EXHIBIT 10.30
                                                                   -------------


                        (As Amended on December 10, 1996)

                              DATAWATCH CORPORATION

                  1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN



      1. Purpose.  This Non-Qualified Stock Option Plan, to be known as the 1996
Non-Employee Director Stock Option Plan (hereinafter,  this "Plan"), is intended
to promote the interests of DATAWATCH Corporation  (hereinafter,  the "Company")
by  providing  an  inducement  to obtain and retain the  services  of  qualified
persons who are not  employees or officers of the Company to serve as members of
its Board of Directors (the "Board").

      2. Available Shares. The total number of shares of Common Stock, par value
$.01 per share,  of the Company  (the "Common  Stock") for which  options may be
granted under this Plan shall not exceed 72,000 shares, subject to adjustment in
accordance   with   paragraph  11  of  this  Plan;   provided,   however,   that
notwithstanding  anything to the contrary set forth herein,  options to purchase
more than an  aggregate  of 24,000  shares of Common  Stock shall not be granted
under this Plan  unless and until this Plan has been  approved  by a majority of
the  stockholders  of the Company no later than June 1, 1997.  Shares subject to
this Plan are authorized but unissued shares or shares that were once issued and
subsequently  reacquired by the Company.  If any options granted under this Plan
are surrendered before exercise or lapse without exercise,  in whole or in part,
the shares reserved therefor shall continue to be available under this Plan.

      3.  Administration.  This Plan shall be  administered by the Board or by a
committee appointed by the Board (the "Committee"). In the event the Board fails
to appoint or refrains  from  appointing a  Committee,  the Board shall have all
power and authority to administer this Plan. In such event, the word "Committee"
wherever  used herein shall be deemed to mean the Board.  The  Committee  shall,
subject to the provisions of the Plan,  have the power to construe this Plan, to
determine  all  questions  hereunder,  and to adopt  and  amend  such  rules and
regulations for the  administration  of this Plan as it may deem  desirable.  No
member  of the  Board  or the  Committee  shall  be  liable  for any  action  or
determination made in good faith with respect to this Plan or any option granted
under it.

      4. Eligibility and Limitations. Options to purchase shares of Common Stock
may be  granted  under  this  Plan  only to  members  of the  Board  who are not
employees or officers of the Company and who may hold




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and beneficially own such options,  and the shares of Common Stock issuable upon
exercise thereof, individually, in their own names.

      5. Automatic Grant of Options. Subject to the availability of shares under
this  Plan,  (a) each  person  who is or  becomes  a member of the Board and who
satisfies  the  requirements  of  paragraph  4 of  this  Plan  (a  "Non-Employee
Director") shall be automatically granted on the later of (i) June 1, 1996, (ii)
the date such person is first elected to the Board or (iii) the date such person
first meets the  requirements of paragraph 4 of this Plan (such later date being
referred to herein as the "Initial Grant Date"),  without  further action by the
Board,  an option to purchase  12,000 shares of the Common  Stock,  and (b) each
person  receiving or eligible to receive an option pursuant to clause (a) hereof
who is a  Non-Employee  Director on the date of the Company's  Annual Meeting of
Stockholders  (the  "Annual  Grant  Date") in each  successive  year  after such
person's  Initial Grant Date during the term of this Plan shall be automatically
granted on each such Annual Grant Date an option to purchase 4,000 shares of the
Common  Stock.  The  number of shares  covered  by  options  granted  under this
paragraph 5 shall be subject to adjustment in accordance  with the provisions of
paragraph 11 of this Plan.

      6. Option  Price.  The  purchase  price of the stock  covered by an option
granted  pursuant  to this Plan shall be 100% of the fair  market  value of such
shares on the day the option is  granted.  The  option  price will be subject to
adjustment in accordance  with the  provisions of paragraph 11 of this Plan. For
purposes of this Plan,  if, at the time an option is granted under the Plan, the
Company's  Common  Stock  is  publicly  traded,  "fair  market  value"  shall be
determined as of the last business day for which the prices or quotes  discussed
in this  sentence  are  available  prior to the date such  option is granted and
shall  mean (i) the  average  (on that  date) of the high and low  prices of the
Common Stock on the principal national  securities  exchange on which the Common
Stock is traded,  if the Common  Stock is then  traded on a national  securities
exchange;  or (ii) the last  reported  sale  price (on that  date) of the Common
Stock on the Nasdaq National Market, if the Common Stock is not then traded on a
national securities exchange;  or (iii) the closing bid price (or average of bid
prices)  last  quoted (on that date) by an  established  quotation  service  for
over-the-counter  securities,  if the Common Stock is not reported on the Nasdaq
National Market. However, if the Common Stock is not publicly traded at the time
an option is granted  under the Plan,  "fair market value" shall be deemed to be
the fair value of the Common Stock as determined  by the Committee  after taking
into  consideration all factors which it deems appropriate,  including,  without
limitation,  recent  sale and  offer  prices  of the  Common  Stock  in  private
transactions negotiated at arm's length.




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      7. Period of Option.  Unless  sooner  terminated  in  accordance  with the
provisions of paragraph 9 of this Plan, an option granted hereunder shall expire
on the date which is ten (10) years after the date of grant of the option.

      8. (a)  Vesting  of Shares and  Non-Transferability  of  Options.  Options
granted  under this Plan shall not be  exercisable  until  they  become  vested.
Options  granted  under  this Plan shall vest in the  optionee  and thus  become
exercisable,  in  accordance  with the  following  schedule,  provided  that the
optionee has  continuously  served as a member of the Board through such vesting
date:







Percentage of Option
Shares for which
Option will be Exercisable          Date of Vesting
--------------------------          ---------------

            0%                      Less than three months from 
                                    the date of grant


  an additional 8.33%               Three months from the date of 
                                    grant and at the end of each 
                                    three month period thereafter 
                                    until three years from the 
                                    date of grant


          100%                      Three years from the date of 
                                    grant

      The  number  of  shares  as to which  options  may be  exercised  shall be
cumulative, so that once the option shall become exercisable as to any shares it
shall  continue  to be  exercisable  as to  said  shares,  until  expiration  or
termination  of the  option  as  provided  in  this  Plan.  Notwithstanding  the
foregoing,  each option granted under this Plan that is outstanding but unvested
shall  become  exercisable  in full 10 days  prior to the date of any  Change in
Control of the Company, as set forth below. For purposes of this Plan, a "Change
in Control" means the occurrence of any of the following events:

              (A) The Company is merged or consolidated  or reorganized  into or
      with another  corporation  or other legal person,  and as a result of such
      merger,  consolidation  or  reorganization  less  than a  majority  of the
      combined  voting  power  of  the   then-outstanding   securities  of  such
      surviving,  resulting or  reorganized  corporation  or person  immediately
      after such  transaction  is held in the  aggregate  by the  holders of the
      then-outstanding  securities 




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      entitled to vote  generally  in the  election of  directors of the Company
      ("Voting Stock") immediately prior to such transaction;

              (B) The Company sells or otherwise  transfers all or substantially
      all of its assets to any other corporation or other legal person, and as a
      result  of such sale or  transfer  less than a  majority  of the  combined
      voting power of the  then-outstanding  securities of such  corporation  or
      person immediately after such sale or transfer is held in the aggregate by
      the holders of Voting Stock of the Company  immediately prior to such sale
      or transfer;

              (C) There is a report filed on Schedule 13D or Schedule  14D-1 (or
      any successor schedule,  form or report),  each as promulgated pursuant to
      the  Securities  Exchange Act of 1934,  as amended (the  "Exchange  Act"),
      disclosing that any "person" (as such term is used in Section  13(d)(3) or
      Section  14(d)(2) of the Exchange Act) has become the  "beneficial  owner"
      (as such term is used in Rule 13d-3 under the Exchange  Act) of securities
      representing 35% or more of the Voting Stock of the Company;

              (D) The  Company  files a  report  or  proxy  statement  with  the
      Securities and Exchange Commission pursuant to the Exchange Act disclosing
      in response to Form 8-K or Schedule 14A (or any successor  schedule,  form
      or report or item  therein)  that a change in control of the  Company  has
      occurred; or

              (E) If during any period of two consecutive years, individuals who
      at the  beginning  of any such period  constitute  the Board cease for any
      reason to constitute at least a majority thereof,  unless the election, or
      the  nomination  for  election  by the  Company's  stockholders,  of  each
      director of the Company first elected during such period was approved by a
      vote of at least a majority of the directors then still in office who were
      directors of the Company at the beginning of any such period;

provided,  however,  that a  "Change  in  Control"  shall  not be deemed to have
occurred for purposes of this Plan solely because (x) the Company, (y) an entity
in which the Company directly or indirectly beneficially owns 50% or more of the
voting securities, or (z) any Company-sponsored employee stock ownership plan or
any  other  employee  benefit  plan of the  Company,  either  files  or  becomes
obligated to file a report or a proxy statement under or in response to Schedule
13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor  schedule,  form
or report)  under the Exchange  Act,  disclosing  beneficial  ownership by it of
shares of Voting  Stock or because the Company  reports that a change in control
of the Company has occurred by reason of such beneficial ownership.

              (b) Non-transferability.  Any option granted pursuant to this Plan
shall  not be  assignable  or  transferable  other  than by will or the 




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laws of descent and  distribution or pursuant to a domestic  relations order and
shall be exercisable during the optionee's lifetime only by him or her.

      9.      Termination of Option Rights.

              (a) In the  event an  optionee  ceases to be a member of the Board
for any reason other than death or permanent  disability,  any then  unexercised
portion  of  options  granted  to such  optionee  shall,  to the extent not then
vested, immediately terminate and become void; any portion of an option which is
then vested but has not been  exercised at the time the optionee so ceases to be
a member of the Board may be exercised,  to the extent it is then vested, by the
optionee  within 90 days of the date the  optionee  ceased to be a member of the
Board; and all options shall terminate after such 90 days have expired.

              (b) In the  event  that an  optionee  ceases to be a member of the
Board by reason of his or her death or permanent disability,  any option granted
to such optionee shall be immediately and  automatically  accelerated and become
fully vested and all  unexercised  options shall be  exercisable by the optionee
(or by the optionee's personal representative,  heir or legatee, in the event of
death) until the scheduled expiration date of the option.

      10.  Exercise of Option.  Subject to the terms and conditions of this Plan
and the option agreements, an option granted hereunder shall, to the extent then
exercisable,  be exercisable in whole or in part by giving written notice to the
Company by mail or in person addressed to DATAWATCH Corporation, 234 Ballardvale
Street,  Wilmington,  Massachusetts  01887, at its principal  executive offices,
stating  the  number  of  shares  with  respect  to which  the  option  is being
exercised, accompanied by payment in full for such shares. Payment may be (a) in
United States dollars in cash or by check,  (b) in whole or in part in shares of
the  Common  Stock  of the  Company  already  owned  by the  person  or  persons
exercising the option or shares subject to the option being  exercised  (subject
to such  restrictions  and guidelines as the Board may adopt from time to time),
valued at fair market value  determined  in  accordance  with the  provisions of
paragraph 6 or (c) consistent with  applicable  law,  through the delivery of an
assignment  to the Company of a sufficient  amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the option and an authorization to
the broker or selling agent to pay that amount to the Company,  which sale shall
be at the  participant's  direction at the time of  exercise.  There shall be no
such  exercise at any one time as to fewer than one hundred  (100) shares or all
of the remaining shares then purchasable by the person or persons exercising the
option,  if fewer than one hundred (100) shares.  The Company's  transfer  agent
shall,  on  behalf  of  the  Company,  prepare  a  certificate  or  certificates
representing  such shares  acquired  pursuant  to exercise of the option,  shall
register  the  optionee  as the




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owner of such  shares on the  books of the  Company  and  shall  cause the fully
executed certificate(s) representing such shares to be delivered to the optionee
as soon as practicable  after payment of the option price in full. The holder of
an option shall not have any rights of a stockholder  with respect to the shares
covered by the option,  except to the extent that one or more  certificates  for
such  shares  shall be  delivered  to him or her upon  the due  exercise  of the
option.

      11. Adjustments Upon Changes in Capitalization and Other Events.  Upon the
occurrence of any of the following  events, an optionee's rights with respect to
options  granted  to him or her  hereunder  shall  be  adjusted  as  hereinafter
provided:

              (a) Stock  Dividends  and Stock  Splits.  If the  shares of Common
      Stock shall be subdivided or combined into a greater or smaller  number of
      shares or if the Company shall issue any shares of Common Stock as a stock
      dividend on its outstanding  Common Stock,  the number of shares of Common
      Stock  deliverable  upon the  exercise of options  shall be  appropriately
      increased or decreased proportionately,  and appropriate adjustments shall
      be made in the  purchase  price per  share to  reflect  such  subdivision,
      combination or stock dividend.

              (b) Issuances of Securities.  Except as expressly provided herein,
      no issuance by the Company of shares of stock of any class,  or securities
      convertible  into  shares  of stock of any  class,  shall  affect,  and no
      adjustment by reason  thereof shall be made with respect to, the number or
      price of shares  subject  to  options.  No  adjustments  shall be made for
      dividends  paid  in cash  or in  property  other  than  securities  of the
      Company.

              (c)  Adjustments.  Upon  the  happening  of any  of the  foregoing
      events, the class and aggregate number of shares set forth in paragraphs 2
      and 5 of this Plan that are subject to options which  previously have been
      or subsequently may be granted under this Plan shall also be appropriately
      adjusted to reflect such events.  The Board shall  determine  the specific
      adjustments to be made under this paragraph 11 and its determination shall
      be conclusive.

      12. Restrictions on Issuance of Shares.  Notwithstanding the provisions of
paragraphs  5 and 10 of this  Plan,  the  Company  shall have no  obligation  to
deliver any certificate or certificates  upon exercise of an option until one of
the following conditions shall be satisfied:

            (i) The issuance of shares with respect to which the option has been
      exercised  is at  the  time  of  the  issue  of  such  shares  effectively
      registered  under  applicable  Federal and state securities laws as now in
      force or hereafter amended; or




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           (ii)  Counsel  for the Company  shall have given an opinion  that the
      issuance  of such  shares is exempt from  registration  under  Federal and
      state  securities  laws as now in  force  or  hereafter  amended;  and the
      Company has complied with all applicable laws and regulations with respect
      thereto,  including  without  limitation all  regulations  required by any
      stock exchange upon which the Company's  outstanding  Common Stock is then
      listed.

      13. Legend on Certificates.  The certificates  representing  shares issued
pursuant  to the  exercise  of an option  granted  hereunder  shall  carry  such
appropriate  legend,  and  such  written  instructions  shall  be  given  to the
Company's  transfer agent, as may be deemed necessary or advisable by counsel to
the Company in order to comply with the  requirements  of the  Securities Act of
1933 or any state securities laws.

      14.  Representation of Optionee. If requested by the Company, the optionee
shall  deliver  to the  Company  written  representations  and  warranties  upon
exercise of the option that are  necessary to show  compliance  with Federal and
state securities laws,  including  representations  and warranties to the effect
that a purchase of shares under the option is made for investment and not with a
view to their distribution (as that term is used in the Securities Act of 1933).

      15. Option  Agreement.  Each option  granted under the  provisions of this
Plan shall be evidenced by an option  agreement,  which  agreement shall be duly
executed and delivered on behalf of the Company and by the optionee to whom such
option is granted. The option agreement shall contain such terms, provisions and
conditions not  inconsistent  with this Plan as may be determined by the officer
executing it.

      16.  Termination  and Amendment of Plan.  Options may no longer be granted
under  this Plan after June 1,  2006,  and this Plan  shall  terminate  when all
options granted or to be granted hereunder are no longer outstanding.  The Board
may at any time  terminate  this Plan or make  such  modification  or  amendment
thereof  as it deems  advisable;  provided,  however,  that the  Board  may not,
without approval of the stockholders,  (a) increase the maximum number of shares
for which options may be granted under this Plan (except by adjustment  pursuant
to Section 11), (b)  materially  modify the  requirements  as to  eligibility to
participate in this Plan, (c) materially  increase  benefits  accruing to option
holders  under this Plan or (d) amend this Plan in any manner  which would cause
Rule  16b-3  under the  Exchange  Act (or any  successor  or  amended  provision
thereof) to become  inapplicable  to this Plan;  and  provided  further that the
provisions of this Plan specified in Rule  16b-3(c)(2)(ii)(A)  (or any successor
or  amended  provision  thereof)  under  the  Exchange  Act  (including  without
limitation,  provisions as to eligibility,  amount,  price and timing of awards)
may not be amended  more than once every six months,  other than




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to comport with changes in the Internal  Revenue Code,  the Employee  Retirement
Income Security Act, or the rules thereunder. Termination or any modification or
amendment of this Plan shall not,  without consent of a participant,  affect his
or her rights under an option previously granted to him or her.

      17.  Withholding  of Income  Taxes.  Upon the  exercise of an option,  the
Company,  in accordance with Section  3402(a) of the Internal  Revenue Code, may
require the optionee to pay withholding  taxes in respect of amounts  considered
to be compensation includible in the optionee's gross income.

      18.  Governing  Law. The validity  and  construction  of this Plan and the
instruments  evidencing  options  shall be  governed by the laws of the State of
Delaware, without giving effect to the principles of conflicts of law thereof.





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