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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[Mark One] AMENDMENT NO. 1 TO FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended March 31, 1996

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _____ to _____

Commission File Number: 0-6377

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, CA 94043-1601
(Address of principal executive offices) (Zip Code)

(415) 969-7277
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
None None
(Title of each class (Name of each exchange
so registered) on which registered)

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.01 Par Value
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. /X/ Yes / / No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /

Based on the last trade price of the Company's Common Stock on The Nasdaq Stock
Market on June 24, 1996, the aggregate market value of the voting stock held by
non-affiliates of the registrant is approximately $113,556,000.

Number of outstanding shares of Common Stock, $.01 par value, at June 24, 1996:
8,900,624

DOCUMENTS INCORPORATED BY REFERENCE: NONE

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The undersigned Registrant hereby amends Part III, Items 10, 11, and 12 of
its Annual Report on Form 10-K for the fiscal year ended March 31, 1996 as
follows in order that such items are contained in the Form 10-K directly rather
than being incorporated by reference from Registrant's Definitive Proxy
Statement:

(a) The foregoing cover page to the Form 10-K is hereby amended to delete
the entry under Documents Incorporated by Reference and to replace it
with the word "NONE."

(b) Part III of the Form 10-K is hereby amended to add the information
required under Items 10, 11, and 12, as follows:

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

A. Directors and Executive Officers

Information concerning directors and executive officers of the Company is
set forth under the caption "Directors and Executive Officers of the Registrant"
at the end of Part I of this Report on Form 10-K.

B. Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers, and beneficial owners of more than
10 percent of the Company's Common Stock to file with the Commission initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. The Company believes these requirements
were satisfied for the fiscal year ended March 31, 1996, except that due to
administrative errors in the Company's stock administration function, certain
Form 4s were filed seven to 14 days late for the following executive officers
and directors: Dr. Dyball, three reports covering a total of ten transactions;
Mr. Larson, two reports covering a total of seven transactions; Messrs. Hausman
and McKenna, two reports covering a total of eight transactions each.

ITEM 11. EXECUTIVE COMPENSATION

A. Compensation of Executive Officers

The table below discloses the total compensation paid to the Company's
President and Executive Vice President for the three fiscal years ended March
31, 1996, 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 aggregate salary and bonuses for the 1996 fiscal year.

SUMMARY COMPENSATION TABLE

Annual Compensation Long-Term Compensation
------------------- ----------------------
Fiscal Shares Underlying
Name and Principal Position Year Salary ($) Bonus ($) Option Grants (#)
- --------------------------- ---- ---------- --------- -----------------

Jerome Drexler, 1996 $ 158,014 $ 0 30,000
Chairman of the Board 1995 $ 146,956 $ 0 17,000
and President 1994 $ 122,308 $ 0 72,000(1)

Christopher Dyball,
Executive Vice President 1996 $ 107,206 $ 0 75,000
and General Manager, 1995 $ 102,979 $ 0 17,000
Card Manufacturing 1994 $ 87,218 $ 0 15,000

(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).

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Stock Option Grants to Executive Officers

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 1996 fiscal year ended March 31, 1996. No other executive officer of
the Company earned $100,000 or more in salary and bonuses for the 1996 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 percent and 10 percent 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

Individual Grants Potential Realizable 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%
---- ---------- -------------- ---------- ------- -- ---

Jerome Drexler 30,000 5.7% $8.563 Aug 24, 2005 $ 161,547 $ 409,393

Christopher 20,000 3.8% $7.00 June 7, 2000 $ 38,679 $ 85,471
Dyball 10,000 1.9% $8.563 Aug 24, 2000 $ 23,657 $ 52,275
45,000 8.5% $9.063 Sep 15, 2000 $ 112,671 $ 248,974

(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) Mr. Drexler's option has a ten-year term, and Dr. Dyball's options have
five-year terms. These options are subject to earlier termination in
certain events.

Aggregated Option Exercises and Options Held by Executive Officers

The following table sets forth the value of options exercised by the
Company's President and Executive Vice President during the 1996 fiscal year and
remaining unexercised at fiscal year end.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

Shares Number of Securities Underlying Value of Unexercised
Acquired on Value Unexercised Options at In-the-Money Options at
Exercise Realized Fiscal Year-End (#) Fiscal Year-End ($)(2)
------------------- ----------------------
Name (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- ----- ------------ ----------- ------------- ----------- -------------

Jerome Drexler 0 0 192,000 0 $1,062,938 0

Christopher Dyball 46,000 $171,671 110,000 45,000 $ 613,725 $132,187

(1) Market value of underlying securities (based on the fair market value of
the Company's Common Stock on The Nasdaq Stock Market) at the time of
their exercise, minus the exercise price.

(2) Market value of securities underlying in-the-money options at fiscal year
end (based on $12.00 per share, the average of the high and low trading
prices of the Company's Common Stock on The Nasdaq Stock Market as of
March 31, 1996), minus the exercise price.

B. Compensation of Directors

Each of the three directors receives a fee of $1,200 per month for serving
as a director, the standard fee in effect since July of 1995. From February of
1985 through June of 1995, the fee paid for serving as a director was $750 per
month. The Company also reimburses reasonable out-of-pocket expenses incurred by
directors performing services for the Company.

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The Company's 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 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 6,000 shares of the Company's Common
Stock. The option share grants to such re-elected directors are exercisable in
full at the time of grant. 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.

C. Employment Contracts, Termination of Employment, and Change of Control
Arrangements

None of the Company's executive officers has employment or severance
arrangements with the Company. 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 the event of a merger or sale of assets or like event, the Board of
Directors is empowered to make appropriate adjustments to options under the 1991
Option Plan. 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 percent 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.

D. 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.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

A. Principal Stockholder

The table below shows the name, address, number of shares held, nature of
ownership, and percentage of shares held as of July 10, 1996, by the only person
or entity known to the Company to be the beneficial owner of more than 5 percent
of the Company's Common Stock.

Number of Shares and Percentage
Name and Address Nature of Ownership of Class

Jerome Drexler 1,463,798(1) 16.4%
c/o Drexler Technology Corporation Full dispositive
1077 Independence Avenue and voting power
Mountain View, CA 94043

(1) Includes 192,000 shares purchasable by exercise of option within 60 days.
Does not include 187,100 shares owned by Mr. Drexler's wife and 15,800
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 held
by The Drexler Foundation is shared by the Foundation's directors,
consisting of Mr. Drexler and his wife.

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B. Security Ownership of Management

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 July 10, 1996. The beneficial owners of
the shares have full 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
July 10, 1996, the Company had outstanding 8,900,624 shares of Common Stock.

STOCK OWNERSHIP TABLE

Director Common Percentage
Name, Principal Occupation, and Other Directorships Age Since Shares of Class

JEROME DREXLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 1968 1,463,798(1) 16.4%
Chairman of the Board of Directors and President of the Company.

ARTHUR H. HAUSMAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 1981 37,500(2) .4%
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); Director of
California Microwave, Inc. (commercial telecommunications and
defense electronics); and Director Emeritus of Technology for
Communications International (high-frequency antenna systems and
electronic reconnaissance systems).

WILLIAM E. McKENNA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 1970 56,000(2) .6%
Director; private investor. Director of California Amplifier, Inc. (low-
noise amplifiers); Safeguard Health Enterprises, Inc. (healthcare
services); WMS Industries, Inc. (amusement games); Williams
Hospitality Management Group, Inc. (resort hotels); and Calprop
Corporation (real estate).

CHRISTOPHER J. DYBALL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 N/A 110,747(3) 1.2%
Executive Vice President and General Manager, Card Manufacturing.

STEVEN G. LARSON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 N/A 90,046(4) 1.0%
Vice President of Finance and Treasurer.

All executive officers and directors as a group (the five persons named above) . 1,758,091(5) 19.8%

(2) Includes 18,000 shares purchasable by exercise of option within 60 days.

(3) Includes 110,000 shares purchasable by exercise of option within 60 days.

(4) Includes 89,900 shares purchasable by exercise of option within 60 days.

(5) Includes 427,900 shares purchasable by exercise of option within 60 days.

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Form 10-K/A to be signed on its behalf by the
undersigned, thereunto duly authorized.

DREXLER TECHNOLOGY CORPORATION

by: /s/Steven G. Larson
--------------------------------------------------
Steven G. Larson
Vice President of Finance and Treasurer
(Principal Financial Officer and Principal
Accounting Officer)

July 26, 1996