Exhibit 10.3


 





 


December 1, 2017


 


Ken Tacelli


via Echosign


 


Dear Ken,


 


The purpose of this letter is to memorialize
the terms of your eligibility for severance with Datawatch Corporation (the “Company”) in the event that you are involuntarily
terminated by the Company or a successor to the Company without Cause (as defined in Paragraph 4 below), or if you terminate your
employment with the Company for Good Reason (as defined in Paragraph 3 below). This letter amends, restates and replaces in its
entirety the letter agreement, dated as of July 25, 2016, by and between you and the Company (the “Prior Agreement”).


 


1.          As
an at-will employee, either you or the Company may terminate your employment at any time for any or no reason with or without notice.
Neither this letter nor its terms constitute a contract for continued employment or a contract for a specific term of employment.
Instead, this letter sets forth the terms of our agreement with respect to your eligibility for severance.


 


2.          For
purposes of this Agreement, 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
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;


 


	Datawatch Corporation	 	 
	 	 	 
	4 Crosby
    Drive Bedford MA 01730	 	info@datawatch.com
	 	 	 
	T. 978
    441 2200   |   F. 978 441 1114	 	www.datawatch.com


 




     


     


    

 





 


(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 50% 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 Agreement 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.


 


3.          In
the event that you voluntarily terminate your employment with the Company at your own election and without Good Reason, you shall
be entitled to no severance. For the purpose of this Agreement, “Good Reason” is defined as (i) a material diminution
in the nature or scope of your responsibilities, duties or authority; provided, however, that the transfer of certain job responsibilities,
or the assignment to others of your duties and responsibilities while you are out of work due to a disability or on a leave of
absence for any reason, shall not constitute a material diminution in the nature or scope of the your responsibilities, duties
or authority as set forth in this Paragraph, (ii) a material diminution in your annual salary rate, or (iii) a change in the geographic
location where you are required to perform services or at which you are principally employed to a geographic location more than
50 miles from the Company’s current corporate headquarters in Bedford, Massachusetts.


 


4.          In
the event that the Company terminates your employment for “Cause,” you shall be entitled to no severance. Termination
by the Company shall constitute a termination for Cause under this Paragraph 4 if such termination is for one or more of the
following reasons:


 


	Datawatch Corporation	 	 
	 	 	 
	4 Crosby
    Drive Bedford MA 01730	 	info@datawatch.com
	 	 	 
	T. 978
    441 2200   |   F. 978 441 1114	 	www.datawatch.com


 




     


     


    

 





 


(a)  the willful and continuing failure or refusal
by you to render services to the Company in accordance with your obligations to the Company;


 


(b)  gross negligence, dishonesty, breach of fiduciary
duty or breach of the terms of any other agreements executed in connection herewith;


 


(c)  the commission by you of an act of fraud,
embezzlement or substantial disregard of the rules or policies of the Company;


 


(d)  acts which, in the judgment of the Board
of Directors, would tend to generate significant adverse publicity toward the Company;


 


(e)  the commission, or plea of nolo contendere,
by you of a felony; or


 


(f)  a breach by you of the terms of the Proprietary
Information, Inventions and Non-Competition Agreement executed by you.


 


		5.	(a)  In the event that the Company or any
successor company terminates your employment for any reason other than those stated in Paragraph 4 above or if you terminate your
employment for Good Reason as defined in Paragraph 3, and you sign a comprehensive release in the form, and of a scope,
acceptable to the Company (the “Release”), the Company will pay you severance payments in equal monthly installments
at your then monthly base salary for six months following your termination (the “Primary Severance Period”). Such
payments shall be made in accordance with the Company’s customary payroll practices and shall be subject to all applicable
federal and state withholding, payroll and other taxes.



 


(b)  If, within the twelve-month
period immediately following a Change in Control, (i) the Company or any successor company terminates your employment for any reason
other than those stated in Paragraph 4 above or (ii) you terminate your employment for Good Reason as defined in Paragraph 3, and
you sign a Release, the Company will pay you severance payments in equal monthly installments at your then monthly base salary
for an additional six months following your termination (the “CIC Severance Period” and, together with the Primary
Severance Period, collectively, the “Severance Period”). For the avoidance of doubt, the payment of any amounts owed
to you under this Paragraph 5(b) shall be in addition to, and not in substitution of, the payments that would also be owed to you
pursuant to Paragraph 5(a).


 


(c)  Any payments pursuant to
this Paragraph 5 shall be made in accordance with the Company’s customary payroll practices and shall be subject to all applicable
federal and state withholding, payroll and other taxes.


 


	Datawatch Corporation	 	 
	 	 	 
	4 Crosby
    Drive Bedford MA 01730	 	info@datawatch.com
	 	 	 
	T. 978
    441 2200   |   F. 978 441 1114	 	www.datawatch.com


 




     


     


    

 





 


(d)  For the duration of the applicable Severance
Period, the Company shall also pay to you a taxable monthly payment (the “Taxable Payments”) in an amount equal to
the Company’s share of your monthly premium for group medical and dental coverage that is in effect immediately prior to
termination of your employment. For the avoidance of doubt, the Taxable Payments may be used by you for any purpose, including,
but not limited to continuation of your medical and dental coverage under the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”), for which you shall be eligible immediately following termination of your employment, subject to the
terms and conditions applicable to COBRA coverage.


 


(e)  If you breach your post-employment obligations
under your Proprietary Information Inventions and Non-Competition Agreement, the Company may immediately cease payment of all severance
and/or benefits described in this Agreement. This cessation of severance and/or benefits shall be in addition to, and not as an
alternative to, any other remedies in law or in equity available to the Company, including the right to seek specific performance
or an injunction.


 


		6.	(a)  Notwithstanding any other provision of this Agreement
or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by
the Company to you or for your benefit pursuant to the terms of this Agreement or otherwise (“Covered Payments”) constitute
parachute payments (“Parachute Payments”) within the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”), and would, but for this Paragraph 6 be subject to the excise tax imposed under Section 4999
of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties
with respect to such taxes (collectively, the “Excise Tax”), then prior to making the Covered Payments, a calculation
shall be made comparing (i) the Net Benefit (as defined below) to you of the Covered Payments after payment of the Excise Tax
to (ii) the Net Benefit to you if the Covered Payments are limited to the extent necessary to avoid being subject to the Excise
Tax. Only if the amount calculated under subparagraph (i) above is less than the amount under subparagraph (ii) above will the
Covered Payments be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the
Excise Tax (that amount, the “Reduced Amount”). For purposes of this Agreement, “Net Benefit” shall mean
the present value of the Covered Payments net of all federal, state, local, foreign income, employment and excise taxes.



 


(b)  Any such reduction shall be made in accordance
with Section 409A of the Code and the following: (i) the Covered Payments which do not constitute nonqualified deferred compensation
subject to Section 409A of the Code shall be reduced first; and (ii)         all other
Covered Payments shall then be reduced as follows: (A) cash payments shall be reduced before non-cash payments; and (B) payments
to be made on a later payment date shall be reduced before payments to be made on an earlier payment date.


 


	Datawatch Corporation	 	 
	 	 	 
	4 Crosby
    Drive Bedford MA 01730	 	info@datawatch.com
	 	 	 
	T. 978
    441 2200   |   F. 978 441 1114	 	www.datawatch.com


 




     


     


    

 





 


(c)  Any determination required under this Paragraph
6, including whether any payments or benefits are parachute payments, shall be made by the Company in its sole discretion. You
shall provide the Company with such information and documents as the Company may reasonably request in order to make a determination
under this Paragraph 6. The Company's determination shall be final and binding on you.


 


(d)  It is possible that after the determinations
and selections made pursuant to this Paragraph 6, you will receive Covered Payments that are in the aggregate more than the amount
provided under this Paragraph 6 (“Overpayment”) or less than the amount provided under this Paragraph 6 (“Underpayment”).
In the event that it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that
has been finally and conclusively resolved that an Overpayment has been made, then you shall pay any such Overpayment to the Company.
In the event that a court of competent jurisdiction determines that an Underpayment has occurred, any such Underpayment will be
paid promptly by the Company to or for the benefit of you.


 


7.          The
terms of this agreement constitute the entire understanding relating to your employment and supersede and cancel all agreements,
written or oral, made prior to the date hereof between you and the Company relating to your employment with the Company (including,
without limitation, the Prior Agreement); provided, however, that nothing herein shall be deemed to limit or terminate the provisions
of Proprietary Information, Inventions and Non-Competition Agreement executed by you or in any manner alter the terms of any Restricted
Stock Unit Agreement entered into between you and the Company.


 


8.          This
Agreement, the employment relationship contemplated herein and any claim arising from such relationship, whether or not arising
under this Agreement, shall be governed by and construed in accordance with the internal laws of Massachusetts, without giving
effect to the principles of choice of law or conflicts of law of Massachusetts and this Agreement shall be deemed to be performable
in Massachusetts. Any claims or legal actions by one party against the other arising out of the relationship between the parties
contemplated herein (whether or not arising under this Agreement) shall be commenced or maintained in any state or federal court
located in Massachusetts, and Executive hereby submits to the jurisdiction and venue of any such court.


 


9.          No
waiver by either party of any breach by the other or any provision hereof shall be deemed to be a waiver of any later or other
breach thereof or as a waiver of any other provision of this Agreement. This Agreement and its terms may not be waived, changed,
discharged or terminated orally or by any course of dealing between the parties, but only by an instrument in writing signed by
the party against whom any waiver, change, discharge or termination is sought. No modification or waiver by the Company shall be
effective without the consent of the Board of Directors then in office at the time of such modification or waiver.


 


10.         You
acknowledge that the services to be rendered by you to the Company are unique and personal in nature. Accordingly, you may not
assign any of your rights or delegate any of your duties or obligations under this Agreement. The rights and obligations of the
Company under this Agreement may be assigned by the Company and shall inure to the benefit of, and shall be binding upon, the successors
and assigns of the Company.


 


[Remainder of page intentionally left blank.]


 


	Datawatch Corporation	 	 
	 	 	 
	4 Crosby
    Drive Bedford MA 01730	 	info@datawatch.com
	 	 	 
	T. 978
    441 2200   |   F. 978 441 1114	 	www.datawatch.com


 




     


     


    

 





 


If this letter correctly states the understanding
we have reached, please indicate your acceptance by countersigning the enclosed copy and returning it to me.


 


	 	Very truly yours,
	 	 
	 	DATAWATCH CORPORATION
	 	 
	 	/s/ Brigid MacDonald
	 	Brigid MacDonald
	 	Vice President Human Resources


 


YOU REPRESENT THAT YOU HAVE READ THE FOREGOING AGREEMENT, THAT YOU
FULLY UNDERSTAND THE TERMS AND CONDITIONS OF SUCH AGREEMENT AND THAT YOU ARE VOLUNTARILY EXECUTING THE SAME.


 


	ACCEPTED:	 
	 	 
	/s/ Ken Tacelli	 
	Ken Tacelli	 


 


	Datawatch Corporation	 	 
	 	 	 
	4 Crosby
    Drive Bedford MA 01730	 	info@datawatch.com
	 	 	 
	T. 978
    441 2200   |   F. 978 441 1114	 	www.datawatch.com