**Exhibit 10.1**

**DIGIMARC CORPORATION 1999 STOCK INCENTIVE PLAN**

**1999 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PROGRAMAmended and Restated on April 22, 2001Amended and Restated on March 29, 2002Amended and Restated on April 17, 2003Amended and Restated on May 2, 2003Amended and Restated on March 10, 2004 Amended and Restated on May 2, 2006Amended and Restated on March 7, 2007**

**ARTICLE IESTABLISHMENT AND PURPOSE OF THE PROGRAM**

**1.01**                        Establishmentof Program

The 1999 Non-Employee Director Stock Incentive 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, issubject to the provisions of the Plan.

**1.02**                        Purpose ofProgram

The purpose of the Program is to enhance the ability of the Company toattract and retain directors who are not Employees (“Non-Employee Directors”)through a program of automatic grants of Options or awards of other types stockincentive compensation under the Plan (together, “Awards”).

**1.03**                        EffectiveDate of the Program

The Program became effective as of the Registration Date onDecember 1, 1999, and was first amended and restated by the Board onApril 22, 2001 to increase the number of Shares granted pursuant toInitial Grants and Subsequent Grants (as defined below) and to change thevesting provisions thereunder. The Program was further amended and restated bythe Board on March 29, 2002 to increase the number of Shares grantedpursuant to Initial Grants and Subsequent Grants, to award additional Optiongrants to Non-Employee Directors serving on committees of the Board, and tochange the vesting provisions for all automatic Option grants. The Program wasfurther amended and restated by the Board on April 17, 2003 to specify thatCommittee Service Grants shall be made only to Non-Employee Directors who serveas a member of a “standing committee” of the Board. The Program was furtheramended and restated by the Board on May 2, 2003 to eliminate therequirement that a Non-Employee Director serve as a director of the Company forat least six (6) months before receiving a Committee Service Grant. TheProgram was further amended and restated by the Board on March 10, 2004 toprovide that the Board may waive the issuance of option grants under theProgram, in whole or

----

in part, for any particular year. The Program was further amended andrestated by the Board on May 2, 2006 to specify that the Board may electto make the stock compensation awards specified by the Program in a form otherthan stock options, including any form of stock compensation authorized underthe Plan, in whole or in part, for any particular year.  The Program was further amended and restatedby the Board on March 7, 2006 to change the amount of the annual stock compensationawards.

**ARTICLE IIDEFINITIONS**

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

**2.01**                        Change inControl

“*Changein Control*” means a change in ownership or control of the Companyeffected through either of the following transactions:

(a)           the direct orindirect acquisition by any person or related group of persons (other than anacquisition from or by the Company or by a Company-sponsored employee benefitplan or by a person that directly or indirectly controls, is controlled by, oris under common control with, the Company) of beneficial ownership (within themeaning of Rule 13d-3 of the Exchange Act) of securities possessing morethan fifty percent (50%) of the total combined voting power of the Company’soutstanding securities pursuant to a tender or exchange offer made directly tothe Company’s stockholders which a majority of the Continuing Directors who arenot Affiliates or Associates of the offeror do not recommend such stockholdersaccept, or

(b)           a change in thecomposition of the Board over a period of thirty-six (36) months or lesssuch 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, tobe comprised of individuals who are Continuing Directors.

**2.02**                        ContinuingDirectors

“*Continuing Directors*”means members of the Board who either (i) have been Board members continuouslyfor a period of at least thirty-six (36) months or (ii) have beenBoard members for less than thirty-six (36) months and were elected ornominated for election as Board members by at least a majority of the Boardmembers described in clause (i) who were still in office at the time suchelection or nomination was approved by the Board.

----

**2.03 CorporateTransaction**

“*CorporateTransaction*” means any of the following transactions:

(a)           a merger orconsolidation in which the Company is not the surviving entity, except for atransaction the principal purpose of which is to change the state in which theCompany is incorporated;

(b)           the sale, transfer orother disposition of all or substantially all of the assets of the Company(including the capital stock of the Company’s subsidiary corporations) inconnection with the complete liquidation or dissolution of the Company;

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

(d)           acquisition by anyperson or related group of persons (other than the Company or by aCompany-sponsored employee benefit plan) of beneficial ownership (within themeaning of Rule 13d-3 of the Exchange Act) of securities possessing morethan fifty percent (50%) of the total combined voting power of the Company’soutstanding securities (whether or not in a transaction also constituting aChange in Control), but excluding any such transaction that the PlanAdministrator determines shall not be a Corporate Transaction.

**ARTICLE IIISTOCK INCENTIVE GRANT TERMS**

**3.01**                        Date of Grantand Number of Shares

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

(b)           *Subsequent Grants*.  Immediately following each annual meeting ofthe Company’s stockholders commencing with the annual meeting of the Company’sstockholders in 2002, each Non-Employee Director who continues as aNon-Employee Director following such annual meeting shall be granted an awardof three thousand (3,000) shares of Restricted Stock and a Non-Qualified StockOption to purchase six thousand (6,000) shares of Common Stock (each a“Subsequent Grant”); provided that no Subsequent Grant shall be made to anyNon-Employee Director who has not served as a director of the Company, as ofthe time of such annual meeting, for at least six (6) months. Each suchSubsequent Grant shall be made on the date of the annual stockholders’ meetingin question.

(c)           *Committee Service Grants*.  Each Non-Employee Director who serves as amember of a standing committee of the Board immediately following each annualmeeting of the Company’s stockholders, commencing with the annual meeting ofthe Company’s stockholders in 2002, shall be granted a Non-Qualified StockOption to purchase three thousand (3,000) shares of Common Stock (a “CommitteeService Grant”). Non-employee directors shall receive an additional CommitteeService Grant for each individual standing committee of the Board upon 

----

which he or she serves as a member as described above. For purposes ofthis provision, the term “standing committee” of the Board shall mean the AuditCommittee, the Compensation Committee, the Corporate Governance Committee, andthe Nominating Committee. Each such Committee Service Grant shall be made onthe date of the annual stockholders’ meeting in question.

(d)           *Waiver of Grants*.  The Board may waive the issuance of grants tobe made pursuant to this Section 3.01 of the Program for any particularyear, in whole or in part, provided such waiver is made prior to the date ofgrant. Any waiver by the Board with respect to grants for a particular yearshall in no way affect the right of Non-Employee Directors to receive grantsunder the Program in a subsequent year.

(e)           *DiscretionRegarding Form of Awards. *Notwithstandingthe foregoing, the Board may elect to make the awards authorized by thisSection 3.1, in whole or in part, for any particular year, in any form ofstock compensation authorized under the Plan so that the total value of allcomponents of stock compensation granted pursuant to this Section 3.1(a),(b) or (c), respectively, equals the value (determined using the Black-Scholesvaluation model, or any other valuation model selected by the Board) of thegrant that would otherwise have been made on the terms set forth in theapplicable subsection.

**3.02**                        Vesting

(a)           *Initial Grant*.  Each Initial Grant under the Program shallvest and become exercisable as to 1/36 of the shares of Common Stock subject tothe Award on each monthly anniversary of the date of grant, such that the Awardwill be fully exercisable (or no longer subject to any risk of forfeiture)three (3) years after its date of grant.

(b)           *Subsequent Grants and Committee Service Grants*.  Each Non-Qualified Stock Option included in aSubsequent Grant or Committee Service Grant under the Program shall vest andbecome exercisable as to 1/12 of the shares of Common Stock subject to theAward on each monthly anniversary of the date of grant, or on such otherschedule as the Board may specify, such that the Award will be fullyexercisable one (1) year after its date of grant.  Each award of Restricted Stock included in aSubsequent Grant or Committee Service Grant under the Program shall be subjectto a forfeiture restriction that lapses as to 100 percent of the shares on theone-year anniversary of the grant date, or on such other schedule as the Boardmay specify, such that the Award will no longer be subject to any risk offorfeiture one (1) year after its date of grant.

**3.03**                        ExercisePrice

The exercise price per share of Common Stock of each Initial Grant andeach Non-Qualified Stock Option included in a Subsequent Grant shall be onehundred percent (100%) of the Fair Market Value per Share on the date of grant.

**3.04**                        CorporateTransaction/Change in Control

(a)           In the event of aCorporate Transaction, each Award which is at the time outstanding under theProgram automatically shall become fully vested and exercisable (or no longersubject to any risk of forfeiture) immediately prior to the effective date ofsuch Corporate

----

Transaction. Effective upon the consummation of the CorporateTransaction, all outstanding Awards under the Program shall terminate. However,all such Awards shall not terminate if the Awards are, in connection with theCorporate Transaction, assumed by the successor corporation or Parent thereof.

(b)           In the event of aChange in Control (other than a Change in Control which also is a CorporateTransaction), each Award which is at the time outstanding under the Programautomatically shall become fully vested and exercisable (or no longer subjectto any risk of forfeiture), immediately prior to the specified effective dateof such Change in Control. Each such Option shall remain so exercisable untilthe expiration or sooner termination of the applicable Option term.

**3.05**                        OtherTerms

The Plan Administrator shall determine theremaining terms and conditions of the Awards awarded under the Program.

----