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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
Digital Generation Systems, Inc.
(Name of Issuer)
Common Stock
- -------------------------------------------------------------------
(Title of Class of Securities)
125708107
(CUSIP Number)
Benjamin L. Douglas, Esq.
c/o Shartsis, Friese & Ginsburg LLP
One Maritime Plaza, 18th Floor
San Francisco, California 94111
(415) 421-6500
- ------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
February 10, 1998
(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 / /.
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 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).
Potential persons who are to respond to the collection of
information contained in this form are not required to respond
unless the form displays a currently valid OMB control number.
SEC 1746 (10-97)
SEC 1746 (10-97)
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 2 of 15 Pages
- ------------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
London Merchant Securities plc
- ------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /*/
(b) / /
- ------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United Kingdom
- ------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY -----------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 1,222,500
REPORTING -----------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
-----------------------------------------
10 SHARED DISPOSITIVE POWER
1,222,500
- ------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,222,500
- ------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- ------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.1%
- ------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
- ------------------------------------------------------------------
*SEE INSTRUCTIONS 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>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 3 of 15 Pages
- ----------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Lion Investments Limited
- ----------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /*/
(b) / /
- ----------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ----------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United Kingdom
- ----------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 430,000
BENEFICIALLY ---------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING ---------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 430,000
---------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- ----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
430,000
- ----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- ----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.5%
- ----------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- ----------------------------------------------------------------
*SEE INSTRUCTIONS 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>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 4 of 15 Pages
- ----------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Westpool Investment Trust plc
- ----------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /*/
(b) / /
- ----------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ----------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United Kingdom
- ----------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 792,500
BENEFICIALLY ---------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING ---------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 792,500
---------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- ----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
792,500
- ----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- ----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.5%
- ----------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00
- ----------------------------------------------------------------
*SEE INSTRUCTIONS 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>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 5 of 15 Pages
- ----------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Robert A. Rayne
- ----------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /*/
(b) / /
- ----------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- ----------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United Kingdom
- ----------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 72,500
BENEFICIALLY ---------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING ---------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 72,500
---------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- ----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
72,500
- ----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- ----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.6%
- ----------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- ----------------------------------------------------------------
*SEE INSTRUCTIONS 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>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 6 of 15 Pages
- ----------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Eugene M. Weber
- ----------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)/*/
(b)/ /
- ----------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- ----------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- ----------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 7,600
BENEFICIALLY ---------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING ---------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 7,600
---------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- ----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,600
- ----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- ----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
- ----------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- ----------------------------------------------------------------
*SEE INSTRUCTIONS 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>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 7 of 15 Pages
- ----------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Morris Cheston III
- ----------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /*/
(b) / /
- ----------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- ----------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- ----------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,140
BENEFICIALLY ---------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING ---------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,140
---------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- ----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,140
- ----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- ----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
- ----------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- ----------------------------------------------------------------
*SEE INSTRUCTIONS 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>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 8 of 15 Pages
- ----------------------------------------------------------------
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Angela G. Weber
- ----------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)/*/
(b)/ /
- ----------------------------------------------------------------
3 SEC USE ONLY
- ----------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- ----------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- ----------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- ----------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,000
BENEFICIALLY ---------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -0-
REPORTING ---------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,000
---------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- ----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000
- ----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
- ----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
- ----------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- ----------------------------------------------------------------
*SEE INSTRUCTIONS 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>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 9 of 15 Pages
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of common stock (the "Securities")
of Digital Generation Systems, Inc. ("DGS"). The principal
executive office of DGS is located at 875 Battery Street, San
Francisco, CA 94111.
ITEM 2. IDENTITY AND BACKGROUND.
The persons filing this statement and the persons enumerated in
Instruction C of Schedule 13D and, where applicable, their
respective places of organization, general partners, directors,
executive officers and controlling persons, and the information
regarding them, are as follows:
(a) London Merchant Securities plc ("LMS"); Lion Investments
Limited ("Lion"); Westpool Investment Trust plc ("Westpool");
Robert A. Rayne ("Rayne"); Eugene M. Weber ("Mr. Weber"); Morris
Cheston III ("Cheston"); and Angela G. Weber ("Ms. Weber").
(b) The business address of LMS, Lion, Westpool and Rayne is 33
Robert Adam Street, London WIM 5AH, United Kingdom. The business
address of Mr. Weber, Cheston and Ms. Weber is 50 California
Street, Suite 3200, San Francisco, CA 94111.
(c) Rayne is a director of LMS, Lion and Westpool. Weber is the
president and sole shareholder of Bluewater Capital Management,
Inc., a California corporation ("Bluewater Inc."), and the managing
member of Bluewater Investments LLC, a California limited liability
company ("Bluewater LLC"). Cheston is an employee of Bluewater
Inc. Ms. Weber is the wife of Mr. Weber.
(d) During the last five years, none of such persons has been
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) During the last five years, none of such persons was 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.
(f) LMS, Lion and Westpool are limited companies organized under
the laws of England and Wales. Rayne is a citizen of the United
Kingdom. Mr. Weber, Cheston and Ms. Weber are citizens of the
United States.
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 10 of 15 Pages
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The source and amount of funds used in purchasing the Securities
were as follows:
Purchaser Source of Funds Amount
LMS Working Capital(1) $5,385,681.25
Lion Working Capital $1,791,437.00
Westpool Working Capital $3,594,244.25
Rayne Personal Funds $ 285,881.00
Mr. Weber Personal Funds $ 25,206.50
Cheston Personal Funds $ 4,997.50
Ms. Weber Personal Funds $ 2,563.00
(1) Includes funds of Lion and Westpool invested in
Securities.
ITEM 4. PURPOSE OF TRANSACTION.
The principal purpose of the acquisitions of securities is
investment. The persons named in Item 2 of this statement have no
plans or proposals that relate to or would result in:
(a) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving DGS or any of its
subsidiaries;
(b) A sale or transfer of a material amount of assets of DGS or of
any of its subsidiaries;
(c) Any change in the present board of directors or management of
DGS, including any plans or proposals to change the number or term
of directors or to fill any existing vacancies on the board;
(d) Any material change in the present capitalization or dividend
policy of DGS;
(e) Any other material change in DGS's business or corporate
structure;
(f) Changes in DGS's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of
control of DGS by any person;
(g) Causing a class of securities of DGS to be delisted from a
national securities exchange or to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national
securities association;
(h) A class of equity securities of DGS becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934, as amended; or
(i) Any action similar to any of those enumerated above.<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 11 of 15 Pages
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The beneficial ownership of the Securities of the persons named in
Item 2 of this statement is as follows at the date hereof:
Aggregate
Beneficially
Owned Voting Power Dispositive Power
Name Number Percent Sole Shared Sole Shared
LMS 1,222,500 10.1% -0- 1,222,500 -0- 1,222,500
Lion 430,000 3.5% 430,000 -0- 430,000 -0-
Westpool 792,500 6.5% 792,500 -0- 792,500 -0-
Rayne 72,500 0.6% 72,500 -0- 72,500 -0-
Mr. Weber 7,600 0.1% 7,600 -0- 7,600 -0-
Cheston 1,140 0.1% 1,140 -0- 1,140 -0-
Ms. Weber 1,000 0.1% 1,000 -0- 1,000 -0-
The persons filing this statement effected the following
transactions in the Securities on the dates indicated, and such
transactions are the only transactions in the Securities since
December 12, 1997, by the persons filing this statement:
Purchase Number Price Broker
Name or Sale Date of Shares Per Share Used
Mr. Weber P 12-30-97 4,000 2.50 AB
Ms. Weber P 12-30-97 1,000 2.50 AB
Westpool P 2-10-98 200,000 3.13 C&C
Lion P 2-10-98 200,000 3.13 C&C
H&Q = Hambrecht & Quist
C&C = Cowen & Co.
AB = Alex. Brown & Sons<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 12 of 15 Pages
ITEM. 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Lion and Westpool are wholly owned subsidiaries of LMS, which is
publicly listed in the United Kingdom. Pursuant to its consultancy
agreement (the "Agreement") with Westpool, Bluewater LLC provides
investment advice to Westpool. Under the Agreement, Bluewater LLC
has no authority to invest Westpool's funds or to vote or dispose
of securities purchased with such funds. The Agreement may be
terminated by either party on notice as provided in the Agreement
and provides for Westpool to pay to Bluewater LLC monthly
consulting fees and, if certain conditions are met, additional fees
based on realized and unrealized gains and losses attributed to
Bluewater LLC's investment advice to Westpool.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
A. Agreement Regarding Joint Filing of Statement on Schedule 13D
or 13G.
SIGNATURES
After reasonable inquiry and to the best of my knowledge, I
certify that the information set forth in this statement is true,
complete and correct.
DATED: February 18, 1998
London Merchant Securities plc
By: /s/ Robert A. Rayne
Robert A. Rayne
Director
Lion Investments Limited
By: /s/ Robert A. Rayne
Robert A. Rayne
Director
Westpool Investment Trust plc
By: /s/ Robert A. Rayne
Robert A. Rayne
Director
/s/ Robert A. Rayne
Robert A. Rayne
(Signatures continued on next page)
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 13 of 15 Pages
(Signatures continued from previous page)
/s/Eugene M. Weber
Eugene M. Weber
/s/ Morris Cheston III
Morris Cheston III
/s/ Angela G. Weber
Angela G. Weber<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 14 of 15 Pages
EXHIBIT A
AGREEMENT REGARDING JOINT FILING
OF STATEMENT ON SCHEDULE 13D OR 13G
The undersigned agree to file jointly with the Securities and
Exchange Commission (the "SEC") any and all statements on Schedule
13D or Schedule 13G (and any amendments or supplements thereto)
required under section 13(d) of the Securities Exchange Act of
1934, as amended, in connection with purchases by the undersigned
of common stock of Digital Generation Systems, Inc. For that
purpose, the undersigned hereby constitute and appoint London
Merchant Securities plc, a limited company organized under the laws
of England and Wales, as their true and lawful agent and attorney-
in-fact, with full power and authority for and on behalf of the
undersigned to prepare or cause to be prepared, sign, file with the
SEC and furnish to any other person all certificates, instruments,
agreements and documents necessary to comply with section 13(d) and
section 16(a) of the Securities Exchange Act of 1934, as amended,
in connection with said purchases, and to do and perform every act
necessary and proper to be done incident to the exercise of the
foregoing power, as fully as the undersigned might or could do if
personally present.
DATED: February 18, 1998
London Merchant Securities plc
By: /s/ Robert A. Rayne
Robert A. Rayne
Director
Lion Investments Limited
By: /s/ Robert A. Rayne
Robert A. Rayne
Director
Westpool Investment Trust plc
By: /s/ Robert A. Rayne
Robert A. Rayne
Director
(Signatures continued on next page)<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 125708107 Page 15 of 15 Pages
(Signatures continued from previous page)
/s/ Robert A. Rayne
Robert A. Rayne
/s/ Iain MacPhail
Iain MacPhail
/s/Eugene M. Weber
Eugene M. Weber
/s/ Morris Cheston III
Morris Cheston III
/s/ Angela G. Weber
Angela G. Weber
