Exhibit 10.3

DIGIMARC CORPORATION

RESTATED 1999 STOCK INCENTIVE PLAN

(amended and restated on May 26, 2000)
(amended and restated on April 17, 2003)

1.Purposes of the Plan.The purposes of this Stock Incentive Plan are to attract and retain the best available
personnel, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Company's business.

2.Definitions.As used herein, the following definitions shall apply:



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3.Stock Subject to the Plan.



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4.Administration of the Plan.



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5.Eligibility.Awards other than Incentive Stock Options may be granted to Employees, Directors and
Consultants. Incentive Stock Options may be granted only to Employees of the Company, a Parent or a Subsidiary. An Employee, Director or Consultant who has been granted an Award may, if otherwise
eligible, be granted additional Awards. Awards may be granted to such Employees, Directors or Consultants who are residing in foreign jurisdictions as the Plan Administrator may determine from time to
time.

6.Terms and Conditions of Awards.



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7.Award Exercise or Purchase Price, Consideration, and Taxes.



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8.Exercise of Award.



9.Conditions Upon Issuance of Shares.



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10.Adjustments Upon Changes in Capitalization.Subject to any required action by the stockholders of the
Company, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, the maximum number of Shares with respect to which Options and SARs may be granted to any Employee
in any fiscal year of the Company, as well as any other terms that the Plan Administrator determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares, or similar event affecting the Shares, (ii) any other
increase or decrease in the number of issued Shares effected without receipt of consideration by the Company, or (iii) as the Plan Administrator may determine in its discretion, any other
transaction with respect to Common Stock to which Section 424(a) of the Code applies or any similar transaction; provided, however that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Plan Administrator and its determination shall be final, binding and conclusive.
Except as the Plan Administrator determines, 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 hereof shall be made with respect to, the number or price of Shares subject to an Award.

11.Effective Date and Term of Plan.The Plan shall become effective upon the earlier to occur of its adoption
by the Board or its approval by the stockholders of the Company. It shall continue in effect for a term of ten (10) years unless sooner terminated. Subject to Section 16, below, and
Applicable Laws, Awards may be granted under the Plan upon its becoming effective.

12.Amendment, Suspension or Termination of the Plan.



13.Reservation of Shares.



14.No Effect on Terms of Employment/Consulting Relationship.The Plan shall not confer upon any Grantee any
right with respect to the Grantee's Continuous Service, nor shall it interfere in any way with his or her right or the Company's right to terminate the Grantee's Continuous Service at any time, with
or without cause.

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15.No Effect on Retirement and Other Benefit Plans.Except as specifically provided in a retirement or other
benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Related
Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of
compensation. The Plan is not a "Retirement Plan" or "Welfare Plan" under the Employee Retirement Income Security Act of 1974, as amended.

16.Stockholder Approval.The Plan became effective when adopted by the Board in October 1999. On
May 26, 2000, the Board adopted and approved an amendment and restatement of the Plan (a) to increase the number of Shares available for issuance under the Plan, (b) to increase
the maximum number of shares by which the aggregate number of Shares available for issuance under the Plan and the aggregate number of Shares available for grant of Incentive Stock Options may be
increased each year and (c) to adopt a limit on the maximum number of Shares with respect to which Options and SARs may be granted to any Grantee in any fiscal year of the Company and certain
other administrative provisions to comply with the performance-based compensation exception to the deduction limit of Section 162(m) of the Code, which amendments are subject to approval by the
stockholders of the Company. On April 17, 2003, the Board adopted and approved an amendment and restatement of the Plan to revise the definition of Fair Market Value such the fair market value
of a Share of Common Stock of the Company shall be determined based on the closing price for a Share on the date of determination, which amendment is not subject to approval by the stockholders of the
Company.

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