<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
/x/ Filed by the Registrant
/ / Filed by a Party Other than the Registrant
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
/x/ Definitive Proxy Statement Commission Only (as permitted
/ / Definitive Additional Materials by Rule 14a-6(e)(2))
/ / Soliciting Material Pursuant to
Section 240.14a-11(c) or Section 240.14a-12
DREXLER TECHNOLOGY CORPORATION
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(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which
the filing fee is calculated and state how it was determined.)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule, or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
DREXLER TECHNOLOGY CORPORATION
1077 Independence Avenue
Mountain View, California 94043
------------------
NOTICE OF 1995 ANNUAL MEETING OF STOCKHOLDERS
Friday, September 15, 1995
2:00 p.m.
To the Stockholders:
The 1995 Annual Meeting of Stockholders of Drexler Technology Corporation
will be held at the Hyatt Rickey's hotel, 4219 El Camino Real, Palo Alto,
California, on Friday, September 15, 1995, at 2:00 p.m., for the following
purposes:
1. to elect directors;
2. to approve amendments to the 1991 Stock Option Plan, in particular (a)
to increase the number of shares reserved for issuance thereunder from
1,270,000 to 1,670,000 and (b) to increase the automatic annual option
grant to directors who serve on the Stock Option Committee from 3,000
to 6,000 shares; and
3. to transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record at the close of business on Tuesday, July 18,
1995, are entitled to vote at this meeting and at any continuation or
adjournment thereof.
By Order of the Board of Directors
JERALD E. ROSENBLUM
Secretary
Mountain View, California
August 10, 1995
YOUR VOTE IS IMPORTANT.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD, AS PROMPTLY AS POSSIBLE, IN THE ENCLOSED ENVELOPE. IF A
QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE ADDED EXPENSE OF RE-ISSUING
THESE PROXY MATERIALS. IF YOU ATTEND THE MEETING, AND SO DESIRE, YOU MAY
WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY.
<PAGE> 3
DREXLER TECHNOLOGY CORPORATION
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To Be Held September 15, 1995
General
The enclosed proxy is solicited on behalf of the Board of Directors of
Drexler Technology Corporation, a Delaware corporation (the "Company"), for use
at the 1995 Annual Meeting of Stockholders of the Company to be held at 2:00
p.m. on Friday, September 15, 1995. Only stockholders of record on Tuesday, July
18, 1995, will be entitled to vote. At the close of business on that date, the
Company had outstanding 8,689,179 shares of Common Stock.
Stockholders are entitled to one vote for each share held. In the election
of directors, votes can be cast only for persons whose names have been placed in
nomination prior to the voting.
Any stockholder giving a proxy in the form accompanying this Proxy Statement
has the power to revoke it prior to its exercise. A proxy may be revoked by
filing with the Secretary of the Company, prior to the meeting, an instrument
revoking it, by duly executing a proxy bearing a later date which is presented
to the meeting, or by attending the meeting and electing to vote in person. The
shares represented by a duly executed and unrevoked proxy in the form
accompanying this Proxy Statement will be voted in accordance with the
instructions contained therein, and in the absence of instructions, will be
voted for the nominees for directors, for Proposal No. 2, and according to the
discretion of the proxy holder(s) on any other matters that properly come before
the meeting.
The address of the Company's principal executive offices and the approximate
date on which this Proxy Statement is being mailed to stockholders are shown on
the accompanying Notice of Annual Meeting of Stockholders.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Nominees
The authorized number of directors to be elected at this meeting is three.
Each director will hold office until the next annual meeting of stockholders and
until his successor is elected and qualified. As explained above, all proxies
solicited hereby will be voted for the election of the three nominees shown in
the table set forth below, all of whom are presently directors of the Company,
unless authority to vote for one or more nominees is withheld in accordance with
the instructions on the proxy card. If any nominee should unexpectedly become
unavailable to act as a director, the proxies may be voted for a substitute
nominee to be designated by the Board of Directors.
No nominations for director of the Company by any person other than the
Board of Directors shall be presented at the meeting unless the person making
the nomination is a stockholder as of the record date and shall have given
timely notice to the Secretary. In order to be timely, a stockholder's notice
shall be delivered to or mailed and received at the principal offices of the
Company no later than the close of business on Monday, August 21, 1995. Such
notice shall (i) set forth the name and address of the person making the
nomination and of the nominee, together with such information concerning the
nomination and the nominee as is required by the appropriate Rules and
Regulations of the Securities and Exchange Commission to be included in a proxy
statement soliciting proxies for the election of such nominee, and (ii) include
the duly executed written consent of such nominee to serve as a director if
elected.
The table below contains information respecting the number of shares and
percentage of the Company's Common Stock beneficially owned by each director of
the Company, by each executive officer of the Company, and by all executive
officers and directors as a group, as of June 19, 1995. The beneficial owners of
the shares have sole voting and investment power, except as indicated in the
table, and have addresses in care of the Company. As of the close of business on
June 19, 1995, the Company had outstanding 8,530,879 shares of Common Stock.
<PAGE> 4
<TABLE>
<CAPTION>
Director Common Percentage
Name, Principal Occupation, and Other Directorships Age Since Shares of Class
--------------------------------------------------- --- -------- -------- ----------
<S> <C> <C> <C> <C>
JEROME DREXLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 1968 1,541,298(1) 18.1%
Chairman of the Board of Directors and President of the Company.
ARTHUR H. HAUSMAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 1981 57,500(2) .7%
Director; private investor. Retired Chairman, President, and
Chief Executive Officer of Ampex Corporation (manufacturer of
professional audio-video systems, data/memory products, and magnetic
tape); Director of California Amplifier, Inc. (low-noise amplifiers);
Technology for Communications International (high-frequency antenna
systems and electronic reconnaissance systems); and California Microwave,
Inc. (commercial telecommunications and defense electronics).
WILLIAM E. McKENNA . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 1970 76,000(2) .9%
Director; private investor. Director of California Amplifier,
Inc. (low-noise amplifiers); Safeguard Health Enterprises, Inc. (health-
care services); WMS Industries, Inc. (amusement games); Williams
Hospitality Management Group, Inc. (resort hotels); and Calprop
Corporation (real estate).
CHRISTOPHER J. DYBALL . . . . . . . . . . . . . . . . . . . . . . . . . . 44 N/A 146,747(3) 1.7%
Executive Vice President and General Manager, Card Manufacturing.
STEVEN G. LARSON . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 N/A 114,146(4) 1.3%
Vice President of Finance and Treasurer.
All executive officers and directors as a group (the five persons named above) . . . . . 1,846,691(5) 22.8%
</TABLE>
---------------------------
(1) Does not include 110,000 shares owned by his wife and 12,100 shares held
indirectly by his wife as custodian, as to all of which shares Mr. Drexler
disclaims any beneficial ownership. Does not include 6,500 shares held by
The Drexler Foundation, the assets of which are perpetually dedicated to
charity. The power to vote and to dispose of the shares is shared by the
Foundation's directors, consisting of Mr. Drexler and his spouse. Includes
162,000 shares purchasable by exercise of option within 60 days.
(2) Includes 38,000 shares purchasable by exercise of option within 60 days.
(3) Includes 146,000 shares purchasable by exercise of option within 60 days.
(4) Includes 114,000 shares purchasable by exercise of option within 60 days.
(5) Includes 498,000 shares purchasable by exercise of option within 60 days.
Board Committees and Meetings
The Board of Directors held seven meetings during the 1995 fiscal year,
which ended March 31, 1995. The Board has standing Audit, Compensation, and
Stock Option Committees. There is no Nomination Committee. The Audit Committee
is composed of Messrs. McKenna and Hausman. The Compensation Committee is
composed of Messrs. McKenna and Drexler. The Stock Option Committee is composed
of Messrs. McKenna and Hausman. During the 1995 fiscal year, the Compensation
Committee held no meetings, the Stock Option Committee held one meeting, and the
Audit Committee held two meetings.
The Audit Committee has functions both as to the Company's independent
public accountants and internal accounting. Its functions as to the Company's
independent public accountants are to (1) recommend engagement and discharge,
(2) review the plan and results of the auditing engagement, (3) approve
additional professional services, (4) review the accountants' independence, and
(5) consider the range of audit and nonaudit fees. Its functions as to the
Company's internal accounting are to (1) review the scope and results of
procedures for internal auditing and (2) consider comments from the independent
public accountants with respect to internal accounting controls. The function of
the Compensation Committee is to approve the salaries of executive officers
(other than the President) and certain other management employees. The function
of the Stock Option Committee is to administer the Company's Employee Stock
Purchase Plan and 1991 Stock Option Plan.
Director Compensation
During the 1995 fiscal year, each director received a monthly fee of $750
for serving as a director. Effective July 6, 1995, the Company increased the
monthly fee paid to each director to $1,200. Since February 1, 1985, the cash
compensation paid to each director has been $750 per month. Management
<PAGE> 5
determined that an inflation adjustment is required to become competitive with
other public companies in the ability to attract and retain qualified and
experienced Board members. The financial impact of this increase is $5,400 per
year per director, for a total additional annual outlay of $16,200, based on the
Company's current three-person Board.
The 1991 Stock Option Plan provides for the automatic grant of a five-year
option to purchase 15,000 shares of the Company's Common Stock on the date any
person first becomes a director. These grants to newly elected directors become
exercisable in cumulative increments of one-third each at the end of 24 months,
36 months, and 48 months from the date of grant. The Company is not proposing
any changes to this procedure.
The Company's 1991 Stock Option Plan further provides that on the date of
the Company's annual meeting of stockholders, each director who has served as a
director of the Company for the preceding nine-month period, who is also a
member of the Stock Option Committee, and who is re-elected at such annual
meeting, is automatically granted a five-year option to purchase 3,000 shares of
the Company's Common Stock. The exercise price for options granted to newly
elected directors and re-elected directors is the fair market value of the
Company's Common Stock on the effective date of the grant of the option. The
option share grants to such re-elected directors are exercisable in full at the
time of grant. As discussed below under Proposal No. 2, the Company proposes,
subject to shareholder approval, to increase the annual automatic option grants
to re-elected directors who are members of the Company's Stock Option Committee
from 3,000 option shares to 6,000 option shares, beginning with the 1995
election.
Required Vote for Approval of Proposal No. 1 -- Election of Directors
The election of each nominee to the Board of Directors requires the
affirmative vote of the holders of a majority of the shares of the Company's
Common Stock present in person or represented by proxy at the meeting. While
there is no definitive statutory or case law in Delaware as to the proper
treatment of abstentions in the counting of votes with respect to election of
directors, the Company believes that abstentions should be counted for purposes
of determining both the presence or absence of a quorum for the transaction of
business and in determining the total number of shares present or represented
and entitled to vote for the election of directors. In light of the absence of
controlling precedent to the contrary, the Company intends to treat abstentions
in this manner. In accordance with applicable rules, brokers vote shares in
accordance with instructions received from the beneficial owners of the shares;
in the absence of specific voting instructions from the beneficial owners,
brokers vote such shares in accordance with their own discretion.
Management recommends a vote FOR election of the nominees
listed in Proposal No. 1.
PROPOSAL NO. 2: AMENDMENTS TO 1991 STOCK OPTION PLAN
General
Proposal No. 2 seeks shareholder approval of the following amendments to
the Company's 1991 Stock Option Plan (the "1991 Option Plan") which were
previously approved by the Board of Directors at its July 6, 1995 meeting: (1)
to increase the number of shares reserved for issuance thereunder by 400,000,
from 1,270,000 to 1,670,000; and (2) to increase the annual automatic stock
option grants to re-elected directors who also are members of the Company's
Stock Option Committee from 3,000 option shares to 6,000 option shares. Each of
these amendments is described in more detail below.
Amendment to Increase Authorized Number of Shares under 1991 Option Plan
Of the 1,270,000 shares of the Company's Common Stock reserved for issuance
under the 1991 Option Plan, 94,920 remained available for future grants as of
the close of business on July 6, 1995. On that date, the Board of Directors
approved, subject to stockholder approval, an amendment to the 1991 Option Plan
to increase the aggregate number of shares available thereunder by 400,000
shares in order to have an adequate number of shares available for future option
grants.
The Board of Directors believes that it is in the best interest of the
Company to be able to continue to create equity incentives to assist in
attracting, retaining, and motivating the key employees and consultants of the
Company and its subsidiaries. Although in September of 1994, the Company's
<PAGE> 6
stockholders approved an amendment to the 1991 Stock Option Plan to increase the
number of shares reserved thereunder by 400,000 shares, the Board of Directors
believes that the number of shares remaining available for granting options
pursuant to the 1991 Option Plan are insufficient for that purpose. The 400,000
share increase sought under Proposal No. 2 represents less than 5% of the
Company's 8,689,179 total outstanding shares as of its proxy solicitation record
date of July 18, 1995.
Increase of Automatic Annual Option Grant Program
The 1991 Option Plan includes an automatic annual option grant program,
which provides for a grant each year of a stock option to directors of the
Company who serve on the Stock Option Committee. The purpose of the automatic
grant program is to allow the members of the Stock Option Committee to
participate in the 1991 Option Plan while removing any possible conflict of
interest which would result from allowing them to administer option grants to
themselves. The members of the Stock Option Committee, currently Arthur H.
Hausman and William E. McKenna, are not otherwise eligible for grants under the
1991 Option Plan.
A director of the Company and member of the Stock Option Committee who
served for the preceding nine-month period is eligible for the automatic annual
stock option grant on the date of his or her reelection, at the annual
stockholders meeting, to serve as a director for the ensuing year and remain on
the Stock Option Committee. The stock option provides the right to purchase
3,000 shares of the Company's Common Stock at the public trading price in effect
on the date of the grant. The option is exercisable in full at the time of the
grant and for a period of five years thereafter.
Subject to approval of the stockholders, the Board of Directors has
approved an increase of the automatic annual grant to provide for an option to
purchase 6,000 shares, rather than the current 3,000 shares, beginning with the
1995 election. Management believes that this adjustment more fairly reflects the
contribution of the members of the Stock Option Committee to, and their
responsibilities on behalf of, the Company.
Required Vote for Approval of Proposal No. 2 -- Amendments to 1991 Option Plan
Approval of the foregoing amendments to the 1991 Option Plan requires the
affirmative vote of the holders of a majority of the shares of the Company's
Common Stock present in person or represented by proxy at the meeting. Votes
against are counted for the purposes of determining the presence or absence of a
quorum for the transaction of business. Votes against are also counted for
purposes of determining the total number of votes required to pass the proposal
and whether such number of votes has been obtained. Refer to discussion earlier
in this document with respect to the effect of abstentions. In accordance with
applicable rules, brokers vote shares in accordance with instructions received
from the beneficial owners of the shares; in the absence of specific voting
instructions from the beneficial owners, brokers vote such shares in accordance
with their own discretion.
Management recommends a vote FOR approval of Proposal No. 2 -- Amendments
to the 1991 Option Plan.
Summary of 1991 Option Plan
The 1991 Option Plan provides for the granting to key employees, officers,
directors, and consultants to the Company and its subsidiaries (37 persons as of
July 6, 1995) of options to purchase shares of the Company's $0.01 par value
Common Stock. In addition, there are unexercised options which were granted
under the Company's now terminated 1986 Stock Option Plan (the "1986 Option
Plan").
The purpose of the 1991 Option Plan is to enhance the concern of the
Company's key employees and consultants (including officers and directors) in
the success of the Company by giving them an ownership interest in the Company
and to give such persons an incentive to continue their service to the Company.
The plan also affords a means for providing additional recognition for services
previously rendered. With the exception of options to be granted to themselves,
the Stock Option Committee determines in its sole discretion which of the
eligible persons are granted options and the number of shares subject to such
options. Members of the Stock Option Committee and newly elected directors are
automatically granted options as more particularly described earlier in this
document.
<PAGE> 7
Options granted to employees may be designated as incentive stock options
(ISOs) or as non-statutory stock options (NSOs), whereas only NSOs may be
granted to consultants. The Internal Revenue Code, as presently in effect,
limits the number of ISOs which can become exercisable by any employee in any
one year and provides that the Company and optionees receive different tax
treatment upon exercise of NSOs and ISOs. No tax consequences result to the
Company or an ISO grantee upon the issuance and exercise of an ISO. No tax
consequences result to the Company or an NSO grantee upon the issuance of an
NSO. Upon the exercise of the NSO, an NSO grantee realizes income in an amount
equal to the difference between the option exercise price and the fair market
value of the Company's Common Stock on the date of exercise of the NSO, and the
Company is entitled to a compensation deduction for the same amount.
All ISOs granted to employees can be exercised only if the optionee is
still an employee of the Company and its subsidiaries, except that ISOs are
exercisable for a limited time period after termination of employment and for
one year after the death or disability of the optionee. There is no requirement
for such a restriction on ISOs granted to officers or on NSOs. All of the
presently outstanding options under the 1986 and 1991 Option Plans have
five-year terms, with the exception of two ten-year options under the 1991
Option Plan. In general, portions of each option granted are exercisable only
after the passage of time or upon the occurrence of certain events, rather than
the entire option being immediately exercisable upon grant. However, under the
terms of the 1991 Stock Option Plan, the Board of Directors and/or Stock Option
Committee retains discretion, subject to certain limits, to modify the terms of
outstanding options. In January of 1993, the Company's Stock Option Committee
accelerated the vesting of all then unvested and outstanding options. In
addition, certain options granted prior to and after October of 1993 were
immediately exercisable upon grant. All other options granted under the 1991
Option Plan have been exercisable in one year or in installments of one-third
each after two, three, and four years from the date of grant.
All options granted under the 1986 and 1991 Option Plans must have an
exercise price not less than the fair market value of the Company's Common Stock
on the date the option is granted. Payment for the shares upon the exercise of
options is in cash unless payment by promissory note is directed by the full
Board of Directors or payment by utilization of outstanding Company stock owned
by the optionee is directed by the Stock Option Committee or by the full Board
of Directors. The Company receives no cash consideration upon the granting of
options. The number of shares remaining available in the 1991 Option Plan is
proportionately adjusted in the case of a stock split or dividend, as is the
number of shares subject to outstanding options and the exercise price of such
options. In the event of a merger or sale of assets or like event, the Board of
Directors is empowered to make appropriate adjustments to such items. The Board
of Directors has adopted guidelines specifying the following as adjustments that
it would consider appropriate upon the occurrence of such an event:
(1) permitting optionees no less than thirty days to exercise the vested
portion of their options;
(2) having the successor corporation either (a) issue to optionees
replacement options for the unvested portions of options, or else (b)
pay deferred compensation on the spread between the value of Company
stock upon the occurrence of such event and the option exercise price
at the time such unvested portion would have vested; and
(3) providing for vesting of 100% of the unvested portion for optionees
employed by the Company for at least two years prior to such event if
their employment is terminated within one year of such event by the
successor corporation other than by resignation or for acts of moral
turpitude.
Executive Officers
The table below lists the names and ages of the Company's current executive
officers, the position held, and the year when first appointed. It is
anticipated that each such executive officer will continue in his position,
although there is no understanding or arrangement to that effect. Any executive
officer could resign or be replaced or removed by the Board of Directors at any
time.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
OFFICER
NAME AGE POSITION WITH COMPANY SINCE
---- --- --------------------- -------
<S> <C> <C> <C>
Jerome Drexler 67 Chairman of the Board of Directors and President 1968
Christopher J. Dyball 44 Executive Vice President and 1992
General Manager, Card Manufacturing
Steven G. Larson 45 Vice President of Finance and Treasurer 1987
</TABLE>
<PAGE> 8
Executive Compensation
The following table summarizes the total compensation paid to the Company's
President and Executive Vice President through June 19, 1995 for the 1995 fiscal
year ended March 31, 1995, as well as the total compensation paid to them for
the Company's two previous fiscal years, for services rendered in all capacities
to the Company and its subsidiaries. No other executive officer of the Company
earned $100,000 or more in salary and bonuses for the 1995 fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------- ----------------------
FISCAL SHARES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTION GRANTS (#)
--------------------------- ---- ---------- --------- -----------------
<S> <C> <C> <C> <C>
Jerome Drexler, 1995 $ 146,956 $ 0 17,000
Chairman of the Board 1994 $ 122,308 $ 0 72,000(1)
and President 1993 $ 140,075 $ 0 58,000
Christopher J. Dyball,
Executive Vice President 1995 $ 102,979 $ 0 17,000
and General Manager, 1994 $ 87,218 $ 0 15,000
Card Manufacturing 1993 $ 99,555 $ 0 75,000
</TABLE>
------------------------
(1) This option was granted in January of 1993 (fiscal 1993) subject to
stockholder approval of certain amendments to the 1991 Stock Option Plan,
which approval was obtained in September of 1993 (fiscal 1994).
Stock Options
The table below sets forth the stock options granted to the Company's
President and Executive Vice President under the Company's 1991 Option Plan
during the 1995 fiscal year ended March 31, 1995. No other executive officer of
the Company earned $100,000 or more in salary and bonuses for the 1995 fiscal
year. The table sets forth hypothetical dollar gains or "option spreads" for the
options at the end of their respective terms, as calculated in accordance with
the rules of the Securities and Exchange Commission. Each gain is based on
arbitrarily assumed annualized rates of compounded appreciation of the market
price at the date of grant of 5% and 10% from the date the option was granted to
the end of the option term. However, no gain to the optionee is possible without
an increase in stock price, which will benefit all stockholders commensurately.
A zero percent gain in stock price appreciation will result in zero dollars for
the optionee. Actual gains, if any, on option exercises are dependent on the
future performance of the Company's Common Stock.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------
POTENTIAL REAKIZABLE VALUE AT
PERCENT OF ASSUMED ANNUAL RATES OF
SHARES TOTAL OPTIONS EXERCISE STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO PRICE 5- OR 10-YEAR OPTION TERM
OPTIONS EMPLOYEES ($/SHARE) EXPIRATION -----------------------------
NAME GRANTED(#) IN FISCAL YEAR (1) DATE(2) 5% 10%
---- ---------- -------------- --- ------- -- ---
<S> <C> <C> <C> <C> <C> <C>
Jerome Drexler 17,000 18.3% $4.6875 Sept. 1, 2004 $50,115 $127,001
Christopher
J. Dyball 17,000 18.3% $4.6875 Sept. 1, 1999 $22,016 $ 48,650
</TABLE>
------------------------
(1) At the discretion of the Board of Directors and/or Stock Option Committee,
the optionee may pay the exercise price to the Company in cash, by
promissory note, or by delivering already owned shares, subject to
certain conditions.
(2) These options are subject to earlier termination in certain events.
<PAGE> 9
The following table sets forth the value of options exercised the Company's
President and Executive Vice President during the 1995 fiscal year and remaining
unexercised at year-end. All options which remained unexercised at March 31,
1995 were granted under the 1991 Option Plan and were exercisable in full as of
that date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
SHARES VALUE NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
ACQUIRED ON REALIZED UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
NAME EXERCISE (#) ($)(1) FISCAL YEAR-END (#)(2) FISCAL YEAR-END ($)(1)(2)
---- ------------ ------ ---------------------- -------------------------
<S> <C> <C> <C> <C>
Jerome Drexler 0 $ 0 162,000 $20,188
Christopher J. Dyball 4,000 $5,490 126,000 $29,502
</TABLE>
------------------------
(1) The dollar values of the shares acquired on exercise of options and the
options remaining unexercised at year-end were calculated based on the
difference between the fair market value of the Company's Common Stock at
the time of exercise and as of March 31, 1995, respectively, multiplied by
the number of shares underlying the respective options.
(2) All of these options are fully exercisable.
The Company cannot now determine the number of options to be received in
the future by all current executive officers as a group, all current directors
who are not also executive officers as a group, or all employees including
current officers who are not executive officers as a group. Under the terms of
the 1991 Stock Option Plan, the Board of Directors and/or Stock Option Committee
retains discretion, subject to certain limits, to modify the terms of
outstanding options.
Principal Stockholder
The table below shows the name, address, number of shares held, nature of
ownership, and percentage of shares held as of June 19, 1995, by the only person
or entity known to the Company to be the beneficial owner of more than 5% of the
Company's Common Stock. The Company has no other class of stock outstanding.
<TABLE>
<CAPTION>
NUMBER OF SHARES AND PERCENTAGE
NAME AND ADDRESS NATURE OF OWNERSHIP OF CLASS
---------------- ------------------- --------
<S> <C> <C>
Jerome Drexler 1,541,298(1) 18.1%
c/o Drexler Technology Corporation Sole dispositive
1077 Independence Avenue and voting power
Mountain View, CA 94043
</TABLE>
----------
(1) Does not include 110,000 shares owned by his wife and 12,600 shares held
indirectly by his wife as custodian, as to all of which shares Mr. Drexler
disclaims any beneficial ownership. Does not include 6,500 shares held by
The Drexler Foundation, the assets of which are perpetually dedicated to
charity. The power to vote and to dispose of the shares is shared by the
Foundation's directors, consisting of Mr. Drexler and his spouse. Includes
162,000 shares purchasable by exercise of option within 60 days.
Compensation Committee Interlocks and Insider Participation
Jerome Drexler, the Company's President, is a member of the Compensation
Committee. The Compensation Committee is responsible for setting the salaries of
the Company's executive officers, other than the President, and for certain
other management employees of the Company and its subsidiaries.
................
<PAGE> 10
With reference to the next two sections, headed Compensation Policy and
Performance Graph, and notwithstanding anything to the contrary set forth in any
of the Company's previous filings under the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended, that might incorporate
future filings, including this Proxy Statement, in whole or part, the
Compensation Policy and the Performance Graph shall not be incorporated by
reference in any such filings, nor shall they be deemed to be soliciting
material or deemed filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, or under the Securities Exchange Act of
1934, as amended.
----------------
Compensation Policy
The Board of Directors, in coordination with the Compensation Committee and
Stock Option Committee, establishes the general compensation policies of the
Company and specific compensation levels for the Company's President and other
executive officers. The Company's compensation policy, as adopted and revised
from time to time, is to provide total compensation opportunities that are
competitive with the pay practices of other companies and thereby enable the
Company to attract and retain superior performing managers. This is accomplished
through a combination of cash incentives and equity incentives which are granted
to the Company's executive officers as well as to a broad range of the Company's
employees. The Company believes that this closely aligns employee interests with
those of its stockholders.
The Board considered a total package for the Company's President in the
context of the Company's objectives and business strategy. The analysis included
reviewing compensation of chief executive officers of comparable companies
within similar industries. The Company's overall financial performance was
considered by the Board in determining the President's compensation; however,
the specific performance of the Company's Common Stock was not a factor. In
addition, the Board considered factors such as the individual's past performance
and future potential. The same factors and considerations were used in
determining the compensation of the Company's other executive officers as were
used in setting the compensation of the President.
The Company also maintains a Management Bonus Plan for its management
employees. The Board determines the Company contribution to a bonus pool. This
contribution is usually related to performance criteria such as pre-tax,
pre-bonus Company earnings and licensing revenues, with various adjustments. The
President then has sole discretion to allocate this bonus pool among the
employees of the Company, excluding himself. The Company made no contribution to
the bonus pool during fiscal 1995.
<TABLE>
<S> <C>
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
Jerome Drexler Arthur H. Hausman
William E. McKenna William E. McKenna
</TABLE>
Performance Graph
The following Stock Performance Graph compares the Company's total
stockholder returns over the last five fiscal years to the Standard & Poor's 500
Stock Index ("S&P 500") and the University of Chicago Center for Research in
Security Prices (CRSP) Total Return Index for The Nasdaq Stock Market Computer
Manufacturing Companies industry group, which includes manufacturers of computer
storage devices.
The chart assumes that the value of the investment in the Company and each
index was $100 on March 31, 1990, and that any dividends were reinvested. [Chart
deleted for EDGAR filing; refer to table below for chart data.] The Stock
Performance Graph was plotted using the following data:
<TABLE>
<CAPTION>
Fiscal Year Ending March 31,
------------------------------------------------------------------
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Drexler Technology Corporation . . . . . $ 100 $ 69 $ 94 $ 80 $ 96 $ 96
S&P 500 . . . . . . . . . . . . . . . . . $ 100 $ 114 $ 127 $ 146 $ 148 $ 170
CRSP Nasdaq Computer Manufacturers . . . $ 100 $ 139 $ 145 $ 166 $ 161 $ 193
</TABLE>
<PAGE> 11
Independent Public Accountants
Arthur Andersen LLP are the Company's independent public accountants
for the current fiscal year and first held this position for the fiscal year
ended March 27, 1981. The independent public accountants are appointed by the
Board of Directors. During the fiscal year ended March 31, 1995, Arthur
Andersen LLP performed audit services including examination of annual financial
statements, assistance on accounting and financial reporting matters, and
performed tax services including the preparation of returns and the rendering
of planning advice. Representatives of Arthur Andersen LLP are expected to be
present at the stockholders' meeting. The representatives will have an
opportunity to make a statement, if they so desire, and will be available to
respond to appropriate questions by stockholders.
Proxy Cost and Solicitation
The Company will bear the entire cost of preparing, assembling, printing,
and mailing proxy materials furnished by the Board of Directors to the
stockholders. Copies of proxy materials will be furnished to brokers, dealers,
banks, voting trustees, and their nominees for forwarding to the beneficial
owners. The Company has retained Corporate Investor Communications, Inc.
("CICI") to assist, if necessary, in the solicitation of proxies from banks,
brokers and nominees at an approximate cost of $5,500 plus out-of-pocket
expenses. In addition to the solicitation of proxies by use of the mails and by
CICI, some of the officers, directors, and regular employees of the Company may
(without additional compensation) solicit proxies by telephone or personal
interview, the cost of which the Company will bear.
Other Matters; Stockholder Proposals for 1996 Annual Meeting
The Board of Directors knows of no other matters which will be brought
before the meeting, but if any such matters are properly presented, the proxies
solicited hereby will be voted in accordance with the judgment of the proxy
holders.
Subject to Securities and Exchange Commission regulations, stockholder
proposals intended to be presented at the 1996 Annual Meeting of Stockholders
must be received by the Company not later than April 12, 1996, in order to be
included in the 1996 Proxy Statement.
This Proxy Statement was printed on recycled paper.
<PAGE> 12
[PROXY CARD]
DREXLER TECHNOLOGY CORPORATION PROXY
This Proxy Is Solicited On Behalf
Of The Board Of Directors -- For Annual Meeting September 15, 1995
The undersigned hereby appoints Jerome Drexler and Jerald E. Rosenblum, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote as designated below, all the
shares of Common Stock of Drexler Technology Corporation held of record by the
undersigned on Tuesday, July 18, 1995, at the Annual Meeting of Stockholders to
be held on Friday, September 15, 1995, or any continuation or adjournment
thereof.
1. ELECTION OF DIRECTORS:
/ / FOR all nominees listed / / WITHHOLD AUTHORITY to vote for
below (except for any nominee all nominees
whose name is lined through
below)
JEROME DREXLER, WILLIAM E. McKENNA, AND ARTHUR H. HAUSMAN
2. Approval of Amendments to 1991 Stock Option Plan:
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof:
/ / FOR / / WITHHOLD AUTHORITY
(Continued and to be signed on reverse side)
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF THIS PROXY IS SIGNED AND RETURNED
WITHOUT VOTING INSTRUCTIONS, THE SHARES WILL BE VOTED FOR ELECTION OF DIRECTORS,
FOR PROPOSAL 2, AND ACCORDING TO THE DISCRETION OF THE PROXY HOLDER(S) ON ANY
OTHER MATTERS THAT PROPERLY COME BEFORE THE MEETING.
Please sign exactly as your name appears on the address label. When shares
are held by joint tenants, both should sign. When signing as attorney, as
executor, administrator, trustee or guardian, please give the full title as
such. If a corporation, please sign in full corporate name by the president or
other authorized officer. If a partnership, please sign the partnership name by
the authorized person.
Dated:_________________________, 1995
_____________________________________
Signature
_____________________________________
Signature (if held jointly)
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE MARK, SIGN, DATE, AND
RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
