UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
TENDER OFFER STATEMENT
under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
AWARE, INC.
(Name of Subject Company (Issuer) and Filing Person (Offeror))
OPTIONS TO PURCHASE COMMON SHARES, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
05453N-10-0*
(CUSIP Number of Class of Securities)
(*Underlying Common Stock)
MICHAEL A. TZANNES
CHIEF EXECUTIVE OFFICER
AWARE, INC.
40 MIDDLESEX TURNPIKE
BEDFORD, MASSACHUSETTS 01730
(781) 276-4000
(Name, address, and telephone numbers of person authorized
to receive notices and communications on behalf of filing persons)
COPIES TO:
WILLIAM R. KOLB, ESQ.
FOLEY HOAG LLP
155 SEAPORT BOULEVARD
BOSTON, MASSACHUSETTS 02210
CALCULATION OF FILING FEE
Transaction valuation* Amount of filing fee
---------------------- --------------------
6,770,366 $1,354
*Calculated solely for purposes of determining the amount of the filing fee.
This amount assumes that options to purchase 6,521,678 shares of common stock of
Aware, Inc. having an aggregate value of $6,770,366 as of February 27, 2003 will
be cancelled pursuant to this offer. The aggregate value of such options was
calculated based on the Black-Scholes option pricing model. The amount of the
filing fee, calculated in accordance with Rule 0-11(b) of the Securities
Exchange Act of 1934, as amended, equals 1/50 of 1% of the transaction value.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid:__________________
Form or Registration No.:________________
Filing Party:____________________________
Date Filed:______________________________
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third-party tender offer subject to RULE 14D-1.
[X] issuer tender offer subject to RULE 13E-4.
[ ] going-private transaction subject to RULE 13E-3.
[ ] amendment to Schedule 13D under RULE 13D-2
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
ITEM 1. SUMMARY TERM SHEET.
The information set forth under "Summary Term Sheet" in the document
entitled "Offer to Exchange Outstanding Stock Options Held By Employees," dated
March 3, 2003 (the "Offer to Exchange"), attached hereto as exhibit (a)(1), is
incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) The name of the issuer is Aware, Inc., a Massachusetts
corporation ("Aware" or the "Company"). The address of the Company's principal
executive office is 40 Middlesex Turnpike, Bedford, Massachusetts 01730. The
telephone number at that address is (781) 276-4000.
(b) This Tender Offer Statement on Schedule TO relates to an offer by
the Company to its employees to exchange all outstanding options having an
exercise price greater than $3.00 per share granted under the Aware, Inc. 1996
Stock Option Plan or the Aware, Inc. 2001 Nonqualified Stock Plan (together the
"Plans") to purchase shares of the Company's common stock, par value $0.01 per
share, for new options that will be granted under the Plans, upon the terms and
subject to the conditions set forth under "The Offer" in the Offer to Exchange.
Non-employee directors are not eligible to participate in the offer. The
information set forth under "The Offer" in the Offer to Exchange is incorporated
herein by reference.
(c) The information set forth in the Offer to Exchange under
Section 7 ("Price Range of Common Stock") is incorporated herein by reference.
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ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) The information set forth under Item 2(a) above and in Schedule A
of the Offer to Exchange ("Information About the Directors and Executive
Officers of Aware, Inc.") is incorporated herein by reference. The Company is
both the filing person and the subject company.
ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in the Offer to Exchange under "Summary
Term Sheet," Section 1 ("Number of Options; Expiration Date"), Section 3
("Procedures for Surrendering Options"), Section 4 ("Change in Election"),
Section 5 ("Acceptance of Options for Exchange and Cancellation and Issuance of
New Options"), Section 6 ("Conditions of this Offer"), Section 8 ("Source and
Amount of Consideration; Terms of New Options"), Section 9 ("Information About
Aware; Summary Financial Information; Risk Factors"), Section 11 ("Accounting
Consequences of this Offer; Status of Options Acquired by us in this Offer"),
Section 12 ("Legal Matters; Regulatory Approvals"), Section 13 ("Material U.S.
Federal Income Tax Consequences"), and Section 14 ("Extension of this Offer;
Termination; Amendment") is incorporated herein by reference.
(b) The information set forth in the Offer to Exchange under
Section 10 ("Interest of Directors and Officers; Transactions and Arrangements
Concerning the Options") is incorporated herein by reference.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
(a) The information set forth in the Offer to Exchange under
Section 10 ("Interest of Directors and Officers; Transactions and Arrangements
Concerning the Options") is incorporated herein by reference. The Aware, Inc.
1996 Stock Option Plan, filed herewith as exhibit (d)(1), and the Aware, Inc.
2001 Nonqualified Stock Plan, filed herewith as exhibit (d)(4), contain
information regarding the subject securities.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a) The information set forth in the Offer to Exchange under
Section 2 ("Purpose of this Offer") is incorporated herein by reference.
(b) The information set forth in the Offer to Exchange under
Section 5 ("Acceptance of Options for Exchange and Cancellation and Issuance of
New Options") and Section 11 ("Accounting Consequences of this Offer; Status of
Options Acquired by us in this Offer") is incorporated herein by reference.
(c) The information set forth in the Offer to Exchange under
Section 2 ("Purpose of this Offer") is incorporated herein by reference.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
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(a) The information set forth in the Offer to Exchange under
Section 8 ("Source and Amount of Consideration; Terms of New Options") and
Section 15 ("Fees and Expenses") is incorporated herein by reference.
(b) The information set forth in the Offer to Exchange under
Section 6 ("Conditions of this Offer") is incorporated herein by reference.
(d) Not applicable.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) The information set forth in the Offer to Exchange under
Section 10 ("Interest of Directors and Officers; Transactions and Arrangements
Concerning the Options") is incorporated herein by reference.
(b) The information set forth in the Offer to Exchange under
Section 10 ("Interest of Directors and Officers; Transactions and Arrangements
Concerning the Options") is incorporated herein by reference.
ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
(a) Not applicable.
ITEM 10. FINANCIAL STATEMENTS.
(a) The information set forth in the Offer to Exchange under
Section 9 ("Information about Aware; Summary Financial Information; Risk
Factors") and Section 16 ("Additional Information"), pages 10 through 40 of the
Company's annual report on Form 10-K for its fiscal year ended December 31, 2001
and pages 3 through 22 of the Company's quarterly report on Form 10-Q for the
quarter ended September 30, 2002 is incorporated herein by reference.
(b) Not applicable.
ITEM 11. ADDITIONAL INFORMATION.
(a) The information set forth in the Offer to Exchange under
Section 10 ("Interests of Directors and Officers; Transactions and Arrangements
Concerning the Options") and Section 12 ("Legal Matters; Regulatory Approvals")
is incorporated herein by reference.
(b) Not applicable.
ITEM 12. EXHIBITS.
(a) (1) Offer to Exchange, dated March 3, 2003.
(2) Form of Letter to Eligible Option Holders, dated March 3, 2003.
(3) Election Form.
(4) Notice to Change Election from Accept to Reject.
(5) Form of Promise to Grant Stock Option(s).
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(6) Form of Optionee Statement
(7) Aware, Inc. Annual Report filed on Form 10-K for the fiscal
year ended December 31, 2001, filed with the Securities and
Exchange Commission on March 20, 2002 and incorporated herein
by reference.
(8) Aware, Inc. Quarterly Report filed on Form 10-Q for the quarter
ended September 30, 2002, filed with the Securities and
Exchange Commission on November 13, 2002 and incorporated
herein by reference.
(9) Definitive Proxy Statement for the Aware, Inc. 2002 Annual
Meeting of stockholders, filed with the Securities and Exchange
Commission on April 15, 2002 and incorporated herein by
reference.
(b) Not Applicable.
(d) (1) Aware, Inc. 1996 Stock Option Plan, filed as Annex A to the
Company's Definitive Proxy Statement, filed with the Securities
and Exchange Commission on April 11, 2000 and incorporated
herein by reference.
(2) Form of Incentive Stock Option Agreement pursuant to the Aware,
Inc. 1996 Stock Option Plan.
(3) Form of Nonqualified Stock Option Agreement pursuant to the
Aware, Inc. 1996 Stock Option Plan.
(4) Aware, Inc. 2001 Nonqualified Stock Plan, as amended.
(5) Form of Nonqualified Stock Option Agreement pursuant to the
Aware, Inc. 2001 Nonqualified Stock Plan.
(g) Not Applicable.
(h) Not Applicable.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
(a) Not Applicable.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
AWARE, INC.
By: /s/ Michael A. Tzannes
-----------------------------
Its: Chief Executive Officer
----------------------------
Date: March 3, 2003
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INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
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(a) (1) Offer to Exchange, dated March 3, 2003.
(a) (2) Form of Letter to Eligible Option Holders, dated March 3, 2003.
(a) (3) Election Form.
(a) (4) Notice to Change Election From Accept to Reject.
(a) (5) Form of Promise to Grant Stock Option(s).
(a) (6) Form of Optionee Statement
(a) (7) Aware, Inc. Annual Report filed on Form 10-K for the fiscal
year ended December 31, 2001, filed with the Securities and
Exchange Commission on March 20, 2002 and incorporated herein
by reference.
(a) (8) Aware, Inc. Quarterly Report filed on Form 10-Q for the quarter
ended September 30, 2002, filed with the Securities and
Exchange Commission on November 13, 2002 and incorporated
herein by reference.
(a) (9) Definitive Proxy Statement for the Aware, Inc. 2002 Annual
Meeting of stockholders, filed with the Securities and Exchange
Commission on April 15, 2002 and incorporated herein by
reference.
(d) (1) Aware, Inc. 1996 Stock Option Plan, filed as Annex A to the
Company's Definitive Proxy Statement, filed with the Securities
and Exchange Commission on April 11, 2000, and incorporated
herein by reference.
(d) (2) Form of Incentive Stock Option Agreement Pursuant to the Aware,
Inc. 1996 Stock Option Plan.
(d) (3) Form of Non-qualified Stock Option Agreement Pursuant to the
Aware, Inc. 1996 Stock Option Plan.
(d) (4) Aware, Inc. 2001 Nonqualified Stock Plan, as amended.
(d) (5) Form of Nonqualified Stock Option Agreement pursuant to the
Aware, Inc. 2001 Nonqualified Stock Plan.
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