EXHIBIT 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of July 31, 2014
(the “Agreement Date”) effective as of November 1, 2014 (the “Effective Date”)
at Beaverton, Oregon between DIGIMARC CORPORATION, an Oregon corporation
(“Digimarc”) with offices at 9405 SW Gemini Drive, Beaverton, Oregon 97008, and
BRUCE DAVIS (“Executive”).

WITNESSETH:

WHEREAS, Executive is Chairman of the Board and Chief Executive Officer of
Digimarc Corporation, an Oregon corporation (“Digimarc”); and

WHEREAS, Digimarc and Executive wish to memorialize the terms of Executive’s
employment in a written agreement.

NOW, THEREFORE, in consideration of the foregoing and in consideration of the
mutual promises and agreements contained herein, the parties hereto agree as
follows:

 

1. DEFINITIONS.

For purposes of this Agreement, the following terms shall have the following
meanings:

a. “Affiliate” shall mean any person or entity that directly or indirectly
controls, is controlled by, or is under common control with Digimarc.

b. “Change of Control” shall mean: (i) any Person (as defined in Section 13(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other
than a broker, bank, or trust company holding common stock of Digimarc for the
account of customers who are not members of a “group” (within the meaning of
Section 13(d) of the Exchange Act), becoming the record or beneficial owner of
50% or more of any class of Digimarc’s voting equity securities, as disclosed by
Digimarc’s stock records or in any other way, including, without limitation, any
filing with the Securities and Exchange Commission or otherwise; (ii) the
purchase of 50% or more of any class of Digimarc’s voting equity securities
pursuant to any tender offer or exchange offer for shares of Digimarc’s stock,
other than one made by Digimarc; (iii) any merger, consolidation, reorganization
or other transaction providing for the conversion or exchange of more than fifty
percent (50%) of the outstanding shares of Digimarc’s stock into securities of a
third party, or cash, or property, or a combination of any of the foregoing; or
(iv) the sale of substantially all of the assets of Digimarc.

c. “Code” shall mean the Internal Revenue Code of 1986, as amended, and the
Treasury regulations promulgated thereunder.

 

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d. “Section 280G” shall mean Code Section 280G and the Treasury regulations
promulgated thereunder or any similar or successor provision.

 

2. PERIOD OF EMPLOYMENT.

Digimarc agrees to employ Executive, and Executive agrees to be so employed, on
the terms and conditions set forth herein for the period beginning on the
Effective Date and ending on October 31, 2017, or on the termination date if
earlier terminated as set forth herein (“Term”).

 

3. DUTIES AND RESPONSIBILITIES.

a. Position. Executive will serve as Chief Executive Officer of Digimarc in
conformity with general management policies, guidelines and directions issued by
the Board of Directors of Digimarc (the “Board”), and shall perform all services
appropriate to that position as designated from time to time by the Board.
Executive will report directly to the Board, and will have general charge and
supervision of those functions and such other responsibilities as are customary
for his position. As long as Executive serves as Chief Executive Officer, it is
the intention of Digimarc that he will continue to be nominated to serve on the
Board. It is the current intention of the Board that Executive, if serving on
the Board, will also serve as Chairman of Board; provided, however, that the
foregoing statement of intent shall in no way derogate from the Board’s right
and power to act as it deems appropriate in the future.

b. Duties. Executive will work exclusively for Digimarc on a full-time basis,
devoting all of his time and attention during normal business hours to
Digimarc’s business. Executive will perform his duties and responsibilities
hereunder diligently, faithfully and loyally in order to facilitate the proper,
efficient and successful operation of Digimarc’s business.

c. Other Activity. Except upon the prior approval of the Board, Executive
(during the Term) shall not (i) accept any other employment; or (ii) engage,
directly or indirectly, in any other business, commercial, or professional
activity (whether or not pursued for pecuniary advantage) that is or may be
competitive with Digimarc, that might create a conflict of interest with
Digimarc, or that otherwise might interfere with the business of Digimarc or any
Affiliate or the performance of Executive’s duties and obligations to Digimarc.
So that Digimarc may be aware of the extent of any other demands upon
Executive’s time and attention, Executive shall disclose in confidence to
Digimarc the nature and scope of any other business activity in which he is or
becomes engaged during the Term.

 

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4. COMPENSATION AND BENEFITS.

As compensation for Executive’s services, Executive will receive a cash salary
and participate in the Company’s stock-based compensation plan, subject to the
terms and conditions set forth in this Agreement.

a. Salary. Executive will be paid a salary of $600,000 per year commencing on
the Effective Date through October 31, 2015, a salary of $620,000 per year
commencing on November 1, 2015 through October 31, 2016, and a salary of
$640,000 per year commencing on November 1, 2016. All salary shall be payable in
such installments as are consistent with Digimarc’s general payroll practices as
they may be amended, by Digimarc in its sole discretion, during the Term. All
compensation and comparable payments to be paid to Executive under this
Agreement shall be less withholdings required by law.

b. Long Term Incentive. The Compensation Committee of the Board has approved a
grant of 110,000 shares of time-based restricted stock to Executive that is
granted effective on the Agreement Date. The restricted stock will vest in
twelve equal quarterly installments from a November 15, 2014 vesting
commencement date. The restricted stock grant shall be subject to the terms and
conditions of Digimarc’s 2008 Incentive Plan, except as to vesting and any other
terms as set forth in this Agreement.

c. Flexible Time Off. Executive will be entitled to flexible time off consistent
with that generally provided to other executives of Digimarc.

d. Life Insurance. Digimarc shall promptly reimburse Executive for the premiums
payable during the Term for a term life insurance policy, with Executive as
beneficiary, that will pay Executive’s estate a death benefit of $3,000,000,
provided Executive requests such reimbursement and provides Digimarc with
evidence reasonably satisfactory to Digimarc of the amount of such premiums and
the fact that such premiums have been paid. Such request must be made and such
evidence provided no later than the January 31 immediately following the end of
the calendar year in which Executive pays such premium. (In lieu of
reimbursement, Digimarc may, in its sole and absolute discretion, elect to pay
such premiums directly to the insurance company.) Executive agrees to use his
best efforts to apply for and obtain such policy, including submitting to
physical examinations and taking such other actions as may be necessary to
obtain such policy.

e. Other Benefits. Except as specifically provided elsewhere in this Agreement,
Digimarc will provide Executive with the same health, disability, retirement,
death and other fringe benefits as are generally provided to other executives of
Digimarc. The amount and extent of benefits to which Executive is entitled shall
be governed by the specific benefit plan, as it may be amended from time to
time. Digimarc reserves the ability, in its sole discretion, to adjust
Executive’s benefits under this Agreement provided that such adjustments
generally apply to all executive officers.

 

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5. TERMINATION.

a. Executive’s employment will terminate automatically upon Executive’s death.

b. Executive’s employment will terminate automatically on the last day of the
calendar month in which Digimarc determines that Executive is permanently
disabled. For purposes of this Agreement, “permanent disability” shall be
defined as disability due to illness, accident or otherwise that renders
Executive unable to perform his regular duties for a period of more than three
(3) months.

c. Digimarc may terminate Executive’s employment under this Agreement at any
time (i) immediately for Cause, or (ii) without Cause upon thirty (30) days
written notice to Executive. “Cause” means (i) any act of personal dishonesty by
Executive in connection with his responsibilities as an officer or employee of
Digimarc, (ii) Executive’s conviction of a felony, (iii) any act by Executive
which constitutes gross negligence or willful misconduct, (iv) any material
violation by Executive of his employment duties provided that if such violation
is curable, it has not been cured within (30) days after delivery to Executive
of a written demand for cure, or (v) any act that would constitute a material
violation of Digimarc’s code of conduct or code of ethics or a material
violation of any restrictive covenants contained in this Agreement or any other
agreement between Digimarc and Executive or any Digimarc plan or program.
Notwithstanding the foregoing, Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a
copy of a resolution duly adopted by the affirmative vote of a majority of the
independent members of the Board (i.e., excluding Executive).

d. Executive may terminate his employment under this Agreement for “Good Reason”
(as defined below) at any time upon thirty-one (31) days prior written notice to
Digimarc. “Good Reason” means any of the following events, if done without
Executive’s prior written consent: (i) a material reduction in Executive’s
authority, duties or responsibilities; (ii) a material reduction in Executive’s
salary or (iii) relocation of Executive’s geographic work location to a location
that is more than 50 miles from the Executive’s geographic work location on the
Effective Date, except for required travel in furtherance of Digimarc’s business
to the extent consistent with Executive’s duties. Notwithstanding any provision
in this Agreement to the contrary, termination of employment by Executive will
not be for Good Reason unless (i) Executive notifies Digimarc in writing of the
existence of the condition which Executive believes constitutes Good Reason
within ninety (90) days of the Executive having actual knowledge of the initial
existence of such condition (which notice specifically identifies such
condition), (ii) Digimarc fails to remedy such condition within thirty (30) days
after the date on which it receives such notice (the “Remedial Period”), and
(iii) Executive actually terminates employment within sixty (60) days after the
expiration of the Remedial Period and before Digimarc remedies such condition.
If Executive terminates employment before the expiration of the Remedial Period
or after Digimarc remedies the condition (even if after the end of the Remedial
Period), then Executive’s termination will not be considered to be for Good
Reason.

 

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e. Executive may otherwise voluntarily terminate his employment at any time upon
thirty (30) days prior written notice to Digimarc.

 

6. EFFECTS OF TERMINATION.

a. If Executive’s employment is terminated by reason of Executive’s death or
permanent disability under either Section 5(a) or Section 5(b), all Digimarc
obligations under this Agreement will end except that (i) Executive’s unvested
stock options and restricted stock that would have vested if Executive’s
employment with Digimarc had continued for an additional twenty-four (24) months
following the termination date will immediately vest and become exercisable,
(ii) Executive’s right to exercise vested stock options will expire on the
earliest of (A) the second anniversary of the date of death or termination due
to disability, (B) the latest date the particular option could have expired by
its original terms under any circumstances, or (C) the tenth anniversary of the
original date of grant of the particular option; and (iii) if Executive’s
employment is terminated by reason of Executive’s death and Executive has been
unable to obtain the life insurance policy on Executive’s life as set forth in
Section 4(e), Executive will receive salary continuation payments (at the salary
rate in effect on the termination date) according to Digimarc’s standard payroll
schedule for the six (6) month period beginning immediately after Executive’s
termination date (and, for purposes of Code Section 409A, each such installment
shall be treated as a separate payment).

b. If Digimarc terminates Executive for Cause or Executive voluntarily
terminates his employment (except for a termination for Good Reason under
Section 5(d)), all Digimarc obligations under this Agreement will end except for
payment of any Compensation payable under Section 4 for services performed prior
to termination and reimbursement of properly authorized business expenses
incurred by Executive prior to termination.

c. If Digimarc terminates Executive without Cause under Section 5(c) or
Executive terminates his employment for Good Reason under Section 5(d), in both
cases other than following a Change of Control, all Digimarc obligations under
this Agreement will end, except that (i) Executive’s unvested stock options and
restricted stock that would have vested if Executive’s employment with Digimarc
had continued for an additional twenty-four (24) months following the
termination date will immediately vest and become exercisable, (ii) Digimarc
will continue to pay salary to Executive for two years from the date of
termination (at the salary rate in effect on the termination date) according to
Digimarc’s standard payroll schedule, and (iii) if Executive and Executive’s
spouse and dependent children are eligible for and timely (and properly) elect
COBRA continuation coverage under Digimarc’s group health plan(s) pursuant to
COBRA, Digimarc will pay the premium for such coverage for a period of
twenty-four (24) months following Executive’s termination date or until
Executive is no longer entitled to COBRA continuation coverage under Digimarc’s
group health plan(s), whichever period is shorter; provided, however, that
Executive shall not be entitled to any of the benefits described in this
Section 6(c) if he breaches Sections 8 or 9 of this Agreement. The

 

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compensation described in Section 6(c)(ii) will be paid according to Digimarc’s
standard payroll schedule from the date of termination, as if Executive had not
been terminated, and, for purposes of Code Section 409A, each such installment
shall be treated as a separate payment. Executive’s right to exercise vested
stock options will expire on the earliest of (A) the first anniversary of the
termination date, (B) the latest date the particular option could have expired
by its original terms under any circumstances, or (C) the tenth anniversary of
the original date of grant of the particular option. Other than as set forth in
this Section 6(c), Digimarc shall have no other obligations to Executive under
this Agreement.

d. If within eighteen (18) months after a Change of Control, Digimarc terminates
Executive without Cause under Section 5(c), or Executive terminates his
employment for Good Reason under Section 5(d), then, all Digimarc obligations
under this Agreement will end, except that (i) Executive’s unvested stock
options and restricted stock will immediately and fully vest and become
exercisable, (ii) Digimarc will continue to pay salary to Executive for two
years from the date of termination (at the salary rate in effect on the
termination date) according to Digimarc’s standard payroll schedule, and
(iii) if Executive and Executive’s spouse and dependent children are eligible
for and timely (and properly) elect COBRA continuation coverage under Digimarc’s
group health plan(s) pursuant to COBRA, Digimarc will pay the premium for such
coverage for a period of twenty-four (24) months following Executive’s
termination date or until Executive is no longer entitled to COBRA continuation
coverage under Digimarc’s group health plan(s), whichever period is shorter;
provided, however, that Executive shall not be entitled to any of the benefits
described in this Section 6(d) if he breaches Sections 8 or 9 of this Agreement.
The compensation described in Section 6(d)(ii) will be paid according to
Digimarc’s standard payroll schedule from the date of termination, as if
Executive had not been terminated, and, for purposes of Code Section 409A, each
such installment shall be treated as a separate payment. Executive’s right to
exercise vested stock options will expire on the earliest of (A) the first
anniversary of the termination date, (B) the latest date the particular option
could have expired by its original terms under any circumstances, or (C) the
tenth anniversary of the original date of grant of the particular option. Other
than as set forth in this Section 6(d), Digimarc shall have no other obligations
to Executive under this Agreement. Solely for purposes of this Section 6(d), the
Term shall be deemed to be extended to the date that is eighteen (18) months
after a Change of Control that occurs within the original Term.

e. Digimarc makes no representations or warranties to Executive with respect to
any tax, economic or legal consequences of this Agreement or any payments or
other benefits provided hereunder, including without limitation under Code
Section 409A, and no provision of the Agreement shall be interpreted or
construed to transfer any liability for failure to comply with Code Section 409A
from Executive or any other individual to Digimarc or any of its affiliates.
Executive, by executing this Agreement, shall be deemed to have waived any claim
against Digimarc and its affiliates with respect to any such tax, economic or
legal consequences. However, the parties intend that this Agreement and the
payments and other benefits provided hereunder be exempt from the requirements
of Code Section 409A to the maximum extent possible, whether pursuant to

 

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the short-term deferral exception described in Treasury Regulation
Section 1.409A-1(b)(4), the involuntary separation pay plan exception described
in Treasury Regulation Section 1.409A-1(b)(9)(iii), or otherwise. To the extent
Code Section 409A is applicable to this Agreement (and such payments and
benefits), the parties intend that this Agreement (and such payments and
benefits) comply with the deferral, payout and other limitations and
restrictions imposed under Code Section 409A. Notwithstanding any provision of
this Agreement to the contrary, this Agreement shall be interpreted, operated
and administered in a manner consistent with such intentions. Without limiting
the generality of the foregoing, and notwithstanding any provision of this
Agreement to the contrary, with respect to any payments and benefits under this
Agreement to which Code Section 409A applies, all references in this Agreement
to the termination of Executive’s employment are intended to mean Executive’s
“separation from service,” within the meaning of Code Section 409A(a)(2)(A)(i).
In addition, if Executive is a “specified employee,” within the meaning of Code
Section 409A(a)(2)(B)(i), at the time of his “separation from service,” within
the meaning of Code Section 409A(a)(2)(A)(i), then to the extent necessary to
avoid subjecting Executive to the imposition of any additional tax under Code
Section 409A, amounts that would otherwise be payable under this Agreement
during the six-month period immediately following Executive’s “separation from
service,” shall not be paid to Executive during such period, but shall instead
be accumulated and paid to Executive (or, in the event of Executive’s death,
Executive’s estate) in a lump sum on the first business day following the date
that is six months after Executive’s separation from service. Moreover, the
parties intend that this Agreement be deemed to be amended to the extent
necessary to comply with the requirements of Code Section 409A and to avoid or
mitigate the imposition of additional taxes under Code Section 409A, while
preserving to the maximum extent possible the essential economics of Executive’s
rights under the Agreement.

f. If the Term ends as a result of the expiration of the Term on its scheduled
end date without renewal, all Digimarc obligations under this Agreement will end
except for payment of any Compensation payable under Section 4 for services
performed prior to expiration and reimbursement of properly authorized business
expenses incurred by Executive prior to expiration; provided, however, that if
Executive’s employment is thereafter terminated without Cause as defined in
Section 5(c) or Executive terminates his employment for Good Reason as defined
in Section 5(d), in both cases other than following a Change of Control (which
is governed by Section 6(d)), (i) any unvested stock options held by Executive
will immediately vest and become exercisable in full and any unvested restricted
stock held by Executive will immediately vest in full and cease to be subject to
forfeiture; (ii) Executive’s right to exercise vested stock options will expire
on the earliest of (A) the first anniversary of the employment termination date,
(B) the latest date the particular option could have expired by its original
terms under any circumstances, or (C) the tenth anniversary of the original date
of grant of the particular option; and (iii) Digimarc will continue to pay
salary to Executive for one year from the date of termination (at the salary
rate in effect on the termination date) according to Digimarc’s standard payroll
schedule.

 

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g. As a condition to receiving benefits under this Section 6, Executive must
sign a general waiver and release in the form provided by the Digimarc within
sixty (60) days of the termination date, which form shall be substantially
similar in coverage to the release contained in Section 10 hereof and
conditioned on Digimarc’s provision of such benefits. Failure to return the
release within such sixty (60)-day period will result in the forfeiture of any
and all benefits hereunder.

 

7. EXCISE TAXES.

a. Notwithstanding any other provision of this Agreement, in the event that
Executive becomes entitled to receive or receives any payments, options, awards
or benefits (including, without limitation, the monetary value of any non-cash
benefits and the accelerated vesting of stock options) under this Agreement or
under any other plan, agreement or arrangement with Digimarc, any person whose
actions result in any change described in Code Section 280G(b)(2)(A)(i) or any
person affiliated with Digimarc or such person (collectively, the “Payments”),
that may separately or in the aggregate constitute “parachute payments” within
the meaning of Section 280G and Digimarc receives confirmation from an
independent accounting firm or independent tax counsel appointed by Digimarc
(the “Tax Advisor”) that, but for this Section 7, any of the Payments will be
subject to any excise tax pursuant to Code Section 4999 or any similar or
successor provision (the “Excise Tax”), then the Company shall pay to Executive
either (i) the full amount of the Payments or (ii) an amount equal to the
Payments, reduced by the minimum amount necessary to prevent any portion of the
Payments from being an “excess parachute payment” (within the meaning of
Section 280G) (the “Capped Payments”), whichever of the foregoing amounts
results in the receipt by Executive, on an after-tax basis, of the greatest
amount of Payments notwithstanding that all or some portion of the Payments may
be subject to the Excise Tax. For purposes of determining the after-tax value of
the Payments, (i) there shall be taken into account any Excise Tax and all
applicable federal, state and local taxes required to be paid by Executive in
respect of the receipt of the Payments and (ii) Executive shall be deemed to pay
income taxes at the highest rate of federal income tax and the highest rate or
rates of state and local income taxes in the state and locality of Executive’s
domicile for income tax purposes for the taxable year in which the Payments will
be made, provided that the state and local income tax rate shall be determined
assuming that such taxes are fully deductible for federal income tax purposes,
and provided further that any phase-out of itemized deductions or other items
shall be ignored.

b. All calculations and determinations under this Section 7, including
application and interpretation of the Code and related regulatory,
administrative and judicial authorities, shall be made by the Tax Advisor. All
determinations made by the Tax Advisor under this Section 7 shall be conclusive
and binding on both Digimarc and Executive, and Digimarc shall cause the Tax
Advisor to provide its determinations and any supporting calculations with
respect to Executive to Digimarc and Executive. Digimarc shall bear all fees and
expenses charged by the Tax Advisor in connection with its services. For
purposes of making the calculations and determinations under this Section 7,
after taking into account the information provided by Digimarc and Executive,

 

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the Tax Advisor may make reasonable, good faith assumptions and approximations
concerning the application of Code Sections 280G and 4999. Digimarc and
Executive shall furnish the Tax Advisor with such information and documents as
the Tax Advisor may reasonably request to assist the Tax Advisor in making
calculations and determinations under this Section 7.

c. In the event that Section 7(a) applies and a reduction is required to be
applied to the Payments thereunder, the Payments shall be reduced by the Company
in its reasonable discretion in the following order: (i) reduction of any
Payments that are subject to Code Section 409A on a pro-rata basis or such other
manner that complies with Code Section 409A, as determined by the Company, and
(ii) reduction of any Payments that are exempt from Code Section 409A.

 

8. TERMINATION OBLIGATIONS.

a. Executive agrees that all property, including, without limitation, all
equipment, tangible Proprietary Information (as defined below), documents,
books, records, reports, notes, contracts, lists, computer disks (and other
computer-generated files and data), and copies thereof, created on any medium
and furnished to, obtained by, or prepared by Executive in the course of or
incident to his employment, belongs to Digimarc and shall be returned promptly
to Digimarc at the end of the Term.

b. All benefits to which Executive is otherwise entitled shall cease upon
Executive’s termination, unless explicitly continued either under this Agreement
or under any specific written policy or benefit plan of Digimarc.

c. Effective at the end of the Term, Executive shall be deemed to have resigned
from all offices and directorships then held with Digimarc or any Affiliate.

d. The representations and warranties contained in this Agreement and
Executive’s obligations under this Section 8 on Termination Obligations and
Section 9 on Proprietary Information shall survive the termination of this
Agreement.

e. Following any termination of this Agreement, Executive shall fully cooperate
with Digimarc in all matters relating to the winding up of pending work on
behalf of Digimarc and the orderly transfer of work to other executives of
Digimarc. Executive shall also cooperate in the defense of any action brought by
any third party against Digimarc that relates in any way to Executive’s acts or
omissions while employed by Digimarc.

f. Prior to beginning any employment within two (2) years following the end of
the Term, Executive shall first provide Digimarc with the name and address of
his prospective employer so that Digimarc may provide the new employer with a
copy of this Agreement.

 

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9. PROPRIETARY INFORMATION AND COVENANT NOT TO COMPETE.

a. Defined. “Proprietary Information” is all information and any idea in
whatever form, tangible or intangible, pertaining in any manner to the business
of Digimarc, or any Affiliate, or its employees, clients, consultants, or
business associates, which was produced by any employee of Digimarc in the
course of his or her employment or otherwise produced or acquired by or on
behalf of Digimarc. All Proprietary Information not generally known outside of
Digimarc’s organization, and all Proprietary Information so known only through
improper means, shall be deemed “Confidential Information.” Without limiting the
foregoing definition, Proprietary and Confidential Information shall include,
but not be limited to: (i) formulas, teaching and development techniques,
processes, trade secrets, computer programs, electronic codes, inventions,
improvements, and research projects; (ii) information about costs, profits,
markets, sales, and lists of customers or clients; (iii) business, marketing,
and strategic plans; and (iv) employee personnel files and compensation
information. Executive should consult any Digimarc procedures instituted to
identify and protect certain types of Confidential Information, which are
considered by Digimarc to be safeguards in addition to the protection provided
by this Agreement. Nothing contained in those procedures or in this Agreement is
intended to limit the effect of the other.

b. General Restrictions on Use. During the Term, Executive shall use Proprietary
Information, and shall disclose Confidential Information, only for the benefit
of Digimarc and as is necessary to carry out his responsibilities under this
Agreement. Following termination, Executive shall neither, directly or
indirectly, use any Proprietary Information nor disclose any Confidential
Information, except as expressly and specifically authorized in writing by
Digimarc. The publication of any Proprietary Information through literature or
speeches must be approved in advance in writing by Digimarc.

c. Location and Reproduction. Executive shall maintain at his work station
and/or any other place under his control only such Confidential Information as
he has a current “need to know.” Executive shall return to the appropriate
person or location or otherwise properly dispose of Confidential Information
once that need to know no longer exists. Executive shall not make copies of or
otherwise reproduce Confidential Information unless there is a legitimate
business need for reproduction.

d. Prior Actions and Knowledge. Executive represents and warrants that from the
time of his first contact with Digimarc, he has held in strict confidence all
Confidential Information and has not disclosed any Confidential Information,
directly or indirectly, to anyone outside of Digimarc, or used, copied,
published, or summarized any Confidential Information, except to the extent
otherwise permitted in this Agreement.

e. Third-Party Information. Executive acknowledges that Digimarc has received
and in the future will receive from third parties their confidential information
subject to a duty on Digimarc’s part to maintain the confidentiality of this
information and to use it

 

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only for certain limited purposes. Executive agrees that he owes Digimarc and
these third parties, during the Term and thereafter, a duty to hold all such
confidential information in the strictest confidence and not to disclose or use
it, except as necessary to perform his obligations hereunder and as is
consistent with Digimarc’s agreement with third parties.

f. No Competition. In the interest of preventing the use or disclosure of
Confidential Information in breach of the preceding subsections and in
consideration for Digimarc agreeing to make the post-termination payments to
Executive described in Section 6, Executive shall not, during the Term and for a
period equal to the longer of (i) one (1) year or (ii) the period during which
Executive is receiving severance payments under Section 6 hereof following the
end of the Term, for any reason, perform work for any of Digimarc’s business
competitors whether as an employee or as a consultant, and shall not serve as a
director, partner, agent or shareholder of such competitor (except that
Executive may hold less than 5% of the outstanding stock of any public company
for investment purposes).

g. Misuse of Confidential Information. Executive agrees that for a period equal
to the longer of (i) one (1) year or (ii) the period during which Executive is
receiving severance payments under Section 6 hereof following the end of the
Term, he shall not, directly or indirectly, (i) divert or attempt to divert from
Digimarc (or any Affiliate) any business of any kind in which it is engaged; or
(ii) employ or recommend for employment any person employed by Digimarc (or any
Affiliate), unless Executive can prove that any action taken in contravention of
this subsection was done without the use in any way of Confidential Information.

h. Interference with Business. In order to avoid disruption of Digimarc’s
business, Executive agrees that for a period equal to the longer of (i) one
(1) year or (ii) the period during which Executive is receiving severance
payments under Section 6 hereof following the end of the Term, he shall not,
directly or indirectly, (i) solicit any customer of Digimarc (or any Affiliate)
known to Executive during the Term to have been a customer; or (ii) solicit for
employment any person employed by Digimarc (or any Affiliate).

 

10. RELEASE.

In consideration for Digimarc agreeing to make the post-termination payments to
Executive, Executive hereby releases Digimarc and the predecessor Digimarc
Corporation from which Digimarc was spun off in 2008 (“Old Digimarc”) from any
and all claims of any kind, known or unknown, arising out of or related to
Executive’s employment by Digimarc or Old Digimarc, excluding worker’s
compensation claims and claims for unemployment compensation, and agrees not to
bring a claim or lawsuit based on or related to the released claims. The claims
Executive is releasing include, without limitation, all claims that Executive
may have under each and every employment agreement entered into between
Executive and each of Old Digimarc and Digimarc prior to the date of this
Agreement, for breach of contract, for “torts,” (civil wrongs or

 

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injuries), or under Title VII of the Civil Rights Act of 1964; the Age
Discrimination in Employment Act, except that this Agreement does not release
any claims under that Act that may arise after the signing of this Agreement;
the Equal Pay Act; the Americans with Disabilities Act; and all other applicable
federal, state or local laws. The release Executive is giving releases not only
all claims Executive may have against Digimarc and Old Digimarc, but also all
claims Executive may have against their respective past and present
shareholders, officers, directors, agents, employees, representatives,
attorneys, parents, subsidiaries, affiliates, benefit plans, predecessors,
successors, transferees and assigns. It also releases such claims of anyone else
Executive can bind in this Agreement, such as Executive’s heirs and assigns.
Executive understands that Executive is releasing potentially unknown claims,
and that Executive has limited knowledge with respect to some of the claims
being released. Executive agree that this release is fairly and knowingly made.
Executive assumes the risk of any mistake in entering into this Agreement.
Excluded are claims under this Agreement and any future claims under employee
benefit plans in which Executive may have participated. In addition, this
Agreement is not intended to release any claims which as a matter of law or
public policy cannot be released.

 

11. NOTICES.

Any notice to be given hereunder by Digimarc to Executive will be deemed to be
given if delivered to Executive in person, or if mailed to Executive, by
certified mail, postage prepaid, return receipt requested, at his address last
shown on the records of Digimarc. Any notice to be given by Executive to
Digimarc will be deemed to be given if delivered in person or by mail, postage
prepaid, return receipt requested to the Chief Financial Officer at Digimarc’s
principal executive office, unless Executive or Digimarc will have duly notified
the other party in writing of a change of address. If mailed, notice will be
deemed to have been given when deposited in the mail as set forth above;
provided, however, that solely for purposes of Section 5(d), Executive shall not
be deemed to have given Digimarc notice of his termination for Good Reason (or
of the event constituting Good Reason) until such time as Digimarc receives
Executive’s written notice thereof.

 

12. AMENDMENTS.

This Agreement will not be modified or discharged, in whole or in part, except
by an agreement in writing signed by an executive officer of Digimarc other than
Executive on the one hand, and Executive on the other hand.

 

13. ENTIRE AGREEMENT.

This Agreement, together with any and all other written agreement(s) made
contemporaneously herewith and applicable options, restricted stock and benefits
plans of Digimarc, constitute the entire agreement between the parties with
respect to Executive’s employment by Digimarc from and after the Effective Date.
The parties are not relying on any other representation or understanding with
respect thereto, express or implied, oral or written. As of the Effective Date,
this Agreement, as supplemented by

 

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such contemporaneous agreement(s), supersedes any prior employment agreement,
written or oral, of Digimarc with respect to Executive, and including the
Employment Agreement between Digimarc and Executive effective as of November 1,
2011.

 

14. CAPTIONS.

The captions contained in this Agreement are for convenience of reference only
and do not affect the meaning of any terms or provisions hereof.

 

15. BINDING EFFECT.

The rights and obligations of Digimarc hereunder will inure to the benefit of,
and will be binding upon, Digimarc and its respective successors and assigns,
and the rights and obligations of Executive hereunder will inure to the benefit
of, and will be binding upon, Executive and his heirs, personal representatives
and estate. All references in this Agreement to “Digimarc” will be deemed to
include its successors and assigns.

 

16. SEVERABLE PROVISIONS.

If any provision of this Agreement, or its application to any person, place, or
circumstance, is held by an arbitrator or a court of competent jurisdiction to
be invalid, unenforceable, or void, such provision shall be enforced to the
greatest extent permitted by law, and the remainder of this Agreement and such
provision as applied to other persons, places, and circumstances shall remain in
full force and effect.

 

17. GOVERNING LAW.

This Agreement will be interpreted, construed, and enforced in all respects in
accordance with the laws of the State of Oregon.

 

18. INTERPRETATION.

This Agreement shall be construed as a whole, according to its fair meaning, and
not in favor of or against any party. By way of example and not in limitation,
this Agreement shall not be construed in favor of the party receiving a benefit
nor against the party responsible for any particular language in this Agreement.
Captions are used for reference purposes only and should be ignored in the
interpretation of the Agreement.

 

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19. EMPLOYEE ACKNOWLEDGEMENT.

Executive acknowledges that he has had the opportunity to consult legal counsel
in regard to this Agreement, that he has read and understands this Agreement,
that he is fully aware of its legal effect, and that he has entered into it
freely and voluntarily and based on his own judgment and not on any
representations or promises other than those contained in this Agreement.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
Agreement Date.

 

DIGIMARC CORPORATION     EXECUTIVE

/s/ Robert Chamness

   

/s/ Bruce Davis

By: Robert Chamness     BRUCE DAVIS Its: Chief Legal Officer