpose of circumventing the provisions or purposes of this Agreement;
|
(v)
|
seek or solicit support for (whether publicly or privately), any written consent of stockholders of the Company;
|
(vi)
|
encourage, advise or influence any other person or assist any third party in so encouraging, assisting or influencing any Person with respect to the giving or withholding of any proxy vote at the 2012 Annual Meeting or 2013 Annual Meeting in opposition to the Company's slate of nominees for election as directors of the Company;
|
(vii)
|
otherwise act in concert with any Person, to seek to control, direct or influence the management, Board (or any individual members thereof), stockholders or policies of the Company;
|
(viii)
|
finance or offer to provide financing for an attempt by any Person to engage in any of the activities or actions prohibited or restricted by the terms of this Agreement;
|
(ix)
|
make or in any way advance any request or proposal to amend, modify or waive any provision of this Agreement except in a nonpublic and confidential manner which nonpublic and confidential request or proposal, if any, shall be accompanied by a written opinion of counsel, to the effect that such proposal or request and the subject matter thereof, as so presented, does not require disclosure by any party hereto, pursuant to the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act or any rule or regulation promulgated thereunder;
|
(x)
|
announce an intention to do, solicit, assist, prompt, induce or attempt to induce others to do, any of the actions restricted or prohibited under subparagraphs (i) through (x) above;
|
4.1
|
Specific Enforcement; Special Remedy.
|
4.2
|
Amendments.
|
4.3
|
Notices.
|
|
(a)
|
if to the Company, to:
|
4.4
|
Successors and Assigns.
|
4.6
|
Counterparts.
|
4.7
|
Headings.
|
4.8
|
Governing Law; Choice of Venue.
|
4.9
|
Waiver; Remedies.
|
4.10
|
Attorneys' Fees.
|
4.11
|
Severability.
|
4.12
|
Additional Parties.
|
4.13
|
Fees and Expenses.
|
4.14
|
Interpretation and Construction.
|
4.15
|
Entire Agreement.
|
Digital Generation, Inc.
|
|||
Name:
|
|
||
Title:
|
|
||
Clinton Magnolia Master Fund, Ltd.
|
|||
By:
|
Clinton Group, Inc., its investment manager
|
||
By:
|
|
||
Name:
|
Francis Ruchalski
|
||
Title:
|
Chief Financial Officer
|
||
Clinton Spotlight Master Fund, L.P.
|
|||
By:
|
Clinton Group, Inc., its investment manager
|
||
By:
|
|
||
Name:
|
Francis Ruchalski
|
||
Title:
|
Chief Financial Officer
|
||
Clinton Group, Inc.
|
|||
By:
|
|
||
Name:
|
Francis Ruchalski
|
||
Title:
|
Chief Financial Officer
|
||
Clinton Special Opportunities Master Fund, Ltd.
|
|||
By:
|
Clinton Group, Inc., its investment manager
|
||
By:
|
|
||
Name:
|
Francis Ruchalski
|
||
Title:
|
Chief Financial Officer
|
||
Clinton Relational Opportunity Master Fund, L.P.
|
|||
By:
|
Clinton Group, Inc., its investment manager
|
||
By:
|
|
||
Name:
|
Francis Ruchalski
|
||
Title:
|
Chief Financial Officer
|
||
Exhibit A
|
Clinton Magnolia Master Fund, Ltd.
|
Clinton Spotlight Master Fund, L.P.
|
Clinton Group, Inc.
|
Clinton Special Opportunities Master Fund, Ltd.
|
Clinton Relational Opportunity Master Fund, L.P.
|
EXHIBIT B
|
FOR IMMEDIATE RELEASE
|
DIGITAL GENERATION AND CLINTON GROUP REACH AGREEMENT TO NOMINATE TWO NEW
INDEPENDENT DIRECTORS FOR ELECTION AT 2012 ANNUAL MEETING OF STOCKHOLDERS
|
Clinton Group Agrees to Support DG's Director Nominees
|
Special Committee's Exploration of Strategic Alternatives Remains Active and Ongoing
|