<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _______)*
DIGITAL SOUND CORPORATION
-------------------------
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
--------------------------
(Title of Class of Securities)
253911101
---------
(CUSIP Number)
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
-------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
December 19, 1997
-----------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of
that section of the Exchange Act but shall be subject to all other provisions of
the Exchange Act.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 2 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oak Investment Partners VII, Limited Partnership
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
6,503,340
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
Not applicable
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
6,503,340
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
Not applicable
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
6,503,340
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
24.19%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 3 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oak Associates VII, LLC
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
6,503,340
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
6,503,340
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
6,503,340
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
24.19%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 4 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oak VII Affiliates Fund, Limited Partnership
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
163,330
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
Not applicable
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
163,330
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
Not applicable
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
163,330
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0.79%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 5 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oak VII Affiliates, LLC
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
163,330
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
163,330
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
163,330
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0.79%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 6 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oak Investment Partners V, Limited Partnership
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
6,720,615
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
Not applicable
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
6,720,615
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
Not applicable
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
6,720,615
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
24.94%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 7 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oak Associates V, LLC
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
6,720,615
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
6,720,615
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
6,720,615
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
24.94%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 8 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oak V Affiliates Fund, Limited Partnership
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
148,090
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
Not applicable
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
148,090
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
Not applicable
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
148,090
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0.72%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 9 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oak V Affiliates
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
148,090
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
148,090
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
148,090
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0.72%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 10 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oak Investment Partners III, A Limited Partnership
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
1,948,322
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
Not applicable
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
1,948,322
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
Not applicable
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
1,948,322
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
9.54%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 11 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oak Associates III, A Limited Partnership
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
1,948,322
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
1,948,322
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
1,948,322
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
9.54%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 12 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oak Management Corporation
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
15,483,697
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
15,483,697
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
15,483,697
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
45.41%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 13 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bandel L. Carano
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
15,483,697
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
15,483,697
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
15,483,697
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
45.41%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 14 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gerald R. Gallagher
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
15,483,697
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
15,483,697
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
15,483,697
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
45.41%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 15 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Edward F. Glassmeyer
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
15,483,697
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
15,483,697
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
15,483,697
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
45.41%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 16 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Fredric W. Harman
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
15,483,697
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
15,483,697
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
15,483,697
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
45.41%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 17 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ann H. Lamont
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
15,483,697
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
15,483,697
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
15,483,697
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
45.41%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 18 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Eileen M. More
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
15,483,697
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
15,483,697
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
15,483,697
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
45.41%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. 253911101 PAGE 19 OF 31 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Seth L. Harrison
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------------------------------------------------------------------
SOLE VOTING POWER
NUMBER OF 7
Not applicable
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
15,483,697
OWNED BY -----------------------------------------------------------
SOLE DISPOSITIVE POWER
EACH 9
Not applicable
REPORTING -----------------------------------------------------------
SHARED DISPOSITIVE POWER
PERSON WITH 10
15,483,697
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
15,483,697
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
45.41%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
ITEM 1: SECURITY AND ISSUER
1) CLASS OF SECURITIES: Common Stock, no par value ("Common Stock")
2) ISSUER: Digital Sound Corporation, a California corporation ("Issuer")
3) PRINCIPAL ADDRESS: 6307 Carpinteria Avenue, Carpinteria, California 93013
ITEM 2: IDENTITY AND BACKGROUND
1) REPORTING PERSON:
a) Oak Investment Partners VII, Limited Partnership ("Oak VII")
b) Oak Associates VII, LLC
c) Oak VII Affiliates Fund, Limited Partnership ("Oak VII Affiliates")
d) Oak VII Affiliates, LLC
e) Oak Investment Partners V, Limited Partnership ("Oak V")
f) Oak Associates V, LLC
g) Oak V Affiliates Fund, Limited Partnership ("Oak V Affiliates")
h) Oak V Affiliates
i) Oak Investment Partners III, A Limited Partnership ("Oak III")
j) Oak Associates III, A Limited Partnership
k) Oak Management Corporation
l) Bandel L. Carano
m) Gerald R. Gallagher
n) Edward F. Glassmeyer
o) Fredric W. Harman
p) Ann H. Lamont
q) Eileen M. More
r) Seth L. Harrison
See Item 2 hereof.
2) PLACE OF ORGANIZATION AND PRINCIPAL BUSINESS: Each of the limited
partnerships and limited liability companies listed in Items 1(a) through
(j) above is a venture capital fund or general partner of a venture capital
fund formed under the laws of the State of Delaware.
Page 20 of 31
<PAGE>
Oak Management Corporation, a Delaware corporation, is an investment
advisor to Oak VII, Oak V and Oak III. The executive officers and directors
of Oak Management Corporation are listed on Schedule I hereto. Each of the
individuals listed in Items 1(l) through (r) is a United States citizen and
a managing member of Oak Associates VII, LLC, Oak VII Affiliates, LLC, Oak
Associates V, LLC and a general partner of Oak V Affiliates and Oak
Associates III, A Limited Partnership, except that Seth L. Harrison is only
a managing member of Oak Associates VII, LLC.
3) PRINCIPAL BUSINESS ADDRESS: Each of the entities and individuals listed in
Items 1(a) through (r) above has the following principal business address:
c/o Oak Management Corporation
One Gorham Island
Westport, CT 06880
4) CRIMINAL CONVICTIONS: None of the Reporting Persons has, during the last
five years, been convicted in a criminal proceeding (excluding traffic
violations and similar misdemeanors).
5) CIVIL ADJUDICATION OF VIOLATION OF SECURITIES LAWS: None of the Reporting
Persons was, during the last five years, a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result
of such proceeding 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.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
1) OAK VII: Oak VII purchased 435,317 shares of Series B Preferred Stock, no
par value, of the Issuer ("Series B Preferred") and a convertible
promissory note ("Convertible Promissory Note") in the principal amount of
$1,612,627.50 for an aggregate purchase price of $4,877,505 pursuant to
that certain Preferred Stock Purchase Agreement, dated December 19, 1997,
by and among Oak VII, the Issuer and certain other investors (the "Purchase
Agreement"). Each share of Series B Preferred is convertible into 10 shares
of Common Stock, and each $7.50 of the principal amount of the Convertible
Promissory Note will be convertible into one share of Series B Preferred.
The shares of Series B Preferred and Convertible Promissory Note purchased
by Oak VII are or will be convertible into an aggregate of 6,503,340 shares
of Common Stock. Such Convertible Promissory Note will be automatically
converted into shares of Series B Preferred upon approval by the Issuer's
shareholders of an amendment to the Issuer's Articles of Incorporation
increasing the Issuer's authorized shares of Common Stock, but will not be
convertible prior to such time.
The source of Oak VII's consideration under the Purchase Agreement was Oak
VII's working capital. Oak VII did not purchase any of the shares of Series
B Preferred or the Convertible Promissory Note with borrowed funds.
2) OAK VII AFFILIATES: Oak VII Affiliates purchased 10,933 shares of Series B
Preferred and a Convertible Promissory Note in the principal amount of
$40,500 for an aggregate purchase price of $122,497.50 pursuant to the
Purchase Agreement. The shares of Series B Preferred and Convertible
Promissory Note purchased by Oak VII Affiliates are or will be convertible
into an aggregate of 163,330 shares of Common Stock. Such Convertible
Promissory Note
Page 21 of 31
<PAGE>
will be automatically converted into shares of Series B Preferred upon
approval by the Issuer's shareholders of an amendment to the Issuer's
Articles of Incorporation increasing the Issuer's authorized shares of
Common Stock, but will not be convertible prior to such time.
The source of Oak VII Affiliates' consideration under the Purchase
Agreement was Oak VII Affiliates' working capital. Oak VII Affiliates did
not purchase any of the shares of Series B Preferred or the Convertible
Promissory Note with borrowed funds.
3) OAK V: Oak V purchased 652,000 shares of Series B Preferred in exchange for
2,573,684 shares of Series A Preferred Stock, no par value, of the Issuer
("Series A Preferred") pursuant to the Purchase Agreement. The shares of
Series B Preferred purchased by Oak V are convertible into an aggregate of
6,520,000 shares of Common Stock. In addition to such shares, the amount
shown as beneficially owned by Oak V on page 6 hereof includes 161,950
shares of Common Stock and options to purchase an aggregate of 38,665
shares of Common Stock held by Mr. Bandel L. Carano on behalf of Oak V.
4) OAK V AFFILIATES: Oak V Affiliates purchased 14,667 shares of Series B
Preferred Stock, no par value, of the Issuer ("Series B Preferred") in
exchange for 57,895 shares of Series A Preferred pursuant to the Purchase
Agreement. The shares of Series B Preferred purchased by Oak V Affiliates
are convertible into an aggregate of 146,670 shares of Common Stock. In
addition to such shares, the amount shown as beneficially owned by Oak V
Affiliates on page 8 hereof includes 550 shares of Common Stock and options
to purchase an aggregate of 870 shares of Common Stock held by Mr. Bandel
L. Carano on behalf of Oak V Affiliates.
5) OAK III: The amount shown as beneficially owned by Oak III on page 10
hereof includes 1,912,857 shares of Common Stock and options to purchase an
aggregate of 35,465 shares of Common Stock held by Mr. Bandel L. Carano on
behalf of Oak III.
ITEM 4. PURPOSE OF THE TRANSACTION
The purpose of the purchase of 435,317 shares of Series B Preferred and a
Convertible Promissory Note in the principal amount of $1,612,627.50 by Oak VII,
10,933 shares of Series B Preferred and a Convertible Promissory Note in the
principal amount of $40,500 by Oak VII Affiliates, 652,000 shares of Series B
Preferred by Oak V, and 14,667 shares of Series B Preferred by Oak V Affiliates
was investment. Mr. Bandel L. Carano is a member of the Issuer's Board of
Directors. Each of Oak VII, Oak VII Affiliates, Oak V and Oak V Affiliates may
make additional purchases of the Issuer's securities, may sell some or all of
the Issuer's securities each of them currently owns, or may distribute some or
all of such securities to their respective partners or members, as applicable,
in each case subject to compliance with applicable federal and state securities
laws. The shares of Series B Preferred may be converted by the holders thereof
into shares of Common Stock in accordance with the Issuer's Certificate of
Determination of Rights, Preferences and Privileges of Series B Preferred Stock.
The Convertible Promissory Notes held by each of Oak VII and Oak VII Affiliates
will be automatically converted into shares of Series B Preferred upon approval
by the Issuer's shareholders of an amendment to the Issuer's Articles of
Incorporation increasing the Issuer's authorized shares of Common Stock, but
will not be convertible prior to such time.
Page 22 of 31
<PAGE>
Except as set forth herein, none of the Reporting Persons set forth in Item 2
hereof has any plan or proposal relating to, or which would result in, any event
described in (a) through (j) of the instructions to this Item 4.
ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER
The approximate percentages of Common Stock reported as beneficially owned by
each of the Reporting Persons is based upon 20,386,004 shares outstanding as of
October 31, 1997, as reported in the Issuer's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1997, in addition to shares of Common Stock
issuable upon conversion or exercise of Series B Preferred, Convertible
Promissory Notes and options held by certain of the Reporting Persons as
described in Item 3 hereof.
See Items 7, 8, 9, 10, 11 and 13 of each Reporting Person's cover sheet for a
description of the number of shares of Common Stock over which such Reporting
Person has sole voting power, shared voting power, sole dispositive power and
shared dispositive power, as well as the aggregate number of shares beneficially
owned by each Reporting Person and the percent of Common Stock represented by
such amount.
Except as set forth in the Purchase Agreement, none of the Reporting Persons has
been a party to any transaction in the Common Stock, Series B Preferred or
Convertible Promissory Notes in the last 60 days. None of the Reporting
Persons knows of any other person that has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
Common Stock, Series B Preferred or Convertible Promissory Notes.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SECURITIES OF THE ISSUER
In addition to the Purchase Agreement, the Issuer, Oak VII, Oak VII Affiliates,
Oak V, Oak V Affiliates and the other purchasers of Series B Preferred and
Convertible Promissory Notes entered into that certain Registration Rights
Agreement, dated December 19, 1997, which provides for the registration of the
shares of Common Stock issuable upon conversion of the Series B Preferred (the
"Registration Rights Agreement"). Other than the Purchase Agreement and the
Registration Rights Agreement, none of the Reporting Persons is aware of any
contracts, arrangements, understandings or relationships (legal or otherwise)
with any person with respect to the Common Stock, the Series B Preferred or the
Convertible Promissory Notes, including transfer or voting of any of such
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, of the giving of
withholding of proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS
EXHIBIT A: Joint Filing Agreement Among the Reporting Persons
Page 23 of 31
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated January 5, 1998 Oak Investment Partners III,
A Limited Partnership
By: Oak Associates III,
A Limited Partnership,
As General Partner
By: /s/ Edward F. Glassmeyer
--------------------------
General Partner
Oak Associates III, A Limited Partnership
By: /s/ Edward F. Glassmeyer
--------------------------
General Partner
Oak Investment Partners V,
Limited Partnership
By: Oak Associates V, LLC
As General Partner
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
Oak Associates V, LLC
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
Oak V Affiliates Fund, Limited Partnership
By: Oak V Affiliates,
As General Partner
By: /s/ Edward F. Glassmeyer
--------------------------
General Partner
Oak V Affiliates
By: /s/ Edward F. Glassmeyer
--------------------------
General Partner
<PAGE>
Oak Investment Partners VII,
Limited Partnership
By: Oak Associates VII, LLC
As General Partner
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
Oak Associates VII, LLC
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
Oak VII Affiliates Fund, Limited Partnership
By: Oak VII Affiliates, LLC
As General Partner
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
Oak VII Affiliates, LLC
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
OAK MANAGEMENT CORPORATION
By: /s/ Edward F. Glassmeyer
------------------------------
Name: Edward F. Glassmeyer
Title: President
/s/ Bandel L. Carano
----------------------
Bandel L. Carano
/s/ Fredric W. Harman
-----------------------
Fredric W. Harman
/s/ Gerald R. Gallagher
-------------------------
Gerald R. Gallagher
/s/ Edward F. Glassmeyer
-------------------------
Edward F. Glassmeyer
<PAGE>
/s/ Ann H. Lamont
-------------------
Ann H. Lamont
/s/ Eileen M. More
--------------------
Eileen M. More
/s/ Seth L. Harrison
----------------------
Seth L. Harrison
<PAGE>
INDEX TO EXHIBITS
Page
----
Exhibit A Joint Filing Agreement Among the Reporting Persons 28
<PAGE>
EXHIBIT A
JOINT FILING AGREEMENT AMONG THE REPORTING PERSONS
Each of the undersigned hereby agrees that the statement on Schedule 13D
filed on the date hereof with respect to the shares of Common Stock of Digital
Sound Corporation has been filed on behalf of the undersigned.
Signature:
Dated January 6, 1998 Oak Investment Partners III,
A Limited Partnership
By: Oak Associates III,
A Limited Partnership,
As General Partner
By: /s/ Edward F. Glassmeyer
--------------------------
General Partner
Oak Associates III, A Limited Partnership
By: /s/ Edward F. Glassmeyer
--------------------------
General Partner
Oak Investment Partners V,
Limited Partnership
By: Oak Associates V, LLC
As General Partner
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
Oak Associates V, LLC
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
Oak V Affiliates Fund, Limited Partnership
By: Oak V Affiliates,
As General Partner
By: /s/ Edward F. Glassmeyer
--------------------------
General Partner
<PAGE>
Oak V Affiliates
By: /s/ Edward F. Glassmeyer
--------------------------
General Partner
Oak Investment Partners VII,
Limited Partnership
By: Oak Associates VII, LLC
As General Partner
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
Oak Associates VII, LLC
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
Oak VII Affiliates Fund, Limited Partnership
By: Oak VII Affiliates, LLC
As General Partner
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
Oak VII Affiliates, LLC
By: /s/ Edward F. Glassmeyer
--------------------------
Managing Member
OAK MANAGEMENT CORPORATION
By: /s/ Edward F. Glassmeyer
--------------------------
Name: Edward F. Glassmeyer
Title: President
/s/ Bandel L. Carano
----------------------
Bandel L. Carano
/s/ Fredric W. Harman
-----------------------
Fredric W. Harman
<PAGE>
/s/ Gerald R. Gallagher
-------------------------
Gerald R. Gallagher
/s/Edward F. Glassmeyer
-------------------------
Edward F. Glassmeyer
/s/ Ann H. Lamont
-------------------
Ann H. Lamont
/s/ Eileen M. More
--------------------
Eileen M. More
/s/ Seth L. Harrison
----------------------
Seth L. Harrison
<PAGE>
SCHEDULE I
OAK MANAGEMENT CORPORATION
Executive Officers
- ------------------
Edward F. Glassmeyer, President
Michele Cassidy, CFO, Treasurer and Secretary
Directors
- ---------
Gerald R. Gallagher
Ann H. Lamont
Fredric W. Harman
Bandel L. Carano
Seth L. Harrison
Eileen M. More
