<PAGE>   1
 
                            SCHEDULE 14A INFORMATION
 
                   PROXY STATEMENT PURSUANT TO SECTION 14(a)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
 
Filed by the Registrant [X]
 
Filed by a Party other than the Registrant [ ]
 
Check the appropriate box:
 

<TABLE>
<S>                                             <C>
[ ]  Preliminary Proxy Statement                [ ]  Confidential, for Use of the Commission
                                                     Only (as permitted by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

 
                                  AWARE, INC.
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)
 
                                 Not Applicable
- --------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
[X]  No fee required.
 
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
     (1)  Title of each class of securities to which transaction applies:
 
          ----------------------------------------------------------------------
 
     (2)  Aggregate number of securities to which transaction applies:
 
          ----------------------------------------------------------------------
 
     (3)  Per unit price or other underlying value of transaction computed
          pursuant to Exchange Act Rule 0-11:*
 
          ----------------------------------------------------------------------
 
     (4)  Proposed maximum aggregate value of transaction:
 
          ----------------------------------------------------------------------
 
     (5)  Total fee paid:
 
          ----------------------------------------------------------------------
 
      *   Set forth the amount on which the filing fee is calculated and state
          how it was determined.
 
          ----------------------------------------------------------------------
 
[ ]  Fee paid previously with preliminary materials.
 
[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2) and identify the filing for which the offsetting fee was paid
     previously. Identify the previous filing by registration statement number,
     or the Form or Schedule and the date of its filing.
 
     (1)  Amount Previously Paid:
 
          ----------------------------------------------------------------------
 
     (2)  Form, Schedule or Registration Statement No.:
 
          ----------------------------------------------------------------------
 
     (3)  Filing Party:
 
          ----------------------------------------------------------------------
 
     (4)  Date Filed:
 
          ----------------------------------------------------------------------

<PAGE>   2
 
                                  AWARE, INC.
 

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
 
                                  MAY 21, 1997
 
     Notice is hereby given that the Annual Meeting of Stockholders of Aware,
Inc. (the "Company") will be held at the Renaissance Bedford Hotel, 44 Middlesex
Turnpike, Bedford, Massachusetts on Wednesday, May 21, 1997, beginning at 10:00
A.M., local time, for the following purposes:
 
          1. To consider and vote upon the election of two Class I directors;
             and
 
          2. To transact such further business as may properly come before the
             Meeting or any adjournment thereof.
 
     The Board of Directors has fixed the close of business on Thursday, April
10, 1997, as the record date for the determination of the stockholders of the
Company entitled to notice of, and to vote at, the Meeting and any adjournment
thereof. Only stockholders of record on such date are entitled to notice of, and
to vote at, the Meeting or any adjournment thereof.
 
                                          By Order of the Board of Directors,
 

                                          JAMES C. BENDER
                                          President
 
A
pril 15, 1997
Bedford, Massachusetts










 
                             YOUR VOTE IS IMPORTANT
 
         PLEASE SIGN AND RETURN THE ENCLOSED PROXY, WHETHER OR NOT YOU
                          PLAN TO ATTEND THE MEETING.

<PAGE>   3
 
                                   AWARE, INC.
                                  ONE OAK PARK
                          BEDFORD, MASSACHUSETTS 01730
                                 (617) 276-4000
 
                                PROXY STATEMENT
 
                         ANNUAL MEETING OF STOCKHOLDERS
 
                                  MAY 21, 1997
 
     This Proxy Statement and the enclosed form of proxy are being mailed to
stockholders on or about April 15, 1997 in connection with the solicitation by
the Board of Directors of Aware, Inc. (the "Company") of proxies to be used at
the Annual Meeting of Stockholders of the Company, to be held at the Renaissance
Bedford Hotel, 44 Middlesex Turnpike, Bedford, Massachusetts, at 10:00 A.M. on
Wednesday, May 21, 1997, and at any and all adjournments thereof (the "Annual
Meeting"). When proxies are returned properly executed, the shares represented
will be voted in accordance with the stockholders' directions. Stockholders are
encouraged to vote on the matters to be considered. If no choice has been
specified by a stockholder, however, the shares covered by any executed proxy
will be voted as recommended by management. Any stockholder may revoke his proxy
at any time before it has been exercised.
 
     The Board of Directors of the Company has fixed the close of business on
Thursday, April 10, 1997, as the record date for the determination of the
stockholders of the Company entitled to notice of, and to vote at, the Annual
Meeting and any adjournment thereof. Only stockholders of record on such date
are entitled to notice of, and to vote at, the Annual Meeting and any
adjournment thereof. At the close of business on March 24, 1997, there were
issued and outstanding 19,159,636 shares of the Company's Common Stock, $0.01
par value per share (the "Common Stock"), entitled to cast 19,159,636 votes.
 
                         QUORUM AND TABULATION OF VOTES
 
     The By-Laws of the Company provide that a quorum at the Annual Meeting
shall consist of a majority in interest of all stock issued, outstanding and
entitled to vote at the Annual Meeting. Shares of Common Stock represented by a
properly signed and returned proxy will be treated as present at the Annual
Meeting for purposes of determining a quorum. In general, votes withheld from
any nominee for election as director, abstentions (if applicable) and broker
"non-votes" (if applicable) are counted as present or represented for purposes
of determining the presence or absence of a quorum for the Annual Meeting. A
"non-vote" occurs when a broker or nominee holding shares for a beneficial owner
does not vote on a proposal because the broker or nominee does not have
discretionary voting power and has not received instructions from the beneficial
owner with respect to that proposal.
 
     The affirmative vote of a plurality of the shares of Common Stock properly
cast at the Annual Meeting will be necessary to elect each director (Proposal
One). Abstentions, votes "withheld" from director-nominees, and broker
"non-votes" will not be included in calculating the number of votes cast on such
Proposal.
 
     Votes will be tabulated by the Company's transfer agent, Boston Equiserve
Limited Partnership. The vote on each matter submitted to stockholders will be
tabulated separately.

<PAGE>   4
 

                                  PROPOSAL ONE
 
                             ELECTION OF DIRECTORS
 
     The Board of Directors has nominated for election as Class I directors
James C. Bender and Jerald G. Fishman, each of whom is currently a director of
the Company. Each director elected at the Annual Meeting will hold office for a
term continuing until the annual meeting held in the third year following the
year of his election and until his successor is duly elected and qualified.
 
     Each of the nominees has agreed to serve if elected, and the Company has no
reason to believe that either nominee will be unable to serve. In the event that
one or both nominees is unable or declines to serve as a director at the time of
the Annual Meeting, proxies will be voted for such other nominee or nominees as
the Board may then designate.
 
 
    THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE TWO
INDIVIDUALS NAMED ABOVE AS CLASS I DIRECTORS OF THE COMPANY.
 
                                        2

<PAGE>   5
 
                        DIRECTORS AND EXECUTIVE OFFICERS
 
     The following table sets forth certain information with respect to the
directors and executive officers of the Company as of March 24, 1997:
 

<TABLE>
<CAPTION>
NAME                                        AGE                      POSITION
- ----                                        ---                      --------
<S>                                         <C>     <C>
Charles K. Stewart(1)(2)..................  50      Chairman of the Board of Directors
James C. Bender(1)........................  44      President, Chief Executive Officer and Director
Michael A. Tzannes........................  35      Senior Vice President, Telecommunications
David C. Hunter...........................  41      Senior Vice President, Product Development
Richard P. Moberg.........................  42      Chief Financial Officer and Treasurer
Edmund C. Reiter..........................  33      Vice President, Advanced Products
Jerald G. Fishman.........................  51      Director
John K. Kerr(1)(2)(3).....................  59      Director
John S. Stafford, Jr.(3)..................  59      Director
</TABLE>

 
- ---------------
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
 
     Charles K. Stewart has been a Director of the Company since 1988 and
Chairman of the Board of Directors since April 1995. Mr. Stewart previously
served as Chairman of the Board of Directors from 1988 to 1990 and from March
1994 to November 1994. From 1975 to December 1993, he traded options, futures
and securities on the Chicago Board of Options Exchange and has been involved in
private venture capital transactions since 1984. Mr. Stewart received an M.B.A.
from Northwestern University and a B.A. from Yale University.
 
     James C. Bender has been President, Chief Executive Officer and a director
of the Company since October 1994. From April 1992 to February 1994, Mr. Bender
served as President and Chief Executive Officer of Logicraft, Inc., a network
service provider. From 1986 to April 1992, Mr. Bender served as Logicraft's
President and Chief Operating Officer. Mr. Bender received an M.B.A. from the
Harvard Graduate School of Business Administration and a B.S. from Lowell
Technological Institute.
 
     Michael A. Tzannes has been the Company's Senior Vice President,
Telecommunications since April 1996. Dr. Tzannes served as the Company's Vice
President, Telecommunications from December 1992 to April 1996, as a Senior
Member of the Company's Technical Staff from January 1991 to November 1992, and
as a consultant to the Company from October 1990 to December 1990. From 1986 to
1990, he was a Staff Engineer at Signatron, Inc., a telecommunications
technology and systems developer. Dr. Tzannes received a Ph.D. in electrical
engineering from Tufts University, an M.S. from the University of Michigan at
Ann Arbor, and a B.S. from the University of Patras, Greece.
 
     David C. Hunter joined the Company in May 1996 as Senior Vice President,
Product Development. From 1982 to April 1996, Mr. Hunter served as Vice
President, Research and Development of I.D.E. Corporation ("IDEA"), a
manufacturer of data communications equipment. Mr. Hunter was a founder and
director of IDEA. Mr. Hunter received an M.B.A. with high distinction from the
Harvard Graduate School of Business Administration and a B.S. with distinction
from Cornell University.
 
     Richard P. Moberg, C.P.A. joined the Company in June 1996 as Chief
Financial Officer and Treasurer. From December 1990 to June 1996, Mr. Moberg
held a number of positions at Lotus Development Corporation, a computer software
developer, including Corporate Controller from June 1995 to June 1996,
 
                                        3

<PAGE>   6
 
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.
 
     Edmund C. Reiter has been the Company's Vice President, Advanced Products
since August 1995. Prior to that, he served as the Company's Manager of Product
Development for still image compression products from June 1994 to August 1995,
as a Senior Member of the Company's Technical Staff from November 1993 to June
1994, and as a Member of the Technical Staff from December 1992 to November
1993. Dr. Reiter served as Senior Scientist at New England Research, Inc. from
January 1991 to November 1992. Dr. Reiter received a B.S. from Boston College
and a Ph.D. from the Massachusetts Institute of Technology.
 
     Jerald G. Fishman has been a Director of the Company since May 1996 and
President and Chief Executive Officer of Analog Devices, Inc. ("ADI") since
November 1996. Mr. Fishman joined ADI in 1971 and held a variety of management
positions in marketing, operations and strategic planning, including Group Vice
President from 1982 to 1988, Executive Vice President from 1988 to November
1991, and President and Chief Operating Officer from November 1991 to November
1996. Mr. Fishman has also served as a Director of ADI since November 1991. Mr.
Fishman received a B.S. in electrical engineering from the City College of New
York, an M.S. in electrical engineering from Northeastern University, an M.B.A.
from Boston University and a J.D. from Suffolk Law School. Mr. Fishman is a
director of Kollmorgen Corporation.
 
     John K. Kerr has been a Director of the Company since 1990. Mr. Kerr
previously served as a Director of the Company from 1988 to 1989 and as the
Chairman of the Board of Directors from November 1992 to March 1994. From June
1992 to November 1994, Mr. Kerr served as the Company's Assistant Vice President
of Marketing. Mr. Kerr has been General Partner of Grove Investment Partners, a
private investment partnership, since 1990. Mr. Kerr received an M.A. and a B.A.
from Baylor University.
 
     John S. Stafford, Jr. has been a Director of the Company since 1988. Mr.
Stafford has been a Member of the Chicago Board of Options Exchange since 1975,
where he trades financial futures, options and equity instruments. Mr. Stafford
received an M.B.A. from the University of North Carolina and a B.A. from
Davidson College.
 
     The Board of Directors is divided into three classes, each consisting of
one-third of the whole number of the Board of Directors. One class is elected
each year at the annual meeting of stockholders to hold office for a term of
three years. Each director holds office until his successor has been duly
elected and qualified. In accordance with Massachusetts law, the Board of
Directors has fixed the number of Directors at six. There is currently one
vacancy on the Board of Directors. Messrs. Bender and Fishman serve in the class
whose terms expire in 1997; Mr. Kerr serves in the class whose terms expire in
1998; and Messrs. Stafford and Stewart serve in the class whose terms expire in
1999. Pursuant to Mr. Bender's employment agreement, the Company has agreed to
use its best efforts to cause Mr. Bender to be elected to the Company's Board of
Directors. See "Compensation of Directors and Executive Officers -- Employment
Agreement." Executive officers are elected annually by the Board of Directors
and serve at the discretion of the Board or until their respective successors
have been duly elected and qualified. There are no family relationships among
the directors and executive officers of the Company.
 
COMMITTEES AND MEETINGS OF THE BOARD
 
     During 1996, the Board met eight times and acted by unanimous written
consent on three occasions. No incumbent director attended fewer than 75% of the
total number of meetings held by the Board and Committees of the Board on which
he served.
 
                                        4

<PAGE>   7
 
     In April 1996, the Company established an Executive Committee, a
Compensation Committee and an Audit Committee. The Company does not have a
nominating committee or other committee performing similar functions. The
Executive Committee has all of the powers of the Board of Directors except the
power to: (i) change the number of directors or fill vacancies on the Board of
Directors; (ii) elect or fill vacancies in the offices of President, Treasurer
or Clerk; (iii) remove any officer or director; (iv) amend the By-Laws of the
Company; (v) change the principal office of the Company; (vi) authorize the
payment of any dividend or distribution to shareholders of the Company; (vii)
authorize the reacquisition of capital stock for value; and (viii) authorize a
merger. In 1996, the Executive Committee met once and took action by unanimous
written consent once.
 
     The Compensation Committee provides recommendations concerning salaries and
incentive compensation for senior management of the Company and administers the
Company's stock option plans. In 1996, the Compensation Committee took action by
unanimous written consent once but did not conduct any formal meetings. The
Audit Committee reviews the results and scope of the annual audit of the
Company's financial statements conducted by the Company's independent
accountants, the scope of other services provided by the Company's independent
accountants, proposed changes in the Company's financial and accounting
standards and principles, and the Company's policies and procedures with respect
to its internal accounting, auditing and financial controls. The Audit Committee
also makes recommendations to the Board of Directors on the engagement of the
independent accountants, as well as other matters which may come before the
Audit Committee or at the direction of the Board of Directors. In 1996, the
Audit Committee neither met nor took action by unanimous written consent.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     The Company's Compensation Committee is currently composed of Messrs. Kerr
and Stafford. Mr. Kerr formerly served as the Company's Assistant Vice President
of Marketing from June 1992 to November 1994. Prior to the appointment of the
Compensation Committee in April 1996, the compensation of the Company's
executive officers was determined by the Board of Directors, which consisted of
Messrs. Bender, Stewart, Stafford and Kerr and Mr. William N. Sick, Jr. Mr. Sick
served on the Board of Directors from January 1996 until his resignation in June
1996. Mr. Bender, the Company's President and Chief Executive Officer, served on
the Board of Directors throughout 1996 and participated in the deliberations of
the Board of Directors concerning the compensation of the Company's executive
officers other than himself. In 1996, no other officer or employee of the
Company participated in any such deliberations. No interlocking relationship has
existed between the Company's Board of Directors or Compensation Committee and
the board of directors or compensation committee of any other company since
January 1, 1996.
 

                COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
 
DIRECTORS' COMPENSATION
 
     Each non-employee director of the Company is reimbursed for expenses
incurred in attending meetings of the Board of Directors. Directors of the
Company are not paid any separate fees for serving as directors. On May 23,
1996, the Company granted Messrs. Stewart and Fishman nonstatutory options under
the 1996 Stock Option Plan to purchase 330,000 and 150,000 shares of Common
Stock, respectively, at an exercise price of $8.25 per share. The options vest
in equal monthly installments over a period of three years, commencing June 1,
1996, except that 30,000 of Mr. Stewart's options were fully vested as of the
date they were granted. For information concerning certain options granted to
Mr. Bender, see "-- Executive Compensation -- Option Grants in Last Fiscal Year"
and "-- Employment Agreement."
 
                                        5

<PAGE>   8
 
EXECUTIVE COMPENSATION
 

     Summary of Cash and Other Compensation.  The following table provides
certain summary information concerning compensation earned for services rendered
to the Company in all capacities in 1996 by the Company's President and Chief
Executive Officer and the Company's four other most highly compensated executive
officers (collectively, the "Named Executive Officers").
 
                           SUMMARY COMPENSATION TABLE
 


<TABLE>
<CAPTION>
                                                                                            LONG TERM
                                                                                           COMPENSATION
                                                                                           ------------
                                                            ANNUAL COMPENSATION               AWARDS
                                                   -------------------------------------   ------------
                                                                            OTHER ANNUAL    SECURITIES
NAME AND                                                                      COMPEN-       UNDERLYING
PRINCIPAL POSITION                          YEAR   SALARY($)     BONUS($)   SATION($)(1)   OPTIONS(#)(2)
- ------------------                          ----   ---------     --------   ------------   ------------
<S>                                         <C>    <C>           <C>        <C>            <C>
James C. Bender.........................    1996   $200,154           --              --      110,000
  President and Chief Executive Officer     1995    179,013           --              --      500,000

Michael A. Tzannes......................    1996    133,038      $20,451              --      130,000
  Senior Vice President,                    1995    103,815           --              --      220,000         
  Telecommunications                        

David C. Hunter.........................    1996    119,904(3)        --              --      330,000
  Senior Vice President, Product            1995         --           --              --           --
  Development                                        

Richard P. Moberg.......................    1996     66,499(4)        --              --       85,000
  Chief Financial Officer and Treasurer     1995         --           --              --           --

Edmund C. Reiter........................    1996     80,138       37,844              --       30,000
  Vice President, Advanced Products         1995     73,843        7,701              --       32,000
</TABLE>

 
- ---------------
(1) Other annual compensation in the form of perquisites and other personal
    benefits has been omitted because the aggregate amount of such perquisites
    and other personal benefits was less than $50,000 and constituted less than
    10% of the Named Executive Officer's total annual salary and bonus.
 
(2) Represents stock options granted under the Company's 1990 Incentive and
    Nonstatutory Stock Option Plan and 1996 Stock Option Plan. In 1995 and 1996,
    the Company did not make any restricted stock awards, grant any stock
    appreciation rights or make any long-term incentive plan payouts.
 
(3) Mr. Hunter commenced employment with the Company in May 1996 at an annual
    salary of $180,000.
 
(4) Mr. Moberg commenced employment with the Company in June 1996 at an annual
    salary of $125,000.
 
                                        6

<PAGE>   9
 
     Option Grants in Last Fiscal Year.  The following table sets forth for each
of the Named Executive Officers certain information concerning stock options
granted under the 1996 Stock Option Plan during 1996.
 
                       OPTION GRANTS IN LAST FISCAL YEAR
 


<TABLE>
<CAPTION>
                                                                                           
                                              INDIVIDUAL GRANTS                                    
                      -----------------------------------------------------------------  POTENTIAL REALIZABLE VALUE
                        NUMBER OF                                                          AT ASSUMED ANNUAL RATE     
                       SECURITIES     PERCENT OF TOTAL                                   OF STOCK PRICE APPRECIATION
                       UNDERLYING     OPTIONS GRANTED    EXERCISE                            FOR OPTION TERM(1)
                         OPTIONS      TO EMPLOYEES IN     PRICE          EXPIRATION      ---------------------------
NAME                  GRANTED(#)(2)    FISCAL YEAR(3)    ($/SH)(4)          DATE           5%($)            10%($)
- ----                  -------------   ----------------   ---------    ----------------   ----------       ----------
<S>                   <C>             <C>               <C>           <C>                <C>            <C>
James C. Bender......   60,000(5)           4.78%         $ 8.25         May 23, 2006    $  311,303       $  788,903
                        50,000(6)           3.98            8.25         May 23, 2006       259,419          657,419

Michael A. Tzannes...   50,000(6)           3.98            8.25         May 23, 2006       259,419          657,419
                        10,043(7)           0.80           10.25(8)    December 5, 2006      64,738          164,061
                        59,957(9)           4.77           10.25(8)    December 5, 2006     386,493          979,449
                        10,000(10)          0.80           10.25       December 5, 2006      64,462          163,359

David C. Hunter......  264,000(11)         21.02            8.25         May 23, 2006     1,369,733        3,471,171
                        20,000(6)           1.59            8.25         May 23, 2006       103,768          262,968
                        36,000(12)          2.87            8.25         May 23, 2006       186,782          473,342
                        10,000(10)          0.80           10.25       December 5, 2006      64,462          163,359

Richard P. Moberg....   75,000(13)          5.97            8.25         June 10, 2006      389,129          986,128
                        10,000(10)          0.80           10.25       December 5, 2006      64,462          163,359

Edmund C. Reiter.....   20,000(6)           1.59            8.25         May 23, 2006       103,768          262,968
                        10,000(10)          0.80           10.25       December 5, 2006      64,462          163,359
</TABLE>

 
- ---------------
 (1) Amounts reported in this column represent hypothetical values that may be
     realized upon exercise of the options immediately prior to the expiration
     of their term, assuming the specified compounded rates of appreciation of
     the price of the Common Stock over the term of the options. These numbers
     are calculated based on rules promulgated by the Securities and Exchange
     Commission and do not represent the Company's estimate of future stock
     price growth. Actual gains, if any, on stock option exercises and Common
     Stock holdings are dependent on the timing of such exercise and the future
     performance of the Common Stock. There can be no assurance that the rates
     of appreciation assumed in this table can be achieved or that the amounts
     reflected will be received by the Named Executive Officers. This table does
     not take into account any appreciation in the price of the Common Stock
     from the date of grant to the current date. The values shown are net of the
     option exercise price, but do not include deductions for taxes or other
     expenses associated with the exercise.
 
 (2) Represents shares of Common Stock issuable upon exercise of incentive stock
     options and nonstatutory stock options granted under the 1996 Stock Option
     Plan.
 
 (3) In 1996, the Company granted employees options to purchase an aggregate of
     1,255,750 shares of Common Stock under the 1996 Stock Option Plan.
 
 (4) All options were granted at no less than fair market value as determined by
     the Board of Directors or the Compensation Committee on the date of grant.
     The market value of the Common Stock prior to the Company's initial public
     offering was determined by the Board of Directors or the Compensation
     Committee based on various factors, including the illiquid nature of an
     investment in the Common Stock, the Company's historical financial
     performance and the Company's future prospects.
 
 (5) The option vests in equal monthly installments over a period of three
     years, commencing November 1, 1995.
 
 (6) The option vests in equal monthly installments over a period of three
     years, commencing June 1, 1996.
 
 (7) The option vests to the extent of 3,377 shares on January 1, 1998 and 6,666
     shares on January 1, 1999.
 
                                        7

<PAGE>   10
 
 (8) The options were originally granted on September 5, 1996 at an exercise
     price of $15.00 per share with ten-year terms expiring September 5, 2006.
     On December 5, 1996, the options were cancelled and new options were
     granted at an exercise price of $10.25 per share with ten-year terms
     expiring December 5, 2006. See "-- Ten-Year Option Repricing."
 
 (9) The option vests in equal monthly installments over a period of three
     years, commencing October 1, 1996.
 
(10) The option vests in equal monthly installments over a period of three
     years, commencing January 1, 1997.
 
(11) The option vests to the extent of 96,000 shares on December 31, 1996 and
     7,333 shares per month commencing May 1, 1996 until fully vested. The
     vesting of the option accelerates in full upon a change in control of the
     Company.
 
(12) The option vests 1,000 shares per month commencing May 1, 1996, 2,000
     shares per month commencing September 1, 1996 and 1,000 shares per month
     commencing January 1, 1997. The vesting of the option accelerates in full
     upon a change in control of the Company.
 
(13) The option vests in equal monthly installments over a period of three
     years, commencing July 1, 1996. The vesting of the option accelerates in
     full upon a change in control of the Company.
 

     Option Exercises and Fiscal Year-End Option Values.  The following table
sets forth certain information concerning stock options exercised during 1996
and stock options held as of December 31, 1996 by each of the Named Executive
Officers.
 
                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                       AND FISCAL YEAR-END OPTION VALUES
 


<TABLE>
<CAPTION>
                                                  NUMBER OF SECURITIES UNDERLYING         VALUE OF UNEXERCISED
                            SHARES                    UNEXERCISED OPTIONS AT              IN-THE-MONEY OPTIONS
                           ACQUIRED     VALUE             FISCAL YEAR END               AT FISCAL YEAR END($)(2)
                              ON       REALIZED  ---------------------------------  --------------------------------
NAME                      EXERCISE(#)   ($)(1)   EXERCISABLE(#)  UNEXERCISABLE(#)   EXERCISABLE($)  UNEXERCISABLE($)
- ----                      -----------  --------  --------------  -----------------  --------------  ----------------
<S>                       <C>          <C>       <C>             <C>                <C>             <C>
James C. Bender.........     10,000      $ 0         664,505          435,495         $5,655,590       $3,287,410
Michael A. Tzannes......         --       --         179,632          230,368          1,508,376        1,066,874
David C. Hunter.........         --       --         162,666          167,334            304,999          295,001
Richard P. Moberg.......         --       --          10,425           74,575             19,547          121,078
Edmund C. Reiter........         --       --          30,597           44,403            246,833          187,792
</TABLE>

 
- ---------------
(1) There was no public trading market for the Common Stock on the exercise
    date; accordingly, value is based on the fair market value of the Common
    Stock on the exercise date, as determined by the Board of Directors, less
    the applicable option exercise price.
 
(2) Value is based on the last sale price of the Common Stock ($10.125 per
    share) on December 31, 1996, as reported by the Nasdaq National Market, less
    the applicable option exercise price. These values have not been and may
    never be realized. Actual gains, if any, on exercise will depend on the
    value of the Common Stock on the date of the sale of the shares.
 
     Ten-Year Option Repricing.  The following table sets forth certain
information regarding the repricing during 1996 of stock options previously
awarded to the Named Executive Officers in 1996. See "Compensation Committee
Report on Executive Compensation" below for further information.
 
                                        8

<PAGE>   11
 
                           TEN-YEAR OPTION REPRICING
 

<TABLE>
<CAPTION>
                                                                                                                  LENGTH OF
                                                   NUMBER OF                                                       ORIGINAL
                                                  SECURITIES    MARKET PRICE                                     OPTION TERM
                                                  UNDERLYING     OF STOCK AT    EXERCISE PRICE       NEW         REMAINING AT
                                                    OPTIONS        TIME OF        AT TIME OF      EXERCISE         DATE OF
NAME AND PRINCIPAL POSITION          DATE         REPRICED(#)   REPRICING($)     REPRICING($)     PRICE($)        REPRICING
- -----------------------------  -----------------  -----------   -------------   ---------------   ---------   ------------------
<S>                            <C>                <C>           <C>             <C>               <C>         <C>
James C. Bender..............                 --         --             --               --             --                    --
  President and Chief
  Executive Officer
Michael A. Tzannes...........   December 5, 1996     70,000        $ 10.25          $ 15.00        $ 10.25     9 years, 274 days
  Senior Vice President,
  Telecommunications
David C. Hunter..............                 --         --             --               --             --                    --
  Senior Vice President,
  Product Development
Richard P. Moberg............                 --         --             --               --             --                    --
  Chief Financial Officer
  and Treasurer
Edmund C. Reiter.............                 --         --             --               --             --                    --
  Vice President,
  Advanced Products
</TABLE>

 
EMPLOYMENT AGREEMENT
 
     Mr. Bender entered into an employment agreement with the Company on October
27, 1994. The agreement was amended on December 20, 1996. As amended, the
agreement provides that Mr. Bender will serve as the President and Chief
Executive Officer of the Company for a term expiring December 31, 2002. Under
the agreement, the term of Mr. Bender's employment will be extended for up to
five one-year periods, the first to commence on January 1, 2003, until either
the Company or Mr. Bender gives the other six month's notice of non-renewal. The
Company also agreed to use its best efforts to cause Mr. Bender to be elected to
the Board of Directors. The agreement provides that Mr. Bender shall receive an
annual salary of $200,000 and bonuses at the discretion of the Board of
Directors. The Company agreed to pay on Mr. Bender's behalf initiation fees at a
golf or country club of up to $40,000 and annual dues up to a maximum of $6,000,
as well as the premiums on a term life insurance policy on his life in the
principal amount of $1.0 million. Mr. Bender is entitled to participate in the
Company's insurance and other employee benefit programs on the same basis as all
other employees. Mr. Bender agreed to be bound by the terms of the Company's
standard employee agreement concerning inventions, confidentiality and
non-competition.
 
     In the event of termination as a result of death or disability, the Company
will continue Mr. Bender's compensation and benefits for a period of six months
thereafter. The Company may terminate Mr. Bender's employment for cause upon ten
days' notice and an opportunity to be heard at a meeting of the Board of
Directors or the Executive Committee; for purposes of the agreement, "cause"
means negligent acts or omissions that have been or will be the sole or primary
cause of material harm to the Company, conviction of a crime involving moral
turpitude or conviction of a crime the principal victim of which is the Company.
In the event that the Company terminates Mr. Bender's employment without cause
or in the event of a change in control of the Company (as defined in the
agreement), the Company will pay Mr. Bender a severance payment upon such
termination equal to the salary he would have earned through the expiration of
his employment, such payment not to be less than $180,000 nor more than
$270,000. Mr. Bender may terminate his employment with the Company by giving
three months' prior written notice to the Company.
 
                                        9

<PAGE>   12
 
     Pursuant to the Agreement, the Company has granted Mr. Bender an incentive
option to purchase 230,769 shares of Common Stock, a nonstatutory option to
purchase 269,231 shares of Common Stock and a nonstatutory option to purchase
300,000 shares of Common Stock, each at an exercise price of $1.30 per share.
The first two options vest in equal monthly installments over periods of three
years ending October 1997 and the third option vests in equal monthly
installments over a period of three years ending December 1997. Each option
expires on the eighth anniversary of the date of grant. If Mr. Bender terminates
his employment before December 31, 1998, he will forfeit up to 30% of the vested
portion of these options.
 
C
OMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
 
     The Compensation Committee established by the Board of Directors is
composed of two outside directors, John K. Kerr and John S. Stafford, Jr. The
Compensation Committee has general responsibility for the Company's executive
compensation policies and practices, including making specific recommendations
to the Board concerning compensation for the Company's executive officers. The
following report summarizes the Company's executive officer compensation
policies for 1996.
 
  Compensation Objectives
 
     The Company's executive compensation programs are generally designed to
relate executive compensation to improvements in the Company's financial
performance and corresponding increases in stockholder value. Decisions
concerning executive compensation are intended to:
 
     - establish incentives that will link executive officer compensation to the
       Company's stock performance and motivate executives to attain the
       Company's quarterly and annual financial targets and to promote the
       Company's long-term financial success; and
 
     - provide a total compensation package that is competitive within the
       industry and that will assist the Company to attract and retain
       executives who will contribute to the long-term financial success of the
       Company.
 

  Executive Compensation
 
     The Company's executive compensation package consists of two principal
components: (1) base salary and (2) long-term incentive compensation in the form
of stock options under the Company's stock option plans. The Company's executive
officers are also eligible to participate in other employee benefit plans,
including health and life insurance plans, a 401(k) retirement plan and a stock
purchase plan, on substantially the same terms as other employees who meet
applicable eligibility criteria, subject to any legal limitations on the amounts
that may be contributed or the benefits that may be payable under these Company
plans.
 
     The Company's executive compensation policy emphasizes stock options which
align the interests of management with the stockholders' interest in the
financial performance of the Company for fiscal quarters, the fiscal year and
the longer term. Executive officers' base salaries were increased for 1996 in
accordance with the Company's general policy of adjusting salaries annually to
reflect comparable executive salaries for comparably sized companies and to
accomplish the Company's compensation objectives as outlined above. Although the
Company did not establish a bonus program for its executive officers in 1996, it
paid commissions to Messrs. Tzannes and Reiter in accordance with predefined,
revenue-based formulas.
 
     In 1996, each of James C. Bender, Michael A. Tzannes, David C. Hunter,
Richard P. Moberg and Edmund C. Reiter was awarded stock options under the
Company's 1996 Stock Option Plan. As indicated in the table captioned "Option
Grants in Last Fiscal Year" above, each of Messrs. Bender, Tzannes, Hunter and
Moberg received substantial option grants in 1996. These large awards, which
were intended to align these four senior executives' interests with those of the
Company's stockholders by providing them with a substantial equity stake in the
Company, may not be indicative of the size of awards to be received by the
current
 
                                       10

<PAGE>   13
 
executive officers of the Company in the future. Vesting of the options granted
to these individuals generally occurs over a period of three years after the
date of grant. The Compensation Committee believes that the grant of options
that vest over an extended period provides significant incentive for executive
officers to continue their efforts on behalf of the Company and to create
long-term value for the Company's stockholders.
 
  Chief Executive Officer Compensation
 
     Consistent with the overall executive officer compensation policy, the
Company's approach to the Chief Executive Officer's compensation package in 1996
was to be competitive with other high growth companies in the industry. The
Compensation Committee believes that this approach provides additional incentive
to Mr. Bender to achieve the Company's performance goals and enhance stockholder
value. His base salary, which was increased from $180,000 in 1995 to $200,000 in
1996, was designed to give him assurance of a base level of compensation
consistent with his position and duration of employment with the Company and to
be competitive with salaries paid to officers holding comparable positions in
the industry. In December 1996, the Company amended Mr. Bender's employment
agreement to reflect this increase in his base salary for future years and to
provide certain additional benefits as described above under "Compensation of
Directors and Executive Officers -- Employment Agreement." The Committee
believes that these benefits are appropriate in light of the successful
completion of the Company's initial public offering in August 1996. As indicated
above, Mr. Bender's 1996 option grants were intended to ensure that his equity
position in the Company was commensurate with his seniority and
responsibilities, rather than as recognition of the Company's or his individual
performance in 1996.
 
  Report on Repricing of Options
 
     The December 1996 repricing of options held by Mr. Tzannes described in the
table captioned "Ten-Year Option Repricing" above reflects the consistent
application of the policy of the Compensation Committee regarding stock options.
The Compensation Committee and the full Board of Directors believe that the
Company can provide the maximum incentive to its employees, including senior
executives, by granting stock options at exercise prices equal to or not
materially greater than the current fair market value of the Company's Common
Stock. As a result of this policy, the options granted to Mr. Tzannes on
September 5, 1996 were repriced on December 5, 1996 to reflect more accurately
the market value of the Common Stock as determined by the closing price of the
Common Stock on the Nasdaq National Market on that date.
 
  Policy Regarding Section 162(m) of the Internal Revenue Code
 
     Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the
deductibility of compensation in excess of $1.0 million paid to the chief
executive officer and the four most highly compensated officers of the Company
(other than the chief executive officer) in any year, unless the compensation
qualifies as "performance-based compensation." The Compensation Committee's
policy with respect to Section 162(m) is to make every reasonable effort to
cause compensation to be deductible by the Company while simultaneously
providing executive officers of the Company with appropriate rewards for their
performance. The aggregate base salaries and bonuses of the Company's executive
officers have not historically exceeded, and are not in the foreseeable future
expected to exceed, the $1.0 million limit, and options under the Company's 1996
Stock Option Plan are intended to qualify as performance-based compensation.
 
                                            The Compensation Committee
 
                                               John K. Kerr
                                               John S. Stafford, Jr.
 
                                       11

<PAGE>   14
 
P
ERFORMANCE GRAPH
 
     The following Performance Graph compares the performance of the Company's
cumulative stockholder return with that of a broad market index, the Nasdaq
Stock Market Index for U.S. Companies and a published industry index, the
Hambrecht & Quist Technology Index. The cumulative stockholder returns for
shares of the Company's Common Stock and for the market and industry indices are
calculated assuming $100 was invested on August 9, 1996, the date on which the
Company's Common Stock commenced trading on the Nasdaq National Market. The
Company paid no cash dividends during the periods shown. The performance of the
market and industry indices is shown on a total return (dividends reinvested)
basis.
 
            COMPARISON OF CUMULATIVE TOTAL RETURN AMONG AWARE, INC.,
            THE NASDAQ STOCK MARKET INDEX FOR U.S. COMPANIES AND THE
                       HAMBRECHT & QUIST TECHNOLOGY INDEX
 

<TABLE>
<CAPTION>
        MEASUREMENT PERIOD                                H&Q TECHNOLOGY       NASDAQ STOCK
      (FISCAL YEAR COVERED)             AWARE, INC.            INDEX           MARKET - U.S.
<S>                                  <C>                 <C>                 <C>
AUGUST 9, 1996                                  100.00              100.00              100.00
DECEMBER 31, 1996                               101.25              116.73              113.20
</TABLE>

 
                                       12

<PAGE>   15
 

                              CERTAIN TRANSACTIONS
 
ADI AGREEMENTS
 
     In 1993, the Company entered into a Development Contract and a License
Agreement with ADI to produce broadband chipsets. The Development Contract was
amended in June 1994 and September 1995. In 1996, the Company received revenue
from ADI of approximately $877,500. Jerald G. Fishman, ADI's President and Chief
Executive Officer, is a director of the Company.
 
         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     At the close of business on March 24, 1997, there were issued and
outstanding 19,159,636 shares of Common Stock entitled to cast 19,159,636 votes.
On March 24, 1997, the closing price of the Company's Common Stock as reported
by the Nasdaq National Market was $10.50 per share.
 
P
RINCIPAL STOCKHOLDERS
 
     The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of March 24, 1997 by (i)
each person or group known by the Company to be the beneficial owner of more
than five percent of the outstanding Common Stock; (ii) each of the Company's
directors; (iii) each of the Named Executive Officers and (iv) all directors and
executive officers of the Company as a group. The information as to each person
has been furnished by such person.
 

<TABLE>
<CAPTION>
 
                                                                         SHARES BENEFICIALLY
                                                                                 OWNED
                                                                        ------------------------
NAMES AND ADDRESSES OF BENEFICIAL HOLDERS                               NUMBER(1)     PERCENT(2)
- -----------------------------------------                               ---------     ----------
<S>                                                                     <C>           <C>
Richard J. Naegele....................................................  2,084,695        10.9%
  401 S. LaSalle Street
  Suite 1502
  Chicago, Illinois 60605

John S. Stafford, Jr..................................................  1,784,783         9.3
  230 S. LaSalle Street
  Suite 688
  Chicago, Illinois 60604

Charles K. Stewart(3).................................................  1,285,402         6.7
  401 S. LaSalle Street
  Suite 1502
  Chicago, Illinois 60605

Howard L. Resnikoff(4)................................................    986,261         5.2
  P.O. Box 812127
  Wellesley, Massachusetts 02181

John K. Kerr(5).......................................................    896,293         4.7

James C. Bender(6)....................................................    748,693         3.8

David C. Hunter(7)....................................................    217,365         1.1

Michael A. Tzannes(8).................................................    191,899           *

Jerald G. Fishman(9)..................................................     45,870           *

Edmund C. Reiter(10)..................................................     38,937           *

Richard P. Moberg(11).................................................     21,962           *

All directors and executive officers as a group (9 persons)(12).......  5,231,204        25.5%
</TABLE>

 
- ---------------
  *  Less than one percent.
 
                                       13

<PAGE>   16
 
 (1) The number of shares beneficially owned by each stockholder is determined
     in accordance with the rules promulgated by the Securities and Exchange
     Commission, and the information is not necessarily indicative of beneficial
     ownership for any other purpose. Under such rules, beneficial ownership
     includes any shares as to which the person has sole or shared voting power
     or investment power and also any shares which the person has the right to
     acquire within 60 days after March 24, 1997 through the exercise of any
     stock option or other right. The inclusion herein of such shares, however,
     does not constitute an admission that the named stockholder is a direct or
     indirect beneficial owner of such shares. To the Company's knowledge, each
     person named in the table has sole voting power and investment power (or
     shares such power with his or her spouse) with respect to all shares of
     Common Stock shown as beneficially owned by such person, except as
     otherwise indicated.
 
 (2) Percentage ownership is based on 19,159,636 shares of Common Stock
     outstanding as of March 24, 1997. Solely for purposes of computing the
     percentage of shares beneficially owned by a person, shares of Common Stock
     which the person has the right to acquire within 60 days of March 24, 1997
     are deemed outstanding.
 
 (3) Includes 163,397 shares subject to options exercisable within 60 days of
     March 24, 1997; 242,431 shares held in trust for Mr. Stewart's children;
     and 80,575 shares held as trustee of the Dawson Family Trust. Does not
     include 208,261 shares subject to options not exercisable within 60 days of
     March 24, 1997.
 
 (4) Includes 508,861 and 475,000 shares held by the Howard L. Resnikoff Living
     Trust and the Joan Resnikoff Living Trust, respectively, of which Mr.
     Resnikoff and his spouse are co-trustees.
 
 (5) Includes 324,193 shares held by Grove Investment Partners, of which Mr.
     Kerr is a general partner.
 
 (6) Includes 708,693 shares subject to stock options exercisable within 60 days
     of March 24, 1997. Does not include 281,307 shares subject to options not
     exercisable within 60 days of March 24, 1997.
 
 (7) Includes 207,223 shares subject to stock options exercisable within 60 days
     of March 24, 1997. Does not include 122,777 shares subject to options not
     exercisable within 60 days of March 24, 1997.
 
 (8) Includes 181,899 shares subject to stock options exercisable within 60 days
     of March 24, 1997. Does not include 183,101 shares subject to options not
     exercisable within 60 days of March 24, 1997.
 
 (9) Represents shares subject to stock options exercisable within 60 days of
     March 24, 1997. Does not include 104,130 shares subject to options not
     exercisable within 60 days of March 24, 1997.
 
(10) Represents shares subject to stock options exercisable within 60 days of
     March 24, 1997. Does not include 36,063 shares subject to options not
     exercisable within 60 days of March 24, 1997.
 
(11) Represents shares subject to stock options exercisable within 60 days of
     March 24, 1997. Does not include 63,038 shares subject to options not
     exercisable within 60 days of March 24, 1997.
 
(12) Includes 1,367,981 shares subject to options exercisable within 60 days of
     March 24, 1997. Does not include 998,677 shares subject to options not
     exercisable within 60 days of March 24, 1997.
 

            SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC"). Officers,
directors and greater-than-10% stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
 
                                       14

<PAGE>   17
 
     Based solely upon review of Forms 3 and 4 and amendments thereto furnished
to the Company during 1996 and Forms 5 and amendments thereto furnished to the
Company with respect to 1996, or written representations that Form 5 was not
required, the Company believes that all Section 16(a) filing requirements
applicable to its officers, directors and greater-than-10% stockholders were
fulfilled in a timely manner.
 
 
                           INDEPENDENT ACCOUNTANTS
 
     The Board of Directors has selected Deloitte & Touche LLP as independent
accountants to audit the financial statements of the Company for the fiscal year
ending December 31, 1997.
 
     Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting, will have an opportunity to make a statement if they desire to
do so, and are expected to be available to respond to appropriate questions from
stockholders.
 
                       CHANGES IN INDEPENDENT ACCOUNTANTS
 
     In April 1996, the Company's Board of Directors authorized the Company to
retain Deloitte & Touche LLP as its independent accountants and dismissed
DiBenedetto & Company, P.A. The financial statements for December 31, 1994, 1995
and 1996 were audited by Deloitte & Touche LLP. DiBenedetto & Company, P.A. had
been retained to audit the Company's financial statements as of and for the year
ended December 31, 1994. The report of DiBenedetto & Company, P.A. for the year
ended December 31, 1994, which is not included herein, contained no adverse
opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or application of accounting principles. During the
year ended December 31, 1994 and through the date of replacement, there were no
disagreements with DiBenedetto & Company, P.A. on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure or "reportable events" as described in Item 304 of Regulation S-K.
 
     Price Waterhouse LLP was retained to audit the Company's financial
statements for the year ended December 31, 1993. On January 10, 1995, Price
Waterhouse LLP resigned and the Company replaced them with DiBenedetto &
Company, P.A. The report of Price Waterhouse LLP for the year ended December 31,
1993, which is not included herein, contained no adverse opinion or disclaimer
of opinion and was not qualified or modified as to uncertainty, audit scope or
application of accounting principles. During the year ended December 31, 1993
and through the date of replacement, there were no disagreements with Price
Waterhouse LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure or "reportable events" as
described in Item 304 of Regulation S-K.
 
                                  SOLICITATION
 
     No compensation will be paid by any person in connection with the
solicitation of proxies. Brokers, banks and other nominees will be reimbursed
for their out-of-pocket expenses and other reasonable clerical expenses incurred
in obtaining instructions from beneficial owners of the Common Stock. In
addition to the solicitation by mail, special solicitation of proxies may, in
certain instances, be made personally or by telephone by directors, officers and
certain employees of the Company. It is expected that the expense of such
special solicitation will be nominal. All expenses incurred in connection with
this solicitation will be borne by the Company.
 
                                       15

<PAGE>   18
 
                             STOCKHOLDER PROPOSALS
 
     Stockholder proposals for inclusion in the proxy materials related to the
1998 Annual Meeting of Stockholders or Special Meeting in lieu thereof must be
received by the Company at its Executive Offices no later than Tuesday, December
16, 1997.
 
                                 MISCELLANEOUS
 
     The Board does not intend to present to the Annual Meeting any business
other than the proposal listed herein, and the Board was not aware, a reasonable
time before mailing this Proxy Statement to stockholders, of any other business
which properly may be presented for action at the Annual Meeting. If any other
business should come before the Annual Meeting, the persons present will have
discretionary authority to vote the shares they own or represent by proxy in
accordance with their judgment.
 
                             AVAILABLE INFORMATION
 
     STOCKHOLDERS OF RECORD ON APRIL 10, 1997 WILL RECEIVE A PROXY STATEMENT AND
THE COMPANY'S ANNUAL REPORT TO STOCKHOLDERS, WHICH CONTAINS DETAILED FINANCIAL
INFORMATION CONCERNING THE COMPANY. THE COMPANY WILL MAIL, WITHOUT CHARGE, A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K (EXCLUDING EXHIBITS) TO ANY
STOCKHOLDER SOLICITED HEREBY WHO REQUESTS IT IN WRITING. PLEASE SUBMIT ANY SUCH
WRITTEN REQUEST TO MR. RICHARD P. MOBERG, CHIEF FINANCIAL OFFICER AND TREASURER,
AWARE, INC., ONE OAK PARK, BEDFORD, MASSACHUSETTS 01730.
 
                                       16

<PAGE>   19


                                   AWARE, INC.

                    PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
                           TO BE HELD ON MAY 21, 1997

The undersigned stockholder of Aware, Inc. (the "Company"), revoking all prior
proxies, hereby appoints James C. Bender, Richard P. Moberg and Robert L.
Birnbaum, or any of them acting singly, proxies, with full power of
substitution, to vote all shares of capital stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
at the Renaissance Bedford Hotel, 44 Middlesex Turnpike, Bedford, Massachusetts,
on Wednesday, May 21, 1997, beginning at 10:00 A.M., local time, and at any
adjournments thereof, upon matters set forth in the Notice of Annual Meeting
dated April 15, 1997 and the related Proxy Statement, copies of which have been
received by the undersigned, and in their discretion upon any business that may
properly come before the Annual Meeting or any adjournments thereof. Attendance
of the undersigned at the Annual Meeting or any adjournment thereof will not be
deemed to revoke this proxy unless the undersigned shall affirmatively indicate
the intention of the undersigned to vote the shares represented hereby in person
prior to the exercise of this proxy.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN WITH RESPECT TO THE PROPOSAL SET FORTH ON THE REVERSE SIDE,
WILL BE VOTED FOR SUCH PROPOSAL OR OTHERWISE IN ACCORDANCE WITH THE
              ---
RECOMMENDATION OF THE BOARD OF DIRECTORS.

Please promptly date and sign this proxy and mail it in the enclosed envelope to
assure representation of your shares. No postage need be affixed if mailed in
the United States.

PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. 

Please sign exactly as your name(s) appear on stock certificate. If
shares are held as joint tenants, both should sign. If stockholder is a
corporation, please sign full corporate name by president or other authorized
officer and, if a partnership, please sign full partnership name by an
authorized partner or other authorized person. If signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.

HAS YOUR ADDRESS CHANGED?                  DO YOU HAVE ANY COMMENTS?

__________________________________         _____________________________________

__________________________________         _____________________________________

__________________________________         _____________________________________





<PAGE>   20



<TABLE>
<S>                                                       <C>
[X] PLEASE MARK VOTES
    AS IN THIS EXAMPLE
                                                                                                           With-  For All
                                                                                                     For   hold   Except
          AWARE, INC.                                     1.  To elect each of James C. Bender and   [  ]  [  ]    [  ]
                                                              Jerald G. Fishman as Class 1 directors
                                                              of the Company.

                                                              NOTE: If you do not wish your shares voted "For" a
                                                              particular nominee, mark the "For All Except" box and
                                                              strike a line through the nominee's name.  Your shares
                                                              will be voted for the remaining nominee.
RECORD DATE SHARES:



                                                              Mark box at right if you plan to attend the  [  ]
                                                              Annual Meeting.

Please be sure to sign and date this Proxy.  Date______       Mark box at right if an address change or    [  ]
                                                              comment has been noted on the reverse side
                                                              of this card.


______________________________    _____________________________
Stockholder sign here             Co-owner sign here




DETACH CARD                                                                                               DETACH CARD
_________________________________________________________________________________________________________________________

                                     Please complete and return the proxy card above.

                        THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AWARE, INC.

                                       A STOCKHOLDER WISHING TO VOTE IN ACCORDANCE
                                    WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS
                        NEED ONLY SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
</TABLE>