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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
FAROUDJA, INC.
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(Name of Issuer)
Common Stock, $.001 par value
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(Title of Class of Securities)
311643 10 0
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(CUSIP Number)
Merv Adelson, 10900 Wilshire Blvd., Suite 950, Los Angeles, CA 90024
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 13, 1999
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(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).
(Continued on following page(s))
Page 1 of Pages
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CUSIP No. 13D Page of Pages
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(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
MERV ADELSON
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(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) /X/
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(3) SEC Use Only
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(4) Source of Funds*
PF
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization
UNITED STATES OF AMERICA
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Number of Shares (7) Sole Voting Power
Beneficially Owned 864,444
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting Power
53,618
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(9) Sole Dispositive Power
864,444
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(10) Shared Dispositive Power
53,618
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
918,062
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
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(13) Percent of Class Represented by Amount in Row (11)
7.59%
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(14) Type of Reporting Person*
IN
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*SEE INSTRUCTION BEFORE FILLING OUT!
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CUSIP No. 13D Page of Pages
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(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
ADELSON INVESTORS, LLC
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(2) Check the Appropriate Box if a Member (a) /X/
of a Group* (b) / /
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(3) SEC Use Only
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(4) Source of Funds*
00
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization
DELAWARE
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Number of Shares (7) Sole Voting Power
Beneficially Owned 841,244
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting Power
-0-
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(9) Sole Dispositive Power
841,244
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(10) Shared Dispositive Power
-0-
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
841,244
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
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(13) Percent of Class Represented by Amount in Row (11)
6.96%
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(14) Type of Reporting Person*
00
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*SEE INSTRUCTION BEFORE FILLING OUT!
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Page of Pages
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ITEM 1. SECURITY AND ISSUER
This Amendment Number 2 to Schedule 13D relates to the Common Stock, $.001
par value, of Faroudja, Inc., whose principal executive offices are located
at 750 Palomar Avenue, Sunnyvale, California 94096.
ITEM 2. IDENTITY AND BACKGROUND
This Amendment Number 2 to Schedule 13D is filed on behalf of Merv Adelson
and Adelson Investors, LLC, a Delaware limited liability company. The
business address of Mr. Adelson and Adelson Investors, LLC is 10900 Wilshire
Boulevard, Suite 950, Los Angeles, California 90024. Mr. Adelson is a
private investor and Adelson Investors, LLC is a Delaware limited liability
company.
Neither Mr. Adelson nor Adelson Investors, LLC has, during the last five
years, been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors), nor has either of them been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as
the result of which either of them was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activity subject to, federal or state securities laws or finding any
violation with respect to such laws.
Mr. Adelson is a citizen of the United States of America and Adelson
Investors is a Delaware limited liability company.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Adelson Investors, LLC directly owns 841,244 shares of Faroudja, Inc.
common stock, all of which were acquired with working capital in the
following manner:
(a) In March, 1996 (i) Faroudja, Inc. issued 1,043,105 shares of
its Common Stock for an aggregate purchase price of $4.0 million of which
213,642 shares were issued to Adelson Investors, LLC; (ii) Yves and Isabell
Faroudja (the "Founders") sold an aggregate of 3,569,395 share of Common
Stock of Faroudja, Inc. for an aggregate purchase price of $14.0 million, of
which 731,062 shares were purchased by Adelson Investors, LLC; and (iii) the
Founders granted Adelson Investors, LLC an option to purchase 486,875 shares
of Faroudja, Inc.'s Common Stock (the "Founder's Option") for an exercise
price of $3.90 per share.
(b) In September, 1997, Adelson Investors, LLC exercised its
Founder's Option for a total purchase price of $1,898,813.
(c) In June, 1998, Adelson Investors, LLC distributed to its
Members an aggregate of 473,486 shares.
(d) In January, 1999, Adelson Investors, LLC distributed to its
Members an aggregate of 116,849 shares.
Mr. Adelson directly owns 76,818 shares of Common Stock of Faroudja,
Inc. 1,482 shares were issued to Mr. Adelson by Faroudja, Inc. as
compensation for services rendered as a member of the Board of Directors of
Faroudja, Inc. and 30,000 shares were purchased in the open market in joint
tenancy with his spouse (the "Joint Shares"). The Joint Shares were
purchased from personal funds for $8.00 per share, or an aggregate purchase
price of $240,000. 23,618 shares were distributed to his spouse from Adelson
Investors, LLC. 21,718 shares covered by the Warrant issued pursuant to the
Consulting Agreement are currently exercisable.
ITEM 4. PURPOSE OF TRANSACTION
Adelson Investors, LLC distributed shares to members of Adelson
Investors, LLC. Neither Adelson Investors, LLC nor Mr. Adelson has any plans
or proposals which relate to or would result in:
(a) the acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer; provided, however,
that Adelson Investors, LLC and Mr. Adelson reserve the right to acquire
additional securities or dispose of securities from time to time.
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer
or any of its subsidiaries;
(d) any change in the present Board of Directors or the management
of the Issuer, including any plans or proposals to change the number or term
of Directors or to fill any existing vacancies on the Board;
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other material change in the Issuer's business or corporate
structure;
(g) changes in the Issuer's Certificate of Incorporation or Bylaws
or other actions which may impede the acquisition of control of the Issuer by
any person;
(h) causing a class of securities of the Issuer to be delisted from
a national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association;
(i) a class of equity securities of the Issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the
Securities Exchange Act of 1934; or
(j) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Adelson Investors, LLC directly owns 841,244 shares of Common Stock of
Faroudja, Inc. representing 6.96% of the outstanding shares. This number
includes (i) 213,642 shares purchased from Faroudja, Inc. in March, 1996;
(ii) 731,062 shares purchased from the Founders in March, 1996; (iii) 486,875
shares obtained upon exercise of the Founder's Option; and (iv) is reduced by
(a) 473,486 shares distributed to members of Adelson Investors, LLC in June,
1998 and (b) 87,637 shares distributed to members of Adelson Investors, LLC
in January, 1999.
Mr. Adelson beneficially owns 918,062 shares of Common Stock of
Faroudja, Inc., representing 7.59% of the outstanding shares. This number
includes (i) 841,244 shares owned directly by Adelson Investors, LLC of which
Mr. Adelson has sole voting and investment power; (ii) 30,000 shares owned in
joint tenancy with his spouse; (iii) 23,618 shares distributed to his spouse
from Adelson Investors, LLC; (iv) 1,482 shares received from Faroudja, Inc.,
as compensation for services as a member of the Board of Directors; and (v)
21,718 shares covered by the Warrant issued pursuant to the Consulting
Agreement.
Mr. Adelson is the managing member of Adelson Investors, LLC, and Mr.
Adelson has sole voting and investment power with respect to the 841,244
shares directly owned by Adelson Investors, LLC.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
In December 1996, Faroudja, Inc. (the "Company") entered into a three
year consulting agreement ("Adelson Consulting Agreement") with Merv Adelson,
a director of the Company pursuant to which Mr. Adelson agreed to provide
certain consulting services in the analysis and implementation of potential
strategic alliances ("Proposed Strategic Alliances") in the specific field of
TV signal enhancement for TV, cable TV, satellite TV and DVDs, including, but
not limited to (i) providing the Company with a list of possible corporate
investors, partners, customers, buyers, lenders and joint ventures ("Proposed
Strategic Alliance Partners"), (ii) coordinating and making approaches to
Proposed Strategic Alliance Partners, and (iv) assisting in the negotiation
of the principal forms of Proposed Strategic Alliances and preparation of all
contracts, documents, approvals and related matters necessary to consummate a
Proposed Strategic Alliance with a Proposed Strategic Alliance Partner. The
Company has agreed to compensate Mr. Adelson for any strategic alliance or
combination of strategic alliances during the term of the agreement in which
the Company receives consideration (as defined in the agreement) of at least
$5 million, through the issuance of a three year warrant to Adelson for the
purchase of 65,152 shares of Common Stock with an exercise price of $.015 per
share. 21,718 shares covered by the Warrant are currently exercisable.
During the term of the Consulting Agreement, the Company also agreed to use
its best efforts to cause the election to the Board of Directors of Mr.
Adelson (or a designee of Mr. Adelson reasonably acceptable to the Board of
Directors) and an additional designee of Mr. Adelson reasonably acceptable to
the Board of Directors. Pursuant to such efforts, Mr. Adelson and Stuart D.
Buchalter, as designee of Mr. Adelson, were elected to the Board of Directors.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
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.
January 14, 1999
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(Date
Adelson Investor, LLC
/s/ Merv Adelson
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(Signature)
Merv Adelson, Managing Member
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(Name/Title)
