UNITED STATES

SECURITIES AND EXCHANGE COMMISSION ~~WASHINGTON, DC 20549~~

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(Dd) ~~OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~Date~~OF ofTHE ~~report~~SECURITIES ~~(Date~~EXCHANGE ofACT ~~earliest event~~OF ~~reported) July 13, 2018~~1934

~~Datawatch~~Date ~~Corporation~~of report (Date of earliest event reported): November 5, 2018

~~(Exact~~DATAWATCH ~~Name of Registrant as Specified in Its Charter)~~CORPORATION

~~Delaware~~(Exact Name of Registrant as Specified in its Charter)

(State or Other Jurisdiction of Incorporation)

Delaware

000-19960

02-0405716

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

000-19960	02-0405716
4 Crosby Drive Bedford, MA		01730
(Commission File Number)	(IRS Employer Identification No.)
(Address of Principal Executive Offices)		(Zip Code)
4 Crosby Drive
Bedford, Massachusetts	01730
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (978) 441-2200

~~(Registrant’s~~Not ~~Telephone Number,~~Applicable ~~Including Area Code)~~

~~Check the~~(Former ~~appropriate~~Name ~~box~~or ~~below~~Former Address, if ~~the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant~~Changed ~~under~~Since ~~any~~Last ~~of the following provisions (see General Instruction A.2. below~~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:

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

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

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

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐ ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ ¨

Item 51.0201 ~~Departure~~Entry ofinto ~~Directors~~a orMaterial ~~Certain~~Definitive ~~Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers~~Agreement.

~~(e)~~Merger ~~Compensatory Plans and Arrangements~~Agreement

~~Amended~~On November 5, 2018, Datawatch Corporation (“Datawatch”), Altair Engineering Inc., a Delaware corporation (“Parent”) and ~~Restated~~Dallas ~~2018~~Merger ~~Compensation~~Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Purchaser”) entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, subject to the terms of the Merger Agreement, Purchaser will commence a tender offer (the “Offer”) to purchase all of the outstanding shares (the “Shares”) of Datawatch common stock, $0.01 par value, at a price of $13.10 per share, without interest and subject to any required withholding taxes (the “Offer Price”).

OnConsummation ~~July~~of ~~13, 2018,~~ the ~~Board of~~Offer ~~Directors~~is ~~(the~~subject ~~“Board”)~~to ofvarious ~~Datawatch~~conditions ~~Corporation~~set forth (in the ~~“Corporation”)~~Merger ~~amended~~Agreement, ~~and~~including, ~~restated in~~but ~~its~~not ~~entirety~~limited ~~the~~to ~~fiscal~~(i) at ~~2018~~least ~~Corporate~~one ~~Officers~~Share ~~Compensation~~more ~~Plan~~than ~~(as~~50 ~~amended~~percent ~~and~~of ~~restated,~~ the ~~“Amended~~Shares ~~2018 Compensation~~then ~~Plan”).~~outstanding ~~The~~being ~~2018~~tendered ~~Corporate~~into ~~Officers~~the ~~Compensation~~Offer, ~~Plan~~ (ii) the ~~“Prior~~receipt ~~2018~~of ~~Compensation~~required ~~Plan”)~~approvals, ~~was~~waivers ~~previously disclosed~~and inconsents, ~~the~~and ~~Corporation’s~~(iii) other conditions ~~Current~~set ~~Report~~forth onin ~~Form~~Annex ~~8-K~~I ~~filed~~to ~~with~~ the ~~Securities~~Merger ~~and~~Agreement. ~~Exchange~~The ~~Commission~~Offer ~~(“SEC”) on~~is ~~December~~not 6,subject ~~2017~~to ~~(the~~any ~~“Prior~~financing ~~8-K”)~~condition.

~~Base~~The ~~salaries,~~Offer ~~performance-based cash~~will ~~bonuses~~expire ~~for~~at ~~the~~midnight, ~~first~~on ~~fiscal quarter and second fiscal quarter of~~ the ~~Corporation’s~~20th ~~2018 fiscal year and existing performance-based~~business ~~cash~~day ~~bonuses~~(calculated ~~for~~in ~~Mr.~~accordance ~~Tacelli~~with ~~have~~the ~~not~~rules of ~~been amended in~~ the ~~Amended~~Securities ~~2018~~Exchange ~~Compensation~~Act ~~Plan~~of ~~compared~~1934) tofollowing the ~~Prior~~commencement ~~2018~~date ~~Compensation Plan~~of ~~disclosed in~~ the Offer ~~Prior~~unless ~~8-K.~~extended ~~The~~in ~~Amended~~accordance ~~2018~~with ~~Compensation~~the ~~Plan~~terms ~~provides~~of ~~for amended performance-based cash bonuses for~~ the ~~third~~ ~~fiscal~~Offer ~~quarter,~~and the ~~fourth~~Merger ~~fiscal~~Agreement ~~quarter~~ and ~~fiscal year as a whole of~~ the ~~Corporation~~applicable ~~based~~rules and ~~on fiscal 2018 performance~~regulations of the ~~Corporation~~United ~~and~~States ~~Angoss~~Securities ~~Software~~and ~~Corporation~~Exchange Commission (the “~~Angoss~~SEC”)~~, the Corporation’s wholly owned Canadian subsidiary which the Corporation acquired on January 30, 2018~~.

~~Base~~Following ~~Salary~~consummation of the Offer, ~~First~~Purchaser will merge with ~~Quarter~~and ~~Bonuses~~into Datawatch with Datawatch surviving as a wholly-owned subsidiary of Parent (the “Merger”). At the effective time of the Merger (the “Effective Time”), each outstanding Share that is not tendered and ~~Second~~accepted ~~Quarter~~pursuant ~~Bonuses~~to the Offer (other than the Shares owned both at the commencement of the Offer and at the Effective Time by Datawatch or by a direct or indirect subsidiary of Datawatch, Shares irrevocably accepted for purchase in the Offer, Shares owned both at the commencement of the Offer and at the Effective Time by Purchaser, Parent or any other direct or indirect wholly owned subsidiary of Parent, and Shares as to which appraisal rights have been perfected in accordance with applicable law) will be cancelled and converted into the right to receive the Offer Price, without interest and subject to any required withholding taxes, on the terms and conditions set forth in the Merger Agreement.

The ~~following~~Merger ~~table~~Agreement ~~sets forth~~provides that the ~~base~~Merger ~~salary~~will ofbe ~~the~~governed ~~executive~~by ~~officers~~ Section 251(h) of the ~~Corporation,~~Delaware ~~eligibility~~General ofCorporation ~~the~~Law ~~executive officers of~~ (the ~~Corporation~~“DGCL”) ~~for~~and will ~~the~~be ~~first~~effected ~~fiscal~~by ~~quarter~~Purchaser and ~~second~~Datawatch ~~fiscal~~as ~~quarter~~soon ~~performance-based~~as ~~cash~~practicable ~~bonuses,~~following ~~and~~ the ~~performance-based~~consummation ~~cash~~of ~~bonus~~the ~~eligibility amount~~Offer ~~for~~without ~~Mr.~~a ~~Tacelli~~stockholders ~~under~~meeting pursuant to the ~~Amended 2018 Compensation Plan:~~DGCL.

Executive	Base Salary ($)	First Quarter Target Bonus ($)	Second Quarter Target Bonus ($)	Tacelli Commission-Based Target Bonus Amount ($)
Michael A. Morrison, Chief Executive Officer	380,000	68,750	68,750	n/a
Ken Tacelli, Chief Operating Officer	350,000	n/a	n/a	250,000
James Eliason, Chief Financial Officer	315,000	35,000	35,000	n/a

At the Effective Time, equity awards previously granted pursuant to Datawatch’s Third Amended and Restated 2011 Equity Compensation and Incentive plan (as amended, supplemented or modified, the “Plan”) shall be cancelled with the following effect:

~~First~~· Each outstanding, unexpired and ~~Second~~unexercised ~~Quarter~~option ~~Bonus Eligibility~~(each, a “Company Option”) to purchase Shares issued pursuant to the Plan shall be cancelled and, ~~Calculation~~in exchange therefor, each former holder thereof shall be entitled to receive a payment in cash (net of any applicable withholding taxes and without interest) in an amount equal to the product of (i) the total number of Shares subject to such Company Option immediately prior to such cancellation and (ii) the excess, if any, of the Offer Price over the exercise price per Share subject to such Company Option immediately prior to such cancellation.

~~For~~· ~~executives~~Each ~~other~~outstanding ~~than~~award ~~Mr.~~of ~~Tacelli,~~restricted ~~first fiscal~~stock ~~quarter~~units ~~and~~(each, ~~second~~a ~~fiscal~~“Company ~~quarter~~RSU”) ~~cash~~for ~~bonuses~~Shares ~~are~~granted ~~payable~~under ~~based on: (A) whether~~ the ~~Corporation~~Plan ~~achieved~~that ~~earnings~~is ~~before interest,~~vested ~~taxes,~~or ~~severance~~that, ~~depreciation~~by ~~and~~the ~~amortization~~terms ~~in excess~~ of athe ~~certain~~applicable ~~threshold~~Plan ~~for~~or ~~such~~award ~~fiscal~~agreement, ~~quarter~~would ~~(each~~automatically ~~such~~become ~~threshold amount~~vested as ~~approved~~a byresult ~~the~~of ~~Board is referred to herein as~~ the ~~“Quarterly~~Merger, ~~EBITDA~~shall ~~Threshold”)~~be cancelled and, ~~(B)~~in ~~only~~exchange iftherefor, ~~the Quarterly~~each ~~EBITDA~~former ~~Threshold~~holder ~~was~~thereof ~~met,~~shall ~~the~~be ~~extent~~entitled to ~~which~~receive ~~the~~a ~~Corporation~~payment ~~achieved~~in ~~its~~cash ~~revenue~~(subject ~~targets~~to ~~for~~any ~~the~~ applicable ~~fiscal quarter~~withholding ~~(each~~taxes ~~such~~and ~~quarterly~~without ~~revenue~~interest) ~~target~~equal asto ~~approved by~~ the ~~Board~~product isof ~~referred~~(i) tothe ~~herein~~total asnumber ~~the~~of ~~“Quarterly~~Shares ~~Revenue~~vested ~~Target”,~~ and ~~each~~otherwise ~~such~~then ~~quarterly~~issuable ~~bonus,~~pursuant ato ~~“Quarterly~~the ~~Bonus”).~~Company ~~Each~~RSU ~~Quarterly~~immediately ~~Bonus~~prior isto ~~payable~~such ~~only~~cancellation ~~if Datawatch’s earnings before interest, taxes, severance, depreciation~~ and ~~amortization~~(ii) ~~met or exceeded~~ the ~~applicable~~Offer ~~Quarterly EBITDA Threshold~~Price.

· Each ~~Quarterly~~outstanding ~~Bonus~~Company isRSU ~~eligible~~ for ~~payout if~~Shares granted under the ~~Corporation:~~Plan ~~(A)~~that ~~achieved~~is not vested after giving effect to any vesting that is contingent upon the ~~applicable~~Merger ~~Quarterly~~having ~~EBITDA~~been ~~Threshold~~consummated shall be cancelled and, ~~(B)~~in ~~achieved~~exchange attherefor, ~~least~~each ~~90%~~former ofholder ~~the~~thereof ~~applicable~~shall ~~Quarterly Revenue~~be ~~Target.~~entitled ~~Assuming~~to ~~the~~receive a payment in cash (subject to any applicable ~~Quarterly~~withholding ~~EBITDA~~taxes ~~Threshold~~and ~~was~~without ~~met,~~interest) ~~Quarterly~~from ~~Bonus~~Parent ~~eligibility~~equal atto ~~performance~~the ~~representing 90%~~product of (i) the ~~Quarterly~~total ~~Revenue~~number ~~Target~~of isShares ~~80%~~unvested ofpursuant to the ~~Quarterly~~Company ~~Bonus~~RSU ~~amount,~~immediately ~~with~~prior ~~bonus~~to ~~eligibility~~such ~~scaling~~cancellation upand at(ii) athe 2Offer toPrice, 1with ~~rate~~payment ~~as performance~~made ~~improves~~on ~~above~~or ~~90%~~after tothe ~~100%~~vesting ofdate when the ~~applicable~~corresponding ~~Quarterly~~portion ~~Revenue~~of ~~Target.~~the ~~Quarterly~~Company ~~EBITDA~~RSU ~~achievement~~would ~~above~~otherwise ~~100%~~have ofvested ~~each Quarterly~~in ~~Revenue~~accordance ~~Target~~with ~~will~~its terms had it not ~~result~~been incancelled, ~~additional~~but ~~payments~~only ~~above~~if ~~100%~~such ofconditions ~~the~~to ~~applicable~~vesting ~~Quarterly~~are ~~Bonus~~satisfied ~~amount~~prior to such vesting date.

~~Tacelli~~The ~~Bonus~~Merger ~~Eligibility~~Agreement contains customary representations and warranties by Parent, Purchaser and Datawatch. The Merger Agreement also contains customary covenants and agreements, including with respect to the operations of the business of Datawatch and its subsidiaries between signing and closing, restrictions on responses by Datawatch with respect to alternative transactions, governmental filings and approvals and other matters.

~~Except~~The ~~for~~Merger ~~the~~Agreement ~~Tacelli~~generally ~~Additional~~prohibits ~~Cash~~Datawatch’s ~~Bonus~~solicitation ~~Amount~~of ~~discussed~~proposals ~~below,~~relating ~~Mr.~~to ~~Tacelli~~alternative business combination transactions and restricts Datawatch’s ~~cash~~ability ~~bonus~~to isfurnish ~~commission-based~~information to, ~~tied~~or toparticipate ~~monthly~~in ~~bookings~~any ofdiscussions ~~the~~or ~~Corporation~~negotiations ~~and~~with, ~~will be~~any ~~paid~~third ~~out~~party ~~monthly~~with inrespect ~~arrears~~to any such transaction, subject to certain exceptions.

~~Third~~The ~~Quarter~~Merger ~~Bonuses, Fourth~~Agreement ~~Quarter~~contains ~~Bonuses~~termination rights for each of Purchaser, ~~Annual~~Parent ~~Bonuses~~and Datawatch, and ~~Additional~~further ~~Bonuses~~provides that upon termination of the Merger Agreement under specified circumstances Datawatch may be required to pay Purchaser a termination fee of approximately $6.1 million.

A copy of the Merger Agreement is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The ~~following~~foregoing ~~table~~description ~~sets~~of the Merger Agreement is qualified in its entirety by reference ~~forth~~to the ~~eligibility~~full text of the ~~executive~~Merger ~~officers~~Agreement. The Merger Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide any other factual information about Datawatch, Parent or Purchaser. In particular, the assertions embodied in the representations and warranties contained in the Merger Agreement are qualified by information in a confidential disclosure letter provided by the parties thereto in connection with the signing of the ~~Corporation~~Merger Agreement. This disclosure letter contains information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement were used for ~~third~~the ~~fiscal~~purpose ~~quarter~~of allocating risk between Datawatch, ~~fourth~~Parent ~~fiscal~~and ~~quarter~~Purchaser, ~~annual~~rather than establishing matters of fact. Accordingly, the representations and warranties ~~additional~~in ~~performance-based~~the ~~cash~~Merger ~~bonuses~~Agreement ~~under~~may not constitute the ~~Amended~~actual ~~2018~~state ~~Compensation~~of ~~Plan:~~facts about Datawatch, Parent or Purchaser.

	Bonus Eligibility for each of the Third and Fourth Quarters		Annual Bonus Eligibility		Additional Bonus Eligibility
Executive	Datawatch Quarterly Target Bonus ($)	Angoss Quarterly Target Bonus ($)	Datawatch Annual Target Bonus ($)	Angoss Annual Target Bonus ($)	Integration Cash Bonus Amount ($)	Tacelli Additional Cash Bonus Amount ($)
Michael A. Morrison, Chief Executive Officer	55,000	13,750	247,500	27,500	55,000	n/a
Ken Tacelli, Chief Operating Officer	n/a	n/a	n/a	n/a	n/a	50,000
James Eliason, Chief Financial Officer	28,000	7,000	126,000	14,000	28,000	n/a

Tender and Support Agreement

~~Third~~Concurrently with the execution of the Merger Agreement, Michael A. Morrison, James Eliason, Ken Tacelli, Christopher T. Cox, Richard de J. Osborne, David C. Mahoney, Thomas H. Kelly, Donald Friedman, Joan C. McArdle, Randy Seidl, Colin Mahony and ~~Fourth~~entities ~~Quarter~~affiliated with such individuals, if applicable, who in the aggregate directly ~~Bonus~~or ~~Eligibility~~indirectly own 1,817,324 Shares, representing approximately14.3% of the Shares outstanding as of October 31, 2018, entered into Tender and ~~Calculation~~Support Agreements with Purchaser and Parent (each, a “Tender and Support Agreement”), which provide, among other things, that such stockholders will tender their Shares in the Offer. The Tender and Support Agreements will terminate upon termination of the Merger Agreement and certain other specified events. The foregoing description of the Tender and Support Agreements does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the form of Tender and Support Agreement, which is attached as Exhibit 99.1 hereto and incorporated herein by reference.

~~For~~Item ~~executives other than Mr~~8. ~~Tacelli,~~01 ~~the~~Other third fiscal quarter bonuses and the fourth fiscal quarter bonuses are only payable if the Corporation and Angoss achieve certain minimum levels of earnings before interest, taxes, severance, depreciation and amortization for such quarter on a consolidated basis (such amount as approved by the Board is referred to herein as the “Combined Quarterly EBITDA Threshold”)Information. If the applicable Combined Quarterly EBITDA Threshold is met, (1) a quarterly target bonus amount (the “Datawatch Quarterly Target Bonus”) is payable based on the extent to which the Corporation achieves its revenue target for the applicable fiscal quarter (each such quarterly revenue target of the Corporation as approved by the Board is referred to herein as the “Datawatch Quarterly Revenue Target”) and (2) an additional quarterly target bonus amount (the “Angoss Quarterly Target Bonus”) is payable based on the extent to which Angoss achieves its revenue target for the applicable fiscal quarter (each such quarterly revenue target of Angoss as approved by the Board is referred to herein as the “Angoss Quarterly Revenue Target”).

~~Assuming the applicable Combined Quarterly EBITDA Threshold is met, the~~ Datawatch ~~Quarterly~~and ~~Target~~Parent ~~Bonus~~issued isa ~~eligible~~joint ~~for~~press ~~payout~~release ifon ~~the Corporation achieves at least~~November ~~90%~~5, of2018 ~~the~~announcing ~~applicable Datawatch Quarterly Revenue Target. Assuming~~ the ~~applicable~~transactions ~~Combined~~contemplated ~~Quarterly~~by ~~EBITDA Threshold is met,~~ the ~~Datawatch~~ ~~Quarterly~~Merger ~~Target~~Agreement. A ~~Bonus~~copy ~~at performance representing 90%~~ of the ~~Datawatch~~press ~~Quarterly~~release ~~Revenue Target~~ is ~~80%~~attached ~~of the Datawatch~~hereto ~~Quarterly Target Bonus, with bonus eligibility scaling up at a 2 to 1 rate~~ as ~~performance improves above 90% to 100% of the applicable Datawatch Quarterly Revenue Target~~Exhibit 99.2 ~~Quarterly~~and ~~revenue~~is ~~achievement~~incorporated ~~above~~herein ~~100%~~by ~~of each Datawatch Quarterly Revenue Target will not result in additional payments above 100% of the applicable Datawatch Quarterly Target Bonus~~reference.

~~Assuming~~Item ~~the applicable Combined Quarterly EBITDA Threshold is met, the Angoss Quarterly Target Bonus is eligible for payout if Angoss achieves at least 90% of the applicable Angoss Quarterly Revenue Target~~9.01 ~~Assuming~~Financial ~~the~~Statements ~~applicable~~and Combined Quarterly EBITDA Threshold is met, the Angoss Quarterly Target Bonus at performance representing 90% of the Angoss Quarterly Revenue Target is 80% of the Angoss Quarterly Target Bonus, with bonus eligibility scaling up at a 2 to 1 rate as performance improves above 90% to 100% of the applicable Angoss Quarterly Revenue TargetExhibits. ~~Quarterly revenue achievement above 100% of each Angoss Quarterly Revenue Target will not result in additional payments above 100% of the applicable Angoss Quarterly Target Bonus.~~

~~Annual~~(d) ~~Bonus Eligibility and Calculation~~Exhibits

Each executive, other than Mr. Tacelli, is eligible for up to two (2) annual performance-based cash bonuses, each payable after the end of the Corporation’s fiscal 2018 year, which are in addition to any quarterly bonuses or additional bonuses payable to the executives. If the Corporation and Angoss achieve earnings before interest, taxes, severance, depreciation and amortization in excess of a threshold for the Corporation’s fiscal year 2018 and, with respect to Angoss, for the six month period ending September 30, 2018, on a consolidated basis (as such combined EBITDA threshold is determined by the Board, the “Combined EBITDA Threshold”), (1) an annual target bonus amount is payable based on the extent to which the Corporation (excluding Angoss) achieves its revenue target for the fiscal year (the “Datawatch Annual Target Bonus”) and (2) an annual target bonus amount is payable based on the extent to which Angoss achieves its revenue target for the six month period ending September 30, 2018 (the “Angoss Annual Target Bonus”).

Exhibit No.		Exhibit Title or Description

2.1(1)		Agreement and Plan of Merger, dated as of November 5, 2018, by and among Datawatch Corporation, Altair Engineering Inc. and Dallas Merger Sub, Inc.

99.1		Form of Tender and Support Agreement, dated as of November 5, 2018, by and among Altair Engineering Inc., Dallas Merger Sub, Inc. and certain directors, officers and shareholders of Datawatch Corporation

99.2		Press release dated November 5, 2018.

~~If the Combined EBITDA Threshold is met, performance over 100% of the revenue target of the Corporation for fiscal year 2018~~ (~~as such revenue target of the Corporation is determined by the Board, the “Datawatch Annual Revenue Target”~~1) ~~will~~Schedules ~~result~~or indisclosure ~~eligibility~~letters ~~for~~omitted ~~the~~pursuant ~~Datawatch~~to ~~Annual~~Item ~~Target Bonus calculated:~~ 601(ib) ~~at a 2 to 1 rate as performance improves above 100% to 105% of the Datawatch Annual Revenue Target and~~ (ii2) ~~at a 4 to 1 rate as performance improves above 105%~~ of ~~the~~Regulation ~~Datawatch Annual Revenue Target~~S-K. ~~There is no cap on the amount of annual cash bonus potentially payable as a result of the Corporation’s performance relative to the~~ Datawatch ~~Annual~~ ~~Revenue~~agrees ~~Target. For example, assuming the Combined EBITDA Threshold is met, (y) performance at 105% of the Datawatch Annual Revenue Target will result in eligibility for an annual cash bonus amount equal~~ to ~~10%~~furnish ofa ~~the~~supplemental ~~applicable~~copy ~~Datawatch Annual Target Bonus and (z) performance at 125%~~ of ~~the~~any ~~Datawatch~~omitted ~~Annual~~schedule ~~Revenue~~or ~~Target will result in eligibility for an annual cash bonus amount~~disclosure ~~equal~~letters to ~~90% of~~ the ~~applicable~~SEC ~~Datawatch~~upon ~~Annual Target Bonus~~request.

IfAdditional ~~the~~Information Combined EBITDA Threshold is met, performance over 100% of the revenue target of Angoss for the six month period ending September 30, 2018 (as such revenue target of Angoss is determined by the Board, the “Angoss Annual Revenue Target”) will result in eligibility for the Angoss Annual Target Bonus calculated: (i) at a 2 to 1 rate as performance improves above 100% to 105% of the Angoss Annual Revenue Target and ~~(ii)~~Where ~~at a 4~~ to 1Find rate as performance improves above 105% of the Angoss Annual Revenue Target. There is no cap on the amount of annual cash bonus potentially payable as a result of Angoss’s performance relative to the Angoss Annual Revenue Target. For example, assuming the Combined EBITDA Threshold is met, (y) performance at 105% of the Angoss Annual Revenue Target will result in eligibility for an annual cash bonus amount equal to 10% of the applicable Angoss Annual Target Bonus and (z) performance at 125% of the Angoss Annual Revenue Target will result in eligibility for an annual cash bonus amount equal to 90% of the applicable Angoss Annual Target Bonus.It

~~Integration~~The ~~Cash~~tender ~~Bonus~~offer ~~Amount~~for the outstanding common stock of Datawatch has not yet commenced. This communication is for informational purposes only and it is neither an offer to purchase nor a solicitation of an offer to sell shares of Datawatch common stock. At the time the tender offer is commenced, Altair will file a tender offer statement, containing an offer to purchase, a form of letter of transmittal and other related tender offer documents with the Securities and Exchange Commission (the “SEC”), and Datawatch will file a Solicitation/Recommendation Statement on Schedule 14D-9 relating to the tender offer with the SEC. Datawatch’s stockholders are strongly advised to read these tender offer materials, as well as any other documents relating to the tender offer and the associated transactions that are filed with the SEC, carefully and in their entirety when they become available, and as they may be amended from time to time, because they will contain important information about the tender offer that Datawatch’s stockholders should consider prior to making any decisions with respect to the tender offer. Once filed, stockholders of Datawatch will be able to obtain a free copy of these documents at the website maintained by the SEC at www.sec.gov or by directing a request to Altair Engineering Inc., Investor Relations, 248-614-2400 ext. 346 or e-mail: ir@altair.com.

~~In addition to any other cash bonus amounts payable as described above, for executives other than Mr. Tacelli, each executive will be eligible for an additional one~~Forward-~~time~~Looking integration cash bonus (“Integration Cash Bonus Amount”) if: (i) the Corporation (excluding Angoss) achieves performance at or above 105% the Datawatch Annual Revenue Target and (ii) Angoss achieves performance at or above 105% the Angoss Annual Revenue Target.Statements

~~Tacelli~~Certain ~~Additional~~statements ~~Cash~~either contained in or incorporated by reference ~~Bonus~~into ~~Amount~~this document, which are not historical facts, are considered to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. These forward-looking statements may be expressed in a variety of ways, including statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “believes,” “plans,” “anticipates,” “projects,” “estimates,” “continue,” “expects,” “intends,” “strategy,” “future,” “opportunity,” “may,” “will,” “should,” “could,” “potential,” the negatives thereof, other variations thereon or other similar expressions. Such forward-looking statements include the ability of the Datawatch, Purchaser and Parent to complete the transactions contemplated by the Merger Agreement, including the parties’ ability to satisfy the conditions to the consummation of the Offer and the other conditions set forth in the Merger Agreement and the possibility of any termination of the Merger Agreement. The forward-looking statements contained in this document are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Actual results may differ materially from current expectations because of risks associated with uncertainties as to the timing of the Offer and the subsequent Merger; uncertainties as to how many of Datawatch’s stockholders will tender their Shares in the Offer; the risk that competing offers or acquisition proposals will be made; the possibility that various conditions to the consummation of the Offer or the Merger may not be satisfied or waived, including: the effects of disruption from the transactions contemplated by the Merger Agreement on Datawatch’s business and the fact that the announcement and pendency of the transactions may make it more difficult to establish or maintain relationships with employees, suppliers and other business partners; the risk that stockholder litigation in connection with the Offer or the Merger may result in significant costs of defense, indemnification and liability; other uncertainties pertaining to the business of the Company, including those set forth in the Company’s filings with the SEC, especially in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended September 30, 2017 and in other periodic reports and filings with the SEC from time to time. The reader is cautioned not to unduly rely on these forward-looking statements. The Company expressly disclaims any intent or obligation to update or revise publicly these forward-looking statements except as required by law.

Mr. Tacelli is eligible for additional cash bonuses up to an aggregate additional cash bonus amount of $50,000 (the “Tacelli Additional Cash Bonus Amount”), which additional cash bonuses are commission-based, tied to monthly bookings of Angoss and will be paid out monthly in arrears.

The Board retains the discretion at any time to change the above cash bonus criteria (including bonus amounts, Quarterly EBITDA Thresholds, Quarterly Revenue Targets, the Tacelli Additional Cash Bonus Amount, Integration Cash Bonus Amount, Combined Quarterly EBITDA Thresholds, Datawatch Quarterly Target Bonus, Angoss Quarterly Target Bonus, Datawatch Quarterly Revenue Targets, Angoss Quarterly Revenue Targets, Angoss Bookings Target, Combined EBITDA Threshold, Datawatch Annual Revenue Target and Angoss Annual Revenue Target), including based on individual performance or in the event any operating changes (including acquisitions) are approved during the fiscal year that materially impact the Corporation’s fiscal 2018 financial plan.

Equity Awards

On July 13, 2018, the Corporation granted to Ken Tacelli an award of restricted stock units for 10,000 shares of the Corporation’s common stock (“RSUs”) under the Corporation’s Third Amended and Restated Equity Compensation and Incentive Plan (the “2011 Plan”) which will vest as follows: (i) one-third of such RSUs will vest upon the Corporation, including Angoss, achieving its annual booking target for the twelve month period ending September 30, 2018 (the “2018 Booking Target”) and (ii) if the Corporation achieves its 2018 Booking Target, the remaining two-thirds of such RSUs will vest in equal installments on the first and second anniversaries of May 1, 2019, provided that Mr. Tacelli remains employed by the Corporation on these dates.

Time-based and performance-based RSUs previously granted by the Board to the executive officers of the Corporation as described in the Prior 8-K have not been amended by the Amended 2018 Compensation Plan.

SIGNATURES

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 hereunto duly authorized.

DATAWATCH CORPORATION By: /s/ James Eliason Name: James Eliason Title: Chief Financial Officer

	DATAWATCH CORPORATION

Date: November 5, 2018	By:	/s/ James Eliason
		Name: James Eliason
		Title: Chief Financial Officer

Date: July 19, 2018

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