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Exhibit 10.11

1999 NON-EMPLOYEE DIRECTOR OPTION PROGRAM
Amended and Restated on April 22, 2001
Amended and Restated on March 29, 2002
Amended and Restated on April 17, 2003
Amended and Restated on May 2, 2003

ARTICLE I
ESTABLISHMENT AND PURPOSE OF THE PROGRAM

1.01    Establishment of Program

        The 1999 Non-Employee Director Option Program (the "Program") is adopted
pursuant to the Digimarc Corporation 1999 Stock Incentive Plan (the "Plan") and,
in addition to the terms and conditions set forth below, is subject to the
provisions of the Plan.

1.02    Purpose of Program

        The purpose of the Program is to enhance the ability of the Company to
attract and retain directors who are not Employees ("Non-Employee Directors")
through a program of automatic Option grants.

1.03    Effective Date of the Program

        The Program became effective as of the Registration Date on December 1,
1999, and was first amended and restated by the Board on April 22, 2001 to
increase the number of Shares granted pursuant to Initial Grants and Subsequent
Grants (as defined below) and to change the vesting provisions thereunder. The
Program was further amended and restated by the Board on March 29, 2002 to
increase the number of Shares granted pursuant to Initial Grants and Subsequent
Grants, to award additional Option grants to Non-Employee Directors serving on
committees of the Board, and to change the vesting provisions for all automatic
Option grants. The Program was further amended and restated by the Board on
April 17, 2003 to specify that Committee Service Grants shall be made only to
Non-Employee Directors who serve as a member of a "standing committee" of the
Board. The Program was further amended and restated by the Board on May 2, 2003
to eliminate the requirement that a Non-Employee Director serve as a director of
the Company for at least six (6) months before receiving a Committee Service
Grant.

ARTICLE II
DEFINITIONS

        Capitalized terms in this Program, unless otherwise defined in this
Program, have the meaning given to them in the Plan. As used in this Program,
the following definitions shall apply:

2.01    Change in Control

        "Change in Control" means a change in ownership or control of the
Company effected through either of the following transactions:

        (a)   the direct or indirect acquisition by any person or related group
of persons (other than an acquisition from or by the Company or by a
Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the

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Company's outstanding securities pursuant to a tender or exchange offer made
directly to the Company's stockholders which a majority of the Continuing
Directors who are not Affiliates or Associates of the offeror do not recommend
such stockholders accept, or

        (b)   a change in the composition of the Board over a period of
thirty-six (36) months or less such that a majority of the Board members
(rounded up to the next whole number) ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who are
Continuing Directors.

2.02    Continuing Directors

        "Continuing Directors" means members of the Board who either (i) have
been Board members continuously for a period of at least thirty-six (36) months
or (ii) have been Board members for less than thirty-six (36) months and were
elected or nominated for election as Board members by at least a majority of the
Board members described in clause (i) who were still in office at the time such
election or nomination was approved by the Board.

2.03    Corporate Transaction

        "Corporate Transaction" means any of the following transactions:

        (a)   a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which the Company is incorporated;

        (b)   the sale, transfer or other disposition of all or substantially
all of the assets of the Company (including the capital stock of the Company's
subsidiary corporations) in connection with the complete liquidation or
dissolution of the Company;

        (c)   any reverse merger in which the Company is the surviving entity
but in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities are transferred to
a person or persons different from those who held such securities immediately
prior to such merger; or

        (d)   acquisition by any person or related group of persons (other than
the Company or by a Company-sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities (whether or not in a transaction also
constituting a Change in Control), but excluding any such transaction that the
Plan Administrator determines shall not be a Corporate Transaction.

ARTICLE III
OPTION TERMS

3.01    Date of Grant and Number of Shares

        (a)    Initial Grant.    A Non-Qualified Stock Option to purchase twenty
thousand (20,000) shares of Common Stock shall be granted ("Initial Grant") to
each Non-Employee Director elected or appointed to the Board for the first time
on or after March 29, 2002. Such Initial Grant shall be made on the date each
such Non-Employee Director first becomes a Non-Employee Director.

        (b)    Subsequent Grants.    Immediately following each annual meeting
of the Company's stockholders commencing with the annual meeting of the
Company's stockholders in 2002, each Non-Employee Director who continues as a
Non-Employee Director following such annual meeting shall be granted a
Non-Qualified Stock Option to purchase twelve thousand (12,000) shares of

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Common Stock (a "Subsequent Grant"); provided that no Subsequent Grant shall be
made to any Non-Employee Director who has not served as a director of the
Company, as of the time of such annual meeting, for at least six (6) months.
Each such Subsequent Grant shall be made on the date of the annual stockholders'
meeting in question.

        (c)    Committee Service Grants.    Each Non-Employee Director who
serves as a member of a standing committee of the Board immediately following
each annual meeting of the Company's stockholders, commencing with the annual
meeting of the Company's stockholders in 2002, shall be granted a Non-Qualified
Stock Option to purchase three thousand (3,000) shares of Common Stock (a
"Committee Service Grant"). Non-employee directors shall receive an additional
Committee Service Grant for each individual standing committee of the Board upon
which he or she serves as a member as described above. For purposes of this
provision, the term "standing committee" of the Board shall mean the Audit
Committee, the Compensation Committee, the Corporate Governance Committee, and
the Nominating Committee. Each such Committee Service Grant shall be made on the
date of the annual stockholders' meeting in question.

3.02    Vesting

        (a)    Initial Grant.    Each Initial Grant under the Program shall vest
and become exercisable as to 1/36 of the shares of Common Stock subject to the
Option on each monthly anniversary of the date of grant, such that the Option
will be fully exercisable three (3) years after its date of grant.

        (b)    Subsequent Grants and Committee Service Grants.    Each
Subsequent Grant and each Committee Service Grant under the Program shall vest
and become exercisable as to 1/12 of the shares of Common Stock subject to the
Option on each monthly anniversary of the date of grant, such that the Option
will be fully exercisable one (1) year after its date of grant.

3.03    Exercise Price

        The exercise price per share of Common Stock of each Initial Grant and
Subsequent Grant shall be one hundred percent (100%) of the Fair Market Value
per Share on the date of grant.

3.04    Corporate Transaction/Change in Control

        (a)   In the event of a Corporate Transaction, each Option which is at
the time outstanding under the Program automatically shall become fully vested
and exercisable immediately prior to the effective date of such Corporate
Transaction. Effective upon the consummation of the Corporate Transaction, all
outstanding Options under the Program shall terminate. However, all such Options
shall not terminate if the Options are, in connection with the Corporate
Transaction, assumed by the successor corporation or Parent thereof.

        (b)   In the event of a Change in Control (other than a Change in
Control which also is a Corporate Transaction), each Option which is at the time
outstanding under the Program automatically shall become fully vested and
exercisable, immediately prior to the specified effective date of such Change in
Control. Each such Option shall remain so exercisable until the expiration or
sooner termination of the applicable Option term.

3.05    Other Terms

        The Plan Administrator shall determine the remaining terms and
conditions of the Options awarded under the Program.

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Exhibit 10.11