SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13G
(Rule 13d-102)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULES 13d-1(b), (c)
AND (d) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(b)
(Amendment No.__)*
DIGITAL GENERATION SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
253921 10 0
- --------------------------------------------------------------------------------
(CUSIP Number)
August 14, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which this
Schedule is filed:
[ ] Rule 13d-1(b)
[ X ] Rule 13d-1(c)
[ ] Rule 13d-1(d)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following pages)
Page 1 of 17 Pages
Exhibit Index Contained on Page 15
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- ----------------------------------------------------------- --------------------------------------------------
CUSIP NO. 253921 10 0 13D Page 2 of 17 Pages
- ----------------------------------------------------------- --------------------------------------------------
- ----------- ------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Integral Capital Management III, L.P. ("ICM3")
- ----------- ------------------------------------------------------------------------------------------------------------------
2 CHECK APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ] (b) [X]
- ----------- ------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------- ------------------------------------------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware (limited partnership)
- --------------------------------------- --------- ----------------------------------------------------------------------------
5 SOLE VOTING POWER -0-
--------- ----------------------------------------------------------------------------
NUMBER 6 SHARED VOTING POWER
OF 801,271 shares, of which 653,597 shares are directly owned by
SHARES Integral Capital Partners III, L.P. ("ICP3") and 147,674 shares
BENEFICIALLY are directly owned by Integral Capital Partners International
OWNED BY EACH III, L.P. ("ICPI3"). ICM3 is the general partner of ICP3 and the
REPORTING investment general partner of ICPI3.
PERSON
WITH
--------- ----------------------------------------------------------------------------
7 SOLE DISPOSITIVE POWER -0-
--------- ----------------------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
801,271 shares (see response to Item 6)
- ----------- ------------------------------------------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
801,271 shares
- ----------- ------------------------------------------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 9 EXCLUDES CERTAIN SHARES*
[ ]
- ----------- ------------------------------------------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 3.6%
- ----------- ------------------------------------------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON* PN
- ----------- ------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
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CUSIP NO. 253921 10 0 13D Page 3 of 17 Pages
- ----------------------------------------------------------- --------------------------------------------------
- ----------- ------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Integral Capital Management IV, LLC ("ICM4")
- ----------- ------------------------------------------------------------------------------------------------------------------
2 CHECK APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ] (b) [X]
- ----------- ------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------- ------------------------------------------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware (limited liability company)
- --------------------------------------- --------- ----------------------------------------------------------------------------
5 SOLE VOTING POWER -0-
--------- ----------------------------------------------------------------------------
NUMBER 6 SHARED VOTING POWER
OF 533,000 shares, which shares are directly owned by Integral
SHARES Capital Partners IV, L.P. ("ICP4"). ICM4 is the general partner
BENEFICIALLY of ICP4
OWNED BY EACH
REPORTING
PERSON
WITH
--------- ----------------------------------------------------------------------------
7 SOLE DISPOSITIVE POWER -0-
--------- ----------------------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
533,000 shares (see response to Item 6)
- ----------- ------------------------------------------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
533,000 shares
- ----------- ------------------------------------------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 9 EXCLUDES CERTAIN SHARES*
[ ]
- ----------- ------------------------------------------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 2.4%
- ----------- ------------------------------------------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON* OO
- ----------- ------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- ----------------------------------------------------------- --------------------------------------------------
CUSIP NO. 253921 10 0 13D Page 4 of 17 Pages
- ----------------------------------------------------------- --------------------------------------------------
- ----------- ------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ICP MS Management, LLC ("ICP Management")
- ----------- ------------------------------------------------------------------------------------------------------------------
2 CHECK APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ] (b) [X]
- ----------- ------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------- ------------------------------------------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware (limited liability company)
- --------------------------------------- --------- ----------------------------------------------------------------------------
5 SOLE VOTING POWER -0-
--------- ----------------------------------------------------------------------------
NUMBER 6 SHARED VOTING POWER
OF 2,715 shares, which shares are directly owned by Integral Capital
SHARES Partners IV MS Side Fund, L.P. ("Side Fund"). ICP Management is
BENEFICIALLY the general partner of Side Fund
OWNED BY EACH
REPORTING
PERSON
WITH
--------- ----------------------------------------------------------------------------
7 SOLE DISPOSITIVE POWER -0-
--------- ----------------------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
2,715 shares (see response to Item 6)
- ----------- ------------------------------------------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,715 shares
- ----------- ------------------------------------------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 9 EXCLUDES CERTAIN SHARES*
[ ]
- ----------- ------------------------------------------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 0.01%
- ----------- ------------------------------------------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON* OO
- ----------- ------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- ----------------------------------------------------------- --------------------------------------------------
CUSIP NO. 253921 10 0 13D Page 5 of 17 Pages
- ----------------------------------------------------------- --------------------------------------------------
- ----------- ------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Integral Capital Partners III, L.P. ("ICP3")
- ----------- ------------------------------------------------------------------------------------------------------------------
2 CHECK APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ] (b) [X]
- ----------- ------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------- ------------------------------------------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware (limited partnership)
- --------------------------------------- --------- ----------------------------------------------------------------------------
5 SOLE VOTING POWER -0-
--------- ----------------------------------------------------------------------------
NUMBER 6 SHARED VOTING POWER
OF 653,597 shares are directly owned by ICP3. Integral Capital
SHARES Management III, L.P. is the general partner of ICP3.
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON
WITH
--------- ----------------------------------------------------------------------------
7 SOLE DISPOSITIVE POWER -0-
--------- ----------------------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
653,597 shares (see response to Item 6)
- ----------- ------------------------------------------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
653,597 shares
- ----------- ------------------------------------------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 9 EXCLUDES CERTAIN SHARES*
[ ]
- ----------- ------------------------------------------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 2.9%
- ----------- ------------------------------------------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON* PN
- ----------- ------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
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CUSIP NO. 253921 10 0 13D Page 6 of 17 Pages
- ----------------------------------------------------------- --------------------------------------------------
- ----------- ------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Integral Capital Partners International III, L.P. ("ICPI3")
- ----------- ------------------------------------------------------------------------------------------------------------------
2 CHECK APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ] (b) [X]
- ----------- ------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------- ------------------------------------------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands (limited partnership)
- --------------------------------------- --------- ----------------------------------------------------------------------------
5 SOLE VOTING POWER -0-
--------- ----------------------------------------------------------------------------
NUMBER 6 SHARED VOTING POWER
OF 147,674 shares are directly owned by ICPI3. Integral Capital
SHARES Management III, L.P. is the investment general partner of ICPI3.
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON
WITH
--------- ----------------------------------------------------------------------------
7 SOLE DISPOSITIVE POWER -0-
--------- ----------------------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
147,674 shares (see response to Item 6)
- ----------- ------------------------------------------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
147,674 shares
- ----------- ------------------------------------------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 9 EXCLUDES CERTAIN SHARES*
[ ]
- ----------- ------------------------------------------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 0.7%
- ----------- ------------------------------------------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON* PN
- ----------- ------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- ----------------------------------------------------------- --------------------------------------------------
CUSIP NO. 253921 10 0 13D Page 7 of 17 Pages
- ----------------------------------------------------------- --------------------------------------------------
- ----------- ------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Integral Capital Partners IV, L.P. ("ICP4")
- ----------- ------------------------------------------------------------------------------------------------------------------
2 CHECK APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ] (b) [X]
- ----------- ------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------- ------------------------------------------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware (limited partnership)
- --------------------------------------- --------- ----------------------------------------------------------------------------
5 SOLE VOTING POWER -0-
--------- ----------------------------------------------------------------------------
NUMBER 6 SHARED VOTING POWER
OF 533,000 shares are directly owned by ICP4. Integral Capital
SHARES Management IV, LLC is the general partner of ICP4.
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON
WITH
--------- ----------------------------------------------------------------------------
7 SOLE DISPOSITIVE POWER -0-
--------- ----------------------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
533,000 shares (see response to Item 6)
- ----------- ------------------------------------------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
533,000 shares
- ----------- ------------------------------------------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 9 EXCLUDES CERTAIN SHARES*
[ ]
- ----------- ------------------------------------------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 2.4%
- ----------- ------------------------------------------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON* PN
- ----------- ------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- ----------------------------------------------------------- --------------------------------------------------
CUSIP NO. 253921 10 0 13D Page 8 of 17 Pages
- ----------------------------------------------------------- --------------------------------------------------
- ----------- ------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Integral Capital Partners IV MS Side Fund, L.P. ("Side Fund")
- ----------- ------------------------------------------------------------------------------------------------------------------
2 CHECK APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ] (b) [X]
- ----------- ------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ----------- ------------------------------------------------------------------------------------------------------------------
4 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware (limited partnership)
- --------------------------------------- --------- ----------------------------------------------------------------------------
5 SOLE VOTING POWER -0-
--------- ----------------------------------------------------------------------------
NUMBER 6 SHARED VOTING POWER
OF 2,715 shares are directly owned by Side Fund. ICP MS Management,
SHARES LLC is the investment general partner of Side Fund.
BENEFICIALLY
OWNED BY EACH
REPORTING
PERSON
WITH
--------- ----------------------------------------------------------------------------
7 SOLE DISPOSITIVE POWER -0-
--------- ----------------------------------------------------------------------------
8 SHARED DISPOSITIVE POWER
2,715 shares (see response to Item 6)
- ----------- ------------------------------------------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,715 shares
- ----------- ------------------------------------------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 9 EXCLUDES CERTAIN SHARES*
[ ]
- ----------- ------------------------------------------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 0.01%
- ----------- ------------------------------------------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON* PN
- ----------- ------------------------------------------------------------------------------------------------------------------
<FN>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
</FN>
</TABLE>
<PAGE>
Page 9 of 17
ITEM 1(a). NAME OF ISSUER:
Digital Generation Systems, Inc.
ITEM 1(b). ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES:
875 Battery Street, 2nd Floor
San Francisco, CA 94111
ITEM 2(a), (b), (c). NAME OF PERSON FILING, ADDRESS OF PRINCIPAL BUSINESS
OFFICE OR, IF NONE, RESIDENCE, AND CITIZENSHIP:
This statement is being filed by Integral Capital Management
III, L.P., a Delaware limited partnership ("ICM3"), Integral Capital Management
IV, LLC, a Delaware limited liability company ("ICM4") and ICP MS Management,
LLC, a Delaware limited liability company ("ICP Management"). The principal
business address of ICM3, ICM4 and ICP Management is 2750 Sand Hill Road, Menlo
Park, California 94025.
ICM3 is the general partner of Integral Capital Partners III,
L.P., a Delaware limited partnership ("ICP3"), and the investment general
partner of Integral Capital Partners International III, L.P., a Cayman Islands
exempted limited partnership ("ICPI3"). ICM4 is the general partner of Integral
Capital Partners IV, L.P., a Delaware limited partnership ("ICP4"). ICP
Management is the general partner of Integral Capital Partners IV MS Side Fund,
L.P., a Delaware limited partnership ("Side Fund"). With respect to ICM3, ICM4
and ICP Management, this statement relates only to ICM3's, ICM4's and ICP
Management's indirect, beneficial ownership of shares of Common Stock of the
Issuer (the "Shares"). The Shares have been purchased by ICP3, ICPI3, ICP4, and
Side Fund, and none of ICM3, ICM4, or ICP Management directly or otherwise hold
any Shares. Management of the business affairs of ICM3, ICM4 and ICP Management,
including decisions respecting disposition and/or voting of the Shares, resides
in a majority of the general partners or managers of ICM3, ICM 4 and ICP
Management, respectively such that no single general partner or manager of ICM3,
ICM4 or ICP Management has voting and/or dispositive power of the Shares.
ITEM 2(d). TITLE OF CLASS OF SECURITIES:
Common Stock
ITEM 2(e). CUSIP NUMBER:
253921100
<PAGE>
Page 10 of 17
ITEM 3. IF THIS STATEMENT IS FILED PURSUANT TO RULE 13d-1(b), or 13d-2(b) or
(c), CHECK WHETHER THE PERSON FILING IS A:
(a) [ ] Broker or dealer registered under Section 15 of the Exchange
Act.
(b) [ ] Bank as defined in Section 3(a)(6) of the Exchange Act.
(c) [ ] Insurance company as defined in Section 3(a)(19) of the
Exchange Act.
(d) [ ] Investment company registered under Section 8 of the Investment
Company Act.
(e) [ ] An investment adviser in accordance with Rule 13d-1(b)(1)(ii)
(E);
(f) [ ] An employee benefit plan or endowment fund in accordance with
Rule 13d-1(b)(1)(ii)(F);
(g) [ ] A parent holding company or control person in accordance with
Rule 13d-1(b)(1)(ii)(G);
(h) [ ] A savings association as defined in Section 3(b) of the Federal
Deposit Insurance Act;
(i) [ ] A church plan that is excluded from the definition of an
investment company under Section 3(c)(14) of the Investment
Company Act;
(j) [ ] Group, in accordance with Rule 13d-1(b)(1)(ii)(J).
If this statement is filed pursuant to Rule 13d-1(c), check this box.
[X].
ITEM 4. OWNERSHIP.
Provide the following information regarding the aggregate number and
percentage of the class of securities of the issuer identified in Item 1.
A. Integral Capital Management III, L.P. ("ICM3")
(a) Amount Beneficially Owned: 801,271
(b) Percent of Class: 3.6%
(c) Number of shares as to which such person has:
1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote: 801,271
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the disposition:
801,271
B. Integral Capital Management IV, LLC ("ICM4")
(a) Amount Beneficially Owned: 533,000
(b) Percent of Class: 2.4%
(c) Number of shares as to which such person has:
1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote: 533,000
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the disposition:
533,000
<PAGE>
Page 11 of 17
C. ICP MS Management, LLC ("ICP Management")
(a) Amount Beneficially Owned: 2,715
(b) Percent of Class: 0.01%
(c) Number of shares as to which such person has:
1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote: 2,715
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the disposition:
2,715
D. Integral Capital Partners III, L.P.
(a) Amount Beneficially Owned: 653,597
(b) Percent of Class: 2.9%
(c) Number of shares as to which such person has:
1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote: 653,597
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the disposition:
653,597
E. Integral Capital Partners International III, L.P.
(a) Amount Beneficially Owned: 147,674
(b) Percent of Class: 0.7%
(c) Number of shares as to which such person has:
1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote: 147,674
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the disposition:
147,674
F. Integral Capital Partners IV, L.P.
(a) Amount Beneficially Owned: 533,000
(b) Percent of Class: 2.4%
(c) Number of shares as to which such person has:
1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote: 533,000
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the disposition:
533,000
G. Integral Capital Partners IV MS Side Fund, L.P.
(a) Amount Beneficially Owned: 2,715
(b) Percent of Class: 0.01%
(c) Number of shares as to which such person has:
1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote: 2,715
3. Sole power to dispose or to direct the disposition: -0-
4. Shared power to dispose or to direct the disposition:
2,715
<PAGE>
Page 12 of 17
ITEM 5. OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS.
If this statement is being filed to report the fact that as of
the date hereof the reporting person has ceased to be the beneficial owner of
more than five percent of the class of securities, check the following [ ].
ITEM 6. OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER PERSON.
Not applicable.
ITEM 7. IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH ACQUIRED
THE SECURITY BEING REPORTED ON BY THE PARENT HOLDING COMPANY.
Not applicable.
ITEM 8. IDENTIFICATION AND CLASSIFCATION OF MEMBERS OF THE GROUP.
Not applicable.
ITEM 9. NOTICE OF DISSOLUTION OF GROUP.
Not applicable.
ITEM 10. CERTIFICATION.
By signing below I certify that, to the best of my knowledge
and belief, the securities referred to above were not acquired and are not held
for the purpose of or with the effect of changing or influencing the control of
the issuer of the securities and were not acquired and are not held in
connection with or as a participant in any transaction having that purpose or
effect.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: October 13, 1998
INTEGRAL CAPITAL MANAGEMENT III, L.P.
By /s/ Pamela K. Hagenah
----------------------------------
Pamela K. Hagenah
a General Partner
<PAGE>
Page 13 of 17
INTEGRAL CAPITAL MANAGEMENT IV, LLC
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a Manager
ICP MS MANAGEMENT, LLC
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a Manager
INTEGRAL CAPITAL PARTNERS III, L.P.
By Integral Capital Management III, L.P.,
its General Partner
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a General Partner
INTEGRAL CAPITAL PARTNERS INTERNATIONAL III, L.P.
By Integral Capital Management III, L.P.,
its Investment General Partner
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a General Partner
INTEGRAL CAPITAL PARTNERS IV, L.P.
By Integral Capital Management IV, LLC,
its General Partner
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a Manager
<PAGE>
Page 14 of 17
INTEGRAL CAPITAL PARTNERS IV MS SIDE FUND, L.P.
By ICP MS Management, LLC,
its General Partner
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a Manager
<PAGE>
Page 15 of 17
EXHIBIT INDEX
-------------
Found on
Sequentially
Exhibit Numbered Page
- ------- -------------
Exhibit A: Agreement of Joint Filing 16
<PAGE>
Page 16 of 17
EXHIBIT A
Agreement of Joint Filing
The undersigned hereby agree that they are filing jointly
pursuant to Rule 13d-1(k)(1) of the Act the statement dated October 13, 1998
containing the information required by Schedule 13G, for the 1,336,986 Shares of
capital stock of Digital Generation Systems, Inc. held by Integral Capital
Partners III, L.P., a Delaware limited partnership, Integral Capital Partners
International III, L.P., a Cayman Islands exempted limited partnership, Integral
Capital Partners IV, L.P., a Delaware limited partnership, and Integral Capital
Partners IV MS Side Fund, L.P., a Delaware limited partnership.
Date: October 13, 1998
INTEGRAL CAPITAL MANAGEMENT III, L.P.
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a General Partner
INTEGRAL CAPITAL MANAGEMENT IV, LLC
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a Manager
ICP MS MANAGEMENT, LLC
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a Manager
INTEGRAL CAPITAL PARTNERS III, L.P.
By Integral Capital Management III, L.P.,
its General Partner
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a General Partner
<PAGE>
Page 17 of 17
INTEGRAL CAPITAL PARTNERS INTERNATIONAL III, L.P.
By Integral Capital Management III, L.P., its Investment
General Partner
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a General Partner
INTEGRAL CAPITAL PARTNERS IV, LLC
By Integral Capital Management IV, LLC,
its General Partner
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a Manager
INTEGRAL CAPITAL PARTNERS IV MS SIDE FUND, L.P.
By Integral Capital Management IV, LLC, its General
Partner
By /s/ Pamela K. Hagenah
---------------------------------
Pamela K. Hagenah
a Manager
