8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 1, 2011

Aware, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number:  000-21129

Massachusetts	04-2911026
(State or other jurisdiction of	(IRS Employer
incorporation)	Identification No.)

40 Middlesex Turnpike, Bedford, MA, 01730

(Address of principal executive offices, including zip code)

(781) 276-4000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02     Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On April 1, 2011, Edmund C. Reiter, President and Chief Executive Officer and a director of Aware, Inc., informed the Board of Directors that he was resigning from Aware and the Board of Directors, effective April 1, 2011.  On April 1, 2011, the Board of Directors of Aware appointed Richard P. Moberg, Aware’s CFO and Kevin T. Russell, Aware’s General Counsel, as co-Chief Executive Officers and co-Presidents on an interim basis while Aware searches for a successor.

Mr. Moberg, age 56, has been Aware’s Chief Financial Officer since February 2008.  Mr. Moberg previously served as Aware’s Chief Financial Officer from June 1996 to October 2003.  Prior to rejoining Aware, Mr. Moberg served as Chief Financial Officer at Crossbeam Systems, Inc. from October 2003 to June 2006.  From June 2006 to November 2007, Mr. Moberg served as Managing Director at Fenway Consulting Group.  From January 2008 to February 2008, Mr. Moberg served as a consultant to Aware.  From December 1990 to June 1996, Mr. Moberg held a number of positions at Lotus Development Corporation, including Corporate Controller from June 1995 to June 1996, Assistant Corporate Controller from May 1993 to June 1995, and Director of Financial Services from December 1990 to May 1993.  Mr. Moberg received an M.B.A. from Bentley College and a B.B.A. in accounting from the University of Massachusetts at Amherst.

Mr. Russell, age 48, has been Aware’s General Counsel since September 2005.  Mr. Russell previously served as Aware’s Corporate Counsel from April 2000 to September 2005.  Prior to joining Aware, Mr. Russell served as Legal Counsel at IRIS Graphics, Inc. from November 1994 to April 2000.  Mr. Russell received a J.D. from Boston University School of Law and a B.B.A. from the University of Massachusetts at Amherst.

In connection with his resignation, Mr. Reiter and Aware entered into a Separation Agreement, dated April 1, 2011 (the "Separation Agreement"). In recognition of his over eighteen years of service and in exchange for signing a general release of claims in favor of Aware, the Separation Agreement provides Mr. Reiter with a severance payment of $192,500 and an unrestricted stock award of 105,000 shares of Aware common stock. All stock options granted to Mr. Reiter by Aware are forfeited. The Separation Agreement also provides that various restrictive covenants, including covenants relating to confidentiality and non-competition, continue to be in effect following the resignation.

Mr. Reiter and Aware also entered into a Consulting Agreement, dated April 1, 2011 (the “Consulting Agreement”) under which Mr. Reiter will provide consulting services to Aware relating to Aware’s businesses for a period of six months from April 2, 2011 to September 30, 2011 in exchange for monthly payments of $32,000.

The foregoing summaries of the Separation Agreement and the Consulting Agreement do not purport to be complete and are qualified in their entirety by reference to the Separation Agreement, which is filed hereto as Exhibit 10.1, and the Consulting Agreement, which is filed hereto as Exhibit 10.2, and are incorporated herein by reference.

Item 9.01.    Financial Statements and Exhibits.

 No financial statements are required to be filed as part of this Report. The following exhibits are filed as part of this Report:

10.1        Separation Agreement dated April 1, 2011 between Aware, Inc. and Edmund C. Reiter.

10.2        Consulting Agreement dated April 1, 2011 between Aware, Inc. and Edmund C. Reiter.

Signature(s)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AWARE, INC.

By: /s/ Richard P. Moberg                                             

Richard P. Moberg
co-Chief Executive Officer and co-President

Date: April 1, 2011

Exhibit Index

Number	Description
10.1	Separation Agreement dated April 1, 2011 between Aware, Inc. and Edmund C. Reiter.
10.2	Consulting Agreement dated April 1, 2011 between Aware, Inc. and Edmund C. Reiter.

EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT

This Separation Agreement (the “Agreement”) is entered into this 1st day of April, 2011, by and between EDMUND C. REITER (“REITER”) and AWARE, INC. (“AWARE”).

WHEREAS, effective April 1, 2011, REITER’s employment with AWARE is terminated, and

NOW THEREFORE, in consideration of the mutual promises and covenants herein set forth, which consideration is acknowledged by the parties to be good and sufficient, the parties hereto covenant and agree as follows:

1.  Within one business day after the end of the Waiting Period (as defined below), AWARE shall pay to REITER a lump sum of One Hundred Ninety Two Thousand Five Hundred Dollars ($192,500), subject to appropriate tax withholdings and other appropriate deductions.

2.  Within one business day after the end of the Waiting Period, AWARE shall grant REITER 105,000 shares of unrestricted common stock of AWARE, subject to the terms of the Unrestricted Stock Award Agreement to be entered into between AWARE and REITER (the “Unrestricted Stock Award Agreement”).

3.  REITER agrees to forfeit to AWARE all AWARE stock options, whether vested or unvested, held or owned by REITER, including, without limitation, AWARE stock option awards granted to REITER on October 14, 2003, September 8, 2004, February 9, 2005 and May 23, 2008.  Upon execution of this Agreement, all such stock options shall be null and void.  REITER acknowledges that the unrestricted stock award of Aware he was granted on July 26, 2010 and which contemplates the possibility of the issuance to him of an additional 107,143 shares of common stock of AWARE, shall be null and void from and after termination of his employment with Aware.   REITER acknowledges that the Stock Appreciation Rights (“SARs”) that were granted to him on May 20, 2009  which provided him with 24,000 SARs will be paid in accordance with the terms of the Stock Appreciation Rights Award between REITER and AWARE.

4.   Beginning April 2, 2011, REITER and REITER’s eligible dependents will be eligible at REITER’s expense to continue healthcare coverage through the provisions set forth in the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended by the Omnibus Budget Reconciliation Act of 1989 (“COBRA”).

5.  REITER acknowledges and agrees that the consideration provided herein constitutes good and sufficient consideration for this Agreement.

6. In consideration of the undertakings, transactions and consideration recited in this Agreement, which REITER agrees he would not otherwise be entitled to, REITER, on behalf of himself, his heirs, agents, representatives, attorneys, assigns, executors, beneficiaries, and administrators, hereby releases and forever discharges AWARE and each and all of its parents, divisions, subsidiaries, affiliates, predecessors, successors and assigns, as well as the past, present and future officers, directors, shareholders, attorneys, employees and agents of each, hereinafter referred to as the “Releasees”, from any and all causes of action, claims for damages, debts, demands, suits, accounts, covenants, contracts, agreements, judgments, executions, orders, bonuses, back pay, commissions and any and all claims, demands and liabilities whatsoever of any kind, whether in law or in equity, arising or which may have existed, from the beginning of the world to this date, whether now known or unknown, suspected or unsuspected including, but not limited to, any and all matters related in any way to REITER’s employment with or separation from AWARE, any claims for severance, compensation, commissions, wages or bonuses, as well as all claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act of 1990, American with Disabilities Act, Massachusetts General Laws c. 151B, the Employee Retirement Income Security Act of 1974, any federal or state anti-discrimination laws, and any other statutory, common law or other claims of any nature whatsoever against any of the Releasees, but expressly excepting all rights and obligations of the parties arising out of or relating to this Agreement.

This means that by signing this Agreement, REITER will have waived any right he had to bring a lawsuit or make any legal claim against AWARE or any of the Releasees based on any actions taken by any of the Releasees up to the date of the signing of this Agreement, and that REITER will have released the Releasees of any and all claims of any nature arising up to the date of the signing of this Agreement.

7.  REITER agrees that he shall not disparage AWARE or its directors, officers, employees or agents in a personal manner, a professional manner or otherwise.

8.  This Agreement shall not be construed as an admission of any sort by AWARE, nor shall it be used as evidence in a proceeding of any kind except one in which a party alleges a breach of the terms of this Agreement or one in which a party elects to use this Agreement as a defense to any claim.

9.  Should any part, term, or provision of this Agreement be determined by any tribunal, court, or arbitrator to be illegal, invalid, or unenforceable, the validity of the remaining parts, terms, or provisions shall not be affected thereby, and the illegal, invalid, or unenforceable part, term, or provision shall be deemed not to be a part of this Agreement.

10.  The parties agree that a failure by any party at any time to require performance of any provision of this Agreement shall not waive, affect, diminish, obviate or void in any way that party’s full right or ability to require performance of the same, or any other provisions of this Agreement, at any time thereafter.

11.  Other than as stated herein, the undersigned parties warrant that no promise or inducement has been offered for this Agreement and that they are competent to execute this Agreement and accept full responsibility for it.

12.  REITER agrees to immediately return all property of AWARE, including, but not limited to all computer equipment, software and books. REITER agrees to turn in all time sheets through the latest pay period.

13.  REITER acknowledges and agrees to comply with his continuing obligations as set forth in the Employee Agreement signed by REITER.  This Agreement, along with the Unrestricted Stock Award Agreement, the Employee Agreement entered into between the parties, and a Consulting Agreement to be entered into between AWARE and REITER as of April 1, 2011, as well as all agreements incorporated by reference in any of the aforementioned agreements, set forth the entire agreement between the parties hereto, and fully supersede any and all prior agreements or understandings between the parties.  This Agreement may be modified only by a writing signed by all parties hereto.

14.  REITER acknowledges that he has been advised to seek the advice and counsel of an attorney prior to executing this Agreement (although REITER may chose not to engage counsel).  REITER further acknowledges that he has the opportunity to consider this Agreement, and in particular the release of claims, including claims under the Age Discrimination in Employment Act, for twenty-one  (21) days (although REITER may waive said requirement by signing this Agreement), and that this Agreement is revocable for seven (7) days following its execution and shall not become effective or enforceable until the eighth day following execution of the same (such seven-day period is referred to herein as the “Waiting Period”).

WHEREFORE, REITER acknowledges that he is entering into this Agreement knowingly and voluntarily and as a waiver of all legal claims against AWARE or any of the Releasees.  REITER and AWARE have read this Agreement, carefully considered its provisions, and attest that they fully understand and knowingly accept its terms in their entirety and without reservation.

AWARE, INC.

By:

/s/ Richard P. Moberg

Date: April 1, 2011

EDMUND C. REITER	Witness
/s/ Edmund C. Reiter	/s/ Kevin T. Russell
Date: April 1, 2011	Date: April 1, 2011

EX-10.2

Exhibit 10.2

CONSULTING AGREEMENT

This Agreement is made effective as of April 1, 2011 (the “Effective Date”) by and between Aware, Inc. (herein referred to as “Aware”) and Edmund C. Reiter (herein referred to as “Consultant”).

WHEREAS, Consultant has experience in Aware’s business operations and is willing to provide services to Aware based on this experience; and

WHEREAS, Aware desires to have Consultant provide consulting services, on the terms and conditions set forth in this Agreement.

THEREFORE, the parties agree as follows:

1.   DESCRIPTION OF SERVICES. Consultant will provide to Aware consulting services relating to Aware’s businesses as reasonably requested by Aware from time to time (“Services”).

2.   PAYMENT.  Aware will pay Consultant for Services performed in the amount of Thirty Two Thousand Dollars ($32,000) per month payable on a monthly basis in arrears. Consultant shall be responsible to remit to the applicable taxing authorities all taxes payable in respect of the fees and other amounts paid by the Aware to Consultant hereunder. Upon termination of this Agreement, payments under this paragraph shall cease.

3.   TERM/TERMINATION.  This Agreement shall begin on April 2, 2011 and continue until September 30, 2011.  This Agreement may be terminated at any time by mutual agreement between the parties.

4.   RELATIONSHIP OF PARTIES.  It is understood by the parties that Consultant is an independent contractor with respect to Aware, and not an employee of Aware.  Aware will not provide fringe benefits, including health insurance benefits, payroll taxes, paid vacation or other compensated absences, or any other employee benefit, for the benefit of Consultant. . Aware will provide such materials and accesses as reasonably required for the Consultant to perform the Services.

5.   CONFIDENTIALITY.  Consultant will not at any time, either during the term of this Agreement or thereafter, divulge furnish, or make available, either directly or indirectly, to any person, firm, corporation or other party any proprietary or confidential information of Aware.  Such information includes, but is not limited to, business plans, financial plans, strategic alliances, existing and potential customer lists, technical specifications and intellectual property.

6.   INVENTIONS.  Any and all inventions, processes, procedures, systems, discoveries, designs, configurations, formulations, technology, works of authorship (including but not limited to computer programs), trade secrets and improvements (whether or not patentable and whether or not they are made, conceived or reduced to practice during working hours or using Aware’s data or facilities)(collectively, the “Inventions”) which Consultant makes, conceives, reduces to practice, or otherwise acquires during the term of this Agreement (either solely or jointly with others) and which are directly related to Aware’s present or planned services or products, shall be the sole property of Aware and shall at all times and for all purposes be regarded as acquired and held by Consultant in a fiduciary capacity for the sole benefit of Aware.  All Inventions that consist of works of authorship capable of protection under copyright laws shall be prepared by Consultant as works made for hire, with the understanding that Aware shall own all of the exclusive rights to such works of authorship under the United States copyright law and all international copyright conventions and foreign laws.  Consultant hereby assigns to Aware, without further compensation, all such Inventions and any and all patents, copyrights, trademarks, trade names or applications therefore, in the United States and elsewhere, relating thereto.  Consultant shall promptly disclose to Aware all such Inventions and shall assist Aware in obtaining and enforcing for its own benefit patents and copyright registrations on such Inventions in all countries.  Upon reasonable request, Consultant shall execute all applications, assignments, instruments and papers and perform all acts, such as the giving of testimony in interference proceedings and infringement suits or other litigation, necessary or desired by Aware to enable Aware and its successors, assigns and nominees to secure and enjoy the full benefits and advantages of such Inventions.

7.   NOTICES.  All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered when delivered in person, via facsimile or via United States mail or overnight delivery services.

8.   ENTIRE AGREEMENT.  This Agreement, including any exhibits attached hereto, contains the entire agreement of the parties with respect to the subject matter hereof. There are no other agreements, understandings, covenants, conditions or undertakings, oral or written, express or implied, concerning such subject matter that are not merged herein or superseded hereby.

9.   AMENDMENT.  This Agreement may be modified or amended if the amendment is made in writing, signed by both parties, and attached to this Agreement.

10.    SEVERABILITY.  If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable.

11.   WAIVER OF CONTRACTUAL RIGHT.  The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.

12.   APPLICABLE LAW.  This Agreement shall be governed by the laws of the Commonwealth of Massachusetts.

Aware, Inc.	Consultant
By:   /s./Richard P. Moberg	By: /s/ Edmund C. Reiter
Date:  April 1, 2011	Date:  April 1, 2011