-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UaW8KiRuNLOanqgVCqOFBlA9Hqm+5ms37xl1ypEYQ6oaYILCRezLWeUElZh9tEfh J1gcJ4fFQknHpK158OaMmg== 0000935836-99-000141.txt : 19990413 0000935836-99-000141.hdr.sgml : 19990413 ACCESSION NUMBER: 0000935836-99-000141 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19990412 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EMBREX INC/NC CENTRAL INDEX KEY: 0000878725 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 561469825 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-42015 FILM NUMBER: 99591466 BUSINESS ADDRESS: STREET 1: 1035 SWABIA COURT CITY: MORRISVILLE STATE: NC ZIP: 27560 BUSINESS PHONE: 9199415185 MAIL ADDRESS: STREET 1: PO BOX 13989 CITY: RESEARCH TRIANGLE PK STATE: NC ZIP: 27709 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PALO ALTO INVESTORS CENTRAL INDEX KEY: 0001012084 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 431 FLORENCE ST STREET 2: STE 200 CITY: PALO ALTO STATE: CA ZIP: 94301 MAIL ADDRESS: STREET 1: 431 FLORENCE ST STREET 2: STE 200 CITY: PALO ALTO STATE: CA ZIP: 94301 SC 13D/A 1 OMB APPROVAL OMB Number:3235-0145 Expires: August 31, 1999 Estimated average burden hours per form 14.90 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 6) EMBREX, INC. (Name of Issuer) Common Stock (Title of Class of Securities) 290817105 (CUSIP Number) Benjamin L. Douglas, Esq. Shartsis Friese & Ginsburg LLP One Maritime Plaza, 18th Floor San Francisco, CA 94111 (415) 421-6500 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 29, 1999 (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(e), 13d-1(f) or 13d-1(g), check the following box / /. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) 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) CUSIP No. 290817105 Page 2 of 7 Pages - ------------------------------------------------------------------ 1 NAME OF REPORTING PERSON IRS IDENTIFICATION NO. OF ABOVE PERSON Palo Alto Investors IRS No.: 94-3088699 - ------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*(a)/X/ (b)/ / - ------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------ 4 SOURCE OF FUNDS AF - ------------------------------------------------------------------ 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION California - ------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER SHARES -0- BENEFICIALLY ----------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 1,083,000 REPORTING ----------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH -0- ----------------------------------------- 10 SHARED DISPOSITIVE POWER 1,083,000 - ------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,083,000 - ------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.0% - ------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON* CO, IA - ------------------------------------------------------------------ CUSIP No. 290817105 Page 3 of 7 Pages - ------------------------------------------------------------------ 1 NAME OF REPORTING PERSON IRS IDENTIFICATION NO. OF ABOVE PERSON William Leland Edwards - ------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*(a)/X/ (b)/ / - ------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------ 4 SOURCE OF FUNDS AF, PF - ------------------------------------------------------------------ 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION California - ------------------------------------------------------------------ NUMBER OF 7 SOLE VOTING POWER SHARES 32,400 BENEFICIALLY ----------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 1,083,000 REPORTING ----------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 32,400 ----------------------------------------- 10 SHARED DISPOSITIVE POWER 1,083,000 - ------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,115,400 - ------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - ------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.4% - ------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON* IN - ------------------------------------------------------------------ CUSIP No. 290817105 Page 4 of 7 Pages ITEM 1. SECURITY AND ISSUER. This statement relates to shares of Common Stock (the "Stock") of Embrex, Inc. (the "Issuer"). The principal executive office of the Issuer is located at 1035 Swabia Court, Durham, NC 27703. 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) The names of the persons filing this statement are Palo Alto Investors ("PAI") and William Leland Edwards ("Edwards") (collectively, the "Filers"). (b) The business address of the Filers is located at 470 University Avenue, Palo Alto, CA 94301. (c) PAI is an investment adviser registered under the Investment Advisers Act of 1940. Edwards is the President and principal shareholder of PAI. (d) During the last five years, neither of the Filers has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, neither of the Filers 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) PAI is a California corporation. Edwards is a citizen of the United States of America. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The source and amount of funds used in purchasing the Stock were as follows: Purchaser Source of Funds Amount PAI Funds Under Management* $6,746,437.89 Edwards Working Capital $ 204,867.00 * Includes funds of PAI's advisory clients invested in the Stock. CUSIP No. 290817105 Page 5 of 7 Pages ITEM 4. PURPOSE OF TRANSACTION. PAI's principal purpose for acquiring the Stock is equity investment. Because of the current market price of the Stock, PAI, on behalf of an advisory client of which PAI is the general partner (the "Client"), has asked the Issuer to include in its proxy a shareholder proposal (the "Proposal") recommending that the Issuer's Board of Directors retain a nationally recognized investment banking firm to recommend and evaluate the Issuer's options to increase shareholder value, including, without limitation, an issuer tender offer. On March 29, 1999, PAI, on behalf of the Client, caused the nominee of the record holder of the Stock beneficially owned by the Client to submit letters to the Issuer that, among other things: (a) informed the Issuer that Edwards would attend the Issuer's annual shareholders meeting to be held in May 1999 to present the Proposal and a proposed amendment to the Issuer's By-laws, a copy of which is attached hereto as Exhibit A (the "Proposed Amendment"); (b) informed the Issuer that the Client intends to deliver a proxy statement and form of proxy to holders of at least the minimum number of the Issuer's voting shares required to approve the Proposed Amendment; and (c) requested, pursuant to North Carolina law, that the Issuer make available certain records of the Issuer for the purpose of the Client's communication with the Issuer's other shareholders to solicit (i) support for the Proposal and (ii) proxies to approve the Proposed Amendment. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Each Filer's beneficial ownership of the Stock at the date hereof is reflected on the cover sheet for that Filer. The Filers have effected the following transactions in the Stock since March 17, 1999: Purchase Number Price Type of Name or Sale Date of Shares Per Share($) Transaction PAI P 3/18/99 500 4.99 Open market purchase PAI P 3/18/99 2,000 4.95 Open market purchase PAI P 3/18/99 3,000 4.94 Open market purchase PAI P 3/18/99 2,500 4.94 Open market purchase CUSIP No. 290817105 Page 6 of 7 Pages PAI is a registered investment adviser whose clients have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Stock. No individual client's holdings of the Stock are more than 5% of the class. ITEM. 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. PAI is a registered investment adviser whose clients have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the various securities in which their assets are invested, including the Stock. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. A. Proposed Amendment to the Issuer's By-laws. 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: April 6, 1999 Palo Alto Investors By: /s/ William L. Edwards William L. Edwards, President /s/ William L. Edwards William L. Edwards CUSIP No. 290817105 Page 7 of 7 Pages Exhibit A PROPOSED AMENDMENT TO ARTICLE III, SECTION 4 OF THE BYLAWS OF EMBREX, INC. Amend Article III, Section 4 of the By-laws of Embrex, Inc. by adding to the end thereof the following paragraph: In addition, and notwithstanding any other provision of these by-laws to the contrary, the following provisions shall govern special meetings of shareholders of the Corporation. A special meeting of the shareholders of the Corporation shall be called by the Secretary upon the written request of shareholders who together own ten percent (10%) or more of the outstanding shares of voting stock of the Corporation. The written request shall state the purpose and date of the meeting. The notice of the special meeting shall be mailed by the Secretary within 30 days following the Corporation's receipt of such request. If the Secretary fails to call the special meeting and mail the notice as required by the preceding sentence, a person designated by the shareholders requesting the meeting shall have the power and authority to call the special meeting and mail such notice. A special meeting called at the request of shareholders shall be presided over by a person designated by the shareholders calling the meeting. The record date for determining shareholders entitled to request a special meeting is the date the first shareholder signs the request. The record date for the special meeting shall be the record date set forth in the request, so long as such date complies with North Carolina law. Special meetings of shareholders shall be held at the location set forth in the request. For purposes of this Section 4, "shareholder" includes a beneficial owner whose shares are held in voting trust or by a nominee and whose beneficial ownership is certified to the Corporation by that voting trust or nominee. Without the approval of the shareholders, the board of directors may not further amend or repeal this Section 4 of the By-laws governing special meetings or adopt any new by-law provision that is inconsistent with or would render ineffective the provisions of this Section 4 pertaining to special meetings of shareholders. BLD\4325\011\1038797 -----END PRIVACY-ENHANCED MESSAGE-----