Exhibit 10.9


 


EQUITY COMPENSATION PROGRAM 

FOR NON-EMPLOYEE DIRECTORS 

UNDER THE DIGIMARC CORPORATION 2008 INCENTIVE PLAN


 


The following provisions set forth the terms of the equity compensation
program (the “Program”) for non-employee
directors of Digimarc Corporation (the “Company”) under
the Digimarc Corporation 2008 Incentive Plan (the “Plan”).  The following terms are intended to
supplement, not alter or change, the provisions of the Plan, and in the event
of any inconsistency between the terms contained in this document and in the
Plan, the Plan shall govern.  All
capitalized terms that are not defined in this document shall be as defined in
the Plan.


 


1.             Eligibility


 


Each director of the Company elected or appointed to the Board who is
not otherwise an officer or employee of the Company or a Related Company (an “Eligible Director”) is eligible to receive the Awards set
forth in the Program.


 


2.             Initial Option Grants


 


Each Eligible Director who is first elected or appointed to the Board
after the date the Program is approved by the Board will automatically receive
a Nonqualified Stock Option to purchase 20,000 shares of Common Stock (an “Initial Grant”).  The
Grant Date for an Initial Grant to an Eligible Director is the date of that
director’s first election or appointment to the Board.  In addition, those Eligible Directors already
serving as directors on the date the Program is approved by the Board will
automatically receive a Nonqualified Stock Option to purchase 20,000 shares of
Common Stock (an “Existing Director Grant”).  The Grant Date for Existing Director Grants
will be the date the Program is approved by the Board.


 


Each Initial Grant will vest and become
exercisable over the two-year period commencing on the Initial Option’s Grant
Date, with 50% of the shares to vest and become exercisable on the first
anniversary of the Grant Date of the Initial Grant and 1/12th of the remaining
shares to vest and become exercisable monthly thereafter.  Each Existing Director Grant will vest and
become exercisable over a two-year period commencing on the date the director
was first elected or appointed to the Board, with 50% of the shares to vest and
become exercisable on the first anniversary of the date the director was first
elected or appointed to the Board and 1/12th of the remaining shares to vest
and become exercisable monthly thereafter.


 


3.             Annual Option Grants.


 


Commencing with the 2009 annual meeting of stockholders, each Eligible
Director will automatically receive immediately following each annual meeting
of stockholders a Nonqualified Stock Option to purchase 7,500 shares of Common
Stock


 

















 


(an “Annual Grant”).  The Grant Date of an Annual Grant will be the
date of such annual meeting.  Each Annual Grant will vest and become
exercisable in twelve equal monthly installments beginning one month after the
Grant Date for the Annual Grant.


 


4.             Option Exercise Price


 


Initial Grants, Existing Director Grants and Annual Grants will have a
per share exercise price equal to the Fair Market Value of the Common Stock on
the Grant Date of the Option.


 


5.             Term of Options


 


Each Option expires ten years from its Grant Date, but is subject to
earlier termination as follows:


 


(A)                              In the event that an
Eligible Director ceases to be a director for any reason other than death, the
unvested portion of any Option granted to the director will terminate
immediately, and the director may exercise the vested portion of the Option
only within three years after he or she ceases to be a director or prior to the
date on which the Option expires by its terms, whichever is earlier.


 


(B)                                In the event of an
Eligible Director’s death, the unvested portion of any Option granted to the
director will become fully vested and exercisable.  The Option is exercisable only within three
years after the date of death of the director or prior to the date on which the
Option expires by its terms, whichever is earlier, and only by the personal
representative of the director’s estate, the person(s) to whom the
director’s rights under the option have passed by will or the applicable laws
of descent and distribution, or any beneficiary designated pursuant to Section 14
of the Plan.


 


6.             Exercise of Options


 


An Eligible Director or an individual set forth in Section 5(B),
as applicable, may exercise the Options by giving notice to the Company (or a
brokerage firm designated or approved by the Company).  The notice must state the number of shares of
Common Stock exercised and be accompanied by payment in full for the Common
Stock.  Payment may be made, to the
extent permitted by applicable laws and regulations, in whole or in part: (a) in
cash or check; (b) by having the Company withhold shares of Common Stock
that would otherwise be issued on exercise of the Option that have an aggregate
Fair Market Value equal to the aggregate exercise price of the shares being
purchased under the Option; (c) by tendering (either actually or by
attestation) shares of Common Stock owned by the director that have an
aggregate Fair Market Value equal to the aggregate exercise price of the shares
being purchased under the Option; (d) if and so long as the Common Stock
is registered under the Exchange Act, by delivery of a properly executed
exercise notice, together with irrevocable instructions to a broker, to
promptly deliver to the Company the amount of proceeds to pay the exercise
price, all in accordance with the regulations of the Federal Reserve Board.


 


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7.             Change
of Control


 


Upon a
Change in Control or Company Transaction, all Options outstanding as of the
date of the Change of Control or Company Transaction, and which are not then
exercisable and vested, will immediately become fully exercisable and vested.


 


8.             Amendment


 


The Board may amend the provisions contained within this Program as it
believes advisable.  An amendment may
not, without the consent of the Eligible Director, impair or diminish any
rights of an Eligible Director or any rights of the Company under an Award.


 


Provisions of the Plan (including any amendments) not discussed above,
to the extent applicable to Eligible Directors, continue to govern the terms
and conditions of Awards granted to Eligible Directors.


 


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