<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 4, 1995;
REGISTRATION NO. 33-88588
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------
DREXLER TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 77-0176309
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1077 INDEPENDENCE AVENUE
MOUNTAIN VIEW, CALIFORNIA 94043-1601
(415) 969-7277
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
<TABLE>
<S> <C>
JEROME DREXLER Copy to:
PRESIDENT JERALD E. ROSENBLUM, ESQ.
DREXLER TECHNOLOGY CORPORATION BARRY LEE KATZMAN, ESQ.
1077 INDEPENDENCE AVENUE ROSENBLUM, PARISH & ISAACS, P.C.
MOUNTAIN VIEW, CALIFORNIA 94043-1601 160 W. SANTA CLARA STREET, SUITE 1500
(415) 969-7277 SAN JOSE, CALIFORNIA 95113
(Name, address, including zip code, and telephone (408) 977-0120
number, including area code, of agent for service)
</TABLE>
-----------------------
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement when
warranted by market conditions and other factors.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
/ /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITES TO BE REGISTERED OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED SHARE (1) PRICE (1) FEE (2)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK 312,500 SHARES $6.8125 $2,128,906.25 $653.39
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of
calculating the filing fee, based on the average of the high and low
prices for the Company's Common Stock as reported on the NASDAQ
National Market System on July 31, 1995.
(2) A filing fee in the amount of $547.68 was paid with the original
filing on January 17, 1995, based upon registration of 267,500 shares
to be sold at a maximum offering price of $5.9375 per share then in
effect. The additional filing fee of $105.71 is included with the
filing of this Amendment No. 1 based upon the addition of 45,000
shares at the maximum offering price per share of $6.8125 currently in
effect.
-----------------------
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
DREXLER TECHNOLOGY CORPORATION
CROSS-REFERENCE SHEET PURSUANT TO
ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
LOCATION IN
ITEM CAPTION IN FORM S-3 PROSPECTUS BY CAPTION
- ---- ------------------- ---------------------
<S> <C> <C>
1. Forepart of the Registration Statement Facing Page; Cross-Reference Sheet;
and Outside Front Cover Page of Outside Front Cover Page
Prospectus
2. Inside Front and Outside Back Cover Outside Front Cover Page; Inside Front
Pages of Prospectus Cover Page; Available Information; Incorporation of Certain
Documents by Reference
3. Summary Information, Risk Factors Risk Factors
and Ratio of Earnings to Fixed
Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Inside Front Cover Page; Selling Stockholders
8. Plan of Distribution Outside Front Cover Page
9. Description of Securities to be Not Applicable
Registered
10. Interests of Named Experts and Not Applicable
Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Information Incorporation of Certain Documents by
by Reference Reference
13. Disclosure of Commission Position on Indemnification of Officers and Directors
Indemnification for Securities
Act Liabilities
</TABLE>
-ii-
<PAGE> 3
Subject to completion, dated August 4, 1995
PROSPECTUS
DREXLER TECHNOLOGY CORPORATION
312,500 Shares Common Stock, $0.01 par value
All of the shares (the "Shares") of Common Stock offered hereby are being
offered for the account of the Selling Stockholders listed below. See "Selling
Stockholders." Drexler Technology Corporation (the "Company") will not receive
any of the proceeds from the sale of the Shares.
The Company's Common Stock is listed on The NASDAQ Stock Market National Market
System under the symbol "DRXR." On July 31, 1995, the last reported sale price
for the Common Stock on the NASDAQ NMS was $6.875 per share.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" FOR A
DISCUSSION OF
CERTAIN MATERIAL RISKS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
PLAN OF DISTRIBUTION
The Registration Statement covering the Shares offered hereby will be
maintained in effect, and the Shares may be sold thereunder by the Selling
Stockholders, until July 31, 1997 (the "Offering Period"). The Selling
Stockholders have advised the Company that they may sell the Shares, directly
or through brokers or dealers, from time to time during the Offering Period.
Such sales may be made at the market price in one or more transactions on The
NASDAQ Stock Market, or at privately negotiated prices in negotiated
transactions, or otherwise at prices and terms prevailing at the time of sale.
At the end of the Offering Period, Shares not sold by the Selling Stockholders
during the Offering Period will return to the status of restricted stock which
may be sold at that time pursuant to the provisions of Rule 144 under the
Securities Act of 1933 (the "Act").
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Such reports and other information
may be inspected and copied at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the regional offices of the Commission located
at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois and 75 Park Place, 14th Floor, New York, New York 10007. Copies of
such material can be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company's Common Stock is listed on the National Association of Securities
Dealers' NASDAQ National Market System, and such reports and other information
concerning the Company also can be inspected at the offices of the NASD at 1735
K Street, N.W., Washington, D.C., 20006-1500.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS _____________________, 1995.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<S> <C>
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . 1
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . 1
SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . 2
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . 3
INDEMNIFICATION OF OFFICERS AND DIRECTORS . . . . . . . . . 5
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . 5
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>
SELLING STOCKHOLDERS
The Shares registered hereunder are being offered for the accounts of
the stockholders of the Company listed below (the "Selling Stockholders").
None of the Selling Stockholders has held any office or other material
relationship or position with the Company or any of its predecessors or
affiliates within the past three years or holds more than 5% of the Company's
outstanding stock.
<TABLE>
<CAPTION>
Number of No. of Shares
Shares Owned Number of Shares Owned After
Stockholder Prior to Offering To Be Offered Offering (1) % (2)
----------- ----------------- ---------------- ------------- -----
<S> <C> <C> <C> <C>
Alphi Fund, L.P. 187,500 187,500 -0- --
Wasatch Aggressive
Equity Fund 40,000 40,000 -0- --
Wasatch Mid-Cap Fund 85,000 85,000 -0- --
</TABLE>
- -----------------------------
(1) Assumes all shares to be offered will be sold.
(2) Percentage of Common Stock outstanding estimated to be owned
after completion of the offering, based upon 8,689,179 shares
of Common Stock outstanding as of June 30, 1995.
The Selling Stockholders purchased the Shares to be offered by them in
private placements in December 1994 and March and June 1995, pursuant to
agreements with the Company which contained an undertaking of the Company to
include the Shares in the registration filing for this offering. The
transactions were exempt from registration under the Act pursuant to Section
4(6) of the Act and Rule 506 of Regulation D under the Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act of 1933 (the "Act") with respect to the
Common Stock offered pursuant to this Prospectus. This Prospectus omits
certain information contained in the Registration Statement, and reference is
made to the Registration Statement, including the exhibits thereto, for further
information with respect to the Company and the securities offered hereby.
Statements made in this Prospectus concerning the contents or provisions of any
agreement or other document referred to herein are not necessarily complete;
and each such statement is qualified in its entirety by, and reference is made
to, the copy of such agreement or other document filed as an exhibit or
schedule to the Registration Statement or incorporated therein by reference.
For further information, reference is made to the Registration Statement and to
the exhibits and schedules filed therewith, which are available for inspection
without charge at the principal office of the Commission in Washington, D.C.
Copies of the material containing this information may be obtained from the
Commission upon payment of the prescribed fee.
The following documents, all of which were previously filed with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference
in this Prospectus: The Company's Annual Report on Form 10-K for the year
ended March 31, 1995 and the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1995. All documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
termination of this Offering, also shall be deemed to be incorporated by
reference herein.
-2-
<PAGE> 5
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that such statement is modified or superseded by a statement
contained in this Prospectus or in any other subsequently filed document that
also is or is deemed to be incorporated by reference into this Prospectus. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a
Prospectus has been delivered, upon the written request of any such person, a
copy of any or all of the documents referred to above that have been or may be
incorporated in this Prospectus by reference, other than exhibits to such
documents. Written requests for such copies should be directed to: Steven G.
Larson, Vice President and Chief Financial Officer, Drexler Technology
Corporation, 1077 Independence Avenue, Mountain View, CA 94043-1601.
RISK FACTORS
EARLY STAGE OF PRODUCT COMMERCIALIZATION. Beginning during the
1980's, the Company has invested considerable resources in the development of
optical memory cards and related equipment and software, which is now the
Company's sole product line. These products have recently entered the
commercial stage through the Company's VAR (value-added reseller) network,
which was initially launched in 1991, and reached sales of approximately
150,000 optical memory cards in fiscal 1995. During fiscal 1995, the Company
sold optical memory cards and related equipment and software through its
subsidiary, LaserCard Systems Corporation, to approximately 57 customers
located in 11 states and 26 foreign countries. However, high-volume orders for
optical memory cards require the VAR companies to develop customers and
applications, or obtain significant follow-on orders from customers whose
programs are already underway. Such orders cannot be predicted as to timing
and amount while the Company's VAR organization is gaining more experience with
optical memory card products and developing customers and applications. The
Company has not yet entered into any long-term supply agreements with its
customers and does not have a material order backlog, as it generally fills
orders within 30 days of receipt of a purchase or release order. Until a
material level of order backlog is established, the Company's sales are subject
to fluctuation.
UNPREDICTABLE LICENSE REVENUES. Historically, revenues from fees for
patent and distribution licenses have been an important part of the Company's
revenues, profits and financing. The Company is actively pursuing efforts to
generate additional license revenues. However, the Company's license sales are
sporadic and unpredictable as to timing and type of license.
LIQUIDITY; LIMITED CAPITAL RESOURCES. At the current level of product
sales, the Company does not generate cash from operations. To fund its
operations, the Company requires either additional financing, sales of
additional patent and distribution licenses, or a substantial increase in order
levels of optical memory cards. Based on current raw material costs and other
expense calculations, the Company estimates that it will break even on cash
flow if it achieves annual sales in the range of 1.5 to 2 million optical
memory cards. Generally, the Company's customers make advance payments, in
whole or in part, at the time of placing an order, since the Company's products
are usually made to custom specifications. Therefore, although the Company has
not established a line of credit, the Company believes that working capital
should be sustainable provided order levels increase. However, should it
become necessary for the Company to negotiate a line of credit, no assurance
can be made that such negotiations will be successful. The Company currently
makes and sells optical cards in limited quantities, with orders typically
ranging from 5,000 to 50,000 cards per order. This volume is expected to
increase as the market expands and/or when one or more major customer programs
require a very large initial quantity of cards. The Company believes there are
prospects for such programs and market expansion, but cannot predict if or when
larger orders will occur. Since the third quarter of fiscal year 1995, the
Company has generated cash through the sale of Common Stock, a single-payment
license fee on the sale of an optical memory card distribution license to an
overseas VAR, and the receipt of a partial payment toward a potential license
upgrade fee. There can be no assurance that the Company will be able to meet
its future cash needs on a favorable basis.
HISTORICAL LOSSES. As of June 30, 1995, the Company had an
accumulated deficit of $24,082,000. The Company anticipates that the size of
its losses will decrease due to anticipated increases in sales of optical
memory cards and related products. However, if increased commercialization is
delayed and the Company does not realize such increased sales, its losses will
remain at previous levels, except in the event of sporadic sales of licenses.
The Company is relying upon its optical card technology to generate future
revenues, earnings and cash flow when order volumes reach material levels.
However, except for Fiscal Year 1991, when the Company recorded a $10 million
licensing fee, the Company has operated
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<PAGE> 6
at a loss during the last five years. The Company cannot predict when material
sales levels of its products will be achieved. Until commercialization
matures, the Company is dependent upon other sources of income, such as license
fees, which cannot be predicted as to timing or dollar amount. Delays in
customers' development of optical memory card based programs, and corresponding
commercialization of the Company's optical memory cards and related products,
combined with an absence of additional license sales or other revenues, could
extend continuing losses and result in the need for additional financing.
READER/WRITER AVAILABILITY. Optical card reader/writer availability
is essential for the viability and growth of the optical memory card business.
Nippon Conlux Co., Ltd., a Japanese company, is currently the only supplier in
commercial quantities of reader/writer equipment for DELA Standard format
cards, the type manufactured by the Company and a licensed second-source card
manufacturer, which comprises the majority of optical memory cards sold in the
world marketplace to date. Two other licensees of the Company have the
capability to produce reader/writers compatible with the Company's optical
memory cards, but are not manufacturing them at this time. If Nippon Conlux
were to curtail manufacture of reader/writers, the Company would allocate its
incoming shipments of such devices among incoming orders from established
customers and would seek a manufacturer suitable for reader/writer production,
as well as a manufacturing license for the Nippon Conlux reader/writer designs.
Nippon Conlux has not developed its own optical memory card, and is not known
to be doing so: its customers continue to rely on cards manufactured by the
Company or, particularly with respect to Japanese customers, Optical Memory
Card Business Corporation ("OMCBC"), a Japanese licensee of the Company, of
which Nippon Conlux is a minority owner. The Company expects card-related
revenues to increase more rapidly if card reader/writers are produced and sold
in volume at lower prices than at present; however, the Company can give no
assurance that increased production will occur in the near term or that
high-volume sales and correspondingly lower prices will result. In addition,
if market demand increases sharply over a short period of time, an initial
shortage of reader/writers could result.
NASDAQ LISTING. Currently the Company's Common Stock is traded on the
NASDAQ National Market System of NASD (National Association of Securities
Dealers). In Fall 1994 this listing was briefly subject to an exception from
ordinary National Market System requirements, under which the Company was
required to, and did successfully, implement a plan to maintain its net
tangible assets at a minimum of $4,000,000. The Company's net tangible assets
also fell below that level during the fourth quarter of Fiscal Year 1995, but
were restored during the first quarter of Fiscal Year 1996 without action by
NASD. If the Company's net tangible assets should fall below $4,000,000, and
if the NASD does not allow another exception, the Common Stock would then be
traded on the NASDAQ Small Cap Market, with some possible reduction of market
interest and liquidity. As of June 30, 1995, the Company's net tangible assets
were $4,644,000.
STOCK PRICE VOLATILITY. The price of the Company's Common Stock is
subject to significant volatility due to fluctuations in revenues, earnings,
capitalization, liquidity, press coverage, and financial market interest. Some
of these factors may be exacerbated because the Company operates solely in the
optical memory card products industry, which is in the early stages of
commercialization.
COMPETITION. The Company's products compete with the products of
OMCBC and Canon, two of its Japanese licensees, who also sell optical cards
under royalty-bearing licenses from the Company. Canon has introduced an
optical card which does not conform to, and which the Company believes lacks
the flexibility, format and other physical and technical advantages of, the
Company's DELA Standard format. OMCBC produces optical memory cards using the
Canon format, as well as cards using the DELA Standard format, and cards
conforming to a third format, created by Olympus Optical Co., another licensee
of the Company, for its own reader/writers. The Company's
production-plant-made cards have had the benefit of five years of successful
customer-run field trials, whereas Canon's current cards began field tests in
late 1992. Nevertheless, the Company expects several of its Japanese licensees
to sell Canon format cards and reader/writers, and believes that if Canon and
Olympus continue their card marketing programs, they should begin to obtain
material orders for cards and equipment. The Company anticipates that insofar
as many optical card programs will be dedicated applications for defined groups
of users, various types of optical cards will coexist. However, the size,
trade name recognition, and marketing and development resources of Canon and
Olympus are substantially greater than the Company's.
COMPETING TECHNOLOGICAL ADVANCES. The Company also competes in
certain applications with other data storage products such as chip (integrated
circuit/microprocessor or "IC") cards and CD-ROMs. IC cards which store two or
three pages of text compete directly with optical memory cards in applications
where the IC cards' limited storage capacity and higher cost per card, but
lower cost per reader/writer, will suffice. The advantages of the optical
memory card in storage capacity, size, portability, durability, security and
low cost, make it better suited for many potentially sizable applications,
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<PAGE> 7
such as in health care, recordkeeping, transaction systems and identification.
However, the IC card has a greater installed base worldwide at present. For
card applications with relatively low storage capacity and security
requirements, such as electronic banking/credit and pay telephone cards, the
Company expects IC cards to be used instead of optical memory cards.
PATENT PROTECTION. The majority of the Company's United States
patents have expiration dates ranging from 2002 to 2012, and counterpart
patents in foreign countries also expire during this period. Under separate
license agreements with the Company, OMCBC and Canon have no obligation to pay
royalties to the Company on the manufacture of optical memory cards after
December 31, 2003 and December 31, 2008, respectively. Canon's royalty
obligation expires on December 31, 2008, in connection with equipment for
reading and writing optical cards. Other royalty-bearing licenses sold by the
Company related to equipment for reading and writing optical cards contain
provisions for royalty payments until the last expiration date of the licensed
patents. The Company is unable to determine whether there would be a material
adverse effect on royalties in the event of expiration or unenforceability of
its patents, because the Company's royalty revenues are not significant at this
time. The Company also cannot predict whether the expiration of its patents
would result in the introduction of competitive products which would affect its
future revenues adversely.
INTERNATIONAL SALES AND OPERATIONS. The Company does not believe that
there are substantial risks inherent in its international business as compared
to its domestic business, with the exception of export/import regulations
pertaining to doing business in specific countries. However, sales of its
products and licenses outside the United States have comprised 62%, 52% and 71%
of net sales in the 1993, 1994 and 1995 fiscal years, respectively. The
Company believes that international sales will be key to its sales growth
potential.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company's Certificate of Incorporation and By-Laws provide for
indemnification of directors and officers to the full extent permitted or
authorized under the Delaware General Corporation Law, for expenses,
liabilities and losses actually and reasonably incurred as a result of any such
director's or officer's status as such, provided that the indemnitee acted in
good faith and in a manner he or she believed to be in or not to be opposed to
the best interest of the corporation. In addition, the Company has entered
into an Indemnification Agreement with each officer and director, which
agreement provides, among other things, for contractual rights of the
indemnitee to advancement of expenses prior to final disposition of an action
provided that, if required by Delaware law, the indemnitee agrees to repay such
advance upon the Company's request if it is ultimately determined that the
indemnitee is not entitled to indemnification.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon
for the Company by Rosenblum, Parish & Isaacs, PC of San Jose, California.
EXPERTS
The audited consolidated financial statements and schedules
incorporated by reference in this Prospectus and elsewhere in this Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto; and are
included therein and incorporated herein by reference in reliance upon the
authority of such firm as experts in providing such reports.
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THIS OFFERING TO GIVE ANY
INFORMATION, OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS,
AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR
AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER WOULD BE
UNLAWFUL, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
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<PAGE> 8
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with
the sale and distribution of the Shares being registered, other than
underwriting discounts and commissions, if any, incurred by the Selling
Stockholders in sales of Shares effected through intermediares. All of the
amounts shown are estimates except the Securities and Exchange Commission
registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee $ 653
Legal fees and expenses $15,000*
Accounting Fees $ 6,000*
Miscellaneous expenses $ 1,054*
- ------------------------
*Estimated
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to provisions of the Delaware General Corporation Law,
Registrant's Certificate of Incorporation includes a provision which eliminates
the personal liability of its directors to Registrant and its stockholders for
monetary damages for any breach of fiduciary duty as a director, except for:
(i) any breach of the duty of loyalty owed by the director to the Registrant or
its stockholders; (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) any liability for
declaration of unlawful dividends or unlawful stock repurchases or redemptions;
or (iv) any transaction from which a director received an improper personal
benefit.
This provision does not eliminate or limit liability of an officer for
any act or omission as an officer, notwithstanding that the officer is also a
director or that his or her actions, if negligent or improper, have been
ratified by the Board of Directors. The provision also has no effect on claims
arising under federal or state securities laws and does not affect the
availability of injunctions and other equitable remedies which Registrant's
stockholders may pursue for any violation of a director's fiduciary duty to
Registrant or its stockholders. Although the validity and scope of the
legislation underlying the provision have not yet been interpreted to any
significant extent by the Delaware courts, the provision may relieve directors
of monetary liability for grossly negligent conduct, including conduct in
situations involving attempted acquisitions of Registrant.
Registrant's Certificate of Incorporation also includes a provision
entitling directors, officers, employees and other agents of Registrant to
indemnification to the fullest extent authorized by the Delaware General
Corporation Law, as well as a provision authorizing the Registrant to maintain
insurance to protect directors, officers, employees and agents against
liability, whether or not Registrant would have the power to indemnify such
person against the applicable liability.
Registrant maintains liability insurance pursuant to policies
currently in effect with two insurers, under which the insurers will pay on
behalf of directors and officers of Registrant certain losses incurred as a
result of defined acts for which the Company does not indemnify such persons,
subject to customary exclusions. In addition, the insurers will reimburse
Registrant for losses in excess of $150,000 incurred as a result of
Registrant's indemnification of an officer or director in connection with
defined acts. The aggregate liability of the insurers is limited to $3,000,000
for claims made under the Evanston Insurance Company policy, and $2,000,000 for
claims made under the Reliance Insurance Company policy, each of which
policies expires November 1, 1995.
The provisions of Section 145 of the Delaware General Corporation Law
that empower Registrant to indemnify its officers, directors and agents are
sufficiently inclusive to allow Registrant to indemnify such persons for
liabilities, including reimbursement of expenses incurred, arising under the
Securities Act of 1933, under certain circumstances.
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<PAGE> 9
ITEM 16. EXHIBITS.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
5 Opinion of Rosenblum, Parish & Isaacs, PC re Legality.
23(a) Consent of Arthur Andersen LLP
23(b) Consent of Rosenblum, Parish & Isaacs, PC (included in Exhibit 5).
24 Power of Attorney (included on Page II-4).
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of Registrant pursuant to the foregoing provisions, or otherwise,
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a director, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement;
provided, however, that paragraphs (i) and (ii) above
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
Registrant pursuant
II-2
<PAGE> 10
to Section 13 or 15(d) of the Securities and Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
* * * * *
[The remainder of this page is intentionally blank.]
II-3
<PAGE> 11
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF MOUNTAIN VIEW, STATE OF CALIFORNIA, ON AUGUST 4,
1995.
DREXLER TECHNOLOGY CORPORATION
By /s/JEROME DREXLER
--------------------------
Jerome Drexler, President
POWER OF ATTORNEY
EACH PERSON WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND APPOINTS
JEROME DREXLER AND STEVEN G. LARSON, JOINTLY AND SEVERALLY, HIS
ATTORNEY-IN-FACT, EACH WITH THE POWER OF SUBSTITUTION FOR HIM IN ANY AND ALL
CAPACITIES, TO SIGN ANY AMENDMENTS (INCLUDING POST-EFFECTIVE AMENDMENTS) TO
THIS REGISTRATION STATEMENT, AND TO FILE THE SAME, WITH EXHIBITS THERETO AND
OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE
COMMISSION, HEREBY RATIFYING AND CONFIRMING ALL THAT EACH OF SAID
ATTORNEYS-IN-FACT, OR HIS SUBSTITUTE OR SUBSTITUTES, MAY DO OR CAUSE TO BE DONE
BY VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/JEROME DREXLER President and Chairman August 4, 1995
- --------------------- of the Board of Directors
Jerome Drexler (Principal Executive Officer)
/s/STEVEN G. LARSON Vice President and August 4, 1995
- --------------------- Treasurer
Steven G. Larson (Chief Financial and
Accounting Officer)
/s/ARTHUR H. HAUSMAN Director August 4, 1995
- ---------------------
Arthur H. Hausman
/s/WILLIAM E. McKENNA Director August 4, 1995
- ---------------------
William E. McKenna
</TABLE>
II-4
<PAGE> 12
EXHIBIT INDEX
Exhibit Number Description
5 Opinion of Rosenblum, Parish & Isaacs, PC, re Legality
23(a) Consent of Arthur Andersen LLP
<PAGE> 1
[EXHIBIT 5]
[LETTERHEAD ROSENBLUM, PARISH & ISAACS]
August 1, 1995
Drexler Technology Corporation
1077 Independence Avenue
Mountain View, California 94043-7277
Re: Proposed Registration of Shares of Common Stock
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-3 to which this
letter will be attached as an exhibit, to be filed by Drexler Technology
Corporation (the "Company") with the Securities and Exchange Commission under
the Securities Act of 1933, relating to 312,500 shares of the Company's Common
Stock, $0.01 per share par value (the "Shares") to be offered for sale by
certain stockholders of the Company.
As counsel to the Company, we have examined such corporate records and
other documents and have made such legal examinations and factual inquiries as
we have considered necessary for the purpose of rendering this opinion. On the
basis of such examinations and inquiries, we are of the opinion that the Shares
are validly authorized, legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" in the Prospectus contained therein. This consent is not to be
construed as an admission that we are a person whose consent is required to be
filed with the Registration Statement under the provisions of Section 7 of the
Securities Act of 1933.
ROSENBLUM, PARISH & ISAACS, PC
By /s/JERALD E. ROSENBLUM
--------------------------
Member of the Firm
<PAGE> 1
[EXHIBIT 23(A)]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated April 27, 1995
included in Drexler Technology Corporation's Form 10-K for the year ended March
31, 1995 and to all references to our Firm included in this registration
statement.
ARTHUR ANDERSEN LLP
San Jose, California
August 3, 1995
