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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 5, 1997; REGISTRATION NO. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
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
(650) 969-7277
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
JEROME DREXLER Copy to:
Chairman of the Board of Directors and JERALD E. ROSENBLUM, ESQ.
Chief Executive Officer MICHAEL W. PROZAN, ESQ.
Drexler Technology Corporation Rosenblum, Parish & Isaacs, P.C.
1077 Independence Avenue 160 W. Santa Clara Street, Suite 1500
Mountain View, California 94043-1601 San Jose, California 95113
(650) 969-7277 (408) 280-2800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
</TABLE>
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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]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration Statement of the earlier effective
registration statement for the same offering. [ ] __________.
If this form is a post effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number for the earlier effective registration statement
for the same offering. [ ] __________.
If delivery of this prospectus is expected to be made pursuant to Rule
434, please check the following box [ ].
CALCULATION OF REGISTRATION FEE
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<CAPTION>
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TITLE OF EACH CLASS AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE REGISTERED OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED PER SHARE (1) OFFERING PRICE (1) FEE (2)
(1)
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COMMON STOCK 200,000 SHARES $ 10.875 $2,175,000 $659.09
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(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating
the filing fee, based on the average of the bid and ask prices for the
Company's Common Stock as reported on the NASDAQ National Market System on
October 30, 1997.
---------------------
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
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<CAPTION>
ITEM CAPTION IN FORM S-3 LOCATION IN PROSPECTUS BY CAPTION
- ---- -------------------- ---------------------------------
<S> <C> <C>
1. Forepart of the Registration and Outside Facing Page; Cross-Reference Sheet;
Front Cover Page of Prospectus Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages Outside Front Cover Page; Inside Front
of Prospectus Cover Page; Available Information;
Incorporation of Certain Documents by
Reference
3. Summary Information, Risk Factors and Risk Factors
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 Registered Not Applicable
10. Interests of Named Experts and Counsel Not Applicable
11. Material Changes Not Applicable
12. Incorporation of Certain Information by Incorporation of Certain Documents by
Reference Reference
13. Disclosure of Commission Position on Indemnification of Officers and Directors
Indemnification for Securities Act
Liabilities
</TABLE>
<PAGE> 3
Subject to completion, dated November 5, 1997
PROSPECTUS
DREXLER TECHNOLOGY CORPORATION
200,000 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 October 30, 1997, the last reported sale
price for the Common Stock on the NASDAQ NMS was $10.875 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 October 31, 1999 (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. In
addition, such material may be viewed or downloaded at the SEC's EDGAR Database
located on the Internet http:\\www.sec.gov. 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 ______________ __, 1997.
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TABLE OF CONTENTS
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<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........................................................................................6
</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(4) %(5)
----------- ----------------- ---------------- ----------- ----
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Eli Shapiro, O.D. 183,000(1) 100,000 83,000 0.9%
Essex Performance Fund
Limited Partnership 100,000(2)(3) 50,000 50,000 0.5%
Essex High Technology
Fund (Bermuda) L.P. 50,000(3) 50,000 0 0
</TABLE>
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(1) Includes 83,000 shares purchased on the open market which are freely
tradeable. These shares are not part of this offering and may be
sold at any time by the stockholder.
(2) Includes 50,000 shares purchased on the open market which are freely
tradeable. These shares are not part of this offering and may be
sold at any time by the stockholder.
(3) The Essex Performance Fund Limited Partnership and the Essex High
Technology Fund (Bermuda) L.P. (the "Funds") are affiliated. The
table excludes an additional 50,000 shares of the Company owned by
the Essex Flexport Fund, Limited Partnership, an affiliate of the
Funds, which were purchased on the open market and are freely
tradeable.
(4) Assumes all shares to be offered will be sold.
(5) Percentage of Common Stock outstanding estimated to be owned after
completion of the offering, based upon 9,519,351 shares of Common
Stock outstanding as of October 28, 1997.
The Selling Stockholders purchased the Shares to be offered by them in
private placements in October 1997, 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 by downloading the information from the
Commission's EDGAR database located on the Internet at http:\\www.sec.gov.
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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, 1997 (as amended by Form 10-K/A filed July 25, 1997) and the Company's
Quarterly Reports on Form 10-Q for the quarters ended June 30, 1997 and
September 30, 1997, respectively. 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, shall also be deemed to be incorporated by
reference herein.
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. The
Company's telephone number is (650) 969-7277.
RISK FACTORS
EARLY STAGE OF PRODUCT COMMERCIALIZATION. The Company has invested
considerable resources in the development of optical memory cards and related
equipment and system software. These products entered the commercial stage
through the Company's VAR (value-added-reseller) network, which was initially
launched in 1991; and, in 1993, optical memory card products became the
Company's sole product line. During fiscal 1997, the Company sold 456,000
optical memory cards, related equipment, and system software through its
subsidiary, LaserCard Systems Corporation, to approximately 50 customers located
in nine states and 26 foreign countries and has sold 850,000 optical memory
cards, related equipment and system software from March 31, 1997 through
September 30, 1997. The Company currently makes and sells optical cards in
varying quantities, with orders typically ranging from 5,000 to 150,000 cards
per order. The largest order to date is an order received in February, 1997 from
the United States Immigration and Naturalization Service (the "INS") in the
amount of $7.1 million for 2 million cards with deliveries scheduled monthly
through April, 1998 (the "INS Order"). The Company does not have the technology
or resources to manufacture certain raw materials used in the manufacture of
optical memory cards; accordingly, its ability to produce the cards will be
dependent upon maintaining sources of supply of such raw materials meeting its
requirements for quality and quantity. High-volume orders for optical memory
cards require the VAR companies to develop customers and applications, or to
obtain significant follow-on orders from customers whose programs are already
underway. The frequency and size of such orders cannot be predicted.
RELIANCE ON SINGLE CUSTOMER. The Company is heavily dependent on the INS
Order. This order provides the largest component of the Company's currently
anticipated card production. As is the case in all U.S. government procurement,
the government reserves the right to change specifications, delay deliveries,
and cancel all or part of the order. Also, the Company could encounter
equipment, raw material, quality control, or other production problems under
high-volume production of this magnitude. The Company believes that follow-on
orders will be forthcoming; however, the Company could experience difficulty in
the future if it is unable to get this order renewed or find additional
customers.
LIMITED CAPITAL RESOURCES. Prior to fiscal 1998, the Company did not
generate net cash from operations after expenses. For the first half of fiscal
1998, the level of revenues was sufficient to generate cash from operations
after expenses, primarily due to the INS Order. Fluctuations in operating assets
and liabilities will use cash in some quarters and provide cash in other
quarters. No assurance can be made that this level of sales will continue beyond
the term of the INS Order. The Company believes that it will receive additional
orders from the INS, but no assurance can be given that such orders will be
forthcoming. The Company generally obtains advance payments, in whole or in
part, from customers prior to the time of manufacturing items made to customer
specifications. The Company believes that, although working capital requirements
should grow in proportion to increased product order and shipment levels, the
advance payments will reduce the need for working capital financing. However,
the Company may require financing for capital expenditures to increase
production capacity and for other reasons. In addition, the Company has not
established a line of credit, and no assurance can be made that the Company will
be successful in obtaining a line of credit should it become necessary to do so.
Recently, the Company generated cash of $1,900,000 from the sale of 200,000
shares of common stock split amongst
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three investors. There is no assurance that such financing could be repeated on
similar terms.
HISTORICAL LOSSES. As of March 31, 1997, the Company had an accumulated
deficit of $27,548,000 and operated at a loss during the previous five years.
The Company has operated profitably for the six months ended September 30, 1997
primarily as a result of the INS Order. The Company is relying upon its optical
card technology to generate future product revenues, earnings, and cash flow. If
the INS Order is not renewed and there are delays in other customers'
development of optical card based programs and corresponding commercialization
of the Company's optical cards and related products, losses could recur.
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. ("Conlux"), 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. DELA Standard format cards comprise 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
Conlux were to curtail manufacture of reader/writers, the Company would allocate
its incoming shipments of such devices among incoming orders from established
customers. 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, by Optical Memory
Card Business Corporation ("OMCBC"), a Japanese licensee of the Company, of
which Conlux is a minority owner. The Company sells Conlux reader/writers for a
few thousand dollars per unit, and these units generally include the Company's
device-driver software. 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. Furthermore, the yen/dollar exchange
rate affects the price of reader/writers, since they are purchased in Japanese
yen. In addition, if market demand increases sharply over a short period of
time, an initial shortage of reader/writers could result.
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 those 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 under its own
standard, called "SIOC." The Company's DELA format and the Canon SIOC format are
not functionally compatible, although both card formats meet the ISO Standard.
The Company believes that the ISO/DELA format offers performance advantages over
the ISO/SIOC format in terms of flexibility and durability, as well as
competitive advantages in system integration, device drivers/interface software,
and customer support for a variety of applications and markets. At least several
times as many ISO/DELA cards have been manufactured and sold than Canon ISO/SIOC
format cards. OMCBC produces optical cards using the ISO/SIOC format, as well as
cards using the ISO/DELA 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 current worldwide market share for optical memory
cards exceeds that of its competitors. However, the Company expects several of
its Japanese licensees to sell ISO/SIOC 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, Olympus, and Dai Nippon Printing Co. (the
principal owner of OMCBC) are substantially greater than those of the Company.
(See "Competing Technological Advances" below.)
COMPETING TECHNOLOGICAL ADVANCES. The Company also competes in certain
applications with other portable data storage products, particularly chip
(integrated circuit/microprocessor or "IC") cards. IC cards which store three or
four pages of text compete directly with optical memory cards in applications
where the limited storage capacity of IC cards and higher cost per card, but
lower cost per reader/writer, will suffice. The advantages of the optical memory
card in storage capacity, durability, and low cost, make it better suited for
potentially sizable applications, such as for patient records in healthcare and
for national identification card systems. However, the IC card has a greater
installed base worldwide at present, mainly as prepaid telephone cards. For
applications with relatively low storage capacity, such as
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electronic banking/credit/debit cards, the Company expects IC cards to be used
instead of optical memory cards. (Also see "Competition" elsewhere in this
report.) In addition, in countries such as the United States and Japan, where
the telecommunications infrastructure is extensive and low cost, it is possible
that centralized data bases and wide-area networks may limit the penetration of
optical memory cards into some potential markets.
PATENT PROTECTION. The Company's U.S. patents have expiration dates
ranging from 2002 to 2012, with the majority expiring during the first half of
this period. Counterpart patents in foreign countries also expire during that
period. Under its license agreement with the Company for manufacture of optical
memory cards, OMCBC's obligation to pay royalties to the Company for use of the
licensed patents ceases on December 31, 2003. Canon's royalty obligations in
connection with its licenses to manufacture optical memory cards and reading and
writing equipment expire on December 31, 2008. Other royalty-bearing licenses
sold by the Company related to equipment for reading and writing optical cards
provide for royalty payments to cease on 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
or invalidation of its patents would result in the introduction of competitive
products which would affect its future revenues adversely. The Company is not
aware of any optical memory card products which otherwise would infringe its
patents in countries where the Company might have difficulty enforcing its
patents or has no patent protection.
FORWARD-LOOKING STATEMENTS. Certain statements made above relating to
plans, objectives and economic performance go beyond historical information and
may provide an indication of future results. To that extent, they are
forward-looking statements within the meaning of Section 27A of the Act, and
each is subject to factors that could cause actual results to differ from those
in the forward-looking statement. Such factors are described above and in the
documents filed by the Company from time to time with the Commission.
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.
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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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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 intermediaries. All of the amounts shown are
estimates except the Securities and Exchange Commission registration fee.
Securities and Exchange Commission registration fee $ 659
Legal fees and expenses $ 5,000 *
Accounting Fees $ 4,000 *
Miscellaneous expenses $ 1,000 *
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*Estimated
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 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.
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.
ITEM 16. EXHIBITS.
EXHIBIT INDEX
Exhibit Number Description
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-3).
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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
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.
* * * * *
II-2
<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 NOVEMBER 4,
1997.
DREXLER TECHNOLOGY CORPORATION
By /s/JEROME DREXLER
--------------------------------------------
Jerome Drexler, Chairman of the Board of
Directors And Chief Executive Officer
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 Chairman of the Board of Directors November 4, 1997
- ---------------------------- and Chief Executive Officer
Jerome Drexler (Principal Executive Officer)
/s/STEVEN G. LARSON Vice President and November 4, 1997
- ---------------------------- Treasurer
Steven G. Larson (Chief Financial and
Accounting Officer)
/s/ARTHUR H. HAUSMAN Director November 4, 1997
- ----------------------------
Arthur H. Hausman
/s/WILLIAM E. McKENNA Director November 4, 1997
- ----------------------------
William E. McKenna
</TABLE>
II-3
<PAGE> 12
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 in Signature Page)
</TABLE>
<PAGE> 1
EXHIBIT 5
November 4, 1997
Drexler Technology Corporation
1077 Independence Avenue
Mountain View, California 94043-1601
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 200,000 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 21, 1997
included in Drexler Technology Corporation's Form 10-K for the year ended March
31, 1997 and to all references to our Firm included in this Registration
Statement.
/s/Arthur Andersen LLP
ARTHUR ANDERSEN LLP
San Jose, California
November 3, 1997
