**Exhibit 10.1**

 

**DIGIMARC CORPORATION**

 

**INDEMNIFICATIONAGREEMENT**

 

THIS AGREEMENT is entered into, effective as of                                     ,2005, by and between Digimarc Corporation, a Delaware corporation (the“Company”), and                                (“Indemnitee”).

 

WHEREAS, it is essential to the Company to retain andattract as directors and officers the most capable persons available;

 

WHEREAS, Indemnitee is a director and/or officer ofthe Company; and

 

WHEREAS, in recognition of Indemnitee’s need forsubstantial protection against personal liability in order to enhanceIndemnitee’s continued and effective service to the Company, and in order toinduce Indemnitee to provide services to the Company as a director and/orofficer, the Company wishes to provide in this Agreement for theindemnification of and the advancing of expenses to Indemnitee to the fullestextent (whether partial or complete) permitted by Delaware law and as set forthin this Agreement, and, to the extent insurance is maintained, for the coverageof Indemnitee under the Company’s directors’ and officers’ liability insurancepolicies.

 

NOW, THEREFORE, in consideration of the above premisesand of Indemnitee’s continuing to serve the Company directly or, at itsrequest, with another enterprise, and intending to be legally bound hereby, theparties agree as follows:

 

# **1.**              Certain Definitions.

 

## (a)           **Board**:  the Board ofDirectors of the Company.

 

## (b)           **Change In Control**: shall be deemed to have occurred if (i) any “person” (as such termis used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, asamended (the “Act”)), other than a trustee or other fiduciary holdingsecurities under an employee benefit plan of the Company or a corporation owneddirectly or indirectly by the stockholders of the Company in substantially thesame proportions as their ownership of stock of the Company (collectively“excluded persons”), is or becomes the “Beneficial Owner” (as defined in Rule13d-3 under the Act), directly or indirectly, of securities of the Companyrepresenting 30% or more of the total voting power represented by the Company’sthen outstanding Voting Securities, or (ii) during any period of twoconsecutive years, individuals who at the beginning of such period constitutethe Board and any new director whose election by the Board or nomination forelection by the Company’s stockholders was approved by a vote of at leasttwo-thirds (2/3) of the directors then still in office who either weredirectors at the beginning of the period or whose election or nomination forelection was previously so approved, cease for any reason to constitute amajority of the Board, or (iii) the stockholders of the Company approve

 

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## a merger or consolidationof the Company with any other corporation, other than a merger or consolidationthat would result in the Voting Securities of the Company outstandingimmediately prior thereto continuing to represent (either by remainingoutstanding or by being converted into Voting Securities of the survivingentity) at least 50% of the total voting power represented by the VotingSecurities of the Company or such surviving entity outstanding immediatelyafter such merger or consolidation, or (iv) the stockholders of theCompany approve a plan of complete liquidation of the Company or an agreementfor the sale or disposition by the Company (in one transaction or a series oftransactions) of all or substantially all of the Company’s assets.

##  

## (c)           **Expenses**:  any expense,liability, or loss, including attorneys’ fees, judgments, fines, ERISA excisetaxes and penalties, amounts paid or to be paid in settlement, any interest,assessments, or other charges imposed thereon, and any federal, state, local,or foreign taxes imposes as a result of the actual or deemed receipt of anypayments under this Agreement, paid or incurred in connection withinvestigating, defending, being a witness in, or participating in (including onappeal), or preparing for any of the foregoing in, any Proceeding relating toany Indemnifiable Event.

##  

## (d)           **Indemnifiable****Event**:  any event or occurrence that takes placeeither prior to or after the effective date of this Agreement, related to thefact that Indemnitee is or was a director or an officer of the Company, orwhile a director or officer is or was serving at the request of the Company asa director, officer, employee, trustee, agent, or fiduciary of another foreignor domestic corporation, partnership, joint venture, employee benefit plan, trust,or other enterprise, or was a director, officer, employee, or agent of aforeign or domestic corporation that was a predecessor corporation of theCompany or of another enterprise at the request of such predecessorcorporation, or related to anything done or not done by Indemnitee in any suchcapacity.

##  

## (e)           **Independent Counsel**: the person or body appointed in connection with Section 3.

##  

## (f)            **Potential Change In Control**: shall be deemed to have occurred if (i) the Company enters into anagreement or arrangement, the consummation of which would result in theoccurrence of a Change in Control, (ii) any person (including the Company)publicly announces an intention to take or to consider taking actions that, ifconsummated, would constitute a Change in Control, (iii) any person (otherthan an Excluded Person) who is or becomes the Beneficial Owner, directly orindirectly, of securities of the Company representing 10% or more of thecombined voting power of the Company’s then outstanding Voting Securities, increaseshis beneficial ownership of such securities by 5% or more over the percentageso owned by such person on the date hereof, or (iv) the Board adopts aresolution to the effect that, for purposes of this Agreement, a PotentialChange in Control has occurred.

##  

## (g)           **Proceeding**: (i) any threatened, pending, or complete action, suit, orproceeding, whether civil, criminal, administrative, investigative, or other,or (ii) any inquiry, hearing, or

 

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## investigation,whether conducted by the Company or any other party, that Indemnitee in goodfaith believes might lead to the institution of any such action, or proceeding.

##  

## (h)           **Reviewing Party**:  theperson or body appointed in accordance with Section 3.

##  

## (i)            **Voting Securities**: any securities of the Company that votegenerally in the election of directors.

##  

# **2.**              Agreement To Indemnify.

# ** **

### (a)           GeneralAgreement. In the event Indemnitee was, is, or become a party to or witnessor other participant in, or is threatened to be made a party to or witness orother participant in, a Proceeding by reason of (or arising in part out of) anIndemnifiable Event, the Company shall indemnify Indemnitee from and againstany and all Expenses to the fullest extent permitted by law, as the same existsor may hereafter be amended or interpreted (but in the case of any suchamendment or interpretation, only to the extent that such amendment orinterpretation permits the Company to provide broader indemnification rightsthan were permitted prior thereto).

###  

### (b)           InitiationOf Proceeding. Notwithstanding anything in this Agreement to the contrary,Indemnitee shall not be entitled to indemnification pursuant to this Agreementin connection with any Proceeding initiated by Indemnitee against the Companyor any director or officer of the Company unless (i) the Company hasjoined in or the Board has consented to the initiation of such Proceeding,(ii) the Proceeding is one to enforce indemnification rights underSection 5, or (iii) the Proceeding is instituted after a Change inControl and Independent Counsel has approved its initiation.

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### (c)           ExpenseAdvances. If so requested by Indemnitee, the Company shall advance (withinten business days of such request) any and all Expenses to Indemnitee (an “**Expense Advance**”); provided that such request shall beaccompanied by reasonable evidence of the expenses incurred by Indemnitee andthat, if and to the extent that the Reviewing Party determines that Indemniteewould not be permitted to be so indemnified under applicable law, the Companyshall be entitled to be reimbursed by Indemnitee (who hereby agrees toreimburse the Company) for all such amounts theretofore paid. If Indemnitee hascommenced legal proceedings in a court of competent jurisdiction to secure adetermination that Indemnitee should be indemnified under applicable law, asprovided in Section 4, any determination made by the Reviewing Party thatIndemnitee would not be permitted to be indemnified under applicable law shallnot be binding and Indemnitee shall not be required to reimburse the Companyfor any Expense Advance until a final judicial determination is made withrespect thereto (as to which all rights of appeal therefrom have been exhaustedor have lapsed).

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### (d)           MandatoryIndemnification. Notwithstanding any other provision of this Agreement(other than Section 2(f) below), to the extent that Indemnitee has beensuccessful on the merits in defense of any Proceeding relating in whole or inpart to an Indemnifiable Event

 

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### or in defense ofany issue or matter therein, Indemnitee shall be indemnified against allExpenses incurred in connection therewith.

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### (e)           PartialIndemnification. If Indemnitee is entitled under any provision of thisAgreement to indemnification by the Company for some or a portion of Expenses,but not, however, for the total amount thereof, the Company shall neverthelessindemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

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### (f)            ProhibitedIndemnification. No indemnification pursuant to this Agreement shall bepaid by the Company on account of any Proceeding in which judgment is renderedagainst Indemnitee for an accounting of profits made from the purchase or saleby Indemnitee of securities of the Company pursuant to the provisions ofSection 16(b) of the Act or similar provisions of any federal, state orlocal laws.

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# **3.**              Reviewing Party.

 

Prior to any Change in Control, the Reviewing Partyshall be any appropriate person or body consisting of a member or members ofthe Board or any other person or body appointed by the Board who is not a partyto the particular Proceeding with respect to which Indemnitee is seekingindemnification; after a Change in Control, the Reviewing Party shall be theIndependent Counsel referred to below. With respect to all matters arisingafter a Change in Control (other than a Change in Control approved by amajority of the directors on the Board who were directors immediately prior tosuch Change in Control) concerning the rights of Indemnitee to indemnitypayments and Expense Advances under this Agreement or any other agreement orunder applicable law or the Company’s Certificate of Incorporation or bylawsnow or hereafter in effect relating to indemnification for IndemnifiableEvents, the Company shall seek legal advice only from Independent Counselselected by Indemnitee and approved by the Company and who has not otherwiseperformed services for the Company or the Indemnitee (other than in connectionwith indemnification matters) within the last five years. The IndependentCounsel shall not include any person who, under the applicable standards ofprofessional conduct then prevailing would have a conflict of interest inrepresenting either the Company or Indemnitee in an action to determineIndemnitee’s rights under this Agreement. Such counsel, among other things,shall render its written opinion to the Company and Indemnitee as to whetherand to what extent the Indemnitee should be permitted to be indemnified underapplicable law. The Company agrees to pay the reasonable fees of theIndependent Counsel and to indemnify fully such counsel against any and allexpenses (including attorney’s fees), claims, liabilities, loss, and damagesarising out of or relating to this Agreement or the engagement of IndependentCounsel pursuant hereto.

 

# **4.**              Indemnification Process And Appeal.

# ** **

#### (a)           SuitTo Enforce Rights. Regardless of any action by the Reviewing Party, ifIndemnitee has not received full indemnification within 60 days after making arequest in accordance with Section 2(c), Indemnitee shall have the rightto enforce its indemnification rights under this Agreement by commencinglitigation, in any appropriate court having subject matter jurisdiction thereofand in which venue is

 

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#### proper, seeking aninitial determination by the court or challenging any determination by theReviewing Party or any aspect thereof, provided, however, that such 60-dayperiod shall be extended for reasonable time, not to exceed another 60 days, ifthe reviewing party in good faith requires additional time for the obtaining orevaluating of documentation and information relating thereto. The Companyhereby consents to service of process and to appear in any such proceeding. Anydetermination by the Reviewing Party not challenged by the Indemnitee shall bebinding on the Company and Indemnitee. The remedy provided for in thisSection 4 shall be in addition to any other remedies available toIndemnitee in law or equity.

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#### (b)           DefenseTo Indemnification, Burden Of Proof, And Presumptions. It shall be adefense to any action brought by Indemnitee against the Company to enforce thisAgreement (other than an action brought to enforce a claim for Expensesincurred in defending a Proceeding in advance of its final disposition wherethe required undertaking has been tendered to the Company) that it is notpermissible under applicable law for the Company to indemnify Indemnitee forthe amount claimed. In connection with any such action or any determination bythe Reviewing Party or otherwise as to whether Indemnitee is entitled to beindemnified hereunder, the burden of proving such a defense or determinationshall be on the Company. Neither the failure of the Reviewing Party or theCompany (including its Board, independent legal counsel, or its stockholders)to have made a determination prior to the commencement of such action byIndemnitee that indemnification of the claimant is proper under thecircumstances because Indemnitee has met the standard of conduct set forth inapplicable law, nor an actual determination by the Reviewing Party or Company(including its Board, independent legal counsel, or its stockholders) that theIndemnitee had not met such applicable standard of conduct, shall be a defenseto the action or create a presumption that the Indemnitee has not met theapplicable standard of conduct. For purposes of this Agreement, the terminationof any claim, action, suit, or proceeding, by judgment, order, settlement(whether with or without court approval), conviction, or upon a plea of nolocontendere, or its equivalent shall not create a presumption that Indemniteedid not meet any particular standard of conduct or have any particular beliefor that a court has determined that indemnification is not permitted byapplicable law.

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# **5.**              Indemnification For Expenses Incurred In EnforcingRights.

# ** **

The Company shall indemnify Indemnitee against any andall Expenses and, if requested by Indemnitee, shall (within ten business daysof such request), advance such Expenses to Indemnitee, that are incurred byIndemnitee in connection with any claim asserted against or covered actionbrought by Indemnitee for (i) indemnification of Expenses or ExpenseAdvances by the Company under this Agreement or any other agreement or underapplicable law or the Company’s Certificate of Incorporation or bylaws now orhereafter in effect relating to indemnification for Indemnifiable Events, andor (ii) recovery under directors’ and officers’ liability insurancepolicies maintained by the Company, regardless of whether Indemnitee ultimatelyis determined to be entitled to such indemnification, Expense Advances, orinsurance recovery, as the case may be.

 

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# **6.**              Notification And Defense Of Proceeding.

# ** **

##### (a)           Notice.Promptly after receipt by Indemnitee of notice of the commencement of anyProceeding, Indemnitee shall, if a claim in respect thereof is to be madeagainst the Company under this Agreement, notify the Company of thecommencement thereof, but the omission so to notify the Company will notrelieve the Company from any liability that it may have to Indemnitee, exceptas provided in Section 6(c).

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##### (b)           Defense.With respect to any Proceeding as to which Indemnitee notifies the Company ofthe commencement thereof, the Company shall be entitled to participate in theProceeding at its own expense and except as otherwise provided below, to theextent the Company so wishes, it may assume the defense thereof with counselreasonably satisfactory to Indemnitee. After notice from the Company toIndemnitee of its election to assume the defense of any Proceeding, the Companyshall not be liable to Indemnitee under this Agreement or otherwise for anyExpenses subsequently incurred by Indemnitee in connection with the defense ofsuch Proceeding other than reasonable costs of investigation or as otherwiseprovided below. Indemnitee shall have the right to employ his or her own legalcounsel in such Proceeding, but all Expenses related thereto incurred afternotice from the Company of its assumption of the defense shall be atIndemnitee’s expense unless: (i) the employment of legal counsel by Indemnitee has beenauthorized by the Company, (ii) Indemnitee has reasonably determined thatthere may be a conflict of interest between Indemnitee and the Company in thedefense of the Proceeding, (iii) after a Change in Control, the employmentof counsel by Indemnitee has been approved by the Independent Counsel, or (iv) theCompany shall not in fact have employed counsel to assume the defense of suchProceeding, in each of which case all Expenses of the Proceeding shall be borneby the Company. The Company shall not be entitled to assume the defense of anyProceeding brought by or on behalf of the Company or as to which Indemniteeshall have made the determination provided for in (ii) above.

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##### (c)           SettlementOf Claims. The Company shall not be liable to indemnify Indemnitee underthis Agreement or otherwise for any amounts paid in settlement of anyProceeding effected without the Company’s written consent, provided, however,that if a Change in Control has occurred, the Company shall be liable forindemnification of Indemnitee for amounts paid in settlement if the IndependentCounsel has approved the settlement. The Company shall not settle anyProceeding in any manner that would impose any penalty or limitation onIndemnitee without Indemnitee’s written consent. The Company shall not beliable to indemnify the Indemnitee under this Agreement with regard to anyjudicial award if the Company was not given a reasonable and timelyopportunity, at its expense, to participate in the defense of such action; theCompany’s liability hereunder shall not be excused if participation in the Proceedingby the Company was barred by this Agreement.

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# **7.**              Non-Exclusivity.

 

The rights of Indemnitee hereunder shall be inaddition to any other rights Indemnitee may have under the Company’sCertificate of

 

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Incorporation,bylaws, applicable law, or otherwise. To the extent that a change in applicablelaw (whether by statute or judicial decision) permits greater indemnificationby agreement than would be afforded currently under the Company’s Certificateof Incorporation, bylaws, applicable law, or this Agreement, it is the intentof the parties that Indemnitee enjoy by this Agreement the greater benefits soafforded by such change.

 

# **8.**              Liability Insurance.

# ** **

To the extent the Company maintains an insurance policyor policies providing directors’ and officers’ liability insurance, Indemniteeshall be covered by such policy or policies, in accordance with its or theirterms, to the maximum extent of the coverage available for any Company directoror officer.

 

# **9.**              Amendment Of This Agreement.

# ** **

No supplement, modification, or amendment of thisAgreement shall be binding unless executed in writing by both of the partieshereto. No waiver of any of the provisions of this Agreement shall operate as awaiver of any other provisions hereof (whether or not similar), nor shall suchwaiver constitute a continuing waiver. Except as specifically provided herein,no failure to exercise or any delay in exercising any right or remedy hereundershall constitute a waiver thereof.

 

# **10.**       Subrogation.

# ** **

In the event of payment under this Agreement, theCompany shall be subrogated to the extent of such payment to all of the rightsof recovery of Indemnitee, who shall execute all papers required and shall doeverything that may be necessary to secure such rights, including the executionof such documents necessary to enable the Company effectively to bring suit toenforce such rights.

 

# **11.**       No Duplication Of Payments.

# ** **

The Company shall not be liable under this Agreementto make any payment in connection with any claim made against Indemnitee to theextent Indemnitee has otherwise received payment (under any insurance policy,bylaw, or otherwise) of the amounts otherwise indemnifiable hereunder.

 

# **12.**       Binding Effect.

 

This Agreement shall be binding upon and inure to thebenefit of and be enforceable by the parties hereto and their respectivesuccessors (including any direct or indirect successor by purchase, merger,consolidation, or otherwise to all or substantially all of the business and/orassets of the Company), assigns, spouses, heirs, and personal and legalrepresentatives. The indemnification provided under this Agreement shallcontinue as to Indemnitee for any action taken or not taken while serving in anindemnified capacity pertaining to an Indemnifiable Event even though he or shemay have ceased to serve in such capacity at the time of any Proceeding.

 

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# **13.**       Severability.

 

If any provision (or portion thereof) of thisAgreement shall be held by a court of competent jurisdiction to be invalid,void, or otherwise unenforceable, the remaining provisions shall remainenforceable to the fullest extent permitted by law. Furthermore, to the fullestextent possible, the provisions of this Agreement (including, withoutlimitation, each portion of this Agreement containing any provision held to beinvalid, void, or otherwise unenforceable, that is not itself invalid, void, orunenforceable) shall be construed so as to give effect to the intent manifestedby the provision held invalid, void, or unenforceable.

 

# **14.**       Governing Law.

# ** **

This Agreement shall be governed by and construed andenforced in accordance with the laws of the State of Delaware applicable tocontracts made and to be performed in such State without giving effect to theprinciples of conflicts of laws.

 

# **15.**       Notices.

# ** **

All notices, demands, and other communicationsrequired or permitted hereunder shall be made in writing and shall be deemed tohave been duly given if delivered by hand, against receipt, or mailed, postageprepaid, certified or registered mail, return receipt requested, and addressedto the Company at:

 

Digimarc Corporation9405 S.W. Gemini DriveBeaverton, OR 97008

 

Notice of change of address shall be effective onlywhen given in accordance with this Section. All notices complying with thisSection shall be deemed to have been received on the date of delivery or on thethird business day after mailing.

 

# **16.**       Counterparts.

# ** **

This Agreement may be executed in one or more counterparts,each of which shall be deemed an original, but all of which together shallconstitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties hereto have dulyexecuted and delivered this Indemnification Agreement as of the day specifiedabove.

 
|   | DIGIMARC  CORPORATION |
|--------|-----------------------|
|   |                  |
|   | By:                   |   |   |
|   |                  |
|   | Title:                |   |   |
|   |                  |
|   |                  |
|   | INDEMNITEE            |
|   |                  |
|   | By:                   |   |   |
|   |                  |
|   | Print Name:           |   |   |
|        |                       |  |  |  |  |  |

 

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