Sec Form 4 Filing - DEVERMANN PAUL @ IMAGEWARE SYSTEMS INC - 2004-08-24

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person DEVERMANN PAUL 2. Issuer Name and Ticker or Trading Symbol IMAGEWARE SYSTEMS INC [ IW] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) Senior Vice President (Last) (First) (Middle) 10883 THORNMINT ROAD 3. Date of Earliest Transaction (MM/DD/YY) 08/24/2004 (Street) SAN DIEGO, CA92127 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 08/24/2004 A 32,640 A $ 0 ( 1 ) 59,654 D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Employee Stock Option $ 6.26 08/24/2004 D 22,000 ( 2 ) 12/18/2011 Common Stock 22,000 ( 1 ) 0 D Employee Stock Option $ 6.19 08/24/2004 D 3,600 ( 3 ) 04/04/2010 Common Stock 3,600 ( 1 ) 11,400 D Employee Stock Option $ 6.29 08/24/2004 D 7,000 ( 4 ) 11/18/2009 Common Stock 7,000 ( 1 ) 0 D Employee Stock Option $ 5.28 08/24/2004 D 21,801 ( 5 ) 01/31/2004 Common Stock 21,801 ( 1 ) 0 D

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other DEVERMANN PAUL 10883 THORNMINT ROAD SAN DIEGO, CA92127 Senior Vice President Signatures /s/By: John Gott, Attorney-in-Fact, For: Paul Deverman 08/25/2004 Signature of Reporting Person Date

Explanation of Responses:

( 1 )On August 24, 2004, the issuer cancelled, pursuant to the issuer's option exchange program, certain options issued to the reporting person on February 1, 1999, November 18, 1999, April 4, 2000, and December 18, 2001. In exchange for the options, the reporting person received 32,640 shares of restricted stock. ( 2 )The cancelled option provided for vesting of one third on December 18, 2002, and installments of one-eighth per quarter over the following eight quarters. ( 3 )The cancelled option provided for vesting in three equal installments beginning on April 4, 2001. ( 4 )The cancelled option provided for vesting in three equal installments beginning on April 1, 2001. ( 5 )The cancelled option provided for vesting in three equal installments beginning on February 1, 2000.

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).

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