AWARE, INC.
OFFER TO EXCHANGE OPTIONS
AMENDED ELECTION FORM
I have received the Offer to Exchange, dated March 3, 2003 (as it may be
amended from time to time, the "Offer"), offering to employees the opportunity
to exchange eligible outstanding stock options for the promise to grant new
options exercisable at the fair market value at least six months and one day
after the date any tendered options are cancelled. If the tendered options are
cancelled on April 1, 2003, as currently expected, the new options will be
issued on a date between October 2, and November 13, 2003, subject to the terms
of the Offer. The new options will be issued under Aware, Inc.'s 1996 Stock
Option Plan or 2001 Nonqualified Stock Plan. The Offer expires at 5:00 p.m.
Eastern Time on April 1, 2003.
I understand that if I elect to cancel my eligible options in exchange for
the promise to issue a new option, I will receive an option for a number of
shares equal to one share for every two shares issuable upon the exercise of my
surrendered options and that a new vesting schedule will be applied to the new
options. I understand that for each option I cancel, I lose my right to all
outstanding unexercised shares under that option. I UNDERSTAND THAT I WILL NOT
RECEIVE THE NEW OPTIONS IF MY EMPLOYMENT IS TERMINATED FOR ANY REASON, INCLUDING
DEATH OR DISABILITY, BEFORE DATE ON WHICH THE NEW OPTIONS ARE GRANTED, WHICH IS
CURRENTLY EXPECTED TO BE BETWEEN OCTOBER 2, and NOVEMBER 13, 2003. I UNDERSTAND
THAT THERE IS A POSSIBILITY THAT THE EXERCISE PRICE OF THE NEW OPTIONS COULD BE
HIGHER THAN THE EXERCISE PRICE OF THE TENDERED OPTIONS RESULTING IN A LOSS OF
SOME STOCK OPTION BENEFIT AND THAT THE NEW OPTIONS WILL ONLY BE INCENTIVE STOCK
OPTIONS TO THE EXTENT THEY QUALIFY AS INCENTIVE STOCK OPTIONS UNDER THE TAX LAWS
ON THE DATE OF GRANT. I AGREE TO ALL TERMS OF THE OFFER.
Subject to the above understandings, I would like to participate in the
Offer. I HAVE READ AND FOLLOWED THE INSTRUCTIONS ATTACHED TO THIS FORM.
* * * * *
By signing below, I agree to tender all of my eligible options as listed on
Attachment A under the terms and subject to the conditions of the Offer. I
understand that if the Company accepts my tendered options, all of these
eligible options will be irrevocably cancelled.
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SIGNATURE SOCIAL SECURITY, TAX ID OR NATIONAL DATE
ID NUMBER
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NAME (PLEASE PRINT) DAYTIME PHONE
Please complete and sign this form and return it with any other documents
required by this Election Form, including your option agreements with respect to
the options that you are tendering, by hand delivery or regular or overnight
mail to:
Rita deAraujo
Aware, Inc.
40 Middlesex Turnpike
Bedford, MA 01730.
The deadline for receipt of this election form is no later than 5:00 p.m.,
Eastern Time, on April 1, 2003.
You may change your election to tender options for exchange by submitting a
Notice to Change Election From Accept to Reject for receipt prior to the
expiration date of 5:00 p.m. Eastern Time, on April 1, 2003.
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ATTACHMENT A
ELIGIBLE OPTIONS HELD BY [NAME]
NUMBER OF NUMBER OF
--------- ---------
OPTION GRANT DATE ELIGIBLE OPTION SHARES NEW OPTION SHARES
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INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Delivery of Election Form.
A properly completed and executed original of this Election Form and any
other documents required by this Election Form must be received by Rita deAraujo
either via hand delivery or regular or overnight mail on or before 5:00 p.m.
Eastern Time on April 1, 2003 (the "Expiration Date").
THE METHOD BY WHICH YOU DELIVER ANY REQUIRED DOCUMENTS IS AT YOUR OPTION
AND RISK, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE COMPANY. YOU MAY HAND DELIVER YOUR ELECTION FORM TO RITA deARAUJO AT AWARE,
INC. (THE "COMPANY"), OR YOU MAY MAIL IT TO HER AT THE ADDRESS LISTED ON THE
PREVIOUS PAGE OF THIS ELECTION FORM. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT
TIME TO ENSURE TIMELY DELIVERY.
Tenders of options made through the Offer may be withdrawn at any time
before the Expiration Date. If the Offer is extended by the Company beyond that
time, you may withdraw your tendered options at any time until the extended
expiration of the Offer. In addition, although the Company currently intends to
accept your validly tendered options promptly after the expiration of the Offer,
unless the Company accepts your tendered options before 5:00 p.m., Eastern Time,
on April 29, 2003, you may withdraw your tendered options at any time
thereafter. To withdraw tendered options you must deliver a signed and dated
Notice to Change Election From Accept to Reject with the required information to
the Company while you still have the right to withdraw the tendered options.
Withdrawals may not be rescinded and any eligible options withdrawn will
thereafter be deemed not properly tendered for purposes of the Offer unless the
withdrawn options are properly re-tendered before the Expiration Date by
delivery of a new, later-dated Election Form following the procedures described
in these Instructions.
The Company will not accept any alternative, conditional or contingent
tenders. All tendering option holders, by signing this Election Form, waive any
right to receive any notice of the acceptance of their tender, except as
provided for in the Offer.
2. Tenders.
If you choose to participate in the Offer, you must tender all of your
eligible options for exchange. You may elect whether to participate or not, but
if you choose to participate we will not accept partial tenders of your eligible
options.
3. Signatures on This Election Form.
If this Election Form is signed by the holder of the eligible options, the
signature must correspond with the name as written on the face of the option
agreement or agreements to which the options are subject without alteration.
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If this Election Form is signed by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, that person should so indicate when
signing, and proper evidence satisfactory to the Company of the authority of
that person so to act must be submitted with this Election Form.
4. Other Information on This Election Form.
In addition to signing this Election Form, you must print your name and
indicate the date on which you signed. You must also include a current daytime
phone number and your social security number, tax identification number or
national identification number, as appropriate.
5. Requests for Assistance or Additional Copies.
Any questions or requests for assistance completing this Election Form, as
well as requests for additional copies of the Offer or this Election Form may be
directed to Rita deAraujo, at Aware, Inc., 40 Middlesex Turnpike, Bedford,
Massachusetts, 01730, telephone number (781) 276-4000. Copies will be furnished
promptly at the Company's expense.
6. Irregularities.
All questions as to the number of option shares subject to options to be
accepted for exchange, and the validity, form, eligibility (including time of
receipt) and acceptance for exchange of any tender of options will be determined
by the Company in its discretion. The Company's determinations shall be final
and binding on all parties. The Company reserves the right to reject any or all
tenders of options the Company determines not to be in proper form or the
acceptance of which may, in the opinion of the Company's counsel, be unlawful.
The Company also reserves the right to waive any of the conditions of the Offer
and any defect or irregularity in the tender of any particular options, and the
Company's interpretation of the terms of the Offer (including these
instructions) will be final and binding on all parties. No tender of options
will be deemed to be properly made until all defects and irregularities have
been cured or waived. Unless waived, any defects or irregularities in connection
with tenders must be cured within such time as the Company shall determine.
Neither the Company nor any other person is or will be obligated to give notice
of any defects or irregularities in tenders, and no person will incur any
liability for failure to give any such notice.
IMPORTANT: THE ELECTION FORM TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS
MUST BE RECEIVED BY THE COMPANY, ON OR BEFORE THE EXPIRATION DATE.
7. Additional Documents to Read.
You should be sure to read the Offer and all documents referenced therein
before deciding to participate in the Offer.
8. Important Tax Information.
You should refer to Section 13 of the Offer, which contains important U.S.
federal income tax information.
9. Acknowledgement and Waiver.
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By accepting the Offer, you acknowledge that: (i) your acceptance of the
Offer is voluntary; (ii) your acceptance of the Offer shall not create a right
to further employment with your employer and shall not interfere with the
ability of your employer to terminate your employment relationship at any time
with or without cause; and (iii) the Offer, the eligible options and the new
options are not part of normal or expected compensation or salary for any
purposes, including, but not limited to, calculating any severance, resignation,
redundancy, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments.
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