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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1999 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED] FOR THE TRANSITION PERIOD FROM
____________ TO ___________
COMMISSION FILE NUMBER: 000-19960
DATAWATCH CORPORATION
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 02-0405716
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
900 CHELMSFORD STREET
TOWER 3, 5TH FLOOR
LOWELL, MASSACHUSETTS 01851
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 978-441-2200
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK $0.01 PAR VALUE
(TITLE OF CLASS)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of January 13, 1999 there were 9,190,779 shares outstanding of the
registrant's common stock, $0.01 par value. As of that date, the aggregate
market value of voting stock held by non-affiliates of the registrant was
approximately $20,915,970.
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<PAGE>
The undersigned registrant, Datawatch Corporation (the "Company"), hereby
amends its Annual Report on Form 10-K to include the additional information set
forth on the pages attached hereto.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The directors of the Company are elected annually and hold office for the
ensuing year until the next annual meeting of stockholders and until their
successors have been elected and qualified. The directors are elected by a
plurality of votes cast by stockholders. The Company's By-Laws state that the
number of directors constituting the entire Board of Directors shall be
determined by resolution of the Board of Directors. The number of directors
currently fixed by the Board of Directors is five. This number may be changed by
resolution of the Board of Directors.
The information below sets forth for each member of the Board of Directors
such person's age, principal occupations during the past 5 years and certain
other information:
Bruce R. Gardner, PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR. Mr.
Gardner, age 56, a founder and director of the Company, has been the President
and Chief Executive Officer since November 1997. Prior to becoming President and
Chief Executive Officer, Mr. Gardner served as Chief Financial Officer and
Treasurer since the Company was founded in 1985, and was a Senior Vice President
until June 1993 when he became Executive Vice President. Mr. Gardner is a
director of ACT Manufacturing, Inc.
Jerome Jacobson, DIRECTOR. Mr. Jacobson, age 78, has been a director of the
Company since 1987. Mr. Jacobson is a private investor and business consultant
and serves as a strategic advisor to several firms. Mr. Jacobson is a director
of Merrill Lynch Venture Capital, II.
Don M. Lyle, DIRECTOR. Mr. Lyle, age 60, has been a director of the Company
since April 1998. Since October 1983, Mr. Lyle has been a Principal of
Technology Management Company, a management consulting firm. He is also a
director of Axiohm Transactions Systems and Emulex Network Systems.
Terry W. Potter, DIRECTOR. Dr. Potter, age 52, has been a director of the
Company since April 1998. Since January 1998, Dr. Potter has been the President
of Venture Solutions and Development, Inc., which provides consulting services
to high technology start-up companies, spin-outs, and Fortune 100 companies.
From 1992 to 1997 he was the President of Modular Group, the parent company of
Advanced Modular Solutions, and from 1994 to 1997 he was the President of
Advanced Modular Solutions, a wholly-owned subsidiary of Modular Group which
develops client-server computers and solutions.
David T. Riddiford, DIRECTOR. Mr. Riddiford, age 64, has been a director of
the Company since 1989. Since 1987, Mr. Riddiford has been a general partner of
Pell, Rudman Venture Management, L.P., which is the general partner of PR
Venture Partners, L.P., a venture capital affiliate of Pell, Rudman & Co., Inc.,
an investment advisory firm. He has also been a general partner of Venture
Founders Capital, a venture capital partnership, since 1984. Mr. Riddiford is
also a director of Vicor Corporation.
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and persons who own more than ten
percent of a registered class of the Company's equity securities (collectively,
"Reporting Persons"), to file reports of ownership and changes in ownership with
the Securities and Exchange Commission (the "Commission"). Such Reporting
Persons are required by regulations of the Commission to furnish the Company
with copies of all such filings. Based solely on its review of copies of such
filings received by it with respect to fiscal year ended September 30, 1999 and
written representations from certain Reporting Persons, the Company believes
that all Reporting Persons complied with all Section 16(a) filing requirements
in the fiscal year ended September 30, 1999.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth summary information concerning the annual and
long-term compensation for services rendered in all capacities to the Company
for the fiscal years ended September 30, 1999, 1998 and 1997 to (i) the
Company's Chief Executive Officer and (ii) each of the four most highly
compensated executive officers of the Company, other than the Chief Executive
Officer, who were serving as such at September 30, 1999 and whose annual
compensation exceeded $100,000 and (iii) one individual for whom disclosure
would have been provided but for the fact that he was not serving as an
executive officer at September 30, 1999 (collectively, the "Named Officers"):
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE><CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------------- ------------------
FISCAL OTHER ANNUAL NUMBER OF ALL OTHER
NAME AND PRINCIPAL POSITIONS(S) YEAR SALARY($) BONUS($)(1) COMPENSATION(2) OPTIONS/SARS(#)(3) COMPENSATION($)(4)
- ------------------------------- ---- --------- ----------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Bruce R. Gardner (5) 1999 243,000 -- -- 50,000 774
President, Chief Executive 1998 195,226 100,000 -- 50,000 612
Officer and Director 1997 183,981 -- -- 80,000 612
Robert W. Hagger (6) 1999 187,146 -- 28,544 (7) 30,000 --
Senior Vice President of 1998 190,659 -- 35,399 (8) 30,000 --
International Operations 1997 -- -- -- -- --
Marco D. Peterson 1999 174,000 20,000 -- 25,000 864
Senior Vice President of 1998 176,006 20,000 -- 25,000 864
North American Operations 1997 166,011 -- -- 50,000 864
John E. Loring, Jr. (9) 1999 107,911 -- -- 12,000 495
Vice President of Information 1998 104,035 10,000 -- 10,000 498
Technology 1997 -- -- -- -- --
Betsy J. Hartwell (10) 1999 103,991 -- -- 12,000 545
Vice President of Finance, 1998 85,675 25,000 -- 15,000 526
Chief Financial Officer, 1997 -- -- -- -- --
Treasurer and Assistant
Secretary
Scott Crenshaw (11) 1999 113,750 -- -- -- 378
Vice President of Product 1998 101,150 45,000 -- 15,000 378
Development 1997 -- -- -- -- --
- ------------
</TABLE>
(1) Bonuses are reported in the year earned, even if actually paid in a
subsequent year.
(2) Excludes perquisites and other personal benefits, the aggregate annual
amount of which does not exceed the lessor of $50,000 or 10% of the
annualized salary reported for the Named Officer.
(3) The Company did not grant any restricted stock awards or stock
appreciation rights or make any long-term incentive plan payouts during
fiscal years ended September 30, 1999, 1998 or 1997.
(4) Amount represents the dollar value of group-term life insurance premiums
and excess life insurance premiums paid by the Company for the benefit of
the Named Officer.
(5) Mr. Gardner served as Executive Vice President and Chief Financial
Officer until November 1, 1997 when he assumed the position of President
and Chief Executive Officer.
(6) Mr. Hagger became an executive officer when he was elected Senior Vice
President of International Operations effective as of November 1, 1997.
Accordingly, the compensation reported covers his compensation for the
full fiscal years 1999 and 1998 and his compensation for fiscal year 1997
is not included in this Summary Compensation Table. Mr. Hagger's annual
compensation for fiscal years 1999 and 1998 were paid by the Company in
British Pounds and for purposes of this Summary Compensation Table have
been converted to U.S. Dollars using an average monthly exchange rate of
1.62736 $/(pound) for the period from October 1, 1998 through the
Company's fiscal year end on September 30, 1999 and 1.6579 $/(pound) for
the period from October 1, 1997 through the Company's fiscal year end on
September 30, 1998.
(7) Amount includes $19,528 of payments made by the Company in fiscal 1999
for the rental of Mr. Hagger's temporary residence in the United Kingdom.
<PAGE>
(8) Amount includes $21,884 of payments made by the Company in fiscal 1998
for the rental of Mr. Hagger's temporary residence in the United Kingdom.
(9) Mr. Loring became an executive officer when he was elected Vice President
of Information Technology effective as of November 1, 1997. Accordingly,
the compensation reported covers his compensation for the full fiscal
years 1999 and 1998 and his compensation for the fiscal year 1997 is not
included in this Summary Compensation Table.
(10) Ms. Hartwell became an executive officer when she was elected Vice
President of Finance, Chief Financial Officer, Treasurer and Assistant
Secretary effective as of November 1, 1997. Accordingly, the compensation
reported covers her compensation for the full fiscal years 1999 and 1998
and her compensation for fiscal year 1997 is not included in this Summary
Compensation Table.
(11) Mr. Crenshaw became an executive officer when he was elected Vice
President of Product Development effective as of November 1, 1997.
Accordingly, the compensation reported covers his compensation for the
full fiscal years 1999 and 1998 and his compensation for fiscal year 1997
is not included in this Summary Compensation Table. Effective as of
August 13, 1999, Mr. Crenshaw resigned from the position of Vice
President of Product Development and terminated his employment with the
Company.
The following table sets forth grants of stock options during the fiscal
year ended September 30, 1999 to the Named Officers who are listed in the
Summary Compensation Table above:
OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
<TABLE><CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS (2) OPTION TERM(3)
-------------------------------------------------------- ---------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL EXERCISE
UNDERLYING OPTIONS/SARS OR
OPTIONS/SARS GRANTED TO BASE
GRANTED EMPLOYEES IN PRICE EXPIRATION
NAME (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---------------------- ------------ ------------ -------- ---------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Bruce R. Gardner 50,000 11.30% $1.1562 7/15/09 36,356 92,134
Robert Hagger 30,000 6.78% $1.1562 7/15/09 21,814 55,281
Marco D. Peterson 25,000 5.65% $1.1562 7/15/09 18,178 46,067
John E. Loring, Jr. 12,000 2.71% $1.1562 7/15/09 8,726 22,122
Betsy J. Hartwell 12,000 2.71% $1.1562 7/15/09 8,726 22,122
Scott Crenshaw* -- -- -- -- -- --
- ------------------
</TABLE>
* Effective as of August 13, 1999, Mr. Crenshaw resigned and terminated his
employment with the Company and, therefore, is no longer an executive
officer of the Company. As reflected in the Summary Compensation Table on
page 3, Mr. Crenshaw was not granted options during the fiscal year
ended September 30, 1999.
(1) No stock appreciation rights ("SARs") were granted by the Company in the
fiscal year ended September 30, 1999.
(2) Stock options were granted under the Company's 1996 Stock Plan at an
exercise price equal to the fair market value of the Company's Common
Stock on the date of grant. The options have a term of 10 years from the
date of grant and become exercisable over three years in twelve equal
quarterly installments beginning three months from the date of grant.
<PAGE>
(3) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation (5% and 10%)
on the Company's 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 reflect 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 Company's 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
individuals.
OPTION EXERCISES AND FISCAL YEAR END VALUES
The following table sets forth information as to the Named Officers with
respect to options to purchase the Company's Common Stock held by each Named
Officer, including (i) the number of shares of Common Stock purchased upon
exercise of options in the fiscal year ended September 30, 1999; (ii) the net
value realized upon such exercise; (iii) the number of unexercised options
outstanding as of September 30, 1999; and (iv) the value of such unexercised
options at September 30, 1999:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE><CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
SHARES HELD AT SEPTEMBER 30, 1999(#) SEPTEMBER 30, 1999($)(2)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bruce R. Gardner -- -- 89,172 90,828 (90,506) (55,304)
Robert Hagger -- -- 33,500 66,500 (38,340) (40,746)
Marco D. Peterson 19,584 11,016 52,091 47,909 (50,885) (20,148)
John E. Loring, Jr. 12,500 7,031 9,171 17,829 (11,407) (9,517)
Betsy J. Hartwell -- -- 15,417 19,917 (18,250) (12,774)
Scott Crenshaw(3) 3,334 1,875 26,250 -- (23,550) --
- ------------------
</TABLE>
(1) Amounts disclosed in this column do not reflect amounts actually received
by the Named Officers but are calculated based on the difference between
the fair market value of the Company's Common Stock on the date of
exercise and the exercise price of the options. The Named Officers will
receive cash only if and when they sell the Common Stock issued upon
exercise of the options, and the amount of cash received by such
individuals is dependent on the price of the Company's Common Stock at
the time of such sale.
(2) Represents the difference between the option exercise price of
in-the-money options and the fair market value per share of Common Stock
at 1999 fiscal year-end ($1.00 per share as quoted on the Nasdaq National
Market at the close of trading on September 30, 1999) multiplied by the
number of shares underlying the in-the-money option.
(3) Mr. Crenshaw resigned and terminated his employment with the Company
effective as of August 13, 1999. Any unvested options held by Mr.
Crenshaw terminated when he resigned as of August 13, 1999 and all vested
options (other than 3,334 vested options which were exercised prior to
November 13, 1999) held by Mr. Crenshaw as of such date, terminated on
November 13, 1999.
<PAGE>
COMPENSATION OF DIRECTORS
During fiscal year ended September 30, 1999, directors who were employees of
the Company received no cash compensation for their services as directors.
Directors who are not employees of the Company receive $15,000 per year for
their service as a director of the Company's Board of Directors.
All directors are eligible to receive stock options under the Company's 1996
Stock Plan and directors who are neither employees nor officers of the Company
and who may hold and beneficially own stock options granted to them, and the
shares of Common Stock issuable upon exercise of such options, individually, in
their own name (a "Non-Employee Director"), are eligible to receive stock
options under the Company's 1996 Non-Employee Director Stock Option Plan, as
amended (the "Director Plan").
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The Director Plan was adopted by the Board of Directors in May 1996, amended
by the Board of Directors in December 1996 and approved by the stockholders of
the Company in March 1997. The Director Plan provides for the grant of options
to purchase a maximum of 72,000 shares of Common Stock to Non-Employee
Directors.
The Director Plan authorizes the automatic grant of stock options only to
Non-Employee Directors. The Director Plan is administered by the Board of
Directors of the Company. The Director Plan authorizes the automatic grant,
without further action by the Board of Directors, (a) of an option to purchase
12,000 shares of Common Stock (the "Initial Grant") to each person who is a
Non-Employee Director on the later of June 1, 1996, the date such person is
first elected to the Board of Directors, or the date such person meets all of
the requirements of a Non-Employee Director (such later date to be referred to
herein as the "Initial Grant Date") and (b) of an option to purchase 4,000
shares of Common Stock to each person who is a Non-Employee Director on the date
of the Company's Annual Meeting of Stockholders in each successive year after
such person's Initial Grant Date. Options granted to Non-Employee Directors
under the Director Plan vest over three years in twelve equal quarterly
installments beginning three months from the date such options are granted.
Notwithstanding this vesting schedule, the Director Plan also provides that in
the event of any change in control of the Company (as defined in the Director
Plan) all options granted under the Director Plan that are outstanding but
unvested automatically become exercisable in full.
The exercise price per share for all options granted under the Director Plan
will be equal to the fair market value per share of the Common Stock on the date
of grant. The term of each option will be for a period of ten years from the
date of grant. Options may not be assigned or transferred except by will or by
the laws of descent and distribution and are exercisable to the extent vested
only while the optionee is serving as a director of the Company or within 90
days after the optionee ceases to serve as a director of the Company (except
that if a director dies or becomes disabled while he or she is serving as a
director of the Company, the option automatically becomes fully vested and is
exercisable until the scheduled expiration date of the option). No options may
be granted under the Director Plan after June 1, 2006.
EXECUTIVE AGREEMENTS AND SEVERANCE ARRANGEMENTS
On April 11, 1996, the Board of Directors approved change in control
severance agreements (the "Executive Agreements") with each of Bruce R. Gardner
and Marco D. Peterson.
<PAGE>
Mr. Peterson's Executive Agreement was amended on July 15, 1999, as described
below. The purpose of the Executive Agreements is to reinforce and encourage the
executive to remain with the Company and to maintain objectivity and a high
level of attention to his duties without distraction from the possibility of a
change in control of the Company. The initial term of the Executive Agreements
was until September 30, 1998 and so long as the executive continues to be
employed by the Company are automatically extended from year to year, unless the
Company or the executive provides prior written notice to the other party of its
desire to terminate the agreement. Pursuant to the Executive Agreements, the
executive remains as an at-will employee of the Company until such time as the
Company enters into a written agreement (a "Business Combination Agreement")
with a third party concerning a possible business combination between the
Company and such third party or any affiliate of such third party which, if
effected, would result in a change of control of the Company, as that term is
defined in the Executive Agreements. In the event the Company enters into such a
Business Combination Agreement, the executive agrees not to voluntarily leave
the employ of the Company and the Company agrees it will not terminate the
employment of the executive other than for cause until the earlier of (i) in the
opinion of the Board of Directors of the Company, such Business Combination
Agreement has been abandoned or terminated, (ii) the date on which such a change
in control of the Company has been effected, or (iii) 120 calendar days from the
date of the execution of the Business Combination Agreement.
The Executive Agreements provide that in the event of a change in control of
the Company the executive is entitled to a lump sum payment (the "Termination
Payment") upon the subsequent "Qualifying Termination" (as defined herein and in
such executive's Executive Agreement) of the executive's employment with the
Company. With respect to Mr. Gardner, a Qualifying Termination under his
Executive Agreement includes (i) termination of his employment with the Company,
for any reason other than for cause, following a change in control of the
Company, or (ii) termination as a result of his resignation, for any or no
reason, following a change in control of the Company. With respect to Mr.
Peterson, a Qualifying Termination under his Executive Agreement includes (i)
termination of his employment with the Company, for any reason other than for
cause, following a change in control of the Company, (ii) termination as a
result of his resignation, for any or no reason, at any time after twelve months
following a change in control of the Company, or (iii) termination as a result
of certain events identified in his Executive Agreement which constitute
constructive termination of his employment with the Company.
The Termination Payment that the executive is entitled to receive under his
respective Executive Agreement is a lump sum payment equal to three times the
sum of (i) the executive's annual base salary as in effect immediately prior to
his qualifying termination and (ii) the highest annual bonus paid to the
executive by the Company during the five most recently completed fiscal years of
the Company ending immediately prior to his qualifying termination; provided,
however, that with respect to Mr. Peterson, for each full month (up to twelve
months) after the date of the change in control of the Company that he remains
employed by the Company and before the date of his qualifying termination, his
Termination Payment will be reduced by an amount equal to his Termination
Payment divided by thirty-six. The July 15, 1999 amendment to Mr. Peterson's
Executive Agreement reduced the number of months used to calculate the reduction
in his termination payment from eighteen months to twelve months, as set forth
in the preceding sentence.
Pursuant to the terms of the Executive Agreements, if any payment or benefit
received or to be received by the executive in connection with a change in
control of the Company, whether pursuant to his Executive Agreement or otherwise
(the "Total Payments"), is determined to be an
<PAGE>
"excess parachute payment" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended, and thus subject to a 20% federal excise tax,
the amount of such executive's Termination Payment will be reduced until the
aggregate of the Total Payments is such that no part of the Total Payments
constitutes an excess parachute payment and is no longer subject to such
exercise tax.
The Company's subsidiary Datawatch International Limited (formerly Workgroup
Systems Limited) entered into a Contract of Employment with Robert Hagger dated
February 24, 1997, as amended on July 15, 1999 (the "Employment Agreement"). The
Employment Agreement provides that Mr. Hagger's employment may be terminated
with cause immediately upon notice to Mr. Hagger or terminated without cause
provided he is given at least 12 months notice.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Board of Directors has established a Compensation and Stock
Committee currently consisting of Messrs. Riddiford, Lyle and Potter. No person
who served as a member of the Compensation and Stock Committee was, during the
fiscal year ended September 30, 1999, an officer or employee of the Company or
any of its subsidiaries, was formerly an officer of the Company or any of its
subsidiaries, or had any relationship requiring disclosure herein. No executive
officer of the Company served as a member of the compensation committee of
another entity (or other committee of the Board of Directors performing
equivalent functions or, in the absence of any such committee, the entire Board
of Directors), one of whose executive officers served as a member of the
Compensation and Stock Committee of the Company.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of January 18, 2000, certain information
regarding beneficial ownership of the Company's Common Stock (i) by each person
who, to the knowledge of the Company, beneficially owned more than 5% of the
shares of Common Stock of the Company outstanding at such date; (ii) by each
director of the Company; (iii) by each executive officer identified in the
Summary Compensation Table on page 3; and (iv) by all current directors and
executive officers of the Company as a group.
<TABLE><CAPTION>
NUMBER OF SHARES PERCENTAGE OF
NAME AND ADDRESS BENEFICIALLY SHARES OF
OF BENEFICIAL OWNER OWNED COMMON STOCK(1)
- ------------------------------ ---------------- ---------------
<S> <C> <C>
Bruce R. Gardner (2) 343,043 3.68%
c/o DATAWATCH Corporation
900 Chelmsford Street
Tower 3, 5th Floor
Lowell, Massachusetts 01851
<PAGE>
NUMBER OF SHARES PERCENTAGE OF
NAME AND ADDRESS BENEFICIALLY SHARES OF
OF BENEFICIAL OWNER OWNED COMMON STOCK(1)
- ------------------------------ ---------------- ---------------
Robert W. Hagger (3) 46,000 *
c/o DATAWATCH Corporation
900 Chelmsford Street
Tower 3, 5th Floor
Lowell, Massachusetts 01851
Marco D. Peterson (4) 187,608 2.03%
c/o DATAWATCH Corporation
900 Chelmsford Street
Tower 3, 5th Floor
Lowell, Massachusetts 01851
John E. Loring, Jr. (5) 26,339 *
c/o DATAWATCH Corporation
900 Chelmsford Street
Tower 3, 5th Floor
Lowell, Massachusetts 01851
Betsy J. Hartwell (6) 27,585 *
c/o DATAWATCH Corporation
900 Chelmsford Street
Tower 3, 5th Floor
Lowell, Massachusetts 01851
Scott Crenshaw 5,001 *
483 Beacon Street, Apt. 71
Boston, Massachusetts 02115
Jerome Jacobson (7) 48,845 *
4200 Massachusetts Avenue, N.W.
Suite 114
Washington, District of Columbia 20016
Don M. Lyle (8) 10,499 *
c/o DATAWATCH Corporation
900 Chelmsford Street
Tower 3, 5th Floor
Lowell, Massachusetts 01851
Terry W. Potter (9) 10,499 *
c/o DATAWATCH Corporation
900 Chelmsford Street
Tower 3, 5th Floor
Lowell, Massachusetts 01851
<PAGE>
NUMBER OF SHARES PERCENTAGE OF
NAME AND ADDRESS BENEFICIALLY SHARES OF
OF BENEFICIAL OWNER OWNED COMMON STOCK(1)
- ------------------------------ ---------------- ---------------
David T. Riddiford (10) 41,264 *
c/o Pell Rudman & Co., Inc.
100 Federal Street
37th Floor
Boston, Massachusetts 02110
Kennedy Capital Management, Inc. (11) 859,630 9.35%
10829 Olive Blvd.
St. Louis, MO 63141
All current directors and executive 741,682 7.77%
officers as a group (9 persons)(12)
- ------------------
</TABLE>
* Less than one percent.
(1) The number of shares of Common Stock deemed outstanding includes (i)
9,190,779 shares of Common Stock outstanding as of January 18, 2000 and
(ii) with respect to each individual, options to purchase shares of
Common Stock which may be exercised by such individuals within 60 days of
January 18, 2000.
(2) Includes 123,340 options that may be exercised within 60 days of January
18, 2000.
(3) Includes 46,000 options that may be exercised within 60 days of January
18, 2000.
(4) Includes 70,843 options that may be exercised within 60 days of January
18, 2000.
(5) Includes 13,839 options that may be exercised within 60 days of January
18, 2000.
(6) Includes 20,917 options that may be exercised within 60 days of January
18, 2000.
(7) Includes 30,845 options that may be exercised within 60 days of January
18, 2000.
(8) Includes 10,499 options that may be exercised within 60 days of January
18, 2000.
(9) Includes 10,499 options that may be exercised within 60 days of January
18, 2000.
(10) Includes 30,845 options that may be exercised within 60 days of January
18, 2000.
(11) As reported on a Schedule 13G filed with the Securities and Exchange
Commission on February 9, 1999 reflecting beneficial ownership of the
Company's Common Stock as of December 31, 1998. According to the Schedule
13G, Kennedy Capital Management, Inc. has sole voting power with respect
to 859,630 shares of Common Stock of the Company and sole dispositive
power with respect to 859,630 shares of Common Stock of the Company.
(12) Includes 357,627 options that may be exercised within 60 days of January
18, 2000.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to the
Annual Report on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized this 28th day of January, 2000.
DATAWATCH CORPORATION
By: /s/ Bruce R. Gardner
----------------------
Bruce R. Gardner
President, Chief Executive Officer
and Director
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------ ----------------------------- ----------------
/s/ Bruce R. Gardner President, Chief Executive January 28, 2000
- ------------------------ Officer and Director
Bruce R. Gardner (Principal Executive Officer)
Vice President Finance, Chief
/s/ Betsy J. Hartwell Financial Officer, Treasurer January 28, 2000
- ------------------------ and (Principal Financial and
Betsy J. Hartwell Accounting officer)
/s/ Jerome Jacobson Director January 28, 2000
- ------------------------
Jerome Jacobson
/s/ David T. Riddiford Director January 28, 2000
- ------------------------
David T. Riddiford
Director January __, 2000
- ------------------------
Don M. Lyle
/s/ Terry W. Potter Director January 28, 2000
- ------------------------
Terry W. Potter
